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                                  CONFIDENTIAL


                                                                  EXHIBIT 10.12


                              PUBLIC HEALTH SERVICE

                       PATENT LICENSE AGREEMENT-EXCLUSIVE

                                   COVER PAGE


For PHS internal use only:

         Patent License Number: L-226-96/D

         Serial Numbers of Licensed Patents:      U.S. PAT. 5,614,191 AND
                                                  U.S. PAT. 4,892,827

         Licensee: NEOPHARM, INC.

         CRADA Number (if applicable): N/A

         Additional Remarks: None

This Patent License Agreement, hereinafter referred to as THE "AGREEMENT,"
consists of this Cover Page, an attached AGREEMENT, a Signature Page, Appendix A
(List of Patent(s) or Patent Applications(s)), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Benchmarks), and Appendix E
(Commercial Development Plan). The Parties to this AGREEMENT are:

1)       The National Institutes of Health ("NIH"), the Centers for Disease
         Control and Prevention ("CDC"), or the Food and Drug Administration
         ("FDA"), hereinafter singly or collectively referred to as "PHS,"
         agencies ("DHHS"); and

2)       The person, corporation, or institution identified ABOVE AND/OR ON THE
         Signature Page, having offices at the address indicated on the
         Signature Page, hereinafter referred to as "Licensee."


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                     PHS PATENT LICENSE AGREEMENT--EXCLUSIVE


PHS and LICENSEE agree as follows:

1.       BACKGROUND

         1.01         In the course of conducting biomedical and behavioral
                      research, PHS investigators made inventions that may have
                      commercial applicability.

         1.02         By assignment of rights from PHS employees and other
                      inventors, DHHS, on behalf of the United States
                      Government, owns intellectual property rights claimed in
                      any United States and foreign patent applications or
                      patents corresponding to the assigned inventions. DHHS
                      also owns any tangible embodiments of these inventions
                      actually reduced to practice by PHS.

         1.03         The Assistant Secretary for Health of DHHS has delegated
                      to PHS the authority to enter into this AGREEMENT for the
                      licensing of rights to these inventions under 35 U.S.C.
                      Sections 200-212, the Federal Technology Transfer Act of
                      1986, 15 U.S.C. Section 3710a, and/or the regulations
                      governing the licensing of Government-owned inventions, 37
                      CFR Part 404.

         1.04         PHS desires to transfer these inventions to the private
                      sector through commercialization licenses to facilitate
                      the commercial development of products and processes for
                      public use and benefit.

         1.05         LICENSEE desires to acquire commercialization rights to
                      certain of these inventions in order to develop processes,
                      methods, or marketable products for public use and
                      benefit.

2.       DEFINITIONS

         2.01         "BACKGROUND PATENT RIGHTS" shall mean U.S. Patent No.
                      4,892,827.

         2.02         "BENCHMARKS" mean the performance milestones that are set
                      forth in Appendix D.

         2.03         "COMMERCIAL DEVELOPMENT PLAN" means the written
                      commercialization plan attached as Appendix E.

         2.04         "FIRST COMMERCIAL SALE" means the initial transfer by or
                      on behalf of LICENSEE or its sublicensees of LICENSED
                      PRODUCTS or the initial practice of a LICENSED PROCESS by
                      or on behalf of LICENSEE or its sublicensees in exchange
                      for cash or some equivalent to which value can be assigned
                      for the purpose of determining NET SALES.

         2.05         "GOVERNMENT" means the Government of the United States of
                      America.

         2.06         "LICENSED FIELDS OF USE" means the fields of use
                      identified in Appendix B.

         2.07         "LICENSED PATENT RIGHTS" means the fields of use
                      identified in Appendix B.


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                      a)         U.S. patent applications and patents listed in
                                 Appendix A as such, all divisions and
                                 continuations of these applications, all
                                 patents issuing from such applications,
                                 divisions, and continuations, and any reissues,
                                 reexaminations, and extensions of all such
                                 patents;

                      b)         to the extent the following contain one or more
                                 claims directed to the invention or inventions
                                 disclosed in a) above: i) continuations-in-part
                                 of a) above; ii) all divisions and
                                 continuations of these continuations-in-part;
                                 iii) all patents issuing from such
                                 continuations-in-part, divisions, and
                                 continuations; and iv) any reissues,
                                 reexaminations, AND EXTENSIONS OF ALL SUCH
                                 PATENTS;

                      c)         to the extent that the following contain one or
                                 more claims directed to the invention or
                                 inventions disclosed in a) above: all
                                 counterpart foreign applications and patents to
                                 a) and b) above, including those listed in
                                 Appendix A.

                      Licensed Patent Rights shall not include b) or c) above to
                      the extent that they contain one or more claims directed
                      to new matter which is not the subject matter disclosed in
                      a) above.

         2.08         "LICENSED PROCESS(ES)" means processes which, in the
                      course of being practiced would, in the absence of this
                      AGREEMENT, infringe one or more claims of the LICENSED
                      PATENT RIGHTS that have not been held invalid or
                      unenforceable by an unappealed or unappealable judgment of
                      a court of competent jurisdiction.

         2.09         "LICENSED PRODUCT(S)" means tangible materials which, in
                      the course of manufacture, use, or sale would, in the
                      absence of this AGREEMENT, infringe one or more claims of
                      the LICENSED PATENT RIGHTS that have not been held invalid
                      or unenforceable by an unappealed or unappealable judgment
                      of a court of competent jurisdiction.

         2.10         "LICENSED TERRITORY" means the geographical area
                      identified in Appendix B.

         2.11         "NET SALES" means the total gross receipts for sales of
                      LICENSED PRODUCTS or practice of LICENSED PROCESSES by or
                      on behalf of Licensee or its sublicensees, and from
                      leasing, renting, or otherwise making LICENSED PRODUCTS
                      available to others without sale or other dispositions,
                      whether invoiced or not, less returns and allowances
                      actually granted, packing costs, insurance costs, freight
                      out, taxes or excise duties imposed on the transaction (if
                      separately invoiced), and wholesaler and cash discounts in
                      amounts customary in the trade. No deductions shall be
                      made for commissions paid to individuals, whether they be
                      with independent sales agencies or regularly employed by
                      LICENSEE, or sublicensees, and on its payroll, or for the
                      cost of collections.

         2.12         "PRACTICAL APPLICATION" means to manufacture in the case
                      of a composition or product, to practice in the case of a
                      process or method, or to operate in the case of a machine
                      or system; and in each case, under such


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                      conditions as to establish that the invention is being
                      utilized and that its benefits are to the extent permitted
                      by law or GOVERNMENT regulations available to the public
                      on reasonable terms.

