<PAGE>
 
                                                          Confidential Treatment
                                                                   Exhibit 10.48


Redacted information denoted as "[REDACTED]," has been omitted from this 
document pursuant to a request for confidential treatment that has been 
separately filed with the Commission.


                                LICENSE AGREEMENT

                               Ovcon(R)[REDACTED]


         This LICENSE AGREEMENT is made as of the Effective Date by and between,
on the one hand, BRISTOL-MYERS SQUIBB COMPANY, having a place of business at 777
Scudders Mill Road, Plainsboro, New Jersey 08543-4500 ("BMS"), and, on the other
hand, WARNER CHILCOTT LABORATORIES IRELAND LIMITED, having a place of business
at Lincoln House, Lincoln Place, Dublin 2, Ireland ("WCL") and, for purposes of
indemnification under Article IX only, WARNER CHILCOTT INC., having a place of
business at Rockaway 80 Corporate Center, 100 Enterprise Drive, Suite 280,
Rockaway, New Jersey 07866 ("WCI").

                                   WITNESSETH:

         WHEREAS, BMS owns the right, title and interest in and to the Trademark
(as defined herein); and

         WHEREAS, BMS owns the right, title and interest in and to approved New
Drug Applications covering the manufacture and sale of norethindrone and ethinyl
estradiol tablets, USP, in formulations containing 50 and 35 micrograms ethinyl
estradiol, which are currently marketed by Apothecon, Inc. (an Affiliate of BMS,
hereinafter referred to as "Apothecon") in the Territory under the trademarks
Ovcon(R)50 and Ovcon(R)35, respectively; and

         WHEREAS, WCL desires to market and sell a norethindrone and ethinyl
estradiol tablet in a formulation containing [REDACTED] micrograms ethinyl
estradiol under the trademark "Ovcon(R)[REDACTED]"; and

         WHEREAS, BMS is willing to grant to WCL an exclusive license (except as
to BMS, its Affiliates, or a purchaser or in-licensor in accordance with Article
II(F) herein) to use and display the "Ovcon(R)" trademark in connection with the
marketing and sale by WCL of a norethindrone and ethinyl estradiol tablet in a
formulation containing [REDACTED] micrograms ethinyl estradiol and to facilitate
WCL's securing its own NDA for that tablet.

         NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, and intending to be legally bound hereby, the parties hereto agree as
follows:

I.       Definitions

         For purposes of this Agreement, the following terms shall have the
corresponding meanings set forth below:
<PAGE>
 
         "Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. A Person shall be regarded as in control of another Person if
it/he/she owns, or directly or indirectly controls, more than fifty percent
(50%) of the voting securities (or comparable equity interests) or other
ownership interests of the other Person, or if it/he/she directly or indirectly
possesses the power to direct or cause the direction of the management or
policies of the other Person, whether through the ownership of voting
securities, by contract or any other means whatsoever.

         "Agreement" means this agreement, together with all appendices,
exhibits and schedules hereto, and as the same may be amended or supplemented
from time to time hereafter by a written agreement duly executed by authorized
representatives of each party hereto.

         "Agreement Quarter" means each three-month period commencing on the
first day of January, April, July, or October, as the case may be, during the
Agreement Term.

         "Agreement Term" has the meaning specified in Article VIII hereof.

         "Commercial Launch" means the first commercial sale of the Product to
an unAffiliated Third Party.

         "Confidential and Proprietary Information" has the meaning set forth in
Article X hereof.

         "Copromotion Agreement" means the agreement for the copromotion of
Ovcon(R)35 and Estrace(R) entered into between Apothecon and WCI as of January
1, 1999 solely as it pertains to Ovcon(R)35.

         "Effective Date" means February 1, 1999.

         "Net Sales" means for the applicable period the gross amount invoiced
for the Product by WCL or its licensees to unAffiliated third parties in the
Territory, less the following amounts to the extent deducted on such invoice or
absorbed by WCL in accordance with U.S. GAAP: (i) quantity, trade and/or cash
discounts, allowances, rebates, and price adjustments or reductions allowed or
given, provided, however, that such discounts, allowances, rebates, adjustments
and reductions are ordinary and usual in the industry; (ii) freight, postage,
and shipping insurance expenses absorbed by WCL and not reimbursed by the
invoicee; (iii) credits, rebates, charge backs, or refunds allowed for rejected,
outdated, or returned Product; (iv) sales and other excise taxes and duties
directly related to the sale, to the extent such items are included in the gross
invoice price (but not including taxes assessed against the income derived from
such sale). If a Product is sold for compensation other than cash, Net Sales
shall be calculated based on the fair market value of the Product in cash.

         "Ovcon(R)35" means all current presentations of norethindrone and
eithinyl estradiol tablets, USP, currently approved by the FDA as an oral
contraceptive (as more fully specified in the labeling for the product) and
marketed under the trademark Ovcon(R)35.

