<PAGE>   1
                                                                   EXHIBIT 10.42


             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


                  COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

This COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement") is entered
into as of November 1, 1996 by and between AMERICAN HOME PRODUCTS CORPORATION, a
Delaware corporation, represented by its Wyeth-Ayerst Laboratories Division
having its principal place of business at 555 East Lancaster Avenue, St. Davids,
Pennsylvania 19087 ("WYETH-AYERST"), and CHEMGENICS Pharmaceuticals Inc.
("CHEMGENICS"), a Delaware corporation, having its registered office at One
Kendall Square, Building 300, Cambridge, Massachusetts 02139, U.S.A.

WHEREAS, CHEMGENICS has expertise in the discovery of bacterial genes and
antibacterial drug targets, the use of bacterial molecular biology and genetics
and the development and use of screening systems for the discovery of targets
and compounds for treating bacterial diseases and has developed a drug source,
including libraries of natural sources, for patentable therapeutic compounds;
and

WHEREAS, WYETH-AYERST has expertise in discovering, developing, testing,
obtaining regulatory approvals, manufacturing and marketing human therapeutic
products for bacterial diseases; and

WHEREAS, WYETH-AYERST and CHEMGENICS wish to enter into this Agreement in order
to collaborate in the performance of research to discover and develop
antibacterial drugs; and


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


WHEREAS, CHEMGENICS will perform research which will be funded and supported by
WYETH-AYERST in order to discover drug targets and Compounds for use in the
Field and will license the results of such research to WYETH-AYERST in the
Territory for the purpose of research for Antibacterial Products for human use,
including drug discovery, and the development, testing, obtaining regulatory
approval, manufacture and sale of Antibacterial Products for human use;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration, the parties hereby agree as follows:

                                 1. DEFINITIONS
                                    -----------
Whenever used in this Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

1.0 "ACCEPTED TARGET" means an antibacterial target for which an assay has been
developed, that is accepted by the Joint Steering Committee ("JSC") for
development of
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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


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1.1 "ACTIVITY PROFILE" means one of the activity profiles set forth in Exhibit
1, or any other activity profile agreed upon by the Joint Steering Committee.

1.2 "AFFILIATE" means any corporation, firm, limited liability company,
partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a party to this Agreement.
"Control" means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or fifty percent (50%) or more of
the equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.



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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


1.3 "ANTIBACTERIAL PRODUCT" means any product which incorporates a CHEMGENICS
Product or a WYETH-AYERST Product (including analogs, derivatives or
modifications thereof) listed on Schedule I hereto, as amended from time to
time, in accordance with Section 2.4 hereof, and any product in the Field which
is discovered during the Research Term of this Agreement and a period of [****]
thereafter, whether or not under the R & D Program, utilizing any Compound,
which discovery would not have occurred but for such utilization of such
Compound.

1.4 "BACTERIAL DISEASE" means a disease in humans caused by infection
with bacterial organisms and which is capable of being treated by pharmaceutical
agents targeting the bacterial organisms. Bacterial disease shall not include
the treatment of H. pylori infection for peptic ulcer disease or gastritis.

1.5 "CHEMGENICS OWNED TECHNOLOGY" has the meaning set forth in Section 6.2.1.

1.6 "CHEMGENICS PRODUCT" means a Compound provided by CHEMGENICS that has been
designated an Antibacterial Product. "CHEMGENICS Product" shall also include
any other compound discovered or developed during the Research Term of this
Agreement and a period of [****] thereafter using any such CHEMGENICS
Compound or using structural, chemical, or biological information relating to
any such CHEMGENICS Compound.

1.7 "COMMERCIAL LICENSE TERM" means the time period referenced in Section 8.2
hereof.



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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


1.8 "COMPOUND" means a chemical compound or mixture of compounds that is
discovered or developed in the R & D Program by either party alone or jointly by
both parties, which is identified as having antibacterial activity [************
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****] Without limiting the generality of the foregoing, a Compound will be
deemed "discovered" in the R & D Program if the potential utility or mode of
action of such Compound in the Field is identified or investigated in the R & D
Program.

1.9 "CONFIDENTIAL INFORMATION" means all Technology and all information
(including but not limited to information about any element of Technology or a
party's business) which is disclosed by one party to the other hereunder or
under the Superseded Confidentiality Agreement (as defined in Section 12.14) and
indicated as confidential by the disclosing party except to the extent that such
information (i) as of the date of disclosure is demonstrably known to the party
receiving such disclosure or its Affiliates, as shown by written documentation,
other than by virtue of a prior confidential disclosure to such party or its
Affiliates; (ii) as of the date of disclosure is in, or subsequently enters, the
public domain, through no fault or omission of the party receiving such
disclosure; or (iii) as of the date of disclosure or thereafter is obtained from
a third party free from any obligation of confidentiality to the disclosing
party.


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


1.10 "COST OF GOODS" means the following direct and indirect costs incurred by
WYETH-AYERST in the production of the Antibacterial Products:[*****************
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     The amount to be allocated for departmental administrative and overhead
shall be determined by computing the percent of direct labor and materials
dollars applicable to the work performed in the production of the Antibacterial
Products in a given department as a proportion to all direct labor and materials
dollars charged to projects in that department, and multiplying that percent by
the total overhead dollars related to that department. The percentage amounts
used to determine the allocated amounts will be calculated using WYETH-AYERST's
accounting system which will compute such rates on a consistent basis. Should
WYETH-AYERST change its method of allocating overhead and administrative costs
to its projects it will so advise CHEMGENICS and the parties will renegotiate
the basis for


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


allocating such costs to the work performed in the production of Antibacterial
Products.

1.11 "CPMP" means the Committee on Proprietary Medical Products of the European
Union.

1.12 "DISCOVERY PROJECT STATUS" means a designation given to a Compound when the
JSC determines that [***********************************************************
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1.13 "EFFECTIVE DATE" means the date of full execution of this Agreement by the
parties.

1.14 "FIELD" means drugs for the prevention and treatment of Bacterial Diseases
in humans.

1.15 "FIRST COMMERCIAL SALE" means the date of the first sale of an
Antibacterial Product in the ordinary course of business in any country by
WYETH-AYERST or an Affiliate or distributor, licensee or sublicensee of such
party.

1.16 "FISCAL QUARTER" means one quarter of WYETH-AYERST's Fiscal Year.

1.17 "FISCAL YEAR" means the twelve month period beginning January 1 and ending
December 31 of a calendar year.

1.18 "JOINT STEERING COMMITTEE" or "JSC" means the committee created pursuant to
Section 2.2.

1.19 "JOINT TECHNOLOGY" has the meaning set forth in Section 6.2.3.



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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


1.20 "NDA" means a New Drug Application, as defined by the U.S. FDA, or the
equivalent in any other country in the Territory.

1.21 "NET SALES" means with respect to an Antibacterial Product, the gross
amount invoiced by WYETH-AYERST, its Affiliates and/or its licensees and
sublicensees, on sales or other dispositions of the Antibacterial Product to
unrelated third parties, less the following items, provided that such items are
actually included in the price charged and do not exceed reasonable and
customary amounts in the country in which such sale occurred:

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     Such amounts shall be determined from the books and records of
WYETH-AYERST, its Affiliates and/or its licensees or sublicensees, maintained in
accordance with generally accepted accounting principles, consistently applied.

     If an Antibacterial Product is sold in bulk (as distinguished from packaged
pharmaceutical form) for resale in packaged or finished form, Net Sales shall be
calculated by


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission
                       Asterisks denote such omissions.


determining the quantity of Antibacterial Product in packaged pharmaceutical
form that would reasonably be produced from the bulk quantity of Antibacterial
Product so sold, and by multiplying such quantity by the average price for such
Antibacterial Product in packaged pharmaceutical form during the applicable
royalty reporting period. If an Antibacterial Product is sold, or otherwise
commercially disposed of for value (including, without limitation, disposition
in connection with the delivery of other products or services), in a transaction
that is not a sale for cash to an independent third party, then the gross amount
invoiced in such transaction shall be deemed to be the gross amount that would
have been paid had there been such a sale at the average sale price of such
Antibacterial Product during the applicable royalty reporting period; provided,
however, that sale of Antibacterial Product in bulk to a third party end user
who repackages but does not resell such Antibacterial Product shall be
calculated at the actual transaction price.

         Net Sales shall not include any consideration received by WYETH-AYERST,
its Affiliates or its licensees or sublicensees in respect of the sale, use or
other disposition of an Antibacterial Product in a country as part of a clinical
trial prior to the receipt of all regulatory approvals required to commence full
commercial sales of such Antibacterial Product in such country, except sales
under "treatment INDs," "named patient sales," "compassionate use sales," or
their equivalents pursuant to which


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


WYETH-AYERST, its Affiliates or licensees and sublicensees is/are entitled,
under applicable regulatory policies, to recover costs incurred in providing
such products to the patients.

1.23 "PATENT RIGHTS" means the rights and interests in and to issued patents and
pending patent applications in any country, including, but not limited to, all
provisional applications, substitutions, continuations, continuations-in-part,
divisions, and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, whether owned solely or jointly by a
party or licensed in by a party with the right to sublicense. "CHEMGENICS Patent
Rights" shall mean Patent Rights owned or licensed by CHEMGENICS, with the right
to sublicense, which are necessary to develop, make, use or sell Antibacterial
Products, "WYETH-AYERST Patent Rights" shall mean Patent Rights owned or
licensed by WYETH-AYERST, with the right to sublicense, which are necessary to
develop, make, use or sell Antibacterial Products, and "Joint Patent Rights"
shall mean such Patent Rights owned or licensed jointly by the parties.

1.24 "PRE-PROJECT STATUS" means a WYETH-AYERST research designation for a
Compound that is a candidate for IND track, given to a Compound by WYETH-AYERST
in accordance with its customary drug development practices, and when, at a
minimum, it has been demonstrated to WYETH's satisfaction, consistent with its
customary criteria, [***********************************************************
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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


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1.25 "PROJECT COMMENCEMENT DATE" means December 1, 1996.

1.26 "R & D PROGRAM" means the research and development program, to be conducted
by CHEMGENICS and WYETH-AYERST pursuant to Section 2 of this Agreement and
reflected in the Work Plans.

1.27 "RESEARCH PHASE" means research relating to Compounds that have not yet
received Pre-Project Status designation.

1.28 "TECHNOLOGY" means and includes all inventions, discoveries, improvements,
proprietary materials, compounds, biological substances, data, know-how and
trade secrets, whether or not patentable, including any negative results.

1.29 "TERRITORY" means all the countries of the world.

1.30 "VALID CLAIM" means any claim of a pending patent application or an
unexpired patent which has not been held unenforceable, unpatentable or invalid
by a decision of a court or other governmental agency of competent jurisdiction,
unappealed or unappealable within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable through reissue, reexamination,
disclaimer or otherwise.

1.31 "WORK PLAN" means the written plan describing the activities to be carried
out during each year of the R & D Program pursuant to this Agreement. Each Work
Plan will be set forth in a written document prepared by CHEMGENICS and
WYETH-AYERST approved by the Joint Steering Committee.



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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


1.32 "WYETH-AYERST OWNED TECHNOLOGY" has the meaning set forth in Section 6.2.2.

1.33 "WYETH-AYERST PRODUCT" means a Compound provided by WYETH-AYERST that has
been designated an Antibacterial Product. "WYETH-AYERST Product" shall also
include any other Compound discovered or developed during the Research Term of
this Agreement and a period of [********] thereafter using any such WYETH-
AYERST Compound or using structural, chemical, or biological information
relating to any such WYETH-AYERST Compound.

