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                                                                EXHIBIT 10.62


                   RELAXIN SCALE-UP AND BULK SUPPLY AGREEMENT


THIS AGREEMENT, effective December 1, 1998, is between Bender + Co Ges.m.b.H.
("BENDER"), a subsidiary of Boehringer Ingelheim, having an address at Dr.
Boehringer-Gasse 5-11, A-1121 Vienna, Austria, and Connetics Corporation
("CONNETICS"), a corporation organized under the laws of Delaware, having an
address at 3400 West Bayshore Road, Palo Alto, California 94303 U.S.A.

WHEREAS, pursuant to the terms of a Confidential Disclosure Agreement dated
January 31, 1997 between BENDER and CONNETICS (under its former name, Connective
Therapeutics, Inc.) the parties have evaluated the feasibility of, and BENDER
has submitted a price quotation for, providing relaxin manufacturing process
scale-up and toll manufacturing services for CONNETICS; and

WHEREAS, BENDER and CONNETICS wishes [sic] to proceed with such services and
define the parties' respective rights and obligations with respect thereto, the
subject of this contract including, e.g., process transfer and implementation,
optimisation of fermentation process, scale-up of fermentation and purification
process and market supply;

NOW, THEREFORE, IT IS HEREBY AGREED as follows:

1.       DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth
below.

1.1      "AFFILIATE" shall mean in respect of either party any corporation or
         business entity controlled by, controlling, or under common control
         with BENDER or CONNETICS, respectively. For this purpose "control"
         shall mean the direct or indirect beneficial ownership of at least
         fifty percent (50%) of the voting stock of, or at least fifty percent
         (50%) interest in the income of, such corporation or other business
         entity, or such other relationship as, in fact, constitutes actual
         control.

1.2      "ATS" shall mean the Austrian Shilling.

1.3      "BENDER IMPROVEMENTS" shall mean all intellectual property, including
         knowhow, technology, trade secrets and any inventions, modifications
         and improvements to the CONNETICS KNOWHOW, patents or applications for
         patents that BENDER develops or conceives individually or in
         conjunction with others pursuant to this Agreement. BENDER IMPROVEMENTS
         shall under no circumstances mean any intellectual property including
         knowhow, technology, trade secrets and any inventions which are not
         PRODUCT-related and which derive solely from Benders experience and
         knowhow.

1.4      "BENDER'S REPRESENTATIVE" means the person designated by BENDER who
         shall be primarily responsible for communications between BENDER and
         CONNETICS. As of the EFFECTIVE DATE, Monika Henninger, Ph.D. is
         designated as BENDER'S REPRESENTATIVE.




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1.5      "BEST EFFORTS" mean [sic] the good faith deployment by BENDER or
         CONNETICS, in light of prevailing circumstances and taking into account
         third party obligations and commitments, of sufficient of its
         resources, capital equipment, material and labor as might reasonably be
         expected to timely achieve, or if there is no time limit then achieve
         in the shortest practical time, the goals, deliverables and benefits
         which are anticipated to accrue to BENDER and CONNETICS hereunder.

1.6      "BLA" shall mean a Biological License Application.

1.7      "cGMP" shall mean Current Good Manufacturing Practices as promulgated
         by the FDA (e.g., 21 CFR 210 and 211).

1.8      "CMC" shall mean the Chemistry, Manufacturing and Controls section of
         an IND or BLA.

1.9      "COGS" shall mean BENDER's actual cost of the production of PRODUCT, as
         determined in accordance with the applicable generally accepted
         accounting principles, which shall be comprised of the sum of direct
         labor and material and product testing costs incurred in connection
         with the manufacture or quality control testing of such PRODUCT, as
         well as directly allocable overhead.

1.10     "COMMENCEMENT OF COMMERCIAL MARKETING" shall mean the date of the first
         arms' length sale of RELAXIN by CONNETICS or an AFFILIATE, sublicensee
         or marketing partner, to a third party forming part of a continuous
         program or campaign designed to market RELAXIN (after all the required
         regulatory approvals have been granted therefor).

1.11     "COMMERCIAL PRODUCT" shall mean the PRODUCT provided by BENDER to
         CONNETICS, its Affiliates, sub-licensees and assigns hereunder in
         connection with and following the COMMENCEMENT OF COMMERCIAL MARKETING.

1.12     "CONNETICS' KNOWHOW" shall mean CONNETICS' existing process for the
         fermentation, purification and otherwise the manufacture of PRODUCT,
         and other knowhow, technology and trade secrets that CONNETICS may
         disclose to BENDER related to or useful in the manufacture of PRODUCT.

1.13     "CONNETICS' PATENTS" shall mean all patent applications and valid,
         issued and unexpired patents which are now or hereafter owned, licensed
         or otherwise controlled by CONNETICS, including any substitutions,
         extensions, reissues, renewals, divisions, continuations, or
         continuations-in-part, and all foreign counterparts of the foregoing,
         which cover and/or would be infringed by the unlicensed development,
         manufacture, use or sale of PRODUCT as contemplated by this Agreement,
         including but not limited to EP 112149, EP 303033, EP 251615, EP
         407401, EP 470976, and/or PCT/US94/06997.

1.14     "CONNETICS' REPRESENTATIVE" means the person designated by CONNETICS
         who shall be primarily responsible for communications between CONNETICS
         and BENDER. As of the EFFECTIVE DATE, Ernst Rinderknecht, Ph.D.
         is designated as CONNETICS' REPRESENTATIVE.

1.15     "EMEA" shall mean the European Medicines Evaluation Agency.



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1.16     "EXPERT TEAM" means a team of up to eight (8) people made up of up to
         four (4) people nominated by each of CONNETICS and BENDER and notified
         to the other, which nominees may be changed from time to time by the
         nominating party on notice to the other party. The EXPERT TEAM shall be
         responsible for agreeing the design [sic] of protocols, monitoring the
         SERVICES and deciding operational and scientific issues arising out of
         the SERVICES.

1.17     "FDA" shall mean the United States Food and Drug Administration.

1.18     "FROZEN RELAXIN BULK" shall mean RELAXIN BULK in frozen form.

1.19     "IND" shall mean an Investigational New Drug Application.

1.20     "INFORMATION" shall mean any information of value, not generally known
         to the public, provided by CONNETICS to BENDER or conceived or
         developed for CONNETICS by BENDER individually or in conjunction with
         others under the terms of this Agreement, including (but not limited
         to):

         o     information relating to pharmaceuticals; processes for developing
               pharmaceuticals; the development status of pharmaceuticals;
               synthetic and manufacturing processes including associated
               documentation such as batch records; compounds; compositions of
               matter; formulations; medicaments and modes of their
               administration; microorganisms; cells or parts thereof, cell
               lines and the progeny thereof, including modified or recombined
               DNA molecules, and vectors and hosts containing the same; natural
               and synthetic antibodies; technical information, such as
               clinical, biological, pharmaceutical and characterizing data;
               computer programs; apparatus; devices; drawings; designs; plans;
               and know-how; and

         o     business information, such as reports; records; customer lists;
               supplier lists; marketing and sales plans; forecasts; financial
               information; costs; and pricing information

         For purposes of this Agreement, INFORMATION shall not include any
         information unrelated to the PRODUCT but related to the BENDER's
         technology and knowhow as a biopharmaceutical manufacturer. All
         INFORMATION shall be subject to the confidentiality provisions of
         SECTION 12.1 below.

1.21     "MCB" shall mean Master Cell Bank.

1.22     "MATERIALS" shall mean all cells, RELAXIN BULK, inclusion bodies,
         MINI-C-PRORELAXIN and the like, provided by CONNETICS to BENDER or
         conceived or developed for CONNETICS by BENDER individually or in
         conjunction with others under the terms of this Agreement. All
         MATERIALS shall be treated as information subject to the
         confidentiality provisions of SECTION 12.1 and the use/transfer
         provisions of SECTION 12.2 below.

1.23     "MHW" shall mean the Japanese Ministry of Health and Welfare.



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1.24     "MINI-C-PRORELAXIN" shall mean the single chain peptide precursor to
         RELAXIN, having the amino acid sequence as set forth in Attachment 2 to
         the RFP.

1.25     "PRODUCT" shall mean RELAXIN BULK and/or FROZEN RELAXIN BULK provided
         by BENDER to CONNETICS, its AFFILIATES, sub-licensees and assigns
         hereunder.

1.26     "PROPOSAL" shall mean BENDER's Final Proposal responsive to the RFP,
         dated February 16, 1998 (copy attached as EXHIBIT B, and incorporated
         herein by this reference).

