<PAGE>

                                                                   Exhibit 10.68

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

                                LICENSE AGREEMENT
                                     BETWEEN
                    PRESIDENT AND FELLOWS OF HARVARD COLLEGE
                                       AND

                                  ONTOGENY, INC

                          Effective as of June 13, 1996

                            Re: Harvard Case No. 1222

      In consideration of the mutual promises and covenants set forth below, the
      parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      As used in this Agreement, the following terms shall have the following
meanings:

1.1   AFFILIATE: any company, corporation, or business in which LICENSEE owns or
      controls at least fifty percent (50%) of the voting stock or other
      ownership. Unless otherwise specified, the term LICENSEE includes
      AFFILIATES.

1.2   HARVARD: President and Fellows of Harvard College, a nonprofit
      Massachusetts educational corporation having offices at the Office for
      Technology and Trademark Licensing, 124 Mt. Auburn Street, Suite 410
      South, Cambridge, Massachusetts 02138.

1.3   BIOLOGICAL MATERIALS: the materials supplied by HARVARD (identified in
      Appendix B, such Appendix to be periodically updated by mutual consent of
      LICENSEE and HARVARD) together with any progeny, mutants, or derivatives
      thereof supplied by HARVARD or created by LICENSEE.

1.4   LICENSED PROCESSES: the processes covered by PATENT RIGHTS or processes
      utilizing BIOLOGICAL MATERIALS or some portion thereof.

1.5   LICENSED PRODUCTS: products covered by PATENT RIGHTS or products made or
      services provided in accordance with or by means of LICENSED PROCESSES or
      products made or services provided utilizing BIOLOGICAL MATERIALS or
      incorporating some portion of BIOLOGICAL MATERIALS..

1.6   MILESTONE PRODUCTS: products identified or discovered through the use of
      PATENT RIGHTS but which are not LICENSED PRODUCTS.

1.7   LICENSEE: Ontogeny, Inc, a corporation organized under the laws of
      Delaware having its principal offices at One Kendall Square, Building 600,
      Cambridge, MA 02139.
<PAGE>

1.8   NET SALES: the amount billed, invoiced, or received (whichever occurs
      first) for sales, leases, or other transfers of LICENSED PRODUCTS, less:

      (a)   customary trade, quantity or cash discounts and non-affiliated
            brokers' or agents' commissions actually allowed and taken;

      (b)   amounts repaid or credited by reason of rejection or return; and

      (c)   to the extent separately stated on purchase orders, invoices, or
            other documents of sale, taxes levied on and/or other governmental
            charges made as to production, sale, transportation, delivery or use
            and paid by or on behalf of LICENSEE or sublicensees.

      (d)   reasonable charges for delivery or transportation provided by third
            parties, if separately stated.

            NET SALES also includes the fair market value of any non-cash
            consideration received by LICENSEE or sublicensees for the sale,
            lease, or transfer of LICENSED PRODUCTS.

1.9   NON-COMMERCIAL RESEARCH PURPOSES: use of PATENT RIGHTS and/or BIOLOGICAL
      MATERIALS for academic research or other not-for-profit scholarly purposes
      which are undertaken at a non-profit or governmental institution that does
      not use the PATENT RIGHTS or BIOLOGICAL MATERIALS in the production or
      manufacture of products for sale or the performance of services for a fee.

1.10  PATENT RIGHTS: United States patent application Serial No. 08/580,031
      filed December 20,1995, jointly owned by HARVARD and LICENSEE, the
      inventions described and claimed therein, and any divisions,
      continuations, continuations-in-part to the extent the claims are directed
      to subject matter specifically described in USSN 08/580,031 and are
      dominated by the claims of the existing PATENT RIGHTS, patents issuing
      thereon or reissues thereof, and any and all foreign patents and patent
      applications corresponding thereto, all to the extent owned or controlled
      by HARVARD. Such continuations-in-part shall include, but are not limited
      to, CIPs which are directed to other signalin homologs, bioactive
      fragments thereof, diagnostic methods involving the signalin genes and/or
      gene products and drug screening protocols involving signalin genes and/or
      gene products, all to the extent that the claims of such CIPs are
      dominated by claims of USSN 08/580,031.

1.11  TERRITORY: Worldwide

1.12  The terms "Public Law 96-517" and "Public Law 98-620" include all
      amendments to those statutes.

1.13  The terms "sold" and "sell" include, without limitation, leases and other
      transfers and similar transactions.


                                     - 2 -
<PAGE>

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

                                   ARTICLE II

                                 REPRESENTATIONS

2.1   HARVARD is owner by assignment from the Howard Hughes Medical Institute
      (HHMI) and Dr. D. Melton and Dr. J. Graff of their entire right, title and
      interest in United States Patent Application Serial No. 08/580,031 filed
      December 12, 1995 entitled "[**]", (H.U. Case #1222), in the foreign
      patent applications corresponding thereto, and in the inventions described
      and claimed therein.

2.2   HARVARD has the authority to issue licenses to HARVARD's ownership
      interests under PATENT RIGHTS.

2.3   HARVARD is committed to the policy that ideas or creative works produced
      at HARVARD should be used for the greatest possible public benefit, and
      believes that every reasonable incentive should be provided for the prompt
      introduction of such ideas into public use, all in a manner consistent
      with the public interest.

