<PAGE>
 
THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF EFFECTIVE
REGISTRATION UNDER SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER AND ALL
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS OR AN EXEMPTION THEREFROM UNDER
SUCH ACT AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.


                              CYTOGEN CORPORATION
                              -------------------


                                    WARRANT


NO. W-1                                              SEPTEMBER 26, 1996

                           VOID AFTER MARCH 31, 2003
                       (or earlier upon the occurrence of
                        certain events described below)


     THIS CERTIFIES that, for value received, ELAN INTERNATIONAL SERVICES, LTD.,
a Bermuda corporation, or permitted assigns (collectively, the "Holder"), shall
be entitled to subscribe for and purchase from CYTOGEN CORPORATION, a Delaware
corporation (the "Company"), up to 1,000,000 shares (the "Warrant Shares"),
subject to adjustment as provided herein, of Common Stock, $.01 par value per
share, of the Company (the "Common Stock"), at the Exercise Price (as defined in
Section 2 hereof), during the Exercise Period (as defined in Section 1 hereof),
pursuant to the terms and subject to the conditions hereof.  This Warrant is
being issued pursuant to the Securities Purchase Agreement dated as of September
26, 1996 (as amended from time to time, the "Purchase Agreement") between the
Company and the initial Holder.  Capitalized terms used herein but not otherwise
defined herein have the meanings ascribed thereto in the Purchase Agreement.

     SECTION 1.  Exercise Period.  This Warrant may be exercised by the Holder
                 ---------------                                              
at any time and from time to time after the date hereof and on or prior to March
31, 2003; provided, that the Holder shall have exercised the Exchange Right as
provided for in the Purchase Agreement on or prior to such exercise date (such
period being herein referred to as the "Exercise Period").  If the Exchange
Right is not exercised by the Holder on or prior to September 30, 2001, this
Warrant shall be automatically cancelled and become null and void by its terms
and without any action on the part of the Company, and the Company shall give
written notice to the Holder to surrender such cancelled warrant to the Company
promptly upon the cancellation of this Warrant.
<PAGE>
 
     SECTION 2.  Exercise Price.  The exercise price (the "Exercise Price") for
                 --------------                                                
each Warrant Share shall be $8.40 if the Exchange Right is exercised on or prior
to September 30, 1997; thereafter the Exercise Price will increase to $9.00 for
the period commencing on October 1, 1997 and ending on March 31, 1998; $9.80 for
the period commencing on April 1, 1998 and ending on September 30, 1998; $11.20
for the period commencing on October 1, 1998 and ending on September 30, 1999,
$12.60 for the period commencing on October 1, 1998 and ending on September 30,
2000 and $14.00 for the period commencing on October 1, 2000 and ending on March
31, 2003, each of such amounts being subject to adjustment pursuant to Section 5
hereof.

     SECTION 3.  Exercise Of Warrant; Warrant Shares.
                 ----------------------------------- 

     (a)  The rights represented by this Warrant may be exercised, in whole or
in any part (but not as to a fractional share of Common Stock), by (i) the
surrender of this Warrant (properly endorsed) at the office of the Company (or
at such other agency or office of the Company in the United States of America as
it may designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company), (ii) delivery to the Company of a notice
of election to exercise in the form of Exhibit A attached hereto, and (iii)
                                       ---------                           
payment to the Company of the aggregate Exercise Price by cash, wire transfer
funds or certified check.

     (b)  Each date on which this Warrant is surrendered and on which payment of
the Exercise Price is made in accordance with Section 3(a) above is referred to
herein as an "Exercise Date." Simultaneously with each exercise, the Company
shall issue and deliver a certificate or certificates for the Warrant Shares
being purchased pursuant to such exercise, registered in the name of the Holder
or the Holder's designee, to such Holder or designee, as the case may be.  If
such exercise shall not have been for the full number of Warrant Shares, then
the Company shall issue and deliver to the Holder a new Warrant, registered in
the name of the Holder, of like tenor to this Warrant, for the balance of the
Warrant Shares that remain after exercise of the Warrant.