                                      -2-
<PAGE>
 
         "Ovcon Products" means all current presentations and formulations of
norethindrone and ethinyl estradiol tablets, USP, currently approved by the FDA
and marketed under and/or utilizing the trademark "Ovcon(R)."

         "Person" shall mean an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority, or any other form of entity not
specifically listed herein.

         "Product" means finished pharmaceutical preparations containing as
their active ingredients norethindrone and [REDACTED] micrograms ethinyl
estradiol.

         "Serious Adverse Event" and "Non-Serious Adverse Event" have the
meanings set forth in Articles VII(G).

         "Territory" means the United States of America, and specifically
excluding Puerto Rico and any U.S. held territories and possessions.

         "Third Party" means any Person other than a party to this Agreement or
an Affiliate thereof.

         "Trademark" means the trademark "Ovcon(R)".


II.      Grant to WCL

         A. Subject to all the terms and conditions of this Agreement, BMS
hereby grants to WCL an exclusive license, (except as to BMS, its Affiliates, or
a purchaser or in-licensor of the Trademark in accordance with Article II(F)
herein), to use the Trademark in the Territory during the Agreement Term solely
in connection with the promotion, marketing and sale of the Product in the
Territory in accordance with the terms of this Agreement. WCL shall not transfer
or grant any sublicenses with respect to the Trademark without the prior,
express written consent of BMS, except that WCL is hereby authorized to grant
nontransferable sublicenses to use the Trademark to its Affiliates for the sole
purpose of carrying out WCL's obligations and efforts under this Agreement,
provided that such Affiliates agree to be bound by the terms and conditions of
this Agreement.

         B. WCL acknowledges that BMS is the sole and exclusive owner of all
right, title and interest in and to the Trademark (including the application and
any subsequent registrations and renewals thereof). In connection with its use
of the Trademark, WCL shall not in any way or manner represent to others that it
owns or has any ownership rights in the Trademark and any subsequent
registrations thereof. WCL agrees and acknowledges that any goodwill accruing or
arising from its use of the Trademark shall be for the sole benefit of BMS. WCL
shall not take any action that impairs, contests or tends to impair or contest
BMS's right, title and interest in and to the Trademark and any goodwill
associated with the Trademark. All rights to use the Trademark not expressly
granted to WCL by BMS pursuant this Agreement are reserved.

         C. WCL shall not use or display any other mark or marks in connection
with the 

                                      -3-
<PAGE>
 
Trademark, except for trademarks used or adopted by WCL generally, such as
"Warner Chilcott" or the "WC" logo, that are used on packaging and/or
advertising or promotional material for the Product and that are physically
separate from the Trademark. Notwithstanding the foregoing exception, WCL shall
not use or adopt any variation of the Trademark or any word or mark that is
confusingly similar to the Trademark. WCL shall comply with the terms and
conditions of this Agreement and all federal and state laws, statutes and
regulations in connection with its use of the Trademark.

         D. WCL shall not use or display the Trademark in connection with or as
part of the promotion, marketing or sale of the Product for a therapeutic area
other than: (i) oral contraception; or (ii) such other therapeutic area as is
consistent with the approved FDA labeling for the Product, provided, however,
that such labeling is consistent with that for the class of products to which
the Product belongs.

         E. BMS shall be responsible, at its own cost and expense, for taking
all actions required for the application, registration, maintenance and renewal
of the Trademark in the United States Patent and Trademark Office. BMS shall not
permit any U.S. registration for the Trademark to lapse or become abandoned. WCL
shall furnish BMS with all information reasonably requested by BMS (including
specimens and samples illustrating the manner of use of the Trademark) and
documents (including the execution and delivery of any and all affidavits,
declarations, oaths and other documents) to assist BMS in maintaining trademark
protection and registrations for the Trademark.

         F. During the Agreement Term, BMS may not use (itself or through an
Affiliate) or out-license the Trademark to any Third Party for any finished
pharmaceutical preparations containing as its active ingredients norethindrone
and [REDACTED] micrograms ethinyl estradiol. Notwithstanding the foregoing, BMS
may sell or out-license the Trademark to an Affiliate or a Third Party provided,
however, that: (i) WCL's exclusive license to utilize the Trademark under the
terms of this Agreement shall survive any such sale or out-license for the
Agreement Term; and (ii) any such sale or out-license of the Trademark to a
Third Party shall be made in accordance with Section 15 of the Copromotion
Agreement.