         2.13         "RESEARCH LICENSE" means a nontransferable, nonexclusive
                      license to make and to use the LICENSED PRODUCTS OR
                      LICENSED PROCESSES as defined by the LICENSED PATENT
                      RIGHTS for purposes of research including human clinical
                      trials and not for purposes of commercial manufacture or
                      distribution or in lieu of purchase if LICENSED PRODUCTS
                      or LICENSED PROCESSES are marketed by LICENSEE.

3.       GRANT OF RIGHTS

         3.01         PHS hereby grants and LICENSEE accepts, subject to the
                      terms and conditions of this AGREEMENT, an exclusive
                      license under the LICENSED PATENT RIGHTS in the LICENSED
                      TERRITORY to make and have made, to use and have used, and
                      to sell and have sold any LICENSED PRODUCTS in the
                      LICENSED FIELDS OF USE and to practice and have practiced
                      any LICENSED PROCESSES in the LICENSED FIELDS OF USE.

         3.02         PHS hereby grants and LICENSEE accepts, subject to the
                      terms and conditions of this AGREEMENT, a non-exclusive
                      license under the BACKGROUND PATENT RIGHTS in the LICENSED
                      TERRITORY to make and have made, to use and have used, and
                      to sell and have sold any LICENSED PRODUCTS in the
                      LICENSED FIELDS OF USE and to practice and have practiced
                      any LICENSED PROCESSES in the LICENSED FIELDS OF USE.

         3.03         This AGREEMENT confers no license or rights by
                      implication, estoppel, or otherwise under any patent
                      applications or patents of PHS other than LICENSED PATENT
                      RIGHTS and BACKGROUND PATENT RIGHTS regardless of whether
                      such patents are dominant or subordinate to LICENSED
                      PATENT RIGHTS or BACKGROUND PATENT RIGHTS.

4.       SUBLICENSING

         4.01         Upon written approval by PHS which will be given within
                      thirty (30) days of a written request by LICENSEE, said
                      approval not to be unreasonably withheld, LICENSEE may
                      enter into sublicensing agreements under the LICENSED
                      PATENT RIGHTS.

         4.02         LICENSEE agrees that any sublicenses granted by it shall
                      provide that the obligations to PHS of Paragraphs
                      5.01-5.04, 8.01, 10.01, 10.02, 12.05 and 13.07-13.09 of
                      this AGREEMENT shall be binding upon the sublicensee as if
                      it were a party to this AGREEMENT. LICENSEE further agrees
                      to attach copies of these Paragraphs to all sublicense
                      agreements.

         4.03         Any sublicenses granted by LICENSEE shall provide for the
                      termination of the sublicense, or the conversion to a
                      license directly between such sublicensees and PHS, at the
                      option of the sublicensee, upon termination of this
                      AGREEMENT under Article 13. Such conversion is subject to
                      PHS approval and contingent upon acceptance by the
                      sublicensee of the remaining provisions of this AGREEMENT.


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         4.04         LICENSEE agrees to forward to PHS a copy of each fully
                      executed sublicense agreement postmarked within thirty
                      (30) days of the execution of such agreement. To the
                      extent permitted by law, PHS agrees to maintain each such
                      sublicense agreement in confidence.

5.       STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

         5.01         PHS reserves on behalf of the GOVERNMENT an irrevocable,
                      nonexclusive, nontransferable, royalty-free license for
                      the practice of all inventions licensed under the LICENSED
                      PATENT RIGHTS throughout the world by or on behalf of the
                      GOVERNMENT and on behalf of any foreign government or
                      international organization pursuant to any existing or
                      future treaty or agreement to which the GOVERNMENT is a
                      signatory. Prior to the FIRST COMMERCIAL SALE, LICENSEE
                      agrees to provide PHS reasonable quantities of LICENSED
                      PRODUCTS or materials made through the LICENSED PROCESSES
                      for PHS research use including for human clinical trials
                      but not for purposes of commercial development,
                      manufacture or distribution.

         5.02         LICENSEE agrees that products used or sold in the United
                      States embodying LICENSED PRODUCTS or produced through use
                      of LICENSED PROCESSES shall be manufactured substantially
                      in the United States, unless a written waiver is obtained
                      in advance from PHS.

         5.03         LICENSEE acknowledges that PHS may enter into future
                      Cooperative Research and Development Agreements (CRADAs)
                      under the Federal Technology Transfer Act of 1986 that
                      relate to the subject matter of this AGREEMENT. LICENSEE
                      agrees not to unreasonably deny requests for a Research
                      License from such future collaborators with PHS when
                      acquiring such rights is necessary in order to make a
                      CRADA project feasible. LICENSEE may request an
                      opportunity to join as a party to the proposed CRADA.

         5.04         In addition to the reserved license of Paragraph 5.01
                      above, PHS reserves the right to grant such nonexclusive
                      RESEARCH LICENSES directly or to require LICENSEE to grant
                      nonexclusive RESEARCH LICENSES on reasonable terms. The
                      purpose of this RESEARCH LICENSE is to encourage basic
                      research, whether conducted at an academic or corporate
                      facility. In order to safeguard the LICENSED PATENT
                      RIGHTS, however, PHS shall consult with LICENSEE before
                      granting to commercial entities a RESEARCH LICENSE or
                      providing to them research samples of the materials.

6.       ROYALTIES AND REIMBURSEMENT

         6.01         LICENSEE agrees to pay to PHS a noncreditable,
                      nonrefundable license issue royalty as set forth in
                      Appendix C within thirty (30) days from the date that this
                      AGREEMENT becomes effective.

         6.02         LICENSEE agrees to pay to PHS a nonrefundable minimum
                      annual royalty as set forth in Appendix C. The minimum
                      annual royalty is due and payable on January 1 of each
                      calendar year and may be credited against any earned
                      royalties due for sales made in that year. The minimum
                      annual royalty due for the first calendar year of this
                      AGREEMENT may be prorated according to the fraction of the
                      calendar year remaining between the effective date of this
                      AGREEMENT and the next subsequent January 1.


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         6.03         LICENSEE agrees to pay PHS earned royalties as set forth
                      in Appendix C.

         6.04         LICENSEE agrees to pay PHS benchmark royalties as set
                      forth in Appendix C.

         6.05         LICENSEE agrees to pay PHS sublicensing royalties as set
                      forth in Appendix C.

         6.06         LICENSEE agrees to pay PHS assignment royalties as set
                      forth in Appendix C.

         6.07         A claim of a patent or patent application licensed under
                      this AGREEMENT shall cease to fall within the LICENSED
                      PATENT RIGHTS or BACKGROUND PATENT RIGHTS for the purpose
                      of computing the minimum annual royalty and earned royalty
                      payments in any given country on the earliest of the dates
                      that a) the claim has been abandoned but not continued, b)
                      the patent expires or irrevocably lapses, or c) the claim
                      has been held to be invalid or unenforceable by an
                      unappealed or unappealable decision of a court of
                      competent jurisdiction or administrative agency.

