Exhibit 10.219


                        SUPPLY AND DEVELOPMENT AGREEMENT

     This Supply and Development Agreement (this "Agreement") is made and
entered into as of the 7th day of January, 2000 (the "Effective Date"), by and
among

               LIGAND PHARMACEUTICALS INCORPORATED, a corporation organized
               and existing under the laws of Delaware and having its principal
               place of business at 10275 Science Center Drive, San Diego,
               California 92121 (hereinafter called "LIGAND"),

               SERAGEN, INC., a corporation organized and existing under
               the laws of Delaware and having its principal place of business
               at 99 South Street, Hopkinton, Massachusetts 01748 (hereinafter
               called "SERAGEN"), and

               COPHARMA, INC., a corporation organized and existing under
               the laws of Delaware and having a principal place of business at
               45 Moulton Street, Cambridge, MA 02138 (hereinafter called
               "COPHARMA").

WHEREAS, SERAGEN has developed a new biological entity designated as DAB389IL-2,
denileukin difitox, the active ingredient in ONTAK(R), prepared as a purified
drug substance (hereinafter "PDS"), and intends to further refine the process
for the manufacture of first generation PDS and to develop a process for the
manufacture of a second generation final formulated bulk product (hereinafter
"FFBP"); and

WHEREAS, SERAGEN desires to have COPHARMA perform certain process development
support, manufacturing, validation and analytical services and services related
to the refinement of the PDS manufacturing process and development of the FFBP
manufacturing process, as described in Article III and Exhibit D of this
Agreement (the "Technology Services"); and

WHEREAS, SERAGEN will be responsible for the commercial development and sale of
PRODUCT on a worldwide basis; and

WHEREAS, SERAGEN desires to have COPHARMA manufacture (including therein,
without limitation, fermentation of ONTAK pellets if required), store, test and
supply commercial PRODUCT on a worldwide basis, test the final drug product
(FDP), perform stability testing, and perform reference standard qualification
as described in Article II of this Agreement, all in accordance with United
States current Good Manufacturing Practices (cGMPs;Title 21 C.F.R., Parts 210
211, and 600 as applicable) and their functional foreign equivalents thereof;
and all other regulatory requirements and filings as applicable; and

WHEREAS, SERAGEN may, from time to time, desire to purchase from COPHARMA
additional services such as, but not limited to, clinical product storage, cell
line stock, storage,

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and reference standard storage and regulatory/CMC consulting all in accordance
with United States current Good Manufacturing Practices (cGMPs;Title 21 C.F.R.,
Parts 210, 211, and 600 as applicable) and their functional foreign equivalents
thereof; and all other regulatory requirements and filings as applicable; and

WHEREAS, COPHARMA is willing to undertake the manufacture, storage, testing and
commercial supply of PRODUCT to SERAGEN and the provision of the Technology
Services to SERAGEN and may chose to provide other services requested by SERAGEN
as described above according to the terms, conditions and covenants hereinafter
set FORTH.

NOW, THEREFORE, the parties hereto, in consideration of the promises and the
mutual covenants and agreements contained herein, the sufficiency of which are
hereby acknowledged, agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

1.01 DEFINED TERMS. In addition to terms otherwise defined in this Agreement,
the following terms have the specified meanings for purposes of this Agreement:

"Affiliate" shall mean any corporation, firm, partnership, individual or other
form of business organization which is now or hereafter owned or controlled by a
Party or, any corporation in which a Party owns at least fifty percent (50%) of
the stock entitled to vote for directors or otherwise controls the election of
directors, and any corporation, firm, partnership, individual or other form of
business organization in which a Party has the maximum ownership interest it is
permitted to have in the country where such business organization exists.

"Batch" shall mean an amount of PRODUCT sufficient to fill *** ( *** ) vials,
each vial containing *** of PRODUCT.

"Lot" shall mean *** vials of Final Drug Product packaged into its final dosage
form.

"cGMPs" shall mean:

               (i) as of the Effective Date of this Agreement, the current
               Good Manufacturing Practices standards required by the FDA as set
               forth in Title 21 C.F.R., Parts 210, 211 and 600 as applicable,
               in the United States Food, Drug & Cosmetic Act, as amended, or
               the applicable FDA regulations, policies or guidelines in effect,
               at the time of manufacture, for the manufacture and testing of
               pharmaceutical materials as applied to bulk pharmaceuticals,
               biologics, and

               (ii) in the future, may also include the corresponding
               equivalent requirements of the Canadian, European, Japanese and
               South American jurisdictions in which


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               FDP is to be marketed and sold, and such other jurisdictions
               of which SERAGEN informs COPHARMA from time to time that FDP is
               to be marketed and sold, provided that the requirements of
               additional jurisdictions will become part of cGMPs only in
               accordance with the terms of this Agreement.

"DAB389IL-2" shall mean a fusion protein developed by SERAGEN and sold in the
United States under the trademark ONTAK(R) comprising the first 389 amino acids
of the A and B fragments of the diphtheria toxin combined with interleukin-2.

"Facility" means the manufacturing, testing and production facility at 97 South
Street, Hopkinton, Massachusetts.

"Food and Drug Act" means the Food, Drug and Cosmetic Act, 21 U.S.C. ' 301-391.

"FDA" shall mean the United States Food and Drug Administration (U.S.A).

"Final Formulated Bulk Product" or "FFBP" shall mean the second generation
formulated DAB389IL-2 protein complete and ready for lyophilization, as
developed in accordance with the Technology Services described in Exhibit D.

"Final Drug Product" or "FDP" shall mean PRODUCT packaged into its final dosage
form (liquid or lyophilized product in vials).

"Intellectual Property" shall mean all know-how, copyrights, designs, databases,
mask works, patents, trademarks, trade names and other proprietary data and
rights, and all registrations and applications therefor.

"Manufacturing and Release Requirements" shall mean any and all specifications
and release requirements mutually agreed on between the Parties for PRODUCT and
its manufacture, including, without limitation, all product, raw materials,
solvents, reagents, processing, storage, shipping and packaging specifications
and necessary test protocols, product release specifications for PRODUCT,
certificates of analysis and other documentation required to describe, control
and assure the quality manufacture and testing of PRODUCT, which Manufacturing
and Release Requirements for PDS are as specifed in Biologics License
Application #97-1325 and its supplements and for FFBP will be attached upon the
completion of the Technology Services, and such Manufacturing and Release
Requirements may be changed only upon the written agreement of the parties. The
current Manufacturing and Release Requirements for PDS are described on Exhibit
A.

"MRR Documentation" means all production and release documentation specified in
the Manufacturing and Release Requirements, as described in Exhibit A.

"Party" or "party" shall mean either SERAGEN, COPHARMA or, subject to the terms
set forth below, LIGAND, and the term "Parties" or "parties" shall, as
appropriate, mean SERAGEN, COPHARMA and LIGAND. LIGAND shall be considered a
Party to this Agreement only for

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the purpose of being subject to the provisions of Section 2.05 and Sections
7.01, 7.06, 7.07 and 7.08 of this Agreement and for being liable to COPHARMA for
a breach of such provisions, including liability pursuant to Article VIII to the
same extent SERAGEN would be liable for such a breach.

"Process Improvements" shall mean any improvement made to the method of
manufacture of PRODUCT.

"PRODUCT" shall mean purified drug substance (PDS, i.e. first generation) or
final formulated bulk product (FFBP, i.e. second generation, provided that
PRODUCT shall only include FFBP once all Technology Services are complete and
all necessary approvals and validations for the manufacture and shipment of FFBP
have been received by the Parties), collectively, manufactured by COPHARMA
pursuant to the terms of this Agreement.

"PRODUCT Intellectual Property" shall mean all Intellectual Property which is
specifically related to PRODUCT and its method of manufacture, including Process
Improvements which are specifically related to PRODUCT. PRODUCT Intellectual
Property shall not include Intellectual Property (including Process
Improvements) which represent general know-how relating to the development and
manufacture of biopharmaceuticals and that have applications to and or value for
developing and manufacturing biopharmaceuticals other than the PRODUCT.

"Purified Drug Substance" or "PDS" shall mean the first generation formulated
DAB389IL-2 protein complete and ready for fill/finish, as described in Exhibit
"A".

"Regulatory Agency " shall mean:

     (i) as of the Effective date of this Agreement, the FDA and all other U.S.
regulatory agencies with authority over the manufacture and/or shipment of
PRODUCT, and

     (ii) in the future may also include equivalent foreign regulatory agencies
including, but not limited to, those of Europe, Canada, Japan, and South America
in which FDP is to be marketed and sold, and such other jurisdictions of which
SERAGEN informs COPHARMA from time to time that FDP is to be marketed and sold,
provided that regulatory agencies in additional jurisdictions will be included
in the definition of Regulatory Agency only in accordance with the terms of this
Agreement.

"Regulatory Requirements" means the Guidelines for Bulk Pharmaceuticals and the
cGMPs in effect at the particular time, issued or required by the Regulatory
Agency for the methods to be used in, and the facilities and controls to be used
for, the manufacture, processing, packaging and storage of the manufactured
PRODUCT.

"Specifications" shall mean any and all specifications mutually agreed on
between the Parties for the manufacture of PRODUCT, including, without
limitation, all product, raw materials, solvents, reagents and processing
specifications contained within the Manufacturing and Release Requirements.

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"Agreement" means this Supply and Development Agreement entered into by and
between COPHARMA, SERAGEN and LIGAND, as amended or modified from time to time.

"Technology Services" means those services set forth in Exhibits "D" and "E" to
this Agreement.

                                   ARTICLE II
                COMMERCIAL SUPPLY OF PRODUCT AND RELATED SERVICES


2.01 VALIDATION REQUIREMENTS.

     (a) CURRENT VALIDATIONS. SERAGEN represents and warrants to COPHARMA that
as of the Effective Date all equipment, manufacturing processes and procedures,
cleaning processes and procedures and analytical test methodologies (together
"Equipment and Procedures") which are used in the manufacture and testing of
PRODUCT have been properly validated under all applicable Regulatory
Requirements and that all such validations are in accordance with cGMPs and are
in full force and effect and will remain so immediately following the Effective
Date. SERAGEN further represents and warrants to COPHARMA that as of the
Effective Date all validations of the Equipment and Procedures which SERAGEN
deems necessary have been received and are in full force and effect and will
remain so immediately following the Effective Date.

     (b) MAINTENANCE OF VALIDATIONS. COPHARMA shall use commercially reasonable
efforts to maintain the validations in effect immediately following the
Effective Date for all Equipment and Procedures. COPHARMA shall use commercially
reasonable efforts to maintain such validations in accordance with cGMPs.

     (c) ADDITIONAL VALIDATIONS Validations in connection with the manufacture
and testing of FFBP for the United States will be executed under the terms and
conditions of this agreement as described in Article III and Exhibits D and E.
The parties agree to negotiate in good faith the cost implications of any
additional validations in connection with PRODUCT. The parties agree that with
respect to additional validations required in connection with PRODUCT,
additional regulatory agencies will not be deemed "Regulatory Agencies" for
purposes of the remainder of this Agreement, and the requirements of any
additional jurisdictions will not be deemed part of "cGMPs" for purposes of the
remainder of this Agreement, until COPHARMA and SERAGEN have successfully
received all required validations and approvals necessary in connection with the
marketing and sale of PRODUCT in the associated jurisdictions.

