<PAGE>

                               CONFIDENTIAL


December 4, 1997

Mr. Peter Tattle
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, NJ  08896


Dear Mr. Tattle:

     This letter agreement (this "AGREEMENT") sets forth the agreement of Chiron
Corporation ("CHIRON"), on the one hand, and Ortho Pharmaceutical Corporation
and Ortho Biotech, Inc. (collectively, "ORTHO"), on the other hand, with respect
to the manufacture, purchase and sale of bulk platelet derived growth factor
("PDGF") for use by Ortho in the research, development and commercialization of
a finished product for wound healing, which is expected to be sold in the United
States under the name Regranex(R) (the "FINISHED PRODUCT").

     1.   PURCHASE AND SALE OF PDGF.  Chiron will sell to Ortho, and Ortho will
purchase from Chiron, Ortho's requirements of PDGF during the term of this
Agreement.

     2.   DELIVERY; TRANSFER OF TITLE.  Title will pass from Chiron to Ortho
upon delivery of PDGF, which will be FOB Chiron's designated manufacturing
facilities.  All risk of loss of PDGF, whether in bulk form, incorporated in
Finished Product, or anywhere in the process of being converted into Finished
Product, will pass to Ortho at that time, including risk of destruction,
expiration of bulk PDGF, expiration of Finished Product prior to its sale to
an Invoiced Party (as defined in Item 7), failure to obtain required
regulatory approvals (other than regulatory approvals required for the
manufacture of PDGF, for which Chiron is responsible), etc., except that
Ortho will be entitled to a credit for Returned Full Price Units and for
Discounted Units as provided in Item 8 below.  The foregoing will not limit
Ortho's recourse against Chiron for PDGF that, when delivered to Ortho, did
not comply with applicable specifications to be included in the definitive
Supply Agreement ("SPECIFICATIONS").  The definitive Supply Agreement shall
also include mutually agreeable procedures for determining compliance and
noncompliance with the Specifications.

     3.   SHELF LIFE.  All PDGF sold to Ortho shall, when delivered to Ortho,
have a remaining shelf life of at least [CONFIDENTIAL TREATMENT REQUESTED]
(the "MINIMUM SHELF LIFE").  If Chiron is able to extend the longest period
of bulk stability set forth in its manufacturing regulatory filings with
respect to PDGF beyond its present level of [CONFIDENTIAL TREATMENT REQUESTED]
and up to [CONFIDENTIAL TREATMENT REQUESTED], the Minimum Shelf Life will
increase by one-half of the full

                                1
<PAGE>

amount of any such extension.  If Chiron is able to extend the longest period
of bulk stability set forth in its manufacturing regulatory filings with
respect to PDGF beyond [CONFIDENTIAL TREATMENT REQUESTED], the Minimum Shelf
Life will increase by the full amount of any such extension.

     4.   FORECASTS; PURCHASE ORDERS; SHIPMENTS.

          (a)  Beginning no later than November 30, 1997, Ortho will provide
     Chiron with rolling six calendar quarter forecasts of its PDGF
     requirements (each a "FORECAST").  Each Forecast shall specify the
     number of grams of bulk PDGF required by Ortho (the "FORECASTED
     REQUIREMENTS") in each covered quarter.  The Forecasted Requirements for
     each quarter shall be in whole increments of [CONFIDENTIAL TREATMENT
     REQUESTED], which approximates the anticipated yield from one production
     lot, and will cover all uses by Ortho of bulk PDGF (i.e., both research
     and development and commercial supplies). However, each Forecast shall
     show an estimated, non-binding breakout (in grams) of the Forecasted
     Requirements by intended use.  Prior to the end of each quarter, Ortho
     shall extend the previous Forecast by an additional quarter.

          (b)  Forecasted Requirements for any 100% binding quarter (i.e., one
     of the first three quarters of a Forecast) will be no less than 50% of the
     Forecasted Requirements for the immediately preceding 100% binding quarter,
     except that Forecasted Requirements for any quarter may be zero grams of
     PDGF if the Forecasted Requirements for the immediately preceding quarter
     were [CONFIDENTIAL TREATMENT REQUESTED] of PDGF.

          (c)  After the first commercial sale of Finished Product Ortho will
     take or pay for [CONFIDENTIAL TREATMENT REQUESTED] of the Forecasted
     Requirements in each of the first three quarters of each Forecast; and

               (i)  Ortho will take or pay for at least [CONFIDENTIAL TREATMENT
     REQUESTED] of the Forecasted Requirements in the fourth quarter of each
     Forecast, and the amount of PDGF shall be no less that [CONFIDENTIAL
     TREATMENT REQUESTED] of the immediately preceding quarter when such fourth
     quarter becomes a 100% binding quarter.  The Forecasted Requirements for
     the fifth and sixth quarter of each Forecast shall be a non-binding
     advisory estimate only.

