<PAGE>

                                                                  EXHIBIT 10.12

                               RESEARCH AGREEMENT

                            (WITH OPTION TO LICENSE)

                                     BETWEEN

                           SOUTHERN RESEARCH INSTITUTE

                                       AND

                            DRUG ABUSE SCIENCES, INC.

                             DATE: JANUARY 21, 2000

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                                TABLE OF CONTENTS



<TABLE>
<CAPTION>

                                                                                                               Page

<S>                                                                                                            <C>
BACKGROUND........................................................................................................1

DEFINITIONS:......................................................................................................1

THE PROJECT.......................................................................................................2

TERM..............................................................................................................2

CHARGES AND INVOICING.............................................................................................3

MATERIALS.........................................................................................................4

DELIVERABLES......................................................................................................4

OWNERSHIP OF INVENTIONS AND DISCOVERIES...........................................................................5

PATENT MATTERS....................................................................................................6

PRODUCT COMMERCIALIZATION.........................................................................................7

PUBLICITY.........................................................................................................7

CONFIDENTIALITY...................................................................................................7

LIMITATION OF LIABILITY...........................................................................................8

INDEMNIFICATION...................................................................................................8

MISCELLANEOUS.....................................................................................................9
         Assignment...............................................................................................9
         Entire Agreement.........................................................................................9
         Parties Independent......................................................................................9
         Waivers; Amendments.....................................................................................10
         Further Assurances......................................................................................10
         Notice..................................................................................................10
         Applicable Law; Divisibility............................................................................11
         Headings................................................................................................11
         Translations............................................................................................11
         Force Majeure...........................................................................................11
         Agreement Under Seal....................................................................................11
         Counterparts............................................................................................11

EXHIBIT A - PRODUCT DESCRIPTION................................................................................   E-1
EXHIBIT B - PATENTS AND PATENT APPLICATIONS....................................................................   E-2
EXHIBIT C - PROPOSAL...........................................................................................   E-3
</TABLE>


                                       i

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          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
          AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
          HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


                               RESEARCH AGREEMENT

                            (WITH OPTION TO LICENSE)

THIS AGREEMENT ("RESEARCH AGREEMENT") is made and entered into as of January 21,
2000, by and between SOUTHERN RESEARCH INSTITUTE, having an address at 2000
Ninth Avenue South, Birmingham, Alabama, 35205 (hereinafter "SOUTHERN"), and
DRUG ABUSE SCIENCES, INC., having an address at 1430 O'Brien Dr., Suite E, Menlo
Park, California, 94025, and Affiliates (hereinafter referred to collectively as
"DAS", where Affiliates are defined below).

                                   BACKGROUND

SOUTHERN is a not-for-profit corporation organized and operated for scientific
purposes and is engaged in conducting scientific research in the public
interest; and

DAS desires that SOUTHERN conduct the research described in this RESEARCH
AGREEMENT and SOUTHERN's Proposal P99.620.3R3 (hereinafter the "Proposal"). A
copy of the Proposal is attached hereto as Exhibit C.

THEREFORE, in consideration of the premises and mutual promises and covenants
herein contained, SOUTHERN and DAS agree as follows:

DEFINITIONS:

                  TECHNOLOGY - Means any and all technical information,
                  formulations, processes, know-how, data, specifications,
                  characterization methods, characterization results, and other
                  proprietary information, whether or not patented or
                  patentable, owned or used by SOUTHERN and relating to the
                  process for [****] or other performance-enhancing qualities
                  to products, including but not limited to the patents
                  (issued, ending, or subsequently filed and including all
                  divisionals, continuations, continuations-in-part or other
                  related United States and foreign applications) listed in
                  Exhibit B to which may be added additional patents or patent
                  applications resulting from developments under this RESEARCH
                  AGREEMENT.

                  PRODUCT TECHNOLOGY - Means any part of the Technology, as
                  defined above, specifically utilized in work on this project
                  and to produce DAS' ultimate product(s), compound(s), or
                  formulation(s), listed in Exhibit A, which Exhibit A may be
                  amended from time to time based on developments under this
                  RESEARCH AGREEMENT.