2.02 REGULATORY INSPECTIONS. COPHARMA shall prepare for, submit to and endeavor
to pass all inspections deemed necessary by the Regulatory Agencies. The parties
agree to negotiate in good faith the cost implications of such preparations,
inspections and corrective actions specific to PRODUCT.

2.03 COMMERCIAL SUPPLY. COPHARMA shall, from time to time, as requested by

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SERAGEN, supply SERAGEN with PRODUCT produced, tested, packaged and shipped
according to the Manufacturing and Release Requirements under the terms and
conditions of this Agreement, and in accordance with all Regulatory
Requirements. SERAGEN shall be notified in writing of all significant process
deviations, manufacturing failures, errors/accidents and out of specification
results within one (1) working day. SERAGEN and COPHARMA agree that for purposes
of this Article 2.03, email messages shall be deemed notification in writing.
SERAGEN and COPHARMA shall agree to investigations of significant process
deviations, manufacturing failures, errors/accidents and out of specification
results if indicated prior to manufacture of subsequent Batches.

2.04 FDP RELEASE AND STABILITY TESTING. COPHARMA shall, from time to time as
requested by SERAGEN, perform validated analytical release and stability testing
for FDP according to SERAGEN approved standard operating procedures (SOP's ) or
protocols. COPHARMA shall perform the work detailed in all protocols under cGMP
conditions, and shall perform the work as detailed in the protocols within the
time agreed, including laboratory testing, QA review of data and final report.
In the event that SERAGEN requests a repeat of a test/protocol, COPHARMA shall
begin the work within *** (***) *** of the request, and complete the work within
the time specified in the original protocols. In the event that analytical
release or stability test results fail to meet Specifications or acceptance
criteria as defined in the protocols, COPHARMA will undertake any resulting
investigations and other actions required as per cGMPs.

2.05 EXCLUSIVITY. COPHARMA shall not manufacture PRODUCT for itself, or for any
other entity other than SERAGEN, except with the prior written consent of
SERAGEN. SERAGEN and LIGAND, and each of their Affiliates, agree to purchase
and/or sell PRODUCT produced exclusively by COPHARMA during the term of this
Agreement, but retain the right to qualify a second source of supply of PRODUCT.
In the event that SERAGEN identifies a second source, COPHARMA agrees to support
at SERAGEN's expense the transfer to the second source of manufacturing methods
and processes which constitute PRODUCT Intellectual Property, including but not
limited to the manufacturing Batch records, solution preparation documents,
pertinent QC assay and manufacturing SOPs, equipment specifications, QC assay
validation protocols, process validation protocols, and technical transfer
assistance at the discretion of COPHARMA.

2.06 FORECASTS. Upon the Effective Date, SERAGEN shall provide COPHARMA with a
binding take or pay *** (***) *** forecast for PRODUCT, consisting of a minimum
of *** (***) Batches (excluding any development batches called for as part of
the Technology Services) for the ***. *** prior to expiration of ***, and ***
thereafter for the duration of this Agreement, SERAGEN will supply COPHARMA with
a binding *** forecast for PRODUCT for the ***. By *** of *** SERAGEN will issue
a PO for the PRODUCT requirements for the *** of the following *** and by *** of
*** SERAGEN will issue a PO for the PRODUCT requirements for the *** of the ***.
Delivery of the first *** Batches of PRODUCT against the PO for the *** of the
*** will be no sooner than ***, and delivery of the first *** Batches of PRODUCT
against the PO for the *** of the *** will be no sooner than ***. PRODUCT will
be delivered at a


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maximum rate of *** Batches *** thereafter.

For the ***, only, the PO for the *** will be issued by *** of *** and the PO
for the *** will be issued by ***. Delivery of the first *** Batches of PRODUCT
against the PO for the *** will be no sooner than ***, and delivery of the first
*** Batches of PRODUCT against the PO for the *** will be delivered no sooner
than ***. PRODUCT will be delivered at a maximum rate of *** Batches ***
thereafter.

Notwithstanding the maximum Batch delivery rate set forth above, additional
PRODUCT Batches may be delivered to SERAGEN at any time on mutual agreement of
the parties if adequate PRODUCT inventory is available.

COPHARMA shall notify SERAGEN within 10 business days of receipt of each
forecast if it anticipates that it will be unable to meet any or all of the
forecasted requirements, provided, however, that failure to make such
notification will not obligate COPHARMA to supply amounts of PRODUCT beyond the
limitations set forth below in this Section 2.06.

COPHARMA may reject, and is under no obligation to fulfill, any purchase order
for PRODUCT which, when aggregated with previously received purchase orders and
any development batches called for under the Technology Services, (i) exceeds by
more than ***% the current *** forecast or the current *** forecast previously
delivered by SERAGEN in accordance with this Section 2.06, (ii) exceeds ***
Batches in any given calendar year or *** Batches in any six-month period, (iii)
exceeds the production capacity of *** Batches every two weeks or *** Batches
per month of COPHARMA'S facility at 97 South Street, Hopkinton, Massachusetts,
or (iv) cannot be filled due to circumstances arising under Section 11.10.
COPHARMA shall notify SERAGEN in writing of any rejection within ten (10) days
of receipt of the purchase order being rejected. Any purchase order which is not
rejected within this ten (10) days of receipt shall be deemed accepted by
COPHARMA.

2.07 MANUFACTURING MATERIALS. COPHARMA shall be responsible for planning and
ordering an adequate supply of other components meeting the Specifications that
are necessary to manufacture PRODUCT. Further, COPHARMA shall provide facilities
to adequately store and maintain all raw materials, starting materials,
reagents, intermediates and PRODUCT within Specifications. COPHARMA shall ensure
that, to the extent COPHARMA and SERAGEN have agreed upon a price for such
services, appropriate diligence, caution and management are taken in COPHARMA'S
storage and control of key cell lines and other reagents owned by SERAGEN which
are directly related to the manufacture and testing of ONTAK, such as, but not
limited to, ***.

2.08 CREDIT FOR CURRENT STOCKS OF MATERIALS AND REAGENTS. As of the Effective
Date SERAGEN has the raw materials, starting materials, reagents and other
components (the "Components") to manufacture *** (***) Batches of PRODUCT. As of
the Effective Date the Components are being stored at the Facility. SERAGEN
agrees that following the Effective Date


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it will make these materials available to COPHARMA for use by COPHARMA in
the manufacture and supply of PRODUCT. COPHARMA will credit against SERAGEN'S
payment due for PRODUCT or other services provided pursuant to this Agreement a
total of *** representing the value of such Components. The *** will be credited
to SERAGEN in ***.

2.09 MANUFACTURING PROCESS. All PRODUCT provided to SERAGEN by COPHARMA shall
meet the Specifications, which cannot be changed unless agreed to in a dated,
written document signed by the Parties. In addition, if any Regulatory Agency
having jurisdiction in any country where SERAGEN is selling FDP requires any
changes to the Specifications, COPHARMA shall make reasonable efforts to make
the required changes, at SERAGEN's expense. In the event amendments or
supplements are required to the Specifications for the purpose of complying with
current Regulatory Requirements, the parties shall mutually agree on appropriate
amendments or supplements.

2.10 PROCESS IMPROVEMENTS. Each of COPHARMA and SERAGEN shall have the right to
request changes to implement Process Improvements or to reduce the cost of
manufacturing, by written notice delivered to the other party. COPHARMA and
SERAGEN shall meet as soon as possible after such notification to discuss such
changes and the continued provision of PRODUCT under this Agreement. No change
shall be implemented by COPHARMA, whether requested by either of the parties or
requested or required by any governmental agency, until SERAGEN has agreed in
writing to such change. Under no circumstances shall this section be construed
to require either party to agree to changes that do not comply with cGMP
Requirements.

2.11 QUALITY CONTROL AND QUALITY ASSURANCE. COPHARMA shall conduct quality
control testing and release the PRODUCT (hereafter referred to as "COPHARMA QA
release") in accordance with (a) the methods and procedures described in the
Manufacturing and Release Requirements, and (b) current Regulatory Requirements.
Unless otherwise authorized by SERAGEN, shipment of PRODUCT shall not occur
prior to SERAGEN's release of the PRODUCT, which release will be based solely
upon SERAGEN'S review of the MRR Documentation supplied by COPHARMA. COPHARMA
shall retain all records pertaining to testing as required by cGMP.

2.12 NON-CONFORMING MANUFACTURED PRODUCT. COPHARMA shall provide SERAGEN'S
quality assurance and compliance department with copies of completed MRR
Documentation listed in Exhibit A, and shall endeavor to do so within 10
business days of COPHARMA QA release of PRODUCT. Within thirty (30) days after
COPHARMA QA release of each batch of PRODUCT and receipt of all MRR
Documentation, SERAGEN shall determine by review of the MRR Documentation
whether or not the given Batch of PRODUCT conforms to the Manufacturing and
Release Requirements, and was manufactured in accordance with cGMPs; provided
that COPHARMA provides timely answers to information requests and resolution of
issues arising from SERAGEN's review of MRR Documentation. If within the thirty
(30) days SERAGEN QA makes a determination that SERAGEN believes the Batch to be
nonconforming,


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SERAGEN shall have the right to reject the Batch in its entirety and shall
notify COPHARMA promptly of this decision. If SERAGEN does not reject the Batch
within such thirty (30) day period the Batch will be deemed accepted by SERAGEN.
Acceptance of the Batch by SERAGEN triggers payment as described in Article VI.
Any dispute between COPHARMA and SERAGEN as to whether or not a Batch that has
been rejected by SERAGEN is nonconforming will be resolved in accordance with
the procedures set forth in Section 2.15 below.

2.13 REPLACEMENT BATCH. COPHARMA shall notify SERAGEN promptly of a rejection of
a Batch by COPHARMA QA, or any delay or irregularity encountered during
manufacture which could lead to a rejection. SERAGEN and COPHARMA shall promptly
and mutually agree upon new dates for the initiation and completion by COPHARMA
of the manufacture of a replacement Batch of PRODUCT if required to meet any
outstanding purchase order.

In the event that a replacement Batch is commenced prior to a rejection and the
Parties subsequently determine that the replacement Batch is not required,
SERAGEN will bear the costs associated with the manufacture of the replacement
Batch, up to the time of such determination. SERAGEN and COPHARMA will negotiate
in good faith terms for the continuance or discontinuation of the manufacture of
any such replacement Batch.

Subject to prior resolution of the dispute in accordance with the procedures set
forth in Section 2.15, below in the event there is a dispute between COPHARMA
and SERAGEN over whether a Batch is nonconforming, COPHARMA shall replace all
non-conforming shipments at its expense, refund any payments made for the
nonconforming shipment, and shall reimburse SERAGEN for any reasonable charges
incurred by SERAGEN for shipping or storage, if applicable, of the
non-conforming shipment. Any replacement Batch of PRODUCT to be manufactured by
COPHARMA shall be invoiced by COPHARMA in accordance with the purchase order
placed by SERAGEN for the nonconforming shipment of PRODUCT.

