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                                                                   EXHIBIT 10.53
                                                                  EXECUTION COPY





               INSTRUMENT, ASSAY DEVELOPMENT AND LICENSE AGREEMENT

                                     BETWEEN

                     GLAXO RESEARCH AND DEVELOPMENT LIMITED

                                       AND

                               GLAXO GROUP LIMITED

                                       AND

                         AURORA BIOSCIENCES CORPORATION



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This Agreement is made by and between GLAXO RESEARCH AND DEVELOPMENT LIMITED AND
GLAXO GROUP LIMITED both with their principal offices at Glaxo Wellcome House,
Berkeley Avenue, Greenford, Middlesex UB6 ONN, United Kingdom, (together with
any Affiliate company, "GW") and AURORA BIOSCIENCES CORPORATION ("Aurora"), a
Delaware corporation with principal offices at 11010 Torreyana Road, San Diego,
California 92121, U.S.A.

                                    RECITALS

WHEREAS, GW and Aurora wish to enter into an agreement involving the purchase by
GW *** (VIPR) from Aurora, collaborative research to develop ***, and licenses
of rights from Aurora to GW to use *** Voltage Sensor Probes (VSPs) and the ***
to practice the technologies *** as set forth herein.

Now, therefore, in consideration of the foregoing and the covenants and premises
contained herein the parties agree as follows:

1. DEFINITIONS

        1.1    "Achievement of Proof of Concept" means the point at which the
               initial human efficacy trial is successfully completed and a
               compound approved for further development by GW, such decision
               usually being agreed to at a meeting of the GW Therapeutic
               Management Team, or its functional equivalent.

        1.2    "Affiliate" means (1) any corporation or other entity directly or
               indirectly owning or controlling, at least *** of the stock
               entitled to vote for election of directors with a party to this
               Agreement or otherwise having the power to direct the management
               and policies of a party to this Agreement, (2) any corporation or
               other entity of which a party to this Agreement directly or
               indirectly owns or controls at least *** of the stock entitled to
               vote for election of directors or otherwise has the power to
               direct the management and policies, (3) any corporate or other
               entity directly or indirectly under common control with a party
               to this Agreement; provided, however, that in the circumstance
               where the country of incorporation of such owned or controlled
               corporation or other entity requires the maximum ownership by a
               foreign entity be less ***, the percentage of ownership required
               to make such an entity an affiliate must be equal to the maximum
               percentage of ownership permitted by such country provided the
               operational control is held by a party to this Agreement.

        1.3    "Assay" means a *** incorporating Aurora VSPs, and additions to
               or substitutions thereof made in accordance with this Agreement.

        1.4    "Assay Transfer Date" means the date that GW receives delivery of
               ***, *** Assay *** Collaborative Research Plan, this date *** of
               the Assay by the Steering Committee.

        1.5    "Aurora Factory Certified Engineers" means engineers provided by
               Aurora to service


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               the VIPR ***.

        1.6    "Aurora Patents" means *** and *** set forth in Exhibit A and ***
               issuing therefrom.

        1.7    "Aurora Technology" means Materials and Know-How owned or
               Controlled by Aurora on or before the Effective Date and
               necessary for the Collaborative Research Program.

        1.8    "Collaborative Research Program" means the collaboration between
               Aurora and GW as set forth in Exhibit B for the development ***.

        1.9    "Collaborative Research Plan" means that project plan attached as
               Exhibit B hereto, which may be amended from time to time, upon
               written mutual agreement of Aurora and GW.

        1.10   "Confidential Information" means all information, data, and
               documentation received by either party from the other party
               pursuant to this Agreement and if in writing, designated as
               confidential at the time of disclosure, subject to the exceptions
               set forth in Section 9.1.

        1.11   "Control" or "Controlled" means, in the context of intellectual
               property, possession by a party of the ability to grant a license
               or sublicense in accordance with the terms of this Agreement, and
               without violating the terms of any agreement by such party with
               any Third Party.

        1.12   "Effective Date" means the latest date on which the Agreement is
               executed by a party hereto.

        1.13   "GW Compounds" means *** compounds and an *** that GW shall
               provide to Aurora in a format *** and that shall be screened by
               Aurora in accordance with Section ***.

        1.14   "GW Materials" means Materials provided by GW to Aurora in
               furtherance of the Collaborative Research Program.

