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                                                                    EXHIBIT 10.8

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.

                             COLLABORATION AGREEMENT


        This COLLABORATION AGREEMENT (the "Agreement") dated as of November 29,
1999 (the "Effective Date"), is entered into between Ixsys, Inc., a Delaware
corporation ("Ixsys"), having a place of business at 3520 Dunhill Street, San
Diego, CA 92121, and Bio-Management Inc., a Nevada corporation
("Bio-Management"), having a place of business at Four Hook Road, Sharon Hill,
PA 19079.

        NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties agree as follows:


                                    ARTICLE 1
                                   DEFINITIONS

        For purposes of this Agreement, the terms defined in the Article 1 shall
have the respective meanings set forth below:

        1.1 "Affiliate" shall mean, 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 owns, or directly or indirectly controls, at least forty percent
(40%) of the voting stock or other ownership interest of the other Person, or if
it directly or indirectly possesses the power to direct or cause the direction
of the management and policies of the other Person by any means whatsoever.

        1.2 "BLA" shall mean a Biologics License Application, Product License
Application, New Drug Application, or other application for marketing approval
of a product for use in any human or veterinary therapeutic application
submitted to the applicable governing health authority of any country.

        1.3 "Candidate Molecules" shall mean, collectively, monoclonal antibody
("mAb") HUIV26 and mAb HUI77 as provided by Bio-Management to Ixsys hereunder.

        1.4 "Confidential Information" shall mean, with respect to a party, all
information of any kind whatsoever (including without limitation, data,
compilations, formulae, models, patent disclosures, procedures, processes,
projections, protocols, results of experimentation and testing, specifications,
strategies and techniques), and all tangible and intangible embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records, reports), which is
disclosed by such party to the other party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure to the other
party. Notwithstanding the foregoing, Confidential Information of a party shall
not include information which the other party can establish by written
documentation (a) to have been publicly known prior to disclosure of such
information by the disclosing party to the other party, (b) to have become
publicly known, without fault on the part of the other party, subsequent to
disclosure of such information by the disclosing party to the other party, (c)
to have been received by the other party at any time from a source, other than
the disclosing party, rightfully having possession of and the right to disclose
such information, (d) to



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have been otherwise known by the other party prior to disclosure of such
information by the disclosing party to the other party, or (e) to have been
independently developed by employees or agents of the other party without access
to or use of such information disclosed by the disclosing party to the other
party.

        1.5 "Derived" or "derived" shall mean obtained, developed, created,
synthesized, designed, derived or resulting from, based upon or otherwise
generated (whether directly or indirectly, or in whole or in part).

        1.6 "Field" shall mean human and veterinary therapeutic and diagnostic
applications.

        1.7 "First Commercial Sale" shall mean, with respect to any Product, the
first sale of such Product by a party, its Affiliates or sublicensees to
customers who are not Affiliates in any country after all applicable marketing
and pricing approvals (if any) have been granted by the applicable governing
health authority of such country.

        1.8 "FDA" shall mean the United States Food and Drug Administration, or
the successor thereto.

        1.9 "IND" shall mean an Investigational New Drug application, or any
other filing with the governing regulatory of any country to commence clinical
testing of a product for use in any human or veterinary therapeutic application
submitted to the applicable governing health authority of any country.

        1.10 "Materials" shall mean the Candidate Molecules, DNA sequence
information and the cDNA to encode Candidate Molecules and the hybridoma cell
lines expressing the Candidate Molecules.

        1.11 "Net Sales" shall mean, with respect to each Product, the gross
sales price charged by Bio-Management, its Affiliates and sublicensees or Ixsys,
its Affiliates and sublicensees for sales of such Product to non-Affiliate
customers, less, to the extent such amounts are deducted by the customer from
the amounts paid to the seller: (i) normal and customary trade, cash and quality
credits, discounts, refunds or government rebates; (ii) credits for claims,
allowances or returns; retroactive price reductions; chargebacks or the like;
and (iii) sales taxes, duties and other governmental charges (including value
added tax), but excluding what is commonly known as income taxes. Net Sales
shall not include sales among Bio-Management, its Affiliates and sublicensees or
Ixsys its Affiliates and sublicensees for resale, provided that Net Sales shall
include the amounts invoiced by Bio-Management, its Affiliates and sublicensees
or Ixsys its Affiliates and sublicensees to Third Parties on the resale of such
Products.

        1.12 "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.

        1.13 "Phase II Clinical Trial" shall mean a human clinical trial in any
country that is intended to initially evaluate the effectiveness of a product
for a particular indication or



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indications in patients with the disease or indication under study, or that
would otherwise satisfy requirements of 21 CFR 312.21(b) , or its foreign
equivalent.

        1.14 "PMA" shall mean a Product Marketing Application, 510(k)
application or other application for marketing approval of a product for use in
any human or veterinary diagnostic application submitted to the applicable
governing health authority of any country.

        1.15 "Product" shall mean any product for use in the Field, which is a
composition that incorporates one or more Program Antibodies or is derived from
one or more Program Antibodies.

