<PAGE>

                                                                  EXHIBIT 10.38



                                LICENSE AGREEMENT


                                     BETWEEN


                         NOVARTIS CONSUMER HEALTH, INC.

                                       AND

                                  GALAGEN INC.






                                                         Dated: October 25, 1999

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                            PAGE

<S>                                                                                                         <C>
1.   DEFINITIONS...............................................................................................1
2.   GRANTS....................................................................................................3
3.   COVENANTS.................................................................................................3
4.   LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES............................................................4
5.   PAYMENT PROCEDURES, RECORDS, AUDITING.....................................................................5
6.   REPRESENTATIONS AND WARRANTIES............................................................................6
7.   CONFIDENTIALITY...........................................................................................7
8.   TERM AND TERMINATION......................................................................................9
9.   PATENTS AND TRADEMARKS...................................................................................10
10.  INFRINGEMENT OF PATENTS AND TRADEMARKS...................................................................10
11.  INFRINGEMENT OF THIRD PARTY RIGHTS.......................................................................10
12.  NOTICES..................................................................................................11
13.  FORCE MAJEURE............................................................................................12
14.  DISPUTE RESOLUTION.......................................................................................15
15.  PUBLICITY................................................................................................12
16.  ASSIGNMENT...............................................................................................12
17.  GOVERNING LAW............................................................................................13
18.  SEVERABILITY.............................................................................................13
19.  MISCELLANEOUS............................................................................................13
20.  INDEPENDENT CONTRACTORS..................................................................................13
21.  COUNTERPARTS.............................................................................................13
22.  ENTIRE AGREEMENT.........................................................................................14
</TABLE>

EXHIBIT A - PATENTS

<PAGE>

                                LICENSE AGREEMENT

This License Agreement (this "License Agreement") is made and entered into as of
this 25th day of October, 1999 ("Effective Date"), by and between Novartis
Consumer Health, Inc., a corporation organized and existing under the laws of
the State of Delaware, having an office at 560 Morris Avenue, Summit, New Jersey
07901-1312, and GalaGen Inc. (hereinafter referred to as "GalaGen"), a
corporation organized and existing under the laws of the State of Delaware,
having an office at 1275 Red Fox Road, Arden Hills, Minnesota 55112.


                                   WITNESSETH:

WHEREAS, GalaGen owns or possesses rights to certain products, trademarks,
patents and know-how and has the right to grant licenses with respect to same;
and

WHEREAS, GalaGen wishes to grant to NCH (as hereinafter defined) a license to
Licensed Ingredients (as hereinafter defined), as well as GalaGen Patents,
Trademarks and Know-How (as hereinafter defined) associated with Licensed
Ingredients, so that NCH may make, have made, use, market, distribute, import,
export, offer for sale and sell Products (as hereinafter defined) in the
Territory (as hereinafter defined) (the "License"); and

WHEREAS, NCH desires to acquire said License on the terms and subject to the
conditions set forth herein; and

WHEREAS, the parties are entering into a Supply Agreement (the "Supply
Agreement") with respect to the supply by GalaGen to NCH of NCH's commercial
requirements of Licensed Ingredients covered by the terms of this License
Agreement; and

WHEREAS, the parties are entering into a Product Development Agreement (the
"Product Development Agreement") to (a) [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] (b) such conduct such other research/ development work as the
parties mutually agree.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and
obligations set forth herein, GalaGen and NCH hereby agree as follows:

1.       DEFINITIONS

The following terms, as used in this License Agreement, shall have the meanings
set forth in this Article 1:

"Affiliate" shall mean any corporation or entity which directly or indirectly
owns, is owned by, or is under common ownership with, a party to this License
Agreement, where own or ownership

<PAGE>

means direct or indirect possession of at least fifty percent (50%) of the
outstanding voting securities of a corporation or a comparable equity
interest in any other type of entity.

"Agreement Period" shall have the meaning set out in Section 8.1 of this License
Agreement.

"Date of First Sale" shall mean the date of first commercial sale of one or more
of the Products by NCH or any of its Affiliates to an unrelated third party.

"DSHEA" shall mean the U.S. Dietary Supplement Health and Education Act.