2.14 DESTRUCTION OF NONCONFORMING PRODUCT. COPHARMA shall destroy, after
thorough investigation and upon determination that no further action can be
taken, at COPHARMA's sole cost and expense, in accordance with all applicable
laws and regulations (including, without limitation, environmental laws and
regulations) and in a manner to which SERAGEN has given its prior written
approval, PRODUCT deemed to be nonconforming in its possession that has been
replaced or is to be replaced, and such PRODUCT shall not be sold, reprocessed,
salvaged, reclaimed or otherwise reused in any manner by COPHARMA. SERAGEN, or
its designees, shall return all rejected Batches to COPHARMA, at COPHARMA's
expense, for destruction. Representatives of SERAGEN shall be permitted to
witness the destruction of nonconforming PRODUCT under this section, and shall
receive from COPHARMA proof of such destruction, upon written request.

2.15 RESOLUTION OF DISPUTES. In the event of dispute between the Parties over
the validity of a Batch rejection for failure to meet PRODUCT Specifications,
the Parties agree to submit a representative sample of the rejected Batch to a
qualified independent cGMP test facility to be agreed upon by the Parties, and
to accept the results of the testing performed by that facility as binding with
regard to that Batch. The testing procedures utilized must be formerly
transferred

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and qualified at the independent test facility prior to performing the testing.
The expense of such testing shall be borne by the losing Party.

In the event that the Parties cannot resolve a dispute regarding conformance
with cGMPs and/or required MRR Documentation, the Parties shall submit the issue
to a mutually agreed upon expert cGMP organization. The findings of the expert
cGMP organization shall be binding on the Parties, absent manifest error.
COPHARMA shall bear such expenses of the cGMP organization if the findings
confirm the non-conformity, and SERAGEN shall bear such expenses if the findings
confirm that the PRODUCT was manufactured in accordance with cGMPs and/or
required MRR Documentation. The Parties agree to make all efforts in good faith
to resolve disputes within 60 days.

2.16 ADDITIONAL SERVICES. Clinical product storage, cell line stock, storage,
and reference standard storage and regulatory/CMC consulting requested by
SERAGEN will be provided by COPHARMA all in accordance with cGMPs; and all other
regulatory requirements and filings as applicable. A list of these additional
services is shown in Exhibit F. The work scope and pricing of these additional
services will be agreed to by the parties by the end of January 2000. The
parties understand and agree that if the fermentation of additional ONTAK
pellets is required in connection with the manufacture of PRODUCT, such
additional fermentation will constitute an additional service requested by
SERAGEN pursuant to this Section 2.16 and that if the parties are unable to
agree upon the terms, including price, for the provision of such service,
COPHARMA will be released from any obligation to supply PRODUCT until and unless
such agreement is reached.

2.17 COMPLETION OF PRODUCT BATCHES WHICH ARE INCOMPLETE AS OF THE EFFECTIVE
DATE. SERAGEN represents and warrants to COPHARMA that as of the Effective Date
(upon which date COPHARMA is taking over operation of the Facility from Marathon
Biopharmaceuticals, Inc., a wholly-owned subsidiary of SERAGEN) the PRODUCT
Batches set forth on Exhibit G have not been completed. SERAGEN represents and
warrants to COPHARMA that Exhibit G sets forth a list of each unfinished Batch.
COPHARMA agrees that following the Effective Date it will complete the
manufacture of the unfinished Batches listed on Exhibit G. As such Batches are
finished COPHARMA will invoice SERAGEN for such Batches in the amounts set forth
on Exhibit G and SERAGEN shall make payment for such Batches in the amounts
specified on Exhibit G following the payment procedures set forth in this
Agreement for Batches wholly manufactured by COPHARMA. For Batches which are in
process as of the Effective Date and are completed by COPHARMA following the
Effective Date, the Parties agree that COPHARMA bears no responsibility or
liability for any work on such Batches through the Effective Date and the
Parties agree that the representations, warranties, covenants and obligations of
COPHARMA contained in this Agreement are applicable to such Batches only to the
extent of the work on the Batches which COPHARMA completes.

2.18 REMOVAL OF REJECTED MATERIALS Within 30 days of execution of this
agreement, SERAGEN and COPHARMA will convene a Material Review Board ("MRB") to
determine disposition of rejected PRODUCT Batches and rejected fermentation
pellets. Materials that are deemed rejected by this MRB will be disposed of
according to approved procedures.

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                                   ARTICLE III

                          DEVELOPMENT SERVICES AND FEES

3.01 TECHNOLOGY SERVICES. COPHARMA agrees to provide and deliver to SERAGEN, on
the terms set forth in this Agreement, the services described in Exhibit "D"
(the "Technology Services"). All Batches of PDS or FFBP provided under the
Technology Services shall be manufactured in accordance with appropriate
application of GMP principles (i.e. using specified raw materials, preapproved
development batch records available at the time of manufacture and subject to QA
review of both parties.)

3.02 TECHNOLOGY SERVICES FEES. In consideration of COPHARMA's providing the
Technology Services, SERAGEN agrees to pay COPHARMA for the Technology Services
according to the payment schedule attached to this Agreement as Exhibit "E."

3.03 PAYMENT TERMS. COPHARMA will invoice SERAGEN on a monthly basis for
Technology Services performed by COPHARMA for SERAGEN during the prior month,
except for payment for GMP Comparability Batches or other GMP Batches produced
under Technology Services, which shall be invoiced in the same manner as other
PRODUCT Batches. Payment shall be due from SERAGEN to COPHARMA within thirty
(30) days of receipt of each invoice

3.04 MODIFICATION OF SERVICES. In the event the Parties agree to amend the scope
of the Technology Services to be provided to account for changes in the
specifications for FFBP, the Parties shall negotiate in good faith appropriate
adjustments to the fees payable under Exhibit E. Any adjustments to Exhibits D
or E shall be effective only if in writing.

3.05 PAYMENT LIMITS. The aggregate payment for Technology Services in year 2000
shall not exceed *** (***). The aggregate payment for Technology Services in
year 2001 shall not exceed *** (***). If the maximum expenditures for the
Technology Services set forth in this Section 3.05 are met in a given year and
SERAGEN does not agree to waive such limit and continue to pay for additional
Technology Services in accordance with the provisions of Section 3.03, then
COPHARMA may immediately cease any further work on the Technology Services and
all of COPHARMA'S obligations to provide the Technology Services will
immediately terminate for that year. Further work on the Technology Services
during the following year will continue from the stage where it was halted
during the previous year.


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                                   ARTICLE IV

           MATTERS RELATED TO MANUFACTURE OF PRODUCT AND PROVISION OF
                              TECHNOLOGY SERVICES

4.01 FACILITIES; STAFFING; MATERIALS; EQUIPMENT. COPHARMA shall perform all
manufacturing, storage, handling, packaging and testing of PRODUCT, testing of
FDP and the Technology Services at its facility located at 97 South Street,
Hopkinton, Massachusetts or other testing facility as agreed to by the parties.
COPHARMA shall use commercially reasonable efforts to maintain at all times such
staffing, supplies and equipment as are sufficient to ensure that it has the
ability to supply PRODUCT and to perform the Technology Services in accordance
with the terms of this Agreement. COPHARMA shall provide SERAGEN with sixty (60)
days prior written notice, and receive SERAGEN'S prior written consent, before
making any changes in the raw materials, process, procedures, suppliers,
facilities, equipment, testing, packaging, labeling specifications or other
significant changes and can not implement that change until necessary approvals
are obtained from Regulatory Agencies by SERAGEN. A list of raw materials and
other components to be used in the manufacture of PRODUCT is attached hereto as
EXHIBIT C. COPHARMA shall formally qualify and approve suppliers of raw
materials, reagents, solvents, and packaging components used in the manufacture
of PRODUCT according to COPHARMA's written procedures consistent with cGMPs.
Pursuant to cGMPs, only suppliers approved by COPHARMA's supplier qualification
program shall be used in the manufacture of PRODUCT.

4.02 SUBCONTRACTING. Without SERAGEN's prior written consent, COPHARMA shall not
enter into any subcontract with any third party for the provision of services
under this Agreement, including the manufacture, storage, handling, packaging
and testing of PRODUCT and FDP and the provision of the Technology Services. Any
third party or contract laboratory used for the testing of PRODUCT or
intermediates must, (i) be approved by SERAGEN in advance, (ii) have signed a
confidentiality agreement with SERAGEN and (iii) have completed a successful
qualification/validation between COPHARMA, or SERAGEN, or a SERAGEN designated
contractor. A copy of the qualification/validation and procedures and results
must be submitted by COPHARMA to SERAGEN for their approval prior to COPHARMA'S
use of the contractor for the designated purposes.

4.03 AUDITS; ACCESS. SERAGEN'S authorized representative(s), after arranging at
least five (5) business days in advance with COPHARMA, shall be allowed during
regular business hours to examine and inspect that portion of the COPHARMA
facilities required for the performance of this Agreement, including periodic
inspections relating to the manufacture, testing, handling, storage, packaging
and labeling of PRODUCT and to inspect and request copies of all MRR
Documentation related to this Agreement, including, but not limited to, the
following: Batch records, validation documentation, analytical results on raw
materials, components, intermediates and final products, deviation reports, in
process testing and PRODUCT reports, trend analysis reports, inspection reports
generated by regulatory authorities and responses to reports and

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inspections by regulatory authorities (both edited to maintain client
confidentiality). SERAGEN shall also be allowed to conduct routine annual cGMP
audits of COPHARMA facilities. SERAGEN shall send a request to schedule an audit
with COPHARMA within sixty (60) days of the proposed audit.

4.04 COOPERATION. COPHARMA shall provide reasonable cooperation in order that
SERAGEN, among other things, may from time to time confirm COPHARMA's compliance
with the provisions of Article IV, including COPHARMA's due and reasonable care
in the storage of biological materials and COPHARMA's full compliance with all
applicable Regulatory Requirements.

4.05 INFORMATION. COPHARMA shall provide SERAGEN copies of all MRR Documentation
relating to the services provided and PRODUCT supplied under this Agreement. All
such MRR Documentation shall be provided in a timely manner at the request of
SERAGEN.

4.06 TAXES. Subject to the provisions of this Section 4.06, SERAGEN shall
reimburse COPHARMA for all tariffs, duties and excise, sales or use, value added
or other taxes or levies (collectively, "TAXES") that may be paid by COPHARMA
with respect to the manufacture and sale to SERAGEN of the PRODUCT or the
provision of the Technology Services or any other services by COPHARMA to
SERAGEN pursuant to this Agreement. Notwithstanding the foregoing, SERAGEN shall
have no reimbursement obligations under this Section 4.06 to the extent that (i)
such Taxes are based on COPHARMA'S net income or (ii) such Taxes are recoverable
or offset by COPHARMA, in whole or in part, as a credit, rebate, deduction or
otherwise.

                                    ARTICLE V
                    STANDARDS OF CARE AND COMPLIANCE WITH LAW

5.01 GENERAL. COPHARMA shall supply PRODUCT and Technology Services in
accordance with current regulatory standards prevailing in the biopharmaceutical
industry. Without limiting the foregoing, COPHARMA shall exercise all due and
reasonable care with regard to any biological raw materials, work-in-process,
clinical products or finished products in its custody relating to the PRODUCT
and its manufacture or the Technology Services.

