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                                                                   Exhibit 10.38
                             Confidential Treatment

                       RESEARCH AND DEVELOPMENT AGREEMENT

         Research and Development Agreement, dated as of December 22, 1998,
between LEUKOSITE, INC., a Delaware corporation ("LeukoSite"), located at 215
First Street, Cambridge, MA 02142, and WARNER-LAMBERT COMPANY, a Delaware
corporation ("Warner"), located at 201 Tabor Road, Morris Plains, New Jersey
07950.

                                   WITNESSETH:

         WHEREAS, LeukoSite and Warner each has certain expertise in the
discovery and development of small molecule antagonists of (alpha)4(beta)7 and
(alpha)E(beta)7 Integrins (the "Field"); and

         WHEREAS, Warner and LeukoSite each wishes to enter into a collaborative
effort to share such expertise, to develop new expertise in the Field, to
research together potential, applications thereof and, if successful, to have
Warner market and sell certain of such applications (the "Collaboration");

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and conditions contained herein, LeukoSite and Warner
agree as follows:



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                                       -2-


                                    ARTICLE A

                                   DEFINITIONS

         The following capitalized terms shall have the following meanings for
purposes of this Agreement: 

         "AFFILIATE" shall mean any corporation, association or other entity
which directly or indirectly controls, is controlled by or is under common
control with the party in question. As used herein the term "control" means
control with possession of the power to direct, or cause the direction of, the
management and policies of a corporation, association or other entity.

         "BACKGROUND TECHNOLOGY" shall mean individually and collectively Warner
Background Technology and LeukoSite Background Technology.
         
         "BRIGHAM AGREEMENT" shall mean the Research and License Agreement
effective January 1, 1994 by and between the The Brigham and Women's Hospital,
Inc. and LeukoSite.

         "COLLABORATION TECHNOLOGY" shall mean individually and collectively
Warner Collaboration Technology and LeukoSite Collaboration Technology.

         "COST OF GOODS" means for commercial supplies of a Warner-LeukoSite
Product, the fully allocated manufacturing cost (determined in a reasonable
manner consistent with Warner's normal internal accounting practices and in
accordance with generally accepted accounting principles ("GAAP")) which
includes (i) direct and indirect labor (salaries, wages and employee benefits);
(ii) direct and indirect materials; (iii) operating costs of building and

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                                       -3-

equipment used in connection with the manufacture of the Warner-LeukoSite
Product; (iv) allocated depreciation and repairs and maintenance; (v) quality
and in-process control and regulatory compliance; (vi) any charges for
obsolescence, out of date product, spoilage, scrap or rework costs; (vii)
royalties paid to third parties (except royalties in respect of rights that a
party hereto currently has an interest in or could have an interest in pursuant
to any currently existing agreements) and (viii) the net cost or credit of any
value added taxes paid with respect to the manufacture of the Warner-LeukoSite
Product. To the extent that manufacturing of a Warner-LeukoSite Product or any
component thereof is performed for Warner by a third party (which is not an
Affiliate of Warner), amounts paid to such third party in connection with the
manufacturing of such Warner-LeukoSite Product or any component thereof shall be
added to the aggregate amount of the applicable hereinabove items (i) through
(viii).

         "DEVELOPMENT" shall mean the conduct of all preclinical, clinical,
chemical synthesis, formulation, stability, assays and validation,
certification, testing development and manufacturing scale-up in accordance with
then current Good Laboratory, Clinical and Manufacturing Practices or other
designated quality standards in connection with any Development Candidate or
Product insofar as the same are reasonably necessary to obtain marketing
approval by the relevant regulatory authorities for a Product's first approved
indication in any country (including, studies required to be 



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                                      -4-

performed after approval as a condition of approval) and the costs of
preparation, filing and submission of regulatory filings in the Territory.

         "DEVELOPMENT CANDIDATE" shall have the meaning set forth in Section
4.1.

         "DEVELOPMENT COMMITTEE" shall have the meaning set forth in 2.3.

         "DEVELOPMENT COSTS" shall mean the direct costs and expenses incurred
by Warner associated with the Development of a Warner-LeukoSite Product;
including without limitation, salaries, fringe benefits, overtime, chemicals,
clinical supplies (including without limitation, active substance, vialing,
packing, labeling and delivery to study sites), lab supplies, animals and other
direct charges, all at actual cost plus an overhead allocation of 25% (cost x
1.25) plus actual costs for travel (other than costs relating to committee
meetings referred to in Section 2.3), clinical studies performed by
investigators under contract with Warner, toxicology studies performed by
outsiders under contract with Warner and out-of-pocket costs for other
professional services.

         "DISTRIBUTION COSTS" shall mean all costs and expenses incurred by
Warner associated with the distribution of a Warner-LeukoSite Product, including
without limitation, expenses related to operating distribution centers and
warehouses, customer services, purchasing, receiving, order processing,
inventory control, order entry and shipping costs from distribution centers to
customers, billing, credit and collection of receivables.

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                                      -5-

         "EFFECTIVE DATE" shall mean the date of this Agreement first stated 
bove.

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

         "FIELD" has the meaning set forth in the first "Whereas" clause.

         "INTEGRIN ANTAGONIST" shall mean small molecule compound(s) which
inhibit the action of (alpha)4(beta)7 and/or (alpha)E(beta)7 Integrins.

         "LEAD COMPOUND" shall mean a compound that in accordance with standards
established by Warner is sufficiently promising to warrant Development.

         "LEUKOSITE BACKGROUND TECHNOLOGY" shall mean all technology,
inventions, information, data, know-how, compounds, materials and substances
(whether or not patented or patentable) which relate to or are potentially
useful as an Integrin Antagonist or is an Integrin Antagonist and/or techniques
for the discovery, screening, design, synthesis, delivery, development, testing,
use, manufacture or sale of Integrin Antagonists which exists as of the
Effective Date which is either owned by LeukoSite or which is licensed to
LeukoSite and as to which LeukoSite has a right to sublicense or otherwise
transfer, including without limitation, technology, inventions, information,
data, know-how, compounds, materials and substances licensed to LeukoSite
pursuant to the Brigham Agreement.

         "LEUKOSITE COLLABORATION TECHNOLOGY" shall mean all technology,
inventions, information, data, know-how, compounds, materials and 

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                                      -6-


substances (whether or not patented or patentable) which is either owned by
LeukoSite (alone or together with Warner) or which is licensed to LeukoSite and
as to which LeukoSite has a right to sublicense or otherwise transfer, and which
is conceived or reduced to practice pursuant to the Research Plan or pursuant to
development of a LeukoSite Product or a Warner-LeukoSite Product.

         "LEUKOSITE PRODUCT" shall have the meaning set forth in Section 4.1.

         "MANAGEMENT COMMITTEE" shall have the meaning set forth in Section 2.1.

         "MARKETING EXPENSE" shall mean all costs and expenses incurred by
Warner (including without limitation, the salaries, commissions, bonuses,
transportation, meals, lodging, benefits and healthcare insurance expenses of
appropriate employees) associated with launch, advertising and sales promotion
(including, without limitation, expenses related to promotional publications,
space or time in various media, salesforce meetings, promotional meetings,
hospital and governmental formulary presentations, physician education programs,
symposia, conventions, seminars, market research, sponsorships, field aids,
tokens, grants and other payments to institutional and managed care purchasers
(except to the extent the same are calculated as deductions to Net Sales) direct
mail campaigns, samples, if any, advertising agency fees and other promotional
activities), the cost of acquisition or manufacture and shipping of product
samples, Phase IV 


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                                      -7-

Studies, Pharmacoeconomic Studies, Phase V Studies, and any other clinical
studies not reasonably necessary to obtain marketing approval by the relevant
regulatory authorities for a Product's first approved indication in any country,
in each case determined in accordance with Warner's normal internal accounting
practices and GAAP.

         "NET SALES" shall mean the gross amount invoiced for sales of a Product
to non-affiliated commercial customers after deduction of the following items:
(i) trade, quantity and cash discounts; (ii) credits, rebates, chargeback
rebates, fees, reimbursements or similar payments granted or given to
wholesalers and other distributors, buying groups, healthcare insurance
carriers, governmental agencies and other institutions provided that such will
not grant a preference or otherwise favor other product(s) of Warner or
LeukoSite, as the case may be, if such preference is based on the fact that
LeukoSite or Warner, as the case may be, is entitled to royalties or a share of
profits; (iii) credits or allowances to the extent allowed for rejection or
return of such Product previously sold; (iv) allowance for bad debt expense in
accordance with Warner's normal internal accounting practices and GAAP; (v) any
tax, tariff, duty or other governmental charge (other than an income tax) levied
on the sale, transportation or delivery of such Product and borne by the seller
thereof; (vi) payments or rebates paid in connection with state or federal
Medicare, Medicaid or similar state or foreign governmental 



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                                      -8-

programs; and (vii) any charge for freight or insurance to the extent separately
invoiced.

