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                                                                   Exhibit 10.3

                                                              CUSTOMER NO. 1208

                                FIRST AMENDMENT TO
                            LOAN AND SECURITY AGREEMENT


       THIS FIRST AMENDMENT to LOAN AND SECURITY AGREEMENT (the "Amendment"),
dated as of March 31, 2000, by and between Trega Biosciences, Inc. (the
"Borrower"), a Delaware corporation, having its principal place of business
and chief executive office at 9880 Campus Point Drive, San Diego, California,
92121, and TRANSAMERICA BUSINESS CREDIT CORPORATION (the "Lender"), a
Delaware corporation, having its principal office at Riverway II, West Office
Tower, 9399 West Higgins Road, Rosemont, Illinois, 60018.


                               W I T N E S S E T H :

       WHEREAS, the Borrower and the Lender are parties to a Loan and
Security Agreement, dated as of December 23, 1998 (as amended, the "Loan
Agreement"; capitalized terms used herein shall have the meanings assigned to
such terms in the Loan Agreement unless otherwise defined herein); and

       WHEREAS, the parties hereto desire to amend the Loan Agreement in the
manner set forth herein.

       NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the Borrower and Lender hereby agree as follows:

       1.     AMENDMENT TO LOAN AGREEMENT. Effective as of the date this
Amendment is fully executed by the Lender and Borrower hereof, and subject to
the satisfaction of the Borrower of conditions as determined by Lender, the
Loan Agreement is hereby amended as follows:

       (a)  Section 3.1, Borrowings, of the Agreement is hereby deleted in
its entirety and the following is inserted in lieu thereof:

       SECTION 3.1.  BORROWINGS.  Each Loan shall be in an amount not less
than $100,000, and in no event shall the sum of the aggregate Loans made
exceed the amount of the Lender's written commitment to the Borrower in
effect from time to time. Notwithstanding anything herein to the contrary,
the Lender shall be obligated to make the initial Loan and each other Loan
only after the Lender, in its sole discretion, determines that the applicable
conditions for borrowing contained in Sections 3.3 and 3.4 are satisfied.
The timing and financial scope of Lender's obligation to make Loans hereunder
are limited as set forth in a commitment letter executed by Lender and
Borrower, dated as of November 25, 1998, as amended on March 31, 2000 and
attached hereto respectively as Exhibit A and Exhibit B (collectively the
"Commitment Letter").

       2.     REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants as follows:

              (a)    Since December 23, 1998, there has occurred no
development, event or change that has had or could reasonably be expected to
have a Material Adverse Effect.

              (b)    No Default or Event of Default has occurred and is
continuing.

              (c)    The representations and warranties of such Borrower
contained in Section 4 of the Loan Agreement are true and correct in all
material respects on the date hereof as though made on and as of the date
hereof, except to the extent that such representation and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties were true and correct on and as of such
earlier date).


                                      -1-
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              (d)    This Amendment constitutes the legal, valid and binding
obligation of such Borrower, enforceable against the Borrower in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency and other laws affecting creditors' rights generally and by
general principles of equity.

       3.     EXPENSES. The Borrower shall pay for all of the reasonable
costs and expenses incurred by the Lender in connection with the transactions
contemplated by the Amendment, including, without limitation, the reasonable
fees and expenses of counsel to the Lender.

       4.     MISCELLANEOUS.

              (a)    Except as expressly amended herein, all of the terms and
provisions of the Loan Agreement and the other Loan Documents are ratified
and confirmed in all respects and shall remain in full force and effect.

              (b)    Upon the effectiveness of this Amendment, all references
in the Loan Documents to the Loan Agreement shall mean the Loan Agreement as
amended by this Amendment and all references in the Loan Agreement to the
"this Agreement", "hereof", "herein", or similar terms, shall mean and refer
to the Loan Agreement as amended by this Amendment.

