<PAGE>

                                                                   EXHIBIT 10.15

                               LICENSE AGREEMENT

THIS AGREEMENT, effective as of December 31, 1998 ("Effective Date"), by and
between St. Jude Children's Research Hospital ("SJCRH"), a corporation located
at 332 North Lauderdale, Memphis, Tennessee 38105 and ZymoGenetics, Inc., a
corporation located at 1201 Eastlake Avenue East, Seattle, WA 98102, which is a
wholly owned subsidiary of Novo Nordisk of North America, which, in turn, is a
wholly owned subsidiary of Novo Nordisk A/S (collectively, "Company").

                                   RECITALS

WHEREAS, SJCRH is the owner by assignment from Drs. Richard J. Bram and Gotz-
Ulrich von Bulow("Inventors") of their entire right, title and interest in
Patent Rights (as later defined herein) and in the inventions described and
claimed therein; and

WHEREAS, SJCRH wishes to have the Patent Rights further developed and marketed
at the earliest possible time in order that products resulting therefrom may be
available for public use and benefit; and

WHEREAS, Company wishes to enter into an agreement to obtain an exclusive
license to the Patent Rights from SJCRH in order to practice the inventions
claimed therein and to make, use and sell in the commercial market the products
as described herein; and

WHEREAS, SJCRH is willing to grant such a license to Company under the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the parties do hereby agree as follows:

1.   Definitions

     1.1. "Affiliate" shall mean any legal entity (such as corporation,
partnership or limited liability company) that controls, is controlled by, or is
placed under the same control as, Company.  For the purposes of this definition,
the term "control" means beneficial ownership of at least fifty percent (50%) of
the voting or income interest of a legal entity.

     1.2. "Confidential Information" shall mean any confidential or proprietary
information furnished by one party (the "Disclosing Party") to the other party
(the "Receiving Party") in connection with this Agreement.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

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<PAGE>

     1.3. "Field" shall mean use of Patent Rights to research, develop,
commercialize, and sell products for [ * ].

     1.4. "Licensed Product" shall mean a drug or other product:
          (a) which is claimed in a Valid Claim; or
          (b) which was manufactured in accordance with one or more Valid
     Claims; or
          (c) which does not satisfy either of the definitions in (a) or (b)
     above, but which incorporates Hospital Materials; or
          (d) which does not satisfy either of the definitions of (a) or (b)
     above but satisfies all of the following criteria:
               (i)   [*] the TACI receptor claimed in the Valid Claims; and
               (ii)  [*] such TACI receptor was made known to Company through
          Company's use of the Valid Claims; and
               (iii) [*] the TACI receptor had not been previously identified
          or discovered prior to Company's use of the Valid Claims.


     1.5. "Net Sales" shall mean the gross amount billed or invoiced on sales by
Company, its Affiliates and Sublicensees of Licensed Product, less the
following: (i) customary trade, quantity, or cash discounts and commissions to
non-affiliated brokers or agents to the extent actually allowed and taken; (ii)
amounts repaid or credited by reason of rejection or return; (iii) to the extent
separately stated on purchase orders, invoices, or other documents of sale, any
taxes or other governmental charges levied on the production, sale,
transportation, delivery, or use of a Licensed Product which is paid by or on
behalf of Company; (iv) duties; and (v) outbound transportation costs prepaid or
allowed and costs of insurance in transit.

     In any transfers of Licensed Product between Company and an Affiliate or
Sublicensee, Net Sales shall be calculated based on the final sale of the
Licensed Product to an independent third party.  In the event that Company or an
Affiliate or Sublicensee receives non-monetary consideration for any Licensed
Product, Net Sales shall be calculated based on the fair market value of such
consideration.  In the event that Company or its Affiliates or Sublicensees use
or dispose of a Licensed Product in the provision of a commercial service, the
Licensed Product shall be considered sold and the Net Sales shall be calculated
based on the sales price of the Licensed Product to an independent third party
during the same Royalty Period or, in the absence of such sales, on the fair
market value of the Licensed Product as determined by the parties in good faith.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       2
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       1.6.  "Patent Rights" shall mean the patent applications listed on
Appendix A, the inventions described and claimed therein, and all divisional,
continuation, or continuation-in-part applications of such patent applications
to the extent that the claims are directed to subject matter specifically
described therein, as well as all patents issued thereon and all reissues and
extensions of such patents, and all foreign counterparts to such patents and
patent applications.

       1.7.  "Hospital Materials" shall mean any tangible biological material,
or a portion thereof having equivalent biological activity, useful or necessary
for the effective exercise of the Patent Rights that are transferred by SJCRH to
Company under this Agreement, including [*].

       1.8.  "Royalty Period" shall mean the calendar half year commencing on
the date on which the first Licensed Product is sold or used in the provision of
commercial services and every calendar half year thereafter during which either
(i) this Agreement remains in effect or (ii) Company has the right to complete
and sell work-in-progress and inventory of Licensed Product pursuant to Section
8.5.