1.27     "REGULATORY AGENCY" shall mean the FDA, the EMEA, the MHW, or
         equivalent body having jurisdiction over the approval for marketing of
         pharmaceutical active agents in any country of the world.

1.28     "RELAXIN" shall mean recombinant human relaxin-H2 (CONNETICS' trade
         name is ConXn(R)), a peptide having the amino acid sequence as set
         forth in Attachment 1 to the RFP.

1.29     "RELAXIN BULK" shall mean Relaxin bulk drug substance produced
         according to GMP and released according to the Specifications.

1.30     "REPORT(S)" means the written report(s) prepared by Bender for
         Connetics pursuant to this Agreement.

1.31     "RFP" shall mean CONNETICS' Request for Proposal dated February 6, 1997
         (a copy of which is attached as EXHIBIT A, and incorporated herein by
         this reference).

1.32     "SERVICES" means the services that comprise Groups 1, 2 and 3
         activities to be carried out by BENDER as described in the PROPOSAL as
         may be amended from time to time pursuant to this Agreement.

1.33     "SPECIFICATIONS" shall mean CONNETICS' specifications for RELAXIN BULK
         and RELAXIN FROZEN BULK [sic] as set forth in Attachment 5 to the RFP.
         The SPECIFICATIONS may be revised, and additional SPECIFICATIONS (e.g.,
         for Master Cell Bank and Working Cell Bank) created, only by mutual
         agreement of the parties, set forth in writing signed by BENDER and
         CONNETICS as an amendment to this Agreement. Any revision to the
         SPECIFICATIONS shall take into account the then-current requirements of
         regulatory authorities with regard to the manufacture of recombinant
         proteins.

1.34     "STEERING COMMITTEE" means a team of up to eight (8) people,
         potentially including designated members of the EXPERT TEAM, made up of
         up to four (4) people nominated by each of CONNETICS and BENDER and
         notified to the other party. The nominees may be changed from time to
         time by the nominating party on notice to the other party. The STEERING
         COMMITTEE shall be responsible for reviewing issues on which the EXPERT
         TEAM have been unable to reach agreement and where possible make
         decisions arising out of such issues as well as carry out the specific
         functions provided for it by this Agreement.

1.35     "WCB" shall mean Working Cell Bank.



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2.       TECHNOLOGY TRANSFER AND COLLABORATION GUIDELINES

2.1      GENERAL DESCRIPTION. CONNETICS shall transfer to BENDER certain
         INFORMATION and MATERIALS as necessary for BENDER to perform the
         scale-up and manufacturing tasks as provided in this Agreement.

2.2      CONNETICS' KNOWHOW. CONNETICS shall provide necessary INFORMATION and
         MATERIALS, including but not limited to:

         2.2.1 To Commence Time-schedule
               [*]
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         2.2.2 Additional

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2.3      BASIC PRODUCTION ASSUMPTIONS. All obligations and deliverables of
         BENDER stated in this Agreement, particularly with respect to the
         timeline, scale, PRODUCT yield, and process scalability are based on
         the following production assumptions provided in the RFP by CONNETICS:

         Fermentation

               [*]

         Downstreaming

               [*]
               [*]
               [*]

2.4      TIMETABLE.

         2.4.1 CONNETICS shall timely deliver the INFORMATION and MATERIALS
described in SECTION 2.2 to BENDER.

         2.4.2    The time schedule for completion of BENDER's obligations under
                  this Agreement, as set forth in the Attachments 7 and 8 of the
                  PROPOSAL, shall commence upon BENDER's receipt of the
                  Information and MATERIALS provided under SECTION 2.2.1 and the
                  first meeting of the EXPERT TEAM (to the extent that agreement
                  on tasks, protocols and documentation is needed prior to
                  commencement). Time is of the essence in this Agreement.

         2.4.3    BENDER shall, within 4 weeks of receipt of the MASTER CELL
                  BANK documentation and sample, evaluate and advise CONNETICS
                  as to the sufficiency thereof for proceeding with the Group 1
                  activities and, if acceptable, proceed promptly as provided
                  under SECTION 3, below. To the extent necessary, BENDER shall
                  perform comprehensive testing as described in the quotation
                  dated April 16, 1998 (a copy of which is attached as EXHIBIT C
                  and incorporated herein by this reference) and according to
                  all applicable regulatory guidelines, draft guidelines, and
                  regulations. If unacceptable, BENDER shall advise CONNETICS as
                  to the reasons therefor, whereupon:

                  (a)      if CONNETICS agrees with BENDER's evaluation,
                           CONNETICS shall [*] and BENDER shall proceed to
                           generate a new MASTER CELL BANK and the required
                           corresponding documentation, or

                  (b)      if CONNETICS disagrees with BENDER's evaluation,
                           BENDER and CONNETICS shall endeavor in good faith to
                           resolve any differences as to the sufficiency of the
                           MASTER CELL BANK.

2.5      TECHNICAL SUPPORT. CONNETICS shall, throughout the term of this
         Agreement, timely respond to BENDER's questions and requests for
         assistance in receiving the INFORMATION and MATERIALS, implementing the
         PROPOSAL and carrying out its duties


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         hereunder. CONNETICS shall provide such reasonable technical support at
         its own expense, including access to CONNETICS' expert personnel.

2.6      MEETINGS. Throughout the term of this Agreement, the parties shall
         designate representatives to the EXPERT TEAM and the STEERING
         COMMITTEE, having technical and business expertise relating to the
         PRODUCT, to meet no less than two (2) times per year to discuss issues
         and define tasks, protocols and documentation relating to the Group 1,
         2 and 3 activities and commercial supply.

2.7      PERFORMANCE. Throughout the term of this Agreement, the parties shall
         employ their BEST EFFORTS to timely and efficiently achieve the goals
         and provide the deliverables as set forth herein. BENDER's activities
         and deliverables hereunder, and CONNETICS review and
         acceptance/rejection thereof shall be consistent with the
         SPECIFICATIONS and with the protocols and documentation as defined by
         the EXPERT Team.

2.8      DELIVERY OF PRODUCTS AND SAMPLES. PRODUCTS and samples to be delivered
         by BENDER pursuant to this Agreement shall be delivered to such
         recipient as CONNETICS may specify, and shall be sent through a
         recognized courier having access to Customs warehouses to allow for
         addition of refrigerant (e.g., dry ice, cardice) if needed. Containers
         for samples and shipment shall be specified by the EXPERT TEAM, if
         necessary. Dispatch costs, including insurance, will be borne by
         CONNETICS. All shipments shall be F.O.B. BENDER's Vienna facility.

2.9      DELIVERY OF DOCUMENTS. Documents to be delivered pursuant to this
         Agreement shall be addressed to CONNETICS' REPRESENTATIVE or BENDER'S
         REPRESENTATIVE, as the case may be, and may initially be sent by
         facsimile, confirmed with hard copies by courier. In all cases in this
         Agreement, the list of documents to be provided is intended to be by
         way of example or minimum requirements, and is not an exhaustive list
         of all documentation that may be required to be provided.

2.10     QUALITY MANAGEMENT SYSTEM. BENDER has established a quality management
         system in accordance with requirements and guidelines of the requisite
         authorities. Nevertheless, BENDER acknowledges that the PRODUCT is
         recorded to be manufactured in accordance with cGMP under FDA
         regulations. In the event that CONNETICS has any reasonable objections
         to documentation in connection with services performed pursuant to this
         Agreement, BENDER shall implement those changes needed to meet cGMP.
         WITH RESPECT TO CHANGES NOT NEEDED TO meet cGMP, BENDER may evaluate
         the objections and may in BENDER's sole discretion implement such
         suggestions, but BENDER will implement such discretionary changes only
         if they are not parallel to BENDER's existing GMP procedures and not
         contrary to BENDER's overall Quality Management System.

3.       PROCESS SCALE-UP (GROUP 1)

3.1      GENERAL DESCRIPTION. As set forth in the RFP and the PROPOSAL, BENDER
         shall commence the Group 1 activities by completing its receipt of the
         technology transfer, and ordering equipment and supplies. BENDER will
         [*] in consultation with CONNETICS, into the design of scaled-up 
         processes. Bender will [*] and deliver the


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         corresponding documentation and product samples to CONNETICS. Upon
         conclusion of the Group 1 activities BENDER and CONNETICS shall review
         the SPECIFICATIONS and agree upon such revisions as may be deemed
         necessary, amending the SPECIFICATIONS for the commencement of Group 2
         activities.

