<PAGE>   1
                                                            --------------------
                                                            Certain confidential
                                                            material contained
                                                            in this document has
                                                            been omitted and
                                                            filed separately
                                                            with the Securities
                                                            and Exchange
                                                            Commission.
                                                            --------------------
CONFIDENTIAL



                                 EXHIBIT 10.34

                             COLLABORATION AGREEMENT

         THIS COLLABORATION AGREEMENT dated as of December 23, 1999, along with
all Exhibits attached hereto, (collectively, the "Agreement") is made by and
among Sankyo Pharma Inc., a Delaware corporation having its principal place of
business at 2 Hilton Court, Parsippany, New Jersey 07054 ("Sankyo") and GelTex
Pharmaceuticals, Inc., a Delaware corporation having its principal place of
business at 153 Second Avenue, Waltham, Massachusetts 02451 ("GelTex"). Sankyo
and GelTex are sometimes referred to herein individually as a "Party" and
collectively as the "Parties."

                                    RECITALS

         A. GelTex has filed New Drug Applications with the FDA for
Cholestagel(R), an orally administered non-absorbed bile acid sequestrant
intended to lower LDL cholesterol;

         B. Sankyo has expertise in the area of commercialization of
biopharmaceutical products;

         C. Sankyo and GelTex desire to collaborate on the commercialization of
Cholestagel(R) in the Territory (as defined below).


                             ARTICLE 1. DEFINITIONS

         For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below. Certain other capitalized terms are defined
elsewhere in this Agreement.

"Affiliate" shall mean any corporation or other entity that controls, is
controlled by, or is under common control with a Party. A corporation or other
entity shall be regarded as in control of another corporation or entity if it
owns or directly or indirectly controls at least fifty percent (50%) of the
voting stock or other ownership interest of the other corporation or entity, or
if it possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the corporation or other entity or
the power to elect or appoint at least fifty percent (50%) of the members of the
governing body of the corporation or other entity. For purposes of this
Agreement, Sankyo Parke Davis is an Affiliate of Sankyo.

"Chemie Commercial Agreement" shall mean the agreement dated as of September 27,
1999 by and between GelTex and DSM Chemie Linz ("Chemie") pursuant to which
Chemie has agreed to manufacture and deliver [ * ] of Drug Substance (as defined
below).

"Drug Substance" shall mean bulk colesevelam hydrochloride ready for conversion
to tablets by the Finisher/Packager."


[ * ] Confidential information omitted and filed separately with the Commission
<PAGE>   2
CONFIDENTIAL



"Effective Date" shall mean the date first written above on this Agreement.

"FDA" shall mean the United States Food and Drug Administration, and any
successor agency thereof.

"Field" shall mean all indications (prescription and over-the-counter) where the
desired therapeutic effect is achieved primarily through the sequestration of
bile acids.

"Finished Product" shall mean the final Product dosage form, packaged, labeled
and suitable for sale to Third Parties; provided however, that should Sankyo
exercise its right under Section 5.2.1 to assume responsibility for packaging
and labeling, "Finished Product" shall mean the unpackaged tableted Product
dosage form.

"Finisher/Packager" shall mean Global Pharm, Inc., or such other
finisher/packager as may from time to time be engaged in accordance with the
terms of this Agreement.

"Finisher/Packager Facilities" shall initially mean Global Pharm's facility
located at 865 York Mills Road, Toronto, Ontario, Canada M3B1Y6.

"Fully Absorbed Cost of Goods" with respect to Product shall mean all amounts
paid to Third Party contract Manufacturers, including Manufacturers of
intermediates, Drug Substance and Finished Product.

"GAAP" shall mean United States generally accepted accounting principles,
consistently applied.

"GelTex Patent Rights" shall mean the: (i) subject matter related to the
development, manufacture, use, offer for sale or sale of Product claimed in or
covered by the pending patent applications and issued patents recited in Exhibit
B; and any continuations, continuations-in-part, divisionals and foreign
counterpart applications thereof and in any patents issuing on these
applications, including reissues and re-examinations; and (ii) Patent Rights
claiming [ * ] to the extent such Patent Rights relate to or are necessary or
useful for the development, manufacture, use, offer for sale or sale of Product
and Sankyo agrees that such Patent Rights should be included in GelTex Patent
Rights.

"GelTex Technology" shall mean all present and, to the extent such Technology is
discovered, made or conceived during and in connection with this Agreement,
future Technology owned or controlled by, or licensed (with the right to
sublicense) to, GelTex or its Affiliates relating to or useful for the
development, manufacture, use, offer for sale or sale of Product. GelTex
Technology shall not include technology licensed to GelTex under the Nittobo
License (as such term is defined below).


[ * ] Confidential information omitted and filed separately with the Commission

                                       2
<PAGE>   3
CONFIDENTIAL



"Manufacturer" shall mean Chemie or such other manufacturer of Drug Substance as
GelTex may from time to time engage in accordance with the terms of this
Agreement.

"Manufacturing Facilities" shall mean the Manufacturer's facility located at St.
Peter-Strasse 25 A4021 Linz/Austria and the Powdersize facility located at 20
Pacific Drive, Quakertown, Pennsylvania, USA.

"Manufacturing/Manufacture" shall mean all the activities relating to production
of Product, including, but not limited to, purchasing and release of raw
materials, manufacturing, milling, quality control and assurance of all
production steps , finishing, filing, labeling, packaging, release, holding and
storage and the tests and analyses conducted in connection therewith.

"NDA" shall mean a new drug application filed with the FDA to obtain marketing
approval for Product in the United States under Section 505(b)(1) of the United
States Food, Drug & Comestic Act, as amended.

"Net Sales" shall mean the invoiced gross sales of the Finished Product sold by
Sankyo and its Affiliates to Third Party customers for use or resale in the
Territory, in each case less the following items, as determined in accordance
with GAAP: [ * ] For purposes of determining Net Sales, the transfer of any
Finished Product by Sankyo to its Affiliates shall not be considered a sale; in
such cases Net Sales shall be determined based on the invoiced sales price to an
independent Third Party customer, less the adjustments allowed under this
Section.

"Nittobo License" shall mean the Agreement dated June 9, 1997 by and between
GelTex and Nitto Boseki Co., Ltd. ("Nittobo") under which Nittobo has granted to
GelTex a license to manufacture polyallyamine (PAA) for use as the starting
material for the Product and to cross-link the PAA.

"Patent Rights" shall mean patents, patent applications, certificates of
invention, or applications for certificates of invention, together with any
extensions, registrations, confirmations, reissues, divisions, foreign
counterpart applications, continuations or continuations-in-part,
re-examinations or renewals thereof.


[ * ] Confidential information omitted and filed separately with the Commission


                                       3
<PAGE>   4
CONFIDENTIAL



"Product" shall mean all forms of the bile acid sequestrant developed by GelTex
for use in the Field that is described in the NDA filed by GelTex with the FDA
on July 30, 1999, including Drug Substance, Finished Product and any
improvements to and combinations of Drug Substance with another compound.

"Project Costs" shall mean reasonable and documented internal costs incurred by
GelTex and amounts paid to Third Parties on or after the Effective Date with
respect to work performed by GelTex and its contractors in connection with
certain services provided by GelTex under Section 6.4 or Article 5 hereof. For
purposes hereof, "internal costs incurred by GelTex" shall mean the fully
burdened cost of GelTex labor at the hourly billing rates to be provided by
GelTex at the time the project is defined, adjusted annually on the anniversary
of the Effective Date for inflation as determined by the United States Consumer
Price Index for All Urban Consumers (the "CPI-U") for the Boston Metropolitan
Area.

"Quality Agreement" shall mean the agreement entered into between Sankyo and
GelTex on the Effective Date in the form attached hereto as Exhibit A.

"Regulatory Approvals" shall mean all approvals from regulatory authorities in
the Territory required to lawfully market Product, including without limitation,
any NDA approvals and any product pricing approvals.

"Regulatory Costs" shall mean reasonable and documented internal costs incurred
by GelTex and amounts paid to Third Parties on or after the Effective Date with
respect to work performed by GelTex and its contractors in connection with
obtaining Regulatory Approvals for Product or in connection with the services
provided by GelTex under Section 6.3.2, including without limitation: (i)
amounts incurred internally or paid to Third Parties to provide assistance to
Sankyo with respect to adverse event tracking and safety reporting, if requested
by Sankyo; (ii) amounts incurred internally and amounts paid to Third Parties in
connection with GelTex's review of promotional and marketing material for so
long as GelTex holds the NDA for Product; (iii) amounts incurred internally or
paid to Third Parties in connection with GelTex's preparation and filing of
supplements to Product NDA, or any other filing required to be made by GelTex as
a result of being the holder of the NDA or in connection with any other required
regulatory filings for Product; and (iv) amounts paid to Third Parties and
incurred internally with respect to process development necessary in order to
implement changes to the Product Specifications required by the FDA or any other
applicable regulatory authority. For purposes hereof, "internal costs incurred
by GelTex" shall mean the fully burdened cost of GelTex labor at the hourly
billing rates set forth in the schedule attached hereto as Exhibit D, adjusted
annually on the anniversary of the Effective Date for inflation as determined by
the CPI-U for the Boston Metropolitan Area.

"Regulatory Scheme" shall mean the United States Food, Drug and Cosmetic Act, as
amended and the regulations, interpretations and guidelines promulgated
thereunder by the FDA or the regulatory scheme applicable to Product in the
Territory, as such statutes, regulations, interpretations and guidelines or
Regulatory Schemes may be amended from


                                       4
<PAGE>   5
CONFIDENTIAL



time to time.

"Sankyo Patent Rights" shall mean Patent Rights claiming [ * ] to the extent
such Patent Rights relate to or are necessary or useful for the development,
manufacture, use, offer for sale or sale of Product.

"Sankyo Technology" shall mean Technology discovered, made or conceived during
and in connection with this Agreement, that is owned or controlled by, or
licensed (with the right to sublicense) to, Sankyo or its Affiliates relating to
or useful for the development, manufacture, use offer for sale or sale of
Product. Sankyo Technology shall not include marketing information developed or
created by Sankyo or its Affiliates.

"Specifications" shall mean the specifications and Manufacturing procedures set
forth in the NDA for Product concerning the Manufacture and supply of Product,
including without limitation all formulae, know-how, Manufacturing processes,
raw materials requirements, in-process and Finished Product specifications,
analytical methods and standards of quality control and quality assurance, all
as are described in the Product NDA. Following the approval of the Product NDA,
the Specifications may be amended in accordance with the terms of Section 5.3.

"Technology" shall mean inventions, trade secrets, copyrights, know-how, data
and other intellectual property of any kind (including without limitation any
proprietary materials, compounds, reagents, techniques, analytical methodology,
or processes that are not included in Patent Rights).