        1.15   "GW Technology" means GW Materials and Know-How owned or
               Controlled by GW on or before the Effective Date and necessary
               for the Collaborative Research Program.

        1.16   "Invention" means ***.

        1.17   "Know-How" means information and data owned or Controlled by a
               party hereto, which is existing as of the Effective Date or which
               a party develops or acquires as part of the Collaborative
               Research Program which is not generally known to the public,
               comprising: designs, concepts, algorithms, formulae, techniques,
               practices, processes,


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               methods, knowledge, skill, experience, expertise and technical
               information.

        1.18   "Materials" means any reagents, cell lines, promoters, enhancers,
               vectors, plasmids, genes, proteins and fragments thereof,
               peptides, antigens, antibodies, agonists, antagonists, inhibitors
               and chemicals.

        1.19   "Patent Rights" means all U.S. or foreign (including regional
               authorities such as the European Patent Office) regular or
               provisional patent applications, including any continuation,
               continuation-in-part, or division thereof or any substitute
               application therefor or equivalent thereof, and any patent
               issuing thereon, including any reissue, reexamination or
               extension thereof and any confirmation patent or registration
               patent or patent of additions based on any such patent,
               containing one or more claims to an Invention (and in the case of
               an issued patent, containing one or more claims), and for which a
               party hereto owns or Controls, individually or jointly, any title
               thereto or rights thereunder.

        1.20   "Pre-clinical Candidate Selection" means the point at which lead
               optimization is concluded and a candidate for further development
               is selected, ***.

        1.21   "Product Launch" means the first commercial sale of a product.

        1.22   "***" means *** defined respectively by *** and ***.

        1.23   "Technology" means Materials and Know-How.

        1.24   "Third Party" means any person or entity other than Aurora and GW
               or its Affiliates.

        1.25   "Tracking Record" means tracking records referred to in Section
               5.8.

        1.26   "VIPR" means Aurora's voltage-ion probe reader as described in
               Attachment 1 ***.

        1.27   "Voltage Sensor Probes" or "VSPs" means *** the Aurora Patents.


2. EQUIPMENT PURCHASE


        2.1.   Shipment. Subject to GW's payments in Section 5, Aurora will ship
               to GW's *** on or before ***. Aurora will provide consultative
               support and technical specifications *** the *** GW's ***. GW
               will also be provided *** described in Section 2.4 *** updates
               regarding the *** with the VIPR on the Assay *** produced by or
               on behalf of Aurora.


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        2.2.   Installation and Validation. Subject to GW's payments in Section
               5, Aurora will install *** site within *** days of the Assay
               Transfer Date. Reasonable travel and expenses of Aurora personnel
               directly related to the installation and validation shall be
               billed separately at GW's expense.

        2.3.   Training. Subject to GW's payments in Section 5, Aurora will
               provide a comprehensive consecutive *** training session on the
               operation of the VIPR for up to *** GW scientists *** to be
               scheduled approximately at the time of the installation of the
               VIPR. Travel and related expenses for Aurora personnel will be
               paid by GW. In addition, *** GW engineers will be trained at
               Aurora and certified by Aurora for routine servicing of ***
               Dollars ($***), such training to take place prior to the delivery
               ***.

        2.4.   Warranty. Subject to GW's payments in Section 5, *** with a ***
               warranty, entitling GW to *** years of *** support, a total of
               *** (*** annually) by an Aurora Factory Certified Engineer
               provided by Aurora *** parts, which are *** and *** service
               invoice after any *** repair. Travel and related expenses for
               Aurora personnel for ***. Travel and related expenses for service
               visits other than preventative maintenance visits shall be paid
               by GW. No one other than an Aurora Factory Certified Engineer is
               authorized to service the VIPR and any tampering with or
               modification of the instrument by any other party will nullify
               the warranty to the VIPR. ***, *** personnel *** in any month,
               *** additional *** cost, *** months of *** and *** to be
               confirmed in writing by Aurora. *** as the *** support *** day of
               request and *** for ***, if needed, within *** of request.


3. COLLABORATIVE RESEARCH


        3.1.   Assay Development at Aurora. Aurora will use *** to develop, in
               collaboration with GW, *** in a *** within four (4) months of the
               Effective Date (the "Collaborative Research Program"). Aurora
               will then transfer the Assay to GW with *** and an *** within two
               (2) weeks of acceptance of the Assay by the Steering Committee.
               Criteria *** defined in the Collaborative Research Plan.


