<PAGE>

                                                                  EXHIBIT 10.16

                                   AGREEMENT

  This agreement is made and entered into this 1st day of November, 1996, by and
  between GalaGen Inc. (hereinafter referred to as "GalaGen") a Delaware
  corporation having a place of business at 4001 Lexington Avenue North,
  Arden Hills, Minnesota 55126-2998, and Colorado Animal Research Enterprises,
  Inc., a Colorado corporation having a place of business at 6200 East County
  Road 56, Fort Collins, Colorado 80524 (hereinafter referred to as "CARE").

  WHEREAS, GalaGen desires to have CARE undertake routine manufacturing of
  [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] relating to
  GalaGen's proprietary use of the [***CONFIDENTIAL TREATMENT REQUESTED;
  PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
  COMMISSION***] as antigens; and

  WHEREAS, CARE possesses the facilities and expertise to perform the
  manufacturing.

  NOW, THEREFORE, in consideration of the promises and mutual covenants herein
  contained, the parties hereto agree to the following:

  1. DEFINITIONS

     1.1  [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED
          FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] shall mean [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***].

     1.2  "Manufacture" shall mean the Propagation, Initial Purification,
          Sterilization, Inactivation and Distribution of [***CONFIDENTIAL
          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***] by CARE.

     1.3  "Lot" shall mean the quantity of [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***] manufactured from a set
          of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED
          FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] by CARE.  Lots shall be manufactured using a minimum of
          two (2) [***CONFIDENTIAL TREATMENT REQUESTED; PORTION
          OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***] to a maximum of sixteen (16)
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED
          FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***].

<PAGE>

     1.4  "Propagation" shall mean the continuous in vivo propagation of
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***],
          from original [***CONFIDENTIAL TREATMENT REQUESTED; PORTION
          OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] "seed stock", in [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES
          AND EXCHANGE COMMISSION***] and the retrieval of [***CONFIDENTIAL
          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***] in the [***CONFIDENTIAL
          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***] of said [***CONFIDENTIAL
          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***].

     1.5  "Initial Purification" shall mean primary [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***] purification, secondary [***CONFIDENTIAL
          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***] purification and
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY
          WITH THE SECURITIES AND EXCHANGE COMMISSION***] purification.

     1.6  "Sterilization" shall mean treatment of [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***] with [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***], and standardization to a specified concentration
          range, resulting in a preparation that passes current USP sterility
          method.

     1.7  "Inactivation" shall mean treatment of the sterile [***CONFIDENTIAL
          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY
          WITH THE SECURITIES AND EXCHANGE COMMISSION***] preparation
          resulting in the loss of [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***].

     1.8  "Distribution" shall mean the shipment of manufactured
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY
          WITH THE SECURITIES AND EXCHANGE COMMISSION***], that have
          been released by GalaGen, to a destination of GalaGen's choice.

     1.9  "Validation" shall mean the program undertaken by CARE and GalaGen to
          demonstrate that CARE's facility, equipment and procedures will
          reliably and consistently result in acceptable Manufacture of
          [***CONFIDENTIAL

                                       2
<PAGE>

          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY
          WITH THE SECURITIES AND EXCHANGE COMMISSION***].

  2. PERFORMANCE

     2.1  CARE shall complete Validation before commencing with Sterilization
          of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] and
          subsequent steps in the Manufacture of [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***].

     2.2  For each Lot scheduled by GalaGen under this Agreement, CARE shall
          complete the Manufacture of [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] in accordance with the terms and conditions of this
          Agreement.  Each Lot shall be Manufactured in accordance with standard
          operating procedures (SOPs); CARE is responsible for SOP development;
          each SOP will be mutually agreed upon, in writing, by CARE and GalaGen
          prior to the commencement of Manufacturing.

     2.3  CARE shall provide, at its expense, all animals, supplies, reagents,
          ingredients and other materials used in the Manufacture of
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***].

     2.4  Propagation and Initial Purification will be conducted and the data
          collected, reported and retained in a manner and form consistent with
          applicable current Good Laboratory Practices.  Subsequent steps in
          the Manufacture of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION
          OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] will be conducted and the data collected, reported and
          retained in a manner and form consistent with applicable current Good
          Manufacturing Practices.