5.02 COMPLIANCE WITH APPLICABLE LAW. COPHARMA shall comply with all applicable
laws, requirements, rules, regulations and standards prescribed by public
authorities (including the Food and Drug Act), in supplying PRODUCT and the
Technology Services and shall maintain all necessary records to comply with
these applicable laws, requirements, rules, regulations and standards. Without
limiting the foregoing, COPHARMA shall comply with current Regulatory
Requirements.

5.03 DOCUMENTS AND REPORTS. COPHARMA shall use commercially reasonable efforts
to ensure that documents required to be retained according to cGMPs are stored
in a confidential manner to maintain their integrity and protection from fire
and other hazards, for the required length of storage. COPHARMA shall
participate and provide information and data, excluding confidential business
and proprietary information of COPHARMA, as are reasonably requested

                                       13

<PAGE>

by SERAGEN to support drug product complaint investigations, annual product
reviews, and error/accident reporting. COPHARMA shall cooperate fully with
SERAGEN in promptly filing all documents and reports required or reasonably
requested by any Regulatory Agency in a form reasonably acceptable to SERAGEN,
and shall provide SERAGEN with such information and assistance as SERAGEN may
require with regard to those filings, including all reports, authorizations,
certificates, methodologies, specifications and other documentation in the
possession of or under the control of COPHARMA, and shall ensure that the
content of all submissions is suitable for regulatory filings.

5.04 DEBARMENT. COPHARMA represents and warrants to SERAGEN that it has neither
been debarred nor is subject to debarment and that it will take commercially
reasonable precautions to not use in any capacity, in connection with PRODUCT or
the Technology Services to be supplied under this Agreement, any person who has
been debarred pursuant to subsections 306(a) or 306(b) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 335a(a)) or who is the subject of a conviction
described in such section. COPHARMA agrees to inform SERAGEN immediately in
writing if it is, or it becomes aware that any person who is performing services
hereunder on behalf of COPHARMA is, debarred or is the subject of a conviction
described in subsections 306(a) or 306(b) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 335a(a)) or if any action, suit, claim, investigation,
or proceeding is pending or, to the knowledge of COPHARMA, threatened relating
to the debarment of COPHARMA or any person performing services on behalf of
COPHARMA hereunder.

5.05 COMPLAINTS; ANNUAL PRODUCT REVIEWS; ACCIDENT REPORTING; ADVERSE EVENTS;
ERROR/ACCIDENT REPORTING. COPHARMA shall participate and provide information and
data, excluding confidential business and proprietary information of COPHARMA,
as are reasonably requested by SERAGEN to support drug product complaint
investigations, annual product reviews, and error/accident reporting. In the
event that COPHARMA receives any complaint or report of adverse drug event(s) as
defined by 21 C.F.R. 600.80 (an "Adverse Event") regarding the PRODUCT,
regardless of its association with the PRODUCT, then COPHARMA shall notify
SERAGEN in writing, by facsimile [858-550-1860] on or before the fifth calendar
day following the receipt thereof; provided that COPHARMA shall notify SERAGEN
in writing, by facsimile [858-550-1860] and by telephone [858-550-7750] within
twenty four (24) hours of any fatal or life-threatening adverse event. SERAGEN
shall have primary responsibility for fielding, investigating and responding to
all PRODUCT complaints and Adverse Events. COPHARMA shall cause its
manufacturing, quality assurance and quality control personnel to cooperate
fully with SERAGEN, as appropriate and needed, to investigate any PRODUCT
complaints or Adverse Events and to provide such information or assistance as is
reasonably requested by SERAGEN in order to support SERAGEN's compliance with
Adverse Event, field alert and other reporting requirements imposed by any
Regulatory Agency. SERAGEN, as the product licensee for Regulatory Agency
purposes, shall have the right to exercise full functional control over the
resolution of complaints and Adverse Events as required by all applicable
regulations. The Parties shall each report to the other on the resolution of
complaints and Adverse Events.

5.06 NOTIFICATION OF POTENTIAL LIABILITY. Each Party shall notify the other in
writing as soon as is reasonably possible following any event, including the
receipt of any notice, warning,

                                       14

<PAGE>

citation, finding, report or service of process or the occurrence of any
release, spill, upset or discharge of hazardous wastes or substances, related to
the PRODUCT or the Technology Services that could reasonably be expected to give
rise to liability on the part of the other Party under any law, rule or
regulation prescribed by a public authority or otherwise.

5.07 GOVERNMENTAL COMMUNICATIONS AND INSPECTIONS. COPHARMA will notify SERAGEN
within twenty-four (24) hours of COPHARMA'S receipt of notice of any inspections
of COPHARMA'S facilities relating to PRODUCT or the Technology Services, whether
pre-scheduled or unannounced, by a Regulatory Agency and if possible shall give
SERAGEN the opportunity to be present and observe such an inspection. The
findings of these inspections shall be provided by COPHARMA to SERAGEN in a
manner which protects the confidential information of third parties, to the
extent they relate to or impact the manufacture, testing, packaging, storage or
handling of PRODUCT for SERAGEN or the provision of Technology Services to
SERAGEN. COPHARMA will notify SERAGEN within twenty-four (24) hours of receipt
of any communications from a Regulatory Agency relating to the PRODUCT or the
Technology Services, including any communication or directive from a Regulatory
Agency commencing or threatening seizure of any PRODUCT or other removal from
the market of any PRODUCT. If a written communication, the notifying Party shall
attach a copy. Otherwise, the notifying Party shall provide a reasonable
description to the other Party of the communication. SERAGEN shall have the
right to review in advance and approve any response to the communication or
investigation submitted by COPHARMA related to PRODUCT. The Parties shall
cooperate fully with each other in providing the information needed for any such
communication.

5.08 NOTIFICATION AND INVESTIGATION OF ALLEGED DEFECTS. In the event that any
PRODUCT is alleged or proven not to meet the Specifications, the Party receiving
notice of the failure shall notify the other Party immediately, and both Parties
shall cooperate fully regarding the investigation and disposition of the matter.

5.09 ALLOCATION OF BURDEN OF PRODUCT RECALL. In the event (a) any government
authority issues a request, directive or order that FDP prepared from PRODUCT
supplied by COPHARMA to SERAGEN be recalled, or (b) a court of competent
jurisdiction orders such a recall, or (c) SERAGEN or COPHARMA shall reasonably
determine that the PRODUCT should be recalled, the parties shall take all
appropriate corrective actions, and shall cooperate in the investigations
surrounding the recall. In the event that such recall results from any cause or
event arising from the manufacture, storage or handling of the PRODUCT by
COPHARMA in a manner which does not comply with the Manufacturing and Release
Requirements (excluding defects relating to packaging or labeling supplied by or
prepared at the direction of SERAGEN), COPHARMA shall be responsible for all
expenses of the recall (except that COPHARMA and SERAGEN shall share such
expenses equally if such recall is due to a failure by SERAGEN to meet the
Manufacturing and Release Requirements during a Process Improvement requested by
or approved by SERAGEN) and COPHARMA shall promptly replace such PRODUCT at no
additional cost to SERAGEN consistent with directions received from the
appropriate governmental authority. In all other cases, SERAGEN shall be
responsible for the expenses of recall, including the cost of replacement
material for the PRODUCT. For the purposes of this

                                       15

<PAGE>

Agreement, the expenses of recall shall include, without limitation, the
expenses of notification and destruction or return of the recalled PRODUCT and
all other costs incurred in connection with such recall, but shall not include
lost profits of either party.

5.10 MATERIAL SAFETY. During the term of this Agreement and for one year
thereafter, COPHARMA shall promptly provide SERAGEN with all new information,
excluding confidential business and proprietary information of COPHARMA, within
its possession or control or otherwise available to COPHARMA from time to time
regarding handling precautions, toxicity and hazards associated with the
manufactured PRODUCT.

5.11 WASTE DISPOSAL. COPHARMA will conduct the manufacture, packaging, storage
and testing of PRODUCT for SERAGEN and the provision of the Technology Services,
including the disposal of all wastes generated thereby, in conformance with
COPHARMA'S waste handling procedures and appropriate local, provincial or
national environmental laws or regulations. SERAGEN shall provide COPHARMA with
any information required for the environmental assessment, such as disposal
requirements, etc. In this regard, COPHARMA will provide SERAGEN, upon SERAGEN's
written request, with information, documents, and permits reasonable requested
by SERAGEN for SERAGEN to perform an environmental assessment to be made
available to the Regulatory Agency through SERAGEN'S Biologics License
Application (BLA), BLA supplements and/or U.S. license, and as required by other
appropriate regulatory authorities, prior to supply of PRODUCT to SERAGEN.


                                   ARTICLE VI
                      PRODUCT PRICING, PAYMENT AND DELIVERY

6.01 PRICING. Pricing of PRODUCT and of FDP release testing during the period
ending *** of this Agreement shall be as specified in Exhibit B attached hereto.
Pricing of additional services provided according to Section 2.16 during the
period ending *** shall be agreed to by the parties by the end of January 2000.
Pricing of PRODUCT stability testing and FDP stability testing during the period
ending December 31, 2000 shall be as specified on Exhibit B.

     For periods after ***, the parties will negotiate the pricing of PRODUCT,
of FDP release testing, and of additional services in good faith. For periods
after ***, the parties will negotiate the pricing of PRODUCT and FDP stability
testing in good faith. Pricing for fermentation of additional ONTAK pellets, if
required in connection with the manufacture of PRODUCT, will be in addition to
the fees set forth in Exhibit "B" and shall be negotiated by the parties in
accordance with Section 2.16 of this Agreement.


*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

                                       16

<PAGE>

6.02 PAYMENT TERM.

     (a) Except as otherwise set forth below, terms of payment for PRODUCT,
shall be net thirty (30) days from COPHARMA QA release of PRODUCT and receipt
from COPHARMA of a corresponding invoice by SERAGEN, provided there is then a
valid purchase order from SERAGEN in effect for such released PRODUCT, unless a
Batch is deemed nonconforming within said thirty (30) day period. Payment shall
be net thirty (30) days following resolution of a dispute over nonconforming
PRODUCT. Payment for PRODUCT, however, does not in any way impact SERAGEN's
rights pursuant to Articles 2.11-2.15. The invoice from COPHARMA shall credit
advance payments made by SERAGEN under subpart (b) to cover estimated material
costs for PRODUCT.

     (b) As applies to production of PRODUCT: On *** of each year COPHARMA shall
invoice SERAGEN for *** the raw materials costs for the Batches ordered by PO
the preceding *** at the rate of ***/Batch. The remainder of the raw materials
costs for the *** PO will be invoiced by COPHARMA to SERAGEN the following ***.
On *** of each year, COPHARMA shall invoice SERAGEN for *** the raw materials
costs for the Batches ordered by PO the preceding *** at the rate of ***/Batch.
The remainder of the raw materials and preparation costs for the *** PO will be
invoiced by COPHARMA to SERAGEN the following *** .