"Territory" shall mean the United States of America and its territories and
possessions.

"Third Party" shall mean any entity other than Sankyo, GelTex and their
respective Affiliates.

                        ARTICLE 2. EXCLUSIVE RELATIONSHIP

During the Term and the term of the Agreement related to "GT 102-279" executed
on even date herewith (the "GT 102-279 Agreement"), neither GelTex, nor any of
its Affiliates, shall independently, or with a Third Party engage in the
Territory in the marketing, sale or distribution of products [ * ].
Notwithstanding the above, during the Term of this Agreement, GelTex and its
Affiliates or licensees shall be permitted to engage in the Territory in the
marketing, sale or distribution of the Compound (as defined in the GT 102-279
Agreement) following the termination of the GT 102-279 Agreement. During the
Term and the term of the GT 102-279 Agreement, neither Sankyo nor any of its
Affiliates, shall independently, or with a Third Party engage in the [ * ]


[ * ] Confidential information omitted and filed separately with the Commission


                                       5
<PAGE>   6
CONFIDENTIAL



[ * ]

               ARTICLE 3. LICENSE GRANTS AND RESERVATION OF RIGHTS

         3.1 License Grants to Sankyo.

                  3.1.1 Product. GelTex hereby grants to Sankyo: (i) the
exclusive, irrevocable (during the Term), right and license under the GelTex
Patent Rights and GelTex Technology to develop, make (subject to the terms of
Article 5), have made (subject to the terms of Article 5), have sold, use,
import, offer for sale and sell Product for use in the Territory in the Field,
and to practice and have practiced the methods licensed under the GelTex Patent
Rights for such purpose; and (ii) the exclusive, irrevocable (during the Term)
right and license to use the registered trademark Cholestagel(R) in the
Territory in connection with the sale of Finished Product in the Field. The
exclusive license granted in Section 3.1.1(i) is subject to licenses previously
granted by GelTex to Chemie in order to permit Chemie to manufacture Drug
Substance for GelTex and GelTex's licensees. The license grants under this
Section 3.1.1 may be sublicensed by Sankyo following written notice to GelTex.

                  3.1.2 Technology or Patent Rights Developed Outside of the
Program. In the event that GelTex develops, acquires rights to or otherwise
comes to own or control Technology or Patent Rights after the Effective Date
other than GelTex Patent Rights and GelTex Technology and such Technology or
Patent Rights are useful in the Field in the Territory, GelTex hereby grants to
Sankyo an option exercisable at Sankyo's discretion to obtain an exclusive,
irrevocable (during the Term) right and license to and right to sublicense such
Technology or Patent Rights limited to use in the Territory in the Field to the
extent useful to enable Sankyo to develop, make, have made, use, have sold,
import, offer for sale and sell Product, in each case subject to Sankyo's
agreeing in a written document satisfactory to GelTex to pay: (i) a commercially
reasonable portion of all costs incurred by GelTex to acquire such Technology or
Patent Rights; (ii) a commercially reasonable portion of any and all development
or other direct, documented and reasonable costs or expenses payable by GelTex
for the development of such Technology or Patent Rights since the date GelTex
acquired or gained rights to acquire such Technology or Patent Rights; and (iii)
all royalties, sublicense fees and other costs or expenses payable to Third
Parties associated with the acquisition or use of such license by Sankyo for
Product in the Field in the Territory provided, however, that if GelTex does not
own or have exclusive rights to such Technology or Patents Rights or cannot
grant Sankyo the right to further sublicense such Technology or Patent Rights,
the license subject to Sankyo's option hereunder shall be for the same level of
exclusivity and subject to the same sublicense terms as the rights held by
GelTex with respect to such Technology or Patent Rights in the Field in the
Territory. Third Party licenses required by a court of competent jurisdiction in
order to sell Product shall be excluded from this Section 3.1.2 and shall be
governed under the terms of Section 7.7.


[ * ] Confidential information omitted and filed separately with the Commission


                                       6
<PAGE>   7
CONFIDENTIAL



         3.2 License from Sankyo to GelTex.

                  3.2.1 Program License. Sankyo hereby grants to GelTex a
non-exclusive, irrevocable (during the Term), royalty-free, right, license and
sublicense under the GelTex Patent Rights, GelTex Technology, Sankyo Patent
Rights and Sankyo Technology solely to the extent required to permit GelTex to
perform its duties under this Agreement and the Quality Agreement. Sankyo also
hereby agrees to grant to GelTex a non-exclusive, irrevocable (during the Term),
royalty-free, right, license and sublicense under any other Technology or Patent
Rights as to which Sankyo elects to obtain a license pursuant to Section 3.1.2
above solely to the extent required to permit GelTex to perform its duties under
this Agreement and the Quality Agreement. GelTex shall have the right to
sublicense its rights under this Section 3.2.1 with the prior written permission
of Sankyo solely to the extent required to permit GelTex to perform its duties
under this Agreement and the Quality Agreement.

                  3.2.2 Non-Exclusive License. Sankyo hereby grants to GelTex a
non-exclusive, irrevocable (during the Term) fully paid-up and royalty-free
license under the Sankyo Patent Rights and the Sankyo Technology to develop,
make, have made, use, import, offer for sale, have sold and sell Product outside
the Territory.

         3.3 Reservation of Rights. Notwithstanding the license grants set forth
in Section 3.1 above, GelTex at all times reserves the right under the GelTex
Patent Rights, the GelTex Technology and any other Technology or Patent Rights
licensed to Sankyo pursuant to Section 3.1.2 above to: (i) make, have made and
use Product for research and development purposes outside the Field; (ii)
develop, make, have made, use, import, offer for sale, sell and have sold
Product outside the Field, but within the Territory, (iii) develop, make, have
made, use, import, offer for sale, sell and have sold Product outside the
Territory; and (iv) grant licenses to Third Parties for the foregoing purposes.
[ * ]

         3.4 Manufacture of Product. Notwithstanding anything else contained in
this Article 3, the Party with a right to Manufacture the Product under Article
5 shall have the right to Manufacture or to have Manufactured the Product in any
country in the world for use, offer for sale and sale by itself or, in the case
of GelTex, its licensees (including Sankyo), in the territories allocated to it
under this Agreement.

                          ARTICLE 4. REGULATORY ISSUES



                                       7

[ * ] Confidential information omitted and filed separately with the Commission
<PAGE>   8
CONFIDENTIAL



         4.1 Serious Adverse Experience Reporting. It is understood that GelTex
shall transfer its rights to the NDA for the Product to Sankyo in accordance
with Section 6.3.1 of the Agreement. Notwithstanding that GelTex has not yet
transferred the NDA to Sankyo, Sankyo will have responsibility for medical
surveillance and adverse event and safety reporting upon approval of the Product
NDA. Each Party shall have an ongoing obligation to notify the other Party of
any adverse experience report it or any of its Affiliates receives in connection
with the use of the Finished Product (or the active ingredient therein) in any
clinical trial, literature report, or spontaneous post-marketing use. This
notification shall occur within seventy-two (72) hours for an unexpected fatal
or life-threatening experience (as used in 21 CFR Section 314.80) associated
with the Finished Product arising during a clinical trial and within five (5)
days for all other adverse experience report associated with the Finished
Product (or the active ingredient therein). This notification shall be by fax at
such number(s) designated by each Party. At all times following NDA approval,
Sankyo shall have responsibility to investigate such adverse experience reports
and for filing post approval reports with governmental and regulatory
authorities in the Territory. For purposes of this Agreement and the Quality
Agreement, the term "adverse experience " shall mean any adverse event
associated with the use of the Finished Product in humans, whether or not
considered drug related, including the following: "An adverse event occurring in
the course of the use of a drug product in professional practice; an adverse
event occurring from drug overdose whether accidental or intentional; an adverse
event occurring from drug abuse; an adverse event occurring from drug
withdrawal; and any failure of expected pharmacological action."

         4.2 Clinical and Regulatory Audits. GelTex shall permit Sankyo, and,
for so long as GelTex holds any Regulatory Approvals in its name, Sankyo shall
permit GelTex, to have access during regular business hours and upon reasonable
advance notice, at the auditing Party's own expense to the non-auditing Party's
records and facilities relating to this Agreement for the purpose of monitoring
compliance with current Good Manufacturing Practices, Good Clinical Practices,
Good Laboratory Practices and other applicable requirements of all Regulatory
Schemes. The auditing rights set forth herein shall be subject to the terms of
the Quality Agreement.

         4.3 Right to Use Non-Clinical, Clinical and Other Information.
Notwithstanding anything else herein to the contrary, GelTex shall be entitled
to disclose, deliver and authorize the use of any non-clinical, clinical and any
other information relating to Product (which may include the full text of an NDA
or other regulatory filing) to a Third Party who becomes a licensee of Product
outside the Territory, provided that, the Parties will negotiate in good faith
to reimburse Sankyo for a pro-rata portion of any phase IV clinical data
obtained by Sankyo. Should GelTex disclose or deliver to a Third Party any
information hereunder that is subject to the confidentiality provisions of
Article 10, GelTex shall ensure that such Third Party shall be bound by
substantially the same terms and conditions as are set forth in Article 10 with
respect to such confidential information. In addition, GelTex shall be permitted
to use, and allow Third Party licensees to use all such non-clinical, clinical
and other information outside of the Field. Notwithstanding anything else herein
to the contrary, Sankyo shall be entitled to disclose, deliver and authorize the
use of any non-clinical, clinical


                                       8
<PAGE>   9
CONFIDENTIAL



and any other information relating to Product (which may include the full text
of an NDA or other regulatory filing) to a Third Party who becomes a licensee of
Product inside the Territory and in the Field. Should Sankyo disclose or deliver
to a Third Party any information hereunder that is subject to the
confidentiality provisions of Article 10, Sankyo shall ensure that such Third
Party shall be bound by substantially the same terms and conditions as are set
forth in Article 10 with respect to such confidential information.

                            ARTICLE 5. PRODUCT SUPPLY

         5.1 Agreement to Supply Product - Drug Substance

                  5.1.1 Engagement of Contract Manufacturers. GelTex shall be
responsible for identifying and contracting with Manufacturers to produce Drug
Substance, and Sankyo shall source all of its requirements for Drug Substance
from GelTex.

                  5.1.2 Use of Facility and Equipment. GelTex shall ensure that
all Manufacturing activities with respect to the Drug Substance shall be carried
out by the Manufacturer at the Manufacturing Facilities and utilizing equipment
in the manner set forth in the Specifications. Prior to altering the location of
the foregoing, GelTex shall provide Sankyo with written notice of its intention
to do so. GelTex shall notify Sankyo in writing prior to making any change to
the equipment designated in the Product NDA which is used in the Manufacture of
the Drug Substance hereunder, and shall notify Sankyo in writing as soon as
practicable of any change to the Manufacturing processes described in the NDA
that the Manufacturer makes in connection with the Manufacture of Drug
Substance.

