<PAGE>
                                                                   EXHIBIT 10.03


                            STOCK PURCHASE AGREEMENT


         THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 24th
day of August, 2001 (the "Execution Date"), by and between Atrix Laboratories,
Inc., a Delaware corporation having offices at 2579 Midpoint Drive, Fort
Collins, CO 80525-4417 (hereinafter, the "Investor"), and CollaGenex
Pharmaceuticals, Inc., a Delaware corporation having offices at 41 University
Drive, Newtown, PA 18940 (hereinafter, "CGPI").

         THE PARTIES HEREBY AGREE AS FOLLOWS:

1.       Purchase and Sale of Stock.

         1.1.     Sale and Issuance of Common Stock. Subject to the terms and
                  conditions of this Agreement, at the Closing (defined below)
                  Investor will purchase and the CGPI will sell and issue to
                  Investor 330,556 shares of CGPI Common Stock (the "Shares")
                  for the purchase price per share equal to [ ]** the Nasdaq
                  National Market System [ ]** for an aggregate purchase price
                  of $2,999,994.03 (the "Purchase Price").

         1.2.     Closing. The purchase and sale of the Shares shall take place
                  at the offices of the Investor, 2579 Midpoint Drive, Fort
                  Collins, Colorado 80525, on the "Effective Date", as such term
                  is defined in the License Agreement of even date herewith
                  between the parties hereto (the "License Agreement"), or at
                  such other times and places as CGPI and Investor mutually
                  agree upon in writing (which times and places are designated
                  as the "Closing"). At the Closing, CGPI shall deliver to its
                  transfer agent, American Stock Transfer & Trust Company, a
                  letter, in the form of Exhibit A, which letter directs
                  American Stock Transfer & Trust Company to deliver promptly to
                  Investor a certificate representing the Shares.

         1.3.     Purchase Price. At the Closing, the Purchase Price shall be
                  paid by Investor to CGPI in immediately available funds by
                  wire transfer to a bank account designated by CGPI two (2)
                  business days prior to the Closing Date or, if not so
                  designated, then by certified or official bank check payable
                  in immediately available funds to the order of CGPI in such
                  amount.

         1.4.     Definition.

                           (a)      The following terms, as used herein, have
                                    the following meanings:

                                    "Affiliate" shall have the meaning defined
                                    in Rule 501 of Regulation D as promulgated
                                    under the 1933 Act.

                                    "Closing Date" means the date of the
                                    Closing.

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** Confidential Treatment Requested

<PAGE>


                                    "Common Stock" means the Common Stock, par
                                    value $.01 per share of CGPI.

                                    "GAAP" means generally accepted accounting
                                    principles in the United States.

                                    "Material Adverse Effect" means a material
                                    adverse effect on the condition (financial
                                    or otherwise), business, assets, results of
                                    operations of CGPI and its subsidiaries
                                    taken as a whole.

                                    "1934 Act" means the Securities Exchange Act
                                    of 1934, as amended, and the rules and
                                    regulations promulgated thereunder.

                                    "1933 Act" means the Securities Act of 1933,
                                    as amended, and the rules and regulations
                                    promulgated thereunder.

                                    "Person" shall mean an individual,
                                    corporation, partnership, trust, business
                                    trust, association, joint stock company,
                                    joint venture, pool, syndicate, sole
                                    proprietorship, and any other form of entity
                                    not specifically listed herein.

                                    "SEC" shall mean the U.S. Securities and
                                    Exchange Commission.

2.       Representations and Warranties of CGPI. CGPI hereby represents and
         warrants to Investor that:

         2.1.     Organization, Good Standing and Qualification. CGPI is a
                  corporation duly organized, validly existing and in good
                  standing under the laws of the State of Delaware and has all
                  requisite corporate power and authority to carry on its
                  business as now conducted. CGPI is duly qualified to transact
                  business and is in good standing in each jurisdiction in which
                  the failure to so qualify would have a Material Adverse
                  Effect.

         2.2.     Capitalization. The authorized capital of CGPI consists of:

                  (a)      Preferred Stock. 5,000,000 shares of preferred stock,
                           $.01 par value, of which (i) 200,000 shares have been
                           designated Series D Convertible Preferred Stock, of
                           which 200,000 are issued and outstanding; and (ii)
                           4,800,000 shares are undesignated, none of which are
                           issued and outstanding.

                  (b)      Common Stock. 25,000,000 shares of Common Stock, of
                           which 10,669,017 shares were issued and outstanding
                           on August 15, 2001.

