<PAGE>

                             ADVANCED MEDICINE, INC.

                              AMENDED AND RESTATED

                           INVESTORS' RIGHTS AGREEMENT

                                MARCH 21, 2000

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
1.  Registration Rights...........................................................................................1
         1.1  Definitions.........................................................................................1
         1.2  Request for Registration............................................................................3
         1.3  Company Registration................................................................................4
         1.4  Form S-3 Registration...............................................................................5
         1.5  Obligations of the Company..........................................................................6
         1.6  Information from Holder.............................................................................7
         1.7  Expenses of Registration............................................................................7
         1.8  Delay of Registration...............................................................................8
         1.9  Indemnification.....................................................................................8
         1.10  Reports Under Securities Exchange Act of 1934.....................................................10
         1.11  Assignment of Registration Rights.................................................................11
         1.12  "Market Stand-Off" Agreement......................................................................11
         1.13  Termination of Registration Rights................................................................11

2.  Covenants of the Company.....................................................................................12
         2.1  Delivery of Annual Financial Statements............................................................12
         2.2  Delivery of Other Financial Information............................................................12
         2.3  Inspection.........................................................................................12
         2.4  Termination of Information and Inspection Covenants................................................13
         2.5  Right of First Offer...............................................................................13
         2.6  Termination of Certain Covenants...................................................................14
         2.7  Proprietary Information Agreements.................................................................14

3.  Miscellaneous................................................................................................14
         3.1  Successors and Assigns.............................................................................14
         3.2  Governing Law......................................................................................14
         3.3  Counterparts.......................................................................................15
         3.4  Titles and Subtitles...............................................................................15
         3.5  Notices............................................................................................15
         3.6  Expenses...........................................................................................15
         3.7  Entire Agreement: Amendments and Waivers...........................................................15
         3.8  Severability.......................................................................................15
         3.9  Aggregation of Stock...............................................................................15
         3.10  Waiver of Right of First Offer....................................................................16
</TABLE>


                                          i
<PAGE>
                                                                Exhibit 10.8


                              AMENDED AND RESTATED
                           INVESTORS' RIGHTS AGREEMENT


          THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT is made as of
the 21st day of March, 2000, by and among Advanced Medicine, Inc., a Delaware
corporation (the "Company"), and the investors listed on the signature pages
hereto, each of which is herein referred to as an "Investor" and the holders of
Common Stock listed on SCHEDULE A, each of which is herein referred to as a
"Common Holder."

                                    RECITALS

          WHEREAS, certain of the Investors (the "Existing Investors") hold
shares of the Company's Series A Preferred Stock, Series B Preferred Stock
and/or Series C Preferred Stock and possess registration rights, information
rights, rights of first refusal and other rights pursuant to an Amended and
Restated Investors' Rights Agreement dated as of January 25, 1999, among the
Company, certain holders of Common Stock and such Existing Investors (the "Prior
Agreement"); and

          WHEREAS, the Existing Investors are holders of at least a majority of
the "Registrable Securities" of the Company (as defined in the Prior Agreement),
and desire to amend, supersede and replace the Prior Agreement and to accept the
rights created pursuant hereto in lieu of the rights granted to them under the
Prior Agreement; and

          WHEREAS, certain Investors are parties to the Series D Preferred Stock
Purchase Agreement of even date herewith among the Company and certain of the
Investors (the "Series D Agreement"), which provides that as a condition to the
closing of the sale of the Series D Preferred Stock, this Agreement must be
executed and delivered by such Investors, Existing Investors holding at least a
majority of the "Registrable Securities" of the Company (as defined in the Prior
Agreement) and the Company.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company and the Existing Investors hereby agree that the
Prior Agreement shall be amended, superseded and replaced in its entirety by
this Agreement, and the parties hereto further agree as follows:

          1.   REGISTRATION RIGHTS. The Company covenants and agrees as follows:

               1.1   DEFINITIONS. For purposes of this Section 1:

                     (a)   The term "Act" means the Securities Act of 1933,
as amended.