2.4   LICENSEE is prepared and intends to diligently develop the invention and
      to bring products to market which are subject to this Agreement. LICENSEE
      is desirous of obtaining an exclusive license in the TERRITORY in order to
      practice the above-referenced invention covered by PATENT RIGHTS in the
      United States and in certain, foreign countries, and to manufacture, use
      and sell in the commercial market the products made in accordance
      therewith, and HARVARD is desirous of granting such a license to LICENSEE
      in accordance with the terms of this Agreement.

2.5   LICENSEE is desirous of obtaining an exclusive license in the TERRITORY in
      order to practice the above-referenced invention covered by PATENT RIGHTS
      in the United States and in certain, foreign countries, and to
      manufacture, use and sell in the commercial market the products made in
      accordance therewith, and HARVARD is desirous of granting such a license
      to LICENSEE in accordance with the terms of this Agreement.

                                   ARTICLE III

                                 GRANT OF RIGHTS

3.1   HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
      terms and conditions hereof, in the TERRITORY:

      (a)   an exclusive commercial license to HARVARD's ownership interest
            under PATENT RIGHTS, and

      (b)   a license to use BIOLOGICAL MATERIALS

            to make and have made, to use and have used, to sell and have sold
            the LICENSED PRODUCTS, and to practice the LICENSED PROCESSES, for
            the fife of the PATENT RIGHTS. Such licenses shall include the right
            to grant sublicenses, subject to HARVARD's approval, which approval
            shall not be unreasonably withheld. In order to provide LICENSEE
            with commercial exclusivity for so long as the license under PATENT
            RIGHTS remains exclusive, HARVARD agrees that it will not grant
            licenses under PATENT RIGHTS to others except as required by
            HARVARD's obligations in paragraph 3.2(a)or as permitted in
            paragraph 3.2(b)


                                     - 3 -
<PAGE>

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

            and that it will not provide BIOLOGICAL MATERIALS to others for any
            commercial purpose.

3.2   The granting and exercise of this license is subject to the following
      conditions:

      (a)   HARVARD's "Statement of Policy in Regard to Inventions, Patents and
            Copyrights," dated March 17, 1986, Public Law 96-517, Public Law
            98-620, and HARVARD's obligations to the Howard Hughes Medical
            Institute (HHMI) as attached in Appendix C. HHMI retains a
            nonexclusive license, without the right to sublicense, to use PATENT
            RIGHTS and BIOLOGICAL MATERIALS for its own internal research. Any
            right granted in this Agreement greater than that permitted under
            Public Law 96-517, or Public Law 98-620, shall be subject to
            modification as may be required to conform to the provisions of
            those statutes.

      (b)   HARVARD reserves the right to

            (i)   make, use, and provide the BIOLOGICAL MATERIALS to others on a
                  non-exclusive basis, and grant others non-exclusive licenses
                  to make and use the BIOLOGICAL MATERIALS, all for
                  NON-COMMERCIAL RESEARCH PURPOSES. BIOLOGICAL MATERIALS will be
                  transferred under a Material Transfer Agreement which
                  acknowledges LICENSEE's rights in the BIOLOGICAL MATERIALS and
                  provides for an option on reasonable commercial terms to
                  LICENSEE of any invention which could not have been made
                  except by use of the BIOLOGICAL MATERIALS; and

            (ii)  make and use, and grant to others non-exclusive licenses to
                  make and use for NON-COMMERCIAL RESEARCH PURPOSES the subject
                  matter described and claimed in PATENT RIGHTS.

      (c)   LICENSEE shall use diligent efforts to effect introduction of the
            LICENSED PRODUCTS into the commercial market as soon as practicable,
            consistent with sound and reasonable business practice and judgment;
            thereafter, until the expiration of this Agreement, LICENSEE shall
            endeavor to keep LICENSED PRODUCTS reasonably available to the
            public.

      (d)   At any time after [**] from the effective date of this Agreement,
            HARVARD may terminate or render this license nonexclusive if, in
            HARVARD's reasonable judgment, the Progress Reports furnished by
            LICENSEE do not demonstrate that LICENSEE: has put the licensed
            subject matter into commercial use in the country or countries
            hereby licensed, directly or through a sublicense, and is not
            keeping the licensed subject matter reasonably available to the
            public, or

            (i)   is engaged in research development, manufacturing, marketing
                  or sublicensing activity appropriate to achieving 3.2(d)(i).

      (e)   HARVARD may terminate this Agreement if LICENSEE does not adhere to
            the following performance milestones for a therapeutic product and
            if LICENSEE does not correct such non-performance within 90 days
            after being so notified in writing


                                     - 4 -
<PAGE>

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

            by HARVARD. HARVARD shall have the right to terminate this Agreement
            if LICENSEE does not pay the following milestone fees and if
            LICENSEE does not correct such failure within 45 days after being so
            notified in writing by HARVARD.

            Milestone            To be accomplished by        Fee
                                        (year)

            IND Filing                   [**]                $[**]

            Completion of Phase          [**]                $[**]
            I clinical trial

            Completion of                [**]                $[**]
            Phase III clinical
            trial

      (f)   LICENSEE shall pay to HARVARD the following payments upon execution
            of the first corporate partnership in a field primarily related to
            the subject matter of PATENT RIGHTS:

                        (1)   [**], if the partnership has a determined value of
                              between [**] and [**] dollars ($[**]), or

                        (2)   [**] dollars ($[**]), if the partnership has a
                              determined value of greater than [**]

            Determined value shall include the sum of any equity payments,
            up-front payments or fees, and the total of committed research
            sponsorship payments.