        1.16 "Program" shall mean the collaborative research program described
in Section 3.1 below to optimize and humanize the Candidate Molecules, and to
use the Program Antibodies (as defined below) to evaluate their diagnostic and
therapeutic potential.

        1.17 "Program Antibody" shall mean the optimized and humanized
compositions of matter developed under the Program, and the cDNA encoding such
compositions of matter, delivered to Bio-Management hereunder.

        1.18 "Program Invention" shall mean any invention, discovery,
composition, technology, data or information (whether or not patentable), made
or conceived by employees or others on behalf of Ixsys, Bio-Management or both
in the performance of the Program during the term of the Program, excluding
Program Antibodies.

        1.19 "Research Plan" shall mean the written research work plan
established by the parties pursuant to Section 3.2 below, as modified from time
to time pursuant to Section 3.2.

        1.20 "Third Party" shall mean any Person other than Ixsys,
Bio-Management and their respective Affiliates.


                                    ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES

        Each party hereby represents and warrants to the other party as follows:

        2.1 Corporate Existence. Such party is a corporation duly organized,
validly existing and in good standing under the laws of the state in which it is
incorporated.

        2.2 Authorization and Enforcement of Obligations. Such party (a) has the
corporate power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder, and (b) has taken all necessary
corporate action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This Agreement has
been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in accordance
with its terms.



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        2.3 Consents. All necessary consents, approvals and authorizations of
all governmental authorities and other Persons required to be obtained by such
party in connection with this Agreement have been obtained.

        2.4 No Conflict. The execution and delivery of this Agreement and the
performance of such party's obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws or regulations and (b) do not
conflict with, or constitute a default under, any contractual obligation of such
party.

        2.5 DISCLAIMER OF WARRANTIES. NEITHER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATERIALS (INCLUDING BUT NOT
LIMITED TO THE CANDIDATE MOLECULES), INCLUDING WITHOUT LIMITATION ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OF THE
PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER PERSON.


                                    ARTICLE 3
                                   THE PROGRAM

        3.1 Collaborative Research. The goal of the Program is: (a) humanize and
optimize Candidate Molecules, and (b) to perform certain preclinical
development.

        3.2 Conduct of Program. An initial Research Plan is attached as Schedule
A. Either party may recommend changes to the Research Plan at any time during
the Program Term. Such change shall only be effective if in a written amendment
duly executed by the parties.

        3.3 Specific Obligations of Bio-Management. Bio-Management shall provide
Ixsys with sufficient quantities of the Materials, sufficient quantities of a
single soluble antigen per Candidate Molecule for purposes of screening and
affinity determination (such single soluable antigen per Candidate molecule
shall be specified in writing prior to the transfer of the Materials to Ixsys),
antigens to which the Materials are directed, and any Bio-Management technology
necessary or useful for the humanization and optimization in accordance with the
Program, and any information known and available to Bio-Management concerning
the storage of the Materials that may be unique or peculiar to the Materials.
Bio-Management shall use its commercially reasonable efforts to perform its
obligations under the Program in accordance with the Research Plan.
Bio-Management shall perform its obligations under the Program in accordance
with high scientific and professional standards, and in compliance with all
material respects within the requirements of applicable laws and regulations and
shall provide all reasonable assistance to Ixsys in connection with Ixsys'
performance of the Program.

        3.4 Specific Obligations of Ixsys. Ixsys shall optimize and humanize the
Candidate Molecules as set forth in the Research Plan. Ixsys shall use its
commercially reasonable efforts to perform its obligations under the Program in
accordance with the Research Plan. Ixsys shall provide the personnel, materials,
equipment and other resources required to conduct its obligations under the
Program. Ixsys shall perform its obligations under the Program in



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accordance with high scientific and professional standards, and in compliance in
all material respects with the requirements of applicable laws and regulations.

        3.5 Materials. Ixsys shall use the Materials solely for purposes of
conducting the Program, at its address listed above, under commercially and
scientifically reasonable containment conditions, and not for any commercial,
business or other use or purpose, without the prior express written consent of
Bio-Management. Notwithstanding anything to the contrary in this Agreement,
Ixsys shall not transfer or provide access to the Materials to any Third Party,
without the prior express written consent of Bio-Management. Ixsys shall not
transfer or transport the Materials from its address identified above to any
other location. Ixsys shall limit access to the Materials to those of its
employees working on its premises, to the extent such access is reasonably
necessary in connection with its activities as expressly authorized by this
Agreement; provided, however that each such employee shall be bound by
confidentiality obligations at least as stringent as those in Section 5.1.

        3.6 Funding of the Program. In consideration of Ixsys' performance of
its obligations under the Research Plan or the identification of a Program
Antibody *** of the Candidate Molecule from which that Program Antibody was
derived ***, Bio-Management shall pay to Ixsys the amounts set forth in Schedule
B.

        3.7 Term of the Program. Unless earlier terminated as provided herein,
the term of the Program and this Agreement shall begin on the Effective Date and
continue for the subsequent *** (the "Program Term"). ***.