                                2. R & D PROGRAM
                                   -------------

2.1  IMPLEMENTATION OF R & D PROGRAM.
     -------------------------------

     2.1.1 Basic Provisions of Program.
           ---------------------------

     The objective of the Research Phase of the R & D Program shall be the
discovery and characterization of Accepted Targets in areas covered by the four
Activity Profiles contained in Exhibit 1 and any other Activity Profiles
designated by the JSC from time to time. The objective of the development phase
of the R & D Program shall be the development of Compounds receiving Pre-Project
Status designation and the testing and regulatory approval of Antibacterial
Products in areas covered by such Activity Profiles. In carrying out the R & D
Program, CHEMGENICS shall devote an average of at least [****] full-time
equivalent employees per year to the Research Phase of the R & D Program over
its five year duration, and shall ensure that a reasonable number of such
employees are devoted solely to the R & D


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


Program, and that key members of such group will be Ph.D. level researchers.
CHEMGENICS and WYETH-AYERST shall each use commercially reasonable efforts to
perform such tasks as are set forth to be performed by it in the Work Plans,
including the provision of such facilities, materials, equipment and consultants
as each deems necessary to the achievement of such Work Plans.

     2.1.2 Collaborative Efforts and Reports.
           ---------------------------------

     The parties agree that the successful execution of the R & D Program will
require the collaborative use of both parties' areas of expertise. The parties
shall keep the JSC and each other fully informed about the status of the
portions of the R & D Program they respectively perform. In particular, without
limitation, each party shall furnish to the JSC and each other a quarterly
written report, describing the progress of its activities in reasonable detail,
no later than thirty (30) days after the end of each Fiscal Quarter.

     Scientists at CHEMGENICS and WYETH-AYERST shall cooperate in the
performance of the R & D Program and, subject to any confidentiality obligations
to third parties, shall exchange information and materials as necessary to carry
out the R & D Program, but subject to the provisions of Sections 4 and 5 hereof.
Each party will attempt to accommodate any reasonable request of the other party
to send or receive personnel for purposes of collaborating or exchanging
information under the R & D Program. Such visits and/or access will have defined


<PAGE>   14



purposes and be scheduled in advance. The requesting party will bear the travel
and lodging costs of any such personnel.

     2.1.3 Work Plans.
           ----------

     The Work Plan for the first year of the R & D Program shall be prepared by
CHEMGENICS and WYETH-AYERST and approved by the JSC as promptly as practical
after the Effective Date. For each year of the R & D Program commencing with the
second year, the Work Plan shall be prepared by CHEMGENICS and WYETH-AYERST and
approved by the JSC no later than thirty (30) days before the end of the prior
year. The Work Plan shall set forth specific research and development
objectives, milestones and resource allocation requirements and shall be
designed to facilitate the earliest practical identification of Accepted Targets
and the fastest practical testing, regulatory approval and marketing of safe and
effective Antibacterial Products.

     Each Work Plan shall be in writing and shall set forth with reasonable
specificity tasks for the period covered by the Work Plan. The JSC may make
adjustments in the Work Plan at its quarterly meetings or otherwise as it may
determine.

     2.1.4 Exclusivity.
           -----------

     CHEMGENICS agrees that for the duration of the "Research Term" (Research
Phase of the R & D Program as specified in Section 2.3 below) and for a period
of four (4) months thereafter, CHEMGENICS will not collaborate with or grant
license rights to any other party in the Field, except as otherwise permitted
hereby. WYETH-AYERST agrees that for the duration of


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             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


this Agreement, WYETH-AYERST will not utilize any CHEMGENICS Owned Technology,
as hereinafter defined, for any purpose other than (i) as provided herein or
(ii) otherwise for the benefit of CHEMGENICS.

2.2  JOINT STEERING COMMITTEE, PROJECT MANAGEMENT TEAM AND PROJECT LEADERS.
     ---------------------------------------------------------------------

     2.2.1 Establishment and Functions of JSC.
           ----------------------------------

     CHEMGENICS and WYETH-AYERST shall establish a "Joint Steering Committee"
(the "JSC"). The JSC will act on behalf of the two companies and will be
responsible for planning and monitoring of the R & D Program (until Pre-Project
Status designation by WYETH-AYERST with respect to any individual Compound) and
for setting forth specific research and development objectives, milestones,
determining when milestones are met, and resource allocation requirements. In
particular, the activities of the JSC shall include reviewing progress in the
R & D Program and recommending necessary adjustments to the R & D Program as the
research and development progresses, supervising the Project Management Team,
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***] Subject to Section 4.1, any technology in the Field to be considered for
in-licensing by either party during


<PAGE>   16


the Research Term, as hereinafter defined, shall be initially presented to the
JSC for discussion, utilizing only public, non-confidential information. Upon
review of such non-confidential information, the JSC may request the further
involvement of the JSC in any evaluation of such technology or may decline any
such involvement.

     In planning and monitoring the R & D Program, the JSC shall assign tasks
and responsibilities taking into account each party's respective specific
capabilities and expertise in order in particular to avoid duplication and
enhance efficiency and synergies.

     2.2.2 JSC Membership.
           --------------

     CHEMGENICS and WYETH-AYERST each shall appoint, in their sole discretion,
three members to the JSC, which shall include a Chair to be designated by
WYETH-AYERST and a Co-Chair to be designated by CHEMGENICS. Substitutes or
alternates for the Chair and Co-Chair or other JSC members may be appointed at
any time by notice in writing to the other party. The parties may mutually agree
to change the size of the JSC as long as there shall be an equal number of
representatives of each party on the JSC.

     The initial Chair, Co-Chair and other JSC members shall be designated by
the parties upon execution of this Agreement.

     2.2.3 Meetings.
           --------

     The JSC shall meet at least quarterly, with such meetings to be held,
alternately, in Cambridge or Framingham, Massachusetts


<PAGE>   17



and Pearl River, New York, unless the parties agree otherwise. Any additional
meetings shall be held at places and on dates selected by the Co-Chairs of the
JSC. In addition, the JSC may act without a formal meeting by a written
memorandum signed by the Co-Chairs of the JSC. Whenever any action by the JSC is
called for hereunder during a time period in which the JSC is not scheduled to
meet, the Co-Chairs of the JSC shall cause the JSC to take the action in the
requested time period by calling a special meeting or by action without a
meeting. Subject to the obligations set forth in Section 5, representatives of
each party or of its Affiliates, in addition to the members of the JSC, may
attend JSC meetings at the invitation of either party with the prior approval of
the other party, which shall not be unreasonably withheld.

     2.2.4 Minutes.
           -------

     The JSC shall keep accurate minutes of its deliberations which record all
proposed decisions and all actions recommended or taken. Drafts of the minutes
shall be delivered to the Co-Chairs of the JSC within twenty (20) days after the
meeting. The party hosting the meeting shall be responsible for the preparation
and circulation of the draft minutes. Draft minutes shall be edited by the
Co-Chairs and shall be issued in final form only with their approval and
agreement as evidenced by their signatures on the minutes.


<PAGE>   18



     2.2.5 Quorum; Voting; Decisions.
           -------------------------

      At each JSC meeting, at least two (2) member(s) appointed by each party
shall constitute a quorum. Each JSC member shall have one vote on all matters
before the JSC, provided that the member or members of each party present at a
JSC meeting shall have the authority to cast the votes of any of such party's
members on the JSC who are absent from the meeting. All decisions of the JSC
shall be made by majority vote, provided that such vote is supported by at least
one representative from each party. All JSC member actions shall be made in
consultation with the management of the party appointing such member. In the
event that the JSC is unable to resolve any matter before it, such matter shall
be referred at the request of either party to the Chief Executive Officer of
CHEMGENICS or some other individual nominated by him or her, and the President
of Wyeth-Ayerst Research or some other individual nominated by him or her, for
attempted resolution by good faith negotiations. If such officers cannot resolve
the matter, each party may, at its own expense, appoint an unaffiliated
scientific or other appropriate expert to advise such officers on the matter.
The scientific or other appropriate experts shall be reasonably acceptable to
the other party and shall be chosen based on their experience and expertise in
the particular type of issue which is unresolved. The experts shall render a
written advisory opinion to such officers, which may be considered by such
officers in an attempt to resolve the issue.



<PAGE>   19



     2.2.6 Expenses.
           --------

     CHEMGENICS and WYETH-AYERST shall each bear all expenses of their
respective JSC members related to their participation on the JSC and attendance
at JSC meetings, and of any scientific experts appointed by them pursuant to
Section 2.2.5.

     2.2.7 Project Leaders.
           ---------------

     CHEMGENICS and WYETH-AYERST shall each appoint a "Project Leader" who shall
serve as such party's primary technical liaison with the other party to discuss
technical matters pertaining to the R & D Program.

     2.2.8 Project Management Team.
           -----------------------

     CHEMGENICS and WYETH-AYERST shall establish a "Project Management Team"
(the "PMT"), which will act on behalf of the two companies and which shall
manage the R & D Program as directed by the JSC. CHEMGENICS and WYETH-AYERST
each shall appoint, in their sole discretion, three members to the PMT, which
shall include the Project Leaders. Substitutes or alternates for the Project
Leaders or other PMT members may be appointed at any time by notice in writing
to the other party. The parties may mutually agree to change the size of the PMT
as long as there shall be an equal number of representatives of each party on
the PMT.

     The initial Project Leaders and other PMT members shall be designated by
the parties upon execution of this Agreement. The PMT shall meet, keep minutes
and establish operating procedures as directed by the JSC.



<PAGE>   20



     The PMT shall be chaired by the two Project Leaders.

2.3  RESEARCH AND DEVELOPMENT TERM.
     -----------------------------

     2.3.1 Term of the R & D Program.
           -------------------------

     The Research Phase of the R & D Program shall terminate five (5) years
after the Project Commencement Date unless extended as provided below or unless
earlier terminated by either party pursuant to the termination provisions below
(hereinafter the "Research Term").

     2.3.2 Extension of the Research Term.
           ------------------------------

     The Research Term may be extended upon six (6) months prior notice by
mutual written agreement of the parties on terms to be agreed upon between the
parties.

     2.3.3 Early Termination of the R & D Program.
           --------------------------------------

     (a) The R & D Program may be terminated by either party upon breach by the
other of the obligation to pay any amount due hereunder, or upon breach of any
other material obligation or condition, effective thirty (30) days after giving
written notice to the other of such termination in the case of a payment breach
and ninety (90) days after giving written notice to the other of such
termination in the case of any other breach, which notice shall describe such
breach in reasonable detail. The foregoing notwithstanding, (i) if the default
or breach is cured or shown to be non-existent within the aforesaid thirty (30)
or ninety (90) day period, the notice shall be deemed automatically withdrawn
and of no effect, and (ii) as to an alleged breach expressly set forth with
reasonable detail to be the subject of a


<PAGE>   21
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


good faith dispute as to whether or not such payment is due and owing or whether
a breach of any other material obligation or condition has occurred, within the
aforesaid thirty (30) day or ninety (90) day period, the running of the
remainder of the thirty (30) day or ninety (90) day period shall be tolled until
the dispute is resolved.

     (b) If either party files for protection under bankruptcy laws, makes an
assignment for the benefit of creditors, appoints or suffers appointment of a
receiver or trustee over its property, files a petition under any bankruptcy or
insolvency act or has any such petition filed against it which is not discharged
within ninety (90) days of the filing thereof, then the other party may
terminate the R & D Program upon notice to such party.