      (g)   In all sublicenses granted by LICENSEE hereunder, LICENSEE shall
            include a requirement that the sublicensee use its best efforts to
            bring the subject matter of the sublicense into commercial use as
            quickly as is reasonably possible. LICENSEE shall further provide in
            such sublicenses that such sublicenses are subject and subordinate
            to the terms and conditions of this Agreement, except:

            (i)   The sublicensee may further sublicense any rights under PATENT
                  RIGHTS or BIOLOGICAL MATERIALS only as

                        (1)   needed or implied in the course of distribution,
                              installation or performance of service as required
                              for the sale to an end-user of LICENSED PRODUCTS,
                              or

                        (2)   not specifically rejected in writing by HARVARD
                              within twenty (20) days of written notification of
                              sub-sublicense by LICENSEE, any such rejection not
                              being unreasonably made by HARVARD; and


                                     - 5 -
<PAGE>

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

            (ii)  The earned royalty rate on NET SALES paid by the sublicensee
                  to the LICENSEE may be higher than the rates in this
                  Agreement.

      Copies of all sublicense agreements shall be provided promptly to HARVARD.

      (h)   If LICENSEE is unable or unwilling to grant sublicenses, either as
            suggested by HARVARD or by a potential sublicensee or otherwise,
            then HARVARD may directly license such potential sublicensee unless,
            in Harvard's reasonable judgment, such license would be contrary to
            sound and reasonable business practice and the granting of such
            license would not materially increase the availability to the public
            of LICENSED PRODUCTS.

      (i)   During the period of exclusivity of this license in the United
            States, LICENSEE shall cause any LICENSED PRODUCT produced for sale
            in the United States to be manufactured substantially in the United
            States.

3.3   All rights reserved to the United States Government and others under
      Public Law 96-517, and Public Law 98-620, shall remain and shall in no way
      be affected by this Agreement.

                                   ARTICLE IV

                                    ROYALTIES

4.1   LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the
      sum of [**] dollars ($[**]) upon execution of this Agreement.

4.2   (a) LICENSEE shall pay to HARVARD during the term of this Agreement a
      royalty of [**] of NET SALES by LICENSEE of LICENSED PRODUCTS in the field
      of therapeutics. LICENSEE shall pay to HARVARD during the term of this
      Agreement a royalty of [**] of NET SALES by LICENSEE of LICENSED PRODUCTS
      in the field of diagnostics. LICENSEE shall also pay to HARVARD a royalty
      of [**] of NET SALES by sublicensees in any field.

      (b)   If the license pursuant to this Agreement is converted to a
            nonexclusive one and if other non-exclusive licenses in the same
            field territory are granted, the above royalties shall not exceed
            the royalty rate to be paid by other licensees in the same field and
            territory during the term of the non-exclusive license.

      (c)   On sales between LICENSEE and its AFFILIATES or sublicensees, for
            resale, the royalty shall be paid on the NET SALES of the AFFILIATE
            or sublicensee.

4.3   In lieu of the royalties of paragraph 4.2, LICENSEE shall pay to HARVARD a
      fee of [**] for each MILESTONE PRODUCT, such payment to be made within six
      (6) months after the date of first sale of the MILESTONE PRODUCT. Such
      payments are in recognition of LICENSEE's early and exclusive use of the
      licensed subject matter.


                                     - 6 -
<PAGE>

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

4.4   If LICENSEE, in order to make, use, sell or otherwise exploit LICENSED
      PRODUCTS or LICENSED PROCESSES in any jurisdiction, reasonably determine
      that they must make royalty payments (`Third Party Payments") to one or
      more independent third parties to obtain a license or similar right to
      make, use, sell or otherwise exploit the LICENSED PRODUCTS or LICENSED
      PROCESSES such that the total royalty burden equals or exceeds [**].
      LICENSEE may reduce the royalty due to HARVARD by [**] of a percentage
      point for each percent above [**], but the residual royalty payable to
      HARVARD shall, in no event, be lower than [**] percent.

4.5   No later than January 1 of each calendar year after the effective date of
      this Agreement, LICENSEE shall pay to HARVARD the following nonrefundable
      license maintenance royalty and/or advance on royalties. Such payments may
      be credited against running royalties due for that calendar year and
      Royalty Reports shall reflect such a credit. Such payments shall not be
      credited against milestone payments (if any) nor against royalties due for
      any subsequent calendar year.

      January 1, 1997 to January 1, 1999    $[**]
      January 1, 2000 to January 1, 2002    $[**]
      January 1, 2003                       $[**]
            each year thereafter            $[**]

                                    ARTICLE V

                                    REPORTING

5.1   Prior to signing this Agreement, LICENSEE has provided to HARVARD a
      written research and development plan under which LICENSEE intends to
      bring the subject matter of the licenses granted hereunder into commercial
      use upon execution of this Agreement. Such plan includes projections of
      sales and proposed marketing efforts.

5.2   No later than sixty (60) days after June 30 of each calendar year,
      LICENSEE shall provide to HARVARD a written annual Progress Report
      describing progress on research and development, regulatory approvals,
      manufacturing, sublicensing, marketing and sales during the most recent
      twelve (12) month period ending June 30 and plans for the forthcoming
      year. If multiple technologies are covered by the license granted
      hereunder, the Progress Report shall provide the information set forth
      above for each technology. If progress differs from that anticipated in
      the plan required under Paragraph 5.1, LICENSEE shall explain the reasons
      for the difference and propose a modified research and development plan
      for HARVARD's review and approval. LICENSEE shall also provide any
      reasonable additional data HARVARD requires to evaluate LICENSEE's
      performance.

