<PAGE>

                                                                   EXHIBIT 10.18

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

                              TECHNOLOGY AGREEMENT

                      GENERATION OF KNOCKOUT MOUSE STRAINS

                                     BETWEEN

                                 DELTAGEN, INC.
                                1031 Bing Street
                              San Carlos, CA 94070

                                       and

                                   PFIZER INC.
                                235 East 42nd St.
                            New York, New York 10017

WHEREAS, Deltagen, Inc. ("Deltagen") and Pfizer Inc. ("Pfizer"),
(collectively, "Parties") seek to collaborate in scientific research related
to generation of Knockout mouse strains;

WHEREAS, Deltagen has knowledge and experience in research and generation of
Knockout mice; and

WHEREAS, Pfizer wishes to obtain Knockout mice generated by Deltagen
according to specifications agreed by the Parties.

1.       DEFINITIONS

As used in this Agreement the following terms shall have the meanings as
specified:

         1.1      "Pfizer Affiliate" shall mean (i) any corporation or
business entity of which fifty percent (50%) or more of the securities or
other ownership interest representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or indirectly,
by Pfizer; or (ii) any corporation or business entity which, directly or
indirectly, owns, controls, or holds 50 percent (50%) (or the maximum
ownership permitted by law) or more of the securities or other ownership
interest representing the equity, the voting stock or, if applicable, the
general partnership interest, of Pfizer.

         1.2      "Effective Date" shall mean the date of the signature of
the representative of the last of the Parties to execute this Agreement.

         1.3      "Joint Patents" shall mean all patent and patent
applications, worldwide, for subject matter which is jointly developed during
the course of this Agreement by both Deltagen and Pfizer and which is useful
or necessary in the generation of the Knockout mice under this Agreement.

         1.4      "Joint Technology" shall mean all know-how and technology
related to the generation of Knockout mice as well as biological, molecular
biological and genetic work and technology in each case, which is developed
jointly hereunder by Deltagen and Pfizer and which is useful in the
generation of the Knockout mice under this Agreement.

         1.5      "Knockout Mice" shall mean a line of *** developed for and
delivered to Pfizer as set forth in Article 2 below, having a Standard
Mutation wherein such mice transmit the Standard Mutation, in the form of a
***, through the germ line.

         1.6      "Knockout Mouse Project" shall mean the creation, testing
and generation, by Deltagen, of Knockout mice.

*** Confidential material redacted and separately filed with the Commission.


                                      -1-
<PAGE>

         1.7      "Deltagen Patents" shall mean any and all patents and
patent applications, worldwide, owned by Deltagen with respect to Knockout
mice.

         1.8      "Deltagen Technology" shall mean technology related to the
generation of Knockout mice or other animals, as well as biological,
molecular biological and genetic work and technology developed solely by
Deltagen with respect to Knockout Mice delivered to Pfizer under this
Agreement.

         1.9      "Pfizer Patents" shall mean any and all patents and patent
applications, world-wide, owned by Pfizer, with respect to genes, genetic
manipulations, DNAs, probes or other subject matter useful in the generation
or use of Knockout mice.

         1.10     "Pfizer Technology" shall mean technology related to the
generation of Knockout mice, as well as biological, molecular biological and
genetic work and technology developed solely by Pfizer useful in the
generation of Knockout mice.

         1.11     "Milestone Payments" shall mean those payments set forth at
Appendix A attached hereto.

         1.12     "Standard Mutation" shall mean the interruption or deletion
in a portion of a single, specified gene by homologous recombination of
embryonic stem cells.

         1.13     "Non-Standard Mutations" shall mean any mutation other than
a "Standard Mutation." Examples of non-standard mutations include the ***.
Non-standard mutations also includes the generation of ***.

         1.14     "Standard Procedure" shall mean the set of procedures
described in Appendix A, with respect to "Milestone 1" through "Milestone 5 ."