     (c) WYETH-AYERST may terminate the R & D Program at its sole discretion (i)
in the event of the "Acquisition" of CHEMGENICS by a third party, (ii) if
CHEMGENICS is no longer generally engaged in drug discovery as a primary
business activity or is generally unable to perform the types of obligations set
forth herein or (iii) if there have not been at least [*****] Accepted Targets
approved by the JSC by the [*****] anniversary of the Project Commencement Date
and there have not been at least [*****] Discovery Projects designated by the
JSC by such [*****] anniversary. For purposes hereof, an "Acquisition" shall be
deemed to have occurred if CHEMGENICS shall consolidate or merge with another
entity, or convey, sell or lease to another entity all or substantially all of
the stock, assets or business


<PAGE>   22

of CHEMGENICS and its subsidiaries, taken as a whole, or suffer a Change in
Control in which another entity shall come to control CHEMGENICS. Change of
Control as used herein shall mean any transaction or event as a result of which
any other entity acquires or for the first time controls and is able to vote
without restriction (directly or through nominees or beneficial ownership) fifty
percent (50%) or more of the capital stock of CHEMGENICS outstanding at the time
having the power ordinarily to vote for directors of CHEMGENICS.

     (d) Any termination of the R & D Program shall be without prejudice to the
rights of either party against the other, then accruing or otherwise accrued
under this Agreement.

     (e) Upon any early termination of the R & D Program by CHEMGENICS under
section 2.3.3(a) or (b), the provisions of Sections 8.7.3(a), (b), and (c) shall
apply as if all licenses granted to WYETH-AYERST under Section 8.1 had been
terminated.

     (f) The licenses granted to WYETH-AYERST pursuant to Section 8.1(b) hereof
shall survive early termination of the R & D Program by WYETH-AYERST under this
Section 2.3.3. Further, as of the effective date of such early termination by
WYETH-AYERST of the R & D Program, WYETH-AYERST shall be released from its
future obligations of equity funding and research funding, pursuant to Sections
3.1, 3.2, and 3.3 hereof, except for any obligations which have accrued but have
not been satisfied as of such termination date.


<PAGE>   23



2.4  PRODUCT DEVELOPMENT
     -------------------

     2.4.1 Identification of Candidate Compounds for Pre-Project Status.
           -------------------------------------------------------------

     WYETH-AYERST and CHEMGENICS agree that a priority of the R & D Program
shall be to demonstrate as quickly as possible the antibacterial activity in
humans of a safe and effective Antibacterial Product in each Activity Profile.
At such time as CHEMGENICS or WYETH-AYERST has identified a CHEMGENICS Compound
or a WYETH-AYERST Compound discovered or developed by it (or jointly by it and
the other party) in the R & D Program which it believes should receive
Pre-Project Status, it shall notify the JSC in writing, and shall provide to the
JSC the data and information demonstrating that the Compound satisfies the
criteria for Pre-Project Status.

     2.4.2 Designation of Antibacterial Products
           -------------------------------------

     At the request of CHEMGENICS or WYETH-AYERST, within thirty (30) days after
receipt of notice pursuant to 2.4.1 above, the JSC shall review the data and
information and shall notify the parties in writing of its determination as to
whether or not it believes the Compound should be given Pre-Project Status and
therefore be designated as a candidate for Pre-Project Status (a "Pre-Project
Status Candidate"). At the request of the JSC, either party, as appropriate,
shall provide the JSC with such additional data as the JSC shall reasonably
request, provided such party can reasonably obtain same. Any negative
determination by the JSC that it does not so recommend, shall be accompanied by
a detailed explanation of the reasons therefor.


<PAGE>   24
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


If the JSC does not act within such thirty (30) day period, it will be deemed to
have designated the Compound as a Pre-Project Status Candidate. Upon designation
of a Compound as a Pre-Project Status Candidate,[*******************************
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Upon issuance of an "Antibacterial Product Designation" the Compound will
become an "Antibacterial Product," Schedule I will be amended to include such
Compound, and such Antibacterial Product shall be deemed to


<PAGE>   25

be included in the license to WYETH-AYERST pursuant to Section 8 hereof. If a
Compound is designated as an Antibacterial Product, its development will no
longer be under the purview of the JSC, but will be the sole responsibility of
WYETH-AYERST. WYETH-AYERST will appoint Discovery and Pre-Project Teams to
manage the development thereof, with CHEMGENICS having at least one
representative on each such Team.

     2.4.3 Pre-Project Status Compounds Not Selected by WYETH-AYERST as
           ------------------------------------------------------------
           Antibacterial Products.
           ----------------------

     In case of failure by WYETH-AYERST to issue an Antibacterial Product
Designation with respect to a particular CHEMGENICS Compound as provided in
Section 2.4.2, CHEMGENICS will not market nor grant rights in the Field in the
Territory to such Compound to any party for the longer of: (i) so long as
WYETH-AYERST is actively and diligently involved in the development and/or the
marketing of an Antibacterial Product in the Field in the Territory in the same
Activity Profile or (ii) until one year after the end of the Research Term.
CHEMGENICS shall have rights with respect to the commercialization of such
CHEMGENICS Compounds in the Territory solely as set forth in Section 2.5 hereof.

     2.4.4 Development Obligations.
           -----------------------

     WYETH-AYERST agrees that it will exert commercially reasonable drug
development and marketing efforts that are consistent with those efforts
undertaken in its own global pharmaceutical business to develop and market in
the Field, throughout such areas of the Territory as it may reasonably


<PAGE>   26



determine, at its own expense, Antibacterial Products incorporating or derived
from any Compounds which receive Antibacterial Product Designation (a "Drug
Development Program").

     2.4.5 Reports.
           -------

     WYETH-AYERST will keep CHEMGENICS fully informed concerning the status of
the Drug Development Program for each Antibacterial Product, it being understood
that all such information is Confidential Information subject to all the terms
and conditions of this Agreement, and particularly Article 5 hereof. WYETH-
AYERST shall (a) report to CHEMGENICS in reasonable detail no less frequently
than quarterly concerning all aspects of such development and commercialization
activities; (b) provide CHEMGENICS with access to Technology and Confidential
Information employed in or arising out of such development and commercialization
activities; (c) provide CHEMGENICS with summaries of all regulatory filings
filed in connection with such Products, together with all clinical protocols and
material correspondence with regulatory authorities in the United States and
other countries; and (d) provide such other information concerning such
development and commercialization activities as CHEMGENICS shall reasonably
request.

2.5  COMMERCIALIZATION RIGHTS.
     ------------------------

     (a)  Except as otherwise provided herein, (i) WYETH-AYERST shall have the
          exclusive right to develop and commercialize Antibacterial Products
          which are derived from either CHEMGENICS Products or WYETH-AYERST
          Products in the Territory for use in the Field; and


<PAGE>   27



          (ii) commencing one year after the end of the Research Term,
          CHEMGENICS shall have the exclusive right in the Territory and in the
          Field to develop and commercialize any Compound which is a CHEMGENICS
          Product, but not an Antibacterial Product being developed by
          WYETH-AYERST, by itself or with a third party and shall have an
          exclusive right of first refusal as set forth in Section 2.6 hereof to
          develop and commercialize by itself or with a third party, any
          WYETH-AYERST Product that WYETH-AYERST makes available for licensing
          in the Field; provided, however, that CHEMGENICS shall have no such
          rights under subsection (ii) hereof if WYETH-AYERST has designated
          and is developing another Compound as an Antibacterial Product
          hereunder, which has the same Activity Profile; and, provided further,
          that CHEMGENICS shall not have the right of first refusal set forth
          above for WYETH-AYERST Products if WYETH-AYERST has terminated the
          R & D Program in accordance with Section 2.3.3(a), 2.3.3(b), or
          clause (i) of Section 2.3.3(c) hereof. Licenses for all such rights
          shall be granted in accordance with the terms of Section 8 hereof.


<PAGE>   28



     (b)  Except as set forth in Section 2.5(c) or Section 2.7, if either party
          wishes to develop and commercialize an Antibacterial Product listed on
          Schedule I for use outside the Field, it shall notify the other party.
          If both parties have the right to engage in such development and
          commercialization, then such opportunities shall be reasonably
          considered by both parties and shall only be pursued upon terms
          mutually agreeable to both parties.

     (c)  Notwithstanding the foregoing, WYETH-AYERST will have an exclusive
          right of first refusal as set forth in Section 2.6 hereof to license
          Compounds and related Technology which reach Pre-Project Status for
          use in the prevention and treatment of bacterial disease in animals,
          said right vesting in WYETH-AYERST as of the date of designation of
          such Compound as an Antibacterial Product.

     (d)  If at any time WYETH-AYERST elects to discontinue the development or
          commercialization of an Antibacterial Product in the Field, (i) it
          shall promptly notify CHEMGENICS, whereupon, WYETH-AYERST's license to
          such Antibacterial Product from CHEMGENICS will be terminated, and,
          (ii) commencing one year after the end of the Research Term and
          provided that WYETH-AYERST is not actively developing another
          Antibacterial Product in the same Activity Profile, (a) CHEMGENICS
          will have the right to develop and commercialize any such


<PAGE>   29



          Antibacterial Product which is a CHEMGENICS Product itself or with a
          third party on the same basis as if the license for such Antibacterial
          Product had been terminated by CHEMGENICS pursuant to Section 8.7.2
          hereof and (b) CHEMGENICS shall have a right of first refusal as set
          forth in Section 2.6 hereof related to any such Antibacterial Product
          which is a WYETH-AYERST Product that WYETH-AYERST makes available for
          licensing in the Field.

     (e)  In the event CHEMGENICS exercises its right to develop and
          commercialize any Antibacterial Product as permitted in Section 2.5(a)
          or 2.5(d) above, it shall give WYETH-AYERST written notice specifying
          the Antibacterial Product to be developed and commercialized.

     (f)  At the request of CHEMGENICS, and provided that CHEMGENICS can
          reasonably demonstrate to WYETH-AYERST that it has appropriate
          capabilities, the parties will discuss CHEMGENICS' participation in
          marketing, co-marketing, co-promoting or manufacturing Antibacterial
          Products, but WYETH-AYERST will not be obligated to agree to
          CHEMGENICS' participation in such activities.

     (g)  For the purposes of this Section, any Product which is within the
          definition of both a WYETH-AYERST Product (as set forth in Section
          1.33) and a CHEMGENICS Product


<PAGE>   30



          (as set forth in Section 1.6) shall be treated for the purposes hereof
          as being jointly owned and the provisions applying to CHEMGENICS
          Products shall apply to CHEMGENICS' ownership interest therein and the
          provisions applying to WYETH-AYERST Products shall apply to
          WYETH-AYERST's ownership interest therein.

2.6  RIGHT OF FIRST REFUSAL.
     ----------------------

     In the event that either party has a right of first refusal hereunder, the
other party (the "Offering Party") shall give written notice to the party having
such right (the "Receiving Party") specifying in reasonable detail the rights
that the Offering Party intends to license (the "Offer"). The Receiving Party
shall have thirty (30) days after the date of the Offer to provide a written
response to the Offering Party (the "Response") as to whether or not it wishes
to enter into negotiations with the Offering Party with respect to such rights.
If the Response states that the Receiving Party wishes to enter into
negotiations with the Offering Party, the parties shall negotiate in good faith
the licensing of such rights for a period of ninety (90) days from the date of
the Response. If the Response is not received within the thirty (30) day
response period or if the Receiving Party declines to enter into negotiations or
if the parties do not agree upon and execute a written agreement within the
ninety (90) day negotiation period, the Offering Party shall thereafter have the
right to negotiate with third parties with respect to such rights. However,
prior to the execution of any definitive agreement with any third party, the
Offering Party


<PAGE>   31



shall provide the complete terms of such agreement to the Receiving Party and
the Receiving Party shall have a period of fifteen (15) days in which to accept
such agreement for itself or to decline the execution of such agreement, after
which time the Offering Party may execute such Agreement with any other party.