5.3   LICENSEE shall report to HARVARD the date of first sale of LICENSED
      PRODUCTS (or results of LICENSED PROCESSES) in each country within thirty
      (30) days of occurrence.


                                     - 7 -
<PAGE>

5.4   (a) LICENSEE shall submit to HARVARD within sixty (60) days after each
      calendar half year ending June 30 and December 31, a Royalty Report
      setting forth for such half year at least the following information:

            (i)   the number of LICENSED PRODUCTS sold by LICENSEE, its
                  AFFILIATES and sublicensees in each country;

            (ii)  total billings for such LICENSED PRODUCTS;

            (iii) an accounting for all LICENSED PROCESSES used or sold;

            (iv)  deductions applicable to determine the NET SALES thereof;

            (v)   the amount of royalty due thereon, or, if no royalties are due
                  to HARVARD for any reporting period, the statement that no
                  royalties are due.

            Such report shall be certified as correct by an officer of LICENSEE
            and shall include a detailed listing of all deductions from
            royalties.

      (b)   LICENSEE shall pay to HARVARD with each such Royalty Report the
            amount of royalty due with respect to such half year. If multiple
            technologies are covered by the license granted hereunder, LICENSEE
            shall specify which PATENT RIGHTS are utilized for each LICENSED
            PRODUCT and LICENSED PROCESS included in the Royalty Report.

      (c)   All payments due hereunder shall be deemed received when funds are
            credited to Harvard's bank account and shall be payable by check or
            wire transfer in United States dollars. Conversion of foreign
            currency to U.S. dollars shall be made at the conversion rate
            existing in the United States (as reported in the New York Times or
            the Wall Street journal) on the last working day of each royalty
            period. No transfer, exchange, collection or other charges shall be
            deducted from such payments.

      (d)   All such reports shall be maintained in confidence by HARVARD except
            as required by law; however, HARVARD may include in its usual
            reports annual amounts of royalties paid.

      (e)   Late payments shall be subject to a charge of one and one half
            percent (1 1/2%) per month, or $250, whichever is greater.


                                     - 8 -
<PAGE>

                                   ARTICLE VI

                                 RECORD KEEPING

6.1   LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to
      keep, accurate records (together with supporting documentation) of
      LICENSED PRODUCTS and MILESTONE PRODUCTS made, used or sold under this
      Agreement, appropriate to determine the amount of royalties due to HARVARD
      hereunder. Such records shall be retained for at least three (3) years
      following the end of the reporting period to which they relate. They
      shall. be available during normal business hours for examination by an
      accountant selected by HARVARD, for the sole purpose of verifying reports
      and payments hereunder. In conducting examinations pursuant to this
      paragraph, HARVARD's accountant shall have access to all records which
      HARVARD reasonably believes to be relevant to the calculation of royalties
      under Article IV.

6.2   HARVARD's accountant shall not disclose to HARVARD any information other
      than information relating to the accuracy of reports and payments made
      hereunder.

6.3   Such examination by HARVARD's accountant shall be at HARVARD's expense,
      except that if such examination shows an underreporting or underpayment in
      excess of five percent (5%) for any twelve (12) month period, then
      LICENSEE shall pay the cost of such examination as well as any additional
      sum that would have been payable to HARVARD had the LICENSEE reported
      correctly, plus interest on said sum at the rate of one and one half per
      cent (11/2%) per month.

                                   ARTICLE VII

               DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

7.1   Upon execution hereof, LICENSEE shall reimburse HARVARD for any reasonable
      expenses HARVARD has incurred for the preparation, filing, prosecution and
      maintenance of PATENT RIGHTS.

7.2   LICENSEE shall assume primary responsibility for the filing, prosecution
      and maintenance of any and all patents and patent applications included in
      PATENT RIGHTS, using patent counsel reasonably acceptable to HARVARD, and
      LICENSEE shall be responsible for all costs relating thereto. Counsel will
      directly notify HARVARD and LICENSEE and provide them copies of any
      official communications from the United States and foreign patent offices
      relating to said prosecution. Counsel shall also provide HARVARD with
      advance copies of all relevant communications to the various patent
      offices, so that HARVARD may be informed and apprised of the continuing
      prosecution of patent applications in PATENT RIGHTS. HARVARD shall have
      reasonable opportunities to participate in decision making on all key
      decisions affecting filing, prosecution and maintenance of patents and
      patent applications in PATENT RIGHTS including, without limitation, the
      right to approve or disapprove the abandonment of any patent or claims
      thereof and LICENSEE will use reasonable efforts


                                     - 9 -
<PAGE>

      to incorporate HARVARD's reasonable suggestions regarding said
      prosecution. LICENSEE shall use all reasonable efforts to amend any patent
      application to include claims reasonably requested by HARVARD to protect
      LICENSED PRODUCTS.

7.3   HARVARD and LICENSEE agree to cooperate fully in the preparation, filing,
      prosecution and maintenance of PATENT RIGHTS and of all patents and patent
      applications licensed to LICENSEE hereunder, executing all papers and
      instruments or requiring members of HARVARD to execute such papers and
      instruments so as to enable LICENSEE to apply for, to prosecute and to
      maintain patent applications and patents in HARVARD's and LICENSEE's name
      in any country.

7.4   In the event that LICENSEE elects not to prosecute or maintain any of the
      patents or patent applications relating to the PATENT RIGHTS or any
      portion thereof in any jurisdiction, then HARVARD shall have the right, at
      its own expense to prosecute or maintain the patents or patent
      applications relating to the PATENT RIGHTS or portion thereof in such
      jurisdiction. LICENSEE shall assign its rights to HARVARD and shall have
      no further rights to such patents or patent applications or portion
      thereof.

