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                                                                         Ex 10.3

Portions of this document are subject to an application for confidential
treatment, and as such have been omitted from this document. The portions that
have been omitted are indicated in the text by the marking {***}. The omitted
information has been filed separately with the Securities and Exchange
Commission.

                COLLABORATION AND INVENTION DISCLOSURE AGREEMENT

      THIS AGREEMENT, effective as of July 8, 2004 (the "Effective Date"), is
between the University of Massachusetts, as represented solely by the Medical
School at its Worcester campus (the "Medical School"), a public institution of
higher education of the Commonwealth of Massachusetts, and CytRx Corporation
("Company"), a Delaware corporation.

                                 R E C I T A L S

      WHEREAS, the University of Massachusetts has licensed technologies from
the Medical School to Company in several fields;

      WHEREAS, the Company would like to receive disclosures of future Medical
School technologies that are related to the existing licenses of Company; and

      WHEREAS, the Medical School is willing to disclose technology within the
fields of RNAi, diabetes, obesity, neurodegenerative diseases including ALS, and
CMV and including the fields of Company's current licenses with the Medical
School according to the terms of this Agreement.

      THEREFORE, Medical School and Company agree as follows:

1. Disclosure.

      1.1. Definitions.

            (a) "Field" means the fields of RNAi, diabetes, obesity,
neurodegenerative diseases including ALS, and CMV.

            (b) "Patent Rights" means invention disclosures, patent
applications, and patents that are not obligated to other parties (e.g., by
sponsored research agreement) for license by the Medical School within the
Field.

      1.2. Disclosure. After the initial internal disclosure according to
Medical School policy, the Medical School shall promptly disclose in writing to
Company Patent Rights in the Field that are conceived or reduced to practice by
the Medical School during the term of this Agreement and within one (1) year
thereafter.

      1.3. Sponsored Research Agreements. Concurrently with the execution of
this Agreement, the Medical School shall provide a written list of its existing
sponsored research agreements that are directed to research in the Field.

<PAGE>

      1.4. Warranty Disclaimer. The Medical School represents and warrants that
its employees are required to assign to Medical School their entire right,
title, and interest in the Patent Rights and that it has authority to grant the
disclosure right set forth in this Agreement. MEDICAL SCHOOL MAKES NO OTHER
WARRANTIES CONCERNING THE PATENT RIGHTS, INCLUDING WITHOUT LIMITATION ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. Specifically, Medical School makes no warranty or representation (a)
regarding the validity, scope, or patentability of any Patent Rights, (b) that
the exploitation the Patent Rights will not infringe any patents or other
intellectual property rights of a third party, and (c) that any third party will
not infringe the Patent Rights.

2. Consideration for Disclosure Right. In consideration of the rights granted
Company under this Agreement, Company shall pay to Medical School a
nonrefundable disclosure fee of One Million Five Hundred Thousand Dollars
($1,500,000), payable in eight equal quarterly installments, One Hundred
Eighty-Seven Thousand Five Hundred Dollars ($187,500) on the Effective Date and
One Hundred Eighty-Seven Thousand Five Hundred Dollars ($187,500) at the
beginning of each quarter year after the Effective Date

3. Option to License Patent Rights.

      (a)   If Company would like an exclusive option to license any particular
            Patent Rights that the Medical School discloses, Company must pay
            the Medical School a nonrefundable option fee of {***}. After timely
            receipt of said {***} from Company, Medical School grants Company a
            first option to obtain a worldwide, royalty-bearing, exclusive
            license with the right to sublicense under its rights in any
            identified disclosure of Patent Rights to the Company in the Field
            (the "Option Right"). Company must exercise the Option Right
            including making the foregoing option payment, upon written notice
            to Medical School that is received by Medical School within sixty
            (60) days after receipt of the disclosure pursuant to Section 1.2
            (the "Option Period"). However, the option fee is {***} for any
            Patent Rights relating to nucleic acid delivery, stability,
            formulations, or modifications of nucleic acid that may improve the
            pharmacological properties of RNAi gene silencing where at least one
            (1) inventor is Michael Czech, Timothy Kowalik, Shan Lu, Tariq Rana,
            or Zuoshang Xu.