       1.9.  "Sublicensee" shall mean any permitted sublicensee of the rights
granted Company under this Agreement, as further described in Section 2.1.

1.10.  "Valid Claim" shall mean a claim of any pending patent application within
the Patent Rights, and any claim of any unexpired granted patent within the
Patent Rights, which claim has not (i) been disclaimed, abandoned, withdrawn, or
canceled (provided that claims that have been withdrawn or canceled solely in
response to a restriction requirement shall not cease to be Valid Claims); (ii)
been finally rejected or held invalid by a decision of a patent-granting
authority beyond right of review or appeal; or (iii) been held invalid or
unenforceable in an unappealable decision of a court or competent body having
jurisdiction (including a decision which as appealable, but which was not timely
appealed).

       2.    Grant

       2.1.  License Grant.

             a.   SJCRH hereby grants to Company and Company accepts, subject to
the terms and conditions herein, a worldwide exclusive license in the Field
under Patent Rights, to make and have made, to use and have used, to import, to
offer for sale, and to sell and have sold Licensed Product, for the term of this
Agreement. Such license shall include the right to grant sublicenses.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       3
<PAGE>

             b.   The license granted pursuant to Section 2.1.a. is subject to
the rights, conditions and limitations imposed by U.S. law on inventions and
discoveries conceived or first actually reduced to practice during the course of
research funded by a U.S. federal agency. The words "exclusive license" as used
herein shall mean exclusive except for any royalty-free non-exclusive license
granted to the U.S. government by SJCRH pursuant to 35 USC Section 202 (c) (4)
for any Patent Rights claiming any invention subject to 35 USC Section 201 and
any other federal laws and applicable regulations.

             c.   Company acknowledges that SJCRH has retained certain rights to
use the subject matter claimed in the Patent Rights for academic research and
educational purposes. SJCRH shall retain the right to make and to use, for
academic research and educational purposes only and not for any commercial
purpose, the subject matter described and claimed in Patent Rights and Hospital
Materials. If SJCRH licenses or permits any researcher outside of SJCRH to use
the subject matter claimed in the Patent Rights, SJCRH shall secure each such
researcher's agreement to limit his/her use of such subject matter to academic
research and educational purposes, and to refrain from using such subject matter
to perform research for or with any commercial entity other than Company.

       2.2.  Transfer of Hospital Materials.  Promptly after request by Company,
SJCRH agrees to transfer to Company any Hospital Materials necessary to permit
Company to fully exploit the License granted herein. Hospital Materials shall be
treated as Confidential Information pursuant to Section 7, and shall not be
transferred to any third party without prior written consent by SJCRH.  Title to
Hospital Materials shall remain with SJCRH; however title to Licensed Product
that incorporates Hospital Materials shall remain with Company.  SJCRH may
transfer Hospital Materials to researchers outside of SJCRH, provided SJCRH
shall secure each such researcher's agreement to limit his/her use of the
Hospital Materials to academic research and educational purposes, and to refrain
from using such Hospital Materials  to perform research for or with any
commercial entity other than Company. Furthermore, SJCRH shall prevent outside
researchers from transferring Hospital Materials to any third party.

       2.3.  Transfer of Materials Covered by the Patent Rights.  SJCRH may
transfer tangible materials covered by the Patent Rights (e.g., [ * ] to
researchers outside of SJCRH, provided SJCRH shall secure each such researcher's
agreement to limit his/her use of such materials to academic research and
educational purposes, and to refrain from using such materials  to perform
research for or with any commercial entity other than Company. Furthermore,
SJCRH shall

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

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<PAGE>

prevent outside researchers from transferring materials covered by the Patent
Rights to any third party.

3.     Company Obligations Relating to Commercialization

       3.1.  Diligence Requirements.  Company shall use commercially reasonable
efforts, or shall cause its Affiliates and Sublicensees to use commercially
reasonable efforts, to develop Licensed Product and to introduce Licensed
Product into the commercial market; thereafter, Company or its Affiliates or
Sublicensees shall make Licensed Product reasonably available to the public.
Company agrees to the following:

             a.   Within ninety (90) days after the Effective Date, Company
shall furnish SJCRH with a written research plan under which Company intends to
conduct research to evaluate opportunities to exploit Patent Rights (the
"Research Plan"). The parties acknowledge that, from time to time, and depending
on outcome of such research, the Research Plan may merit revision, in which
case, the parties agree to confer in good faith to negotiate such revision(s) to
the Research Plan.

             b.   No later [*], Company shall furnish SJCRH with a written plan
(the "Development Plan") under which Company intends to develop Licensed
Product. Thereafter, Company may revise the Development Plan to SJCRH's
reasonable satisfaction to accommodate uncertainties inherent in the drug
development process, including but not limited to, regulatory delay or
unexpected regulatory requirements, additional or unexpected scientific or
clinical data, and delays in patient recruitment.

             c.   Within sixty (60) days after each anniversary of the Effective
Date, Company shall furnish SJCRH with a brief written report on the progress of
its efforts during the prior year to research, develop and commercialize
Licensed Product.