"Field of Use" shall be defined as follows: [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

"Improvements" shall mean any enhancement to Licensed Ingredients (as
hereinafter defined) and/ or Products (as hereinafter defined) in the Field of
Use, including process technology and/or formulation improvements made during
the Agreement Period.

"Know-How" shall mean all tangible and intangible inventions, technology, trade
secrets, data, processes, methods and any physical or chemical material,
including any replication of any part of such material, other information that
GalaGen owns, controls or has a license to, with the right to sublicense,
existing as of the Effective Date, which are necessary or useful to the
formulation, development, manufacture, packaging or commercialization of
Licensed Ingredients or Products within the Field of Use, and any Improvements
made to any of the foregoing.

"Licensed Ingredients" shall mean [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

"NCH" shall mean Novartis Consumer Health, Inc. and its Affiliates.

"Net Sales" shall mean [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

"Patents" shall mean all patents and patent applications owned, or controlled,
or licensed (with the right to sublicense) during the term of this License
Agreement, by or on behalf of GalaGen or any of its Affiliates, which contain a
claim covering inventions necessary to the development, manufacture, packaging,
use, offer for sale or sale of Licensed Ingredients and/or Products, including
those patents and patent applications now owned, controlled or licensed by
GalaGen listed in EXHIBIT A, attached hereto. EXHIBIT A shall be updated from
time to time as appropriate and mutually agreed to by the parties, but at least
once per calendar year, to incorporate any


                                       2
<PAGE>

additional patents and patent applications NOT listed in EXHIBIT A as of the
Effective Date having a claim covering inventions necessary for the sale of
Licensed Ingredients and/or Products in the Field of Use, including patents
covering any Improvements, as well as any continuations,
continuations-in-part, divisions, re-examinations, reissues or extensions to
the patents or patent applications listed in EXHIBIT A, THAT HAVE A CLAIM
COVERING INVENTIONS NECESSARY FOR THE SALE OF LICENSED INGREDIENTS AND/OR
PRODUCTS IN THE FIELD OF USE.

"Products" shall mean products incorporating either or both of the Licensed
Ingredients within the Field of Use.

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

"Royalty Computation Period" shall mean a three (3) month calendar quarter
ending on the last day of March, June, September and December of a given year.

"Royalty Period" means that period beginning on the Date of First Sale of the
Products in the Territory by NCH and ending on (a) the expiration of the
Agreement Period or (b) the earlier termination of this License Agreement.

"Territory" shall mean worldwide.

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

2.       GRANTS

2.1 Subject to the terms of this License Agreement, GalaGen hereby grants, and
Novartis Consumer Health, Inc. hereby accepts on behalf of itself and its
Affiliates, an exclusive worldwide license under GalaGen's Patents and Know-How
to permit NCH to use Licensed Ingredients to make, have made, use, market,
distribute, import, export, offer for sale and sell Products in the Field of
Use.

2.1.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

2.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

3.       COVENANTS

3.1 GalaGen hereby covenants and agrees that it shall use the Confidential
Information belonging to NCH (as to which obligations of confidentiality apply)
solely for the purposes specified in this License Agreement and for no other
purpose.


                                       3
<PAGE>

3.2 NCH hereby covenants and agrees that it shall use the licensed Patents,
Trademarks and Know-How and Confidential Information belonging to GalaGen (as to
which obligations of confidentiality apply) solely for the purposes specified in
this License Agreement and for no other purpose.

3.3 GalaGen hereby covenants and agrees to keep NCH fully informed of all
Improvements to Licensed Ingredients.

3.4 GalaGen hereby covenants and agrees during the term of this License
Agreement not to (a) commercialize, or cause to be commercialized, or fund, or
provide services, including, without limitation, consulting, research,
development and/or manufacturing services, with respect to the commercialization
of, products incorporating either or both of the Licensed Ingredients in the
Field of use, or (b) license, assign or otherwise convey, to any third party,
except as may be expressly permitted in this License Agreement, any of the
rights or licenses granted to NCH under this License Agreement.