               3.1.1. Late Delivery of Assay. If Aurora does not transfer the
                      Assay to GW within nine (9) months of the Effective Date,
                      GW, *** either: (i) make the payments under Sections 5.1.2
                      and 5.2.4 and *** and approval *** is


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                      contractually precluded from licensing to Third Parties;
                      or (ii)not make the payments of Sections 5.1.2 and 5.2.4
                      and *** .

               3.1.2. Assay Throughput. In the event that all other validation
                      criteria for the Assay are satisfied, but the Assay ***
                      specified in Exhibit B, the parties ***, or assay payments
                      due to Aurora based upon the ***, unless the ***, in which
                      case ***. In the event *** shall promptly *** Aurora.

        3.2.   Materials from GW. GW will provide pursuant to this Agreement the
               GW Materials and GW Compounds, or a mutually agreed upon subset
               thereof, to Aurora within *** days of the Effective Date, and
               before ***, respectively. Aurora will not use GW Materials or GW
               Compounds for any purpose other than those described in this
               Agreement. Aurora will return or destroy all *** outlined in
               Exhibit C. Aurora will destroy all GW Materials within *** of the
               Assay, *** Collaborative Research Program, which shall be held
               for up to *** by Aurora following *** and *** GW.

        3.3.   Screening of GW Compounds. Upon validation *** with the
               Collaborative Research Plan and payment by GW according to
               Section 5.5, Aurora shall undertake to screen the GW Compounds
               ***. Such screening by Aurora shall be completed within *** of
               *** and receipt of the GW Compounds. Upon completion of such
               screening and written agreement of the parties, ***, as agreed
               upon in the Collaborative Research Plan, GW shall pay Aurora in
               accordance with Section 5.5 for performance of such screening.

        3.4.   Steering Committee. The Collaborative Research Program shall be
               managed by a joint steering committee (the "Joint Steering
               Committee") of a size and composition to be determined in good
               faith by the parties and indicated in writing, with equal
               representation from both GW and Aurora. Each member of the Joint
               Steering Committee shall have ***. The Joint Steering Committee
               shall meet on a schedule and in a venue or format mutually
               agreed. Initial meetings shall by teleconference every ***.



        3.5.   ***. During the period of the Collaborative Research Program, ***
               so ***.

4. LICENSES AND OPTION

        4.1.   Non-exclusive License. Aurora hereby grants to GW and its
               Affiliates a non-



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               exclusive, non-sublicensable, non-transferable, royalty-free
               milestone bearing, single VIPR instrument, worldwide license
               under the Aurora Patents and Aurora Technology solely to ***
               Aurora or modifications produced by *** using other *** for drug
               discovery screening. GW shall notify Aurora of any *** in
               writing. The license grant of this Section 4.1 shall be effective
               until the date of the *** anniversary of the ***. The license, at
               that point, may be extended through exercise of the option
               described in Section 4.2. The license grant of this Section 4.1
               may be ***, to allow GW to *** to be proposed by GW and *** other
               than in the event that Aurora is contractually precluded from
               licensing to Third Parties, should GW ***, during the time period
               such license grant is in effect, or should Aurora *** GW *** of
               the Effective Date, in accordance with Section ***.

        4.2.   Option to Extend License. Aurora hereby grants to GW an option to
               extend the license granted in Section 4.1 above *** to an
               additional five (5) years on an *** Dollars ($***) to be paid to
               Aurora *** (the "***") and each subsequent anniversary of the ***
               for up to *** years. Such option granted to GW expires on the
               date *** days prior to the third (3rd) anniversary of the *** or
               a later date taking into account any license ***. It is
               understood that the *** under Section ***.



        4.3.   Retained Rights and Limitations. The licenses under this Section
               4 are subject to GW's obligations described herein including
               payments by GW as set forth in Section 5. For clarity, the
               license rights granted to GW in this Section 4 specifically
               exclude the right 1) ***. Aurora retains the right to work with
               other parties on the same or similar targets, compounds, data and
               cell lines supplied by a Third Party or independently developed
               by Aurora without the use of GW Confidential Information, GW
               Compounds, or GW Materials. Except as expressly licensed herein,
               GW *** or *** under the Aurora Patents and Aurora Technology.