                     (b)   The term "Form S-3" means such form under the Act
as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC

<PAGE>

that permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the SEC.

                     (c)   The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.11 hereof; provided, however, that the Common
Holders shall not be deemed to be Holders for purposes of Section 1.2, 1.4
and 3.7.

                     (d)   The term "Initial Offering" means the Company's
first firm commitment underwritten public offering of its Common Stock under
the Act.

                     (e)   The term "Major Investor" means any Investor that
holds on the date hereof at least (i) 1,000,000 shares of Series A, Series B
or Series C Preferred Stock (or the Common Stock issued upon conversion
thereof, as adjusted for stock splits, stock dividends, combinations and
other recapitalizations) or (ii) 800,000 shares of Series D Preferred Stock
(or the Common Stock issued upon conversion thereof, as adjusted for stock
splits, stock dividends, combinations and other recapitalizations).

                     (f)   The term "1934 Act" means the Securities Exchange
Act of 1934, as amended.

                     (g)   The term "Preferred Stock" means the Company's
Series A, Series B, Series C and Series D Preferred Stock, each $.01 par
value.

                     (h)   The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and
the declaration or ordering of effectiveness of such registration statement
or document.

                     (i)   The term "Registrable Securities" means (i) the
Common Stock issuable or issued upon conversion of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock (ii) the shares of Common Stock held by the Common Holders;
provided, however, that such shares of Common Stock shall not be deemed
Registrable Securities for the purposes of Section 1.2, 1.4 and 3.7 and (iii)
any Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security that is issued as) a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the shares referenced in (i) and (ii) above, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction
in which his rights under this Section 1 are not assigned.

                     (j)   The number of shares of "Registrable Securities"
outstanding shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities that are, Registrable
Securities.

                                   2
<PAGE>

                     (k)   The term "SEC" shall mean the Securities and
Exchange Commission.

               1.2   REQUEST FOR REGISTRATION.

                     (a)   Subject to the conditions of this Section 1.2, if
the Company shall receive at any time six (6) months after the effective date
of the Initial Offering, a written request from the Holders of fifty percent
(50%) or more of the Registrable Securities then outstanding (the "Initiating
Holders") that the Company file a registration statement under the Act
covering the registration of Registrable Securities, then the Company shall,
within twenty (20) days of the receipt thereof, give written notice of such
request to all Holders, and subject to the limitations of this Section 1.2,
use all reasonable efforts to effect, as soon as practicable, the
registration under the Act of all Registrable Securities that the Holders
request to be registered in a written request received by the Company within
twenty (20) days of the mailing of the Company's notice pursuant to this
Section 1.2(a).

                     (b)   If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 1.2 and the Company shall include such information in the
written notice referred to in Section 1.2(a). In such event the right of any
Holder to include its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority of the Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 1.2, if the underwriter
advises the Company that marketing factors require a limitation of the number
of securities underwritten (including Registrable Securities), then the
Company shall so advise all Holders of Registrable Securities that would
otherwise be underwritten pursuant hereto, and the number of shares that may
be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders). Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.

                     (c)   The Company shall not be required to effect a
registration pursuant to this Section 1.2:

                           (i)   in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process
in effecting such registration, unless the Company is already subject to
service in such jurisdiction and except as may be required under the Act; or

                           (ii)  after the Company has effected one (1)
registration pursuant to this Section 1.2, and such registration has been
declared or ordered effective;

                                  3
<PAGE>

provided, however, beginning twelve (12) months following the effective date
of the Initial Offering, for so long as the Company does not satisfy the
eligibility requirements for utilization of a registration statement on Form
S-3, if the Company has, within the twelve (12) month period preceding the
date of such request, already effected two registrations for the Holders
pursuant to this Section 1.2; or

                           (iii) during the period starting with the date of the
filing of, and ending on a date one hundred eighty (180) days following the
effective date of, a Company-initiated registration subject to Section 1.3
below, provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective; or

                           (iv)  if the Initiating Holders propose to dispose
of Registrable Securities that may be registered on Form S-3 pursuant to
Section 1.4 hereof; or

                           (v)   if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the Company's Chief Executive Officer or Chairman of
the Board stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
stockholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for a
period of not more than ninety (90) days after receipt of the request of the
Initiating Holders, provided that such right to delay a request shall be
exercised by the Company not more than once in any twelve (12)-month period.

