<PAGE>

                                                                    EXHIBIT 10.7

                               LICENSE AGREEMENT

                                 by and among

                         SIDNEY KIMMEL CANCER CENTER

                                      and

                         DANIEL MERCOLA, M.D., Ph.D.,

                                  as Licensor

                                      and

                                 UROGEN CORP.

                                  as Licensee
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             Page
<S>                                                                                          <C>
1.   DEFINITIONS.............................................................................  1

2.   LICENSE TERMS AND CONDITIONS............................................................  3
     2.1.    Grant of License................................................................  3
             2.1.1  Exclusive License for Products...........................................  3
             2.1.2  Reserved Rights..........................................................  3
             2.1.3  Rights of United States Government.......................................  3
             2.1.4  No Additional Licenses...................................................  3
     2.2.    Sponsored Research..............................................................  4
     2.3.    Minimum Annual Royalties........................................................  4
     2.4.    Running Royalties...............................................................  5
     2.5.    Quarterly Payments..............................................................  6
     2.6.    Term of License.................................................................  6
     2.7.    Sublicense......................................................................  6
     2.8.    Reports.........................................................................  7
     2.9.    Records.........................................................................  7
     2.10.   Foreign Sales...................................................................  7
     2.11.   Foreign Taxes...................................................................  7

3.   PATENT MATTERS..........................................................................  8
     3.1     Patent Prosecution and Maintenance..............................................  8
     3.2     Information to Licensee.........................................................  8
     3.3     Patent Costs....................................................................  8
     3.4     Effect of Licensee's Discounting Payments.......................................  8
     3.5     Ownership.......................................................................  9
     3.6     Licensor's Right to Pursue Patent...............................................  9
     3.7     Infringement Actions............................................................  9
             3.7.1  Infringement.............................................................  9
             3.7.2  Challenge to Licensor Patent Rights...................................... 10

4.   OBLIGATIONS RELATED TO COMMERCIALIZATION................................................ 10
     4.1.    Commercialization Obligation.................................................... 10
     4.2.    Governmental Approvals and Marketing of Products................................ 10
     4.3.    Indemnity....................................................................... 10
     4.4.    Patent Marking.................................................................. 11
     4.5.    No Use of Name.................................................................. 11
     4.6.    Foreign Registration............................................................ 11

5.   LIMITED WARRANTY........................................................................ 11
</TABLE>

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<TABLE>
<S>                                                                                          <C>
6.   INTERESTS IN INTELLECTUAL PROPERTY RIGHTS............................................... 11
     6.1.    Preservation of Title........................................................... 11
     6.2.    Governmental Interests.......................................................... 11

7.   CONFIDENTIALITY AND PUBLICATION......................................................... 12
     7.1.    Treatment of Confidential Information........................................... 12
     7.2.    Publications.................................................................... 12
     7.3.    Publicity....................................................................... 12

8.   TERM AND TERMINATION.................................................................... 12
     8.1.    Term............................................................................ 12
     8.2.    Termination Upon Default........................................................ 12
     8.3.    Termination Upon Bankruptcy or Insolvency....................................... 13
     8.4.    Rights Upon Expiration.......................................................... 13
     8.5.    Rights Upon Termination......................................................... 13
     8.6.    Work-in-Progress................................................................ 13

9.   ARBITRATION............................................................................. 14
     9.1.    Binding Arbitration............................................................. 14
     9.2.    Selection of Arbitrators........................................................ 14
     9.3.    Discovery....................................................................... 14
     9.4.    Case Management................................................................. 14
     9.5.    Remedies........................................................................ 14
     9.6.    Expenses........................................................................ 15
     9.7.    Confidentiality................................................................. 15

10.  GENERAL PROVISIONS...................................................................... 15
     10.1.   Assignment...................................................................... 15
     10.2.   Binding Upon Successors and Assigns............................................. 15
     10.3.   Independent Contractors......................................................... 15
     10.4.   Entire Agreement; Modification.................................................. 15
     10.5.   California Law.................................................................. 15
     10.6.   Headings........................................................................ 16
     10.7.   Severability.................................................................... 16
     10.8.   No Waiver....................................................................... 16
     10.9.   Attorneys' Fees................................................................. 16
     10.10.  Notices......................................................................... 16
     10.11.  Compliance with U.S. Laws....................................................... 17
</TABLE>

                                       ii
<PAGE>

                               LICENSE AGREEMENT

           This License Agreement is entered into and made effective as of
11/5/1997, ("Effective Date")by and among SIDNEY KIMMEL CANCER CENTER, a
California non-profit public benefit corporation ("SKCC"), Daniel A. Mercola,
M.D., Ph.D. ("Licensor") and UroGen Corp., a Delaware corporation ("Licensee").

                                    RECITAL

     A.    Licensor is an employee of SKCC. Licensor is the inventor of the
presently existing invention described in the patent application listed as item
number 1 on Exhibit A attached hereto, which constitutes Licensor Patent Rights,
as further defined in this Agreement. SKCC has released to Licensor any
ownership rights in said existing invention and patent application, and Licensor
has agreed to an allocation as hereinafter set forth of any royalties which may
be earned by Licensor from said existing invention and patent application and
the Licensor Patent Rights.

     B.    Licensor has the right to grant a license to certain technology
regarding methods for gene characterization, and Licensor desires to grant to
Licensee, and Licensee wishes to acquire, an exclusive right and license to such
technology on the terms and conditions set forth herein.


                                   AGREEMENT

           NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, Licensor and Licensee hereby agree as follows:

1.   DEFINITIONS

     Capitalized terms shall have the meaning set forth below.

     The term "Affiliate" shall mean any entity which directly or indirectly
               ---------
controls, is controlled by or is under common control with Licensee. The term
"control" as used herein means the possession of the power to direct or cause
the direction of the management and the policies of an entity, whether through
the ownership of a majority of the outstanding voting securities or by contract
or otherwise.