         6.08         No multiple royalties shall be payable because any
                      LICENSED PRODUCTS or LICENSED PROCESSES are covered by
                      more than one of the LICENSED PATENT RIGHTS.

         6.09(a)      Transfer of LICENSED PRODUCTS by LICENSEE to sublicensees
                      or an affiliated party made in other than an arm's-length
                      transaction for no further resale shall be attributed a
                      value which would have been received in an arm's-length
                      transaction of like quantity and quality of products sold
                      on or about the time of the transfer of LICENSED PRODUCTS
                      for the purpose of calculating NET SALES.

         6.09(b)      Transfer of LICENSED PRODUCTS by LICENSEE to sublicensees
                      or affiliated party for further resale shall have
                      attributed either a value which would have been received
                      in an arm's-length transaction based on sales of like
                      quantity and quality of products transferred on or about
                      the time of such transfer of LICENSED PRODUCTS or the
                      actual value received in a later arm's-length transaction,
                      whichever is greater, for purposes of calculating NET
                      SALES.

         6.10(a)      With regard to expenses associated with the preparation,
                      filing, prosecution, and maintenance of all patent
                      applications and patents included within the LICENSED
                      PATENT RIGHTS incurred by PHS prior to the effective date
                      of this AGREEMENT, LICENSEE shall pay to PHS, as an
                      additional royalty, within sixty (60) days of PHS's
                      submission of a statement and request for payment to
                      LICENSEE, an amount equivalent to such patent expenses
                      previously incurred by PHS.

         6.10(b)      With regard to expenses associated with the preparation,
                      filing, prosecution, and maintenance of all patents
                      included within the BACKGROUND PATENT RIGHTS incurred by
                      PHS prior to the effective date of this AGREEMENT,
                      LICENSEE shall pay to PHS, as an additional royalty,
                      within (60) days of PHS's submission of a statement and
                      request for


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                      payment an amount equivalent to three-thousand
                      three-hundred dollars ($3,300.00).

         6.11         With regard to expenses associated with the preparation,
                      filing, prosecution, and maintenance of all patent
                      applications and patents included within the LICENSED
                      PATENT RIGHTS incurred by PHS on or after the effective
                      date of this AGREEMENT, PHS, at its sole option, may
                      require LICENSEE:

                      (a) to pay PHS on an annual basis, within sixty (60) days
                      of PHS's submission of a statement and request for
                      payment, a royalty amount equivalent to all such patent
                      expenses incurred during the previous calendar year(s); or

                      (b) to pay such expenses directly to the law firm employed
                      by PHS to handle such functions. However, in such event,
                      PHS and not LICENSEE shall be the client of such law firm.

                      Under exceptional circumstances, LICENSEE may be given the
                      right to assume responsibility for the preparation,
                      filing, prosecution, or maintenance of any patent
                      application or patent included with the LICENSED PATENT
                      RIGHTS. In that event, LICENSEE shall directly pay the
                      attorneys or agents engaged to prepare, file, prosecute or
                      maintain such patent applications or patents and shall
                      provide to PHS copies of each invoice associated with such
                      services as well as documentation that such invoices have
                      been paid.

         6.12         LICENSEE may elect to surrender its rights in any country
                      of the LICENSED TERRITORY under any LICENSED PATENT RIGHTS
                      upon sixty (60) days written notice to PHS and owe no
                      payment obligation under Article 6.10 (a) for
                      patent-related expenses incurred in that country after the
                      effective date of such written notice.

7.       PATENT FILING, PROSECUTION, AND MAINTENANCE

         7.01         Except as otherwise provided in this Article 7, PHS agrees
                      to take responsibility for, but to consult with, the
                      LICENSEE in the preparation, filing, prosecution, and
                      maintenance of any and all patent applications or patents
                      included in the LICENSED PATENT RIGHTS and shall furnish
                      copies of relevant patent-related documents to LICENSEE.

         7.02         Upon PHS's written request, LICENSEE shall assume the
                      responsibility for the preparation, filing, prosecution,
                      and maintenance of any and all patent applications or
                      patents included in the LICENSED PATENT RIGHTS and shall
                      on an ongoing basis promptly furnish copies of all
                      patent-related documents to PHS. In such event, LICENSEE
                      shall, subject to the prior approval of PHS, select
                      registered patent attorneys or patent agents to provide
                      such services on behalf of LICENSEE and PHS.PHS shall
                      provide appropriate powers of attorney and other documents
                      necessary to undertake such actions to the patent
                      attorneys or patent agents providing such services.
                      LICENSEE and its attorneys or agents shall consult with
                      PHS in all aspects of the preparation, filing, prosecution
                      and maintenance of patent applications and patents
                      included within the LICENSED PATENT RIGHTS and shall 
                      provide PHS sufficient opportunity to comment on any 
                      document that LICENSEE intends to file or to cause to 
                      be filed with the relevant intellectual property or 
                      patent office.

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         7.03         At any time, PHS may provide LICENSEE with written notice
                      that PHS wishes to assume control of the preparation,
                      filing, prosecution, and maintenance of any and all patent
                      applications or patents included in the LICENSED PATENT
                      RIGHTS. If PHS elects to assume such responsibilities,
                      LICENSEE agrees to cooperate fully with PHS, its attorneys
                      and agents in the preparation, filing, prosecution, and
                      maintenance of any and all patent applications or patents
                      included in the LICENSED PATENT RIGHTS and to provide PHS
                      with complete copies of any and all documents or other
                      materials that PHS deems necessary to undertake such
                      responsibilities. If PHS elects to assume control of the
                      preparation, filing, prosecution, and maintenance of any
                      and all patent applications or patents included in the
                      LICENSED PATENT RIGHTS for a reason other than LICENSEE'S
                      failure to perform under this AGREEMENT, PHS shall be
                      responsible for all costs associated with transferring
                      patent prosecution responsibilities to an attorney or
                      agent of PHS's choice.

         7.04         Each party shall promptly inform the other as to all
                      matters that come to its attention that may affect the
                      preparation, filing, prosecution, or maintenance of the
                      LICENSED PATENT RIGHTS and permit each other to provide
                      comments and suggestions with respect to the preparation,
                      filing, and prosecution of LICENSED PATENT RIGHTS, which
                      comments and suggestions shall be considered by the other
                      party.

