<PAGE>



                                                                  Exhibit 4.5(b)

                                                                  CONFORMED COPY













                              ELAN CORPORATION PLC

                            ELAN PHARMACEUTICALS, INC

                               ELAN PHARMA LIMITED

                                       AND

                          VERNALIS DEVELOPMENT LIMITED


            ________________________________________________________


                         TRANSITIONAL SERVICES AGREEMENT

            ________________________________________________________

<PAGE>

                                    CONTENTS


CLAUSE                                                                      PAGE
------                                                                      ----

1.     Interpretation.......................................................  1

2.     Responsibilities of the Parties......................................  2

3.     Transitional Services Managers.......................................  4

4.     Term and Termination.................................................  4

5.     Records..............................................................  6

6.     Disclaimer and Limitation of Liability...............................  6

7.     Miscellaneous........................................................  6

8.     Whole Agreement......................................................  9

Schedule 1    SERVICES...................................................... 11

Schedule 2    TRANSITIONAL SERVICE MANAGERS................................. 14
<PAGE>

THIS AGREEMENT is made on 18th May 2004

BETWEEN:

(1)    ELAN CORPORATION PLC, a company incorporated in Ireland (registered no.
       30356), whose registered office is at Lincoln House, Lincoln Place,
       Dublin 2, Ireland ("ELAN CORP");

(2)    ELAN PHARMACEUTICALS, INC., a company incorporated in the State of
       Delaware, whose principal office is at 800 Gateway Boulevard, South San
       Francisco, CA 94080, USA ("EPI");

(3)    ELAN PHARMA LIMITED, a company incorporated in Ireland (registered no.
       100382), whose registered office is at Monksland, Athlone, County
       Westmeath, Ireland ("EPL"); and

(4)     VERNALIS DEVELOPMENT LIMITED, a company incorporated in England and
        Wales (registered no. 2600483), whose registered office is at Oakdene
        Court, 613 Reading Road, Winnersh, Wokingham, Berkshire RG41 5UA
        ("VDL").

WHEREAS:

(A)    On 29 March 2004, Elan Corp, Elan Pharma International Limited, EPI, VDL
       and Vernalis plc entered into a sale and purchase agreement (the "SALE
       AND PURCHASE AGREEMENT") under which:

       (i)    the Licence Agreement and the Development Agreement were
              terminated; and

       (ii)   the Sellers agreed to sell the Assets to VDL,

       (the "TRANSACTION").

(B)    EPI and EPL (together the "ELAN COMPANIES") have agreed to provide
       certain services to VDL for a transitional period after completion of the
       termination and sale under the Sale and Purchase Agreement.

(C)    Elan Corp is a party to this Agreement for the purposes of Clause 2.10.

(D)    This Agreement sets out the terms on which such services will be
       provided.

THE PARTIES AGREE, in consideration of the mutual covenants and agreements set
out in this Agreement, as follows:

1.     INTERPRETATION

1.1    Capitalised terms and expressions used in this Agreement shall have the
       same meaning as in the Sale and Purchase Agreement, unless otherwise
       defined in this Agreement.

1.2    In this Agreement:

       "SERVICE" and "SERVICES" have the meanings given to them in Clause 2.1;

       "TERM" has the meaning given to it in Clause 4.1;and


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       "TUPE" means the Transfer of Undertakings (Protection of Employment)
       Regulations 1981.

1.3    In this Agreement, a reference to a "CLAUSE" or "SCHEDULE", unless the
       context otherwise requires is a reference to a clause or schedule of this
       Agreement.

1.4    The headings in this Agreement do not affect its interpretation.

1.5    The schedules to this Agreement form part of it.

2.     RESPONSIBILITIES OF THE PARTIES

2.1    Subject to the terms and conditions of this Agreement, during the
       applicable Term, the Elan Companies shall provide (or cause to be
       provided) the services described in Schedule 1 (collectively, the
       "SERVICES" and each a "SERVICE") to VDL. No fee shall be payable by VDL
       for the Services during the first six months after Completion, save for
       any recall of Product which is payable at the overhead FTE rate incurred
       in dealing with such recall (such amounts to be invoiced monthly in
       arrears and (subject to Clause 2.9) paid within 30 days of invoice).

2.2    The Services shall be provided to at least the same level and degree of
       quality as is consistent with past practices of the Elan Companies in
       furnishing comparable services to their own internal organisation.