        3.8 Results.

                3.8.1 Reports. Within thirty (30) days following the end of the
initial seven (7) month period of the Program, within thirty (30) days following
the expiration or termination of the Program (if extended), and within thirty
(30) days after the end of each six (6) month period thereafter for the
following ten (10) years, each Party shall prepare, and provide to the other
party, a reasonably detailed written report which shall describe the work
performed by such party during that period, and the results achieved, to date
under this Agreement, together with copies of all data resulting from the tests
and evaluation performed by such party to date under the Agreement. Such reports
shall include, without limitation, pre-clinical animal studies of efficacy,
toxicity and immunogenicity; and regulatory filings such as Investigational New
Drug ("IND") applications, and Phase I, Phase II and Phase III FDA reports.

                3.8.2 Records. Each party shall maintain records, in sufficient
detail and in good scientific manner appropriate for patent purposes, which
shall be complete and accurate and shall fully and properly reflect all work
done and results achieved in the performance of the Program. 3.8.3



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                3.8.3 Inspection of Records. Each party shall have the right,
during normal business hours and on reasonable written notice, to inspect and
copy such records of the other party regarding the work done and results
achieved in the performance of the Program, to the extent reasonably necessary
to enable such party to conduct its obligations under the Program or to exercise
its rights hereunder. Each party shall maintain such records of the other party
(together with the information contained therein) in confidence in accordance
with Article 5 below and shall not use such records (or information) except to
the extent otherwise permitted by this Agreement.

        3.9 Program Leaders. Each party shall appoint a person (a "Program
Leader") to coordinate its part of the Program. The Program Leaders shall be the
primary contacts between the parties with respect to the Program. Each party
shall notify the other within thirty (30) days after the date of this Agreement
of the appointment of its Program Leader and shall notify the other party as
soon as practicable upon changing this appointment.

        3.10 Subcontracts. Ixsys may not subcontract portions of the Program to
be performed by it in the normal course of its business without the prior
written consent of Bio-Management.

        3.11 *** Program Antibodies. ***. Ixsys shall not use the Program
Antibodies, or the suboptimized and humanized compositions of matter derived by
Ixsys from the Candidate Molecules under the Program (or the cDNA encoding such
compositions of matter), for any purpose other than the performance of its
obligations under this Agreement.

        3.12 Materials and Program Antibodies. The parties hereby acknowledge
that the Materials and the Program Antibodies are experimental in nature and
that they are provided "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE
USE OF THE MATERIALS OR THE PROGRAM ANTIBODIES WILL NOT INFRINGE OR VIOLATE ANY
PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

        3.13 Each party hereby represents that all employees and other persons
acting on its behalf in performing its obligations under the program shall be
obligated under a binding written agreement to assign to it, or as it shall
direct, all Inventions made or conceived by such employees or other persons.

        3.14 Prosecution, Maintenance and Enforcement.

                3.14.1 *** Campbell & Flores LLP, or another intellectual
property counsel with biotechnology expertise specifically in the field of human
antibodies, shall be appointed by mutual agreement between the parties and
retained as


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the intellectual property counsel for the prosecution and maintenance of all
patent applications and patents which claim Program Antibodies.

                3.14.2 Bio-Management hereby assigns to Ixsys all right, title
and interest in the Program Inventions and all patent rights and other
intellectual property rights therein. Ixsys shall have the right, at its sole
discretion, to control the preparation, filing, prosecution, maintenance and
enforcement of all patent applications and patents which claim Program
Inventions. Nothing in this Section 3.14.2 shall relieve Ixsys from its
confidentiality obligations set forth in Article 5 below.

                                    ARTICLE 4
                                  CONSIDERATION

        4.1 Financial Terms.

                4.1.1 Notice of First Commercial Sale. Within thirty (30) days
following the First Commercial Sale for each Product in each country, and within
thirty (30) days after the occurrence of each of the milestone events described
in Section 4.1.4 below, Bio-Management shall give written notice to Ixsys
thereof.

                4.1.2 Royalties. In consideration for the sale of Program
Antibodies to Bio-Management pursuant to Section 3.11 above, Bio-Management
shall pay to Ixsys royalty equal to *** percent (***%) of Net Sales of Products
sold by Bio-Management, its Affiliates and sublicensees; provided, however, in
the event that ***, Bio-Management shall pay to Ixsys a royalty equal to ***
percent (***%) of Net Sales of Products sold by Bio-Management, its Affiliates
and sublicensees.

                4.1.3 Length of Royalty Obligations. Bio-Management's obligation
to pay royalties with respect to each Product in such country shall commence on
the First Commercial Date for such Product in such country, and shall continue
for such Product in such country until the date ten (10) years from the First
Commercial Sale.

