<PAGE>

                                                                  Exhibit 10.27
                                                                  -------------

                            COST SHARING AGREEMENT

     This COST SHARING AGREEMENT (this "Agreement") is made as of July 27 1999,
by and between ARE-  104 ALEXANDER ROAD, LLC, a Delaware limited liability
company ("ARE"), and PARADIGM GENETICS, INC., a North Carolina corporation
("PARADIGM"), with reference to the following Recitals:

                                   RECITALS:

     A.  Concurrently herewith, ARE and Triangle Service Center, Inc., a North
Carolina corporation ("TSC") have entered into that certain Ground Lease
Agreement of even date herewith (the "GROUND LEASE"), wherein TSC, as ground
lessor, ground leased that certain parcel of land located in Durham County,
North Carolina (the "PROPERTY") to ARE, as ground lessee.

     B.  Concurrently herewith, ARE and Paradigm have entered into that certain
Lease Agreement of even date herewith (the "Lease"), wherein ARE, as landlord,
leased the Property to TSC, as tenant.

     C.  ARE plans to construct certain improvements on the Property to be
leased by Paradigm.

     D.  Pursuant to Sections 19(b) and 19(d) of the Ground Lease, ARE has the
right under certain circumstances set forth therein to be reimbursed by TSC.

     E.  Pursuant to Section 19(d) of the Ground Lease, ARE has the right to
                     -------------
terminate the Ground Lease.

     F.  The parties hereto desire to set forth their understanding with regard
to the exercise of such reimbursement and termination rights and the sharing of
costs in connection with the development of the Property.

     NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

1.   DEFINED TERMS.  All initially capitalized terms not otherwise defined
     herein shall have the meanings set forth in the Ground Lease unless the
     context clearly indicates otherwise.

2.   ALLOCATION OF DISBURSEMENTS OF THE INCREMENTAL COSTS FUND.  Pursuant to
     Section 19(b) of the Ground Lease, in the event that the presence of the
     Pre-Existing Contamination (as defined in the Ground Lease) or Off-site
     Originated Contamination (as defined in the Ground Lease) cause ARE or
     Paradigm to incur (a) any and all costs and expenses in connection with the
     design, construction or operation of the Improvements at the Demised
     Premises that would not have been incurred had such Contamination not
     existed (including, without limitation, any costs to relocate any existing
     monitoring wells,
<PAGE>

     the costs of retaining design professionals and environmental consultants
     to evaluate such Contamination, the increased cost for additional or
     specialized equipment or contractors necessitated because of the presence
     of such Contamination, any increased expense incurred because of delays in
     construction of the Initial Improvements due to the presence of such
     Contamination), (b) the cost of performing any Compliance Action related to
     such Contamination incurred by Tenant or Paradigm, or (c) a liquidated
     damages amount equal to $3,000 per day (the "DAILY LIQUIDATED AMOUNT") of
     delay in the completion of construction of the Initial Improvements
     (collectively, "INCREMENTAL COSTS"), then TSC has agreed to reimburse ARE
     for such Incremental Costs initially up to the amount of the Incremental
     Costs Fund plus, subject to certain reserves, on and after the completion
     of the Phase 2 Land Initial Improvements any amount remaining in the
     Remediation Fund. Notwithstanding anything to the contrary contained in the
     Ground Lease, except as may be expressly provided for in the Lease
     (specifically including any rights of Paradigm to receive an abatement of
     Rent under the Lease), Paradigm hereby irrevocably waives and relinquishes
     (a) any and all rights Paradigm may otherwise have to claim or receive
     damages from ARE as a result of delays in the construction of the
     Improvements due to the Pre-Existing Contamination or any Off-Site
     Originated Contamination in excess of the lesser of (i) the Liquidated
     Daily Amount actually paid to Paradigm, (ii) the Liquidated Daily Amount
     actually paid by TSC to ARE, (iii) amounts received by Paradigm in
     accordance with this Agreement, or (iv) any other amounts paid by TSC to
     ARE on account of such delay in the construction of the Improvements due to
     Pre-Existing Contamination or any Off-Site Originated Contamination; and
     (b) any and all rights Paradigm may otherwise have to claim or receive
     consequential damages from ARE as a result of delays in the completion of
     construction of the Improvements due to the Pre-Existing Contamination or
     any Off-Site Originated Contamination in excess of $75,000 unless and until
     the amount of other Incremental Costs are fully reimbursed to ARE from TSC
     and then only to the extent amounts remain in the Incremental Costs Fund.
     Notwithstanding the foregoing waivers (the "WAIVERS"), Paradigm expressly
     reserves any and all rights it may have against TSC; provided, however,
     Paradigm hereby indemnifies and agrees to defend and hold ARE harmless from
     and against any and all Claims suffered or incurred by ARE as a result of
     Paradigm making a Claim against TSC for any of the items covered by the
     Waivers. Paradigm further agrees that Paradigm shall not be entitled to be
     paid any amounts as consequential damages from ARE as a result of delays in
     the construction of the Improvements due to the Pre-Existing Contamination
     or any Off-Site Originated Contamination unless such delays in the
     construction of the Improvements result in actual delays in the completion
     of such Improvements and only if ARE does not exercise the termination
     right provided in Section 19(d) of the Ground Lease. Paradigm also agrees
     that no amounts shall be paid as consequential damages unless and until the
     Initial Improvements have been completed. The agreements set forth in this
     Section 2 shall apply in a similar manner to the respective rights of the
     parties with respect to the Phase 2 Land Initial Improvements if the Option
     (as defined in the Ground Lease) to ground lease the Phase 2 Land is
     exercised and the Amendment is executed. ARE and Paradigm hereby agree to
     reasonably cooperate with each in order to allow ARE to timely comply with
     its obligations to deliver evidence to TSC of Incremental Costs.