3.2      BENDER'S DELIVERABLES. BENDER shall complete the Group 1 activities as
         set forth in the RFP and the PROPOSAL, including but not limited to
         timely delivery of the following:

         [*]

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         [*]

         All PRODUCT amounts and runs described in this SECTION 3.2 are based on
         the Basic Production Assumptions set forth in SECTION 2.3.

         Delivery of samples shall be made consistent with SECTION 2.8, unless
         otherwise specified, and addressed to CONNETICS' REPRESENTATIVE.

         Delivery of documents shall be made consistent with SECTION 2.9, and
         addressed to CONNETICS' REPRESENTATIVE.

3.3      CONNETICS' PARTICIPATION. In addition to the technology transfer and
         technical support, as set forth in the RFP, CONNETICS shall:

         [*]

         [*]
         [*]
         [*]
         [*]
         [*]

3.4      REGULATORY DOCUMENTS. If the RELAXIN BULK manufactured under the Group
         1 activities meets the SPECIFICATIONS, BENDER shall provide the
         necessary resources to prepare and either deliver to CONNETICS (or file
         directly, as appropriate and to the extent requested by CONNETICS given
         the understanding that additional charges may apply), the following
         materials written in the English language concerning the manufacture of
         PRODUCT for use by CONNETICS in seeking regulatory approval for use of
         this material in clinical trials:

         o        All site-relevant and CMC-relevant documents necessary to the
                  filing of an IND amendment by CONNETICS to support the testing
                  of PRODUCT produced by BENDER in human clinical trials shall
                  be filed or delivered to CONNETICS within [*] days of
                  CONNETICS acceptance and release of each cGMP RELAXIN BULK lot
                  (the specific identification of such documents to be mutually
                  agreed upon at such time).


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         CONNETICS shall be solely responsible for processing all data and
         reports as needed to file regulatory documents, such as the IND, BLA
         and, eventually, for registration of the PRODUCT.

4.       PROCESS SCALE-UP (GROUP 2)

4.1      GENERAL DESCRIPTION. As set forth in the RFP and the PROPOSAL, and in
         consideration of the Basic Production Assumptions set forth in SECTION
         2.3, BENDER shall produce three cGMP conformance lots of PRODUCT of at
         least [*] each.

4.2      BENDER'S DELIVERABLES. BENDER shall complete the Group 2 activities as
         set forth in the RFP and the PROPOSAL, including but not limited to
         timely delivery of the following:

         [*]

         [*]
         [*]
         [*]
         [*]
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         Delivery of samples shall be made consistent with SECTION 2.8, unless
         otherwise specified, and addressed to CONNETICS' REPRESENTATIVE.

         Delivery of documents shall be made consistent with SECTION 2.9, and
         addressed to CONNETICS' REPRESENTATIVE.

         All PRODUCT amounts and runs described in this SECTION 4.2 are based on
         the Basic Production Assumptions set forth in SECTION 2.3, and BENDER
         shall use its BEST EFFORTS to produce the lots described in this
         SECTION 4.2. Subject to SECTION 6.2, conformance with SPECIFICATIONS
         shall be at CONNETICS' risk.

4.3      CONNETICS' PARTICIPATION. In addition to the technology transfer and
         technical support, as set forth in the RFP, CONNETICS shall:

         [*]

         [*]

4.4      REGULATORY DOCUMENTS. If the RELAXIN BULK manufactured under the Group
         2 activities meets the SPECIFICATIONS, BENDER shall provide the
         necessary resources to prepare and either deliver to CONNETICS (or file
         directly, as appropriate and to the extent requested by CONNETICS given
         the understanding that additional charges may apply), the following
         materials written in the English language concerning the


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         manufacture of PRODUCT for use by CONNETICS in seeking regulatory
         approval for use of this material in clinical trials:

         [*]

5.       PROCESS SCALE-UP (GROUP 3)

5.1      GENERAL DESCRIPTION.  As set forth in the RFP and the PROPOSAL, BENDER
         shall complete the following:

         [*]
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5.2      BENDER'S DELIVERABLES. BENDER shall complete the Group 3 activities as
         set forth in the RFP and the PROPOSAL, including but not limited to
         timely delivery of the following:

         [*]
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         [*]

         Delivery of samples shall be made consistent with SECTION 2.8, unless
         otherwise specified, and addressed to CONNETICS' REPRESENTATIVE.

         Delivery of documents shall be made consistent with SECTION 2.9, and
         addressed to CONNETICS' REPRESENTATIVE.

5.2      CONNETICS' PARTICIPATION. In addition to the technology transfer and
         technical support, as set forth in the RFP, CONNETICS shall:

         [*]
         [*]
         [*]
         [*]
         [*]
         [*]
         [*]

5.4      REGULATORY DOCUMENTS. BENDER shall use its BEST EFFORTS and provide the
         necessary resources to prepare and either deliver to CONNETICS (or file
         directly, as appropriate and to the extent requested by CONNETICS given
         the understanding that additional charges may apply), the following
         materials written in the English language concerning the manufacture of
         PRODUCT for use by CONNETICS in seeking regulatory approval for
         RELAXIN:

         [*]

         BENDER shall perform its obligations under this Agreement according to
         all applicable regulatory guidelines, draft guidelines, and
         regulations. The parties shall consult with each other fully concerning
         the scope and content of all regulatory filings to be made related to
         BENDER's manufacture of PRODUCT. If the parties determine that BENDER
         should make any filing directly, then a full copy of each such filing
         and any subsequent amendments shall be provided to CONNETICS
         simultaneously with its filing by BENDER. BENDER will provide letter(s)
         granting CONNETICS and its designees the right of cross-reference to
         any BENDER filings as necessary.

5.5      If additional analytical testing and/or additional production runs are
         required by the FDA, EMEA or other REGULATORY AGENCY during/after
         registration, BENDER will perform such testing and/or runs as required.
         The cost of such additional testing/runs will be borne by CONNETICS
         unless the requirement results from an error or omission caused by
         BENDER's negligence.

6.       TESTING, ACCEPTANCE / REJECTION OF GROUP 1 AND 2 MATERIALS



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6.1      Promptly upon receipt of RELAXIN BULK samples from BENDER, CONNETICS
         shall submit the samples to at least two (2) test methods (selected
         from the SPECIFICATIONS) for confirmation of consistency with
         SPECIFICATIONS. At its option, CONNETICS may perform the confirmatory
         testing itself or through an independent testing laboratory.

         6.1.1    BENDER shall be promptly notified of CONNETICS' acceptance or
                  rejection of all samples delivered in the Group 1 and 2
                  activities. Any rejection shall be accompanied by the detailed
                  reasons therefor.

         6.1.2    BENDER and CONNETICS, initially through the EXPERT TEAM and if
                  necessary through the STEERING COMMITTEE, shall discuss any
                  rejection and endeavor to agree upon a satisfactory and timely
                  resolution of the matter. If unable to agree upon a
                  resolution, CONNETICS may decide whether to perform tests on
                  additional lots at its own cost as provided in SECTION 6.2
                  below.

6.2      As necessary, replacement lots shall be provided as soon as possible
         using BENDER's BEST EFFORTS to expedite completion and adherence to the
         time schedule, for delivery of the following:

         [*]
         [*]
         [*]

         Except as provided below, CONNETICS bears the risk that the medium and
         large scale lots produced in the Group 1 and 2 activities will not meet
         SPECIFICATIONS. CONNETICS shall be responsible for payment of BENDER's
         COGS for production of any replacement lots; the price of such
         additional lots shall be based on the cost of previous implementation
         runs, and shall not exceed:

         [*]
         [*]
         [*]

         If it is determined that the PRODUCT did not meet the SPECIFICATIONS
         through BENDER's negligent act or omission, all costs of replacement
         will be borne by BENDER.

7.       PAYMENTS FOR GROUPS 1, 2 AND 3 ACTIVITIES

7.1      CONNETICS shall pay to BENDER, and BENDER agrees to accept as
         compensation for BENDER's activities and all deliverables pursuant to
         Groups 1, 2 and 3:

         7.1.1    GROUP 1. [*] The first installment is due within thirty (30)
                  days after CONNETICS receives BENDER's invoice submitted upon
                  the start of BENDER's time schedule


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                  pursuant to SECTION 2.4.2, with each respective subsequent
                  installment due on the anniversary [*]  months thereafter.

                  (a)    If BENDER [*] as provided in SECTION 2.4.3, CONNETICS
                         shall pay BENDER up to an additional [*] as set forth
                         in EXHIBIT C, payable within thirty (30) days of 
                         CONNETICS' receipt of BENDER's report and invoice upon
                         completion of the evaluation.