5. PAYMENTS


        5.1.   Equipment purchase. In consideration for the purchase of the
               VIPR, GW shall pay to Aurora a total of *** Dollars ($***)
               according to the following schedule of non-refundable,
               non-creditable payments:


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               5.1.1. A *** Dollar ($***) pre-payment due upon the Effective
                      Date; and

               5.1.2. A *** Dollar ($***) payment due on ***.

               Shipping will be prepaid and added FOB San Diego to the invoice.

        5.2.   Collaborative research. In consideration for the development of
               ***, or in the event that GW *** Assay is ***, GW shall pay to
               Aurora in accordance with the following schedule of
               non-refundable, non-creditable payments:

               5.2.1. *** Dollars ($***) on the Effective Date; and

               5.2.2. *** Dollars ($***)*** Assay Transfer Date is *** ; ***

               5.2.3. *** Dollars ($***)*** Assay Transfer Date is *** Effective
                      Date and ***; ***

               5.2.4. *** Dollars ($***)*** Assay *** months *** and *** GW does
                      *** Agreement.

        5.3.   License fees. In consideration for the licenses granted in
               Section 4.1, GW shall pay to Aurora a non-refundable,
               non-creditable license fee of *** Dollars ($***), first due on
               the Assay Transfer Date and then each anniversary of the Assay
               Transfer Date for a total *** payments and *** Dollars ($***). GW
               may extend the license in accordance with Section 4.1.

        5.4.   Reagent Supply. In consideration for the provision of the VSPs by
               Aurora to GW, GW shall pay to Aurora *** Dollars ($***) for ***
               of the VSPs. Such *** shall be delivered to GW on the ***. GW's
               payment for such VSPs is due upon receipt. For subsequent orders
               of VSPs from Aurora during the period from the Assay Transfer
               Date to the *** anniversary of the Effective Date, GW shall pay
               ***.

        5.5.   Screening Payment. In consideration for the screening services
               provided in Section 3.3, GW shall pay to Aurora, the amount equal
               to *** Dollars ($***) for such agreed screening program. Such
               payment is due within *** after the Assay Transfer Date.

        5.6.   Warranty Payments. In consideration for the warranty described in
               Section 2.4, GW shall pay to Aurora (i) *** Dollars ($***) on the
               first anniversary of the Assay Transfer Date ***; and (ii) ***
               Dollars ($***) on the *** for the ***.

        5.7.   Milestone Payments. In addition to other fees described in this
               Section 5, GW shall also pay to Aurora the following milestone
               payments ***, ***:


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              Event                                      Milestone Payment
              -----                                      -----------------
               ***                                              ***


        5.8.   Payment and Tracking Milestones. The milestones due under this
               Section 5 shall be paid within *** days after the end of each
               calendar quarter period in which such milestones are earned and
               ***. The compounds and target tested using the Assay developed
               under this Agreement will be recorded and stored by GW using its
               customary means and in a computer searchable database on a
               storage device. The information stored will include the target,
               screen type, the concentration, structure and activity of the
               compound tested, and date of testing. Records of any hits,
               derivatives or any compound subject to additional screening or
               evaluation will be stored by GW in a computer searchable file or
               database that may or may not be separate from other GW data not
               related to the Assay. GW shall keep appropriate records of
               compounds discovered, identified or profiled with the Assay
               subjected to ***. All the records described in this Section are
               collectively referred to as tracking records (the "Tracking
               Records"). GW *** by Aurora and agreed to by GW, and *** GW, to
               inspect the Tracking Records once per year upon reasonable prior
               written request by Aurora for the sole purpose of determining the
               attainment of a milestone under this Section 5. The Tracking
               Records shall be securely retained *** for no less than *** years
               from ***. Until all of the milestones have been paid and upon the
               request of Aurora, GW will provide Aurora with a summary of the
               status of development compounds and products that may be used to
               calculate milestones.


        5.9.   Patent disclaimer. The parties acknowledge that Aurora may not
               own or Control patent applications or patents covering the
               manufacture, sale, use or importation of a particular compound or
               pharmaceutical product developed and/or commercialized by GW as a
               result of the Assay; provided, however, GW agrees to pay to
               Aurora the milestones in Section 5.7 regardless of whether a
               compound or pharmaceutical product is covered by a patent
               application or patent within the Aurora Patents.

        5.10.  Withholding taxes. All amounts required to be paid to Aurora by
               GW pursuant to Sections 5.3, 5.6 and 5.7 of this Agreement may be
               paid ***. At Aurora's request, GW shall provide Aurora a
               certificate evidencing deduction of any withholding taxes
               hereunder and shall reasonably assist Aurora to obtain the
               benefit of any applicable tax treaty. Should the benefit of ***
               not be as favorable as that applying at the Effective Date then
               ***.