                4.1.4 Milestone Payments.

                        a. Within thirty (30) days after the first occurrence of
each of the following milestone events with respect to each Product for use in
any human or veterinary therapeutic application, Bio-Management shall pay to
Ixsys the applicable non-refundable, non-creditable milestone payment set forth
below:

        ***     upon submission of the first IND for such Product

        ***     upon enrollment of the first patient in the first Phase II
                Clinical Trial for such Product

        ***     upon submission of the first BLA for such Product



* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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        ***     upon receipt of the first marketing approval (and pricing
                approval,

if any is required for commercial sale) for such Product If any milestone event
listed in this Section 4.1.4(a) is achieved with respect to a Product for use in
any human or veterinary therapeutic application, and at such time any one or
more of the milestone events previously listed in this Section 4.1.4(a) has not
been achieved with respect to such Product, then at the time of the payment of
the milestone payment for such achieved milestone event, Bio-Management shall
pay to Ixsys the previously listed and unpaid payments for such unmet milestone
events. At the time of the First Commercial Sale of a Product for use in any
human or veterinary therapeutic application, if any one or more of the milestone
events listed in this Section 4.1.4(a) has not been achieved with respect to
such Product, then within thirty (30) days after the First Commercial Sale of
such Product, Bio-Management shall pay to Ixsys all payments for such unmet
milestone events for such Product.

                        b. Within thirty (30) days after the first occurrence of
each of the following milestone events with respect to each Product for use in
any human or veterinary diagnostic application, Bio-Management shall pay to
Ixsys the applicable non-refundable, non-creditable milestone payment set forth
below:

        ***     upon initiation of the first clinical trials of a Product
                intended to gather data to be incorporated into a PMA for such
                Product

        ***     upon submission of the first PMA for such Product


        If any milestone event listed in this Section 4.1.4(b) is achieved with
respect to a Product for use in any human or veterinary diagnostic application,
and at such time any one or more of the milestone events previously listed in
this Section 4.1.4(b) has not been achieved with respect to such Product, then
at the time of the payment of the milestone payment for such achieved milestone
event, Bio-Management shall pay to Ixsys the previously listed and unpaid
payments for such unmet milestone events. At the time of the First Commercial
Sale of a Product for use in any human or veterinary diagnostic application, if
any one or more of the milestone events listed in this Section 4.1.4(b) has not
been achieved with respect to such Product, then within thirty (30) days after
the First Commercial Sale of such Product, Bio-Management shall pay to Ixsys all
payments for such unmet milestone events for such Product.

                        c. Within thirty (30) days after Bio-Management first
grants or transfers to, or authorizes, any other Person any license or other
right to conduct research (other than basic research conducted at academic or
non-profit institutions), develop or commercialize any Product, Bio-Management
shall pay to Ixsys the applicable non-refundable, non-creditable milestone
payment of *** per Product.

                        d. Notwithstanding anything to the contrary in this
Agreement, Bio-Management shall not be obligated to pay each milestone payment
set forth above more than once with respect to each milestone event described
above, beyond one series of milestone payments as encompassed by the provisions
of this Section 4.14, for all such Products derived from the same Candidate
Molecule.

        4.2 Royalty Reports and Payment Terms.

                4.2.1 Royalty Reports. Within thirty (30) days after the end of
each calendar quarter during the term of this Agreement following the First
Commercial Sale of a Product by Bio-Management, its Affiliate, licensees or
sublicensee, Bio-Management shall furnish to Ixsys a written report showing in
reasonably specific detail, on a Product-by-Product and country-by-



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country basis, (a) the gross sales of all Products sold by Bio-Management, its
Affiliates, licensees, and sublicensees during such calendar quarter and the
calculation of Net Sales from such gross sales; (b) the calculation of the
royalties, if any, which shall have accrued based upon such Net Sales; (c) the
withholding taxes, if any, required by law to be deducted with respect to such
sales; and (d) the exchange rates, if any, used in determining the amount of
United States dollars.

                4.2.2 With respect to sales of Products invoiced in United
States dollars, all such amounts shall be expressed in United States dollars.
With respect to sales of Products invoiced in a currency other than United
States dollars, all such amounts shall be expressed both in the currency in
which the distribution is invoiced and in the United States dollar equivalent.
The United States dollar equivalent shall be calculated using the exchange rate
(local currency per US$1) published in The Wall Street Journal, Western Edition,
under the heading "Currency Trading," on each of the last business day of each
month during the applicable calendar quarter.

                4.2.3 Bio-Management shall keep complete and accurate records in
sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable to be determined.

        4.3 Audits.

                4.3.1 Upon the written request of Ixsys and not more than once
in each calendar year, Bio-Management shall permit an independent certified
public accounting firm of nationally recognized standing, selected by Ixsys and
reasonably acceptable to Bio-Management, at Ixsys' expense, to have access
during normal business hours to such of the records of Bio-Management as may be
reasonably necessary to verify the accuracy of the royalty reports hereunder for
any year ending not more than thirty-six (36) months prior to the date of such
request. The accounting firm shall disclose to Ixsys only whether the reports
are correct or not and the specific details concerning any discrepancies. No
other information shall be shared.