     2.5  CARE shall notify GalaGen, in writing, of any proposed change(s) to
          SOPs prior to implementation of the change.  Implementation of any
          such change shall require the written consent of GalaGen.

     2.6  After the Initial Purification and prior to Sterilization, CARE shall
          collect a small quantity of [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***], as specified by GalaGen, and provide this to GalaGen
          for use as an assay reagent.  After completing Sterilization and prior
          to beginning Inactivation, CARE shall submit a sample, as specified by
          GalaGen, from each container of [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***], to GalaGen.  GalaGen shall test each sample taken
          after Sterilization for sterility, concentration, quantity and
          identity according

                                       3

<PAGE>

          to the following.  CARE shall not proceed with Inactivation until
          receiving notice from GalaGen that testing confirms sterility,
          concentration, quantity and identification specifications.

          2.6.1  Sterility - The sample shall be tested for sterility according
                 to current USP test methods and must pass.  If the testing does
                 not confirm sterility, then CARE shall repeat Sterilization and
                 resubmit samples to GalaGen for testing.  If required, repeat
                 Sterilization will be performed within five working days of
                 GalaGen's notification to CARE to repeat Sterilization.

          2.6.2  Concentration of [***CONFIDENTIAL TREATMENT REQUESTED;
                 PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
                 EXCHANGE COMMISSION***] shall be determined by direct count
                 (hemocytometer) and shall be [***CONFIDENTIAL TREATMENT
                 REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES
                 AND EXCHANGE COMMISSION***]/ml.  If the testing does not
                 confirm this concentration, then CARE shall adjust the
                 [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
                 SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***]
                 concentration and resubmit samples to GalaGen for testing.
                 If required, concentration adjustment will be performed within
                 5 working days of GalaGen's notification to CARE to adjust
                 concentration.

          2.6.3  Quantity shall be determined by multiplying the concentration
                 of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
                 SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***]
                 determined in Section 2.6.2 by the total volume of
                 [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
                 SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***]
                 and dividing the result by the number of [***CONFIDENTIAL
                 TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH
                 THE SECURITIES AND EXCHANGE COMMISSION***] used for
                 Manufacturing of the Lot.  The quantity of [***CONFIDENTIAL
                 TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
                 SECURITIES AND EXCHANGE COMMISSION***] shall be at least
                 [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
                 SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***]
                 after Sterilization.

          2.6.4  Identity of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION
                 OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                 COMMISSION***] shall be determined by [***CONFIDENTIAL
                 TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
                 SECURITIES AND EXCHANGE COMMISSION***] and shall have the
                 following characteristics:

                                       4
<PAGE>

               2.6.4.1   [***CONFIDENTIAL TREATMENT REQUESTED;
                         PORTION OMITTED FILED SEPARATELY WITH THE
                         SECURITIES AND EXCHANGE COMMISSION***]
               2.6.4.2   [***CONFIDENTIAL TREATMENT REQUESTED;
                         PORTION OMITTED FILED SEPARATELY WITH THE
                         SECURITIES AND EXCHANGE COMMISSION***]
               2.6.4.3   [***CONFIDENTIAL TREATMENT REQUESTED;
                         PORTION OMITTED FILED SEPARATELY WITH THE
                         SECURITIES AND EXCHANGE COMMISSION***]

               If testing fails to confirm [***CONFIDENTIAL TREATMENT
               REQUESTED; PORTION OMITTED FILED SEPARATELY WITH
               THE SECURITIES AND EXCHANGE COMMISSION***] identity,
               GalaGen shall communicate to CARE final disposition of
               the Lot.

     GalaGen shall initiate testing of the sample(s) within 3 days of receipt.
     GalaGen shall notify CARE of the results of testing within 21 days of test
     initiation.  If the testing confirms compliance with all specifications,
     then CARE shall proceed with Inactivation and complete Inactivation within
     10 working days of receiving notice to proceed.  In the event of
     reprocessing of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] according to
     2.6.1 or 2.6.2, the resubmitted samples must meet all specifications before
     proceeding to Inactivation.

     2.7  CARE shall complete a quality review of each Lot that includes a
          review of all Manufacturing documentation for accuracy, completeness
          and consistency and to determine compliance with approved procedures
          prior to submitting Lot documentation to GalaGen.