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       1

<PAGE>

                  AFFILIATE - means any entity or organization that controls, is
                  controlled by or is under common control with a party. For
                  this purpose, "control" shall mean the ownership (whether
                  directly or indirectly) of forty-nine percent (49%) or more of
                  the voting stock or other equity interest or the ability
                  (whether directly or indirectly) to determine the policy or
                  actions of any entity on account of contract or other
                  relationships.

                  BUPRENORPHINE - means each of [********]

                  CONTROLLED RELEASE BUPRENORPHINE - means any [********]

                  THE PROJECT

         1.       (a) DAS hereby establishes a research project with SOUTHERN
(hereinafter the "Project"), the purpose of which is to develop the product(s)
listed in Exhibit A (hereinafter the "PRODUCT").

                  (b) During the term of this RESEARCH AGREEMENT , SOUTHERN will
undertake the Project described in Paragraph 1(a) exclusively for DAS
[********].

                  (c) SOUTHERN grants to DAS an exclusive option to license the
PRODUCT developed during the term of this RESEARCH AGREEMENT (hereinafter said
term shall be referred to as the "Option Period"). The purpose of such option to
license is for DAS to evaluate its interest in commercializing the PRODUCT. The
payment for such option to license shall be in the amount and shall occur
pursuant to Paragraph 3(a) herein. DAS' rights under this option to license are
described in Paragraph 8 herein.

                                      TERM

         2.       (a) This RESEARCH AGREEMENT and the Option Period shall become
effective on the date written above and, unless earlier terminated by DAS as set
forth below, shall terminate the earlier of three (3) years thereafter or upon
completion of the services which DAS may require for entering and performing
clinical studies toward the commercialization of PRODUCT, except as otherwise
provided herein; provided, however, that the three (3) year term set forth in
this sentence shall be changed to two (2) years if DAS ceases the operation of
its business. It is the intent of the parties that both parties use best efforts
to produce a PRODUCT acceptable to DAS that shall be delivered to DAS not later
than [********] from the initiation of the development set forth in the
Proposal.

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       2

<PAGE>

                  (b) Paragraphs 1(c), 2(b) and (c), 3(a), 5, 6, 7, 8, 9, 10,
11, 12 and 13 shall survive the termination of this RESEARCH AGREEMENT.

                  (c) DAS can terminate this RESEARCH AGREEMENT, which will
also terminate the option to license, by giving SOUTHERN a written notice
stating the desired termination date. This notice shall be given at least
[*********] of the desired termination date. DAS shall pay to SOUTHERN in
full for all of SOUTHERN's activities occurring under this RESEARCH AGREEMENT
through the date of termination. In the event that DAS terminates this
RESEARCH AGREEMENT prior to delivery of PRODUCT and SOUTHERN enters into a
subsequent research agreement for Buprenorphine and employs Product
Technology developed under this RESEARCH AGREEMENT, SOUTHERN agrees to
negotiate in good faith with DAS reasonable compensation for DAS' payments
prior to such termination. Such compensation shall take into consideration
pharmaceutical industry standard drug profit margins, the fact of DAS'
termination, the total amount paid by DAS, the extent to which the Product
Technology will be used, the savings in performing such future research which
SOUTHERN will enjoy, the period of time elapsing between the termination by
DAS and the entering into such subsequent research agreement, and such other
considerations which are relevant to the determination of compensation. If
the parties cannot agree on such compensation within [*********] of a party's
request to negotiate, then either party may submit the matter to binding
arbitration. The parties agree to hold a meeting, attended by individuals
with decision-making authority regarding the dispute, to attempt in good
faith to negotiate a resolution of the dispute prior to pursuing other
available remedies. If, within [*********] after such meeting, unless extended
by mutual consent, the parties have not succeeded in negotiating a resolution
of the dispute, the parties agree to hold another meeting, attended by
individuals holding at least vice presidential offices within their
respective organizations, to again attempt in good faith to negotiate a
resolution of the dispute. If, within [*********] after such meeting, unless
extended by mutual consent, the parties have not succeeded in negotiating a
resolution of the dispute, such dispute shall be submitted to final and
binding arbitration under the then current rules relating to commercial
disputes of the American Arbitration Association ("AAA"), with a single
arbitrator in New York, New York. Such arbitrator shall be selected by mutual
agreement of the parties or, failing such agreement, shall be selected
according to the aforesaid AAA rules. The parties shall bear the costs of
arbitration equally unless the arbitrators, pursuant to their right, but not
their obligation, require the non-prevailing party to bear all or any unequal
portion of the prevailing party's costs. The decision of the arbitrator shall
be final and may be sued on or enforced by the party in whose favor it runs
in any court of competent jurisdiction at the option of the successful party.
The arbitrators will be instructed to prepare and deliver a written, reasoned
opinion conferring their decision. The rights and obligations of the parties
to arbitrate any dispute relating to the interpretation or performance of
this Agreement or the grounds for the termination thereof shall survive the
expiration or termination of this Agreement for any reason.