     The term "Confidential Information" shall mean any and all proprietary or
               ------------------------
confidential information of SKCC, Licensor or Licensee which may be exchanged
between the parties at any time and from time to time during the term of this
Agreement. Information shall not be considered confidential to the extent that
it:

                                       1
<PAGE>

          a.   is publicly disclosed through no fault of any party hereto,
either before or after it becomes known to the receiving party; or

          b.   was known to the receiving party prior to the date of this
Agreement, which knowledge was acquired independently and not from the other
party hereto (or such party's employees); or

          c.   is subsequently disclosed to the receiving party in good faith by
a third party who has a right to make such disclosure; or

          d.   has been published by a third party as a matter of right.

     The term "Field" shall mean methods for therapy sensitization by the
               -----
inhibition of jun kinase and/or the claims specified in the patent application
described on Exhibit A attached hereto.

     The term "Future Patent Rights" shall mean (i) any and all U.S. and foreign
               --------------------
patent applications and issued patents describing inventions within the scope of
the Field resulting from the research conducted by or under the direction of
SKCC or its employees in performance of the Sponsored Research described in
Section 2.2 hereof, if and only to the extent that Licensee agrees to pay and
pays for all patent protection costs related thereof as evidenced by a written
agreement therefor delivered by Licensee to Licensor and SKCC within 120 days
after Licensor and/or SKCC furnish to Licensee a customary invention disclosure
therefor containing a customary description of the invention and of the related
relevant literature references, and (ii) all continuations-in-part (but only to
the extent that said continuation-in-part describes inventions identified in
subpart (i) hereof and excluding any new invention), reissues, reexaminations,
and extensions thereof. Said patents and patent rights shall cease to be Future
Patent Rights to the extent that Licensee ceases to pay the patent protection
costs, that they are withdrawn or abandoned and not refiled, or to the extent
they are held to be invalid and/or unenforceable by a court of competent
jurisdiction from which there is no appeal or, if appealable, from which no
appeal has been taken.

     The term "JAMS" shall mean the Judicial Arbitration and Mediation Services
               ----
in San Diego, California.

     The term "Licensor Patent Rights" shall mean all pending patent
               ----------------------
applications and issued patents and patent rights derived from (i) the
inventions described in the pending patent application listed on Exhibit A
attached hereto and incorporated herein by reference, together with any
corresponding foreign patent applications and/or issued patents, and (ii) all
continuations-in-part (but only to the extent that said continuation-in-part
describes inventions identified in subpart (i) hereof and excluding any new
invention), reissues, reexaminations, and extensions thereof. Said patents and
patent rights shall cease to be Licensor Patent Rights to the extent they are
withdrawn or abandoned and not refiled, or to the extent they are held to be
invalid and/or unenforceable by a court of competent jurisdiction from which
there is no appeal or, if appealable, from which no appeal has been taken.

                                       2
<PAGE>

     The term "Products" shall mean any one or more products, processes or
               --------
devices which cannot be made, used or sold without infringing one or more claims
under Licensor Patent Rights or the Future Patent Rights.

     The term "Net Sales" shall mean:
               ---------

          a.   The gross amount invoiced by Licensee, or its Affiliates and
sublicensees, or any of them, on all sales of Products, less (i) discounts
actually allowed, (ii) credits for claims, allowances, retroactive price
reductions or returned goods, (iii) prepaid freight and (iv) sales taxes or
other governmental charges actually paid in connection with sales of Products
(but excluding what is commonly known as income taxes). For purposes of
determining Net Sales, a sale shall be deemed to have occurred when an invoice
therefor shall be generated or the Product is shipped for delivery, whichever
occurs earlier.

          b.   If a Product is transferred for consideration in some manner
other than a sale for money, then the monetary equivalent of said consideration
shall be deemed "Net Sales" and the transfer shall be deemed a sale.

          c.   Sales of Products by Licensee, or an Affiliate or sublicensee of
Licensee to any Affiliate or sublicensee which is a reseller thereof shall be
excluded, and only the subsequent sale of such Products by Affiliates or
sublicensees of Licensee to unrelated parties shall be deemed Net Sales
hereunder.

     The term "Sponsored Research" shall have the meaning as defined in Section
               ------------------
2.2 hereof.

2.   LICENSE TERMS AND CONDITIONS

     2.1. Grant of License.
          ----------------

          2.1.1  Exclusive License for Products. Subject to the terms of this
                 ------------------------------
Agreement, except as otherwise provided in this Section 2.1, Licensor and SKCC
hereby grant to Licensee an exclusive, worldwide license, including the right to
sublicense, under Licensor Patent Rights and Future Patent Rights, to make, have
made, use, sell, import and export Products.

          2.1.2  Reserved Rights. Licensor and SKCC reserve and retain the
                 ---------------
rights to use any or all Licensor Patent Rights and Future Patent Rights for
research by Licensor or SKCC or its designees, so long as the same is not used
for any commercial purposes.

          2.1.3  Rights of United States Government. As a result of the receipt
                 ----------------------------------
by SKCC and Licensor of certain funding from the United States government,
Licensee acknowledges that the grant of the license hereunder by Licensor
is subject to certain rights of the United States government as further
described in Section 6.2 below.

          2.1.4  No Additional Licenses. Licensee acknowledges and agrees that
                 ----------------------
the scope of license granted hereunder is specifically and expressly defined in
this Section 2.1, and no additional licenses are granted or implied hereunder.

                                       3
<PAGE>

     2.2. Sponsored Research. Within 30 days after the date when Licensee enters
          -------------------
into an agreement for a corporate partner or strategic alliance relationship
(including without limitation a research and development agreement, technology
license agreement, marketing or distribution agreement, merger or acquisition
agreement, etc.), Licensee shall commence making monthly installment payments of
at least $12,500 to fund SKCC's costs for sponsored research to be performed in
the laboratory of and under the direction of Licensor while Licensor continues
to be associated with SKCC (the "Sponsored Research"). If Licensor ceases to be
associated with SKCC, then future payments of said monthly installment payments
shall be payable by Licensee to whatever new institution Licensor becomes
associated, subject to Licensee and said new institution entering into a
mutually approved agreement. Said Sponsored Research shall be (i) in areas of
research within the nature and focus of SKCC's research programs and (ii)
directly or indirectly related to the inventions described in Licensor's Patent
Rights, as mutually approved by Licensor, SKCC and Licensee. If no such mutual
agreement is reached promptly, Licensee shall nevertheless commence and continue
to pay at least $12,500 per month, as credits against costs ultimately to be
incurred by SKCC for conducting Sponsored Research. A minimum of $12,500 per
month for Sponsored Research shall continue to be payable by Licensee to SKCC
for the remainder of the term of this Agreement. The costs for the Sponsored
Research shall be SKCC's actual direct costs for labor, materials and equipment,
plus SKCC's customary overhead/indirect costs at the rate established from time
to time for the governmental grant supported research projects performed by
SKCC.