     2.8  CARE shall submit documentation for each Lot to GalaGen within
          10 working days of completing Inactivation.  Documentation shall
          include a batch record and copies of certain raw data as requested
          by GalaGen.

     2.9  There will be no guarantee by CARE of the quality and/or number of
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY
          WITH THE SECURITIES AND EXCHANGE COMMISSION***] submitted to GalaGen
          from each Lot; provided, however, that only [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***] that have been Propagated and undergone
          Initial Purification, Sterilization and Inactivation according to
          approved SOPs, have been confirmed as sterile and in compliance with
          and meeting the specifications contained in Section 2.6 will be
          accepted by GalaGen.  GalaGen shall conduct a review of documentation
          submitted by CARE after Inactivation and shall be responsible for
          determining whether [***CONFIDENTIAL TREATMENT REQUESTED; PORTION
          OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] from a Lot meet such specifications and whether
          documentation is acceptable.  GalaGen shall notify CARE, in
          writing within 30 days of receipt of documentation, if the Lot

                                      5
<PAGE>

          passes or fails GalaGen's review.  CARE will not perform Distribution
          of a Lot until the Lot is released by GalaGen.

   2.10   Between the Manufacture of Lots, CARE shall be responsible for
          maintaining a minimum of two separate stock solutions of
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] according
          to agreed upon procedures and shall use its best efforts to prevent
          loss or destruction of such "seed stocks".  GalaGen shall be notified
          immediately, in writing, if there is any actual or suspected loss,
          contamination, destruction, etc. of such stocks between Manufacture
          of Lots.

  3. VALIDATION

     3.1  GalaGen and CARE shall be jointly responsible for developing a
          Validation Master Plan (the "Plan") that identifies what is to be
          validated and the acceptance criteria for each validation to be
          executed.

     3.2  The Plan shall be executed by GalaGen and CARE personnel as identified
          in the Plan.

     3.3  GalaGen shall be responsible for supplying analytical testing used in
          execution of the Plan and selecting and reimbursing any consultants
          retained for Validation.

     3.4  CARE shall be responsible for providing the facility, personnel and
          equipment, at its expense, in the execution of the Plan; however
          GalaGen shall reimburse CARE for personnel time in the execution of
          the Plan.  Such time shall be documented by CARE and submitted to
          GalaGen.  GalaGen shall reimburse CARE at the rate of $60/hour in 1996
          and $63/hr in 1997.  Compensation for Validation or re-Validation
          required in later years shall be negotiated as needed.

     3.5  Once the Manufacture has been Validated according to the Plan any
          subsequent validation required pursuant to Section 2.5, made at the
          request of CARE, shall be executed and paid for by CARE.  If changes
          are made not at the request of CARE then GalaGen shall compensate CARE
          for personnel time expended to implement the change in accordance with
          Section 3.4.

  4. REPRESENTATIONS AND WARRANTIES

     4.1  CARE warrants and represents to GalaGen that it has the capability to
          perform the Manufacture in an expert and professional manner.

     4.2  CARE warrants and represents to GalaGen that Manufacturing will be
          performed in accordance with the specifications and instructions
          provided by GalaGen.

     4.3  CARE warrants and represents to GalaGen that it has no obligations,
          contractual or otherwise, that would conflict with its entering into
          this Agreement.

                                       6
<PAGE>

     4.4  CARE warrants and represents to GalaGen that all Manufacturing shall
          be performed in accordance with applicable current Good Laboratory
          Practices or current Good Manufacturing practices according to
          Section 2.4.

     4.5  CARE warrants and represents to GalaGen that it will comply with all
          laws, ordinances, rules, regulations and actions of the United States
          and of any state, county, township or municipal subdivision or other
          governmental agency which may now or hereafter be applicable to this
          Agreement, and that it has obtained and will maintain in effect all
          permits, licenses and other documentation now or hereafter necessary
          in order to comply with such governmental laws, ordinances, orders,
          rules, regulations and actions, and that it shall furnish copies of
          same to GalaGen upon request.

  5. EXCLUSIVITY

     5.1  During the term of this Agreement, CARE will not Manufacture
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] for
          purposes of provision of retrieved [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES
          AND EXCHANGE COMMISSION***] to any other individual or entity
          except GalaGen.

