<PAGE>

                                                                Exhibit 10.81

                        [CONFIDENTIAL TREATMENT REQUESTED]

[Certain information has been omitted herein pursuant to a request for
confidential treatment pursuant to Rule 24b-2.]


THIS  AGREEMENT is made this 15th day of November, 1995

                                     between

                               CIBA-GEIGY LIMITED
                 of Klybeckstrasse 141, 4002 Basel, Switzerland,
                       (hereinafter referred to as "Ciba")

                                       and

                               CHIRON CORPORATION
            of 4560 Horton Street, Emeryville, California 94608, USA,
                     (hereinafter  referred to as "Chiron")



INTRODUCTION

A. Chiron and its affiliates have accumulated considerable experience and
     technology in the Technology Transfer Field, as defined below.

B. Ciba wishes to gain access to Chiron's technology within the Technology
     Transfer Field and to use it for the purpose of identifying or discovering
     drugs, as well as identifying or discovering compounds suitable for use in
     areas other than pharmaceuticals in which Ciba is or becomes active.

C. Chiron is willing to provide Ciba with access to  technology within the
     Technology Transfer Field, and any improvements it makes thereto during a
     specified period following the date of this Agreement.  Both Ciba and
     Chiron are willing to collaborate in a research and development program
     aimed at the enhancement of such technology, it being the intention of the
     parties that Ciba will be free to use such transferred technology and such
     improvements during and after the term of this Agreement, subject to the
     terms set forth herein.

D. In addition, Chiron has considerable experience and expertise in utilizing
     the technology within the Technology Transfer Field to design and
     synthesize combinatorial libraries and in applying these technologies to
     the discovery and development of pharmaceutical products.  The parties
     intend to collaborate with a view to the  ultimate discovery and
     development of new drugs for the targets which are selected as provided
     below.

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                                       -2-

E. This Agreement represents the technology transfer and research and
     development collaboration between the parties which is contemplated in
     Section 2.05 of that certain Cooperation and Collaboration Agreement dated
     as of November 20, 1994 (the "Cooperation Agreement").


THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:


1.   DEFINITIONS

1.1  "AFFILIATE" means in the case of each party any entity that directly or
indirectly controls, is controlled by, or is under common control with that
party.  For such purpose the term "control"  means ownership or control of at
least 50% of the voting interest in the entity in question.  Chiron, Ciba and
their respective Affiliates shall not be considered Affiliates of each other for
the purposes of this Agreement, regardless of the percentage ownership interest
which Ciba may hold in Chiron.

1.2  "CHIRON LICENSED TECHNOLOGY" means all inventions, know-how, trade secrets,
and other proprietary information  (whether patented or not), which are owned by
Chiron or its current Affiliates, or their respective employees or assignors, as
of the date of execution of this Agreement: (i) which are within the Technology
Transfer Field as the same is defined as at the date of execution of this
Agreement, or as the same may be redefined during the five years following such
date pursuant to Section 1.30; (ii) as to which Chiron has the right to grant to
Ciba a license hereunder, subject to Section 3.2.2; and (iii) which Ciba elects
to license pursuant to Section 3.1.2.

1.3  "CHIRON LICENSED TECHNOLOGY IMPROVEMENTS"  means inventions, know-how,
trade secrets and proprietary information (whether patented or not) within the
Technology Transfer Field, which are invented or developed by Chiron or its
Affiliates, or their respective employees or assignors, subject to Section 1.30,
within five (5) years after the date of this Agreement, with the right to
license to Ciba hereunder, all subject to Section 3.2.2.

1.4  "CHIRON LICENSED TECHNOLOGY PATENTS" means all patents and patent
applications (including provisionals, divisionals, continuations, continuations
in part, reissues, re-examinations, substitutions, additions and any extensions
to such patents) claiming Chiron Licensed Technology or Chiron Licensed
Technology Improvements made within the period referenced in Section 1.3.

1.5  "CHIRON PRODUCT" means a product developed and commercialized by Chiron
pursuant to Section 4.3.

1.6  "CIBA LICENSED TECHNOLOGY" means all inventions, know-how, trade secrets,
and other proprietary information  (whether patented or not), which are owned by
Ciba or its current Affiliates, or their respective employees or assignors, as
of the date of execution of this Agreement: (i) which are within the Technology
Transfer Field as the same is defined as at the date of execution

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                                       -3-

of this Agreement, or as the same may be redefined during the five years
following such date pursuant to Section 1.30; and (ii) as to which Ciba has the
right to grant to Chiron a license hereunder, subject to Section 3.2.2.

1.7  "CIBA LICENSED TECHNOLOGY IMPROVEMENTS"  means inventions, know-how, trade
secrets and proprietary information (whether patented or not) within the
Technology Transfer Field, which are invented or developed by Ciba or its
Affiliates, or their respective employees or assignors, subject to Section 1.30,
within five (5) years after the date of this Agreement, with the right to
license to Chiron hereunder, all subject to Section 3.2.2.

1.8  "CIBA LICENSED TECHNOLOGY PATENTS" means all patents and patent
applications (including provisionals, divisionals, continuations, continuations
in part, reissues, re-examinations, substitutions, additions and any extensions
to such patents) claiming Ciba Licensed Technology or Ciba Licensed Technology
Improvements made within the period referenced in Section 1.7.

1.9  "CIBA PRODUCT" means a product developed and commercialized by Ciba
pursuant to Section 4.3.

1.10 "COMBINATORIAL LIBRARY"  means a library or mixture of compounds, including
the compounds contained or proposed to be contained therein, produced using
Combinatorial Technology.

     "CHIRON COMBINATORIAL LIBRARY"  means a Combinatorial Library designed
       and/or synthesized or acquired by Chiron (alone or with third parties and
       available for sublicense to Ciba under the terms and conditions of this
       Agreement) prior to the execution date hereof or during the term of the
       Target Collaboration.

     "CIBA COMBINATORIAL LIBRARY" means a Combinatorial Library designed and/or
       synthesized or acquired by Ciba (alone or with third parties)  without
       the assistance of or involvement of Chiron in the design or synthesis
       of such library; provided that the mere use by Ciba of Chiron Licensed
       Technology shall not be considered assistance or involvement of Chiron
       for the purpose of this definition.

     "JOINT COMBINATORIAL LIBRARY" means a Combinatorial Library, as to which
       Ciba and Chiron each perform inventive or creative acts in designing the
       library, and/or contribute proprietary components or compositions to the
       library.

1.11 "COMBINATORIAL TECHNOLOGY" means methods and materials for the production,
design,  synthesis, characterization and/or use of synthetic, non-peptide
chemical libraries, either as individual compounds or mixtures thereof, using
combination and/or permutation strategies with respect to the structural
components, e.g. organic scaffold or polymeric or oligomeric backbone structures
and chemistries, together with sidechain or substituent chemistries; such
libraries generated using

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                                       -4-

chemical strategies based on (i) solid-phase or solid supported systems, e.g.
resins and/or supported spatial arrays (e.g. pins), or (ii) solution chemistry.

1.12 "COMPOUND HIT" means a singular molecular entity identified as having
biological activity at a level to be agreed upon by the parties, which would
typically be a 50% effect (estimated ED(50)) at less than or equal to 100
nanomolar, which identification results from the screening of Combinatorial
Libraries pursuant to the Target Collaboration.

1.13 "COMPOUND PATENT" means a patent or patent application claiming an
invention or discovery made pursuant to the Target Collaboration, which is
specific to a lead compound and a genus of compounds reasonably expected to have
the same or similar activity.  Patentability of a Compound Patent is premised on
the activity of the lead compound(s).  A Compound Patent may include claims to
the compounds per se, methods of making the compounds, methods of using the
compounds, formulations and the like, as appropriate.

1.14 "EDC" means a compound directed against a Selected Target which has
undergone extensive preclinical animal studies, formulation and production work,
and is identified as suitable to be prepared for tolerability studies in human
volunteers by the appropriate TARB of Ciba or the equivalent body of Chiron.

1.15 "FTE" means the full time equivalent effort, for one year, of one person
who participates directly in  the technology transfer or the research and
development activities contemplated under this Agreement, on behalf of one of
the parties hereto.  Chiron will use its standard cost accounting procedure in
determining FTE support and will fairly allocate costs among its various
programs.  Such participation includes, without limitation, production of
chemical, biological and/or other materials or reagents provided for use under
this Agreement (and the resupply thereof if shelf stock is provided, as
reasonably determined by Chiron).

1.16 "JOINT PRODUCT" means a product developed and commercialized by Ciba and
Chiron under a co-development arrangement  pursuant to Section 4.3.

1.17 "LIBRARY PATENT" means a patent or patent application claiming an invention
or discovery which is specific to a group of compounds related by structure but
not necessarily activity (i.e., a library).  A Library Patent will include
claims to the library as a composition, and or methods for making and using a
library as appropriate.  Patentability of a Library Patent is premised on the
use of the library to find active compounds for one or more targets.  A Library
Patent may disclose and claim one or more compounds identified from the library
(including compositions and methods of making and using) without being
considered a Compound Patent.

1.18 "NET SALES" means the total revenue from commercial sales received by a
party hereto, its Affiliates and/or licensees from the sale of a product subject
to royalties hereunder ("Royalty Bearing Product") to independent third parties
less the following amounts : (i) discounts, including

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                                       -5-

cash discounts, trade allowances or rebates actually allowed or granted, (ii)
credits or allowances actually granted upon claims or returns, regardless of the
party requesting the return, (iii) separately itemized freight charges paid for
delivery and (iv) taxes or other governmental charges levied on or measured by
the invoiced amount, whether absorbed by the billing party or the billed party.

In the event that the Royalty Bearing Product is sold in the form of a
combination product or kit containing one or more active ingredient components
or a delivery system ("Combination Product") then the Net Sales for such
Combination Product will be calculated by multiplying actual Net Sales of such
Combination by the fraction A/(A+B) where A is the fair market price of the
Royalty Bearing Product if such were sold separately as the only active
ingredient therein and B is the fair market price of additional active
ingredient components.  If the Royalty Bearing Product and other active
components are not sold separately, or if a delivery system is an integral part
of the Combination Product and adds significant  value, the parties will in good
faith negotiate a formula to determine the amount of Net Sales to which the
royalty will be applicable, which formula will reflect the Royalty Bearing
Product's and/or delivery system's contribution to the Combination  Product.

1.19 "RESEARCH COMPOUND" means a compound directed at a Selected Target and
identified as a potential candidate for Early Compound Evaluation by Ciba's
Therapeutic/Indication Area Management, or by the equivalent body at Chiron,
based on such criteria as completion of screening in primary, selectivity and
cellular assays, and preliminary IN VIVO pharmacology studies.

1.20      "RESTRICTED TARGET" means a Target in relation to which, because of
pre-existing commitments of Chiron to third parties, Chiron is not permitted to
grant Ciba a license to use the Chiron Licensed Technology or the Chiron
Licensed Technology Improvements transferred to Ciba hereunder for the purpose
of research and development with respect to  pharmaceuticals for human use.  A
list of Restricted Targets is attached hereto as Exhibit D, which shall be
amended from time to time by eliminating one or more Restricted Targets, in the
event that such pre-existing commitments by Chiron to third parties are
terminated as to any such Targets.

1.21      "SCIENCE COMMITTEE" means the Science Committee created pursuant to
the Cooperation Agreement.

1.22 "SELECTED TARGET" means a Target selected pursuant to Section 4.1.1 to be
the subject of the Target Collaboration, or a Target selected for addition to
the Target Collaboration pursuant to Section 4.2.5 or 4.2.6.

1.23 "STEERING COMMITTEE" means the committee to be established pursuant to
Article 2 hereof.

1.24 "TARB"  means a Therapeutic Area Review Board of Ciba.

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                                       -6-




1.25 "TARGET" means one molecular entity, such as, but not limited to, a
receptor or an enzyme, together with its subtypes or isozymes, based on
scientific knowledge as it exists at the time of target selection.  The parties
will mutually agree on the precise definition of any Target at the time it is
selected as a Selected Target hereunder.

For clarity of understanding, and by way of example rather than limitation:
     

     [CONFIDENTIAL TREATMENT REQUESTED]


1.26 "TARGET COLLABORATION" means the research and development program conducted
by the parties pursuant to Article 4 of this Agreement.

1.27 "TARGET COLLABORATION FIELD" means the discovery, optimization and
development of small molecule compounds directed against a Selected Target for
human therapeutic use. The Target Collaboration Field specifically excludes
vaccines; diagnostics and therapeutic monitoring tests; antisense, aptamers and
related anti-gene therapies; and gene transfer  technology.

1.28 "TARGET PROJECT TEAM" means a team to be established for the purposes of
the Target Collaboration pursuant to Section 4.2.2 hereof.