         2.3.     Authorization. All corporate action on the part of CGPI, its
                  officers, directors and stockholders necessary for (i) its
                  authorization, execution and delivery of this Agreement, (ii)
                  the performance of all obligations of CGPI hereunder and (iii)
                  the authorization, issuance (or reservation for issuance) and
                  delivery of the Common



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<PAGE>


                  Stock being sold hereunder, to the extent that the foregoing
                  requires performance on or prior to the Closing, has been
                  taken. This Agreement, assuming due authorization, execution
                  and delivery by Investor, constitutes the valid and legally
                  binding obligation of CGPI, enforceable against CGPI in
                  accordance with its terms, except as such enforcement may be
                  limited by applicable bankruptcy, insolvency, reorganization,
                  moratorium or similar laws affecting the enforcement of
                  creditors' rights generally or by equitable principles
                  relating to enforceability (regardless of whether considered
                  in a proceeding at law or in equity).

         2.4.     Valid Issuance of Common Stock. The Shares, when issued
                  against payment thereof in accordance with this Agreement,
                  will be duly and validly issued, fully paid and nonassessable
                  and, based in part upon the representations of the Investor in
                  this Agreement and except for requisite Federal securities and
                  state blue sky filings, will be issued in compliance with all
                  applicable federal and state securities laws.

         2.5.     SEC Filings. CGPI has registered its Common Stock pursuant to
                  Section 12 of the 1934 Act, and the Common Stock is quoted on
                  the Nasdaq National Market. CGPI has filed all 1934 Act
                  reports for a period of at least twelve (12) months
                  immediately preceding the offer or sale of the Shares. CGPI's
                  filings with the SEC complied as of their respective filing
                  dates, or in the case of registration statements, their
                  respective effective dates, as to form in all material
                  respects with all applicable requirements of the 1933 Act and
                  the 1934 Act and the rules and regulations promulgated
                  thereunder. None of such filings, including, without
                  limitation, any exhibits, financial statements or schedules
                  included therein, at the time filed, or in the case of
                  registration statements, at their respective filing dates,
                  contained any untrue statement of a material fact or omitted
                  to state a material fact required to be stated therein or
                  necessary to make the statements therein, in light of the
                  circumstances under which they were made, not misleading. The
                  audited financial statements of CGPI included in CGPI's Annual
                  Report on Form 10-K for the year ended December 31, 2000
                  comply as to form in all material respects with the published
                  rules and regulations of the SEC with respect thereto, and
                  such audited financial statements (i) were prepared from the
                  books and records of CGPI, (ii) were prepared in accordance
                  with GAAP applied on a consistent basis (except as may be
                  indicated therein or in the notes or schedules thereto) and
                  (iii) present fairly the financial position of CGPI as of the
                  dates thereof and the results of operations and cash flows for
                  the periods then ended. The unaudited financial statements
                  included in CGPI's Quarterly Reports on Form 10-Q for the
                  quarterly periods ended March 31, 2001 and June 30, 2001
                  comply as to form in all material respects with the published
                  rules and regulations of the SEC with respect thereto; and
                  such unaudited financial statements (i) were prepared from the
                  books and records of CGPI, (ii) were prepared in accordance
                  with GAAP, except as otherwise permitted under the 1934 Act
                  and the rules and regulations thereunder, on a consistent
                  basis (except as may be indicated therein or in the notes or
                  schedules thereto, and except that they do not contain
                  footnotes and other presentation items that may be required by
                  GAAP) and (iii) present fairly the financial position of CGPI
                  as of the dates thereof and the results of operations and



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<PAGE>


                  cash flows (or changes in financial condition) for the periods
                  then ended, subject to normal year-end adjustments and any
                  other adjustments described therein or in the notes or
                  schedules thereto.

         2.6.     Litigation. Except as disclosed in CGPI's filings with the
                  SEC, there is no action, suit or proceeding before or by any
                  court or governmental agency or body, domestic or foreign, now
                  pending or, to the knowledge of CGPI, threatened, against or
                  affecting CGPI, or any of its properties, which could
                  reasonably be expected, individually or in the aggregate, (i)
                  to have a Material Adverse Effect or (ii) to result in the
                  issuance of an order restraining, enjoining or otherwise
                  prohibiting or making illegal the consummation of any of the
                  transactions contemplated by this Agreement.

         2.7.     No Default. Except as disclosed in CGPI's filings with the
                  SEC, CGPI is not in default in the performance or observance
                  of any material obligation, agreement, covenant or condition
                  contained in any indenture, mortgage, deed of trust or other
                  material agreement or instrument to which it is a party or by
                  which it or its property may be bound and which is filed as an
                  exhibit to CGPI's 1934 Act reports, except for defaults that
                  have not had and would not reasonably be expected to have,
                  individually or in the aggregate, a Material Adverse Effect.