2.7  RIGHT OF FIRST NEGOTIATION FOR H. PYLORI INFECTION.
     --------------------------------------------------

     In addition to the foregoing commercialization rights granted hereunder to
WYETH-AYERST, during the Research Term, in the event that CHEMGENICS determines
to undertake a program to develop and commercialize for itself or to license to
any non-Affiliate rights to develop, make, use, offer for sale, sell and import
any product having potential use for treatment of H. pylori infection in humans
for use in peptic ulcer disease or gastritis (an "H. pylori Program"),
CHEMGENICS shall give written notice to WYETH-AYERST, specifying in reasonable
detail the H. pylori Program that CHEMGENICS intends to pursue and any rights
CHEMGENICS intends to license or the product which it intends to develop (the
"CHEMGENICS Notice"). WYETH-AYERST shall have thirty (30) days after the date of
the CHEMGENICS Notice to provide a written response to CHEMGENICS ("WYETH-AYERST
Response") as to whether or not it wishes to enter into negotiations with
CHEMGENICS concerning such H. pylori Program. If CHEMGENICS does not receive a
WYETH-AYERST Response within such thirty (30) day period or if WYETH-AYERST
declines to enter into negotiations, CHEMGENICS shall thereafter have the right,
alone or in collaboration with a third party, to pursue


<PAGE>   32



development, commercialization or licensing of the rights which were the subject
of the CHEMGENICS Notice free of any restriction or limitation, or duty to
WYETH-AYERST whatsoever. If the WYETH-AYERST Response states that WYETH-AYERST
wishes to enter into negotiations with CHEMGENICS, the parties shall negotiate
in good faith the licensing of such rights to WYETH-AYERST for a period of sixty
(60) days from the date of the WYETH-AYERST Response.

     If the parties do not agree upon and execute a written agreement for such
rights within such sixty (60) day period, as such period may be extended by
written agreement of both parties, WYETH-AYERST shall set forth in writing in
detail its "last best offer" with respect to such development, commercialization
or licensing of rights. If CHEMGENICS does not accept such last best offer,
CHEMGENICS will furnish WYETH-AYERST with a written statement that it rejects
such last best offer, and CHEMGENICS shall thereafter have the right, alone or
in collaboration with a third party, to pursue development, commercialization or
licensing of the rights which were the subject of the CHEMGENICS Notice, but
only on terms reasonably believed by CHEMGENICS to be more favorable in the
aggregate to CHEMGENICS than WYETH-AYERST's last best offer. Both parties
recognize that in evaluating the favorability to CHEMGENICS of development,
commercialization or licensing terms, numerous factors may be taken into account
and given appropriate weight, including without limitation, the amount of
upfront payments, the amount and timing of subsequent payments, the royalty
rate(s), the definition of territory, the purchase and pricing of equity, the
identity, experience and


<PAGE>   33

market position of the other party in the relevant markets, and the contribution
of patent or other intellectual property rights material to the commercial
success of CHEMGENICS. Moreover, WYETH-AYERST agrees that CHEMGENICS is entitled
to assign reasonable value to comarketing, copromotion, manufacturing or patent
rights or other consideration that CHEMGENICS receives in return for the rights
granted by CHEMGENICS.

2.8  RETAINED RIGHTS.
     ---------------

     Except as set forth herein, and in particular as set forth in Sections
2.5(b) and 2.5(c) hereof, nothing in this Agreement shall limit in any respect
the right of either party to conduct research and development with respect to
and market products outside the Field using any of such party's technology,
information, or otherwise.

                                   3. FUNDING
                                      -------

3.1  EQUITY INVESTMENTS.
     ------------------

     WYETH-AYERST will make three equity investments in CHEMGENICS in accordance
with the terms of a Series E Preferred Stock Purchase Agreement of even date
herewith (the "Stock Purchase Agreement"):

     1.   $5 million on the Effective Date of this Agreement

     2.   $5 million as set forth in Section 1.03(b) of the Stock Purchase
          Agreement.

     3.   $3 million as set forth in Section 1.03(c) of the Stock Purchase
          Agreement.




<PAGE>   34
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


3.2  RESEARCH FUNDING.
     ----------------

     In partial consideration of the work to be done by CHEMGENICS in the R & D
Program, WYETH-AYERST will pay CHEMGENICS non-refundable research payments of
[*****] per month during the initial three-year-period of the Research Term
commencing retroactively as of October 1, 1996. During the fourth and fifth
years of the Research Term, WYETH-AYERST will pay CHEMGENICS [******************
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*******************************************************************************]
Such payments will be made in advance, on or before the first day of each
calendar quarter, with  the first and last payments prorated in the event that
the Effective Date is not the first day of a calendar quarter. The first
research payment shall be made simultaneously with the execution of this
Agreement and shall include all amounts necessary to make WYETH-AYERST current
in research payments due since October 1, 1996. WYETH-AYERST will fund its own
activities under the R & D Program.

3.3  ADDITIONAL R&D PAYMENTS.
     -----------------------

     WYETH-AYERST will make additional research payments to CHEMGENICS within 30
days of the determination (as set forth in




<PAGE>   35
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


Section 3.5) of the achievement of certain research goals as set forth below. If
any goal is achieved during the term of this Agreement, the payment for such
goal will be absolutely due and payable.

Goal                                            Payment
----                                            -------

*****                                           *****
*****

*****                                           *****
*****
*****

*****                                           *****
*****
*****
*****

*****                                           *****
*****
*****
*****
*****
*****
*****

















                                                                          ]




<PAGE>   36
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


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3.4  MILESTONE PAYMENTS.
     ------------------

     WYETH-AYERST will make payments to CHEMGENICS within thirty (30) days after
the determination (as set forth in Section 3.5) of the achievement of each of
the milestones set forth below for each of the Activity Profiles to be pursued
under the R & D Program. If any milestone is achieved during the term of this
Agreement, the payment for such milestone will be absolutely due and payable.

Milestone                                                       Payment
---------                                                       -------
*****                                                           *****
****

*****                                                           *****
*****

*****                                                           *****
***

*****                                                           *****
***



                                                                           ]



<PAGE>   37
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


*******
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3.5  DETERMINATION THAT GOALS AND MILESTONES ARE ACHIEVED.
     ----------------------------------------------------
     In the event that CHEMGENICS believes any research goal or milestone has
been achieved, it shall so notify the JSC in writing and shall provide to the
JSC the data and information demonstrating that the research goal or milestone
has been achieved. Within thirty (30) days, the JSC shall review the data and
information and shall certify in writing whether or not the research goal or
milestone has been achieved. Any negative determination shall be accompanied by
a detailed explanation of the reasons therefor. If the JSC does not take action
within such thirty (30) day period, the research goal or milestone shall be
deemed to have been achieved.

3.6  RESEARCH AND DEVELOPMENT TAX CREDITS.
     ------------------------------------
     Each party shall be entitled to seek the benefit of any research and
development tax credits arising out of any research paid for by such party or
its Affiliates. CHEMGENICS acknowledges that, to the extent appropriate,
research payments made hereunder, including Sections 3.2, 3.3 and 3.4, are made
in furtherance of research, and may entitle WYETH-AYERST to seek research tax
credits.


<PAGE>   38

                               4. OTHER TECHNOLOGY
                                  ----------------
4.1  OTHER TECHNOLOGY.
     ----------------
     The parties hereto acknowledge that WYETH-AYERST may engage in development
and commercialization of antibacterial products, through internal research
efforts and in collaboration with others, and that both WYETH-AYERST and
CHEMGENICS may engage in discussions or may enter into agreements with other
parties relative to development and commercialization of other pharmaceutical
products. Accordingly, nothing contained in this Agreement shall be construed as
limiting the right of either party to engage in any such discussions or third
party agreements, and any benefits or obligations arising from such independent
transactions shall inure solely to the party participating therein.

     Notwithstanding the foregoing, but subject to Section 2.2.1, it is
contemplated hereunder that WYETH-AYERST may elect, at its sole discretion, to
place other technologies at its disposal into the collaboration hereunder to the
extent it is permitted to do so. If WYETH-AYERST makes such an election, it will
in no way affect the rights and obligations of the parties hereto except as
expressly set forth herein without the prior written consent of CHEMGENICS,
which consent shall not be unreasonably withheld.


<PAGE>   39



                    5. TREATMENT OF CONFIDENTIAL INFORMATION
                       -------------------------------------
5.1  CONFIDENTIALITY.
     ---------------

     5.1.1 General.
           -------
     CHEMGENICS and WYETH-AYERST each recognize that the other party's
Confidential Information constitutes highly valuable and proprietary
confidential information. Subject to the terms and conditions of Section 8,
CHEMGENICS and WYETH-AYERST each agree that during the R & D Program and the
License Term and for five (5) years thereafter, it will keep confidential, and
will cause its employees, consultants, Affiliates and licensees and sublicensees
to keep confidential, all Confidential Information of the other party that is
disclosed to it, or to any of its employees, consultants, Affiliates and
licensees and sublicensees, pursuant to or in connection with this Agreement.
Neither CHEMGENICS nor WYETH-AYERST nor any of their respective employees,
consultants, Affiliates and licensees and sublicensees shall use Confidential
Information of the other party for any purpose whatsoever except as expressly
permitted in this Agreement. Notwithstanding the foregoing, WYETH-AYERST will
reasonably cooperate with CHEMGENICS in the making of reasonable, confidential
disclosures of Confidential Information to investment bankers, investors and
potential investors of CHEMGENICS.

     5.1.2 Restricted Access.
           -----------------
     CHEMGENICS and WYETH-AYERST each agree that any disclosure of the other
party's Confidential Information to any of its officers, employees, consultants
or agents or those of any of its


<PAGE>   40



Affiliates and licensees and sublicensees shall be made only if and to the
extent necessary to carry out its rights and responsibilities under this
Agreement with respect to the Field, shall be limited to the maximum extent
possible consistent with such rights and responsibilities and shall only be made
to persons who are bound by written confidentiality agreements to maintain the
confidentiality thereof and not to use such Confidential Information except as
expressly permitted by this Agreement. CHEMGENICS and WYETH-AYERST, for
themselves and their Affiliates, each agree not to disclose the other party's
Confidential Information to any third parties under any circumstance without
prior written approval from the other party, except as required in any patent
application or patent prosecution, in any application for regulatory approval
for testing, manufacture or sale of an Antibacterial Product subject to this
Agreement, or as otherwise required by law, and except as otherwise reasonably
required to exercise such party's rights under this Agreement. However, before
disclosing the other party's Confidential Information in connection with a
patent application, patent prosecution or regulatory application or as otherwise
required by law, the disclosing party shall provide a copy of such intended
disclosure to the other party. If the other party so requests and where
permitted by law or regulation, the disclosing party shall redact such portion
of the intended disclosure as reasonably requested. Each party shall take such
action, and shall cause its Affiliates and licensees and sublicensees to take
such action, to preserve the confidentiality


<PAGE>   41



of each other's Confidential Information as it would customarily take to
preserve the confidentiality of its own Confidential Information, and in no
event, less than reasonable care. Each party, upon the other's request, will
return all the Confidential Information disclosed to it by the other party
pursuant to this Agreement, including all copies and extracts of documents,
within sixty (60) days of the request following the termination of this
Agreement; provided that a party may retain Confidential Information of the
other party relating to any license or right to use Technology which survives
such termination and one copy of all other Confidential Information may be
retained in confidential and inactive archives solely for the purpose of
establishing the contents thereof.

     5.1.3 Employee Confidentiality Agreements.
           -----------------------------------
     CHEMGENICS and WYETH-AYERST each represents that all of its employees and
all of the employees of its Affiliates, and any consultants to such party or its
Affiliates, participating in the R & D Program who shall have access to
Confidential Information of the other party are bound by written agreements to
maintain such information in confidence and not to use such information except
as expressly permitted herein. Each party agrees to enforce confidentiality
obligations to which its employees and consultants (and those of its Affiliates)
are obligated.


