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                                                                     EXHIBIT 4.3

                          NEUROCRINE BIOSCIENCES, INC.

                            2003 INCENTIVE STOCK PLAN

                                   AS AMENDED

1.    PURPOSE OF THE PLAN. The purposes of this Incentive Stock Plan are to
attract and retain the best available personnel, to provide additional incentive
to the employees of Neurocrine Biosciences, Inc. (the "Company") and to promote
the success of the Company's business. Options granted hereunder may be either
Incentive Stock Options or Nonstatutory Stock Options, at the discretion of the
Board and as reflected in the terms of the written option agreement. The Board
also has the discretion to grant Restricted Stock Awards and Stock Bonus Awards.

2.    DEFINITIONS.

            (a)   "Award" shall mean any right granted under the Plan, including
an Option, a Restricted Stock Award and a Stock Bonus Award.

            (b)   "Board" shall mean the Committee, if one has been appointed,
or the Board of Directors of the Company, if no Committee is appointed.

            (c)   "Code" shall mean the Internal Revenue Code of 1986, as
amended.

            (d)   "Committee" shall mean the Committee appointed by the Board in
accordance with Section 4(a) of the Plan, if one is appointed.

            (e)   "Common Stock" shall mean the common stock of the Company, par
value $.001 per share.

            (f)   "Company" shall mean Neurocrine Biosciences, Inc.

            (g)   "Consultant" shall mean any natural person who is engaged by
the Company or any Parent or Subsidiary to render bona fide consulting services
and is compensated for such consulting services, and any Director whether
compensated for such services or not.

            (h)   "Continuous Status as an Employee or Consultant" shall mean
the absence of any interruption or termination of service as an Employee or
Consultant, as applicable. Continuous Status as an Employee or Consultant shall
not be considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Board; provided that such leave is for a
period of not more than ninety (90) days or reemployment upon the expiration of
such leave is guaranteed by contract or statute.

            (i)   "Director" means a member of the Board.

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            (j)   "Employee" shall mean any persons, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.

            (k)   "Incentive Stock Option" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

            (l)   "Nonstatutory Stock Option" shall mean an Option not intended
to qualify as an Incentive Stock Option.

            (m)   "Option" shall mean a stock option granted pursuant to the
Plan.

            (n)   "Optioned Stock" shall mean the Common Stock subject to an
Option.

            (o)   "Optionee" shall mean an Employee or Consultant who receives
an Option.

            (p)   "Outside Director" means a Director who is not an Employee.

            (q)   "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

            (r)   "Performance Criteria" shall mean the following business
criteria with respect to the Company, any Subsidiary or any division or
operating unit: (a) net income, (b) pre-tax income, (c) operating income, (d)
cash flow, (e) earnings per share, (f) return on equity, (g) return on invested
capital or assets, (h) cost reductions or savings, (i) funds from operations,
(j) appreciation in the fair market value of Common Stock, and (k) earnings
before any one or more of the following items: interest, taxes, depreciation or
amortization; each as determined in accordance with generally accepted
accounting principles or subject to such adjustments as may be specified by the
Board.

            (s)   "Plan" shall mean this Incentive Stock Plan.

            (t)   "Purchaser" shall mean an Employee or Consultant who exercises
a Restricted Stock Award or receives a Stock Bonus Award.

            (u)   "Restricted Stock Award" shall mean a right to purchase Common
Stock pursuant to Section 11 of the Plan.

            (v)   "Section 162(m) Participant" shall mean any key Employee
designated by the Board as a key Employee whose compensation for the fiscal year
in which the key Employee is so designated or a future fiscal year may be
subject to the limit on deductible compensation imposed by Section 162(m) of the
Code.

            (w)   "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

            (x)   "Stock Bonus Award" shall mean the right to receive a bonus of
Common Stock for past services pursuant to Section 12 of the Plan.

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            (y)   "Subsidiary" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.

3.    STOCK SUBJECT TO THE PLAN.

      (a)   Subject to the provisions of Section 14 of the Plan, the maximum
aggregate number of shares under the Plan is three million three hundred
thousand (3,300,000) shares of Common Stock. The Shares may be authorized but
unissued, or reacquired Common Stock. If an Award should expire or become
unexercisable for any reason without having been exercised in full, then the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant or sale under the Plan.
Notwithstanding any other provision of the Plan, shares issued under the Plan
and later repurchased by the Company shall not become available for future grant
or sale under the Plan.

      (b)   The following limitations shall apply to grants of Awards to
Employees:

                  (i)   No Employee shall be granted, in any fiscal year of the
            Company, Awards pursuant to which more than an aggregate of two
            hundred and fifty thousand (250,000) Shares are issuable to such
            Employee.

                  (ii)  In connection with his or her initial employment, an
            Employee may be granted Awards to purchase and/or receive up to an
            additional two hundred and fifty thousand (250,000) Shares which
            shall not count against the limit set forth in subsection (i) above.

                  (iii) The foregoing limitations shall be adjusted
            proportionately in connection with any change in the Company's
            capitalization as described in Section 14.

                  (iv)  If an Option is canceled in the same fiscal year of the
            Company in which it was granted (other than in connection with a
            transaction described in Section 14), the canceled Option shall be
            counted against the limit set forth in subsection (i) above.