2.3    The Elan Companies will be solely responsible for selecting and assigning
       personnel to perform the Services, and will instruct such personnel to
       perform the Services in a timely, efficient and competent manner. VDL
       will have the right to request that the Elan Companies replace personnel
       who do not perform the Services properly and in accordance with
       reasonable technical or general work standards or in accordance with
       Clause 2.4 or otherwise to the reasonable satisfaction of VDL.

2.4    Notwithstanding any other provision of this Agreement, it is agreed that
       the Elan Companies are not in the business of providing the Services and
       that the standards of care and skill to which the Elan Companies and any
       employee or agent of the Elan Companies performing the Services shall be
       accountable shall be the standards of care and skill used by the Elan
       Companies in furnishing comparable services to their own internal
       organisation consistent with past practices; provided that such level of
       care shall be at least that of a reasonably careful person under the
       circumstances. Under no circumstances will VDL hold the Elan Companies or
       their employees or agents accountable to a greater standard of care than
       one that is appropriate for a party in the business of furnishing similar
       services to a third party.

2.5    VDL acknowledges that the Services are intended only to be transitional
       in nature, and are furnished by the Elan Companies solely for the purpose
       of accommodating VDL in connection with the transactions contemplated by
       the Sale and Purchase Agreement. VDL acknowledges that the Elan Companies
       are not in the business of providing the Services and have no long-term
       interest in continuing this Agreement.


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<PAGE>

2.6    In providing the Services, the Elan Companies will not be obligated to:

       2.6.1  hire any additional employees;

       2.6.2  maintain the employment of any specific employee; or

       2.6.3  purchase, lease or license any additional equipment or software.

2.7    No provision of the Services by the Elan Companies or by any employee of
       the Elan Companies shall require any such employee or other person to
       become or be deemed to have become an employee of VDL and all of the
       employees involved in carrying out the Services shall remain the
       employees of the Elan Companies for the duration of this Agreement and
       on its expiry. The Elan Companies agree to use their best endeavours to
       ensure that no employee or former employee of the Elan Companies or any
       liability in respect of such person transfers pursuant to TUPE to VDL on
       termination of this Agreement or the cessation of all or any of the
       Services pursuant to TUPE and, in the event that such a transfer of any
       such employee or former employee or liability does occur pursuant to
       TUPE, the Elan Companies will indemnify VDL in relation to all
       liabilities arising from the same.

2.8    VDL shall reimburse each Elan Company for any amount which such Elan
       Company pays to any third party in performing the Services (any such
       amount to be invoiced to VDL and (subject to Clause 2.9) paid within 30
       days of invoice). The Elan Companies shall consult with VDL prior to
       incurring or paying (as appropriate) amounts greater than $10,000 to any
       third party.

2.9    On a monthly basis during the Term, the Elan Companies shall pay to VDL:

       2.9.1  the sum of:

              (a)    all amounts received on behalf of VDL in relation to supply
                     of the Product; and

              (b)    all amounts for which VDL is entitled to invoice EPI
                     pursuant to Schedule 8 of the Sale and Purchase Agreement;
                     less

       2.9.2  the sum of:

              (a)    all amounts for which an Elan Company is entitled to
                     invoice VDL pursuant to Clauses 2.1, 2.8 and 4.1 of this
                     Agreement; and

              (b)    all amounts for which EPI is entitled to invoice VDL
                     pursuant to Schedule 8 of the Sale and Purchase Agreement.

2.10   Elan Corp undertakes to procure the due performance of the obligations
       under this Agreement of each Elan Company and any person to whom an
       assignment or sub-contracting or delegation is made pursuant to Clauses
       7.4 and 7.5.

2.11   Within one week following Completion, EPI shall despatch a letter to
       each addressee of the Customer Information Letter and the Physician
       Information Letter informing them


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<PAGE>

       that Completion has taken place and advising them of the transitional
       arrangements such letters to be in a form agreed with VDL.

3.     TRANSITIONAL SERVICES MANAGERS

3.1    The Elan Companies and VDL each undertake to appoint a transitional
       services manager for the duration of this Agreement (the "TRANSITIONAL
       SERVICES MANAGERS"). Schedule 2 sets forth the names for the initial
       Transitional Services Managers.