         2.8.     Subsequent Events; Undisclosed Liabilities. Since June 30,
                  2001, CGPI has not incurred any liability or obligation,
                  contingent or otherwise, that taken as a whole, is material in
                  the aggregate to CGPI, except (i) in the ordinary course of
                  business consistent with past practices, or (ii) as reflected
                  in or reserved against in the balance sheet of CGPI as of June
                  30, 2001. Since June 30, 2001, CGPI has conducted its business
                  in the ordinary course of business consistent with past
                  practices, and there has not been any Material Adverse Effect
                  and there is no condition existing that could reasonably be
                  expected to result in a Material Adverse Effect on the
                  business of CGPI.

         2.9.     Consents and Approvals. No material consent, approval,
                  qualification, order or authorization of, or filing with, any
                  local, state or federal governmental authority or any third
                  party, including any approval under the Hart-Scott-Rodino
                  Antitrust Improvements Act of 1976, as amended, is required on
                  the part of CGPI in connection with CGPI's valid execution,
                  delivery or performance of this Agreement, or the offer, sale
                  or issuance of the Shares by CGPI, other than the filings that
                  have been made prior to the Closing, except that any notices
                  of sale required to be filed by CGPI with the SEC under
                  Regulation D of the 1933 Act and filings required by the rules
                  of the Nasdaq National Market, or such post-closing filings as
                  may be required under applicable state securities laws, which
                  will be timely filed within the applicable periods therefor.

         2.10.    Compliance with Laws and Court Orders. CGPI is not in
                  violation of any applicable law, rule, regulation, judgment,
                  injunction, order or decree except for violations that have
                  not had and would not reasonably be expected to have,
                  individually or in the aggregate, a Material Adverse Effect.



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<PAGE>


         2.11.    No Conflict. Except for rights to anti-dilution protection for
                  holders of CGPI's Series D Preferred Stock, the execution and
                  delivery of this Agreement and CGPI's performance of its
                  obligations under this Agreement will not (i) violate any
                  applicable law, ordinance, rule or regulation of any
                  governmental authority or (ii) conflict with or result in a
                  breach of the terms and conditions of, or constitute any
                  default under, CGPI's Certificate of Incorporation or By-laws,
                  or any contract, agreement or instrument to which CGPI or any
                  subsidiary is a party or by which CGPI or any Subsidiary or
                  any of their respective property if bound, except, in each
                  case, for violations, conflicts or breaches which individually
                  or in the aggregate would not have a Material Adverse Effect.

         2.12.    Insurance. CGPI has in full force and effect fire and
                  casualty, general liability and product liability insurance
                  policies, with extended coverage, in amounts customary for
                  companies similarly situated to CGPI.

3.       Representations and Warranties of Investor. Investor hereby represents
         and warrants to CGPI that:

         3.1.     Organization and Existence. Investor is a corporation duly
                  incorporated, validly existing and in good standing under the
                  laws of Delaware and has all requisite corporate power and
                  authority to carry on its business as now conducted.

         3.2.     Corporate Authorization. Investor has full corporate power and
                  authority to execute and deliver this Agreement and perform
                  its obligations hereunder. The execution, delivery and
                  performance by Investor of this Agreement have been duly
                  authorized by all requisite corporate action. This Agreement,
                  assuming due authorization, execution and delivery by CGPI,
                  constitutes the valid and legally binding obligation of
                  Investor, enforceable against Investor in accordance with its
                  terms, except as such enforcement may be limited by applicable
                  bankruptcy, insolvency, reorganization, moratorium or similar
                  laws affecting the enforcement of creditors' rights generally
                  or by equitable principles relating to enforceability
                  (regardless of whether considered in a proceeding at law or in
                  equity).

         3.3.     Purchase Entirely for Own Account. Investor is sophisticated
                  in transactions of this type and capable of evaluating the
                  merits and risks of the transactions described herein, and has
                  the capacity to protect its own interests. Investor has not
                  been formed solely for the purpose of entering into the
                  transactions described herein. The Shares to be received by
                  Investor will be acquired for investment for Investor's own
                  account, not as a nominee or agent, and not with a view to the
                  resale or distribution of any part thereof, and that Investor
                  has no present intention of selling, granting any
                  participation in, or otherwise distributing the same. By
                  executing this Agreement, Investor further represents that
                  Investor does not have any contract, undertaking, agreement or
                  arrangement with any person to sell, transfer or grant
                  participation to such person or to any third person, with
                  respect to any of the Shares.