4.    ADMINISTRATION OF THE PLAN.

      (a)   Procedure.

                  (i)   Multiple Administrative Bodies. The Plan may be
            administered by different Committees with respect to different
            groups of Employees and Consultants.

                  (ii)  Section 162(m). To the extent that the Board determines
            it to be desirable to qualify Awards granted hereunder as
            "performance-based compensation" within the meaning of Section
            162(m) of the Code, the Plan shall be administered by a Committee of
            two or more "outside directors" within the meaning of Section 162(m)
            of the Code.

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                  (iii) Rule 16b-3. To the extent desirable to qualify
            transactions hereunder as exempt under Rule 16b-3, the transactions
            contemplated hereunder shall be structured to satisfy the
            requirements for exemption under Rule 16b-3.

                  (iv)  Other Administration. Other than as provided above, the
            Plan shall be administered by (A) the Board or (B) a Committee,
            which committee shall be constituted to satisfy applicable laws.

      (b)   Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant Incentive Stock
Options, Nonstatutory Stock Options, Restricted Stock Awards or Stock Bonus
Awards; (ii) to determine, upon review of relevant information and in accordance
with Section 7 of the Plan, the fair market value of the Common Stock; (iii) to
determine the exercise price per share of each Award to be granted, if any,
which exercise price shall be determined in accordance with Section 7 of the
Plan; (iv) to determine the Employees or Consultants to whom, and the time or
times at which, Awards shall be granted and, subject to the limitations of
Section 3(b) above, the number of shares to be represented by each Award; (v) to
interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations
relating to the Plan; (vii) to determine the terms and provisions of each Award
granted (which need not be identical) and, with the consent of the holder
thereof, modify or amend any provisions (including provisions relating to
exercise price) of any Award; (viii) to accelerate or defer (with the consent of
the Optionee) the exercise date of any Option, consistent with the provisions of
Section 5 of the Plan; (ix) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Award previously
granted by the Board; (x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Award that number of Shares having a fair market
value equal to the statutory minimum amount required to be withheld. The fair
market value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an Award
holder to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Board may deem necessary or advisable; and (xi) to
make all other determinations deemed necessary or advisable for the
administration of the Plan.

      (c)   Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees,
Purchasers and any other holders of any Awards granted under the Plan.

      (d)   Provisions Applicable to Section 162(m) Participants.

                  (i)   The Board, in its discretion, may determine whether an
            Award is to qualify as performance-based compensation as described
            in Section 162(m)(4)(C) of the Code.

                  (ii)  Notwithstanding anything in the Plan to the contrary,
            the Board may grant any Award to a Section 162(m) Participant,
            including a Restricted Stock Award or Stock Bonus Award the
            restrictions with respect to which lapse upon the attainment of
            performance goals which are related to one or more of the
            Performance Criteria.

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                  (iii) To the extent necessary to comply with the
            performance-based compensation requirements of Section 162(m)(4)(C)
            of the Code, with respect to any Restricted Stock Award or Stock
            Bonus Award granted under the Plan to one or more Section 162(m)
            Participants, no later than ninety (90) days following the
            commencement of any fiscal year in question or any other designated
            fiscal period or period of service (or such other time as may be
            required or permitted by Section 162(m) of the Code), the Board
            shall, in writing, (i) designate one or more Section 162(m)
            Participants, (ii) select the Performance Criteria applicable to the
            fiscal year or other designated fiscal period or period of service,
            (iii) establish the various performance targets, in terms of an
            objective formula or standard, and amounts of such Restricted Stock
            Awards and Stock Bonus Awards, as applicable, which may be earned
            for such fiscal year or other designated fiscal period or period of
            service, and (iv) specify the relationship between Performance
            Criteria and the performance targets and the amounts of such
            Restricted Stock Awards and Stock Bonus Awards, as applicable, to be
            earned by each Section 162(m) Participant for such fiscal year or
            other designated fiscal period or period of service. Following the
            completion of each fiscal year or other designated fiscal period or
            period of service, the Board shall certify in writing whether the
            applicable performance targets have been achieved for such fiscal
            year or other designated fiscal period or period of service. In
            determining the amount earned by a Section 162(m) Participant, the
            Board shall have the right to reduce (but not to increase) the
            amount payable at a given level of performance to take into account
            additional factors that the Board may deem relevant to the
            assessment of individual or corporate performance for the fiscal
            year or other designated fiscal period or period of service.

                  (iv)  Furthermore, notwithstanding any other provision of the
            Plan, any Award which is granted to a Section 162(m) Participant and
            is intended to qualify as performance-based compensation as
            described in Section 162(m)(4)(C) of the Code shall be subject to
            any additional limitations set forth in Section 162(m) of the Code
            (including any amendment to Section 162(m) of the Code) or any
            regulations or rulings issued thereunder that are requirements for
            qualification as performance-based compensation as described in
            Section 162(m)(4)(C) of the Code, and the Plan shall be deemed
            amended to the extent necessary to conform to such requirements.