In the event that SJCRH reasonably determines that Company, or an Affiliate or
Sublicensee, has not fulfilled its material  obligations under the Sections 3.1.
(a) or (b), SJCRH shall furnish Company with written notice of such
determination. Upon Company's receipt of such written notice, Company shall use
good faith efforts to: (i) prove to SJCRH's reasonable satisfaction that Company
has fulfilled its obligations under Sections 3.1. (a) or (b); (ii) fulfill the
relevant obligation; or (iii) negotiate with SJCRH mutually acceptable revisions
to the Research Plan, Development Plan, or Section 3.1. (a) or (b), as
applicable. If Company has not complied with (i), (ii) or (iii) within ninety
(90) days after Company's receipt of SJCRH's written notice, SJCRH shall have
the right, immediately upon written

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       5
<PAGE>

notice to Company and subject to Section 9 of this Agreement, to terminate this
Agreement or to convert Company's license into a non-exclusive license and grant
additional licenses under the Patent Rights in the Field. If SJCRH converts
Company's license into a non-exclusive license, the amounts payable under
Sections 4.2 and 4.3 shall be reduced [*].

       3.2.  Indemnifications.

             a.   Indemnity. Company shall indemnify, defend and hold harmless
SJCRH and SJCRH's fundraising organization (the American Lebanese Syrian
Associated Charities, or "ALSAC"), and their respective Boards of Governors,
officers, faculty, students, employees and agents and their respective
successors, heirs and assigns (the "Indemnitees"), against any liability,
damage, loss, or exposure (including reasonable attorney's fees and expenses of
litigation) incurred by or imposed upon any of the Indemnitees in connection
with any claims, suits, actions, demands or judgments arising out of any theory
of liability (including without limitation actions in the form of tort,
warranty, or strict liability and regardless of whether such action has any
factual basis) concerning any product, process, or service that is made, used,
or sold pursuant to any right or license granted under this Agreement; provided,
however, that such indemnification shall not apply to any liability, damage,
loss, or expense to the extent attributed to (i) the negligent activities or
intentional misconduct of the Indemnitees or (ii) the settlement of a claim,
suit, action, or demand by Indemnitees without the prior written approval of
Company.

             b.   Procedures. The Indemnitees agree to provide Company with
prompt written notice of any claim, suit, action, demand, or judgment for which
indemnification is sought under this Agreement. Company agrees, at its own
expense, to provide attorneys reasonably acceptable to SJCRH to defend against
any such claim. If the Indemnitees so desire, they may be represented by
separate legal counsel, at their own expense. The Indemnitees shall cooperate
fully with Company in such defense and will permit Company to conduct and
control such defense and the disposition of such claim, suit, or action
(including all decisions relative to litigation, appeal, and settlement).
Company agrees to keep SJCRH informed of the progress in the defense and
disposition of such claim and to consult with SJCRH with regard to any proposed
settlement.

             c.   Insurance. Company shall maintain insurance or self-insurance
that is reasonably adequate to fulfill its obligation to the Indemnitees.
Company shall provide SJCRH, upon request, with written evidence of such
insurance or self-insurance. Company shall continue to maintain such insurance
or self-insurance after the expiration or termination of this Agreement during

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       6
<PAGE>

any period in which Company or any Affiliate or Sublicensee continues to make,
use, or sell a Licensed Product developed under this Agreement.

       3.3.  Use of SJCRH Name. Company and its Affiliates and Sublicensees
shall not use the name "St. Jude Children's Research Hospital" or any variation
of that name, or any of SJCRH's trustees, officers, faculty, students,
employees, or agents, or any adaptation of such names, or any term of this
Agreement in any promotional material or other public announcement or disclosure
or in connection with the marketing or sale of any Licensed Product without the
prior written approval of SJCRH. SJCRH hereby gives its written approval that
Company may use the name of SJCRH's and the Inventors for information purposes
only in communicating with patent and regulatory authorities, and in seeking,
negotiating or securing agreements with Sublicensees.

       3.4.  Marking of Licensed Product. To the extent commercially feasible
and consistent with prevailing business practices, Company shall mark, and shall
cause its Affiliates and Sublicensees to mark, all Licensed Product that are
manufactured or sold under this Agreement with the number of each issued patent
under the Patent Rights that applies to such Licensed Product.

       3.5   Clinical Trials.  In the event that Company elects to proceed with
human clinical trials on a Licensed Product, Company agrees to so notify SJCRH.
The parties shall jointly determine the feasibility of conducting one or more
such trials at SJCRH.  Company agrees to give preference to SJCRH for conducting
one or more such trials should SJCRH so request, provided SJCRH is able and
willing to conduct such trials under terms and conditions no less favorable to
Company than any other institution able and willing to conduct such trials.

4.     Royalties and Payments

       4.1   License Fee. In partial consideration of the rights granted Company
under this Agreement, Company shall pay to SJCRH, within ten (10) business days
after the Effective Date, a license fee [*] This license fee payment is
nonrefundable and is not creditable against any other payments due to SJCRH
under this Agreement.