                  5.1.3 Initial Forecast and Commitments. The parties
acknowledge that GelTex has entered into the Chemie Commercial Agreement for the
delivery of [ * ] of Drug Substance with such delivery to commence in [ * ] and
be complete in [ * ]. Sankyo agrees to purchase the full [ * ] of Drug Substance
to be delivered under the Chemie Commercial Agreement as per the delivery
schedule set forth in the Chemie Commercial Agreement. By February 1, 2000,
Sankyo shall provide GelTex with a forecast (the "First Long Term Forecast") of
its requirements for Drug Substance to be delivered between February 1, 2001 and
December 31, 2001 (the "2001 Delivery Period"). [ * ]. Sankyo acknowledges that
Chemie will be commencing the manufacture of Drug Substance [ * ]. Sankyo agrees
that its First Long Term Forecast will contain a firm commitment to take
delivery of at least [ * ] of Drug Substance from the [ * ] Facility during
2001. GelTex shall use all commercially reasonable and diligent efforts to
deliver Drug Substance during February and March 2001 from the [ * ] Facility.
However, should Chemie be unable to deliver Drug Substance from the [ * ]
Facility until April 2001, GelTex will deliver up to a total of [ * ] of Drug
Substance from the old


                                       9


[ * ] Confidential information omitted and filed separately with the Commission.
<PAGE>   10
CONFIDENTIAL



facility prior to April 2001, if requested by Sankyo. The supply price to be
charged to Sankyo for Drug Substance delivered during February and March 2001
and made in the old facility will be [ * ] per Kg.

                  5.1.4 Long Term Forecasts. The forecast to be provided under
Section 5.1.3 shall include, in addition to the First Long Term Forecast, a
forecast of Sankyo's purchases of the Drug Substance for delivery during the
additional periods as described below. The chart below sets forth a schedule for
the delivery of Long Term Forecasts of Sankyo's requirements of Drug Substance
and describes what portion of each Long Term Forecast will constitute a firm
commitment and what portion will be non-binding. These Long Term Forecasts shall
be updated more frequently if deemed to be reasonably necessary by GelTex or
Sankyo. The non-binding portion of each Long Term Forecast shall represent
Sankyo's best estimate of its Drug Substance requirements from GelTex, and the
non-binding portion of each Long Term Forecast shall be provided for the
convenience of GelTex only, and shall not constitute firm purchase or shipping
orders and shall not be binding upon, or create any obligation or liability with
respect to Sankyo. With respect to all portions of a Long Term Forecasts
designated as firm, Sankyo will be obligated to purchase at least [ * ] of the
Drug Substance set forth in the firm forecast, and GelTex will not be obligated
to supply purchase orders for more than [ * ] of the Drug Substance forecasted
in the firm forecast. The schedule for forecasting under Sections 5.1.3 and
5.1.4 and the nature of each part of each forecast is set forth in table format
below:

<TABLE>
<CAPTION>
         Date Forecast Delivered    Delivery Periods              Nature of Forecast
         -----------------------    Covered by Forecast           for Delivery Periods
                                    (the "Delivery Periods")      --------------------
                                    ------------------------
<S>                                 <C>                           <C>
         February 1, 2000           Feb. 2001-Dec. 31, 2001           [ * ]
                                    Jan. 1, 2002-Dec. 31, 2002        [ * ]
                                    Jan. 1, 2003-Dec. 31, 2003        [ * ]
                                    Jan. 1, 2004-Dec. 31, 2004        [ * ]
                                    Jan. 1, 2005-Dec. 31, 2005        [ * ]

         July 1, 2001               Jan. 1, 2002-Dec. 31, 2002        [ * ]
                                    Jan. 1, 2003-Dec. 31, 2003        [ * ]
                                    Jan. 1, 2004-Dec. 31, 2004        [ * ]
                                    Jan. 1, 2005-Dec. 31, 2005        [ * ]
                                    Jan. 1, 2006-Dec. 31, 2006        [ * ]
</TABLE>


         Thereafter, Long Term Forecasts will continue to be delivered on July 1
of each year. In continuing with the schedule set forth above, each Long Term
Forecast shall list the quantities of Drug Substance scheduled for delivery
during the next calendar year. [ * ] In the event


                                       10


[ * ] Confidential information omitted and filed separately with the Commission
<PAGE>   11
CONFIDENTIAL



that the approval of the NDA for the Product is delayed substantially, the
Parties may mutually agree to revise the forecasting schedule discussed above in
response to such delay.

                  5.1.6 Short Term Forecast. By April 1, 2000, and thereafter,
not less than ninety (90) days prior to the first day of each calendar quarter
during the Term, Sankyo shall provide GelTex with Sankyo's rolling twenty four
(24) month written forecast on a quarterly basis for its purchases of Drug
Substance for the twenty four (24) month period commencing with such calendar
quarter. [ * ]

                  5.1.7 Purchase Orders. The terms of Section 5.1.3 hereof shall
serve as the firm purchase order for the initial [ * ] of Drug Substance to be
delivered during the [ * ] Delivery Period. For all quantities of Drug Substance
thereafter, the following terms shall apply. By October 1, 2000 [ * ] prior to
the first day of each calendar quarter during the Term, Sankyo shall provide
GelTex with a firm purchase order setting forth the quantities of Drug Substance
ordered for each month of that calendar quarter, the delivery dates for such
quantities and the locations to which such quantities shall be delivered
("Purchase Order"). All Purchase Orders for the Drug Substance shall be for a
minimum batch size quantities reasonably agreed to by the Parties. In addition,
GelTex is not obligated to accept a Purchase Order (i) for Purchase Orders which
will be filled during the first two quarters of any calendar year unless the
amount ordered under the Purchase Order is equal to at least [ * ] of the total
amount of the firm commitment made to GelTex under Section 5.1.4 with respect to
the Delivery Period to which the Purchase Order relates (except that this
requirement shall not apply to the Purchase Order placed by Sankyo for
deliveries in the first quarter of 2001 which shall be governed by the terms of
Section 5.1.3), and (ii) for all Purchase Orders, the amount ordered under the
Purchase Order does not require production at a rate in excess of [ * ] per
year. If Sankyo determines that it will require an increase in the production of
Drug Substance such that Drug Substance is manufactured at a rate in excess of
[ * ] per year, Sankyo shall provide GelTex with at least [ * ] notice and the
Parties shall discuss the terms under which such additional capacity can be met.

                  5.1.8 Delivery. GelTex shall ship Drug Substance ordered by
Sankyo pursuant to Section 5.1.7 hereof [ * ]. All transportation, handling,
insurance costs and all costs and charges relating to the shipment of Drug
Substance to the Finisher/Packager Facilities shall be paid by [ * ].

                  5.1.9 Title and Risk of Loss. Title to and risk of loss of all
Drug Substance ordered under Purchase Orders shall remain with GelTex, or its
Manufacturer, until the Drug Substance is delivered to the carrier for shipment
to the Finisher/Packager. At the time the Drug Substance is delivered to such
carrier, Sankyo shall assume title to and risk of loss in respect of such Drug
Substance. However, GelTex shall be responsible for insuring the Drug Substance
during delivery to the Finisher/Packager and shall designate Sankyo as the loss
payee with respect to such insurance. In addition, for so long as GelTex is
responsible for contracting with a Finisher/Packager, GelTex shall ensure that
any such contract provides


                                       11


[ * ] Confidential information omitted and filed separately with the Commission.
<PAGE>   12
CONFIDENTIAL



that the Finisher/Packager assumes the risk of loss associated with the Drug
Substance while the Drug Substance remains in the custody of the
Finisher/Packager, and that the Finisher/Packager shall be responsible for
reimbursing Sankyo for any Drug Substance destroyed, damaged or lost while in
the custody of the Finisher/Packager.

                  5.1.10 Price for Drug Substance. With the exception of
improvements and combinations thereof, and subject to the terms of Sections
5.1.3 and 5.3, the supply price to be charged by GelTex to Sankyo for the Drug
Substance shall be [ * ] Kg for the initial [ * ] and [ * ] Kg for all Drug
Substance delivered in accordance with the 2001 Delivery Period and thereafter.

                  5.1.11 Invoices. GelTex shall invoice Sankyo for all shipments
of Drug Substance ordered by Sankyo pursuant to Purchase Orders. The invoices
shall be in substantially the form that Sankyo shall reasonably request. Payment
on each invoice will be made within thirty (30) days after Sankyo's receipt of
GelTex's invoice in accordance with the terms of Section 9.3. Invoices shall be
dated no earlier than the date of the applicable bill of lading.

                  5.1.12 Taxes. Sankyo shall reimburse GelTex for any federal,
state, or local excise or other tax or assessment, which GelTex may be required
to pay upon the sale, production or transportation of Drug Substance (excluding
taxes based on GelTex's income).

         5.2 Agreement to Supply Product - Finished Product.

                   5.2.1 Engagement of Contract Finishers. GelTex shall be
responsible for identifying and contracting with a Finisher/Packager to tablet,
test, package and label Finished Product. GelTex shall consult with Sankyo
regarding the terms of any agreement that GelTex enters into with a
Finisher/Packager after the Effective Date. Sankyo shall have the right to
consent to the terms of such agreement prior to GelTex's execution thereof,
which consent shall not be unreasonably withheld. However, in the event that
Sankyo does not consent to the terms which GelTex deems acceptable, the prices
set forth in Section 5.2.7 shall be void. In such case, GelTex shall charge
Sankyo for the actual price charged by the Finisher/Packager. Sankyo shall have
the right to assume full, but not partial, responsibility through, but not
limited to, assignment of contract(s) with the Finisher/Packager(s) for
conversion and packaging of Finished Product, upon reasonable notice. In
addition, following the approval of the Product NDA, Sankyo shall have the right
to assume full, but not partial responsibility for the packaging and labeling of
the tablets, upon reasonable notice. Notwithstanding the above, Sankyo's right
to assume responsibility for production of Finished Product and/or packaging and
labeling of tablets shall at all times be subject to Sankyo's agreement to
assume the contractual obligations regarding the Manufacture of


                                       12


[ * ] Confidential information omitted and filed separately with the Commission
<PAGE>   13
CONFIDENTIAL



Finished Product that GelTex has entered into prior to Sankyo's exercise of this
right.

                  5.2.2 Use of Facility and Equipment. GelTex shall ensure that
all Manufacturing activities with respect to the Finished Product shall be
carried out by the Finisher/Packager at the Finisher/Packager Facilities in the
manner set forth in the Specifications. Prior to altering the location of the
foregoing, GelTex shall provide Sankyo with written notice of its intention to
do so. GelTex shall notify Sankyo in writing prior to making any change to the
equipment designated in the Product NDA used in the Manufacture of the Finished
Product hereunder, and shall notify Sankyo in writing as soon as practicable of
any change to the Manufacturing process described in the Product NDA that the
Finisher/Packager makes in the Manufacture of the Finished Product.