     (c)  The person in whose name any certificate for shares of Common Stock is
issued upon any exercise shall for all purposes be deemed to have become the
holder of record of such shares as of the Exercise Date, except that if the
Exercise Date is a date on which the stock transfer books of the Company are
closed, such person or entity shall be deemed to have become the holder of
record of such shares at the close of business on the next succeeding date on
which the stock transfer books are open.  The Company shall pay all documentary,
stamp or other transactional taxes attributable to the issuance or delivery of
shares of Common Stock upon exercise of all or any part of this Warrant;
provided, however, that the Company shall not be required to pay any taxes which
--------  -------                                                               
may be payable in respect of any transfer involved in the issuance or delivery
of any certificate for such shares in a name other than that of the Holder to
the extent such taxes would exceed the taxes otherwise payable if such
certificate had been issued to the Holder.

     SECTION 4.  Representations, Warranties And Covenants As To Common Stock.
                 ------------------------------------------------------------  

                                       2
<PAGE>
 
STOCK.  The Company represents and warrants to the Holder that all shares of
-----
Common Stock which may be issued upon the exercise of this Warrant will, upon
issuance, be validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and free from all taxes, liens and
charges with respect to the issue thereof. The Company covenants to the Holder
that it will from time to time take all such action as may be required to assure
that the stated or par value per share of the Common Stock is at all times no
greater than the then effective Exercise Price. The Company further covenants
and agrees that the Company will take all such action as may be required to
assure that the Company shall at all times have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to
provide for the exercise of this Warrant. If any shares of Common Stock reserved
for the purpose of issuance upon the exercise of this Warrant require
registration with or approval of any governmental authority under any Federal or
state law before such shares may be validly issued or delivered upon exercise to
the Holder, then the Company shall in good faith and as expeditiously as
possible, at the expense of the Company, endeavor to secure such registration or
approval, as the case may be.

     SECTION 5.  Adjustment Of Exercise Price.
                 ---------------------------- 

     (a)  Changes in Common Stock.  In case the Company shall at any time or
          -----------------------     
from time to time after the date of this Agreement (i) pay a dividend or make
any other distribution with respect to its Common Stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, (iii) combine its outstanding shares of Common
Stock or (iv) issue any shares of its capital stock or other assets in a
reclassification or reorganization of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing entity), then the number and kind of shares of capital
stock of the Company or other assets that may be received upon the exercise of
this Warrant shall be adjusted to the number of the Warrant Shares and amount of
any such securities, cash or other property of the Company which the holders
would have owned or have been entitled to receive after the happening of any of
the events described above had the Warrant been exercised immediately prior to
the record date (or, if there is no record date, the effective date) for such
event. An adjustment made pursuant to this clause (a) shall become effective
retroactively immediately after the effective date in other cases. Any Warrant
Share or other assets to be acquired as a result of such adjustment shall not be
issued prior to the effective date of such event. For the purposes of this
clause (a), the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Company.

     (b)  Issuance of Rights; Etc.  In case the Company shall issue, at any time
          ------------------------                                              
on or prior to March 31, 1998, to all holders of its Common Stock rights,
options or warrants to subscribe for or purchase, or other securities
exchangeable for or convertible into, shares of Common Stock (any such rights,
options, warrants or other securities, collectively, "Rights") (excluding rights
to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest) at a subscription offering, exercise or conversion price
per share (as defined below, the "offering price per share") which, before
deduction of customary discounts and commissions,  is lower than the current
Market Price per share of Common Stock on the record date of such issuance of
grant, whether or not, in the case of Rights, such Rights are 

