<PAGE>

Exhibit 10.17

[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.]

                          SPONSORED RESEARCH AGREEMENT

                                 by and between

                                  NANOGEN, INC.

                                       and

                                  PROLINX, INC.

         This Sponsored Research Agreement (the "Agreement") is entered into as
of the 18th day of December, 1996 (the "Effective Date"), by and between
NANOGEN, INC., a California corporation having offices at 10398 Pacific Center
Court, San Diego, California 92121 ("Nanogen") and PROLINX, INC., a Delaware
corporation having offices at 22322 20th Avenue, S.E., Suite 100, Bothell,
Washington 98021 ("Prolinx").

         WHEREAS, Nanogen has developed proprietary expertise related to, among
other things, microelectronic DNA and macromolecular transport and detection,
screening and imaging of molecules, electronic hybridization, sample
preparation, genetic probe technology, electronic stringency control, electronic
complexity reduction and microfluidics; and

         WHEREAS, Prolinx has developed proprietary expertise related to, among
other things, chemical affinity systems, probe immobilization, luminescent
detection reagents and amplification polymers to provide enhanced detection
sensitivity in probe assays; and

         WHEREAS, Nanogen and Prolinx desire to collaborate on a sponsored
research program to be conducted by Prolinx and funded in part by Nanogen as
provided in Article 2 hereof (the "Sponsored Research Program"), the components
of which are to (1) identify and develop a chromophore/fluorophore/luminescent
detection reagent (the "Detection Reagent Research Program"), (2) refine and
develop an amplification polymer (the "Amplimer Research Program"), and (3)
apply Prolinx's proprietary chemical affinity systems to the immobilization of
oligonucleotide probes (the "Immobilization and Capture Program"), with the
overall goal of the Sponsored Research Program being the development of an
enhanced sensitivity detection system for use with Nanogen's proprietary
electronically addressable microchip assays.

         NOW, THEREFORE, the parties agree as follows:

<PAGE>

                                    ARTICLE 1

                                   DEFINITIONS

         1.1 "INFORMATION" means any and all current and future proprietary or
confidential information relating to, without limitation, either party's
designs, specifications, techniques, inventions, practices, knowledge, trade
secrets, know how, intellectual property, skill, experience, test data, quality
control, manufacturing data or drawings.

         1.2 "NANOGEN BACKGROUND INVENTIONS" means the proprietary inventions,
technology and expertise conceived and/or actually or constructively reduced to
practice by Nanogen prior to the Effective Date hereof, including, without
limitation, those covered by United States Patent Number 5,219,726 and its
foreign counterparts, and those described and claimed in United States Patent
Application Numbers 08/146,504, 08/232,233, 08/234,637, 08/258,168, 08/271,882,
08/304,657, 08/534,454, 08/677,305, *** AND , *** and their respective foreign
counterparts, and all Nanogen invention disclosures.

         1.3 "NANOGEN PLATFORM" means Nanogen's proprietary, electronically
addressable microchip arrays.

         1.4 "PROLINX BACKGROUND INVENTIONS" means the proprietary inventions,
technology and expertise conceived and/or actually or constructively reduced to
practice by Prolinx prior to the Effective Date hereof, including, without
limitation, those described and claimed in United States Patent Application
Numbers ***, 08/577,068, 08/188,531, ***, ***, 08/486,714, 08/472,851,
08/480,970, 08/188,958, 08/482,886, 08/189,176, 08/689,341, 08/691,929,
08/691,930, 08/689,283, and 08/692,429 and their respective foreign
counterparts, and all Prolinx invention disclosures.

                                   ARTICLE 2

                          FUNDING; ANNUAL RESEARCH FEE

         2.1 FUNDING. The parties agree that the cost of the Sponsored Research
Program shall be funded as follows: the cost of the Detection Reagent Research
Program shall be funded solely by Nanogen, the cost of the Amplimer Research
Program shall be funded jointly by Nanogen and Prolinx, and the cost of the
Immobilization and Capture Program shall be funded solely by Prolinx.