     2.3. Minimum Annual Royalties.
          ------------------------

          2.3.1  Licensee shall pay to SKCC the following minimum annual royalty
cash amounts;

                 a.      Months 1 through 12 following the Effective Date:
$2,500 per month, payable by the end of each month, for a total of $30,000
during the first year.

                 b.      Second anniversary of the Effective Date: $30,000.

                 c.      Third anniversary of the Effective Date: $30,000.

                 d.      Each subsequent anniversary of the Effective Date for
the duration of the term of this Agreement: $30,000.

          2.3.2  To the extent that Licensee has paid running royalties
pursuant to Section 2.4.1 hereof for Net Sales made in the year preceding the
anniversary payment date, said payments shall be credited against the foregoing
minimum annual royalty payment for that year. To the extent that the running
royalties for a particular year exceed the minimum annual royalties payable for
that year, the excess shall not be carried forward as a credit against the next
year's minimum annual royalties.

          2.3.3  Each of the foregoing payments shall be credited against any
running royalties payable pursuant to Section 2.4 hereof for Net Sales made
during the year preceding the anniversary payment date. If the credit is greater
than the running royalties payable, there is no

                                       4
<PAGE>

carryforward of the unused credit against subsequent minimum annual royalty
payments required to maintain this Agreement in effect. However, half of any
unused credits from the minimum annual royalty payment for one year may be used
as a carryforward and applied as a credit against half of the future accruing
running royalties. For avoidance of doubt and as an example, if Licensee pays
the $30,000 minimum annual royalty for year two, and no running royalties are
earned for year two, then Licensee will have a $15,000 carryforward which can be
used to satisfy $15,000 of a future $30,000 running royalty obligation earned in
year three or a later year.

     2.4. Running Royalties.
          -----------------

          2.4.1  As further consideration for the license granted pursuant to
Section 2.1 hereof, Licensee shall pay to SKCC a running royalty at the rate of
three percent (3%) of Net Sales for any and all Products which are made, used,
sold or otherwise disposed of under Licensor Patent Rights and/or the Future
Patent Rights. The minimum annual royalties paid pursuant to Section 2.3 shall
be credits against the running royalties payable, as specified in Section 2.3.3
hereof.

          2.4.2  To the extent that Licensee grants any sublicense rights under
this Agreement and the sublicensee pays to Licensee a running royalty in excess
of 3% of Net Sales, then Licensee shall share with and pay to SKCC an mount
equal to 10% of said excess received by Licensee. SKCC shall also receive the 3%
running royalty on the Net Sales by the sublicensee. Licensee shall not accept
any alternative payments (e.g., license fees or milestone payments) "in lieu of"
a customary, fair and reasonable running royalty, unless Licensee also pays to
SKCC 10% of said "in lieu of" alternative payment.

          2.4A. Allocation of Payments. As a matter between Licensor and SKCC,
                ----------------------
with which Licensee need not be concerned, the payments received by SKCC
pursuant to Sections 2.3 and 2.4 shall be allocated and distributed as follows:

                (i)  As to payments under Section 2.3 and as to payments under
Section 2.4 for Products utilizing the Licensor Patent Right or for Products
utilizing the Future Patent Rights for which Licensor is the sole inventor, the
payments shall be allocated and distributed:

                     25%  to Licensor, for his own personal benefit, or to his
                          heirs or assigns;

                     25%  to SKCC, for use in Licensor's laboratory at SKCC
                          while Licensor continues to be associated with SKCC,
                          and thereafter to SKCC for its own uses; and

                     50%  to SKCC for its own uses.

                (ii) As to payments under Section 2.4 for Products utilizing the
Future Patent Rights for which Licensor is a co-inventor with other SKCC
employees (and not utilizing the Licensor Patent Rights), the payments shall be
allocated and distributed in accordance with SKCC's Patent Policy.

                                       5
<PAGE>

     2.5. Quarterly Payments. With regard to Net Sales made by Licensee or its
          ------------------
Affiliates or sublicensees, royalties shall be payable by Licensee quarterly,
within ninety (90) days after the end of each calendar quarter, based upon the
Net Sales of Products during such preceding calendar quarter, commencing with
the calendar quarter in which the first commercial sale of any Product is made.

     2.6. Term of License.
          ---------------

          2.6.1   Unless terminated sooner in accordance with the provisions of
this Agreement, the term of this license shall expire when the last of the
royalty obligations has expired. The royalty obligations of Licensee as to each
Product shall terminate on a product-by-product and country-by-country basis
concurrently with the expiration of the last to expire of Licensor Patent Rights
utilized by or in each such Product in each such country.

          2.6.2   Upon the expiration of the royalty obligation on a product-by-
product and country-by-country basis described above, and provided that Licensee
is not then in default hereunder, Licensee shall have the right to continue to
sell or otherwise distribute the applicable Product in said country without
further royalty obligations on account of Net Sales in such country.

          2.6.3   Notwithstanding the foregoing, if applicable government
regulations require a shorter term and/or a shorter term of exclusivity than
provided for herein, then the term of this License Agreement shall be so
shortened or this License Agreement shall be amended to provide for a
nonexclusive license, and, in such event, the parties shall negotiate in good
faith to reduce equitably the royalties payable as set forth under Section 2.4
hereof. If the parties cannot agree, the equitable adjustment shall be
determined by arbitration in accordance with Article 9 hereof.