          (d)  Ortho will submit firm purchase orders to Chiron specifying, in
     whole increments of [CONFIDENTIAL TREATMENT REQUESTED], the number of grams
     of bulk PDGF required (in accordance with the Forecasted Requirements) and
     requested delivery dates.  Each purchase order will specify in grams, based
     on Ortho's good faith estimate, the portion of the ordered quantity of PDGF
     to be used for research and development purposes, which will be invoiced at
     the R&D Price, and for commercial purposes, which will be invoiced at the
     Commercial Price then in effect.  Each requested delivery date shall be at
     least (i) three (3) months following delivery of any purchase order until
     March 31, 1998, (ii) six (6) months following delivery of any purchase
     order between April 1, 1998 and June 30, 1998, and (iii) nine (9) months
     following delivery of any

                                2
<PAGE>


     purchase order thereafter.  Chiron will accept all purchase orders
     within thirty (30) days, so long as they comply with the terms of this
     Agreement.

          (e)  Within sixty (60) days after the end of each Forecast quarter,
     Ortho shall pay Chiron an amount equal to the difference between the
     Commercial Price and the R&D Price for all grams of PDGF that are
     redirected from research and development purposes to commercial purposes.

          (f)  The parties acknowledge that Chiron intends to deliver bulk PDGF
     to Ortho in whole production lot increments, and that, although an average
     production lot is expected to approximate [CONFIDENTIAL TREATMENT
     REQUESTED], deviations in gram yields (both upward and downward) are likely
     to occur.  Accordingly, for purposes of determining the quantity of PDGF to
     be sold by Chiron to Ortho in any given quarter, a deviation of PLUS OR
     MINUS [20%] (measured on a quarterly basis) will be allowed.  For example:

               (A)  If Ortho purchase orders for a particular quarter specify an
          aggregate of [CONFIDENTIAL TREATMENT REQUESTED] of PDGF, Ortho will
          purchase up to [CONFIDENTIAL TREATMENT REQUESTED] of PDGF in that
          quarter if required to enable Chiron to deliver bulk PDGF in whole
          production lot increments; and

               (B)  If Ortho purchase orders for a particular quarter specify an
          aggregate of [CONFIDENTIAL TREATMENT REQUESTED] of PDGF, Chiron will
          be deemed to have fulfilled its obligations under those purchase
          orders if it delivers at least [CONFIDENTIAL TREATMENT REQUESTED] of
          PDGF that comply with the Specifications.

          (g)  Chiron will fill all orders that do not exceed 150% of the
     Forecasted Requirements for each binding quarter (i.e., excluding Advisory
     Quarters) by the requested delivery date, or upon mutual agreement of the
     Parties.  Chiron will use commercially reasonable efforts to fill any other
     orders for bulk PDGF (i.e., orders exceeding 150% of the Forecasted Amount
     for binding quarters) as promptly as practicable, but Chiron cannot
     guarantee that those orders will be available by the requested delivery
     date.

     5.   R&D PRICE.  The price per gram for PDGF for research and development
purposes (including Phase I, II, III and, if applicable, Phase IV clinical
trials) (the "R&D PRICE") will be [CONFIDENTIAL TREATMENT REQUESTED].  All such
research and development shall be related to Finished Product.  Orders under
this Item 5 will be invoiced at the [CONFIDENTIAL TREATMENT REQUESTED] per gram
price.  If at the end of each calendar year Ortho has not submitted to Chiron
binding purchase orders for a total of more than [CONFIDENTIAL TREATMENT
REQUESTED] grams of PDGF (for all purposes) Ortho shall pay to Chiron
[CONFIDENTIAL TREATMENT REQUESTED]per gram of such PDGF within sixty (60) days
after the end of such calendar year.  If Chiron demonstrates, to the reasonable
satisfaction of Ortho, that Chiron's manufacturing cost for PDGF exceeds

                                3
<PAGE>


[CONFIDENTIAL TREATMENT REQUESTED] per gram, then Ortho agrees to consider an
adjustment to the R&D Price.

     6.   COMMERCIAL PRICE.  The price per gram of PDGF for commercial purposes
(the "COMMERCIAL PRICE") will equal, for each calendar quarter, (x) the product
of (i) the Chiron Percentage multiplied by (ii) the Net Sales of Full Price
Units in such calendar quarter, divided by (y) the Net Labelled Amount for such
calendar quarter.