       4.2.  Milestone Payments. Company shall pay SJCRH the following milestone
payments within thirty (30) days after the occurrence of each event related to
the first Licensed Product sold by Company, its Affiliate or Sublicensee:

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       7
<PAGE>

             Milestone                                Payment
             ---------                                -------

             First IND approval                       [*]
             of such first Licensed Product

             First successful completion of
             Phase II or pivotal clinical trial       [*]
             demonstrating efficacy of such first
             Licensed Product

             First Market Approval                    [*]
             of such first Licensed Product


       4.3.  Royalties.   In partial consideration of the rights granted to
Company under this Agreement, Company shall pay to SJCRH a percentage royalty on
Net Sales of Licensed Product by Company, its Affiliates and Sublicensees.
Unless the Agreement is terminated earlier as provided herein, the royalty shall
be paid on a country by country basis.  The abandonment of a patent application,
and/or the holding of a patent to be invalid or unenforceable by a Court or in
arbitration from which no appeal can be or is taken, shall be deemed to be
"expiration" of the patent.  No multiple royalties shall be payable because a
particular Licensed Product or its manufacture, use, importation, offer for
sale, or sale are or shall be covered by more than one patent application or
patent included within the Patent Rights.  The applicable royalty rates are set
forth below.

a.     For Licensed Products that satisfy either of the definitions of Section
1.4. (a) or (b), the royalty rate shall be:

             Annual Net Sales                     Royalty Rate
             ----------------                     ------------

             [*]

b.     For Licensed Products that do not satisfy either of the definitions of
Section 1.4. (a) or (b), but do satisfy the definition of Section 1.4(c), the
royalty rate shall [*] of the rates shown in Subsection 4.3.a. above.

c.     For Licensed Products that do not satisfy either of the definitions of
Section 1.4(a) or (b), but do satisfy the definition of Section 1.4. (d), the
royalty rate shall be:  (i)  [*] rates shown in Subsection 4.3.a. above if the
active component in such Licensed Product is [*] and (ii) [*] rates shown in
Subsection 4.3.a. above if the active component in such Licensed Product is [*]

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       8
<PAGE>

       4.4.  Credits for Royalties Paid to Third Parties.  If Company makes a
payment to one or more third parties for a license(s) under such third party's
patent rights, biological materials or know-how, which license Company
reasonably believes is necessary or proper for commercialization of a Licensed
Product in a given country, Company may deduct [*] of the payments made to
such third parties relevant to such Licensed Product in such country from the
royalties payable to SJCRH under Subsection 4.3 for sales and uses of such
Licensed Product by Company, its Affiliates and Sublicensees in such country;
provided, however, that the royalties payable to SJCRH shall not be reduced by
such deduction to less [*] of the royalties that would have been due in any
Royalty Period in the absence of such payments to said third parties.

5.     Royalty Reports; Payments; Records

       5.1.  First Sale. Company shall report to SJCRH the date of first
commercial sale of any Licensed Product within thirty (30) days after
occurrence.

       5.2.  Reports and Payments. Within sixty (60) days after the conclusion
of each Royalty Period, Company shall deliver to SJCRH a report containing the
following information:

             a.   the gross invoiced amount for all Licensed Products sold or
commercially used by Company and its Affiliates and Sublicensees during the
applicable Royalty Period in each country;

             b.   the calculation of Net Sales for the applicable Royalty Period
in each country, including a listing of applicable deductions and applicable
royalty rate; and

             c.   the total royalty payable on Net Sales in U.S. dollars,
together with the exchange rates used for conversion and any credits taken under
Section 4.4 and Section 6.3.

All such reports shall be considered Company Confidential Information.  If no
royalties are due to SJCRH for any Royalty Period, the report shall so state.
Concurrent with this report, Company shall remit to SJCRH any payment due for
the applicable Royalty Period.  SJCRH shall timely instruct Company as to method
of payment.

       5.3.  Records. Company shall maintain, and shall cause its Affiliates and
Sublicensees to maintain, complete and accurate records necessary to determine
amounts payable to SJCRH by Company under this Agreement, which records shall
contain sufficient information to permit SJCRH to confirm the accuracy of

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

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<PAGE>

any reports delivered to SJCRH under Section 5.2. The relevant party shall
retain such records relating to a given Royalty Period for at least three (3)
years after the conclusion of that Royalty Period, during which time SJCRH shall
have the right, at its expense, to cause an independent, certified public
accountant reasonably acceptable to Company to inspect such records during
normal business hours for the sole purpose of verifying any reports and payments
delivered under this Agreement. Such accountants shall not disclose to SJCRH any
information other than information relating to accuracy of reports and payments
delivered under this Agreement. The parties shall reconcile any underpayment or
overpayment within thirty (30) days after the accountant delivers the results of
the audit. SJCRH may exercise its rights under this Section only once every year
and only with reasonable prior notice to Company.