1.29 "TECHNOLOGY IMPROVEMENT COLLABORATION" means the research and development
program conducted by the parties for the purpose of developing improvements
within the Technology Transfer Field pursuant to Section 3.3.

1.30 "TECHNOLOGY TRANSFER FIELD" means solid-phase or solid supported organic
chemistry  and related Combinatorial Technology based techniques for drug
discovery and optimization in preclinical research and development, for use in
the research and development of pharmaceuticals for human use or research and
development of other products (e.g. agricultural products), and including but
not limited to the following, all as applied to Combinatorial Technology: (i)
pins and/or resins, particularly the optimization of solid phases, grafted
surfaces and linkers, i.e., extending from the inert substrate to and including
the reactive moiety of the linker(s); (ii) methods and procedures for use
thereof, i.e., for performing solid-phase organic chemistry thereon, including
conditions for performing organic reactions generally and/or certain types or
classes of organic reactions specifically (e.g., solvent(s), temperature,
catalyst(s) and the like); (iii) formats, e.g., multipin systems or other
spatially addressable arrays, including automation software therefor, and
robotics technology for compound synthesis, including automation software
therefor; (iv) analytics to monitor the preceding; (v) computational chemistry,
including molecular modeling, diversity modeling and data handling techniques
for creating and maintaining data bases, and informatics; (vi) assay methods,
including robotics technology (with automation software therefor) and affinity
selection-mass spectrometry; and (vii) in vitro and in vivo test systems for
assessment of safety,

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                                       -7-

efficacy and pharmacokinetics (including ADME characteristics).  Notwithstanding
the foregoing, the Technology Transfer Field specifically excludes (a) peptides
and biological molecules; (b) all existing and future Chiron Combinatorial
Libraries and compounds contained therein; (c) Chiron information relating to,
or Chiron participation in, the application of any of the foregoing techniques
to the design, synthesis and/or characterization of specific compound sets or
libraries or individual compounds or materials, or the use or application
thereof; (d) medicinal chemistry; (e) specific assays and/or targets;  and (f)
all  biological and chemical results and data, including existing and future
Chiron databases.

The parties recognize that the definition of the Technology Transfer Field may
evolve over the five years following the date of this Agreement.  The precise
extent of the definition of the Technology Transfer Field in the future, and the
decision of whether any particular invention or technology of either party is
Chiron Licensed Technology or a Chiron Licensed Technology Improvement, on the
one hand, or Ciba Licensed Technology or a Ciba Licensed Technology Improvement,
on the other hand, will be based on the following principles:

     1.   The Chiron technology which is within the Technology Transfer Field as
            of the date of this Agreement is described in Exhibit B.

     2.   In the absence of agreement to the contrary, neither the Technology
            Transfer Field nor the licenses granted under Sections 3.5.1 or
            3.5.2 shall be deemed to cover, or allow either party access to
            the other party's technology other than Combinatorial Technology
            based research and development techniques.

     3.   On the other hand, both parties intend that the licenses granted under
            Sections 3.5.1 and 3.5.2 will provide each party with access to
            technologies of the other  party (the "licensor") which both (i)
            become a routine part of the licensor's Combinatorial Technology
            based research and development techniques, such routine use not
            to be artificially delayed, and (ii) the Steering Committee
            determines are necessary or important to maintain the
            Combinatorial Technology program of the licensor at the state of
            the art.


1.31 "THIRD PARTY EXCLUDED TARGETS" means, for the purposes of Article 4 only,
all Targets for which, as of the time of any relevant decision hereunder
relating to Third Party Excluded Targets, Chiron has an obligation to a third
party, as further described below. Initially, the Third Party Excluded Targets
shall be those Targets identified in Exhibit A.  Chiron shall have the right, at
any time, immediately on written notice to Ciba, to amend Exhibit A by adding as
additional Third Party Excluded Targets those Targets as to which Chiron (i) has
granted rights to any third party; or (ii) is engaged in active negotiations
with a third party which have resulted in an agreed upon term sheet. Targets to
which the foregoing criteria no longer apply shall be deleted.

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                                       -8-

1.32 "TRANSFER PROJECT TEAM" means a project team to be established pursuant to
Section 3.1.4 hereof.


2    STEERING COMMITTEE

2.1  The parties will establish a Steering Committee for the purposes of
       supervising the Technology Transfer, implementation of the technology
       development plans and resolving any conflicts arising in the course of
       the development and the Target Collaboration.  The Steering Committee
       shall have such even number of members as the parties shall agree, half
       of the members being appointed by each party, with each of Chiron and
       Ciba having one vote.  In the event of deadlock on any issue, such issue
       shall be referred for decision to the Science Committee.

2.2  The Steering Committee shall monitor the progress of the Technology
       Transfer, technology development plans and the Target Collaboration on a
       regular basis and shall have the power to alter the Technology Transfer
       timetable, technology development plans and the Target Collaboration as
       necessary from time to time.  The Steering Committee shall meet not less
       than twice per year, and the location of such meetings shall alternate
       between Emeryville and Basel, all unless otherwise agreed by the parties.


3    TECHNOLOGY TRANSFER ARRANGEMENTS

3.1  TRANSFER OF TECHNOLOGY

3.1.1     Attached hereto as Exhibit B is a summary description of the
       technology owned by Chiron within the Technology Transfer Field as of the
       date of this Agreement.

3.1.2     Ciba will notify Chiron as soon as practicable which of such
       technology it wishes to license.  It is acknowledged and agreed that each
       such notification need not be comprehensive, and that Ciba may call for
       additional technology it wishes to license from Chiron by serving notice
       on Chiron specifying the additional technology required at any time
       during the five years following execution of this Agreement.  (The
       information specified in such notices shall determine which technology
       within the Technology Transfer Field will be Chiron Licensed Technology
       hereunder).  As soon as practicable after the first notification the
       parties will agree to a timetable for the transfer of sufficient
       information and instruction to Ciba to enable it to practice the Chiron
       Licensed Technology and the manner in which such information is to be
       transferred (i.e., visits by Chiron personnel to Ciba's premises or vice
       versa).

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                                       -9-

     The goal of the parties is to cause Ciba to be fully informed and able to
       practice the Chiron Licensed Technology not later than [CONFIDENTIAL
       TREATMENT REQUESTED] from the date on which the relevant Chiron 
       Licensed Technology was first identified by Ciba and notified to Chiron.
       Chiron agrees to devote the FTE effort required pursuant to Section 3.1.5
       to the accomplishment of such goal and the goal regarding installation of
       equipment during such period, as set forth in Section 3.1.3.

3.1.3     Chiron will supply Ciba with a list of the equipment which in Chiron's
       view will be required by Ciba to enable Ciba to practice the Chiron
       Licensed Technology and to conduct Ciba's activities pursuant to the
       Technology Improvement Collaboration and the Target Collaboration.  Ciba
       will be responsible for obtaining all equipment, and for the assembly and
       installation of such equipment as is purchased.  To the extent that any
       such equipment has to be specially manufactured, Chiron will at Ciba's
       expense either manufacture the same and sell it to Ciba at [CONFIDENTIAL
       TREATMENT REQUESTED], or will procure its manufacture for Ciba by a third
       party on terms to be agreed in advance with Ciba.

     Within the limitations of the FTE commitment pursuant to Section 3.1.5,
       Chiron will send suitably qualified and experienced employees to
       Ciba's premises to assist Ciba in the installation of the equipment.
       Chiron will also provide training for an agreed number of Ciba employees
       in the use of the equipment.

     Subject, in the case of Chiron, to the limitations of the FTE commitment
       pursuant to Section 3.1.5, Chiron and Ciba both agree to use reasonable
       commercial efforts to have the equipment installed and operational at
       Ciba's premises not later than [CONFIDENTIAL TREATMENT REQUESTED] from
       the date on which Chiron Licensed Technology is first identified pursuant
       to Section 3.1.2, with a target of [CONFIDENTIAL TREATMENT REQUESTED] 
       following such date.

3.1.4     To facilitate the transfer of information regarding the Chiron
       Licensed Technology pursuant to this Section 3.1, a project team ("the
       Transfer Project Team") will be formed if either party so requests.  The
       members of the Transfer Project Team shall be selected on the basis of
       their experience and suitability having regard to the nature of the
       information to be transferred.

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                                      -10-

3.1.5     To assist in the transfer of information regarding the Chiron Licensed
       Technology pursuant to this Section 3.1, unless otherwise agreed in
       writing, Chiron shall make available the services of [CONFIDENTIAL 
       TREATMENT REQUESTED] FTEs (being suitably qualified and experienced) in
       each of the first and second years after execution of this Agreement and 
       [CONFIDENTIAL TREATMENT REQUESTED] FTEs in each of the third, fourth and 
       fifth years after execution of this Agreement, the cumulative number of 
       FTEs being not less than [CONFIDENTIAL TREATMENT REQUESTED] nor more than
       [CONFIDENTIAL TREATMENT REQUESTED] over the 5 years. The actual FTE 
       commitment, within such ranges, shall be mutually determined by the 
       parties from time to time.  Any balance of such FTE's not used in 
       connection with technology transfer may be used in the Target 
       Collaboration  (without affecting the FTE commitments set forth in
       Section 4.2.4) or in the Technology Improvement Collaboration, at Ciba's
       election.

     Ciba shall pay Chiron's fully-burdened cost of the provision of the FTEs
       provided pursuant to this Section 3.1.5.  The initial rate shall be U.S.
       [CONFIDENTIAL TREATMENT REQUESTED] per FTE per year, this amount to be 
       increased annually, effective January 1 of each calendar year, based on
       increases in the [CONFIDENTIAL TREATMENT REQUESTED] for the previous 
       calendar year.  This payment compensates Chiron for all ordinary travel
       and subsistence expenses incurred by such FTE's, but excludes expenses of
       extraordinary travel or exceptionally long stays, which shall be 
       separately reimbursed in amounts to be mutually agreed upon by the 
       parties. For the purposes of this Section 3.1.5, travel which exceeds (i)
       travel necessary to attend meetings of the Transfer Project Team and/or 
       Steering Committee, plus (ii) [CONFIDENTIAL TREATMENT REQUESTED] days per
       year per FTE, shall be considered extraordinary travel or exceptionally 
       long stays.

     The annual cost of such FTEs shall be due and payable in equal semi-annual
       installments in advance, according to the following schedule.  The first
       such payment shall be based on [CONFIDENTIAL TREATMENT REQUESTED] 
       FTE's, and shall be due and payable upon execution of this Agreement, to
       cover the FTE cost through December 31, 1995, on a prorated basis.  
       Thereafter,  FTE payments for each semi-annual period shall be due and 
       payable on each  January 15 and July 15 until the end of the fifth year 
       following execution of this  Agreement, the final payment also being 
       prorated.

     If the level of effort by Chiron is less than an average, on an annual
       basis, of the number of FTE's required and funded pursuant to this
       Section 3.1.5,  Ciba will be entitled to additional FTE effort in
       subsequent semi-annual periods, such that the required annual average is
       restored.  Conversely, if the average annual level of effort by Chiron
       exceeds the number of FTE's required and funded pursuant to this Section
       3.1.5, Chiron will be entitled to reduce the FTE effort in subsequent
       semi-annual periods, such that the required annual average is restored.

     From time to time during the five years following the execution of this
       Agreement, each party shall be entitled, at its own expense, to locate an
       agreed number of its employees at the premises of the other party, for
       such periods as may be agreed, for the purposes of the transfer of
       information regarding the Chiron Licensed Technology and Chiron Licensed

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                                      -11-

       Technology Improvements, on the one hand, and the Ciba Licensed
       Technology and Ciba Licensed Technology Improvements on the other hand.
       All such visits shall be subject to the confidentiality obligations set
       forth in Article 9.

3.1.6     Attached hereto as Exhibit C is a complete list of the Chiron patents
       which are available for license hereunder, whether as part of the
       Technology Transfer Field or pursuant to Section 3.2.3, as of the date of
       execution of this Agreement.  Chiron will update this list once every
       year during the term of this Agreement.

3.1.7     Although divisions of Ciba other than the Pharma Division as well as
       corporate units of Ciba may be involved in the transfer of information
       regarding the Chiron Licensed Technology, the prime point of contact
       within Ciba shall be the Pharma Division.  Ciba will be solely
       responsible for transferring such information and technology to, and
       acquiring and installing equipment for, its other divisions and corporate
       units.