                4.3.2 If such accounting firm concludes that additional
royalties were owed during the audited period, Bio-Management shall pay the
additional royalties within thirty (30) days of the date Ixsys delivers to
Bio-Management such accounting firm's written report so concluding. The fees
charged by such accounting firm shall be paid by Ixsys; provided, however, if
the audit discloses that the royalties payable by Bio-Management for such period
are more than *** percent *** of the royalties actually paid for such period,
then Bio-Management shall pay the reasonable fees and expenses charged by such
accounting firm.

                4.3.3 Ixsys shall treat all financial information subject to
review under this Section 4.3 as confidential, and shall cause its accounting
firm to retain all such financial information in confidence.

                4.3.4 Payment Terms. All royalties shown to have accrued by each
royalty report provided for under Section 4.1 above shall be payable on the date
such royalty report is due. Payment of royalties in whole or in part may be made
in advance of such due date.

                4.3.5 Payment Method. All payments by Bio-Management to Ixsys
under this Agreement shall be paid in United States dollars, and all such
payments shall be originated from



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a United States bank located in the United States and made by bank wire transfer
in immediately available funds to such account as Ixsys shall designate before
such payment is due.

                4.3.6 Exchange Control. If at any time legal restrictions
prevent the prompt remittance of part or all royalties with respect to any
country where the Product is sold, Bio-Management shall have the right, at its
option, to make such payments by depositing the amount thereof in local currency
to Ixsys' account in a bank or other depository in such country. If the royalty
rate specified in this Agreement should exceed the permissible rate established
in any country, the royalty rate for sales in such country shall be adjusted to
the highest legally permissible or government-approved rate.

                4.3.7 Withholding Taxes. Bio-Management shall be entitled to
deduct the amount of any withholding taxes, value-added taxes or other taxes,
levies or charges with respect to such amounts, other than United States taxes,
payable by Bio-Management, or any taxes required to be withheld by
Bio-Management, to the extent Bio-Management pays to the appropriate
governmental authority on behalf of Ixsys such taxes, levies or charges.
Bio-Management shall use reasonable efforts to minimize any such taxes, levies
or charges required to be withheld on behalf of Ixsys by Bio-Management.
Bio-Management promptly shall deliver to Ixsys proof of payment of all such
taxes, levies and other charges, together with copies of all communications from
or with such governmental authority with respect thereto.


                                    ARTICLE 5
                                 CONFIDENTIALITY

        5.1 Confidential Information. During the term of this Agreement, and for
a period of five (5) years following the expiration or earlier termination
hereof, each party shall maintain in confidence all Confidential Information
disclosed by the other party, and shall not use, disclose or grant the use of
the Confidential Information except on a need-to-know basis to those directors,
officers, employees, consultants, clinical investigators, contractors,
sublicensees, distributors or permitted assignees, to the extent such disclosure
is reasonably necessary in connection with such party's activities as expressly
authorized by this Agreement. To the extent that disclosure is authorized by
this Agreement, prior to disclosure, each party hereto shall obtain agreement of
any such Person to hold in confidence and not make use of the Confidential
Information for any purpose other than those permitted by this Agreement. Each
party shall notify the other promptly upon discovery of any unauthorized use or
disclosure of the other party's Confidential Information.

        5.2 Terms of this Agreement. Except as otherwise provided in Section 5.1
above, neither party shall disclose any terms or conditions of this Agreement to
any Third Party without the prior written consent of the other party.
Notwithstanding the foregoing, prior to execution of this Agreement, the parties
shall agree upon the substance of information that can be used to describe the
terms of this transaction, and each party may disclose such information, as
modified by mutual agreement from time to time, without the other party's
consent.

        5.3 Permitted Disclosures. The confidentiality obligations contained in
this Article 5 shall not apply to the extent that the receiving party (the
"Recipient") is required (a) to disclose



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information by law, order or regulation of a governmental agency or a court of
competent jurisdiction, or (b) to disclose information to any governmental
agency for purposes of obtaining approval to test or market a Product, provided
in either case that the Recipient shall provide written notice thereof to the
other party and sufficient opportunity to object to any such disclosure or to
request confidential treatment thereof.

        5.4 Notice of Publication. During the term of the Agreement, Ixsys and
Bio-Management each acknowledge the other party's interest in publishing certain
of its results to obtain recognition within the scientific community and to
advance the state of scientific knowledge. Each party also recognizes the mutual
interest in obtaining valid patent protection and protecting business interests.
Consequently, either party, its employees or consultants wishing to make a
publication (including any oral disclosure made without obligation of
confidentiality) relating to work performed by such party as part of the Program
(the "Publishing Party") shall transmit to the other party (the "Reviewing
Party") a copy of the proposed written publication at least forty-five (45) days
prior to the presentation. The Reviewing Party shall have the right (a) to
propose modifications to the publication for patent reasons, (b) to request a
reasonable delay in publication in order to protect patentable information and
(c) to edit the publication in a manner reasonably acceptable to the Publishing
Party to protect its Confidential Information.