         2.2 ANNUAL RESEARCH FEE. In satisfaction of its funding obligations
under the Detection Reagent Research Program and the Amplimer Research Program,
Nanogen shall pay Prolinx an annual research fee of Five Hundred Thousand
Dollars ($500,000) per year during the term of this Agreement (the "Annual
Research Fee"), unless sooner terminated as set forth in Article 10. The Annual
Research Fee shall be payable in equal monthly Installments of $41,667. Such
payments shall commence within forty-five (45) days after the Effective Date,
and thereafter shall be made on the first day of each calendar month during the
term of this

-------------------------
***Confidential material redacted and separately filed with the Commission.

                                       -2-
<PAGE>

Agreement. Such monthly payments shall be made to Prolinx in immediately
available U.S. funds payable by cashier's or certified check or wire transfer.

                                   ARTICLE 3

                       DETECTION REAGENT RESEARCH PROGRAM

         3.1 PROGRAM OVERVIEW. The Detection Reagent Research Program to be
conducted by Prolinx shall focus on the identification and development of a
proprietary chromophore/fluorophore/luminescent detection reagent for Optimized
Use on the Nanogen Platform. For purposes of this Agreement, "Optimized Use"
means a ***-fold to ***-fold increase in detection sensitivity as compared to a
probe labeled with a single fluorophore.

         3.2 FUNDING. As provided in Section 2.1 above, funding for the
Detection Reagent Research Program shall be provided solely by Nanogen from the
Annual Research Fee.

         3.3 LICENSE. Nanogen shall be granted an exclusive license to the
detection reagent developed for Nanogen by Prolinx pursuant to the Detection
Reagent Research Program, with no field of use limitations, subject to the terms
of a License Agreement to be negotiated between the parties but including, at a
minimum, the terms provided in Sections 2, 3 and 4 of the Letter of Intent
between the parties dated July 24, 1996 (the "License Agreement").

                                   ARTICLE 4

                            AMPLIMER RESEARCH PROGRAM

         4.1 PROGRAM VIEW. The Amplimer Research Program to be conducted by
Prolinx shall focus on the refinement and development of an amplification
polymer designed to amplify and enhance detection sensitivity on the Nanogen
Platform to Optimized Use (as defined in Section 3.1).

         4.2 FUNDING. As provided in Section 2.1 above, funding for the Amplimer
Research Program shall be provided jointly by Nanogen and Prolinx in equal
amounts. Nanogen's portion of such funding shall be provided from the Annual
Research Fee.

         4.3 LICENSE. Nanogen shall be granted an exclusive license within the
Nanogen Field of Use (as defined in the License Agreement) to the amplification
polymer developed for Nanogen by Prolinx pursuant to the Amplimer Research
Program, subject to the terms of the License Agreement.

-------------------------
***Confidential material redacted and separately filed with the Commission.

                                       -3-
<PAGE>

                                    ARTICLE 5

                       IMMOBILIZATION AND CAPTURE PROGRAM

         5.1 PROGRAM OVERVIEW. The Immobilization and Capture Program to be
conducted by Prolinx shall involve the application by Prolinx of its already
existing immobilization and capture chemical affinity systems, which systems are
Prolinx Background Inventions, to the immobilization of oligonucleotide probes,
and the development by Prolinx of such additional immobilization and capture
chemical affinity systems as are necessary to achieve the goals and purposes
provided in the Research Plan.

         5.2 FUNDING. As provided in Section 2.1 above, funding for the
Immobilization and Capture Program shall be provided solely by Prolinx.

         5.3 LICENSE. Nanogen shall be granted a non-exclusive license within
the Nanogen Field of Use (as defined in the License Agreement) to the
immobilization and capture chemical affinity systems developed for Nanogen by
Prolinx pursuant to the Immobilization and Capture Program, subject to the terms
of the License Agreement.

                                   ARTICLE 6

                          RESEARCH OVERSIGHT COMMITTEE

         6.1 RESEARCH OVERSIGHT COMMITTEE. To further the objectives of the
parties and to coordinate the research activities conducted pursuant to the
Sponsored Research Program, the parties shall establish a Research Oversight
Committee ("ROC"). The ROC shall be created within thirty (30) days after the
Effective Date and shall be comprised of six (6) members, each with equal voting
power, three of whom shall be appointed, and may be replaced at any time(s), by
Nanogen in its sole discretion, and three of whom shall be appointed, and may be
replaced at any time(s), by Prolinx in its sole discretion. The purposes of the
ROC shall be to supervise and coordinate the Sponsored Research Program and to
provide a mechanism for exchanging information, modifying the Research Plan (as
described in Section 6.5 hereof), monitoring progress on achieving Technical
Milestones set forth in the Research Plan and reviewing the overall progress of
the Sponsored Research Program. Each party shall be free to replace its
representatives on the ROC from time to time upon written notice to the other
party. The ROC shall continue to operate throughout the term of this Agreement.