     For the year 2000 only COPHARMA shall invoice SERAGEN ***, 2000 for *** the
raw materials costs for the Batches ordered by PO by *** of 2000 at the rate of
***/Batch. The remainder of the raw materials costs for the *** PO will be
invoiced by COPHARMA to SERAGEN the following ***. On *** of 2000, COPHARMA
shall invoice SERAGEN for *** the raw materials costs for the Batches ordered by
PO on *** of 2000 at the rate of ***/Batch. The remainder of the raw materials
and preparation costs for the *** PO will be invoiced by COPHARMA to SERAGEN the
following *** .

     Payment by SERAGEN to COPHARMA shall be net thirty (30) days from the
receipt of an invoice from COPHARMA for such estimated costs.

     (c) Terms of payment for FDP release testing shall be net thirty (30) days
from COPHARMA QA approval of the Certificate of Analysis and receipt by SERAGEN
of an invoice for the testing services.

     (d) Terms of payment for stability testing shall be net thirty (30) days
from receipt by SERAGEN of an invoice submitted by COPHARMA on the last day of
every month for scheduled work performed during that month.

     (e) Terms of payment for additional services provided under Section 2.16
shall be net thirty (30) days from receipt by SERAGEN of an invoice submitted by
COPHARMA on the last


*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

                                       17

<PAGE>

day of every month for scheduled work performed during that month.

6.03 ***

6.04 MATTERS AFFECTING PRICE OF PRODUCT AND FDP TESTING. The pricing of PRODUCT
and FDP release and stability testing set forth on Exhibit B is based upon the
current Manufacturing and Release Requirements for first generation PRODUCT, the
anticipated Manufacturing and Release Requirements for second generation
PRODUCT, and the current release and stability testing procedures for FDP, as
well as current regulatory requirements. In the event that any regulatory
requirements change or the manner of producing the PRODUCT or performing release
and stability testing for FDP, as set forth on Exhibit A or as anticipated for
second generation PRODUCT, changes, in such a way to increase or decrease the
cost or burden on COPHARMA to manufacture the PRODUCT or perform such release
and stability testing, the parties agree to negotiate an appropriate price
adjustment.

     Similarly, the pricing of PRODUCT and FDP release and stability testing set
forth on Exhibit B is based upon the number of inquiries, requests for
information and explanation, and similar forms of correspondence which COPHARMA
would expect to have from a customer of its contract manufacturing services. In
the event that the burden of answering and dealing with such inquiries, requests
for information and explanation, and other similar forms of correspondence from
SERAGEN is greater than the burden associated with the provision of similar
services to other customers the parties agree to negotiate appropriate pricing
increases.

6.05 DELIVERY OF PRODUCT. Delivery shall be FOB the COPHARMA Plant located at 97
South Street, Hopkinton, Massachusetts or such other location as agreed to by
the parties. SERAGEN shall, at its cost, ensure that adequate insurance
coverage, for full replacement cost, exists on PRODUCT in transit to SERAGEN or
its designee in the event that such PRODUCT is damaged, destroyed or lost, and
shall bear all costs of such insurance. Title to and risk of loss of PRODUCT
shall pass to SERAGEN or its designee at the time of SERAGEN QA release of
PRODUCT.

                                   ARTICLE VII
                    CONFIDENTIALITY AND INTELLECTUAL PROPERTY

7.01 CONFIDENTIALITY The Parties recognize that all non-public information
including, where appropriate and without limitation, any information, know-how,
patent disclosures, patent applications, structures, models, techniques,
processes, compositions, compounds, apparatus and other confidential or
proprietary data and information relating to the same of one Party disclosed to
the other Party pursuant to this Agreement is of proprietary value and is to be
considered highly confidential ("Proprietary Information"). The Parties agree
not to use (except in accordance with this Agreement), and not to disclose to
any third party, any Proprietary Information except with the prior written
consent of the other Party. The foregoing obligations


*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

                                       18

<PAGE>

shall survive the expiration or termination of this Agreement for a period
of ten (10) years. For purposes of this Article VII, all confidential
information specifically relating to the PRODUCT and its manufacture acquired or
generated by COPHARMA on behalf of SERAGEN as a result of this Agreement shall
be considered to be Proprietary Information disclosed by SERAGEN to COPHARMA,
provided, however, that this shall not impact COPHARMA'S rights to file patent
applications and prosecute, maintain, enforce and defend such applications and
subsequently issued patents pursuant to the terms of Section 7.05 of this
Agreement covering such Proprietary Information. The obligations of non-use and
nondisclosure shall not apply to Proprietary Information that:

     (a) is known by the receiving Party at the time of its receipt, and not
through a prior disclosure by the disclosing Party, as documented by written
records;

     (b) is at the time of disclosure or thereafter becomes published or
otherwise part of the public domain without breach hereof by the receiving
Party;

     (c) is subsequently disclosed to the receiving Party by a third party who
has no confidentiality obligation to the disclosing Party with respect to the
information disclosed;

     (d) is developed by the receiving Party independently of Proprietary
Information or other information received from the disclosing Party and such
independent development can be properly demonstrated by the receiving Party;

     (e) is disclosed to governmental or other regulatory authorities in order
to obtain patents or to gain approval to conduct clinical trials or to market
the PRODUCT, but such disclosure may be only to the extent reasonably necessary
to obtain such patents or authorizations;

     (f) is necessary to be disclosed to sublicensees, agents, consultants,
affiliates, or other third parties for the research and development,
manufacturing, or marketing of the PRODUCT (or for such parties to determine
their interest in performing such activities) in accordance with this Agreement
on the condition that such third parties agree to be bound by the
confidentiality obligations and use restrictions contained in this Agreement and
that the term of such obligations and restrictions for such third parties shall
be no less than the term of such obligations and restrictions hereunder, but
such disclosure may be only to the extent reasonably necessary for such
purposes; or

     (g) is required to be disclosed by law or court order, PROVIDED that notice
is promptly delivered to the other Party in order to provide it with an
opportunity to seek a protective order or other similar order with respect to
such Proprietary Information, but such disclosure may be only to the extent
reasonably necessary to comply with the required disclosure, whether or not a
protective order or other similar order is obtained by the other Party.

7.02 LICENSE. SERAGEN represents and warrants to COPHARMA that SERAGEN owns all
rights necessary to manufacture, market, sell and distribute the PRODUCT and to
perform the Technology Services. During the term of this Agreement, SERAGEN
hereby grants to

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<PAGE>

COPHARMA a paid-up, royalty-free, non-exclusive license, without the right to
sublicense or transfer, to all rights held by SERAGEN necessary to manufacture
PRODUCT and to perform the Technology Services for SERAGEN under this Agreement,
but only for such purposes and only to the extent necessary for COPHARMA to
perform its obligations under this Agreement. The parties agree that the grant
contained in this section is personal to COPHARMA only and COPHARMA agrees to
make use of SERAGEN's confidential information only in accordance with this
license and only by COPHARMA.

7.03 INTELLECTUAL PROPERTY.

     (a) All Intellectual Property worldwide to ideas, innovations or inventions
(whether or not patentable) developed solely by COPHARMA and its employees
during the course of fulfilling its obligations under this Agreement, including
any Process Improvements for manufacture of PRODUCT, shall be solely owned by
COPHARMA.

     (b) Intellectual Property worldwide to ideas, innovations or inventions
(whether or not patentable) developed solely by SERAGEN and its employees while
this Agreement is in force, including any Process Improvements, shall be solely
owned by SERAGEN.

     (c) Intellectual Property worldwide to ideas, innovations or inventions
(whether or not patentable ) developed jointly by COPHARMA and SERAGEN and their
respective employees while this Agreement is in force, including any Process
Improvements, shall be jointly owned by the Parties.

     (d) COPHARMA agrees to promptly disclose to SERAGEN as they occur any
PRODUCT Intellectual Property developed by COPHARMA during the course of
fulfilling its obligations under this Agreement. COPHARMA represents and
warrants that all of its employees are obligated by written agreement to assign
to COPHARMA any of their inventions that arise as a result of the provision of
services under this Agreement.

7.04 EXCLUSIVE LICENSE. COPHARMA hereby grants to SERAGEN an irrevocable,
worldwide, royalty free, fully paid-up exclusive license, with right to
sublicense, under PRODUCT Intellectual Property or other Intellectual Property
necessary or desirable to manufacture PRODUCT owned in whole or in part by
COPHARMA, only for SERAGEN to make, have made, use and sell PRODUCT, and to
offer PRODUCT for sale. The parties agree that this license does not apply to
the use of Intellectual Property for purposes other than to make, have made, use
and sell PRODUCT and COPHARMA retains all other rights to Intellectual Property,
including the right to license such other rights. Upon request by SERAGEN,
COPHARMA agrees to execute any documents necessary for SERAGEN to exercise its
rights under the exclusive license granted under this provision.

7.05 PATENTS. With respect to Intellectual Property owned solely by SERAGEN or
jointly by SERAGEN and COPHARMA under this Agreement, SERAGEN shall decide, at
its sole discretion, whether, when and where to file a patent application and if
SERAGEN decides to file a patent application, it shall be solely responsible for
filing, prosecuting, maintaining, enforcing

                                       20

<PAGE>

and defending such application or subsequently issued patent. Upon request by
SERAGEN, COPHARMA shall provide SERAGEN with reasonable assistance in obtaining
any copyright, patent or other Intellectual Property protection covering any
Intellectual Property created or developed under this Agreement and owned solely
or jointly by SERAGEN, provided that COPHARMA's costs are paid for by SERAGEN.

With respect to Intellectual Property owned solely by COPHARMA, COPHARMA shall
first decide whether, when and where to file a patent application. If COPHARMA
decides to file a patent application to protect Intellectual Property, it shall
be solely responsible for filing, prosecuting, maintaining, enforcing and
defending such application or subsequently issued patent. If COPHARMA decides
not to file a patent application to protect PRODUCT Intellectual Property, or
decides to abandon an existing patent or patent application covering PRODUCT
Intellectual Property, it shall promptly notify SERAGEN of its decision and
SERAGEN shall have the right to file a patent application to protect the PRODUCT
Intellectual Property, or to maintain the existing patent or patent application.
If SERAGEN exercises its rights to assume responsibility for PRODUCT
Intellectual Property abandoned by COPHARMA under this provision, COPHARMA shall
assign its rights to the PRODUCT Intellectual Property to SERAGEN and shall
provide SERAGEN with reasonable assistance in obtaining patent protection,
provided that COPHARMA's costs are paid for by SERAGEN.

7.06 NO PUBLICITY. No Party shall disclose the terms related to this Agreement
without the prior written consent of the other Party. Nothing in the foregoing,
however, shall prohibit a Party from making such disclosures to the extent
deemed necessary under applicable federal or state securities laws or any rule
or regulation of any nationally recognized securities exchange; in such event,
however, the disclosing Party shall use good faith efforts to consult with the
other Party prior to such disclosure and, where applicable, shall request
confidential treatment to the extent available. In addition, COPHARMA may
disclose the identity of SERAGEN as a customer of COPHARMA to other customers
and potential customers.

7.07 TRADEMARKS AND TRADE NAMES. The Parties hereby acknowledge and agree that
neither Party has acquired, nor shall it acquire by virtue of this Agreement or
the activities contemplated hereby, any interest in any of the other Party's
trademarks or trade names.