                  (d) The term of this RESEARCH AGREEMENT and the Option
Period can be extended subject to mutual agreement in writing between DAS and
SOUTHERN.

                              CHARGES AND INVOICING

         3.       (a) Upon signing of this RESEARCH AGREEMENT, DAS shall have
the option, at no cost, to license described in Paragraph 1(c) herein, which
option shall remain in

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       3

<PAGE>

effect for a period of [*********], with an understanding that DAS shall use
diligent efforts develop a product. Thereafter, the option may be extended on
a year by year basis by a payment of [*********]. The payments for the option
to license are not refundable.

                  (b) DAS' liability for the payment of charges in carrying
out the Project shall not exceed, in the aggregate, [*********] without DAS'
prior written consent. Each task described in the Proposal shall require a
purchase order issued by DAS.

                  (c) DAS shall pay to SOUTHERN the sum of the charges
incurred during each month within [*********] of the invoice date for the
corresponding purchase order.

                  (d) SOUTHERN reserves the right to terminate this RESEARCH
AGREEMENT and the option to license, if DAS fails to pay any invoice within
[*********]from the invoice date.

                  (e) Upon receipt of DAS' written notice to terminate this
RESEARCH AGREEMENT, SOUTHERN will promptly discontinue work on the Project
and will invoice DAS for the sum of any uninvoiced charges incurred prior to
DAS' requested termination date. DAS shall pay to SOUTHERN the sum of the
charges listed on this invoice within [*********] of the invoice date.

                                    MATERIALS

         4.       (a) With respect to the Project, SOUTHERN shall provide the
services of such personnel, laboratory facilities, equipment, chemicals, and
other supplies to conduct its activities under this RESEARCH AGREEMENT.
SOUTHERN shall provide as Exhibit D the names of the senior personnel who
will be working on the Project. In addition to the milestones set forth in
Exhibit C, the status of the Project at [*********] from the initiation of
the Project shall be treated as a milestone. At the time of each of the
milestones, the parties shall meet and assess the progress of the Project.
The meeting site for such meetings will alternate between the parties'
respective offices, with each party to bear its own costs associated
therewith. The information set forth in Exhibit D shall not be binding on
SOUTHERN, but SOUTHERN will notify DAS of any significant change in personnel
or charges.

                  (b) DAS agrees to supply to SOUTHERN, at no charge to
SOUTHERN, such necessary quantities of Buprenorphine ("Material") for the
Project at such times as SOUTHERN may reasonably request in order to complete
the Project. SOUTHERN shall give DAS reasonable notice of any need for the
Material, so as to allow DAS to obtain reasonable delivery of the Material
without delaying the Project.

                                  DELIVERABLES

         5.       (a) SOUTHERN will furnish DAS timely progress reports on a
monthly basis summarizing the results of the Project and technical reports on
completion of a specific task or activity. These progress reports shall
contain technical information generated on the Project, except the details of
the process to make the PRODUCT.