<PAGE>   42



5.2  PUBLICITY.
     ---------
     Neither party may disclose the existence or terms of this Agreement without
the prior written consent of the other party; provided, however, that either
party may make such a disclosure to the extent required by law, subject to the
provisions of redaction set forth in 5.1.2 hereof, and that CHEMGENICS may make
a disclosure of the existence and terms of this Agreement to investors,
prospective investors, lenders and other financing sources, or for products for
which rights in the Field are granted to CHEMGENICS hereunder, and subject to
the provisions of redaction set forth in 5.1.2 hereof. The parties, upon the
execution of this Agreement and from time to time thereafter, will agree to news
releases for publication in general circulation periodicals and newswires. Once
any written statement is approved for disclosure by both parties, either party
may make subsequent public disclosure of the contents of such statement without
the further approval of the other party.

5.3  PUBLICATION.
     -----------
     It is expected that each party may wish to publish the results of its
research under this Agreement. In order to safeguard intellectual property
rights, the party wishing to publish or otherwise publicly disclose the results
of its research hereunder shall first submit a draft of the proposed scientific
manuscripts, abstracts or other proposed public presentations, to the JSC for
review, comment and consideration of appropriate patent action at least four (4)
weeks prior to any submission for publication or other public disclosure. Within


<PAGE>   43



twenty (20) days of receipt of the prepublication materials, the JSC will advise
the party seeking publication as to whether a patent application will be
prepared and filed or whether trade secret protection should be pursued and, if
so, the JSC will, in cooperation with both parties, determine the appropriate
timing and content of any such publications.

5.4  PROHIBITION ON HIRING.
     ---------------------
     Neither WYETH-AYERST nor its Affiliates shall, without CHEMGENICS' prior
written approval, during the R & D Program, but in any event for at least five
(5) years from the Effective Date, solicit (directly or indirectly) or hire any
person who was employed by CHEMGENICS or its Affiliates, whether such person is
hired as an employee, investigator, independent contractor or otherwise, without
the express written consent of CHEMGENICS. This restriction shall not apply to
any CHEMGENICS employee who did not participate in the R&D Program and who
actively seeks employment with WYETH-AYERST and initiates contact with WYETH-
AYERST regarding same.

                         6. INTELLECTUAL PROPERTY RIGHTS
                            ----------------------------

6.1  DISCLOSURE OF INVENTIONS.
     ------------------------
     Each party shall promptly inform the other and the JSC about all inventions
in the Field that are conceived, made or developed in the course of carrying out
the R & D Program by employees or consultants of either of them or their
Affiliates alone or jointly with employees or consultants of the other party or
its


<PAGE>   44



Affiliates. The following provisions shall apply to rights in the intellectual
property developed by CHEMGENICS or WYETH-AYERST, or both, during the course of
carrying out the R & D Program.

6.2  OWNERSHIP.
     ---------

     6.2.1 CHEMGENICS Intellectual Property Rights.
           ---------------------------------------
     CHEMGENICS shall have sole and exclusive ownership of all right, title and
interest on a worldwide basis in and to any Technology developed solely by
CHEMGENICS (collectively, the "CHEMGENICS Owned Technology"), with full rights
to license or sublicense, subject to WYETH-AYERST's rights hereunder. Without
limiting the foregoing, subject to the licenses granted in Section 8 hereof and
WYETH-AYERST's rights under Section 8.6 hereof, CHEMGENICS shall be the sole
owner of all Patent Rights, all trade secret rights and any other intellectual
property rights in the CHEMGENICS Owned Technology, including the sole and
exclusive right to exclude others from making, using, selling, offering for sale
or importing the CHEMGENICS Owned Technology or any products based on or derived
from the CHEMGENICS Compounds or any other CHEMGENICS Owned Technology.

     6.2.2 WYETH-AYERST Intellectual Property Rights.
           -----------------------------------------
     WYETH-AYERST shall have sole and exclusive ownership of all right, title
and interest on a worldwide basis in and to any Technology developed solely by
WYETH-AYERST without use of CHEMGENICS Technology, including any compounds
obtained by WYETH-AYERST other than as a result of the R&D Program
("WYETH-AYERST Owned Technology"), with full rights to license or sublicense,


<PAGE>   45



subject to CHEMGENICS' rights hereunder. Without limiting the foregoing, subject
to the licenses granted hereunder and CHEMGENICS' rights under Section 8.6
hereof, WYETH-AYERST shall be the sole owner of all Patent Rights, all trade
secret rights and any other intellectual property rights in the WYETH-AYERST
Owned Technology, including the sole and exclusive right to exclude others from
making, using, selling, offering for sale or importing the WYETH-AYERST Owned
Technology or any products based on or derived from the WYETH-AYERST Compounds
or any other WYETH-AYERST Owned Technology.

     6.2.3 Joint Technology.
           ----------------
     WYETH-AYERST and CHEMGENICS shall jointly own (a) all Technology jointly
invented by both CHEMGENICS and WYETH-AYERST in the R & D Program without the
use of CHEMGENICS Technology and (b) all Technology developed by WYETH-AYERST
with the use of CHEMGENICS Technology (the "Joint Technology") and shall jointly
own all Joint Patent Rights. Each party shall have rights to use Joint
Technology and Joint Patent Rights outside the Field, subject to the provisions
of Article 2.5 hereof.

     6.2.4 Rights Outside the Field.
           ------------------------
     Except as specifically set forth herein, each party shall have the sole and
exclusive right, including rights under its own interests in any Joint
Technology and any Patent Rights thereon and rights to grant sublicenses
thereunder, to develop, have developed, make, have made, use, distribute for
sale, sell, offer for sale and import any products which are derived from its


<PAGE>   46



Compounds other than Antibacterial Products listed on Schedule I for all uses
outside the Field.

6.3  PATENT COORDINATORS.
     -------------------
     CHEMGENICS and WYETH-AYERST shall each appoint a Patent Coordinator who
shall serve as such party's primary liaison with the other party on matters
relating to patent filing, prosecution, maintenance and enforcement. Each party
may replace its Patent Coordinator at any time by notice in writing to the other
party. The initial Patent Coordinators shall be designated by the parties upon
execution of this Agreement.

6.4  INVENTORSHIP.
     ------------
     In case of dispute between CHEMGENICS and WYETH-AYERST over inventorship,
the JSC, with the advice of the parties and mutually acceptable outside patent
counsel, shall make the determination of the inventor(s) by application of the
standards contained in United States patent law. The JSC, with the advice of the
Patent Coordinators and mutually acceptable outside patent counsel, shall also,
in the case of dispute, make the determination as to whether an invention is
Joint Technology.

6.5  TRADEMARKS.
     ----------
     WYETH-AYERST, its Affiliates, distributors, assignees, licensees and
sublicensees, shall have the absolute right to use, and in its sole discretion,
register any trademarks, tradenames and/or tradedress WYETH-AYERST may choose,
in connection with the Antibacterial Products licensed to it hereunder provided
that the label for any such Antibacterial Product shall contain the words


<PAGE>   47



"Manufactured under license from ChemGenics Pharmaceuticals Inc." in reasonably
prominent type, consistent with applicable regulatory and labeling requirements.
Except as provided by Section 8.7.3(b)(i) hereof, CHEMGENICS shall have no
right, title, or interest in or to any trademark, tradenames or tradedress which
WYETH-AYERST, its Affiliates, distributors, assignees, licensees or sublicensees
may use on or in connection with Antibacterial Products, or the packaging,
advertising, promotion, labeling, marketing or selling thereof. Further, and for
so long as WYETH-AYERST, its Affiliates, distributors, assignees, licensees or
sublicensees shall have any interest in or to any such trademarks, tradenames,
or tradedress whether as proprietor, owner, licensee, or licensor, in the
Territory or any part thereof, CHEMGENICS shall not adopt, use, apply for
registration, register, own or acquire such trademark, tradename or tradedress,
or any mark, name or tradedress confusingly similar thereto.

                7. PROVISIONS CONCERNING THE FILING, PROSECUTION
                   ---------------------------------------------
                        AND MAINTENANCE OF PATENT RIGHTS
                        --------------------------------
     The following provisions relate to the filing, prosecution and maintenance
of Patent Rights during the term of this Agreement:

7.1  FILING OF PATENTS.
     -----------------
     In consultation with the Patent Coordinators, the JSC will coordinate the
determination of what patents will be filed on Technology developed under the R
& D Program. Each party will be responsible for the filing and prosecution
(including the defense


<PAGE>   48



of interferences and similar proceedings) of any such patents for which it is
the sole inventor, provided that the other party will have the opportunity to
provide substantive review and comment on any such filing and prosecution.
Responsibility for filing and prosecution of patents (including the defense of
interferences and similar proceedings) on Joint Technology will be agreed upon
by the parties on a case-by-case basis and handled by mutually acceptable
outside patent counsel charged with the duty to act in the best interests of
both parties. Each party shall also promptly give notice to the other of the
grant, lapse, revocation, surrender, invalidation or abandonment of any Patent
Rights for which it has responsibility. If at any time, either party wishes to
discontinue the prosecution of any such patent(s) owned solely by it, such party
shall promptly give notice of such intention to the other party. The party
receiving such notice shall have the right, but not the obligation, to assume
responsibility for the prosecution of any such patent(s) by giving notice to the
party wishing to discontinue such prosecution of such intention within thirty
(30) days and such patents shall thereafter be exclusively licensed to the party
assuming the responsibility for prosecution or maintenance of the Patent Right
under this Agreement, in accordance with the license grant of Section 8 hereof.

7.2  EXPENSES.
     --------
     CHEMGENICS will bear the costs of the prosecution and maintenance of all
patents for which it has prosecution and


<PAGE>   49



maintenance responsibilities pursuant to Section 7.1 hereof in the territories
of the United States, countries covered by the European Patent Office and Japan.
WYETH-AYERST will determine the countries in which patent applications will be
filed and shall bear the costs of the prosecution and maintenance of all patents
filed pursuant to this Agreement except as set forth in the preceding sentence
or the following sentence. If CHEMGENICS wishes to file a patent application on
CHEMGENICS Technology in a country not selected by WYETH-AYERST, CHEMGENICS may
do so at its own expense. The parties shall cooperate with each other in gaining
patent term restoration or similar extensions or continuations of rights under
Patent Rights.
                                8. LICENSE RIGHTS
                                   --------------
8.1  LICENSE GRANTS.
     --------------
     (a) CHEMGENICS hereby grants to WYETH-AYERST a license under Technology,
Confidential Information, and Patent Rights and CHEMGENICS' interests in Joint
Technology and Joint Patent Rights, co-exclusive with CHEMGENICS, to research,
discover, develop, and make Compounds and to use Accepted Targets solely to
discover and develop Antibacterial Products for use in the Field in accordance
with the R&D Program and during the R&D Term.

     (b) During the Commercial License Term, as to each Antibacterial Product
listed on Schedule I hereto pursuant to the provisions of Section 2.4.2 hereof
which is derived from either a CHEMGENICS Compound or a WYETH-AYERST Compound,
CHEMGENICS hereby grants to WYETH-AYERST an exclusive license in the Territory


<PAGE>   50



including the right to grant sublicenses, to develop, have developed, make, have
made, use, distribute for sale, offer for sale, sell and import such
Antibacterial Product for use in the Field under any and all Patent Rights,
Confidential Information, and Technology covering such Antibacterial Product
owned by or licensed (with the right to grant sublicenses) to CHEMGENICS
(including CHEMGENICS' interests in Joint Technology and Joint Patent Rights).
Upon the expiration of the Commercial License Term for each Antibacterial
Product, WYETH-AYERST shall have a paid up royalty free license to any and all
Patent Rights, Confidential Information and Technology covering such
Antibacterial Product for purposes of the manufacture, use, sale or import
thereof.