     5.2  CARE has the right, as this is the usual type of business in which
          they are engaged, to perform research projects, unrelated to GalaGen,
          in which pharmaceutical or biological products are tested for efficacy
          against [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] in
          [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***].  CARE
          will not conduct other testing in [***CONFIDENTIAL TREATMENT
          REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***] used for Manufacturing of GalaGen's Lots
          during the period in which a Lot is being Manufactured.

  6. SCHEDULING

     6.1  Lots will be Manufactured at least approximately every three
          (3) months and at most twice per month.

     6.2  Both parties recognize that [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
          COMMISSION***] viability must be maintained via in vivo Propagation
          minimally every three (3) months, thus scheduling will accommodate
          said requirement.  Each Lot will be Manufactured using a minimum of
          two (2) [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***] and a
          maximum of sixteen (16) [***CONFIDENTIAL

                                       7
<PAGE>

          TREATMENT REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE
          SECURITIES AND EXCHANGE COMMISSION***].

        If GalaGen places an order, in writing, for a Lot at least six
        (6) months prior to the desired completion of Manufacturing then
        CARE shall guarantee the availiability of facilities for the
        Manufacture of that Lot. Shorter advance notice will be accommodated
        by CARE if possible dependent upon prior commitments, but in any
        case CARE will complete Manufacturing of an order for any Lot no
        later than six (6) months from the time the order is received by
        CARE.

  7.  COMPENSATION

      7.1  Compensation to CARE for Manufacturing of a Lot will be dependent
           upon the number of [***CONFIDENTIAL TREATMENT REQUESTED; PORTION
           OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
           COMMISSION***] included in the Lot as follows:

                                          COMPENSATION PER [***
                                          CONFIDENTIAL TREATMENT
                                          REQUESTED; PORTION OMITTED
                                          FILED SEPARATELY WITH THE
                                          SECURITIES AND EXCHANGE
                                          COMMISSION***]

                                          1996    1997    1998

  Two (2) [***CONFIDENTIAL TREATMENT REQUESTED;     [***CONFIDENTIAL
  PORTION OMITTED FILED SEPARATELY WITH THE         TREATMENT REQUESTED;
  SECURITIES AND EXCHANGE COMMISSION***] Lot:       PORTION OMITTED FILED
                                                    SEPARATELY WITH THE
                                                    SECURITIES AND
                                                    EXCHANGE COMMISSION***]



  Three to four (3-4) [***CONFIDENTIAL TREATMENT    [***CONFIDENTIAL
  REQUESTED; PORTION OMITTED FILED SEPARATELY       TREATMENT REQUESTED;
  WITH THE SECURITIES AND EXCHANGE                  PORTION OMITTED FILED
  COMMISSION***] Lot:                               SEPARATELY WITH THE
                                                    SECURITIES AND EXCHANGE
                                                    COMMISSION***]



  Five to seven  (5-7) [***CONFIDENTIAL TREATMENT   [***CONFIDENTIAL
  REQUESTED; PORTION OMITTED FILED SEPARATELY       TREATMENT REQUESTED;
  WITH THE SECURITIES AND EXCHANGE                  PORTION OMITTED FILED
  COMMISSION***] Lot:                               SEPARATELY WITH THE
                                                    SECURITIES AND EXCHANGE
                                                    COMMISSION***]

                                      8
<PAGE>

  eight to ten (8-10) [***CONFIDENTIAL TREATMENT    [***CONFIDENTIAL
  REQUESTED; PORTION OMITTED FILED SEPARATELY       TREATMENT REQUESTED;
  WITH THE SECURITIES AND EXCHANGE                  PORTION OMITTED FILED
  COMMISSION***] Lot:                               SEPARATELY WITH THE
                                                    SECURITIES AND EXCHANGE
                                                    COMMISSION***]



  eleven to sixteen (11-16) [***CONFIDENTIAL        [***CONFIDENTIAL
  TREATMENT REQUESTED; PORTION OMITTED FILED        TREATMENT REQUESTED;
  SEPARATELY WITH THE SECURITIES AND EXCHANGE       PORTION OMITTED FILED
  COMMISSION***] Lot:                               SEPARATELY WITH THE
                                                    SECURITIES AND EXCHANGE
                                                    COMMISSION***]


          In addition to the per [***CONFIDENTIAL TREATMENT REQUESTED;
          PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
          EXCHANGE COMMISSION***] cost, compensation shall include the following
          per Lot for Sterilization, Inactivation and Distribution.