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       4

<PAGE>

                  (b) SOUTHERN will provide research samples of the PRODUCT
("Research Samples") to DAS for evaluation as they become available. With the
Research Samples, SOUTHERN will provide DAS with sufficient information to
evaluate the Research Samples. The Research Samples shall be used by DAS for
research purposes only and DAS shall not distribute the Research Samples to a
third party without permission of SOUTHERN, except that DAS may without
permission give the Research Samples to laboratories for testing and
evaluation, which laboratories shall agree not to analyze the samples for
their composition, and provided that such laboratories satisfy any
requirements of the United States Drug Enforcement Agency. Information
generated by DAS from use of Research Samples may be shared in confidence
with SOUTHERN and will not be published, presented publicly, such as at
scientific meetings, or patented by SOUTHERN without prior written agreement
of the parties.

                  (c) It is understood and agreed that said Research Samples
cannot be used in humans.

                  (d) Should any phase of this Project involve the supply of
clinical samples of the PRODUCT ("Clinical Samples") by SOUTHERN for use in
humans, DAS hereby represents and warrants to SOUTHERN that all human
clinical protocols involving the use of any Clinical Samples to be provided
under this and/or subsequent agreements will be reviewed by the appropriate
Regulatory Agency(ies) and Institutional Human-Use Review Board(s) for
analysis of risk, benefit, and safety to human subjects and compliance with
all applicable procedures, laws, and regulations. It is agreed that said
Clinical Samples shall be prepared under current Good Manufacturing Practices
(cGMP) and supply of such Clinical Samples to DAS shall occur after SOUTHERN
receives from DAS written verification that appropriate Regulatory
Agency(ies) and Institutional Human-Use Review Board(s) approvals are in
place.

                  (e) Prior to DAS preparing any Clinical Samples of the
PRODUCT, SOUTHERN reserves the right to reassess its potential liability
arising from such use and to renegotiate the indemnity provisions of this
RESEARCH AGREEMENT. SOUTHERN shall provide DAS with the basis for its request
for renegotiation and substantiate the reasons for the change in indemnity
provisions.

                     OWNERSHIP OF INVENTIONS AND DISCOVERIES

         6.       (a) SOUTHERN represents that each of its employees has
entered into an employment agreement that provides for assignment to SOUTHERN
of all inventions made by such employee during the course of his employment
with SOUTHERN.

                  (b) DAS shall have title to any and all discoveries
relating to preparations and/or formulations and/or methods of use of the
formulations (collectively, the "Composition/Method Invention") in connection
with this Project, solely made or obtained during the term of this RESEARCH
AGREEMENT by personnel of DAS engaged in work on the Project. SOUTHERN shall
have title to any Composition/Method Invention in connection with this
Project solely made or obtained during the term of this RESEARCH AGREEMENT by
personnel of SOUTHERN engaged in the work on the Project. DAS and SOUTHERN
shall have title to any Composition/Method Invention in connection with this
Project jointly made or obtained during the term of this RESEARCH AGREEMENT
by personnel of SOUTHERN and

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       5

<PAGE>

employees of DAS engaged in work on the Project. Such Composition/Method
Invention, whether patentable or not, shall promptly be made known to DAS in
writing. Whether or not a Composition/Method Invention patent issues as a
result of the research herein, SOUTHERN shall grant to DAS the right to use
any Composition/Method Invention owned solely by SOUTHERN only for the
PRODUCT contingent upon the signing of a license agreement ("LICENSE
AGREEMENT") by the parties. If a jointly owned patent issues, DAS shall
assign its rights to non-PRODUCTS to SOUTHERN, while retaining a
non-exclusive non-transferable royalty-free license to fully exploit such
patent(s) and the underlying technology.