7.5   If HARVARD can demonstrate that it is not being adequately informed or
      apprised of the continuing prosecution of patents or patent applications
      in PATENT RIGHTS, or that it is not being provided with reasonable
      opportunities to participate in decision making or that its interests are
      not being adequately protected, HARVARD shall be entitled to engage, at
      LICENSEE's expense, independent patent counsel to review and evaluate
      patent prosecution and filing of patents and patent applications included
      in PATENT RIGHTS. Henceforth HARVARD and LICENSEE shall share
      responsibility for patent prosecution, with LICENSEE reimbursing HARVARD
      in full for any patent expenses incurred by HARVARD.

                                  ARTICLE VIII

                                  INFRINGEMENT

8.1   With respect to any PATENT RIGHTS that are exclusively licensed to
      LICENSEE pursuant to this Agreement, LICENSEE shall have the right to
      prosecute in its own name and at its own expense any infringement of such
      patent, so long as such license is exclusive at the time of the
      commencement of such action. HARVARD agrees to notify LICENSEE promptly of
      each infringement of such patents of which HARVARD is or becomes aware.
      Before LICENSEE commences an action with respect to any infringement of
      such patents, LICENSEE shall give careful consideration to the views of
      HARVARD and to potential effects on the public interest in making its
      decision whether or not to sue.

8.2   (a) If LICENSEE elects to commence an action as described above, Harvard
      may, to the extent permitted by law, elect to join as a party in that
      action. Regardless of whether HARVARD elects to join as a party, HARVARD
      shall cooperate fully with LICENSEE


                                     - 10 -
<PAGE>

      in connection with any such action and will join the suit as required for
      enforcement of PATENT RIGHTS.

      (b)   If HARVARD elects to join as a party pursuant to subparagraph (a),
            HARVARD shall jointly control the action with LICENSEE.

      (c)   LICENSEE shall reimburse HARVARD for any costs HARVARD incurs,
            including reasonable attorneys' fees, as part of an action brought
            by LICENSEE, irrespective of whether HARVARD becomes a co-plaintiff.

8.3   If LICENSEE elects to commence an action as described above, LICENSEE may
      deduct from its royalty payments to HARVARD with respect to the patent(s)
      subject to suit an amount not exceeding fifty percent (50%) of LICENSEE's
      expenses and costs of such action, including reasonable attorneys' fees;
      provided, however, that such reduction shall not exceed fifty percent
      (50%) of the total royalty due to HARVARD with respect to the patent(s)
      subject to suit for each calendar year. If such fifty percent (50%) of
      LICENSEE's expenses and costs exceeds the amount of royalties deducted by
      LICENSEE for any calendar year, LICENSEE may to that extent reduce the
      royalties due to HARVARD from LICENSEE in succeeding calendar years; but
      never by more than fifty percent (50%) of the total royalty due in any one
      year with respect to the patent(s) subject to suit.

8.4   No settlement, consent judgment or other voluntary final disposition of
      the suit may be entered into without the prior written consent of HARVARD,
      which consent shall not be unreasonably withheld.

8.5   Recoveries or reimbursements from actions commenced pursuant to this
      Article shall first be applied to reimburse LICENSEE and HARVARD for
      litigation costs not paid from royalties and then to reimburse HARVARD for
      royalties deducted by LICENSEE pursuant to paragraph 8.3. Any remaining
      recoveries or reimbursements shall be shared equally by LICENSEE and
      HARVARD.

8.6   If LICENSEE elects not to exercise its right to prosecute an infringement
      of the PATENT RIGHTS pursuant to this Article, HARVARD may do so at its
      own expense, controlling such action and retaining all recoveries
      therefrom. LICENSEE shall cooperate fully with HARVARD in connection with
      any such action.

8.7   Without limiting the generality of paragraph 8.6, HARVARD may, at its
      election and by notice to LICENSEE, establish a time limit of sixty (60)
      days for LICENSEE to decide whether to prosecute any infringement of which
      HARVARD is or becomes aware. If, by the end of such sixty (60)-day period,
      LICENSEE has not commenced such an action, HARVARD may prosecute such an
      infringement at its own expense, controlling such action and retaining all
      recoveries therefrom. With respect to any such infringement action
      prosecuted by HARVARD in good faith, LICENSEE shall pay over to Harvard
      any payments (whether or not designated as "royalties") made by the
      alleged infringer to LICENSEE under any existing or future sublicense
      authorizing LICENSED


                                     - 11 -
<PAGE>

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

      PRODUCTS, up to the amount of HARVARD's unreimbursed litigation expenses
      (including, but not limited to, reasonable attorneys' fees).

8.8   If a declaratory judgment action is brought naming LICENSEE as a defendant
      and alleging invalidity of any of the PATENT RIGHTS, HARVARD may elect to
      take over the sole defense of the action at its own expense. LICENSEE
      shall cooperate fully with HARVARD in connection with any such action.

                                   ARTICLE IX

                            TERMINATION OF AGREEMENT

9.1   This Agreement, unless terminated as provided herein, shall remain in
      effect until the last patent or patent application in PATENT RIGHTS has
      expired or been abandoned.

9.2   HARVARD may terminate this Agreement as follows:

      (a)   If LICENSEE does not make a payment due hereunder and fails to cure
            such non-payment (including the payment of interest in accordance
            with paragraph 5.4(e)) within forty-five (45) days after the date of
            notice in writing of such non-payment by HARVARD.