7.08 INJUNCTIVE RELIEF. The Parties hereto understand and agree that remedies at
law may be inadequate to protect against any breach of any of the provisions of
this Article 7 by any Party or their employees, agents, officers or directors or
any other person acting in concert with it or on its behalf. Accordingly, each
Party shall be entitled to the granting of injunctive relief by a court of
competent jurisdiction against any action that constitutes any such breach of
this Article 7.

7.09 NO OTHER RIGHTS. Except as otherwise expressly set forth in this Agreement,
it is understood and agreed by the Parties that this Agreement does not grant
any license or other right under any Intellectual Property of the Parties.

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                                  ARTICLE VIII
                                 INDEMNIFICATION

8.01 INDEMNIFICATION BY SERAGEN. SERAGEN shall indemnify and hold harmless
COPHARMA and its Affiliates, and their respective directors, officers,
shareholders, employees, consultants and agents from and against all suits,
claims, losses, demands, liabilities, damages, costs and expenses (including
court costs, reasonable attorney's fees and reasonable investigative costs)
(together "Liabilities") in connection with any suit, demand or action by any
third party (a "Third Party Action") arising out of, resulting from or relating
to: (a) the further processing, formulation, storage, labeling, promotion,
marketing, use or sale of PRODUCT by SERAGEN, as long as the PRODUCT met or
exceeded the Manufacturing and Release Requirements provided herein at the time
of its release to SERAGEN and was manufactured in accordance with cGMPs, (b)
breach of any representation, warranty, covenant or agreement contained in this
Agreement by SERAGEN, (c) SERAGEN's negligence, recklessness or willful
misconduct or the negligence, recklessness or willful misconduct of any employee
or agent of SERAGEN, (d) any representation or warranty made by SERAGEN to its
customers or users with respect to the PRODUCT, other than a representation that
the PRODUCT conformed to the Manufacturing and Release Requirements at the time
of its release to SERAGEN, or (e) any Third Party Action alleging that the
PRODUCT or the production of the PRODUCT or provision of the Technology Services
pursuant to the Agreement infringes any patent or other proprietary rights
except to the extent such Third Party Action relates to the use of COPHARMA's
patents or other proprietary rights which are not deemed Proprietary Information
of SERAGEN; except in each case to the extent that any of the foregoing arises
out of or results from the breach by COPHARMA of the terms of this Agreement or
failure of COPHARMA to provide PRODUCT that meets or exceeds the Manufacturing
and Release Requirements at the time of release to SERAGEN and was manufactured
in accordance with cGMPs.

8.02 INDEMNIFICATION BY COPHARMA. COPHARMA shall indemnify and hold harmless
SERAGEN and its Affiliates, and their respective directors, officers,
shareholders, employees, consultants and agents from any and all Liabilities to
third parties to the extent that such Liability arises from: (a) COPHARMA'S
failure to meet the Manufacturing and Release Requirements, (b) COPHARMA'S
negligence, recklessness, or willful misconduct in the manufacture, handling,
storage, testing or packaging of PRODUCT, (c) COPHARMA'S failure to manufacture
PRODUCT in accordance with cGMPs, (d) COPHARMA'S failure to reasonably comply
with all laws, regulatory filings, rules or regulations applicable to its
performance under this Agreement, or (e) breach of any representation, warranty,
covenant or agreement contained in this Agreement by COPHARMA.

8.03 INDEMNIFICATION PROCEDURES. As a condition of the indemnification rights
provided in this Article 8, the indemnified Party shall promptly notify the
indemnifying party in writing of any claim, action or suit (the "Asserted
Liability") potentially giving rise to the indemnification obligation hereunder.
The indemnifying party may elect to compromise or defend, and control the
defense of, at its own expense and by counsel reasonably satisfactory to the
indemnified party, any such Asserted Liability, provided that the indemnified
party shall have no liability under any compromise or settlement agreed to by
the indemnifying party which it has not

                                       22

<PAGE>

approved in writing. The indemnified party shall cooperate upon the request
and at the expense of the indemnifying party, in the compromise of, or defense
against, such Asserted Liability. If the indemnifying party elects not to
compromise or defend the Asserted Liability, or fails to notify the indemnified
party of its election as herein provided, the indemnified party may pay,
compromise or defend such Asserted Liability and receive full indemnification
for its losses as provided in Sections 8.01 or 8.02 hereof, including all costs
of defending such suit. In any event, the indemnified party and the indemnifying
party may participate, at their own expense, in the defense of such Asserted
Liability. If the indemnifying party chooses to defend any claim, the
indemnified party shall make available to the indemnifying party any books,
records or other documents within its control that are reasonably requested for
such defense and shall otherwise cooperate with the indemnifying party, in which
event the indemnified party shall be reimbursed for its out-of-pocket expense.

8.04 SURVIVAL OF REMEDIES. All limitations on either Party's remedies and
liabilities under this Article VIII shall survive the expiration, termination or
cancellation of this Agreement.

8.05 LIMITATION OF LIABILITY.

     (a) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
INCIDENTIAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF THE
PERFORMANCE OF THIS AGREEMENT.

     (b) THE MAXIMUM AGGREGATE LIABILITY OF COPHARMA FOR ALL CAUSES OF ACTION
ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
LIABILITY ARISING UNDER ARTICLE 8.02 (INDEMNIFICATION), LIABILITY ARISING FROM A
BREACH OF THIS AGREEMENT OR NONPERFORMANCE UNDER THIS AGREEMENT, AND LIABILITY
ARISING OUT OF OR RELATED TO THE MANUFACTURE OF PRODUCT, THE PROVISION OF THE
TECHNOLOGY SERVICES, AND THE PROVISION OF OTHER SERVICES PROVIDED BY COPHARMA
PURSUANT TO THIS AGREEMENT, SHALL BE THE DIFFERENCE BETWEEN (A) THE SUM OF (I)
THE AMOUNT WHICH COPHARMA WOULD BE ABLE TO RECOVER IN CONNECTION WITH ANY SUCH
CAUSES OF ACTION UNDER THE INSURANCE POLICY DESCRIBED IN SECTION 8.06(B) BELOW
IF COPHARMA TOOK COMMERCIALLY REASONABLE STEPS TO MAINTAIN AND COLLECT UNDER
SUCH INSURANCE AND (II) THE AMOUNT PAID BY SERAGEN TO COPHARMA PURSUANT TO THIS
AGREEMENT FOR THE MANUFACTURE OF PRODUCT, THE PROVISION OF THE TECHNOLOGY
SERVICES AND THE PROVISION OF SUCH OTHER SERVICES DURING THE TWELVE (12) MONTHS
PRIOR TO ANY EVENT GIVING RISE TO LIABILITY AND (B) THE AMOUNT OF ALL PREVIOUS
AGGREGATE LIABILITY OF COPHARMA FOR CAUSES OF ACTION ARISING OUT OF OR RELATED
TO THIS AGREEMENT. THE LIMITATION ON COPHARMA'S AGGREGATE LIABILITY CONTAINED IN
THE PRECEDING SENTENCE SHALL NOT APPLY TO LIABILITY ARISING FROM COPHARMA'S
WILLFUL MISCONDUCT IN THE MANUFACTURE, HANDLING, STORAGE, TESTING OR PACKAGING
OF PRODUCT; PROVIDED THAT

                                       23

<PAGE>

THIS SENTENCE SHALL NOT APPLY TO COPHARMA'S FAILURE TO MANUFACTURE AND SUPPLY
PRODUCT PURSUANT TO THIS AGREEMENT, EVEN IF WILLFUL.

8.06 INSURANCE.

     (a) Throughout the Term, SERAGEN shall obtain and maintain comprehensive
general liability insurance (including broad form general liability, completed
operations and products liability, personal injury liability, blanket
contractual liability and broad form property damage liability) with limits of
not less than $3,000,000 combined single limit for bodily injury and property
damage liability per occurrence and annual aggregate, containing a
cross-liability or severability of interests clause. Without limiting the
foregoing, SERAGEN shall obtain and maintain, at its sole expense, product
liability insurance relating to the PRODUCT that is comparable in type and
amount to the insurance it maintains with respect to its most similar other
products. With respect to all insurance coverage required under this clause (a):
(i) SERAGEN shall, promptly upon COPHARMA's request, furnish COPHARMA with
certificates of insurance evidencing such insurance; and (ii) all policies shall
include provisions for at least 30 days' prior written notice of any material
change or cancellation (whether for non-payment or otherwise).

     (b) Throughout the Term, COPHARMA shall obtain and maintain comprehensive
general liability insurance (including broad form general liability, completed
operations and products liability, blanket contractual liability and broad form
property damage liability) with limits of not less than $3,000,000 combined
single limit for bodily injury and property damage liability per occurrence and
annual aggregate, containing a cross-liability or severability of interests
clause. During the Term, COPHARMA shall obtain and maintain worker's
compensation insurance as required under Massachusetts law and employer's
liability insurance with a limit of not less than $1,000,000. With respect to
all insurance coverage required under this clause (b): (i) COPHARMA shall,
promptly upon SERAGEN's request, furnish SERAGEN with certificate of insurance
evidencing such insurance; and (ii) all policies shall include provisions for at
least 30 days' prior written notice of any material change or cancellation
(whether for non-payment or otherwise). COPHARMA shall use its best efforts to
obtain and maintain five-year tail coverage for the above-mentioned insurance.

                                       24

<PAGE>

                                   ARTICLE IX
                         WARRANTIES AND REPRESENTATIONS

9.01 REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each Party represents and
warrants to the other that (a) it is a corporation, duly organized and validly
existing under the laws of the State of Delaware; (b) it has all requisite
corporate power and authority to own its properties, conduct its business as
presently conducted, and enter into and perform its obligations under this
Agreement; (c) it has taken all necessary corporate action to authorize this
Agreement; (d) it has duly executed and delivered this Agreement and this
Agreement constitutes its legal and valid obligation, enforceable against it in
accordance with its terms; (e) the execution and delivery of this Agreement and
the performance of its obligations hereunder do not and will not (i) violate any
other agreement or instrument of any nature to which it is a party or by which
it is bound, (ii) violate any law, rule or regulation to which it is subject or
by which it is bound, or (iii) require any filing, approval, authorization,
permit or license from or with any governmental authority which has not been
made or obtained, PROVIDED, HOWEVER, that COPHARMA makes no representation or
warranty concerning any approvals or consents which may be required for, or in
connection with, the transfer of any Permits (as defined in the Asset Purchase
Agreement, dated the date hereof, between COPHARMA, SERAGEN, LIGAND and Marathon
Biopharmaceuticals, Inc. (the "Asset Purchase Agreement")) required for
COPHARMA'S operation of the Business (as defined in the Asset Purchase
Agreement) or COPHARMA'S use of the Facility or the Purchased Assets (as defined
in the Asset Purchase Agreement) following the Closing (as defined in the Asset
Purchase Agreement) or the performance of any of the COPHARMA'S obligations
under this Agreement.