         "PATENT RIGHTS" shall mean, with respect to LeukoSite or Warner, all
United States and foreign patents owned in whole or in part or licensed to
LeukoSite or Warner, respectively, as to which LeukoSite or Warner has a right
to a sublicense, at any time during the Term of this Agreement, which would be
infringed by the manufacture, use or sale of a Product or which would be
infringed by activities to be performed by the parties under the Research Plan
including all United States and foreign patents and patent applications
(including, without limitation, all reissues, extensions, substitutions,
confirmations, registrations, revalidations, additions, continuations,
continuations-in-part, and divisions thereof).

         "PHARMACOECONOMIC STUDIES" shall mean clinical studies designed with
the primary intention of developing, pharmacoeconomic data.

         "PHASE II STUDIES" shall mean that portion of the clinical development
program which provides for small scale clinical trials primarily to determine
safety of a product and other factors, such as dosing range.

         "PHASE IV STUDIES" shall mean clinical studies designed to enhance
sales for an approved indication, but shall not include Pharmacoeconomic
Studies.

         "PHASE V STUDIES" shall mean clinical studies directed for approval of
additional indications, new dosages or other line extensions.


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                                      -9-

         "PRODUCTS" shall mean Warner Products, LeukoSite Products,
Warner-LeukoSite Products and/or any product derived from or based on Warner
Collaboration Technology as to which LeukoSite has rights under Section 1.4(a),
as applicable.

         "RESEARCH COMMITTEE" shall have the meaning set forth in Section 2.2.

         "RESEARCH PLAN" shall have the meaning set forth in Section 1.1.

         "SALES COSTS" with respect to any applicable period shall equal the
aggregate amount of expenses incurred by Warner for maintaining its sales force
(including the costs set forth below) for Warner-LeukoSite Products in the
Territory. The costs shall include but not be limited to salary, commissions,
bonuses, transportation, meals, lodging, benefits and health care insurance
expenses for the sales force, and sales force training, management and support
in the Territory, all only as it relates to Warner-LeukoSite Product but
specifically excluding any cost or expense included in Marketing Expenses, in
each case determined in accordance with the parties' normal internal cost
accounting practices and GAAP.

         "SHARE OF PROFIT" shall mean Total Profit actually received in respect
of sales of a Warner-LeukoSite Product multiplied by *********************.

         "TERM OF THIS AGREEMENT" shall mean from the Effective Date until this
Agreement is terminated pursuant to its terms.

         "TERM OF THE RESEARCH COLLABORATION" shall have the meaning set forth
in Section 1.3.

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."

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                                      -10-


         "TERRITORY" shall mean all countries and territories of the world.

         "TOTAL PROFIT" shall mean with respect to a Warner-LeukoSite Product,
Net Sales minus the sum of (i) the Cost of Goods, (ii) Marketing Expenses and
Sales Costs and (iii) Distribution Costs. For the purposes of this definition
only, Warner-LeukoSite Product does not include a "generic" form of a
Warner-LeukoSite Product which is not covered by a Patent Right.

         "WARNER BACKGROUND TECHNOLOGY" shall mean all technology, inventions,
information, data, know-how, compounds, materials and substances (whether or not
patented or patentable) which relate to or are potentially useful as an Integrin
Antagonist or is an Integrin Antagonist and/or techniques for the discovery,
screening, design, synthesis, delivery, development, testing, use, manufacture
or sale of Integrin Antagonists which exists as of the Effective Date which is
either owned by Warner or which is licensed to Warner and as to which Warner has
a right to sublicense or other-wise transfer.

         "WARNER COLLABORATION TECHNOLOGY" shall mean all technology,
inventions, information, data, know-how, compounds, materials and substances
(whether or not patented or patentable) which is either owned by Warner (alone
or together with LeukoSite) or which is licensed to Warner and as to which
Warner has a right to sublicense or otherwise transfer, which is conceived or
reduced to practice pursuant to the Research Plan or pursuant to development of
a Warner Product or Warner-LeukoSite Product.

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                                      -11-


         "WARNER-LEUKOSITE PRODUCT" shall have the meaning set forth in Section
4.1.

         "WARNER PRODUCT" shall have the meaning set forth in Section 4.1.

                                    ARTICLE I

                                  COLLABORATION

         1.1 UNDERTAKING AND SCOPE. Each party agrees to use its best efforts to
perform the activities detailed in the research plan attached hereto as Exhibit
1 (the "Research Plan") in a professional and timely manner. Each party agrees
to use its best efforts to assure the complete and prompt exchange of Background
Technology, Collaboration Technology, and the results of all activities
conducted pursuant to the Research Plan. During the term of the Collaboration,
(i) Warner will use its best efforts, at its cost (including the cost of any
royalties or other amounts owed to third parties by Warner) to screen
substantially all of its compound library with such screen provided by LeukoSite
and (ii) LeukoSite will use its best efforts, at its cost (including the cost of
any royalties or other amounts owed to third parties by LeukoSite) to screen
substantially all of its compound library with the same screen that it provides
to Warner for such purposes. Pursuant to the Research Plan, LeukoSite and Warner
will use their best efforts, each at its own cost, to conduct in vitro and in
vivo characterization of the compounds identified as Integrin Antagonists in
such screen.


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                                      -12-


         1.2 PERSONNEL AND RESOURCES. Each party agrees to commit the personnel,
facilities, expertise and other resources necessary to perform the activities
and other obligations under this Agreement and the Research Plan in accordance
with its terms; provided, however, that neither party warrants that the
Collaboration will achieve any of the research objectives contemplated by the
parties. For the first twelve (12) months of this Agreement, Warner shall fund
the Collaboration pursuant to the Research Plan which shall provide for the
funding of ** LeukoSite full time equivalent employees (each a "FTE") at
********* per FTE to be paid quarterly by Warner. Warner, during this same
period, shall employ **** FTEs to perform its work under the Collaboration. The
scientific priorities and direction of the parties' respective staff under the
Research Plan will be determined by the Management Committee.

         1.3 TERM OF THE RESEARCH COLLABORATION. Activities under the Research
Plan, as the same may be amended or expanded from time to time but only by
mutual agreement of the parties, shall commence as of the Effective Date and,
unless terminated earlier by either party pursuant to the terms of this
Agreement or extended by mutual agreement of the parties, shall end one year
after the Effective Date (the "Term of the Research Collaboration"). Warner
shall have the option to extend the Term of the Research Collaboration for two
additional one-year terms upon written notice to LeukoSite prior to the
expiration of any one-year Term of the 


"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


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                                      -13-


Collaboration. The work to be performed and funded for such extensions shall be
determined by the Management Committee.

         1.4 COLLABORATION OPTIONS. Promptly after termination or expiration of
the Term of the Research Collaboration, but in no event later than thirty (30)
days thereafter, Warner will elect to proceed under one of the following
options:

         a. OPTION 1. Warner may terminate this Agreement after termination or
expiration of the Term of the Research Collaboration. In such event, Warner will
grant to LeukoSite a perpetual, royalty-free (except as stated in this Section
below), worldwide, exclusive license (with the right to sublicense) in the
Warner Collaboration Technology (including but not limited to any product which
is identified in the Research Plan as an Integrin Antagonist (a "Stage I
Product")) and any Patent Rights based thereon solely for use in the Field. In
addition, Warner will grant a nonexclusive license under Patent Rights not based
on Warner Collaboration Technology to the extent required to exploit Warner
Collaboration Technology and any patent rights based thereon solely for use in
the Field. Notwithstanding, the foregoing, Warner will retain a perpetual,
royalty-free, worldwide interest in Warner Collaboration Technology and Patent
Rights of Warner based thereon to make, use or sell any product or process (i)
for use outside the Field, (ii) discovered after the Term of the Collaboration
and which is within the Field and which is not derived from or based on
LeukoSite Background 



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                                      -14-


Technology, provided that in each case such product is not identical to a
product which Warner is aware that LeukoSite or any one of its licensees is
actively pursuing. LeukoSite shall pay Warner a royalty of *** percent of
worldwide Net Sales of (i) any Stage I Product (or any product which results
from research by or on behalf of LeukoSite directed to such Stage I Product or
any other compound provided by Warner to LeukoSite pursuant to the Stage I
Research) sold by LeukoSite or its sublicensee and (ii) any product sold by
LeukoSite or its sublicensee that is covered by a Warner Patent Right licensed
to LeukoSite under this Section, in each case for the period set forth in
Section 5.5(d).