                                                    COMPENSATION PER LOT

                                                    1996    1997     1998

  Two to four (2-4) [***CONFIDENTIAL TREATMENT       NA     [***CONFIDENTIAL
  REQUESTED; PORTION OMITTED FILED SEPARATELY               TREATMENT REQUESTED;
  WITH THE SECURITIES AND EXCHANGE                          PORTION OMITTED
  COMMISSION***] Lot:                                       FILED SEPARATELY
                                                            WITH THE
                                                            SECURITIES AND
                                                            EXCHANGE
                                                            COMMISSION**]




  Five to seven (5-7) [***CONFIDENTIAL TREATMENT     NA     [***CONFIDENTIAL
  REQUESTED; PORTION OMITTED FILED SEPARATELY               TREATMENT
  WITH THE SECURITIES AND EXCHANGE                          REQUESTED; PORTION
  COMMISSION***] Lot:                                       OMITTED FILED
                                                            SEPARATELY WITH THE

                                       9
<PAGE>
                                                            SECURITIES AND
                                                            EXCHANGE
                                                            COMMISSION***]



  Eight to ten (8-10) [***CONFIDENTIAL TREATMENT      NA    [***CONFIDENTIAL
  REQUESTED; PORTION OMITTED FILED SEPARATELYC              TREATMENT
  WITH THE SECURITIES AND EXCHANGE                          REQUESTED; PORTION
  COMMISSION***] Lot:                                       OMITTED FILED
                                                            SEPARATELY WITH THE
                                                            SECURITIES AND
                                                            EXCHANGE
                                                            COMMISSION***]



  Eleven to thirteen (11-13) [***CONFIDENTIAL         NA    [***CONFIDENTIAL
  TREATMENT REQUESTED; PORTION OMITTED FILED                TREATMENT
  SEPARATELY WITH THE SECURITIES AND EXCHANGE               REQUESTED; PORTION
  COMMISSION***] Lot                                        OMITTED FILED
                                                            SEPARATELY WITH THE
                                                            SECURITIES AND
                                                            EXCHANGE
                                                            COMMISSION***]



  Fourteen to sixteen (14-16) [***CONFIDENTIAL        NA    [***CONFIDENTIAL
  TREATMENT REQUESTED; PORTION OMITTED FILED                TREATMENT
  SEPARATELY WITH THE SECURITIES AND EXCHANGE               REQUESTED; PORTION
  COMMISSION***] Lot:                                       OMITTED FILED
                                                            SEPARATELY WITH THE
                                                            SECURITIES AND
                                                            EXCHANGE
                                                            COMMISSION***]


          If more than one shipment of each Lot is required for Distribution
          then GalaGen shall pay for the additional shipping costs.

     7.2  Payments shall be made to CARE by GalaGen according to the following
          schedule per Lot:

          -      40 % of total Lot compensation prior to [***CONFIDENTIAL
                 TREATMENT REQUESTED; PORTION OMITTED FILED
                 SEPARATELY WITH THE SECURITIES AND EXCHANGE
                 COMMISSION***] procurement

          -      30 % of total Lot compensation within 30 days of submitting
                 sample from Sterilization step provided sterility,
                 concentration, quantity and identification specifications as
                 set forth in Section 2 have been met.


                                      10
<PAGE>

          -      30 % of total Lot compensation within 30 days of receiving Lot
                 documentation from CARE provided that documentation is found
                 acceptable by GalaGen.

  8. OWNERSHIP

     8.1  CARE shall retain title to and shall be responsible for all
          calibration, certification and maintenance for any equipment used in
          the execution of this Agreement.  Equipment purchased with funds
          provided by GalaGen shall be maintained and certified at CARE's
          expense.  Use of equipment purchased with funds provided by GalaGen
          shall be prioritized to performance of this Agreement.  All rights
          to procedures provided by GalaGen and the content and results of the
          Plan shall be owned exclusively by GalaGen and shall be considered
          its confidential, proprietary information.

     8.2  Ownership of all Lots, whether or not possessed by CARE, shall vest
          in GalaGen.

  9. CONFIDENTIALITY

     9.1  CARE agrees to maintain confidentiality of GalaGen's proprietary
          information disclosed by GalaGen in writing or verbally to CARE.
          After termination of this Agreement, CARE shall not use or disclose
          such information, including procedures supplied by GalaGen or the
          Plan.

