<PAGE>








                              DEVELOPMENT AGREEMENT
                                     BETWEEN
                                 ALZA CORPORATION
                                       AND
                         THERAPEUTIC DISCOVERY CORPORATION
                               DATED MARCH 10, 1993


<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                              Page
                                                              ----

SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . .   1

     1.1  "Affiliate" . . . . . . . . . . . . . . . . . . . .   1
     1.2  "ALZA Proprietary Rights" . . . . . . . . . . . . .   2
     1.3  "Available Funds  . . . . . . . . . . . . . . . . .   2
     1.4  "Developed Technology"  . . . . . . . . . . . . . .   2
     1.5  "Development Cost(s) "  . . . . . . . . . . . . . .   2
     1.6  "Distribution"  . . . . . . . . . . . . . . . . . .   2
     l.7  "Drug"  . . . . . . . . . . . . . . . . . . . . . .   3
     1 8  "FDA" . . . . . . . . . . . . . . . . . . . . . . .   3
     1.9  "License Option"  . . . . . . . . . . . . . . . . .   3
     1.10 "License Option Agreement"  . . . . . . . . . . . .   3
     1.11 "Major Market Country"  . . . . . . . . . . . . . .   3
     l 12 "Net Sales" . . . . . . . . . . . . . . . . . . . .   3
     1.13 "0ther Royalty-Bearing Product" . . . . . . . . . .   4
     1.14 "Product" . . . . . . . . . . . . . . . . . . . . .   4
     1.15 "Product Candidate" . . . . . . . . . . . . . . . .   4
     1.16 "Product Development Program" . . . . . . . . . . .   4
     1.17 "Proprietary Rights"  . . . . . . . . . . . . . . .   4
     1.18 "Purchase Option" . . . . . . . . . . . . . . . . .   4
     1.19 "Special Royalty Payments"  . . . . . . . . . . . .   5
     1.20 "Sublicensing Revenues" . . . . . . . . . . . . . .   5
     1.21 "System"  . . . . . . . . . . . . . . . . . . . . .   5
     1.22 "Technology License Agreement"  . . . . . . . . . .   6

SECTION 2 PRODUCT DEVELOPMENT PROGRAM . . . . . . . . . . . .   6

     2.1  Product Candidate Work Plans  . . . . . . . . . . .   6
     2.2  Product Selection . . . . . . . . . . . . . . . . .   6
     2.3  Product Development . . . . . . . . . . . . . . . .   7
     2.4  Later Requests  . . . . . . . . . . . . . . . . . .   8

SECTION 3 RESEARCH AND DEVELOPMENT PROGRAMS;
          ALZA SERVICES . . . . . . . . . . . . . . . . . . .   8

     3.1  Product Development - TDC Obligations . . . . . . .   8
     3.2  Product Development - ALZA Obligations;
            Other ALZA Activities . . . . . . . . . . . . . .   9
     3.3  Work Plans and Cost Estimates . . . . . . . . . . .   9
     3.4  Third Party Rights  . . . . . . . . . . . . . . . .  10
     3.5  Consultation  . . . . . . . . . . . . . . . . . . .  10
     3.6  No Use of Available Funds After License . . . . . .  10

SECTION 4 PAYMENT FOR SERVICES; TIMING OF PAYMENTS  . . . . .  11

     4.1  Payment of Development Costs  . . . . . . . . . . .  11
     4.2  Timing of Payments  . . . . . . . . . . . . . . . .  11
     4.3  Sufficiency of Funds  . . . . . . . . . . . . . . .  11

                                      -i-
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
                                  (continued)

                                                              Page
                                                              ----

SECTION 5 REPORTS AND RECORDS  . . . . . . . . . . . . . . .   11

     5.1  Quarterly and Final Reports. . . . . . . . . . . .   11
     5.2  Available Funds Report . . . . . . . . . . . . . .   12
     5.3  Records  . . . . . . . . . . . . . . . . . . . . .   12

SECTION 6 LICENSE OF TECHNOLOGY FOR DEVELOPMENT  . . . . . .   12

     6.1  License to use ALZA Proprietary Rights . . . . . .   12
     6.2  Termination of License . . . . . . . . . . . . . .   13

SECTION 7 OWNERSHIP AND LICENSE OF DEVELOPED TECHNOLOGY;
          PATENTS  . . . . . . . . . . . . . . . . . . . . .   13

     7.1  ownership of Products. . . . . . . . . . . . . . .   13
     7.2  Ownership of Developed Technology  . . . . . . . .   13
     7.3  Patents Covering Developed Technology  . . . . . .   13
     7.4  Royalties on Other Royalty-Bearing Products  . . .   13
     7.5  Buyout of Other Royalty-Bearing Product
            Royalties  . . . . . . . . . . . . . . . . . . .   14
     7.6  Reports  . . . . . . . . . . . . . . . . . . . . .   15
     7.7  Review by Accountants  . . . . . . . . . . . . . .   15
     7.8  Payments   . . . . . . . . . . . . . . . . . . . .   16
     7.9  Late Payments  . . . . . . . . . . . . . . . . . .   17

SECTION 8 ACCESS TO INFORMATION  . . . . . . . . . . . . . .   17

     8.1  Access   . . . . . . . . . . . . . . . . . . . . .   17
     8.2  Third Parties  . . . . . . . . . . . . . . . . . .   17
     8.3  Confidentiality  . . . . . . . . . . . . . . . . .   17

SECTION 9 DISCLAIMERS  . . . . . . . . . . . . . . . . . . .   19

     9.1  Disclaimer   . . . . . . . . . . . . . . . . . . .   19

SECTION 10 COVENANTS . . . . . . . . . . . . . . . . . . . .   19

     10.1  Use of Available Funds  . . . . . . . . . . . . .   19
     10.2  Negative Pledge . . . . . . . . . . . . . . . . .   20
     10.3  Protection of Available Funds . . . . . . . . . .   20
     10.4  No Inconsistent Agreements .  . . . . . . . . . .   20