          (a)  "CHIRON PERCENTAGE" means [CONFIDENTIAL TREATMENT REQUESTED]
     until cumulative Net Sales of Total Units reaches [CONFIDENTIAL TREATMENT
     REQUESTED] until cumulative Net Sales of Total Units reaches [CONFIDENTIAL
     TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] thereafter.

          (b)  "FULL PRICE UNITS" means units of Finished Product distributed at
     a price equal to or greater than the Floor Price.

          (c)  "DISCOUNTED UNITS" means units of Finished Product distributed at
     a price less than the Floor Price (including units distributed without
     charge).

          (d)  "TOTAL UNITS" means Full Price Units and Discounted Units,
     collectively.

          (e)  "FLOOR PRICE" means the price for a unit of Finished Product
     that, if run through the pricing formula set forth in this Item 6, would
     yield a Commercial Price of [CONFIDENTIAL TREATMENT REQUESTED] per gram of
     PDGF given the Chiron Percentage then in effect.  For example, assuming
     that (i) the Labelled Amount of PDGF contained in a 15g tube of Finished
     Product equals 1,500mcg, and (ii) the Chiron Percentage is [CONFIDENTIAL
     TREATMENT REQUESTED], then the Floor Price for a 15g tube of Finished
     Product would equal [CONFIDENTIAL TREATMENT REQUESTED.  Similarly, the
     Floor Price for a 15g tube of Finished Product would equal [CONFIDENTIAL
     TREATMENT REQUESTED], if the Chiron Percentage is [CONFIDENTIAL TREATMENT
     REQUESTED], and [CONFIDENTIAL TREATMENT REQUESTED]), if the Chiron
     Percentage is [CONFIDENTIAL TREATMENT REQUESTED].  If Chiron demonstrates,
     to the reasonable satisfaction of Ortho, that Chiron's manufacturing cost
     for PDGF exceeds [CONFIDENTIAL TREATMENT REQUESTED] per gram, then Ortho
     agrees to consider an adjustment to the Floor Price.

          (f)  "LABELLED AMOUNT" means the amount of PDGF contained in any unit
     of Finished Product as set forth on the product labelling, and shall
     expressly exclude any PDGF in excess of that amount (i.e., overfill).

          (g)  "NET LABELLED AMOUNT" means, with respect to any quarter, (i) the
     aggregate Labelled Amount of PDGF contained in all Full Price Units sold in
     such calendar quarter, minus (ii) the aggregate Labelled Amount of PDGF
     contained in all Full Price Units for which Ortho takes a Return Credit (as
     defined in Item 7) in such calendar quarter.

     7.   NET SALES.  Net Sales will be defined as amounts invoiced for sales to
third parties not affiliated with Ortho (including end users), or to affiliates
of Ortho that are also end users of

                                4
<PAGE>

the applicable product (such unaffiliated third parties (including end users)
and affiliated end users, collectively, the "INVOICED PARTIES"), less credits
and refunds for returns allowed and taken (collectively, "RETURN CREDITS")
sales, excise and turnover tax, customer charges, import duties and other
governmental charges, imposed directly upon and actually paid by the seller,
and customary trade or quantity discounts, including but not limited to,
customer chargebacks, Medicaid and managed care rebates, allowed and taken.
Sales between Ortho and its affiliates (where such affiliate is not the end
user) or between affiliates for subsequent sale to end users shall not be
included.  If Finished Products are sold in combination with other products,
gross sales, and deductions taken therefrom to arrive at Net Sales, will be
allocated proportionately between the various products in the combination
based on their list prices when sold separately.

     8.   CREDITS.  Ortho shall be entitled to credits against future purchases
of PDGF from Chiron, as follows:

          (a)  For all Full Price Units returned to Ortho by Invoiced Parties
     due to expiration or for any other reason (other than problems with Ortho's
     manufacturing, for which Ortho shall be responsible) (collectively,
     "RETURNED FULL PRICE UNITS"), Ortho shall be entitled to a credit equal to
     (x) the amount of PDGF included in Returned Full Price Units (including
     both the Labelled Amount of PDGF and any overfill) multiplied by
     (y) (A) the Commercial Price then in effect minus (B) the Floor Price then
     in effect.  Such credit shall be available only during the period (the
     "SHORT DATING PERIOD") beginning on the date of this Agreement and ending
     on such date as Finished Product receives regulatory approval for
     [CONFIDENTIAL TREATMENT REQUESTED] dating.

          (b)  For all Discounted Units, Ortho shall be entitled to a credit
     equal to (x) the amount of PDGF included in Discounted Units (including
     both the Labelled Amount of PDGF and any overfill) multiplied by
     (y) (A) the Commercial Price then in effect minus (B) the Floor Price then
     in effect.  This provision shall remain in effect for the full term of the
     Agreement.