                                    ARTICLE 6
                                    DILIGENCE



        Bio-Management shall use its best efforts to actively research, develop
and obtain regulatory approvals to market in major markets throughout the world
at least one Product hereunder as expeditiously as possible, and following such
approval to maximize sales of such Product. Without limiting the foregoing,
Bio-Management shall meet the following diligence milestones by the dates set
forth below:

        6.1 Filing of IND. Bio-Management, its licensees or sublicensees shall
file an IND with the U.S. FDA for one or more Products under this Agreement
within five (5) years of the Effective Date. After the filing of an IND for a
Product, Bio-Management, its licensees or sublicensees, shall be required to
have an active IND and to be actively and diligently conducting clinical trials
in pursuit of regulatory approval for such Product in the U. S. until such
Product may be sold commercially in the U.S.

        6.2 Conduct of Clinical Trials. Bio-Management, its licensees or
sublicensees shall use its best efforts to conduct, as soon as commercially
practicable, such human clinical trials as are necessary or desirable to obtain
all regulatory approvals to develop and commercialize in the U.S. each Product
for which an IND has been filed.

        6.3 Obtain Regulatory Approvals. Bio-Management, its licensees or
sublicensees shall use its best efforts to obtain, as soon as commercially
practicable, regulatory approval to market in the U.S. at least one Product, and
(b) shall obtain regulatory approval to market in the United States at least one
Product within ten (10) years after the Effective Date.



                                      -11-
<PAGE>   12

                                    ARTICLE 7
                              TERM AND TERMINATION

        7.1 Expiration. Unless terminated earlier pursuant to Section 7.2 below,
this Agreement shall expire on the expiration of Bio-Management's obligations to
pay royalties under this Agreement.

        7.2 Termination for Cause. A party may terminate this Agreement upon or
after the breach of any material provision of this Agreement by the other party,
if the breaching party has not cured such breach within thirty (30) days after
notice thereof from the other party; provided, however, that if the breach is
due to Bio-Management's failure to pay under Article 4 or Section 3.6, Ixsys
shall provide an additional notice of failure to pay and allow Bio-Management a
second thirty (30) day period to cure such breach. ***.

        7.3 Effect of Expiration and Termination. Expiration or termination of
this Agreement shall not relieve the parties of any obligation accruing prior to
such expiration or termination. The provisions of Articles 2, 5, 8, and Sections
3.8.1, 3.12, 7.4 and 9.11 shall survive the expiration or termination of this
Agreement.

        7.4 Effect of Certain Breaches. In addition to all other rights and
remedies available by law or otherwise, in the event of a breach of the
provisions of Section 3.6 or Article 4 or 6 above, Ixsys shall have the right to
terminate the Agreement pursuant to Section 7.2 thereof. In the event of such
termination, Bio-Management shall grant to Ixsys an exclusive license under all
Bio-Management's patent rights relating to Program Antibodies, Products and the
use of thereof in the Field. In addition, Bio-Management shall deliver to Ixsys
copies of all data and information in Bio-Management's control resulting from
research related to the Program Antibodies and Products, and shall assign and
deliver to Ixsys all copies of any and all regulatory filings related to Program
Antibodies and Products. In consideration of the foregoing, Ixsys shall pay to
Bio-Management the following: (a) *** percent (***%) of cash consideration
received by Ixsys or its Affiliates in consideration for sublicenses (including
modified or renegotiated sublicenses) granted thereunder (excluding royalties on
sales) and (b) with respect to sales, all royalties received on Net Sales of
Products covered by Bio-Management's patents on Program Antibodies or Products
except for *** percent (***%) of which shall be retained by Ixsys; provided,
however, that in the event that Ixsys sells Products directly, Ixsys shall only
pay to Bio-Management a royalty equal to *** percent (***%) of Net Sales on
Products sold by Ixsys. In the event that such termination occurs and an
exclusive license to Ixsys is granted pursuant to this Section 7.4 and
Bio-Management previously has granted license or sublicense rights to any third
party, Ixsys shall enter into a license or sublicense, as the case may be, on
substantially the same terms provided that such third party agrees in writing to
be bound by all of the terms and conditions therein.


                                    ARTICLE 8
                                    INDEMNITY



* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.


                                      -12-
<PAGE>   13

        8.1 Indemnity.

                8.1.1 By Ixsys. Ixsys shall indemnify and hold Bio-Management
harmless, and hereby forever releases and discharges Bio-Management, from and
against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) resulting from all claims, demands, actions and other
proceedings by any Third Party to the extent arising from (a) the breach of any
representation, warranty or covenant of Ixsys under this Agreement, (b) the use
of the Materials by Ixsys or, its Affiliates, or (c) the gross negligence or
willful misconduct of Ixsys, its Affiliates or licensees in the performance of
its obligations, and its permitted activities, under this Agreement.

                8.1.2 By Bio-Management. Bio-Management shall indemnify and hold
Ixsys harmless, and hereby forever releases and discharges Ixsys, from and
against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) resulting from all claims, demands, actions and other
proceedings by any Third Party to the extent arising from (a) the breach of any
representation, warranty or covenant of Bio-Management under this Agreement, (b)
the use of the Materials by Bio-Management, its Affiliates or licensees (other
than Ixsys), (c) the making, using or selling of Products (including claims,
demands, actions or other proceedings based on strict liability), or (d) the
gross negligence or willful misconduct of Bio-Management, its Affiliates or
licensees (other than Ixsys) in the performance of its obligations, and its
permitted activities, under this Agreement.