         G. WCL shall promptly notify BMS of: (i) any actual or suspected
infringement or misuse of the Trademark, or (ii) any information which may
adversely affect the Trademark. If the Trademark is infringed by a Third Party,
BMS shall have the right and option, but not the obligation, to bring an action
for infringement, at its sole expense, against the Third Party, and/or reach a
settlement with the Third Party. In the event BMS elects not to bring an action
for infringement or settle the claims against the Third Party, then BMS shall
give WCL prompt written notice of that election so that the claim is not
compromised, and WCL shall have the right and option, but not the obligation, at
its cost and expense, to initiate infringement litigation against the Third
Party and/or reach a settlement with the Third Party. The proceeds of any
recovery resulting from an infringement action against and/or settlement with a
Third Party shall be applied first to the unreimbursed expenses and legal fees
of the party bring the action or entering into the settlement. Any remaining
balance shall be divided between BMS and WCL based on the Net Sales of the
Ovcon(R) Products (for BMS) and the Product (for WCL) as a percentage of the
combined Net Sales for both the Ovcon(R) Products and the Product, each in the
twelve (12) month period preceding the date on which the monies are actually
collected. By way of example, if sales for the Ovcon(R) 

                                      -4-
<PAGE>
 
Products are [REDACTED], and sales of the Product are [REDACTED], then BMS would
be entitled to [REDACTED] of the remaining recovery and WCL to [REDACTED].


III.  Product Development

         A. WCL shall diligently pursue, within the standards of commercial
reasonableness, the development of, and an approved NDA for, the Product. WCL
shall have sole responsibility for undertaking and funding all aspects of the
development of the Product, including, but not limited to, Product formulation
and obtaining FDA approval to market the Product. WCL shall be the owner of all
NDAs and intellectual property derived from such activities, including patents,
(excluding, however, all intellectual property rights related to the Trademark,
which rights are and shall continue to be owned by BMS) and BMS shall not in any
way represent to others that it owns or has any ownership rights in the NDA or
WCP intellectual property relating to the Product apart from the Trademark.

         B. BMS shall provide WCL with reasonable access to the NDA for
Ovcon(R)35 in connection with WCL's development of the Product. WCL hereby
acknowledges and agrees that all information in the NDA is and will be treated
as Confidential and Proprietary Information of BMS.

         C. At BMS's option and sole discretion, BMS will provide WCL, in
response to a request by WCL, with product development and regulatory support
services in connection with WCL's development of the Product. BMS shall invoice
WCL for any support services it provides to WCL utilizing BMS's then current
standard absorbed cost for such services, calculated in accordance with U.S.
GAAP, consistently applied. WCL shall pay the invoices within thirty (30) days
of its receipt thereof.

IV.      Product Marketing
         A. WCL shall be solely responsible for undertaking and funding all
aspects of the marketing, promotion, and sale of the Product in the Territory,
including but not limited to all regulatory matters. WCL shall maintain in full
force and effect all necessary licenses, permits and other authorizations
required by law to carry out its duties and obligations under this Agreement.
WCL shall comply with all laws, ordinances, rules and regulations (collectively,
"Laws") applicable to its activities under this Agreement.

         B. WCL shall market the Product under the WCL label. WCL shall make no
representations or warranties relative to the Product that conflict or are
inconsistent with the FDA-approved label for the Product.

         C. During the Agreement Term WCL shall not promote or otherwise market
the Product in a manner designed to convert prescribers or users of the Ovcon(R)
Products to the Product.

         D. WCL shall obtain BMS's prior approval of WCL's use of the Trademark
in promotional and advertising materials, which approval shall not be
unreasonably withheld. For purposes of implementing the foregoing, WCL shall
provide BMS with samples of its use of the Trademark in promotional and
advertising materials no less than sixty (60) days prior to WCL's first

                                      -5-
<PAGE>
 
commercial use of such materials, and BMS shall provide any objections to the
proposed use of the Trademark, if any, within thirty (30) days of its receipt of
the samples.

V.       CONSIDERATION

         A. In consideration of the Trademark license and the NDA for the
Ovcon(R) Products being made available to WCL, WCL agrees to compensate BMS as
follows:

         1. If WCI does not terminate the Copromotion Agreement prior to
December 31, 2003, WCL will pay BMS a royalty in the amount of [REDACTED] of all
Net Sales of the Product in the Territory during the Agreement Term, plus, if
the Commercial Launch of the Product occurs during the Copromotion Term, (as
defined in the Copromotion Agreement):

                  (a) the difference, if any, between (i) the Net Sales of
         Ovcon(R)35 in the Territory during the [REDACTED] months preceding the
         month of the Commercial Launch of the Product, and (ii) the Net Sales
         of Ovcon(R)35 in the [REDACTED] following the Commercial Launch of the
         Product; plus

                  (b) the difference, if any, between (i) the Net Sales of
         Ovcon(R)35 in the Territory during the [REDACTED] preceding the month
         of the Commercial Launch of the Product, and (ii) the Net Sales of
         Ovcon(R)35 in the [REDACTED] months following the Commercial Launch of
         the Product; plus

                  (c) the difference, if any, between (i) the Net Sales of
         Ovcon(R)35 in the Territory during the [REDACTED] months preceding the
         month of the Commercial Launch of the Product and (ii) the Net Sales of
         Ovcon(R)35 in the [REDACTED] months following the Commercial Launch of
         the Product.