               1.3   COMPANY REGISTRATION.

                     (a)   If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public
offering of such securities (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a registration
relating to a corporate reorganization or other transaction under Rule 145 of
the Act, or a registration in which the only Common Stock being registered is
Common Stock issuable upon conversion of debt securities that are also being
registered), the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given within twenty (20) days after mailing of such notice by the Company in
accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.3(c), use all reasonable efforts to cause to be registered under
the Act all of the Registrable Securities that each such Holder has requested
to be registered.

                     (b)   RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any registration initiated by it
under this Section 1.3 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration. The expenses of such withdrawn registration shall be borne by
the Company in accordance with Section 1.7 hereof.

                                   4
<PAGE>

                     (c)   UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock,
the Company shall not be required under this Section 1.3 to include any of
the Holders' securities in such underwriting unless they accept the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it (or by other persons entitled to select the underwriters) and
enter into an underwriting agreement in customary form with an underwriter or
underwriters selected by the Company, and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with
the success of the offering, then the Company shall be required to include in
the offering only that number of such securities, including Registrable
Securities, that the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling Holders according to the total amount
of securities entitled to be included therein owned by each selling Holder or
in such other proportions as shall mutually be agreed to by such selling
Holders). For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder that is a Holder of Registrable
Securities and that is a partnership or corporation, the partners, retired
partners and stockholders of such Holder, or the estates and family members
of any such partners and retired partners and any trusts for the benefit of
any of the foregoing persons shall be deemed to be a single "selling Holder,"
and any pro rata reduction with respect to such "selling Holder" shall be
based upon the aggregate amount of Registrable Securities owned by all such
related entities and individuals.

               1.4   FORM S-3 REGISTRATION. In case the Company shall receive
from the Holders of at least ten percent (10%) of the Registrable Securities
a written request or requests that the Company effect a registration on Form
S-3 and any related qualification or compliance with respect to all or a part
of the Registrable Securities owned by such Holder or Holders, the Company
shall:

                     (a)   promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and

                     (b)   use all reasonable efforts to effect, as soon as
practicable, such registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders' Registrable Securities
as are specified in such request, together with all or such portion of the
Registrable Securities of any other Holders joining in such request as are
specified in a written request given within fifteen (15) days after receipt
of such written notice from the Company, provided, however, that the Company
shall not be obligated to effect any such registration, qualification or
compliance, pursuant to this Section 1.4:

                           (i)   if Form S-3 is not available for such
offering by the Holders;


                                    5
<PAGE>

                           (ii)  if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $1,000,000;

                           (iii) if the Company shall furnish to the Holders
a certificate signed by the Chief Executive Officer or Chairman of the Board
of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its stockholders for such Form S-3 Registration to be effected at such
time, in which event the Company shall have the right to defer the filing of
the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder or Holders under this Section
1.4; provided, however, that the Company shall not utilize this right more
than once in any twelve month period;

                           (iv)  if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.4; or

                           (v)   in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification
or compliance.

                     (c)   Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. Registrations effected pursuant to
this Section 1.4 shall not be counted as requests for registration effected
pursuant to Sections 1.2.

               1.5   OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

                     (a)   prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use all reasonable
efforts to cause such registration statement to become effective, and, upon
the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for a
period of up to one hundred twenty (120) days or, if earlier, until the
distribution contemplated in the Registration Statement has been completed;

                     (b)   prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement;

                     (c)   furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act,

                                6
<PAGE>

and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;

                     (d)   use all reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions;

                     (e)   in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement
(including, but not limited to, reasonable due diligence), in usual and
customary form, with the managing underwriter of such offering;

                     (f)   notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Act or the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing;

                     (g)   cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed; and

                     (h)   provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the effective
date of such registration.