6. INTELLECTUAL PROPERTY OWNERSHIP


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        6.1.   Pre-existing Intellectual Property. This agreement does not
               affect the ownership of Inventions, Technology and Patent Rights
               of either party which existed prior to the Effective Date.

        6.2.   Intellectual Property created under the Collaborative Research
               Program. The Assay developed by Aurora *** Collaborative Research
               Program ***.


        6.3.   Intellectual Property created through GW's ***. Any Inventions,
               Technology and Patent Rights relating to the activities or
               properties of compounds discovered, identified or profiled
               through GW's *** the Assay or other assays incorporating Aurora
               Technology ***, subject to the terms of the licenses granted by
               Aurora under Section 4. *** will be responsible for the filing,
               prosecution, and enforcement of all applicable patents and for
               the expenses thereof. Any improvements, Know-How, Inventions,
               Technology and Patent Rights developed by ***, *** for paying any
               fees related to the filing, prosecution, and enforcement of all
               applicable patents and for the expenses thereof.


        6.4.   Transfer of Rights. All rights not expressly licensed or assigned
               by Aurora are retained by Aurora and no implied licenses are
               conveyed herein or were conveyed before the Effective Date.
               Except as otherwise expressly provided in this Agreement, nothing
               in this Agreement is intended to convey or transfer ownership by
               one party to the other of any rights, title or interest in any
               Confidential Information, Technology, copyrights or Patent Rights
               owned or Controlled by a party. Except as expressly provided for
               in this Agreement, nothing in this Agreement shall be construed
               as a license or sublicense by one party to the other of any
               rights in any Technology, copyrights, or Patent Rights owned or
               Controlled by a party.

        6.5.   Inventorship and Assignment. Inventorship of patentable
               inventions shall be determined by U.S. patent law. GW and Aurora
               *** Inventions, Technology and Patent Rights.

        6.6.   Copyrights. The parties agree to treat and handle, to the maximum
               extent practical, any copyrights owned or Controlled by a party
               in the same manner as Patent Rights owned or Controlled by such
               party.

7. PRODUCT DEVELOPMENT, COMMERCIALIZATION AND DILIGENCE

        7.1.   *** development and commercialization of all compounds discovered
               through GW's ***, and such development and commercialization will
               be at GW's sole discretion.

8. CONFIDENTIALITY

        8.1.   Confidential Information. Except as expressly provided herein,
               the parties agree that, for the term of this Agreement and ***
               years thereafter, the receiving party


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               shall keep completely confidential and shall not publish or
               otherwise disclose to another party and shall not use for any
               purpose other than to perform the purposes contemplated by this
               Agreement any Confidential Information furnished to it by the
               disclosing party hereto pursuant to this Agreement, except that
               to the extent that it can be established by the receiving party
               by competent proof that such Confidential Information:

               -      was already known to the receiving party, other than under
                      an obligation of confidentiality, at the time of
                      disclosure;

               -      was generally available to the public or otherwise part of
                      the public domain at the time of its disclosure to the
                      receiving party;

               -      became generally available to the public or otherwise part
                      of the public domain after its disclosure and other than
                      through any act or omission of the receiving party in
                      breach of this Agreement;

               -      was lawfully disclosed to the receiving party by a person
                      other than a party hereto, or

               -      was independently developed by the receiving party without
                      the use of Confidential Information.

        8.2.   Permitted Use and Disclosures. Each party hereto may use or
               disclose Confidential Information disclosed to it by the other
               party to the extent such use or disclosure is (i) reasonably
               necessary in filing or prosecuting patent applications,
               prosecuting or defending litigation, (ii) complying with
               applicable law, governmental regulation or court order, (iii)
               submitting information to tax or other governmental authorities,
               (iv) making a permitted sublicense or (v) otherwise exercising
               its rights hereunder, provided that if a party is required to
               make any such disclosure of another party's Confidential
               Information, other than pursuant to subsection (ii) hereof, it
               will give reasonable advance notice to the latter party of such
               disclosure, and shall obtain the prior written approval of said
               latter party, which approval shall not be unreasonably withheld.