3.5 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

3.5.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.5.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.6 Novartis Consumer Health, Inc. hereby covenants and agrees to guarantee the
performance and any payments due from any NCH Affiliates under the terms of this
License Agreement.

4.       LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES

4.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

4.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

4.3 NCH's obligation to make payments pursuant to Sections 4.1 and 4.2 shall not
commence until it completes its due diligence review to its satisfaction. NCH
shall use reasonable commercial efforts to complete its due diligence, including
inspection of GalaGen's facilities, by November 8, 1999.

4.4 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]


                                       4

<PAGE>

4.5      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***].

5.       PAYMENT PROCEDURES, RECORDS, AUDITING

5.1      All payments due to GalaGen pursuant to Article 4 hereof shall be
made in U.S. dollars by wire transfer to such bank in the United States of
America as GalaGen shall specify from time to time. For purposes of
determining the running royalty payment due to GalaGen, Net Sales shall be
converted on a country-by-country basis to U.S. dollars at the exchange rate
prevailing at the close of the last business day of the relevant Royalty
Computation Period as published the next day in The Wall Street Journal.

         5.1.1 Payments hereunder shall be made without deduction other than
such amounts, if any, as NCH is required by law to deduct or withhold. NCH shall
obtain a receipt from the relevant taxing authorities for all withholding taxes
paid and forward such receipts to GalaGen to enable GalaGen to claim any and all
tax credits for which it may be eligible. NCH shall reasonably assist GalaGen in
claiming exemption from such deductions or withholdings under any double
taxation or similar agreement or treaty from time to time.

5.2      NCH shall pay to GalaGen royalties as set forth in Article 4 hereof
within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] days after the end of each
Royalty Computation Period. Each payment of royalties shall be accompanied by a
statement, on a country-by-country basis, of the amount of Net Sales during such
quarter, the amount of aggregate Net Sales in the Territory during such quarter
and the amount of royalties or other payments due on such sales.

5.3      During the Agreement Period, NCH shall keep complete and accurate
books and records setting forth gross sales, net sales, amounts deducted from
gross sales to arrive at Net Sales, calculations of royalty payments owed to
GalaGen, and any other information necessary to allow the calculation of
royalties to be paid by NCH to GalaGen for each country within the Territory,
for no less than three (3) years after the end of each Royalty Computation
Period. NCH shall permit GalaGen, at GalaGen's expense, to have said books
and records examined by independent certified public accountants retained by
GalaGen and acceptable to NCH, during regular business hours upon reasonable
advance notice but not later than three (3) years following the close of the
Royalty Computation Period in question, and no more than one (1) time per
year. Such accountant shall report to GalaGen only those findings required to
verify or contradict the royalty amounts calculated by NCH to be owed to
GalaGen and the amounts of any discrepancy. Any information obtained or
reports completed by said accountants during such examination will be
considered Confidential Information of NCH under Article 7 hereof. If it is
determined as a result of said examination that there was an underpayment of
royalties due GalaGen, NCH will pay to GalaGen the balance of the royalties
due within thirty (30) days and will reimburse GalaGen for the reasonable
costs of such examination. Similarly, in the event it is determined that
there has been an overpayment of royalties, GalaGen will credit such overpaid
amount against running royalty payments owed by NCH at the end of the next
Royalty Computation


                                       5
<PAGE>

Period, or subsequent Royalty Computation Periods when required, until such
time as such overpayment has been fully credited against the running
royalties; PROVIDED, HOWEVER, such credit shall not exceed fifty percent
(50%) of any royalties due GalaGen in such Royalty Computation Period, and
any residual credit shall be carried over to the next Royalty Computation
Period and applied in accordance with this Section 5.3.

6.       REPRESENTATIONS AND WARRANTIES

6.1      GalaGen warrants and represents that:

         6.1.1 It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this License Agreement and to grant all of the rights,
powers and authorities herein granted in Article 2 hereof.

         6.1.2 The execution, delivery and performance of this License Agreement
do not conflict with, violate or breach any agreement to which GalaGen is a
party, or GalaGen's Certificate of Incorporation or Bylaws.