5.    ELIGIBILITY.

      (a)   Awards may be granted to Employees and Consultants, provided that
Incentive Stock Options may only be granted to Employees. An Employee or
Consultant who has been granted an Award may, if such Employee or Consultant is
otherwise eligible, be granted additional Awards. Each Outside Director shall be
eligible to be automatically granted Options at the times and in the manner set
forth in Section 10.

      (b)   Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate fair market
value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year

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(under all plans of the Company) exceeds one hundred thousand dollars
($100,000), such Options shall be treated as Nonstatutory Stock Options.

      (c)   For purposes of Section 5(b), Options shall be taken into account in
the order in which they were granted, and the fair market value of the Shares
shall be determined as of the time the Option with respect to such Shares is
granted.

      (d)   The Plan shall not confer upon any Optionee or Purchaser any right
with respect to continuation of employment by or the rendition of consulting
services to the Company, nor shall it interfere in any way with his or her right
or the Company's right to terminate his or her employment or services at any
time, with or without cause.

6.    TERM OF PLAN. The Plan shall become effective upon the earlier to occur of
its adoption by the Board or its approval by vote of holders of a majority of
the outstanding shares of the Company entitled to vote on the adoption of the
Plan. It shall continue in effect until terminated under Section 15 of the Plan.
Notwithstanding the foregoing, no Incentive Stock Option may be granted under
this Plan after the first to occur of (a) the expiration of ten (10) years from
the date the Plan is adopted by the Board or (b) the expiration of ten (10)
years from the date the Plan is approved by the Company's stockholders under
Section 20.

7.    EXERCISE PRICE AND CONSIDERATION.

      (a)   The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be no less than one hundred percent (100%) of the
fair market value per Share on the date of grant; provided, however, that in the
case of an Incentive Stock Option granted to an Employee who, at the time of
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than one
hundred and ten percent (110%) of the fair market value per Share on the date of
grant. Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than one hundred percent (100%) of the fair market value
per Share on the date of grant pursuant to a merger or other corporate
transaction.

      (b)   The fair market value shall be determined by the Board in its
discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices (or the closing price per share if the Common Stock is listed on
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System) of the Common Stock for the date of grant, as reported
in the Wall Street Journal (or, if not so reported, as otherwise reported by the
NASDAQ System) or, in the event the Common Stock is listed on a stock exchange,
the fair market value per Share shall be the closing price on such exchange on
the date of grant of the Option or Restricted Stock Award, as reported in the
Wall Street Journal.

      (c)   The consideration to be paid for the Shares to be issued upon
exercise of an Award, including the method of payment, shall be determined by
the Board (and in the case of an Incentive Stock Option, shall be determined at
the time of grant) and to the extent permitted under applicable laws may consist
entirely of cash, check, promissory note, other Shares of Common Stock which

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(i) either have been owned by the Optionee for more than six (6) months on the
date of surrender or were not acquired directly or indirectly, from the Company,
and (ii) have a fair market value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares to the extent
permitted under applicable law.

8.    TERM OF OPTION. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.

9.    EXERCISE OF OPTION.

      (a)   Procedure for Exercise; Rights as a Shareholder.

                  (i)   Any Option granted hereunder shall be exercisable at
            such times and under such conditions as determined by the Board,
            including performance criteria with respect to the Company and/or
            the Optionee, and as shall be permissible under the terms of the
            Plan.

                  (ii)  An Option may not be exercised for a fraction of a
            Share.

                  (iii) An Option shall be deemed to be exercised when written
            notice of such exercise has been given to the Company in accordance
            with the terms of the Option by the person entitled to exercise the
            Option and full payment for the Shares with respect to which the
            Option is exercised has been received by the Company. Full payment
            may, as authorized by the Board, consist of any consideration and
            method of payment allowable under Section 7 of the Plan. Until the
            issuance (as evidenced by the appropriate entry on the books of the
            Company or of a duly authorized transfer agent of the Company) of
            the stock certificate evidencing such Shares, no right to vote or
            receive dividends or any other rights as a stockholder shall exist
            with respect to the Optioned Stock, notwithstanding the exercise of
            the Option. Upon an Optionee's request, the Company shall issue (or
            cause to be issued) such stock certificate promptly upon exercise of
            the Option. To the extent an Option designated as an Incentive Stock
            Option at grant that is treated as the exercise of a Nonstatutory
            Stock Option pursuant to Section 5(b), the Company shall issue a
            separate stock certificate evidencing the Shares treated as acquired
            upon exercise of an Incentive Stock Option and a separate stock
            certificate evidencing the Shares treated as acquired upon exercise
            of a Nonstatutory Stock Option and shall identify each such
            certificate accordingly in its stock transfer records. No adjustment
            will be made for a dividend or other right for which the record date
            is prior to the date the stock certificate is issued, except as
            provided in Section 14 of the Plan.

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         (iv)     Exercise of an Option in any manner shall result in a decrease
                  in the number of Shares which thereafter may be available,
                  both for purposes of the Plan and for sale under the Option,
                  by the number of Shares as to which the Option is exercised.