9.02 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SERAGEN. SERAGEN represents
that it is not aware of any asserted or threatened claim or demand that it
believes may be enforced against its patents and other proprietary rights
relating to the PRODUCT or the Technology Services, and in entering into this
Agreement, to its knowledge it will not infringe on any patent or other
proprietary rights of any third party. SERAGEN further represents that
operations which are critical to its performance under this Agreement,
particularly with regard to computer systems and applications, will be "Year
2000 ready". "Year 2000 ready" means that operations will not be adversely
affected by the occurrence of the year 2000 and that computer systems and
applications will operate and (1) will correctly store, represent and process
(including sort) all dates (including single and multi-century formulas and leap
year calculations), such that errors will not occur when the date being used is
in the year 2000, or in a year preceding or following the year 2000; and (2)
will not cause or result in an abnormal termination or ending.

9.03 REPRESENTATIONS AND WARRANTIES OF COPHARMA. COPHARMA represents and
warrants that, at the time of delivery of the PRODUCT to SERAGEN, the PRODUCT
will (a) have been manufactured, stored and shipped in accordance with current
Regulatory Requirements and cGMPs, (b) will meet or exceed the Manufacturing and
Release Requirements, and (c) not be adulterated or misbranded under the Food
and Drug Act or any other applicable law, rule or regulation.

                                       25

<PAGE>

9.04 REMEDIES. In the event that any PRODUCT provided by COPHARMA was not
manufactured in accordance with cGMPs, and/or fails to meet the Manufacturing
and Release Requirements or the warranties provided herein, SERAGEN'S sole
remedy with respect to a rejected Batch shall be the re-supply, at COPHARMA'S
cost, of (1) lost fermentation pellets; and (2) said non-conforming PRODUCT in a
non-defective form meeting the Manufacturing and Release Requirements.

9.05 DISCLAIMER OF WARRANTIES. THE PARTIES ACKNOWLEDGE AND AGREE THAT ALL
SERVICES PROVIDED UNDER THIS AGREEMENT WILL BE PERFORMED BY COPHARMA AT THE
DIRECTION OF SERAGEN. COPHARMA DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTIBILITY OR
FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTIES ARISING FROM COURSE OF DEALING
OR USAGE OF TRADE OR ANY WARRANTIES OF PATENT VALIDITY OR FREEDOM OF OR FROM
PATENT INFRINGMENT, WITH RESPECT TO ANY PRODUCT OR SERVICES DELIVERED UNDER THIS
AGREEMENT (OTHER THAN THOSE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT).


                                    ARTICLE X
                              TERM AND TERMINATION

10.01 TERM. This Agreement shall commence on the later of (i) January 7, 2000
and (ii) the Closing Date (as defined in Section 1.8 of the Asset Purchase
Agreement) (the later of (i) or (ii) being the "Effective Date") and shall
continue in full force and effect until ***, unless earlier terminated, in whole
or in part, in accordance with the provisions of Section 10.02, 10.03, 10.04,
10.05, 10.06 or 10.07 below (the "Term"). Beginning ***, the parties will enter
into negotiations for a period not to exceed *** (***) *** concerning whether
they desire to extend this Agreement beyond ***, and if so, the terms and
conditions for any such extension.

10.02 TERMINATION FOR BREACH OR DEFAULT. On any material breach of or default
under this Agreement by either Party (the "Breaching Party"), the other Party
(the "Non-Breaching Party") shall have the right to serve notice (a "Preliminary
Termination Notice") on the Breaching Party of the Non-Breaching Party's
intention to terminate this Agreement if the breach is not cured within ***
following the Breaching Party's receipt of the Preliminary Termination Notice.
The Preliminary Termination Notice shall state the cause for the Non-Breaching
Party's intention to terminate this Agreement. If the Breaching Party does not
remedy the breach or default within the *** period, the Non-Breaching Party
shall have the right to terminate this Agreement effective immediately upon
provision of further notice (the "Final Termination Notice") to the Breaching
Party, and following the provision of the Final Termination Notice, this
Agreement and all rights, privileges and licenses granted under this Agreement
shall automatically terminate and neither Party shall have any further rights,
duties or obligations under this Agreement except


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                                       26

<PAGE>

as may have then accrued under this Agreement before termination or except
as otherwise provided in this Agreement. If, at any time before receipt of the
Final Termination Notice, the Breaching Party has remedied the default, this
Agreement shall continue in full force and effect as if the Final Termination
Notice had not been given.

COPHARMA may terminate the Agreement for a material breach of or default under
the Agreement by LIGAND in the same manner as COPHARMA would terminate above for
such a breach or default by SERAGEN.

10.03 TERMINATION FOR FORCE MAJEURE. If an event under Section 11.10 causes the
failure of performance of a party for a period of ninety (90) days or more, any
Party to this Agreement, including the Party whose performance has failed
pursuant to Section 11.10, shall have the right to terminate this Agreement upon
written notice to the other Parties.

10.04 TERMINATION FOR REGULATORY ISSUES RELATED TO FACILITY TRANSFER. If any
Regulatory Agency or other governmental agency or instrumentality objects to the
transfer of the Facility to COPHARMA or COPHARMA'S manufacture of PRODUCT at the
Facility following the Effective Date, or suspends or terminates any validation
or approval in connection with such Facility transfer then both parties resolve
to work together diligently to resolve the problems and implement remedies
sufficient to regain approval. All obligations to supply and order PRODUCT shall
be suspended until necessary approvals are reinstated.

10.05 BANKRUPTCY. SERAGEN shall have the right to terminate this Agreement
effective immediately in the event COPHARMA files a voluntary petition in
bankruptcy, is adjudicated as bankrupt, makes a general assignment for the
benefit of creditors, admits in writing that it is insolvent or fails to
discharge within fifteen (15) days an involuntary petition in bankruptcy filed
against it COPHARMA shall have the right to terminate this Agreement effective
immediately in the event SERAGEN or LIGAND files a voluntary petition in
bankruptcy, is adjudicated as bankrupt, makes a general assignment for the
benefit of creditors, admits in writing that it is insolvent or fails to
discharge within fifteen (15) days an involuntary petition in bankruptcy filed
against it.

10.06 TERMINATION OF TECHNOLOGY SERVICES. With respect only to Technology
Services provided under Article III, either Party may terminate this Agreement
upon ***written notice to the other Party. Termination under this Section 10.06
shall not affect the commercial supply and related services provided under
Article II, except that if the Technology Services are not completed PRODUCT
shall not be deemed to include FFBP.

10.07 TERMINATION OF ADDITIONAL SERVICES. With respect only to additional
services provided under Section 2.16, either Party may terminate this Agreement
upon *** written notice to the other Party. Termination under this Section 10.07
shall not affect the commercial supply and related services provided under
Article II or development services provided under Article III.


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                                       27

<PAGE>

10.08 CONSEQUENCES OF TERMINATION.

     (a) Nothing in this Agreement shall be construed to release either Party
from any obligation that matured (including, without limitation, the obligation
to make payment for PRODUCT manufactured or Technology Services or other
services rendered prior to such termination, or thereafter, if rendered in
accordance in this Section 10.08) or any breach of this Agreement that occurred
before the effective date of termination; provided, however, that upon any
termination of this Agreement COPHARMA shall cease any further provision of
Technology Services and, except as set forth below, shall cease all other
services under this Agreement as well. Upon a termination of this Agreement, in
addition to payment for the PRODUCT, Technology Services and other services
rendered prior to such termination, SERAGEN shall be responsible for paying to
COPHARMA the amounts of any outstanding commitments to which COPHARMA has
obligated itself in connection with COPHARMA'S performance under this Agreement
and which COPHARMA is unable, using reasonable commercial efforts, to terminate.

     (b) In the event of termination of this Agreement for a material breach or
default by COPHARMA (except for matters covered by Section 11.10 of this
Agreement), COPHARMA shall, if COPHARMA is able and SERAGEN elects for COPHARMA
to do so, *** Upon purchase by SERAGEN in accordance with this Agreement, the
materials and components specified in (i) of the preceding sentence shall become
the exclusive property of SERAGEN.

     In the event that this Agreement is terminated for a breach or default of
SERAGEN or LIGAND then, in addition to the provisions set forth above, SERAGEN
shall pay to COPHARMA, as liquidated damages and not as a penalty, (i) the
amount SERAGEN would have had to pay if COPHARMA had manufactured all remaining
PRODUCT called for by the forecasts for PRODUCT in effect at the time of such
termination, less the estimated costs COPHARMA would have incurred in providing
such PRODUCT according to article 6.02(b) and (ii) the amount SERAGEN would have
had to pay if COPHARMA had performed the remaining Technology Services called
for through December 31, 2001, less the estimated costs COPHARMA would have
incurred in providing such Technology Services. Such payments shall be made in a
lump sum amount on the date of the termination of this Agreement.

The obligations under Sections 4.06, Taxes, this Article X, Section 5.09,
Allocation of Burden of Product Recall, Article IX, Warranties and
Representations, Article VII, Confidentiality and Intellectual Property and
Article VIII, Indemnification, shall survive expiration or termination of this
Agreement or any extensions thereof. With respect to confidential information
exchanged under Article VII, upon termination of this Agreement the receiving
Party shall return all confidential information to the disclosing Party.

10.09 LIMITATION OF LIABILITY.


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                                       28

<PAGE>

     (a) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
INCIDENTIAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF THE
PERFORMANCE OF THIS AGREEMENT.

     (b) THE MAXIMUM AGGREGATE LIABILITY OF COPHARMA FOR ALL CAUSES OF ACTION
ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
LIABILITY ARISING UNDER ARTICLE 8.02 (INDEMNIFICATION), LIABILITY ARISING FROM A
BREACH OF THIS AGREEMENT OR NONPERFORMANCE UNDER THIS AGREEMENT (INCLUDING
LIABILITY ASSOCIATED WITH OR ARISING OUT OF SERAGEN'S ATTEMPT TO FIND ALTERNATE
SOURCES OF SUPPLY IN THE EVENT OF COPHARMA'S NONPERFORMANCE OR BREACH), AND
LIABILITY ARISING OUT OF OR RELATED TO THE MANUFACTURE OF PRODUCT, THE PROVISION
OF THE TECHNOLOGY SERVICS, AND THE PROVISION OF OTHER SERVICES PROVIDED BY
COPHARMA PURSUANT TO THIS AGREEMENT, SHALL BE THE DIFFERENCE BETWEEN (A) THE SUM
OF (I) THE AMOUNT WHICH COPHARMA WOULD BE ABLE TO RECOVER IN CONNECTION WITH ANY
SUCH CAUSES OF ACTION UNDER THE INSURANCE POLICY DESCRIBED IN SECTION 8.06(B)
ABOVE IF COPHARMA TOOK COMMERCIALLY REASONABLE STEPS TO MAINTAIN AND COLLECT
UNDER SUCH INSURANCE AND (II) THE AMOUNT PAID BY SERAGEN TO COPHARMA PURSUANT TO
THIS AGREEMENT FOR THE MANUFACTURE OF PRODUCT, THE PROVISION OF THE TECHNOLOGY
SERVICES AND THE PROVISION OF SUCH OTHER SERVICES DURING THE TWELVE (12) MONTHS
PRIOR TO ANY EVENT GIVING RISE TO LIABILITY AND (B) THE AMOUNT OF ALL PREVIOUS
AGGREGATE LIABILITY OF COPHARMA FOR CAUSES OF ACTION ARISING OUT OF OR RELATED
TO THIS AGREEMENT. THE LIMITATION ON COPHARMA'S AGGREGATE LIABILITY CONTAINED IN
THE PRECEDING SENTENCE SHALL NOT APPLY TO LIABILITY ARISING FROM COPHARMA'S
WILLFUL MISCONDUCT IN THE MANUFACTURE, HANDLING, STORAGE, TESTING OR PACKAGING
OF PRODUCT; PROVIDED THAT THIS SENTENCE SHALL NOT APPLY TO COPHARMA'S FAILURE TO
MANUFACTURE AND SUPPLY PRODUCT PURSUANT TO THIS AGREEMENT, EVEN IF WILLFUL.