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<PAGE>


         3.4.     Restricted Securities. Investor understands that the shares of
                  Common Stock it is purchasing are characterized as "restricted
                  securities" under the federal securities laws inasmuch as they
                  are being acquired from CGPI in a transaction not involving a
                  public offering and that under such laws and applicable
                  regulations such securities may be resold without registration
                  under the 1933 Act only under certain limited circumstances.
                  Investor represents that it is familiar with SEC Rule 144, as
                  presently in effect, and understands the resale limitations
                  imposed thereby and by the 1933 Act.

                  Investor agrees that it shall not sell or otherwise transfer
                  any of the Shares without registration under the 1933 Act, or
                  pursuant to Rule 144 under the 1933 Act, or pursuant to an
                  opinion of counsel reasonably satisfactory to CGPI that an
                  exemption from registration is available, and fully
                  understands and agrees that it must bear the total economic
                  risk of its purchase for an indefinite period of time because
                  of the restricted nature of the Shares. Investor understands
                  that CGPI is under no obligation to register the Shares on its
                  behalf. Investor understands the lack of liquidity and
                  restrictions on transfer of the Shares and that this
                  investment is suitable only for a person or entity of adequate
                  financial means that has no need for liquidity of this
                  investment and that can afford a total loss of its investment.

         3.5.     Legends. Investor acknowledges that the certificates
                  evidencing the Shares shall bear the following or
                  substantially similar legend and such other legends as may be
                  required by state or other applicable securities laws:

                           "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT
                           BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                           AMENDED (THE "ACT"), OR THE SECURITIES ACT OF ANY
                           STATE. THE SHARES MAY NOT BE SOLD, TRANSFERRED FOR
                           VALUE, PLEDGED, HYPOTHECATED OR OTHERWISE ENCUMBERED
                           IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM
                           UNDER THE ACT AND/OR THE SECURITIES ACT OF ANY STATE
                           OR IN THE ABSENCE OF AN OPINION OF COUNSEL ACCEPTABLE
                           TO CGPI THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
                           SUCH ACT OR ACTS."

                           "Until the Separation Time (as defined in the Rights
                           Agreement referred to below), this certificate also
                           evidences and entitles the holder hereof to certain
                           Rights as set forth in a Shareholder Protection
                           Rights Agreement, dated as of September 15, 1997 (as
                           such may be amended from time to time, the "Rights
                           Agreement"), between CollaGenex Pharmaceuticals, Inc.
                           (the "Company") and American Stock Transfer & Trust
                           Company, as Rights Agent, the terms of which are
                           hereby incorporated herein by reference and a copy of
                           which is on file at the principal executive offices
                           of the Company. Under certain circumstances, as set
                           forth in the Rights Agreement, such Rights may be
                           redeemed, may become exercisable for securities or
                           assets of the Company or securities of another
                           entity, may be exchanged for shares of Common Stock
                           or other securities or assets of the



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                           Company, may expire, may become void (if they are
                           "Beneficially Owned" by an "Acquiring Person" or an
                           Affiliate or Associate thereof, as such terms are
                           defined in the Rights Agreement, or by any transferee
                           of any of the foregoing) or may be evidenced by
                           separate certificates and may no longer be evidenced
                           by this certificate. The Company will mail or arrange
                           for the mailing of a copy of the Rights Agreement to
                           the holder of this certificate without charge after
                           the receipt of a written request therefor."

         3.6.     Removal of Legends

                  (a)      The first legend endorsed on a certificate pursuant
                           to Section 3.5 shall be removed (i) if the shares of
                           Common Stock represented by such certificate shall
                           have been resold under an effective registration
                           statement under the 1933 Act or otherwise lawfully
                           sold in a public transaction, (ii) if such shares are
                           transferred in compliance with Rule 144 promulgated
                           under the 1933 Act, or (iii) if the holder of such
                           shares shall have provided CGPI with an opinion of
                           counsel, in form and substance acceptable to CGPI and
                           its counsel, stating that a public sale, transfer or
                           assignment of such shares may be made without
                           registration.

                  (b)      Any legend endorsed on a certificate as required by
                           state securities laws pursuant to Section 3.5 shall
                           be removed if CGPI receives an order of the
                           appropriate state authority authorizing such removal
                           or if the holder of such shares provides CGPI with an
                           opinion of counsel, in form and substance acceptable
                           to CGPI and its counsel, stating that such state
                           legend may be removed.

         3.7.     Accredited Investor. Investor is an "accredited investor" (as
                  defined in Rule 501(a) under the 1933 Act) and has the
                  financial ability to bear the economic risks of its
                  investment, has adequate means for providing for its current
                  needs and contingencies and has no need for liquidity with
                  respect to its investment in CGPI.