      (b)   If LICENSEE defaults in its obligations under paragraph
            10.4(c)and(d) to procure and maintain insurance.

      (c)   If, at any time after [**] from the date of this Agreement, HARVARD
            determines that the Agreement should be terminated pursuant to
            paragraph 3.2(d).

      (d)   If LICENSEE shall become insolvent, shall make an assignment for the
            benefit of creditors, or shall have a petition in bankruptcy filed
            for or against it. Such termination shall be effective immediately
            upon HARVARD giving written to LICENSEE.

      (e)   If an examination by Harvard's accountant pursuant to Article VI
            shows an underreporting or underpayment by LICENSEE in excess of 20%
            for any twelve (12) month period.

      (f)   If LICENSEE is convicted of a felony relating to the manufacture,
            use, or sale of LICENSED PRODUCTS.

      (g)   Except as provided in subparagraphs; (a), (b), (c), (d), (e) and (f)
            above, if LICENSEE defaults in the performance of any obligations
            under this Agreement and the default has not been remedied within
            ninety (90) days after the date of notice in writing of such default
            by HARVARD.


                                     - 12 -
<PAGE>

9.3   LICENSEE shall provide, in all sublicenses granted by it under this
      Agreement, that LICENSEE' S interest in such sublicenses shall at
      HARVARD's option terminate or be assigned to HARVARD upon termination of
      this Agreement.

9.4   LICENSEE may terminate this Agreement by giving ninety (90) days advance
      written notice of termination to HARVARD. Upon termination, LICENSEE shall
      submit a final Royalty Report to HARVARD and any royalty payments shall
      become immediately payable.

9.5   Paragraphs 6.1, 6.2, 6.3, 7.1, 8.5, 9.4, 9.5, 9.6, 10.2, 10.4, 10.5, 10.8
      and 10.9 of this Agreement shall survive termination.

                                    ARTICLE X

                                     GENERAL

10.1  HARVARD does not warrant the validity of the PATENT RIGHTS licensed
      hereunder and makes no representations whatsoever with regard to the scope
      of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited
      by LICENSEE, an AFFILIATE, or sublicensee without infringing other
      patents.

10.2  HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
      MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
      ANY PARTICULAR PURPOSE OF T`HE PATENT RIGHTS, OR INFORMATION SUPPLIED BY
      HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS
      AGREEMENT.

10.3  (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and HHMI
      and their current or former directors, governing board members, trustees,
      officers, faculty, medical and professional staff, employees, students,
      and agents and their respective successors, heirs and assigns
      (collectively, the "Indemnitees"), against any liability, damage, loss or
      expenses (including reasonable attorneys' fees and expenses of litigation)
      incurred by or imposed upon the Indemnitees or any of them in connection
      with any claims, suits, actions, demands or judgments arising out of any
      theory of product liability (including, but not limited to, actions in the
      form of tort, warranty, or strict liability) concerning any product,
      process or service made, used or sold pursuant to any right or license
      granted under this Agreement.

      (b)   LICENSEE shall indemnify and hold harmless HHMI against any claims,
            liability costs, loss or obligation, including without limitation,
            reasonable attorneys's fees and costs, in connection with any aspect
            of this License Agreement including but not limited, to such product
            liability indemnity identified in Section 10.3(a) above.

      (c)   LICENSEE shall, at its own expense, provide attorneys reasonably
            acceptable to HARVARD to defend against any actions brought or filed
            against any Indemnitee


                                     - 13 -
<PAGE>

            hereunder with respect to the subject of indemnity contained herein,
            whether or not such actions are rightfully brought.

      (d)   Beginning at the time any such product, process or service is being
            commercially distributed or sold (other than for the purpose of
            obtaining regulatory approvals) by LICENSEE or by a sublicensee,
            AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and
            expense, procure and maintain commercial general liability insurance
            in amounts not less than $2,000,000 per incident and $2,000,000
            annual aggregate and naming the Indemnitees as additional insureds.
            During clinical trials of any such product, process or service,
            LICENSEE shall, at its sole cost and expense, procure and maintain
            commercial general liability insurance in such equal or lesser
            amount as HARVARD shall require, naming the Indemnitees as
            additional insureds. Such commercial general liability insurance
            shall provide (i) product liability coverage and (ii) broad form
            contractual liability coverage for LICENSEE's indemnification under
            this Agreement. If LICENSEE elects to self-insure all or part of the
            limits described above (including deductibles or retentions which
            are in excess of $250,000 annual aggregate) such self-insurance
            program must be acceptable to HARVARD and the Risk Management
            Foundation of the Harvard Medical Institutions, Inc. in their sole
            discretion. The minimum amounts of insurance coverage required shall
            not be construed to create a limit of LICENSEE's liability with
            respect to its indemnification under this Agreement.

      (e)   LICENSEE shall provide HARVARD with written evidence of such
            insurance upon request of HARVARD. LICENSEE shall provide HARVARD
            with written notice at least fifteen (15) days prior to the
            cancellation, non-renewal or material change in such insurance; if
            LICENSEE does not obtain replacement insurance providing comparable
            coverage within such fifteen (15) day period, HARVARD shall have the
            right to terminate this Agreement effective at the end of such
            fifteen (15) day period without notice or any additional waiting
            periods.