                  (c) SOUTHERN shall have title to any and all discoveries
relating to chemical and/or fabrication processes (collectively, the "Process
Invention") arising from research investigations under this Project, made or
obtained during the term of this RESEARCH AGREEMENT by personnel of SOUTHERN
engaged in the work on the Project. SOUTHERN shall grant to DAS the right to
use such Process Invention, whether or not a letters patent issues, to
manufacture only the PRODUCT contingent upon the signing of the LICENSE
AGREEMENT by the parties.

                  (d) SOUTHERN shall grant to DAS the right to use SOUTHERN's
existing inventions listed in Exhibit B. DAS can use such existing inventions
to manufacture only the PRODUCT in accordance with the LICENSE AGREEMENT.

                                 PATENT MATTERS

         7.       (a) Any expense for the drafting, filing, assignment,
recording of assignment, prosecution, annuities, and maintenance of United
States or foreign patent applications and patents for Composition/Method
Inventions arising from research investigations of this Project shall be
borne by DAS during the Option Period and during the period that such patent
applications and patents are exclusively licensed for PRODUCT to DAS.
Otherwise, such expenses shall be borne by SOUTHERN. SOUTHERN shall be
responsible for all patent prosecution for Composition/Method Inventions and
all decisions thereto, except that under any LICENSE AGREEMENT, DAS shall
assume all costs and have control of all Composition/Method of Use patents
covering PRODUCT. Each party shall cooperate with the other party in the
filing and prosecution of any such patents covering Composition/Method
Inventions arising under this Agreement.

                  (b) Any expense for the drafting, filing, assignment,
recording of assignment, prosecution, annuities, and maintenance of United
States or foreign patent applications and patents for Process Inventions
arising from research investigation of this Project shall be borne by
SOUTHERN. SOUTHERN shall be responsible for all patent prosecution for
Process Inventions and all decisions thereto.

                  (c) Both SOUTHERN and DAS shall have the opportunity for a
timely textual review of patent filing and prosecution matters related to
Composition/Method Invention applications that result from research
investigations of this Project.

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       6

<PAGE>

                            PRODUCT COMMERCIALIZATION

     8. (a) At any time during the Option Period, DAS upon written notice to
SOUTHERN, may, at its sole option, elect to enter into the LICENSE AGREEMENT for
the PRODUCT attached hereto as Exhibit D.

        (b) No PRODUCT based upon the Technology, derivatives thereof, or their
use shall be commercialized by DAS or any third party without license from
SOUTHERN, except as provided for in Article 5 para. (b).

        (c) If DAS executes a clinical or commercial supply agreement for
PRODUCT with a third party, SOUTHERN will, at DAS' expense, assist DAS and such
third party in utilizing the Project Technology to manufacture the PRODUCT. Such
third party shall be subject to SOUTHERN's reasonable approval and shall agree
in writing to be bound by the confidentiality and other relevant provisions of
this RESEARCH AGREEMENT.

                                    PUBLICITY

     9. Except as required by law, no publication, advertising, or publicity
matter having any reference to either DAS or SOUTHERN, expressed or implied,
shall be made use of by either party or anyone on behalf of either party, unless
and until such matter shall have first been mutually agreed upon in writing. The
foregoing shall not restrict the parties' right to make reference to the
parties' relationship or this Agreement to investors or potential investors.

                                 CONFIDENTIALITY

     10. (a) DAS and SOUTHERN agree that they will exert diligent efforts to
ensure their employees, agents, and consultants will keep in confidence and not
disclose or publish any proprietary information, confidential technical
information, or confidential business information (collectively hereinafter
referred to as "Information") transmitted to one another for use in the
performance of this Project or new information developed by DAS or SOUTHERN in
connection with this Project, including any Composition/Method and Process
Inventions. The confidentiality obligations herein shall not apply to:

               (i)  information, that at the time of disclosure, is in the
public domain; or

               (ii) information, that after disclosure, becomes available to the
public through no fault of either party hereto or is lawfully made available to
DAS or SOUTHERN by a third party without restrictions as to disclosure; or