         6.1.3 This License Agreement has been duly executed and delivered by
GalaGen and is a legal, valid and binding obligation enforceable against GalaGen
in accordance with its terms.

         6.1.4 With respect to the Patents, Trademarks and Know-How which are
the subject of this License Agreement, GalaGen has the right and authority
necessary to grant the License pursuant to Article 2 hereof, and which are free
of any lien or encumbrance or any rights or claims of any third party in the
Territory.

         6.1.5 To GalaGen's knowledge, the Licensed Ingredients do not infringe
any valid trademarks, patents or other proprietary rights of third parties, nor
do said third parties have any claim of ownership with respect to the Licensed
Ingredients, Trademarks, Patents and Know-How.

         6.1.6 To GalaGen's knowledge, the Patents licensed under this License
Agreement are neither invalid nor unenforceable, nor would a court of competent
jurisdiction hold them invalid or unenforceable. If, during the Agreement
Period, GalaGen (a) becomes aware that anyone (including GalaGen) has requested
a re-examination of any such Patents, (b) requests a re-issuance of any such
Patents, or (c) becomes aware that a declaratory judgment action has been filed
to have any such Patents declared invalid or unenforceable, GalaGen promptly
shall notify NCH of such and specify which Patents are involved.

         6.1.7 During the term of this License Agreement, GalaGen shall not
enter into any agreement that is inconsistent with or in derogation of GalaGen's
representations and warranties under this License Agreement.


                                       6
<PAGE>

         6.1.8 As of the Effective Date, GalaGen is not aware of any third party
that is infringing the Patents licensed to NCH.

         6.1.9 Both of the Licensed Ingredients are safe and GalaGen has in its
possession sufficient clinical data to support structure function claims under
DSHEA as enacted as of the Effective Date.

6.2      NCH warrants and represents that:

         6.2.1 It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this License Agreement.

         6.2.2 The execution, delivery and performance of this License Agreement
do not conflict with, violate or breach any agreement to which NCH is a party,
or NCH's Certificate of Incorporation or Bylaws.

         6.2.3 This License Agreement has been duly executed and delivered by
NCH and is a legal, valid and binding obligation enforceable against NCH in
accordance with its terms.

7.       CONFIDENTIALITY

7.1      Both GalaGen and NCH agree that, subject to the limitations set
forth in Section 7.3 hereof, all information disclosed to the other party,
whether in oral, written or graphic form, and identified in writing by the
disclosing party as confidential shall be deemed "CONFIDENTIAL INFORMATION"
of the disclosing party. In particular, Confidential Information shall be
deemed to include, but not be limited to, any patent application or drawing
or potential patent claim, trade secrets, information, ideas, inventions,
samples, processes, procedures, methods, formulations, packaging designs and
materials, test data, future development plans, Products launch date,
Know-How and engineering, manufacturing, regulatory, marketing, servicing,
sales, financing or human resources matters relating to the disclosing party
and its business.

7.2      Each party will take precautions as it normally takes with its own
confidential and proprietary information to prevent disclosure to third
parties.

7.3      Both GalaGen and NCH agree that, notwithstanding the above, the
obligations of confidentiality shall not be deemed to apply to:

         7.3.1 Information which at the time of disclosure is or thereafter
becomes generally known or available to the public, through no wrongful act or
failure to act on the part of the receiving party.

         7.3.2 Information that was known by or in the possession of the
receiving party at the time of receiving such information from the disclosing
party as evidenced by written records.


                                       7
<PAGE>

         7.3.3 Information obtained by the receiving party from a third party
source who is not breaching a commitment of confidentiality to the disclosing
party by revealing such information to the receiving party.

         7.3.4 Information that is independently developed by the receiving
party without use of confidential information of the other party as evidenced by
written records.

         7.3.5 Information that is the subject of a granted written permission
to disclose that is issued by the disclosing party to the other party.

         7.3.6 Information that is required to be disclosed pursuant to the law
(including SEC regulations), but only to the extent required to be disclosed;
PROVIDED, HOWEVER, the disclosing party notifies the other party in writing and
gives the other party reasonable time to comment on the same prior to
disclosure.