                  5.2.3 Short Term Forecast. By April 1, 2000, and not less than
ninety (90) days prior to the first day of each calendar quarter during the Term
(or such shorter lead time as GelTex shall can secure from the
Finisher/Packager), Sankyo shall provide GelTex with Sankyo's rolling twenty
four (24) month written forecast on a quarterly basis for its purchases of
Finished Product for the twenty four (24) month period commencing with such
calendar quarter. [ * ] Sankyo shall use reasonable
commercial efforts to ensure that its forecasts are as accurate as possible as
GelTex will rely on such forecasts when scheduling production time and ordering
materials.

                  5.2.4 Purchase Orders. By April 1, 2000, and not less than
[ * ] Sankyo shall provide GelTex with a firm purchase order setting forth the
quantities of Finished Product ordered for each month of that calendar quarter,
the delivery dates for such quantities and the locations to which such
quantities shall be delivered ("Purchase Order"). All Purchase Orders for the
Finished Product shall be for minimum batch size quantities reasonably agreed to
by the Parties. GelTex shall have a right to reject all or a portion of a
Purchase Order for Finished Product if the Drug Substance necessary to produce
the Finished Product has not been ordered by Sankyo under Purchase Order
described in Section 5.1.7 in a sufficient period of time for the Manufacturer
of Drug Substance to produce such Drug Substance and deliver it to the
Finisher/Packager.

                  5.2.5 Delivery. GelTex shall ship Finished Product ordered by
Sankyo pursuant to Section 5.2.4 hereof [ * ] All
Finished Product shall be delivered in approved Sankyo shipping cartons to
Sankyo's designated shipping address. All transportation, handling, insurance
costs and all other costs and charges relating to the shipment of the Finished
Product shall be paid by [ * ] Sankyo shall reserve the right to select the
means of shipment of Finished Product.

[*] Confidential information omitted and filed separately with the Commission.


                                       13
<PAGE>   14
CONFIDENTIAL



                  5.2.6 Title. [ * ]

                  5.2.7 Price for Finished Product. Subject to Sections 5.1 and
5.3, the supply price to be charged by GelTex to Sankyo for conversion of the
Drug Substance to the Finished Product packaged for commercial sale in the
manner described on Exhibit C hereto, shall be not more than [ * ] for the
initial [ * ] and [ * ] thereafter. Should GelTex be obligated to agree to index
the price for the conversion of Finished Product in its agreement with the
Finisher/Packager, then the prices set forth herein shall be adjusted annually
throughout the Term in accordance with the Consumer Price Index-All Urban
Consumers (or such other index as shall be contained in GelTex's agreement with
the Finisher/Packager). [ * ] In the event that Sankyo modifies the commercial
packaging specifications from those specified on Exhibit C (for sampling
purposes or otherwise), and such modifications result in an increased cost to
tablet and package the Finished Product, then GelTex shall charge Sankyo for the
actual price charged by the Finisher/Packager, even though such price may exceed
the maximum amount set forth above. In the event that Sankyo exercises its right
under Section 5.2.1 to assume responsibility for packaging and labeling the
tablets, the prices set forth herein shall be void, and GelTex shall charge
Sankyo the cost it incurs in connection with the conversion of Drug Substance to
tablets.

                  5.2.8 Invoices. GelTex shall invoice Sankyo for all shipments
of Finished Product ordered by Sankyo pursuant to Purchase Orders. The invoices
shall be in substantially the form reasonably requested by Sankyo. Payment of
each invoice will be made within thirty (30) days after Sankyo's receipt of
GelTex's invoice in accordance with the terms of Section 9.3. Invoices shall be
dated no earlier than the date of the applicable bill of lading.

                  5.2.9 Taxes. Sankyo shall reimburse GelTex for any federal,
state, or local excise or other tax assessment, which GelTex may be required to
pay upon the sale, production or transportation of the Finished Product
(excluding taxes based on GelTex's income).

         5.3 Changes to Product Specifications Requested by Sankyo. Following
the NDA approval of the Product, if Sankyo shall request changes to the
Specifications, GelTex shall use commercially reasonable efforts to accommodate
the changes requested by Sankyo. If the changes would result in process
development work or other manufacturing development work to be performed by
GelTex or a Manufacturer, the cost associated with the performance of such work
shall be borne by [ * ] In addition, if the changes to
Specifications would result in an increase in GelTex's cost of the Drug
Substance or Finished

[*] Confidential information omitted and filed separately with the Commission.

                                       14
<PAGE>   15
CONFIDENTIAL



Product, the prices set forth in Sections 5.1.10 and 5.2.7 shall be adjusted to
reflect such increased cost to GelTex.

         5.4 Funding of Project Costs Associated with Supply and Quality
Management.

                  5.4.1 Description of Project Costs. Project Costs shall
include: (i) for so long as GelTex is serving as a supplier of Finished Product
to Sankyo, (a) those external Third Party costs incurred by GelTex in satisfying
its obligations under Section 5.2 of this Agreement and under the Quality
Agreement solely in connection with its supply of Finished Product, including,
but not limited to costs paid in connection with the validation lots of
commercial Finished Product, and the required stability on commercial lots of
Finished Product, (b) those external Third Party costs incurred by GelTex in
implementing a modification to the Specifications in response to a request by
Sankyo under Section 5.3, including, but not limited to costs paid for process
development work, validation lots and stability lots, and (c) the fully burdened
cost of GelTex labor incurred by GelTex in satisfying its obligations under this
Agreement and under the Quality Agreement in connection with its supply of
Finished Product; and (ii) with respect to GelTex's supply of Drug Substance,
(a) those external Third Party costs incurred by GelTex in modifying the
Specifications in response to a request by Sankyo under Section 5.3, including,
but not limited to costs paid for process development work, validation lots and
stability lots, and (b) the fully burdened cost of GelTex labor incurred by
GelTex in implementing a modification to the Specifications in response to a
request by Sankyo under Section 5.3.

                  5.4.2 Items Not Included in Project Costs. Project Costs shall
specifically exclude (i) the internal and Third Party costs incurred by GelTex
in satisfying its obligations under Section 5.1 of this Agreement in connection
with the supply of Drug Substance, (ii) the Third Party costs associated with
the validation of NDA registration lots of Drug Substance or Finished Product
necessary for NDA approval and (iii) the Third Party costs associated with the
stability required on the NDA registration lots of Drug Substance or Finished
Product necessary for NDA approval.

                   5.4.3 Budget for Project Costs. On or before February 1, 2000
for the year 2000, and by sixty (60) days prior to the end of each calendar year
thereafter, GelTex shall provide Sankyo with a detailed budget of Project Costs
GelTex expects to incur during the next calendar year in connection with supply
and quality management. On a quarterly basis GelTex shall provide Sankyo with an
invoice for these costs incurred by GelTex during the previous quarter. Sankyo
shall reimburse GelTex in full for these costs detailed in each invoice within
thirty (30) days of Sankyo's receipt thereof. Notwithstanding the above, Sankyo
shall not be required to reimburse GelTex for Project Costs in excess of the
budget prepared by GelTex unless Sankyo specifically authorizes additional
services to be provided by GelTex. For purposes of this Section 5.4, "the fully
burdened cost of GelTex labor" shall be charged at the hourly billing rates set
forth in the schedule attached hereto as Exhibit D, and shall be adjusted
annually on the anniversary of the Effective Date for inflation as determined by
the CPI-U for the Boston Metropolitan Area.




                                       15
<PAGE>   16
CONFIDENTIAL



                          ARTICLE 6. COMMERCIALIZATION

         6.1 Responsibility for Commercialization. All sales, marketing,
distribution and other costs associated with the commercialization of Product in
the Territory shall be borne exclusively by Sankyo. All terms of sale,
including, without limitation, pricing policies, credit terms, cash discounts
and returns and allowances, shall be set by Sankyo in its sole discretion.

         6.2 Due Diligence.

                  6.2.1 Affirmative Obligation to Seek Regulatory Approval,
Launch and Diligently Market. Sankyo shall use commercially reasonable and
diligent efforts to promote, market and sell Product in the Territory. Without
limiting the generality of the foregoing, Sankyo will use commercially
reasonable and diligent efforts to launch commercial sales of Product in the
Territory, within [ * ] of Sankyo's receipt of regulatory approval to promote,
market and sell Product for use in the Field by the FDA, unless a legal or
governmental prohibition or restriction which is out of Sankyo's control,
prevents Sankyo from so doing. The Parties acknowledge that at such time as
Sankyo has launched GT 102-279 (under the terms of the GT 102-279 Agreement, as
defined in Article 2), Sankyo may determine to reduce its marketing and sales
efforts with respect to the Product. The Parties agree that such reduction in
effort following the launch of GT 102-279 will be commercially reasonable.

                  6.2.2 Consequence of Failure to Launch. If Sankyo fails to
launch the promotion, marketing and sales of Product for use in the Field within
the [ * ] period of Section 6.2.1, within the Territory for any reason, other
than a legal or governmental prohibition or restriction, GelTex shall have the
right to provide written notice to Sankyo of its decision to terminate the
Agreement, and the rights and obligations of the parties shall be those set
forth in Section 13.3.2.

         6.3 Regulatory Matters.

                  6.3.1 Assignment of Regulatory Filings. Following the approval
of the NDA for the Product, GelTex shall assign to Sankyo the NDA and IND for
the Product. Sankyo will provide GelTex with at least two months written notice
of the date following the approval of the NDA on which Sankyo desires for the
assignment to be effective; provided, however that such date shall be no later
than six (6) months following the approval of the NDA. Sankyo may give its
notice as to the effective date of the assignment prior to the approval of the
NDA, but in no event will the assignment be effective prior to the approval of
the NDA. Prior to or upon assignment, GelTex shall transfer all information and
material related to the regulatory filings related to Product to Sankyo. In
connection with the assignment, the Parties shall agree on an orderly transfer
of relevant information and materials, including, but not limited to, the safety
data base collected in connection with the

[*] Confidential information omitted and filed separately with the Commission.

                                       16
<PAGE>   17
CONFIDENTIAL



clinical development of the Product.