6.     Patent Prosecution and Infringement

       6.1   Responsibility for Patent Rights.  SJCRH shall have primary
responsibility, at the expense of Company as described in Section 6.2, for the
preparation, filing, prosecution, and maintenance of all Patent Rights.  In
furtherance of its obligations under this Section, SJCRH shall use the services
of  law firm of Klauber and Jackson of Hackensack, New Jersey, or, if that is
not possible, another law firm acceptable to Company.  SJCRH shall consult with
Company regarding the prosecution of all patent applications within the Patent
Rights and shall afford Company adequate opportunity to review and comment on
any responses, new patent application(s) or submissions to the relevant patent
authorities.

6.2.  Communications.  SJCRH shall require its outside patent counsel to deliver
to Company copies of all communications regarding the Patent Rights from the
U.S. Patent and Trademark Office, foreign patent offices, and its foreign
associates at the same time it sends such documents to SJCRH.  SJCRH shall
require its outside patent counsel to deliver to Company copies of proposed
substantive communications which it intends to send to such patent offices or
foreign associates in sufficient time before the due date in order to provide
Company adequate opportunity to comment on the content thereof.  SJCRH shall
require its outside patent counsel or foreign associates to send reminder
notices to Company of any annuity or maintenance fees payable in any country for
any of the Patent Rights in a manner to allow timely payment of such fees.  Upon
Company's written request, SJCRH shall permit Company to pay annuity or
maintenance fees payable in any country for any of the Patent Rights directly to
SJCRH's outside counsel or foreign associates.  The contact at Company for such
communications shall be Susan Lingenfelter, or such other person later
designated by Company.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       10
<PAGE>

       6.3.  Reimbursement for Patent Expenses. Within thirty (30) days after
the Effective Date of this Agreement Company agrees to reimburse SJCRH for all
amounts expended prior to the date hereof for the preparation, filing,
prosecution and maintenance of the Patent Rights licensed to Company, said
amount being $18,362 as of the execution of this Agreement. Company shall
reimburse SJCRH for all reasonable patent-related out-of-pocket expenses
thereafter incurred by SJCRH pursuant to Section 6.1 within thirty (30) days
after Company's receipt of each reasonably-itemized invoice for such expense.
Company may elect, upon sixty (60) days written notice to SJCRH, to cease
reimbursement of the expenses associated with obtaining or maintaining patent
protection for one or more Patent Rights in one or more countries, and such
decision shall not be a default under this Agreement. In such event, Company
shall lose all rights under this Agreement with respect to such Patent Rights in
such countries. Company shall be entitled to credit [*] of all such reimbursed
amounts in each country (or region in the case of the EPO) against royalties
payable to SJCRH under this Agreement for such country or region.

       6.4.  Abandonment by SJCRH. In the event that SJCRH desires to abandon
any patent or patent application within the Patent Rights, SJCRH shall provide
Company with reasonable prior written notice of such intended abandonment, but
in any event not less than sixty (60) days prior to the effective date of such
abandonment, and Company shall have the right, at its expense, to prepare, file,
prosecute, and maintain the relevant Patent Rights. Upon such election by SJCRH,
SJCRH shall cooperate, and instruct its outside patent counsel and foreign
associates to cooperate, with Company to ensure a smooth transfer of such
responsibility to Company. As of the date of SJCRH's election to abandon any
patent application or patent within the Patent Rights and continuing until
expiration or termination of this Agreement, Company shall have no obligation
under Section 4.3 to pay royalties to SJCRH for use or sale of Licensed Products
that satisfy the definition of "Licensed Products" solely under Section 1.4(a)
or (b) for such elected patent application or patent.

       6.5.  Other Licensees.  In the event that SJCRH grants one or more
licenses under the Patent Rights to other licensees (e.g., in other fields),
SJCRH shall endeavor to secure from each other licensee permission to disclose
to Company the identity of such licensee and their licensed field.  If such
other licensee is not willing to so identify itself and its licensed field to
Company, SJCRH shall not grant to such licensee any right to participate in
filing,  prosecution or maintenance of the Patent Rights, or in any
interference, opposition or litigation proceeding involving the Patent Rights.
SJCRH, Company and such other licensee(s) shall negotiate in good faith to
modify Company's reimbursement obligations under Section 6.3 so that all
licensees are liable for reimbursement of patent expenses to an extent
commensurate with their licensed field.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       11
<PAGE>

       6.6.  Infringement, Interferences and Oppositions.

             a.   Notification of Infringement. Each party agrees to provide
written notice to the other party promptly after becoming aware of any
infringement or potential infringement of the Patent Rights, or of any
initiation of interference or opposition proceedings regarding the Patent
Rights.