7.4      During the Agreement Period and for a period of five (5) years after
the end of the Agreement Period, each party shall maintain all Confidential
Information in trust and confidence and shall not disclose any Confidential
Information to any third party or use any such information for any
unauthorized purpose, other than as authorized in Section 7.3 hereof or as
necessary to accomplish the purpose of this License Agreement subject to an
appropriate binder of confidentiality as set forth in Section 7.5 hereof.
Each party may use such Confidential Information only to the extent required
to accomplish the purposes of this License Agreement. Confidential
Information shall not be used for any purpose or in any manner that is not
consistent with this License Agreement or that would constitute a violation
of any laws or regulations including, without limitation, the export control
laws of the United States. Each party hereby agrees that it will not in any
way attempt to obtain, either directly or indirectly, any information
regarding any Confidential Information from any third party who has been
employed by, provided consulting services to, or received in confidence
information from, the other party.

7.5      Both parties will make diligent efforts to ensure that all
employees, consultants, agents, subcontractors and manufacturing contractors
who may have access to Confidential Information of the other party, and any
other third parties who might have access to Confidential Information, will
use such information in a manner consistent with the terms of this License
Agreement and will be bound by the terms set forth in this Article 7. No
Confidential Information shall be disclosed to any employees, subcontractors,
agents or consultants who do not have a need to receive such information.

7.6      To the extent either party discloses Confidential Information of the
other party to an employee, consultant, subcontractor or manufacturing
contractor (collectively "Agents") or permits an Agent to have access to such
Confidential Information, such party shall indemnify the other party for any
claims, damages, losses, liabilities, costs or expenses, including reasonable
attorneys' fees, incurred by the other party as a result of the indemnifying
party's Agent further disclosing or misusing such Confidential Information.


                                       8
<PAGE>

8.       TERM AND TERMINATION

8.1      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.2      In the event either party commits a material breach or defaults in the
performance or observance of any of the material provisions of this License
Agreement, and such breach or default is not cured within ninety (90) days after
the receipt of notice thereof from the other party specifying such breach or
default, the party not in breach or default shall be entitled (without prejudice
to any of its other rights) following arbitration and determination of material
breach, to terminate this License Agreement, without additional penalty,
termination fee or cost, by giving notice to take effect immediately.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]. The parties agree that a material
breach is a serious breach of a party's obligations such that the nature of the
transaction would be significantly modified or the economics underlying this
License Agreement would be significantly and negatively impacted.

         8.2.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.3      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.4      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.5      The termination of this License Agreement by either party shall not
release either party from any obligation that matured prior to the effective
date of the termination.

8.6      The confidentiality provisions set forth in Article 7 hereof shall
survive the termination or expiration of this License Agreement as set forth
therein.

8.7      Except as otherwise expressly provided in this License Agreement,
upon a termination of this License Agreement:

         8.7.1 All licensed rights under the Patents, Trademarks and Know-How
granted to NCH shall terminate and revert to GalaGen, and NCH shall not make any
use whatsoever of said rights, nor sell any Products in the Territory, except as
expressly provided for elsewhere in this License Agreement.

         8.7.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

         8.7.3 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]


                                       9
<PAGE>

         8.7.4 Except as otherwise set forth herein, termination under this
Article 8 shall be without prejudice to and shall not affect the right of either
party to recover any and all damages to which it may be entitled, or exercise
any other remedies which it may otherwise have under this License Agreement.

9.       PATENTS AND TRADEMARKS

         GalaGen shall undertake and shall bear all costs of the prosecution and
maintenance of the Patents and Trademarks in the Territory. GalaGen shall employ
reasonable efforts to keep NCH fully and timely informed, at NCH's reasonable
expense, in respect to the course and conduct of the patent application
prosecution matters within the scope of the Patents licensed under this License
Agreement and such information (to which the obligation of confidentiality
applies) disclosed pursuant to this Article 9 shall be Confidential Information
for purposes of Article 7 hereof.

10.      INFRINGEMENT OF PATENTS AND TRADEMARKS

10.1     If either party shall become aware of any material infringement of any
Patent or Trademark in the Territory, then the party having such knowledge shall
give notice to the other within ten (10) days of becoming aware of such
infringement and the basis therefor.