3.2    The Transitional Services Managers shall be the authorised
       representatives of the Elan Companies and VDL respectively and empowered
       to act on their behalf in connection with the Services. The Elan
       Companies and VDL may change their respective Transitional Services
       Manager from time to time in circumstances where there is a legitimate
       business reason to do so by giving written notice to the other.

3.3    The Transitional Services Managers shall ensure that at all times during
       the period of this Agreement there is appointed a representative of the
       Elan Companies and VDL (as the case may be) in respect of each of the
       Services (the "SERVICE REPRESENTATIVES"). The name and contact details
       of each Service Representative shall be notified to each Transitional
       Services Manager. The Transitional Services Managers may change their
       respective Service Representatives from time to time in circumstances
       where there is a legitimate business reason to do so by giving written
       notice to the other Transitional Services Manager.

3.4    The Transitional Services Managers shall have day to day responsibility
       for the provision and use of the Services and for ensuring the smooth
       and efficient operation of this Agreement. The Transitional Services
       Managers will meet within two weeks from the date of this Agreement to
       agree the operational framework pursuant to which the Services will be
       provided.

3.5    The Services Representatives shall have day to day responsibility for
       the provision and use of the relevant Service and each Service
       Representative shall report to their Transitional Services Manager in
       respect of such Service.

3.6    The Transitional Services Managers shall use all reasonable efforts to
       resolve in an amicable and co-operative manner issues which are raised
       in relation to the provision of the Services.

3.7    Either of the Transitional Services Managers may propose any change to
       the scope of the Services by written notice to the other specifying the
       proposed change in reasonable detail. Each party shall act in good faith
       in relation to any such proposal but the Elan Companies shall not be
       obliged to change the scope of or add to a Service.

4.     TERM AND TERMINATION

4.1    This Agreement shall commence on the date of this Agreement and:

       4.1.1  each Service set out in Part A of Schedule 1 shall be provided for
              a six-month period; and


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<PAGE>

       4.1.2  each Service set out in Part B of Schedule 1 shall be provided for
              a 12-month period,

       in each case unless earlier terminated pursuant to Clauses 4.2 or 4.3
       (from the date hereof until each such time, an applicable "TERM"). At
       VDL's request, any of the Services to be provided for a period of six
       months will be extended for another period of up to six months. From the
       date which is six months following Completion, VDL shall pay the Elan
       Companies for any Services (including, for the avoidance of doubt, those
       referred to in Clause 4.1.2) which are provided after such date at the
       overhead FTE rate incurred in providing such Service (such amounts to be
       invoiced monthly in arrears and (subject to Clause 2.9) paid within 30
       days of invoice).

4.2    This Agreement, or any Service, may be terminated by VDL upon written
       notice to EPI at any time.

4.3    This Agreement, or any Service, may be terminated by either EPI or EPL
       upon written notice to VDL (an "ELAN TERMINATION NOTICE") at any time
       if:

       4.3.1  VDL fails to perform or otherwise breaches a material obligation
              under this Agreement; provided, however, that VDL shall have 30
              days from the date of receipt of an Elan Termination Notice to
              cure such failure or breach, following which time this Agreement
              or the relevant Service shall terminate if such failure or breach
              has not been cured;

       4.3.2  VDL passes a resolution for its winding up or a court of competent
              jurisdiction makes an order for VDL's winding up or dissolution;

       4.3.3  the appointment of an administrator of VDL or a receiver appointed
              over, or an encumbrancer takes possession of or sells, an asset of
              VDL;

       4.3.4  VDL makes an arrangement or composition with its creditors
              generally or makes an application to a court of competent
              jurisdiction for protection from its creditors generally; or

       4.3.5  performance of this Agreement or any Service has been rendered
              impossible for a period of three consecutive months by reason of
              the occurrence of any of the events described in Clause 7.3
              without prejudice to the Elan Companies' obligations under Clause
              7.3.

4.4    Upon expiration or other termination of this Agreement or any Service
       for any reason in accordance with the terms of this Agreement, the
       parties shall cooperate in the orderly termination of the Services and
       the Elan Companies shall provide such assistance as VDL may reasonably
       request (at the expense of VDL to the extent that any such assistance is
       outside the scope of the Services) to assist with the transfer of the
       provision of any of the Services to VDL (or to its nominee).