     9.2  CARE shall have no obligation of confidentiality with respect to
          information disclosed to CARE by GalaGen if:

          -      such information is, at the time of disclosure by GalaGen, in
                 the public domain or such information thereafter becomes a part
                 of the public domain without a breach of this Agreement by
                 CARE; or

          -      such information is known to CARE at the time GalaGen discloses
                 it; or

          -      such information is independently developed by CARE personnel
                 who have not had access to the information; or

          -      such information is received by CARE from a third party who had
                 a lawful right to disclose such information; or

          -      such information is disclosed with the written approval of
                 GalaGen; or

          -      such information is obligated to be produced by CARE under
                 court order. In such event, CARE shall promptly notify GalaGen
                 so that GalaGen may file its own timely objections to said
                 court order.

     9.3  If required by law, CARE may disclose proprietary Information received
          hereunder to the United States Government provided that such
          Information is requested to be treated as confidential in accordance
          with appropriate federal regulations.


                                      11
<PAGE>

  10.     RECALLS, INVESTIGATIONS AND CORRECTIVE ACTION

    10.1  Without limiting the generality of the warranties made in Section 4,
          CARE warrants that it shall observe at all times the laws and
          regulations in the United States in order to maintain an effective
          system for the recall from the market of GalaGen products
          containing [***CONFIDENTIAL TREATMENT REQUESTED; PORTION OMITTED
          FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***].

    10.2  In the event of a recall CARE shall cooperate with GalaGen in
          identifying and locating any Lots included in the recall.

    10.3  CARE will assist GalaGen, as necessary, in any investigations and/or
          corrective actions as a result of any complaint or adverse experience
          report including, but not limited to, evaluation and modification of
          procedures used in the performance of Manufacturing.  In the event
          that a modification of procedures is implemented the Parties shall
          mutually agree to a modification of compensation, if any.

11. TERM

    This Agreement shall become effective upon the date first herein above
    written and shall be effective for a period of five years unless extended
    by mutual written consent of the parties hereto or terminated pursuant to
    the terms of this Agreement.

12. TERMINATION

    12.1  This Agreement may be terminated by GalaGen at any time with or
          without cause by providing ninety (90) days prior written notice
          of termination to CARE.

    12.2  If this Agreement is terminated and CARE is not in default in its
          performance of its obligations under this Agreement, then CARE shall
          be entitled to receive full payment for all work performed under
          this Agreement through the date of termination.

   12.3   Any party hereto may terminate this Agreement upon a material breach
          of this Agreement by such other party if such other party has failed
          to cure or demonstrate the nonexistence of such breach within sixty
          (60) days of receipt of a written notice describing the breach with
          reasonable specificity and demanding cure of such breach.

   12.4   Any party hereto may terminate this Agreement, effective immediately,
          by written notice to the other party (i) if the other party shall
          file in any court or agency pursuant to any statute or regulation
          of the United States or any state a petition in bankruptcy or
          insolvency or for reorganization or for an arrangement or for the
          appointment of a receiver or trustee of such party or its assets,
          or if the other party shall make an assignment for the benefit of
          creditors, or (ii) if the other party is unable to perform its
          obligations hereunder due to conditions within the scope of Section 17
          (Force Majeure) and such inability continues for more than ninety
          (90) days.

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<PAGE>

     12.5 Upon expiration or early termination of this Agreement for any reason,
          (i) neither party shall be relieved of any obligation which accrued
          prior to the effective date of such expiration or early termination;
          (ii) each party shall return to the other party any and all
          confidential information originally disclosed by the other party,
          and (ii) in the case of early termination, each party shall retain any
          and all rights or remedies such party may have in law or in equity,
          provided that neither party may claim compensation for lost
          opportunity or consequential damages arising out of the fact of such
          early termination.

     12.6   Sections 9 and 14 shall survive the termination of this Agreement.

13.  INDEPENDENT CONTRACTOR

     13.1   CARE shall be deemed to be and shall be an independent contractor
            with respect to GalaGen, and as such, shall not be entitled to any
            benefits applicable to employees of GalaGen.

     13.2   No party is empowered to act as an agent for the other for any
            purpose and shall not on behalf of the other enter into any
            contract, warranty, or representation as to any matter.