         6.2 MEETING. The ROC shall meet either in person or telephonically, as
the parties may agree, at least quarterly and, if in person, the meeting site
shall alternate between the offices of Nanogen and Prolinx. Each party shall be
responsible for the expenses incurred by its respective members of the ROC in
attending such meetings. A quorum of all six (6) members of the ROC shall be
required to meet and conduct business, and all decisions of the ROC shall
require a majority vote.

         6.3 RESEARCH PROJECT COORDINATOR. Nanogen, as the sponsoring party,
shall name a Research Project Coordinator from its members on the ROC. The
Research Project Coordinator shall be responsible for convening and conducting
meetings of the ROC, overseeing the

                                       -4-
<PAGE>

occasional and annual modification of the Research Plan pursuant to agreement
of the ROC, sending notices of meetings to all members of the ROC, and
preparing agendas for each ROC meeting. The secretary of each meeting shall
be designated by the party hosting such meeting and shall be responsible for
recording, preparing and disseminating minutes of such meeting to all members
of the ROC. The ROC also may be polled or consulted by the Research Project
Coordinator from time to time by means of telecommunications or
correspondence, but no action of the ROC shall be effective unless it is by a
majority vote.

         6.4 AGENDAS. Each ROC member shall communicate to the Research Project
Coordinator proposed agenda items in advance of each meeting of the ROC, and
each such item shall be placed on the agenda.

         6.5 RESEARCH PLAN. Research under the Sponsored Research Program shall
be conducted pursuant to a research plan (the "Research Plan"), which shall be
modified annually under the oversight of the Research Project Coordinator
pursuant to the agreement of the ROC, or by either party at any time with the
consent of the ROC. A copy of the initial Research Plan is attached hereto as
Exhibit A. The Research Plan, among other things, shall specify the direction,
research and Technical Milestones, responsibilities of the parties, reporting
requirements, timetable and experimental parameters of the research activities
conducted pursuant to the Sponsored Research Program.

         6.6 RESEARCH COMMITMENT. In consideration for the funding provided by
Nanogen, Prolinx shall commit to the Sponsored Research Program a dedicated team
consisting of such number of appropriately qualified scientists and support
personnel per year for the duration of the Sponsored Research Program as is
called for under the Research Plan, as modified annually or from time to time
pursuant to Section 6.5 above. Upon the prior approval of Nanogen, which
approval shall not be unreasonably withheld, Prolinx may change the composition
of the dedicated team from time to time in its reasonable discretion to achieve
the needs of the Sponsored Research Program. Prolinx shall use its best efforts
to execute the Research Plan and to achieve the overall goals of the Sponsored
Research Program. In using its best efforts, it is understood that Prolinx is
not obligated to spend more than the Annual Research Fee as specified in Section
2.2 hereof, plus those expenditures specified in Sections 4.2 and 5.2 hereof. It
is further understood that Prolinx does not guarantee the results of this
scientific endeavor.

                                   ARTICLE 7

                             PATENTS AND TECHNOLOGY

         7.1 OWNERSHIP OF INTELLECTUAL PROPERTY. Each party hereto expressly
acknowledges and agrees that the other party currently is engaged, and shall
continue to be so engaged during the term of this Agreement, in research and
development activities on numerous other projects and matters besides the
Sponsored Research Program (the "Other Work"). Each party further expressly
acknowledges and agrees that all right, title and interest in and to the Nanogen
Background Inventions and the Prolinx Background Inventions, and any and all
intellectual property developed by Nanogen or Prolinx in connection with its
Other Work (the "Other Intellectual Property"), is and shall continue to be the
sole and exclusive property of Nanogen or

