<PAGE>
                                                                    Exhibit 4.36


                              DEVELOPMENT AGREEMENT

                                     between

LEO PHARMA A/S of Industriparken 55, DK-2750 Ballerup, Denmark (hereinafter
referred to as "LEO") ---

                                       and

GALEN (CHEMICALS) LIMITED of 4 Adelaide Street, Dun Laoghaire, Co. Dublin,
Ireland (hereinafter referred to as "GALEN").

Capitalized terms not otherwise defined herein shall have the meanings set forth
in Article I of this Agreement.

WHEREAS Bristol-Myers Squibb Company (BMS) has entered into a co-promotion
agreement with GALEN regarding Dovonex(R) Product in the Territory (the
"Co-promotion Agreement").

WHEREAS GALEN and BMS have entered into an option agreement (the "Option
Agreement") in which GALEN has options to acquire all of BMS's rights and to
assume BMS's obligations (the "Option") under the agreement dated September 28,
1989 between BMS (as successor to E.R. Squibb & Sons Inc.) and LEO, as amended
July 6, 1992 and April 8, 1993 and as of the date hereof and the Product Supply
Agreement between Bristol-Myers Squibb Company and LEO dated as of April 8, 1993
(each as may be amended or supplemented by the parties in the future,
collectively, the "BMS Agreements"); and

WHEREAS BMS has given up its rights under the BMS Agreements to a pharmaceutical
preparation containing both the Compound and Betamethasone Dipropionate in an
ointment (the "Combination Product") as of the date hereof; and

WHEREAS LEO has developed and owns proprietary information regarding the
Combination Product, and has filed a patent application for the Combination
Product; and
<PAGE>
WHEREAS GALEN has marketing expertise within the dermatological field; and

WHEREAS LEO and GALEN have entered into a License and Supply Agreement dated as
of even date herewith between LEO and GALEN regarding the Combination Product
(the "Dovobet(R) Agreement") and subject to the coming into force of that
Agreement under its terms, LEO has appointed GALEN as its exclusive distributor
in the Territory of the Combination Product expected to be marketed under the
trademark Dovobet(R); and

WHEREAS GALEN and LEO have entered into a License and Supply Agreement dated as
of even date herewith pursuant to which GALEN will be the exclusive distributor
of Dovonex(R) Product in the Territory subsequent to the exercise of the Option
by GALEN and the acquisition of BMS's rights and assumption of BMS's obligations
under the BMS Agreements by GALEN (the "Dovonex(R) Agreement"); and

WHEREAS GALEN, if the FDA mandates an additional pivotal phase III clinical
trial for the Combination Product, will financially support LEO;

NOW THEREFORE the Parties hereby agree as follows:

I - DEFINITIONS

1.1      "AB rated" means, with respect to any Product (as defined in the
         Dovonex(R) Agreement), a pharmaceutical product which is an AB-rated
         equivalent to the Product, as defined in the 22nd edition of Approved
         Drug Products with Therapeutic Equivalence Evaluations issued by the
         United States Department of Health and Human Services.

1.2      "Action or Proceeding" means any action, suit, proceeding, arbitration
         or Governmental or Regulatory Authority action, notification,
         investigation or audit.

1.3      "Affiliate" means, with respect to any Person, any Person which,
         directly or indirectly, controls, is controlled by, or is under common
         control with, the specified Person. For purposes of this definition,
         the term "control" as applied to any Person, means the possession,
         directly or indirectly, of at least fifty-one per cent (51%) of the
         power to direct or cause the direction of the management of that
         Person, whether through ownership of voting securities or otherwise.

1.4      "Agreement" means this Development Agreement between LEO and GALEN.

1.5      "Compound" means the compound Calcipotriene, a vitamin D analogue with
         the formula C27H4003.

                                                                               2
<PAGE>
1.6      "Dovonex(R) Product" means the Compound marketed in the Territory under
         the trademark Dovonex(R).

1.7      "FDA" means the United States Food and Drug Administration.

1.8      "GALEN Information" means any information (including, but not limited
         to, technical improvements, financial and marketing information)
         developed, made and/or generated by GALEN relating to and made as a
         result of its work with the Combination Product.

1.9      "Governmental or Regulatory Authority" means any court, tribunal,
         arbitrator, agency, commission, official or other instrumentality of
         the United States or any relevant country, state, province, county,
         city or other political subdivision.

1.10     "IND" means the Investigational New Drug Application, as defined by the
         United States Federal Food, Drug and Cosmetic Act and applicable
         regulations promulgated thereunder as amended from time to time, filed
         in the United States, for the Combination Product.