3.1.8     In consideration of the licenses granted pursuant to Section 3.5,
       Ciba will pay Chiron the sum of Twenty-six Million Dollars ($26,000,000),
       payable as follows:

     $5,500,000 upon execution of this Agreement;
     [CONFIDENTIAL TREATMENT REQUESTED] upon the first anniversary of the 
                execution of this Agreement;
     [CONFIDENTIAL TREATMENT REQUESTED] upon the second anniversary of the 
                execution of this Agreement;
     [CONFIDENTIAL TREATMENT REQUESTED] upon the third anniversary of the 
                execution of this Agreement;
     [CONFIDENTIAL TREATMENT REQUESTED] upon the fourth anniversary of the 
                execution of this Agreement;
                and
     [CONFIDENTIAL TREATMENT REQUESTED] upon the fifth anniversary of the 
                execution of this Agreement.

3.1.9     Chiron will keep records of the time spent by its FTEs pursuant to
       this Section 3.1, as well as pursuant to Sections 3.2 and 3.3, including
       the transfer of information relating to Chiron Licensed Technology
       Improvements.  Ciba shall have the right to have these records audited in
       the same manner as is set forth in Section 7.4.  Chiron will report the
       level of FTE effort to Ciba on a semi-annual basis.

3.1.10    As soon as practicable following execution of this Agreement, Ciba
             will inform Chiron of the Ciba Licensed Technology available for
             license to Chiron hereunder.  The parties will mutually arrange for
             transfer of the Ciba Licensed Technology to Chiron as part of the
             technology transfer process pursuant to this Section 3.1.


3.2  IMPROVEMENTS AND ACQUIRED TECHNOLOGY

3.2.1     In connection with the licenses granted pursuant to Section 3.5,  each
       party will keep the other informed during the five years following the
       execution of this Agreement of all Chiron Licensed Technology
       Improvements and all Ciba Licensed Technology Improvements, respectively.
       Pursuant to Section 1.30, each party will keep the other

<PAGE>

                                      -12-

       informed of developments which may cause the definition of the Technology
       Transfer Field to expand, and of technology of the informing party which
       may become Chiron Licensed Technology or Ciba Licensed Technology,
       respectively, in the event of such an expansion of such definition.  The
       parties will develop methods for effectively exchanging information about
       improvements, which will include consideration of such matters at the
       regular meetings of the Transfer Project Team and Steering Committee.
       Through the Steering Committee, the parties will keep appropriate records
       to identify the Chiron Licensed Technology Improvements and the Ciba
       Licensed Technology Improvements.  Methods of exchanging information may
       also include visits pursuant to Section 3.1.5 (last paragraph), seminars
       or other scientific exchanges.


3.2.2     In the event that (i) either party currently holds technology which is
       within the Technology Transfer Field but which is subject to obligations
       to third parties; or (ii) either party acquires in the future, by
       purchase, license or otherwise, Subject Technology, as defined below; or
       (iii) either party acquires an Affiliate which holds Subject Technology;
       in the case of (ii) or (iii), within the five years following the
       execution of this Agreement; such party agrees, if so requested by the
       other party, to include such technology within licenses granted pursuant
       to Section 3.5.1 or 3.5.2, as the case may be, subject to the conditions
       set forth in this Section 3.2.2.  For the purposes hereof, Subject
       Technology means technology within the Technology Transfer Field which,
       in the case of Chiron, would have been Chiron Licensed Technology or
       Chiron Licensed Technology Improvements had it been invented solely by
       Chiron, and in the case of Ciba, would have been Ciba Licensed Technology
       or Ciba Licensed Technology Improvements, had it been invented solely by
       Ciba.

     Such licenses shall be subject to the following conditions:

     (i)   Such acquiring party has the right to obtain such technology and to
             license it to the other party hereunder; and

     (ii)  If the technology in question is acquired or licensed from a third
             party, the license of such technology to the other party
             hereunder shall be subject to all terms and conditions which are
             imposed by such third party with respect thereto, including without
             limitation payment of all royalties which are due and payable to
             the third party with respect to the use of such technology  by the
             other party pursuant to this Agreement; and

     (iii) In the case of acquisitions after the execution date hereof, if the
             acquiring party has paid consideration to acquire the Affiliate or
             the technology in question, prior to license of such technology
             hereunder, the parties shall reasonably negotiate in good faith
             compensation to the acquiring party which will result in a fair
             sharing by the parties of the acquisition cost of the technology,
             considering their respective interests therein.

<PAGE>

                                      -13-

3.2.3     In the event that Ciba wishes to obtain sublicenses to [CONFIDENTIAL 
       TREATMENT REQUESTED] currently licensed or assigned to Chiron and subject
       to obligations to third parties, the provisions of Section 3.2.2 shall 
       apply to such sublicenses.


3.3  JOINT IMPROVEMENT OF TECHNOLOGY

3.3.1     During the five (5) years following the execution of this Agreement,
       Ciba and Chiron may cooperate with a view to the development of
       improvements within the Technology Transfer Field, in accordance with
       technology development plans to be agreed by the parties.  Any such
       projects which are mutually agreed upon shall, unless otherwise agreed,
       be equally funded by the parties.  Except as expressly set forth in this
       Agreement, each party shall be free to use and to grant sublicenses under
       any joint inventions resulting from such cooperation.

3.3.2     The Steering Committee may nominate one or more Development Project
       Teams to implement the development plans.

3.3.3     For joint improvements of technology which are claimed in patent
       applications or patents, the Steering Committee shall determine what
       compensation, if any, shall be received by one party in the event that
       the other party licenses any such joint improvement to a third party,
       using the criteria set forth in Section 3.5.2(b) with respect to
       compensation.  Any dispute concerning such compensation shall be referred
       to the Science Committee.

3.4  TITLE TO NEW INVENTIONS AND PATENT RIGHTS

3.4.1     Subject to the licenses granted pursuant to Section 3.5, as between
       the parties hereto, ownership of new inventions within the Technology
       Transfer Field, whether made individually or as part of the Technology
       Improvement Collaboration pursuant to Section 3.3, shall be based on the
       principles set forth below.  For clarity of understanding, the parties
       agree that new inventions pursuant to the Target Collaboration leading to
       Compound Patents or Library Patents shall not be deemed within the
       Technology Transfer Field, and shall be governed by Section 4.6, rather
       than by this Section.

     (a)  If the new invention is a patentable improvement to the Chiron
             Licensed Technology, such invention shall be assigned
             to Chiron. The ultimate assignee of the invention shall be
             determined by the parties, prior to filing a patent application if
             reasonably possible, according to the following considerations:

           (i)       If the new invention was made solely by Chiron employees
                        or assignors, the assignment shall remain with Chiron.

<PAGE>

                                      -14-

           (ii)      If the new invention was made solely by Ciba employees or
                        assignors, or jointly by Ciba employees and Chiron
                        employees and/or their respective assignors, the
                        ultimate assignee shall be determined according to
                        inventorship under U.S. patent law, unless the parties
                        agree that a different disposition should occur.
                        Ownership of patent applications filed outside the
                        U.S. shall be determined according to inventorship.
                        Inventorship shall be determined under U.S. patent
                        law.

     (b)   If the new invention is a patentable improvement to the Ciba
              Licensed Technology, such invention shall be assigned to Ciba.
              The ultimate assignee of the invention shall be determined by the
              parties, prior to filing a patent application if reasonably
              possible, according to the following considerations:

            (i)  If the new invention was made solely by Ciba employees or
                    assignors,  the assignment shall remain with Ciba.

            (ii) If the new invention was made solely by Chiron employees or
                    assignors, or jointly by Ciba employees and Chiron
                    employees and/or their respective assignors, the ultimate
                    assignee shall be determined according to inventorship
                    under U.S. patent law, unless the parties agree that a
                    different disposition should occur.  Ownership of patent
                    applications filed outside the U.S. shall be determined
                    according to inventorship.  Inventorship shall be
                    determined under U.S. patent law.

          (c)  If the new invention represents new technology, rather than an
                  improvement to the Chiron Licensed Technology or the Ciba
                  Licensed Technology as the case may be:

               (i)  If the invention is made by employees or assignors of one
                       party hereto (or its Affiliates), whether solely or
                       jointly with employees or assignors of a third party,
                       such invention shall be assigned to the party which is
                       the employer or assignee of the inventor (subject to such
                       ownership interests as may vest in any such third party).

               (ii) If such invention is made jointly by employees or assignors
                       of Chiron or its Affiliates, on the one hand, and by
                       employees or assignors of Ciba or its Affiliates, on the
                       other hand, such invention shall be assigned to the
                       parties jointly.

              (iii) Inventorship shall be determined in accordance with United
                       States Patent Law.

<PAGE>

                                      -15-

     (d)  For the purposes of this Section 3.4.1, an "assignor" of a party is an
            individual under an obligation to assign patent rights to that
            party, e.g., a consultant retained by that party.


3.4.2     Chiron shall have the sole right to file, maintain and prosecute
     patents with respect to the Chiron Licensed Technology and with respect to
     inventions or discoveries finally assigned to Chiron.  Chiron agrees to
     keep Ciba reasonably informed as to the status of the Chiron Licensed
     Technology Patents.

3.4.3     Ciba shall have the sole right to file, maintain and prosecute patents
     with respect to  Ciba Licensed Technology and with respect to inventions or
     discoveries finally assigned to Ciba.  Ciba agrees to keep Chiron
     reasonably informed as to the status of the Ciba Licensed Technology
     Patents.

3.4.4     In the case of an invention or discovery owned jointly by the parties,
     the Steering Committee shall decide which party shall be responsible for
     filing the patent application(s), if any, in respect thereof.  Joint
     patents shall be the joint property of both parties, who shall  share the
     costs of filing applications and of maintenance.


3.5  TECHNOLOGY LICENSES AND OPTIONS

3.5.1     Subject to the terms, conditions and limitations of this Agreement,
     Chiron hereby grants to Ciba a perpetual, worldwide, non-exclusive,
     royalty-free license to use internally, including use by Ciba in third
     party collaborations,  the Chiron Licensed Technology and the Chiron
     Licensed Technology Improvements, including without limitation the Chiron
     Licensed Technology Patents, for the purpose of research and development,
     and to make, have made, use and sell products arising as a result of such
     research and development, except that (i) such license shall be limited as
     provided in this Section 3.5.1; and (ii) Ciba's rights with respect to
     products arising from the Target Collaboration shall be governed by Article
     4 hereof.  Such license expressly excludes any right to make, have made, or
     sell the Chiron Licensed Technology or the Chiron Licensed Technology
     Improvements themselves as products for research use.

     (a)  For Chiron Licensed Technology Improvements which are not claimed in
            Chiron Licensed Technology Patents, and are not otherwise
            determined by the Steering Committee to merit restrictions
            on sublicensing under the criteria set forth in Section 3.5.2(b), 
            and represent improvements to Ciba Licensed Technology only, 
            rather than to the Chiron Licensed Technology, Ciba shall have the
            right to grant sub-licenses to such Chiron Licensed Technology 
            Improvements hereunder to third parties [CONFIDENTIAL TREATMENT 
            REQUESTED].

<PAGE>

                                      -16-

     (b)  Save as mentioned at (a) in this Section 3.5.1, Ciba shall not have
            the right to grant sublicenses under Chiron Licensed Technology and
            Chiron Licensed Technology Improvements except to Affiliates of
            Ciba, without the prior written consent of Chiron.

     (c)  Ciba shall not use the Chiron Licensed Technology or Chiron Licensed
            Technology Improvements for research or development with respect to
            the Restricted Targets, without Chiron's prior written consent,
            subject to the following:

          (i)  [CONFIDENTIAL TREATMENT REQUESTED]

          (ii) Nothing herein shall preclude Ciba from utilizing Ciba Licensed
                 Technology, or improvements invented by Ciba to the Ciba
                 Licensed Technology, or technology acquired by Ciba from third
                 parties, against the Restricted Targets.

         (iii) Nothing herein shall preclude Ciba from utilizing, against the
                 Restricted Targets, technology which is within the public
                 domain, unless and until patents are issued covering such
                 technology.

          (iv) As of the first anniversary of the execution of this Agreement,
                 the parties will mutually determine the impact of these
                 restrictions.  If, as of such date, no Restricted Targets
                 remain, these restrictions shall be deemed to have no impact.
                 If, as of such date, any Restricted Targets remain, the parties
                 shall determine whether, as of such date, the restrictions
                 imposed under this Section 3.5.1(c) actually preclude the use
                 of Chiron Licensed Technology in an active research project of
                 Ciba against a Restricted Target as to which Ciba would, absent
                 such restrictions, utilize the Chiron Licensed Technology.  If
                 not, the restrictions shall be deemed to have no impact.  If
                 so, Chiron agrees that Ciba shall be entitled to a credit of
                 [CONFIDENTIAL TREATMENT REQUESTED] for each Restricted Target
                 as to which use of the Chiron Licensed Technology in an active
                 Ciba program is actually precluded, up to a maximum of 
                 [CONFIDENTIAL TREATMENT REQUESTED].