                                       -5-
<PAGE>

Prolinx, respectively, and that neither party shall have any rights
whatsoever to the Background Inventions or Other Intellectual Property of the
other party. The following provisions shall apply only to inventions that are
conceived and actually or constructively reduced to practice during the
course of, and arising directly from, the Sponsored Research Program
(collectively "Inventions") pursuant to this Agreement:

                  7.1.1 Upon conceiving or reducing to practice any Invention,
         the party doing such immediately shall provide the other party with
         written notice setting out in detail the nature of the Invention,
         the experiments which support the Invention, the person or persons
         responsible for conceiving and reducing to practice the Invention and
         any other information relevant to the Invention. The discovering
         party also shall supply the other party with copies of all invention
         disclosures and patent and over applications describing and claiming
         the Invention.

                  7.1.2 The ownership of all Inventions shall be determined as
         follows: (i) all right, title and interest in and to all Inventions
         conceived and reduced to practice solely by Nanogen, including its
         independent contractors, shall be owned by Nanogen; (ii) all right,
         title and interest in and to all Inventions conceived and reduced to
         practice solely by Prolinx, including its independent contractors,
         shall be owned by Prolinx; and (iii) all right, title and interest in
         and to all Inventions conceived and reduced to practice jointly by
         Nanogen and Prolinx shall be owned jointly by Nanogen and Prolinx.

                  7.1.3 With respect to any Invention owned by one party under
         Section 7.1.2(i) or (ii), the other party shall assist the owner, to
         the extent reasonably necessary, at the owner's written request and
         expense, in the preparation of patent applications covering such
         Inventions which the owner elects in its sole discretion to file.

                  7.1.4 With respect to any Inventions owned jointly under
         Section 7.1.2(iii), Nanogen and Prolinx shall cooperate reasonably in
         determining whether to file patent applications covering such
         Inventions, but in no event shall either party thereby be compelled to
         remit any payments in respect to such patent applications. Should one
         party elect to seek patent protection covering an Invention and the
         other party elects not to participate in the costs with respect to such
         application, then the non-paying party shall relinquish all rights in
         the Invention to the paying party. With respect to jointly owned
         Inventions for which patent application and prosecution expenses are
         shared jointly, the parties shall engage in good faith discussions
         regarding any proposed licensing of such Inventions on a case by case
         basis. In addition, if one party wishes to obtain an exclusive license
         for a jointly owned Invention with regard to a particular field of use,
         the parties shall engage in good faith negotiations for such license.

         7.2 LIMITATIONS. Each party hereto expressly acknowledges and agrees
that any rights and interests arising in connection with this Agreement with
regard to intellectual property, technology or materials owned or developed by
the other party shall be strictly limited to those rights and interests
expressly granted to such party herein and in the License Agreement. Each party
further expressly agrees that no technology or materials provided by the other
party hereunder may be used for IN VIVO human studies under any circumstance
without such over party's prior written consent.

                                       -6-
<PAGE>

                                   ARTICLE 8

                                 CONFIDENTIALITY

         8.1 OBLIGATION OF NONDISCLOSURE. All Information communicated by one
party to the other party under this Agreement shall be maintained by the
receiving party in strict confidence and shall not be disclosed to any third
party without the express written permission of the disclosing party, which
permission may be granted or withheld in such disclosing party's sole
discretion. Notwithstanding the foregoing, either party may disclose Information
of the other party to its professional advisors, provided that such advisors are
bound by similar obligations of confidentiality to those contained herein. In
addition, either party may reveal Information of the other party where required
to do so by law or court order; provided, however, that the party intending to
so reveal shall provide the other party with notice of its intent to reveal at
least twenty (20) days prior to such revelations. The confidentiality
obligations of the parties hereunder shall continue for a period of five (5)
years from the expiration or termination of this Agreement.

         8.2 EXCEPTIONS. The Section 8.1 obligation of non-disclosure shall
apply to all such Information except that which:

                  8.2.1 Is known by the receiving party prior to its disclosure
         other than pursuant to an obligation of confidentiality; or

                  8.2.2 Becomes known to the receiving party from a third party
         under no obligation of confidentiality regarding such Information; or

                  8.2.3 Is public knowledge or later becomes public knowledge
         through no act on the part of the receiving party.

         8.3 SAMPLES. No samples of chemicals, machinery, components, probes,
reagents, and other materials submitted by either party to the other party
pursuant to this Agreement shall be transferred by such other party to any third
party without the prior written consent of the submitting party. All such
samples and materials, to the extent unused, shall be returned to the submitting
party promptly upon the expiration or termination of this Agreement.