                  (b)    If BENDER [*] as provided in SECTION 2.4.3(a), 
                         CONNETICS shall pay BENDER an additional [*], payable
                         within thirty (30) days after CONNETICS notifies BENDER
                         that it agrees with BENDER's evaluation.

         7.1.2    GROUP 2. [*] payable in [*]
                  installments, respectively, of [*]. The first installment is
                  due within thirty (30) days after CONNETICS receives BENDER's
                  invoice submitted upon commencement of the [*] pursuant to 
                  SECTION 4.1, with each respective subsequent installment due
                  on the anniversary [*] thereafter.

         7.1.3    GROUP 3. [*] payable in [*] equal quarterly installments
                  of [*]. The first installment is due within thirty (30) days
                  after CONNETICS receives BENDER's invoice submitted upon
                  commencement of [*] pursuant to SECTION 5.1, with each 
                  respective subsequent installment due on the anniversary [*]
                  thereafter.

         7.1.4    EQUIPMENT. CONNETICS shall reimburse BENDER for the purchase
                  of equipment as specified at page 22 of the PROPOSAL for such
                  equipment investments, estimated at a total of [*] in [*] 
                  installments, of which the first [*] shall be [*]. The first
                  installment is due within thirty (30) days after CONNETICS
                  receives BENDER's invoice together with proof of purchase of
                  the equipment submitted upon the start of BENDER's time
                  schedule pursuant to SECTION 2.4.2, with each respective
                  subsequent installment due on the anniversary [*] thereafter.
                  Any difference between the actual and estimated costs of such
                  equipment shall be paid/refunded with the last quarterly
                  installment.

7.2      CURRENCY. CONNETICS' payments pursuant to SECTIONS 7.1 and 8.6 shall be
         made in Austrian Shillings. Any payment under this Agreement which
         becomes due can be



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<PAGE>   15

                                                                         Page 15

         made at the option of Connetics in ATS or in such other European
         currency which the European Union might have established then as a
         valid means or [SIC] payment in the European Union or some countries of
         the European Union. If the ATS is replaced by such European currency
         completely at some time in the future, payments becoming due thereafter
         shall be made in such European currency at the then-official conversion
         rate as reported in the Wall Street Journal.

7.3      DELAYS. In case of delays of payment, BENDER has the right to
         discontinue subsequent activities until such payment has been received.

8.       COMMERCIAL MANUFACTURING - ORDER, SUPPLY AND PAYMENT

8.1      SUPPLY. BENDER shall manufacture and supply CONNETICS' worldwide
         requirements of COMMERCIAL PRODUCT. BENDER will sell or otherwise
         provide the COMMERCIAL PRODUCT for sale or use only to CONNETICS and
         its AFFILIATES, licensees, marketing partners and other designees
         during the term of this Agreement. Subject to CONNETICS' compliance
         with SECTIONS 8.2 and 8.4, BENDER is committed and prepared to supply
         COMMERCIAL PRODUCT to CONNETICS. The PRODUCT will be manufactured,
         packaged, stored and prepared for shipping in accordance with cGMP, in
         an FDA-inspected and certified facility, currently envisioned to be
         BENDER's facility in Vienna, Austria.

8.2      PLANT CAPACITY RESERVATION.

         8.2.1    INITIAL RESERVATION. CONNETICS reserves the respective space
                  and time in each of the fermentation plant, secondary recovery
                  unit, and purification area to product [SIC] [*] of PRODUCT
                  per [*] presently estimated at [*] in the fermentation plant,
                  [*] for secondary recovery [*], and [*] in the purification 
                  area. CONNETICS initially reserves such space and time for a
                  period of [*] commencing within six (6) months of completion
                  of CONNETICS' Phase III clinical trial and contingent upon the
                  successful outcome thereof. The reservation of capacity for 
                  production of [*] of PRODUCT is based on the Basic Production
                  Assumptions set forth in SECTION 2.3. (Commencement of 
                  reservation to be determined - currently estimated 
                  approximately [*].)

         8.2.2    EXTENSION OF INITIAL RESERVATION. CONNETICS' initial
                  reservation may be extended by one (1) or more full years, at
                  any time up to the end of the third year of the initial
                  reservation. CONNETICS may make further extensions at any time
                  thereafter, provided that such extension is made with at least
                  four (4) years remaining of CONNETICS' then-existing
                  reservation. The grant of any extension requested after
                  CONNETICS' existing reservation has less than four years
                  remaining shall be at the sole discretion of BENDER.

         8.2.3    LOWERING RESERVED CAPACITY. After the third year of the
                  initial reservation, the reservation of capacity may be
                  decreased below that required for [*] of PRODUCT per [*] 
                  proportional to CONNETICS' actual requirements, provided that
                  (a) CONNETICS shall give BENDER one (1) year's notice of such
                  decrease,


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<PAGE>   16

                                                                         Page 16

                  and (b) the reserved capacity shall never fall below [*]. If
                  CONNETICS' actual requirements should fall below [*],
                  CONNETICS shall pay BENDER an amount equal to the costs
                  actually incurred plus fixed costs for the difference between
                  CONNETICS' actual requirements and [*].

         8.2.4    INCREASING RESERVED CAPACITY. CONNETICS' reservation of
                  capacity may be increased above that required for [*] of
                  PRODUCT per [*], provided that CONNETICS shall give BENDER
                  one (1) year's notice of such increase and subject to the
                  availability of space/time therefor upon receipt of such
                  notice by BENDER.

         8.2.5    OPTION TO INCREASE THROUGHPUT. It is foreseen that the
                  throughput per unit time may increase, e.g., [*],
                  during the term of CONNETICS' reservation with the result that
                  CONNETICS may proportionally increase the quantities in its
                  purchase orders without increase in the associated fixed costs
                  or reservation.

         8.2.6    FURTHER SCALE-UP OF PROCESS. If during the term of the
                  Agreement CONNETICS' actual requirements surpass the capacity
                  of the process employed by BENDER (e.g., lots of [*] or 
                  [*]), BENDER and CONNETICS commit to good faith negotiations
                  regarding further scale-up of the process, its implementation
                  and regulatory approval.

8.3      FORECASTS. Commencing on March 1, 1999, and on each anniversary
         thereafter, CONNETICS shall provide BENDER with a 12-month forecast for
         BENDER's use in budgeting and production planning.

8.4      PURCHASE ORDERS. Written purchase orders will be placed directly by
         CONNETICS or its designated representatives with BENDER no later than
         June 30 of each year for the next full calendar year, for up to the
         amount of the full reserved capacity for that year, including the
         following details: quantity, requested shipping date, shipping
         instructions and CONNETICS' order reference number including the price
         calculated according to the volume ordered.

8.5      INVOICE. BENDER shall provide CONNETICS with a quarterly invoice, which
         CONNETICS shall pay upon receipt of proof of delivery of COMMERCIAL
         PRODUCT (together with confirmation that the PRODUCT was shipped or
         placed in storage), and with the corresponding Certificate of Analysis
         on a timely basis. CONNETICS shall pay each such invoice:

         8.5.1    if by wire transfer or other electronic payment, within
                  thirty-five (35) days of receipt; and

         8.5.2    if by other than electronic payment, within thirty (30) days
                  of receipt;

         8.5.3    provided, that payment by any means within ten (10) days of
                  receipt shall entitle CONNETICS to a two percent (2%) discount
                  of the full invoice price.


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<PAGE>   17

                                                                         Page 17

8.6      COMMERCIAL PRICE.

         8.6.1    Calculation of Commercial Price. BENDER shall provide RELAXIN
                  BULK and FROZEN RELAXIN BULK to CONNETICS. The commercial
                  price shall be the same for RELAXIN BULK and FROZEN RELAXIN
                  BULK, calculated according to the same formula as follows:

                                     [*]
                      where:
                      
                                     [*]

                      The price of the fixed costs and the variable price per kg
                      of RELAXIN BULK and FROZEN RELAXIN BULK will increase year
                      by year due to the average Austrian trade index forecast
                      of June (AATX) shown in the statistic monthly report of
                      the Oesterreichische Nationalbank, Section 6.2.0 (by way
                      of example, the AATX for 1998 is 1.2%).

                      The mechanism for calculating the commercial price of
                      RELAXIN BULK and FROZEN RELAXIN BULK is shown at the table
                      set forth in EXHIBIT D.