               Such credit shall be applied against the consideration payable by
                 Ciba pursuant to Section 3.1.8.  If there is one Restricted
                 Target resulting in such preclusion, such credit shall be
                 implemented by reducing the payment due upon [CONFIDENTIAL 
                 TREATMENT REQUESTED] of this Agreement to [CONFIDENTIAL 

<PAGE>

                                      -17-
                 TREATMENT REQUESTED]. If there are two or more Restricted
                 Targets resulting in such preclusion, the payment due upon 
                 [CONFIDENTIAL TREATMENT REQUESTED] of this Agreement shall be
                 reduced to [CONFIDENTIAL TREATMENT REQUESTED] and, the payment
                 due upon [CONFIDENTIAL TREATMENT REQUESTED] of this
                 Agreement shall be reduced to [CONFIDENTIAL TREATMENT 
                 REQUESTED]. Except as provided herein, all consideration for 
                 the licenses granted in this Section 3.5 shall remain payable 
                 as provided in Section 3.1.8.


3.5.2     Subject to the terms, conditions and limitations of this Agreement,
     Ciba hereby grants to Chiron a perpetual, worldwide, non-exclusive license
     to use internally, including use by Chiron in third party collaborations,
     the Ciba Licensed Technology and the Ciba Licensed Technology Improvements,
     including without limitation the Ciba Licensed Technology Patents, for the
     purpose of research and development, and to make, have made, use and sell
     products arising as a result of such research and development,  except that
     Chiron's rights with respect to products arising from the Target
     Collaboration shall be governed by Article 4 hereof.  Such license
     expressly excludes any right to make, have made, or sell the Ciba Licensed
     Technology or the Ciba Licensed Technology Improvements themselves as
     products for research use.

     (a)  For Ciba Licensed Technology or Ciba Licensed Technology Improvements
               which are not claimed in Ciba Licensed Technology Patents
               and are not otherwise determined by the Steering Committee to
               merit compensation or restrictions on sublicensing under the
               criteria set forth in Section 3.5.2(b), Chiron shall have the
               right to grant sublicenses to such Ciba Licensed Technology or
               Ciba Licensed Technology Improvements hereunder to third parties,
               [CONFIDENTIAL TREATMENT REQUESTED].

     (b)  For Ciba Licensed Technology or Ciba Licensed Technology Improvements
               which are claimed in Ciba Licensed Technology Patents, the
               Steering Committee will determine whether the invention
               merits restrictions on sublicensing and/or compensation to
               Ciba, based on such factors as uniqueness, competitive
               advantage, and commercial value.  It is understood that the
               fact that an invention is claimed in a patent application or
               patent is not itself sufficient to justify either
               restrictions on sublicensing or compensation.  On an
               exceptional basis, a series of non-patented inventions, when
               taken and used together, may also be deemed by the Steering
               Committee to merit  restrictions on sublicensing and/or
               compensation.

     (c)  Based on the criteria set forth in Section 3.5.2(b), the Steering
               Committee may determine (i) that Chiron will not have the
               right to grant sublicenses under the invention in question to
               third parties, other than its Affiliates, without the prior
               written consent of Ciba; or (ii) that Ciba is entitled to
               reasonable compensation for Chiron's internal use and/or
               sublicense of the invention in question, in which event,

<PAGE>

                                      -18-
               the amount of such compensation will be negotiated in good faith;
               provided always that the [CONFIDENTIAL TREATMENT REQUESTED]
               payable to Ciba for Chiron's internal use of Ciba Licensed
               Technology or Ciba Licensed Technology Improvements hereunder
               during the five years following the date of this Agreement shall
               not exceed [CONFIDENTIAL TREATMENT REQUESTED]. Any dispute with
               respect to any such determinations shall be referred to the
               Science Committee for resolution.


3.5.3     The parties acknowledge that Ciba wishes to use the Chiron Licensed
     Technology to independently design, synthesize and/or analyze new
     Combinatorial Libraries, and to use such libraries and the compounds
     contained therein without restriction. The parties further acknowledge
     that, due to current commitments, and to potential future commitments which
     Chiron is free to make, both internally and with third parties, as
     reflected in Section 1.30, Chiron will not provide to Ciba any
     Combinatorial Libraries or any assistance or collaborative effort in the
     design or synthesis of libraries, except subject to restrictions as to
     their use.  As a result, and for clarity of understanding, the parties
     agree as follows:

     (a)  The Chiron Licensed Technology and the Chiron Licensed Technology
               Improvements will not include any Combinatorial Libraries
               and Chiron will not provide Ciba with any assistance in designing
               or synthesizing specific Combinatorial Libraries, except as part
               of the Target Collaboration, and subject to all of the terms and
               conditions thereof.

     (b)  Pursuant to the Target Collaboration, Chiron will provide
               Combinatorial Libraries to Ciba, will assist Ciba in designing
               Combinatorial Libraries, and will work cooperatively to design
               and synthesize Combinatorial Libraries, all for use in the Target
               Collaboration only.

     (c)  Each party agrees that it will not design or synthesize any
               Combinatorial Libraries which it knows or has reason to know
               duplicate Combinatorial Libraries provided or disclosed by the
               other party for use in the Target Collaboration, except with the
               prior written consent of the other party.  In the event such
               consent is granted, the grantee agrees to use such Combinatorial
               Libraries only for the purposes of the Target Collaboration
               pursuant to Article 4, except with the other party's prior
               written consent and on terms to be negotiated in good faith.
               Ciba further agrees not to utilize any Chiron or Joint
               Combinatorial Libraries, or compounds included therein or
               developed through the Target Collaboration, against Third Party
               Excluded Targets.  Use of Joint Libraries is further governed by
               Section 4.8.3.

<PAGE>

                                      -19-

4    TARGET COLLABORATION

     The Target Collaboration shall commence upon Ciba's selection of the
initial Selected Targets ("the Commencement Date"), which shall not be later
than [CONFIDENTIAL TREATMENT REQUESTED] after the date of execution of this 
Agreement.  The Target Collaboration  shall continue for three years 
following the Commencement Date, extendable for up to two additional years 
under the same FTE funding terms as are set forth in Section 4.2.4,
[CONFIDENTIAL TREATMENT REQUESTED].


4.1  TARGET SELECTION

4.1.1     As soon as practicable after execution of this Agreement, Ciba shall
     provide to Chiron  a list of Targets in which Ciba is interested, other
     than Third Party Excluded Targets.  The parties shall meet and discuss the
     Targets on such list and the respective capabilities of the parties in
     these areas, and shall together determine a group of potential Targets,
     from which Ciba shall select two (2) initial Selected Targets.  It is
     acknowledged that as to Targets on which Chiron has done prior work which
     the parties then agree will be used within the Target Collaboration, or as
     to which the parties then agree that Chiron will provide proprietary
     biology not generally available to researchers in the area, either of which
     constitute additional value to the Target Collaboration beyond the value of
     Chiron's Combinatorial Technology capabilities and Combinatorial Libraries,
     Chiron will be entitled to reasonable compensation for the additional value
     added.  As part of the foregoing discussions, the parties will mutually
     agree upon applicable compensation, if any, with respect to a Target prior
     to Ciba's selection of that Target as a Selected Target.

4.1.2     Upon request by Ciba and receipt of the payments required pursuant to
     Section 4.2.3 Chiron will provide Ciba with sufficient quantities of
     existing Chiron Combinatorial Libraries for the purpose of screening
     against the Selected Targets.

4.1.3     Chiron shall have no obligation to provide Ciba, for use in the Target
     Collaboration, any Chiron Combinatorial Library developed  by Chiron
     jointly with a third party, or developed solely by Chiron but pursuant to
     the terms of an agreement with a third party, or developed for Chiron's use
     outside the Target Collaboration.   Chiron Combinatorial Libraries
     developed jointly with or under agreement with third parties will not be
     available for use in the Target Collaboration unless such third party
     consents, and shall then be subject to such additional terms and conditions
     as may be imposed by the third party.  Chiron will inform Ciba of any such
     additional terms and conditions prior to the use of any such Chiron
     Combinatorial Library hereunder.

<PAGE>

                                      -20-

4.2  RESEARCH PROGRAM

4.2.1     The parties agree to enter into a research program to utilize
     Combinatorial Libraries, including libraries designed pursuant to such
     research program, to screen against the Selected Targets, to optimize hits
     and to produce sets of compounds achieving Research Compound or above
     status in the Target Collaboration Field.  Once the Selected Targets have
     been determined pursuant to Section 4.1, the parties agree that during the
     term of the Target Collaboration they will collaborate exclusively with
     each other in the Target Collaboration Field with respect to the Selected
     Targets, subject to the following:

     (a)  The parties recognize that this Agreement is intended to focus on
            compound discovery, optimization and development within the
            Target Collaboration Field.  The parties agree to include within the
            Target Collaboration any internal programs or collaborations which
            would otherwise constitute competing discovery and optimization
            programs with respect to the Selected Targets within the Target
            Collaboration Field.  However, Ciba will not be precluded from
            acquiring rights to and pursuing, independently of the Target
            Collaboration, individual third party compounds against the Selected
            Target which have already reached at least the Research Compound
            Stage, provided that no data or information arising from the Target
            Collaboration is used in connection with such development. In such
            event, the Target Collaboration as to such Selected Target will
            continue to be governed by all terms of this Agreement, including
            without limitation the diligence obligations set forth in Section
            4.3.10.

     (b)  Either party may from time to time wish to acquire technology or
            collaborate with third parties within the Target Collaboration
            Field to enhance the prospect of success and be included within
            the Target Collaboration (e.g. with a university in the
            development of an assay).  Since such transactions may have
            financial impact on, or affect intellectual property, confidential
            information or product rights of, the other party hereunder, neither
            party will enter into such a transaction without the approval of the
            other party, which approval shall not be unreasonably withheld.  If
            one party bears the financial burden of such a third party
            collaboration, the parties will reasonably discuss whether an
            adjustment should be made to the compensation payable to such party
            pursuant to Section 4.3.

     (c)  Nothing herein shall restrict either party from establishing programs
               outside the Target Collaboration Field with respect to the same
               Selected Targets,  including for example and without limitation,
               biological or gene therapy approaches to such Selected Targets.

     (d)  Both parties acknowledge that Chiron is currently party to, and may in
               the future enter into additional, target collaborations with
               third parties.  Chiron may also enter into

<PAGE>


                                      -21-

            future transactions with third parties  which involve technology
            transfer independent of collaborations on specific targets.  With
            respect to any such arrangements, the parties understand as follows:

          (i)   Chiron will not provide third parties with Chiron Combinatorial
                  Libraries or licenses under Chiron Library Patents, or
                  actively participate with third parties in the design
                  of new Combinatorial Libraries or compounds, for use
                  with the Selected Targets during the term of the Target
                  Collaboration, or otherwise in violation of the licenses
                  granted pursuant to Section 4.7.1 hereunder.  With respect to
                  target specific collaborations which Chiron enters into after
                  the execution date of this Agreement, Chiron will impose
                  restrictions on third party use of selectivity assays directed
                  toward  Ciba's Selected Targets which are similar to the
                  restrictions set forth in Section 4.2.11(a).

          (ii)  However, Chiron will not be required to restrict future third
                  party recipients of technology transfer from utilizing
                  the transferred technology to design or synthesize
                  Combinatorial Libraries for use against any target, including
                  Selected Targets, provided that Chiron does not participate in
                  such design or grant licenses in violation of Section
                  4.2.1(d)(i).

          (iii) In the course of target collaborations with third parties,
                  compounds may be identified against targets other than
                  Selected Targets, which compounds prove useful against the
                  Ciba Indications, as identified under Section 4.3.  Chiron
                  shall not be required to restrict the ability of any third
                  party to pursue all indications of such compounds, despite the
                  fact that some overlap with the Ciba Indications may exist;
                  except in the event that the compound itself is licensed
                  exclusively to Ciba pursuant to Section 4.7.1(b).

          (iv)  Ciba acknowledges that Chiron and/or its Affiliate, Chiron
                  Mimotopes Pty Ltd, currently engage in the design and
                  sale of pins for use in organic chemistry, and will
                  continue to engage in such business, including
                  progressively newer generations of pins.  Chiron
                  Mimotopes currently does, and will continue to, engage
                  in synthesis of peptides and other compounds based on
                  specifications provided by third parties.  Chiron and
                  Chiron Mimotopes will not be required to impose any
                  target restrictions with respect to any such sales or
                  services.