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<PAGE>

5.     RECORDS

5.1    The Elan Companies shall keep, in accordance with its normal business
       practice and record keeping policies, complete and adequate records and
       accounts relating to the Services (the "SERVICE Records").

5.2    The Elan Companies shall allow VDL, its employees and agents and any
       other person authorised by VDL (subject to the provisions of Clause 5.3
       of this Agreement and clause 20 of the Sale and Purchase Agreement):

       5.2.1  on reasonable notice to inspect (at all reasonable times during
              usual business hours) such of the Service Records as it may
              reasonably request in connection with the Services (which, for the
              avoidance of doubt, shall not include any tax records); and

       5.2.2  at VDL's cost, to take copies of any of those Service Records.

5.3    The Elan Companies shall maintain all Service Records for a period of
       ten years after Completion. Thereafter, EPI shall give VDL 90 days'
       written notice of any intention to dispose of any Service Records. VDL
       may elect to remove, at its cost, during such 90 day period, such of the
       Service Records as it may reasonably require in connection with the
       Services (which, for the avoidance of doubt, shall not include any tax
       records).

6.     DISCLAIMER AND LIMITATION OF LIABILITY

6.1    Except as expressly set forth in the Sale and Purchase Agreement,
       neither EPI nor EPL makes any representations or warranties whatsoever,
       express or implied, including, without limitation, the implied
       warranties of merchantability or fitness for a particular purpose.

6.2    Except with respect to the negligence or wilful misconduct of an Elan
       Group Undertaking or its employees, agents or contractors (for which
       their total liability shall not exceed $1,000,000), neither EPI nor EPL
       nor VDL will, under any circumstances, be liable to each other for any
       damages resulting or arising from this Agreement, any performance or
       non-performance under this agreement or the termination of this
       Agreement.

6.3    No Elan Group Undertaking, nor any of their employees, agents or
       contractors shall be entitled to claim for any punitive, indirect or
       consequential loss (including loss of profit) in respect of any claim
       under this Agreement.

6.4    Nothing in this Agreement shall operate to exclude or restrict any
       party's liability for death or personal injury resulting from negligence
       or for fraud.

7.     MISCELLANEOUS

7.1    Except as otherwise specifically provided herein, any notice or other
       documents to be given under this Agreement shall be in writing and shall
       be deemed to have been duly given if sent in accordance with clause 28
       of the Sale and Purchase Agreement and, in the case of EPL, as if it
       were listed in clause 28.3.1 of the Sale and Purchase Agreement.


                                      -6-
<PAGE>

7.2    This Agreement shall not be amended, modified, varied or supplemented
       except in writing signed by duly authorised representatives of each of
       the parties.

7.3    If any party is prevented or delayed in the performance of any of its
       obligations under this Agreement by Force Majeure, it shall as soon as
       reasonably practicable give written notice thereof to the other parties
       specifying the matters constituting Force Majeure together with such
       evidence as it reasonably can give and specifying the period for which
       it is estimated that such prevention or delay will continue. Provided
       that the party shall use reasonable endeavours to limit the effect of
       such event on the other party, the party shall be excused from the
       performance or the punctual performance of such obligations as the case
       may be from the date of such notice for so long as such cause of
       prevention or delay shall continue. In this Clause 7.3, "FORCE MAJEURE"
       shall be deemed to include any cause materially and substantially
       affecting the performance by any party of this Agreement arising from or
       attributable to acts, events, non-happenings, omissions or accidents
       beyond the reasonable control of the party whose performance is so
       affected.

7.4    No party hereto shall be entitled to assign its rights and obligations
       hereunder without the prior written consent of the other parties, which
       consent shall not be unreasonably withheld or delayed; provided,
       however, that:

       7.4.1  each of EPI and EPL shall be entitled, without the prior written
              consent of the other parties, to assign its rights and obligations
              under this Agreement to an Elan Group Undertaking, but such
              assignment to an Elan Group Undertaking shall not relieve the
              assignor of its obligations under this Agreement and shall be
              expressed to have effect only for so long as the assignee remains
              an Elan Group Undertaking and that immediately before ceasing to
              be an Elan Group Undertaking the assignee shall assign the rights
              and obligations under this Agreement to another Elan Group
              Undertaking;

       7.4.2  VDL shall be entitled, without the prior written consent of the
              other parties, to assign its rights and obligations under this
              Agreement to a Vernalis Group Undertaking, but such assignment to
              a Vernalis Group Undertaking shall not relieve the assignor of its
              obligations under this Agreement and shall be expressed to have
              effect only for so long as the assignee remains a Vernalis Group
              Undertaking and that immediately before ceasing to be a Vernalis
              Group Undertaking the assignee shall assign the rights and
              obligations under this Agreement to another Vernalis Group
              Undertaking; and

       7.4.3  VDL shall be entitled to assign the benefit of this Agreement in
              relation to any financing arrangement into which it enters.