It is understood that that payments set forth in Articles V(A)(1)(a) through (c)
above are intended to insure that the Product does not convert existing
Ovcon(R)35 sales, and that there shall be no credit, offset or other payment due
from BMS or any of its Affiliates to WCL as a result of any of those differences
being a negative number.

         2. In the event that WCI terminates the Copromotion Agreement prior to
December 31, 2003 and such termination is not due to a Substantial Disruption of
the Market or an uncured breach of the Copromotion Agreement by Apothecon, WCL
will pay BMS a royalty of [REDACTED] of Net Sales of the Product dating from the
effective date of the termination of the Copromotion Agreement.

         3. In the event that WCI terminates the Copromotion Agreement prior to
December 31, 2003 due to a Substantial Disruption of the Market or an uncured
breach of the Copromotion Agreement by Apothecon, WCL will pay BMS a royalty of
[REDACTED] of Net Sales of the Product dating from the effective date of the
termination of the Copromotion Agreement.

         4. In the event Apothecon terminates the Copromotion Agreement prior to
December 31, 2003 due to an uncured breach by WCI or pursuant to Sections
12(b)(i) or (ii) of the 

                                      -6-
<PAGE>
 
Copromotion Agreement (i.e., for failure to meet the prescription goals set
forth therein), WPC will pay BMS a royalty of [REDACTED] of Net Sales of the
Product dating from the effective date of the termination of the Copromotion
Agreement.

         B. As used in Article V(A), herein, "Net Sales" of Ovcon(R)35 is as
defined in the Copromotion Agreement, and "Substantial Disruption of the Market"
means: (a) the commercialization of an AB rated generic version or equivalent of
Ovcon(R)35; or (b) APOTHECON'S inability to supply Ovcon(R)35 for [REDACTED]
consecutive days; or (c) a material recall or other regulatory or governmental
action affecting the availability of Ovcon(R)35 for sale.

         C. Royalties due hereunder shall accrue from the date of Commercial
Launch through the end of the Agreement Term.

         D. Royalties due hereunder shall accrue when Product is billed.


VI.      Payments and Reporting

         A. WCL shall furnish to BMS a written report covering each Agreement
Quarter, showing the gross sales price and the Net Sales Price of all Product
sold by WCL during each Agreement Quarter and the royalties which shall have
accrued. Said reports shall be due on the forty-fifth day (45th) day following
the close of each Agreement Quarter. In case no royalty is due for any Agreement
Quarter, WCL shall so report.

         B. Royalties shown to have accrued by each of the royalty reports
provided for under Article VI(A) of this Agreement shall be due and payable on
the date such royalty report is due. Amounts payable under Articles V(A)(1)(a)
through (c) shall be due and payable on the forty-fifth day (45th) following
each of the three respective twelve month periods following the Commercial
Launch of the Product.

         C. The parties will maintain complete and accurate books and records in
sufficient detail to enable verification of the basis for calculating the
compensation or other payments paid by WCL to BMS hereunder. Either party may
demand an audit of the other party's relevant books and records in order to
verify the other's reports and/or invoices on the aforesaid matters. Upon
reasonable prior notice to the party to be audited, the independent public
accountants of the other party shall have access to the relevant books and
records of the party to be audited in order to conduct a review or audit
thereof. Such access shall be available during normal business hours not more
than once each calendar year during the Agreement Term and only for a period
until two years after the relevant period in question. The accountants shall be
entitled to report its conclusions and calculations to the party requesting the
audit, except that in no event shall the accountants disclose the names of
customers of either party or the prices, discounts, rebates, or other terms of
sale charged by BMS or its Affiliates for Ovcon(R)35 or by WCL for the Product.

         The party requesting the audit shall bear the full cost of the
performance of any such audit except as hereinafter set forth. If, as a result
of any inspection of the books and records of WCL, it is shown that WCL's
payments to BMS under this Agreement were less than the amount which 

                                      -7-
<PAGE>
 
should have been paid, then WCL shall make all payments required to be made to
eliminate any discrepancy revealed by said inspection within 30 days after BMS's
demand therefor. If, as a result of any inspection of the books and records of
BMS, it is shown that WCL's payments to BMS under this Agreement were more than
the amount which should have been paid, then BMS shall reimburse WCL for the
discrepancy revealed by said inspection within 30 days after WCL's demand
therefor. Furthermore, if the payments were more or less than the amount which
should have been paid by an amount in excess of [REDACTED] percent [REDACTED] of
the payments actually made during the period in question, the party responsible
for the discrepancy shall also reimburse the auditing party for its out-of-
pocket costs of such inspection.