                                       3
<PAGE>
 
immediately exercisable or convertible, then the number of Warrant Shares
issuable upon exercise of this Warrant shall be adjusted by multiplying the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to any adjustment in connection with such issuance or grant by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
(exclusive of any treasury shares) on the record date of issuance or grant of
such Rights plus the number of additional shares of capital stock that would be
issued upon exercise of the Rights, and the denominator of which shall be the
number of shares of Common Stock outstanding (exclusive of any treasury shares)
on the record date of issuance or grant of such Rights plus the number of shares
which the aggregate offering price (as defined below) of the total number of
shares of Common Stock so offered would purchase at the current Market Price per
share of Common Stock on the record date, less customary discounts and
commissions. Market Price means the average of the closing prices on the Nasdaq
Stock Market (or other principal exchange of Cytogen's Common Stock) for the 10
trading days preceding the date of determination. Such adjustment shall be made
immediately after the record date for the issuance or granting of such Rights.
For purposes of this clause, the "offering price per share" of Common Stock
shall in the case of Rights be determined by dividing (x) the total amount
received or receivable by the Company in consideration of the issuance of such
Rights plus the total consideration payable to the Company upon exercise thereof
(the "aggregate offering price"), by (y) the total number of shares of Common
Stock covered by such Rights. In case the Company shall issue, at any time on or
after April 1, 1998, to all holders of its Common Stock any Rights (excluding
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest) at the offering price per share which, before deduction
of customary discounts and commissions, is lower than the current Market Price
per share of Common Stock on the record date of such issuance or grant, whether
or not, in the case of Rights, such Rights are immediately exercisable or
convertible, then the Holder shall be entitled to receive all of the same Rights
pro rata as the holders of Common Stock, on an as-exercised basis, as and when
distributed to the holders of Common Stock. For the purposes of this clause (b),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company. The Company shall not issue any
Rights in respect of shares of Common Stock held in the treasury of the Company.

     (c)  Dividends and Distributions.  In case the Company shall distribute to
          ---------------------------                                          
all holders of its shares of Common Stock any dividend or other distribution of
evidences of its indebtedness or other assets (other than as provided in clause
(a) above) or Rights, then, in each case, the Holder shall be entitled to
receive all of the same dividends, distributions or Rights, as the case may be,
as the holders of Common Stock, on an as-exercised basis, as and when the Holder
shall have elected to exercise this Warrant.

     (d)  Computations.  For the purpose of any computation under clauses
          ------------                                                   
(b) and (c) above, the current Market Price per share of Common Stock at any
date shall be as set forth in (i) the definition of Market Price for the 10
consecutive trading days commencing 20 trading days prior to the earlier to
occur of (A) the date as of which the market price is to be computed or (B) the
last full trading day before the commencement of "ex-dividend" trading in the
Common stock relating to the event giving rise to the adjustment required by
clause (a) or (b) or (ii) any other arm's-length adjustment formula that the
Board of Directors of the Company may use in good faith.  In the event the
Common Stock of the Company is not then publicly traded or 

                                       4
<PAGE>
 
if for any other reason the current market price per share cannot be determined
pursuant to the foregoing provisions of this clause (d) the current market price
per share shall be the Fair Value thereof.

     (e)  Adjustment.  Whenever the number of Warrant Shares issuable upon
          ----------                                                      
exercise of this Warrant is adjusted as provided under clauses (a) or  (b), the
Exercise Price shall be adjusted by multiplying such Exercise Price immediately
prior to such adjustment by a fraction, the numerator of which shall be the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment, and the denominator of which shall be the number of
Warrant Shares issuable upon exercise of this Warrant immediately thereafter.

     (f)  Securities.  For the purpose of this Section (f), the term "shares of
          ----------                                                           
Common Stock" shall mean (i) the class of stock designated as Common Stock, par
value $.01 per share, of the Company on the date of this Warrant or (ii) any
other class of stock resulting from successive changes or reclassifications of
such shares consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.

     (g)  Re-Adjustment.  If, at any time after any adjustment to the number of
          -------------                                                        
Warrant Shares issuable upon exercise of this Warrant or the Exercise Price
shall have been made pursuant to clause (e) of this Section 5, any rights,
options, warrants or other securities convertible into or exchangeable for
shares of Common Stock shall have expired, or any thereof shall not have been
exercised, the Exercise Price and the number of Warrant Shares issuable upon
exercise of this Warrant shall, upon such expiration, be readjusted and shall
thereafter be such as it would have been had it been originally adjusted (or had
the original adjustment not been required, as the case may be) as if (A) the
only shares of Common Stock offered were the shares of common stock, if any,
actually issued or sold upon the exercise of such rights, options or warrants
and (B) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options or warrants whether or not
exercised; provided, further that no such readjustment shall have the effect of
increasing the Exercise  Price or decreasing the number of Warrant Shares
issuable upon exercise of this Warrant by an amount (calculated by adjusting
such increase or decrease as appropriate to account for all other adjustments
pursuant to this Section 5 following the date of the original adjustment
referred to above) in excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such rights, options or warrants.