     (c) For the avoidance of doubt, it is acknowledged that, pursuant to the
terms of this Agreement (i) WYETH-AYERST shall have no license from CHEMGENICS
under, access to or right to use, any Patent Rights or Technology owned by or
licensed to CHEMGENICS, for any purpose other than those expressly set forth in
the preceding paragraphs (a) and (b) hereof, including diagnostic purposes, and
(ii) CHEMGENICS shall have no license from WYETH-AYERST under, access to or
right to use, any Patent Rights or Technology owned by or licensed to
WYETH-AYERST, for any purpose other than those expressly set forth herein,
including diagnostic purposes.


<PAGE>   51
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.



     8.2  TERM OF COMMERCIAL LICENSE.
          --------------------------
     The Commercial License Term as to each Antibacterial Product shall commence
upon the issuance of an Antibacterial Product Designation pursuant to Section
2.4.2 with respect to the Antibacterial Product. The Commercial License Term for
each Antibacterial Product shall continue on a country-by-country and
product-by-product basis until the last to expire of the CHEMGENICS Patent
Rights, WYETH-AYERST Patent Rights or Joint Patent Rights in any country in the
Territory to which the license pertains, having at least one composition, method
of manufacture, or therapeutic use Valid Claim that covers such composition,
method of manufacture or therapeutic use, or until the expiration of [*******]
from the First Commercial Sale in such country by WYETH-AYERST or its
Affiliates, licensees or sublicensees of each Antibacterial Product, whichever
is later. The license for each such Antibacterial Product shall be deemed a
license separate and severable from licenses to other Antibacterial Products.

8.3  LICENSES AND SUBLICENSES TO THIRD PARTIES.
     -----------------------------------------
     If WYETH-AYERST grants a license or sublicense to a third party,
WYETH-AYERST shall guarantee that such licensee or sublicensee will fulfill all
of WYETH-AYERST's obligations under this Agreement; provided, however, that
WYETH-AYERST shall not be relieved of its obligations pursuant to this Agreement
as a result of such license or sublicense.


<PAGE>   52
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


8.4  PAYMENT OF ROYALTIES, ROYALTY RATES, ACCOUNTING FOR
     ---------------------------------------------------
     ROYALTIES AND RECORDS.
     ---------------------

     8.4.1 Payment of Royalties to CHEMGENICS
           ----------------------------------
     The payment of royalties by WYETH-AYERST is in consideration of the
provision of and licenses to Patents, Technology and Confidential Information
granted hereunder, and for lead time provided for the acceleration of
identifying novel compounds as potential products. WYETH-AYERST shall pay
CHEMGENICS a royalty based on the Net Sales of Antibacterial Products in each
country during the Commercial License Term for each such Antibacterial Product.
For each Antibacterial Product, the royalty shall be calculated as follows:

For Annual Net Sales between:                           Marginal Royalty:

*******                                                        **
*******                                                        **
*******                                                        **

Such royalty shall be determined based on total annual Net Sales of WYETH-AYERST
and its Affiliates, licensees and sublicensees of each Antibacterial Product in
each Fiscal Year.

     8.4.2 Credits and Offsets.
           -------------------
     Notwithstanding the foregoing, for all Net Sales by WYETH-AYERST or its
Affiliates, licensees or sublicensees in the Territory of each particular
Antibacterial Product, the royalty payments due to CHEMGENICS as specified above
are subject to a credit equal to [*****] of any Milestone Payments made by
WYETH-AYERST on such Antibacterial Product pursuant to the


<PAGE>   53
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


provisions of Section 3.4 hereof; provided that such credits shall not reduce
the royalty payable on any Antibacterial Product in any year by more than [***]
of the amount otherwise payable. Such [***] of Milestone Payments will be
carried forward until credited in full against royalty payments on such
Antibacterial Product.

     8.4.3 Reductions.
           ----------
     In the event that Cost of Goods, plus, if applicable, royalty paid to a
third party for use of an Accepted Target licensed from the third party, plus
royalty payable to CHEMGENICS for any Antibacterial product, exceeds the
maximum percentage of Net Sales set forth below, then the royalty for the year
in which such excess occurs, after applying any credit pursuant to Section
8.4.2 hereof, will be further reduced by **********************************
provided that such reduction, together with the credits set forth in the
preceding paragraph, shall not reduce the royalty on any Antibacterial Product
in any year by more than      of the amount otherwise payable.

                                                Costs of Goods Plus
For annual Net Sales between:                       Royalty (%)

        *******                                         ***
        *******                                         ***
        *******                                         ***

     8.4.4 Outside Technology.
           ------------------
     If, solely as a result of the incorporation of any Outside Technology in
the R & D Program as envisioned in Section 4.1, after application of the credits
and reductions set forth in 8.4.2 and 8.4.3 above, the commercialization of any
Antibacterial


<PAGE>   54



Product hereunder becomes infeasible because of the overall level of royalties
payable thereon, the parties will in good faith discuss the modification of the
economic terms hereof in order to attempt to mitigate such circumstances.

    8.4.5 Payment Dates and Reports.
           -------------------------
     Royalties shall be paid by WYETH-AYERST on Net Sales within thirty (30)
days after the end of each Fiscal Quarter in the Fiscal Year in which such Net
Sales are made. Such payments shall be accompanied by a report showing the
quantity and Net Sales of each Antibacterial Product sold by WYETH-AYERST or any
Affiliate, licensee or sublicensee in each country, the applicable royalty rate
for such Antibacterial Product, any credits or offsets to be applied, and a
calculation of the amount of royalty due.

     8.4.6 Accounting.
           ----------
     The Net Sales used for computing the royalties payable to CHEMGENICS
hereunder shall be computed, and royalties shall be paid, in U.S. dollars. For
purposes of determining the amount of royalties due, the amount of Net Sales in
any foreign currency shall be computed by converting such amount into U.S.
dollars at the prevailing commercial rate of exchange for purchasing dollars
with such foreign currency as reported in The Wall Street Journal on the last
business day of the period to which a royalty payment relates.

     CHEMGENICS agrees that any tax burden levied by any countries foreign to
the United States covered by this Agreement on receipt by CHEMGENICS of
royalties from WYETH-AYERST under


<PAGE>   55



this Agreement shall be borne by CHEMGENICS. In the event that such tax is
required to be withheld by WYETH-AYERST, its Affiliates, licensees or
sublicensees, it shall deliver to CHEMGENICS a statement including the amount of
tax withheld and justification therefor, and such other information as may be
necessary for United States foreign tax credit purposes.

     8.4.7 Records.
           -------
     WYETH-AYERST, its Affiliates, licensees and sublicensees shall keep for
five (5) years from the date of each payment of royalties complete and accurate
records of sales by WYETH-AYERST and its Affiliates, licensees and sublicensees
of each Antibacterial Product in sufficient detail to allow the accruing
royalties to be determined accurately. CHEMGENICS shall have the right for a
period of five (5) years after receiving any report or statement with respect to
royalties due and payable to appoint an independent certified public accountant
reasonably acceptable to WYETH-AYERST to inspect the relevant records of
WYETH-AYERST and its Affiliates, licensees and sublicensees to verify such
report or statement. WYETH-AYERST and its Affiliates, licensees and sublicensees
shall make its records available for inspection by such independent certified
public accountant during regular business hours at such place or places where
such records are customarily kept, upon reasonable notice from CHEMGENICS,
solely to verify the accuracy of the reports and payments. Such inspection right
shall not be exercised more than once in any Fiscal Year nor more than once with
respect to sales of any


<PAGE>   56



Antibacterial Product in any given payment period. CHEMGENICS agrees, and will
require that any such certified public accountant shall agree, to hold in strict
confidence all information concerning royalty payments and reports, and all
information learned in the course of any audit or inspection, except to the
extent necessary for CHEMGENICS to reveal such information in order to enforce
its rights under this Agreement or if disclosure is required by law. The results
of each inspection, if any, shall be binding on both parties. CHEMGENICS shall
pay for such inspections, except that in the event there is any upward
adjustment in aggregate royalties payable for any Fiscal Year of the inspected
party shown by such inspection of more than five percent (5%) of the amount
paid, WYETH-AYERST shall pay for such inspection.

     8.4.8 Overdue Royalties.
           -----------------
     Royalties not paid within the time period set forth in Section 8.4.5 shall
bear interest at a rate per month equal to one-twelfth of the annual prime rate
as published in the Wall Street Journal Eastern Edition on the date the payment
was due from such due date until paid in full.

8.5  MANUFACTURING.
     -------------
     Each party will have the right to manufacture or have manufactured for
itself and its Affiliates and sublicensees all Products to which it has rights
under this Agreement. WYETH- AYERST will have sole right to manufacture or have
manufactured



<PAGE>   57



Antibacterial Products to which it has rights hereunder for use in the Field.

8.6  LEGAL ACTION.
     ------------
     8.6.1 Actual or Threatened Infringement.
           ---------------------------------
     (a) In the event either party becomes aware of any possible infringement or
unauthorized possession, knowledge or use in the Field of any patent or other
intellectual property which is the subject matter of this Agreement
(collectively, an "Infringement"), that party shall promptly notify the other
party and provide it with full details.

     WYETH-AYERST shall be responsible for the prosecution, prevention or
termination of any Infringement at WYETH-AYERST's expense and with the sharing
of recoveries as specified below. If WYETH-AYERST does not commence an action to
prosecute, or otherwise take steps to prevent or terminate an Infringement
within one hundred and twenty (120) days from such notice, then with respect to
CHEMGENICS Owned Technology and Patent Rights and Joint Technology and Joint
Patent Rights, or with respect to any WYETH-AYERST Patent Rights or Technology
licensed to CHEMGENICS hereunder, CHEMGENICS shall have the right and option to
take such reasonable action as CHEMGENICS considers appropriate to prosecute,
prevent or terminate such Infringement. If either party determines that it is
necessary or desirable for the other to join any such suit, action or
proceeding, the second party shall execute all papers and perform such other
acts as may be reasonably required in the circumstances.


<PAGE>   58



     Each party shall, unless otherwise mutually agreed, bear the cost of any
proceeding or suit under this Section 8.6.1(a) brought by it. In each case, the
party bringing suit shall have the right first to reimburse itself out of any
sums recovered in such suit or in its settlement for all reasonable costs and
expenses, including reasonable attorney's fees, related to such suit or
settlement. The remainder is next to be used to reimburse the other party for
its costs and expenses so incurred. Any remaining amounts, and including as
appropriate any non-monetary recovery or award, shall be divided on an equitable
basis by the parties, to compensate the non-selling party for lost royalties, if
any, and to compensate the party selling the product affected by the
Infringement for its lost profits and market penetration. Each party shall
always have the right to be represented by counsel of its own selection and at
its own expense in any suit instituted under this Section by the other party for
Infringement. If WYETH-AYERST lacks standing and CHEMGENICS has standing to
bring any such suit, action or proceeding, then CHEMGENICS shall do so at the
request of WYETH-AYERST and at WYETH-AYERST's expense.

     (b) In the event either party becomes aware of any possible infringement or
unauthorized possession, knowledge or use outside the Field of any patent right
or other intellectual property of CHEMGENICS which is the subject matter of this
Agreement, that party shall promptly notify the other party and provide it with
full details. CHEMGENICS shall have the right



<PAGE>   59



and option at its own expense to take such action as may be reasonably necessary
to prosecute, prevent or terminate such infringement. If CHEMGENICS reasonably
determines that it is necessary for WYETH-AYERST to join any such action, suit
or proceeding, WYETH-AYERST shall execute all papers and perform such other acts
as may be reasonably required in the circumstances and CHEMGENICS shall
reimburse WYETH-AYERST for any reasonable costs incurred in connection
therewith. CHEMGENICS shall have sole right to all sums recovered in such suit
or its settlement unless the parties hereto have agreed otherwise in writing.