               1.6   INFORMATION FROM HOLDER. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this Section 1 with respect to the Registrable Securities of any selling
Holder that such Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Holder's Registrable Securities.

               1.7   EXPENSES OF REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Sections 1.2, 1.3 and
1.4, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company reasonable fees of one special counsel for the
selling Holders not to exceed $35,000 shall be borne by the Company.
Notwithstanding the foregoing, the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 or
Section 1.4 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses
pro rata based upon the number of Registrable Securities that were to be

                                7
<PAGE>

requested in the withdrawn registration), provided, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the
request with reasonable promptness following disclosure by the Company of
such material adverse change, then the Holders shall not be required to pay
any of such expenses.

               1.8   DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Section 1.

               1.9   INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Section 1:

                     (a)   To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners or officers, directors
and stockholders of each Holder, legal counsel and accountants for each
Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the 1934 Act, against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the Act, the 1934
Act or any state securities laws, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities laws
or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities laws; and the Company will reimburse each such Holder,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection l.9(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation that occurs in reliance
upon and in conformity with written information furnished expressly for use
in connection with such registration by any such Holder, underwriter or
controlling person; provided further, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter, or any person controlling such Holder
or underwriter, from whom the person asserting any such losses, claims,
damages or liabilities purchased shares in the offering, if a copy of the
prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) is provided to the Holder
but was not sent or given by or on behalf of such Holder or underwriter to
such person, if required by law so to have been delivered, at or prior to the
written

                                    8
<PAGE>

confirmation of the sale of the shares to such person, and if the prospectus
(as so amended or supplemented) would have cured the defect giving rise to
such loss, claim, damage or liability.

                     (b)   To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person,
if any, who controls the Company within the meaning of the Act, legal counsel
and accountants for the Company, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any
such underwriter or other Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or any state securities laws,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will
reimburse any person intended to be indemnified pursuant to this subsection
l.9(b), for any legal or other expenses reasonably incurred by such person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection l.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld), provided that in no event shall any indemnity
under this subsection l.9(b) exceed the net proceeds from the offering
received by such Holder.

                     (c)   Promptly after receipt by an indemnified party
under this Section 1.9 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 1.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.9.

                     (d)   If the indemnification provided for in this
Section 1.9 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, then the indemnifying party, in

                                  9
<PAGE>

lieu of indemnifying such indemnified party hereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage
or expense, as well as any other relevant equitable considerations; provided,
however, that such contribution shall not exceed the net proceeds from the
offering received by such Holder. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission.

                     (e)   Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, with the
consent of the holders of a majority of the Registrable Securities, the
provisions in the underwriting agreement shall control.

                     (f)   The obligations of the Company and Holders under
this Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.

               1.10  REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any
time permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:

                     (a)   make and keep public information available, as
those terms are understood and defined in SEC Rule 144, at all times after
ninety (90) days after the effective date of the Initial Offering;

                     (b)   file with the SEC in a timely manner all reports
and other documents required of the Company under the Act and the 1934 Act;
and

                     (c)   furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule
144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at
any time after it has become subject to such reporting requirements), or that
it qualifies as a registrant whose securities may be resold pursuant to Form
S-3 (at any time after it so qualifies), (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the
SEC that permits the selling of any such securities without registration or
pursuant to such form.

                                 10
<PAGE>

               1.11  ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to this Section 1 may
be assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such securities that (i) is a subsidiary, parent,
partner, limited partner, retired partner or stockholder of a Holder, (ii) is
a Holder's family member or trust for the benefit of an individual Holder, or
(iii) after such assignment or transfer, holds at least 50,000 shares of
Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations), provided: (a) the
Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and (b) such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement, including without
limitation the provisions of Section 1.12 below.