2.       RESEARCH AND WORK TO BE CONDUCTED

         2.1      Deltagen shall conduct one or more Knockout Mouse Projects
at the request of Pfizer on the terms and conditions of this Agreement.
Pfizer will request Deltagen in writing to begin work on each Knockout mouse
project to be conducted under this Agreement, such written notice to be
provided to Deltagen by an authorized representative of Pfizer in the form
set forth in Appendix B. Deltagen shall have the right to evaluate such
request and the information provided to Deltagen by Pfizer under Section 2.3
below, to determine whether such requested Knockout mouse project is
feasible. If, after good faith discussion with Pfizer, Deltagen reasonably
determines that such project is not technically feasible, within the
parameters of Appendix A, Deltagen shall so advise Pfizer in writing and
shall not be required to undertake such project.

*** Confidential material redacted and separately filed with the Commission.


                                      -2-
<PAGE>

         2.2      For each Knockout Mouse Project, Deltagen will use
reasonable efforts to complete each Milestone in a timely fashion, as defined
in Appendix A.

         2.3      Deltagen shall undertake up to *** Knockout Mice Projects
according to the terms and conditions set forth in this Agreement. To
initiate each Knockout mouse project the parties agree to undertake, Deltagen
and Pfizer will establish a timetable for each project Milestone, and Pfizer
shall:

                  2.3.1    Identify to Deltagen in writing each Knockout
Mouse Project to be initiated;

                  2.3.2    Disclose in writing to Deltagen any *** necessary
for Deltagen to identify and generate probes useful m completing Milestone 1
with respect to each Knockout Mouse Project, as defined at Appendix A;

                  2.3.3    Consult with Deltagen *** for such Knockout Mouse
Project;

                  2.3.4    Transfer to Deltagen any *** Pfizer deems
appropriate to transfer and which may be suitable for ***; and

                  2.3.5    Identify and notify Deltagen in writing of the ***
for each Knockout Mouse Project for which Deltagen is requested by Pfizer to
produce a Knockout Mouse. ***.

         2.4      For purposes of the schedule set forth in Appendix A, each
Knockout Mouse Project conducted hereunder shall commence fifteen (15) days
after Deltagen's receipt from Pfizer of all information and materials set
forth in Section 2.3 relating to such Knockout Mouse Project.

         2.5      Each Knockout Mouse Project shall be deemed complete upon
Deltagen's completion of Milestone 5 (see Appendix A) and Deltagen's delivery
after the birth of the first generation of Knockout mice of at least *** and
*** mice which are ***. Deltagen, or a period of six (6) months following the
completion of each Milestone 5 for each Knockout Mouse Project, shall retain
a small backup colony of *** from such project consisting of *** for each
Knockout Mouse Project). With respect to such backup colonies of Knockout
Mice, Pfizer shall for a period not to exceed six (6) months following
completion of Milestone 5 pay to Deltagen ***. At Pfizer's request, Deltagen
will transfer the mice to Pfizer. All reasonable transportation and transfer
costs shall be paid by Pfizer. If Pfizer does not request transfer within the
six month period, Deltagen, following Deltagen's written notification to
Pfizer, shall dispose of the mice in accordance with all applicable laws and
regulations.

         2.6      Deltagen shall use reasonable efforts to *** and to
generate Knockout mice under each Knockout mouse project according to the
specification of Pfizer as set forth in Section 2.3 above.

         2.7      Deltagen shall, at all times in its animal care and
handling activities related to this Agreement, comply with all applicable
Federal, State and local laws and

*** Confidential material redacted and separately filed with the Commission.


                                      -3-
<PAGE>

regulations, and assure that Deltagen animal facilities meet or exceed
minimum accreditation standards ***.

3.       PAYMENTS

         3.1      Within thirty (30) days after the Effective Date and
receipt of invoice, Pfizer shall pay to Deltagen $300,000 (30%) of the total
estimated cost for the *** Knockout mouse projects *** as calculated in
accordance with Appendix A. Such payment shall be non-non-readable and shall
be credited against Milestones as set forth in Appendix A. Deltagen will
provide invoices to Pfizer for all payments due under this agreement.
Invoices received by Pfizer shall be paid within thirty (30) days of receipt.

         3.2      Pfizer shall pay to Deltagen for each Milestone completed
by Deltagen:

                  3.2.1    The Milestone Payments set forth in Appendix A are
for all Knockout Mouse Projects wherein a *** is requested by Pfizer under
Section 2.3 above, so long as the Project is initiated during the term of
this Agreement. The Milestone Payments for all Knockout Mouse Projects
wherein a *** is requested, shall be determined on a case-by-case basis, upon
good faith negotiations between the parties and shall be mutually agreed to
in writing by the parties.