               (iii) information that DAS or SOUTHERN can establish by
reasonable proof was in their possession at the time of disclosure, or was
subsequently and independently developed by employees of DAS or SOUTHERN,
outside of the scope of this Project, who had no knowledge of the information
disclosed; or

               (iv) information  deemed  necessary  and appropriate by DAS
or SOUTHERN to perfect patent rights pursuant to Paragraphs 6 and 7; or

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                        7
<PAGE>

               (v) information that DAS and SOUTHERN mutually agree in writing
to release from the terms of this RESEARCH AGREEMENT; or

               (vi) information  required to be disclosed by order of a court,
other governmental body, or other government regulatory agency in the
furtherance of the purposes of the Project, after consultation with the party
who owns the Information.

         (b) DAS' and SOUTHERN's obligation to keep in confidence, not to
disclose or publish such Information shall continue for a period of ten (10)
years from the date of this RESEARCH AGREEMENT, at the end of such period the
obligation will terminate.

         (c) DAS and SOUTHERN may, in their sole discretion, disclose
necessary or appropriate Information to representatives of one or more of its
subsidiaries (whether directly or indirectly owned) in order for DAS or SOUTHERN
to perform its obligation under this RESEARCH AGREEMENT, provided, however, that
such subsidiary and such representatives shall be bound by the terms and
conditions of this Paragraph 10 that are applicable to DAS and SOUTHERN. Such
obligation not to disclose or publish shall continue in effect for any former
such subsidiary and such representatives of DAS or SOUTHERN.

         (d) DAS and SOUTHERN agree that the Information disclosed will not be
used to provoke an interference with any patent application that the other party
or its employees have filed with respect to Information, and will not be used to
amend any claim in any pending patent application to expand the claim to read
on, cover or dominate any invention (whether or not patentable) disclosed as
Information.

                             LIMITATION OF LIABILITY

     11. Under this RESEARCH AGREEMENT, SOUTHERN is to perform certain research
and other work incidental thereto, and is to provide certain counseling, advice,
conclusions, and/or recommendations. SOUTHERN will use its professional
experience and diligent professional efforts in performing this work. However,
SOUTHERN does not represent, warrant, or guarantee that its research results or
any products produced therefrom are merchantable or satisfactory for any
particular purpose, and there are no warranties, express or implied, to such
effect. DAS hereby agrees to release, waive, and forever discharge any demands,
claims, suits, or actions of any character against SOUTHERN arising out of or in
connection with DAS' acceptance, reliance on, or use of such results in the
absence of any negligent or willful act or omission by SOUTHERN in the
fulfillment of its activities under this RESEARCH AGREEMENT. In connection with
this Agreement, neither party shall be responsible or liable in contract or in
tort for any special, indirect, incidental, or consequential damages such as,
but not limited to, loss of PRODUCT, profits or revenues, damage or loss from
operation or nonoperation of plant, or claims of customers.

                                 INDEMNIFICATION

         12. DAS hereby agrees to indemnify, hold harmless, and defend SOUTHERN
and its officers, directors, representatives, agents, and employees from and
against any and all demands, claims, suits, or actions of any character
presented or brought on account of any injuries, losses, or damages sustained by
any person or property in consequence of any act or omission of DAS

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                        8
<PAGE>

or its agents, employees, or subcontractors, except for any injuries, losses, or
damages that result from and to the extent of the negligence or willful
misconduct of SOUTHERN, in the performance of the Project and obligations
imposed herein and [*********]. The foregoing indemnity shall include but not be
limited to court costs, attorneys' fees, costs of investigation, costs of
defense associated with such demands, claims, suits, or actions.

     During the time that any product, process, service relating to, or
developed pursuant to this RESEARCH AGREEMENT is introduced into human trials
or is being commercially distributed or sold by DAS or by a licensee,
affiliate or agent of DAS, DAS shall, at no cost to SOUTHERN, procure and
maintain [*********] in reasonable amount in relation to the nature of the
PRODUCT being sold, to the extent that such insurance is available to DAS at
a cost reasonably related to the anticipated risks and commensurate with
DAS's reasonable assessment of the risk and its ability to respond in
damages. Any such [*********] insurance shall provide (i) [*********] (ii)
[*********]. The amounts provided for by such insurance shall not be
[*********].