              (c)    The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as an
amendment to or waiver of any right, power or remedy of the Lender under any
of the Loan Documents, or constitute an amendment or waiver of any provision
of any of the Loan Documents.

              (d)    This Amendment may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one and the same
agreement. This Amendment may be executed and delivered by telecopier with
the same force and effect as if the same were a fully executed and delivered
original manual counterpart.

              (e)    This Amendment shall constitute a Loan Document.

       5.     GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.


                                      -2-

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       IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective duly authorized officers
as of the date first above written.


                                   BORROWER

                                   TREGA BIOSCIENCES, INC.


                                   By: _____________________________
                                       Name:
                                       Title:

                                   Hereunto Duly Authorized



                                   LENDER

                                   TRANSAMERICA BUSINESS CREDIT CORPORATION


                                   By: _____________________________
                                       Name:
                                       Title:
                                   Hereunto Duly Authorized





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                                    Exhibit A


November 25, 1998



Mr. Howard Sampson
Acting Chief Financial Officer
Trega Biosciences, Inc.
9880 Campus Point Drive
San Diego, California 92121

Dear Howard:

Transamerica Business Credit Corporation - Technology Finance Division
("Lender") is pleased to offer financing for the Equipment described in this
letter to Trega Biosciences, Inc. ("Borrower"). This Commitment supersedes all
prior correspondence, proposals, and oral or other communications relating to
financing arrangements between Borrower and Lender.

The outline of this offer is as follows:

LENDER:                             Transamerica Business Credit Corporation -
                                    Technology Finance Division and/or its
                                    affiliates, successors or assigns.

BORROWER:                           Trega Biosciences, Inc.

AMOUNT OF LOANS:                    Not to exceed $2,200,000 in the aggregate,
                                    of which up to $700,000 may be used to
                                    finance tenant improvements and $75,000 may
                                    be for software.

EQUIPMENT:                          Laboratory and office equipment, computers
                                    and tenant improvements, software and
                                    related soft costs. All Equipment subject to
                                    Lender approval prior to funding.

COLLATERAL:                         Lender will require a perfected first
                                    priority security interest in all Equipment
                                    financed with the Loans, including but not
                                    limited to all additions, accessions,
                                    improvements, replacements and attachments
                                    thereto and proceeds (including insurance
                                    proceeds) thereof (the "Collateral").

LOCATION OF COLLATERAL:             San Diego, California

EXPECTED DRAW-DOWN SCHEDULE:        A minimum of $1,000,000 will be drawn on or
                                    before December 31, 1998 and the remaining
                                    availability will be drawn on or before
                                    December 31, 1999.

LOAN TERM:                          Each Loan Term will commence upon delivery
                                    of the equipment or upon each delivery of
                                    items of equipment having an aggregate cost
                                    of not less than $100,000, and will continue
                                    through 48 months from the first day of the
                                    month next following or coincident with
                                    commencement of that Loan Term.


<PAGE>


PAYMENT TERMS:                     Monthly Payments equal to 2.395% of original
                                   principal amount of each Loan will be
                                   payable monthly in advance. The first
                                   Monthly Payment will be due and payable on
                                   or before commencement of each Loan Term.

ADJUSTMENT TO                      Lender reserves the right to increase the
PAYMENT TERMS:                     rate set forth above as of the date each
                                   Loan Term commences proportionally to the
                                   change in the weekly average of the interest
                                   rates of four-year U.S. Treasury Securities
                                   (as published in the WALL STREET JOURNAL)
                                   from the week ending October 23, 1998 to the
                                   week preceding the commencement of that Loan
                                   Term. As of the date each Loan Term
                                   commences, the Monthly Payment will be fixed
                                   for that entire Loan Term. A schedule of the
                                   actual Monthly Payments will be provided by
                                   the Lender following commencement of each
                                   Loan Term.

BALLOON PAYMENT:                   At the end of each Loan Term, the
                                   Borrower will be obligated to make one final
                                   Balloon Payment equal to 10% of the original
                                   principal amount of each Loan, plus any other
                                   amounts then due and owing to Lender.