         In the event that at any time after exercise of Option 1, Warner
desires to exercise Option 2 with respect to a Stage I Product under the terms
and conditions of this Agreement, Warner shall notify LeukoSite in writing, and
if LeukoSite is not actively researching, developing, marketing or selling, such
Stage I Product and has not granted rights to such Stage I Product to any third
party, then Option 2 shall be considered to be exercised by Warner.

         b. OPTION 2. Warner may agree to continue research and/or development
and/or marketing and selling of Collaboration Technology in the Field in
accordance with this Agreement.

         1.5 RIGHTS TO BACKGROUND TECHNOLOGY AND COLLABORATION TECHNOLOGY.
Subject to the terms and conditions of this Agreement each party hereby grants
and agrees to grant to the other a non-exclusive, worldwide, 

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


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                                      -15-


royalty-free license to use such party's Background Technology and Collaboration
Technology for research and development of an Integrin Antagonist under the
Research Plan and as to LeukoSite for development of a LeukoSite Product and as
to Warner for development of a Warner Product and/or Warner-LeukoSite Product.

         1.6 EXCLUSIVITY. Until termination of the Term of the Research
Collaboration, neither LeukoSite nor Warner will undertake any research or
development of small molecules identified by the Research Committee as Integrin
Antagonists except pursuant to this Agreement. Notwithstanding the foregoing,
LeukoSite or Warner may undertake research and development, alone or with one or
more third parties, with regard to monoclonal antibodies of any kind.

         1.7. RIGHT OF FIRST REFUSAL. LeukoSite hereby grants to Warner a right
of first negotiation on any other (beta)7 integrin technology directed toward
development of a small molecule either discovered by LeukoSite or that LeukoSite
acquires rights to after the date hereof and which LeukoSite decides to
research, develop and/or market with a third party. LeukoSite shall promptly
notify Warner of its decision to work with a third party to research, develop
and/or market any such (beta)7 integrin technology. If Warner is interested in 
such technology, LeukoSite shall provide Warner with information and data 
regarding such (beta)7 integrin technology. If after evaluation of the 
information and data provided, Warner remains interested 


<PAGE>
                                      -16-


in such technology, the parties shall in good faith negotiate the terms of a
research and development agreement, license agreement, co-promotion agreement or
other appropriate agreement which shall evidence their respective rights and
obligations. In the event (i) Warner is not interested in the (beta)7 integrin
technology about which it received notice and/or information or (ii) the parties
have not entered into a letter of intent with respect to such (beta)7 integrin
within ninety (90) days of beginning such negotiations, LeukoSite shall be 
free to pursue such (beta)7 integrin technology with any third party and 
Warner shall not have any further rights.

                                   ARTICLE II

                    MANAGEMENT COMMITTEE: RECORDS AND REPORTS

         2.1 MANAGEMENT COMMITTEE. Promptly after the Effective Date, Warner and
LeukoSite will each appoint three (3) representatives to a management committee
(the "Management Committee"). The Warner representatives on such committee will
together have only one vote and the LeukoSite members on such committee will
together have only one vote. The Management Committee will meet promptly after
the Effective Date to prepare such procedures and mechanisms as may be necessary
for the operation of the Management Committee to assure the most efficient
conduct of the Collaboration. Thereafter, the Management Committee will meet
quarterly or as otherwise mutually agreed. The Management Committee will assure
that agendas and minutes are prepared for each of its meetings. The 


<PAGE>
                                      -17-


personnel, facilities, expertise and other resources of each party to be used in
performance of the Collaboration shall be established by the Management
Committee. The Management Committee and will have the rights and
responsibilities specifically set forth in this Agreement. The Management
Committee will have the authority to resolve disputes among the members of the
Research Committee. All actions taken and decisions made by the Management
Committee shall be by unanimous agreement. If the Management Committee fails to
reach unanimous consent on any matter, the matter will be resolved by the senior
officer of Warner's pharmaceutical business with the advice of LeukoSite's
President. A party may change any of its appointments to the Management
Committee at any time upon giving written notice to the other party. The
Management Committee does not itself have the authority to amend this Agreement
in any manner that would require the separate approval of authorized officers of
the respective parties.

         2.2 RESEARCH COMMITTEE. Warner and LeukoSite will each appoint up to
four (4) representatives to a research committee (the "Research Committee"),
which will oversee all aspects of the Collaboration; including responsibilities
in the case of a Warner-LeukoSite Product. The Warner representatives on such
committee will together have only one vote and the LeukoSite members on such
committee will together have only one vote. The Research Committee will meet
quarterly, or more frequently if mutually agreed, and will report to the
Management Committee. Warner's and 


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                                      -18-


LeukoSite's initial representatives to the Research Committee will be appointed
by each of them promptly after the Effective Date. The Research Committee will
be responsible for recommending compounds to Warner for their consideration to
be designated as Development Candidates in the Field. All actions taken and
decisions made by the Research Committee will be by unanimous agreement. The
Management Committee will resolve disputes among the members of the Research
Committee. A party may change any of its appointments to the Research Committee
at any time upon giving written notice to the other party.

         2.3 DEVELOPMENT COMMITTEE. Warner will appoint up to four (4)
representatives and LeukoSite will appoint one (1) representative to a
development committee (the "Development Committee"), which will oversee the
pre-clinical and clinical development of each Warner-LeukoSite Product. Each
representative on such committee will have one vote. Warner will have
responsibility for interfacing with all regulatory agencies worldwide in
connection with the relevant Warner-LeukoSite Product. A party may change any of
its appointments to any Development Committee at any time upon giving written
notice to the other party.

         2.4 MEETINGS. The Management Committee, the Development Committee and
the Research Committee may meet by telephone or in person at such times as are
agreeable to the members of each such committee. Attendance at meetings shall be
at the respective expense of the participating 


<PAGE>
                                      -19-


parties. Warner and LeukoSite shall alternate the right to determine the
location of each meeting of the Management Committee and the Research Committee,
with LeukoSite determining the location of the first meeting of each committee.
Warner shall determine the location of each meeting of the Development
Committee. A quorum for the conduct of business at each meeting shall require
the attendance of at least one Warner member and at least one LeukoSite member.

                                   ARTICLE III

                    PATENTS, KNOW-HOW, RIGHTS AND INVENTIONS

         3.1 RIGHTS TO INVENTIONS. Ownership of Collaboration Technology shall
be determined in accordance with United States laws of inventorship. The owner
(the "Inventor") of any patentable Collaboration Technology (an "Invention")
shall have the right, at its option and expense, to prepare, file and prosecute
worldwide in its own name any patent applications with respect to any Invention
owned by it and to maintain any patents issued. In connection therewith, the
non-Inventor party agrees to cooperate with the Inventor at the Inventor's
expense in the preparation and prosecution of all such patent applications and
in the maintenance of any patents issued.
This obligation shall survive the expiration or termination of this Agreement.

         3.2 JOINT INVENTIONS. Collaboration Technology jointly invented by
LeukoSite and Warner will be jointly owned by them; however, Warner will have
the rights and responsibilities of the "Inventor" as described in this 


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                                      -20-


Article III in respect of any such patentable, jointly owned Collaboration
Technology and LeukoSite shall have the rights and responsibilities of a
nonInventor therein. Warner shall pay all expenses in connection with the
preparation, filing and prosecution of patent applications that claim
patentable, jointly owned Collaboration Technology and maintain, enforce and
protect all patents issuing thereon. Warner shall from time to time notify
LeukoSite of the amount of its out-of-pocket expenses in connection with the
foregoing and LeukoSite shall promptly thereafter pay Warner *** of the
out-of-pocket expenses incurred by Warner. At LeukoSite's option, such payments
to Warner may be delayed until earlier of (i) termination or expiration of this
Agreement or (ii) payment by Warner of a milestone or royalty payment hereunder.
In the event such payments become due upon payment by Warner of a milestone or
royalty payment hereunder, Warner may credit the amount due it against such
milestone or royalty payment due to LeukoSite, provided that such credit shall
not exceed *** of the payment due to LeukoSite. Thereafter, any amounts which
remain unpaid to Warner, shall be paid in accordance with the terms of this
Section 3.2.