         3.3      Deltagen shall inform Pfizer, in writing, of its completion
of each Milestone, as defined in Appendix A. In such written notice, Deltagen
shall certify that the Knockout Mice delivered to Pfizer conform to the
Knockout Mice specifications for each Knockout Mouse Project set forth in
Appendix A, and Deltagen shall provide with each delivery of Knockout Mice to
Pfizer all of the information and data described in Appendix A for each
Knockout Mouse Project.

         3.4      Subject to payment credit as provided in Section 3.1,
Pfizer shall pay all Milestones to Deltagen within thirty (30) days after
Pfizer's receipt of written representation from Deltagen of Deltagen's
completion of Milestones in compliance with the terms of this Agreement.

4.       ON-SITE CONSULTATION

         4.1      Pfizer may reasonably request on-site consultations by
Deltagen personnel relating directly to projects under this Agreement. Pfizer
will reimburse Deltagen for all reasonable and reasonably documented travel
expenses associated with such onsite consultations by Deltagen personnel.

         4.2      Upon reasonable notice to Deltagen and upon reasonable
terms and conditions agreed upon by Deltagen and Pfizer, Pfizer shall be
entitled to perform site visits to Deltagen facilities involved in the
Knockout Mouse Projects to inspect the facilities for compliance with
generally accepted scientific and animal care procedures including, but not
limited to those set forth in Appendix A and Section 2.7 above.

*** Confidential material redacted and separately filed with the Commission.


                                      -4-
<PAGE>

5.       TERM AND TERMINATION

         5.1      The term of this Agreement shall commence on the Effective
Date and shall remain in effect until the earlier of either (a) termination
of this Agreement pursuant to the completion by Deltagen of all Milestones
under this Agreement or (b) two (2) years from the Effective Date; provided,
however, that all applicable obligations of Deltagen and Pfizer under this
Agreement shall remain in force with respect to any Knockout Mouse Project
requested by Pfizer and initiated by Deltagen which remains ongoing prior to
the date set forth in subsection (b) of this paragraph.

         5.2      Pfizer may unilaterally terminate a Knockout Mouse Project
for any reason and at any time. Should Pfizer at any time during the Knockout
Mouse Project terminate the development and creation or completion of a
specific Knockout Mouse Project, Pfizer shall make the next Milestone Payment
corresponding to that work being conducted by Deltagen to complete such
Milestone at the time of termination, as if Deltagen had completed the
Milestone, regardless of whether such Milestone has been reached.

         5.3      Deltagen may terminate a Knockout Mouse Project upon
Deltagen's identification of technical difficulty beyond the reasonable
control of Deltagen which would prevent Deltagen from completing the Project
using commercially reasonable efforts, provided that Deltagen has informed
Pfizer, in writing, of the details of such technical difficulty, and the
parties have had an opportunity to discuss the circumstances to attempt to
resolve the technical difficulty in a reasonable manner. Pfizer is not
entitled to a refund of any past Milestone payments paid if a project is
terminated as the result of technical difficulty beyond the control of
Deltagen.

         5.4      If either of the Parties is in breach of any obligation
under this Agreement, the party complaining of said breach shall give written
notice to the breaching party to remedy such breach. If the breach is not
remedied within 60 days following the receipt of such notice, the party
complaining of breach may terminate this Agreement upon written notice to the
other party at any time and with immediate effect. Any such termination will
be without prejudice to any other rights which the party complaining of
breach may have as a result of any breach of this Agreement.

6.       CONFIDENTIALITY

         6.1      Except as otherwise provided pursuant to Section 7.2, each
party shall treat all information which has been received from the other
party as strictly confidential ("Information"), and shall not make such
Information available to any third party without the express prior written
consent of the other party and only to use such Information for the purposes
expressly provided in this Agreement. For this purpose, employees and
consultants of the parties shall be bound by obligations of confidentiality
and secrecy no less strict than those set out herein and shall not be
regarded as third Parties.