        8.3    Confidential Terms. Except as expressly provided herein, each
               party agrees not to disclose any material or financial terms of
               this Agreement to another party without the consent of the other
               party, not to be unreasonably withheld; provided, however, each
               party reserves the right to make reasonable disclosures
               (including the redaction of material or financial terms) as
               required by securities or other applicable laws, or to actual or
               prospective investors or corporate partners (including licensees
               and acquirers), or to accountants, attorneys and other
               professional advisors on a need-to-know basis under circumstances
               that reasonably ensure the confidentiality thereof, or to the
               extent required by law. If such Confidential Information is to
               become public information by such disclosure the disclosing party
               must obtain the written consent of the non-disclosing party in
               order to obtain protection of the Confidential Information if
               necessary.

        8.4.   Press Release. Notwithstanding the foregoing, the parties agree
               that Aurora will make a press release to announce the execution
               of this Agreement which shall be subject to prior written
               approval of GW, such approval not to be unreasonably withheld.
               Thereafter, GW and Aurora may each disclose to Third Parties the
               information contained in the mutually agreed upon press release
               without the need for further approval by the other.

9. TERM AND TERMINATION OF THE RESEARCH COLLABORATION



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        9.1.   Term. This Agreement shall commence on the Effective Date and
               shall terminate on the date that the last patent of the Aurora
               Patents expires. The Collaborative Research Program will
               terminate on the completion of the screening of the Assay by
               Aurora in accordance with Section 3.3., or *** after the
               Effective Date, whichever is first, unless extended by mutual
               written agreement of both parties.

        9.2.   Termination. Either party shall have the right to terminate this
               Agreement at any time during the term for a material breach of
               this Agreement by the other party, provided that the
               non-breaching party shall have first given *** days prior written
               notice (***days in the event of non-payment of any amounts due
               under this Agreement) to the breaching party describing such
               breach and stating the non-breaching party's intention to
               terminate this Agreement if such breach remains uncured, and the
               breaching party thereafter fails to cure same within such *** day
               period (*** day period in the event of non-payment of any amounts
               due under this Agreement).

        9.3.   Termination by GW this Agreement pursuant to Sections 3.1.1 or
               3.1.2. All amounts paid by GW to Aurora under this Agreement
               under Sections 5.1, 5.2 and 5.3 shall be nonrefundable.

        9.4.   Effect of Expiration or Termination. Except as otherwise
               expressly provided in this Agreement, the rights and obligations
               of the parties hereof shall terminate and be of no further force
               or effect whatsoever upon any termination of this Agreement under
               Section 9 hereof. Sections *** and ***, hereof shall survive
               termination or expiration of this Agreement. Upon expiration or
               other termination of the Agreement all licenses granted will
               thereby terminate and Materials will be destroyed or returned at
               the direction of the parties within *** days.

10 MISCELLANEOUS

        10.1.  Binding Effect; Assignment. Except as otherwise provided herein,
               neither this Agreement nor any interest hereunder will be
               assignable in part or in whole *** may assign this Agreement ***.
               This Agreement will be binding upon *** herein will be deemed to
               *** to the extent necessary to carry out the intent of this
               Agreement. Any assignment which is not in accordance with this
               Section is void.


        10.2.  Effect of Waiver. No waiver of any default, condition, provisions
               or breach of this Agreement shall be deemed to imply or
               constitute a waiver of any other like default, condition,
               provision or breach of this Agreement.

        10.3.  Representations and Warranties of Aurora and GW. Each Party
               hereby represents and warrants: Such party is duly organized and
               validly existing and in good standing under the laws of the state
               of its incorporation and has all requisite corporate power and
               authority to enter into this Agreement and to carry out the
               provisions hereof. Such party


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               is duly authorized to execute and deliver this Agreement and to
               perform its obligations hereunder. This Agreement is a legal and
               valid obligation binding upon it and enforceable in accordance
               with its terms. The execution, delivery and performance of this
               Agreement by such party does not conflict with any agreement,
               instrument or understanding, oral or written, to which it is a
               party or by which it may be bound, nor violate any law or
               regulation of any court, governmental body or administrative or
               other agency having jurisdiction over it.

        10.4   *** Indemnification for products or services arising from license
               granted herein. With respect to rights licensed to *** by the ***
               or by ***, *** agrees to indemnify, defend and hold harmless ***,
               as appropriate, and their respective officers, directors,
               employees, sponsors and agents from and against all damages or
               other amounts payable to a Third Party (including product
               liability) resulting or arising from *** use of the rights
               granted herein to the extent that such indemnification by *** is
               required by *** pursuant to agreements between *** or between
               ***.