         3.3 PROTECTION OF PATENT RIGHTS. (a) The Inventor shall keep the other
party currently informed of all steps to be taken in the preparation,
prosecution and maintenance of all of its patents and patent applications now or
hereafter existing which claim such Invention and shall furnish the other party
with copies of patents and applications, amendments thereto and other 

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


<PAGE>
                                      -21-


related correspondence relating to such Invention to and from patent offices and
permit the other party to offer its comments thereon before the Inventor makes a
submission to a patent office which could materially affect the scope or
validity of the patent coverage that may result. The non-Inventor party shall
offer its comments promptly. LeukoSite and Warner shall each promptly notify the
other of any infringement and/or unauthorized use of an Invention that comes to
its attention.

         (b) The non-Inventor party may request in writing that the Inventor
take specific, reasonable actions to (i) prepare, file or prosecute patent
applications in the United States of America and all other countries of the
world with respect to an Invention, (ii) maintain any patents issued with
respect to an Invention, (iii) protect against abandonment of a patent or
application which claims an Invention or (iv) obtain a discontinuance of an
infringement or unauthorized use of such patent or application. If such actions
are not undertaken within thirty days of the Inventor's receipt of such written
request and timely pursued thereafter, the Inventor shall permit, and the
non-Inventor party at its option and expense may undertake, such actions in the
name and on behalf of the Inventor. The party not undertaking such actions shall
fully cooperate with the other party and shall provide to the other party
whatever documents that may be needed in connection therewith. The party not
undertaking such actions may require a suitable indemnity 


<PAGE>
                                      -22-


against all damages, costs and expenses and impose such other reasonable
conditions as such party's advisors may require.

         (c) If either party commences any actions or proceedings (legal or
otherwise) pursuant to this Section, it shall prosecute the same vigorously at
its expense and shall not abandon or compromise them or fail to exercise any
rights of appeal without giving the other party the right to take over their
conduct at its own expense. The party finally conducting legal actions or
proceedings against an alleged infringer or other party shall be entitled to any
damages or costs awarded against such infringer or other party, provided,
however, that if Warner initiates such action to protect a Warner Product or
Warner-LeukoSite Product, then the amount of the award less applicable legal
expenses incurred by Warner will be considered Net Sales of the applicable
Warner or Warner-LeukoSite Product, and if LeukoSite initiates such action to
protect a LeukoSite Product, the amount of the award less applicable legal
expenses incurred by LeukoSite shall be considered Net Sales of the applicable
LeukoSite Product.

         3.4 ALLEGATIONS OF INFRINGEMENT BY THIRD PARTIES. In the event that
Warner or LeukoSite receives notice that any action by either of them under this
Agreement is alleged to be a violation of the patent or other intellectual
property rights of a third party, it shall immediately notify the other party to
this Agreement. The Management Committee shall promptly determine an appropriate
response and course of action. In the case of a Warner-LeukoSite 


<PAGE>
                                      -23-


Product, Warner will control any defense, and the costs thereof (including any
damages, costs or expenses resulting from any action) shall be borne by Warner.
In the case of a Warner Product or a LeukoSite Product the control and costs of
defense (including any damages, costs or expenses resulting from any action)
will be borne by Warner or LeukoSite, respectively.

                                   ARTICLE IV

                             DEVELOPMENT CANDIDATES

         4.1 DESIGNATION OF DEVELOPMENT CANDIDATE. Warner may, at any time
during or after the Term of the Research Collaboration, designate a "Development
Candidate," in the Field upon the declaration that such compound satisfies
Warner's then current, internal standards for a Lead Compound. LeukoSite shall
have the option, but not the obligation to provide funding to Warner for *** of
Warner's Development Costs for a Development Candidate. If LeukoSite provides
such funding it shall be entitled to a Share of Profit. Within forty-five (45)
days after designation of a Development Candidate, Warner shall provide to
LeukoSite in writing its non-binding, best estimate of the Development Costs of
the Development Candidate, LeukoSite shall then have forty-five (45) days to
notify Warner in writing whether or not LeukoSite will exercise its rights to a
Share of Profit. Upon exercise of such rights by LeukoSite the Development
Candidate shall become a "Warner-LeukoSite Product". LeukoSite's share of
Development Costs shall be payable upon the first to occur of (i) first
commercial sale of a 

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


<PAGE>
                                      -24-


Warner-LeukoSite Product, (ii) termination or expiration of this Agreement or
(iii) termination of the development of such Development Candidate. If LeukoSite
fails to exercise such rights within the stated period or in the event such
Warner-LeukoSite Product is sold commercially, to pay its share of Development
Costs when due, the Development Candidate shall become a "Warner Product".

         4.2 WARNER-LEUKOSITE PRODUCT. For each Warner-LeukoSite Product,
Development thereof will be, pursued under the direction of the Development
Committee to the extent necessary or desirable for regulatory approval. The
preparation, filing and prosecution of Investigational New Drug Applications,
New Drug Applications and other regulatory filings required to be filed with the
FDA and its foreign equivalents in regard to any Warner-LeukoSite Product will
be in the name of and at the responsibility of Warner, subject to the advice of
LeukoSite. The costs incurred by Warner (and approved by the Development
Committee) in the preparation, filing and submission of such regulatory filings
in the Territory and all Development Costs related to regulatory approvals in
such countries (not including the costs of clinical studies not reasonably
necessary for authorization by relevant regulatory authorities to sell such
Warner-LeukoSite Product for its first approved indication in each country),
will be borne *** by Warner and *** by LeukoSite, retroactive to the date the
Warner-LeukoSite Product was 


"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."

<PAGE>
                                      -25-


designated a Development Candidate. Neither party warrants that any regulatory
filings will actually be filed or, if filed, will be approved.

         4.3 WARNER PRODUCT. Subject to Sections 4.5, 4.6 and 4.7 Warner may
pursue Development and commercialization of a Warner Product at its direction.
All costs of Development of a Warner Product will be borne by Warner from the
date a product becomes a Warner Product.

         4.4 LEUKOSITE PRODUCT. Warner Products or Warner-LeukoSite Products can
become LeukoSite Products only in accordance with Section 4.7. LeukoSite may
pursue Development and commercialization of a LeukoSite Product at its
direction. All costs of Development of a LeukoSite Product will be borne by
LeukoSite from the date a product becomes a LeukoSite Product.

         4.5 Warner agrees to use at least that level of effort that it employs
for its other products of similar scientific and commercial promise to develop,
obtain regulatory approval for and to market and sell in each country each
Warner Product and each Warner-LeukoSite Product and to continue to market and
sell in each country each Warner Product and each Warner-LeukoSite Product (in
each case by itself or through one or more Affiliates or licensees).
Notwithstanding the foregoing, in no event will Warner be required to seek
regulatory approval, market or sell a Warner Product or Warner-LeukoSite Product
in any country where Warner has any commercially reasonable reason in its
discretion to delay or withhold such 


<PAGE>
                                      -26-


approval, marketing or sale (e.g. insufficient patent protection available,
insufficient government set pricing or insufficient market potential).

         4.6 Warner agrees to promptly notify LeukoSite in writing if at any
time Warner does not intend to continue to develop and/or obtain regulatory
approval for and/or market and sell any Warner Product or Warner-LeukoSite
Product (in each case by itself or through one or more Affiliates or licensees).

         4.7 In the event that Warner does not substantially meet its
obligations under Section 4.5 with respect to any Warner Product or any
Warner-LeukoSite Product in any country(ies), upon written notice from LeukoSite
to Warner, such product shall become a LeukoSite Product in such country(ies).
In the event that Warner provides LeukoSite with notice pursuant to Section 4.6
with respect to any Warner-LeukoSite Product or Warner Product with respect to
any country(ies), such Warner Product and/or Warner-LeukoSite Product in such
country(ies) shall become a LeukoSite Product in such countries, upon (i)
written notice from LeukoSite to Warner and (ii) payment by LeukoSite of the
amounts then due pursuant to Section 3.2 and reimbursement of a portion of the
Development Costs to be negotiated in good faith between the parties taking into
account among other things, whether it is a Warner or Warner-LeukoSite Product
and the portion of the Development which is applicable to LeukoSite's continued
development and/or marketing of the product.