               1.12  "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees
that it will not, without the prior written consent of the managing
underwriter, during the period commencing on the date of the final prospectus
relating to the Company's initial public offering and ending on the date
specified by the Company and the managing underwriter (such period not to
exceed one hundred eighty (l80) days) (i) lend, offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether such shares or any such securities are
then owned by the Holder or are thereafter acquired), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing provisions of this Section 1.12 shall only be applicable to the
Holders if all non-selling officers and directors and greater than two (2%)
shareholders of the Company enter into similar agreements. The underwriters
in connection with the Company's initial public offering are intended third
party beneficiaries of this Section 1.12 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.

         In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

               1.13  TERMINATION OF REGISTRATION RIGHTS. No Holder shall be
entitled to exercise any right provided for in this Section 1 after five (5)
years following the consummation of the Initial Offering or, as to any Holder
holding two percent (2%) or less of the outstanding capital stock of the
Company, such earlier time at which all Registrable Securities held by such
Holder (and any affiliate of the Holder with whom such Holder must aggregate
its sales under Rule 144) can be sold in a single transaction without
registration in compliance with Rule 144 of the Act.

                                  11
<PAGE>

         2.    COVENANTS OF THE COMPANY.

               2.1   DELIVERY OF ANNUAL FINANCIAL STATEMENTS. The Company
shall deliver to each Investor as soon as practicable, but in any event
within ninety (90) days after the end of each fiscal year of the Company, an
income statement for such fiscal year, a balance sheet of the Company and
statement of stockholder's equity as of the end of such year, and a statement
of cash flows for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles ("GAAP"), and audited and certified by independent public
accountants of nationally recognized standing selected by the Company.

               2.2   DELIVERY OF OTHER FINANCIAL INFORMATION. The Company
shall deliver to each Major Investor:

                     (a)   as soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Company, an unaudited income statement, statement of
cash flows for such fiscal quarter and an unaudited balance sheet as of the
end of such fiscal quarter.

                     (b)   within thirty (30) days of the end of each month,
an unaudited income statement and statement of cash flows and balance sheet
for and as of the end of such month, in reasonable detail including
comparison figures;

                     (c)   as soon as practicable, but in any event at least
thirty (30) days prior to the end of each fiscal year, a budget and business
plan for the next fiscal year, prepared on a monthly basis, including balance
sheets, income statements and statements of cash flows for such months and,
as soon as prepared, any other budgets or revised budgets prepared by the
Company;

                     (d)   with respect to the financial statements called
for in subsections (a) and (b) of this Section 2.2, an instrument executed by
the Chief Financial Officer or President of the Company certifying that such
financials were prepared in accordance with GAAP consistently applied with
prior practice for earlier periods (with the exception of footnotes that may
be required by GAAP) and fairly present the financial condition of the
Company and its results of operation for the period specified, subject to
year-end audit adjustment; and

                     (e)   such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as the
Investor or any assignee of the Investor may from time to time request,
provided, however, that the Company shall not be obligated under this
subsection (e) or any other subsection of Sections 2.1 and 2.2 to provide
information that it deems in good faith to be a trade secret or similar
confidential information.

               2.3   INSPECTION. The Company shall permit each Major
Investor, at such Major Investor's expense, to visit and inspect the
Company's properties, to examine its books of account and records and Board
minutes and to discuss the Company's affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by the Major
Investor; provided, however, that the Company shall not be obligated pursuant
to this Section 2.3

                                  12
<PAGE>

to provide access to any information that the Board determines in good faith
to be a trade secret or similar confidential information.

               2.4   TERMINATION OF INFORMATION AND INSPECTION COVENANTS. The
covenants set forth in Sections 2.1, 2.2 and 2.3 shall terminate as to each
Investor and Major Investor and be of no further force or effect when the
sale of securities pursuant to a registration statement filed by the Company
under the Act in connection with the firm commitment underwritten offering of
its securities to the general public is consummated or when the Company first
becomes subject to the periodic reporting requirements of Sections 12(g) or
15(d) of the 1934 Act, whichever event shall first occur.