       10.4.1. Limitation of Liability and Warranty. NEITHER PARTY SHALL BE
               LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTIAL,
               OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER
               CAUSED, UNDER ANY THEORY OF LIABILITY. Except as expressly set
               forth in this Agreement, Aurora MAKES NO REPRESENTATIONS AND
               EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED.
               THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
               FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED
               PRODUCTS OR SERVICES WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
               TRADEMARK, OR OTHER RIGHTS OR ANY OTHER EXPRESS OR IMPLIED
               WARRANTIES.

       10.4.2. *** Indemnification. *** shall indemnify, hold harmless and
               defend ***, its officers, employees, and agents from and against
               any and all claims, suits, losses, liabilities, damages, costs,
               fees, and expenses (collectively, "Claims") resulting from or
               arising out of the development, manufacture, storage, sale or
               other distribution or use of chemical entities identified using
               the Assay by or on behalf of *** or an Affiliate thereof,
               resulting from rights granted herein, except in the case of
               negligence or willful misconduct by ***. This indemnification
               includes, but is not limited to, any product liability. *** shall
               give prompt notice of the Claim to *** and, provided that *** is
               not contesting the indemnity obligation, shall permit *** to
               control any litigation relating to such a Claim and disposition
               of any such Claim provided that *** shall act reasonably and in
               good faith with respect to all matters relating to the settlement
               or disposition of any Claim as the settlement or disposition
               relates to parties being indemnified under this Section and ***
               shall not settle or otherwise resolve any Claim without prior
               notice to *** and the consent of *** if such settlement involves
               anything other than the payment of money by ***. *** shall
               cooperate with ***, at *** expense, in its defense of any Claim
               for which indemnification is sought under this Section.

       10.4.3. Aurora Indemnification. Aurora agrees to indemnify, defend and
               hold harmless GW, its officers, employees and agents from and
               against any and all claims,


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               liabilities, demands, damages, judgements, awards, settlements,
               expenses or losses (including reasonable attorney fees)
               (collectively, "Claims") arising out of Aurora's negligence or
               willful misconduct or any damages to property or injuries
               (including death) to any persons directly caused by Aurora, its
               employees, agents or permitted subcontractors. GW shall give
               prompt notice of the Claim to Aurora and, provided that Aurora is
               not contesting the indemnity obligation, shall permit Aurora to
               control any litigation relating to such a Claim and disposition
               of any such Claim provided that Aurora shall act reasonably and
               in good faith with respect to all matters relating to the
               settlement or disposition of any Claim as the settlement or
               disposition relates to parties being indemnified under this
               Section and Aurora shall not settle or otherwise resolve any
               Claim without prior notice to GW and the consent of GW if such
               settlement involves anything other than the payment of money by
               Aurora. GW shall cooperate with Aurora, at Aurora's expense, in
               its defense of any Claim for which indemnification is sought
               under this Section.

        10.5.  Force Majeure. Neither party shall lose any rights hereunder or
               be liable to the other party for damages or losses (except for
               payment obligations) on account of failure of performance by the
               defaulting party if the failure is occasioned by war, strike,
               fire, act of God(s), earthquake, flood (including El Nino and La
               Nina), lockout, embargo and governmental acts or orders or
               restrictions.

        10.6.  Amendment. No modification, supplement to or waiver of this
               Agreement or any Addendum hereto or any of their provisions shall
               be binding upon a party hereto unless made in writing and duly
               signed by an authorized representative of both GW and Aurora. In
               no event may the terms of this Agreement be changed, deleted,
               supplemented or waived by any notice, purchase order, receipt,
               acceptance, bill of lading or other similar form of document. A
               failure of either party to exercise any right or remedy
               hereunder, in whole or in part, or on one or more occasions,
               shall not be deemed either a waiver of such right or remedy to
               the extent not exercised, or of any other right or remedy, on
               such occasion, or a waiver of any right or remedy on any
               succeeding occasion.