4.2.2     The Target Collaboration shall be implemented by project teams
     ("Target Project Teams"), membership of which will be according to the
     needs of the particular project.  The leaders of the Target Project Teams
     shall be nominated by the Steering Committee.  In the

<PAGE>

                                      -22-

     event of deadlock on any matter the Target Project Teams shall refer such
     matter to the Steering Committee.

With respect to the Target Collaboration, the Steering Committee shall function
     as defined in Article 2, except that Ciba's views shall prevail, subject to
     all other terms of this Article 4, in the selection of, replacement of, or
     abandonment of, Selected Targets.

4.2.3     In consideration of the exclusive rights given to it with respect to
     the Selected Targets Ciba shall make a once and for all payment to Chiron
     of [CONFIDENTIAL TREATMENT REQUESTED] for each of the two initial 
     Selected Targets, ([CONFIDENTIAL TREATMENT REQUESTED] in total).  This 
     amount shall be payable upon  the Commencement Date.

4.2.4     In addition, Ciba shall pay Chiron's fully-burdened costs per year per
     FTE actively engaged in the Target Collaboration.  The initial rate shall
     be [CONFIDENTIAL TREATMENT REQUESTED] per FTE per year, this amount to be 
     increased annually, effective January 1 of each calendar year, based on 
     increases in the [CONFIDENTIAL TREATMENT REQUESTED] for the previous 
     calendar year.  Such indexing shall occur initially as of January 1, 1996,
     regardless of whether payments pursuant to this Section 4.2.4 have then 
     occurred.  This  payment compensates Chiron for all ordinary travel and 
     subsistence expenses incurred by such FTE's, but excludes expenses of 
     extraordinary travel or exceptionally long stays, which shall be separately
     reimbursed in amounts to be mutually agreed upon by the parties.  For the 
     purposes of this Section 4.2.4, travel which exceeds (i) travel necessary 
     to attend meetings of the Target Project Team and/or Steering Committee, 
     plus (ii) [CONFIDENTIAL TREATMENT REQUESTED] days per year per FTE,  shall
     be considered extraordinary travel or exceptionally long stays.

   Unless otherwise agreed in writing, Chiron shall make available an average of
     [CONFIDENTIAL TREATMENT REQUESTED] FTEs per year for each of the two 
     Selected Targets. Such FTEs shall include a balanced group of Ph.D. or 
     equivalent and other scientists. For the avoidance of doubt, if research 
     effort on one of the Selected Targets is reduced or terminated before the 
     end of the Target Collaboration, the FTE's employed on that Target shall 
     be deployed on the remaining Selected Target or Targets for the remainder 
     of the Target Collaboration.

   The annual cost of such FTEs shall be due and payable in equal semi-annual
     installments in advance, on the following schedule.  The first such payment
     shall be due and payable upon the Commencement Date, and shall cover the
     FTE cost from such date through the end of the then current semi-annual
     period, on a prorated basis.  Thereafter, FTE payments for each semi-annual
     period shall be due and payable on each January 15 and July 15  for the
     remainder of the term of the Target Collaboration the last payment also
     being prorated.

<PAGE>

                                      -23-

4.2.5     Ciba may elect to add up to two Selected Targets, increasing the total
     number of Selected Targets to a maximum of four at any time.  Collaboration
     on any such additional Selected Targets shall continue for a minimum of two
     years, and Ciba agrees to extend the Target Collaboration as necessary to
     accommodate such requirement.  The proposed additional Targets shall be
     selected by Ciba in the same manner as is provided in Section 4.1.1 and
     shall not be Third Party Excluded Targets. Ciba agrees to pay a one time
     fee of [CONFIDENTIAL TREATMENT REQUESTED] per Target added.  At the time 
     a Target is added, the parties shall mutually agree upon the number of 
     additional FTE's needed in connection with each such Target and the cost 
     thereof.  Ciba agrees to  pay for the FTE cost of, and Chiron agrees to 
     make available, such additional FTE's, all in the same manner as is set 
     forth in Section 4.2.4.

4.2.6     The parties agree to work on each Selected Target for a reasonable
     period of time.  Ciba may elect to abandon any of the Selected Targets at
     any time during the term of the Target Collaboration for scientific,
     technical or commercial reasons, on written notice to Chiron.  Ciba shall
     select a replacement Selected Target for each abandoned Target, to the
     extent necessary to maintain at least two Selected Targets within the
     Target Collaboration; provided that if a Selected Target is abandoned
     within the last six months of the Target Collaboration, Ciba need not
     select a replacement, so long as Ciba continues to pay for the full 
     [CONFIDENTIAL TREATMENT REQUESTED] FTE commitment pursuant to Section 
     4.2.4. Replacement Selected Targets will be selected in the same manner
     as is provided in Section 4.1.1 and shall not be Third Party Excluded 
     Targets.  Collaboration on any such replacement Selected Target shall 
     continue for a minimum of two years, and the collaboration shall be 
     extended as necessary to allow for such two year period.  No further 
     payment shall be made by Ciba pursuant to Section 4.2.3 for a Target 
     selected to replace any Selected Target.

4.2.7     Ciba and Chiron shall cooperate in the use of assays developed prior
     to or during the Target Collaboration by Ciba and/or Chiron for the
     identification or further characterization of a compound or compounds for
     the two Selected Targets.

     Each party agrees not to use outside the Target Collaboration any assays
       which have been independently developed by the other party outside the
       Target Collaboration and provided for use in the Target Collaboration,
       except with the prior written consent of the providing party and on terms
       to be negotiated in good faith.

     From time to time, Ciba may request Chiron to utilize the FTE's provided
       pursuant to Section 4.2.4 to develop new assays with respect to the
       Selected Targets.  Chiron agrees to undertake such assay development
       subject to availability of resources for such work. If such development
       involves then existing proprietary biology of Chiron which adds value,
       Chiron will be entitled to mutually agreed compensation for the value
       added in the same manner as is provided in Section 4.1.1.   New assays
       developed as part of the Target Collaboration will

<PAGE>

                                      -24-

       be available to both parties for use outside the Target Collaboration,
without compensation to the other party except pursuant to the preceding
sentence.

4.2.8     The Target Project Teams shall meet as often as may be required for
     the purposes of the collaboration but in any event not less than four times
     per year, again unless otherwise agreed by the parties.  Written reports of
     such meetings and of the status of the individual projects shall be
     submitted to the Steering Committee.  Unless otherwise agreed, meetings
     shall alternate between the relevant sites of Chiron and Ciba.

4.2.9     Chiron will keep records of the time spent by its FTEs on the Target
     Collaboration.  Ciba shall have the right to have these records audited, in
     the same manner as is set forth in Section 7.4. Chiron will report the
     level of FTE effort to Ciba on a semi-annual basis.   During the course of
     the Target Collaboration, Chiron will notify Ciba if it becomes apparent
     that the level of effort at Chiron is expected to exceed the level required
     under Section 4.2.4.

     If the level of effort is less than an average, on an annual basis, of the
       number of FTE's required pursuant to Section 4.2.4,  Ciba will be
       entitled  to additional FTE effort in subsequent semi-annual periods,
       such that the required annual average is restored. Conversely, if the
       average annual level of effort by Chiron exceeds the number of FTE's
       required and funded pursuant to Section 4.2.4, Chiron will be entitled to
       reduce the FTE effort in subsequent semi-annual periods, such that the
       required annual average is restored.  At the end of the Target
       Collaboration, the parties will restore any such imbalance between actual
       and funded FTE's either through appropriate payments or refunds, or
       through an extension of the Target Collaboration until the balance is
       restored.

4.2.10    If a Selected Target is abandoned pursuant to Section 4.2.6, ownership
            and all rights to all data and information resulting from the Target
            Collaboration with respect to such abandoned Target shall be
            determined as follows, subject to the provisions of Section 4.2.11:

          (a)  Either party shall be free to use, without further compensation
                    to the other, information generally applicable to
                    the abandoned Target or to multiple targets, such as assay
                    technology, animal models, etc.  Either party shall also be
                    free to use information otherwise in the public domain.

          (b)  Chiron shall have the exclusive right to use all unpublished
                    compound specific information, including without limitation
                    bioactivity and profile information (collectively, the
                    "Compound Data") with respect to the abandoned Target,
                    subject to payment of a royalty to Ciba on any products
                    resulting from the use of such Compound Data, at a rate
                    between [CONFIDENTIAL TREATMENT REQUESTED], to be mutually
                    determined.  Such rights shall include the patent licenses
                    granted pursuant to

<PAGE>

                                      -25-

                    Section 4.7.2(c).  Chiron shall have the right to use the
                    Compound Data to conduct research and development of such
                    products alone or with a third party. For the purposes of
                    Article 9 hereof, the Compound Data will be deemed
                    Proprietary Information of Chiron following the abandonment
                    of the Selected Target.

               (i)   From such time as Chiron elects to proceed with a third
                         party, Ciba shall have no right to resume research and
                         development using the  Compound Data with respect to
                         the abandoned Target.

               (ii)  If Chiron is not proceeding with a third party and Ciba
                         wishes to resume research and development with respect
                         to the abandoned Target using Compound Data, Ciba will
                         have the following rights:

                    (aa) If Ciba wishes to resume within five (5) years after
                              the Commencement Date and Chiron has not
                              commenced its own research and development program
                              with respect to the abandoned Target, Ciba may add
                              the abandoned Target to the collaboration as a
                              Selected Target pursuant to Section 4.2.5, or may
                              replace another Selected Target with the abandoned
                              Target pursuant to Section 4.2.6.

                    (bb) If Ciba wishes to resume within five (5) years after
                              the Commencement Date and Chiron has commenced its
                              own research and development program with respect
                              to the abandoned Target, Ciba may buy in to a co-
                              development program with Chiron in the same manner
                              as is set forth in Section 4.3.6.

                    (cc) If Ciba wishes to resume more than five (5) years after
                              the Commencement Date, which period may be
                              extended as provided below, Ciba shall be free to
                              pursue the abandoned Target using the Compound
                              Data, subject to payment of a royalty to Chiron on
                              any products resulting from such information at a
                              rate between [CONFIDENTIAL TREATMENT REQUESTED], 
                              to be mutually determined. If Chiron is then 
                              pursuing the abandoned target, alone or with 
                              third parties, Ciba will not be entitled to any 
                              licenses under any patents covering the Compound 
                              Data which have been assigned or exclusively 
                              licensed to Chiron.  If Chiron has also abandoned
                              the target at that point, Ciba will be entitled to
                              such licenses under such patents as will enable 
                              Ciba to proceed, and Chiron will retain such 
                              rights as

<PAGE>

                                      -26-

                              will enable Chiron to resume its activity with
                              respect to such target in the future, unless
                              otherwise agreed by the parties at the time. The
                              five (5) year period referenced in this
                              subsection (cc) shall be reasonably extended if
                              the Selected Target is abandoned late in the
                              Target Collaboration, to allow Chiron reasonable
                              time to either commence its own activities with
                              respect to such target, or to seek a third party
                              collaborator.

4.2.11    The parties recognize that in the course of the collaboration, the
            parties will test Compound Hits and potential Research Compounds in
            assays directed toward Targets other than Selected Targets for
            selectivity purposes.

          (a)  If the selectivity assay is directed toward a Third Party
                    Excluded Target, Ciba shall have the right to use
                    the results only for the purpose of determining selectivity
                    of its compounds against the Selected Target.  If the assay
                    identifies activity against the Third Party Excluded Target,
                    the parties shall reasonably discuss whether Chiron will
                    have the right to use such results with its third party
                    collaborator in a research and development program against
                    the Third Party Excluded Target, subject to a reasonable
                    royalty to Ciba at a rate between [CONFIDENTIAL TREATMENT 
                    REQUESTED].  In the absence of such an arrangement, neither
                    party shall have any rights to use the data in any program
                    directed against the Third Party Excluded Target.

          (b)  If the selectivity assay identifies activity against any Target
                              other than a Third Party Excluded Target, the
                              parties will consider whether such other Target
                              should be included within the Target Collaboration
                              as an added or replacement Target.  If not, the
                              parties will mutually determine the respective
                              rights of either or both of them to use such
                              results in independent programs directed toward
                              such Target and the appropriate compensation
                              therefor, which shall consist of a reasonable
                              royalty at a rate between [CONFIDENTIAL 
                              TREATMENT REQUESTED].

<PAGE>

                                      -27-

4.3  RESEARCH COMPOUNDS AND DEVELOPMENT CANDIDATES

     The provisions of this Section 4.3 shall apply only to compounds that
       achieve Research Compound status or above within [CONFIDENTIAL 
       TREATMENT REQUESTED]years after the end of the Target Collaboration.
       As to such compounds, the parties agree that product development and 
       commercialization rights will be allocated as follows:

4.3.1     For each of the Selected Targets, once Compound Hits have been
       identified through the primary Target assay, Ciba will prepare a
       preclinical research and development plan, including protocols and
       timetables for profiling and other steps necessary to move Compound Hits
       to the Research Compound stage in the indication(s) of primary interest
       to Ciba (the "Ciba Indications").  The plan will be submitted to the
       Steering Committee for information purposes.  Based on the plan, the
       Steering Committee will agree on the criteria for success, for the
       purpose of determining which compounds will become available for Chiron
       development pursuant to Section 4.3.3.