                    (a) The above obligations shall not apply or cease to
apply to Information which the recipient can show:

                    (b) has become generally available to the public other
than through violation of this undertaking;

*** Confidential material redacted and separately filed with the Commission.

                                      -5-

<PAGE>

                    (c) was already in the recipient's possession prior to
its acquisition from the disclosing party as reasonably demonstrated by
competent written evidence of the same.

                    (d) was independently developed without use of
information received from the disclosing party as reasonably demonstrated by
competent written proof of the same.

                    (e) has been received from a third party, under no
obligation to maintain the Information as confidential; or

                    (f) is required to be disclosed by law or court order,
provided that notice is promptly delivered to the other party in order to
provide an opportunity to challenge or limit such disclosure.

A statutory obligation to disclose confidential information to governmental
authorities in connection with the Food and Drug Administration product
registration procedures is not subject to this secrecy obligation.

         6.2      This obligation of confidentiality shall survive the
expiration and/or termination of this Agreement for a period of *** years.

         6.3      Upon expiration or termination of this Agreement, or at any
time upon the disclosing party's written request, the receiving party shall
destroy, or at the written request of the disclosing party, deliver to the
disclosing party any and all Information (including copies) received or
generated hereunder, except that the receiving party may, for archival
purposes, maintain one copy of the Information in its confidential legal
files for the purpose of complying with this agreement.

7.       OWNERSHIP OF RIGHTS

         7.1      Deltagen shall own all Deltagen Patents and Deltagen
Technology. Additionally, any Deltagen Patents or Deltagen Technology arising
out of the work performed pursuant to this Technology Agreement and which
apply to the production of Knockout Mice shall be owned solely by Deltagen.
Deltagen hereby grants to Pfizer a non-exclusive, royalty-free license to
Deltagen Patents, Deltagen Technology and Deltagen inventions, that solely
arise during the Knockout Mice Projects under this Agreement which are useful
or necessary for Pfizer (a) to use, breed and perform further research and
development using the Knockout Mice generated hereunder (and their progeny),
and (b) to sublicense such rights to use, breed and perform further research
and development using the Knockout Mice to agents, consultants and Affiliates
of Pfizer; PROVIDED HOWEVER that Pfizer and its sublicencees shall not have a
license to use (and shall not use) the Knockout Mice (or their progeny),
Deltagen Patents, Deltagen Technology or Deltagen inventions, directly or
indirectly to reverse-engineer the methods, processes, techniques or similar
Deltagen know-how relating directly or indirectly to the design, creation,
development, generation or production of such Knockout Mice or other
transgenic mice or animals.

         7.2      Pfizer will own all Pfizer patents and Pfizer technology.
Pfizer will grant to Deltagen a non-exclusive, non-sublicensable, and
non-transferable license to all Pfizer patents necessary for Deltagen to make
Knockout Mice solely for Pfizer according to this Agreement. Pfizer shall own
all phenotypic data and characteristics of the Knockout Mice generated by
Deltagen for Pfizer under this

*** Confidential material redacted and separately filed with the Commission.


                                      -6-
<PAGE>

Agreement; provided however, that Deltagen shall have a nonexclusive,
nonsublicensable, nontransferable, license to use such phenotypic data and
characteristics for Deltagen's research analysis solely for Pfizer in
accordance with the purposes of this Agreement.

         7.3      Joint Patents and Joint Technology will be owned by both
Parties jointly. Both parties shall decide whether it is desirable for patent
applications to be filed for Joint Technology developed. If a patent
application is filed, the Parties shall share costs equally. If one party
wishes to patent Joint Technology, but the other party does not, then the
party wishing to file the application may do so at its own expense. In such
instance, the party filing the application will own all rights in the patent
application and the other party shall assign its rights in the patent
application to the party filing the application, provided that the non-filing
party shall be granted a nonexclusive license to use such rights under such
patent application.

         7.4      Both Parties shall decide whether to maintain patents or
patent applications within the Joint Patents and the extent of foreign filing
of such patent applications. If one party wishes to abandon a patent or
patent application within the Joint Patents, but the other party wishes to
maintain it, the party wishing to maintain it may do so by paying all
necessary fees; the party paying the fees shall own all rights in this patent
or patent application and the other party will assign its rights in such
patent or patent application to the paying party. If the Parties disagree on
whether to file a patent application within the Joint Patents in any given
country, the party wishing to file in such country may do so at its own
expense, and will own all rights in such patent application in such country
and the other party will assign its rights in such patent application to the
party filing the application.