INTERIM PAYMENT:                   An Interim Payment will accrue from the date
                                   each Loan Term commences until the next
                                   following first day of a month (unless the
                                   Loan Term commences on the first day of a
                                   month). The Interim Payment will be
                                   calculated at the daily equivalent of the
                                   currently adjusted Monthly Payment.

INSURANCE:                         Prior to any delivery of equipment, the
                                   Borrower will furnish confirmation of
                                   insurance acceptable to the Lender covering
                                   the Collateral including primary, all risk,
                                   physical damage, property damage and bodily
                                   injury with appropriate loss payee and
                                   additional insured endorsements in favor of
                                   the Lender.

CONDITIONS PRECEDENT               Each Loan will be subject to the following:
TO LENDING:                        1.   No material adverse change in the
                                        financial condition, operations or
                                        prospects of the Borrower prior to
                                        funding. The Lender reserves the right
                                        to rescind any unused portion of its
                                        commitment in the event of a
                                        material adverse change in financial
                                        condition, operation or prospects of the
                                        Borrower.
                                   2.   Completion of the documentation and
                                        final terms of the proposed financing
                                        satisfactory to Lender and Lender's
                                        counsel.
                                   3.   Results of all due diligence, including
                                        lien, judgment and tax search and other
                                        matters Lender may request shall be
                                        satisfactory to Lender and Lender's
                                        counsel.
                                   4.   Receipt by Lender of duly executed loan
                                        documentation in form and substance
                                        satisfactory to Lender and its counsel.
                                   5.   Lender shall receive a valid and
                                        perfected first priority lien and
                                        security interest in the Equipment and
                                        Lender shall have received satisfactory
                                        evidence that there are no liens on the
                                        Equipment except as expressly permitted
                                        herein.
                                   6.   Satisfactory review by Lender's
                                        Scientific Advisory Board.


                                       2
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ADDITIONAL                         There will be no actual or threatened
COVENANTS:                         conflict with, or violation of, any
                                   regulatory statute, standard or rule
                                   relating to the Borrower, its present or
                                   future operations, or the Equipment.

                                   Borrower will be required to provide
                                   quarterly financial information. All
                                   information supplied by the Borrower will be
                                   correct and will not omit any statement
                                   necessary to make the information supplied
                                   not be misleading. There will be no material
                                   breach of the representations and warranties
                                   of the Borrower in the Loan.

EXPENSES:                          All costs and expenses incurred by the Lender
                                   in connection with the underwriting and
                                   closing of the Loans will be paid by the
                                   Borrower whether or not any Loans are
                                   consummated and funds are advanced by the
                                   Lender. Such expenses shall not exceed $3,000
                                   without the consent of the Borrower.

LAW:                               This letter and the proposed Loan are
                                   intended to be governed by and construed in
                                   accordance with Illinois law without regard
                                   to its conflict of law provisions.

INDEMNITY:                         Borrower agrees to indemnify and to hold
                                   harmless Lender, and its officers, directors
                                   and employees against all claims, damages,
                                   liabilities and expenses which may be
                                   incurred by or asserted against any such
                                   person in connection with or arising out of
                                   this letter and the transactions contemplated
                                   hereby, other than claims, damages,
                                   liability, and expense resulting from such
                                   person's gross negligence or willful
                                   misconduct.

CONFIDENTIALITY:                   This letter is delivered to you with the
                                   understanding that neither it nor its
                                   substance shall be disclosed publicly or
                                   privately to any third person except those
                                   who are in a confidential relationship to you
                                   (such as your legal counsel and accountants),
                                   or where the same is required by law and then
                                   only on the basis that it not be further
                                   disclosed, which conditions Borrower and its
                                   agents agree to be bound by upon acceptance
                                   of this letter.

                                   Without limiting the generality of the
                                   foregoing, none of such persons shall use or
                                   refer to Lender or to any affiliate name in
                                   any disclosures made in connection with any
                                   of the transactions without Lender's prior
                                   written consent.