      (f)   LICENSEE shall maintain such commercial general liability insurance
            beyond the expiration or termination of this Agreement during (i)
            the period that any product, process, or service, relating to, or
            developed pursuant to, this Agreement is being commercially
            distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or
            agent of LICENSEE and (ii) a reasonable period after the period
            referred to in (e)(i) above which in no event shall be less than
            fifteen (15) years.

10.4  LICENSEE shall not use the name of HHMI nor use HARVARD's name or
      insignia, or any adaptation of them, or the name of any of HARVARD's
      inventors in any advertising, promotional or sales literature without the
      prior written approval of HARVARD and HHMI.

10.5  Without the prior written approval of HARVARD in each instance, neither
      this Agreement nor the rights granted hereunder shall be transferred or
      assigned in whole or in part by LICENSEE to any person whether voluntarily
      or involuntarily, by operation of law or otherwise. This Agreement shall
      be binding upon the respective successors, legal representatives and
      assignees of HARVARD and LICENSEE.


                                     - 14 -
<PAGE>

10.6  The interpretation and application of the provisions of this Agreement
      shall be governed by the laws of the Commonwealth of Massachusetts.

10.7  LICENSEE shall comply with all applicable laws and regulations. In
      particular, it is understood and acknowledged that the transfer of certain
      commodities and technical data is subject to United States laws and
      regulations controlling the export of such commodities and technical data,
      including all Export Administration Regulations of the United States
      Department of Commerce. These laws and regulations among other things,
      prohibit or require a license for the export of certain types of technical
      data to certain specified countries. LICENSEE hereby agrees and gives
      written assurance that it will comply with all United States laws and
      regulations controlling the export of commodities and technical data, that
      it will be solely responsible for any violation of such by LICENSEE or its
      AFFILIATES or sublicensees, and that it will defend and hold HARVARD
      harmless in the event of any legal action of any nature occasioned by such
      violation.

10.8  LICENSEE agrees (i) to obtain all regulatory approvals required for the
      manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES and (ii)
      to utilize appropriate patent marking on such LICENSED PRODUCTS. LICENSEE
      also agrees to register or record this Agreement as is required by law or
      regulation in any country where the license is in effect.

10.9  Any notices to be given hereunder shall be sufficient if signed by the
      party (or party's attorney) giving same and either (a) delivered in
      person, or (b) mailed certified mail return receipt requested, or (c)
      faxed to other party if the sender has evidence of successful transmission
      and if the sender promptly sends the original by ordinary mail, in any
      event to the following addresses:

If to LICENSEE:

      Ontogeny, Inc.
      One Kendall Square, Bldg 600
      Cambridge, MA 02139

      Fax No.:(617) 225-0096

If to Harvard to:

      Office for Technology and
      Trademark Licensing
      Harvard University
      124 Mt.  Auburn Street, Suite 410 South
      Cambridge, MA 02138

      Fax No.:  617-495-9568


                                     - 15 -
<PAGE>

            By such notice either party may change their address for future
            notices.

            Notices delivered in person shall be deemed given on the date
            delivered. Notices sent by fax shall be deemed given on the date
            faxed. Notices mailed shall be deemed given on the date postmarked
            on the envelope.

10.10 Should a court of competent jurisdiction later hold any provision of this
      Agreement to be invalid, illegal, or unenforceable, and such holding is
      not reversed on appeal, it shall be considered severed from this
      Agreement. All other provisions, rights and obligations shall continue
      without regard to the severed provision, provided that the remaining
      provisions of this Agreement are in accordance with the intention of the
      parties.

10.11 In the event of any controversy or claim arising out of or relating to any
      provision of this Agreement or the breach thereof, the parties shall try
      to settle such conflict amicably between themselves. Subject to the
      limitation stated in the final sentence of this section, any such conflict
      which the parties are unable to resolve promptly shall be settled through
      arbitration conducted in accordance with the rules of the American
      Arbitration Association. The demand for arbitration shall be filed within
      a reasonable time after the controversy or claim has arisen, and in no
      event after the date upon which institution of legal proceedings based on
      such controversy or claim would be barred by the applicable statute of
      limitation. Such arbitration shall be held in Boston, Massachusetts. The
      award through arbitration shall be final and binding. Either party may
      enter any such award in a court having jurisdiction or may make
      application to such court for judicial acceptance of the award and an
      order of enforcement, as the case may be. Notwithstanding the foregoing,
      either party may, without recourse to arbitration, assert against the
      other party a third-party claim or cross-claim in any action brought by a
      third party, to which the subject matter of this Agreement may be
      relevant.

10.12 This Agreement constitutes the entire understanding between the parties
      and neither party shall be obligated by any condition or representation
      other than those expressly stated herein or as may be subsequently agreed
      to by the parties hereto in writing.


                                     - 16 -
<PAGE>

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

            PRESIDENT AND FELLOWS                         LICENSEE
             OF HARVARD COLLEGE

            /s/ Joyce Brinton    .                   /s/ Heidi Wyle    .
            ---------------------                    -------------------

                                              ----------------------------------
           Joyce Brinton, Director                       Heidi Wyle
          Office for Technology and                         COO
             Trademark Licensing

                   6/13/96                                6/23/96
      ----------------------------------      ---------------------------------
                    Date                                    Date



                                    - 17 -

<PAGE>

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

                                   Appendix A

The following comprise PATENT RIGHTS:

United States Patent Application Serial No. 08/580,031, filed December 20, 1995,
      entitled "[**]."