     2.7. Sublicense.
          ----------

          2.7.1   Licensee shall have the right to grant sublicenses to any
party with respect to any rights conferred upon Licensee under this Agreement.
Notwithstanding the foregoing, (i) any such sublicense shall be subject in all
respects to the restrictions, exceptions, royalty obligations, reports,
termination provisions, and other provisions contained in this Agreement (but
not including the payment of a license fee pursuant to Section 2.3 hereof) and
(ii) each such sublicensee, and the form and substance of each such sublicense,
shall be subject to the prior written approval of Licensor and SKCC, which
approval shall not be unreasonably withheld. Any termination of this License
Agreement shall automatically terminate any sublicense hereunder, at the option
of Licensor and SKCC.

          2.7.2   Licensee shall pay to SKCC, or cause its Affiliate or
sublicensee to pay SKCC, the royalties on all Net Sales of such Affiliate or
sublicensee the same as if said Net Sales had been made by Licensee. Each
Affiliate and sublicensee shall report its Net Sales to SKCC through Licensee,
which Net Sales shall be aggregated with any Net Sales of Licensee for purposes
of determining the Net Sales upon which royalties are to be paid to Licensor.

                                       6
<PAGE>

     2.8.  Reports. Licensee shall furnish to SKCC at the same time as each
           -------
royalty payment is made by Licensee, a detailed written report of Net Sales of
the Products and the royalty due and payable thereon, including a description of
any permitted offsets or credits deducted therefrom, on a product-by-product and
country-by-country basis, for the calendar quarter upon which the royalty
payment is based.

     2.9.  Records. Licensee shall keep, and cause its Affiliates and
           --------
sublicensees to keep, full, complete and proper records and accounts of all
sales of Products in sufficient detail to enable the royalties payable on Net
Sales of each Product to be determined. SKCC shall have the right to appoint an
independent certified public accounting firm to audit the records of Licensee,
its Affiliates and sublicensees as necessary to verify the royalties payable
pursuant to this Agreement. Licensee, its Affiliates and sublicensees shall pay
to an amount equal to any additional royalties to which SKCC is entitled as
disclosed by the audit, plus a late payment charge thereon at the rate of one
and one-half percent (1.5%) per month. Such audit shall be at the expense of the
party requesting such audit; provided, however, that if the audit discloses that
SKCC was underpaid royalties with respect to any Product by at least five
percent (5%) for any calendar quarter, then Licensee shall reimburse SKCC for
the audit costs applicable thereto. SKCC may exercise its right of audit as to
each of Licensee, its Affiliates or sublicensees no more frequently than once in
any calendar year. The accounting firm shall disclose to SKCC the results of
such audit, but limiting the disclosure to only information relating to the
accuracy and discrepancies of the royalty payments; and otherwise the accounting
firm shall be obligated to maintain the confidentiality of the information it
obtains from said audit. Licensee, its Affiliates and sublicensees shall
preserve and maintain all such records required for audit for a period of three
(3) years after the calendar quarter to which the record applies.

     2.10. Foreign Sales. The remittance of royalties payable on sales outside
           --------------
the United States shall be payable to SKCC in United States Dollar equivalents
at the official rate of exchange of the currency of the country from which the
royalties are payable, as quoted in the Wall Street Journal for the last
business day of the calendar quarter in which the royalties are payable. If the
transfer of or the conversion into the United States Dollar equivalents of any
such remittance in any such instance is not lawful or possible, the payment of
such part of the royalties as is necessary shall be made by the deposit thereof,
in the currency of the country where the sale was made on which the royalty was
based to the credit and account of SKCC or its nominee in any commercial bank or
trust company of SKCC's choice located in that country, prompt written notice of
which shall be given by Licensee to SKCC.

     2.11. Foreign Taxes. Any tax required to be withheld by Licensee under the
           -------------
laws of any foreign country for the account of SKCC shall be promptly paid by
Licensee for and on behalf of SKCC to the appropriate governmental authority,
and Licensee shall use its best reasonable efforts to furnish SKCC with proof of
payment of such tax together with official or other appropriate evidence issued
by the applicable government authority. Any such tax actually paid on SKCC's
behalf shall be deducted from royalty payments due SKCC.

                                       7
<PAGE>

3.   PATENT MATTERS

     3.1. Patent Prosecution and Maintenance. From and after the date of this
          ----------------------------------
Agreement, the provisions of this Article 3 shall control the prosecution and
maintenance of any patent included within Licensor Patent Rights and/or Future
Patent Rights. Subject to the requirements, limitations and conditions set forth
in this Agreement, Licensor shall direct and control patent matters applicable
to the invention described in item 1 of Exhibit A, and SKCC shall direct and
control the patent matters for inventions resulting from the sponsored research
program described in Section 2.2 hereof, including (i) the preparation, filing
and prosecution of the United States and foreign patent applications within
Licensor Patent Rights and/or Future Patent Rights (including any interferences
and foreign oppositions) and (ii) maintain the patents issuing therefrom.
Licensor or SKCC, respectively, shall select the patent attorney, subject to
Licensee's written approval, which approval shall not be unreasonably withheld.
Licensee shall have full rights of consultation with the patent attorney so
selected on all matters relating to Licensor Patent Rights and/or Future Patent
Rights. Licensor or SKCC, respectively, shall use its reasonable good faith
efforts to implement all reasonable requests made by Licensee with regard to the
preparation, filing, prosecution and/or maintenance of the patent applications
and/or patents within Licensor Patent Rights and/or Future Patent Rights.

     3.2. Information to Licensee. Licensor or SKCC shall keep Licensee informed
          -----------------------
with regard to the patent application and maintenance processes applicable to
patent protection. Licensor or SKCC shall deliver to Licensee a copy of all
patent applications, amendments, related correspondence, preliminary drains of
the foregoing prior to finalization, and other relevant matters related thereto.

     3.3. Patent Costs. Licensee acknowledges and agrees that Licensor and SKCC
          ------------
do not have independent funding to cover patent costs, and that the license
granted hereunder is in part in and consideration for Licensee's assumption of
patent costs and expenses as described herein. Licensee shall pay for all
expenses incurred by Licensor or SKCC pursuant to Section 3.1 hereof. SKCC
hereby represents and acknowledges that SKCC has not yet incurred any patent
costs and expenses in connection with Licensor Patent Rights and/or Future
Patent Rights licensed hereunder. By separate agreement, Licensor and Licensee
are handling patent costs previously incurred by Licensor. Licensee agrees to
pay all such future patent expenses directly to Licensor's or SKCC's patent
attorney, within thirty (30) days after Licensee receives an itemized invoice
therefor.