         8.6.2    Cost Savings. As an incentive to work together to reduce COGS,
                  BENDER and CONNETICS shall share equally in any savings of
                  actual manufacturing costs during the term of this Agreement.

8.7      MOST FAVORED CUSTOMER. BENDER's calculation of COGS for PRODUCT under
         this Agreement shall be no less favorable to CONNETICS than BENDER's
         calculation of cost of production for services of a similar scope
         provided to any third party.

8.8      RISK OF LOSS. Deliveries of each order or portion thereof will be
         F.O.B. delivery to CONNETICS' forwarding agent, shipper or such other
         recipient as may be specified by CONNETICS and accepted by BENDER, or
         documented placement in storage facility at BENDER, as applicable.

8.9      INSURANCE, SHIPPING AND TAXES.

         8.9.1    CONNETICS and BENDER shall cooperate in evaluating the most
                  cost effective manner of securing adequate insurance for the
                  PRODUCT during shipment.

         8.9.2    BENDER and CONNETICS shall cooperate in seeking/applying for
                  all available waivers, exclusions, exemptions, rebates and the
                  like with respect to potential taxes on the PRODUCT.

         8.9.3    Dispatch costs, including insurance, will be borne by
                  CONNETICS.

8.10     SHORTFALL. If CONNETICS' purchase orders for a given calendar year fall
         below CONNETICS' reservation for that year, CONNETICS' sole liability
         shall be to pay



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<PAGE>   18

                
                                                                         Page 18

         BENDER in the amount of BENDER's fixed costs (as set forth in EXHIBIT
         D) for any such shortfall.

8.11     STORAGE OF FROZEN BULK. BENDER shall store FROZEN RELAXIN BULK on terms
         to be negotiated when, and if, CONNETICS requests such storage, and
         depending on BENDER's capacity at the time.

9.       QUALITY ASSURANCE - TESTING, ACCEPTANCE / REJECTION OF COMMERCIAL
         PRODUCT

9.1      AUDITS

         9.1.1    CONNETICS may, prior to the commencement of BENDER's time
                  schedule as provided in SECTION 2.4.2, conduct an initial, in
                  depth GMP audit of BENDER's manufacturing operations, storage
                  facilities and any BENDER QC laboratory at which COMMERCIAL
                  PRODUCT testing is to be performed, including BENDER's
                  relevant records (or the corresponding facilities and records
                  of any of BENDER's sub-contractors), and may terminate this
                  Agreement with no legal or financial liability if, as a result
                  of the audit, deficiencies are uncovered which, after good
                  faith discussion by the STEERING COMMITTEE, in the view of
                  CONNETICS cannot be adequately or appropriately resolved.

         9.1.2    CONNETICS may conduct periodic, typically annual, re-audits of
                  BENDER's manufacturing operations, storage facilities and QC
                  laboratories and records. If, as a result of the audit,
                  deficiencies are uncovered which, after good faith discussion
                  by the STEERING COMMITTEE, in the view of CONNETICS cannot be
                  adequately or appropriately resolved, CONNETICS may terminate
                  this Agreement pursuant to SECTION 13.3.

         9.1.3    In addition to the annual re-audits provided for under SECTION
                  9.1.2, responsive to any specific concern CONNETICS may
                  conduct additional audits whenever in good faith deemed
                  necessary; CONNETICS shall give BENDER such notice as is
                  reasonably possible under the circumstances giving rise to
                  such concern.

9.2      CONNETICS REPRESENTATIVE AT BENDER. Upon reasonable notice to BENDER,
         CONNETICS may, at CONNETICS' expense, place a company representative
         on-site at BENDER's manufacturing facility during the manufacture of
         the PRODUCT hereunder. Subject to the following sentence, such
         representative shall have full, unfettered access to all operations,
         documents, and records (excluding any cost calculations) that pertain
         to the manufacture of the PRODUCT. CONNETICS' REPRESENTATIVE at BENDER
         shall accept BENDER's procedures regulating external customer
         relationships (including GMP training, hygiene training, health
         examination, guarantee of confidentiality, and controlled access to
         documents) and will obtain BENDER's agreement prior to any active
         participation in the process or analytical testing.



<PAGE>   19

                
                                                                         Page 19

9.3      DOCUMENTATION AND RECORDS.

         9.3.1    CONNETICS' review and approval of documents is required prior
                  to the first commencement of any cGMP manufacturing operation
                  hereunder, including but not limited to the following:

                                     [*]
                                     [*]
                                     [*]
                                     [*]
                                     [*]
                                     [*]
                                     [*]
                                     [*]

         9.3.2    CONNETICS' review and approval of the BENDER's facilities and
                  controls (including any new construction and equipment) and
                  the sources of raw materials is required prior to the first
                  commencement of any cGMP manufacturing operation hereunder.

         9.3.3    BENDER shall notify CONNETICS in advance of any proposed
                  changes to any of the documents, facilities, controls and
                  sources listed in SECTION 9.3.1 and 9.3.2, and shall be
                  included in the review cycle, and CONNETICS' written approval
                  shall be required for any such proposed changes. In addition
                  to requiring CONNETICS' written approval, any proposed changes
                  requiring FDA pre-approval shall not be implemented without
                  providing CONNETICS copies of the documentation of such
                  pre-approval.

         9.3.4    BENDER shall provide CONNETICS with official copies of all of
                  the approved documents listed in this SECTION 9.3.

         9.3.5    BENDER shall provide CONNETICS with necessary records in
                  connection with the production process, including but not
                  limited to the following:

                                     [*]
                                     [*]
                                     [*]
                                     [*]
                                     [*]
                                     [*]

9.4           QC TESTING. CONNETICS reserves the right to have COMMERCIAL
              PRODUCTS tested by CONNETICS or by one or more qualified third
              party testing facilities (the cost of implementation and
              cross-validation at CONNETICS or a CONNETICS' third party testing
              facility shall be borne by CONNETICS). In that regard, it is
              envisioned that BENDER shall be required to provide:


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<PAGE>   20

                
                                                                         Page 20

                                     [*]
                                     [*]
                                     [*]

9.5      REGULATORY INSPECTIONS.

         9.5.1    BENDER shall promptly notify CONNETICS in advance of any
                  pre-approval inspection of BENDER's facilities related to the
                  approval of PRODUCT, and permit CONNETICS to have a
                  representative present at such inspection.

         9.5.2    BENDER shall promptly notify CONNETICS of any planned
                  REGULATORY AGENCY inspection of BENDER's facilities related to
                  the PRODUCT prior to the expected date of the inspection, and
                  permit CONNETICS to have a representative present at such
                  inspection.

         9.5.3    BENDER shall notify CONNETICS of any unplanned REGULATORY
                  AGENCY inspection of BENDER's facilities related to the
                  PRODUCT immediately upon notice or if BENDER has received no
                  notice immediately upon commencement thereof, and permit
                  CONNETICS to have a representative present at such inspection.

         9.5.4    BENDER warrants that it is not the subject of any regulatory
                  action arising from a REGULATORY AGENCY inspection of BENDER's
                  facilities for any purpose. If BENDER becomes the subject of
                  any regulatory action arising from a REGULATORY AGENCY
                  inspection of BENDER's facilities for any purpose, BENDER
                  shall promptly notify CONNETICS of such action, the extent to
                  which it affects the PRODUCT, and of BENDER's plans to rectify
                  the matters underlying such action. BENDER shall bear the full
                  financial and operational responsibility for rectifying the
                  matters underlying such action.

9.6      Prior to each shipment of the COMMERCIAL PRODUCT (or, alternatively,
         upon documented proof of delivery of the PRODUCT to storage), BENDER
         shall provide to CONNETICS a Certificate of Analysis attesting to the
         quality of each batch contained within the shipment, including review
         and approval by the appropriate quality control unit of all batch
         production and control records. BENDER shall also provide to CONNETICS
         a file sample from each lot of COMMERCIAL PRODUCT to be shipped (in a
         quantity sufficient for complete bulk release testing, if necessary) to
         be retained by CONNETICS. BENDER shall maintain all necessary records
         and samples, and provide CONNETICS with such documentation as may be
         required for compliance with FDA and other applicable regulations.

9.7      BENDER warrants that the COMMERCIAL PRODUCT will be prepared and tested
         in accordance with cGMP and shall meet the SPECIFICATIONS.