         7.5      As of the date of this Agreement, Deltagen represents and
warrants to Pfizer that to Deltagen's best knowledge, using reasonable due
diligence, Deltagen has the right to enter into this Agreement and to grant
to Pfizer the licenses hereunder without knowingly violating any rights of
third parties. As of the date of this Agreement, Pfizer represents and
warrants to Deltagen that to Pfizer's best knowledge, using reasonable due
diligence, Pfizer has the right to enter into this Agreement and to grant
Deltagen the licenses hereunder without knowingly violating any rights of
third parties.

Deltagen shall indemnify and hold harmless Pfizer and its Affiliates,
Directors, officers, employees and agents from and against any and all
losses, Liabilities, damages and expenses (including reasonable attorneys'
fees and costs) (collectively "Liabilities") that they may suffer as a result
of any claims, demands, actions or other proceedings made or instituted by
any third party and arising out of or relating to (a) a breach of any
representation, warranty or covenant of Deltagen under this Agreement or (b)
Deltagen's gross negligence or willful misconduct, except in each case to the
extent such Liabilities resulted from the gross negligence or willful
misconduct of Pfizer.

Pfizer shall indemnify and hold harmless Deltagen and its directors,
officers, employees and agents from and against any and all Liabilities that
they may suffer as a result of any claims, demands, actions or other
proceedings made or instituted by any third party and arising out of or
relating to (a) a breach of any representation, warranty or covenant of
Pfizer under this Agreement or (b) Pfizer's gross negligence or willful
misconduct, except in each case to the extent such Liabilities resulted from
the gross negligence or willful misconduct of Deltagen.

*** Confidential material redacted and separately filed with the Commission.


                                      -7-
<PAGE>

         7.6 After Pfizer has made all applicable Milestone Payments, or
other payments under Section 3.2 above, and upon delivery by Deltagen to
Pfizer's designated carrier (FOB), title shall transfer to Pfizer for each
Knockout Mouse Project and Pfizer shall own exclusively all Knockout Mice
produced under this Agreement, and *** Deltagen on behalf of Pfizer,
regardless of whether they ***. Pfizer shall have the exclusive right to use
the Knockout Mice, and their progeny, for any purpose, without restriction,
including, but not limited to, research, development, production, breeding,
sales and distribution of the Knockout Mice to agents, consultants and Pfizer
Affiliates; provided however that Pfizer shall not use the Knockout Mice
directly or indirectly to reverse-engineer the methods, processes, techniques
or similar Deltagen know-how relating directly or indirectly to the design,
creation, development, generation or production of such Knockout Mice.

8.       MISCELLANEOUS

         8.1 PUBLICATION. If Pfizer publishes any information, data or
material regarding the Knockout mice contemplated under this Agreement,
Pfizer shall acknowledge within the publication, the contribution of Deltagen
to the generation of such mouse or mice.

         8.2 FORCE MAJEURE. Neither party shall be liable for its failure to
perform its obligations under this Agreement due to contingencies beyond its
reasonable control, including but not limited to strikes, riots, wars, fire,
flood, accident, labor disputes, embargoes, inability to obtain export or
import license, acts of God, or acts in compliance with any governmental or
state law, regulation or other.

         8.3 AMENDMENTS. Amendments or modifications of this Agreement may
only be made by a written Agreement executed by both Parties.

         8.4 NOTICES. All notices required or permitted hereunder shall be
given in writing and sent postage prepaid by first class certified or
registered mail, or sent by a nationally recognized express courier service,
or hand delivered at the following addresses:

                  If to Deltagen:
                  William Matthews
                  President
                  Deltagen, Inc.
                  1031 Bing Street
                  San Carlos, CA  94070
                  Fax: (650) 610-6823

                  If to Pfizer:
                  Barry Hesp
                  Vice-President of Technology Investments
                  Central Research Division
                  Eastern Point Road
                  Groton, CT 06340
                  Fax: (860) 441-6491

         8.5 REPRESENTATIONS AND WARRANTIES. Each party represents and
warrants that:


*** Confidential material redacted and separately filed with the Commission.

                                      -8-
<PAGE>


               8.5.1 It will use commercially reasonable efforts to complete
its obligations under this Agreement in compliance with any and all
applicable federal, state, or local laws, and regulations.