1.11     "Laws" means all laws, statutes, rules, regulations, ordinances and
         other pronouncements having the effect of law of any relevant
         Governmental or Regulatory Authority.

1.12     "LEO Logo Guidelines" means the guidelines for use of the LEO name and
         the Assyrian Lion logo attached to the Dovobet(R) Agreement.

1.13     "LEO Product Branding" means the Trademark, the LEO name, the Assyrian
         Lion, the LEO Logo Guidelines, the LEO Product Concept and any domain
         names or websites related to the Combination Product in the Territory.

1.14     "LEO Product Concept" means the global design concept for packaging and
         promotional materials related to the Combination Product developed by
         LEO.

1.15     "Losses" means any and all damages, fines, fees, penalties,
         deficiencies, losses and expenses (including without limitation
         interest, court costs, reasonable fees of attorneys, accountants and
         other experts or other expenses of litigation or other proceedings or
         of any claim, default or assessment).

1.16     "Master Agreement" means the Master Agreement dated as of even date
         herewith between LEO and GALEN.

1.17     "NDA" means a New Drug Application filed with the FDA for the
         Combination Product, requesting permission to place a drug on the
         market in accordance with 21 C.F.R. Part 314 and all supplements filed
         pursuant to the requirements of the FDA, including all documents, data
         and other

                                                                               3
<PAGE>
         information concerning the Combination Product which are necessary for
         FDA approval to market a product in the United States.

1.18     "Party" means GALEN or LEO, as the case may be, and "Parties" means
         GALEN and LEO.

1.19     "Person" means any individual, firm, corporation, partnership, limited
         liability company, trust, joint venture, Governmental or Regulatory
         Authority or other entity or organization.

1.20     "Technical Information" means all information in the possession of LEO
         and/or its Affiliates, and any information transferred from BMS to
         GALEN, regarding preclinical, chemical-pharmaceutical and clinical data
         or other scientific information (including specifications, master batch
         records, analytical methods including validation protocol and the drug
         master file), or secret know-how about the Combination Product
         including, but not limited to marketing know-how and show-how or uses
         for the Combination Product in the possession of LEO regarding the
         Combination Product necessary for GALEN to fulfil its obligations under
         the Agreement.

1.21     "Territory" means the fifty (50) states of the United States of
         America, the District of Columbia, its territories and current
         possessions.

1.22     "Trademark" means the trademark Dovobet(R) or any other trademark LEO
         may select for the Combination Product.


II - WORK BY LEO

2.1      LEO has performed any and all preclinical, clinical and other studies
         necessary to obtain marketing approval for the Combination Product in
         Europe and has borne all costs and expenses associated therewith.
         Furthermore, LEO will perform any and all additional studies, required
         specifically by the FDA and will bear all costs and expenses associated
         therewith except for the obligation of GALEN described in Article 3.1.

         A development plan is attached as Appendix I

2.2      LEO is responsible for obtaining approval of the NDA in the United
         States.


III - OBLIGATIONS OF GALEN

3.1    If the FDA mandates that a second pivotal phase III clinical trial for
       the Combination Product is required for registration in the United
       States, GALEN agrees to pay 50% of the reasonable costs for

                                                                               4
<PAGE>
         said study, such costs to be invoiced by LEO on a quarterly basis. The
         payments are non-refundable.

3.2      GALEN will provide reasonable assistance to LEO in its endeavours to
         obtain approval of the NDA in the United States.

3.3      Within thirty (30) days after the date hereof, GALEN will pay to LEO
         US$5,000,000 (five million United States dollars) to reimburse LEO for
         a portion of the actual development costs that have been incurred by
         LEO. This payment is non-refundable.

IV - INDEMNIFICATION

4.1      LEO shall indemnify and hold GALEN and its agents, directors, officers
         and employees and representatives harmless from and against any and all
         Losses which they may at any time incur by reason of any Action or
         Proceeding brought by any Governmental or Regulatory Authority or other
         third party against GALEN arising out of or resulting from (a) any
         misrepresentation, breach of warranty or non-fulfilment of or failure
         to perform any agreement or covenant made by LEO in this Agreement, (b)
         the use of the Combination Product in any clinical trial, or (c) any
         other negligent act or omission of LEO.

4.2      GALEN shall indemnify and hold LEO and its agents, directors, officers
         and employees and representatives harmless from and against any and all
         Losses which they may at any time incur by reason of any Action or
         Proceeding brought by any Governmental or Regulatory Authority or other
         third party against LEO arising out of or resulting from (a) any
         misrepresentation, breach of warranty or non-fulfilment of or failure
         to perform any agreement or covenant made by GALEN in this Agreement,
         or (b) any other negligent act or omission of GALEN.