       No permitted assignment hereunder, other than an assignment by VDL to a
       financier, shall be deemed effective until the assignee has executed and
       delivered an instrument in writing, reasonably satisfactory in form and
       substance to the other parties, pursuant to which the assignee assumes
       all of the obligations of the assignor under this Agreement. Any
       purported assignment of this Agreement in violation of this Clause 7.4
       shall be void. This Agreement shall be binding upon the successors and
       permitted assigns of the parties hereto and the name of a party hereto
       shall be deemed to include the names of its successors and assigns.


                                      -7-
<PAGE>

7.5    The Elan Companies may sub-contract with or delegate to any Elan Group
       Undertaking for so long as such undertaking remains an Elan Group
       Undertaking any of their obligations under this Agreement provided that
       any such sub-contracting or delegation shall not relieve the relevant
       Elan Company of its obligations under this Agreement. The Elan Companies
       (and any relevant Elan Group Undertaking to whom obligations may have
       been sub-contracted or delegated) shall not otherwise sub-contract or
       delegate their obligations under this Agreement without the prior
       written consent of VDL (such consent not be unreasonably withheld or
       delayed).

7.6    This Agreement shall not be deemed to create any partnership, joint
       venture, or agency relationship between the parties. Each party shall
       act under this Agreement as an independent contractor. The parties shall
       have no authority to enter into agreements of any kind on behalf of each
       other and shall have no power or authority to bind or obligate another
       party in any manner to any third party.

7.7    This Agreement is governed by English law. The courts of England have
       exclusive jurisdiction to settle any dispute arising from or connected
       with this Agreement (a "DISPUTE") including a dispute regarding the
       existence, validity or termination of this Agreement or the consequences
       of its nullity. The parties agree that the courts of England are the
       most appropriate and convenient courts to settle any Dispute and,
       accordingly, that they will not argue to the contrary.

7.8    The parties agree that the documents which start any proceedings
       relating to a Dispute ("PROCEEDINGS") and any other documents required
       to be served in relation to those Proceedings may be served on any
       Seller in accordance with Clause 7.1. These documents may, however, be
       served in any other manner allowed by law.

7.9    Neither the failure nor delay on the part of any party to require the
       strict performance of any term, covenant or condition of this Agreement
       or to exercise any right or remedy available on a breach thereof shall
       constitute a waiver of any such breach or of any such term or condition.
       The consent to, or the waiver of, any breach, or the failure to require
       on any single occasion the performance or timely performance of any
       term, covenant, or condition of this Agreement shall not be construed as
       authorizing any subsequent or additional breach and shall not prevent a
       subsequent enforcement of such term, covenant, or condition.

7.10   In the event that any provision of this Agreement or the application
       thereof to any party or circumstance shall be invalid or unenforceable
       to any extent, then:

       7.10.1 a suitable and equitable provision shall be substituted therefor
              in order to carry out, so far as may be valid and enforceable, the
              intent and purpose of such invalid and unenforceable provision;
              and

       7.10.2 the remainder of this Agreement and the application of such
              provision to the parties or circumstances other than those to
              which it is held invalid or unenforceable shall not be affected
              thereby.

7.11   The parties hereto acknowledge and agree that:


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<PAGE>

       7.11.1 each party and its representatives has reviewed and negotiated the
              terms and provisions of this Agreement and have contributed to its
              revision;

       7.11.2 the rule of construction to the effect that any ambiguities are
              resolved against the drafting party shall not be employed in the
              interpretation of this Agreement; and

       7.11.3 the terms and provisions of this Agreement shall be construed
              fairly as to each party hereto and not in favour of or against
              either party regardless of which party was generally responsible
              for the preparation of this Agreement.