<PAGE>
                                      -27-


         4.8 In the event that any Warner Product or Warner-LeukoSite Product
becomes a LeukoSite Product in any country(ies), Warner shall transfer to
LeukoSite (at LeukoSite's expense) any and all information, data, technology and
know-how related to the development, manufacture and sale of such Warner Product
and/or Warner LeukoSite Product. In addition, to the extent allowed by law,
Warner shall permit LeukoSite to refer to and use any regulatory filings and/or
information contained therein to obtain approval for marketing and sale by
LeukoSite or its sublicensees or agents of such Warner and/or Warner-LeukoSite
Product and to the extent permitted by law Warner shall transfer to (at
LeukoSite's expense) and/or permit LeukoSite and/or its agents or sublicensees
to operate under any regulatory approval or regulatory application with respect
to such Warner Product and/or Warner-LeukoSite Product in such country(ies).

         4.9 Upon sixty (60) days prior written notice, LeukoSite may terminate
LeukoSite's obligation to fund Development of any Warner-LeukoSite Product in
the Territory, in which case, upon sending of such notice, such Warner-LeukoSite
Product shall become a Warner Product, provided, however, that LeukoSite will be
obligated to continue its Development efforts and pay its share of the costs
with respect to such Product until the expiration of such notice period.

         4.10 In the event that Warner provides notice pursuant to Section 4.6
with respect to a Warner-LeukoSite product, Warner shall be obligated to


<PAGE>
                                      -28-


continue its Development and pay its share of the costs with respect to such
Warner-LeukoSite Product in such country for sixty (60) days following the
giving of such notice.

         4.11 In the event a Warner Product or a Warner-LeukoSite Product
becomes a LeukoSite Product, and for so long as Warner is manufacturing such
product for its own purposes, Warner agrees to manufacture and supply to
LeukoSite such LeukoSite Product to the extent that Warner is able to do so
without adversely affecting its requirements therefor upon terms and conditions
and profit margins which are customary in the industry for a supplier of
products of such type.

         4.12 No earlier than one year after a product becomes a LeukoSite
Product, Warner can request in writing that such LeukoSite Product become a
Warner Product, or in the case where such LeukoSite Product was originally a
Warner-LeukoSite Product that such LeukoSite Product become a Warner-LeukoSite
Product, subject to the terms and conditions of this Agreement, and if LeukoSite
is not actively researching, developing, marketing or selling such LeukoSite
Product and has not granted rights thereto to a third party, such LeukoSite
Product shall become a Warner Product or a Warner-LeukoSite Product, as the case
may be, subject to the terms and conditions of this Agreement.

<PAGE>
                                      -29-


                                    ARTICLE V

                             LICENSES AND ROYALTIES

         5.1 GRANT BY LEUKOSITE. LeukoSite hereby grants and agrees to grant to
Warner under the Patent Rights of LeukoSite and under LeukoSite Collaboration
Technology and LeukoSite Background Technology exclusive, worldwide licenses to
make, have made, use, and sell, have sold, offer to sell or import (with the
right to sublicense) each Warner Product and each Warner-LeukoSite Product in
the Territory. Notwithstanding the foregoing, no rights under the Patent Rights
of LeukoSite, LeukoSite Collaboration Technology or LeukoSite Background
Technology are granted to Warner to make, have made, use, sell, have sold, offer
to sell or import any monoclonal antibody or any fragment, subunit, derivative
or variant thereof or DNA encoding such product for human therapeutic or
prophylactic use.

         5.2 GRANT BY WARNER. Warner hereby grants and agrees to grant to
LeukoSite under the Patent Rights of Warner and under Warner Collaboration
Technology and Warner Background Technology exclusive, worldwide licenses to
make, have made, use, sell, have sold, offer to sell or import (with the right
to sublicense) each LeukoSite Product. Notwithstanding the foregoing, no rights
under the Patent Rights of Warner, Warner Collaboration Technology or Warner
Background Technology are granted to LeukoSite to make, have made, use, sell,
have sold, offer to sell or import any monoclonal antibody or any fragment,
subunit, derivative or 


<PAGE>
                                      -30-


variant thereof or DNA encoding such product for human therapeutic or
prophylactic use.

         5.3 During the Term of the Research Collaboration, Warner agrees that
Warner will not use or grant rights to use Warner compounds whose primary
activity is in the Field except for activities under the Research Plan. Warner
agrees that Warner will not use or grant rights to use LeukoSite Background
Technology or LeukoSite Collaboration Technology except for (i) activities under
the Research Plan and/or (ii) activities with respect to development, marketing,
sale, manufacture or use of a Warner Product and/or a Warner-LeukoSite Product
for which payments are to be made to LeukoSite under this Agreement.

         5.4 Warner and LeukoSite each acknowledges and agrees to the extent
that it is granted a right or license under this Agreement as a sublicensee such
sublicense is subject to the terms and conditions of the agreement under which
the sublicense is granted. Warner or LeukoSite, as a sublicensee, will perform
the obligations (other than payment obligations) which are applicable to a
sublicensee pursuant to the agreement under which the sublicense is granted. No
such sublicense shall be granted until LeukoSite has expressly notified Warner
in writing of the obligations of such sublicense and Warner has acknowledged
that it will perform such obligations.

<PAGE>
                                      -31-


         5.5 ROYALTIES AND OTHER COMPENSATION. (a) In the event LeukoSite
declines to pay its share of Development Costs, as provided in Section 4.1,
Warner will pay LeukoSite one of the following royalties on worldwide Net Sales
of Warner Products: ** of worldwide, annual Net Sales up to ***********; *** of
worldwide, annual Net Sales from above ********************** and *** of
worldwide, annual Net Sales above ***********.

         (b) If LeukoSite pays its designated share of Development Costs under
Section 4.1, LeukoSite will receive its Share of Profit for such
Warner-LeukoSite Product.

         (c) LeukoSite will pay Warner royalties on worldwide Net Sales of
         LeukoSite Products of **. 

         (d) The royalties set forth in this Section will be payable on a
Product by Product and country by country basis for a period of ten (10) years
from first commercial sale in a country as part of nationwide introduction of
the Product. If at the expiration of such ten (10) year period, a Product(s) is
sold in a country(ies) and such Product(s) where manufactured, used or sold
infringes a Patent Right, then the royalty shall continue with respect to such
Product(s) in such country(ies) until expiration of such Patent Right.

         (e) As used herein, "Annual Net Sales" shall mean Net Sales in a
calendar year.

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


<PAGE>
                                      -32-


         (f) In addition to royalties or Share of Profit, Warner shall pay to
LeukoSite the sum of ********* upon execution of this Agreement as a license fee
related to (alpha)4(beta)7 and ********* upon execution of this Agreement as a
license fee related to (alpha)E(beta)7. Further, the Research Committee shall 
set key objectives for the collaboration and in the event such objectives 
are met by LeukoSite, and Warner agrees to extend the Term of the Research 
Collaboration for an additional year, Warner shall pay LeukoSite
********************************** upon the later to occur of (i) the
achievement of such objectives and (ii) January 7, 2000. There shall be no
further payments, if the Term of the Research Collaboration is extended for a
second one-year extension.

         5.6 CURRENCY OF PAYMENT. All payments to be made under this Agreement
shall be made in United States dollars in the United States to a bank account
designated by the party to be paid. Royalties earned shall first be determined
in the currency of the country in which they are earned and then converted to
its equivalent in United States currency. The buying rates of exchange for the
currencies involved into the currency of the United States quoted by Citibank
(or its successor in interest) in New York, New York at the close of business on
the last business day of the quarterly period in which the royalties were earned
shall be used to determine any such conversion.

         5.7 PAYMENT AND REPORTING. The royalties due under Section 5.6 shall be
paid quarterly, within sixty (60) days after the close of each calendar 

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


<PAGE>
                                      -33-


quarter, or earlier if practicable (i.e., on or before the last day of each of
the months of May, August, November and February) immediately following each
quarterly period of each year in which such royalties are owed. With each such
quarterly payment, the payor shall furnish the payee a royalty statement (the
"Royalty Statement"), setting forth on a country-by-country basis the total
number of units of each Product made, used and/or sold hereunder for the
quarterly period for which the royalties are due.

         5.8 RECORDS. The royalty paying party shall keep accurate books and
accounts of record in connection with the manufacture, use and/or sale by or for
it of all products in sufficient detail to permit accurate determination of all
figures necessary for verification of royalty obligations set forth in this
Article V. Such records shall be maintained for a period of 3 years from the end
of each year in which sales occurred. The payee, at its expense, through a
certified public accountant, shall have the right to access such books and
records for the sole purpose of verifying the Royalty Statements; such access
shall be conducted after reasonable prior notice by the payee to the payor
during the payor's ordinary business hours and shall not be more frequent than
once during each calendar year. Said accountant shall not disclose to the payee
or any other party any information except that which should properly be
contained in a royalty report required under this Agreement. In the event that
there has been an underreporting of royalties of ten percent (10%) or greater
over the full period reviewed by such accountants, then the cost of 


<PAGE>
                                      -34-


such accountants shall be paid by the payor. Any underpaid royalties shall be
paid within thirty (30) days after notice of the underpayment.