4.3      The obligation of the Parties in this Article IV shall survive the
         expiration or earlier termination of this Agreement to the extent
         permitted by applicable Law.

4.4      In any case under this Article IV, where GALEN or LEO is to indemnify
         the other, the control of the defence of any Action or Proceeding and
         negotiations for settlement and compromise thereof, shall repose with
         the indemnifying Party, except that nothing in this paragraph shall be
         construed to relieve either Party hereto of the obligation to give the
         other all reasonable co-operation, assistance and authority necessary
         to permit full and complete defence of any Action or Proceeding;
         provided, however, that no Party will settle any of such claims without
         consent of the other Party; however, such consent shall not be
         unreasonably withheld. Both Parties shall, if desired, be allowed to
         participate, at their own expense, directly or through a representative
         e.g. their product liability insurers, in any Action or Proceeding.

                                                                               5
<PAGE>
V - CONFIDENTIALITY

5.1      All Technical Information disclosed to GALEN and all GALEN Information
         disclosed to LEO shall be considered confidential regardless of
         designation, and shall not be disclosed by the receiving Party to any
         third party or used outside the scope of this Agreement without the
         prior written consent of the disclosing Party except to a duly
         authorised Governmental or Regulatory Authority in connection with the
         registration or regulation of the Combination Product or if otherwise
         required by Law. In the event that a Party is asked to disclose any
         confidential information to a Governmental or Regulatory Authority,
         such Party will - if possible - notify the nondisclosing Party
         sufficiently prior to making such disclosure so as to allow the
         nondisclosing Party adequate time to take whatever action it may deem
         to be appropriate to protect the confidentiality of the information.
         The obligation not to disclose Technical Information and GALEN
         Information shall not apply to (a) any information that it now or later
         becomes publicly available through no fault of the receiver, its
         officers, employees or agents; (b) any information that the receiver
         obtains from a third party not under a confidentiality obligation to
         the discloser with respect to such information; (c) any information
         that the receiver already has in its possession as indicated in its
         written records; and (d) any information that is independently
         developed or created by the receiver.

5.2      Each Party shall keep the terms of this Agreement confidential and
         shall not disclose the same to any third party other than (i) by
         agreement of the Parties hereto, or (ii) as required by Law or stock
         exchange regulation or an order of a competent Governmental or
         Regulatory Authority; provided that prior to disclosure pursuant to
         (ii) above, the disclosing Party shall - if possible - notify the
         nondisclosing Party sufficiently prior to making such disclosure so as
         to allow the nondisclosing Party adequate time to take whatever action
         it may deem to be appropriate to protect the confidentiality of the
         information.

5.3      Neither Party shall make any press release or other public announcement
         or other disclosure to third Parties relating to this Agreement without
         the prior consent of the other Party, which consent shall not be
         unreasonably withheld, except where required by applicable Law;
         provided that prior to disclosure, the disclosing Party shall notify
         the nondisclosing Party sufficiently prior to making such disclosure so
         as to allow the nondisclosing Party adequate time to take whatever
         action it may deem to be appropriate to protect the confidentiality of
         the information.

5.4      This Article V shall survive the termination of this Agreement for a
         period of ten (10) years, provided, however, that following the
         termination of this Agreement LEO shall be free to use all data,
         information or other confidential information relating to the
         Combination Product and following termination of this Agreement, GALEN
         shall be free to use all GALEN Information.

                                                                               6
<PAGE>
VI - COMPLIANCE WITH LAWS

Both LEO and GALEN shall observe all applicable Laws in effect in fulfilling
their obligations under this Agreement.

VII - TERM AND TERMINATION - CONSEQUENCES OF TERMINATION

7.1      This Agreement will be effective when signed by both Parties provided
         that the Co-promotion Agreement and the Option Agreement have been
         signed and have come into force and provided also that said agreements
         do not prohibit GALEN from entering into the Dovonex(R) Agreement and
         the Dovobet(R) Agreement.