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[*]                                                                      Page 21

 9.8     After completion of final PRODUCT manufacture, CONNETICS will submit
         the biologic product (filled and finished vials of RELAXIN) to at least
         two (2) test methods (selected from the SPECIFICATIONS) for
         confirmation of consistency with SPECIFICATIONS. At its option,
         CONNETICS may perform the confirmatory testing itself or through an
         independent testing laboratory. If any failure to conform with
         SPECIFICATIONS can be traced to the respective COMMERCIAL PRODUCT:

         9.8.1    BENDER shall be promptly notified of CONNETICS' rejection
                  together with the detailed reasons therefor.

         9.8.2    BENDER and CONNETICS shall discuss any rejection and endeavor
                  to agree upon a satisfactory and timely resolution of the
                  matter. If unable to agree upon a resolution, any dispute as
                  to acceptability or conformance with SPECIFICATIONS shall be
                  resolved as provided in SECTION 9.8.3 below.

         9.8.3    Any dispute over acceptability or conformance with
                  SPECIFICATIONS shall be decided finally by a qualified
                  independent laboratory (the selection of which shall be
                  approved by the EXPERT TEAM), which will repeat the disputed
                  tests following the methods referenced in the SPECIFICATIONS.
                  If the independent laboratory determines that the COMMERCIAL
                  PRODUCT did not meet the SPECIFICATIONS, all costs incurred in
                  connection with the investigation by such independent
                  laboratory and the cost of replacement of COMMERCIAL PRODUCT
                  (including fill and finishing) will be borne by BENDER. If the
                  independent laboratory determines that the COMMERCIAL PRODUCT
                  did meet the SPECIFICATIONS, and is otherwise free of fault by
                  BENDER, then the costs incurred with the investigation by such
                  independent laboratory and the cost of any replacement of
                  COMMERCIAL PRODUCT will be borne by CONNETICS.

         9.8.4    As necessary, replacement lots shall be provided as soon as
                  possible using BENDER's BEST EFFORTS to expedite completion.

10.      WARRANTY AND INDEMNIFICATION

10.1     WARRANTIES. BENDER warrants to CONNETICS that, when delivered, (a) the
         COMMERCIAL PRODUCT will conform in all respects to the SPECIFICATIONS,
         as then in effect, and (b) the PRODUCT will not be adulterated or
         misbranded within the meaning of the Federal Food, Drug and Cosmetic
         Act.

10.2     INDEMNIFICATION BY BENDER. BENDER shall indemnify, defend and hold
         harmless CONNETICS from and against all third party costs, claims,
         suits, expenses (including reasonable attorney's fees) and damages
         (excluding consequential damages) arising out of or resulting from any
         willful or negligent act or omission by BENDER relating to the subject
         matter of this Agreement or any defect in the manufacture or failure to
         deliver PRODUCT in accordance with BENDER's warranties (except to the
         extent such cost, claim, suit, expense or damage arose or resulted from
         any negligent act or omission by CONNETICS), provided that CONNETICS
         gives reasonable notice to BENDER of any such claims or action, tenders
         the defense of such claim or action to BENDER and assists BENDER at
         BENDER's expense in defending such claim or action and does not
         compromise or settle such claim or action without BENDER's prior
         written consent.


<PAGE>   22
                                                                         Page 22

10.3     INDEMNIFICATION BY CONNETICS. CONNETICS shall indemnify, defend and
         hold harmless BENDER from and against all third party costs, claims,
         suits, expenses (including reasonable attorney's fees) and damages
         (excluding consequential damages) arising out of or resulting from any
         willful or negligent act or omission by CONNETICS relating to the
         subject matter of this Agreement or the use by or administration to any
         person of a PRODUCT that arises out of this Agreement (except to the
         extent such cost, claim, suit, expense or damage arose or resulted from
         any negligent act or omission by BENDER or any defect in the
         manufacture of PRODUCT by BENDER), provided that BENDER gives
         reasonable notice to CONNETICS of any such claims or action, tenders
         the defense of such claim or action to CONNETICS and assists CONNETICS
         at CONNETICS' expense in defending such claim or action and does not
         compromise or settle such claim or action without CONNETICS' prior
         written consent.

11.      BACK-UP SUPPLIER; LICENSES

11.1     ALTERNATE SUPPLIER. In order that CONNETICS is not dependent on a
         single supplier of PRODUCT and recognizing that regulatory requirements
         dictate that all PRODUCT utilized by CONNETICS should be manufactured
         by the same process, BENDER agrees pursuant to SECTION 11.2 that
         CONNETICS may itself use, or have another supplier use, the processes
         including any BENDER IMPROVEMENTS, to produce annually two (2) 500 gram
         lots of PRODUCT. In addition to the foregoing, in the event BENDER
         fails for any reason, including without limitation, a force majeure
         event described in SECTION 14.5, to deliver COMMERCIAL PRODUCT in the
         full amounts set forth in CONNETICS' purchase orders for a continuous
         period of 120 days, then CONNETICS shall have the right to make or have
         made all of its requirements of COMMERCIAL PRODUCT for the duration of
         BENDER's inability to supply.

11.2     CONNETICS agrees to provide the first opportunity to qualify as a
         second source for Product to a BENDER AFFILIATE in North America or
         Europe, at costs, if any, to be negotiated in good faith. If no such
         Affiliate is qualified, BENDER shall assist CONNETICS in transferring
         the process to an alternate supplier for PRODUCT by providing
         reasonable technical assistance and documentation as necessary.
         BENDER's obligations under this SECTION 11.2 shall be subject to the
         availability of BENDER personnel and time, provided that BENDER shall
         not unreasonably withhold such assistance. In no event shall BENDER be
         responsible for costs relating to (a) process transfer and
         implementation at the backup supplier, (b) transfer of any process
         improvements, (c) implementation of analytical methods or qualification
         of the analytical laboratories of the backup supplier, or (d) any costs
         for compliance testing and verifying PRODUCT identity between BENDER
         and the backup supplier.

11.3     Unless CONNETICS selects a Bender AFFILIATE to qualify as CONNETICS'
         second source, CONNETICS shall reimburse BENDER'S out-of-pocket
         expenses in providing technical assistance pursuant to SECTION 11.2.



<PAGE>   23

                                                                         Page 23


12.      INTELLECTUAL PROPERTY

12.1     CONFIDENTIALITY.

         12.1.1   In order to facilitate this Agreement it will be necessary for
                  the parties to exchange certain proprietary information, each
                  recipient of which agrees to retain such information in strict
                  confidence and not to disclose or transfer Information to any
                  party (except to an AFFILIATE of BENDER under similar
                  conditions of confidentiality) or make any use of information
                  except as authorized by the terms of this Agreement or
                  otherwise in writing by the discloser.

         12.1.2   The parties hereby acknowledge that the information can
                  constitute "inside information" for securities purposes and
                  each recipient agrees not to make any unauthorized disclosure,
                  trading or other such use of information received hereunder.

         12.1.3   These obligations of confidentiality and non-use shall not
                  apply to information:

                  o      that was previously known to the recipient as evidenced
                         by recipient's written records, or
                  o      that is lawfully obtained by recipient from a source
                         independent of the discloser, or
                  o      that is now or becomes public knowledge other than by
                         breach of this Agreement or
                  o      that is properly required by law, regulation, rule, act
                         or order of any governmental authority or agency to be
                         disclosed by receiver, provided that receiver shall
                         provide discloser with reasonable advance notice of any
                         such required disclosure and cooperate with discloser
                         in minimizing the extent of any such disclosure and in
                         seeking such protective order(s) or the like as may be
                         available to protect the confidentiality of the
                         Information.

         12.1.4   These obligations of confidentiality and non-use shall survive
                  the expiration or termination of this Agreement.

12.2     MATERIALS.

         12.2.1 BENDER agrees:

                  o      not to use the MATERIALS for any purposes other than in
                         conducting the Group 1, 2 and 3, and commercial
                         manufacture and supply activities pursuant to this
                         Agreement;
                  o      not to transfer the MATERIALS to any third party; and
                  o      that the MATERIALS will not be used on any human
                         subjects.

         12.2.2   BENDER represents that it is regularly engaged in
                  manufacturing biopharmaceutical active agents, and will assure
                  that the MATERIALS will be used and/or disposed in compliance
                  with all applicable federal, state and/or local laws and
                  regulations.