10.2     Subject to Section 10.3 hereof, GalaGen shall have the sole right to
take such action, as it deems appropriate and reasonable, whether by action,
suit, proceeding or otherwise, at its own expense, to prevent or eliminate
the infringement of the Patents or Trademarks by others and to collect
damages. NCH agrees to cooperate with GalaGen in any reasonable manner in an
action brought by GalaGen. GalaGen agrees to pay all reasonable out-of-pocket
expenses incurred by NCH as a result of NCH's cooperation at GalaGen's
request in the prosecution of any such action, suit or proceeding for
infringement. GalaGen shall be entitled to retain any damages recovered by
bringing the action for patent infringement.

10.3      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

11.      INFRINGEMENT OF THIRD PARTY RIGHTS

11.1     If either party to this License Agreement shall become aware of any
action, or suit, or receive a written threat of action or suit, by a third
party alleging that the manufacture, use, marketing, distribution, offer for
sale or sale of any Licensed Ingredients infringes a patent or trademark, or
violates any other proprietary rights of any third party, the party aware of
same shall notify the other party of the same and fully disclose the basis
therefor within ten (10) days of becoming aware of such action, or suit, or
threat of such action or suit.


                                       10

<PAGE>

11.2 GalaGen shall have the right, but not the obligation: (a) to secure a
license, at GalaGen's expense, with the right to sublicense, which would obviate
the alleged infringement and GalaGen shall grant to NCH, at no additional cost,
a sublicense under such license; or (b) to develop at GalaGen's expense one or
more substitute Licensed Ingredients acceptable to NCH which are free of the
alleged infringement. NCH shall cooperate at NCH's reasonable expense in such
development, and in negotiations for such license, as GalaGen may reasonably
request.

11.3 In the event GalaGen elects not to exercise its rights under Section 11.2
within ninety (90) days of receiving notice of such claim, or otherwise notifies
NCH within such ninety (90) days that it does not intend to exercise such right,
NCH shall have the right to defend any such claim at its own expense and sole
discretion as to the control, conduct and prosecution of such defense.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

11.4 Nothing in this Article 11, or in Article 10 hereof, shall be construed as
a waiver or cure of any breach of any warranties set forth in Article 6 hereof
or any release of any claim by NCH as may be appropriate relating thereto.

12.      DISPUTE RESOLUTION

If a claim of breach, nonperformance, nonpayment or repudiation should arise
related to or connection with this License Agreement (a "DISPUTE"), the parties
shall attempt to resolve the matter (a) within sixty (60) days from the date
that the party raising the Dispute notifies the other party in writing of the
Dispute, or (b) if this License Agreement specifies a cure period for the
subject of the Dispute, (b) within such cure period. If the parties do not
resolve the Dispute within the sixty (60) day period or relevant cure period, as
appropriate, then the parties agree to submit the matter to binding arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules by a panel of three mutually agreeable qualified arbitrators.
GalaGen and NCH agree to make available to the arbitrators on a confidential
basis any information, test results, or research in either party's possession
related to the subject of the Dispute in addition to supplying any other
information requested or necessary to allow the arbitrators to deliver an
opinion, which shall be rendered within forty-five (45) days of selection of the
full panel or such additional time as the arbitrators reasonably need. The
arbitrators shall be required to provide to the parties a written summary of
their findings and the facts and law on which their decision is based.

13.      NOTICES

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


         Novartis Consumer Health, Inc.


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<PAGE>

         560 Morris Avenue
         Summit, New Jersey 07901-1312
         Attention: General Counsel

         GalaGen Inc.
         1275 Red Fox Road
         Arden Hills, Minnesota 55112
         Attention: Henry J. Cardello

Any notice, if mailed properly addressed, postage prepaid, shall be deemed made
three (3) days after the date of mailing as indicated on the certified or
registered mail receipt, or on the next business day if sent by express courier
service or on the date of delivery or transmission if hand delivered or sent by
facsimile transmission.