         8.4 PUBLICATIONS. At least thirty (30) days prior to the presentation
or submission for publication of manuscripts, including abstracts, and texts of
poster presentations of the results of any research conducted pursuant to this
Agreement and containing Information, the party proposing to make such
publication shall submit the same to the other party for purposes of allowing
the other party to comment on the manuscript or text, decline to authorize the
publication of any of its Information, request the filing by the submitting
party of a patent application or initiate the filing of a patent application
prior to publication of any such Information. Each party shall make such
submissions to the other party until two (2) years following the expiration or
termination of this Agreement.

                                       -7-
<PAGE>

                                   ARTICLE 9

                            WARRANTIES AND COVENANTS

         9.1 REPRESENTATIONS AND WARRANTIES. Nanogen and Prolinx each hereby
represents and warrants to the other that:

                  9.1.1 CORPORATE POWER. It is duly organized and validly
         existing and has full corporate power and authority to enter into this
         Agreement and to carry out the provisions hereof.

                  9.1.2 DUE AUTHORIZATION. It is duly authorized to execute and
         deliver this Agreement and to perform its obligations hereunder.

                  9.1.3 BINDING AGREEMENT. This Agreement is a legal and valid
         obligation binding upon the party making such representation and
         warranty and enforceable in accordance with its terms. The execution,
         delivery and performance of this Agreement does not conflict with any
         agreement, instrument or understanding, oral or written, to which or by
         which the party making such representation and warranty may be bound,
         nor violate any law or regulation of any court, governmental body or
         administrative or other agency having jurisdiction over the party
         making such representation and warrant.

                  9.1.4 INTELLECTUAL PROPERTY RIGHTS. It holds all necessary
         right, title and interest in and to its respective Background
         Inventions and technology to permit it to undertake the Sponsored
         Research Program contemplated by this Agreement without subjecting the
         other party hereto to liability for infringement of any patent,
         copyright or trade secret of any third party.

                                   ARTICLE 10

                              TERM AND TERMINATION

         10.1 TERM AND TERMINATION. The term of this Agreement shall be three
(3) years from the Effective Date, unless sooner terminated by either party upon
ninety (90) days written notice. If either party fails materially to perform its
obligations hereunder or otherwise breaches in any material respect any material
covenant, term or condition set forth in this Agreement, the nonbreaching party
may give written notice specifying the breach together with a statement of its
intention to terminate this Agreement if the breach is not cured within such
thirty (30) day period immediately following the date of such written notice. If
such breach is not reasonably susceptible of cure within such thirty (30) day
period, but the breaching party has undertaken and continues to make diligent
efforts to cure said breach within such thirty (30) day period, the period for
cure shall be extended for an additional fifteen (15) days. If, at the end of
the cure period, the breaching party has not cured the specified breach, the
non-breaching party may cause this Agreement to be terminated immediately
effective upon notice to the breaching party.

         10.2 TERMINATION IN FIRST YEAR. Notwithstanding the provisions of
paragraph 10.1, except in the case of material nonperformance or other material
breach by Prolinx, Nanogen

                                       -8-
<PAGE>

shall not terminate funding for the Sponsored Research Program during the
first twelve (12) months of the Sponsored Research Program unless a
determination is made, subject to the following procedures, that the
Technical Milestones, as defined in the Research Plan, have not been achieved.