     13.3   No party shall be bound by the acts or conduct of the other.

14.  INDEMNIFICATION

     14.1   GalaGen shall defend, indemnify, and hold CARE harmless from and
            against all claims, demands, loss, liability, expenses (including
            reasonable litigation expenses) or damage GalaGen and/or CARE may
            incur arising from GalaGen's use of the [***CONFIDENTIAL TREATMENT
            REQUESTED; PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
            EXCHANGE COMMISSION***] manufactured under this Agreement.

     14.2   CARE shall defend, indemnify, and hold GalaGen harmless from and
            against all claims, demands, loss, liability, expenses (including
            reasonable litigation expenses) or damage CARE and/or GalaGen may
            incur arising from CARE's Manufacture.

15.  AUDITS AND INSPECTIONS

     15.1   GalaGen reserves the right to conduct audits of CARE's operations
            applicable to the execution of this Agreement.  Without limitation,
            upon reasonable notice GalaGen may periodically visit CARE's
            facilities and review CARE's manufacturing and quality control
            procedures and records to ensure conformance with contractor's
            obligations under this Agreement.  GalaGen  reserves the right
            to have its representative present during all CARE's manufacturing
            operations applicable to this Agreement.  CARE agrees to cooperate
            with GalaGen in the performance of any such audits and visits.


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<PAGE>

     15.2   In the event regulatory agencies conduct facility or product
            inspections or audits which include a review of CARE's records
            related to performance of this Agreement, CARE agrees to immediately
            notify GalaGen of the arrival of such regulatory personnel so as to
            enable GalaGen the opportunity to be present on the premises in such
            inspections or audits.  CARE agrees to notify GalaGen before any
            release of CARE's records related to performance of this Agreement
            to regulatory agencies.  CARE agrees to provide GalaGen copies of
            (a) portions of any inspection or audit reports provided by
            regulatory agencies relevant to performance of this Agreement, and
            (b) any responses by CARE to any such regulatory agency regarding
            such an inspection or audit and relating to performance of this
            Agreement.

    16.     GOVERNING LAW

            This Agreement shall be governed and construed in accordance with
            the laws of the State of Minnesota.

    17.     FORCE MAJEURE

            Neither party to this Agreement shall be liable for delay or failure
            in the performance of any of its obligations hereunder if such delay
            or failure is due to causes beyond its reasonable control,
            including, without limitation, acts of God, fires, earthquakes,
            strikes and labor disputes, acts of war, civil unrest or
            intervention of any governmental authority, and inability to obtain
            raw materials, but any such delay or failure shall be remedied by
            such party as soon as is reasonably possible.

    18.     ASSIGNMENT

            This Agreement shall not be assigned by either party without the
            prior written consent of the parties hereto except that GalaGen
            may assign this Agreement to a successor of its entire interest.

    19.     ENTIRE AGREEMENT

            This Agreement is the entire and complete understanding between the
            parties in regard to the covered subject matter.

    20.     MODIFICATION

            Any agreement to change the terms of this Agreement in any way shall
            be valid only if the change is made in a written document, signed by
            authorized representatives of both parties.

    21.     NOTICES

            Notices and special communications hereunder shall be deemed made if
            given by registered or certified envelope, postage prepaid, and
            addressed to the party to receive such notice or communication at
            the address given below, or such other address as may be hereafter
            be designated by notice in writing:

     If to GalaGen:                If to CARE:


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<PAGE>


   Michael E. Cady                    Diane J. Fagerberg, Ph.D.
   Vice President, Manufacturing      President and General Manager
   GalaGen Inc.                       Colorado Animal Research Enterprises, Inc.
   4001 Lexington Avenue North        6200 East County Road 56
   Arden Hills, MN 55126-2998         Fort Collins, CO 80524

  IN WITNESS WHEREOF, the parties have caused these presents to be executed in
  duplicate as of the day and year first above written.


  GALAGEN INC.                         COLORADO ANIMAL RESEARCH
                                       ENTERPRISES, INC.

  By: /s/ Michael E. Cady              By: /s/ Diane J. Fagerberg

  Name: Michael E. Cady,               Name: Diane J. Fagerberg, Ph.D.,
        Vice President                       President

  Date:  November 1, 1996              Date:  November 11, 1996


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