<PAGE>   24

                                                                         Page 24

12.3     INVENTIONS. Recognizing that CONNETICS will disclose the CONNETICS'
         KNOWHOW to BENDER, that CONNETICS holds the CONNETICS' PATENTS, and
         that it will compensate BENDER for conducting the process scale-up
         Group 1, 2 and 3, and commercial manufacture and supply activities,
         which may give rise to BENDER IMPROVEMENTS:

         12.3.1   BENDER agrees to and does hereby sell, assign, transfer and
                  set over to CONNETICS, its successors or assigns, as the case
                  may be, all of BENDER's right, title and interest in and to
                  the BENDER IMPROVEMENTS, to be held and enjoyed by CONNETICS,
                  its successors or assigns, as the case may be, as fully as the
                  BENDER IMPROVEMENTS would have been held by BENDER had this
                  Agreement, sale or assignment not been made, including for any
                  patent that may be granted within the BENDER IMPROVEMENTS for
                  the full term thereof. CONNETICS agrees to pay BENDER a
                  license fee to be negotiated for the right to use BENDER
                  IMPROVEMENTS pursuant to this SECTION 12.3.1 in connection
                  with products unrelated to the PRODUCT.

         12.3.2   Any writings prepared by BENDER pursuant to this Agreement are
                  prepared as works for hire for the benefit of CONNETICS, for
                  which BENDER hereby assigns to CONNETICS any copyright to
                  which BENDER is entitled.

         12.3.3   BENDER shall promptly disclose to CONNETICS any such
                  intellectual property, and shall make, execute and deliver any
                  and all instruments and documents and perform any and all
                  acts, necessary to obtain, maintain and enforce patents,
                  trademarks and copyrights for such intellectual property as
                  CONNETICS may desire in any and all countries. All costs and
                  expenses of application and prosecution of such patents,
                  trademarks and copyrights shall be paid by CONNETICS.

         12.3.4   Upon the written request of CONNETICS, BENDER shall make any
                  assignment provided for in this SECTION 12.3 directly to, or
                  for the benefit of, a CONNETICS AFFILIATE or CONNETICS'
                  designee, including BENDER's performance of any related
                  obligations hereunder.

12.4     PUBLICATIONS. BENDER may publish under BENDER's (and CONNETICS')
         scientists' names as appropriate, scientific papers relating to the
         work done in the course of the this [sic] Agreement, but only with the
         prior written approval of CONNETICS, which approval (a) shall be in
         CONNETICS's sole discretion with respect to material directly relating
         to the PRODUCT, and (b) shall not otherwise be unreasonably withheld by
         CONNETICS.

12.5     LICENSE TO BENDER. CONNETICS hereby grants to BENDER a non-exclusive,
         non-transferable license to use CONNETICS' KNOWHOW and CONNETICS'
         PATENTS solely for the purpose of manufacturing PRODUCT for CONNETICS
         as provided in this Agreement. The license granted under this SECTION
         12.5 shall automatically terminate upon the expiration or termination
         of this Agreement.



<PAGE>   25
                                                                         Page 25

12.6     THIRD PARTY CLAIMS. With respect to any third party claims for
         infringement of intellectual property:

         12.6.1   CONNETICS shall indemnify and hold harmless BENDER to the
                  extent the claim alleges infringement based on the structure
                  of RELAXIN, the fact that BENDER is manufacturing RELAXIN, and
                  the work performed by BENDER for CONNETICS pursuant to this
                  Agreement, and

         12.6.2   BENDER shall indemnify and hold harmless CONNETICS to the
                  extent the claim alleges infringement based on the specific
                  process and methods of fermentation, purification or otherwise
                  manufacture when utilized by BENDER, to the extent that such
                  claim is based on BENDER IMPROVEMENTS.

13.      TERM AND TERMINATION

         13.1     This Agreement is effective as of the date first written above
                  (the "Effective Date") and shall remain in force for the
                  longer of ten (10) years from the Effective Date, or eight (8)
                  years from the COMMENCEMENT OF COMMERCIAL MARKETING.
                  Thereafter, this Agreement may be renewed for successive
                  periods of three (3) or more calendar year(s) each, any such
                  agreement to renew to be confirmed in writing by the parties.

         13.2     EARLY TERMINATION

                  13.2.1   CONNETICS may terminate this Agreement on thirty (30)
                           days written notice pursuant to SECTION 14.3, at any
                           time prior to the start of the Group 2 or Group 3
                           
                           activities, but shall remain liable for the payment
                           of any fees or expenses for services or equipment
                           already performed, already expended or otherwise not
                           cancelable. Unless such termination is predicated on
                           data failing to show efficacy in the primary endpoint
                           [*] and/or a therapeutic ratio (vs any side-effects)
                           that is acceptable under reasonable standards
                           then-prevailing in the biotechnology industry,
                           however, CONNETICS shall also be liable for the
                           payment of BENDER's fixed costs (as set forth in
                           SECTION 8.6 and EXHIBIT D) for reserving capacity in
                           the fermentation and purification plant for Group 2
                           [*] or Group 3 [*], except to the extent that such
                           reserved capacity is otherwise filled by BENDER.

                  13.2.2   CONNETICS may terminate this Agreement on thirty (30)
                           days written notice pursuant to SECTION 14.3, at any
                           time after completion of the Group 3 activities,
                           prior to the start of the commercial manufacturing,
                           but shall remain liable for the payment of any fees
                           or expenses for services or equipment already
                           performed, already expended or otherwise not
                           cancelable. Unless such termination is predicated on
                           data failing to show efficacy in the primary endpoint
                           [*] and/or a therapeutic ratio (vs. any side-effects)
                           that is acceptable under reasonable standards
                           then-prevailing in the biotechnology industry,
                           however, CONNETICS shall also be liable for the
                           payment of BENDER's



* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.
<PAGE>   26

                                                                         Page 26

                           fixed costs (as set forth in SECTION 8.6 and EXHIBIT
                           D) for reserving capacity in the fermentation and
                           purification plant for up to one (1) year of
                           commercial manufacturing.

                  13.2.3   CANCELLATION.

                           (a)   If, during the term of this Agreement, the
                                 PRODUCT is withdrawn or not approved for
                                 commercial use by virtue of a government order
                                 or authority, CONNETICS may terminate this
                                 Agreement on thirty (30) days written notice
                                 pursuant to SECTION 14.3, provided that
                                 CONNETICS shall be liable for the payment of
                                 BENDER's fixed costs (as set forth in SECTION
                                 8.6 and EXHIBIT D) for reserved capacity in the
                                 fermentation and purification plant for one (1)
                                 year following such notice, except to the
                                 extent that such reserved capacity is otherwise
                                 filled by BENDER.

                           (b)   If, during the term of this Agreement, FDA
                                 approval for the PRODUCT is delayed beyond
                                 reasonable expectations, CONNETICS and BENDER
                                 shall negotiate in good faith with respect to
                                 the costs related to continue this Agreement in
                                 force.

                           (c)   If, during the term of this Agreement, the
                                 PRODUCT is withdrawn for any other reason,
                                 CONNETICS may, at any time after the first two
                                 (2) years of commercial production, terminate
                                 this Agreement on thirty (30) days written
                                 notice pursuant to SECTION 14.3, provided that
                                 CONNETICS shall be liable for the payment of
                                 BENDER's fixed costs (as set forth in SECTION
                                 8.6 and EXHIBIT D) for reserved capacity in the
                                 fermentation and purification plant for two (2)
                                 years following such notice, except to the
                                 extent that such reserved capacity is otherwise
                                 filled by BENDER.

         13.3     If either party hereto breaches any of the material terms of
                  this Agreement, and fails to remedy such breach within two (2)
                  months after written notice thereof from the other party
                  pursuant to SECTION 14.3, the other party may at its option
                  terminate this Agreement immediately upon written notice
                  pursuant to SECTION 14.3 to the breaching party, upon which
                  event all rights of the breaching party shall terminate upon
                  the effective date of termination specified in such notice.

         13.4     Either party may terminate this Agreement by notice to the
                  other in the event that such other party shall have become
                  insolvent or bankrupt, or shall have made an assignment for
                  the benefit of creditors, or there shall have been appointed a
                  trusted [sic] or receiver for all or a substantial part of its
                  property, or any case or proceeding shall have been commenced
                  or other action taken by or against such other party in
                  bankruptcy or seeking reorganization, liquidation,
                  dissolution, winding-up, arrangement, composition or
                  readjustment of its debts or any other similar relief, and any
                  such event shall have continued for more than 60 days
                  undismissed, unbonded and undischarged.

         13.5     Termination of this Agreement shall not release either party
                  from any liability or obligation which has accrued prior to
                  such termination and which remains to be



<PAGE>   27
                
                                                                         Page 27

                  performed under the terms of this Agreement, nor release
                  either party from any obligation that is intended to survive
                  termination of this Agreement.