     (h)  Voluntary Adjustment by the Company.  The Company may at its option,
          -----------------------------------
at any time during the term of this Warrant, reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company, in its sole discretion, but subject to approval by
the Holder.

     (i)  Reorganization, Reclassification, Consolidation, Merger or Sale.  Any
          ---------------------------------------------------------------      
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Company's assets to another Person or other
transaction which is effected in such a manner that holders of Common Stock are
entitled to receive (either directly or upon 

                                       5
<PAGE>
 
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "Organic Change". Prior to
the consummation of any Organic Change, the Company shall make appropriate
provisions to ensure that the Holder shall thereafter have the right to acquire
and receive, in lieu of or in addition to (as the case may be) the Warrant
Shares immediately theretofore acquirable and receivable upon the exercise of
this Warrant, such shares of stock, securities or assets as such holder would
have received in connection with such Organic Change if such holder had
exercised this Warrant immediately prior to such Organic Change. The Company
shall not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor corporation (if other than the Company)
resulting from consolidation or merger or the corporation purchasing such assets
assumes by written instrument, the obligation to deliver to each such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.

     (j)  Notices.
          ------- 

          (1)  Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.

          (2)  The Company shall given written notice to the Holder at least 30
days prior to the date on which the Company closes its books or takes a record
for determining rights to receive any dividends or distributions.

          (3)  The Company shall also give written notice to the Holder at least
30 days prior to the date on which any Organic Change shall take place.

     (k)  Calculations.  All calculations under this Section 5 shall be made to
          ------------                                                         
the nearest one-thousandth of a cent ($.001) or to the nearest one-thousandth of
a share, as the case may be.

     SECTION 6.  No Shareholder Rights.  This Warrant shall not entitle the
                 ---------------------                                     
Holder to any voting rights or other rights as a shareholder of the Company.

     SECTION 7.  Restrictions On Transfer.  Subject to the other provisions of
                 ------------------------                                     
this Section 7 and Section 9 of the Purchase Agreement, this Warrant and all
rights hereunder are transferable on or after September 26, 1997, in whole or in
part, at the agency or office of the Company referred to in Section 3 hereof, by
the Holder in person or by duly authorized attorney, upon (i) surrender of this
Warrant properly endorsed, and (ii) delivery of a notice of transfer in the form
of EXHIBIT B hereto; provided, however, that this Warrant and the Warrant Shares
   ---------         --------  -------                                          
may be transferred to a maximum of three holders (reasonably satisfactory to the
Company) other than an Affiliate of the initial Holder.  The Warrant Shares are
transferable at any time in compliance with applicable laws.  Each transferee
and holder of this Warrant, by accepting or holding the same, consents that this
Warrant, when endorsed, in blank, shall be deemed negotiable, and, when so
endorsed, the holder hereof shall be treated by the Company and all other
persons dealing with this Warrant as the absolute owner hereof for any purposes
and as the 

                                       6
<PAGE>
 
person entitled to exercise the rights represented by this Warrant,
or to the transfer hereof on the books of the Company, any notice to the
contrary notwithstanding; provided, however, that until each such transfer is
                          --------  -------                                  
recorded on such books, the Company may treat the registered holder hereof as
the owner hereof for all purposes.

     SECTION 8.  Lost, Stolen, Mutilated Or Destroyed Warrant.  If this Warrant
                 --------------------------------------------                  
is lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as it may in its reasonable discretion impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed.  Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.