          (c)  Ortho shall use commercially reasonable efforts to claim in full
     all credits to which it is entitled (i) under Item 8(a) in the same
     calendar quarter in which the applicable Returned Full Price Units are
     returned and (ii) under Item 8(b) in the same calendar quarter in which the
     applicable Discounted Units are distributed.

     9.   PAYMENT TERMS; REPORTING.

          (a)  The R&D Price shall be payable in full within forty-five days
     after delivery of the PDGF to Ortho.

          (b)  The Commercial Price of PDGF will be payable in installments as
     follows:

               (i)  The first installment will be payable in full within
          forty-five days after delivery of the PDGF to Ortho, and shall equal
          (x) [CONFIDENTIAL TREATMENT REQUESTED] prior to the first commercial
          sale of Finished Product in any jurisdiction ("FIRST COMMERCIAL SALE")
          and (y) the Estimated Commercial Price thereafter.  The "ESTIMATED
          COMMERCIAL PRICE" shall equal (x) [CONFIDENTIAL TREATMENT REQUESTED]
          prior to Chiron's receipt of the first Report (as defined below), and
          (y) thereafter, the Commercial Price for the period covered by the
          most recently delivered Report.

                                5
<PAGE>

               (ii) Within 60 days after receipt from the FDA of an approvable
          letter with respect to Final Product, a second installment, in the
          amount of [CONFIDENTIAL TREATMENT REQUESTED], will be payable with
          respect to all quantities of PDGF as to which Ortho's first
          installment under clause (i) above was [CONFIDENTIAL TREATMENT
          REQUESTED].

               (iii)     Within sixty (60) days after the end of each calendar
          quarter, Ortho will deliver to Chiron a written report setting forth
          (A) gross sales of Full Price Units in the applicable quarter
          (provided that where estimates rather than actuals are used, the
          estimates will be in the ordinary course of Ortho's business and will
          be reconciled no less frequently than once per year), (B) estimated
          deductions taken therefrom to arrive at Net Sales of Full Price Units,
          (C) the Net Labelled Amount for the applicable quarter, (D) the
          Commercial Price for the applicable quarter, (E) the number of
          Returned Full Price Units returned in the applicable quarter, and the
          amount of PDGF included in such Returned Full Price Units (including
          both Labelled Amount and overfill), (F) the number of Discounted Units
          distributed in the applicable quarter, and the amount of PDGF
          (including both Labelled Amount and overfill) included in such
          Discounted Units, (G) Net Sales of Total Units for the applicable
          quarter, (H) cumulative Net Sales of Total Units to date, and (I) the
          amount of PDGF redirected from research and development to commercial
          use (if any), including reasonable supporting documentation regarding
          each of the foregoing items (each a "REPORT").  Chiron will have
          reasonable, once annual audit rights regarding the Reports.

               (iv) If the Report for a calendar quarter indicates that the
          Commercial Price for that quarter is higher than the Estimated
          Commercial Price previously paid by Ortho for PDGF purchased by it
          in such quarter, Ortho shall pay Chiron, within thirty (30) days
          after delivery of the Report, an amount equal to the product of (A)
          the amount by which the Commercial Price exceeds the Estimated
          Commercial Price, multiplied by (B) the number of grams of PDGF
          purchased by Ortho in the quarter covered by such Report (RIDER 1).
          /s/EPM, /s/CW, /s/LTW

               (v)   If the Report for a calendar quarter indicates that the
          Estimated Commercial Price previously paid by Ortho for PDGF
          purchased by it in such quarter is higher than the Commercial Price
          for such quarter, Chiron shall pay Ortho, within thirty (30) days
          after delivery of the Report, an amount equal to the product of (A)
          the amount by which the Estimated Commercial Price exceeds the
          Commercial Price, multiplied by (B) the number of grams of PDGF
          purchased by Ortho in the quarter covered by such Report (RIDER 2).
          /s/EPM, /s/CW, /s/LTW

/s/EPM, /s/LTW, /s/CW  (RIDER 3)

     10.  ALLOCATION OF CONSIDERATION.  The total consideration payable by Ortho
to Chiron under this Agreement shall be allocated as follows:  (a) an amount
equal to [CONFIDENTIAL TREATMENT REQUESTED], shall be deemed to constitute the
transfer price for PDGF; and (b) the remainder of the total consideration shall
be deemed to constitute compensation for the other know-how, assets and services
provided by Chiron pursuant to this Agreement, that certain Master Agreement,
effective as of June 10, 1986, between Chiron and Ethicon, Inc., the

                                     6
<PAGE>

                                   RIDER 1

, except that any such adjustment resulting from the first Report shall be
payable as an increase to the aggregate purchase price of the next shipment
of PDGF sold to Ortho.