SECTION 11 TERM AND TERMINATION  . . . . . . . . . . . . . .   21

     11.1  Automatic Termination . . . . . . . . . . . . . .   21
     11.2  Other Termination . . . . . . . . . . . . . . . .   21

SECTION 12 FORCE MAJEURE . . . . . . . . . . . . . . . . . .   21

     12.1  Force Majeure . . . . . . . . . . . . . . . . . .   21


                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                -----------------
                                   (continued)

                                                              Page
                                                              ----

SECTION 13 MISCELLANEOUS . . . . . . . . . . . . . . . . . .   22

     13.1  Amendment . . . . . . . . . . . . . . . . . . . .   22
     13.2  Assignment  . . . . . . . . . . . . . . . . . . .   22
     13.4  Counterparts  . . . . . . . . . . . . . . . . . .   24
     13.5  Governing Law   . . . . . . . . . . . . . . . . .   24
     13.6  Headings  . . . . . . . . . . . . . . . . . . . .   24
     13.7  Notices . . . . . . . . . . . . . . . . . . . . .   24
     13.8  Public Disclosure . . . . . . . . . . . . . . . .   25
     13.9  Severability  . . . . . . . . . . . . . . . . . .   25
     13.10 Relationship of the Parties . . . . . . . . . . .   26
     13.11 Survival  . . . . . . . . . . . . . . . . . . . .   26




                                     -iii-
<PAGE>

                             DEVELOPMENT AGREEMENT

     AGREEMENT made as of the 10th day of March, 1993 between ALZA
Corporation, a Delaware corporation ("ALZA"), and Therapeutic Discovery
Corporation, a Delaware corporation ("TDC").

                                 R E C I T A L S
                                 - - - - - - - -

     A.   TDC is a corporation organized for the purpose of developing and
commercializing products utilizing ALZA Proprietary Rights (as defined below).

     B.   ALZA is engaged in the business of research and development of
pharmaceutical products.

     C.   TDC desires to have ALZA perform, on behalf of TDC, research and
development activities directed toward the development of Products (as
defined below).

     NOW, THEREFORE, the parties agree as follows:

                                     SECTION 1
                                     ---------

                                    DEFINITIONS
                                    ------------

          1.1  "Affiliate" shall mean a corporation or any other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the designated party.
"Control" shall mean ownership of at least 50% of the shares of stock
entitled to vote for the election of directors in the case of a corporation,
and at least 50% of the interests in profits in the case of a business entity
other than a corporation.


<PAGE>

          1.2  "ALZA Proprietary Rights" shall mean all Proprietary Rights of
ALZA (including the Developed Technology) to the extent they are owned and
controlled by ALZA now or during the term of this Agreement.

          1.3  "Available Funds" shall mean the sum of (a) $250 million plus
(b) interest and other income earned through temporary investment of such
funds pending their application under this Agreement, minus the sum of (c)
reasonable ongoing administrative expenses of TDC, including legal and
administrative expenses and reasonable reserves for present and future
obligations plus (d) the costs of the Distribution.

          1.4  "Developed Technology" shall mean Proprietary Rights that (a)
are generated, developed, conceived or first reduced to practice, as the case
may be, by ALZA or others under a Product Development Program undertaken
pursuant to this Agreement or (b) are in any manner acquired by, or otherwise
obtained on behalf of TDC during the term of this Agreement from persons
other than ALZA and necessary or useful to the development or
commercialization of Products.

          1.5  "Development Cost(s)" shall mean the cost of the activities
undertaken pursuant to this Agreement, determined in accordance with Exhibit
A hereto.

          1.6  "Distribution" shall mean the distribution by ALZA of units
comprising one share of TDC Class A Common Stock and one warrant to acquire
one-eighth of a share of ALZA Class A Common Stock to ALZA stockholders of
record on May 28, 1993.


                                      -2-
<PAGE>

          1.7  "Drug" shall mean a therapeutic compound specified in a work
plan under Section 2.1 or 2.3.

          1.8  "FDA" shall mean the United States Food and Drug
Administration or any successor agency whose approval is necessary to market
a Product in the United States.

          1.9  "License Option" shall mean the option granted to ALZA under
the License Option Agreement to obtain licenses to Products, on a Product by
Product basis, as described in the License Option Agreement.

          1.10 "License Option Agreement" shall mean the License option
Agreement between ALZA and TDC dated as of the date hereof.

          1.11 "Major Market Country" shall mean any of the United States,
the United Kingdom, France, Germany, Italy or Japan.

          1.12 "Net Sales" shall mean the total amount invoiced in United
States dollars (or converted thereto in accordance with Section 7.8) on sales
by ALZA and its Affiliates to independent, unrelated third parties (other
than distributors or sublicensees who make payments that constitute
Sublicensing Revenues) in bona fide arms' length transactions, less the
following deductions, in each case related specifically to the product in
question and actually allowed and taken by such third parties and not
otherwise recovered by or reimbursed to ALZA or its Affiliates: (i) trade,
cash and quantity discounts; (ii) taxes on sales (such as sales or use taxes)
to the extent added to the sales price and set forth separately as such in
the total amount invoiced; (iii)


                                      -3-
<PAGE>

freight, insurance and other transportation charges to the extent added to
the sales price and set forth separately as such in the total amount
invoiced; and (iv) amounts repaid or credited by reason of rejections,
defects or returns or because of retroactive price reductions, or due to
government laws or regulations requiring rebates.  Net Sales shall not
include sales between or among ALZA and its Affiliates or Sublicensing
Revenues.

          1.13 "Other Royalty-Bearing Product" shall mean, in any country,
any human pharmaceutical product (other than a Product) covered in such
country at the time of sale by an ALZA Patent covering Developed Technology.

