April 16, 1999


Dr. Bengt Agerup
Managing Director
Q-Med AB
80 rue Jouffroy d'Abbans
750 17 Paris, France

Dear Dr. Agerup:

     This will confirm our agreement in principle pursuant to which Q-Med
AB (AQ-Med@) or a wholly-owned subsidiary thereof will purchase an initial 50%
interest in the capital stock of Ixion Biotechnology, Inc. (AIxion@) through the
purchase of newly-issued common stock of Ixion, and will execute a royalty free
license to its non-animal stabilized hyaluronic acid (ANASHA@) technology in the
field of islet cell encapsulation to Ixion.

     1. The number of shares to be purchased by Q-Med shall be not less than
3,000,000 shares of newly-issued common stock of Ixion for consideration
consisting of a cash price of $2.00 per share, and a royalty-free license to
NASHA technology for the field of islet cell encapsulation.

     2. The agreement set forth in this letter shall be a binding agreement
between us, subject to the following conditions:

        (a)  The board of directors of Ixion and the board of directors of
             Q-Med shall have approved the transaction contemplated hereby
             prior to July 15, 1999, unless extended by mutual agreement; and

        (b)  A mutually satisfactory formal stock purchase agreement as
             hereinafter described, shall have been prepared and executed.

     3. The stock purchase agreement (which shall be drafted by counsel for
Q-Med) shall contain such representations, warranties, covenants, terms
and conditions as are mutually acceptable to counsel to the parties
hereto, specifically including the following:

        (a)  The number of shares to be purchased by Q-Med shall be equal to
             the sum of (i) 2,514,014 (the number of shares outstanding on the
             date hereof; (ii) 100,900 (the number of options to purchase
             shares outstanding on the date hereof; (iii) 23,630 (the number of
             shares issuable upon the exercise of certain stock purchase
             warrants; (iv) 21,513 (the number of shares issuable upon the
             exercise of Charitable Benefit Warrants, after adjustment); (v)
             51,630 (the number of shares to be issued to purchasers in the
             Ixion public offering to adjust the price of their shares);
             288,313 (shares to be reserved for issuance under the Ixion Board
             Retainer Plan and the 1994 Stock Option Plan); and (vi) a number
             of shares equal to the number of shares which are purchased by
             current shareholders of Ixion pursuant to an offer in the nature
             of a preemptive right to be made to current shareholders at a price
             of not less than $2.00/share;

       (b)   Payment by Q-Med in the amount of $3,300,000 (plus accrued interest
             on the loan described below) shall be made on the Closing Date,
             which shall be September 1, 1999. On that date, Ixion will issue
             the number of shares equal to $3,300,000 plus accrued interest
             divided by $2.00, or approximately 1,650,000 shares. On the Closing
             Date, Ixion shall issue warrants for the remainder of the shares to
             be purchased by Q-Med (not less than 1,350,000 shares) with an
            exercise price of $2.00 per share, expiring on the first anniversary
             of the Closing Date.

      (c)    On the Closing Date, Dr. Bengt Agerup will be added to the board of
             Ixion as an inside director.

      (d)    The closing of the stock purchase agreement will be contingent on
             (i) Q-Med's successful completion of an initial public offering not
             later than July 15, 1999, (ii) the stockholders of Ixion approval
             of an increase in the number of authorized shares of common stock
             as set forth in the preliminary proxy statement filed with the
             Securities and Exchange Commission on April 8, 1999; (iii) Ixion's
             not, since the date hereof, having (a) disposed or made changes in
             its assets or incurred any liability other than in the ordinary
             course of business, (b) made any material changes in its business
             structure, or (c) declared any dividend or made any other
             distribution to its shareholders.

      (e)    Upon the issuance of shares of newly-issued stock by Ixion after
             the initial Closing Date, Q-Med shall have the right to purchase
             for cash such number of shares, at the same price per share as such
             shares are offered to third parties, as are necessary to maintain
             its percentage interest in Ixion.

      (f)    Royalty-free license of NASHA for use as an encapsulation material
             for Ixion islets.

     4.  Each party agrees to proceed in good faith and with all due diligence
to enter into the formal stock purchase agreement and to close the transaction
contemplated hereby. In the event that such stock purchase agreement is not
executed on or prior to June 15, 1999, either party may terminate this agreement
by giving written notice to the other. Between the date hereof and the date of
any such notice, Ixion will not entertain or accept any offers for the purchase
of its stock and shall suspend its public offering of stock pursuant to its
current registration statement.