7.2      This Agreement shall terminate if (a) the Dovonex(R) Agreement is
         terminated by LEO pursuant to Articles 15.4, 15.7 or 15.8 thereof or
         (b) the Dovonex(R) Agreement is terminated by LEO pursuant to Article
         15.2 thereof in the event that GALEN has not exercised the Option for
         reasons not including that (i) the aggregate turnover of the Products
         in the U.S. during the period 1 July 2004 - 30 June 2005, as measured
         by IMSHealth, is equal to or less than US$50,000,000 (fifty million
         dollars) or (ii) on or prior to August 1, 2005 a generic product that
         is AB rated to any Product (as defined in the Dovonex(R) Agreement) is
         approved by the FDA and has become commercially available, provided,
         for purposes of this subclause (ii), that GALEN has not provided
         assistance to the holder of the registration for the AB rated product
         to obtain such registration, or (c) the Dovobet(R) Agreement comes into
         force and GALEN has fulfilled its obligations under this Agreement,
         unless prior terminated in accordance with any of the provisions
         hereof.

7.3      In the event that one of the Parties hereto materially defaults or
         breaches any of the provisions of this Agreement, the other Party shall
         have the right to terminate this Agreement upon sixty (60) days'
         written notice, provided, however, that if the Party in default, within
         the sixty day period referred to, remedies the said default or breach,
         the Agreement shall continue in full force and effect.

7.4      In the event of termination of this Agreement under the provisions of
         this Article VII GALEN shall not be relieved of the duty and
         obligations to pay in full, any payments due and unpaid at the
         effective date of such termination. In such event GALEN shall:

         (a)      return any and all Technical Information and any other
                  information relating to the Combination Product provided to
                  GALEN and shall make no further use thereof;

         (b)      cease to make use of the Trademark, the other LEO Product
                  Branding and all other information related to the Combination
                  Product, and all rights in the Trademark, the other

                                                                               7
<PAGE>
                  LEO Product Branding and all other information relating to the
                  Combination Product will promptly revert to LEO and be
                  transferred to LEO;

         (c)      if GALEN is then the owner of any patents specifically related
                  to the Combination Product, GALEN shall transfer such
                  ownership to LEO, except for LEO being in breach in which case
                  GALEN will sell said patents and LEO will purchase said
                  patents at a price equal to the expenses GALEN has borne in
                  relation to developing, establishing and maintaining said
                  patent rights;

         (d)      if GALEN is then the owner of any patents, which in part
                  relates to the Combination Product then LEO, its Affiliates
                  and partners shall have a royalty free license to such patents
                  for the term of the patents;

         (e)      if GALEN is then the owner of any data related to the
                  Combination Product, including, but not limited to, any data
                  related to any study performed under this Agreement such data
                  shall be transferred to LEO. At such time, LEO shall have the
                  right, but not the obligation, to have assigned to LEO any
                  third party clinical agreement then pending;

         (f)      GALEN shall transfer the NDA, the IND and any other relevant
                  registrations related to the Combination Product held by
                  GALEN, if any, to LEO or its designee.

         In the event that LEO terminates this Agreement pursuant to Article 7.3
         or Article 7.2(a) or (b), the transfers required under Article 7.4 (a),
         (b), (c), (e) and (f) shall be made free of charge to LEO. Otherwise,
         the costs of transfers shall be split evenly between the parties.

VIII - ASSIGNABILITY

This Agreement shall be binding upon, and shall inure to the benefit of
successors of the Parties hereto, or to any assignee of all of the goodwill and
entire business assets of a Party hereto relating to pharmaceuticals, but shall
not otherwise be assignable without the prior written consent of the other
Party.

For the avoidance of doubt, LEO agrees and acknowledges that GALEN may perform
any or all of its obligations under this agreement through its U.S. Affiliates,
Warner Chilcott, Inc..

IX - AMENDMENT OF AGREEMENT; WAIVER; SEVERABILITY

9.1      This Agreement shall not be changed or modified orally.

9.2      Any term or condition of this Agreement may be waived at any time by
         the Party that is entitled to the benefit thereof, but no such waiver
         shall be effective unless set forth in a written instrument

                                                                               8
<PAGE>
         duly executed by or on behalf of the Party waiving such term or
         condition. No waiver by either Party of any term or condition of this
         Agreement, in any one or more instances, shall be deemed to be or
         construed as a waiver of the same or any other term or condition of
         this Agreement on any future occasion. All remedies, either under this
         Agreement or by Law or otherwise afforded, will be cumulative and not
         alternative.

9.3      If any provision of this Agreement is held to be illegal, invalid or
         unenforceable under any applicable present or future Law, and if the
         rights or obligations of any Party hereto under this Agreement will not
         be materially and adversely affected thereby, (a) such provision will
         be fully severable, (b) this Agreement will be construed and enforced
         as if such illegal, invalid or unenforceable provision had never
         comprised a part hereof, (c) the remaining provisions of this Agreement
         will remain in full force and effect and will not be affected by the
         illegal, invalid or unenforceable provision or by its severance
         herefrom and (d) in lieu of such illegal, invalid or unenforceable
         provision, the Parties will add as a part of this Agreement, a legal,
         valid and enforceable provision as similar in terms to such illegal,
         invalid or unenforceable provision as may be possible.