8.       RECORD KEEPING

         8.01         LICENSEE agrees to keep accurate and correct records of
                      LICENSED PRODUCTS made, used, or sold and LICENSED
                      PROCESSES practiced under this Agreement appropriate to
                      determine the amount of royalties due PHS. Such records
                      shall be retained for at least five (5) years following a
                      given reporting period. They shall be available during
                      normal business hours for inspection at the expense of PHS
                      by an accountant or other designated auditor selected by
                      PHS for the sole purpose of verifying reports and payments
                      hereunder. The accountant or auditor shall only disclose
                      to PHS information relating to the accuracy of reports and
                      payments made under this AGREEMENT. If an inspection shows
                      an underreporting or underpayment in excess of five
                      percent (5%) for any twelve (12) month period, then
                      LICENSEE shall reimburse PHS for the cost of the
                      inspection at the time Licensee pays the unreported
                      royalties, including any late charges as required by
                      Paragraph 9.08 of this AGREEMENT. All payments required
                      under this Paragraph shall be due within thirty (30) days
                      of the date PHS provides LICENSEE notice of the payment
                      due.

         8.02         LICENSEE agrees to conduct an independent audit of sales
                      and royalties at least every two years if annual sales of
                      the LICENSED PRODUCT or LICENSED PROCESSES are over two
                      (2) million dollars. The audit may be conducted in
                      conjunction with the annual audit performed on behalf of
                      LICENSEE. The audit shall address, at a minimum, the
                      amount of gross sales by or on behalf of LICENSEE during
                      the audit period, the amount of funds owed to the
                      GOVERNMENT under this AGREEMENT, and whether the amount


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                      owed has been paid to the GOVERNMENT and is reflected in
                      the records of the LICENSEE. A report by the auditor shall
                      be submitted promptly to PHS on completion. LICENSEE shall
                      pay for the entire cost of the audit.

9.       REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

         9.01         Prior to signing this AGREEMENT, LICENSEE has provided to
                      PHS the COMMERCIAL DEVELOPMENT PLAN at Appendix F, under
                      which LICENSEE intends to bring the subject matter of the
                      LICENSED PATENT RIGHTS to the point of PRACTICAL
                      APPLICATION. This COMMERCIAL DEVELOPMENT PLAN is hereby
                      incorporated by reference into this Agreement. Based on
                      this plan, performance BENCHMARKS are determined as
                      specified in Appendix D.

         9.02         LICENSEE shall provide written annual reports on its
                      product development progress or efforts to commercialize
                      under the COMMERCIAL DEVELOPMENT PLAN for each of the
                      LICENSED FIELDS OF USE within sixty (60) days after
                      December 31 of each calendar year. These progress reports
                      shall include, but not be limited to: progress on research
                      and development, status of applications for regulatory
                      approvals, manufacturing, sublicensing, marketing, and
                      sales during the preceding calendar year, as well as plans
                      for the present calendar year. PHS also encourages these
                      reports to include information on any of LICENSEE'S public
                      service activities that relate to the LICENSED PATENT
                      RIGHTS. If reported progress differs from that projected
                      in the COMMERCIAL DEVELOPMENT PLAN and BENCHMARKS,
                      LICENSEE shall explain the reasons for such differences.
                      In any such annual report, LICENSEE may propose amendments
                      to the COMMERCIAL DEVELOPMENT PLAN, acceptance of which by
                      PHS may not be denied unreasonably. LICENSEE agrees to
                      provide any additional information reasonably required by
                      PHS to evaluate LICENSEE'S performance under this
                      AGREEMENT. LICENSEE may amend the Benchmarks at any time
                      upon written consent by PHS. PHS shall not unreasonably
                      withhold approval of any request of LICENSEE to extend the
                      time periods of this schedule if such request is supported
                      by a reasonable showing by LICENSEE of diligence in its
                      performance under the COMMERCIAL DEVELOPMENT PLAN and
                      toward bringing the LICENSED PRODUCTS to the point of
                      practical application as defined in 37 CFR 404.3(d).
                      LICENSEE shall amend the COMMERCIAL DEVELOPMENT PLAN and
                      BENCHMARKS at the request of PHS to address any LICENSED
                      FIELDS OF USE not specifically addressed in the plan
                      originally submitted.

         9.03         LICENSEE shall report to PHS the date of the FIRST
                      COMMERCIAL SALE in each country in the LICENSED TERRITORY
                      within thirty (30) days of such occurrence.

         9.04         LICENSEE shall submit to PHS within sixty (60) days after
                      each calendar half-year ending June 30 and December 31 a
                      royalty report setting forth for the preceding half-year
                      period the amount of the LICENSED PRODUCTS sold or
                      LICENSED PROCESSES practiced by or on behalf of LICENSEE
                      in each country within the LICENSED TERRITORY, the NET
                      SALES, and the amount of royalty accordingly due. With
                      each such royalty report, LICENSEE shall submit payment of
                      the earned royalties due. If no earned royalties are due
                      to PHS for any reporting period, the written report shall
                      so state. The royalty report shall be certified as correct
                      by an authorized officer of LICENSEE and shall include a
                      detailed listing of all deductions made


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                      under Paragraph 2.11 to determine NET SALES made under
                      Article 6 to determine royalties due.

         9.05         LICENSEE agrees to forward semi-annually to PHS a copy of
                      such reports received by LICENSEE from its sublicensees
                      during the preceding half-year period as shall be
                      pertinent to a royalty accounting to PHS by LICENSEE for
                      activities under the sublicense.

         9.06         Royalties due under Article 6 shall be paid in U.S.
                      dollars. For conversion of foreign currency to U.S.
                      dollars, the conversion rate shall be the New York foreign
                      exchange rate quoted in The Wall Street Journal on the day
                      that the payment is due. All checks and bank drafts shall
                      be drawn on United States banks and shall be payable, as
                      appropriate, for FDA or NIH licenses to the National
                      Institutes of Health, P.O. Box 360120, Pittsburgh,
                      Pennsylvania 15251-6120. Any loss of exchange, value,
                      taxes, or other expenses incurred in the transfer or
                      conversion to U.S. dollars shall be paid entirely by
                      LICENSEE. The royalty report required by Paragraph 9.04 of
                      this AGREEMENT shall accompany each such payment and a
                      copy of such report shall also be mailed to PHS at its
                      address for notices indicated on the Signature Page of
                      this AGREEMENT.

         9.07         LICENSEE shall be solely responsible for determining if
                      any tax on royalty income is owed outside the United
                      States and shall pay any such tax and be responsible for
                      all filings with appropriate agencies of foreign
                      governments. The taxes paid by LICENSEE on behalf of PHS
                      may be deducted from the earned royalty due under
                      paragraph 6.03.