                  6.3.2 Regulatory Activities Prior to Assignment. Prior to the
approval of the NDA for the Product, GelTex agrees to provide Sankyo with
information regarding its material discussions with the FDA and to keep Sankyo
informed as to the negotiations in which GelTex engages with the FDA regarding
labeling of the Product. Prior to the assignment of the NDA and IND to Sankyo,
GelTex shall continue to be responsible for maintaining each NDA and IND and
completing all filings required to be made with the FDA regarding the NDA and
IND. Such activities may include, but shall not necessarily be limited to,
compliance with FDA regulations regarding promotional and marketing materials
and physician sampling. Sankyo shall provide GelTex with all promotional
materials to review and file with the FDA. Such materials shall be provided in
the time frames reasonably requested by GelTex in order to permit GelTex to meet
its obligations hereunder and to the FDA, which obligations may include the
obligation to submit materials to the FDA prior to use. Additionally, as further
described in the attached Quality Agreement, Sankyo shall adhere to standard
operating procedures developed by, or approved by, GelTex to ensure compliant
physician sampling. Notwithstanding the fact that the NDA has not yet been
assigned to Sankyo, Sankyo shall assume full responsibility for medical
surveillance and adverse event and safety data reporting upon the approval of
the NDA.

                  6.3.3 Budget for Regulatory Costs. On or before February 1,
2000, GelTex shall provide Sankyo with a detailed budget of the Regulatory Costs
GelTex expects to incur during 2000 in connection with the performance of
services under Section 6.3.2. On a quarterly basis GelTex shall provide Sankyo
with an invoice for the Regulatory Costs incurred by GelTex during the previous
quarter. Sankyo shall reimburse GelTex in full for the costs detailed in each
invoice within thirty (30) days of Sankyo's receipt thereof. Notwithstanding the
above, Sankyo shall not be required to reimburse GelTex for Regulatory Costs in
excess of the budget prepared by GelTex unless Sankyo specifically authorizes
additional services to be provided GelTex. Upon assignment of the IND and NDA
under Section 6.3.1, all Regulatory Costs shall accrue solely to Sankyo.

         6.4 Projects Requested by Sankyo.

                  6.4.1 Defining the Projects. From time to time during the
Term, Sankyo may request that GelTex conduct or assist in conducting certain
projects related to the Product. GelTex shall have the right, but not the
obligation to accept the assignment of such projects from Sankyo. If GelTex
agrees to conduct the project requested by Sankyo, GelTex shall prepare a
description of the services to be provided by GelTex and a budget for the costs
associated with completing the project. Sankyo shall bear all Project Costs
associated with the project, including the fully burdened cost of GelTex labor
incurred in connection with GelTex's completion of the project and the Third
Party costs incurred by GelTex in completing the project. GelTex shall use all
commercially reasonable and diligent efforts to complete the projects which it
accepts.



                                       17
<PAGE>   18
CONFIDENTIAL



                  6.4.2 Projects Requested Prior to the Effective Date. Prior to
the Effective Date, Sankyo has requested that GelTex conduct, and GelTex has
agreed to conduct, projects regarding [ * ] GelTex agrees to deliver a budget of
the Project Costs associated with these projects on or before February 1, 2000,
and GelTex agrees that the budget for such Project Costs shall be substantially
similar to the expenses previously discussed with Sankyo.

                  6.4.3 Funding of Project Costs. During such time as GelTex is
engaged in a project for Sankyo hereunder, GelTex shall provide Sankyo with
quarterly invoices for the Project Costs incurred by GelTex during the previous
quarter. Sankyo shall reimburse GelTex in full for the Project Costs detailed in
each invoice within thirty (30) days of Sankyo's receipt thereof.
Notwithstanding the above, Sankyo shall not be required to reimburse GelTex for
Project Costs in excess of the budget prepared by GelTex unless Sankyo
specifically authorizes additional services to be provided by GelTex.

             ARTICLE 7. INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS

         7.1 Ownership. The Parties acknowledge that the ownership rights set
forth herein: (i) shall not be affected by the participation in the development
of an Invention by the Joint Steering Committee in the course of discharging its
duties hereunder; and (ii) are subject to the license grants set forth in
Article 3 above.

                  7.1.1 Ownership of Discoveries and Improvements. All right,
title and interest in all writings, inventions, discoveries, improvements and
other Technology, whether or not patentable or copyrightable, and any patent
applications, patents or copyrights based thereon that are discovered, made or
conceived during and in connection with this Agreement (collectively, the
"Inventions") [ * ] Each of GelTex and Sankyo shall promptly disclose to the
other Party the making, conception or reduction to practice of Inventions by
employees or others acting on behalf of such Party or inventions licensed to the
other Party hereunder. Patent Rights and Technology covering [ * ] shall be
automatically licensed to Sankyo in accordance with Section 3.1.1 hereof to the
extent that Sankyo has determined to include such [ * ] in the definition of
GelTex Patent Rights. Patent Rights and Technology covering [ * ] shall be
automatically licensed to GelTex in accordance with Sections 3.2.1 and 3.2.2
hereof.

[*] Confidential information omitted and filed separately with the Commission.

                                       18
<PAGE>   19
CONFIDENTIAL



                  7.1.2 Determination of Inventorship. Inventorship shall be
determined in accordance with United States patent law.

                  7.1.3 Ownership of Trademarks. Sankyo shall select all
trademarks for the sale and use of Finished Product in the Territory. Sankyo, or
its Affiliates, shall own all such trademarks and shall bear all expenses
thereof, except for the registered trademark Cholestagel(R), as to which it has
been granted a license pursuant to Section 3.1.1 hereof. GelTex shall maintain
the trademark Cholestagel(R) in the Territory.

                  7.1.4 Cooperation of Employees. Each of Sankyo and GelTex
represents and agrees that all employees or others acting on its behalf in
performing its obligations under this Agreement shall be obligated under a
binding written agreement to assign to such Party, or as such Party shall
direct, all Inventions made or conceived by such employee or other person. In
the case of non-employees working for other companies or institutions on behalf
of GelTex or Sankyo, GelTex or Sankyo, as applicable, shall use commercially
reasonable and diligent efforts to obtain licenses for all Inventions made by
such non-employees on behalf of Sankyo or GelTex, as applicable, in accordance
with the policies of said company or institution. Sankyo and GelTex agree to
undertake to use commercially reasonable and diligent efforts to enforce such
agreements (including, where appropriate, by legal action) considering, among
other things, the commercial value of such Inventions.

         7.2 Filing, Prosecution and Maintenance of Patent Rights.

                  7.2.1 Filing, Prosecution and Maintenance. Each of Sankyo and
GelTex shall be responsible for the reasonable and diligent filing, prosecution,
maintenance and patent term extension of all patent applications and patents
which make up its Patent Rights, except that the Parties will determine, on a
case-by-case basis, which Party shall be responsible for the filing,
prosecuting, maintenance and patent term extension of all patent applications
and patents covering [ * ]. For so long as any of the license grants set forth
in Section 3.1 hereof remain in effect in the Territory, GelTex agrees to file
and prosecute patent applications, obtain patent term extensions, where
available, and maintain the patents covering its Patent Rights in the Territory.
GelTex shall consult with and keep Sankyo informed of all material issues
relating to the preparation and filing, prosecution and maintenance of such
patent applications and patents.

                  7.2.2 Patent Filing Costs. All reasonable and documented costs
incurred after the Effective Date and associated with filing, prosecuting and
maintaining patent applications and patents covering each of GelTex's Patent
Rights with claims applicable to the Field in the Territory shall be paid by
[ * ].

         7.3 Cooperation. Each of GelTex and Sankyo shall, at its own expense,
make available to the other Party (or to the other Party's authorized attorneys,
agents or representatives) its employees, agents or consultants to the extent
necessary or appropriate to enable the appropriate Party to file, prosecute and
maintain patent applications and resulting patents with respect to Inventions
owned by a Party and for periods of time sufficient for


[*] Confidential information omitted and filed separately with the Commission.

                                       19
<PAGE>   20
CONFIDENTIAL

such Party to obtain the assistance it needs from such personnel. Where
appropriate, each of GelTex and Sankyo shall sign or cause to have signed all
documents relating to said patent applications or patents at no charge to the
other Party.

         7.4 Notification of Patent Term Restoration. Each of GelTex and Sankyo
shall notify the other Party of: (a) receipt of the Notice of Issuance of each
United States patent included within the notifying Party's Patent Rights, giving
the date of issue and patent number for each such patent; and (b) each notice
pertaining to any patent included within the notifying Party's Patent Rights
which it receives as patent owner pursuant to the Drug Price Competition and
Patent Term Restoration Act of 1984, including notices pursuant to Sections 101
and 103 of such Act from persons who have filed an abbreviated NDA. Such notices
shall be given promptly, but in any event within ten (10) business days after
receipt of each such notice pursuant to such Act. Each of GelTex and Sankyo
shall notify the other Party of each filing for patent term restoration under
such Act, any allegations of failure to show due diligence and all awards of
patent term restoration (extensions) with respect to the notifying Party's
Patent Rights.

         7.5 No Other Technology Rights. Except as otherwise expressly provided
in this Agreement, under no circumstances shall a Party, as a result of this
Agreement, obtain any ownership interest in or other right to the Patent Rights
or Technology of the other Party, including items owned, controlled or developed
by the other Party, or transferred by the other Party to said Party at any time
pursuant to this Agreement.

         7.6 Enforcement of Patent Rights. GelTex and Sankyo shall promptly
notify the other in writing of any alleged or threatened infringement of GelTex
Patent Rights or Sankyo Patent Rights of which it becomes aware.

                  7.6.1 First Right to Respond. [ * ] shall have the first
right, but not obligation, to prosecute or prevent such infringement in the
Field in the Territory. [ * ] Any action taken by [ * ] pursuant to this Section
7.6.1 shall be at the sole cost and expense of [ * ], provided, however, that
[ * ] shall have the right to participate in any such action at its own expense.
[ * ]

                  7.6.2 Second Right to Respond. If [ * ] does not exercise its
right to respond to such infringement within sixty (60) days of becoming aware
of or being notified of such infringement, then [ * ] shall have the right, but
not the obligation, to do so at its sole expense. [ * ]

[*] Confidential information omitted and filed separately with the Commission.

                                       20
<PAGE>   21
CONFIDENTIAL



[ * ].

                  7.6.3 Cooperation. If either Party has exercised its right to
prosecute or prevent the infringement of GelTex Patent Rights or Sankyo Patent
Rights as described in Sections 7.6.1 and 7.6.2 hereof, then the other Party
shall provide reasonable and diligent cooperation with such Party in all matters
concerning any such infringement and shall make available any relevant records,
documents, or information if requested to do so.

         7.7 Third Party Licenses.

                  7.7.1 For Identified Patents. If Sankyo is required by a court
of competent jurisdiction to obtain a license from the owners, assignees or
licensees of the [ * ] in order to sell Product in the Territory, [ * ].

                  7.7.2 For All Other Patents. If Sankyo is required, in its
reasonable judgment or by a court of competent jurisdiction, to obtain a license
from a Third Party under any issued patent in order to sell Product in the
Territory, [ * ].