4.3.2     Compounds meeting the criteria for success determined under Section
       4.3.1 will be available for development by Ciba.  While the parties
       anticipate that Ciba's development program will focus on the Ciba
       Indications, Ciba shall have the right to fully develop any compound it
       selects as an EDC for any indications except that Ciba agrees not to
       pursue any compound arising from the Target Collaboration against the
       indications set forth in Exhibit E without Chiron's prior written
       consent.

4.3.3     Compounds which are not tested or do not meet the criteria for success
       determined under Section 4.3.1 will become available for development by
       Chiron in indication(s) (the "Chiron Indications") other than the Ciba
       Indications, subject to the provisions of this Section 4.3. At its
       meetings, the Steering Committee will review which compounds become
       available for Chiron development pursuant to this Section 4.3.3.  If
       Chiron wishes to proceed with development of such compounds in the Chiron
       Indications, Chiron will prepare a preclinical research and development
       plan, including protocols and timetables for profiling and other steps
       necessary to move Compound Hits to the Research Compound stage in the
       Chiron Indications.  Such plan will be submitted for information purposes
       to the Steering Committee.  Based on the plan, the Steering Committee
       will agree on the criteria for success.   Development rights to compounds
       which do not meet the criteria for success under the Chiron plan shall be
       subject to mutual agreement.

     Ciba retains the right to continue to screen, in the Ciba Indications,
       compounds which are available for Chiron development pursuant to this
       Section 4.3.3.


4.3.4     Chiron agrees not to pursue regulatory approval of any compounds for
     the same or  overlapping indications to the Ciba Indications, as the Ciba
     Indications are identified as of

<PAGE>

                                      -28-

     the earlier of [CONFIDENTIAL TREATMENT REQUESTED]. If the Ciba Indications
     change after that point, the provisions of Section 4.3.6 shall govern.
     Chiron shall have the right to fully develop any compound it selects as an
     EDC for any indications other than the Ciba Indications identified as 
     provided in this Section 4.3.4.

   The determination of whether Chiron Indications are the same or overlapping
     with the Ciba Indications shall be made jointly by Ciba and Chiron, and
     shall be based on all relevant information available at that time. Relevant
     considerations include differences in Target subtype or isozyme, chemical
     structure, pharmacology, mode of administration,  therapeutic or toxicity
     profile, or expected disease indications.  Examples of anticipated
     overlapping indications include the following, without limitation:
     serotonin re-uptake inhibitors for anxiety and depression; estrogen
     receptor antagonists for breast and ovarian cancer; estrogen replacement
     for menopause and osteoporosis; ACE inhibitors for hypertension, congestive
     heart failure and renal insufficiency.

4.3.5     The parties will communicate with each other as to the progress of
     their respective development programs, and will share with each other the
     results of such programs.  To the extent that such programs continue during
     the [CONFIDENTIAL TREATMENT REQUESTED] following the end of the Target 
     Collaboration, such communication shall also continue during that period; 
     and the Steering Committee will continue to meet during that period as 
     necessary to carry out the provisions of this Section 4.3.

4.3.6     If Chiron is developing a compound for Chiron Indications pursuant to
     Section 4.3.3, and Ciba, as a result of its continued testing in the Ciba
     Indications, determines that it is also interested in developing such
     Chiron compound for Ciba Indications, or if it becomes apparent through
     other available data that the Chiron compound also has utility in the Ciba
     Indications, Ciba has the right to buy in to a co-development program with
     Chiron with respect to such compound.  Unless otherwise agreed, the parties
     will then proceed with a joint development program with further costs
     shared equally, 50/50 profit sharing, and shared marketing rights, all on
     commercially reasonable terms to be negotiated by the parties.

   Ciba may exercise this buy in right at any time prior to [CONFIDENTIAL 
       TREATMENT REQUESTED] at a mutually agreed upon buy in price, to be 
       determined based upon each party's investment in the research and 
       development of such compound to the date of buy in, investment by 
       either party in generating preclinical and clinical data with respect
       to other compounds that is useful in the development of such compound,
       the risk assumed by each party to such date,  and the market potential
       likely to result from each party's indication rights.

<PAGE>

                                      -29-

4.3.7     If Chiron wishes to engage a partner to develop any compound under
     this Section 4.3, Chiron agrees to offer Ciba the right of first
     negotiation to co-develop such compound.

4.3.8     (a)  Ciba shall make a milestone payment of [CONFIDENTIAL TREATMENT 
            REQUESTED] on [CONFIDENTIAL TREATMENT REQUESTED].

     (b)  For Ciba EDCs, which are developed exclusively by Ciba, the following
            milestone payments shall be made by Ciba to Chiron:

          - [CONFIDENTIAL TREATMENT REQUESTED]
               and

          - [CONFIDENTIAL TREATMENT REQUESTED]

       For clarity of understanding, the milestones referred to in Section
          4.3.8(a) and (b) shall each be payable only once for each
          compound; such that the maximum aggregate milestone payments for a
          single compound will be [CONFIDENTIAL TREATMENT REQUESTED].

       (c)  Chiron will not be required to pay milestones with respect to its
               EDCs or Chiron Products.

       (d)  For each Ciba Product, Ciba shall pay to Chiron royalties on Net
               Sales made by Ciba, its Affiliates or licensees, at the rate 
               of [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales if aggregate
               annualized worldwide Net Sales for that Ciba Product do not 
               exceed [CONFIDENTIAL TREATMENT REQUESTED], and [CONFIDENTIAL 
               TREATMENT REQUESTED] of Net Sales if aggregate annualized 
               worldwide Net Sales for that Ciba Product exceed 
               [CONFIDENTIAL TREATMENT REQUESTED].

            For Chiron Products, Chiron shall pay to Ciba royalties at the rate
               of [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales made by 
               Chiron, its Affiliates or licensees.

            In the event that, on a country by country basis, a Ciba Product or
               a Chiron Product is not covered by a patent which prevents the
               lawful manufacture, use or sale of such product by a third party,
               or the relevant patent has expired,  the royalties otherwise
               payable hereunder with respect to the sale of such Ciba Product
               or Chiron Product in such country shall be reduced by 
               [CONFIDENTIAL TREATMENT REQUESTED].

<PAGE>

                                      -30-

            Should either party have to pay royalties to a third party under an
               issued valid claim of  a third party patent which is infringed 
               by the manufacture or sale of a Ciba Product or a Chiron 
               Product, including royalties payable to third parties pursuant 
               to Sections 3.2.2, 3.2.3 or 4.1.3, [CONFIDENTIAL TREATMENT 
               REQUESTED] of the royalties payable to such third party shall be
               deducted from royalties due to Ciba or Chiron hereunder, 
               provided, however, that in no event shall the aggregate 
               reductions in royalties arising from this paragraph and/or the 
               preceding paragraph result in royalties on a Ciba Product of 
               less than [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales if 
               aggregate annualized worldwide Net Sales of that Ciba Product 
               do not exceed [CONFIDENTIAL TREATMENT REQUESTED] or less than 
               [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales if aggregate 
               annualized worldwide Net Sales exceed [CONFIDENTIAL TREATMENT 
               REQUESTED], or in royalties on Chiron Products of less than 
               [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales.

            Royalties shall be paid until expiry of the patents on a country by
               country basis or for [CONFIDENTIAL TREATMENT REQUESTED] from the 
               first commercial launch in each country, whichever is longer.

            If "off-label" prescribing or administration of a Chiron Product or
               a Ciba Product should result in a significant loss of revenue to
               the other party with respect to its products developed hereunder,
               the parties agree to meet and discuss whether adjustments to
               royalties on either product are appropriate.

4.3.9     For the purposes of this Section 4.3, a Ciba Product or a Chiron
       Product includes all products containing the same active compound, or a
       compound which is a derived from the active compound (such as a different
       salt, ester, crystal form or the like), regardless of other differences,
       such as dose, dosage form, indication and the like.

4.3.10    Unless the parties are engaged in co-development of a compound, each
            party agrees to use commercially reasonable diligence to develop and
            commercialize at [CONFIDENTIAL TREATMENT REQUESTED] per Selected 
            Target, in the case of Ciba, and [CONFIDENTIAL TREATMENT REQUESTED]
            in the case of Chiron.  Each party will keep the other informed of 
            its development of products under this Section 4.3, not less 
            frequently once per year. In the event that Ciba fails to 
            diligently pursue development and commercialization of 
            [CONFIDENTIAL TREATMENT REQUESTED] per Selected Target,  Ciba 
            shall either abandon such Selected Target pursuant to Section 4.2.6,
            or invite Chiron to participate in the co-development of compound(s)
            for such Selected Target.  In the event that Chiron fails to pursue
            diligently the development and commercialization of [CONFIDENTIAL 
            TREATMENT REQUESTED] Chiron shall either abandon such product or 
            invite Ciba to participate in co-development of compound(s) for such
            Selected Target.


4.4  COMPOUNDS NOT ACHIEVING RESEARCH COMPOUND STATUS

<PAGE>

                                      -31-

       The arrangements set out in Section 4.3 shall not apply to any compounds
          that do not achieve Research Compound status or above by the end
          of the [CONFIDENTIAL TREATMENT REQUESTED] period following the end of
          the Target Collaboration. At the end of such [CONFIDENTIAL TREATMENT 
          REQUESTED] period, the parties will meet and inventory all compounds 
          at or near Research Compound stage or above, and the indications 
          thereof, being pursued by either party under this Agreement at that 
          time.  Either party will be free to develop and commercialize any 
          compounds arising from this Collaboration which are not at least at 
          or near Research Compound stage at the end of such [CONFIDENTIAL 
          TREATMENT REQUESTED] period, without royalty or milestone obligations
          to the other party; provided that (i) Ciba agrees not to pursue such 
          compounds for Third Party Excluded Targets identified at the time of 
          such inventory; and (ii) for an additional [CONFIDENTIAL TREATMENT 
          REQUESTED], neither party will pursue any such compounds for any
          indications of compounds being pursued by the other party under this
          Agreement, as identified in such inventory.


4.5  PRODUCTS DEVELOPED INDEPENDENTLY OF THE TARGET COLLABORATION

     The provisions of this Article 4 shall not apply to any compounds developed
       independently by Ciba, by Chiron or by a third party, prior to or
       after the term of the Target Collaboration, or during such term to the
       extent permitted under Section 4.2.1,  so long as such independent
       development is  without the use of data or information arising from the
       Target Collaboration.


4.6  TITLE TO NEW INVENTIONS AND PATENT RIGHTS

4.6.1     New inventions and discoveries shall be owned as follows:

     (a)  All Compound Patents based on inventions or discoveries made pursuant
            to the Target Collaboration shall be owned [CONFIDENTIAL TREATMENT 
            REQUESTED].  Each party shall require its employees, agents, and 
            consultants  to assign any such inventions [CONFIDENTIAL TREATMENT 
            REQUESTED], as of the date the invention was made.

     (b)  Library Patents with respect to Chiron Combinatorial Libraries shall
            be owned by Chiron; Library Patents with respect to Ciba
            Combinatorial Libraries shall be owned by Ciba; and Library Patents
            with respect to Joint Combinatorial Libraries shall be owned by the
            parties jointly.

     (c)  All inventions or discoveries made pursuant to the Target
            Collaboration which do not result in Compound Patents or Library
            Patents, but are inventions within the Technology Transfer Field
            shall be governed by Section 3.4.1.

<PAGE>

                                      -32-


     (d)  All inventions or discoveries which are not governed by Section 3.4.1
               or by the remaining provisions of this Section 4.6.1 shall be
               owned based on inventorship, as determined in accordance with
               United States patent law.

4.6.2     Patents and patent applications shall be drafted, filed, prosecuted
     and maintained by the party owning the patent rights.  The parties shall
     agree which party is to draft, file, prosecute and maintain joint patents
     on a case-by-case basis.  In all cases, each party shall keep the other
     party informed as to the status and progress of all relevant patents and
     patent applications; and shall draft, file, prosecute and maintain joint
     patents and patent applications in consultation with the other party.

4.6.3  The parties shall be jointly responsible for all expenses associated with
     the filing, prosecution and maintenance of joint patents, including
     Compound Patents.