               8.5.2 It shall devote the necessary level of personnel and
resources to conduct and complete its obligations in a commercially
reasonable manner under this Agreement.

         8.6 LIMITATION OF WARRANTY AND LIABILITY. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, DELTAGEN MAKES NO WAS, EXPRESS OR
IMPLIED, WITH RESPECT TO THE KNOCKOUT MICE GENERATED UNDER THIS AGREEMENT OR
THE KNOCKOUT MOUSE PROJECTS. DELTAGEN DISCLAIMS ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION A WARRANTY OF NON-INFRINGEMENT AND
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS OR
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES DIRECTLY OR INDIRECTLY ARISING
OUT OF THIS AGREEMENT OR THE RESEARCH, DEVELOPMENT, GENERATION OR USE OF THE
KNOCKOUT MICE UNDER THIS AGREEMENT.

         8.7 APPLICABLE LAW AND VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware as though
made and performed in said state without regard to its conflict of law
revisions.

         8.8 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         8.9 U.S. EXPORT LAWS AND REGULATIONS. Without limitation, each party
shall comply with all laws and regulations of the United States relating to
the export of biological materials, products and technical information.

         8.10 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof. All
express or implied Agreements and understandings, either oral or written,
heretofore made are expressly superseded by this Agreement.

         8.11 INDEPENDENT CONTRACTORS. It is expressly agreed that Deltagen
and Pfizer shall be independent contractors and that the relationship between
the two parties shall not constitute a partnership, joint venture or agency.
Neither Deltagen nor Pfizer shall have the authority to make any statements,
representations or commitments or any kind, or to take any action, which
shall be binding on the other, without the prior consent of the party to do
so.

         8.12 WAIVER. The waiver by either party of any right hereunder or
the failure to perform or of a breach by the other party shall not be deemed
a waiver of any other right hereunder or of any other breach or failure by
said other party whether of a similar nature or otherwise.

                                      -9-
<PAGE>

AGREED AND ACCEPTED:


DELTAGEN. INC.                               PFIZER INC.

By /s/   William Matthews                    By /s/ George M. Milne, Jr.
   -------------------------------              -------------------------------

NAME       William Matthews                  NAME   George M. Milne, Jr.
     -----------------------------                -----------------------------

TITLE      President                         TITLE    Vice President
      ----------------------------                 ----------------------------

DATE      December 17, 1998                  DATE     December 22, 1998
     -----------------------------                -----------------------------




                                      -10-
<PAGE>

                                   APPENDIX A

    SCIENTIFIC MILESTONES AND PAYMENT SCHEDULE IN THE GENERATION OF KNOCKOUT
                   MOUSE STRAINS AND THEIR PHENOTYPIC ANALYSIS

     Within 30 days of the Effective Date, Deltagen is to begin development
and generation of up to 10 custom Knockout Mice and on receipt of invoice,
Pfizer shall pay Deltagen $300,000.00 (32.3%) of the total value of the
contract (*** gene knockouts at $*** per knockout ***).

         Subsequent payments to Deltagen will be based on the achievement of
the specific Milestones for each knockout as outlined below. Pfizer
understands and acknowledges that production of Knockout Mouse Project
involves a number of technologically complex steps, and that the time periods
for performance are reasonable estimates only and subject to change due to
technological difficulties encountered. Deltagen shall be obligated to notify
Pfizer of any such technical difficulties as soon as reasonably possible
after they arise, and the parties will commence good faith discussions to
resolve such technical difficulties in a reasonable manner.