      (b)   Termination of Status as an Employee or Consultant. In the event of
termination of an Optionee's Continuous Status as an Employee or Consultant (as
the case may be), such Optionee may, but only within such period of time as is
determined by the Board, with such determination in the case of an Incentive
Stock Option not exceeding three (3) months and in the case of Nonstatutory
Stock Option not exceeding six (6) months after the date of termination
(provided that such period shall be three (3) months in the case of an Option
granted to an Outside Director pursuant to Section 10), with such determination
in the case of an Incentive Stock Option being made at the time of grant of the
Option, exercise the Option to the extent that such Employee or Consultant was
entitled to exercise it at the date of such termination (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option Agreement). To the extent that such Employee or Consultant was not
entitled to exercise the Option at the date of such termination, or if such
Employee or Consultant does not exercise such Option (which such Employee or
Consultant was entitled to exercise) within the time specified herein, the
Option shall terminate.

      (c)   Disability of Optionee. Notwithstanding the provisions of Section
8(b) above, in the event of termination of an Optionee's Continuous Status as an
Employee or Consultant as a result of such Employee's or Consultant's total and
permanent disability (as defined in Section 22(e)(3) of the Code), such Employee
or Consultant may, but only within six (6) months (twelve (12) months in the
case of an Option granted to an Outside Director pursuant to Section 10) (or
such other period of time not exceeding twelve (12) months as in determined by
the Board, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option) from the date of such termination
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), exercise the Option to the extent the right
to exercise would have accrued had the Optionee continued Continuous Status as
an Employee or Consultant for a period of six (6) months following termination
of Continuous Status by reason of disability. To the extent that such Employee
or Consultant was not entitled to exercise an Option in this period, or if such
Employee or Consultant does not exercise such Option (which such Employee or
Consultant was entitled to exercise) within the time specified herein, the
Option shall terminate.

      (d)   Retirement of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event of termination of an Employee Optionee's Continuous
Status as an Employee as a result of such Employee's retirement from the Company
at age fifty five (55) or greater after having Continuous Status for (5) years
or more, all Options held by such Optionee shall vest and such Employee may, but
only within three (3) years from the date of such termination (but in no event
later than the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent such Employee was entitled
to exercise it at the date of such termination.

      (e)   Death of Optionee. In the event of the death of an Optionee:

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                  (i)   during the term of the Option who is at the time of his
            or her death an Employee or Consultant of the Company and who shall
            have been in Continuous Status as an Employee or Consultant since
            the date of grant of the Option, the Option may be exercised, at any
            time within six (6) months (twelve (12) months in the case of an
            Option granted to an Outside Director pursuant to Section 10) (or at
            such later time as may be determined by the Board but in no event
            later than the date of expiration of the term of such Option as set
            forth in the Option Agreement), by the Optionee's estate or by a
            person who acquired the right to exercise the Option by bequest or
            inheritance, but only to the extent that the right to exercise would
            have accrued had the Optionee continued living and remained in
            Continuous Status as an Employee or Consultant six (6) months (or
            such other period of time as in determined by the Board) after the
            date of death; or

                  (ii)  within thirty (30) days (or such other period of time
            not exceeding three (3) months as is determined by the Board, with
            such determination in the case of an Incentive Stock Option being
            made at the time of grant of the Option) after the termination of
            Continuous Status as an Employee or Consultant, the Option may be
            exercised, at any time within six (6) months (twelve (12) months in
            the case of an Option granted to an Outside Director pursuant to
            Section 10) (or such other period of time as is determined by the
            Board at the time of grant of the Option) following the date of
            death (but in no event later than the date of expiration of the term
            of such Option as set forth in the Option Agreement), by the
            Optionee's estate or by a person who acquired the right to exercise
            the Option by bequest or inheritance, but only to the extent that
            the right to exercise that had accrued at the date of termination.

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10.   AUTOMATIC GRANTING OF OPTIONS TO OUTSIDE DIRECTORS.

      (a)   First Option Grants. Unless otherwise determined by the Board, each
new Outside Director shall be automatically granted an Option to purchase twenty
thousand (20,000) Shares (a "First Option") on the date on which such person
first becomes a Director, whether through election by the stockholders of the
Company or appointment by the Board to fill a vacancy.

      (b)   Subsequent Option Grants. Unless otherwise determined by the Board,
each Outside Director and the Chairman of the Board of Directors shall be
automatically granted an annual Option (a "Subsequent Option") to purchase, in
the case of an Outside Director, twelve thousand (12,000) Shares, and in the
case of the Chairman of the Board of Directors, fifteen thousand (15,000)
Shares, each on the date of each annual meeting of the stockholders of the
Company, if on such date, he or she shall have served on the Board for at least
six (6) months.

      (c)   Terms of Options Granted to Outside Directors. Options granted to
Outside Directors pursuant to this Section 10 shall have a per Share exercise
price of no less than one hundred percent (100%) of the fair market value per
Share on the date of grant. Subject to Section 9, the term of each Option
granted to an Outside Director pursuant to this Section 10 shall be ten (10)
years from the date of grant thereof. First Options and Subsequent Options shall
become exercisable in cumulative monthly installments of 1/12 of the Shares
subject to such Option on each of the monthly anniversaries of the date of grant
of the Option, commencing with the first such monthly anniversary, such that
each such Option shall be one hundred percent (100%) vested on the third
anniversary of its date of grant.

11.   RESTRICTED STOCK AWARDS.

      (a)   Rights to Purchase. After the Board determines that it will offer an
Employee or Consultant a Restricted Stock Award, it shall deliver to the offeree
a stock purchase agreement setting forth the terms, conditions and restrictions
relating to the offer. Such agreement shall further specify the number of Shares
which such person shall be entitled to purchase, and the time within which such
person must accept such offer, which shall in no event exceed six (6) months
from the date upon which the Board or its Committee made the determination to
grant the Restricted Stock Award. The offer shall be accepted by execution of a
stock purchase agreement in the form determined by the Board.

      (b)   Purchase Price. The Board shall establish the purchase price, if
any, and form of payment for each Restricted Stock Award; provided, however,
that such purchase price shall be no less than one hundred percent (100%) of the
fair market value per Share on the date of grant; provided, further, however,
that the purchase price per Share may be reduced on a dollar-for-dollar basis to
the extent the Restricted Stock Award is granted to the Purchaser in lieu of
cash compensation otherwise payable to the Purchaser. In all cases, legal
consideration shall be required for each issuance of a Restricted Stock Award.

      (c)   Issuance of Shares. Forthwith after payment therefor, the Shares
purchased shall be duly issued; provided, however, that the Board may require
that the Purchaser make adequate

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provision for any Federal and State withholding obligations of the Company as a
condition to the Purchaser purchasing such Shares.

      (d)   Repurchase Option. Unless the Board determines otherwise, the stock
purchase agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the Purchaser's employment with the
Company for any reason (including death or disability). Subject to applicable
laws, if the Board so determines, the purchase price for shares repurchased may
be paid by cancellation of any indebtedness of the Purchaser to the Company.
Subject to Section 4(d) with respect to Restricted Stock Awards granted to
Section 162(m) Participants, the repurchase option shall lapse at such rate as
the Board may determine.

      (e)   Other Provisions. The stock purchase agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Board.

12.   STOCK BONUS AWARDS.

      (a)   Terms of Award. After the Board determines that it will offer an
Employee or Consultant a Stock Bonus Award, it shall deliver to the offeree a
stock bonus agreement setting forth the terms, conditions and restrictions
relating to the offer and the number of shares to be awarded. The offer shall be
accepted by execution of a stock bonus agreement in the form determined by the
Board.

      (b)   Purchase Price. The Board shall establish the purchase price, if
any, and form of payment for each Stock Bonus Award; provided, however, that
such purchase price shall be no less than one hundred percent (100%) of the fair
market value per Share on the date of grant; provided, further, however, that
the purchase price per Share may be reduced on a dollar-for-dollar basis to the
extent the Stock Bonus Award is granted to the Purchaser in lieu of cash
compensation otherwise payable to the Purchaser.

      (c)   Issuance of Shares. Forthwith after payment therefor, the Shares
purchased shall be duly issued; provided, however, that the Board may require
that the Purchaser make adequate provision for any Federal and State withholding
obligations of the Company as a condition to the Purchaser purchasing such
Shares.

      (d)   Repurchase Option. Unless the Board determines otherwise, the stock
bonus agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary termination of the Purchaser's employment with the
Company for any reason (including death or disability). Subject to applicable
laws, if the Board so determines, the purchase price for shares repurchased may
be paid by cancellation of any indebtedness of the Purchaser to the Company.
Subject to Section 4(d) with respect to Stock Bonus Awards granted to Section
162(m) Participants, the repurchase option shall lapse at such rate as the Board
may determine.

      (e)   Other Provisions. The stock bonus agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Board.

13.   NON-TRANSFERABILITY OF AWARDS. Unless determined otherwise by the Board,
an Award may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by

                                      -11-

<PAGE>

will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. If the Board makes an Award
transferable, such Award shall contain such additional terms and conditions as
the Board deems appropriate.

14.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

      (a)   Changes in Capitalization. Subject to any action by the Company
required by applicable law or regulations or the requirements of the Nasdaq
Stock Market or an established stock exchange on which the Company's securities
are traded, and subject to Section 14(d), the number and kind of shares of
Common Stock (or other securities or property) covered by each outstanding
Award, and the number and kind of shares of Common Stock (or other securities or
property) which have been authorized for issuance under the Plan but as to which
no Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of Common
Stock (or other securities or property) covered by each such outstanding Award,
shall be adjusted proportionately to the extent the Board determines that any
increase, decrease or adjustment in the number or kind of issued shares of
Common Stock (or other securities or property), dividend, distribution, stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, reorganization, merger, consolidation, split-up, repurchase,
liquidation, dissolution, or sale, transfer, exchange or other disposition of
all or substantially all of the assets of the Company, exchange of Common Stock
or other securities of the Company, or other similar corporate transaction or
event, in the Board's sole discretion, affects the Common Stock such that an
adjustment is determined by the Board to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to an Award. Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Award.

      (b)   Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Board shall notify the Optionee or Purchaser
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Award shall terminate immediately prior to
the consummation of such proposed action.

      (c)   Merger or Asset Sale. In the event of a merger, sale of all or
substantially all of the assets of the Company, tender offer or other
transaction or series of related transactions resulting in a change of ownership
of more than fifty percent (50%) of the voting securities of the Company
("Change in Control") approved by the majority of the members of the Board on
the Board prior to the commencement of such Change in Control, each outstanding
Option shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation;
provided, however, in the event that within one year of the date of the
completion of the Change in Control, the successor corporation or a Parent or
Subsidiary of the successor corporation terminates the employment of an Optionee
without Cause (as defined below), such Optionee shall fully vest in and have the
right to exercise the options assumed or substituted for the Option as to all of
the Optioned Stock, including Shares as to which it would not otherwise be
exercisable. In the event that the successor corporation refuses to assume or
substitute for the

                                      -12-

<PAGE>

Option, the Optionee shall fully vest in and have the right to exercise the
Option as to all of the Optioned Stock, including Shares as to which it would
not otherwise be exercisable. If an Option becomes fully vested and exercisable
in lieu of assumption or substitution in the event of a Change of Control, the
Board shall notify the Optionee in writing or electronically that the Option
shall be fully vested and exercisable for a period of fifteen (15) days from the
date of such notice, and the Option shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the Change of Control, the option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change of Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the Change of Control is not solely common
stock of the successor corporation or its Parent, the Board may, with the
consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Change of Control. For purposes of this
paragraph, termination shall be for "Cause" in the event of the occurrence of
any of the following: (a) any intentional action or intentional failure to act
by employee which was performed in bad faith and to the material detriment of
the successor corporation or its Parent or Subsidiary; (b) employee willfully
and habitually neglects the duties of employment; or (c) employee is convicted
of a felony crime involving moral turpitude, provided that in the event that any
of the foregoing events is capable of being cured, the successor corporation or
its Parent or Subsidiary shall provide written notice to the employee describing
the nature of such event and the employee shall thereafter have five (5)
business days to cure such event.

      In the event of a Change in Control which is not approved by the majority
of the members of the Board on the Board prior to the commencement of a Change
in Control, each Optionee shall fully vest in and have the right to exercise all
outstanding Options as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable.

      (d)   With respect to Awards which are granted to Section 162(m)
Participants and are intended to qualify as performance-based compensation under
Section 162(m)(4)(C), no adjustment or action described in this Section 14 or in
any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause such Award to fail to so qualify under Section
162(m)(4)(C), or any successor provisions thereto.

15.   DATE OF GRANTING AWARDS. The date of grant of an Award shall, for all
purposes, be the date on which the Board makes the determination granting such
Award. Notice of the determination shall be given to each Employee or Consultant
to whom an Award is so granted within a reasonable time after the date of such
grant.

16.   AMENDMENT AND TERMINATION OF THE PLAN.

      (a)   Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made

                                      -13-

<PAGE>

which would impair the rights of any Optionee or Purchaser under any grant
theretofore made, without his or her consent. In addition, to the extent
necessary and desirable to comply with Section 422 of the Code (or any other
applicable laws or regulation, the requirements of the Nasdaq Stock Market or an
established stock exchange), the Company shall obtain stockholder approval of
any Plan amendment in such a manner and to such a degree as required.

      (b)   Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Awards already granted, and such Awards
shall remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee or the
Purchaser, as applicable, and the Board, which agreement must be in writing and
signed by the Optionee or the Purchaser, as applicable, and the Company.

17.   CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to
the exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of the Nasdaq Stock Market or any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

As a condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

18.   RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

19.   AWARD AGREEMENTS. Options shall be evidenced by written option agreements
in such form as the Board shall approve. Upon the exercise of a Restricted Stock
Award or a Stock Bonus Award, the Purchaser shall sign a stock purchase
agreement or stock bonus agreement in such form as the Board shall approve.

20.   STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to approval
by the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under applicable laws and the rules of the Nasdaq
Stock Market or any stock exchange upon which the Common Stock is listed.

                                      -14-
<PAGE>

                          [NEUROCRINE BIOSCIENCES LOGO]

                         FORM OF STOCK OPTION AGREEMENT

      Unless otherwise defined herein, the terms defined in the 2003 Stock
Option Plan, (the "Plan") shall have the same defined meanings in this Option
Agreement.

I. NOTICE OF STOCK OPTION GRANT

      As part of the Company's Performance Options Policy you have been granted
      an option to purchase Common Stock of the Company, subject to the terms
      and conditions of the Plan and this Option Agreement, as follows:

      Date of Grant:

      Vesting Commencement Date

      Exercise Price per Share:

      Total Number of Shares Granted:

      Total Exercise Price:

      Type of Option:
                 Incentive Stock Option
                 Nonstatutory Stock Option

      Term/Expiration Date:

Vesting Schedule:

This Option may be exercised, in whole or in part, in accordance with the
following schedule:

      One forty-eighth (1/48) of the Shares subject to the Option shall vest
      each month beginning one month after the Vesting Commencement Date, and
      1/48 of the Shares subject to the Option shall vest each month thereafter,
      subject to the Optionee continuing to be an Employee or Consultant on such
      dates.

TERMINATION PERIOD:

      This Option may be exercised for ninety (90) days (or such other period of
      time not exceeding six (6) months, as is determined by the Board) after
      Optionee's Continuous Status as an Employee or Consultant terminates. Upon
      the death or Disability of the Optionee, this Option may be exercised for
      six (6) months after Optionee's Continuous Status as an Employee or
      Consultant. In no event shall this Option be exercised later than the
      Term/Expiration Date as provided above.

<PAGE>

II. AGREEMENT

      1. Grant of Option. The Plan Administrator of the Company hereby grants to
the Optionee named in the Notice of Grant attached as Part I of this Agreement
(the "Optionee") an option (the "Option") to purchase the number of Shares, as
set forth in the Notice of Grant, at the exercise price per share set forth in
the Notice of Grant (the "Exercise Price"), subject to the terms and conditions
of the Plan, which is incorporated herein by reference. Subject to Section 13(b)
of the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.

      If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
this Option is intended to qualify as an Incentive Stock Option under Section
422 of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d)
it shall be treated as a Nonstatutory Stock Option ("NSO").

      2. Exercise of Option.

            (a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

            (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the President, the Chief Financial Officer or
Secretary of the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.

            No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

      3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee;

            (a) cash; or

            (b) check; or

            (c) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan; or

            (d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares; [or

            (e) with the Administrator's consent, delivery of Optionee's
promissory note (the "Note") in the form attached hereto as Exhibit C, in the
amount of the aggregate Exercise Price of the Exercised Shares together with the
execution and delivery by the Optionee of the Security Agreement attached hereto
as Exhibit B. The Note shall bear interest at the "applicable federal rate"
prescribed under the Code and its regulations at time of purchase, and shall be
secured by a pledge of the Shares purchased by the Note pursuant to the Security
Agreement.]

<PAGE>

      4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee; only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

      5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

      6. Tax Consequences. Some of the federal tax consequences relating to this
Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

            (a) Exercising the Option.

                  (i) Nonstatutory Stock Option. The Optionee may incur regular
federal income tax liability upon exercise of a NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their-aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect (from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

                  (ii) Incentive Stock Option. If this Option qualifies as an
ISO, the Optionee will have no regular federal income tax liability upon its
exercise, although the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price will be
treated as an adjustment to alternative minimum taxable income for federal tax
purposes and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee ceases to be an Employee but continues
to provide services to the Company, any Incentive Stock Option of the Optionee
that remains unexercised shall cease to qualify as an Incentive Stock Option and
will be treated for tax purposes as a Nonstatutory Stock Option on the date
three (3) months and one (1) day following such change of status.

            (b) Disposition of Shares.

                  (i) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes (holding the Shares for
more than eighteen (18) months may lower the long-term capital gains rate).

                  (ii) ISO. If the Optionee holds ISO Shares for at least one
year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income

<PAGE>

(taxable at ordinary income rates) to the extent of the excess, if any, of the
lesser of (A) the difference between he Fair Market Value of the Shares acquired
on the date of exercise and the aggregate Exercise Price, or (B) the difference
between the sale price of such Shares and the aggregate Exercise Price. Any
additional gain will be taxed as capital gain, short-term or long-term depending
on the period that the ISO Shares were held.

            (c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of:(i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

      7. Entire Agreement; Governing Law, The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirely all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.

      8.

NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER).

OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE
OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
RELATIONSHIP AS AN EMPLOYEE OR CONSULTANT AT ANY TIME, WITH OR WITHOUT CAUSE.

<PAGE>

      By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE:                                  NEUROCRINE BIOSCIENCES, INC.

______________________                          ________________________________
Signature                                       For Neurocrine Biosciences, Inc.

______________________                          ________
Date                                            Date

Name:

<PAGE>

                                CONSENT OF SPOUSE

      The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

                                                     ________________________
                                                        Spouse of Optionee

                                        6

<PAGE>

                                    EXHIBIT A

                          NEUROCRINE BIOSCIENCES, INC.

                             2003 STOCK OPTION PLAN

                                 EXERCISE NOTICE

Neurocrine Biosciences. Inc.
12790 El Camino Real
San Diego, CA 92130

Attention: Secretary

      1. Exercise of Option. Effective as of today,___________________,20__ ,
the undersigned ("Purchaser") hereby elects to) purchase ____________shares (the
"Shares") of the Common Stock of Neurocrine Biosciences, Inc. (the "Company")
under and pursuant to the 2003 Stock Option Plan (the "'Plan") and the Stock
Option Agreement dated _______________, 20______(the "Option Agreement"). The
purchase price for the Shares shall be $__________, as required by the Option
Agreement.

      2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

      3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

      4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 11 of the
Plan.

      5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

<PAGE>

Submitted by:                      Accepted by:

PURCHASER;                         NEUROCRINE BIOSCIENCES, INC.
______________________             ______________________
Signature                             By
______________________             ______________________
Print Name                            Its

Address:                           Address:

                                      Neurocrine Biosciences, Inc.
                                      12790 El. Camino Real
                                      San Diego, CA 92130
                                      __________________________________
                                      Date Received

<PAGE>

                                    EXHIBIT B

                               SECURITY AGREEMENT

      This Security Agreement is made as of_______________________,
20_____between Neurocrine Biosciences, Inc., a Delaware corporation, a
("Pledgee"), and___________________________________________("Pledgor").