4.7  LICENSES

4.7.1     Subject to the terms and conditions of this Agreement, Chiron hereby
     grants the following licenses to Ciba:

     (a)    A worldwide exclusive license, without right to sublicense, during
               the term of the Target Collaboration, under Chiron
               Library Patents and Chiron know-how and trade secrets relating to
               Chiron Combinatorial Libraries, to screen Chiron Combinatorial
               Libraries against the Selected Targets.  Such license shall
               automatically terminate as to Selected Targets which are
               abandoned by Ciba.

     (b)    A worldwide exclusive license under Chiron's interest in Compound
               Patents to develop, make, have made, use and sell Ciba
               Products.  Ciba shall have the right to grant sublicenses under
               such license to Affiliates of Ciba, and to third parties;
               provided that Ciba's rights to sublicense the manufacture or sale
               of Ciba Products to third parties shall be subject to the terms
               and conditions of the Cooperation Agreement.

4.7.2       Subject to the terms and conditions of this Agreement, Ciba hereby
       grants the following licenses to Chiron:

     (a)  A worldwide, non-exclusive license, without right to sublicense,
               during the term of the Target Collaboration, under Ciba Library
               Patents and Ciba know-how and trade secrets related to Ciba
               Combinatorial Libraries, to screen Ciba Combinatorial Libraries
               against Selected Targets pursuant to the Target Collaboration.

<PAGE>

                                      -33-

       (b)  A worldwide exclusive license under Ciba's interest in Compound
               Patents to develop, make, have made, use and sell
               Chiron Products.  Chiron shall have the right to grant
               sublicenses under such licenses to Affiliates of Chiron, and to
               third parties; provided that Chiron's rights to sublicense the
               manufacture or sale of Chiron Products to third parties shall be
               subject to the terms and conditions of the  Cooperation
               Agreement.

       (c)     With respect to Selected Targets abandoned by Ciba, Ciba shall
               assign to Chiron its interest in any Compound Patents, use
               patents or any other patents arising from the Compound Data to
               Chiron.  Chiron shall retain the exclusive right, under all such
               patents, to make, have made, use and sell products directed
               against the abandoned Target, with right to sublicense to Chiron
               Affiliates or third parties, all in accordance with Section
               4.2.10.  In the event that compounds identified pursuant to the
               Target Collaboration as active against the abandoned Target were
               made by Ciba prior to the execution of this Agreement, Ciba shall
               grant to Chiron a worldwide exclusive license to make, have made,
               use and sell such compounds in Chiron Products against the
               abandoned Target.  Ciba shall retain rights to such compounds for
               use other than against the abandoned Target.


4.8  USE OF COMBINATORIAL LIBRARIES

4.8.1     The parties acknowledge that the Chiron Combinatorial Libraries
     screened pursuant to the Target Collaboration will also be screened by
     Chiron, its Affiliates and contractors, and by third parties outside this
     collaboration. The rights of the parties with respect to compounds
     identified through this collaboration will be subject to rights arising as
     a result of such use of the libraries outside this collaboration.  The
     parties agree that the determination of ownership, patent and license
     rights to compounds contained in Chiron Combinatorial Libraries shall be
     based on the first to invent the subject matter in question, as determined
     under U.S. Patent Law.  Except as expressly stated in Section 3.5 or
     Section 4.7, no implied rights or licenses are granted hereunder to any
     inventions or patent rights arising outside this Agreement, including
     without limitation rights under dominating patent claims.  The following
     principles shall apply.

   (a)    Ciba agrees to notify Chiron in writing as soon as possible following
            identification of any Compound Hit.  Chiron shall be entitled to
            rely on the content and timing of receipt of notices of
            identification of compounds received from all users of Chiron
            Combinatorial Libraries as evidence of which party is first to
            invent and in determining whether conflicts exist.

   (b)    If, at any time, Chiron believes in good faith that a conflict exists
            among parties who are each entitled to exclusive rights to
            compounds contained in Chiron Combinatorial Libraries, with respect
            to patent applications filed or to be filed by

<PAGE>

                                      -34-

            Chiron, Chiron shall notify each party involved of the existence of
            the conflict, the claims of such party which are involved, and the
            identity of (but not the specific compounds or claims of) the other
            party.  Ciba hereby consents to such notification under Article 9
            hereof.  Chiron shall not be required to take any action in filing
            new patent applications or amending existing applications with
            respect to the conflicting subject matter, except on instructions
            approved by both parties to the conflict.  However, Chiron shall
            have the right, but not the obligation, to take such actions as
            Chiron believes in good faith will protect the rights of both
            parties to the conflict, pending receipt of such jointly approved
            instructions (e.g. filing potentially conflicting applications,
            combining conflicting subject matter into a CIP application, filing
            continuations of applications to prevent double patenting rejections
            of another application, etc.)

4.8.2     Ciba retains the right to use Ciba Combinatorial Libraries (and any
       other libraries owned by Ciba) outside the Target Collaboration; and
       Chiron retains the right to use Chiron Combinatorial Libraries (and any
       other libraries owned by Chiron) outside the Target Collaboration, in
       each case without restriction, except as expressly provided herein.

4.8.3     Each party shall have the right to use Joint Combinatorial Libraries
       outside the Target Collaboration, subject to the following conditions:

     (a)    Ciba shall not use any Joint Combinatorial Library in connection
               with Third Party Excluded Targets, determined as of the time of
               creation of the Joint Library.

     (b)    In the event that either party (the "providing party") reasonably
               believes that its strategic proprietary rights to components
               which such party provided for a Joint Combinatorial Library would
               be jeopardized by use of such library by a third party, the
               providing party may preclude third party use of such Joint
               Combinatorial Library, or the parts thereof containing such
               proprietary component, without the prior consent of the providing
               party.  The providing party will notify the other party of any
               such intended restrictions at the time of the design or
               development of the Joint Combinatorial Library, and in any event
               at the request of the other party prior to the use of the Joint
               Combinatorial Library outside the Target Collaboration.

     (c)  In the event of use of a Joint Combinatorial Library outside the
               Target Collaboration by one party, the parties shall reasonably
               and mutually determine if the other party should be entitled to a
               royalty on products arising from such use.  Such royalty, if any,
               shall be at a rate between [CONFIDENTIAL TREATMENT REQUESTED] of 
               Net Sales, to be mutually determined, based on such factors as 
               the uniqueness of the library or the proprietary nature of its 
               components.  At the time of determination of the royalty rate, 
               the parties will also determine the time period during which use
               of the Joint Library will result in a

<PAGE>

                                      -35-
               royalty on products arising from such use, which time period will
               be reassessed by the parties three years following the end of the
               Target Collaboration.


5  PATENT ENFORCEMENT

5.1  In general, the owner of any patent shall have the right to enforce such
       patent against third parties at the owner's expense, and the owner shall
       be entitled to all recoveries.  In the case of jointly owned patents, the
       parties shall mutually determine how to proceed.

5.2  Each party shall notify the other party of any third party infringement
       activity of which it becomes aware; and each party shall reasonably
       cooperate with the other party in connection with the enforcement of
       patent rights pursuant to this Article  5.


6  INDEMNITY; NO WARRANTIES

6.1  In the event that a Ciba Product or a Chiron Product is developed solely by
       Ciba or solely by Chiron, under the terms of this Agreement, or in the
       event that either party develops a product outside this collaboration
       under licenses granted under this Agreement, the developing party agrees
       to indemnify, defend and hold harmless the non-developing party and its
       Affiliates, and their respective officers, directors, shareholders, and
       employees, from and against all claims, losses, costs, damages and
       liability of any kind, including without limitation attorneys fees,
       (collectively "Liabilities") arising in connection with the development,
       manufacture, use or sale of such product, except for Liabilities arising
       as a result of  breach by the non-developing party of its obligations
       under this Agreement, or any manufacturing, marketing or other agreement
       with respect to the product in question.  The indemnified party shall not
       make any admission of liability nor take any other action which could
       prejudice the defence of such claim or lawsuit by the indemnifying party.

6.2  In the event that a product is co-developed by both parties pursuant to
       this Agreement, each party (the "indemnifying party")  agrees to
       indemnify, defend and hold harmless the other party and its Affiliates,
       and their respective officers, directors, shareholders, and employees,
       (collectively, the "indemnified party"), from and against all Liabilities
       arising from the wilful misconduct, failure to comply with applicable
       law, regulation or government order, or breach of this Agreement, or any
       related agreements, by the indemnifying party in connection with the
       development, manufacture, use or sale of such product.

     In the event that any Liability arises in connection with the development,
       manufacture, use or sale of such a product which is not covered by
       the previous paragraph, the party sued shall be responsible for its own
       defense at its own expense.  Such party shall be entitled to deduct the
       cost of such defense, as well as all damages or other amounts paid in
       settlement or

<PAGE>

                                      -36-

       disposition of such matter, from Net Sales of the product in question
       prior to the allocation of the profits between the parties.

6.3  In all cases, the indemnified party shall promptly notify the indemnifying
       party of receipt of any claim or lawsuit subject to Section 6.1 or 6.2,
       and shall cooperate with the indemnifying party in connection with the
       investigation and defense of such claim or lawsuit.  The indemnifying
       party shall have the right to control the defense, with counsel of its
       choice, provided that the indemnified party shall have the right to be
       represented by advisory counsel at its own expense.  The indemnifying
       party shall not settle or dispose of the matter in any manner which could
       affect the rights or liability of the indemnified party without the
       indemnified party's prior written consent, which shall not be
       unreasonably withheld.

6.4  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
       WARRANTY, AND EACH PARTY EXPRESSLY DISCLAIMS ALL DISCLAIMS ALL IMPLIED
       WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
       PARTICULAR PURPOSE, WITH RESPECT TO ANY COMBINATORIAL LIBRARIES OR OTHER
       BIOLOGICAL OR CHEMICAL MATERIALS OR INFORMATION PROVIDED TO THE OTHER
       PARTY PURSUANT TO THIS AGREEMENT.

     Each party acknowledges that all Combinatorial Libraries and other
       biological or chemical materials provided by the other party pursuant to
       this Agreement are experimental and  agrees to take reasonable
       precautions to prevent personal injury, illness and/or property damage
       with respect to its handling and use thereof.


7  PAYMENTS AND ACCOUNTING

7.1  All payments hereunder shall be made in U.S. Dollars.

7.2  Each party shall keep true and correct accounts of sales of all products in
       respect of which royalties are payable to the other party pursuant to
       this Agreement, and the calculation of Net Sales and royalties with
       respect thereto, and shall deliver to the other party written statements
       thereof in such form as both shall agree upon within sixty (60) days
       following the end of each calendar quarter and at the same time shall pay
       to the other party the amount of such royalties shown to be due.

7.3  All royalties shall be earned in the local currency of the country where
       the applicable Net Sales are made, but shall be converted for payment
       into U.S. Dollars, in accordance with the standard procedures used by the
       paying party in converting currencies of worldwide product sales for its
       products generally.

<PAGE>

                                      -37-

     If royalties cannot be remitted from a country, the parties will work
        together to arrive at an equitable solution for paying such royalties
        to the other party.

     Any withholding or other tax that the paying party is required by law to
        withhold and pay on behalf of the other party with respect to the
        royalties payable to the other party under this Agreement shall be
        deducted from said royalties and paid  contemporaneously with the
        remittance to the other party; provided, however, that in regard to
        any tax so deducted, the paying party shall furnish the other party
        with proper evidence of the taxes paid on its behalf.

7.4  Each party shall have the right to have an independent certified public
        accountant of its own selection and at its own expense,
        except one to whom the other party may have reasonable objection,
        examine the relevant books and records of account of the other party
        during reasonable business hours, to determine whether appropriate
        accounting and payment have been made hereunder.  Said independent
        certified public accountant shall treat as confidential, and shall not
        disclose to party requesting the audit, any other information not
        pertaining to the royalty amounts payable under this Agreement.  Such
        examination can be undertaken at any time within two years after the
        date on which such royalty amounts were due and payable.


8    PUBLIC ANNOUNCEMENTS

     The parties will mutually agree on a press release to be issued upon
       execution of this Agreement. Neither party shall make any subsequent 
       public announcement concerning the terms of this Agreement not 
       previously made public without the prior written approval of the other 
       party with regard to the form, content and precise timing of such 
       announcement, except such as may be required to be made by either party 
       in order to comply with applicable law, regulations or court orders.  
       Such consent shall not be unreasonably withheld or delayed by the other 
       party. Prior to any such public announcement, the party wishing to make
       the announcement will submit a draft of the proposed announcement to the
       other party in sufficient time to enable the other party to consider and 
       comment thereon. Nothing in this section shall preclude disclosures by 
       either party to third parties under confidentiality restrictions in 
       order to carry out the purposes of this Agreement or to define the scope
       of rights which may be granted to a third party without violating this 
       Agreement.