             b.   Company Right to Prosecute.  So long as the license granted
Company under Section 2.1. remains exclusive in the Field, Company shall have
the right, under its own control and at its own expense, to prosecute any and
all interference and opposition proceedings involving the Patent Rights, and
third party infringement of the Patent Rights in the Field, to send "cease and
desist" letters to suspected infringers of the Patent Rights in the Field, and,
to defend the Patent Rights in any declaratory judgment action brought by a
third party which alleges invalidity, unenforceability, or non-infringement of
the Patent Rights.  Prior to commencing any such action, Company shall consult
with SJCRH and shall consider the views of SJCRH regarding the advisability of
the proposed action and its effect on the public interest.  Company shall not
enter into any settlement, consent judgment, or other voluntary final
disposition of any infringement action under this Subsection without the prior
written consent of SJCRH, which consent shall not be unreasonably withheld or
delayed.  Any recovery obtained in an action under this Subsection shall be
distributed as follows:  (i) each party shall be reimbursed for all out-of-
pocket expenses incurred in the action, including attorneys fees, expert fees,
and court costs; (ii) out of any award and recovery of ordinary damages to
Company, Company shall pay to SJCRH the amount approximately equal to the
royalties that Company would have paid to SJCRH if Company had sold the
infringing products and services rather than the infringer, and (iii) as to
special or punitive damages, the parties shall share equally in any award.

             c.   SJCRH as Indispensable Party. SJCRH shall permit any action
under this Section to be brought in its name if required by law, provided that
Company shall hold SJCRH harmless from, and if necessary indemnify SJCRH
against, any costs, expenses or liability that SJCRH may incur in connection
with such action, except to the extent such costs, expenses or liability are
attributable to the actions of SJCRH.

             d.   SJCRH Right to Prosecute.  In the event that Company fails to
initiate an infringement action within a reasonable time after it first becomes
aware of the basis for such action, or to answer a declaratory judgment action
within a reasonable time after such action is filed, SJCRH shall have the right
to prosecute such infringement or answer such declaratory judgment action, under

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       12
<PAGE>

its sole control and at its sole expense, and any recovery obtained shall be
given to SJCRH.

             e.   Cooperation. Each party agrees to cooperate fully in any
action under this Section 6.6, which is controlled by the other party, provided
that the controlling party reimburses the cooperating party promptly for any
reasonable out-of-pocket costs and expenses incurred by the cooperating party in
connection with providing such assistance.

7.     Confidential Information; Publicity

       7.1.  Confidential Information.

             a.   Obligations. For a period of five (5) years after disclosure
of any portion of Confidential Information, the Receiving Party shall (i)
maintain such Confidential Information in strict confidence, except that the
Receiving Party may disclose or permit the disclosure of any Confidential
Information to its directors, officers, employees, consultants, and advisors,
and those of its affiliates and Sublicensees, who are obligated to maintain the
confidential nature of such Confidential Information and who need to know such
Confidential Information for the purpose of this Agreement; the Company may also
disclose to the appropriate patent office(s) and legal counsel any Confidential
Information necessary for filing, prosecuting, maintaining, defending and
enforceing the Patent Rights; (ii) use such Confidential Information solely for
the purposes of this Agreement; and (iii) allow its trustees or director,
officers, employees, consultants, and advisors, and those of its affiliates and
Sublicensees, to reproduce the Confidential Information only to the extent
necessary for the purposes of this Agreement, with all such reproductions being
considered Confidential Information.

             b.   Exceptions.  The obligations of the Receiving party under
Subsection 7.1.a above shall not apply to the extent that the Receiving Party
can demonstrate that certain Confidential Information (i) was in the public
domain prior to the time of its disclosure under this Agreement; (ii) entered
the public domain after the time of its disclosure under the Agreement through
means other than an unauthorized disclosure resulting from an act or omission by
the Receiving Party; (iii) was independently developed or discovered by the
Receiving Party without use of the Confidential Information; (iv) is or was
disclosed to the Receiving Party at any time, whether prior to or after the time
of its disclosure under this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no obligation to
confidentiality with respect to such Confidential Information; or (v) is
required to be disclosed to comply with applicable laws or regulations, or with
a court or administrative

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       13
<PAGE>

order, provided that the Disclosing Party receives reasonable prior written
notice of such disclosure in a timely manner so that the Disclosing Party may
take steps to prevent or limit disclosure.

8.     Term and Termination

       8.1.  Term. This Agreement shall commence on the Effective Date and shall
remain in effect until the expiration in all countries of Company's royalty
obligations under Section 4.3. Company's royalty obligations under Section 4.3
shall expire on a country-by-country basis as described below. For products that
are "Licensed Products" under Sections 1.4 (a) or (b), Company's royalty
obligation shall expire on the expiration date of the last-to-expire patent
within the Patent Rights in each country. For each product that is not "Licensed
Product" under Section 1.4(a) or (b) but is "Licensed Product" under either
Section 1.4 (c) or (d), provided that "License Product" under Section 1.4(d) is
[*], Company's royalty obligation shall expire on the date ten (10) years after
the date of first commercial sale of such Licensed Product, after which date,
Company shall have a worldwide, paid-up, royalty-free exclusive license to
Licensed Product. For each product that is not "Licensed Product" under Section
1.4(a) or (b) but is "Licensed Product" under Section 1.4(d) and is [*],
Company's royalty obligation shall expire on the date ten (10) years after the
date of first commercial sale of such Licensed Product in such country, after
which date, Company shall have a paid-up, royalty-free exclusive license to
Licensed Product for such country.