         3.8.     Consents and Approvals. Except for Schedule 13D or 13G under
                  the Securities Exchange Act of 1934, no material consent,
                  approval, qualification, order or authorization of, or filing
                  with, any local, state or federal governmental authority or
                  any third party, including any approval under the
                  Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
                  amended, is required on the part of the Investor in connection
                  with the Investor's valid execution, delivery or performance
                  of this Agreement.

         3.9.     Legal Proceedings, Etc. There is no legal, administrative,
                  arbitration or other action or proceeding or governmental
                  investigations pending, or to the Investor's knowledge
                  threatened against the Investor which could reasonably be
                  expected to result in the issuance of an order restraining,
                  enjoining or otherwise prohibiting or making illegal the
                  consummation of any of the transactions contemplated by this
                  Agreement.



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         3.10.    Availability of Funds. Investor has or will have available at
                  Closing, sufficient funds to pay the Purchase Price for the
                  Shares.

4.       Covenant relating to Rule 144. CGPI will file reports in compliance
         with the 1934 Act, will comply with all rules and regulations of the
         Commission applicable in connection with the use of Rule 144 and take
         such other actions and furnish the Investor with such other information
         as the Investor may request in order to avail itself of such rule or
         any other rule or regulation of the Commission allowing Investor to
         sell the Shares without registration, and will, at its own expense,
         upon the request of the Investor, deliver to the Investor a
         certificate, signed by CGPI's principal financial officer, stating (a)
         CGPI's name, address and telephone number (including area code), (b)
         CGPI's Internal Revenue Service identification number, (c) CGPI's
         Commission file number, (d) the number of shares of each class of stock
         outstanding as shown by the most recent report or statement published
         by CGPI, and (e) whether CGPI has filed the reports required to be
         filed under the 1934 Act for a period of at least ninety (90) days
         prior to the date of such certificate and in addition has filed the
         most recent annual report required to be filed thereunder. If at any
         time CGPI is not required to file reports in compliance with either
         Section 13 or Section 15(d) of the 1934 Act, CGPI at its expense will,
         upon the written request of the Investor, make available adequate
         current public information with respect to CGPI within the meaning of
         paragraph (c)(2) of Rule 144. The covenants set forth in this Section 4
         shall survive the Closing.

5.       Piggyback Registration Rights.

         5.1.     Registration Rights. If (but without any obligation to do so)
                  CGPI proposes to register any of its stock or other securities
                  under the 1933 Act in connection with an underwritten public
                  offering of such securities (other than a registration
                  relating solely to the sale of securities to participants in a
                  CGPI stock plan, a registration relating to a corporate
                  reorganization or other transaction under Rule 145 of the 1933
                  Act, a registration on any form that does not include
                  substantially the same information as would be required to be
                  included in a registration statement covering the sale of the
                  Shares, a registration in which the only Common Stock being
                  registered is Common Stock issuable upon conversion of debt
                  securities that are also being registered, or Common Stock
                  issued or to be issued pursuant to an equity line financing),
                  CGPI shall, at such time, promptly give Atrix written notice
                  of such registration. Upon the written request of Atrix given
                  within twenty (20) days after mailing of such notice by CGPI,
                  CGPI shall, subject to the provisions of Section 5.2 and
                  Section 5.6 hereof, use commercially reasonable efforts to
                  cause to be registered under the 1933 Act all of the Shares
                  that Atrix has requested to be registered.

         5.2.     Right to Terminate Registration. CGPI shall have the right to
                  terminate or withdraw any registration initiated by it under
                  Section 5.1 prior to the effectiveness of such registration
                  whether or not Atrix has elected to include securities in such
                  registration. The expenses of such withdrawn registration
                  shall be borne by CGPI.



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<PAGE>


         5.3.     Atrix to Provide Information. It shall be a condition
                  precedent to the obligations of CGPI to take any action
                  pursuant to this Section 5 with respect to the registration of
                  the Shares that Atrix furnish to CGPI such information
                  regarding itself, the Shares, and the intended method of
                  distribution of such Shares as shall be reasonably required to
                  effect the registration of such Shares.

         5.4.     Payment of Expenses. All expenses other than underwriting
                  discounts and commissions incurred in connection with
                  registrations, filings or qualifications pursuant to this
                  Section 5, including, without limitation, all registration,
                  filing and qualification fees (including "blue sky" fees),
                  printers' and accounting fees, fees and disbursements of
                  counsel for CGPI shall be borne by CGPI.