                  10.2.1 DISPUTE RESOLUTION PROCEDURES. If, within the first
nine (9) months of the Sponsored Research Program, Nanogen wishes to
terminate funding based upon a claim that the Technical Milestones have not
been achieved, the matter shall be presented to the ROC for consideration. If
the ROC cannot agree by majority vote, within ten (10) business days, that
the Technical Milestones have not been achieved, the matter shall be
submitted to a Management Committee comprised of the Chief Executive Officers
of both Nanogen and Prolinx for consideration. If the Management Committee
cannot agree, within ten (10) business days, that the Technical Milestones
have not been achieved, the parties shall have five (5) business days to
reach a mutual agreement on a competent third party technical arbitrator (the
"Arbitrator") to make such determination. Once the Arbitrator is chosen, both
parties shall exert best efforts to provide all reasonably necessary written
information to the Arbitrator within ten (10) business days. Upon the
delivery of all such information, the parties shall meet with the Arbitrator
for a single eight (8) hour session during which each party shall be
available to answer questions from the Arbitrator. The Arbitrator shall then
have two (2) additional business days to reach a decision on the dispute.

                  10.2.2 OUTCOME OF DISPUTE RESOLUTION. If the Arbitrator
         concludes that the Technical Milestones have not been achieved, Nanogen
         shall have the right to terminate this Agreement upon sixty (60) days
         written notice to Prolinx, commencing upon the date of the Arbitrator's
         decision. If the Arbitrator concludes that the Technical Milestones
         have been achieved, Nanogen shall have no right to terminate this
         Agreement under Section 10.2.1; PROVIDED, HOWEVER, that Nanogen shall
         continue to have rights of termination as provided in Sections 10.1,
         10.3 and 10.4 hereof. In the event of termination by Nanogen during the
         first twelve (12) months of this Agreement pursuant to the terms of
         this Section, Nanogen's sole and exclusive remedy hereunder shall be to
         cease paying the Annual Research Fee provided under this Agreement;
         PROVIDED, HOWEVER, that such limitation on Nanogen's remedies shall not
         apply in the case of termination by Nanogen for material breach by
         Prolinx.

         10.3 TERMINATION AFTER FIRST YEAR. After the first year, Nanogen shall
have the right, upon ninety (90) days written notice, to terminate this
Agreement, including the obligation to further fund the Sponsored Research
Program, without cause and at its sole discretion should it decide to do so.

         10.4 INSOLVENCY OR BANKRUPTCY. Either party, in addition to any other
remedies available to it by law or in equity, may terminate this Agreement by
written notice to the other party in the event such other party becomes
insolvent or bankrupt, or makes an assignment for the benefit of its creditors,
or a trustee or receiver of such other party or for all or a substantial part of
its property has been appointed.

         10.5 ACTIONS UPON TERMINATION. Upon termination of this Agreement, each
party shall return all Information and samples of the other party to such other
party and shall make no

                                       -9-
<PAGE>

further use of such Information and samples. Upon termination, each party's
intellectual property and Inventions shall remain exclusively its own, and
each party shall retain ownership and control of its respective patent
applications (or, in its sole discretion, enter into discussions for the
transfer of such applications to the other party hereto). All ownership and
license rights granted hereunder by either party to the other thereupon shall
terminate.

                                   ARTICLE 11

                                 INDEMNIFICATION

         11.1 INDEMNIFICATION. Each party hereby acknowledges that other party's
technology is experimental in nature. Therefore, each party shall defend,
indemnify and hold harmless the other party and its directors, officers,
shareholders, employees and agents of, from and against any and all actions,
causes of action, claims, liabilities, damages, losses, fees (including legal
fees), expenses and costs whatsoever (including without limitation losses,
damages and expenses for death, personal injury, illness, property damage or any
other injury or damage) arising from (i) its use, handling or storage of the
other party's technology at its own facility unless such actions, causes of
action, claims, liabilities and/or damages are proven to be the result of the
gross negligence or the willful breach by the other party of its obligations
hereunder, and (ii) any breach of its representations and warranties contained
herein.

                                   ARTICLE 12

                                   ASSIGNMENT

         12.1 ASSIGNMENT. Except as otherwise provided herein, no party may
assign its contractual rights or obligations under this Agreement to any other
person or entity without the prior written consent of the other party. Nothing
in this Section 12.1 shall restrict the power of either party to assign or
otherwise transfer any of its rights to any of its Background Inventions or
other property.