VII.     Adverse Experience Reporting

         A. All regulatory matters regarding the Product shall be the
responsibility of WCL. WCL will have the sole responsibility, at its cost and
expense, to respond to product and medical complaints and to handle all returns
and recalls of the Product. WCL shall provide BMS with prompt notice of all
recalls.

         B. Beginning as of the Effective Date of this Agreement, each party
shall promptly notify the other party of any significant event(s) that affects
the marketing of the Product, including, but not limited to, adverse drug
experiences and governmental inquiries, whether within or outside the Territory,
concerning the Ovcon Products or the Product.

         Serious adverse events (as defined in Article VII(G) below) for the
Product or the Ovcon(R) Products learned by a party shall be submitted to the
other within three (3) working days but no more than four (4) calendar days from
the receipt date.

         Non-serious adverse events for the Product or the Ovcon(R) Products (as
defined in Article VII(C) below) that are spontaneously reported to a party
shall be submitted to the other party no more than one (1) month from the date
received by the first party; provided, however, that medical and scientific
judgment should be exercised in deciding whether expedited reporting is
appropriate in other situations, such as important medical events that may not
be immediately life-threatening or result in death or hospitalization but may
jeopardize the patient or may require intervention to prevent a serious adverse
event outcome.

         C. WCL shall have the responsibility of reporting serious and
non-serious adverse events concerning the Product to the applicable regulatory
health authorities anywhere in the world.

                                      -8-
<PAGE>
 
         WCL shall report all adverse events involving the Product learned by it
to:

                  Vice President, Worldwide Safety & Surveillance
                  Bristol-Myers Squibb Company
                  P.O. Box 5400
                  Mail Stop HW19-1.01
                  Princeton, New Jersey 08543-5400
                  U.S.A.
                  Facsimile No.:  (609) 818-3804
                  Telephone No.:  (609) 818-3737

         A.       CIOMS-I form or a form that contains the data elements of a
CIOMS-I form is recommended.

         Serious adverse events concerning the Ovcon Products learned by BMS
shall be reported by BMS to WCL at the time that BMS reports such events to FDA,
and shall be sent to:

                  Vice President B Regulatory Affairs
                  Warner Chilcott
                  100 Enterprise Drive
                  Rockaway, New Jersey 07866
                  Facsimile No.: (973) 442-3224
                  Telephone No.: (973) 442-3200

         D. Beginning as of the Effective Date of this Agreement, each party
shall promptly notify the other party in writing of any order, request or
directive of a court or other governmental authority to recall or withdraw the
Product or the Ovcon(R) Products in any jurisdiction.

         E. WCL shall inform Bristol Myers Squibb Company's office of the Vice
President, Worldwide Safety & Surveillance of any Product Quality Complaint
received within three (3) working days but no more than four (4) calendar days
from the receipt date by WCL. A Product Quality Complaint is defined as any
complaint that questions the purity, identity, potency or quality of the
Product, its packaging, or labeling, or any complaint that concerns any incident
that causes the drug product or its labeling to be mistaken for, or applied to,
another article or any bacteriological contamination, or any significant
chemical, physical, or other change or deterioration in the distributed drug
product, or any failure of one or more distributed batches of the drug product
to meet the specifications therefor in the NDA for the Product. Such information
shall be sent to the same address as set forth in Article VII(C) above.

         F.       WCL shall handle all medical inquiries concerning the Product.

         G. A "serious" adverse event for the Product is defined as any untoward
medical occurrence that at any dose for the Product: (i) results in death; (ii)
is life-threatening; (iii) requires inpatient hospitalization or prolongation of
existing hospitalization; (iv) results in persistent or significant
disability/incapacity; (v) is a congenital anomaly/birth defect; (vi) results in
drug dependency or drug abuse; (vii) is cancer, or (viii) is an overdose. A
"nonserious" adverse event 

                                      -9-
<PAGE>
 
is defined as that which is not serious.

VIII. Agreement Term

         A. Unless sooner terminated pursuant to Article VIII(B) below, the term
of this Agreement (including the Trademark license granted herein) (the
"Agreement Term") shall commence on the Effective Date and end on the later of:
(i) twenty (20) years from the date of the Commercial Launch of the Product, or
(ii) the expiration of any patent rights held by WCL relating to the Product.

         B. Upon written notice to WCL, BMS may terminate the Agreement Term
without penalty upon the occurrence of any of the following events:

                  1. [REDACTED] percent [REDACTED] or more the voting securities
of WCL are sold or transferred to a Person that, in the reasonable judgment of
BMS, is a competitor or potential competitor of BMS or any of its
Affiliates,(for purposes of the foregoing, voting securities sold or transferred
to an Affiliate of a Person shall be deemed to be sold or transferred to such
Person); or

                  2. WCL breaches any material obligation or duty under this
Agreement and said breach is continuing thirty (30) days after BMS has advised
WCL in writing of the existence and nature of this breach.