      (a)   If Company elects not to exercise the Option Right, or fails to
            exercise the Option Right during the Option Period, Medical School
            is free to license its rights under the Patent Rights to any third
            party. If Company does elect to exercise the Option Right, Medical
            School and Company shall negotiate in good faith a license agreement
            containing commercially reasonable terms. Said option fee is
            creditable against payments received under the terms of the
            negotiated license agreement. If Medical School and Company do not
            reach agreement within six (6) months after Company exercises the
            Option Right (the "Negotiation Period"), Medical School is free to

<PAGE>

            license its rights under the Patent Rights to any third party.
            However, if the parties fail to reach an agreement within the
            Negotiation Period, for a period of one (1) year after the
            Negotiation Period expires the following terms apply:

            (i)   Within five (5) business days after expiration of the
                  Negotiation Period, Company may elect to have the terms of the
                  license determined by arbitration by delivering written notice
                  of that election to Medical School. If Company elects
                  arbitration, the arbitration shall be conducted in Boston,
                  Massachusetts, by one (1) independent arbitrator who is
                  experienced in licensing biotechnology intellectual property.
                  The arbitrator shall be chosen by mutual consent of the
                  parties within sixty (60) days after Company elects
                  arbitration. Company shall pay the first Ten Thousand Dollars
                  ($10,000) of the expenses of the arbitration, and thereafter
                  the parties shall share the expenses equally. Each party is
                  responsible for its own legal expenses in association with the
                  arbitration. The arbitration shall be in a format in which the
                  arbitrator shall rule that either Company's or Medical
                  School's proposed terms are the final terms. Once the terms
                  have been established by the arbitrator and delivered in
                  writing to Company, Company has ten (10) days to agree to
                  enter into the license agreement on those terms or to reject
                  those terms. If Company rejects those terms, Medical School
                  thereafter is free to license its rights under the Patent
                  Rights to any third party without further notice to Company,
                  provided that the terms of that license are no more favorable
                  to the licensee than those that were proposed by Company in
                  the arbitration.

            (ii)  If Company does not elect arbitration pursuant to Section
                  3(b)(i), Medical School is free to license its rights under
                  the Patent Rights to any third party, provided that the terms
                  of that license are no more favorable to the licensee than the
                  last offer made by Medical School to Company, unless Medical
                  School first provides Company with written notice of Medical
                  School's intention to make a more favorable offer (the
                  "Proposed Offer") and Company either declines in writing to
                  accept the Proposed Offer or fails to respond to the Proposed
                  Offer within thirty (30) days after receiving the notice.

4. Maintenance of and Responsibility for Patent Rights. Medical School is
responsible at its expense and in its sole discretion for the preparation,
filing, prosecution, and maintenance of the Patent Rights.

5. Information Exchange.

      5.1. Purpose. During the term of this Agreement, Company and Medical
School are likely to exchange information relating to the Patent Rights. The
following provisions are

<PAGE>

intended to protect the confidential or proprietary information of each party
during this period of information exchange.

      5.2. Definition of Confidential Information. "Confidential Information"
means any confidential or proprietary information furnished by one party (the
"Disclosing Party") to the other party (the "Receiving Party") in connection
with this Agreement, provided that the information is specifically designated as
confidential. Confidential Information includes, without limitation, any
information relating to the Patent Rights. The Disclosing Party shall mark
Confidential Information that is disclosed in writing with a legend indicating
its confidential status (such as, "Confidential" or "Proprietary"). The
Disclosing Party shall document Confidential Information that is disclosed
orally or visually in a written notice and deliver it to the Receiving Party
within thirty (30) days after the disclosure. The notice shall summarize the
Confidential Information disclosed to the Receiving Party and reference the time
and place of disclosure.