                                   ARTICLE 13

                                  MISCELLANEOUS

         13.1 NOTICES. To be effective, all notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission (receipt verified), mailed by registered or
certified mail (return receipt requested), postage prepaid, or sent by express
courier service, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice; provided, that notices
of a change of address shall be effective only upon receipt thereof):

                                       -10-
<PAGE>


         If to Nanogen, addressed to:

                  Nanogen, Inc.
                  10398 Pacific Center Court
                  San Diego, CA 92121
                  Attention:  Vice President, General Counsel
                  With a copy to:  Chairman and Chief Executive Officer

         If to Prolinx, addressed to:

                  Prolinx, Inc.
                  22322 20th Avenue S.E., Suite 100
                  Bothell, WA 98021
                  Attention:  President and Chief Executive Officer

         13.2 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California. Any claim or controversy arising out of or relating to this
contract or any breach hereof shall be submitted to a court of competent
jurisdiction in the State of California or the State of Washington.

         13.3 SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any party or circumstance, to any extent, is held
to be invalid or unenforceable, then (i) the remainder of this Agreement, or the
application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law; and (ii) the
parties hereto covenant and agree to renegotiate any such term, covenant or
application thereof in good faith in order to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable.

         13.4 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against either party, irrespective of which party may be deemed to
have authored the ambiguous provision.

         13.5 ENTIRE AGREEMENT. This Agreement, including all Exhibits hereto,
sets forth all the covenants, promises, warranties, representations, conditions
and understandings between the parties hereto and supersedes all prior
agreements and understandings, written or oral, between the parties.

         13.6 MODIFICATIONS. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the parties hereto unless
reduced to writing and signed by the respective authorized officers of the
parties.

         13.7 FORCE MAJEURE. Neither party hereto shall lose any rights
hereunder or be liable to the other party for damages or losses on account of
failure of performance by the defaulting party if the failure is occasioned by
government action (including compliance with requests, rules, regulations or
orders of any governmental authority), war, fire, robbery, vandalism, explosion,
flood, strike, lockout, embargo, act of God, or any similar cause beyond the
control of the

                                       -11-
<PAGE>

defaulting party, provided that the party claiming force majeure has exerted
all reasonable efforts to avoid or remedy such force majeure.

         13.8 FURTHER ACTIONS. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

         13.9 INDEPENDENT CONTRACTORS. The parties acknowledge and agree that
they are acting as independent contractors, and neither party is granted any
rights or authority to assume or create any obligation or liability, express or
implied, on the other party's behalf or to bind the other party in any manner
whatsoever.

         13.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.

         IN WITNESS WHEREOF, the parties have executed this Agreement in
duplicate originals by their authorized officers as of the date and year first
above written.


NANOGEN, INC.                              PROLINX, INC.


By: /s/ Howard C. Birndorf                 By: /s/ Mark L. Stolowitz
   -----------------------------------        ----------------------------------
           Howard C. Birndorf                            Mark L. Stolowitz
              Chairman and                                 President and
         Chief Executive Officer                      Chief Executive Officer



                                       -12-
<PAGE>

                                    EXHIBIT A

                              INITIAL RESEARCH PLAN

                     RESEARCH PROTOCOL FOR THE JOINT PROGRAM
               BETWEEN NANOGEN AND PROLINX ON ATTACHMENT CHEMISTRY
                            AND SIGNAL AMPLIFICATION

                                NOVEMBER 21, 1996

         The application of Prolinx's attachment chemistry to Nanogen's chip
technology is critically dependent on the stability of the*** under electric
field conditions. A feasibility study has been designed to address this issue
before the research agreement is finalized. This study must be completed within
one month of receiving the reagents from Prolinx so that the Research Oversight
Committee will have time to assess the results and determine if continuation of
the Sponsored Research Agreement scheduled to commence on January 1, 1997, is
justified.

         This plan is based on the assumption that the linkage is stable. We
will continue with a full-scale evaluation of the probes and linkers supplied by
Prolinx. The first three quarters will focus on the use of *** attachment
chemistry with a variety of polymer surfaces. Work on signal amplification will
begin in the third quarter with greater emphasis occurring toward the end of the
year.

                       Feasibility Study (Nov. - Dec. '96)

                                Stability of ***



[6 PAGES OF TECHNICAL DATA AND RESEARCH PROGRAM DETAILS REDACTED AND FILED
SEPERATELY WITH THE COMMISSION.]


-------------------
*** Confidential material redacted and separately filed with the Commission.

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