     3.4. Effect of Licensee's Discontinuing Payments. In the event Licensee
          -------------------------------------------
elects to discontinue payment for the filing, prosecution and/or maintenance of
any United States or foreign patent application and/or United States or foreign
patent within Licensor Patent Rights and/or Future Patent Rights, Licensee shall
give Licensor or SKCC at least sixty (60) days' prior written notice of such
election. No such notice shall have any effect on Licensee's obligations to pay
expenses incurred up to the effective date of such election. From and after the
effective date of such notice of election, Licensor or SKCC shall have the
right, but not the obligation, to pay for the prosecution and/or maintenance of
the patent right which Licensee is discontinuing. From and after the effective
date of such notice of election, any such patent application or patent as to
which Licensee shall have elected to discontinue payments shall thereafter be
excluded from the

                                       8
<PAGE>

definition of Licensor Patent Rights and/or Future Patent Rights and from the
scope of license granted under this Agreement. All rights relating to such
patent application or patent for Licensor Patent Rights shall revert to Licensor
or SKCC, as the case may be, and may be freely licensed by Licensor, and for
Future Patent Rights shall revert to SKCC, as the case may be, to any other
person or entity.

     3.5. Ownership. The patent applications filed and the patents obtained by
          ---------
Licensor or SKCC pursuant to Section 3.I hereof shall be owned solely by
Licensor or SKCC, as the case may be, and deemed a part of Licensor Patent
Rights and/or Future Patent Rights.

     3.6. Licensor's Right to Pursue Patent. If at any time during the term of
          ---------------------------------
this Agreement, Licensee's rights with respect to Licensor Patent Rights and/or
Future Patent Rights are terminated, Licensor and SKCC shall have the right to
take whatever action Licensor and SKCC deem appropriate to obtain or maintain
the corresponding patent protection at its own expense. If Licensor or SKCC
pursues patents under this Section 3.6, Licensee agrees to cooperate fully,
including by providing, at no charge to Licensor or SKCC, all appropriate or
necessary technical data and executing all appropriate or necessary legal
documents for said patent prosecution.

     3.7. Infringement Actions.
          --------------------

          3.7.1 Infringement. Licensee shall have the option to prosecute any
                ------------
and all infringements of any Licensor Patent Rights and/or Future Patent Rights.
Licensee shall be entitled to bring an action against the infringement in
Licensor's or SKCC's name if required by law or otherwise deemed appropriate.
Licensee hereby holds Licensor and SKCC harmless from and against any costs,
expenses or liability of any kind respecting all such infringements or any
charges of infringements. Licensor and SKCC agree to provide reasonable
assistance of a technical nature to Licensee which Licensee may require in any
litigation arising in accordance with the provisions of this Section 3.7.1, for
which Licensee shall pay to Licensor and SKCC a reasonable hourly rate of
compensation together with reimbursement of reasonable out-of-pocket costs and
expenses. Licensee shall have the right, with the consent of Licensor and SKCC,
which consent shall not be unreasonably withheld, to enter into any settlements,
judgments or other arrangements respecting the infringement claim. Any damages,
judgments or other payments actually recovered from the infringing party in the
litigation pursued by Licensee shall be used first to reimburse Licensee for all
costs (including those Licensor's or SKCC's costs paid by Licensee) of pursuing
the litigation; and any net remaining balance shall be shared seventy percent
(70%) to Licensee and thirty percent (30%) to SKCC. In the event Licensee elects
not to prosecute any such infringement, Licensee shall promptly so notify
Licensor and SKCC, and Licensor and SKCC shall thereafter have the right to
prosecute such infringement action on its own behalf. In the event Licensor or
SKCC elects to prosecute any such infringement action on its own behalf, any net
recovery obtain in connection therewith shall be shared seventy percent (70%) to
Licensor and/or SKCC, as the case may be, and thirty percent (30%) to Licensee.
Any net payments received by SKCC pursuant to this Section shall be treated as a
payment pursuant to Section 2.4 and allocated and distributed as specified in
Section 2.4A.

                                      9
<PAGE>

          3.7.2 Challenge to Licensor Patent Rights. In the event there is any
                -----------------------------------
challenge to the validity, scope or enforceability of Licensor Patent Rights,
Licensee shall bear the costs to resist and defend said challenge unless
Licensee elects to not do so by written notice to Licensor. Licensor and
Licensee shall confer and decide upon an appropriate strategy and plan to
resist said challenge, including the selection of legal and patent counsel to
represent Licensor therein. Fifty percent (50%) of Licensee's costs to resist
said challenge shall constitute credit offsets against up to fifty percent (50%)
of the running royalties payable in any future period. Licensee shall pay the
royalty rate for said Licensor Patent Rights unless and until a final and non-
appealable decision has been rendered upholding the challenge. If Licensee
elects to not fund the costs to resist said challenge, then Licensor may do so.
Licensee hereby agrees to not contest or challenge the validity of Licensor
Patent Rights and/or Future Patent Rights and to not encourage or abed any third
party to do so; but in the event and to the extent that the foregoing is legally
impermissible, the foregoing shall be deemed to be modified and limited so as to
be legally permissible.

4.   OBLIGATIONS RELATED TO COMMERCIALIZATION

     4.1. Commercialization Obligation. In order to maintain the license granted
          ----------------------------
hereunder in force, Licensee shall use reasonable efforts and due diligence (i)
to pursue research and development for Products, and (ii) to obtain and maintain
necessary governmental approvals for the sale of Products, as promptly as is
reasonably and commercially feasible, and (iii) thereafter to produce and sell
reasonable quantities of such Products in worldwide markets. Licensee shall keep
Licensor and SKCC generally informed as to Licensee's progress for such
research, development, approvals, production and sale, including its efforts, if
any, to sublicense Licensor Patent Rights and/or Future Patent Rights. Licensee
shall deliver to Licensor and SKCC an annual written report and such other
reports as Licensor or SKCC may reasonably request. In the event Licensor, SKCC
and Licensee cannot agree upon any matter related to Licensee's
commercialization obligations, the parties agree to utilize arbitration pursuant
to Article 9 hereof in order to resolve the matter. If the arbitrator determines
that Licensee has not complied with its obligations hereunder as to a particular
Product or Products, and such default is not fully cured within six (6) months
after the arbitrator's decision, then Licensor may terminate this Agreement as
to said particular Product or Products.