          1.14 "Product" shall mean a Product Candidate that is accepted for
development pursuant to Section 2.3.

          1.15 "Product Candidate" shall mean a Drug combined with a System
for which a work plan is proposed by ALZA in accordance with Section 2.1.

          1.16 "Product Development Program" shall mean a program to develop
a Product.

          1.17 "Proprietary Rights" shall mean data, inventions, information,
processes, know-how and trade secrets, and patents or patent applications
covering any of the foregoing, owned by or licensed to a person and which
such person has the right to license.  Proprietary Rights shall not include
trademarks.

          1.18 "Purchase Option" shall mean that certain option to purchase
all of the outstanding shares of TDC Class A Common


                                      -4-
<PAGE>

Stock that is granted to ALZA pursuant to TDC's Certificate of Incorporation,
as amended as of the date hereof.

          1.19 "Special Royalty Payments" shall mean "front-end" distribution
fees, prepaid royalties and similar one-time, infrequent or special payments.
Solely for purposes of calculating a buyout price under Section 7.5, any
Special Royalty Payments will be amortized over a period of 28 calendar
quarters, beginning with the quarter in which such payment is made.

          1.20 "Sublicensing Revenues" shall mean (a) any royalties or
percentage of sales payments received by ALZA or any of its Affiliates under
either (i) any sublicense for the manufacture, use or sale of the product in
question or (ii) any distribution agreement entered into with a distributor
who agrees to pay royalties or make percentage of sales payments to ALZA or
any of its Affiliates in respect of the manufacture, use or sale of such
product and (b) any Special Royalty Payments received by ALZA or its
Affiliates in respect of such product, in each case excluding amounts paid to
reimburse ALZA for research and development or manufacturing costs.

          1.21 "System" shall mean a delivery system for the controlled
release of a Drug, based upon, utilizing or arising out of ALZA Proprietary
Rights. The term "System" shall include anything incorporated in or used in
connection with, or which is an attribute of, a Product, other than a
therapeutic agent (including anything which affects or may affect the
pharmacodynamics, pharmacokinetics, stability or absorption of a


                                      -5-
<PAGE>

therapeutic agent or the formulation, stabilization or use of a therapeutic
agent in the System).

          1.22 "Technology License Agreement" shall mean the Technology
License Agreement dated as of the date hereof between ALZA and TDC.

                                    SECTION 2
                                    ---------

                            PRODUCT DEVELOPMENT PROGRAM
                            ---------------------------

          2.1  PRODUCT CANDIDATE WORK PLANS.  Within 60 days after the date
hereof, and from time to time hereafter, ALZA shall provide TDC with a list
of possible Product Candidates together with initial work plans that provide
for each Product Candidate an estimate of the total Development Costs to
determine the likelihood that the System included in such Product Candidate
could meaningfully enhance the therapeutic value of the Drug included in such
Product Candidate, and any other factors that the parties deem appropriate to
determine whether to select a Product Candidate for development.  Within 45
days after ALZA provides TDC with such a proposed work plan for a Product
Candidate, TDC shall notify ALZA of its acceptance or rejection of such work
plan.

          2.2  PRODUCT SELECTION.  TDC hereby hires ALZA to perform all
activities under work plans approved under Section 2.1. ALZA diligently shall
perform or cause to be performed the activities under each accepted work
plan, as amended from time to time so as to remain a best estimate of the
work to be performed to complete the work plan for each Product Candidate and
of the Development Costs thereof.


                                      -6-
<PAGE>

          2.3  PRODUCT DEVELOPMENT.  Within 45 days after completion of a
work plan under Section 2.2 for a Product Candidate, ALZA shall provide TDC
with a written report of ALZA's assessment of the technical and economic
feasibility of development of such Product Candidate and, based thereon,
ALZA's good faith recommendation of whether to proceed with development of
such Product Candidate. If ALZA does not recommend development of a Product
Candidate, TDC shall have no rights with respect to such Product Candidate;
provided that ALZA may not further develop any such Product Candidate during
the term of this Agreement unless it first recommends it to TDC for
development in accordance with the other terms of this Agreement.  If ALZA
recommends development for a Product Candidate, then such report to TDC shall
include initial work plans that provide for such Product Candidate an
estimate of the total Development Costs for a Product Development Program
through the filing for FDA approval to market the Product, milestones
(including the timetable for the development of the Product), and detailed
work plans and cost estimates for the first 12 months of the Product
Development Program.  Within 45 days after ALZA provides TDC with a proposed
work plan for a Product Development Program for a Product Candidate, TDC
shall notify ALZA in writing of its acceptance or rejection of such work
plan.  Upon written acceptance of a work plan under this Section 2.3 for a
Product Candidate, such Product Candidate shall be deemed to be a "Product."
ALZA and TDC shall maintain a complete list of the Products at all times.


                                      -7-
<PAGE>

          2.4  LATER REQUESTS.  If TDC fails to accept a recommended Product
Candidate for development as a Product within the 45 day period specified in
Section 2.3, then, at any time during the term of this Agreement, TDC may
request ALZA to perform a Product Development Program for such Product
Candidate and ALZA shall undertake its duties with respect to such Product
Development Program, all in accordance with this Section 2, unless, at the
time of such request, ALZA is then undertaking the development of such
Product Candidate for its own account or with a third party, or ALZA is
otherwise not permitted to undertake such development hereunder because of an
arrangement with a third party.