      5.3. Obligations. For five (5) years after disclosure of any portion of
Confidential Information, the Receiving Party shall (a) maintain Confidential
Information in confidence, except that the Receiving Party may disclose or
permit the disclosure of any Confidential Information to its directors,
officers, employees, consultants, and advisors who are obligated to maintain the
confidential nature of Confidential Information and who need to know
Confidential Information for the purposes of this Agreement; (b) use
Confidential Information solely for the purposes of this Agreement; and (c)
allow its trustees or directors, officers, employees, consultants, and advisors
to reproduce the Confidential Information only to the extent necessary for the
purposes of this Agreement, with all reproductions being Confidential
Information.

      5.4. Exceptions. The obligations of the Receiving Party under Section 5.3.
above do not apply to the extent the Receiving Party can demonstrate that the
Confidential Information (a) was in the public domain prior to the time of its
disclosure under this Agreement; (b) entered the public domain after the time of
its disclosure under this Agreement through means other than an unauthorized
disclosure resulting from an act or omission by the Receiving Party; (c) was
independently developed or discovered by the Receiving Party without use of the
Confidential Information; (d) is or was disclosed to the Receiving Party at any
time, whether prior to or after the time of its disclosure under this Agreement,
by a third party having no fiduciary relationship with the Disclosing Party and
having no obligation of confidentiality with respect to the Confidential
Information; or (e) is required to be disclosed to comply with applicable laws
or regulations, or with a court or administrative order, provided that the
Disclosing Party receives reasonable prior written notice of the disclosure.

      5.5. Ownership and Return. The Receiving Party acknowledges that the
Disclosing Party (or any third party entrusting its information to the
Disclosing Party) owns its Confidential Information in the possession of the
Receiving Party. Upon the expiration or termination of this Agreement, or at the
request of the Disclosing Party, the Receiving Party shall return to the
Disclosing Party all originals, copies, and summaries of documents, materials,
and other tangible

<PAGE>

manifestations of Confidential Information in the possession or control of the
Receiving Party, except the Receiving Party may retain one copy of the
Confidential Information solely for the purpose of monitoring its obligations
under this Agreement.

6. Term and Termination.

      6.1. Term. This Agreement commences on the Effective Date and remains in
effect for two (2) years, unless earlier terminated in accordance with the
provisions of this Agreement. However, Section 1.2 and Article 3 survive
expiration of the term of this Agreement in accordance with the terms of those
sections. Company may extend the term for one (1) additional year upon payment
of Seven Hundred Fifty Thousand Dollars ($750,000), payable in four equal
quarterly installments to Medical School of One Hundred Eighty-Seven Thousand
Five Hundred Dollars ($187,500) commencing on the second anniversary of the
Effective Date and at the beginning of each quarter thereafter.

      6.2. Termination for Default. If either party commits a material breach of
its obligations under this Agreement and fails to cure that breach within sixty
(60) days after receiving written notice thereof, the other party may terminate
this Agreement immediately upon written notice to the party in breach. If the
alleged breach involves nonpayment of any amounts due Medical School under this
Agreement, Company shall have only one opportunity to cure a material breach for
which it receives notice as described above; any subsequent material breach by
Company will entitle Medical School to terminate this Agreement immediately upon
written notice to Company, without the sixty-day cure period.

      6.3. Effect of Termination. The following provisions survive the
expiration or termination of this Agreement: Articles 3 and 5; Sections 1.2.,
7.1., and 7.6.

      6.4. Force Majeure. Neither party is responsible for delays resulting from
causes beyond its reasonable control, including without limitation, fire,
explosion, flood, war, strike, or riot, provided that the nonperforming party
uses commercially reasonable efforts to avoid or remove those causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever the causes are removed.

7. Miscellaneous.

      7.1. Publicity Restrictions. Neither party may use the name of the other
or any of its trustees, officers, faculty, students, employees, or agents, or
any adaptation of those names, or any terms of this Agreement in any promotional
material or other public announcement or disclosure without the prior written
consent of the other party. The foregoing notwithstanding, Company may disclose
such information without the consent of Medical School in any prospectus,
offering memorandum, or other document or filing required by applicable
securities laws or other applicable law or regulation, provided that Company
shall provide Medical School at least ten (10) days' (or a shorter period in
order to enable Company to make a timely

<PAGE>

announcement, while affording Medical School the maximum feasible time to review
the announcement) prior written notice of the proposed text for the purpose of
giving Medical School the opportunity to comment on the text.