       8.2.  Voluntary Termination by Company. Company shall have the right to
terminate this Agreement, for any reason, upon ninety (90) days prior written
notice to SJCRH. Upon termination, a final report shall be submitted and any
royalty payments and unreimbursed patent expenses due to SJCRH shall become
immediately payable upon invoice to Company from SJCRH.

       8.3.  Termination for Default. In the event that either party commits a
material breach of its obligation under this Agreement and fails to cure that
breach within sixty (60) days after receiving written notice thereof, the other
party may terminate this Agreement immediately upon written notice to the party
in breach, subject to Section 9.

       8.4.  Force Majeure.  Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fires, explosion, flood, war, strike, or riot, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       14
<PAGE>

       8.5.  Effect of Termination. The following provisions shall survive the
expiration or termination of this Agreement: Sections 1 and 9 and 10; Sections
3.2., 3.3, 5.2. (obligation to provide final report and payment), 6.2., 7.1.,
and 8.5. Upon the early termination of this Agreement, Company and its
Affiliates and Sublicensees may complete and sell any work-in-progress and
inventory of Licensed Product that exists as of the effective date of
termination, provided that (i) Company is current in payment of all amounts due
SJCRH under this Agreement, (ii) Company pays SJCRH the applicable royalty on
such sales of Licensed Product in accordance with the terms and conditions of
this Agreement, and (iii) Company and its Affiliates and Sublicensees shall use
reasonable efforts to complete and sell all work-in-progress and inventory of
Licensed Product within six (6) months after the effective date of termination.

8.6.   Sublicenses.  Upon termination of this Agreement, SJCRH shall elect to
either:  (i) convert all sublicenses under the Patent Rights granted by Company
into direct licenses from SJCRH, with all material terms remaining the same; or
(ii) terminate all such sublicenses and promptly offer each Sublicensee a new
license with financial terms at least as favorable to such Sublicensee as those
in the Sublicensee's sublicense from Company.

9.     Dispute Resolution. In the event of any controversy or claim arising out
of or relating to any provision of this Agreement, the breach thereof, SJCRH's
election under Section 3.1 to terminate Company's license or to convert
Company's license to a non-exclusive license; or SJCRH's notice of termination
under Section 8.3, the parties shall try to settle such conflicts amicably
between themselves. If the parties are unable to resolve such controversy or
claim informally, they shall submit the issue to alternative dispute resolution.
If alternative dispute resolution fails to resolve the issue, the parties shall
submit the issue to arbitration conducted in accordance with the rules of the
American Arbitration Association.  The demand for arbitration shall be filed
within a reasonable time after the parties' informal efforts and alternative
dispute resolution have failed, and in no event after the date upon which
institution of legal proceedings based on such controversy or claim would be
barred by the applicable statute of limitation.  Such arbitration shall be held
in Memphis, Tennessee if initiated by Company and in Seattle, Washington if
initiated by SJCRH.  The award through arbitration shall be final and binding.
Either party may enter any such award in a court having jurisdiction or may make
application to such court for judicial acceptance of the award and an order of
enforcement, as the case may be.  Notwithstanding the foregoing, either party
may, without recourse to arbitration, assert against the other party a third-
party claim or cross-claim in any action brought by a third-party, to which the
subject matter of this Agreement may be relevant.

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       15
<PAGE>

10.    Miscellaneous

       10.1. Representation and Warranties. SJCRH represents and warrants that
the Inventors have assigned to SJCRH their entire right, title, and interest in
the Patent Rights and that SJCRH has authority to grant the rights and licenses
set forth in this Agreement. SJCRH MAKES NO OTHER WARRANTIES CONCERNING THE
PATENT RIGHTS AND RELATED TECHNOLOGY, INCLUDING WITHOUT LIMITATION ANY EXPRESS
OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Specifically, SJCRH makes no warranty or representation (i) regarding the
validity or scope of the Patent Rights, (ii) that the exploitation the Patent
Rights or any Licensed Product will not infringe any patents or other
intellectual property rights of a third party, and (iii) that any third party is
not currently infringing or will not infringe the Patent Rights. Without making
a warranty or representation, SJCRH states that as of the Effective Date, it has
no present knowledge (1) that practice of the inventions claimed in the Patent
Rights would necessarily infringe a patent or patents of any third party, or (2)
of any third party infringers.

       10.2. Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.

       10.3. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns.

       10.4  Assignment.  This Agreement may not be assigned by either party
without the prior written consent of the other party, except that Company may
assign this Agreement to an Affiliate or to a successor in connection with the
merger, consolidation, or sale of all or substantially all of its assets or that
portion of its business to which this Agreement relates.

       10.5  Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.