     (c) In any action under this Section 8.6, the parties shall fully cooperate
with and assist each other. No suit under Section 8.6.1(a) or Section 8.6.1(b)
regarding CHEMGENICS' patents or intellectual property may be settled by
WYETH-AYERST without CHEMGENICS' consent. No suit under Section 8.6.1(a)
regarding WYETH-AYERST's patents or intellectual property licensed to CHEMGENICS
hereunder may be settled by CHEMGENICS without WYETH-AYERST's consent.

     8.6.2 Defense of Claims by WYETH-AYERST.
           ---------------------------------
     Notwithstanding anything to the contrary in this Agreement, in the event
that any action, suit or proceeding is brought against CHEMGENICS or
WYETH-AYERST or any Affiliate, licensee or sublicensee of WYETH-AYERST alleging
the infringement of the intellectual property rights of a third party by reason
of the discovery, development, manufacture, use, sale, importation or offer for
sale of a Antibacterial Product by WYETH-AYERST or its


<PAGE>   60



Affiliates, licensees or sublicensees, WYETH-AYERST will have the obligation to
defend CHEMGENICS in such action, suit or proceeding at WYETH-AYERST's expense.
CHEMGENICS shall have the right to separate counsel at its own expense in any
such action or proceeding. The parties will cooperate with each other in the
defense of any such suit, action or proceeding. The parties will give each other
prompt written notice of the commencement of any such suit, action or proceeding
or claim of infringement and will furnish each other a copy of each
communication relating to the alleged infringement. WYETH-AYERST shall not
compromise, litigate, settle or otherwise dispose of any such suit, action or
proceeding which involves the use of CHEMGENICS Owned Technology, Joint
Technology, CHEMGENICS Patent Rights or Joint Patent Rights without CHEMGENICS'
advice and prior consent, provided that CHEMGENICS shall not unreasonably
withhold its consent to any settlement which does not have a material adverse
effect on CHEMGENICS or CHEMGENICS' business.

8.7  TERMINATION AND DISENGAGEMENT.
     -----------------------------
     8.7.1 Events of Termination.
           ---------------------
     The events which permit a party to terminate the R & D Program as set forth
in Sections 2.3.3(a) (taking into account the applicable cure periods) and
2.3.3(b) hereof with respect to the R&D Program shall also permit such party to
terminate all of the licenses granted by such party hereunder ("Events of
Termination"). The breach by either party of its obligation to pay any amount
due hereunder with respect to a particular Antibacterial Product or the breach
by either party of any other


<PAGE>   61



material obligation or condition with respect to a particular Antibacterial
Product, including without limitation a breach by WYETH-AYERST of its guarantee
under Section 12.11, shall constitute a "License Termination Event" hereunder
with respect to the breaching party solely with respect to the license hereunder
for such particular Antibacterial Product.

     8.7.2 Termination.
           -----------
     Upon the occurrence of any Event of Termination, the terminating party may,
by written notice to the other party, terminate this Agreement or any or all of
the licenses provided under this Agreement subject to the same periods of cure
and other conditions as detailed in Section 2.3.3(a), (b), (d) and (e), said
Sections incorporated herein mutatis mutandis. Upon the occurrence of any
License Termination Event with respect to a particular Antibacterial Product,
the terminating party may terminate the license with respect to the
Antibacterial Product involved in such License Termination Event, effective
thirty (30) days after giving written notice of such termination in the case of
a payment breach and ninety (90) days after giving written notice of such
termination in case of any other material breach, which notice shall describe
the License Termination Event in reasonable detail. The foregoing
notwithstanding, (i) if the License Termination Event is cured or shown to be
non-existent within the aforesaid thirty (30) day or ninety (90) day period, the
notice of termination shall be deemed automatically withdrawn and of no effect,
and (ii) as to an alleged breach expressly set forth with reasonable detail to
be the subject of a good faith


<PAGE>   62



dispute as to whether or not such payment is due and owing or whether a breach
of another material obligation or condition has occurred within the aforesaid
thirty (30) day or ninety (90) day period, the running of the remainder of the
thirty (30) day or ninety (90) day period shall be tolled until the dispute is
resolved. A License Termination Event which relates solely to any given license
shall not be grounds for terminating this Agreement in its entirety or
terminating any other license for any other Antibacterial Product.

     8.7.3 Effect of Termination.
           ---------------------

     (a) EFFECT OF TERMINATION ON LICENSE FROM CHEMGENICS. Upon termination by
CHEMGENICS under Section 2.3.3(a), 2.3.3(b) or Section 8.7.2 hereof of any
licenses granted to WYETH-AYERST hereunder with respect to any Antibacterial
Product, all rights to the Antibacterial Product covered by such terminated
license granted by CHEMGENICS to WYETH-AYERST hereunder under such terminated
licenses shall immediately and automatically revert to CHEMGENICS. Without
limiting the generality of the foregoing, all licenses and sublicenses granted
by CHEMGENICS to WYETH-AYERST hereunder to the Antibacterial Product shall
terminate automatically and WYETH-AYERST shall promptly transfer to CHEMGENICS
all documents, instruments, and records embodying CHEMGENICS Technology and
Joint Technology in its possession with respect to such Antibacterial Product
without retaining any copies thereof. In such case, CHEMGENICS shall have the
option to grant a direct license to any sublicensee of WYETH-AYERST with respect
to such Antibacterial Product.


<PAGE>   63



     (b) LICENSE FROM WYETH-AYERST AND TRANSFER OF REGULATORY APPLICATIONS. Upon
termination by CHEMGENICS under Section 2.3.3(a), 2.3.3(b), or 8.7.2 of any
license granted to WYETH-AYERST hereunder with respect to any Antibacterial
Product and in the event that WYETH-AYERST is not developing or commercializing
another Antibacterial Product in the same Activity Profile, WYETH-AYERST shall

          (i) grant CHEMGENICS an exclusive license under all of WYETH-AYERST's
     rights and interests in all Patent Rights, Joint Patents, Technology, and
     Joint Technology, and in all trademarks used uniquely and solely by
     WYETH-AYERST with respect to such Antibacterial Product, to develop, make,
     have made, use, offer for sale, distribute for sale, sell and import such
     Antibacterial Product in the Territory, or, in WYETH AYERST'S sole
     discretion and in lieu of such exclusive licenses, assign to CHEMGENICS any
     and all of its right, title, and interest in and to all or a portion of
     such Patents, Technology, or trademarks. In either event, CHEMGENICS shall
     assume all subsequent costs associated with searching, filing, prosecuting
     and maintenance of any such Patents, Technology or trademarks.

          Further, and provided to do so would not be in conflict with any legal
     or regulatory duties of WYETH-AYERST or its Affiliates, WYETH-AYERST shall:

          (ii) grant CHEMGENICS the right to use applicable WYETH-AYERST
     regulatory submissions, registrations, and approvals, or, where permissible
     by law or regulation in the


<PAGE>   64

     particular country in question, assign to CHEMGENICS any such regulatory
     submission, registration, or approval in lieu of such grant of a right to
     use.

     (c) DOCUMENTATION. At the request of CHEMGENICS, WYETH-AYERST shall
execute and deliver such bills of sale, assignments and licenses and other
documents as may be necessary to fully vest in CHEMGENICS all right, title and
interest to which it is entitled as aforesaid pursuant to this Section 8.7.3.

     8.7.4 Surviving Provisions.
           --------------------
     Termination of this Agreement for any reason shall be without prejudice to:

     (a) the rights and obligations of the parties provided in Sections 2.8,
3.1, 3.3, 3.4, 3.5, 5.1, 5.2, 5.3, 5.4, 6.2, 8.8, 8.9, 10.1, 10.2, 11.1 and
Section 12, all of which shall survive such termination;

     (b) CHEMGENICS' right to receive all research goal, milestone, royalty and
other payments earned and/or accrued prior to termination hereunder; and

     (c) any other rights or remedies which either party may otherwise have
against the other.

8.8  WARRANTY DISCLAIMER.
     -------------------
     EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS OR
OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING.


<PAGE>   65



8.9  LIMITED LIABILITY.
     -----------------
     NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER
CHEMGENICS NOR WYETH-AYERST WILL BE LIABLE TO THE OTHER WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT OF
SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.

                        9. REPRESENTATIONS AND WARRANTIES
                           ------------------------------

9.1  MUTUAL REPRESENTATIONS.
     ----------------------
     CHEMGENICS and WYETH-AYERST each represents and warrants as follows:

     9.1.1 Organization.
           ------------
     It is a corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware, and it and its Affiliates are
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the performance of its obligations hereunder requires
such qualification and has all requisite power and authority, corporate or
otherwise, to conduct its business as now being conducted, to own, lease and
operate its properties and to execute, deliver and perform this Agreement.

     9.1.2 Authorization.
           -------------
     The execution, delivery and performance by it of this Agreement have been
duly authorized by all necessary corporate action and do not and will not (a)
require any consent or approval of its stockholders or (b) violate any provision
of any


<PAGE>   66



law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to it or any provision of its
charter documents.

     9.1.3 Binding Agreement.
           -----------------
     This Agreement is a legal, valid and binding obligation of it enforceable
against it in accordance with its terms and conditions.

     9.1.4 No Inconsistent Obligation.
           --------------------------
     It is not under any obligation to any person, or entity, contractual or
otherwise, that is conflicting or inconsistent in any respect with the terms of
this Agreement or that would impede the diligent and complete fulfillment of its
obligations.

     9.1.5 Governmental Consents.
           ---------------------
     No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of either party in
connection with the valid execution, delivery and performance of this Agreement
and the Stock Purchase Agreement of even date herewith, except for any filings
under any applicable securities laws and except for any filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.. The filings
under securities laws, if any, will be affected by CHEMGENICS at its cost within
the applicable stipulated statutory period. Any filings under the Hart-Scott-
Rodino Antitrust Improvements Act, if any, will be effected by the parties
hereto within twenty-one (21) days after the Effective Date. If a
Hart-Scott-Rodino filing is effected by the


<PAGE>   67



parties, the costs attendant thereto shall be borne equally by the parties. If
this Agreement is enjoined under Hart-Scott- Rodino, then this Agreement and the
Stock Purchase Agreement shall be null and void and the initial equity payment
under Section 3.1.1 and the initial research funding under Section 3.2 shall be
returned to WYETH-AYERST and WYETH-AYERST shall return the certificate for the
shares purchased pursuant to the Stock Purchase Agreement to CHEMGENICS.

     9.1.6 Intellectual Property.
           ---------------------
     It (a) owns or is the licensee in good standing of all Patent Rights, trade
secrets and other intellectual property to be used by it in connection with this
Agreement; (b) has received no notice of infringement or misappropriation of any
alleged rights asserted by any third party in relation to any technology to be
used by it in connection herewith; (c) is not in default with respect to any
license agreement related hereto; and (d) is not aware of any patent, trade
secret or other right of any third party which could materially adversely affect
its ability to carry out its responsibilities hereunder, or the other party's
ability to exercise or exploit any license granted to it under this Agreement.
Such party agrees to immediately notify the other party in writing in the event
such party hereafter receives a notice of the type referred to in (b) above,
becomes in default under any license agreement referred to in (c) above, or
becomes aware of any patent, trade secret or other right of the nature referred
to in (d) above.

     9.1.7. Litigation.
            ----------

<PAGE>   68



     There is no action, suit, proceeding or investigation pending or currently
threatened against it which questions the validity of this Agreement or the
right to enter into such instrument or to consummate the transactions
contemplated hereby.