         9.08         Late charges will be assessed by PHS as additional
                      royalties on any overdue payments at a rate of one (1)
                      percent per month compounded monthly. The payment of such
                      late charges shall not prevent PHS from exercising any
                      other rights it may have as a consequence of the lateness
                      of any payment.

         9.09         All plans and reports required by this Article 9 and
                      marked "confidential" by LICENSEE shall, to the extent
                      permitted by law, be treated by PHS as commercial and
                      financial information obtained from a person and as
                      privileged and confidential and any proposed disclosure of
                      such records by the PHS under the Freedom of Information
                      Act, 5 U.S.C. Section 552 shall be subject to the
                      predisclosure notification requirements of 45 CFR Section
                      5.65(d).


10.      PERFORMANCE

         10.01        LICENSEE shall use its reasonable best efforts to bring
                      the License Products and Licensed Processes to Practical
                      Application. "Reasonable best efforts" for the purposes of
                      this provision shall include adherence to the COMMERCIAL
                      DEVELOPMENT PLAN at Appendix F and performance of the
                      BENCHMARKS at Appendix D. The efforts of a sublicensee
                      shall be considered the efforts of LICENSEE.

         10.02        Upon the FIRST COMMERCIAL SALE, until the expiration of
                      this Agreement, LICENSEE shall use its reasonable best
                      efforts to make LICENSED PRODUCTS


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                      and LICENSED PROCESSES reasonably accessible to the United
                      States public.

11.      INFRINGEMENT AND PATENT ENFORCEMENT

         11.01        PHS and LICENSEE agree to notify each other promptly of
                      each infringement or possible infringement of the LICENSED
                      PATENT RIGHTS, as well as any facts which may affect the
                      validity, scope, or enforceability of the LICENSED PATENT
                      RIGHTS of which either Party becomes aware.

         11.02        Pursuant to this AGREEMENT and the provisions of Chapter
                      29 of title 35, United States Code, LICENSEE may a) bring
                      suit in its own name, at its own expense, and on its own
                      behalf for infringement of presumably valid claims in the
                      LICENSED PATENT RIGHTS; b) in any such suit, enjoin
                      infringement and collect for its use, damages, profits,
                      and awards of whatever nature recoverable for such
                      infringement; and c) settle any claim or suit for
                      infringement of the LICENSED PATENT RIGHTS provided,
                      however, that PHS and appropriate GOVERNMENT authorities
                      shall have the first right to take such actions. If
                      LICENSEE desires to initiate a suit for patent
                      infringement, LICENSEE shall notify PHS in writing. If PHS
                      does not notify LICENSEE of its intent to pursue legal
                      action within ninety (90) days, LICENSEE will be free to
                      initiate suit. PHS shall have a continuing right to
                      intervene in such suit. LICENSEE shall take no action to
                      compel the GOVERNMENT either to initiate or to join in any
                      such suit for patent infringement. LICENSEE may request
                      the GOVERNMENT to initiate or join in any such suit if
                      necessary to avoid dismissal of the suit. Should the
                      GOVERNMENT be made a party to any such suit, LICENSEE
                      shall reimburse the GOVERNMENT for any costs, expenses, or
                      fees which the GOVERNMENT incurs as a result of such
                      motion or other action, including any and all costs
                      incurred by the GOVERNMENT in opposing any such motion or
                      other action. In all cases, LICENSEE agrees to keep PHS
                      reasonably apprised of the status and progress of any
                      litigation. Before LICENSEE commences an infringement
                      action, LICENSEE shall notify PHS and give careful
                      consideration to the views of PHS and to any potential
                      effects of the litigation on the public health in deciding
                      whether to bring suit.

         11.03        In the event that a declaratory judgment action alleging
                      invalidity or non-infringement of any of the LICENSED
                      PATENT RIGHTS shall be brought against LICENSEE or raised
                      by way of counterclaim or affirmative defense in an
                      infringement suit brought by LICENSEE under Paragraph
                      11.02, pursuant to this AGREEMENT and the provisions of
                      Chapter 29 of Title 35, United States Code or other
                      statutes, LICENSEE may a) defend the suit in its own name,
                      at its own expense, and on its own behalf for presumably
                      valid claims in the LICENSED PATENT RIGHTS; b) in any such
                      suit, ultimately to enjoin infringement and to collect for
                      its use, damages, profits, and awards of whatever nature
                      recoverable for such infringement; and c) settle any claim
                      or suit for declaratory judgment involving the LICENSED
                      PATENT Rights-provided, however, that PHS and appropriate
                      Government authorities shall have the first right to take
                      such actions and shall have a continuing right to
                      intervene in such suit. If PHS does not notify LICENSEE of
                      its intent to respond to the legal action within a
                      reasonable time, LICENSEE will be free to do so. Licensee
                      shall take no action to compel the GOVERNMENT either to
                      initiate or to join in any such declaratory judgment
                      action. LICENSEE may request the GOVERNMENT to


<PAGE>

                      initiate or to join any such suit if necessary to avoid
                      dismissal of the suit. Should the GOVERNMENT be made a
                      party to any such suit by motion or any other action of
                      LICENSEE, LICENSEE shall reimburse the GOVERNMENT for any
                      costs, expenses, or fees which the GOVERNMENT incurs as a
                      result of such motion or other action. If LICENSEE elects
                      not to defend against such declaratory judgment action,
                      PHS, at its option, may do so at its own expense. In all
                      cases, LICENSEE agrees to keep PHS reasonably apprised of
                      the status and progress of any litigation. Before LICENSEE
                      commences an infringement action, LICENSEE shall notify
                      PHS and give careful consideration to the views of PHS and
                      to any potential effects of the litigation on the public
                      health in deciding whether to bring suit.

         11.04        In any action under Paragraphs 11.02 or 11.03, the
                      expenses including costs, fees, attorney fees, and
                      disbursements, shall be paid by LICENSEE. Up to
                      twenty-five percent (25%) of such expenses may be credited
                      against the royalties payable to PHS under Paragraph 6.03
                      under the LICENSED PATENT RIGHTS in the country in which
                      such a suit is filed. In the event that twenty-five
                      percent (25%) of such expenses exceed the amount of
                      royalties payable by LICENSEE in any calendar year, the
                      expenses in excess may be carried over as a credit on the
                      same basis into succeeding calendar years. A credit
                      against litigation expenses, however, may not reduce the
                      royalties due in any calendar year to less than the
                      minimum annual royalty. Any recovery made by LICENSEE,
                      through court judgment or settlement, first shall be
                      applied to reimburse PHS for royalties withheld as a
                      credit against litigation expenses and then to reimburse
                      LICENSEE for its litigation expense. Any remaining
                      recoveries shall be split with seventy-five (75%) going to
                      Licensee and twenty-five percent (25%) going to PHS.