         5.5.     Additional Agreements. In the event of an underwritten public
                  offering, the right of the Investor to registration pursuant
                  to this Section 5 is conditioned upon such Investor's
                  participation in such underwriting, the inclusion of such
                  securities in the underwriting to the extent provided herein
                  and Investor entering into an underwriting agreement with the
                  underwriter or underwriters selected for such underwriting by
                  the Company (together with the Company and the other holders
                  distributing their securities through such underwriting), and
                  such other documents, agreements and certificates as shall be
                  deemed necessary by the underwriter in connection with such
                  public offering.

         5.6.     Registration Priority. Notwithstanding any other provision of
                  this Section 5, if the underwriter advises the Company in
                  writing that in its good faith judgment the number of shares
                  requested to be registered exceeds the number of shares which
                  can be sold in such offering: (a) the number of shares so
                  requested to be included in the offering will be reduced to
                  that number of shares which in the good faith judgment of the
                  underwriter can be sold in such offering and (b) such reduced
                  number of shares will be allocated first to the securities
                  CGPI proposes to sell; second to those CGPI stockholders
                  having registration rights pursuant to the terms of that
                  certain Registration Rights Agreement dated September 29, 1995
                  and that certain Stockholders and Registration Rights
                  Agreement dated March 19, 1999 in accordance with the terms of
                  each such agreement; third, to those CGPI stockholders having
                  registration rights pursuant to the terms of those certain
                  Registration Rights Agreements dated March 12, 2001 in
                  accordance with the terms of each such agreement; and fourth,
                  to Atrix, with respect to the Shares.

         5.7.     Termination of Registration Rights. Atrix shall not be
                  entitled to exercise any right provided for in this Section 5
                  at such time as all of the Shares can be sold pursuant to Rule
                  144(k) of the 1933 Act.

6.       Conditions to Closing.

         6.1.     Conditions of Investor to Closing; Deliveries to Investor. The
                  obligations of Investor to consummate the transactions
                  contemplated by this Agreement are subject to the
                  satisfaction, at or prior to the Closing, of each of the
                  following conditions:



                                       9
<PAGE>


                  (a)      A certificate from a duly authorized officer of CGPI
                           certifying that the representations and warranties of
                           CGPI set forth in this Agreement shall be true and
                           correct as of the Closing Date as if made on and as
                           of the Closing Date.

                  (b)      The Effective Date of the License Agreement shall
                           have occurred.

                  (c)      Investor shall have received the following documents
                           or deliveries at or before the Closing, each of which
                           shall be in full force and effect:

                           (i) evidence of the delivery of the letter to CGPI's
                  transfer agent pursuant to Section 1.2 above; and

                           (ii) a certificate signed by the chief executive
                  officer and the corporate secretary of CGPI certifying (x) to
                  resolutions duly and validly adopted by the Board of Directors
                  of CGPI evidencing its authorization of the execution and
                  delivery of this Agreement and the issuance of the Shares to
                  Investor, and the consummation of the transactions
                  contemplated hereby and that such resolutions have not been
                  amended and remain in full force and effect, and (y) to the
                  names and signatures of the persons authorized on behalf of
                  CGPI to execute and deliver this Agreement.

         6.2.     Conditions of CGPI to Closing; Deliveries to CGPI. The
                  obligations of CGPI to consummate the transactions
                  contemplated by this Agreement are subject to the
                  satisfaction, at or prior to the Closing, of each of the
                  following conditions:

                  (a)      A certificate from a duly authorized officer of
                           Investor certifying that the representations and
                           warranties of Investor set forth in this Agreement
                           shall be true and correct as of the Closing Date as
                           if made on and as of the Closing Date.

                  (b)      The Effective Date of the License Agreement shall
                           have occurred.

                  (c)      CGPI shall have received the following documents or
                           deliveries at or before the Closing, each of which
                           shall be in full force and effect:

                           (i) a certificate signed by the chief executive
                  officer and the corporate secretary of Investor certifying (x)
                  to resolutions duly and validly adopted by the Board of
                  Directors of Investor evidencing its authorization of the
                  execution and delivery of this Agreement and the consummation
                  of the transactions contemplated hereby and that such
                  resolutions have not been amended and remain in full force and
                  effect, and (y) to the names and signatures of the persons
                  authorized on behalf of Investor to execute and deliver this
                  Agreement; and

                           (ii) the consideration payable by Investor at Closing
                  as provided in Section 1.3 in immediately available funds.



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<PAGE>


7.       Termination.

         7.1.     Termination. This Agreement may be terminated prior to the
                  Closing:

                  (a)      By mutual written consent of CGPI and Investor.