Appendix B

The following comprise BIOLOGICAL MATERIALS:

Appendix C

Excerpt from the "Collaboration Agreement between Howard Hughes Medical
      Institute and President and Fellows of Harvard College" for the Faculty of
      Arts and Sciences dated February 6, 1987.




                                     - 18 -

<PAGE>
                                   Appendix C

                                   ARTICLE IV

                            PATENTS, COPYRIGHTS, AND
                              INTELLECTUAL PROPERTY

4.1   Ownership and Assignment of Rights and Obligations.

      (a)   Except as provided in subparagraphs (b), (c) and (d) of this
            Section, the rights and obligations with respect to inventions,
            discoveries, improvements, and other intellectual property, whether
            or not patentable or copyrightable (each a "Subject Invention"),
            conceived or reduced to practice by employees of the Institute
            participating in the Research Program will be assigned to and be the
            sole property of the University, and will be determined in
            accordance with the applicable policies and procedures of the
            University subject to the other provisions of this Article 4.

      (b)   Rights and obligations with respect to Subject Inventions conceived
            or reduced to practice in whole at the Children's Hospital
            Laboratory shall be assigned to the Hospital.

      (c)   Rights and obligations with respect to Subject Inventions conceived
            or reduced to practice in part at the Children's Hospital Laboratory
            and in part at the Cambridge Laboratory shall be assigned jointly to
            the University and the Hospital. Subject Inventions assigned jointly
            to the University and the Hospital shall be administered by-the
            University, in consultation with the Hospital, and costs and
            royalties with respect to such Subject Inventions (as defined in
            Section 4.5 below) shall be shared equally among the Institute, the
            University and the Hospital.

      (d)   Subject Inventions arising from the Research Program in structural
            biology which are assigned solely to the Hospital or solely to the
            University shall be administered by the assignee in consultation
            with the other party. Licensing efforts by the Hospital and the
            University shall be cooperative for all Subject Inventions arising
            from the Research Program in structural biology, whether assigned
            solely to the Hospital, solely to the University or jointly to the
            Hospital and the University.

4.2   Mutual Objective. The parties agree that their mutual objective in respect
      of intellectual property conceived or developed pursuant to this Agreement
      is to disseminate such property for public use and benefit. The parties
      will consult periodically with respect to any potential changes in their
      respective intellectual property policies.

4.3   Paid-Up License. The University will grant the Institute a paid-up,
      non-exclusive, irrevocable license to use each Subject Invention for its
      research and academic purposes, but with no right to sub-license for
      commercial purposes.

4.4   Use of the Property. The University will have the right to determine how
      best to utilize the Subject invention; provided that (a) the Institute
      will, upon request, be given annual


                                     - 19 -

<PAGE>

      reports by the University on the utilization thereof; (b) the Institute
      will have the right to require licensing to others where, in its judgment,
      effective steps to achieve practical application of Subject Inventions
      have not been taken-by the University within a reasonable time or such
      licensing is necessary to meet the needs of public health or safety, and
      the University, within 90 days following notice from the Institute, fails
      to take such effective steps or otherwise to meet the needs of public
      health and safety through the enforcement of contractual rights or by
      other action; and (c) any license or sub-license by the University of any
      Subject Invention to a third party (i) will not relieve the University of
      its obligations to the Institute under Sections 4.3, 4.5 and 4.6 of this
      Article in respect of the Subject Invention and (ii) will provide that the
      Institute shall be indemnified and held harmless against any claims,
      liability, costs, loss or obligation, including without limitation,
      reasonable attorney's fees and costs in connection with such license or
      sub-license.

4.5   Sharing of Costs and Royalties. Except as provided in Section 4.1(b), the
      Institute will share equally with the University (a) the reasonable costs
      incurred by the University and not borne by the inventor(s) for patenting,
      copyrighting, protecting and preserving patent and copyright rights,
      maintaining patents and copyrights, the licensing of patents and
      copyrights and related property rights, and such other reasonable costs,
      taxes or reimbursements as may be necessary or desirable, in connection
      with a Subject Invention, and (b) any royalty income from such Subject
      Invention after distribution to the inventor(s) of such inventor's(s')
      share of royalty income.

4.6   Failure to Proceed. If the University declines or fails within a
      reasonable period of time to obtain patent or copyright protection with
      respect to any Subject invention, the Institute, subject to any rights of
      the United States Government, and upon 90-days' notice to the University,
      will have the right to do so and all rights and obligations with respect
      to such invention will be determined in accordance with the Institute's
      intellectual property policy and without regard to the terms of the patent
      policy and procedures of the University; however, the Institute will grant
      the University a paid-up, non-exclusive, irrevocable license to use each
      Subject Invention for its research and academic purposes, but with no
      right to sublicense for commercial purposes.

                                    ARTICLE V

                          OCCUPANCY, USE, AND OWNERSHIP
                                 OF THE PREMISES

5.1   Occupancy. The Institute will have the right to occupy and use the
      Cambridge Laboratories (in conjunction with the Children's Hospital
      Laboratory) as a medical research laboratory and office facility for the
      conduct of the Research Program. The Institute will have exclusive and
      quiet possession of the Cambridge Laboratories. Subject to Section 5.3 of
      this Article, (1) the Institute's right to use and occupy the Cambridge
      Laboratories will commence on the effective date of this Agreement and
      will terminate upon dissolution of the collaboration under this Agreement,
      and (2) the Institute will have the right, with the University's consent
      (not to be unreasonably withheld) and at the Institute's own expense, to
      make additional renovations, refurbishments, alterations, and improvements
      to the Cambridge Laboratories.


                                     - 20 -