                                   Upon completion of the initial takedown by
                                   Borrower, the Borrower will no longer be
                                   required to obtain Lender's prior written
                                   consent to disclose the transaction
                                   contemplated hereby. In addition, the
                                   Borrower agrees to provide camera ready
                                   artwork of typestyles and logos of the
                                   Borrower for use in promotional material by
                                   the Lender.

CONDITIONS OF ACCEPTANCE:          This Commitment Letter is intended to be a
                                   summary of the most important elements of
                                   the agreement to enter into a loan
                                   transaction with Borrower, and it is subject
                                   to all requirements and conditions contained
                                   in Loan documentation proposed by Lender or
                                   its counsel in the course of closing


                                       3
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                                   the Loans described herein. Not every
                                   provision that imposes duties, obligations,
                                   burdens, or limitations on Borrower is
                                   contained herein, but shall be contained in
                                   the final Loan documentation satisfactory to
                                   Lender and its counsel.

                                   EACH OF THE PARTIES HERETO IRREVOCABLY AND
                                   UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY
                                   JURY IN ANY SUIT, ACTION, PROCEEDING OR
                                   COUNTERCLAIM ARISING OUT OF OR RELATED TO
                                   THIS LETTER OR THE TRANSACTION DESCRIBED IN
                                   THIS LETTER.

APPLICATION FEE:                   The $11,000 Application Fee previously
                                   paid will be first applied to the reasonable
                                   costs and expenses of the Lender in
                                   connection with the transaction, and any
                                   remainder shall be applied pro rata to the
                                   second month's payment due under each Loan.

COMMITMENT EXPIRATION:             This commitment shall expire on December 4,
                                   1998 unless prior thereto either extended in
                                   writing by the Lender or accepted as
                                   provided below by the Borrower.

Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
copy of this letter to me by December 4, 1998.

                                           Yours truly,

                                           TRANSAMERICA BUSINESS CREDIT CORP  -
                                           TECHNOLOGY FINANCE DIVISION


                                           By
                                             -----------------------------------
                                             Robert D. Pomeroy, Jr.
                                             Executive Vice President

Accepted this _____day of December, 1998

TREGA BIOSCIENCES, INC.


By
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                                    Exhibit B


March 31, 2000

Mr. Gerald Wills
Chief Financial Officer
Trega Biosciences, Inc.
9880 Campus Point Drive
San Diego, California 92121

Dear Gerald:

Transamerica Business Credit Corporation - Technology Finance Division
("Lender") is pleased to offer to amend that certain Commitment Letter dated
November 25, 1998 as (the "Commitment") from Lender to Trega Biosciences, Inc.
("Borrower") as provided below.

1. The paragraph entitled "Amount of Loans" is hereby deleted in its entirety
and the following is inserted in lieu thereof:

AMOUNT OF LOANS:                  Not to exceed $2,800,000 in the aggregate.


2. The paragraph entitled "Expected Draw-Down Schedule" is hereby deleted in its
entirety and the following is inserted in lieu thereof:

EXPECTED DRAW-DOWN SCHEDULE:      A minimum of $1,000,000 will be drawn on or
                                  before December 31, 1998, and the remaining
                                  availability will be drawn on or before
                                  March 31, 2000.

Except as modified hereby, the Commitment and all documents in connection with
the Commitment and between Lender and Borrower, are hereby ratified and
confirmed in all respects and shall continue in full force and effect.

Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
copy of this letter to me by April 6, 2000.

                                             Yours truly,

                                             TRANSAMERICA BUSINESS CREDIT
                                             CORPORATION -TECHNOLOGY FINANCE
                                             DIVISION

                                             By
                                               ---------------------------------
                                               Gerald A. Michaud
                                               Senior Vice President - Marketing

Accepted this __ day of April, 2000.

TREGA BIOSCIENCES, INC.


By
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