               2.5   RIGHT OF FIRST OFFER. Subject to the terms and
conditions specified in this Section 2.5, the Company hereby grants to each
Investor that holds on the date hereof at least 25,000 shares of Preferred
Stock (or Common Stock issued upon conversion thereof, as adjusted for stock
splits, stock dividends, combinations and other capitalizations) ("Minimum
Investor") a right of first offer with respect to future sales by the Company
of its Shares (as hereinafter defined). For purposes of this Section 2.5, a
Minimum Investor includes any general partners and affiliates of a Minimum
Investor. A Minimum Investor shall be entitled to apportion the right of
first offer hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.

         Each time the Company proposes to offer any shares of, or securities
convertible into or exchangeable or exercisable for any shares of, any class
of its capital stock ("Shares"), the Company shall first make an offering of
such Shares to each Investor in accordance with the following provisions.

                     (a)   The Company shall deliver a notice in accordance
with Section 3.5 ("Notice") to the Investors stating (i) its bona fide
intention to offer such Shares, (ii) the number of such Shares to be offered,
and (iii) the price and terms upon which it proposes to offer such Shares.

                     (b)   By written notification received by the Company,
within twenty (20) calendar days after receipt of the Notice, the Investor
may elect to purchase or obtain, at the price and on the terms specified in
the Notice, up to that portion of such Shares that equals the proportion that
the number of shares of Common Stock issued and held, or issuable upon
conversion of the Preferred Stock then held, by such Investor bears to the
total number of shares of Preferred Stock of the Company then outstanding
(assuming full conversion and exercise of all securities convertible or
exercisable for shares of Preferred Stock).

                     (c)   If all Shares that Investors are entitled to
obtain pursuant to subsection 2.5(b) are not elected to be obtained as
provided in subsection 2.5(b) hereof, the Company may, during the ninety (90)
day period following the expiration of the period provided in subsection
2.5(b) hereof, offer the remaining unsubscribed portion of such Shares to any
person or persons at a price not less than, and upon terms no more favorable
to the offeree than those specified in the Notice. If the Company does not
enter into an agreement for the sale of the Shares within such period, or if
such agreement is not consummated within ninety (90) days of

                                13
<PAGE>

the execution thereof, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to the
Investors in accordance herewith.

                     (d)   The right of first offer in this Section 2.5 shall
not be applicable to (i) the issuance or sale of shares of Common Stock (or
options therefor) to employees, directors and consultants for the primary
purpose of soliciting or retaining their services pursuant to a plan approved
by the Board; (ii) the issuance of up to 333,333 shares of Series D Preferred
Stock (appropriately adjusted for any stock split, dividend, combination or
other recapitalization), (iii) the issuance of securities pursuant to a bona
fide, firmly underwritten public offering of shares of Common Stock,
registered under the Act, at an offering price of at least $10.00 per share
(appropriately adjusted for any stock split, dividend, combination or other
recapitalization) and resulting in proceeds to the Company of at least
$30,000,000 in the aggregate, (iv) the issuance of securities pursuant to the
conversion or exercise of convertible or exercisable securities, (v) the
issuance of securities in connection with a bona fide business acquisition of
or by the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise or (vi) the issuance of stock, warrants or
other securities or rights to persons or entities with which the Company has
business relationships provided such issuances are for other than primarily
equity financing purposes and have been approved by the Board or (vii) the
issuance of any equity security, including any security convertible into or
exercisable for any equity security, that is not senior to the Company's
Preferred Stock with respect to dividends, liquidation, redemption or voting,
provided that such securities are issued to a person or entity that has a
research, development, clinical, regulatory, marketing, sales or other
operational or strategic relationship with this corporation.

               2.6   TERMINATION OF CERTAIN COVENANTS. The covenants set
forth in Section 2.5 shall terminate and be of no further force or effect
upon the consummation of the sale of securities pursuant to a bona fide,
firmly underwritten public offering of shares of common stock, registered
under the Act.