7.12   This Agreement may be executed by facsimile and in two or more
       counterparts, each of which shall be deemed an original, but both of
       which together shall constitute a single agreement.

7.13   A person who is not a party to this Agreement has no right under the
       Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
       Agreement.

7.14   Nothing contained herein shall in any way be deemed to:

       7.14.1 constitute a waiver or modification of any rights to which any
              party may otherwise be entitled under the Sale and Purchase
              Agreement or any other document entered into pursuant thereto; or

       7.14.2 to amend, supplement or modify any of the terms of the Sale and
              Purchase Agreement or any other document entered into pursuant
              thereto.

7.15   No party shall by virtue of this Agreement derive any rights of title,
       or any right of use or access to any rights to Intellectual Property
       used or owned by any other party other than those rights of use
       expressly stated in this Agreement.

7.16   Except where this Agreement provides otherwise, each party shall pay the
       costs and expenses incurred by it in connection with the entering into
       and implementation of this Agreement.

7.17   Time is not of the essence in relation to any obligation under this
       Agreement unless time is expressly stated to be of the essence in
       relation to that obligation.

7.18   The termination of this Agreement for any reason shall be without
       prejudice to any rights or obligations which have accrued before
       termination and shall not destroy or diminish the binding force of any
       of the provisions of this Agreement which are expressly provided to come
       into force on, or continue in force after such termination.

8.     WHOLE AGREEMENT

8.1    This Agreement and the documents referred to in it contain the whole
       agreement between the parties relating to the transactions contemplated
       by this Agreement and supersede all previous agreements between the
       parties relating to these transactions.

8.2    Each party acknowledges that, in agreeing to enter into this Agreement,
       it has not relied on any representation, warranty, collateral contract
       or other assurance (except those repeated in this Agreement and the
       documents referred to in it and any other agreement


                                      -9-
<PAGE>

       entered into on the date of this agreement between the parties) made by
       or on behalf of any other party at any time before the signature of this
       Agreement. Each party waives all rights and remedies which, but for this
       Clause 8.2, might otherwise be available to it in respect of any such
       representation, warranty, collateral contract or other assurance.

8.3    Nothing in the preceding Clause limits or excludes any liability for
       fraud.

AS WITNESS this agreement has been signed by the parties (or their duly
authorised representatives) on the date stated at the beginning of this
agreement.







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                                   SCHEDULE 1

                                    SERVICES

Without prejudice to Clause 2 of this Agreement, the Elan Companies and VDL
agree that the Elan Companies will continue current systems with current
policies and procedures to support the service areas outlined below. The parties
hereto shall work together in good faith to perform the Safety Data Exchange
Agreement between EPI and VDL, dated 14 April 2003 (with such amendments as may
be necessary to take account of the Transaction).

The Elan Companies agree to provide the services described below to VDL.


PART A: SIX MONTH SERVICES

1.     PRODUCT QUALITY COMPLAINTS
       o      Phone receipt and data collection
       o      Documentation and spreadsheet entry (with lot # where available)
       o      Research response and letter
       o      Investigations to VDL QA (weekly)
       o      VDL to approve all Quality Complaints prior to closing out the
              report
       o      Managing any Product recall required (Service to be charged to VDL
              in accordance with Clause 2.1)

2.     QUALITY ASSURANCE
       o      Review batch records
                 -  Manufacturing
                 -  labelling and packaging
                 -  analytical
       o      Packaging Validation Report review, as appropriate
       o      Commercial Stability Data review
       o      Review Master Batch Records prior to manufacture, packaging and
              labelling of any new production run
       o      Facilitate interaction of VDL with key partners including Sharp
              and DDN
       o      Review change controls and deviations and out-of-specification
              reports.

3.     SUPPLY CHAIN
       o      Develop monthly forecast of planned orders for use by contract
              manufacturer
       o      Coordinate issuance and scheduling of purchase orders for
              procurement of inventory
       o      Monitor warehouse inventory levels and shelf lives and, following
              consultation with and approval by VDL, reschedule orders where
              necessary to ensure continuous supply of Product
       o      Coordinate logistics including obtaining/maintaining all necessary
              import/export licences or permits and all other necessary
              documentation for transporting Product
       o      Transition meetings with contract manufacturer and VDL as needed
       o      Monitor security levels at manufacturers
       o      Manage the distribution of Product to wholesalers