                                       2
<PAGE>

3.   EXERCISE OF THE TERMINATION RIGHT PURSUANT TO SECTION 19(d) OF THE GROUND
     LEASE.  On or before the 44th day after the Commencement of Construction of
     the Improvements, ARE and Paradigm shall meet and confer with respect to
     their respective preferences regarding the exercise of the termination
     right pursuant to Section 19(d) of the Ground Lease.  ARE and Paradigm
     acknowledge and agree that ARE shall not have the right to unilaterally
     exercise such termination right unless: (a) Paradigm is in default under
     the Lease beyond any applicable cure period; (b) the Incremental Costs
     (other than amounts paid as part of the Liquidated Daily Amount) equals or
     exceeds $200,000, unless Paradigm irrevocably agrees to reimburse ARE for
     such excess and concurrently therewith provides ARE with reasonably
     satisfactory assurances of payment therefor; or (c) Paradigm has delivered
     to ARE written notice requesting that ARE exercise such termination right.
     In the event that ARE desires to exercise the termination right pursuant to
     Section 19(d) of the Ground Lease, and Paradigm does not desire to have
     such termination right exercised, then so long as (x) Paradigm irrevocably
     agrees to assume ARE's entire leasehold interest under the Ground Lease and
     all of ARE's obligations thereunder, and (y) Paradigm irrevocably agrees to
     reimburse ARE for all of its costs and expenses incurred to date in
     connection with the Ground Lease and the development of the Demised
     Premises, and provides ARE with reasonably satisfactory assurance of
     payment therefor, then ARE will not exercise such termination right and ARE
     shall assign its interest under the Ground Lease to Paradigm concurrently
     with the payment of such reimbursement.  The agreements set forth in this
     Section 2 shall apply in a similar manner to the respective rights of the
     parties with respect to the Phase 2 Land Initial Improvements if the Option
     to ground lease the Phase 2 Land is exercised and the Amendment is
     executed.

4.   ALLOCATION OF COSTS AFTER TERMINATION PURSUANT TO SECTION 19(d) OF THE
     GROUND LEASE. In the event the Ground Lease is terminated pursuant to
     Section 19(d) of the Ground Lease, ARE and Paradigm shall cooperate in
     determining all costs and expenses incurred by ARE and Paradigm in
     connection with the construction and development of the Improvements (the
     "ACCOUNTING") and shall complete the Accounting within 30 days after the
     termination of the Ground Lease. Based upon the Accounting, all costs and
     expenses incurred by ARE and Paradigm in connection with the construction
     and development of the Improvements (including the costs associated with
     any restoration required pursuant to Section 19(d)) shall be split equally
     between ARE and Paradigm, after applying any reimbursement received from
     TSC pursuant Section 19(d). Any amounts owed by ARE or Paradigm to the
     other in order to split the costs determined in the Accounting shall be
     paid within 15 days after the Accounting is completed.

5.   GOVERNING LAW.  This Agreement and the legal relations between the parties
     hereto shall be governed by and construed and enforced in accordance with
     the laws of the State of North Carolina, without regard to its principles
     of conflicts of law.

6.   ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement between
     ARE and Paradigm pertaining to the subject matter hereof and supersedes the
     Lease and all prior agreements, understandings, letters of intent,
     negotiations and discussions, whether oral or written, of the parties, and
     there are no warranties, representations or other agreements,

                                       3
<PAGE>

     express or implied, made to either party by the other party in connection
     with the subject matter hereof except as specifically set forth herein.