              ARTICLE 8. INITIAL, MILESTONE AND ROYALTIES PAYMENTS

         8.1 Status of Payments. All initial payments, milestones and other
amounts payable by Sankyo under this Agreement will be non-refundable and
non-creditable against future royalty or milestone obligations. Notwithstanding
the above, should this Agreement terminate pursuant to Section 13.2.4 within
three (3) years following the NDA approval, GelTex shall refund all initial
payments and milestones which have been paid to GelTex.

         8.2 Initial Payments. GelTex hereby acknowledges receipt of an initial
payment of One Million Dollars ($1,000,000) received by GelTex following the
execution of the Letter of Intent on November 15, 1999. Sankyo shall also make
an additional initial payment of Nine Million Dollars ($9,000,000) on or before
December 31, 1999.

         8.3 Milestone Payments. Sankyo shall pay GelTex Twenty Million Dollars
($20,000,000) within thirty (30) business days following Sankyo's receipt of
written notice from GelTex that the FDA has approved the NDA for the Product.

         8.4 Royalty on Net Sales of Product. In consideration of the licenses
granted hereunder, Sankyo agrees to pay to GelTex during the Term a royalty on
Net Sales of


[*] Confidential information omitted and filed separately with the Commission.

                                       21
<PAGE>   22
CONFIDENTIAL



Product sold by Sankyo in the Territory at the rates set forth below:

<TABLE>
<CAPTION>
              Amount of Annual Net Sales                      Percentage of Annual Net Sales
              --------------------------                      ------------------------------
<S>                                                           <C>
               [ * ]                                              [ * ]
</TABLE>



[*] Confidential information omitted and filed separately with the Commission.




                                       22
<PAGE>   23
CONFIDENTIAL



                            ARTICLE 9. PAYMENT TERMS

         9.1 Royalty Reports. During the Term and commencing with the first
calendar quarter in which the first commercial sale of Product occurs, Sankyo
shall, within fifty days following the end of the calendar quarter, furnish to
GelTex a written report showing, the gross sales of Product sold to Third Party
customers during the quarter and the calculation of Net Sales and the amount
payable as royalties pursuant to Article 8 hereof. Within sixty days following
the end of the calendar quarter, Sankyo shall pay to GelTex the amount of
royalties shown to be due thereon with annual adjustments for discrepancies
between estimated allowances booked in accordance with GAAP and actual
deductions to invoiced gross sales. If no royalties shall be due, Sankyo shall
so report.

         9.2 Records. Sankyo shall keep and maintain proper and complete records
and books of account documenting all information relating to royalties payable
hereunder. Sankyo shall permit independent accountants retained by GelTex and
acceptable to Sankyo to have access to its records and books for the sole
purpose of determining the accuracy of such royalties. Such examination shall be
during regular business hours and upon reasonable advance notice and no more
than once in each calendar year during the term of this Agreement. The
accountant shall not disclose to GelTex or any Third Party any information
except that which should properly be contained in such a report. If such
examination reveals that any royalties have been understated, any underpayment
shall be paid within thirty (30) days. GelTex shall pay the fees and expenses of
the accountant engaged to perform the audit, unless such audit reveals an
underpayment of five percent (5%) or more for the period examined, in which
case, Sankyo shall pay all reasonable costs and expenses of the accountant.

         9.3 Payment Method. Except as otherwise provided in this Agreement or
agreed to by the Parties, all payments under this Agreement shall be made by
electronic bank transfer in United States dollars available on the date due, to
such account as GelTex specifies to Sankyo in writing within a reasonable period
before such payment is due.

         9.4 Books of Account; Audit. GelTex shall keep and maintain proper and
complete records and books of account documenting all Project Costs and
Regulatory Costs incurred by it. GelTex shall permit independent accountants
retained by Sankyo and acceptable to GelTex to have access to its records and
books for the sole purpose of determining the accuracy of all Project Costs and
Regulatory Costs charged by GelTex. Such examination shall be during regular
business hours and upon reasonable advance notice and no more than once in each
calendar year during the term of this Agreement. The accountant shall not
disclose to Sankyo or any Third Party any information except that which should
properly be contained in a report of costs incurred. If such examination reveals
that any costs including, without limitation, Project Costs and/or Regulatory
Costs have been overstated, any overpayment shall be refunded within thirty (30)
days. Sankyo shall pay the fees and expenses of the accountant engaged to
perform the audit, unless such audit reveals an overcharge of five percent (5%)
or more for the period examined, in which case, GelTex


                                       23
<PAGE>   24
CONFIDENTIAL



shall pay all reasonable costs and expenses of the accountant.


                           ARTICLE 10. CONFIDENTIALITY

         10.1 Nondisclosure Obligations. Except as otherwise provided in this
Article 10, during the term of this Agreement and for a period of five (5) years
thereafter, the Parties shall maintain in confidence and use only for purposes
specifically authorized under this Agreement and/or under the Quality Agreement:
(a) confidential information and data resulting from or related to the
Agreement, the Quality Agreement and/or the development of Product; (b) all
information and data not described in clause (a) but supplied by another Party
under this Agreement or the Quality Agreement and marked "Confidential"; or (c)
information that by its nature should be considered confidential.

         For purposes of this Article 10, information and data described in
clause (a), (b) or (c) of the preceding paragraph shall be referred to as
"Information." To the extent it is reasonably necessary or appropriate to
fulfill its obligations or exercise its rights under this Agreement and/or under
the Quality Agreement, a Party may disclose Information it is otherwise
obligated under this Section not to disclose to its Affiliates, consultants,
outside contractors and clinical investigators, on a need-to-know basis and on
the condition that such entities or persons agree to keep the Information
confidential for the same time periods and to the same extent as such Party is
required to keep the Information confidential; and a Party or its sublicensees
may disclose such Information to government or other regulatory authorities to
the extent that such disclosure is reasonably necessary to obtain patents or
authorizations to conduct clinical trials with and to market Product
commercially. The obligation not to disclose Information shall not apply to any
part of such Information that: (i) is or becomes patented, published or
otherwise becomes publicly known other than by acts of the Party obligated not
to disclose such Information or its Affiliates in contravention of this
Agreement; (ii) can be shown by written documents to have been disclosed to the
receiving Party or its Affiliates by a Third Party, provided that such
Information was not obtained by such Third Party directly or indirectly from the
other Party under this Agreement or under the Quality Agreement; (iii) prior to
disclosure under this Agreement or under the Quality Agreement, was already in
the possession of the receiving Party or its Affiliates, provided that such
Information was not obtained directly or indirectly from the other Party under
this Agreement and/or under the Quality Agreement; (iv) can be shown by written
documents to have been independently developed by the receiving Party or its
Affiliates without breach of any of the provisions of this Agreement; or (v) is
disclosed by the receiving Party or its Affiliates pursuant to a subpoena
lawfully issued by a court or governmental agency, provided that the receiving
Party or its Affiliates, as the case may be, notifies the other Party
immediately upon receipt of any such subpoena.

         10.2 Terms of this Agreement and other Public Disclosures. The Parties
acknowledge that GelTex will be required to file this Agreement with the
Securities and Exchange Commission, and GelTex agrees to seek confidential
treatment for portions of this Agreement when making such filing upon review by
Sankyo. Except as permitted by the


                                       24
<PAGE>   25
CONFIDENTIAL



foregoing provisions or as otherwise required by law, each of the Parties hereby
agrees not to disclose any terms or conditions of this Agreement to any Third
Party without the prior consent of the other Party; provided, that each Party
shall be entitled to disclose the terms of this Agreement without such consent
to potential investors or other financing sources on the condition that such
entities or persons agree to keep such terms confidential for the same time
periods and to the same extent as such Party is required to keep such terms
confidential. The Parties agree to coordinate the timing and scope of any other
public disclosures discussing the work conducted under this Agreement.

         10.3 Publications. Each Party recognizes the mutual interest in
obtaining valid patent protection. Consequently, any Party, its employees or
consultants wishing to make a publication (including any oral disclosure made
without obligation of confidentiality) relating to work performed by such Party
related to Product (the "Publishing Party") shall transmit to the other Party
(the "Reviewing Party") a copy of the proposed written publication at least
forty-five (45) days prior to submission for publication, or an abstract of such
oral disclosure at least fifteen (15) days prior to submission of the abstract
or the oral disclosure. The Reviewing Party shall have the right to: (a) request
a delay in publication or presentation in order to protect patentable
information; (b) propose modifications to the publication for patent reasons; or
(c) request that the information be maintained as a trade secret.

         If the Reviewing Party requests a delay as described in clause (a)
above, the Publishing Party shall delay submission or presentation of the
publication for a period of ninety (90) days to enable patent applications
protecting each Party's rights in such information to be filed. Upon the
expiration of forty-five (45) days, in the case of proposed written disclosures,
or fifteen (15) days, in the case of an abstract of proposed oral disclosures,
from transmission of such proposed disclosures to the Reviewing Party, the
Publishing Party shall be free to proceed with the written publication or the
oral presentation, respectively, unless the Reviewing Party has requested the
delay described above.

         To the extent possible in the reasonable exercise of its discretion,
the Publishing Party shall incorporate all modifications proposed under clause
(b) above. If a trade secret that is the subject of a request made under clause
(c) above cannot be otherwise protected without unreasonable expense to the
Reviewing Party, such information shall be omitted from the publication.


                   ARTICLE 11. REPRESENTATIONS AND WARRANTIES

         11.1 Authorization. Each Party warrants and represents to the other
that: (i) it has the legal right and power to enter into this Agreement and the
Quality Agreement, to extend the rights and licenses granted to the other in
this Agreement, and to perform fully its obligations hereunder; (ii) this
Agreement and the Quality Agreement have been duly authorized, executed and
delivered and are valid and binding agreements of such Party, enforceable in
accordance with their respective terms subject to applicable bankruptcy,
insolvency, reorganization, and other laws of general application limiting the
enforcement of


                                       25
<PAGE>   26
CONFIDENTIAL



creditor's rights; (iii) such Party has obtained all necessary approvals to the
transactions contemplated hereby; (iv) such Party has not made nor will it make
any commitments to others in conflict with or in derogation of such rights or
this Agreement; (v) GelTex Patent Rights and Technology comprise all the
intellectual property owned by GelTex which is necessary and useful for
manufacturing and commercializing Product in the Field and in the Territory; and
(vi) GelTex is not debarred under Section 306(a) or (b) of the Generic Drug
Enforcement Act of 1992.

         11.2 Intellectual Property Rights.

                  11.2.1 Existing Rights. GelTex hereby represents and warrants
(i) that immediately prior to the execution and delivery of this Agreement it
possesses an exclusive right, title and interest to the existing GelTex Patent
Rights and the GelTex Technology (except for licenses granted to Chemie); (ii)
that the GelTex Patent Rights and the GelTex Technology are, and during the Term
will remain free and clear of any lien or other encumbrance; and (iii) that
GelTex has the right to enter into the obligations set forth in this Agreement
and in the Quality Agreement and to grant the rights and licenses set forth in
Article 3 hereof.