                  3. BMS receives notice that WCL or WCI has become insolvent or
has suspended business in all material respects hereof, or has consented to an
involuntary petition purporting to be pursuant to any reorganization or
insolvency law of any jurisdiction, or has made an assignment for the benefit of
creditors, or has applied for or consented to the appointment of a receiver or
trustee for a substantial part of its property or assets.

                  4.       WCL does not or ceases to diligently pursue, within
                           the standards of commercial reasonableness,
                           development of, or an approved NDA for, the Product.

         C. Neither the termination nor expiration of the Agreement Term shall
release or operate to discharge any party from: (i) any liability or obligation
that may have accrued prior to such termination or expiration, or (ii) any other
agreement which may exist between the parties, except as may be set forth in
such other agreement. Any termination of the Agreement Term by a party shall not
be an exclusive remedy, but shall be in addition to any legal or equitable
remedies that may be available to the terminating party. However, no party shall
be liable to another party for any damages (whether direct, indirect, special,
consequential, incidental, or other, including lost profits) sustained by reason
of expiration of this Agreement or for termination of this Agreement by a party
in accordance with the terms hereof.

         D. During any notice period, each party shall continue to fulfill its
obligations under this Agreement. Upon the termination or expiration of the
Agreement Term, WCL shall discontinue any use of the Trademark.

                                      -10-
<PAGE>
 
IX. Indemnification and Insurance

         A. WCL and WCI shall, jointly and severally, defend, indemnify and hold
BMS and its employees, agents, officers, directors and affiliates (a "BMS
Party") harmless from and against any and all losses, liabilities, obligations,
claims, fees (including, without limitation, attorneys fees), expenses and
lawsuits incurred by a BMS Party that are claimed by any third party and that
result from or arise in connection with (i) the breach of any covenant,
representation or warranty of WCL contained in this Agreement, (ii) the
manufacturing, sale or distribution of the Product by WCL or any licensee or
affiliate thereof, including, without limitation, any claim of patent
infringement, (iii) any product liability claim related to the Product,
including, without limitation, the use by any person of the Product, (iv) any
contamination of or defect in the Product; and (v) breach by WCL of its
obligations under Article IV hereof. In addition to the foregoing, WCI agrees to
indemnify BMS for all losses arising from WCL's breach of its obligations under
Article V of this Agreement.

         B. BMS shall defend, indemnify and hold WCL and its employees, agents,
officers, directors and affiliates (a "WCL Party") harmless from and against any
and all losses, liabilities, obligations, claims, fees (including, without
limitation, attorneys fees), expenses and lawsuits brought against or incurred
by a WCL Party by a third party resulting from or arising in connection with (i)
the breach by BMS of any covenant, representation or warranty of BMS contained
in this Agreement.
         C. To receive the benefits of the indemnity under clauses (A) or (B)
above, as applicable, an indemnified party must (i) give the indemnifying party
written notice of any claim or potential claim promptly after the indemnified
party receives notice of any such claim; (ii) allow the indemnifying party to
assume the control of the defense and settlement (including all decisions
relating litigation, defense and appeal) of any such claim (so long as it has
confirmed its indemnification obligation responsibility to such indemnified
party under this Article IX; and (iii) so long as such cooperation does not
vitiate any legal privilege to which it is entitled, reasonably cooperate
(provided the indemnifying party reimburses the indemnified party's reasonable
documented out-of-pocket expenses) with the indemnifying party in its defense of
the claim (including, without limitation, making documents and records available
for review and copying and making persons within its/his/her control available
for pertinent testimony). If the indemnifying party defends the claim, an
indemnified party may participate in, but not control, the defense of such claim
at its/his/her sole cost and expense. An indemnifying party shall have no
liability under this Article IX as to any claim for which settlement or
compromise of such claim or an offer of settlement or compromise of such claim
is made by an indemnified party without the prior consent of the indemnifying
party.

         D. WCL shall maintain for the entire Agreement Term commercial general
liability coverage and product liability coverage (including umbrella liability
coverage and excess umbrella liability coverage) in per occurrence and aggregate
amounts no less, and with deductibles no greater, than those set forth on
Exhibit A, each with insurers with Best ratings of A- or better. Apothecon, Inc.
and Bristol-Myers Squibb Company shall be named as insureds on the policy. WCL
shall furnish to BMS evidence of such insurance, upon request.