      7.2. Research Partially Funded by Grants.

            (a) Federal Government. To the extent that any invention claimed in
the Patent Rights has been partially funded by the federal government, this
Agreement and the grant of any rights in the invention is subject to and
governed by federal law as set forth in 35 U.S.C. Sections 201-211 and the
regulations promulgated thereunder, as amended, or any successor statutes or
regulations. If any term of this Agreement fails to conform to those laws and
regulations, the relevant term is invalid and the parties shall modify the term
pursuant to Section 7.8.

            (b) Other Organizations. To the extent that any invention claimed in
the Patent Rights has been partially funded by a non-profit organization or
state or local agency, this Agreement and the grant of any rights in the
invention is subject to and governed by the terms of the applicable research
grant. If any term of this Agreement fails to conform to those terms, the
relevant term is invalid and the parties shall modify the term pursuant to
Section 7.8.

      7.3. Tax-Exempt Status. Company acknowledges that Medical School, as a
public institution of the Commonwealth of Massachusetts, is an exempt
organization under the United States Internal Revenue Code. Company also
acknowledges that certain facilities in which the inventions subject to the
license disclosure were developed may have been financed through offerings of
tax-exempt bonds. If the Internal Revenue Service determines, or if counsel to
Medical School reasonably determines, that any term of this Agreement
jeopardizes the tax-exempt status of Medical School or the bonds used to finance
Medical School facilities, the relevant term is invalid and the parties shall
modify the term pursuant to Section 7.8.

      7.4. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, including without
limitation, in connection with a merger, consolidation, or sale of all or
substantially all of its assets or that portion of its business (including any
subsidiary) to which this Agreement relates, which consent may not be
unreasonably withheld or delayed.

      7.5. Amendment and Waiver. This Agreement may be amended, supplemented, or
otherwise modified only by means of a written instrument signed by both parties.
Any waiver of any rights or failure to act in a specific instance relates only
to that instance and is not an agreement to waive any rights or fail to act in
any other instance, whether or not similar.

      7.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts irrespective of
any conflicts of law principles. Any action regarding this Agreement shall be
brought in Massachusetts Superior Court, Suffolk County.

<PAGE>

      7.7. Notice. Any notices required or permitted under this Agreement shall
be in writing, shall specifically refer to this Agreement, and shall be sent by
recognized national overnight courier or registered or certified mail, postage
prepaid, return receipt requested, to the following addresses of the parties:

If to Medical School:

Office of Technology Management
University of Massachusetts
365 Plantation Avenue
Worcester, MA  01655
Attention: Executive Director

If to Company:

CytRx Corporation
11726 San Vicente Boulevard, Suite 650
Los Angeles, California 90049
      Attention:    Steven A. Kriegsman
      Invoices to:  Steven A. Kriegsman

All notices under this Agreement are effective upon receipt. A party may change
its contact information immediately upon written notice to the other party in
the manner provided in this Section.

      7.8. Severability. If any provision of this Agreement is held invalid or
unenforceable for any reason, the invalidity or unenforceability does not affect
any other provision of this Agreement, and the parties shall negotiate in good
faith to modify the Agreement to preserve (to the extent possible) their
original intent.

      7.9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements or understandings between the parties relating to its subject matter.
The parties acknowledge that this Agreement has no effect on and does not limit
any of Company's rights under any specific license or sponsored research
agreements that have been executed between the parties prior to or within thirty
(30) days after the Effective Date.

      The parties have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date.

<PAGE>

UNIVERSITY OF MASSACHUSETTS                 CYTRX CORPORATION

By: /s/ CHESTER A. BISBEE, Ph.D., J.D.      By: /s/ STEVEN A. KRIEGSMAN
    -----------------------------------         --------------------------------
Name:  Chester A. Bisbee, Ph.D., J.D.       Name:  Steven A. Kriegsman
Title: Assistant Director, OTM              Title: Chief Executive Officer