               2.7   PROPRIETARY INFORMATION AGREEMENTS. The Company
covenants that it will cause each employee and consultant of the Company to
execute a Proprietary Information and Inventions Agreement in the form
previously provided to the Investors.

         3.    MISCELLANEOUS.

               3.1   SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in
this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

               3.2   GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.

                                 14
<PAGE>

               3.3   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.

               3.4   TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

               3.5   NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be
deemed effectively given upon personal delivery to the party to be notified
or upon delivery by confirmed facsimile transmission, one (1) day after given
to a nationally recognized overnight courier service, or five (5) days after
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice
to the other parties.

               3.6   EXPENSES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.

               3.7   ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement among the parties with regard to the subjects
hereof and thereof. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Registrable Securities; provided, however, that in the event that such
amendment or waiver adversely affects the obligations and/or rights of the
Common Holders in a different manner than the other Holders, such amendment
or waiver shall also require the written consent of the holders of a majority
in interest of the Common Holders. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities, each future holder of all such Registrable
Securities, each Common Holder, each future Common Holder and the Company.

               3.8   SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall
be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

               3.9   AGGREGATION OF STOCK. All shares of Registrable
Securities held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement, including, but not limited to, for purposes of
Sections 1.1(e), 1.3(c) and 1.11.

                                  15
<PAGE>

               3.10  WAIVER OF RIGHT OF FIRST OFFER. Each Existing Investor
hereby waives its right of first offer as set forth in the Prior Agreement
with respect to the sale of shares of Series D Preferred Shares pursuant to
the terms of the Series D Agreement. Such waiver shall be binding upon all
parties to the Prior Agreement.


                            16
<PAGE>

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

                                   ADVANCED MEDICINE, INC.

                                   By: /s/ James B. Tananbaum
                                       -----------------------------------
                                       James B. Tananbaum
                                       President

                                   COMMON HOLDERS:
                                   By:
                                       -----------------------------------
                                   Title:
                                         ---------------------------------
                                   By:
                                       -----------------------------------
                                   Title:
                                         ---------------------------------

                AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

<PAGE>

                                   INVESTOR:

                                   ABS VENTURES AM L.L.C.
                                   By:  Calvert Capital III L.L.C., its
                                        Managing Member

                                   By: /s/ Richard Spalding
                                      -----------------------------------
                                      Name: Richard Spalding
                                      Title: Managing Member

                                      Address:
                                              ---------------------------

                                      -----------------------------------

                                   ABS INVESTORS L.L.C.

                                   By: /s/ Richard Spalding
                                      -----------------------------------
                                      Name: Richard Spalding
                                      Title: Managing Member

                                      Address:
                                              ----------------------------

                                       -----------------------------------

                                   ABS INVESTORS AM L.L.C.

                                   By:  Calvert Capital III L.L.C., its
                                        Managing Member

                                   By:  /s/ Richard Spalding
                                       -----------------------------------
                                       Name:  Richard Spalding
                                       Title:  Managing Member

                                       Address:
                                               ---------------------------

                                       -----------------------------------

                                  PHARMA VISION 2000 AG

                                   By:  /s/ Peter Sjostand
                                       -----------------------------------
                                       Name:  Peter Sjostand
                                       Title:  Member of the Board

                                       Address:
                                               ---------------------------

                                       -----------------------------------

                                  THE GOLDMAN SACHS GROUP

                                   By:  /s/ Richard Friedman
                                       -----------------------------------
                                       Name:  Richard Friedman
                                       Title:  Vice President

                                       Address:
                                               ---------------------------

                                       -----------------------------------

<PAGE>

                                   SCHEDULE A

                                 COMMON HOLDERS

James Tananbaum
George Whitesides
John Griffin
Mathai Mammen
The Marianthi Foundation, Inc.
Andrew S. Vagelos
Randall H. Vagelos
Ellen T. Vagelos
Cynthia M. Vagelos Roberts
Cara Diana Roberts Trust Dated 9/2/94
Olivia Sophia Vagelos Trust Dated 9/2/94
Lydia Joan Roberts Trust Dated 10/26/95