                                    SECTION 3
                                    ----------

                          RESEARCH AND DEVELOPMENT PROGRAMS;
                                   ALZA SERVICES
                                   -------------

          3.1  PRODUCT DEVELOPMENT - TDC OBLIGATIONS.  Once a Product is
selected pursuant to Section 2.3, TDC shall use diligent efforts to develop
such Product. TDC shall request that ALZA perform, or shall use diligent
efforts to cause a third party to perform, the activities under each approved
work plan; provided, however, that ALZA's prior written consent shall be
required for a third party to perform any activities that involve ALZA
Proprietary Rights or that could affect ALZA's rights under any agreement
between ALZA and TDC or ALZA's rights as holder of the Class B Common Stock
of TDC.  TDC shall use diligent efforts to cause each contractor other than
ALZA diligently to perform the activities assigned it under a work plan.


                                      -8-
<PAGE>

          3.2  PRODUCT DEVELOPMENT - ALZA OBLIGATIONS; OTHER ALZA ACTIVITIES.
TDC hereby hires ALZA to perform certain research, development and
experimentation activities to develop Products in accordance with the tasks
assigned to ALZA under the work plans approved under Section 2.3, and to
undertake such other activities as the parties may agree.  ALZA diligently
shall perform or cause to be performed such activities.  In connection
therewith, ALZA shall make available such of its scientific, engineering,
manufacturing and other personnel, and shall take such steps, as it deems
necessary in order to perform its obligations in accordance with the terms
hereof, but ALZA is not obligated to devote any specific amount of time or
resources to activities hereunder. ALZA shall have full discretion to
determine from time to time the allocation of resources of ALZA (facilities,
equipment and personnel) that are available to TDC for Product Development
Programs, and to determine from time to time the allocation of resources of
ALZA among Product Development Programs.  TDC understands, acknowledges and
agrees that ALZA may devote substantial time and resources to research and
development activities for other persons and for its own account, and as a
result, ALZA may develop and commercialize, or have commercialized, products
competitive with the Products.

          3.3  WORK PLANS AND COST ESTIMATES.  The parties understand and
acknowledge that it is difficult to predict accurately the activities that
will be necessary to develop any Product, or the Development Costs thereof,
and that significant uncertainties exist in any Product development effort.
TDC and


                                      -9-
<PAGE>

ALZA shall cooperate in good faith with respect to mutually acceptable work
plans and cost estimates for Product Development Programs and for such other
activities as the parties may agree.  Such work plans and cost estimates
shall be subject to review and revision from time to time, at least on a
semi-annual basis.  Each party diligently shall execute such work plans and
shall report significant deviations therefrom in a timely manner.  TDC shall
not be obligated to pay Development Costs in excess of those provided in
approved work plans and cost estimates, and ALZA shall not be obligated to
perform work which would result in Development Costs exceeding approved cost
estimates.

          3.4  THIRD PARTY RIGHTS.  Subject to the terms and conditions of
this Agreement, TDC shall have discretion to attempt to obtain, using
Available Funds, any Proprietary Rights from any third party that TDC
reasonably determines to be necessary or useful to conduct Product
Development Programs under this Agreement.  Such Proprietary Rights shall be
included in the Developed Technology.

          3.5  CONSULTATION.  TDC shall consult with ALZA and shall review
with ALZA from time to time the progress toward completion of each work plan
for each Product under development, including without limitation, the status
in each country for which marketing approval is being sought.

          3.6  NO USE OF AVAILABLE FUNDS AFTER LICENSE.  After such time as
either (i) ALZA exercises the License Option for a Product in a country or
(ii) such License Option expires


                                      -10-
<PAGE>

unexercised in such country, no additional Available Funds shall be expended
with respect to such Product in such country.

                                    SECTION 4
                                    ---------

                       PAYMENT FOR SERVICES; TIMING OF PAYMENTS
                       ----------------------------------------

          4.1  PAYMENT OF DEVELOPMENT COSTS.  In consideration of the work to
be carried out by ALZA hereunder, TDC shall reimburse ALZA for all of its
Development Costs in accordance with approved work plans and costs estimates.

          4.2  TIMING OF PAYMENTS.  TDC shall pay to ALZA monthly, in
arrears, all Development Costs incurred by ALZA during the preceding calendar
month, within 30 days after ALZA's invoice therefor.

          4.3  SUFFICIENCY OF FUNDS.  Neither TDC nor ALZA makes any
warranty, express or implied, that Available Funds will be sufficient to
complete the development of any Product or Products.

                                   SECTION 5
                                   ---------

                               REPORTS AND RECORDS
                               -------------------

          5.1  QUARTERLY AND FINAL REPORTS.  Within 45 days after the end of
each calendar quarter, ALZA shall provide to TDC, and TDC shall require each
third party contractor to provide to TDC and to ALZA, a reasonably detailed
report setting forth (a) a summary of the work performed hereunder by ALZA
and any third party contractor, as appropriate, and their respective
employees and agents during such quarter; and (b) the total Development Costs
of such activities during such quarter and cumulatively to date, on a Product
by Product basis.


                                      -11-
<PAGE>

          5.2  AVAILABLE FUNDS REPORT.  Within 45 days after the end of each
calendar quarter, TDC shall provide to ALZA a reasonably detailed report
setting forth a reconciliation of the use of all Available Funds to the date
of such request.

          5.3  RECORDS.  Each of TDC and ALZA shall keep and maintain, in
accordance with generally accepted accounting principles, proper and complete
records and books of account documenting all Development Costs.  Each of TDC
and ALZA shall have the right, at all reasonable times during regular
business hours, and at its own expense, to examine or to have examined by a
certified public accountant or similar person reasonably acceptable to the
other party, pertinent books and records of one another, for the sole purpose
of determining the correctness of Development Costs invoiced by ALZA
hereunder and the application of Available Funds by TDC.  Such examination
shall take place not later than two years following the year in question, and
only one examination may take place with respect to any period as to which
such books and records are examined.  TDC shall obtain, for itself and for
ALZA, similar reasonable rights to audit the Development Costs of each third
party contractor.