        10.7.  Entire Agreement. This Agreement and each supplemental written
               agreement contemplated hereunder, sets forth the entire
               understanding and agreement of the parties as to the subject
               matter thereof, and there are no other understandings,
               representations or promises, written or verbal, not set forth
               herein or on which either party has relied. If any provisions of
               any such Addendum or supplemental written agreement conflict with
               any provisions set forth in this Agreement, the provisions of
               this Agreement shall take precedence, unless such Addendum or
               supplemental written agreement expressly refers to the specific
               provision(s) of this Agreement that it is intended to replace or
               modify (and which shall be limited in force and effect to such
               Addendum or supplemental written agreement only).


        10.8.  Notices. All Notices under this Agreement shall be given in
               writing and shall be addressed to the parties at the following
               addresses:


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                             For Glaxo Wellcome:

                             ***

                             Glaxo Wellcome House West,
                             Berkeley Avenue,
                             Greenford, Middlesex UB6 ONN,
                             United Kingdom

                      For Aurora:
                             Harry Stylli, Ph.D.
                             Senior Vice President Commercial Development
                             Aurora Biosciences Corporation
                             11010 Torreyana Road
                             San Diego, CA.  92121

                             Copies to:
                             John D. Mendlein, Ph.D., J.D.
                             Senior Vice President, Intellectual Property
                             and Chief Knowledge Officer
                             Aurora Biosciences Corporation
                             11010 Torreyana Road
                             San Diego, CA.  92121

               Notices shall be in writing and shall be deemed delivered when
               received, if delivered by a courier, or on the second business
               day following mailing, if sent by first-class certified or
               registered mail, postage prepaid.

        10.9.  Governing Law. This Agreement shall be governed by and construed
               in accordance with the laws of the State of California as those
               laws apply to California residents, without regard or giving
               effect to its principles of conflict of laws. Resolution of any
               disputes will be decided in California.

        10.10. Third Party Beneficiaries. This Agreement and the rights and
               obligations created hereunder are for the sole benefit of the
               parties hereto and their respective successors or assigns as may
               be permitted under the terms of this Agreement. By entering into
               this Agreement, the parties agree that they are not creating and
               do not intend to create implied or incidental rights inuring to
               the benefit of Third Parties.

        10.11. Severability. This Agreement is intended to be severable. If any
               provision(s) of this Agreement are or become invalid, are ruled
               illegal by a court of competent jurisdiction or are deemed
               unenforceable under the current applicable law from time to time
               in effect during the term hereof, it is the intention of the
               parties that the remainder of the Agreement shall not be affected
               thereby and shall continue to be construed to the maximum extent
               permitted by law at such time. It is further the intention of the
               parties that in lieu of each such provision which is invalid,
               illegal, or unenforceable, there shall be substituted or added as
               part of this Agreement by such court of competent jurisdiction a
               provision which shall be as similar as possible, in economic and
               business


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               objectives as intended by the parties to such invalid, illegal or
               unenforceable provision, but shall be valid, legal and
               enforceable.

        10.12. Headings. Captions and paragraph headings are for convenience
               only and shall not form an interpretative part of this Agreement.
               Unless otherwise specifically provided, all references to a
               Section incorporate all Sections or subsections thereunder. This
               Agreement shall not be strictly construed against either party
               hereto and maybe executed in two (2) or more counterparts, each
               of which will be deemed an original and the same instrument.
               Counterparts may be signed and delivered by facsimile, each of
               which shall be binding when sent, and in each case an original
               shall be sent via overnight courier. This Agreement will not be
               enforceable and shall have no effect if this Agreement is not
               executed ***.

        IN WITNESS WHEREOF, the parties have executed, by duly authorized
representatives, this Agreement:

For Glaxo Group Limited                      For Glaxo Research and
                                             Development Limited

By: /s/  SM Bicknell                         By:    /s/  SM Bicknell
   ---------------------------------            --------------------------------

Date:   15 December 1999                     Date:  15 December 1999
     -------------------------------              ------------------------------

Name:   SM Bicknell                          Name:   SM Bicknell
     -------------------------------              ------------------------------

Title:   Assistant Secretary                 Title:   Assistant Secretary
      ------------------------------               -----------------------------


For Aurora Biosciences Corporation

By:  /s/  Michael J. Dunn
   ---------------------------------

Date:   12/15/99
     -------------------------------

Name:  Michael J. Dunn
     -------------------------------

Title: Vice President Business Development
       -----------------------------------


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                                    EXHIBIT A


                                       ***


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                                    EXHIBIT B




                                       ***




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                                       ***










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                                       ***












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                                    EXHIBIT C










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                                  ATTACHMENT 1

                                       ***




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