                  (b)      In the event that the Effective Date under the
                           License Agreement shall not have occurred on or prior
                           to August 24, 2001.

         7.2.     Effect of Termination. In the event of the termination of this
                  Agreement as provided in Section 7.1, this Agreement shall be
                  of no further force or effect; provided, however that the
                  termination of this Agreement shall not relieve any party from
                  any liability for any willful and knowing breach of this
                  Agreement.

8.       Miscellaneous.

         8.1.     Successors and Assigns. This Agreement may not be assigned
                  without the prior written consent of the non-assigning party;
                  provided, however, that without prior written approval,
                  Investor may assign any and all of its rights and interest
                  under this Agreement to one or more of its Affiliates and
                  designate one or more of its Affiliates to perform its
                  obligations under this Agreement; provided such Affiliate
                  expressly acknowledges and confirms the representations,
                  warranties and information set forth in Sections 3.4, 3.5 and
                  3.7 of this Agreement. Any purported assignment in violation
                  of this provision shall be null and void. The terms and
                  conditions of this Agreement shall inure to the benefit of and
                  be binding upon the respective permitted successors and
                  assigns of the parties. Nothing in this Agreement, express or
                  implied, is intended to confer upon any party other than the
                  parties hereto or their respective successors and assigns any
                  rights, remedies, obligations, or liabilities under or by
                  reason of this Agreement, except as expressly provided in this
                  Agreement.

         8.2.     Third Party Purchaser. A third-party purchaser of the Shares
                  from Investor will not be subject to any of the terms of this
                  Agreement other than those imposed by the federal and state
                  securities laws.

         8.3.     Governing Law. This Agreement shall be governed by and
                  construed under the laws of the State of Delaware
                  (irrespective of its choice of law principles).

         8.4.     Counterparts. This Agreement may be executed in two or more
                  counterparts, each of which shall be deemed an original, but
                  all of which together shall constitute one and the same
                  instrument.

         8.5.     Titles and Subtitles. The titles and subtitles used in this
                  Agreement are used for convenience only and are not to be
                  considered in construing or interpreting this Agreement.

         8.6.     Notices. All notices, requests and other communications to any
                  party hereunder shall be in writing (including facsimile
                  transmission) and shall be deemed to have



                                       11
<PAGE>


                  been given if delivered personally, mailed by certified mail
                  (return receipt requested) or sent by cable, telegram,
                  telecopier or recognized overnight delivery service to the
                  parties at the following addresses or at such other addresses
                  as specified by the parties by like notice:

                           If to Investor:
                           Atrix Laboratories, Inc.
                           2579 Midpoint Drive
                           Fort Collins, Colorado 80525
                           Attn:  Dr. Charles P. Cox, Senior Vice President of
                                    Corporate Development
                           Fax:  (970) 482-9765
                           Phone:  (970) 482-5868

                           With a copy to:

                           Morrison & Foerster LLP
                           370 17th Street, Suite 5200
                           Denver, Colorado 80202
                           Attn:  Warren L. Troupe, Esq.
                           Fax:  (303) 592-1510
                           Phone:  (303) 592-1500

                           If to CGPI:

                           CollaGenex Pharmaceuticals, Inc.
                           41 University Drive
                           Newtown, PA 18940
                           Attn:  Brian M. Gallagher, Ph.D.
                           Chairman, President and Chief Executive Officer
                           Telephone: (215) 579-7388
                           Facsimile:  (215) 579-8577

                           With a copy to:

                           William J. Thomas, Esq.
                           Hale and Dorr LLP
                           650 College Road East
                           Princeton, New Jersey 08540

                  Notice so given shall be deemed given and received (i) if by
                  mail on the fourth calendar day after posting; (ii) by cable,
                  telegram, telecopier, telex of personal delivery on the date
                  of actual transmission or (as the case may be) personal or
                  other delivery or one business day after transmission (if
                  transmitted and received on a non-business day); and (iii) if
                  by overnight courier, on the next business day following the
                  day such notice is delivered to the courier service.



                                       12
<PAGE>


         8.7.     Finders Fee. Each party represents that it neither is nor will
                  be obligated for any finders' fee or commission in connection
                  with this transaction. Investor agrees to indemnify and hold
                  harmless CGPI from any liability for any commission or
                  compensation in the nature of a finders' fee (and costs and
                  expenses of defending against such liability or asserted
                  liability) for which Investor or any of its officers,
                  partners, employees or representatives is responsible. CGPI
                  agrees to indemnify and hold harmless Investor from any
                  liability for any commission or compensation in the nature of
                  a finders' fee (and the costs and expenses of defending
                  against such liability or asserted liability) for which CGPI
                  or any of its officers, employees or representatives is
                  responsible.