     4.2. Governmental Approvals and Marketing of Products. Licensee shall be
          ------------------------------------------------
responsible for obtaining all necessary governmental approvals for the
development, production, distribution, sale and use of the Products, at
Licensee's expense. Licensee shall have sole responsibility for any warning
labels, packaging and instructions as to the use of Products and for the quality
control for any Product.

     4.3. Indemnity. Licensee hereby agrees to indemnify, defend and hold
          ---------
harmless Licensor and SKCC from and against any liability or expense arising
from any product liability claim asserted by any party as to the Products or any
claims arising from the use of any Licensor Patent Rights and/or Future Patent
Rights pursuant to this Agreement. Such indemnity and defense obligation shall
apply to any product liability or other claims, including without limitation,
personal injury, death or property damage, made by employees, subcontractors,
sublicensees, or agents of Licensee or its Affiliates or sublicensees, as well
as any member of the general public.

                                       10
<PAGE>

     4.4. Patent Marking. To the extent required by applicable law, Licensee
          --------------
shall mark all Products or their containers in accordance with the applicable
patent marking laws.

     4.5. No Use of Name. The use of the name of Licensor or SKCC in connection
          --------------
with the advertising or sale of the Products is expressly prohibited.

     4.6. Foreign Registration. Licensee agrees to register this Agreement with
          --------------------
any foreign governmental agency which requires such registration, and Licensee
shall pay all costs and legal fees in connection therewith. In addition,
Licensee shall assure that all foreign laws affecting this Agreement or the sale
of Products are fully satisfied.

5.   LIMITED WARRANTY

     Licensor hereby represents and warrants that it has sole ownership of
Licensor Patent Rights licensed hereunder, and that Licensor has the full right
and power to enter into this Agreement. SKCC hereby represents and warrants that
it has the right to grant the rights it is granting as specified in this
Agreement. LICENSOR AND SKCC MAKE NO OTHER WARRANTIES CONCERNING LICENSOR PATENT
RIGHTS AND/OR FUTURE PATENT RIGHTS COVERED BY THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AS TO LICENSOR PATENT RIGHTS AND/OR FUTURE PATENT RIGHTS OR
ANY PRODUCT. LICENSOR AND SKCC MAKE NO WARRANTY OR REPRESENTATION AS TO THE
VALIDITY OR SCOPE OF LICENSOR PATENT RIGHTS AND/OR FUTURE PATENT RIGHTS OR THAT
ANY PRODUCT WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY
INFRINGING LICENSOR PATENT RIGHTS AND/OR FUTURE PATENT RIGHTS COVERED BY THIS
AGREEMENT.

6.   INTERESTS IN INTELLECTUAL PROPERTY RIGHTS

     6.1. Preservation of Title. Licensor hereby retains ownership and title to
          ---------------------
Licensor Patent Rights and SKCC hereby retains ownership and title to Future
Patent Rights licensed hereunder, subject to Licensee's rights under this
Agreement.

     6.2. Governmental Interests. To the extent, if any, that Licensor or SKCC
          ----------------------
has received funding from the United States Government in support of research
activities which resulted in Licensor Patent Rights and/or Future Patent
Rights, Licensee acknowledges that Licensee's rights pursuant to this Agreement
shall be subject to the rights of the United States Government, if any, which
arise or result from the receipt of research support from the United States
Government by Licensor and SKCC, including without limitation, (i) the grant to
the United States of a nonexclusive, irrevocable, royalty-free license to
Licensor Patent Rights and/or Future Patent Rights licensed hereunder for
governmental purposes, (ii) the right of the United States to exercise "march-
in" rights to force certain non-exclusive licensing if Licensee is not
diligently commercializing certain Products, and (iii) the obligation of
Licensee to manufacture substantially

                                       11
<PAGE>

in the United States those licensed Products which are sold in the United
States, unless a waiver is obtained from an agency of the United States.

7.   CONFIDENTIALITY AND PUBLICATION

     7.1. Treatment of Confidential Information. The parties agree that during
          -------------------------------------
the term of this Agreement, and for a period of three (3) years after this
Agreement terminates, a party receiving Confidential Information of the other
party will (i) maintain in confidence such Confidential Information to the same
extent such party maintains its own proprietary industrial information, but in
any event the party shall use reasonable efforts, (ii) not disclose such
Confidential Information to any third party without prior written consent of the
other party and (iii) not use such Confidential Information for any purpose
except those permitted by this Agreement.

     7.2. Publications. Licensee agrees that Licensor and SKCC shall have the
          ------------
right to publish in accordance with customary academic practices and policies.
However, prior to publication, Licensor and SKCC shall submit to Licensee copies
of proposed publications which contain subject matter relating to intellectual
property licensed hereunder or to a Product, and afford Licensee thirty (30)
days to review the publication(s). Upon timely written request by Licensee,
Licensor and SKCC shall delay any such publication until the preparation and
filing of a patent application pursuant to Section 3.1, which delay shall not
exceed an additional thirty (30) days.

     7.3. Publicity. Except as otherwise provided herein or required by law, no
          ---------
party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, stockholders'
reports, or otherwise, relating to this Agreement or to any sublicense
hereunder, or to the performance hereunder or any such agreements, without the
prior written approval of the other party, which approval shall not be
unreasonably withheld. Scientific publications published in accordance with
Section 7.2 of this Agreement shall not be construed as publicity governed by
this Section 7.3.