     5.  In connection with of the closing of the stock purchase transaction
contemplated by this agreement, Ixion shall have the right to make an offer to
its current shareholders permitting them to purchase a number of shares at a
price of $2.00 per share equal to the number of shares held by them (or equal
to the number of shares which they may purchase through the exercise of options
or warrants) such that they may substantially protect their current percentage
ownership of Ixion. Ixion may cancel and reissue all options issued at a price
greater than $4.00 per share with a new exercise price of $4.00 per share.

     6.  Upon the execution of the stock purchase agreement, Ixion will make
the following offer to holders of its unsecured convertible debentures: (a) All
holders will be given 60 days from the Closing Date to elect to convert their
debentures at the price of $2.00 per share;


<PAGE>


          (b)  Q-Med will offer to redeem, at the maturity date, from all
               holders electing not to convert at such date, all variable rate
               unsecured debt at a price equal to par, plus an amount equal to
               accrued interest at 10% for the life of the debenture.

     6    The parties agree to consult with each other regarding any press
releases or other public disclosures related to this agreement in principal or
the transactions contemplated hereby.  Q-Med understands that the U.S. federal
securities laws will apply to disclosures required to be made by Ixion.

     7.   In consideration for Ixion's agreeing to not entertain or accept any
offers between the date hereof and June 15, 1999, and its agreement to suspend
its public offering, Q-Med shall lend Ixion $300,000 payable upon execution of
this letter, for the purpose of purchasing certain equipment and funding Ixion's
operating costs. The terms of the loan are set forth in the promissory note
attached hereto as Annex A. The terms of the loan shall survive termination of
this agreement.

     If the foregoing correctly sets forth our agreement, please sign and return
to us the copy of this letter enclosed for the purpose, at which time this
letter shall become a binding agreement between us.


                              Sincerely yours,

                              Ixion Biotechnology, Inc.

                              By:     /s/ Weaver H. Gaines

                              Weaver H. Gaines
                              Chairman and Chief Executive Officer

Q-Med AB

By: /s/ Bengt  Agerup
    Bengt Agerup
    Managing Director


<PAGE>


Exhibit A

                     Unsecured Convertible Promissory Note

                                                                April 16, 1999

$300,000.00
Alachua, Florida

            1. FOR VALUE RECEIVED, Ixion Biotechnology, Inc., a Delaware
corporation (the "Maker") hereby promises to pay to the order of Q-Med AB, on
September 1, 1999, the amount of $300,000, together with interest accruing from
the date hereof on the unpaid principal amount of this Note.

     2. Interest shall be set at the prime rate in effect at the beginning of
each month and on the date hereof, as set forth in the Wall Street Journal, plus
3%. Interest will be computed on the basis of a 360-day year, 30 day month.

     3. Maker shall accrue interest on this Note monthly on the last day of the
month for such month. Interest shall not be paid in cash but shall be added to
the principal of the Note on the date interest is due.

     4. If suit is instituted to collect this Note or any portion thereof, the
Maker hereby promises to pay to the holder, in addition to the principal and
interest due hereunder, all costs of collection hereof, together with such
amount as any court of competent jurisdiction may adjudge reasonable as said
holder's attorney's fees in said suit.

      5. Accrued interest shall be entered by the Maker on the Schedule
attached to the copy of the Note held at the Maker's principal offices. Holder
shall be entitled to a copy of the Schedule, certified by the Treasurer as of a
particular date, upon written request.

      6. On September 1, 1999, this Note may be converted, at Maker's sole
election, into common stock of the Maker for the account of Holder at a price of
$2.00 per share. Fractional shares shall not be issued but shall be paid to
Holder in cash. Notice of such election must be in writing and may be given at
any time prior to the maturity date hereof.

      7. This Note shall be construed in accordance with and governed by the
laws of the State of Florida.

      8. The Maker hereby waives presentment and demand for payment, notice of
dishonor, protest, and any and all other notices or demands in connection with
the delivery, acceptance, performance, default or enforcement of this Note.

                              Ixion Biotechnology, Inc.


                              By
                              Weaver H. Gaines
                              Chairman and Chief Executive Officer

Attest:

Mary Trew, Secretary