         11.05        PHS shall cooperate fully with LICENSEE in connection with
                      any action under Paragraphs 11.02 or 11.03. PHS agrees
                      promptly to provide access to all necessary documents and
                      to render reasonable assistance in response to a request
                      by LICENSEE.

12.      NEGATION OF WARRANTIES AND INDEMNIFICATION

         12.01        PHS offers no warranties other than those specified in
                      Article 1.

         12.02        PHS does not warrant the validity of the LICENSED PATENT
                      RIGHTS and makes no representations whatsoever with regard
                      to the scope of the LICENSED PATENT RIGHTS, or that the
                      LICENSED PATENT RIGHTS may be exploited without infringing
                      other patents or other intellectual property rights of
                      third parties.

         12.03        PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF
                      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
                      SUBJECT MATTER OR DEFINED BY THE CLAIMS OF THE LICENSED
                      PATENT RIGHTS.

         12.04        PHS does not represent that it will commence legal actions
                      against third parties infringing the LICENSED PATENT
                      RIGHTS.

         12.05        LICENSEE shall indemnify and hold PHS, its employees,
                      students, fellows, agents, and consultants harmless from
                      and against all liability, demands,


<PAGE>

                      damages, expenses, and losses, including but not limited
                      to death, personal injury, illness, or property damage in
                      connection with or arising out of a) the use by or on
                      behalf of LICENSEE, its sublicensees, directors,
                      employees, or third parties of any LICENSED PATENT RIGHTS,
                      or b) the design, manufacture, distribution, or use of any
                      LICENSED PRODUCTS, LICENSED PROCESSES or materials by
                      Licensee, or other products or processes developed in
                      connection with or arising out of the LICENSED PATENT
                      RIGHTS. LICENSEE agrees to maintain a liability insurance
                      program consistent with sound business practice.

13.      TERM TERMINATION. AND MODIFICATION OF RIGHTS

         13.01        This AGREEMENT is effective when signed by all parties and
                      shall extend to the expiration of the last to expire of
                      the LICENSED PATENT RIGHTS unless sooner terminated as
                      provided in this Article 13.

         13.02        In the event that LICENSEE is in default in the
                      performance of any material obligations under this
                      AGREEMENT, including but not limited to the obligations
                      listed in Article 13.05, and if the default has not been
                      remedied within ninety (90) days after the date of notice
                      in writing of such default, PHS may terminate this
                      AGREEMENT by written notice.

         13.03        In the event that LICENSEE becomes insolvent, files a
                      petition in bankruptcy, has such a petition filed against
                      it, determines to file a petition in bankruptcy, or
                      receives notice of a third party's intention to file an
                      involuntary petition in bankruptcy, LICENSEE shall
                      immediately notify PHS in writing.

         13.04        LICENSEE shall have a unilateral right to terminate this
                      AGREEMENT and/or any licenses in any country by giving PHS
                      sixty (60) days written notice to that effect.

         13.05        PHS shall specifically have the right to terminate or
                      modify, at its option, this AGREEMENT, if PHS determines
                      that the LICENSEE: 1) is not executing the COMMERCIAL
                      DEVELOPMENT PLAN submitted with its request for a license
                      and the LICENSEE cannot otherwise demonstrate to PHS's
                      satisfaction that the LICENSEE has taken, or can be
                      expected to take within a reasonable time, effective steps
                      to achieve practical application of the LICENSED PRODUCTS
                      or LICENSED PROCESSES; 2) has not achieved the Benchmarks
                      as may be modified under Paragraph 9.02; 3) has willfully
                      made a false statement of, or willfully omitted, a
                      material fact in the license application or in any report
                      required by the license agreement; 4) has committed a
                      material breach of a covenant or agreement contained in
                      the license; 5) is not keeping LICENSED PRODUCTS or
                      LICENSED PROCESSES reasonably available to the public
                      after commercial use commences; 6) cannot reasonably
                      satisfy unmet health and safety needs; or 7) cannot
                      reasonably justify a failure to comply with the domestic
                      production requirement of Paragraph 5.02 unless waived. In
                      making this determination, PHS will take into account the
                      normal course of such commercial development programs
                      conducted with sound and reasonable business practices and
                      judgment and the annual reports submitted by LICENSEE
                      under Paragraph 9.02. Prior to invoking this right, PHS
                      shall give written notice to LICENSEE providing LICENSEE
                      specific notice of,


<PAGE>

                      and a ninety (90) day opportunity to respond to, PHS's
                      concerns as to the previous items 1) to 7). If LICENSEE
                      fails to alleviate PHS's concerns as to the previous items
                      1) to 7) or fails to initiate corrective action to PHS's
                      satisfaction, PHS may terminate this AGREEMENT.

         13.06        When the public health and safety so require, and after
                      written notice to LICENSEE providing LICENSEE a sixty (60)
                      day opportunity to respond, PHS shall have the right to
                      require LICENSEE to grant sublicenses to responsible
                      applicants, on resonable terms, in any Licensed Fields of
                      Use under the Licensed Patent Rights, unless LICENSEE can
                      reasonably demonstrate that the granting of the sublicense
                      would not materially increase the availability to the
                      public of the subject matter of the LICENSED PATENT
                      RIGHTS. PHS will not require the granting of a sublicense
                      unless the responsible applicant has first negotiated in
                      good faith with LICENSEE.

         13.07        PHS reserves the right according to 35 U.S.C. Section
                      209(f)(4) to terminate or modify this AGREEMENT if it is
                      determined that such action is necessary to meet
                      requirements for public use specified by federal
                      regulations issued after the date of the license and such
                      requirements are not reasonably satisfied by LICENSEE.

         13.08        Within thirty (30) days of receipt of written notice of
                      PHS's unilateral decision to modify or terminate this
                      Agreement, LICENSEE may, consistent with the provisions of
                      37 CFR 404.11, appeal the decision by written submission
                      to the designated PHS official. The decision of the
                      designated PHS official shall be the final agency
                      decision. LICENSEE may thereafter exercise any and all
                      administrative or judicial remedies that may be available.

         13.09        Within ninety (90) days of termination of this AGREEMENT
                      under this Article 13 or expiration under Paragraph 3.02,
                      a final report shall be submitted by LICENSEE. Any royalty
                      payments, including those related to patent expense, due
                      to PHS shall become immediately due and payable upon
                      termination or expiration. If terminated under this
                      Article 13, sublicensees may elect to convert their
                      sublicenses to direct licenses with PHS pursuant to
                      Paragraph 4.03.