                                      -11-
<PAGE>

4.     PACKAGING TECHNICAL SERVICES
       o      Revise Frova labelling. This includes reviewing the new proofs,
              routing them for approvals, and creating/approving the new specs
              and BOMs
       o      Prepare a package together of all the packaging/labelling
              documentation for them plus supporting any artwork revisions for
              their information

5.     REGULATORY
       o      Review safety reports (this assumes no support of manufacturing
              amendments relating to the NDA)
       o      Preparation in FDA format and review of individual case records
              and periodic safety reports
       o      Consult with VDL regarding discussions with the FDA and Health
              Canada
       o      Provision of advice in relation to historical regulatory and DDMAC
              review of marketing materials

6.     MANAGED CARE ORGANISATIONS
       o      Manage orderly transition of contracts and contacts with managed
              care organisations
       o      Manage supply of Product in accordance with Elan's contracts with
              managed care organisations and government agencies


PART B: TWELVE MONTH SERVICES

1.     ADE DATA MANAGEMENT
       o      Collection of adverse drug experience (ADE) information and entry
              into the Elan electronic database (via initial collection forms)
       o      Evaluation of all ADE (serious, non-serious, and literature) for
              regulatory reportability (domestic/international)
       o      Extraction and entry of safety data from source documents and
              collection forms
       o      Event and Disease Coding (MedDRA), drug coding (WHO-DRL)
       o      Narrative Development
       o      Follow-up for completeness
       o      Verification of data
       o      Data Quality Checks/Compliance
       o      Administrative handling of cases (login records, ordering and
              labelling of documents in folders)
       o      Preparation of individual and periodic safety reports as may be
              required to be submitted by VDL to the FDA
       o      Literature Search and Review
       o      Provide, where practical, electronic versions of data
       o      Provide data in accordance with the terms of the Safety Data
              Exchange Agreement
       o      Upon termination of this Agreement, provide an export of the
              Product safety data from the GSS database in a format to be
              further agreed upon by the parties

2.     MEDICAL INQUIRIES
       o      Phone receipt of medical inquiries


                                      -12-
<PAGE>

       o      Documentation of handling of inquiries
       o      Report to VDL Medical Affairs at Completion and monthly thereafter
              until this Agreement terminates together with a final report at
              the date of termination of this Agreement

3.     MEDICAL MONITORING
       o      Ongoing review of safety information for signal detection and
              trend analysis
       o      Review of all potentially reportable (expedited) ADRs
       o      Review of MedDRA coding
       o      Review of all prepared regulatory submissions
       o      Transfer all documentation (including correspondence in relation
              to Agreement and protocols) which relate to investigator initiated
              studies
       o      Assist in the finalisation of documentation and supply of study
              drug in connection with the initiation of the following
              investigator-led studies:
                     -  Diamond - High Frequency Migraine
                     -  Rapoport - Chronic Daily Headache
              Note - VDL will be responsible for managing these studies and for
              payment of all third party costs including investigator grants.

4.     RETURNS, REBATES AND CHARGEBACKS
       o      Process incoming customer orders
       o      Coordinate order confirmation with 3PL warehouse
       o      Perform Inventory Management activities
       o      Coordinate freight management
       o      Process billing and invoicing
       o      Reconcile aged AR balances
       o      Process return product credits
       o      Process rebates and charge backs
       o      Destroy returned products

5.     FINANCE
       o      Financial accounting with respect to the Product
       o      Preparing budgets relating to the Product


                                      -13-
<PAGE>

                                   SCHEDULE 2

                          TRANSITIONAL SERVICE MANAGERS

            NAME                                         APPOINTED BY:
         Don Murphy                                     Elan Companies
         Martin Pue                                           VDL









                                      -14-
<PAGE>

EXECUTED BY THE PARTIES



Signed by                                    )
For and on behalf of                         )   LIAM DANIEL
ELAN CORPORATION PLC                         )   Director





Signed by                                    )
For and on behalf of                         )   JUAN CARLOS AGUILERA
ELAN PHARMACEUTICALS, INC.                   )   Authorised Signatory





Signed by                                    )
For and on behalf of                         )   LIAM DANIEL
ELAN PHARMA LIMITED                          )   Director





Signed by                                    )
For and on behalf of                         )   A. J. WEIR
VERNALIS DEVELOPMENT LIMITED                 )   Director


                                      -15-