       10.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       16
<PAGE>

       10.7. Notice.  Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following address or facsimile
numbers of the parties:

       If to SJCRH:

             Office of Technology Licensing
             St. Jude Children's Research Hospital
             332 North Lauderdale
             Memphis, Tennessee 38105
             Attn:  Barbara S. Conta, PhD
             VP, Technology Development and Transfer
             TEL: (901) 495-2342
             FAX: (901) 495-3148

       If to Company:

             ZymoGenetics, Inc.
             1201 Eastlake Avenue East
             Seattle, WA 98102
             Attn:  Director, Business Development
             TEL: (206) 442-6600
             FAX: (206) 442-6697

All notices under this Agreement shall be deemed effective upon receipt.  A
party may change its contact information immediately upon written notice to the
other party in the manner provided in this Section.

       10.8  Severability.  In the event that any provision of this Agreement
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent.  If the parties fail to reach a
modified agreement within sixty (60) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Section 9.  While the dispute is pending resolution,
this Agreement shall be construed as if such provision were deleted by agreement
of the parties.

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       17
<PAGE>

       10.9  Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements or understandings between the parties relating to its subject matter.

       IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.

ST. JUDE CHILDREN'S                              ZYMOGENETICS, INC
RESEARCH HOSPITAL



By: /s/ Barbara S. Conta                         By: /s/ Claus Kuhl
--------------------------------------           ----------------------
        Barbara S. Conta, Ph.D.                          Claus Kuhl
        VP, Technology Development & Transfer            President


[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                       18
<PAGE>

                                  APPENDIX A

                 Patent Applications Within the Patent Rights
                           As of the Effective Date


--------------------------------------------------------------------------------
    Country       Number       Filing Date and       Title          Inventors
                                Priority Date
--------------------------------------------------------------------------------
 [*]
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

                        AMENDMENT TO LICENSE AGREEMENT


This is an Amendment dated February 4, 1999 to a License Agreement dated
December 31,1998 entered into by and between St. Jude Children's Research
Hospital ("SJCRH") and ZymoGenetics, Inc.

                               WITNESSETH THAT:

IN CONSIDERATION of the mutual covenants herein contained and other good and
valuable consideration, the parties agree as follows:
To replace Article 1.7 of the License Agreement with the following:

1.7.  "Hospital Materials" shall mean any tangible biological material, or a
      -------------------
portion thereof having equivalent biological activity, useful or necessary for
the effective exercise of the Patent Rights that are transferred by SJCRH to
Company under this Agreement, including, [*].

ALL OTHER PROVISIONS OF THE LICENSE AGREEMENT REMAIN UNCHANGED.

IN WITNESS whereof, the parties have executed this Amendment to the License
Agreement through duly authorized representatives as of the date set forth
below.

St. Jude Children's Research Hospital       ZymoGenetics, Inc.


By: /s/ Barbara S. Conta                    By: /s/ Bruce L.A. Carter
    -------------------------------------       --------------------------------
        Barbara S. Conta, Ph.D.                     Bruce L.A. Carter, Ph.D.
        Vice President, Technology                  President
        Development and Licensing

Date: 2/4/99                                Date: 2/9/99
      -----------------------------------         ------------------------------


[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

                              AMENDMENT No. 2 TO
                               LICENSE AGREEMENT


BETWEEN:            ZymoGenetics, Inc.
                    1201 Eastlake Avenue East
                    Seattle, WA 98102

AND:                St. Jude Children's Research Hospital
                    332 North Lauderdale
                    Memphis, TN 38105


THIS AMENDMENT is made effective as of October 23, 2000.  The parties hereby
agree that  the License Agreement on TACI (Dr. Bram), dated December 31, 1998,
amended on February 4, 1999 by Amendment No. 1, shall be further amended as
follows:


IN THE PREAMBLE

Replace the preamble in its entirety with the following:

     THIS AGREEMENT, effective as of December 31, 1998 ("Effective Date"), by
     and between St. Jude Children's Research Hospital ("SJCRH"), a corporation
     located at 332 North Lauderdale, Memphis, Tennessee 38105 and ZymoGenetics,
     Inc. ("Company"), a corporation located at 1201 Eastlake Avenue East,
     Seattle, WA 98102.


IN ARTICLE 1  DEFINITIONS

In Section 1.1, replace the existing definition for "Affiliate" in its entirety
with the following:

     1.1  "Affiliate" shall mean any legal entity (such as corporation,
           ---------
     partnership or limited liability company) that controls, is controlled by,
     or is placed under the same control as, Company.  For the purposes of this
     definition, the term "control" means ownership of at least fifty percent
     (50%) of the voting interest of a legal entity.

The remainder of Article 1 is unchanged.

[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

Agreement of SJCRH and ZGI in the terms stated above is indicated by signatures
affixed below.


                              St. Jude Children's
Research Hospital                              ZymoGenetics, Inc.

/s/ John Scott Elmer                           /s/ Bruce L. A. Carter
-----------------------------------            ---------------------------------
Signature

Director, Office of Technology Licensing       Bruce L. A. Carter
----------------------------------------
Name and Title                                 President and CEO


[*] designated portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.