14.      GENERAL PROVISIONS

         14.01        Neither Party may waive or release any of its rights or
                      interests in this AGREEMENT except in writing. The failure
                      of the GOVERNMENT to assert a right hereunder or to insist
                      upon compliance with any term or condition of this
                      AGREEMENT shall not constitute a waiver of that right by
                      the GOVERNMENT or excuse a similar subsequent failure to
                      perform any such term or condition by LICENSEE.

         14.02        This AGREEMENT constitutes the entire agreement between
                      the Parties relating to the subject matter of the LICENSED
                      PATENT RIGHTS, and all negotiations, representations,
                      agreements, and understandings are merged into,
                      extinguished by, and completely expressed by this
                      AGREEMENT.

         14.03        The provisions of this AGREEMENT are severable, and in the
                      event that any


<PAGE>

                      provision of this AGREEMENT shall be determined to be
                      invalid or unenforceable under any controlling body of law
                      such determination shall not in any way affect the
                      validity or enforceability of the remaining provisions of
                      this AGREEMENT.

         14.04        If either Party desires a modification to this AGREEMENT,
                      the Parties shall, upon reasonable notice of the proposed
                      modification by the Party desiring the change, confer in
                      good faith to determine the desirability of such
                      modification. No modification will be effecffve until a
                      written amendment is signed by the signatories to this
                      AGREEMENT or their designees.

         14.05        The construction, validity, performance, and effect of
                      this AGREEMENT shall be governed by Federal law as applied
                      by the Federal courts in the District of Columbia.

         14.06        All notices required or permitted by this AGREEMENT shall
                      be given by prepaid, first class, registered or certified
                      mail properly addressed to the other Party at the address
                      designated on the following Signature Page, or to such
                      other address as may be designated in writing by such
                      other Party, and shall be effective as of the date of the
                      postmark of such notice..

         14.07        This AGREEMENT shall not be assigned by LICENSEE except a)
                      with the prior written consent of PHS, such consent not to
                      be withheld unreasonably; or b) as part of a sale or
                      transfer of substantially the entire business of LICENSEE
                      relating to operations which concern this Agreement.
                      LICENSEE shall notify PHS within ten (10) days of any
                      assignment of this Agreement by LICENSEE.

         14.08        LICENSEE agrees in its use of any PHS-supplied materials
                      to comply with all applicable statutes, regulations, and
                      guidelines, including Public Health Service and National
                      Institutes of Health regulations and guidelines. LICENSEE
                      agrees not to use the materials for research involving
                      human subjects or clinical trials in the United States
                      without complying with 21 CFR Part 50 and 45 CFR Part 46.
                      Licensee agrees not to use the materials for research
                      involving human subjects or clinical trials outside of the
                      United States without notifying PHS, in writing, of such
                      research or trials and complying with the applicable
                      regulations of the appropriate national control
                      authorities.. Written notification to PHS of research
                      involving human subjects or clinical trials outside of the
                      United States shall be given no later than sixty (60) days
                      prior to commencement of such research or trials.

         14.09        LICENSEE acknowledges that it is subject to and agrees to
                      abide by the United States laws and regulations (including
                      the Export Administration Act of 1979 and Arms Export
                      Control Act) controlling the export of technical data,
                      computer software, laboratory prototypes, biological
                      material, and other commodities. The transfer of such
                      items may require a license from the cognizant Agency of
                      the U.S. GOVERNMENT or written assurances by LICENSEE that
                      it shall not export such items to certain foreign
                      countries without prior approval of such agency. PHS
                      neither represents that a license is or is not required or
                      that, if required, it


<PAGE>

                      shall be issued.

         14.10        LICENSEE agrees to mark the LICENSED PRODUCTS or their
                      packaging sold in the United States with all applicable
                      U.S. patent numbers and similarly to indicate "Patent
                      Pending" status. All LICENSED PRODUCTS manufactured in,
                      shipped to, or sold in other countries shall be marked in
                      such a manner as to preserve PHS patent rights in such
                      countries.

         14.11        By entering into this AGREEMENT, PHS does not directly or
                      indirectly endorse any product or service provided, or to
                      be provided, by LICENSEE whether directly or indirectly
                      related to this Agreement. LICENSEE shall not state or
                      imply that this AGREEMENT is an endorsement by the
                      GOVERNMENT, PHS, any other GOVERNMENT organizational unit,
                      or any GOVERNMENT employee. Additionally, LICENSEE shall
                      not use the names of NIH, CDC, PHS, or DHHS or the
                      GOVERNMENT or their employees in any advertising,
                      promotional, or sales literature without the prior written
                      consent of PHS.

         14.12        The Parties agree to attempt to settle amicably any
                      controversy or claim arising under this Agreement or a
                      breach of this Agreement, except for appeals of
                      modifications or termination decisions provided for in
                      Article 13. LICENSEE agrees first to appeal any such
                      unsettled claims or controversies to the designated PHS
                      official, or designee, whose decision shall be considered
                      the final agency decision. Thereafter, LICENSEE may
                      exercise any administrative or judicial remedies that may
                      be available.

         14.13        Nothing relating to the grant of a license, nor the grant
                      itself, shall be construed to confer upon any person any
                      immunity from or defenses under the antitrust laws or from
                      a charge of patent misuse, and acquisition and use of
                      rights pursuant to 37 CFR Part 404 shall not be immunized
                      from the operation of state or Federal law by reason of
                      the source of the grant.

         14.14        Paragraphs 4.03, 8.01, 9.06-9.08, 12.01-12.05, 13.08,
                      13.09, and 14.12 of this AGREEMENT shall survive
                      termination of this AGREEMENT.

                          SIGNATURES BEGIN ON NEXT PAGE


<PAGE>



                    PHS PATENT LICENSE AGREEMENT -- EXCLUSIVE

                                 SIGNATURE PAGE

For PHS:

/s/                                                                     9/23/97
Signature of Authorized PHS Official                                 Date

Printed Name

Title

Mailing Address for Notices:



For LICENSEE (Upon, information and belief, the undersigned expressly certifies
or affirms that the contents of any statements of LICENSEE made or referred to
in this document are truthful and accurate.):

by:

/s/
Signature of Authorized Official                                     Date

John N. Kapoor, Ph.D.
Printed Name

Chairman
Title

Mailing Address for Notices:

 225 East Deerpath Rd.
 Suite 250
 Lake Forest, IL 60045


<PAGE>



                APPENDIX A -- PATENT(S) OR PATENT APPLICATION(S)


PATENT(s) OR PATENT APPLICATION(s) THAT ARE LICENSED PATENT RIGHTS:
U.S. Patent 5,614,191 issued March 25, 1997
USSN 08/821,840 (div of 08/404,685) filed March 21, 1997

PATENT(s) OR PATENT APPLICATION(s) THAT ARE BACKGROUND PATENT RIGHTS:
U.S. Patent 4,892,827 issued January 9, 1990


<PAGE>



               APPENDIX B -- LICENSED FIELDS OF USE AND TERRITORY



LICENSED FIELDS OF USE: Use of the chimeric molecule hIL-13-PE38QQR or
cphIL-13-PE38QQR to treat cancer.