        8.2 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 8 shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification. The Indemnitor shall have the
right to participate in, and to the extent the Indemnitor so desires jointly
with any other indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor; provided, however, that the Indemnitee shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the Indemnitor, if representation of the Indemnitee by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other party represented by such counsel
in such proceedings. The indemnity obligations under this Article 8 shall not
apply to amounts paid in settlement of any claim, demand, action or other
proceeding if such settlement is effected without the prior express written
consent of the Indemnitor, which consent shall not be unreasonably withheld or
delayed. The failure to deliver notice to the Indemnitor within a reasonable
time after notice of any such claim or demand, or the commencement of any such
action or other proceeding, if prejudicial to its ability to defend such claim,
demand, action or other proceeding, shall relieve such Indemnitor of any
liability to the Indemnitee under this Article 8 with respect thereto, but the
omission so to deliver notice to the Indemnitor shall not relieve it of any
liability that it may have to the Indemnitee otherwise than under this Article
8. The Indemnitor may not settle or otherwise consent to an adverse judgment in
any such claim, demand, action or other proceeding, that diminishes the rights
or interests of the Indemnitee without the prior express written consent of the
Indemnitee, which consent shall not be unreasonably withheld or delayed. The
Indemnitee, its employees and agents, shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigation of any claim,
demand, action or other proceeding covered by this Article 8.



                                      -13-
<PAGE>   14

        8.3 Insurance. Each party shall maintain insurance with respect to the
development, manufacture and sales of Products by such party, its Affiliates or
sublicensees in such amounts as such party customarily maintains with respect to
the development, manufacture and sales of its other products. Each party shall
maintain such insurance for so long as it continues to develop, manufacture or
sell Products, and thereafter for so long as it customarily maintains insurance
for itself covering the development, manufacture and sales of its other
products.


                                    ARTICLE 9
                                  MISCELLANEOUS

        9.1 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties to the other shall be
in writing and addressed to such other party at its address indicated below, or
to such other address as the addressee shall have last furnished in writing to
the addressor, and shall be effective upon receipt by the addressee.

           If to Ixsys:            Ixsys, Inc.
                                   3520 Dunhill Street
                                   San Diego, California 92121
                                   Attention:  Lawrence E. Bloch, M.D., M.B.A.

           with a copy to:         Pillsbury Madison & Sutro LLP
                                   235 Montgomery Street, 16th Floor
                                   San Francisco, California 94104
                                   Attention:  Thomas E. Sparks, Jr.

           If to Bio-Management:   Bio-Management Inc.
                                   Four Hook Road
                                   Sharon Hill, PA 19079
                                   Attention:  Mr. Raymond A. Mirra, Jr.

           with a copy to:         Bio-Management Inc.
                                   Four Hook Road
                                   Sharon Hill, PA 19079
                                   Attention:  Joseph A. Troilo, Jr.

        9.2 Assignment. Except as otherwise expressly provided under this
Agreement neither this Agreement nor any right or obligation hereunder may be
assigned or otherwise transferred (whether voluntarily, by operation of law or
otherwise), without the prior express written consent of the other party;
provided, however, that either party may, without such consent, assign this
Agreement and its rights and obligations hereunder in connection with the
transfer or sale of all or substantially all of its business related to this
Agreement or in the event of its merger, consolidation, change in control or
similar transaction. Any permitted assignee shall assume all obligations of its
assignor under this Agreement. Any purported assignment or transfer in violation
of this Section 9.2 shall be void.



                                      -14-
<PAGE>   15

        9.3 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to the
conflicts of law principles thereof.

        9.4 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof. All express or implied
representations, agreements and understandings, either oral or written,
heretofore made are expressly superseded by this Agreement. This Agreement may
be amended, or any term hereof modified, only by a written instrument duly
executed by both parties.

        9.5 Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.

        9.6 Independent Contractors. Each party hereby acknowledges that the
parties shall be independent contractors and that the relationship between the
parties shall not constitute a partnership, joint venture or agency. Neither
party shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other party, without the prior consent of the other party to do so.

        9.7 Waiver. The waiver by a party of any right hereunder, or of any
failure to perform or breach by the other party hereunder, shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by the
other party hereunder whether of a similar nature or otherwise.

        9.8 Force Majeure. A party shall neither be held liable or responsible
to the other party, nor be deemed to have defaulted under or breached this
Agreement, for failure or delay in fulfilling or performing any obligation under
this Agreement (other than an obligation for the payment of money) to the
extent, and for so long as, such failure or delay is caused by or results from
causes beyond the reasonable control of such party including but not limited to
fire, floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party.