                  11.2.2 [*]

                  11.2.3 Representation and Warranty. [*] and those patents
owned by Nittobo as to which GelTex has a non-exclusive license, GelTex warrants
and represents that to the best of its knowledge, the development, manufacture,
marketing, promotion, use, sale or offer for sale of Product by Sankyo, its
Affiliates or sublicensees will not constitute any infringement of any issued
patent, patent publication, know-how and/or trademarks owned by any Third Party.

         11.3 Product Warranties.

                  11.3.1 GelTex Warranties. GelTex warrants that Product
delivered to Sankyo by GelTex in accordance with the terms of Article five will
conform in all material respects to: (i) the Specifications; (ii) the conditions
of any applicable Regulatory Approvals regarding the Manufacturing process as
specified in the NDA; and (iii) any applicable requirements of the Regulatory
Scheme regarding the Manufacturing process.

                  11.3.2 Sankyo Warranties. Sankyo warrants that Products sold
pursuant to this Agreement will be marketed and sold in all material respects:
(i) in accordance with the conditions of any applicable Regulatory Approvals and
any applicable labeling claims; and (ii) any applicable requirements of the
Regulatory Scheme regarding the sale and/or

                                       26

[*] Confidential information omitted and filed separately with the Commission.



<PAGE>   27
CONFIDENTIAL



distribution of Product.

         11.4 Disclaimer of Representations and Warranties. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER GELTEX NOR SANKYO MAKES ANY
REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT OF ANY THIRD-PARTY PATENTS OR
PROPRIETARY RIGHTS. ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE EXPRESSLY
DISCLAIMED BY THE PARTIES.

         11.5 Limitation of Liability. It is agreed by the Parties that neither
Party shall have a right to or shall claim special, indirect or consequential
damages, including lost profits, for breach of this Agreement. Remedies shall be
limited to claims for amounts due hereunder or as otherwise provided in this
Agreement, including claims for indemnification as provided in Article 12
hereof.


                              ARTICLE 12. INDEMNITY

         12.1 GelTex Indemnity Obligations.

                  12.1.1 For Product Liability Claims. Except to the extent such
claims, losses, damages or expenses result from Sankyo's negligence or a breach
of a representation or warranty by Sankyo, GelTex agrees to defend, indemnify
and hold harmless Sankyo, its Affiliates, licensees and their respective
directors, officers, employees and agents harmless from all claims, losses,
damages or expenses: [*]

                  12.1.2 For Intellectual Property Claims. In the event that a
claim or assertion of patent, know-how, copyright and/or trademarks infringement
is made against Sankyo or its Affiliates or licensees by any Third Party in the
Territory, including any assignee or licensee of the [*], by reason of the
development, making, having made, using, selling, having sold and offering for
sale by Sankyo hereunder, [*]

         12.2 Sankyo Indemnity Obligations. Except to the extent such claims,
losses, damages or expenses result from GelTex's negligence or a breach of a
representation or warranty by GelTex, Sankyo agrees to defend, indemnify and
hold GelTex, its Affiliates and


                                       27


[*] Confidential information omitted and filed separately with the Commission.

<PAGE>   28
CONFIDENTIAL

their respective directors, officers, employees and agents harmless from all
claims, losses, damages or expenses arising out of or relating to [*}


                  12.3 Procedure. Should a Party or any of its Affiliates or its
officers, directors, employees or agents (the "Indemnitee") intend to claim
indemnification under this Article 12, such Indemnitee shall promptly notify the
other Party (the "Indemnitor") in writing of any loss, claim, damage, liability
or action in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall be entitled to assume the defense
thereof with counsel selected by the Indemnitor and approved by the Indemnitee,
such approval not to be unreasonably withheld; provided, however, that if
representation of Indemnitee by such counsel first selected by the Indemnitor
would be inappropriate due to a conflict of interest between such Indemnitee and
any other party represented by such counsel, then Indemnitor shall select other
counsel for the defense of Indemnitee, with the fees and expenses to be paid by
the Indemnitor, such other counsel to be approved by Indemnitee and such
approval not to be unreasonably withheld. The indemnity agreement in this
Article 12 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Indemnitor, which consent shall not be withheld unreasonably. The failure
to deliver notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 12, but the omission so to deliver notice to the Indemnitor will
not relieve it of any liability that it may have to any Indemnitee otherwise
than under this Article 12. The Indemnitee under this Article 12, its officers,
directors, employees and agents, shall cooperate fully with the Indemnitor and
its legal representatives in the investigation of any action, claim or liability
covered by this indemnification. In the event that each Party claims indemnity
from the other and one Party is finally held liable to indemnify the other, the
Indemnitor shall additionally be liable to pay the reasonable legal costs and
attorneys' fees incurred by the Indemnitee in establishing its claim for
indemnity.


                        ARTICLE 13. TERM AND TERMINATION

         13.1 Term.

                  13.1.1 Expiration. Unless terminated earlier pursuant to
Section 13.2, this Agreement shall continue in full force and effect until the
expiration of the last of any GelTex Patent Rights in the Territory.

                  13.1.2 Effect of Expiration. Expiration of the Agreement shall
not relieve the Parties of any obligation accruing prior to such expiration.
Upon expiration of this Agreement in connection with Product pursuant to Section
13.1.1 above: (i) Sankyo shall have a paid-up, non-exclusive license, with right
to sublicense, under the GelTex Patent


                                       28

[*] Confidential information omitted and filed separately with the Commission.

<PAGE>   29
CONFIDENTIAL

Rights and GelTex Technology to make, have made, use, offer for sale, sell and
have sold Product in the Territory for use in the Field; (ii) Sankyo shall have
a paid-up license and right to use the registered trademark Cholestagel in the
Territory in connection with the sale of Product for use in the Field; and (iii)
GelTex shall have a paid-up non-exclusive license under the Sankyo Patent Rights
and Sankyo Technology to make, have made, use, offer for sale, sell and have
sold Product in the Territory.

         13.2 Termination. This Agreement may be terminated in the following
circumstances:

                  13.2.1 For Certain Material Breaches. If: (i) either GelTex or
Sankyo fails to use commercially reasonable and diligent efforts to perform any
material duty imposed upon such Party, or materially breaches any representation
or warranty made by such Party under this Agreement; or (ii) Sankyo fails to use
commercially reasonable efforts to commercialize Product in the Territory, and
in any case, such failure to perform is not cured within ninety (90) days of
written notice thereof from the non-breaching Party, the non-breaching Party may
elect, in its sole discretion, to: (i) enforce the terms of this Agreement and
seek any and all remedies available to it at law and in equity; and/or (ii)
terminate this Agreement with the consequences set forth in Section 13.3 below.
Such 90-day period shall be extended to one hundred eighty (180) days if the
breaching Party has engaged in good faith efforts to remedy such default within
such 90-day period that it believes that it will be able to remedy the default
within such 180-day period, but such extension shall apply only so long as the
breaching Party is engaging in good faith efforts to remedy such default.

                  13.2.2 Upon Bankruptcy. Either GelTex or Sankyo may terminate
this Agreement upon the bankruptcy, insolvency, dissolution or winding-up of the
other Party, except in the case of a petition in bankruptcy filed involuntarily
against a Party, if such petition is dismissed within sixty (60) days of the
date of its filing.

                  13.2.3 For Changed Circumstances. Sankyo shall have the right
to terminate this Agreement if: (i) the NDA for Product is not approved by the
FDA on or before [*] for reasons other than actions taken by Sankyo; (ii) after
submitting a Hart-Scott-Rodino filing with the Federal Trade Commission (FTC),
FTC does not approve the transaction as set forth herein or requires
modifications to the transaction that are unacceptable to Sankyo, (iii) a
generic version of colesevelam hydrochloride is approved by the FDA and is being
sold in the Territory for use in the Field, or (iv) Sankyo launches GT102-279
for sale in the Territory, and Sankyo determines to cease all sales of the
Product in the Territory.

                  13.2.4 Following Certain Infringement Claims. This Agreement
shall be terminated as to Product should a Patent Claim (as defined in Section
12.1.2) result in the issuance of a final injunction prohibiting the future
development and/or commercialization of Product.


                                      29




[*] Confidential information omitted and filed separately with the Commission.
<PAGE>   30
CONFIDENTIAL



         13.3 Effects of Termination. Termination of the Agreement shall not
relieve the Parties of any obligation accruing prior to such expiration.

                  13.3.1 Termination by Sankyo. Upon any termination by Sankyo
pursuant to Section 13.2.1 or 13.2.2 above: (i) in its sole discretion, Sankyo
shall retain the licenses granted in Section 3.1 to commercialize Product in the
Territory for use in the Field; (ii) provided that Sankyo retains the licenses,
Sankyo shall continue to be obligated to pay royalties on Net Sales of the
Product as set forth in Article 8 to GelTex; (iii) provided that Sankyo retains
the licenses, Sankyo shall pay to GelTex any milestone payments not previously
paid to GelTex at such time as the milestone payment would otherwise have been
due; (iv) in the case of termination due to bankruptcy of GelTex under Section
13.2.2, in Sankyo's sole discretion, GelTex shall assign all contracts with
suppliers to Sankyo and assist Sankyo in any way necessary for Sankyo to assume
the rights (but not necessarily any obligations that are overdue) under such
contracts; and (v) GelTex shall retain the license granted to it pursuant to
Section 3.2.2. Additionally, upon termination by Sankyo pursuant to Sections
13.2.3 or 13.2.4 above: (i) all licenses granted to Sankyo pursuant to Article 3
shall be revoked; (ii) Sankyo shall transfer to GelTex, at GelTex's cost and
expense any applicable Regulatory Approvals (or applications for Regulatory
Approvals), all non-clinical and clinical data owned or licensed by Sankyo, all
contracts relating to Product and requested by GelTex and all other information
useful to enable GelTex to sell Product in the Territory; (iii) Sankyo shall
transfer to GelTex all trademarks owned or licensed by Sankyo which are being
used in connection with the sale of Product in the Territory, and (iv) at
GelTex's request, Sankyo shall sell to GelTex at Sankyo's actual cost all
Product inventory in Sankyo's possession or control.