LICENSED TERRITORY: World-wide



<PAGE>



                             APPENDIX C -- ROYALTIES

ROYALTIES:

1. LICENSEE agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty in the amount of seventy-five thousand dollars ($75,000).

2. LICENSEE agrees to pay to PHS a nonrefundable minimum annual royalty in the
amount of ten thousand dollars ($10,000) prior to the FIRST COMMERCIAL SALE or
twenty-five thousand dollars ($25,000.00) after the FIRST COMMERCIAL SALE.

3. LICENSEE agrees to pay PHS an earned royalty of four percent (4%) on NET
SALES; provided however that LICENSEE shall be entitled to a credit of one-half
percent (0.5%) against the earned royalty rate for each percent point in excess
of two percent (2.0%) that LICENSEE must pay to an unaffiliated licensor for the
manufacture and sale of LICENSED PRODUCTS. Said credit, however, shall not
reduce the earned royalty due to PHS for LICENSED PRODUCTS below two percent
(2.0%).

4. LICENSEE agrees to pay PHS benchmark royalties as follows:

<TABLE>
<S>                                                              <C>     
1. Submission of first IND                                       $ 25,000
2. Completion of first Phase I Clinical Trial                    $ 50,000
3. Completion of first Phase II Clinical Trial                   $ 75,000
4. Completion of each additional Phase II Clinical Trial         $ 35,000
5. Completion of first Phase III Clinical Trial                  $100,000
6. Completion of each additional Phase III Clinical Trial        $ 50,000
7. Approval of first BLA/ELA/PLA/NDA                             $300,000
8. Approval of each additional BLA/PLA/ELA/NDA                   $150,000
</TABLE>

5. LICENSEE agrees to pay PHS sublicensing royalties as follows:

         (a)      Twenty-five percent (25%) of earned royalties paid by a
                  sublicensee on NET SALES or two percent of the NET SALES of a
                  sublicensee, whichever is greater; and

         (b)      Twenty percent (20%) of all non-creditable and non-refundable
                  consideration received for granting a sublicense, if the
                  technology is sublicensed on or before the one year
                  anniversary of this AGREEMENT; or ten percent (10%) of all
                  non-creditable and non-refundable consideration received in
                  granting a sublicense, if the technology is sublicensed after
                  the one year anniversary of this AGREEMENT. Fees paid
                  expressly for research and development of LICENSED PRODUCT and
                  LICENSED PROCESSES, such as clinical trial support, shall be
                  excluded.

6. In the event that Licensee shall transfer, in a separate and distinct
transaction, that aspect of its business involving this AGREEMENT, Licensee
agres to pay PHS an assignment royalty of fifteen-percent (15%) of any cash
consideration received as part of such sale or transfer, provided, however, that
no such royalty shall be owned to PHS in the event that the foregoing transfer
is part of or results from a merger, consolidation or other reorganization of
the LICENSEE or from a sale, exchange or other transfer of all or substantially
all of its assets.


<PAGE>



                    APPENDIX D -- BENCHMARKS AND PERFORMANCE

LICENSEE agrees to the following BENCHMARKS, for its performance under this
AGREEMENT and, within ten (10) days of achieving a BENCHMARK, shall notify PHTS
that the BENCHMARK has been achieved.

<TABLE>
<CAPTION>
            BENCHMARK                                           DEADLINE
            ---------                                           --------
<S>                                                 <C>
1.  Pilot Scale Up Production                       1.  within one year of executing
                                                        this  Agreement but no
                                                        later than August 1, 1998
2.  Initiation of In Vivo Efficacy Studies          2.  December 1, 1998
3   Completion of In Vivo Efficacy Studies          3.  October 1, 1999
4   Initiation of Toxicological end                 4.  April 1, 2000
    Pharmacological Studies
5.  Completion of Toxicological and                 5.  April 1, 2001
    Pharmacological Studies
6.  IND Submission                                  6.  November 1, 2001
7   Initiation of Phase I Clinical Trial            7.  March 1, 2002
8   Completion of Phase I Clinical Trial            8.  March 1, 2003
9.  Initiation of Small Phase II Clinical           9.  September 1, 2003
    Trials for Renal Cell Carcinoma
    (use 20 patients)
10. Completion of Small Phase II Clinical           10. March 1, 2004
    Trial in patients with Renal Cell
    Carcinoma
11. Initiation of Large Phase II Clinical           11. September, 2004
    Trials in Renal Cell Carcinoma (use
    at least 150 patients)
12. Election of 2nd cancer type* for                12. March, 2005
    development
13. Initiation of Small Phase II Clinical           13. September, 2005
    Trial on 2nd Cancer type to be
    developed
14. Completion of Large Phase II in                 14. March, 2006
    patients with Renal Cell Carcinoma
15. Completion of Small Phase II Clinical           15. June, 2006
    Trial on 2nd Cancer to be developed
16. Initiation of Phase III Clinical                16. September, 2006
    Trial for Renal Cell Cancer
17. Initiation of Large Phase II Clinical           17. January, 2007
    Trial for 2nd Cancer type to be
    developed
18. Submission of a Revised Development             18. June, 2007
    Plan which includes election of 3rd
    indication to be developed and
    benchmarks for development
19. Completion of Large Phase II Clinical           19. June, 2008
    Trial for 2nd Cancer type to be
    developed
20. Completion of Phase III Clinical                20. September, 2008
    Trial Renal Cell Cancer
21. Initiation of Phase III Clinical                21. January, 2009
    Trial for 2nd Cancer type to be
    developed
22  BLA Submission for Renal Cell Cancer            22. March, 2009
23  Product Launch for Renal Cell Cancer            23. March, 2010
24. Completion of Phase III Clinical Trial          24. January, 2011
    for 2nd  Cancer type in development
25  BLA Submission for 2nd Cancer Type              25. June, 2011
</TABLE>

<PAGE>

<TABLE>
<S>                                                 <C>
    Developed
26  Product Launch for 2nd Cancer Type
    Developed                                       26. June, 2012
</TABLE>

* The next therapy to be developed will treat either brain, pancreatic, ovarian,
prostate, breast or colon cancer or Karposi's sarcoma.


<PAGE>



                    APPENDIX E -- COMMERCIAL DEVELOPMENT PLAN



SEE ATTACHED