        9.9 Other Activities. Except as otherwise expressly provided in this
Agreement, nothing in this Agreement shall preclude either party from conducting
other programs (either for its own benefit or with or for the benefit of any
other Person) to conduct research, or to develop or commercialize products or
services, for use in any field.

        9.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        9.11 Arbitration. All controversies or claims under this Agreement, the
enforcement or interpretation hereof, or because of an alleged breach, default
or misrepresentation under the provisions hereof, shall be settled by final and
binding arbitration in San Diego, California in accordance with the
then-existing commercial arbitration rules (the "Rules") of the American
Arbitration Association ("AAA"), and judgment upon the award rendered by the
arbitrators may



                                      -15-
<PAGE>   16

be entered in any court having jurisdiction thereof; provided, however, that the
law applicable to any controversy shall be the law of the State of California,
regardless of its or any other jurisdiction's choice of law principles. In any
arbitration pursuant to this Agreement, the award or decision shall be rendered
by the majority of the members of a Board of Arbitration consisting of three (3)
members, one of whom shall be appointed by each party and the third of whom
shall be the chairman of the panel and shall be appointed be mutual agreement of
said two party-appointed arbitrators. In the event of a failure of said two
arbitrators to agree within sixty (60) days after the commencement of the
arbitration proceeding upon the appointment of the third arbitrator, the third
arbitrator shall be appointed by the AAA in accordance with the Rules. In the
event that either party shall fail to appoint an arbitrator within thirty (30)
days after the commencement of the arbitration proceedings, such arbitrator
shall be appointed by the AAA in accordance with the Rules. Notwithstanding the
foregoing, the parties may apply to any court of competent jurisdiction for a
temporary restraining order, as necessary, without breach of this arbitration
agreement and without abridgement of the powers of the arbitrator. In no event
shall the demand for arbitration be made after the date when institution of a
legal or equitable proceeding based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitation.

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

Bio-Management, Inc.                    Ixsys, Inc.

Signature:  /s/ Raymond A. Mirra, Jr.   Signature:  /s/ Lawrence E. Bloch
          --------------------------              -----------------------------
Name:   Mr. Raymond A. Mirra, Jr.       Name:   Lawrence E. Bloch, M.D., M.B.A
Title:  Vice President                  Title:  Vice President of Business
                                                Development



                                      -16-
<PAGE>   17

                                   SCHEDULE A

                                  RESEARCH PLAN


        A.      Antibody Cloning
                a.      Sequence murine antibody DNA
                        i.      Use specific primers if protein sequence is
                                known
                        ii.     Design degenerate signal sequence primers if
                                protein sequence is unknown
                b.      Express chimeric antibody (human constant region fused
                        with murine variable region)
                        i.      Clone murine antibody into Ixsys' phage
                                expression system

        B.      Assay Development and Validation
                a.      Determine antigen labeling/detection system using murine
                        monoclonal antibody (ELISA format)
                b.      Establish and optimize capture lift parameters using
                        chimeric construct
                c.      Establish and optimize capture ELISA parameters using
                        chimeric construct
                d.      Establish and optimize direct ELISA parameters
                e.      Validate all assays to demonstrate:
                        i.      Time- and concentration-dependence of signal
                        ii.     Saturability of signal
                        iii.    Specificity of signal (competable)

        C.      Design and Synthesis of Humanization/Optimization Libraries
                ***
                ***
                ***
                ***
                        ***
                        ***
                        ***

        D.      Screening
                a.      High density capture lift screening of libraries
                b.      Plaque purification of optimal clones
                c.      Capture ELISA characterization of clones identified in
                        capture lift screening
                d.      Direct ELISA characterization of highest affinity clones





* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

<PAGE>   18



        E.      Characterization
                a.      DNA sequencing to identify framework motif and
                        beneficial CDR mutations
                b.      Transfer best clones to expression vector
                c.      Purify variants
                d.      Determine precise affinity constants using BIAcore
                e.      Transfer to Bio-Management 2 mg of the best humanized
                        Fab variant (bacterially expressed)

        F.      Affinity Maturation
                ***
                ***
                ***
                ***
                ***
                ***

        G.      Iterative Affinity Maturation
                ***
                ***
                ***
                ***

        H.      Deliverables
                a.      Transfer to Bio-Management the DNA sequence encoding the
                        Fab of the best humanized and optimized variant
                b.      Transfer to Bio-Management the vector expressing the Fab
                        of the best humanized and optimized variant



* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.


                                       -2-
<PAGE>   19

                                   SCHEDULE B

                                 PROJECT FUNDING

        1. Fixed Fee. Bio-Management shall pay to Ixsys *** each for the
humanization and optimization of each of the two (2) Candidate Molecules, to be
paid *** starting from the Effective Date. Payments shall be due within thirty
(30) days.

        2. Milestone Payments. Bio-Management shall pay to Ixsys milestone
payments equal to *** per Program Antibody *** which that Program Antibody was
derived ***. These milestone payments shall be paid within days *** following
the demonstration of the Program Antibody *** of the Candidate Molecule from
which that Program Antibody was derived.***



* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.