         8.8.     Expenses. CGPI and the Investor shall pay their own respective
                  costs and expenses incurred with respect to the negotiation,
                  execution, delivery and performance of this Agreement and the
                  transactions contemplated hereby.

         8.9.     Amendments and Waivers. Any term of this Agreement may be
                  amended and the observance of any term of this Agreement may
                  be waived (either generally or in a particular instance and
                  either retroactively or prospectively), only with the written
                  consent of CGPI and the Investor. Any amendment or waiver
                  effected in accordance with this paragraph shall be binding on
                  the Investor and CGPI.

         8.10.    Severability. If one or more provisions of this Agreement are
                  held to be unenforceable under applicable law, such provision
                  shall be excluded from this Agreement and the balance of this
                  Agreement shall be interpreted as if such provision were so
                  excluded and shall be enforceable in accordance with its
                  terms.

         8.11.    Entire Agreement. This Agreement constitutes the entire
                  agreement between the parties with respect to the subject
                  matter hereof and supersedes all prior agreements and
                  understandings, both oral and written, between the parties
                  with respect to the subject matter hereof. No representation,
                  inducement, promise, understanding, condition or warranty not
                  set forth herein has been made or relied upon by either party
                  intended to confer upon any person other than the parties
                  hereto any rights or remedies hereunder.

                                    * * * * *



                                       13
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


ATRIX LABORATORIES, INC.                       COLLAGENEX PHARMACEUTICALS, INC.
a Delaware corporation                         a Delaware corporation



By:  /s/ David R. Bethune                      By:  /s/ Brian M. Gallagher
   ---------------------------------              ------------------------------
     David R. Bethune, Chairman and                 Brian M. Gallagher, Ph.D.
     Chief Executive Officer                        Chairman, President and
                                                    Chief Executive Officer




                                       14
<PAGE>


                                    EXHIBIT A

                 LETTERHEAD OF COLLAGENEX PHARMACEUTICALS, INC.



                                 August 24, 2001



American Stock Transfer & Trust Company
Transfer Agent and Registrar
40 Wall Street
New York, New York 10005
Attention:  Craig Leibell

         Re:  CollaGenex Pharmaceuticals, Inc. - Share Issuance Instructions

Ladies and Gentlemen:

         CollaGenex Pharmaceuticals, Inc., a Delaware corporation ("CGPI"),
proposes to issue three hundred thirty thousand five hundred fifty-six (330,556)
shares of its common stock, par value $.01 per share (the "Common Stock")
pursuant to a Stock Purchase Agreement between CGPI and Atrix Laboratories, Inc.

         1. You are hereby irrevocably authorized and directed, as CGPI's
Transfer Agent and Registrar, to register and countersign, as an original issue,
one certificate representing an aggregate of 330,556 shares of the Common Stock
in the name of Atrix Laboratories, Inc.

         2. You are further directed to deliver the above referenced share
certificate to the following address, by registered mail:

                  Atrix Laboratories, Inc.
                  2579 Midpoint Drive
                  Fort Collins, CO 80525-4417
                  Attn:  Brian G. Richmond
                  Chief Financial Officer

         3. The above-referenced certificate shall bear the legends
substantially similar to the following:

         "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES ACT
OF ANY STATE. THE SHARES MAY NOT BE SOLD, TRANSFERRED FOR VALUE, PLEDGED,
HYPOTHECATED OR OTHERWISE ENCUMBERED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
OF THEM UNDER THE ACT AND/OR THE SECURITIES ACT OF ANY STATE OR IN THE ABSENCE
OF AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR ACTS."



                                      A-1


<PAGE>


         "Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Protection Rights Agreement, dated
as of September 15, 1997 (as such may be amended from time to time, the "Rights
Agreement"), between CollaGenex Pharmaceuticals, Inc. (the "Company") and
American Stock Transfer & Trust Company, as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or securities of another
entity, may be exchanged for shares of Common Stock or other securities or
assets of the Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate thereof, as such
terms are defined in the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and may no longer be
evidenced by this certificate. The Company will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this certificate without
charge after the receipt of a written request therefor."

         Please acknowledge receipt of these instructions below.

                                 Very truly yours,



                                 By: /s/ Brian M. Gallagher
                                    -------------------------------------------
                                 Name:   Brian M. Gallagher, Ph.D.
                                 Title:  Chairman, President and Chief Executive
                                         Officer



American Stock Transfer & Trust Company
as Transfer Agent and Registrar



By:
   -------------------------------------
Name:
     -----------------------------------
Title:
      ----------------------------------




                                      A-2