Payment by Pfizer for initiation of contract:                      $300,000.00

The following payments are per Knockout Mouse Project:

Milestone 1 * * *                                             $* * *

Milestone 2 - * * *                                           $* * *
Milestone 3 - * * *                                           $* * *
Milestone 4 - * * *                                           $* * *
Milestone 5 - * * *                                           $* * *

MILESTONE 1.     * * *
                 Deltagen will *** based on * * *. The cost for each *** paid by
                 Pfizer. Anticipated time frame for completion will be within
                 *** after receipt of necessary * * * information. In the event
                 of unforeseen technical difficulties in and * * * resulting
                 from * * *, Deltagen (upon consultation with Pfizer)
                 will * * *. The reasonable cost for this * * * will be
                 determined on a case-by-case basis, after good faith
                 negotiations between the parties (***).


*** Confidential material redacted and separately filed with the Commission.

                                      -11-
<PAGE>


MILESTONE 2.     ***
                 Deltagen will * * *. Deltagen will screen a maximum of ***.
                 Deltagen will receive *** upon the identification of a * * * or
                 Deltagen's * * * of ***. If * * * in the * * * clones, Deltagen
                 will first * * * or alternatively, *** (after consultation
                 with, and written agreement by, Pfizer). The cost of a * * *
                 will not exceed ***. Cost for * * * will be *** per ***.
                 Anticipated time for completion of *** will be *** from receipt
                 of * * *. Confirmation of * * * will be obtained ***. Pfizer
                 will also receive * * * information in order to confirm * * *.

MILESTONE 3.     ***
                 Deltagen will transfer ***. Upon the ***mice from each * * *,
                 Deltagen will receive a payment of *** per ***. Anticipated
                 time frame for completion will be *** from receipt * * *.
                 Deltagen will confirm * * *.

MILESTONE 4.     ***
                 Deltagen will *** animals for * * * of the * * *. For
                 production of *** with the desired * * *, Deltagen will receive
                 *** per ***. Anticipated time frame will be within *** from
                 receipt of * * *. The * * * of *** will be confirmed ***.

MILESTONE 5.     ***
                 Deltagen will perform the following analysis on up to * * *
                 gene Knockout mice that are generated from the ***. *** mice
                 will be *** animals. In cases where the gene knockout produces
                 a ***, Deltagen will make reasonable efforts to determine * *
                 *. Each *** will be inspected for ***. * * * will be monitored
                 * * *. At * * * mice * * * will be *** with that will include
                 the following ***. ***will be *** and Deltagen will prepare a
                 written report of all findings. Deltagen will also make * * *
                 to Pfizer upon request. In addition to the above analysis,
                 Deltagen will provide complete ***. This readout will include
                 ***. *** will also be ***.

                 Deltagen will incorporate a *** into each * * * to allow for
                 the determination of * * *. Adult mice will be *** and the * *
                 * will be * * *. All findings will be reported as above.

                 Upon completion of * * * analysis for each Knockout Mouse
                 Project, Deltagen will receive *** per Knockout Mouse Project.
                 Anticipated time frame is within *** from receipt of * * *. If
                 Deltagen is unable to provide the *** indicated above the ***
                 milestone payment for * * * analysis will be waived.

                 All mice in the Deltagen animal facility will be tested
                 routinely for ***. Results will be provided to Pfizer on a ***
                 basis.


*** Confidential material redacted and separately filed with the Commission.

                                      -12-
<PAGE>

                                   APPENDIX B

     FORM NOTIFICATION LETTER FOR INITIATION OF A NEW KNOCKOUT MOUSE PROJECT

                               (Template follows)








                                      -13-
<PAGE>

                               (Pfizer letterhead)


March 3, 1998

Bill Matthews, Ph.D.
President
Deltagen, Inc.
***

Dear Bill,

This letter is to provide notice to Deltagen of Pfizer's request to Deltagen
to initiate work on a Knockout Mouse Project under the terms and conditions
of the Technology Agreement between Deltagen, Inc. and Pfizer, dated
__________ (the "Agreement"), including but not limited to, the
confidentiality obligations of the Agreement.

The Knockout Mouse Project to be initiated is described as follows:

The Pfizer contact scientist for technical information regarding the project
will be:

Pfizer requests that Deltagen begin to work to develop the above described
Knockout mouse on the terms and conditions of the above-referenced Agreement.

Sincerely,



Pfizer's Signatory



Agreed,



----------
Deltagen






*** Confidential material redacted and separately filed with the Commission.

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