                                   RIDER 2

, except that any such adjustment resulting from the first Report shall be
payable as a decrease to the aggregate purchase price of the next shipment of
PDGF sold to Ortho; PROVIDED, HOWEVER, that such adjustment may not reduce
the aggregate purchase price to less than [CONFIDENTIAL TREATMENT REQUESTED]
per gram.  If the adjustment resulting from the first Report would otherwise
operate to reduce the aggregate purchase price to less than
[CONFIDENTIAL TREATMENT REQUESTED] per gram, the excess adjustment amount
shall be applied against the aggregate purchase price of the immediately
subsequent shipments until used in full.

                                   RIDER 3

(vi)  The adjustment mechanisms in clauses (iv) and (v) above, and the
payment terms in clause (ii) above, respectively, shall also apply to the
approximately [CONFIDENTIAL TREATMENT REQUESTED] of PDGF purchased by Ortho
in 1997 for commercial purposes, which have been invoiced at a price of
[CONFIDENTIAL TREATMENT REQUESTED] per gram, and such adjustment will be
based on the data contained in the first Report delivered by Ortho.

<PAGE>

predecessor in interest to Ortho ("ETHICON"), and the various agreements entered
into in association with the Master Agreement.

     11.  MANUFACTURING RESPONSIBILITIES.  Chiron will be responsible for the
manufacture of bulk PDGF for delivery to Ortho.  Chiron will have no
responsibility for any subsequent manufacturing and other activities required to
transform bulk PDGF into Finished Product, including gel formulation,
fill/finish and QA/QC of Finished Product, except that Chiron will also provide
mitogenic assay services on Finished Product for Ortho, at a price equal to
[CONFIDENTIAL TREATMENT REQUESTED] pursuant to a separate agreement to be
negotiated and agreed to by the parties.

     12.  THIRD PARTY ROYALTIES.  Ortho and Chiron shall [CONFIDENTIAL TREATMENT
REQUESTED] all royalties payable to third parties on account of the manufacture,
use and/or sale of PDGF and Finished Product under the license agreements set
forth on EXHIBIT A.  Upon payment of any such royalties, the paying party shall
invoice the other party for [CONFIDENTIAL TREATMENT REQUESTED].  The other party
shall pay any such invoice within thirty days after receipt thereof.  The
parties may also, by subsequent mutual agreement, determine to acquire licenses
to other technology, in which event the parties will [CONFIDENTIAL TREATMENT
REQUESTED] the royalties and other amounts payable under such licenses.

     13.  TERM.  The term of this Agreement will begin on the date hereof and
will end effective automatically upon the termination or expiration of that
certain License Agreement, effective as of June 10, 1986, between Chiron and
Ethicon, insofar as that agreement relates to PDGF.

     14.  BINDING AGREEMENT.  The parties intend to be bound by this Agreement,
which sets forth all of the material terms of the transactions contemplated
hereby.  The parties agree to negotiate diligently and in good faith a
definitive Supply Agreement, which shall contain the terms set forth herein and
other reasonable and customary terms, not inconsistent with the terms set forth
herein, as the parties may mutually agree.  Until replaced by such definitive
Supply Agreement, this Agreement shall remain binding on the parties and their
respective successors and assigns.  The parties intend to execute the definitive
Supply Agreement on or before December 31, 1997.

     If the foregoing accurately reflects your agreement with respect to the
above issues, please execute and return a copy of this Agreement to Chiron.

                                     Very truly yours,
                                     CHIRON CORPORATION

                                     By:       /S/ LEWIS T. WILLIAMS
                                        -------------------------------
                                        Lewis T. Williams, M.D., Ph.D.
                                        Senior Vice President

                                    7
<PAGE>

Accepted and agreed to this
4th day of December, 1997



ORTHO PHARMACEUTICAL CORPORATION


By:       /S/ ERIC P. MILLEDGE
   -----------------------------
     Eric P. Milledge
     President



ORTHO BIOTECH, INC.


By:       /S/ CAROL WEBB
   -----------------------------
     Carol A. Webb
     President

                                      8
<PAGE>

                                     EXHIBIT A


1. ZymoGenetics/Novo Nordisk

2. University of California (Kurjan/Alpha Factor)

3. Washington Research Foundation (Hitzeman/Expression of Polypeptides in Yeast)

4. Genentech (Ikatura/Riggs patents)

5. Stanford University (Cohen/Boyer patents)


                                       9