                                 SECTION 6
                                 ---------

                     LICENSE OF TECHNOLOGY FOR DEVELOPMENT
                     -------------------------------------

          6.1  LICENSE TO USE ALZA PROPRIETARY RIGHTS.  TDC hereby grants to
ALZA a sublicense under the Technology License Agreement solely for the
purpose of conducting the activities contemplated hereunder.


                                      -12-
<PAGE>

          6.2  TERMINATION OF LICENSE.  Termination of the license granted
under the Technology License Agreement automatically shall terminate the
sublicense to the Licensed Technology granted to ALZA under this Agreement.

                                   SECTION 7
                                   ----------

                    OWNERSHIP AND LICENSE OF DEVELOPED TECHNOLOGY;
                 PATENTS; ROYALTIES ON OTHER ROYALTY-BEARING PRODUCTS
                 ----------------------------------------------------

          7.1  OWNERSHIP OF PRODUCTS.  TDC shall own all Products, subject to
the License Option.

          7.2  OWNERSHIP OF DEVELOPED TECHNOLOGY.  ALZA shall own all
Developed Technology.

          7.3  PATENTS COVERING DEVELOPED TECHNOLOGY.  ALZA shall determine
whether and to what extent to seek and maintain United States and/or foreign
patents with respect to any inventions included in Developed Technology. Any
such patents and applications therefor shall be in ALZA's name and shall be
owned by ALZA.  TDC and ALZA each shall pay one-half of the costs of
obtaining and maintaining any such patents during the term of this Agreement.

          7.4  ROYALTIES ON OTHER ROYALTY-BEARING PRODUCTS.  ALZA shall pay
TDC royalties in respect of sales of each other Royalty-Bearing Product.
Such royalties shall equal the sum of (a) 1% of the Net Sales in the relevant
country or countries of such Other Royalty-Bearing Product; and (b) 10% of
Sublicensing Revenues in the relevant country or countries with respect to
such Other Royalty-Bearing Product; provided, however, that in determining
payments due under this Section 7.4, Net Sales and Sublicensing Revenues
shall be reduced by the dollar amount of


                                      -13-
<PAGE>

any license or similar payments due to third parties from ALZA with respect
to any such sales and Sublicensing Revenues of such other Royalty-Bearing
Product. Only one royalty under this Section 7.4 shall be payable by ALZA to
TDC with respect to any particular Net Sales or Sublicensing Revenues of each
Other Royalty-Bearing Product in any country, regardless of the number of
patents covering such Other Royalty-Bearing Product in such country.

          7.5  BUYOUT OF OTHER ROYALTY-BEARING PRODUCT ROYALTIES.  ALZA shall
have the option, in its discretion, at any time from and after the end of the
twelfth full calendar quarter following the first commercial sale in each
country of any Other Royalty-Bearing Product, to buy out its remaining
obligation to make payments under Section 7.4 with respect to sales of such
other Royalty-Bearing Product in such country.  The buyout price shall be an
amount equal to 15 times the payments made by or due to TDC from ALZA under
Section 7.4 with respect to sales of such other Royalty-Bearing Product in
such country during the four most recent calendar quarters preceding the date
of exercise of the buyout option for which royalties were paid or were due in
respect of such country.  ALZA shall have the option, in its discretion, at
any time from and after the end of the twelfth full calendar quarter
following the first commercial sale of any Other Royalty-Bearing Product as
to which payments are due under Section 7.4 in either the United States or
two other Major Market Countries, to buy out its remaining worldwide
obligations to make payments under Section 7.4 with respect to such Other



                                      -14-
<PAGE>

Royalty-Beating Product.  The buyout price shall be an amount equal to 20
times the payments made by or due to TDC from ALZA under Section 7.4 during
the four most recent calendar quarters preceding the date of exercise of the
buyout option for which royalties were paid or were due on a worldwide basis
with respect to such Other Royalty-Bearing Product under Section 7.4 (and, in
addition, such payments as would have been paid by or due from ALZA to TDC if
ALZA had not exercised any country-specific buyout option with respect to
such Other Royalty-Bearing Product) less any amounts previously paid to
exercise any country-specific buyout option with respect to such Other
Royalty-Bearing Product.

          7.6  REPORTS.  Within 90 days after the end of each calendar
quarter for which royalties are due under Section 7.4, ALZA shall render an
accounting to TDC, on a country-by-country basis, with respect to all
payments due for such quarter under Section 7.4. Such report shall indicate
for such quarter, the quantity and dollar amount of sales of each Other
Royalty-Bearing Product by ALZA and its Affiliates, and Sublicensing Revenues
received by ALZA with respect to which payments are due; provided, however,
that if ALZA shall not have received from any foreign sublicensee or
distributor a report of its sales for such quarter, then such sales shall be
included in the next quarterly report. In case no payment is due for any
calendar quarter, ALZA shall so report.  ALZA shall keep accurate records in
sufficient detail to enable the payments due hereunder to be determined.

          7.7  REVIEW BY ACCOUNTANTS.  At TDC's request, ALZA shall permit an
independent public accountant selected by TDC to


                                      -15-
<PAGE>

have access, once in each calendar year during regular business hours and
upon reasonable notice to ALZA, to such of the records of ALZA as may be
necessary to verify the accuracy of the payments and reports made under
Sections 7.4 and 7.6, but said accountant shall not disclose to TDC any
information except that which should have been properly contained in such
reports.  The right of review with respect to any quarterly accounting shall
terminate two years after TDC's receipt of the royalties due with respect to
such quarter.