X - STATUS OF PRIOR AGREEMENTS

This Agreement together with the Master Agreement, the Dovonex(R) Agreement and
the Dovobet(R) Agreement constitute the entire agreement between the Parties
hereto with respect to the subject matter and supersede all previous agreements,
whether written or oral.

XI - FORCE MAJEURE

The occurrence of an event which materially interferes with the ability of a
Party to perform its obligations or duties hereunder which is not within the
reasonable control of the Party affected, not due to malfeasance, and which
could not with the exercise of due diligence have been avoided ("Force Majeure")
including, but not limited to, fire, accident, labour difficulty, strike, riot,
civil commotion, act of God, delay or errors by shipping companies or change in
Law shall not excuse such Party from the performance of its obligations or
duties under this Agreement, but shall merely suspend such performance during
the continuation of Force Majeure. The Party prevented from performing its
obligations or duties because of Force Majeure shall promptly notify the other
Party hereto (the "Other Party") of the occurrence and particulars of such Force
Majeure and shall provide the Other Party, from time to time, with its best
estimate of the duration of such Force Majeure and with notice of the
termination thereof. The Party so affected shall use its best efforts to avoid
or remove such causes of non-performance. Upon termination of Force Majeure, the
performance of any suspended obligation or duty shall promptly recommence.
Neither Party shall be liable to the Other Party for any direct, indirect,
consequential, incidental, special, punitive or exemplary damages arising out of
or relating to the

                                                                               9
<PAGE>
suspension or termination of any of its obligations or duties under this
Agreement by reason of the occurrence of Force Majeure. In the event that Force
Majeure has occurred and is continuing for a period of at least six (6) months,
the Other Party shall have the right to terminate this Agreement upon thirty
(30) days' notice.

XII - PARTNERSHIP/AGENCY; THIRD PARTIES

12.1     None of the provisions of this Agreement shall be deemed to constitute
         the relationship of partnership or agency between the Parties, and
         neither Party shall have any authority to bind the other Party in any
         way except as provided in this Agreement.

12.2     The Parties agree that no third party which is not a Party to this
         Agreement is intended to benefit from or shall have any right to
         enforce any provision of this Agreement.

XIII - GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES OF SUCH STATE OTHER THAN SECTIONS 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

Each Party irrevocably submits to the exclusive jurisdiction of (a) the Supreme
Court of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby or thereby. Each Party agrees to commence any
such action, suit or proceeding either in the United States District Court for
the Southern District of New York or if such suit, action or other proceeding
may not be brought in such court for jurisdictional reasons, in the Supreme
Court of the State of New York, New York County. Each Party further agrees that
service of any process, summons, notice or document by registered mail to such
Party's respective address set forth above shall be effective service of process
for any action, suit or proceeding in New York with respect to any matters to
which it has submitted to jurisdiction in this Article XIII. Each Party
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby and thereby in (i) the Supreme Court of the State of New
York, New York County or (ii) the United States District Court for the Southern
District of New York, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.

                                                                              10
<PAGE>
Each Party hereto hereby waives to the fullest extent permitted by applicable
Law, any right it may have to a trial by jury in respect to any litigation
directly or indirectly arising out of, under or in connection with this
Agreement.

XIV - NOTICES

Any notice hereunder shall be deemed to be sufficiently given if sent by
registered mail or by fax followed by mail to:

In the case of GALEN:

                GALEN (CHEMICALS) LIMITED
                4 Adelaide Street
                Dun Laoghaire, Co. Dublin
                Ireland

                Fax: + 353 1 214 8477

With a copy to:

                Galen Holdings PLC
                Att. Chief Executive Officer
                100 Enterprise Drive, Suite 280
                Rockaway, New Jersey 07866
                USA

                Fax: + 1 973 442 3362

In the case of LEO:

                LEO PHARMA A/S

                Att. CEO, President
                Industriparken 55
                DK-2750 Ballerup
                Denmark

                Fax: + 45 44 64 15 80

or such other address as the receiver shall have last furnished to the sender.

                                                                              11
<PAGE>
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly
executed in duplicate by their authorised officers as of the date last below
written.

Rockaway, April ____, 2003                          Ballerup,  April ____, 2003

GALEN (CHEMICALS) LIMITED                           LEO Pharma A/S




------------------------------                      ----------------------------
Name:  Roger M. Boissonneault                       Name:
Title:        Director                              Title: