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                                                                   EXHIBIT 10.26

                                LICENSE AGREEMENT

THIS AGREEMENT is made as of December 14, 1994, by and between MGI PHARMA, INC.
("MGI"), 300E Opus Center, 9900 Bren Road East, Minneapolis, Minnesota
55343-9667, U.S.A. and KISSEI PHARMACEUTICAL CO., LTD. ("Kissei"), 19-48
Yoshino, Matsumoto, Nagano Prefecture 399, Japan.

                                    Recitals

A. MGI acquires, develops and markets pharmaceuticals that it believes address
currently unmet medical needs or significantly improve upon current therapies.

B. Kissei acquires, develops and markets ethical pharmaceutical products in
Japan and has established government-approved manufacturing facilities and
distribution channels throughout Japan for those purposes.

C. MGI has developed a pharmaceutical product utilizing Pilocarpine Drug
Substance (as hereinafter defined) as the active ingredient for certain medical
indications, has obtained U.S. Food and Drug Administration approval to market
such pharmaceutical product in the United States, and has acquired certain
exclusive rights in Japan to the supply of Pilocarpine Drug Substance for
non-topical use. MGI distributes a form of Pilocarpine Drug Substance in the
United States and elsewhere in the world in tablet form under the trademark
Salagen(R).

D. MGI and Kissei have previously entered into that certain Option Agreement
dated June 14, 1994 (the "Option Agreement"), under which MGI has granted
certain rights to Kissei and Kissei has made certain payments to MGI.

E. MGI desires to have this pharmaceutical product sold, promoted and
distributed in Japan, and Kissei desires to obtain rights to sell, promote and
distribute this pharmaceutical product in Japan, all upon the terms and
conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the Parties hereto have agreed as follows:

Article 1.0 INTRODUCTORY PROVISIONS

1.1 Defined Terms. The following terms, when used in capitalized form in this
Agreement, shall have the meanings set forth below:

     (a)  "Adverse Experience Data" shall mean all data concerning any serious
          or unexpected adverse effects, side-effects and contraindications of
          any Licensed Product which may come to the attention of either Party
          or of any permitted sublicensee of either Party and which, in the
          reasonable judgment of such Party or a permitted sublicensee of a
          Party, is of such a nature and magnitude that it is required under the
          laws of the United States or any country in the Territory to be
          collected, maintained and reported to a Competent Authority.
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     (b)  "Affiliate" when used with reference to either Party shall mean any
          corporation controlling, controlled by or under common control with,
          the said Party. For purposes hereof, "control" shall mean ownership,
          directly or indirectly, of more than fifty percent (50%) of the
          securities having the right to vote for the election of directors, in
          the case of a corporation, and more than fifty percent (50%) of the
          beneficial interest in the capital, in the case of a business entity
          other than a corporation.

     (c)  "Best Efforts" shall mean those efforts that would be made by a
          reasonably prudent business person acting in good faith and in the
          exercise of reasonable commercial judgment.

     (d)  "Competent Authority" shall mean the FDA in the United States, the PAB
          in Japan, or any other government agency responsible for the issuance
          of Marketing Authorizations, Pricing Approvals and/or Reimbursement
          Approvals for pharmaceutical products marketed in any other country in
          the world.

     (e)  "Confidential Information" shall mean all proprietary information,
          including Proprietary Product Information of a Party, including any
          information on the markets, customers, suppliers, patents or patent
          applications, inventions, products, procedures, designs, formulas,
          business plans, financial projections, organizations, employees or
          consultants or any other similar aspects of a Party's present or
          future business, the secrecy of which confers a competitive advantage
          upon that Party.

     (f)  "Drug Master File" shall mean Type II Drug Master File No. 8453 on
          file with the FDA, any supplementary or successor drug master file in
          respect of Pilocarpine Drug Substance that may hereafter be submitted
          by E. Merck to the FDA, or any corresponding drug master file or
          similar file in respect of Pilocarpine Drug Substance that may
          hereafter be submitted by E. Merck to any Competent Authority.

     (g)  "E. Merck" shall mean E. Merck Fine Chemicals Division, a German
          corporation, and EM Industries, Incorporated, a New York corporation,
          together with and representing their "Affiliates" as that term is
          defined in the E. Merck Agreement, and any and all successors to
          either of them as parties to the E. Merck Agreement.

     (h)  "E. Merck Agreement" shall mean that certain Supply and License
          Agreement dated as of March 19, 1992 between E. Merck and MGI, as the
          same may be amended from time to time in accordance with Section 14.2.

     (i)  "Effective Date" shall mean the date first above written.

     (j)  "FDA" shall mean the United States Food and Drug Administration.

     (k)  "Good Clinical Practices" shall mean (i) with respect to the United
          States, those procedures and practices approved by the FDA for the
          purpose of conducting clinical trials, pursuant to the Code of Federal
          Regulations, Title 21, and other

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          administrative interpretations and rulings in connection therewith;
          (ii) with respect to Japan, those procedures and practices approved by
          the PAB in Notification No. 874 and other administrative
          interpretations and rulings in connection therewith; and (iii) with
          respect to any country in the Territory other than Japan, any
          analogous or comparable rules and regulations.

     (l)  "Health Registration Dossier" shall mean all documentation which is
          now or shall hereafter be on file with the FDA, the PAB or any other
          Competent Authority in any country other than Japan in the Territory,
          which comprises the information and data submitted to such agency in
          support of an application made by either Party, or a permitted
          sublicensee of either Party, to such Competent Authority for Marketing
          Authorization for a Licensed Product to treat any Indication.

     (m)  "Indication" shall mean any medical condition or set of symptoms for
          the treatment of which a Licensed Product may be determined to be safe
          and efficacious.

     (n)  "Know-How" shall mean all information and data, regardless of form,
          which is necessary or useful to the manufacture of a Licensed Product
          or to the development or manufacture of dose forms or means of
          delivery of a Licensed Product, and which is owned, developed,
          acquired or otherwise licensable by either Party or any permitted
          sublicensee of either Party during the term of this Agreement.

     (o)  "Licensed Products" shall mean any pharmaceutical products having as
          an active ingredient Pilocarpine Drug Substance, either alone or in
          combination with other substances, whether or not such products are
          known or in existence on the Effective Date.

     (p)  "Marketing Authorization" shall mean any governmental approval from a
          Competent Authority which is legally required under applicable laws,
          regulations or administrative decisions to put a pharmaceutical
          product on the market in such country for use in the treatment of any
          Indication.

     (q)  "Net Sales Revenue" shall mean, in respect of any period of time, that
          amount which is the aggregate of the gross sale price of all Licensed
          Products sold by Kissei and/or its Affiliates, as well as those sold
          by all permitted sublicensees of Kissei and/or their Affiliates, to
          third parties other than their respective Affiliates, as reflected in
          invoices issued by all such sellers during that period of time, after
          deduction of (i) credits for returns, including withdrawals and
          recalls; (ii) sales rebates allowed or paid; (iii) commissions allowed
          or paid to third-party distributors which are not Affiliates of
          Kissei; (iv) cash, trade or volume discounts to the extent that the
          same are not reflected in the invoiced price; (v) sales, value-added
          and other taxes that are payable by the buyer and are included in the
          invoiced price; (vi) transportation and insurance costs that are
          payable by the buyer and related to such sales; and (vii) customs
          duties.

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     (r)  "PAB" shall mean the Pharmaceutical Affairs Bureau of the Japanese
          Ministry of Health and Welfare.

     (s)  "Party" shall mean either of the two parties to this Agreement and, to
          the extent appropriate when required by context, to any permitted
          sublicensees of a Party.

     (t)  "Patents" shall mean any and all patents under the laws of any country
          or countries which are owned, acquired or otherwise licensable by
          either Party or its permitted sublicensees during the term of this
          Agreement and which are necessary or useful (i) to the manufacture of
          the Licensed Products, (ii) to the development or manufacture of dose
          forms or means of delivery of the Licensed Products, or (iii) to the
          use of the Licensed Products in conjunction with other products.

     (u)  "Pilocarpine Drug Substance" shall mean naturally-occurring
          pilocarpine (which is derived primarily from the pilocarpus jaborandi
          and/or the pilocarpus microphyllus species of tropical shrubs),
          including derivative forms thereof such as, but not limited to,
          pilocarpine base, pilocarpine hydrochloride and pilocarpine nitrate.

     (v)  "Pivotal Trial" shall mean a human trial of a Licensed Product,
          conducted in accordance with a written protocol, which is designed to
          develop definitive, statistically analyzable, efficacy and safety data
          for submission to the FDA in the United States, the PAB in Japan
          and/or to any other Competent Authority in any country other than
          Japan in the Territory in support of an application for Marketing
          Authorization for that Licensed Product.

     (w)  "Pricing Approval" shall mean any governmental approval of the price
          at which it is intended that a particular pharmaceutical product is to
          be sold which is or shall hereafter be required under the laws,
          regulations or administrative decisions in effect in Japan or any
          other country in the Territory as a condition of the marketing of such
          product in that country.

     (x)  "Product Launch" shall mean the first commercial sale of the Licensed
          Products for resale or use in Japan or any other country in the
          Territory.

     (y)  "Proprietary Product Information" shall mean (i) all information and
          data now or hereafter contained in any Drug Master File or Health
          Registration Dossier to which either Party, or any permitted
          sublicensee of either Party, shall have the right under applicable
          law, regulations and administrative decisions to refer, to authorize
          third parties to refer and to prohibit third parties from referring,
          for purposes of any application for Marketing Authorization for any
          Licensed Product and (ii) all other information and data now or
          hereafter in existence which relates to the development, testing,
          manufacture, marketing or use of any Licensed Product which is
          incorporated in any Supporting Data and/or Adverse Experience Data and
          which is not in the public domain.

     (z)  "Reimbursement Approval" shall mean a decision to include a particular
          pharmaceutical product on a positive list of pharmaceutical products
          covered by

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          the national health insurance system in Japan or any other country in
          the Territory where such inclusion is a condition to the reimbursement
          of patients for the cost of such products as a part of the cost of
          medical treatment.

     (aa) "Sjogren's Indication" shall mean the treatment for part or all of the
          medical condition known as Sjogren's Syndrome.

     (bb) "Supporting Data" shall mean all data and information in the
          possession of either Party or any permitted sublicensee of a Party
          relating to (i) the pharmacological or toxicological properties of a
          Licensed Product, (ii) pre-clinical or clinical testing and experience
          in relation to a Licensed Product which is not included in any Health
          Registration Dossier and (iii) to the extent reasonably required for
          purposes of any application for Marketing Authorization, the chemical
          composition, manufacturing processes and quality control testing of a
          Licensed Product.

     (cc) "Territory" shall mean Japan only, unless otherwise expressly agreed
          in writing by the Parties.

     (dd) "Trademark" shall mean any of the trademarks used to market any
          Licensed Product in Japan or any other country in the Territory,
          whether or not such trademark is registered or otherwise protected
          under the laws of such country.

     (ee) "Xerostomia Indication" shall mean the medical condition known as
          post-radiation xerostomia.

1.2 Other Rules of Interpretation. Unless the context clearly indicates
otherwise, the following rules shall govern the interpretation of this
Agreement:

     (a)  The definitions of all terms defined herein shall apply equally to the
          singular, plural, and possessive forms of such terms;

     (b)  All references herein to "days" shall mean calendar days; and

     (c)  All references to "Sections" shall mean the corresponding Sections of
          this Agreement.

Article 2.0 WARRANTIES AND REPRESENTATIONS; LIMITATIONS

2.1 Limited Warranty. Each Party represents and warrants to the other Party
that:

     (a)  it has the legal right and power to enter into this Agreement;

     (b)  it has taken all necessary corporate action to authorize and perform
          this Agreement;

     (c)  it has not entered into any inconsistent prior obligations that would
          impair the rights being licensed to the other Party hereunder;

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     (d)  it owns or has the right to license all the rights granted to the
          other Party herein, including, without limitation, all information and
          data in any applicable Drug Master Files and/or Health Registration
          Dossiers which a Party may provide to the other Party under this
          Agreement; and

     (e)  it knows of no third party claims that would challenge or impair the
          license of the rights granted to the other Party herein, including,
          without limitation, any claims based upon patents, copyrights or trade
          secret laws in the United States or Japan.

2.2 LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN SECTION 2.1 ABOVE OR IN THE
EVENT OF A MATERIAL BREACH BY EITHER PARTY OF THE LIMITATIONS SET FORTH IN
ARTICLE 11.0 BELOW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOSS,
EXPENSE OR DAMAGE ARISING OUT OF OR RESULTING FROM THIS AGREEMENT. IN ANY EVENT,
NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL LOSS OR DAMAGES. IN THE EVENT OF ANY CLAIM FOR SUCH LOSS OR
DAMAGES, THE SOLE AND EXCLUSIVE REMEDY FOR ANY LIABILITY UNDER THIS AGREEMENT
SHALL BE LIMITED TO A REFUND OF ANY SUMS PAID AND/OR THE TERMINATION OF ANY
RIGHTS GRANTED UNDER THIS AGREEMENT.

Article 3.0 RIGHTS IN INTELLECTUAL PROPERTY

3.1 License to Kissei to Import, Market and Sell. MGI hereby grants to Kissei,
and Kissei hereby accepts from MGI, an exclusive, royalty-bearing right and
license under all of MGI's Know-How and Proprietary Product Information to apply
for Marketing Authorizations for Licensed Products in the Territory and to use,
develop (but not make), import, repackage, market, promote and sell Licensed
Products in the Territory for any Indications. The right and license granted
herein shall be further subject to the following terms and conditions:

     (a)  In applications for Marketing Authorization for Licensed Products in
          the Territory, Kissei may refer to documentation incorporating
          Proprietary Product Information as follows:

          (i)  Kissei may refer to and/or otherwise use the Drug Master File as
               well as any MGI Health Registration Dossier, provided, MGI has
               the lawful right to share such information with a third party and
               is not precluded from doing so under a confidentiality agreement;
               and

          (ii) Kissei may refer to any Supporting Data from the MGI Pivotal
               Trials in the United States for the Xerostomia Indication and the
               Sjogren's Indication.

     (b)  Kissei may use all Proprietary Product Information required to be
          provided by MGI pursuant to this Article 3.0 for the purpose of
          importing, developing (but not making), marketing, promoting and
          selling Licensed Products.

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     (c)  During the term of this Agreement, MGI shall not market, promote or
          sell Licensed Products within the Territory or license, supply or
          otherwise assist any third party to do so.

     (d)  Kissei may grant sublicenses of the above right and license to
          non-Affiliates subject to the following conditions but not otherwise:

          (i)  each proposed sublicensee shall be subject to MGI's prior written
               approval, which approval shall not be unreasonably withheld;

          (ii) each authorized sublicensee may market, sell and promote but may
               not make or have made the Licensed Products;

          (iii) Kissei must have entered into a written sublicense agreement
               with each such sublicensee in accordance with the obligations of
               Kissei under this Agreement, including but not limited to Article
               7.0, which sublicense agreement shall be in a form acceptable to
               MGI;

          (iv) No sublicense granted pursuant hereto shall include the right to
               grant further sublicenses;

          (v)  An MGI approval of a sublicense shall not relieve Kissei of its
               obligation to use its own Best Efforts to market, sell and
               promote the Licensed Products to the extent of its independent
               capabilities within the Territory or to pay MGI any royalties
               that would otherwise be due to MGI from Kissei under the
               provisions of Section 7.2; and

          (vi) Kissei hereby guarantees all payments of royalties to MGI due
               under the provisions of Section 7.2 by any permitted sublicensee
               of Kissei.

3.2 License of Grant-Back to MGI. Kissei (and any of its permitted sublicensees)
hereby grants to MGI, and MGI accepts from Kissei (and any of its permitted
sublicensees), an irrevocable, non-exclusive, royalty-free right and license
outside the Territory under:

     (a)  all Proprietary Product Information for any Indication developed by
          Kissei or its permitted sublicensees during the term of this
          Agreement; and

     (b)  all Patents and Know-How conceived and reduced to practice by Kissei
          or its permitted sublicensees during the term of this Agreement in
          connection with the use, sale or manufacture of Licensed Products,
          except for Patents and Know-How developed by Kissei or its permitted
          sublicensees without use of MGI Confidential Information, as shown by
          reasonable proof.

3.3 Conditions on Grant-Back License to MGI. The right and license to MGI in
Section 3.2 above is granted subject to the following terms and conditions:

     (a)  Such right and license shall include the right to refer, in any
          application for Marketing Authorization for the Licensed Products in
          respect of any country

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          outside the Territory, to any and all Health Registration Dossiers
          which Kissei may establish with any Competent Authorities in the
          Territory;

     (b)  Such right and license shall also include the right to sublicense
          MGI's permitted sublicensees outside the Territory; and

     (c)  Nothing in this Section 3.3 shall impose upon Kissei or its permitted
          sublicensees any disclosure obligations with respect to Proprietary
          Product Information, Patents or Know-How other than those expressly
          set forth in this Agreement.

3.4 MGI Health Registration Dossiers. MGI shall provide to Kissei, if it has not
already done so during the term of the Option Agreement, a copy in English of
any documentation contained in or prepared for MGI's Health Registration Dossier
for the Xerostomia Indication, within thirty (30) days after the Effective Date.
MGI shall also provide a copy in English of any new documentation which is added
to the Health Registration Dossier after the Effective Date within thirty (30)
days after the date on which MGI submits such documentation to the FDA or other
Competent Authority, subject to the provisions of Section 3.6(b). In addition,
if any information contained in the Drug Master File is required to be furnished
by Kissei to any Competent Authority in the Territory, MGI shall also provide
such information (or cause such information to be submitted to such Competent
Authority with the appropriate right to reference) to Kissei, subject to the
terms and conditions of the E. Merck Agreement.

3.5 Kissei Health Registration Dossiers. Kissei shall provide MGI with a
complete copy of the Health Registration Dossier for any Indication, or any
amendment or supplement thereto, immediately upon filing of the Health
Registration Dossier with the PAB or other Competent Authority in the Territory,
in the language it is written in for filing. Within sixty (60) days after such
submission (except if an earlier time frame is provided in Section 3.6(b)),
Kissei shall provide MGI with a copy in English of (i) a summary of such Health
Registration Dossier and (ii) a list of sections of the Health Registration
Dossier which are contained within the Health Registration Dossier. MGI shall
determine the priority of translation into English of the various sections of
such Health Registration Dossier, or amendment or supplement thereto. Kissei
shall thereafter have the Health Registration Dossier, or amendment or
supplement thereto, translated into English according to the priority
established by MGI and shall provide MGI with a copy of such English translation
as soon as practicable. If MGI determines at any time that a particular section
of such Health Registration Dossier, or amendment or supplement thereto, is
needed on an accelerated basis, the Parties shall work together to revise the
translation schedule to accommodate MGI's needs as the Parties shall mutually
agree.

3.6 Other Information and Data. In accordance with the following provisions,
each Party shall provide to the other Party complete and accurate copies of all
documentation containing Supporting Data and Adverse Experience Data relating to
any Licensed Product which is prepared or acquired by such Party or any of its
respective permitted sublicensees during the term of this Agreement:

     (a)  Copies of Supporting Data in English shall be forwarded by Federal
          Express or other equivalent courier service as soon as practicable
          after it has been prepared or acquired, but, in any case, Kissei shall
          provide a summary in English thereof

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          no later than sixty (60) days after such preparation or acquisition
          and the provisions for translation set forth in Section 3.5 shall
          apply to information provided herein; and

     (b)  Copies of Adverse Experience Data in English shall be forwarded by
          facsimile with a duplicate by Federal Express or other equivalent
          courier service as quickly as may be necessary to permit the recipient
          to comply with any applicable legal requirements and in no event later
          than the earlier of (i) fifteen (15) working days after such Adverse
          Experience Data has been prepared or acquired and translated into
          English or (ii) the date on which such Adverse Experience Data is
          provided to any Competent Authority anywhere in the world, but, in any
          case, no later than thirty (30) days after such preparation or
          acquisition, or within such other time frame as may be mutually agreed
          to by the Parties in writing. The Parties shall consult and agree on
          the form of such reporting of Adverse Experience Data by each Party to
          the other. The Parties shall cooperate to accelerate the reporting
          requirements of this provision in the event that the any relevant
          Competent Authority requires accelerated reporting of such Adverse
          Experience Data in the future.

3.7 Other MGI Products. MGI hereby grants to Kissei, and Kissei hereby accepts
from MGI, a right of first offer to make, promote, sell and distribute in the
Territory any other pharmaceutical products developed by or for MGI, whether
made from Pilocarpine Drug Substance or not, which are intended for any of the
same Indications as the Licensed Products. Any such additional grant of rights
shall be subject to the negotiation of mutually acceptable terms and conditions,
including, without limitation, the payment of additional upfront fees to MGI.
MGI shall notify Kissei in writing about any such proposed pharmaceutical
product and its availability to Kissei hereunder. If MGI and Kissei have not
reached substantial agreement on mutually acceptable terms and conditions within
thirty (30) days of receipt of such notice, MGI shall then be free to offer such
product to any other party in the Territory.

Article 4.0 TRADEMARK

4.1 Salagen(R) and other MGI Marks. The Parties hereby acknowledge that the mark
"Salagen" is not available in Japan and is therefore not licensed by MGI to
Kissei under this Agreement for purposes of marketing any Licensed Product in
the Territory. Kissei acknowledges that nothing in this Agreement shall
constitute a grant of any license or right in or to any trademarks, trade names
or logotypes owned by MGI other than the Trademarks.

4.2 Trademark Selection and Registration. The Parties shall promptly meet and
confer to select one or more suitable Trademarks to be used by Kissei under this
Agreement for purposes of marketing any Licensed Product in the Territory. Prior
to such meeting, Kissei shall use its best efforts to identify a trademark or
trademarks that it wishes to use in connection with the marketing of Licensed
Products in the Territory, which Kissei shall have determined to be, to the best
of Kissei's knowledge after reasonable inquiry, free of conflict with any other
trademark of a third party in the Territory. MGI shall be the sole and exclusive
owner of any such Trademarks and shall control any such registration in any
jurisdictions in the Territory where there are no conflicting trademarks,
provided:

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     (a)  MGI shall be responsible for all reasonable expenses, including
          attorney's fees, in registering or otherwise protecting such
          Trademarks in the Territory;

     (b)  MGI may request Kissei's reasonable assistance in making any
          registration of a Trademark in Japan;

     (c)  In the event a conflicting mark is discovered in a jurisdiction within
          the Territory, the Parties shall consult with each other in regard to
          an appropriate resolution. Kissei shall cooperate with MGI in
          resolving such conflict, including reasonable attorney's fees,
          provided, that, MGI shall have the sole and unfettered ability to
          abandon a trademark application if MGI's determines that the cost of
          resolving such conflict is unreasonable;

     (d)  MGI shall notify Kissei at least thirty (30) days prior to abandoning
          a trademark application to allow Kissei to pursue such registration if
          it so chooses, subject to such special arrangements as the Parties may
          agree; and

     (e)  If MGI considers it desirable, for defensive reasons, to effect any
          filing or obtain any governmental approval or sanction for the use of
          a Trademark in any jurisdiction of the Territory, the Parties shall
          consult with each other in regard thereto.

4.3 Trademark License Grant. MGI hereby grants to Kissei, and Kissei hereby
accepts from MGI, an exclusive, royalty-free right and license, during the term
of this Agreement, to reproduce and use any Trademark in connection with the
marketing, promotion, advertising and sale or other distribution of the Licensed
Products within the Territory and for no other purpose. Kissei may sublicense
such right and license to use any Trademark to any permitted sublicensee if such
sublicensee agrees in writing to be bound the terms and conditions of this
Article 4.0. Immediately upon termination of this Agreement, Kissei shall cease
and desist from use of any Trademark in any manner, other than to liquidate its
then-existing inventory of Licensed Products within ninety (90) days of such
termination. Kissei hereby grants to MGI, in the event of such termination, full
power of attorney, with the right of substitution, to cancel, revoke or withdraw
any governmental registration or authorization permitting Kissei to use any
Trademark in the Territory, and Kissei shall provide such further documentation
and assistance as MGI may reasonably request in connection therewith.

4.4 Quality Standards. Any Trademark shall be used only on or in connection with
the sale of Licensed Products manufactured and sold in accordance with this
Agreement. Any Licensed Product sold under a Trademark by Kissei or a permitted
sublicensee shall be subject to the following restrictions:

     (a)  The marking or packaging of any Licensed Product shall comply with all
          applicable laws, regulations and governmental requirements of the
          jurisdictions in which such Licensed Product is manufactured and sold;

     (b)  Whenever and wherever legally permissible in the Territory, all
          packages in which a Licensed Product is to be sold to consumers shall
          bear a prominent legend in a form approved by MGI and in Japanese or
          other official languages in

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          the Territory as are appropriate, stating that such Licensed Product
          is "Sold by [Kissei or permitted sublicensee] under license from MGI
          PHARMA, INC., Minneapolis, Minnesota, USA";

     (c)  To the extent consistent with the foregoing paragraph (a), MGI may
          establish reasonable standards, after consultation with Kissei and
          consistent with the rules and regulations of the PAB, for the marking
          and packaging of Licensed Products and use of a Trademark, which
          standards shall be provided to Kissei in writing as soon as feasible
          and in any event prior to the filing by Kissei of the first
          application for Marketing Authorization of such Licensed Product in
          the Territory. MGI may also make reasonable changes, consistent with
          the rules and regulations of the PAB, to such standards, provided that
          MGI shall give at least thirty (30) days notice to Kissei prior to the
          implementation of such changes. MGI and Kissei will mutually discuss
          any proposed changes in MGI's quality standards under this Section
          4.4(c), and MGI will agree to such reasonable modifications to such
          proposed changes, as Kissei may suggest as being necessary in
          connection with the marketing of a Licensed Product in the Territory;

     (d)  Upon request by MGI, Kissei shall provide MGI with samples of any
          brochures, professional literature, packaging and consumer
          instructions which are created or intended for use by Kissei or any of
          its Affiliates in the advertising, promotion, marketing or sale of a
          Licensed Product bearing a Trademark to verify compliance with MGI's
          trademark standards. If such materials are in any language other than
          English, Kissei shall also supply a true and accurate translation
          thereof in the English language to facilitate MGI's review thereof,
          provided, however, Kissei shall be solely and exclusively responsible
          for any errors or omissions in such non-English materials,
          notwithstanding any such review by MGI. Kissei shall also permit MGI,
          upon reasonable notice and at times reasonably acceptable to Kissei,
          to examine any stocks of Licensed Products held by Kissei or any
          permitted sublicensees to verify compliance with MGI's trademark
          standards;

     (e)  If MGI notifies Kissei in writing of any non-conformity with MGI's
          standards in the use of a Trademark, Kissei shall promptly take all
          reasonable steps or measures, at Kissei's sole cost and expense,
          necessary to ensure that such use complies with MGI's standards; and

     (f)  Neither Kissei nor its permitted sublicensees may use a Trademark in
          combination with any other trademark or trade name.

4.5 Reservation of Rights. Kissei acknowledges MGI's proprietary rights in and
to any Trademark, subject to the license and right granted in Section 4.3.
Kissei shall not adopt, use or register any words, phrases or symbols which are
identical to or confusingly similar to any Trademark and shall not use any
Trademark as part of its corporate or trade name or permit any third party to do
so.

                                      -11-
<PAGE>

4.6 Infringements. Kissei shall promptly notify MGI of any use in the Territory
by any third party of any Trademark or of any similar mark which may constitute
an infringement or passing off of a Trademark. MGI shall have the exclusive
right, at its option, to institute proceedings against third-party infringers in
respect of infringements occurring in the Territory. If MGI elects not to
institute such proceedings within a period of thirty (30) days after
notification of the alleged infringement, Kissei shall have the option to do so,
and MGI shall thereafter refrain from doing so. MGI shall have the exclusive
right in its sole discretion to institute proceedings against third-party
infringers in respect of infringements occurring outside the Territory. Each
Party shall cooperate fully with the other Party in connection with any such
proceedings against third-party infringers of the Trademarks in the Territory
provided that all expenses of such proceedings shall be borne by the Party
instituting same and all damages which may be awarded or agreed upon in
settlement of such action shall accrue to such Party.

Article 5.0 PRODUCT REGULATORY APPROVALS

5.1 Regulatory Approvals. Kissei shall submit all applications and Supporting
Data and information to obtain Marketing Authorizations, Pricing Approvals and
Reimbursement Approvals required for the marketing, promotion and sale of any
Licensed Product in the Territory and shall use its Best Efforts, in
consultation with MGI, promptly to obtain such Marketing Authorizations, Pricing
Approvals and Reimbursement Approvals. Such responsibility shall include the
conduct and documentation of such testing and clinical trials as are required in
connection with the submission of applications for Marketing Authorization
within the Territory.

5.2 Kissei's Regulatory Responsibilities. In Kissei's performance of its duties
under Section 5.1 above, the following terms and conditions shall apply:

     (a)  Kissei shall use its Best Efforts to ensure that the first Health
          Registration Dossier for a Licensed Product is submitted to the PAB in
          Japan not later than January 31, 2000. Notwithstanding Kissei's Best
          Efforts, if the submission of such Health Registration Dossier in
          Japan is delayed beyond such date, the Parties shall consult with one
          another on modification of such date. In the event that the submission
          of such Health Registration Dossier in Japan is delayed more than
          twelve (12) months beyond such date, and for so long thereafter as
          such delay shall continue, MGI may elect to terminate this Agreement
          pursuant to Section 12.2, regardless of whether the delay is due to
          Kissei's fault or not.

     (b)  Because MGI's ability to assure exclusive rights to Pilocarpine Drug
          Substance for Kissei in Japan during the term of this Agreement is
          dependent on obtaining Marketing Authorization in the Territory by the
          end of August, 2002, pursuant to the terms of the E. Merck Agreement,
          Kissei shall use its Best Efforts to obtain Marketing Authorization
          for a Licensed Product in Japan at the earliest date possible, based
          on the following development schedule:

          Conduct of Early Phase II trials        October 1995 to October 1996
          Conduct of Late Phase II trials         April 1997 to March 1998
          Conduct of Phase III trials             June 1998 to June 1999

                                      -12-
<PAGE>

          Long-term experience                    April 1997 to June 1999
          Filing of Health Registration Dossier   December 1999 to January 2000

          At the conclusion of the Early Phase II trials, the Parties shall meet
          to review the development schedule and to determine whether the
          schedule, as set forth above, can be accelerated to achieve an earlier
          date for filing of the Health Registration Dossier with the PAB or if
          the time frame for review of the Health Registration Dossier by the
          PAB is different from the 32 month time-period anticipated at the time
          of signing of this Agreement. If the Parties determine that the
          development schedule cannot be accelerated and that the review period
          for the Health Registration Dossier by the PAB is not likely to be
          significantly shorter than the period set forth in this subsection,
          then the Parties will cooperate and use their Best Efforts to approach
          E. Merck regarding extension of the exclusive supply provisions of the
          E. Merck Agreement as such provisions apply to the Territory.

     (c)  Kissei shall use its Best Efforts to achieve the Product Launch of a
          Licensed Product in Japan within six (6) months after Kissei's receipt
          of Marketing Authorization and any required Pricing Approval and/or
          Reimbursement Authorization. Notwithstanding Kissei's Best Efforts, if
          Kissei fails to achieve the Product Launch by that date, MGI may elect
          to terminate this Agreement pursuant to Section 12.2, provided,
          however, the foregoing shall not apply if such delay is solely due to
          MGI's failure to supply Licensed Product to Kissei under the Supply
          Agreement, of even date herewith, between the Parties (the "Supply
          Agreement").

     (d)  In the event that the Territory is expanded to include countries in
          addition to Japan as provided in Section 1.1(cc) of this Agreement,
          Kissei shall use its Best Efforts to ensure that Marketing
          Authorization for a Licensed Product is granted in each country in the
          expanded Territory within the time frames negotiated in good faith by
          both Parties at the time of expansion of the Territory and that a
          Product Launch in each such country in the Territory other than Japan
          occurs within six (6) months after receipt of Marketing Authorization
          and of any required Pricing Approval and/or Reimbursement Approval in,
          such country. Notwithstanding Kissei's Best Efforts, if Kissei fails
          to receive Marketing Authorization or achieve the Product Launch
          within the time frames specified in this Section 5.2(d) or agreed to
          hereunder, MGI may elect to terminate this Agreement as to that
          country only pursuant to Section 12.2, provided, however, the
          foregoing shall not apply if such delay is solely due to MGI's failure
          to supply Licensed Product to Kissei under the Supply Agreement.

     (e)  Except as provided in Section 5.3 below, Kissei shall bear all its own
          costs and expenses to register, market and promote Licensed Products
          in accordance with the provisions herein.

5.3 Mutual Assistance. Each Party shall use its Best Efforts to provide such
assistance as the other Party shall reasonably request for purposes of obtaining
Marketing Authorizations, Pricing

                                      -13-
<PAGE>

Approvals and Reimbursement Approvals for the Licensed Products, in accordance
with the following provisions:

     (a)  Each Party shall use its Best Efforts to make its personnel available,
          either in person or by telephone, for reasonable periods of time and
          subject to the availability of such personnel, to advise the other
          Party in connection with its applications for Marketing Authorization
          for the Licensed Products. Where such assistance will require travel
          of the Party requested to provide such assistance, the requesting
          Party shall notify the other Party of such need at least thirty (30)
          days in advance of the day on which it desires such personnel, unless
          unusual or emergency circumstances arise that make such notice
          unfeasible;

     (b)  Each Party shall collaborate with and assist the other Party in
          interpretation of any Health Registration Dossier or other Supporting
          Data provided by either Party to the other, (ii) review of regulatory
          documentation and submissions prepared by the other Party and (iii)
          obtaining of cooperation from third parties as needed in connection
          with the foregoing;

     (c)  Each Party shall promptly notify and share with the other Part any
          Adverse Experience Data as provided in Section 3.6(b); and

     (d)  Each Party shall bear the cost and expenses of its own personnel
          engaged in the foregoing cooperative efforts. However, it is the
          intent of the Parties that the scope and duration of such efforts
          shall not be such as to require the hiring of additional personnel or
          as to conflict with the efficient operation of either Party's other
          business or to be borne unevenly (given the anticipated relative
          contributions of the Parties). In the event that more extensive
          cooperation may be required than can be achieved in a manner
          consistent with these criteria, the Parties will jointly consider
          possible cost-sharing or other mutually-beneficial solutions.

5.4 Inspections. Kissei shall cooperate with any inspection by MGI of Kissei's
distribution or storage facilities for the Licensed Products in the Territory
and, at no cost to MGI, shall furnish (and shall cause Kissei's permitted
sublicensees to furnish) adequate and representative samples of such Licensed
Products from time to time to enable MGI to verify that the Licensed Products
are being sold in accordance with MGI's quality standards (consistent with the
requirements of the PAB) for such products. In addition, Kissei shall furnish
copies of any internal quality assurance or other related documentation that are
reasonably requested by MGI for such purposes.

Article 6.0 PROMOTION AND MARKETING

6.1 General Best Efforts Obligation. Kissei shall commit adequate funding and
use its Best Efforts, comparable to those that it devotes to other products with
similar potential, to fund and support Product Launch and ongoing promotion,
marketing and sale of Licensed Products. Representatives of Kissei and MGI shall
meet from time to time, at least on an annual basis, at such place as the
Parties shall mutually agree, to discuss Kissei's and MGI's respective

                                      -14-
<PAGE>

promotional and marketing efforts relating to the Licensed Products in the
Territory and in the United States.

6.2 Compliance with Law. Kissei shall market, promote and sell the Licensed
Products in compliance with the conditions and requirements of all applicable
Marketing Authorizations, Pricing Approvals and Reimbursement Approvals and with
all other applicable legal and regulatory requirements in the Territory.

6.3 Trade Shows, Product Fairs, Etc. Kissei shall attend any medical or
pharmaceutical conventions, trade shows, product fairs or other comparable
events in the Territory, to the extent that Kissei judges them to be suitable
and rewarding for purposes of promoting Licensed Products and where it would be
normal and customary to display and promote ethical pharmaceuticals of the type
and nature of a Licensed Product, and shall feature the Licensed Products at
such events in such manner as it devotes to other Kissei products with similar
potential.

6.4 Advertising. In compliance with applicable laws or regulations, Kissei shall
advertise the Licensed Products in such medical or pharmaceutical journals and
similar publications where it would be normal and customary to display and
promote ethical pharmaceuticals of the type and nature of a Licensed Product,
and shall feature the Licensed Products in such publications in such manner as
it devotes to other Kissei products with similar potential.

Article 7.0 LICENSE ISSUE FEE AND ROYALTIES

7.1 License Issue Fee. Kissei shall pay a total of Two Million Five Hundred
Thousand Dollars (US $2,500,000) to MGI as a license issue fee ("License Issue
Fee"), which payment shall be made in three (3) installments ("Milestone
Payments") as follows:

     (a)  The first Milestone Payment of Eight Hundred and Forty Thousand
          Dollars (US $840,000) shall be due and payable upon execution of this
          Agreement by the Parties, subject to a credit of One Hundred
          Twenty-Five Thousand Dollars (US $125,000) for Kissei's payments to
          MGI under the Option Agreement;

     (b)  the second Milestone Payment of Eight Hundred and Thirty Thousand
          Dollars (US $830,000) shall be due and payable upon the earlier of (i)
          the date of Kissei's commencement of the first Pivotal Trial for a
          Licensed Product for any Indication in Japan or (ii) within ten (10)
          days of the date on which Kissei determines no such Pivotal Trials are
          required in Japan due to the sufficiency of information in MGI's
          Health Registration Dossier or Supporting Data or otherwise; and

     (c)  the third Milestone Payment of Eight Hundred and Thirty Thousand
          Dollars (US $830,000) shall be due and payable upon the date of
          Kissei's submission of the initial Health Registration Dossier for a
          Licensed Product to the PAB in Japan.

7.2 Royalties. In addition to the License Issue Fee under Section 7.1 above,
Kissei shall pay to MGI the following:

                                      -15-
<PAGE>

     (a)  Royalties equal to *** of Net Sales Revenue on all Licensed Products
          sold by Kissei and/or its permitted sublicensees to third parties but
          exclusive of sales or other transfers made by Kissei to its Affiliates
          or permitted sublicensees ("Product Royalties").

     (b)  As a condition of maintaining the license granted under this
          Agreement, Kissei shall be required to pay to MGI Annual Minimum
          Royalties in amounts not less than shown below for the following
          periods:

          Year                                        Annual Minimum Royalty
          Year 1                                      ***
          Year 2                                      ***
          Year 3                                      ***
          Year 4 and thereafter                       ***

     (c)  At the conclusion of the Early Phase II trials, as set forth in
          Section 5.2(b) of this Agreement, the Parties shall meet to review the
          Annual Minimum Royalties set forth in Section 7.2(b) and to evaluate
          whether the Annual Minimum Royalties should be adjusted either upward
          or downward. In evaluating the marketing model, the Parties shall
          consider assumptions relating to pricing of Licensed Products in the
          Territory, patient population and market penetration. Following
          receipt of Marketing Authorization, Kissei may request a meeting with
          MGI to further evaluate the appropriateness of the Annual Minimum
          Royalties, as in effect at such time, if the marketing model referred
          to in this Section 7.2(c) is different from the model on which the
          Annual Minimum Royalties were based. In addition, the Parties agree to
          evaluate the appropriateness of the Annual Minimum Royalties if at any
          time following launch of a Licensed Product in the Territory, the PAB
          takes action to and does reduce the price that Kissei may charge for a
          Licensed Product.

     (d)  "Year" for purposes of Section 7.2 shall mean the calendar year in
          which Kissei's first sale of a Licensed Product occurs in the
          Territory and each succeeding calendar year during the term of this
          Agreement.

     (e)  The Annual Minimum Royalties shall be payable until a generic product
          directly competing with the Licensed Product(s) is introduced for sale
          in the Territory. The Annual Minimum Royalty for Year 1 shall be
          prorated based on the number of months remaining in the calendar year
          following the first sale of a Licensed Product. The Annual Minimum
          Royalty shall be payable no later than February 15 of the year
          following the year for which the Annual Minimum Royalty is due; any
          Product Royalties actually paid to MGI under the provisions of Section
          7.2(a) shall be used to offset the Annual Minimum Royalty due under
          Section 7.2(b).

     (f)  The Annual Minimum Royalty payable under the terms of Section 7.2(b)
          shall be payable for any year in which a sale of a Licensed Product
          occurs in the Territory despite the fact that this Agreement may be
          terminated by either Party prior to the due date for payment of the
          Annual Minimum Royalty under the provisions of

*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.

                                      -16-
<PAGE>

          Section 7.2(d). The amount of the Annual Minimum Royalty due for such
          year shall be prorated based on the number of months of the year that
          the Agreement is in effect before termination.

7.3 Payments and Reports. Kissei shall pay the Product Royalties to MGI by wire
transfer on a quarterly basis on or before forty-fifth (45th) day after the end
of each calendar quarter during the term of this Agreement and shall
simultaneously provide to MGI a report which shows the Net Sales Revenue and the
calculation of the Product Royalties payable for such quarter by Licensed
Product and by country in the Territory. Kissei shall bear all wire transfer or
other applicable bank charges for such payments.

7.4 Exchange Rates. All royalties due under the provisions of Section 7.2(a)
shall be paid to MGI in U.S. Dollars or Japanese Yen. If paid in U.S. Dollars,
the currency rate conversions from Japanese yen to U.S. Dollars shall be based
on the average (arithmetic mean) of the exchange rates published for Japanese
yen and U.S. Dollars in the Wall Street Journal on the Monday and the Friday of
the week preceding the payment due date or, if any such Monday or Friday is not
a day on which the Wall Street journal is published, on the next regular
publication day thereof following such day. The Annual Minimum Royalties payable
under the provisions of Section 7.2(b) shall be paid to MGI in U.S. Dollars. For
purposes of the payment of the Annual Minimum Royalties under Section 7.2(b)
only the currency rate conversion of Yen to Dollars is to be deemed to be 100
Yen for $1.00 at the time of execution of this Agreement. In the event that, at
the time of payment of the Annual Minimum Royalties in any year, the currency
rate conversion of Yen to Dollars has varied more than ten percent (10%) either
up or down, then Kissei shall be entitled to the benefit of ninety percent (90%)
of the currency rate conversion differential in excess of the ten percent (10%)
change in determining the Annual Minimum Royalties due to MGI in such year.
Determination of the exchange rates for purposes of the Annual Minimum Royalties
shall be based on the average (arithmetic mean) of the exchange rates published
for Japanese yen and U.S. Dollars in the Wall Street Journal on the Monday and
the Friday of the week preceding the payment due date for the Annual Minimum
Royalties or, if any such Monday or Friday is not a day on which the Wall Street
Journal is published, on the next regular publication day thereof following such
day.

7.5 Books and Records. Kissei shall keep adequate and complete books and records
showing all Licensed Products sold by Kissei and its permitted sublicensees with
respect to which Product Royalties are due MGI hereunder. Such books and records
shall include all information necessary to verify the total amount and
computation of the Product Royalties hereunder, and shall be open to inspection,
audit and copying by MGI or its agents during reasonable business hours and upon
reasonable notice to the extent necessary to verify the amount of such Product
Royalties. Such inspection, audit and copying may be conducted at the expense of
MGI by an independent Certified Public Accountant or other agent appointed by
MGI and reasonably acceptable to Kissei, provided, however, Kissei shall
reimburse MGI its reasonable expenses incurred in such inspection and audit if
they reveal any underpayment of Product Royalties owed to MGI of more than Ten
Thousand Dollars (US $10,000) or five percent (5%), whichever is greater, for
any quarter covered by such inspection and audit. MGI shall cause such
independent Certified Public Accountant or other agent appointed by MGI to
maintain as confidential any information it has gained during the auditing of
Kissei's books and records and shall not disclose or use such information for
any purpose except as provided in this Section 7.5.

                                      -17-
<PAGE>

7.6 Withholding. With respect to any income taxes in the Territory applicable to
the License Issue Fee or the royalties payable to MGI under the provisions of
Section 7.2, including, without limitation, Japanese income taxes under the
U.S.-Japan Income Tax Treaty,

     (a)  MGI shall pay such income taxes and hereby authorizes Kissei to
          withhold such taxes from the applicable payments due to MGI under this
          Agreement and to pay such withheld amounts to the relevant tax
          authorities within the Territory; and

     (b)  whenever Kissei withholds and pays such income taxes from any payments
          due to MGI under this Agreement, it shall furnish MGI with a
          certificate of the relevant tax authorities within the Territory, in a
          form issued by such tax authorities and reasonably acceptable to the
          U.S. Internal Revenue Service, documenting payment of such taxes.

7.7 Net Payments. Except as expressly provided in Section 7.6 above, all
payments by Kissei to MGI under this Agreement represent the net amounts that
MGI is entitled to receive and shall not be subject to any other withholding or
deduction for any reason whatsoever.

7.8 Interest. If any payment owed to MGI under this Agreement is overdue, in
whole or in part, interest shall accrue on such overdue amount at the rate of
eighteen percent (18%) per annum or the legal rate of interest, whichever is
lower.

7.9 Currency Controls. If Kissei is precluded at any time from paying any
Milestone Payment or royalties due to MGI under the provisions of Section 7.2
because Kissei has failed, notwithstanding its Best Efforts, to obtain any
governmental approvals that may be required under the laws and regulations of
any jurisdiction in the Territory for such transfers of funds, then Kissei
shall:

     (a)  deposit, or cause its agent to deposit, such sums to the account of
          MGI at a bank within such jurisdiction designated by MGI;

     (b)  provide, or cause its agent to provide, to MGI documentary evidence of
          such deposits; and

     (c)  remit such deposits to MGI immediately upon the subsequent receipt of
          any required governmental approvals for such transfers.

Article 8.0 INDEMNIFICATION

8.1 Product Liability Claims. Each of the Parties shall indemnify and hold
harmless the other Party and its Affiliates from and against all liabilities,
damages, losses, costs and expenses (including reasonable attorneys' fees)
arising out of claims, suits or proceedings brought by third parties wherein it
is alleged that personal injury or death has resulted from use of the Bulk
Finished Product marketed by Kissei in the Territory, as follows:

     (a)  MGI shall indemnify and hold harmless Kissei, its Affiliates, if and
          to the extent that any such claim, suit or proceeding is based upon
          (i) negligence, gross negligence or willful misconduct of or
          attributable to MGI in connection with the

                                      -18-
<PAGE>

          conduct of pre-clinical or clinical testing of any Bulk Finished
          Product; (ii) negligence, gross negligence or willful misconduct of or
          attributable to MGI, E. Merck, or any contractor of MGI in the
          manufacture of any Bulk Finished Product supplied by MGI to Kissei;
          (iii) failure of any Bulk Finished Product supplied by MGI to Kissei
          to conform to the Product Release Specifications for such Bulk
          Finished Product or to comply with the warranties as set forth in this
          Agreement or the Supply Agreement or with applicable laws, regulations
          or administrative decisions; or (iv) failure of MGI to comply with any
          provision of this Agreement or of the Supply Agreement or with any
          applicable laws, regulations and/or administrative decisions relating
          to the Bulk Finished Product; or otherwise arises from the sale or
          provision of any Bulk Finished Product by MGI to any third party,
          except to the extent subject to indemnification by Kissei pursuant to
          Section 8.1(b).

     (b)  Kissei shall indemnify and hold harmless MGI and its Affiliates, if
          and to the extent that any such claim, suit or proceeding is based
          upon negligence, gross negligence or willful misconduct of or
          attributable to Kissei in the promotion, marketing, packaging,
          labeling or sale of any Bulk Finished Product, whether or not supplied
          by MGI, or failure of Kissei to comply with any provision of this
          Agreement or of the Supply Agreement or with any applicable laws,
          regulations and/or administrative decisions relating to the Bulk
          Finished Product; or otherwise arises from the sale or provision of
          any Bulk Finished Product by Kissei to any third party, except to the
          extent subject to indemnification by MGI pursuant to Section 8.1(a).

     (c)  Whenever either Party shall become aware of a claim, suit or
          proceeding in respect of which such Party and its Affiliates shall be
          entitled to indemnification under the provisions of this Agreement,
          such Party shall give notice in writing to the other Party, shall
          permit the other Party to assume exclusive control of the defense or
          settlement of the matter, and shall provide, at the expense of the
          other Party, all authority, information and assistance which the other
          Party shall reasonably request for purposes of such defense. If a
          single law firm engaged by the indemnified Party would be subject to
          any material conflict of interest in representing one or more of such
          Parties, the indemnified Party shall not be required to waive such
          conflict and may, instead, request separate representation by an
          independent law firm at the expense of the indemnifying Party. An
          indemnified Party may engage its own counsel, at its own expense, to
          monitor the defense of any such matter.

     (d)  The following definitions shall apply to this Section 8.1:

          "Bulk Finished Product" shall mean Licensed Products in the form of
          finished tablets not packaged or labeled for distribution or resale.

          "Product Release Specification" shall mean the analytical
          (chemical/physical) product quality specification for the Bulk
          Finished Product as established by mutual agreement of the Parties
          from time to time.

                                      -19-
<PAGE>

8.2 Further Indemnification. Notwithstanding any other provision hereof, each
Party hereby indemnifies and holds harmless the other Party from and against any
loss, liability, damage or expense (including reasonable attorney's fees) which
the other Party may suffer or sustain as a direct and proximate result of:

     (a)  any gross negligence or willful misconduct on the part of employees or
          agents of the indemnifying Party or its Affiliates,

     (b)  any breach of any covenant or agreement of the indemnifying Party
          contained in this Agreement, or

     (c)  any misrepresentation by the indemnifying Party in or in connection
          with this Agreement.

8.3 Subrogation. If a Party has indemnified the other Party under Section 8.1 or
Section 8.2 above, the indemnifying Party shall be subrogated to the rights of
the indemnified Party against any third party, and such indemnified Party hereby
assigns to the indemnifying Party all claims, causes of action and other rights
which the indemnified Party may then have against any third party. Conversely,
and without in any way limiting the obligation of either Party to indemnify the
other Party as herein provided, to the extent that an indemnifying Party fails
to perform its indemnification obligations under Section 8.1 or Section 8.2
above, the indemnifying Party hereby assigns to the indemnified Party all
claims, cause of action and other rights which the indemnifying Party may then
have against any third party with respect to the claim, suit or proceeding.

Article 9.0 LOYALTY

During the term of this Agreement, Kissei shall not make, market, promote or
sell within any country in the Territory any pharmaceutical product which is
directly competitive with the Licensed Products.

Article 10.0 FORCE MAJEURE

10.1 Definition and Notice. "Force Majeure" shall mean any event, not existing
as of the Effective Date and not reasonably within the control of the Parties as
of such date, which, in whole or in material part, prevents or makes
commercially unreasonable one Party's performance of its obligations under this
Agreement. Force Majeure shall include, without limitation: fire, storm,
earthquake, flood, acts of State or other governmental action, war or civil
unrest, strikes, and prolonged shortage of energy or any other supplies. A Party
affected by an event of Force Majeure shall promptly provide the other Party
with written notice describing the event, its cause and foreseeable duration,
and its possible consequences upon performance under this Agreement.

10.2 Suspension of Performance. After an affected Party has given notice under
Section 10.1, that Party shall be relieved of any liability under this
Agreement, except for the obligation to pay amounts due and owing, but only to
the extent and only for so long as the Force Majeure prevents performance. The
other Party may likewise suspend the performance of all or part of its

                                      -20-
<PAGE>

obligations, except for the obligation to pay any amounts due and owing, to the
extent that such suspension is commercially reasonable.

10.3 Termination. If the period of Force Majeure continues for more than one (1)
year, either Party may terminate this Agreement upon giving notice to the other
Party without incurring liability other than the obligation to make payments due
to such date.

Article 11.0 CONFIDENTIALITY

11.1 Non-Use and Non-Disclosure. Each Party acknowledges and agrees that all the
other Party's Confidential Information is confidential and proprietary to the
disclosing Party. Each Party shall not use or disclose to any third party the
other Party's Confidential Information for any purpose other than as permitted
or required hereunder. Each Party shall take the same reasonable measures
necessary to prevent any disclosure by its employees, agents, contractors,
permitted sublicensees, or consultants of the other Party's Confidential
Information as it applies to the protection of its own Confidential Information.

11.2 Marking. To be entitled to protection as Confidential Information, all MGI
or Kissei documents containing that Party's Confidential Information shall be
appropriately and clearly marked as "Proprietary," "Secret," "Confidential," or
other words to similar effect. If a disclosure of Confidential Information is
made orally, as in a meeting, the disclosing Party shall indicate the nature of
that information at the time of its disclosure and shall confirm such
designation in writing within ten (10) days of the date of such disclosure to
the receiving Party.

11.3 Exclusions. Information shall not be considered Confidential Information
hereunder if it:

     (a)  was already in the possession of the receiving Party prior to its
          receipt from the disclosing Party, as shown by the receiving Party's
          books and records;

     (b)  is, or becomes, part of the public knowledge or literature through no
          fault, act or omission of the receiving Party, provided, Proprietary
          Product Information shall not be deemed to have entered the public
          domain by reason of its having been filed with any Competent
          Authority;

     (c)  is, or becomes, available to the receiving Party from a source other
          than the disclosing Party, which source has rightfully obtained the
          same information and has no obligation of confidentiality to the
          disclosing Party with respect to it;

     (d)  is made available on an unrestricted basis by the disclosing Party to
          a third party unaffiliated with the disclosing Party; or

     (e)  is required to be revealed pursuant to law, provided, however, the
          receiving Party which is under any such requirement of law shall give
          reasonable notice to the disclosing Party of such requirement and
          shall cooperate with the disclosing Party in reasonable legal efforts
          to limit or mitigate any such revelation so as to preserve the
          proprietary nature of any Confidential Information contained therein.

                                      -21-
<PAGE>

11.4 Duration; Surviving Obligation. Each Party's obligations of non-use and
non-disclosure of the other Party's Confidential Information shall apply during
the term of this Agreement and shall also survive for a period of five (5) years
after its termination for any reason.

11.5 Option Agreement. The non-disclosure and non-use provisions of this
Agreement hereby supersede the provisions of Article 4.0 of the Option
Agreement, provided, however, this Article 11.0 shall be deemed retroactive to
the effective date of the Option Agreement.

Article 12.0 TERM AND TERMINATION

12.1 Term. Unless earlier terminated in accordance with Section 12.2 or 12.3
below, this Agreement shall be in effect for a period of ten (10) years after
the first launch of a Licensed Product in the Territory (the "Initial Term").
This Agreement shall automatically renew for successive one (1) year periods
thereafter ("Renewal Term"), unless either Party notifies the other Party in
writing of its intention to terminate this Agreement at least one hundred and
twenty (120) days prior to the expiration of the Initial Term or any Renewal
Term.

12.2 Termination for Cause. Either Party may terminate this Agreement at any
time by giving notice in writing to the other Party, which shall be effective
sixty (60) days after its date, in accordance with the following provisions:

     (a)  if the other Party files a petition of any type as to its bankruptcy,
          is declared bankrupt, becomes insolvent, makes an assignment for the
          benefit of creditors, goes into liquidation or receivership, or
          otherwise loses legal control of its business;

     (b)  if the other Party is in material breach of this Agreement and has
          failed to cure such breach within sixty (60) days of the receipt of
          written notice of breach from the non-breaching Party; or

     (c)  if an event of Force Majeure continues for more than one (1) year as
          provided in Section 10.3.

12.3 Termination by Mutual Agreement. The Parties may agree in writing to
terminate this Agreement for their mutual convenience at any time and for any
reason, subject to such terms and conditions as they may adopt.

12.4 Rights and Obligations on Termination. If this Agreement is terminated for
any reason, the Parties shall have the following rights and obligations:

     (a)  Termination of this Agreement shall not release either Party from the
          obligation to make payment of all amounts then or thereafter due and
          payable;

     (b)  Each Party's respective obligations of non-use and non-disclosure
          under Article 11.0 shall survive as provided in Section 11.4;

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     (c)  Each Party's respective obligations of indemnification under Article
          8.0 and to settle all disputes, controversies or claims under Article
          13.0 shall survive such termination of this Agreement;

     (d)  The license granted under Section 3.2 and the provisions of Section
          3.3 shall survive termination of this Agreement and such license shall
          extend to the whole world, including the Territory;

     (e)  Kissei (and any permitted sublicensees) shall, within ninety (90) days
          of the date of the termination of this Agreement, return any
          documentation and all copies of documentation (in any media) in its
          possession, custody or control that contain the MGI's Confidential
          Information, including, without limitation, any Health Registration
          Dossiers, the Drug Master File, and the Supporting Data, and shall
          certify in writing that it has done so after a reasonable examination
          of all its files where such documentation has been maintained; and

     (f)  If Kissei or any permitted sublicensee has any remaining inventory of
          Licensed Products, there will be a sell-off period of ninety (90) days
          after the effective date of termination in which such residual
          inventory may be sold, provided Product Royalties shall be due and
          owing on any such sales. After that date, and at the option of MGI,
          Kissei or its permitted sublicensees may sell and MGI may buy any
          unsold remaining inventory at a price to be negotiated between the
          Parties.

12.5 No Compensation. The Parties agree that, subject to the above provisions of
Section 12.4, and without prejudice to any other remedies at law or in equity
that either Party may have in respect of any breach of this Agreement, neither
Party shall be entitled to or claim that it is entitled to any compensation or
like payment as a result of or arising out of any termination in accordance with
this Article 12.0, whether claimed as loss of good will, foregone profits, lost
investments, or otherwise.

Article 13.0 DISPUTE RESOLUTION

13.1 Negotiation. The Parties agree to consult and negotiate in good faith to
try to resolve any dispute, controversy or claim that arises out of or relates
to this Agreement. Except as provided in Section 13.2, no formal dispute
resolution shall be used by either Party unless and until the chief executive
officers of each Party shall have attempted to meet in person to achieve such an
amicable resolution.

13.2 Reservation for Litigation. Notwithstanding Section 13.3 below, each Party
expressly reserves the right to seek judicial relief from a court of competent
jurisdiction if the other Party is or appears to be in violation of such other
Party's obligations of non-use and non-disclosure under Article 11.0 above,
including, without limitation, any injunction or other preliminary relief.

13.3 Arbitration. Subject to the reservation of the Parties under Section 13.2
above, all disputes, claims or controversies arising out of or in connection
with the present Agreement shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by one or
more arbitrators appointed in accordance with the said Rules. The place of

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arbitration shall be Honolulu, Hawaii, United States of America. The arbitration
shall be conducted in the English language.

13.4 Survival. The duty of the Parties to arbitrate any dispute, controversy or
claim under this Article 13.0 shall survive the termination of this Agreement
for any reason.

Article 14.0 ADDITIONAL COVENANTS OF MGI

14.1 E. Merck Agreement. During the term of this Agreement, MGI shall comply
with its obligations under the E. Merck Agreement to the extent necessary to
preserve its exclusive rights in the Territory thereunder and to preserve its
rights to a regular supply of Pilocarpine Drug Substance for production of
Licensed Products.

14.2 Amendment or Termination of E. Merck Agreement. MGI shall not terminate the
E. Merck Agreement, or agree to any amendment to or modification of the E. Merck
Agreement which may materially adversely affect any rights of Kissei under this
Agreement or the ability of MGI to perform its obligations hereunder this
Agreement, without the prior written consent of Kissei, which consent shall not
unreasonably be withheld.

14.3 Sjogren's Syndrome Trials. MGI acknowledges that Kissei believes a major
Indication for the Licensed Products is the Sjogren's Indication. Accordingly,
MGI will use Best Efforts to accelerate its Sjogren's program in the United
States for the Sjogren's Indication, consistent with Good Clinical Practices and
statistical considerations regarding individual site enrollment, substantially
in accordance with the following targets:

     (a)  completion of patient enrollment for Sjogren's Indication Pivotal
          Trial, with a target date of December 31, 1995, provided the FDA
          permits MGI to modify its research protocol design for such trials to
          substantially reduce the eye portion thereof and thus to have reduced
          the number of patients required therein, thereby allowing study
          enrollment to be reached earlier than would otherwise be the case; and

     (b)  as soon as is practical after completion of appropriate studies and/or
          data analyses for the Sjogren's Indication, submission to the FDA by
          MGI of a file for the alteration of labeling for the Licensed Product
          in the United States to acknowledge its utility in the treatment of
          Sjogren's Syndrome, provided, however, MGI's technical and regulatory
          consultants agree that such a submission to the FDA is warranted by
          the data accumulated during the Pivotal Trial (as modified in
          accordance with paragraph (a) above) and provided, further, that FDA
          does not require additional clinical or pre-clinical studies over
          those presently contemplated. The Parties agree that the requirements
          of this Section 14.3 shall cease to apply at such time as the FDA
          agrees to inclusion of language covering a Sjogren's Indication in the
          labeling for Salagen(R) Tablets in the United States.

14.4 Access to E. Merck Drums Master File. MGI shall obtain for Kissei the
written permission of E. Merck to allow Kissei exclusive right to reference to
the non-topical Drug Master File to be established in Japan by E. Merck.

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Article 15.0 GENERAL PROVISIONS

15.1 Entire Agreement. This Agreement, along with the Supply Agreement,
constitute the entire agreement of the Parties with respect to the subject
matter hereof and thereof and supersede all the Parties' previous
correspondence, term sheets, understandings, agreements and representations,
oral or written, including any prior Non-Disclosure Agreements or the Option
Agreement between the Parties.

15.2 Assignment. Neither Party shall assign or otherwise transfer its rights or
obligations under this Agreement except with the prior written consent of the
other Party; provided that no such consent for a transfer to an entity shall be
required and all rights and obligations arising hereunder shall inure to the
benefit of that entity if it is (a) an Affiliate of either Party, (b) the
successor in interest of one Party by reason of sale, merger or operation of
law, or (c) has acquired all or substantially all of the assets and business of
a Party.

15.3 Amendment. This Agreement may not be modified or amended, in whole or in
part, except by a written agreement signed by both Parties.

15.4 Severability. If one or more of the provisions of this Agreement is
subsequently declared invalid or unenforceable, this Agreement shall be treated
as though that provision were not in this Agreement, and this shall not affect
the validity or enforceability of the remaining provisions of this Agreement
(unless those provisions that are invalidated or unenforceable are clearly
material and inseparable from the other provisions). The Agreement as modified
shall be applied and construed to reflect substantially the good faith intent of
the Parties and to achieve the economic effects originally intended by the terms
hereof.

15.5 Notices; Language. Except as may be otherwise provided in this Agreement,
any notice, demand or request given, made or required to be made shall be in
writing and shall be effective, unless otherwise provided herein, when received
after delivery by (a) registered air mail, postage prepaid; (b) facsimile with
electronic confirmation of receipt; or (c) a reputable international courier
such as Federal Express or DHL at the addresses set forth on the first page of
this Agreement or to any other address that a Party specifies in writing. All
reports, notices and communications required or permitted hereunder shall be in
the English language.

15.6 Waiver. Either Party's failure or delay in exercising any remedy for
default shall not be deemed a waiver of that or any subsequent default of that
provision or of any other provision hereof.

15.7 Counterparts. This Agreement shall be executed in two (2) or more
counterparts in the English language, each of which shall be deemed an original.
In the event of any difference with the translation of this Agreement into any
other language, the original English version shall prevail.

15.8 Governing Law. Except as to patents, this Agreement shall be governed by,
and interpreted and construed in accordance with, the laws of the State of
Minnesota, excluding (a) its choice of law rules and (b) the United Nations
Convention on the International Sale of Goods and provided however that the
operation of the arbitration agreement contained in Section 13.3

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hereof, and the enforcement of any award rendered pursuant thereto, shall be
governed by United States federal law to the exclusion of any state law.

15.9 Relationship. The Parties are independent contractors and have only a
licensor-licensee relationship hereunder and shall not be deemed to have formed
any partnership, joint venture or other relationship. Neither Party shall make,
or represent to any other person that it has the power or authority to make, any
financial or other commitment on behalf of the other Party.

15.10 Governmental Approvals. If any governmental approval is required for this
Agreement to become effective, Kissei shall undertake to obtain such approval
from any relevant agency of the Government of Japan, and MGI shall undertake to
obtain any such approval from any relevant agency of the Government of the
United States. Each Party shall use its Best Efforts to obtain such approvals as
rapidly as possible and shall keep the other Party reasonably informed about any
such applications for approval. Each Party shall furnish the other Party with a
copy of any such approval within ten (10) days of its receipt.

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first above written.

MGI PHARMA, INC.                            KISSEI PHARMACEUTICAL CO., LTD.



By /s/ Kenneth F. Tempero                   By /s/ Mutsuo Kanzawa
   ----------------------                      ------------------
   Kenneth F. Tempero                          Mutsuo Kanzawa
   Chairman and Chief                          President and Chief
   Executive Officer                           Executive Officer

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