                                    Recitals

      Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated______________________ (the "Option"), between Pledgor and
Pledgee under Pledgee's 2003 Stock Option Plan, and Pledgor's election under
the terms of the Option to pay for such shares with his promissory note (the
"Note"), Pledgor has purchased_____________________________shares of Pledgee's
Common Stock (the "Shares") at a price of $______________________per share, for
a total purchase price of $___________________. The Note and the obligations
thereunder are as set forth in Exhibit C to the Option

      NOW, THEREFORE, it is agreed as follows:

      1. Creation and Description of Security Interest. In consideration of the
transfer of the Shares to Pledgor under the Option Agreement, Pledgor, pursuant
to the California Commercial Code, hereby pledges all of such Shares (herein
sometimes referred to as the "Collateral") represented by certificate
number_____________________, duly endorsed in blank or with executed stock
powers, and herewith delivers said certificate to the Secretary of Pledgee
("Pledgeholder"), who shall hold said certificate subject to the terms and
conditions of this Security Agreement.

      The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.

      2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:

            a. Payment of Indebtedness. Pledgor will pay the principal sum of
the Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.

            b. Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.

            c. Margin Regulations. In the event that Pledgee's Common Stock is
now or later becomes margin listed by the Federal Reserve Board and Pledgee is
classified as a "lender" within the meaning of the regulations under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees to
cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.

      3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.

<PAGE>

      4. Stock Adjustments. In the event that during the term of the pledge any
stock dividend, reclassification, readjustment or other changes are declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor Pledgee and Pledgeholder shall
cooperate and execute such documents as arc reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include, the substituted shares of
capital stock of Pledgor as a result thereof.

      5. Options and Rights. In the event that, during the term of this pledge,
subscription Options or other rights or options shall be issued in connection
with the pledged Shares, such rights, Options and options shall be the property
of Pledgor and, if exercised by Pledgor, all new stock or other securities so
acquired by Pledgor as it relates to the pledged Shares then held by
Pledge-holder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.

      6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:

            a. Payment of principal or interest on the Note shall be delinquent
for a period of 10 days or more; or

            b. Pledgor fails to perform any of the covenants set forth in the
Option or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.

      In the case of an event of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the California
Commercial Code.

      7. Release of Collateral. Subject to any applicable contrary rules under
Regulation G, there shall be released from this pledge a portion of the Shares
held by Pledgeholder here-under upon payments of the principal of the Note. The
number of the pledged Shares which shall be released shall be that number of
full Shares which bears the same proportion to the initial number of Shares
pledged hereunder as the payment of principal bears to the initial full
principal amount of Note.

      8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.

      9. Term. The within pledge of Shares shall continue until the payment of
all indebtedness secured hereby, at which time the remaining pledged stock shall
be promptly delivered to Pledgor, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.

      10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

<PAGE>

      11. Pledgeholder Liability. In the absence of willful or gross negligence,
Pledgeholder shall not be liable to any party for any of his acts, or omissions
to act, as Pledgeholder.

      12. Invalidity of Particular Provisions, Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.

      13. Successors or Assigns. Pledgor and Pledgee agree that all of the terms
of this Security Agreement shall be binding on their respective successors and
assigns, and that the term "Pledgor" and the term "Pledgee" as used herein shall
be deemed to include, for all purposes, the respective designers, successors,
assigns, heirs, executors and administrators.

      14. Governing Law. This Security Agreement shall be interpreted and
governed under the internal substantive laws, but not the choice of law rules,
of California.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

"PLEDGOR"

                                                    ________________________
                                                    Signature

                                                    ________________________
                                                    Print Name

                                    Address:______________________________

                                                    ________________________

"PLEDGEE"                                Neurocrine Biosciences, Inc.,
                                               a Delaware corporation

                                                    ________________________
                                                    Signature

                                                    ________________________
                                                    Print Name

                                                    ________________________
                                                    Title

"PLEDGEHOLDER"

                                                    ________________________
                                                    Secretary of
                                                    Neurocrine Biosciences, Inc.

<PAGE>

                                    EXHIBIT C

                                      NOTE

$_______________________                                    SanDiego, California

                                                   _______________-______, 19,_.

      FOR VALUE RECEIVED,____________________________________ promises to pay to
Neurocrine Biosciences, Inc., a Delaware corporation (the "Company"), or order,
the principal sum of _,____________________($_____________________), together
with interest on the unpaid principal hereof from the date hereof at the rate
of_______________________________ percent (________%) per annum, compounded
semiannually.

      Principal and interest shall be due and payable on_______________________,
20_____. Payment of principal and interest shall be made in lawful money of the
United States of America.

      The undersigned may at any time prepay all or any portion of the principal
or interest owing hereunder.

      This Note is subject to the terms of the Option, dated as
of________________________________. This Note is secured in part by a pledge of
the Company's Common Stock under the terms of a Security Agreement of even date
herewith and is subject to all the provisions thereof.

      The holder of this Note shall have full recourse against the undersigned,
and shall not be required to proceed against the collateral securing this Note
in the event of default.

      In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.

      Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.

                                    ________________________

                                    ________________________