8.   TERM AND TERMINATION

     8.1. Term. Unless terminated sooner in accordance with the terms set forth
          ----
herein, the term of this Agreement, and the license granted hereunder, shall
terminate as provided in Article 2.6 hereof.

     8.2. Termination Upon Default.
          ------------------------

          8.2.1     Any one or more of the following events shall constitute an
event of default hereunder: (i) the failure of a party to pay any amounts when
due hereunder and the expiration of sixty (60) days after receipt of a written
notice requesting the payment of such amount; or (ii) the failure of a party to
perform any other obligation required of it to be performed hereunder, and the
failure to cure within sixty (60) days after receipt of notice from the other
party specifying in reasonable detail the nature of such default. Upon the
occurrence of any event of default, the

                                       12
<PAGE>

non-defaulting party may deliver to the defaulting party written notice of
intent to terminate, such termination to be effective upon the date set forth in
such notice.

          8.2.2     Such termination rights shall be in addition to and not in
substitution for any other remedies that may be available to the non-defaulting
party. Termination pursuant to this Section 8.2 shall not relieve the defaulting
party from liability and damages to the other party for breach of this
Agreement. Waiver by either party of a single default or a succession of
defaults shall not deprive such party of any right to terminate this Agreement
arising by reason of any subsequent default.

     8.3. Termination Upon Bankruptcy or Insolvency. Unless otherwise prohibited
          -----------------------------------------
by applicable law, this Agreement may be terminated by Licensor or SKCC giving
written notice of termination to Licensee upon the filing of bankruptcy
proceedings for Licensee, or the appointment of a receiver of any of Licensee's
assets, or the making by Licensee of any assignment for the benefit of
creditors, or the institution of any proceedings against Licensee under any
bankruptcy law. Termination shall be effective upon the date specified by
Licensor or SKCC in such notice.

     8.4. Rights Upon Expiration. Neither party shall have any further rights or
          ----------------------
obligations upon the expiration of the full term of this Agreement upon its
regularly scheduled expiration date with respect to this Agreement, other than
the obligation of Licensee to make any and all reports and payments for the
final quarter period. Notwithstanding the foregoing, upon such expiration, (i)
each party shall be required to continue to abide by its obligations as
described in Article 7, (ii) Licensee may continue to sell the Product under the
terms described in Section 2.6, and (iii) Licensee shall continue to abide by
its obligation to indemnify Licensor as described in Section 4.3.

     8.5. Rights Upon Termination. Notwithstanding any other provision of this
          -----------------------
Agreement, upon any termination of this Agreement prior to the regularly
scheduled expiration date of this Agreement, the license granted hereunder shall
terminate. Except as otherwise provided in Section 8.6 of this Agreement with
respect to work-in-progress, upon such termination, Licensee shall have no
further right to develop, manufacture, use, market or sell any Product, or to
otherwise use any Licensor Patent Rights and/or Future Patent Rights. Upon any
such termination, Licensee shall promptly return all materials, samples,
documents, information, and other materials which embody or disclose Licensor
Patent Rights and/or Future Patent Rights, provided, however, that Licensee
shall not be obligated to provide Licensor and SKCC with proprietary information
which Licensee can show that it independently developed. Any such termination
shall not relieve either party from any obligations accrued to the date of such
termination. Upon such termination, each party shall be required to abide by its
obligations as described in Section 7.1, and Licensee shall continue to abide by
its obligations to indemnify Licensor as described in Article 4.3.

     8.6. Work-in-Progress. Upon any such early termination of the license
          ----------------
granted hereunder in accordance with Section 8.5 of this Agreement, Licensee
shall be entitled to finish any work-in-progress and to sell any completed
inventory of Product covered by such license which remain on hand as of the date
of the termination, so long as Licensee pays to SKCC the

                                       13
<PAGE>

royalties applicable to said subsequent sales in accordance with the terms and
conditions as set forth in this Agreement, provided that no such sales shall be
permitted after the expiration of six (6) months after the date of termination.

9.   ARBITRATION

     9.1. Binding Arbitration. Any dispute arising out of this Agreement shall
          -------------------
be resolved by binding arbitration under the rules of JAMS. The location of the
arbitration shall be in the County of San Diego.

     9.2. Selection of Arbitrators. The arbitration shall be conducted by a
          ------------------------
panel of three neutral arbitrators who are independent and disinterested with
respect to the parties, this Agreement, and the outcome of the arbitration.
Licensor and SKCC, together, shall appoint one neutral arbitrator, and Licensee
shall appoint one neutral arbitrator, and these two arbitrators so selected by
the parties shall then select the third arbitrator. If one party has given
written notice to the other party as to the identity of the arbitrator appointed
by the party, and the party thereafter makes a written demand on the other party
to appoint its designated arbitrator within the next ten days, and the other
party fails to appoint its designated arbitrator within ten days after
receiving said written demand, then the arbitrator who has already been
designated shall appoint the other two arbitrators.

     9.3. Discovery. Unless the parties mutually agree in writing to some
          ---------
additional and specific pre-hearing discovery, the only pre-hearing discovery
shall be (a) reasonably limited production of relevant and non-privileged
documents, and (b) the identification of witnesses to be called at the hearing,
which identification shall give the witness's name, general qualifications and
position, and a brief statement as to the general scope of the testimony to be
given by the witness. The arbitrators shall decide any disputes and shall
control the process concerning these pre-hearing discovery matters. Pursuant to
JAMS rules, the parties may subpoena witnesses and documents for presentation at
the hearing.

     9.4. Case Management. Prompt resolution of any dispute is important to both
          ---------------
parties; and the parties agree that the arbitration of any dispute shall be
conducted expeditiously. The arbitrators are instructed and directed to assume
case management initiative and control over the arbitration process (including
scheduling of events, pre-hearing discovery and activities, and the conduct of
the hearing), in order to complete the arbitration as expeditiously as is
reasonably practical for obtaining a just resolution of the dispute.

     9.5. Remedies. The arbitrators may grant any legal or equitable remedy or
          --------
relief that the arbitrators deem just and equitable, to the same extent that
remedies or relief could be granted by a state or federal court, provided
however, that no punitive damages may be awarded. No court action may be
maintained seeking punitive damages. The decision of any two of the three
arbitrators appointed shall be binding upon the parties.