     DAS shall provide SOUTHERN with written evidence of such insurance or
evidence of DAS' attempts to obtain such insurance upon written request of
SOUTHERN and shall give SOUTHERN at least [**********] notice prior to
cancellation, non-renewal or material change relating to insurance of which DAS
has previously notified SOUTHERN.

                                  MISCELLANEOUS

     13. (a) ASSIGNMENT. This RESEARCH AGREEMENT and the benefits and
obligations hereunder may not be assigned by a party without the prior written
consent of the other party, except

               (i)  to an Affiliate, or

               (ii) in connection with a merger or consolidation of the party in
which such party is not the surviving entity, or a sale of all or substantially
all of the assets of the party provided that the successor or purchaser agrees
to assume all of the obligations of the party hereunder.

In the event of an assignment under Subsection (ii) of this Paragraph 13(a), the
assigning party shall notify the other party in writing of such assignment at
least thirty (30) days in advance of its occurrence.

         (b) ENTIRE AGREEMENT. This RESEARCH AGREEMENT, including all Exhibits
hereto, sets forth and constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes any and all
prior agreements, requests for quotation, quotations, purchase orders, letters
of intent and understandings between the parties, and any and all promises,
statements, and representations made by either party to the other concerning
the subject matter hereof and the terms applicable hereto.

         (c) PARTIES INDEPENDENT. In making and performing this RESEARCH
AGREEMENT, the parties are acting and shall act at all times as independent
contractors and

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.


                                        9

<PAGE>

nothing contained in this RESEARCH AGREEMENT shall be construed or implied to
create an agency, partnership, or joint venture relationship between the
parties.

         (d) WAIVERS; AMENDMENTS.

               (i) The failure of either party to insist upon the performance of
any of the terms of this RESEARCH AGREEMENT or to exercise any right hereunder
or at law or in equity, or any delay by either party in the exercise of any such
right, shall not be construed as a waiver or relinquishment of any such
performance or right or of the future performance of any such term or the future
exercise of such right, and any effective waiver or relinquishment of any such
right must be in writing and signed by a duly authorized officer of the party
waiving or relinquishing the right or rights. No waiver or relinquishment of any
right granted by either party to the other shall be deemed to be a continuing
waiver of such right in the future unless otherwise provided in the waiver.

               (ii) This RESEARCH AGREEMENT may not be released, discharged,
amended, or modified in any manner except by an instrument in writing that
references this RESEARCH AGREEMENT and is signed by a duly authorized officer
of each party.

         (e) FURTHER ASSURANCES. Each of the parties shall execute and deliver
to, or cause to be executed and delivered to, the other party, such further
instruments, or take such other action as may reasonably be requested of it to
consummate more effectively the transactions contemplated hereby.

         (f) NOTICE. Any notice or other written communication required or
permitted to be made or given hereunder may be made or given by either party to
the other party by fax communication to the fax number set forth below and such
notice shall be followed up by depositing the same in the mail, certified
delivery, return receipt requested, postage prepaid, and addressed to the
mailing address set forth below:

         DAS:                  DrugAbuse Sciences, Inc.
                               Attn:  Chief Executive Officer

                               1430 O'Brien Drive, Suite E
                               Menlo Park, CA 94025
                               FAX: (650) 462-1003

         SOUTHERN:             Dr. Thomas R. Tice
                               Director, Pharmaceutical
                                 Formulations Department
                               Southern Research Institute
                               2000 Ninth Avenue South
                               Birmingham, Alabama, 35205
                               FAX: 205-581-2888

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                        10

<PAGE>

         (g) APPLICABLE LAW; DIVISIBILITY. This RESEARCH AGREEMENT is to be
governed by and construed in accordance with the laws of the State of Alabama,
United States of America. If, however, any provision hereof in any way
contravenes the laws of any state or jurisdiction where this RESEARCH AGREEMENT
is to be performed, such provision shall be deemed to be deleted therefrom, and
if any term of this RESEARCH AGREEMENT shall be declared by a final adjudication
to be illegal or contrary to public policy, it shall not affect the validity of
any other terms or provisions of this RESEARCH AGREEMENT.