                  13.3.2 Termination by GelTex. Upon any termination by GelTex
pursuant to Sections 13.2.1 or 13.2.2 above, or Section 6.2.2: (i) Sankyo shall
grant to GelTex a royalty-free, paid-up exclusive and irrevocable right and
license, with the right to grant sublicenses, under the Sankyo Patent Rights and
Sankyo Technology to develop, make, have made, use, import, offer for sale, sell
and have sold Product, and Sankyo shall execute such documents and take all such
action as may be necessary or desirable to affect the foregoing; (ii) all
licenses granted pursuant to Article 3 to Sankyo shall be revoked; (iii) all
licenses granted to GelTex in Article 3 shall remain in full force and effect;
(iv) Sankyo shall transfer to GelTex any applicable Regulatory Approvals (or
applications for regulatory approvals), all non-clinical and clinical data owned
or licensed by Sankyo, all contracts relating to Product and requested by GelTex
and all other information useful to enable GelTex to continue to sell Product in
the Territory without interruption; (v) the Parties will negotiate appropriate
reimbursement for a portion of the cost associated with any clinical data
generated by Sankyo and transferred to GelTex pursuant to (iv) above; (vi)
Sankyo shall transfer to GelTex at GelTex's cost and expense all trademarks
owned or licensed by Sankyo which are being used in connection with the sale of
Product in the Territory; and (vii) at GelTex's request, Sankyo shall sell to
GelTex at Sankyo's actual cost all Product inventory in Sankyo's possession or
control.




                                       30




[*] Confidential information omitted and filed separately with the Commission.
<PAGE>   31
CONFIDENTIAL



                            ARTICLE 14. MISCELLANEOUS

         14.1 Exchange Controls. All payments due hereunder shall be paid in
United States dollars. If at any time legal restrictions prevent the prompt
remittance of part or all payments with respect to any country where a Product
is sold, payment shall be made through such lawful means or methods as the
Parties may determine.

         14.2 Force Majeure. No Party shall be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached this Agreement or
the Quality Agreement for failure or delay in fulfilling or performing any term
of this Agreement when such failure or delay is caused by or results from causes
beyond the reasonable control of the affected Party, including but without
limitation fire, floods, embargoes, war, acts of war (whether war is declared or
not), insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or one or both of the other Parties; provided, however,
that the Party so affected shall use commercially reasonable and diligent
efforts to avoid or remove such causes of non-performance, and shall continue
performance hereunder with reasonable and diligent dispatch whenever such causes
are removed. In the event a force majeure event is reasonably likely to
interrupt GelTex's supply of Drug Substance or Finished Product to Sankyo for a
period in excess of three months, the Parties shall negotiate in good faith such
changes to Article 5 as may be necessary to secure an alternate source of supply
for Sankyo. Each Party shall provide the other Party with prompt written notice
of any delay or failure to perform that occurs by reason of force majeure. The
Parties shall mutually seek a resolution of the delay or the failure to perform
as noted above. 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
suspension or termination of any of its obligations or duties under this
Agreement and/or under the Quality Agreement by reason of the occurrence of
force majeure.

         14.3 Assignment. This Agreement may not be assigned or otherwise
transferred by any Party without the consent of the other Party; provided,
however, that either GelTex or Sankyo may, without such consent, assign its
rights and obligations under this Agreement and the Quality Agreement: (a) in
connection with a corporate reorganization, to any member of an affiliated
group, all or substantially all of the equity interest of which is owned and
controlled by such Party or its direct or indirect parent corporation; or (b) in
connection with a merger, consolidation or sale of substantially all of such
Party's assets to an unrelated Third Party; provided, however, that such Party's
rights and obligations under this Agreement and under the Quality Agreement
shall be assumed by its successor in interest in any such transaction and shall
not be transferred separate from all or substantially all of its other business
assets, including those business assets that are the subject of this Agreement.
Any purported assignment in violation of the preceding sentence shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement in writing.



                                       31
<PAGE>   32
CONFIDENTIAL



         14.4 Severability. Each Party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the Parties will substitute, by mutual consent,
valid provisions for such invalid provisions, which valid provisions in their
economic effect are sufficiently similar to the invalid provisions that it can
be reasonably assumed that the Parties would have entered into this Agreement
with such valid provisions. In case such valid provisions cannot be agreed upon,
the invalidity of one or several provisions of this Agreement shall not affect
the validity of this Agreement as a whole, unless the invalid provisions are of
such essential importance to this Agreement that it is to be reasonably assumed
that the Parties would not have entered into this Agreement without the invalid
provisions.

         14.5 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement and/or under the Quality Agreement by one of
the Parties hereto to the other shall be in writing, delivered personally or by
facsimile (and promptly confirmed by personal delivery or courier) or courier,
postage prepaid (where applicable), addressed to such other Party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor in accordance with this Section 14.5, and
shall be effective upon receipt by the addressee.

         If to GelTex:              GelTex Pharmaceuticals, Inc.
                                    153 Second Avenue
                                    Waltham, MA 02451
                                    Attention:  President
                                    Facsimile:  (781) 672-5822

         with a copy to:            GelTex Pharmaceuticals, Inc.
                                    153 Second Avenue
                                    Waltham, MA 02451
                                    Attention:  Corporate Counsel
                                    Facsimile:  (781)  895-4982

         If to Sankyo:              Sankyo Parke Davis
                                    Two Hilton Court
                                    Parsippany, NJ  07054
                                    Attention:  President
                                    Facsimile:  (973) 359-2605

         with a copy to:            Sankyo Pharma Inc.
                                    Two Hilton Court
                                    Parsippany, NJ  07054
                                    Attention:  President
                                    Facsimile:  (973) 359-2629



                                       32
<PAGE>   33
CONFIDENTIAL



         14.6 Applicable Law. This Agreement and the Quality Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.

         14.7 Arbitration. Any disputes arising between the Parties relating to,
arising out of or in any way connected with this Agreement or the Quality
Agreement or any term or condition hereof, or the performance by either Party of
its obligations hereunder, whether before or after termination of this Agreement
(a "Dispute"), which has not resolved in accordance with the provisions of
Section 4.3 hereof, shall be finally resolved by binding arbitration as herein
provided.

                  14.7.1 General. Except as otherwise provided in this Section
14.7, any arbitration hereunder shall be conducted under the commercial rules of
the American Arbitration Association. Each such arbitration shall be conducted
in the English language by a panel of three arbitrators (the "Arbitration
Panel"). Each of GelTex and Sankyo shall appoint one arbitrator to the
Arbitration Panel and the third arbitrator shall be appointed by the two
arbitrators appointed by GelTex and Sankyo. The Arbitration Panel shall be
convened upon delivery of the Notice of Arbitration (as defined below). Any such
arbitration shall be held in Boston, Massachusetts. The Arbitration Panel shall
have the authority to grant specific performance, and to allocate between the
Parties the costs of arbitration in such equitable manner as it shall determine.
Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.

                  14.7.2 Procedure.

                           (a) Whenever a Party (the "Claimant") shall decide to
institute arbitration proceedings, it shall give written notice to that effect
(the "Notice of Arbitration") to the other Party (the "Respondent"). The Notice
of Arbitration shall set forth in detail the nature of the Dispute, the facts
upon which the claimant relies and the issues to be arbitrated (collectively the
"Arbitration Issues"). Within thirty (30) days of its receipt of the Notice of
Arbitration, the Respondent shall send the Claimant and the Arbitration Panel a
written Response (the "Response"). The Response shall set forth in detail the
facts upon which the Respondent relies. In addition, the Response shall contain
all counterclaims which the Respondent may have against the Claimant which are
within the Arbitration Issues, whether or not such claims have previously been
identified. If the Response sets forth a counterclaim, the Claimant may, within
thirty (30) days of the receipt of the Response, deliver to the Respondent and
the Arbitration Panel a rejoinder answering such counterclaim.

                           (b) Within fifteen (15) days after the later of (i)
the expiration of the period provided in clause (a) above for the Claimant to
deliver a rejoinder or (ii) the completion of any discovery proceedings
authorized by the Arbitration Panel: (A) the Claimant shall send to the
Arbitration Panel a proposed resolution of the Arbitration Issues and a proposed
resolution of any counterclaims set forth in the Response (the "Claimant's
Proposal"), including the amount of monetary damages, if any, or other relief
sought; and (B)


                                       33
<PAGE>   34
CONFIDENTIAL

the Respondent shall send to the Arbitration Panel a proposed resolution of the
Arbitration Issues, a proposed resolution of any counterclaims set forth in the
Response and a proposed resolution of any rejoinder submitted by the Claimant
(the "Respondent's Proposal"), including the amount of monetary damages, if any,
or other relief sought. Once both the Claimant's Proposal and the Respondent's
Proposal have been submitted, the Arbitration Panel shall deliver to each Party
a copy of the other Party's proposal.

                           (c) Within fifteen (15) days after delivery of both
the Claimant's Proposal and the Respondent's Proposal, the Arbitration Panel
shall provide notice to the Claimant and the Respondent of the date of a hearing
to be held no later than sixty (60) days following the date of the notice. At
such hearing, both parties shall have the opportunity to discuss the facts
giving rise to the dispute and the proposals that have been presented. The
Arbitration Panel will determine the procedure for the hearing.

                           (d) The Arbitration Panel shall issue an opinion with
respect to any Dispute, which opinion shall explicitly accept either the
Claimant's Proposal or the Respondent's Proposal in its entirety (the "Final
Decision"). The Arbitration Panel shall not have the authority to reach a Final
Decision that provides remedies or requires payments other than those set forth
in the Claimant's Proposal or the Respondent's Proposal. The concurrence of two
(2) arbitrators shall be sufficient for the entry of a Final Decision. The
arbitrators shall issue a Final Decision within one (1) month from the later of
(i) the last day for submission of proposals under clause (b) above, or (ii) the
date of the final hearing on any Dispute held by the Arbitration Panel. A Final
Decision shall be binding on all of the Parties.

         14.8 Entire Agreement. This Agreement, along with its Exhibits,
contains the entire understanding of the Parties with respect to the subject
matter hereof. All express or implied agreements and understandings, either oral
or written, heretofore made are expressly merged in and made a part of this
Agreement. This Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by the Parties.

         14.9 Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.

         14.10 Independent Contractors. It is expressly agreed that GelTex and
Sankyo shall be independent contractors and that the relationship between the
two Parties shall not constitute a partnership, joint venture or agency. Neither
GelTex nor Sankyo shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the other Party to do so.

         14.11 Waivers. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any waiver on the part of any party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other


                                       34
<PAGE>   35
CONFIDENTIAL



such right, power or privilege.

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

         14.13 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;
(iii) the terms and provisions of this Agreement shall be construed fairly as to
all Parties hereto and not in favor of or against any Party, regardless of which
Party was generally responsible for the preparation of this Agreement.




                (REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)







                                       35
<PAGE>   36
CONFIDENTIAL





         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

                                     GELTEX PHARMACEUTICALS, INC.

                                     By:

                                     /s/ Mark Skaletsky
                                     --------------------------------------
                                     Mark Skaletsky

                                     Title: President and CEO


                                     SANKYO PHARMA, INC.

                                     By:

                                     /s/ Takashi Chiba
                                     ---------------------------------------
                                     Takashi Chiba

                                     Title: President




                                       36