          7.8  PAYMENTS.  Payments shown by each calendar quarter report to
have accrued shall be due and payable on the date the report is due and shall
be paid in United States dollars.  Any and all taxes due or payable on such
payments or with respect to the remittance thereof shall be deducted from
such payments and shall be paid by ALZA to the proper taxing authorities, and
proof of payment shall be secured and sent to TDC as evidence of such
payment.  The rate of exchange to be used in computing the amount of United
States dollars due to TDC in satisfaction of payment obligations with respect
to sales in foreign countries shall be calculated by converting the amount
due in such foreign currency into United States dollars based on the rate for
the purchase of United States dollars with such currency as published in the
WALL STREET JOURNAL on the last business day of the calendar quarter for
which payment is being made.  If governmental regulations prevent remittance
from any foreign country of any amounts due under Section 7.4 in respect of
that country, ALZA shall so notify TDC in writing, and the obligation under
this Agreement to


                                      -16-
<PAGE>

make payments in respect of sales in that country shall be suspended (but the
amounts due but not paid shall continue to accrue) until such remittances are
possible.  TDC shall have the right, upon written notice to ALZA to receive
payment in any such country in the local currency.

          7.9  LATE PAYMENTS.  Any payments due hereunder that are not made
when due shall accrue interest at the lesser of 10% per annum or the maximum
rate as may be allowed by law, beginning on the date when TDC notifies ALZA
that such payments are overdue.

                                    SECTION 8
                                    ----------

                                ACCESS TO INFORMATION
                                ---------------------

          8.1  ACCESS.  Subject to the terms of this Agreement, each party
shall be permitted access to the premises of the other during normal business
hours, for the purpose of monitoring the progress of activities under this
Agreement.  Each party shall keep full and complete records and notebooks
containing all experiments performed during its work under this Agreement and
the results thereof.  Such items and copies of all documentation shall be
available during normal business hours for inspection by the other party.  In
addition, each party shall provide to the other such other information as
reasonably may be requested.

          8.2  THIRD PARTIES.  TDC shall cause each third party contractor to
provide access similar to that to be provided pursuant to Section 8.1, for
the benefit of both TDC and ALZA.

          8.3  CONFIDENTIALITY.  During the term of this Agreement and for a
period of 10 years following its termination,


                                      -17-
<PAGE>

each party shall maintain in confidence all Proprietary Rights of the other;
provided, however, that nothing contained herein shall prevent either party
from disclosing any Proprietary Rights to the extent that such Proprietary
Rights (a) are required to be disclosed in connection with the development of
or securing necessary governmental authorization for the marketing of
Products, or to make, use and sell Products as permitted or provided in the
agreements between the parties, (b) are required to be disclosed by law for
the purpose of complying with governmental regulations, (c) are disclosed to
sublicensees permitted under the Technology License Agreement in connection
with the development, manufacturing or marketing of Products, subject to
similar obligations of confidentiality on the part of such third parties as
required by the Technology License Agreement, (d) are known to the recipient
prior to the date hereof as evidenced by the recipient's written records; (e)
are lawfully disclosed to the recipient by a third party having the right to
disclose such information to the recipient; or (f) either before or after the
time of disclosure to the recipient, become known to the public other than by
an unauthorized act or omission of the recipient or any of the recipient's
employees or agents.  ALZA Proprietary Rights may be disclosed to third
parties only in accordance with the provisions of Section 10.4 hereof and in
accordance with the provisions of the Technology License Agreement.  The
obligations of each of the parties pursuant to this Section 8.3 shall survive
the termination of this Agreement for any reason. Any breach of this Section
8.3


                                      -18-
<PAGE>

shall result in irreparable harm, and in the event of a breach, the aggrieved
party shall be entitled to injunctive relief (without the need to post a
bond) in addition to any other remedies available at law or in equity.

                                   SECTION 9
                                   ---------

                                  DISCLAIMERS
                                  -----------

          9.1  DISCLAIMER.  ALZA DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY
(i) THAT ALZA PROPRIETARY RIGHTS (INCLUDING ANY DEVELOPED TECHNOLOGY), OR THE
USE THEREOF, OR PRODUCT CANDIDATES OR PRODUCTS INCORPORATING OR MANUFACTURED
BY THE USE THEREOF, WILL BE FREE FROM CLAIMS OF PATENT INFRINGEMENT,
INTERFERENCE OR UNLAWFUL USE OF PROPRIETARY INFORMATION OF ANY THIRD PARTY
AND (ii) OF THE ACCURACY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE,
COMPREHENSIVENESS OR MERCHANTABILITY OF ALZA PROPRIETARY RIGHTS AND DEVELOPED
TECHNOLOGY OR THEIR SUITABILITY OR FITNESS FOR ANY PURPOSE WHATSOEVER
INCLUDING, WITHOUT LIMITATION, THE DESIGN, DEVELOPMENT, MANUFACTURE, USE OR
SALE OF PRODUCTS.  ALZA DISCLAIMS ALL OTHER WARRANTIES OF WHATEVER NATURE,
EXPRESS OR IMPLIED.

                                   SECTION 10
                                   ----------

                                   COVENANTS
                                   ---------

          10.1 USE OF AVAILABLE FUNDS.  TDC agrees to expend all Available
Funds for activities undertaken pursuant to this Agreement, unless ALZA
agrees otherwise. Pending application of all Available Funds as set forth
above, Available Funds shall be invested in securities issued or guaranteed
as to principal and interest by the United States, or by a person controlled
or


                                      -19-
<PAGE>

supervised by or acting as an instrumentality of the government of the United
States pursuant to authority granted by the Congress of the United States, or
any certificate of deposit for any of the foregoing, or any other investment
that is approved by ALZA in its sole discretion.

          10.2 NEGATIVE PLEDGE.  TDC shall not create, incur, assume or
suffer to exist any lien upon or with respect to, or otherwise take any
action with respect to, Available Funds so as to prevent or interfere with
full expenditure of such funds for activities under this Agreement in
accordance with Section 10.1.

          10.3 PROTECTION OF AVAILABLE FUNDS.  As soon as practicable
following execution of this Agreement, TDC shall make arrangements
satisfactory to ALZA to ensure that Available Funds will remain available for
expenditure under this Agreement.