         E. The indemnification obligations set forth in this Article IX shall
survive termination of the Agreement.

                                      -11-
<PAGE>
 
X.       Confidentiality

         A. Each party acknowledges that it may receive confidential or
proprietary information of another party in the performance of this Agreement.
Each party shall hold confidential and shall not, directly or indirectly,
disclose, publish or use for the benefit of any third party or itself, except in
carrying out its duties hereunder, any confidential or proprietary information
of the other party, without first having obtained the furnishing party's written
consent to such disclosure or use. "Confidential or proprietary information"
shall include, inter alia, know-how, scientific information, clinical data,
efficacy and safety data, adverse event information, formulas, methods and
processes, specifications, pricing information (including discounts, rebates and
other price adjustments) and other terms and conditions of sales, customer
information, business plans, and all other intellectual property. This
restriction shall not apply to any information within the following categories:

                  (1) information that is known to the receiving party or its
         Affiliates prior to the time of disclosure to it, to the extent
         evidenced by written records or other competent proof;

                  (2) information that is independently developed by employees,
         agents, or independent contractors of the receiving party or its
         Affiliates without reference to or reliance upon the information
         furnished by the disclosing party, as evidenced by written records or
         other competent proof;

                  (3) information disclosed to the receiving party or its
         Affiliates by a third party that has a right to make such disclosure;

                  (4) information that is contained in any written promotional
         material prepared by BMS for use in connection with the Ovcon Products
         or in any written promotional material prepared by WCL in connection
         with the Product; or

                  (5) any other information that becomes part of the public
         domain through no fault or negligence of the receiving party.

         The receiving party shall also be entitled to disclose the other
party's Confidential Information that is required to be disclosed in compliance
with applicable laws or regulations (including, without limitation, to comply
with SEC, NASDAQ or stock exchange disclosure requirements), or by order of any
governmental body or a court of competent jurisdiction; provided that the party
required to disclose such information shall use all reasonable efforts to obtain
confidential treatment of such information by the agency or court.

                  (b)      This obligation shall survive the termination or
expiration of this Agreement for five (5) years.

                  (c) The confidentiality obligations described above shall be
in addition to the any obligations a party may have under the Confidential
Disclosure Agreement between Apothecon and WCI dated as of July 14, 1998, except
that to the extent there is an conflict between that agreement and provisions of
this Agreement, this Agreement shall govern.

                                      -12-
<PAGE>
 
XI.      Representations and Warranties

         A. BMS represents and warrants to WCL that (i) the execution, delivery
and performance of this Agreement by BMS does not conflict with, or constitute a
breach of or under, any order, judgment, agreement or instrument to which BMS is
a party; (ii) the execution, delivery and performance of this Agreement by BMS
does not require the consent of any person or the authorization of (by notice or
otherwise) any governmental or regulatory authority; (iii) the rights granted by
BMS to WCL hereunder do not conflict with any rights granted by BMS to any Third
Party; (iv) it is the sole and exclusive owner of the Trademark , free and clear
of any liens or encumbrances; (v) it has not received any notice of, and is not
aware of any facts that indicate a likelihood of, any infringement or
misappropriation by any Third Party with respect to the Trademark; and (vi) BMS
or an Affiliate of BMS owns the NDA for Ovcon(R)35.

         B. WCL represents and warrants to BMS that (i) the execution, delivery
and performance of this Agreement by WCL does not conflict with, or constitute a
breach of or under, any order, judgment, agreement or instrument to which WCL is
a party; and (ii) the execution, delivery and performance of this Agreement by
WCL does not require the consent of any person or the authorization of (by
notice or otherwise) any governmental or regulatory authority.

XII.     Notices

         Unless otherwise explicitly set forth herein, any notice required or
permitted to be given hereunder shall be in writing and shall be delivered
personally by hand, or sent by reputable overnight courier, signature required,
to the addresses of each party set forth below or to such other address or
addresses as shall be designated in writing in the same matter:

                  (A) If to BMS:

                            Bristol Myers Squibb Company
                            777 Scudders Mill Road
                            Plainsboro, NJ  08536
                                        Attention: General Manager

with a copy to the attention of the "Vice President and Senior Counsel" at the
same address.


                  (B) If to WCL:

                            Warner Chilcott Laboratories Ireland Limited
                            c/o Warner Chilcott Inc.
                            Rockaway 80 Corporate Center
                            100 Enterprise Drive
                            Suite 280
                            Rockaway, N.J. 07866
                                        Attention: President and General Counsel

                                      -13-
<PAGE>
 
with a copy to:

                           Warner Chilcott Laboratories Ireland Limited
                           Lincoln House
                           Lincoln Place
                           Dublin 2, Ireland
                           Attention:  General Manager

All notices shall be deemed given when received by the addressee.