         5.9 TAXES WITHHELD. Any income or other tax that one party hereunder,
its Affiliates or sublicensees is required to withhold (the "Withholding Party")
and pay on behalf of the other party hereunder (the "Withheld Party") with
respect to the royalties or other amounts payable under this Agreement shall be
deducted from and offset against said royalties or other amounts prior to
remittance to the Withheld Party; provided, however, that in regard to any tax
so deducted, the Withholding Party shall give or cause to be given to the
Withheld Party such assistance as may reasonably be necessary to enable the
Withheld Party to claim exemption therefrom or credit therefor, and in each case
shall furnish the Withheld Party proper evidence of the taxes paid on its
behalf.

         5.10 COMPUTATION OF ROYALTIES. All sales of LeukoSite Products between
LeukoSite and any of its Affiliates and sublicensees with the intent of resale
by such Affiliates and sublicensees shall be disregarded for purposes of
computing royalties under this Article V, but in such instances royalties shall
be payable only upon commercial sales to unlicensed third parties by the
Affiliates and sublicensees. Nothing herein contained shall obligate LeukoSite
to pay Warner more than one royalty on any unit of a LeukoSite Product. All
sales of Warner Products or Warner-LeukoSite Products between Warner and any of
its Affiliates and sublicensees with the intent of resale by 


<PAGE>
                                      -35-


such Affiliates and sublicensees shall be disregarded for purposes of computing
royalties under this Article V, but in such instances royalties shall be payable
only upon commercial sales to unlicensed third parties by the Affiliates and
sublicensees. Nothing herein contained shall obligate Warner to pay LeukoSite
more than one royalty on any unit of a Warner Product or Warner-LeukoSite
Products.

         5.11 LICENSES TO AFFILIATES. Each party shall, at the other party's
request, sign license and/or royalty agreements in respect of Warner Products,
LeukoSite Products or Warner-LeukoSite Products not being promoted by the
parties hereunder directly with the other party's Affiliates and sublicensees in
those situations where such agreements would not decrease the amount of
royalties or other amounts which would be owed hereunder. Such agreements shall
contain the same language as contained herein with appropriate changes in
parties and territory. No such license and/or royalty agreement will relieve
Warner or LeukoSite, as the case may be, of its obligations hereunder, and such
party will guarantee the obligations of its Affiliate or sublicensee in any such
agreement. Royalties and other amounts received directly from one party's
Affiliates and sublicensees shall be credited towards such party's obligations
hereunder.

         5.12     MILESTONE PAYMENTS.

         (a) Warner will pay to LeukoSite the following amounts the first time
that each following milestones is achieved:


<PAGE>
                                      -36-

<TABLE>
<CAPTION>
         <S>      <C>                                                           <C>
         (i)      Designation of a Development
                  Candidate as a Warner Product
                  or a Warner-LeukoSite Product.................................*******

         (ii)     Acceptance by the FDA of an IND
                  (or its equivalent in Japan or in each of the United Kingdom,
                  France, Italy, Germany and Spain hereinafter such five
                  countries being collectively "EU") for a Warner Product or a
                  Warner-LeukoSite
                  Product.......................................................*************
         (iii)    Completion of Phase II Studies for a
                  Warner Product or a Warner
                  LeukoSite Product.............................................*************
         (iv)     Filing with the FDA of an NDA
                  for a Warner Product or a Warner
                  LeukoSite Product.............................................*************
         (v)      Filing of an MAA in the EU
                  or Japan for a Warner Product or
                  Warner-LeukoSite Product......................................*************
         (vi)     Filing of a jNDA in Japan for a Warner Product
                  or Warner -LeukoSite Product..................................*************
         (vii)    Launch of any of the foregoing
                  Products in U.S...............................................*************
</TABLE>


"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


<PAGE>
                                      -37-

<TABLE>
<CAPTION>
         <S>      <C>                                                           <C>
         (viii)   Launch of any of the foregoing
                  Products in EU................................................*************
         (ix)     Launch of any of the foregoing
                  Products in Japan.............................................*************
</TABLE>

         5.13 PRE-EXISTING OBLIGATIONS. Certain research activities to be
performed hereunder and the manufacture, use or sale of Products hereunder may
require payments to unaffiliated third parties. Such payments in respect of
rights that a party hereto currently has an interest in or could have an
interest in pursuant to any currently existing agreements (except the Brigham
Agreement) will be borne by such party. Warner shall reimburse LeukoSite for
************** of any royalty payments payable by LeukoSite under the Brigham
Agreement in connection with a Warner Product or Warner-LeukoSite Product;
provided however, that if the aggregate amount paid or otherwise due or owing by
Warner with respect to a particular Warner or Warner-LeukoSite Product for (i)
royalties due to LeukoSite pursuant to Section 5.5, (ii) for the Cost of Goods
of such Warner or Warner-LeukoSite Product and (iii) for its share of royalty
payments under the Brigham Agreement exceeds ************************** of such
Product, Warner's obligation to reimburse LeukoSite for royalties payable under
the Brigham Agreement shall be reduced by the amount, the sum of (i), (ii) and
(iii) above exceeds ************************** of such Product. All other such
payments will be borne by (i) Warner in the case of a Warner Product or 

"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."


<PAGE>
                                      -38-


a Warner-LeukoSite Product, (ii) LeukoSite in the case of a LeukoSite Product,
and (iii) as a "Cost of Goods" in the case of Warner-LeukoSite in which
LeukoSite has a Share of Profits. Each party hereto will disclose such payment
obligations to the other party hereto prior to designation of the subject
compound as a Development Candidate.

         LeukoSite agrees that it shall not (i) enter into any amendments to the
Brigham Agreement which would adversely affect the rights granted to Warner
hereunder or which would increase the amount of Warner's obligation pursuant to
this Section 5.13 without Warner's prior written consent or (ii) send a notice
of termination under the Brigham Agreement without first receiving Warner's
prior written consent. LeukoSite shall promptly notify Warner if it receives a
notice of termination under the Brigham Agreement.

                                   ARTICLE VI

                                       FDA

         6.1 SIDE EFFECTS. Each party shall advise the other as promptly as
reasonably practical by telefax or overnight delivery service addressed to the
attention of its Vice President, International Regulatory Affairs and Drug
Safety and Surveillance (or, in LeukoSite's case, the party with similar
responsibilities), of any unexpected side effect, adverse reaction or injury
which has been brought to that party's attention at any place and which is
alleged to have been caused by a Warner-LeukoSite Product. Warner shall 



<PAGE>

                                      -39-

have all rights and responsibility timely to report such side effects, adverse
reaction or injury to regulatory authorities and others as appropriate. The
parties agree to amend this Section 6.1 by setting forth a more detailed set of
drug safety reporting requirements between the parties if an NDA, MAA or jNDA is
filed for a Warner-LeukoSite Product.

         6.2 REGULATORY AND OTHER INQUIRIES. Upon being contacted by the FDA or
any drug regulatory agency for any regulatory purpose pertaining to this
Agreement or to a Warner-LeukoSite Product, LeukoSite and Warner shall
immediately notify and consult with one another and Warner shall provide a
response as it deems appropriate. Warner shall have sole right and
responsibility for responding to all inquiries to Warner or LeukoSite regarding
the quality benefits, side effects and other characteristics of Warner-LeukoSite
Products. LeukoSite shall not have contacts or communications with any
governmental or regulatory authority regarding any Warner-LeukoSite Product or
Warner Product without the prior written consent of Warner.

         6.3 PRODUCT RECALL. In the event that Warner or LeukoSite determines
that an event, incident or circumstance has occurred which may result in the
need for a recall or other removal of any Warner-LeukoSite Product, or any lot
or lots thereof, from the market in any Country, it shall advise and consult
with the other party with respect thereto. Warner shall make the final
determination to recall or otherwise remove the 


<PAGE>
                                      -40-


Warner-LeukoSite Product or any lot or lots thereof from the market. In the
event LeukoSite is receiving its Share of Profit, Warner and LeukoSite shall
share the costs and expenses of such recall or removal in each Country,
including without limitation expenses and other costs or obligations to third
parties, the cost and expense of notifying customers and costs and expenses
associated with shipment of the recalled Product from a customer to either
Warner or LeukoSite. Such costs shall be shared in proportion to each party's
share of Total Profit.