         (h) HEADINGS. Descriptive headings used herein are for convenience only
and shall not affect the meaning or construction of any provision hereof.

         (i) TRANSLATIONS. In the event of an inconsistency between any terms of
this RESEARCH AGREEMENT and any translations thereof into another language, the
English language meaning shall control.

         (j) FORCE MAJEURE. The untimely performance of any obligation arising
hereunder by either party will be excused, and such delay of performance shall
not constitute a breach or grounds for termination or prejudice of any rights
hereunder, provided that (a) the delay of performance is a result of
circumstances or occurrences beyond the reasonable control of the party whose
performance is excused hereunder (the "Delaying Event"), and (b) such party
shall (i) immediately resume performance after the Delaying Event is removed and
(ii) be reasonably diligent during such Delaying Event in avoiding further
delay. Without limiting the generality of circumstances or occurrences that
shall constitute a Delaying Event, examples of Delaying Events include, but are
not limited to, strikes, shortages of power or other utility services, materials
or transportation, acts of government or of God, sabotage, insurrection and
civil war. A party whose performance may be affected by a Delaying Event
promptly shall give notice to the other party of such Delaying Event and the
fact that it intends to rely upon such Delaying Event to excuse its performance
under this RESEARCH AGREEMENT.

         (k) AGREEMENT UNDER SEAL. This RESEARCH AGREEMENT is intended to be
under the seal of all parties hereto and to have the effect of a sealed
instrument in accordance with the law.

         (l) COUNTERPARTS. This RESEARCH AGREEMENT may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.


                                        11

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this RESEARCH
AGREEMENT to be duly executed, on the date written above.

SOUTHERN RESEARCH INSTITUTE                  DRUGABUSE SCIENCES, INC.

By:   /s/ David W. Mason                     By:  /s/ Philippe Pouletty
    ------------------------------------        ------------------------------
Name:   David W. Mason                       Name:   Philippe Pouletty
      ----------------------------------          ----------------------------
Title:  Assistant Secretary Director         Title: CEO
        Commercialization and
        Intellectual Property

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       12

<PAGE>

                                    EXHIBIT A

                               PRODUCT DESCRIPTION

                        CONTROLLED RELEASE BUPRENORPHINE

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       E-1
<PAGE>

                                    EXHIBIT B

                         PATENTS AND PATENT APPLICATIONS

A.       COMPOSITION/METHOD INVENTION PATENT APPLICATIONS

U.S PATENT NUMBER:         4,897,268

TITLE:                     Drug Delivery System and
                           Making the Same

U.S. PATENT APPLICATION NUMBER:     60-151112, filed 8/27/99

TITLE:            [*********].

AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR DIVISIONALS AND ANY
FOREIGN COUNTERPART OF THE ABOVE.

B.       PROCESS INVENTION PATENT APPLICATIONS

U.S. PATENT NUMBER:        5,407,609

TITLE:                     Improved Encapsulation Process
                           and Products Therefrom

U.S. PATENT NUMBER:        4,897,268

TITLE:                     Drug Delivery System and Method of Making the Same

U.S. PATENT APPLICATION NUMBER:     60-151112 filed 8/27/99

TITLE:                     [*********].

AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR DIVISIONALS AND ANY
FOREIGN COUNTERPART OF THE ABOVE.

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       E-2

<PAGE>

                                    EXHIBIT C

                          SOUTHERN PROPOSAL P99.620.3R3



[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       E-3

<PAGE>

                                    EXHIBIT D

                                LICENSE AGREEMENT


                              [see attached pages]

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                                       E-4