     9.6. Expenses. The expenses of the arbitration, including the arbitrators'
          --------
fees, expert witness fees, and attorney's fees, may be awarded to the prevailing
party, in the discretion of the arbitrators, or may be apportioned between the
parties in any manner deemed appropriate by the

                                       14
<PAGE>

arbitrators. Unless and until the arbitrators decide that one party is to pay
for all (or a share) of such expenses, both parties shall share equally in the
payment of the arbitrators' fees as and when billed by the arbitrators.

     9.7.  Confidentiality. Except as set forth below, the parties shall keep
           ---------------
confidential the fact of the arbitration, the dispute being arbitrated, and the
decision of the arbitrators. Notwithstanding the foregoing, the parties may
disclose information about the arbitration to persons who have a need to know,
such as directors, trustees, management employees, witnesses, experts,
investors, attorneys, lenders, insurers, and others who may be directly
affected. Additionally, if a party has stock which is publicly traded, the party
may make such disclosures as are required by applicable securities laws.
Further, if a party is expressly asked by a third party about the dispute or the
arbitration, the party may disclose and acknowledge in general and limited terms
that there is a dispute with the other party which is being (or has been)
arbitrated. Once the arbitration award has become final, if the arbitration
award is not promptly satisfied, then these confidentiality provisions shall no
longer be applicable.

10.  GENERAL PROVISIONS

     10.1. Assignment. Neither this Agreement nor any rights granted hereunder
           ----------
may be assigned or transferred by Licensee except (i) to an Affiliate of
Licensee or (ii) as expressly permitted hereunder, without the prior written
consent of Licensor and SKCC.

     10.2. Binding Upon Successors and Assigns. Subject to the limitations on
           -----------------------------------
assignment herein, this Agreement shall be binding upon and inure to the benefit
of any successors in interest and assigns of Licensor, SKCC and Licensee. Any
such successor or assignee of Licensee's interest shall expressly assume in
writing the performance of all the terms and conditions of this Agreement to be
performed by Licensee.

     10.3. Independent Contractors. The relationship between SKCC, Licensor and
           -----------------------
Licensee is that of independent contractors. SKCC, Licensor and Licensee are not
joint venturers, partners, principal and agent, master and servant, employer or
employee, and have no other relationship other than independent contracting
parties. SKCC, Licensor and Licensee shall have no power to bind or obligate
each other in any manner, other than as is expressly set forth in this
Agreement.

     10.4. Entire Agreement; Modification. This Agreement sets forth the entire
           ------------------------------
agreement and understanding between the parties as to the subject matter hereof.
There shall be no amendments or modifications to this Agreement, except by a
written document which is signed by both parties.

     10.5. California Law. This Agreement shall be construed and enforced in
           --------------
accordance with the laws of the State of California.

     10.6. Headings. The headings for each article and section in this Agreement
           --------
have been inserted for convenience of reference only and are not intended to
limit or expand on the meaning of the language contained in the particular
article or section.

                                       15
<PAGE>

     10.7.  Severability. Should any one or more of the provisions of this
            ------------
Agreement be held invalid or unenforceable by a court of competent jurisdiction,
it shall be considered severed from this Agreement and shall not serve to
invalidate the remaining provisions thereof. The parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by them when entering this
Agreement may be realized.

     10.8.  No Waiver. Any delay in enforcing a party's rights under this
            ---------
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.

     10.9.  Attorneys' Fees. In the event of a dispute between the parties
            ---------------
hereto or in the event of any default hereunder, the party prevailing in the
resolution of any such dispute or default shall be entitled to recover its
reasonable attorneys' fees and other costs incurred in connection with resolving
such dispute or default.

     10.10. Notices. Any notices required by this Agreement shall be in writing,
            -------
shall specifically refer to this Agreement and shall be sent by registered or
certified airmail, postage prepaid, or by telefax, telex or cable, charges
prepaid, or by overnight courier, postage prepaid and shall be forwarded to the
respective addresses set forth below unless subsequently changed by written
notice to the other party:

               For Licensee:            UroGen Corp.

                                             3099 Science Park Road, Suite A
                                             San Diego, CA 92121
                                             Attn: President
                                             Fax: 450-5949

               For SKCC:                Sidney Kimmel Cancer Center

                                             3099 Science Park Rd., Suite 200
                                             San Diego, CA 92121
                                             Attn: President
                                             Fax: (619) 450-3251

               For Licensor:            Daniel A. Mercola, M.D., Ph.D.

                                             P.O. Box 3752
                                             Rancho Santa Fe, CA 92067

            Notice shall be deemed delivered upon the earlier of (i) when
received, or (ii) three (3) days after deposit into the United States mail if
sent within the United States, or (iii) the date

                                       16
<PAGE>

notice is sent via telefax, telex or cable, or (iii) one business day
immediately following delivery to overnight courier (except Sunday and holidays)
for delivery within the United States.

     10.11. Compliance with U.S. Laws. Nothing contained in this Agreement
            -------------------------
shall require or permit Licensor or Licensee to do any act inconsistent with
the requirements of any United States law, regulation, or executive order as the
same may be in effect from time to time.

            IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized representatives as of the date set forth above.

Licensee:                                    SKCC:

UroGen Corp.                                      Sidney Kimmel Cancer Center


By: [SIGNATURE ILLEGIBLE]                    By: /s/ Linda Bergen
    ---------------------------------            -------------------------------

Its: President & CEO                         Its: Assistant Vice President
     --------------------------------             ------------------------------


                                             Licensor:

                                             /s/ Daniel A. Mercola
                                             -----------------------------------
                                             Daniel A. Mercola, M.D., Ph.D.

                                       17
<PAGE>

                                   EXHIBIT A

                            Licensor Patent Rights

1.   U.S. Patent Applications
     ------------------------

     Inventor: Daniel Mercola
     Title: Methods for Therapy Sensitization by Inhibition of Jun Kinase

     Patent Attorney Docket No.: P-UR 2590 (2841302)
                                 ---------
     Date filed with PTO:      5/28/97
                         ------------------

                                       i