          10.4 NO INCONSISTENT AGREEMENTS.  Without the written consent of
ALZA, TDC shall not enter into any agreement or arrangement that is in any
way inconsistent with or that could adversely affect ALZA's rights under any
agreement between ALZA and TDC, or that is in any way inconsistent with or
that could adversely affect ALZA's rights as holder of the Class B Common
Stock of TDC.  TDC must include in any agreement between TDC and a third
party relating to Products, Developed Technology and/or activities hereunder
such provisions as ALZA reasonably deems appropriate to protect ALZA
Proprietary Rights and to protect ALZA's rights under all agreements between
ALZA and TDC and under the Purchase Option.


                                      -20-
<PAGE>

                                   SECTION 11
                                   ----------

                               TERM AND TERMINATION
                               --------------------

          11.1 AUTOMATIC TERMINATION.  This Agreement shall terminate upon
expiration of the Purchase Option, except that ALZA's obligations to make
payments to TDC with respect to Other Royalty-Bearing Products shall continue
as provided in Section 7 hereof.

          11.2 OTHER TERMINATION.  Either party may, in its discretion,
terminate this Agreement and its term in the event that the other party:

               (a)  breaches any material obligation hereunder or under the
Technology License Agreement, the License Option Agreement, or any license
thereunder, and such breach continues for a period of 60 days after written
notice thereof by the terminating party to the other party; or

               (b)  enters into any proceeding, whether voluntary or
otherwise, in bankruptcy, reorganization or arrangement for the appointment
of a receiver or trustee to take possession of its assets or any other
proceeding under any law for the relief of creditors, or makes an assignment
for the benefit of its creditors.

                                 SECTION 12
                                 ----------

                                FORCE MAJEURE
                                -------------

          12.1 FORCE MAJEURE.  Neither party to this Agreement shall be
liable for delay in the performance of any of its obligations hereunder if
such delay is due to causes beyond its reasonable control including, without
limitation, acts of God,


                                      -21-
<PAGE>

fires, strikes, acts of war, or intervention of any governmental authority,
but any such delay or failure shall be remedied by such party as soon as
possible.

                                    SECTION 13
                                    ----------

                                   MISCELLANEOUS
                                   -------------

          13.1 AMENDMENT.  Any waiver by either party hereto of a breach of
any provisions of this Agreement shall not be implied and shall not be valid
unless such waiver is recited in writing and signed by such party.  Failure
of any party to require, in one or more instances, performance by the other
party in strict accordance with the terms and conditions of this Agreement
shall not be deemed a waiver or relinquishment of the future performance of
any such terms or conditions or of any other terms and conditions of this
Agreement.  A waiver by either party of any term or condition of this
Agreement shall not be deemed or construed to be a waiver of such term or
condition for any other term.  All rights, remedies, undertakings,
obligations and agreements contained in this Agreement shall be cumulative
and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement of either party.  This Agreement may not
be amended except in a writing signed by both parties.

          13.2 ASSIGNMENT.  Neither party may assign its rights and
obligations hereunder without the prior written consent of the other party,
which consent may not be unreasonably withheld; provided, however, that ALZA
may assign such rights and obligations hereunder to any person or entity with
which ALZA is


                                      -22-
<PAGE>

merged or consolidated or which purchases all or substantially all of the
assets of ALZA.  ALZA may subcontract all or any portion of its duties
hereunder to third parties, in its sole discretion.

          13.3 ARBITRATION.

               13.3.1  ARBITRATION.  All disputes which may arise under, out
of or in connection with this Agreement shall be settled by arbitration
conducted in the city of San Francisco, State of California, in accordance
with the then existing rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.  The parties hereby agree that service of
any notices in the course of such arbitration at their respective addresses
as provided for in Section 13.7 of this Agreement shall be valid and
sufficient.

                 13.3.2  ARBITRATORS.  In any arbitration pursuant to this
Section 13.3, the award shall be rendered by a majority of the members of a
board of arbitration consisting of three members who shall be appointed by
the parties jointly, or if the parties cannot agree as to three arbitrators
within 30 days after the commencement of the arbitration proceeding, then one
arbitrator shall be appointed by ALZA and one arbitrator shall be appointed
by TDC within 60 days after the commencement of the arbitration proceeding.
The third arbitrator shall be appointed by mutual agreement of such two
arbitrators.  In the event of failure of the two arbitrators to agree within
75 days after commencement of the arbitration proceeding upon the appointment


                                      -23-
<PAGE>

of the third arbitrator, the third arbitrator shall be appointed by the
American Arbitration Association in accordance with its then existing rules.
Notwithstanding the foregoing, in the event that any party shall fail to
appoint an arbitrator it is required to appoint within the specified time
period, such arbitrator and the third arbitrator shall be appointed by the
American Arbitration Association in accordance with its then existing rules.
For purposes of this Section 13.3, the "commencement of the arbitration
proceeding" shall be deemed to be the date upon which a written demand for
arbitration is received by the American Arbitration Association from one of
the parties.

          13.4 COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute this Agreement.

          13.5 GOVERNING LAW.  This Agreement shall be governed by the laws
of the state of California as applied to residents of that state entering
into contracts to be performed in that state.

          13.6 HEADINGS.  The headings set forth at the beginning of the
various sections of this Agreement are for reference and convenience and
shall not affect the meanings of the provisions of this Agreement.

          13.7 NOTICES.  Notices required under this Agreement shall be in
writing and sent by registered or certified mail, postage prepaid, or by
telex or facsimile and confirmed by registered or certified mail and
addressed as follows:


                                      -24-
<PAGE>

                   If to ALZA:         ALZA Corporation
                                       950 Page Mill Road
                                       P.0. Box 10950
                                       Palo Alto, CA  94303-0802
                                       Attention:  Vice President, Legal

                   If to TDC:          Therapeutic Discovery Corporation
                                       1290 Page Mill Road
                                       P.O. Box 10051
                                       Palo Alto, CA  94303-0860
                                       Attention:  Chief Executive officer

All notices shall be deemed to be effective five days after the date of
mailing or upon receipt if sent by telex or facsimile (but only if followed
by certified or registered confirmation).  Either party may change the
address at which notice is to be received by written notice pursuant to this
Section 13.7.