9    CONFIDENTIALITY

9.1  Except as specifically authorized under the terms of this Agreement each
       party shall, for the term of this Agreement and for five (5) years after
       its termination for any reason whatsoever, treat any proprietary
       information disclosed to it by the other party as strictly confidential,

<PAGE>

                                      -38-

       and shall not disclose such proprietary information to third parties or
       use it for purposes other than those authorized herein.

     Except as set forth in the exceptions hereinafter any information, data or
       material, including without limitation, software, technology, business
       plans or information, communicated to the other which is identified as
       confidential, or which the other party has reason to believe is
       confidential, will be deemed and treated as Proprietary Information.

     Proprietary Information also includes proprietary chemical, physical or
       biological materials exchanged pursuant to this Agreement. Access to such
       Proprietary Information will be limited to those employees or consultants
       of the party receiving such information or of such party's Affiliates or
       sublicensees, who reasonably require such information in order to carry
       out activities authorized pursuant to this Agreement. Such employees or
       consultants will be advised of the confidential nature of the Proprietary
       Information and the related confidentiality undertaking.

     Proprietary Information shall not include, and the above confidentiality
       undertaking shall in  no event restrict or impair each party's right to
       use or disclose any information which:

     (a)  at the time of disclosure is in the public domain or thereafter
            becomes part of the public through no fault of the party receiving
            such information;

     (b)  the party receiving such information can conclusively establish that
            it was in its possession prior to the time of disclosure;

     (c)  is independently made available to the party receiving such
            information by a third party who is not thereby in violation of a
            confidential relationship with the other party; or

     (d)  the receiving party can establish was independently developed without
            use of the Proprietary Information of the other party.

     The receiving party shall not be restricted from disclosing such
       information as is  required to be disclosed by law, regulation, or court
       or governmental order, provided that the receiving party reasonably
       notifies the disclosing party prior to such disclosure of such
       requirement.

     Upon termination of this Agreement, and provided the Proprietary
       Information is still of a confidential nature, the party recipient of the
       Proprietary Information will upon request from the disclosing party
       either return any such information or destroy the same.

9.2  Information which is developed in the course of the Target Collaboration,
       and which is not within any of the exceptions to Proprietary Information
       set forth in Section 9.1, may be used by the parties outside the Target
       Collaboration as set forth in Article 4.  To the extent

<PAGE>

                                      -39-

       permitted by Article 4, such information may be disclosed to third
       parties, subject to confidentiality obligations not less restrictive than
       those set forth in Section 9.1.

     Neither party will publish or publicly disclose results arising from the
       Target Collaboration without the prior consent of the other party, which
       consent shall not be unreasonably withheld.  Each party agrees to provide
       to the other a copy of any proposed publication or public disclosure of
       such results for review and comment, at least forty-five (45) days prior
       to release for publication or disclosure.


10 TERM AND TERMINATION

10.1 The Target Collaboration shall have the term set forth in Article 4.

10.2 Unless terminated earlier under Section 10.3, this Agreement shall continue
       in full force and effect until the expiration of all annual payment,
       milestone or royalty obligations of either party under Articles 3 and 4,
       and the expiration of all obligations with respect to co-development or
       profit sharing under Article 4.  Upon expiration of this Agreement under
       this Section 10.2, the parties shall each have fully paid-up licenses,
       respectively, under Sections 3.5.1, 3.5.2, 4.7.1(b) and 4.7.2(b) and (c);
       and the provisions identified in Section 10.3(e) shall survive expiration
       hereof.

10.3 (a)  In the event of material breach of this Agreement by either party,
            which is not cured within sixty (60) days following receipt of
            written notice of the alleged default from the non-breaching party,
            the matter shall be submitted for resolution to the chief executive
            officers of each party.

     (b)  The parties acknowledge that under this Agreement, each party holds a
            complex series of ongoing technology rights and licenses,
            development rights and obligations, and economic rights and
            obligations, the breach of which may not be adequately compensated
            in monetary damages alone.  The parties therefore agree that each
            may be entitled to remedies in the nature of specific performance of
            the obligations of the other.

     (c)  Each party further waives the right to terminate this Agreement in its
            entirety in the event of breach by the other party, except
            in the event that termination (i) is mutually agreed upon by the
            parties, or (ii) is ordered by a court of competent jurisdiction,
            after consideration of all relevant rights and obligations of the
            parties under the Agreement, and the rights and remedies of the non-
            breaching party in law or equity,  including, without limitation,
            the extent to which the non-breaching party can be adequately
            protected through remedies other than complete termination of the
            Agreement.

<PAGE>

                                      -40-

     (d)  In the event of termination of this Agreement pursuant to this Section
            10.3, unless otherwise specifically agreed or ordered
            pursuant thereto, the following provisions shall survive
            termination, together with any and all rights and obligations
            accrued prior to the date of termination:

          (i)   To the extent Ciba has paid in full all of its obligations under
                    Article 3: Section 3.5.1;

          (ii)  To the extent applicable to any development candidates or
                    products which remain under development
                    or commercialization by either party following such
                    termination: Sections 4.3, 4.7.1(b), 4.7.2(b) and (c), and
                    7; and

          (iii) In addition to those set forth in Section 10.3(d)(i) or (ii),
                    the following Sections shall survive any early termination
                    of this Agreement: 3.5.2 and the provisions identified in
                    Section 10.3(e) below.

     (e)  The following provisions shall survive any expiration or early
            termination of this Agreement, together with any other obligations
            of either party which have accrued as of the effective date of
            termination or expiration: Sections 3.4, 3.5.3, 4.2.7, 4.2.10,
            4.2.11, 4.4, 4.5, 4.6, 4.8, and Articles 5, 6, 8, 9, 10 and 11.

10.4 All licenses granted under this Agreement are deemed to be, for purposes of
          Section 365(n) of the U.S. Bankruptcy Code, licenses of right to
          "intellectual property" as defined in Section 101 of such Code.  The
          parties agree that the licensee may fully exercise all of its rights
          and elections under the Bankruptcy Code.  The parties further agree
          that, in the event a licensee elects to retain its rights as a
          licensee under such Code, the licensee shall be entitled to complete
          access to any technology licensed to it hereunder and all embodiments
          of such technology.  Such embodiments of the technology shall be
          delivered to the licensee not later than (a) the commencement of
          bankruptcy proceedings against the licensor, upon written request,
          unless the licensor elects to perform its obligations under this
          Agreement, or (b) if not delivered under (a) above,  upon the
          rejection of this Agreement by or on behalf of the licensor, upon
          written request.

10.5 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR
          ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES TO THE OTHER PARTY,
          HOWEVER CAUSED, IN CONNECTION WITH THIS AGREEMENT; PROVIDED THAT
          NOTHING IN THIS SECTION 10.5 SHALL LIMIT THE INDEMNIFICATION
          OBLIGATIONS OF EITHER PARTY PURSUANT TO ARTICLE 6 AS TO CONSEQUENTIAL,
          INCIDENTAL OR INDIRECT DAMAGES TO THIRD PARTIES FOR WHICH THE
          INDEMNITEE MAY BE LIABLE.

<PAGE>

                                      -41-


11   MISCELLANEOUS

11.1 Neither party shall have the right to assign its rights or obligations
       under this Agreement to any third party other than an Affiliate of such
       party without the prior written consent of the other party, which consent
       shall not be unreasonably withheld.  This Agreement shall be binding on,
       and inure to the benefit of, the permitted successors and assigns of the
       parties.

11.2 Pursuant to this Agreement, each party has certain rights to grant
       sublicenses  hereunder to Affiliates and, in some cases, to third
       parties.  In addition, it is contemplated that each party may wish to
       involve one or more of its Affiliates in research and development
       activities conducted by such party pursuant to this Agreement.

   (i)    Neither party shall transfer or disclose to any of its Affiliates (a)
            any Proprietary Information of the other party, including,
            without limitation, technology, improvements, Combinatorial
            Libraries, or other chemical or biological materials, or (b) any
            Joint Combinatorial Libraries, or (c) any data or information with
            respect to, or arising from, any of the foregoing;   unless such
            Affiliate has agreed in writing to be bound by all of the terms and
            conditions of this Agreement as though the Affiliate were a party
            hereto.

   (ii)   All permitted sublicenses and/or assignments by either party of any of
            its rights under this Agreement shall be subject to all of the
            terms and conditions of this Agreement, which shall be binding on
            the sublicensees and/or assignees.

11.3 The parties hereto are independent contractors.  Nothing contained herein
       shall constitute either party the agent of the other party for any
       purpose whatsoever, or constitute the parties as partners or joint
       venturers.  Employees of each party remain employees of said party and
       shall be considered at no time agents of or render a fiduciary duty to
       the other party.  Neither party hereto shall have any implied right or
       authority to assume or create any obligations on behalf of or in the name
       of the other party or to bind the other party to any other contract,
       agreement or undertaking with any third party.

11.4 No amendment, waiver or modification of this Agreement shall be valid or
       binding on either party unless made in writing signed by both parties.
       The failure of either party to enforce any provision of this Agreement at
       any time shall not be construed as a present or future waiver of such or
       any other provision of this Agreement.  The express waiver by either
       party of any provision or requirement hereunder shall not operate as a
       future waiver of such or any other provision or requirement.

<PAGE>

                                      -42-

11.5  In the event that any provision in this Agreement shall be held to be
        unlawful or invalid in any jurisdiction, the meaning of such provision
        shall be construed to the greatest extent possible so as to render it
        enforceable.  If no such construction can render such provision
        enforceable, it shall be severed, and the remainder of the Agreement
        shall remain in full force and effect, only to the extent that such
        remainder is consistent with the intentions of the parties as evidenced
        by this Agreement as a whole.  The parties shall use best efforts to
        negotiate in good faith a reasonable substitute, valid and enforceable
        provision effective in such jurisdiction.

11.6  Any notice required or permitted to be given by either party under this
        Agreement shall be in writing, addressed, in the case of Chiron, to its
        Chief Executive Officer, with copy to its General Counsel, and in the
        case of Ciba, to its head of the Pharma Division, with copy to its
        General Counsel, at the respective addresses of the parties shown in 
        the first paragraph of this Agreement, or such other address as may 
        from time to time by indicated in a notice given under this Section 
        11.5.  All notices shall be sent by certified or registered first class
        mail, telefax confirmed by certified or registered first class mail, or
        personal delivery, and shall be effective on receipt at the address
        referenced above.

11.7  Neither party will be deemed in breach of this Agreement as a result of
        default, delay or failure to perform by such party which is due to 
        causes beyond the reasonable control of such party, including without
        limitation, fire, earthquake, acts of God, severe weather, acts of war,
        strikes, lockouts or other labor disputes, riots, civil disturbances,
        actions or inactions of governmental authorities (except in response to
        a breach by such party), or epidemics.  In the event of any such force
        majeure, the party affected shall promptly notify the other party, shall
        use all reasonable efforts to overcome such force majeure, and shall 
        keep the other party informed with respect thereto.

11.8  All headings and captions used in this Agreement are for convenience 
        only, and are not intended to have substantive effect.

11.9  This Agreement may be executed by the parties in one or more identical
        counterparts, all of which together shall constitute this Agreement.

11.10 This Agreement shall be governed by and construed in accordance with
        the laws of the State of New York.

11.11 This Agreement constitutes the entire agreement of the parties with
        respect to the subject matter hereof, and supersedes all previous
        agreements, understandings and negotiations, whether oral or 
        written, with respect to such subject matter.

<PAGE>

                                      -43-

Executed and effective as of the date first set forth above.


CIBA-GEIGY Limited

By: R. Paioni                     By: R.E. Walker
   -------------------------          ---------------------------

Title: Head of Pharma Licensing   Title: Division Counsel
      -------------------------         -------------------------

CHIRON CORPORATION

By: Walter Moos
    ---------------------------
Title: Vice President
      -------------------------

<PAGE>

                                      -44-

                                    EXHIBIT A
                          THIRD PARTY EXCLUDED TARGETS
                                     1 page
                         [CONFIDENTIAL TREATMENT REQUESTED]


                                   EXHIBIT B
                               CHIRON TECHNOLOGY
                                    17 pages
                         [CONFIDENTIAL TREATMENT REQUESTED]

                                    EXHIBIT C
                     CHIRON COMBINATORIAL CHEMISTRY PATENTS
                                     2 pages
                         [CONFIDENTIAL TREATMENT REQUESTED]

                                    EXHIBIT D
                               RESTRICTED TARGETS
                                     1 page
                         [CONFIDENTIAL TREATMENT REQUESTED]

                                    EXHIBIT E
                             PROHIBITED INDICATIONS
                                     1 page
                         [CONFIDENTIAL TREATMENT REQUESTED]