XIII.    Miscellaneous Provisions

         A. Assignment. No party shall assign or otherwise transfer this
Agreement or any interest herein or right hereunder without the prior written
consent of the other party, and any such purported assignment, transfer or
attempt to assign or transfer any interest herein or right hereunder shall be
void and of no effect; except that each party (i) may assign its rights and
obligations hereunder to an Affiliate without the prior consent of the other
party (although, in such event, the assigning party shall remain responsible for
all of its obligations and agreements set forth herein, notwithstanding such
assignment) and (ii) subject to BMS's right to terminate the Agreement under
Article VIII(B)(1), may assign its rights and obligations to a successor
(whether by merger, consolidation, reorganization or other similar event) or
purchaser of all or substantially all of its business assets relating to the
Product, provided, that such successor or purchaser has agreed in writing to
assume all of such party's rights and obligations hereunder and a copy of such
assumption is provided to the other party hereunder; and except that BMS may
sell or out-license the rights to the Trademark as set forth in Article II(F).

         B. Non-Waiver. Any failure on the part of a party to enforce at any
time or for any period of time any of the provisions of this Agreement shall not
be deemed or construed to be a waiver of such provisions or of any right of such
party thereafter to enforce each and every such provision on any succeeding
occasion or breach thereof.

         C. Dispute Resolution. If any dispute arises under this Agreement, the
matter shall be submitted to the President of WCL and the General Manager of
Apothecon for resolution. Any dispute that cannot be so resolved within 30 days
after submission shall be submitted for arbitration in accordance with the rules
of the American Arbitration Association, and the award or decision made by the
arbitrator(s) designated pursuant to the American Arbitration Association rules
of arbitration shall be binding upon the parties hereto and a judgment
consistent therewith may be entered in any court of competent jurisdiction;
provided, however, that nothing herein contained shall preclude a party from
seeking equitable remedies in any court of competent jurisdiction.
Any such arbitration proceedings shall be conducted in New Jersey.

         D. Entirety of Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all previous and contemporaneous verbal and written agreements,
representations and warranties with respect to such subject matter. This
Agreement (or any provision or term hereof) may be released, waived, changed or

                                      -14-
<PAGE>
 
supplemented only by a written agreement signed by an officer or other
authorized representative of the party against whom enforcement of any release,
waiver, change or supplement is sought. This Agreement shall not be strictly
construed against any party hereto.

         E. Public Announcements. The form and content of any public
announcement to be made by one party regarding this Agreement, or the subject
matter contained herein, shall be subject to the prior written consent of the
other party (which consent may not be unreasonably withheld), except as may be
required by applicable law (including, without limitation, disclosure
requirements of the SEC, NASDAQ, or any other stock exchange) in which event the
other party shall endeavor to give the other party reasonable advance notice and
review of any such disclosure. Proposed public announcements submitted to the
other party for approval shall be considered approved if the submitting party
has not received comments or objections from the other party within fifteen (15)
days from the date of submission, provided that public announcements proposed by
WCL or WCI must be simultaneously provided to both the General Manager and in
house Legal Counsel for Apothecon, at Apothecon, Inc., 777 Scudders Mill Road,
Plainsboro, New Jersey.

         F. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey, without regard to
its conflicts of law principles.

         G. Relationship of the Parties. In making and performing this
Agreement, the parties are acting, and intend to be treated, as independent
entities and nothing contained in this Agreement shall be construed or implied
to create an agency, partnership, joint venture, or employer and employee
relationship between BMS and WCL or BMS and WCI. Except as otherwise provided
herein, no party may make any representation, warranty or commitment, whether
express or implied, on behalf of or incur any charges or expenses for or in the
name of any other party. No party shall be liable for the act of any other party
unless such act is expressly authorized in writing by both such parties.

         H. Counterparts. This Agreement shall become binding when any one or
more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against the
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument.

                                      -15-
<PAGE>
 
         I. Force Majeure. No party shall be liable to any other party for any
failure to perform as required by this Agreement if the failure to perform is
due to circumstances reasonably beyond such party's control, including, without
limitation, acts of God, civil disorders or commotions, acts of aggression,
fire, explosions, floods, drought, war, sabotage, embargo, unexpected safety or
efficacy results obtained with the Product, utility failures, material
shortages, labor disturbances, a national health emergency, or appropriations of
property. A party whose performance is affected by a force majeure event shall
take prompt action using its reasonable best efforts to remedy the effects of
the force majeure event.


                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.

Bristol Myers Squibb Company       Warner Chilcott Laboratories Ireland Limited

By:  /s/ Richard J. Lane           By: /s/ Roger M. Boissonneault  
     ---------------------------       -----------------------------
     Richard J. Lane                   Roger M. Boissonneault
     Title: President U.S.             Title: President
             Medicines Group and               Warner Chilcott, Inc.
             Worldwide Franchise 
             Management






Prepared by Harvey C. Kaish
McCarter & English, LLP

                                      -16-