7.   MODIFICATIONS; WAIVER.  No supplement, modification, waiver or termination
     of this Agreement shall be binding unless executed in writing by the party
     to be bound thereby.  No waiver of any provision of this Agreement shall be
     deemed or shall constitute a waiver of any other provision hereof (whether
     or not similar), nor shall such waiver constitute a continuing waiver
     unless otherwise expressly provided.

8.   NOTICES.  All notices, consents, requests, reports, demands or other
     communications hereunder (collectively, "Notices") shall be in writing and
     may be delivered personally, by reputable overnight delivery service or by
     facsimile transmission (with in the case of a facsimile transmission,
     confirmation by reputable overnight delivery service) to each of the
     parties at the addresses set forth in the Lease, as changed from time to
     time in accordance with the notice provision contained therein.  Notices
     given by facsimile transmission shall be deemed to be delivered when
     confirmed; and all other Notices shall have been deemed to have been
     delivered on the date of delivery or refusal.

9.   SEVERABILITY.  Any provision or part of this Agreement which is invalid or
     unenforceable in any situation in any jurisdiction shall, as to such
     situation and such jurisdiction, be ineffective only to the extent of such
     invalidity and shall not affect the enforceability of the remaining
     provisions hereof or the validity or enforceability of any such provision
     in any other situation or in any other jurisdiction.

10.  THIRD PARTIES.  Except as specifically set forth or referred to herein,
     nothing herein expressed or implied is intended or shall be construed to
     confer upon or give to any person or entity, other than the parties hereto
     and their successors or assigns, any rights or remedies under or by reason
     of this Agreement.

11.  COUNTERPARTS.  This Agreement may be executed in as many counterparts as
     may be deemed necessary and convenient, and by the different parties hereto
     on separate counterparts, each of which, when so executed, shall be deemed
     an original, but all such counterparts shall constitute one and the same
     instrument.

12.  HEADINGS.  The section headings of this Agreement are for convenience of
     reference only and shall not be deemed to modify, explain, restrict, alter
     or affect the meaning or interpretation of any provision hereof.

13.  CONSTRUCTION.  This Agreement shall not be construed more strictly against
     one party hereto than against any other party hereto merely by virtue of
     the fact that it may have been prepared by counsel for one of the parties.

14.  ATTORNEYS' FEES.  If any action is brought by either party against the
     other party, relating to or arising out of this Agreement, the transaction
     described herein or the enforcement hereof, the prevailing party shall be
     entitled to recover from the other party reasonable attorneys' fees, costs
     and expenses incurred in connection with the prosecution or defense

                                       4
<PAGE>

     of such action. For purposes of this Agreement, the term "ATTORNEYS' FEES"
     or "ATTORNEYS' FEES AND COSTS" shall mean the fees and expenses of counsel
     to the parties hereto, which may include printing, photostating,
     duplicating and other expenses, air freight charges, and fees billed for
     law clerks, paralegals and other persons not admitted to the bar but
     performing services under the supervision of an attorney, and the costs and
     fees incurred in connection with the enforcement or collection of any
     judgment obtained in any such proceeding. The provisions of this Section
     shall survive the entry of any judgment, and shall not merge, or be deemed
     to have merged, into any judgment.

                                       5
<PAGE>

                           [Signatures on next page ]

     IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the date first above written.

ARE:                               ARE-104 ALEXANDER ROAD, LLC
                                   a Delaware limited liability company

                                   By: ALEXANDRIA REAL ESTATE EQUITIES, L.P.
                                       a Delaware limited partnership,
                                       as Managing Member

                                       by:  ARE-QRS CORP.,
                                            a Maryland corporation
                                            as General Partner

                                       By: /s/ Lynn Anne Shapiro
                                          -------------------------
                                          Name: Lynn Anne Shapiro
                                               --------------------
                                          Its: General Counsel
                                               --------------------

PARADIGM:                          PARADIGM GENETICS, INC.,
                                   a North Carolina corporation

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

                                       6
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the date first above
written.

ARE:                               ARE-104 ALEXANDER ROAD, LLC
                                   a Delaware limited liability company

                                   By:   ALEXANDRIA REAL ESTATE EQUITIES, L.P.
                                         a Delaware limited partnership,
                                         as Managing Member

                                         by:  ARE-QRS CORP.,
                                              a Maryland corporation
                                              as General Partner

                                         By:
                                            -------------------------

                                            Name:
                                                 --------------------

                                            Its:
                                                 --------------------

PARADIGM:                          PARADIGM GENETICS, INC.,
                                   a North Carolina corporation

                                         By: /s/ Ian Howes
                                            -------------------------

                                           Name: Ian Howes
                                            -------------------------

                                           Its: Vice President
                                            -------------------------

                                       7