                                   ARTICLE VII

                                 CONFIDENTIALITY

         7.1 CONFIDENTIALITY. (a) Except as specifically permitted hereunder,
each party hereby agrees to hold in confidence and not use on behalf of others
(or on behalf of itself outside the Collaboration) all data, samples, technical
and economic information (including, the economic terms hereof),
commercialization, clinical and research strategies and know-how provided by the
other party (the "Disclosing Party") during the Term of this Agreement and all
data, results and information developed pursuant to the Collaboration and owned
solely by the other party (collectively the "Confidential Information"), except
that the term "Confidential Information" shall not include:

         (i)      Information that is or becomes part of the public domain
                  through no fault of the non-Disclosing Party or its
                  Affiliates; and


<PAGE>

                                      -41-

         (ii)     Information that is obtained after the date hereof by the
                  non-Disclosing Party or one of its Affiliates from any third
                  party that is lawfully in possession of such Confidential
                  Information and not in violation of any contractual or legal
                  obligation to the Disclosing Party with respect to such
                  Confidential Information; and
   
         (iii)    Information that is known to the non-Disclosing Party prior to
                  disclosure by the Disclosing Party, as evidenced by the
                  non-Disclosing Party's written records; and
 
         (iv)     Information that is necessary or advantageous to both parties
                  to be disclosed to any governmental authorities or pursuant to
                  any regulatory filings, provided that in such case the
                  non-Disclosing Party notifies the Disclosing Party reasonably
                  in advance of such disclosure and cooperates with the
                  Disclosing Party to minimize the scope and content of such
                  disclosure; and

         (v)      Information that is required to be disclosed pursuant to any
                  relevant law or regulation or under order of a court of
                  competent jurisdiction, provided that in such case the
                  non-Disclosing Party notifies the Disclosing Party reasonably
                  in advance of such disclosure and cooperates with the
                  Disclosing Party to minimize the scope and content of such
                  disclosure.
<PAGE>
                                      -42-


         (b) The obligations of this Section 7.1 shall survive for five years
following the expiration or termination of this Agreement except to the extent
required by any obligations of confidentiality to a third party that are
disclosed to the non-disclosing party prior to termination of this Agreement.

         7.2 PUBLICITY. All publicity, press releases and other announcements
relating to this Agreement or the transactions contemplated hereby shall be
reviewed in advance by and subject to the approval of both parties; except that
such review and approvals shall not be required for any announcement that
discloses the existence of this Agreement without disclosing any of its material
terms. Notwithstanding the foregoing, to the extent required by applicable law,
rule or regulation or in connection with filings with regulatory agencies or the
offering of securities, including but not limited to the SEC, a party may file
this Agreement and/or disclose the contents of this Agreement without the
approval of the other party, provided that the other party is provided with the
opportunity to review and comment on such disclosure and further provided that
such disclosure shall be limited to the minimum amount of information and
distribution required by such law, rule, regulation or filing.

         7.3 PUBLICATION. The parties shall cooperate in appropriate publication
of the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, it is 


<PAGE>
                                      -43-


agreed that prior to any public disclosure of any such results, the party
proposing disclosure shall send the other party a copy of the information to be
disclosed, and shall allow the other party 15 days from the date of receipt in
which to determine whether the information to be disclosed contains subject
matter for which patent protection should be sought prior to disclosure. If
notification is not received during the 15 day period, the party proposing
disclosure shall be free to proceed with the disclosure. If due to a valid
business reason or a belief by the nondisclosing party that the disclosure
contains subject matter for which a patentable invention should be sought, then
prior to the expiration of the 15 day period, the nondisclosing party shall so
notify the disclosing party, who shall then delay public disclosure of the
information for an additional period of up to 2 months to permit the preparation
and filing of a patent application on the subject matter to be disclosed or
other action to be taken. The party proposing disclosure shall thereafter be
free to publish or disclose the information. The determination of authorship for
any paper shall be in accordance with accepted scientific practice. Nothing in
this Section will be construed to allow either party to disclose the
Confidential Information of the other party in any publication or other
disclosure without the express written consent of such other party.


<PAGE>
                                      -44


                                  ARTICLE VIII

                         REPRESENTATIONS AND WARRANTIES

         8.1 LEGAL AUTHORITY. Each party represents and warrants to the other
that it has the legal power, authority and right to enter into this Agreement
and to perform its respective obligations set forth herein.

         8.2 NO CONFLICTS. Each party represents and warrants that as of the
date of this Agreement it is not a party to any agreement or arrangement with
any third party or under any obligation or restriction, including pursuant to
its Certificate of Incorporation or By-Laws, which in any way limits or
conflicts with its ability to fulfill any of its obligations under this
Agreement.

         8.3 OTHERS BOUND. Each party represents and warrants that anyone
performing services under this Agreement on its behalf shall be bound by all of
the conditions of this Agreement.

         8.4 BRIGHAM AGREEMENT. LeukoSite represents and warrants to Warner that
the Brigham Agreement is in full force and effect and that it has not been
amended since January 1, 1994. LeukoSite also represents and warrants to Warner
that as the date of this Agreement, it has not received a notice of termination
from The Brigham and Women's Hospital, Inc. in connection with the Brigham
Agreement.

<PAGE>
                                      -45-

         8.5 SURVIVAL. The foregoing representations and warranties shall
survive the execution, delivery and performance of this Agreement,
notwithstanding any investigation by or on behalf of either party.

         8.6 DISCLAIMER. Except as otherwise expressly stated herein, Warner
hereby disclaims any warranty expressed or implied as to any LeukoSite Product
manufactured by or for, used, sold or placed in commerce by or on behalf of
LeukoSite. Except as otherwise expressly stated herein, LeukoSite hereby
disclaims any warranty expressed or implied as to any Warner Product and/or any
Warner-LeukoSite Product manufactured by or for, used, sold or placed in
commerce by or on behalf of Warner in the Territory.

                                   ARTICLE IX

                                   TERMINATION

         9.1 TERMINATION. In the event of a material breach of the provisions of
this Agreement described below, the breaching party shall have ninety days after
receipt of written notice from the non-breaching party to cure such breach,
which period shall be sixty (60) days in the case of a failure to make a payment
when due.

         (a) In the event of an uncured material breach of Article I, the
non-breaching party may terminate this Agreement.

         (b) In the event of an uncured material breach of Article V by Warner
in regard to a Warner Product or Warner-LeukoSite Product, LeukoSite may
immediately (i) terminate the licenses granted by it pursuant 


<PAGE>
                                      -46-


to Section 5.1 in respect of such Product and (ii) require Warner to grant
LeukoSite an exclusive (even as to Warner), worldwide license under the Patent
Rights, Background Technology and Collaboration Technology relating to such
Product and owned or controlled by Warner to the extent necessary to make, have
made, use or sell such Product. In such event such Warner Product or
Warner-LeukoSite Product shall be a LeukoSite Product for the purposes of this
Agreement.

         (c) In the event of an uncured material breach of LeukoSite's
obligation to pay royalties as set forth in Section 1.4(a) by LeukoSite or
Article V by LeukoSite in regard to a LeukoSite Product, Warner may immediately
(i) terminate the licenses granted by it pursuant to Section 5.2 in respect of
such Product and (ii) require LeukoSite to grant Warner an exclusive (even as to
LeukoSite), worldwide license under the Patent Rights, Background Technology and
Collaboration Technology to the extent necessary to make, have made, use or sell
such Product. Such LeukoSite Product shall be a Warner Product for the purposes
of this Agreement.

         (d) In the event of an uncured material breach of Article VI or VII by
Warner in regard to a Warner-LeukoSite Product, LeukoSite may immediately (i)
terminate the licenses granted by it pursuant to Section 5.1 in respect of such
Product and (ii) require Warner to grant it an exclusive (even as to Warner),
worldwide license under the Patent Rights, Background Technology and
Collaboration Technology to the extent necessary to make, 


<PAGE>
                                      -47-


have made, use or sell such Product. In such event, such Product will be a
LeukoSite Product for purposes of this Agreement.

         9.2 EFFECT OF BANKRUPTCY. If either party files a voluntary petition in
bankruptcy, is adjudicated a bankrupt, makes a general assignment for the
benefit of creditors, admits in writing that it is insolvent or fails to
discharge within 15 days an involuntary petition in bankruptcy filed against it,
then the other party will have 60 days to determine whether or not this
Agreement shall immediately terminate.