     (c) IN ADDITION TO BEING SUBJECT TO THE LIMITATION ON AGGREGATE LIABILITY
SET FORTH ABOVE, IN THE EVENT THAT SERAGEN MUST COVER FOR ANY BREACH OR
NONPERFORMANCE OF COPHARMA, THE MAXIMUM LIABILITY OF COPHARMA TO SERAGEN FOR THE
COSTS ASSOCIATED WITH ANY SUCH COVER SHALL BE *** PER BATCH OF PRODUCT FOR WHICH
SUCH COVER IS REQUIRED.

10.10 LIMITATION OF REMEDIES FOLLOWING DECEMBER 31, 2002. Notwithstanding any
other provisions of this Agreement to the contrary, SERAGEN'S sole remedy for
any breach or nonperformance under this Agreement by COPHARMA which occurs on or
after December 31, 2002, shall be to (i) terminate this Agreement, (ii) require
COPHARMA to transfer all raw


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                                       29

<PAGE>

materials used in the manufacture of PRODUCT which have been paid for by
SERAGEN and are in COPHARMA'S possession to an alternate supplier of PRODUCT
designated by SERAGEN and (iii) have COPHARMA technical personnel available for
reasonable assistance in effecting such transfer of the manufacture of PRODUCT
for a period of six (6) months from the effective date of termination. SERAGEN
shall not be entitled to any damages in connection with a termination covered by
this Section 10.10.

                                   ARTICLE XI
                                  MISCELLANEOUS

11.01 NOTICES. All notices or other communications that are required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered by registered or certified mail, return receipt
requested, postage prepaid, by facsimile transmission, by reputable overnight
courier service of national reputation, or by hand, addressed as follows:

                  If to COPHARMA:

                         COPHARMA, INC.
                         97 South Street
                         Hopkinton, Massachusetts 01748
                         Facsimile:  (508) 497-0777
                         Attention:       President

                  If to SERAGEN:

                          Seragen,  Inc., c/o Ligand Pharmaceuticals Inc.
                          10275 Science Center Drive
                          San Diego, CA  92121
                          Attention: Phillip Duffy, Vice President
                             Manufacturing & Technical Operations
                          Facsimile:  (858) 550-1826

                                       30

<PAGE>



                  If to LIGAND:

                          10275 Science Center Drive
                          San Diego, CA  92121
                          Attention: Phillip Duffy, Vice President
                             Manufacturing & Technical Operations
                          Facsimile: (858) 550-1826


or to such other address as either Party may be notice to the other Party have
directed.


11.02. FURTHER ASSURANCES. Each Party to this Agreement covenants and agrees
that it will promptly, during the term and on the request of the other Party,
execute, acknowledge and deliver or otherwise properly authenticate, as may be
required by law, all documents, instruments, applications, assignments,
registrations, or other legal papers necessary to effectuate the provisions of
this Agreement.

11.03 ASSIGNMENT. SERAGEN may assign this Agreement and the rights and
obligations hereunder granted to SERAGEN without prior written approval of
COPHARMA, provided that the party to whom the Agreement is assigned agrees in
writing with COPHARMA to be bound by all of the terms of this Agreement.
COPHARMA shall not assign this Agreement without the prior written consent of
SERAGEN, which consent shall not be unreasonably withheld, however, COPHARMA
may, without such written consent, assign this Agreement, and its rights and
objections hereunder, in connection with the transfer or sale of all or
substantially all of its business, or in the event of its merger or
consolidation or change in control or similar transaction. In the event of any
assignment, performance shall be guaranteed by the assignor in form satisfactory
to the other Party.

11.04 EFFECTS. This Agreement is binding on, and shall redound to the benefit
of, the Parties to this Agreement and their respective successors and permitted
assigns. Except as otherwise expressly provided in this Agreement, this
Agreement does not create or confer, and is not to be construed as creating or
conferring, any right, remedy, claim or benefit on any third party, other than
the respective successors and permitted assigns of the Parties to this
Agreement.

11.05 WAIVERS AND AMENDMENTS. Any amendment or supplementation of this Agreement
or any waiver of any term or condition of this Agreement shall be effective only
if in writing. A waiver of any breach of any of the terms or conditions of this
Agreement is not in any way to be construed as a waiver of any subsequent
breach.

11.06 SEVERABILITY. In the event that any one or more of the provisions of this
Agreement is determined to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
in any other respect and the remaining

                                       31

<PAGE>

provisions of this Agreement shall not, at the election of the Party for whom
the benefit of the provision exists, be in any way impaired.

11.07 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which together constitute one and the same instrument.

11.08 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
the conflict-of-laws rules of Massachusetts law.

11.09 ENTIRE AGREEMENT. This Agreement (including the Exhibits), the Asset
Purchase Agreement of even date herewith and of its all attachments, and all
other documents executed in connection with the consummation of the transactions
contemplated by these agreements contain the entire agreement among the parties
with respect to the supply of PRODUCT and related transactions, and supersedes
all prior agreements, written or oral, with respect thereto.

11.10 FORCE MAJEURE. Any delays in or failure by either Party in performance of
any obligations hereunder shall be excused if and to the extent caused by such
occurrences beyond such Party's reasonable control, including, but not limited
to, acts of God, strikes, or other labor disturbances, war, whether declared or
not, sabotage, product shortages, acts or omissions of governmental authorities,
including, without limitation, failure to receive required regulatory approvals
or revocation or suspension of required regulatory approvals, and other causes,
whether similar or dissimilar to those specified which cannot reasonably be
controlled by the Party who failed to perform. Upon request from SERAGEN,
COPHARMA shall use commercially reasonable efforts to provide contingency plans
for occurrences as described in this Section at such time as they may be
required, provided that COPHARMA shall not be required, as part of such
contingency plans, to take steps which are commercially unreasonable.

11.11 INDEPENDENT CONTRACTORS. The status of the Parties under this Agreement is
that of independent contractors. Neither Party shall have the right to enter
into any agreements on behalf of the other Party, nor may either Party represent
to any person that it has any such right or authority. Nothing in this Agreement
is to be construed as establishing a partnership or joint venture relationship
between the Parties.

11.12 HEADINGS. Headings are used in this Agreement for convenience only and
shall not affect any construction or interpretation of this Agreement.


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                                       32

<PAGE>


         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

SERAGEN, INC.                            COPHARMA, INC.

By: /S/PAUL V. MAIER                     By: /S/SAMUEL ACKERMAN
    ------------------                       --------------------


Title: CEO                               Title:
       --------------                          --------------


Date: --------------                     Date: --------------


LIGAND PHARMACEUTICALS
INCORPORATED

By:      /S/WILLIAM L. RESPESS
         ----------------------

Title:
       ------------------------

Date:
       ------------------------


              [Signature page to Supply and Development Agreement]


                                       33

<PAGE>


                                   EXHIBIT "A"
                     MANUFACTURING AND RELEASE REQUIREMENTS


Manufacturing and Release Requirements for PDS are as specified in Biologics
License Application #97-1325 and its supplements.

MRR Documentation is defined as copies of the following:

a)   All production batch records

b)   All QC Test/Request Forms (result worksheets) and associated data

c)   Dynamic monitoring performed during processing

d)   Any alert/action notifications generated during processing

e)   Any planned or unplanned deviations associated with the PRODUCT

f)   Any out of specification result investigations associated with the PRODUCT

g)   The Certificate of Analysis for the batch lot comparing testing to
     specifications

h)   The appropriate disposition notification for the Batch

i)   The Client Authorization/Notification form



                                       34

<PAGE>


                                   EXHIBIT "B"
                                     PRICING

COPHARMA will provide SERAGEN's PRODUCT requirements during the term of the
Agreement at a price of *** per Batch for PDS and *** per Batch for FFBP.

COPHARMA will provide FDP release testing at a price of *** per Lot for the year
2000 and at a price of *** per Lot for each succeeding year through ***.

COPHARMA will provide stability testing (PRODUCT and FDP) at a price of
***/timepoint for clinical Lots and a price of ***/timepoint for commercial
Batches and Lots.





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<PAGE>


                                   EXHIBIT "C"
                    KEY RAW MATERIALS AND APPROVED SUPPLIERS









                                       36

<PAGE>




RAW MATERIALS - CLIENT USE



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*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.




<PAGE>


RAW MATERIALS - CLIENT USE




                                      ***










*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.


<PAGE>




RAW MATERIALS - CLIENT USE




                                      ***










*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.





<PAGE>



QA APPROVED VENDOR LIST



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*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.





<PAGE>



QA APPROVED VENDOR LIST





                                       ***










*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.





<PAGE>

                                   EXHIBIT "D"
                               TECHNOLOGY SERVICES


I.  ONTAK 1ST GENERATION POLYSORBATE MODIFICATION




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II.      ONTAK SECOND GENERATION DEVELOPMENT




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*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.




<PAGE>

                                   EXHIBIT "E"
                          FEES FOR TECHNOLOGY SERVICES

                        TECHNOLOGY SERVICES FEES FOR PDS
                                    YEAR 2000

<TABLE>
<CAPTION>

PART I ITEMS:
   SERVICE ITEMS                       PRICING           EST. COMPLETE
      <S>                                <C>                   <C>



       ***                               ***                   ***
</TABLE>




* Dates are estimated starting dates, not completion dates, for real time
stability studies


<TABLE>
<CAPTION>
PART II ITEMS:
   SERVICE ITEMS                       PRICING           EST. COMPLETE
      <S>                                <C>                   <C>



       ***                               ***                   ***
</TABLE>





*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.




<PAGE>


                    TECHNOLOGY SERVICES FEES FOR FFBP AND PDS
                                    YEAR 2001

<TABLE>
<CAPTION>

PART I ITEMS:
   SERVICE ITEMS                       PRICING           EST. COMPLETE
      <S>                                <C>                   <C>



       ***                               ***                   ***
</TABLE>



<TABLE>
<CAPTION>

PART II ITEMS:
   SERVICE ITEMS                       PRICING           EST. COMPLETE
      <S>                                <C>                   <C>



       ***                               ***                   ***
</TABLE>






* Dates are estimated starting dates, not completion dates, for real time
stability studies



*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.



<PAGE>

                                   EXHIBIT "F"
                               ADDITIONAL SERVICES





                                       ***









*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.



<PAGE>

                                   EXHIBIT "G"
                           INCOMPLETE PRODUCT BATCHES

THE COSTS FOR COMPLETION OF INCOMPLETE PRODUCT BATCHES ARE AS FOLLOWS:

         BATCH #                                  COST TO COMPLETE






                                      ***



*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.