14.      GENERAL TERMS AND CONDITIONS

14.1     ASSIGNMENT. Save as otherwise agreed this Agreement may not be assigned
         by either of the parties except to any successor by merger or sale of
         substantially all of its assets to which this Agreement relates, but
         (a) CONNETICS shall be entitled to assign or delegate performance of
         this Agreement to any company which is an AFFILIATE of CONNETICS
         provided that such successor or AFFILIATE first agrees to be bound by
         the terms of the Agreement as if named as a party thereto, and (b)
         BENDER shall be entitled to assign or delegate performance of this
         Agreement to any company which is an AFFILIATE of BENDER provided that
         CONNETICS gives its prior written consent and such successor or
         AFFILIATE first agrees to be bound by the terms of the Agreement as if
         named as a party thereto.

14.2     INDEPENDENT PARTIES/ANNOUNCEMENTS/PUBLICITY. Notwithstanding anything
         herein to the contrary, the parties' status with each other shall be,
         at all times during the term of this Agreement, that of independent
         contractors. Nothing in this Agreement shall be construed to give
         either party the power or authority to act or make representations for,
         or on behalf of, or to bind or commit the other. Accordingly, the
         parties shall endeavor to provide each other courtesy copies in advance
         of any public statements, whether verbal or written, including, but not
         limited to shareholder reports, prospectuses, communications with stock
         market analysts, press releases or other communications with the media.

14.3     NOTICES. Any notice required or permitted by the terms of this
         Agreement shall be given by registered mail, prepaid and properly
         addressed, or delivered by hand including overnight courier to BENDER
         or CONNETICS at the respective addresses first given above or at such
         other address as either party hereto may designate by notice pursuant
         hereto. Any such notice shall be deemed to have been given when
         received. All notices to CONNETICS shall be sent to the attention of
         its President, with a copy to Vice President, Legal Affairs. All
         notices to BENDER shall be sent to the attention of its President.

14.4     DISPUTE RESOLUTION / APPLICABLE LAW. Any dispute, controversy or claim
         arising out of or relating to this Agreement, or the breach or
         termination thereof shall be dealt with in the following manner:

         14.4.1   The dispute, controversy or claim shall first be referred for
                  discussion at a meeting of the parties held pursuant to
                  SECTION 2.6, or a special meeting if necessary, or at the
                  parties option to the President of each of BENDER and
                  CONNETICS for resolution at a place to be agreed between such
                  chief executive officers and, failing agreement, in New York,
                  New York.

         14.4.2   If the dispute, controversy or claim is not settled or agreed
                  at such meeting or between such chief executive officers
                  within a period of thirty (30) days, then it shall be settled
                  by arbitration in accordance with the rules of the American
                  Arbitration Association then in effect. Judgment upon the
                  award rendered by the



<PAGE>   28
                                                                         Page 28

                  arbitrators may be entered in any court having jurisdiction
                  thereof. In any arbitration pursuant to this section, the
                  award shall be rendered by a majority of the members of a
                  board of arbitration consisting of three members, one being
                  appointed by each party and the third being appointed by
                  mutual agreement of the two arbitrators appointed by the
                  parties. The place of arbitration shall be New York, New York.

         14.4.3   This Agreement shall be interpreted and enforced in accordance
                  with, and any arbitrators shall apply, the law of the State of
                  New York (regardless of that jurisdiction's or any other
                  jurisdiction's choice of law principles), and the parties
                  stipulate for the purpose of any legal proceeding to
                  jurisdiction and venue in the state and federal courts located
                  within the State of New York.

14.5     FORCE MAJEURE. Neither party shall be liable for failure to perform any
         duty or obligation that party may have under this Agreement where such
         failure has been occasioned by any Force Majeure which shall mean and
         include government regulation, fire, strike, inevitable accident,
         national emergency, or any other cause outside the reasonable control
         of the party having the duty so to perform. Such failure to perform
         shall only be excusable under the provisions of this Section for so
         long as, and to the extent that, the same is rendered impossible by
         Force Majeure. The party claiming that Force Majeure has occurred shall
         send to the other party within five working days of the first
         occurrence of Force Majeure full particulars thereof including its date
         of first occurrence and of the cause or event giving rise to it.
         Notwithstanding the relief granted to any party by this Section, the
         relevant party shall nevertheless use its reasonable endeavors in any
         situation where it has invoked this Section to perform its relevant
         obligations as soon as possible after Force Majeure has ceased.

14.6     DILIGENCE.

         14.6.1   Time is of the essence in this Agreement.

         14.6.2   BENDER shall use its BEST EFFORTS to accomplish the Group 1, 2
                  and 3 activities and in the manufacture of PRODUCT for
                  CONNETICS pursuant to this Agreement.

14.7     SURVIVAL. The definitions of SECTION 1 and the covenants and agreements
         set forth in SECTIONS 6.1, 7.2, 8.8, 9.7, 9.8, 10, 12 and 14 shall
         survive any termination or expiration of this Agreement and remain in
         full force and effect regardless of the cause of termination.

14.8     NONWAIVER OF RIGHTS. No failure or delay on the part of a party in
         exercising any right hereunder will operate as a waiver of, or impair,
         any such right. No single or partial exercise of any such right will
         preclude any other or further exercise thereof or the exercise of any
         other right. No waiver of any such right will be deemed a waiver of any
         other right hereunder.

14.9     HEADINGS. Section headings contained in this Agreement are included for
         convenience only and form no part of the agreement between the parties.

14.10    VALIDITY OF PROVISIONS AND SEVERABILITY. If any provision of this
         Agreement is or becomes or is deemed to be invalid, illegal, or
         unenforceable in any jurisdiction, such



<PAGE>   29
                                                                         Page 29

         provision will be deemed amended to conform to applicable laws of such
         jurisdiction so as to be valid and enforceable, or, if it cannot be so
         amended without materially altering the intention of the parties, it
         will be stricken; the validity, legality and enforceability of such
         provision will not in any way be affected or impaired thereby in any
         other jurisdiction; and the remainder of this Agreement will remain in
         full force and effect.

14.11    ENTIRE AGREEMENT. This Agreement, together with all of its exhibits,
         sets forth the entire agreement of the parties with respect to the
         subject matter hereof; in the event of any inconsistency among them,
         this Agreement shall govern. This Agreement may not be modified except
         by a writing signed by the parties.


IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the day and year first above written.


CONNETICS CORPORATION                         BENDER + CO GES.M.B.H.



By /s/ T. Wiggins                             By /s/ I. Aringer
   ---------------------------------             -------------------------------
     Thomas G. Wiggans                              Mag. Irmfried Aringer
     Chief Executive Officer                     Direktor Produktion und Technik


Date November 20, 1998                        Date December 23, 1998           
     -------------------------------               -----------------------------


By /s/ Ernst H. Rinderknecht                  By /s/ R. Werner                  
   ---------------------------------             -------------------------------
     Ernst H. Rinderknecht, Ph.D.                Prof. Dr. Rolf G. Werner
     Vice President,                             Director of Biopharmaceutical
     Process Science and Manufacturing           Manufacture
                                                 Boehringer Ingelheim Pharma KG


Date November 20, 1998                        Date 12.1.1999                    
     -------------------------------               -----------------------------



<PAGE>   30










                                    EXHIBIT A


                        CONNETICS' Request for Proposal,
                             dated February 6, 1997





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  been requested with respect to the omitted portions.


<PAGE>   31





                                    EXHIBIT B


     BENDER's Final Proposal in response to CONNETICS' Request for Proposal,
                             dated February 16, 1998







                                      [***]





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  separately with the Commission. Confidential treatment has 
  been requested with respect to the omitted portions.


<PAGE>   32







                                    EXHIBIT C




Fax Letter from Bender Wien (Dr. Henninger) to Connetics (Dr. Rinderknecht)
dated April 16, 1998.








                                      [***]





* Certain information on this page has been omitted and filed 
  separately with the Commission. Confidential treatment has 
  been requested with respect to the omitted portions.



<PAGE>   33




                                    EXHIBIT D


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
YEAR       PRICE OF FIXED COSTS ("PFC")        VARIABLE PRICE ("VP") PER kg
               FOR [*] RESERVATION                   RELAXIN BULK
--------------------------------------------------------------------------------
<S>      <C>                                   <C>
1999     ATS [*]                               ATS [*]
--------------------------------------------------------------------------------
2000     [*]                                   [*]
--------------------------------------------------------------------------------
2001     [*]                                   [*]
--------------------------------------------------------------------------------
</TABLE>



* Certain information on this page has been omitted and filed 
  separately with the Commission. Confidential treatment has 
  been requested with respect to the omitted portions.