         9.3 TERMINATION BY EITHER PARTY OTHER THAN FOR CAUSE. After the first
twelve (12) months of this Agreement, either party may terminate this Agreement
at any time for any reason upon 6 months written notice. In such event, the
terminating party shall immediately pay all amounts that are then due hereunder
and the other party shall have a non-exclusive, worldwide, license to all
Collaboration Technology as well as an exclusive, royalty-free worldwide license
to the extent necessary to make, have made, use and sell all Products.

         9.4 REMEDIES. In the event of any breach of any provision of this
Agreement, in addition to the termination rights set forth herein, each party
shall have all other rights and remedies at law or equity to enforce this
Agreement.

<PAGE>
                                      -48-


                                    ARTICLE X

                               GENERAL PROVISIONS

         10.1 INDEMNIFICATION. Warner and LeukoSite each agrees to indemnify and
hold harmless the other party and its Affiliates and their respective employees,
agents, officers, directors and permitted assigns (such party's "Indemnified
Group") from and against any claims, judgments, expenses (including reasonable
attorneys' fees), damages and awards (collectively a "Claim") arising out of or
resulting from (i) its negligence or misconduct in regard to any Product, (ii) a
breach of any of its representations or warranties hereunder or (iii) the
manufacture, use or sale of a Warner Product or a Warner-LeukoSite Product (in
the case of Warner) or a LeukoSite Product (in the case of LeukoSite), except to
the extent that such Claim arises out of or results from the negligence or
misconduct of a party seeking to be indemnified and held harmless or the
negligence or misconduct of a member of such party's Indemnified Group. An
indemnified party shall promptly give notice to the indemnifying party of any
information from which it should reasonably conclude an incident has occurred
that could give rise to a Claim, and in the event a Claim is made or a suit is
brought, all indemnified parties shall assist the indemnifying party and
cooperate in the gathering of information with respect to the time, place, and
circumstances and in obtaining the names and addresses of any injured parties
and available witnesses. The failure to give the notice referred to in the 
preceding

<PAGE>
                                      -49-


sentence shall not relieve a party of its indemnification obligations, except 
to the extent such failure prejudices the ability of the indemnifying party 
to defend against such claim. No indemnified party shall, except at its own 
cost, voluntarily make any payment or incur any expense in connection with 
any such Claim or suit without the prior written consent of the indemnifying 
party. Each indemnified party shall permit the indemnifying party to assume 
the defense of any claim. The obligations set forth in this Section shall 
survive the expiration or termination of this Agreement.

         10.2 ASSIGNMENT/CHANGE OF CONTROL. This Agreement is not assignable by
either party without the prior written consent of the other party. To the extent
that assignment is permitted this Agreement shall be binding upon and inure to
the benefit of the parties' successors, legal representatives and assigns.
Notwithstanding the foregoing, (i) Warner may assign this Agreement to any of
its subsidiaries or any entity succeeding to a majority of its Parke-Davis
business or substantially all of the business to which this Agreement is related
and (ii) LeukoSite may assign this Agreement to any of its subsidiaries or to
any entity succeeding to substantially all of its pharmaceutical business or
substantially all of the business to which this Agreement is directed. In no
event will any assignment relieve the assigning party of its obligations
hereunder. No assignment shall take effect until the assignee notifies the
non-assigning 


<PAGE>
                                      -50-


party of such assignment and the assignee agrees in writing to be bound by all
the terms, conditions and obligations of this Agreement.

         10.3 NON-WAIVER. The waiver by either of the parties of any breach of
any provision hereof by the other party shall not be construed to be a waiver of
any succeeding breach of such provision or a waiver of the provision itself.

         10.4 SUBMISSION TO SENIOR OFFICERS FOR DISPUTE RESOLUTION. The parties
recognize that the collaborative research program under this Agreement and the
development and commercialization of Development Candidates will require the
resolution of certain issues in the future. In the event the Management
Committee is unable to resolve a dispute under this Agreement or come to
unanimous agreement on terms mutually acceptable to both parties, either party
may have the dispute referred to the senior officer of Warner's pharmaceutical
business for good faith resolution. Such senior officer shall confer with
LeukoSite's President prior to resolving, such dispute. The resolution of the
dispute pursuant to this Section shall be final and binding on the parties.

         10.5 GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the laws of the Commonwealth of Massachusetts, other than
those provisions governing conflicts of law.

         10.6 PARTIAL INVALIDITY. If and to the extent that any court or
tribunal of competent jurisdiction holds any of the terms or provisions of this
Agreement, or the application thereof to any circumstances, to be invalid or



<PAGE>
                                      -51-


unenforceable in a final nonappealable order, the parties shall use their best
efforts to reform the portions of this Agreement declared invalid to realize the
intent of the parties as fully as practicable, and the remainder of this
Agreement and the application of such invalid term or provision to circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each of the remaining terms and provisions of this
Agreement shall remain valid and enforceable to the fullest extent of the law.

         10.7 NOTICE. Any notice to be given to a party under or in connection
with this Agreement shall be in writing and shall be (i) personally delivered,
(ii) delivered by a internationally recognized overnight courier or (iii)
delivered by certified mail, postage prepaid, return receipt requested to the
party at the address set forth below for such party:

         To Warner:                          To LeukoSite:

         Senior Vice President,              Christopher K. Mirabelli, Ph.D.

         Research and Development            Chairman of the Board and
         Parke-Davis Pharmaceutical          Chief Executive Officer
         Research,                           LeukoSite, Inc.
         Warner-Lambert Company              215 First Street
         2800 Plymouth Road                  Cambridge, MA 02142
         Ann Arbor, MI 48105

         with a copy to:                     with a copy to:

         Vice President and                  Elliot Olstein, Esq.
         General Counsel                     Carella, Byrne, Bain, Gilfillan,
         Warner-Lambert Company               Cecchi, Stewart & Olstein
         201 Tabor Road                      6 Becker Farm Road
         Morris Plains, NJ 07950             Roseland, NJ 07068

<PAGE>
                                      -52-


or to such other address as to which the party has given notice thereof. Such
notices shall be deemed given upon receipt.

         10.8 HEADINGS. The headings appearing herein have been inserted solely
for the convenience of the parties hereto and shall not affect the construction,
meaning or interpretation of this Agreement or any of its terms and conditions.

         10.9 NO IMPLIED LICENSES OR WARRANTIES. No right or license under any
patent application, issued patent, know-how or other proprietary information is
granted or shall be granted by implication. All such rights or licenses are or
shall be granted only as expressly provided in the terms of this Agreement.
Neither party warrants the success of any clinical or other studies undertaken
by it.

         10.10 FORCE MAJEURE. No failure or omission by the parties hereto in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement, nor shall it create any liability, if the same shall arise from
any cause or causes beyond the reasonable control of the affected party,
including, but not limited to, the following, which for purposes of this
Agreement shall be regarded as beyond the control of the party in question: acts
of god; acts or omissions of any government; any rules, regulations, or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof, fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; invasion; strikes; and lockouts or the like;


<PAGE>
                                      -53-


provided that the party so affected shall use its best efforts to avoid or
remove such causes or nonperformance and shall continue performance hereunder
with the utmost dispatch whenever such causes are removed.

         10.11 SURVIVAL. The representations and warranties contained in this
Agreement as well as those rights and/or obligations contained in the terms of
this Agreement which by their intent or meaning have validity beyond the term of
this Agreement shall survive the termination or expiration of this Agreement.

         10.12 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter contained
herein and supersedes any and all prior agreements, understandings and
arrangements whether oral or written between the parties relating to the subject
matter hereof.

         10.13 AMENDMENTS. No amendment, change, modification or alteration of
the terms and conditions of this Agreement shall be binding upon either party
unless in writing and signed by the party to be charged.

         10.14 INDEPENDENT CONTRACTORS. It is understood that both parties
hereto are independent contractors and engage in the operation of their own
respective businesses, and neither party hereto is to be considered the agent or
partner of the other party for any purpose whatsoever. Neither party has any
authority to enter into any contracts or assume any obligations for the 


<PAGE>
                                      -54-


other party or make any warranties or representations on behalf of the other
party.

         10.15 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and both of which together shall
constitute one and the same instrument.

         10.16 In the event that there is a conflict between the text of this
Agreement and Exhibit 1, the text of this Agreement shall control.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.

LEUKOSITE, INC.                           WARNER-LAMBERT COMPANY


By:                                       By:                                  
   --------------------------------          ----------------------------------
         Name:                                     Name:

         Title:                                    Title:
<PAGE>
                                      -55-


                                    EXHIBIT A


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"Confidential Treatment requested:  material has been omitted and filed 
separeately with the Commission."