14.      FORCE MAJEURE

Neither party shall be responsible or liable to the other hereunder for failure
or delay in performance of this License Agreement due to any war, fire, flood,
accident or other casualty, or any labor disturbance or act of God or the public
enemy, or any other contingency beyond such party's reasonable control. In
addition, in the event of the applicability of this Article 13, the party
affected by such force majeure shall use reasonable efforts, consistent with
good business judgment, to eliminate, cure and overcome any of such causes and
resume performance of its obligations.

15.      PUBLICITY

GalaGen and NCH agree not to issue any press release or other public statement
disclosing the existence of or relating to this License Agreement without prior
written consent of the other party; PROVIDED, HOWEVER, that neither GalaGen nor
NCH shall be prevented from complying with any duty of disclosure it may have
pursuant to law (including SEC regulations) subject to notifying the other party
in writing and giving such other party reasonable time to comment on the same
prior to disclosure.

16.      ASSIGNMENT

This License Agreement and all rights and obligations hereunder are personal to
the parties hereto and may not be assigned without the express prior written
consent of the other party. Any assignment or attempt at same in the absence of
such prior written consent shall be void and without effect; PROVIDED, HOWEVER,
either party may assign this License Agreement to an Affiliate or any successor
by merger or sale of all or substantially all of its business units to which
this License Agreement relates without such consent. This License Agreement
shall be binding upon the successors and permitted assigns of the parties and
the name of a party appearing herein will be deemed to include the names of such
party's successors and permitted assigns to the extent necessary to carry out
the intent of this License Agreement.


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<PAGE>

17.      GOVERNING LAW

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New Jersey as though made and to be fully performed in said
State.

18.      SEVERABILITY

If any one or more of the provisions of this License Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality or enforceability
of the remaining provisions hereof shall not in any way be affected or impaired
thereby. In the event any provision shall be held invalid, illegal or
unenforceable, the parties shall use commercially reasonable efforts to
substitute a valid, legal and enforceable provision which, insofar as possible,
implements the purposes hereof.

19.      MISCELLANEOUS

19.1 GalaGen must inform NCH in writing of GalaGen's intention to file a
voluntary petition in bankruptcy or of another's intention to file an
involuntary petition in bankruptcy in respect to GalaGen at least thirty (30)
days prior to the filing of such a petition; PROVIDED, HOWEVER, if GalaGen is
not aware of another's intention to file an involuntary petition in bankruptcy
in respect of GalaGen thirty (30) days prior to the filing of such petition,
GalaGen shall inform NCH in writing of such other party's intention to file as
soon as reasonably possible after GalaGen becomes aware of it. Upon receipt of
such notice, NCH in its sole discretion shall have the option of terminating
this License Agreement upon sixty (60) days' written notice to GalaGen, unless
GalaGen refrains from filing its petition, withdraws its petition, prevents the
other party from filing its involuntary petition or obtains dismissal of the
petition, as the case may be, during this sixty (60) day period. The filing of
such petition without conforming to this requirement shall be deemed a material,
pre-petition incurable breach of this License Agreement.

19.2 The failure of any party hereto at any time or times to require performance
of any provisions hereof shall in no manner affect its rights to enforce such
provision at a later time.

20.      INDEPENDENT CONTRACTORS

The parties shall perform their obligations under this License Agreement as
independent contractors and nothing contained in this License Agreement shall be
construed to be inconsistent with such relationship or status. This License
Agreement shall not constitute, create or in any way be interpreted as a joint
venture or partnership of any kind.

21.      COUNTERPARTS

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


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<PAGE>

22.      ENTIRE AGREEMENT

This License Agreement, together with the Supply Agreement and the Product
Development Agreement, constitute the entire understanding between the parties
relating to the subject matter thereof, and no amendment or modification to this
License Agreement shall be valid or binding upon the parties unless made in
writing and signed by the representatives of such parties.


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<PAGE>

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


NOVARTIS CONSUMER HEALTH, INC.      GALAGEN INC.


By:     /s/ Al Piergallini                    By:      /s/ H.J. Cardello
        -------------------                            -------------------

Name:   Al Piergallini                        Name:    H.J. Cardello
        -------------------                            -------------------

Title:  President & CEO                       Title:   President
        --------------------                           -------------------


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