          13.8 PUBLIC DISCLOSURE.  Neither party shall disclose to third
parties, nor originate any publicity, news release or public announcement,
written or oral, whether to the public, the press, stockholders or otherwise,
referring to the existence or terms of this Agreement, the subject matter to
which it relates, the performance under it or any of its specific terms and
conditions, except such announcements, as in the opinion of the counsel for
the party making such announcement, are required by law, including United
States securities laws, rules or regulations, without the prior written
consent of the other party.  If a party decides to make an announcement it
believes to be required by law with respect to this Agreement, it will give
the other party such notice as is reasonably practicable and an opportunity
to comment upon the announcement.

          13.9 SEVERABILITY.  If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid or


                                      -25-
<PAGE>

unenforceable, it shall be modified, if possible, to the minimum extent
necessary to make it valid and enforceable or, if such modification is not
possible, it shall be stricken and the remaining provisions shall remain in
full force and effect; provided, however, that if a provision is stricken so
as to significantly alter the economic arrangements of this Agreement, the
party adversely affected may terminate this Agreement upon 60 days' prior
written notice to the other party.

          13.l0 RELATIONSHIP OF THE PARTIES.  For all purposes of this
Agreement, TDC and ALZA shall be deemed to be independent entities and
anything in this Agreement to the contrary notwithstanding, nothing herein
shall be deemed to constitute TDC and ALZA as partners, joint ventures,
co-owners, an association or any entity separate and apart from each party
itself, nor shall this Agreement constitute any party hereto an employee or
agent, legal or otherwise, of the other party for any purposes whatsoever.
Neither party hereto is authorized to make any statements or representations
on behalf of the other party or in any way obligate the other party, except
as expressly authorized in writing by the other party.  Anything in this
Agreement to the contrary notwithstanding, no party hereto shall assume nor
shall be liable for any liabilities or obligations of the other party,
whether past, present or future.

          13.11 SURVIVAL.  The provisions of Sections 1, 5, 7, 8, 9, 11,
13.3, 13.5, 13.7, 13.8, 13.9, 13.10 and this Section 13.11 survive the
termination for any reason of this Agreement.  Neither party shall be liable
to the other due to the


                                      -26-
<PAGE>

termination of this Agreement as provided herein, whether in loss of good
will, anticipated profits or otherwise.  In addition, any payments due under
this Agreement with respect to any period prior to its termination shall be
made notwithstanding the termination of this Agreement.



                                      -27-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above by their duly authorized
representatives.

                                   ALZA CORPORATION

                                   By: /s/ Jane E. Shaw
                                      ------------------------------------------
                                   Title:  President and Chief Operating Officer
                                         ---------------------------------------

                                   THERAPEUTIC DISCOVERY CORPORATION


                                   By: /s/ Pieter P. Bonsen
                                      ----------------------------
                                   Title:  President
                                         -------------------------




                                      -28-
<PAGE>

                                   EXHIBIT A

                                DEVELOPMENT COSTS
                                -----------------

Development Costs are equal to the sum of (i) Research Expenses, (ii) General
and Administrative Expenses and (iii) Capital Asset Expenditures.

     (i)  Research Expenses include both Direct Expenses and Indirect Expenses,
          with the cost elements outlined on Exhibit A-1.

          (a)  Direct Expenses include Direct Research Salaries,
               Clinical Expenses, Supplies and other expenses incurred
               specifically in connection with the Program.

          (b)  Indirect Expenses include Research Management and support
               costs of the research and product development
               organization. (Indirect Expenses are allocated to all
               projects and billed to clients at a fixed rate* of 160%
               of Direct Research Salaries.)

     (ii)  General and Administrative Expenses include cost elements
           outlined on Exhibit A-2. (General and Administrative Expenses
           are allocated among the research and product development,
           manufacturing and marketing organizations. The portion
           allocated to the research and product development organization
           is then allocated to all projects and billed to clients at a
           fixed rate* of 80% of Direct Research Salaries.)

     (iii) Capital Asset Expenditures are the actual costs of new capital
           assets acquired specifically for the project.



-------------------------

*   This fixed billing rate will not be changed prior to January 1,
    1994 and, if changed on or after January 1, 1994, such
    changes will be limited to not more than one change per
    calendar year and shall be a maximum of 10% of the rate in
    effect at the time of the increase.

<PAGE>

                                EXHIBIT A-1

                             Research Expenses
                             -----------------


DIRECT EXPENSES

Direct Research Salaries*

Project Clinical Expenses and Outside Services

Project Specific Supplies

Project Travel and Related Expenses

Miscellaneous Project Expenses


INDIRECT EXPENSES

Research Management and Indirect Salaries*

General Research Supplies and Materials

General Research Consulting and Outside Services

Facilities Expenses

Telephone and Communications

Equipment Depreciation, Rent, Maintenance and Services

Research Travel and Related Expenses

Patent and Trademark Expenses

Miscellaneous Indirect Research Expenses



*Salaries include Benefits

<PAGE>

                                EXHIBIT A-2

                    General and Administrative Expense
                    ----------------------------------


Corporate Management, Administrative, and Indirect Salaries*

Telephone and Communications

Equipment Depreciation, Rent, Maintenance and Services

Board of Directors and Corporate Consulting

Annual Audit, Accounting and Legal Expenses

Facilities Expenses

Net Interest Expense

Miscellaneous General and Administrative Expenses






*Salaries include Benefits