     SECTION 9.  Notices.  All notices or other communications which are
                 -------                                                
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered mail, postage prepaid, return receipt
requested, or via facsimile, addressed as follows:

          If to the Company, to:

               Cytogen Corporation
               600 College Road East
               CN 5308
               Princeton, New Jersey   08540-5308
               Attention:  Chief Executive Officer
               Facsimile:  (609) 951-9298;

          With a copy to:

               Dewey Ballantine
               1301 Avenue of the Americas
               New York, New York   10019
               Attention:  Frederick W. Kanner, Esq.
               Facsimile:  (212) 259-6333

          If to the initial Holder or any of its Affiliates, to:

               Elan International Services, Ltd.
               102 St. James Court
               Flatts Smiths
               SL04
               Bermuda
               Attention:  President
               Facsimile:  (441) 292-2224

                                       7
<PAGE>
 
          With a copy to:

               O'Sullivan Graev & Karabell, LLP
               30 Rockefeller Plaza
               New York, New York  10112
               Attention:  David Robbins, Esq.
               Facsimile:  (212) 408-2420;

or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith.  If mailed, as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.

     SECTION 10.  Governing Law.  This Warrant shall be governed by and
                  -------------  
construed in accordance with the laws of the State of New York (without giving
effect to principles of conflicts of laws).

     SECTION 11.  Headings.  The headings of the various sections contained in
                  --------
this Warrant have been inserted for convenience of reference only and should not
be deemed to be a part of this Warrant.

     SECTION 12.  Execution In Counterpart.  This Warrant may be executed in one
                  ------------------------  
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument and not separate Warrants.

                                   *  *  *  *

                                       8
<PAGE>
 
     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officers as of the date first written above.

                                    CYTOGEN CORPORATION          
                                                                 
                                                                 
                                    By: /s/ Thomas J. McKearn      
                                        -----------------------  
                                        Name: Thomas J. McKearn
                                        Title:Chairman, President and CEO


ATTEST:
-------


/s/ Charles Ogelsby
-------------------------
Name: Charles Ogelsby
Title:Corporate Controller and 
      Assistant Secretary
<PAGE>
 
                                                                       EXHIBIT A
                                                                       ---------

                     FORM OF NOTICE OF ELECTION TO EXERCISE

                       [To be executed only upon exercise
                 of the Warrant to which this form is attached]


To Cytogen Corporation:

     The undersigned, the holder of the Warrant to which this form is attached,
hereby irrevocably elects to exercise the right represented by such Warrant to
purchase __________ shares of Common Stock of CYTOGEN CORPORATION, and herewith
tenders the aggregate payment of $_________ in the form of cash, wire transfer
funds or certified check, in full payment of the purchase price for such shares.
The undersigned requests that a certificate for such shares be issued in the
name of _______________, whose address is ________________________, and that
such certificate be delivered to ______________, whose address is
_______________.

     If such number of shares is less than all of the shares purchasable under
the current Warrant, the undersigned requests that a new Warrant, of like tenor
as the Warrant to which this form is attached, representing the remaining
balance of the shares purchasable under such current Warrant be registered in
the name of _______________, whose address is _____________________________, and
that such new Warrant be delivered to ______________, whose address is
_____________________________.



                 Signature:___________________________________
                              (Signature must conform in all respects to the
                              name of the holder of the Warrant as specified on
                              the face of the Warrant)


                 Date:________________________________________
<PAGE>
 
                                                                       EXHIBIT B
                                                                       ---------


                           FORM OF NOTICE OF TRANSFER

                       [To be executed only upon transfer
                 of the Warrant to which this form is attached]



     For value received, the undersigned hereby sells, assigns and transfers
unto _________________________ all of the rights represented by the Warrant to
which this form is attached to purchase _________________________ shares of
Common Stock of CYTOGEN CORPORATION (the "Company"), to which such Warrant
relates, and appoints __________________________ as its attorney to transfer
such right on the books of the Company, with full power of substitution in the
premises.


                 Signature:___________________________________
                              (Signature must conform in all respects to the
                              name of the holder of the Warrant as specified on
                              the face of the Warrant)


                 Address:_____________________________________

                         _____________________________________


                 Date:________________________________________


Signed in the presence of:


______________________________