                               10. INDEMNIFICATION
                                   ---------------

10.1 INDEMNIFICATION OF CHEMGENICS BY WYETH-AYERST.
     ---------------------------------------------

     WYETH-AYERST shall indemnify, defend and hold harmless CHEMGENICS, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "CHEMGENICS Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the CHEMGENICS
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments of third parties, including without limitation personal
injury and product liability matters (except in cases where such claims, suits,
actions, demands or judgments result from a willful material breach of this
Agreement, gross negligence or willful misconduct on the part of CHEMGENICS)
arising directly out of any actions of WYETH-AYERST in the performance of the R
& D Program or arising out of the development, testing, production, manufacture,
promotion, import, sale or use by any person of any Antibacterial Product
manufactured or sold by WYETH-AYERST or by an Affiliate, licensee, sublicensee,
distributor or agent of WYETH-AYERST.

10.2 INDEMNIFICATION OF WYETH-AYERST BY CHEMGENICS.
     ---------------------------------------------

<PAGE>   69



     CHEMGENICS shall indemnify, defend and hold harmless WYETH- AYERST, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "WYETH-AYERST Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the WYETH- AYERST
Indemnitees, or any one of them, in connection with any claims, suits, actions,
demands or judgments of third parties, (except in cases where such claims,
suits, actions, demands or judgments result from a willful material breach of
this Agreement, gross negligence or willful misconduct on the part of
WYETH-AYERST), arising directly out of any actions of CHEMGENICS in the
performance of the R & D Program or arising out of the development, testing,
production, manufacture, promotion, import, sale or use by any person of any
Antibacterial Product manufactured or sold by CHEMGENICS or by an Affiliate,
licensee, sublicensee, distributor or agent of CHEMGENICS.

                             11. DISPUTE RESOLUTION
                                 ------------------

11.1 SENIOR OFFICIALS.
     ----------------

     The parties recognize that a bona fide dispute as to certain matters may
from time to time arise during the term of this Agreement which relates to
either party's rights and/or obligations hereunder. In the event of the
occurrence of such a dispute, either party may, by notice to the other party,
have such dispute referred to their respective senior officials designated below
or their successors, for attempted resolution by good faith negotiations within
thirty (30) days after such notice


<PAGE>   70



is received. Said senior officials shall be designated by the parties upon
execution of this Agreement.

                                12. MISCELLANEOUS
                                    -------------
12.1 PAYMENT METHOD.
     --------------

     Each payment to CHEMGENICS under this Agreement shall be paid by
WYETH-AYERST in U.S. currency by wire transfer of funds to an account of
CHEMGENICS in accordance with instructions provided by CHEMGENICS.

12.2 NOTICES.
     -------

     All notices shall be in writing mailed via certified mail, return receipt
requested, courier providing evidence of delivery, or facsimile transmission
with confirmation of receipt requested, addressed as follows, or to such other
address as may be designated by notice so given from time to time:

                  If to WYETH-AYERST: WYETH-AYERST LABORATORIES
                                      555 East Lancaster Avenue
                                      St. Davids, Pennsylvania 19087

                                      Attention:  Senior Vice President
                                                  Global Business Development

                  With a copy to:     Associate General Counsel
                                      Patents and Trademarks
                                      AMERICAN HOME PRODUCTS CORPORATION
                                      Five Giralda Farms
                                      Madison, New Jersey  07940

                  If to CHEMGENICS:   CHEMGENICS Pharmaceuticals Inc.
                                      One Kendall Square, Building 300
                                      Cambridge, MA 02139
                                      Attention:  Chief Executive Officer

                  With a copy to:     Jeffrey M. Wiesen, Esq.
                                      Mintz, Levin, Cohn, Ferris, Glovsky
                                        and Popeo, P.C.
                                      One Financial Center
                                      Boston, MA  02111



<PAGE>   71



                  If to the JSC:      To the Chair and Co-Chair at their
                                      respective addresses furnished in
                                      writing to the parties

                  If to the Patent
                  Coordinators:       To the two Patent Coordinators at their
                                      respective addresses furnished in
                                      writing to the parties

     Notices shall be deemed given as of the date received as evidenced by
confirmation of receipt.

12.3 GOVERNING LAW AND JURISDICTION.
     ------------------------------

     This Agreement shall be governed by and construed in accordance with the
laws of the state of New Jersey, U.S.A., without regard to the application of
principles of conflicts of law, except with regard to issues of patent law,
which shall be determined with reference to the substantive laws of the country
in question.


<PAGE>   72



12.4 BINDING EFFECT.
     --------------

     This Agreement shall be binding upon and inure to the benefit of the
parties and their respective legal representatives, successors and permitted
assigns.

12.5 HEADINGS.
     --------

     Section and subsection headings are inserted for convenience of reference
only and do not form a part of this Agreement.

12.6 COUNTERPARTS.
     ------------

     This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.

12.7 AMENDMENT; WAIVER.
     -----------------

     This Agreement may be amended, modified, superseded or canceled, and any of
the terms may be waived, only by a written instrument executed by each party or,
in the case of waiver, by the party or parties waiving compliance. The delay or
failure of any party at any time or times to require performance of any
provisions shall in no manner affect the rights at a later time to enforce the
same. No waiver by any party of any condition or of the breach of any term
contained in this Agreement, whether by conduct, or otherwise, in any one or
more instances, shall be deemed to be, or considered as, a further or continuing
waiver of any such condition or of the breach of such term or any other term of
this Agreement.


<PAGE>   73



12.8 NO THIRD PARTY BENEFICIARIES.
     ----------------------------

     Except as set forth in Section 10, no third party, including any employee
of any party to this Agreement, shall have or acquire any rights by reason of
this Agreement.

12.9 NO AGENCY OR PARTNERSHIP.
     ------------------------

     Nothing contained in this Agreement shall give either party the right to
bind the other, or be deemed to constitute the parties as agents for the other
or as partners with each other or any third party.

12.10 ASSIGNMENT AND SUCCESSORS.
      -------------------------

     This Agreement may not be assigned by either party without the consent of
the other, which consent shall not be unreasonably withheld, except that each
party may, without such consent, assign this Agreement and the rights,
obligations and interests of such party, in whole or in part, to any of its
Affiliates, to any purchaser of all or substantially all of its assets to which
the subject matter of the Agreement relates, or to any successor corporation
resulting from any merger or consolidation of such party with or into such
corporation.

12.11 AFFILIATE AGREEMENTS.
      --------------------

     WYETH-AYERST may, from time to time after Pre-Project Status has been
granted to an Antibacterial Product, request and CHEMGENICS agrees to execute
separate license agreements for such Antibacterial Product under Section 8.1(b)
hereof in mutually satisfactory form ("Affiliate Agreements") separately
granting to American Home Products Corporation, or separately granting directly
to any Affiliate, equivalent rights as granted to WYETH-


<PAGE>   74


AYERST in Section 8.1(b) hereof, in any country or countries other than the
United States within the Territory. Any such Affiliate Agreement entering into
force under this Section shall be prepared by WYETH-AYERST, subject to review
and approval by CHEMGENICS, and shall contain terms and conditions consistent
with those of this Agreement, subject only to such modifications as may be
required by the laws or regulations of the country or countries having
jurisdiction over any such Affiliate Agreement, including, but not limited to,
governmentally required changes in the rate of payment, restrictions against the
remittance thereof and limitations upon the term or duration of any such
Affiliate Agreement. If the terms of any such Affiliate Agreement are varied
from the terms of this Agreement because of local law or regulation,
WYETH-AYERST shall enter into an amendment hereof requiring WYETH-AYERST to
fully compensate CHEMGENICS according to the terms hereof, including, without
limitation, compensation for any additional tax imposed on CHEMGENICS.
WYETH-AYERST hereby fully guarantees performance of each Affiliate under any
such Affiliate Agreement. In those countries in which any such Affiliate
Agreement requires prior government approval or registration, such Affiliate
Agreement shall not be binding or have any force or effect until the required
government approval or registration has been granted. All Affiliate Agreements
shall be deemed to be severable and independent with respect to this Agreement
and to each other except that CHEMGENICS shall have the right to terminate all
Affiliate Agreements upon termination of this Agreement. The parties agree that
it is their mutual


<PAGE>   75



understanding that CHEMGENICS shall not incur any additional cost or economic
detriment as a result of any Affiliate Agreement.

12.12 FORCE MAJEURE.
      -------------

     Neither WYETH-AYERST nor CHEMGENICS shall be liable for failure of or delay
in performing obligations set forth in this Agreement, and neither shall be
deemed in breach of its obligations, if such failure or delay is due to natural
disasters or any causes beyond the reasonable control of WYETH-AYERST or
CHEMGENICS. In event of such force majeure, the party affected thereby shall use
reasonable efforts to cure or overcome the same and resume performance of its
obligations hereunder. If such force majeure continues for a period longer than
one (1) year, the party not affected thereby may, for purposes of termination of
this Agreement or any license hereunder, treat the failure or delay as if it
were not caused by force majeure but the party affected by the force majeure
shall nonetheless have no other liability for such failure or delay.

12.13 INTERPRETATION.
      --------------

     The parties hereto acknowledge and agree that: (i) each party and its
counsel reviewed and negotiated the terms and provisions of this Agreement and
have contributed to its revision; (ii) the rule of construction to the effect
that any ambiguities are resolved against the drafting party shall not be
employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all parties hereto
and not in a favor of or against any


<PAGE>   76



party, regardless of which party was generally responsible for the preparation
of this Agreement.

12.14 INTEGRATION; SEVERABILITY.
      -------------------------

     This Agreement is the sole agreement with respect to the subject matter
hereof and supersedes all other agreements and understandings between the
parties with respect to same, including but not limited to the Confidentiality
Agreement between CHEMGENICS and WYETH-AYERST dated April 24, 1996 (the
"Superseded Confidentiality Agreement"). If any provision of this Agreement is
or becomes invalid or is ruled invalid by any court of competent jurisdiction or
is deemed unenforceable, it is the intention of the parties that the remainder
of this Agreement shall not be affected.

12.15 EXPORT CONTROLS.
      ---------------

     This Agreement is made subject to any restrictions concerning the export of
Antibacterial Products, Confidential Information, or Technology from the United
States which may be imposed upon or related to either party to this Agreement
from time to time by the Government of the United States. Neither party will
export, directly or indirectly, any Confidential Information, Technology or any
Antibacterial Products utilizing such Confidential Information or Technology to
any countries for which the United States Government or any agency thereof at
the time of export requires an export license or other governmental approval,
without first obtaining the written consent to do so from the Department of
Commerce or other agency of the United


<PAGE>   77



States Government when required by applicable statute or regulation.

12.16 SECTION 365(n) OF THE BANKRUPTCY CODE.
      -------------------------------------

     All rights and licenses granted under or pursuant to any section of this
Agreement are, and shall otherwise be, deemed to be, for purposes of Section
365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101(35A) of the Bankruptcy Code. The Parties shall retain
and may fully exercise all of their respective rights and elections under the
Bankruptcy Code. Upon the bankruptcy of either Party, the non-bankrupt Party
shall further be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property, and such, if not already in its
possession, shall be promptly delivered to the non-bankrupt Party.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.

                                     AMERICAN HOME PRODUCTS CORPORATION
                                     REPRESENTED BY ITS
                                     WYETH-AYERST LABORATORIES DIVISION

                                     By:        /s/ Fred Hasse
                                                -------------------------
                                     Title:     EVP, AHP
                                                -------------------------
                                     Date:      11-27-96
                                                -------------------------

                                     CHEMGENICS PHARMACEUTICALS INC.

                                     By:        /s/ Barry Berkowitz
                                                -------------------------
                                     Title:     Chief Executive Officer
                                                -------------------------
                                     Date:      11/27/96
                                                -------------------------



<PAGE>   78



                                   SCHEDULE I

                             Antibacterial Products
                             ----------------------


<PAGE>   79
             Confidential Materials omitted and filed separately
                 with the Securities and Exchange Commission.
                       Asterisks denote such omissions.


                                                                       EXHIBIT 1
                                ACTIVITY PROFILES
                                -----------------

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