<PAGE>

                                                                  EXHIBIT 10. 19

Portions of this Exhibit have been omitted pursuant to a request for
Confidential Treatment. The omitted portions, marked by [****], have been
separately filed with the Commission.

                               LICENSE AGREEMENT

                 THIS LICENSE AGREEMENT ("Agreement") is made and entered into
as of August 2, 1995 (the "Effective Date") between VIRUS RESEARCH INSTITUTE,
INC., a Delaware corporation having its principal place of business at 61
Moulton Street, Cambridge, Mass 02138 (hereinafter referred to as "VRI"), and
PASTEUR MERIEUX SERUMS ET VACCINS, a French corporation having its registered
head office at 58 Avenue Leclerc, Lyon, France (hereinafter referred to as
"PMC").

                                    RECITALS

                 A. VRI has certain proprietary rights relating to the use of
polyphosphazene for the mucosal delivery of vaccines against human diseases.

                 B. PMC desires to obtain a license to such rights and to
research, develop, manufacture, market, sell and distribute certain vaccines
which incorporate polyphosphazene, all under the terms and conditions set forth
below.

                 NOW THEREFORE, for and in consideration of the covenants,
conditions, and undertakings hereinafter sat forth, it is agreed by and between
the parties as follows:

                                   ARTICLE 1

                                  DEFINITIONS

                 1.1 "Affiliate" shall mean, with respect to any Person, (i) any
other Person of which securities or other ownership interests representing 50%
or more of the voting interests (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction) are,
at the time such determination is being made, owned, controlled or held directly
or indirectly, by such Person, or (ii) any other Person which, at the time such
determination is being made, is Controlling, Controlled by or under common
Control with, such Person.

                 For the purpose of this section 1.1, "Control," whether used as
a noun or verb, refers to the possession directly or indirectly, of the power to
direct, or cause the direction of, the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Person" means any natural person, corporation, firm, business trust, joint
venture, association, organization, company, partnership or other business
entity, or

<PAGE>

The information below marked by [****] has been omitted
pursuant to a request for Confidential Treatment. The omitted portion has been
separately filed with the Commission.

any government, or any agency or political subdivision thereof.  The Joint
Venture companies known as Pasteur Merieux MSD Snc and MCM Vaccine Co. are
Affiliates of PMC.

                 1.2 "Co-Exclusive Vaccine" shall mean a mucosally administered
vaccine (other than a DNA vaccine) against one or more of the following
diseases: Respiratory Syncytial Virus ("RSV"), Para Influenza, Cytomegalovirus
("CMV"), Pneumococcal Pneumonia ("Pneumo") (including S. pneumoniae,
Branhamalla, non-typable Haemophilus Influenza and Otitis Media), Rabies, each
alone or in combination with each other, and specifically excluding a
combination of (a) one or more of the vaccines specifically enumerated as a
Co-Exclusive Vaccine or Exclusive Vaccine with (b) a vaccine which is not
specifically enumerated as an Exclusive Vaccine or Co-Exclusive Vaccine.

                 1.3 "Exclusive Vaccine" shall mean a mucosally administered
vaccine(s) (other than a DNA vaccine) against one or more of Lyme Disease,
Meningococcus and Influenza, each alone or in combination with each other or in
combination with a Co-Exclusive Vaccine and shall also include [****]
specifically excluding a combination of (a) one or more of the vaccines
specifically enumerated as a Co-Exclusive Vaccine or Exclusive Vaccine with (b)
a vaccine which is not specifically enumerated as an Exclusive Vaccine or
Co-Exclusive Vaccine.

                 1.4 "Field" shall mean the prevention of a disease in humans.

                 1.5 "Licensed Know-How" shall mean any biological materials,
and any research and development information, inventions, know-how,
pre-clinical, clinical and other technical data, in each case that are owned by
VRI, or possessed by VRI with the right to provide the same to others, from and
after the Effective Date and which is necessary or useful for the improving,
making, using or selling of Licensed Products as provided in this Agreement.

                 1.7 "Licensed Product(s)" shall mean, individually and
collectively, the Exclusive Vaccines and the Co-Exclusive Vaccines provided that
polyphosphazene is used for the mucosal administration of the product containing
such vaccine.

                 1.8 "Net Sales" shall mean the gross invoice price of Licensed
Products sold or distributed by PMC or its Affiliates or any of their
sublicensees, less: (i) normal and customary rebates, trade discounts, and
credits for returns and allowances, all to the extent actually allowed, (ii) to
the extent separately reported on the invoice, sales or other excise taxes or
duties imposed upon and paid by PMC, its Affiliates or sublicensees with respect
to such sales, and (iii) transportation charges and insurance for transportation
to the extent separately invoiced or separately reported on the invoice and paid
by the seller.

                                      -2-

<PAGE>

                 In the event that Licensed Product is sold in other than an
arms length transaction, then Net Sales shall be the gross invoice price which
would be received in an arms length transaction, taking account of any
deductions for items referred to in clauses (i), (ii) and (iii) of the preceding
paragraph.

                 In the event that consideration in addition to or in lieu of
money is received for Licensed Product such consideration shall be added to Net
Sales.

                 Notwithstanding the provisions of this Section, Net Sales shall
not include sales to an Affiliate for resale by such Affiliate.

                 1.9 "Patent Rights" shall mean the following patents and patent
applications, and all subject matter claimed therein:

                          (a)     All patents and applications listed in
Exhibit A; any continuations, continuations-in-part, divisions and substitutions
thereof, or of which such an application or patent is a successor; patents which
may issue upon any of the foregoing; and all renewals, reissues and extensions
thereof; and

                          (b)     Any foreign patents and/or applications that
are counterparts of a patent or application described in paragraph (a) above,
including any patent or application that claims subject matter claimed in, or
that takes priority from, a patent or application described in paragraph (a)
above; and

                          (c)     Any patent or application owned by VRI during
the term of this Agreement which claims polyphosphazene and/or the use thereof
in as part of a vehicle for the mucosal administration of vaccine.

                 1.10 "PMC Mucosal Delivery Technology" shall mean any and all
materials, information, data, improvements, patents and patent applications
directed to polyphosphazene and/or its use as part of a mucosal delivery system
including, but not limited to, data related to polymer safety (other than Drug
Master Files or clinical data, and excluding that which is unique to the
formulation of polyphosphazene with a specific PMC antigen) which are owned by
PMC or in the possession of PMC with the right to provide same to others during
the term of the Agreement.

                 1.11 "Significant Competition" with respect to each Licensed
Product in each country for each calendar year shall mean that a third party
sells a mucosally delivered vaccine which competes with a Licensed Product as to
a given indication, whether in single antigen or multivalent form and such third
party vaccine has a commercially recognized advantage in safety, immunogenicity
and/or therapeutic value over the competing Licensed

                                      -3-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

Product and that such third party vaccine has [****] vaccines for the indication
concerned. The sale of a Co-Exclusive Vaccine by a licensee of VRI or the sale
of a polyphosphazene adjuvanted parenteral vaccine shall not be a third party
vaccine for the purpose of this definition.

                 1.12 "Territory" shall mean (i) all countries included in the
continents of North and South America, including Central America and the islands
of the Caribbean, Europe, and Africa, including the dependencies and territories
of such countries; (ii) Thailand, and (iii) all countries previously part of the
U.S.S.R. [****]

                 1.13 "Valid Claim" shall mean a claim of an issued and
unexpired patent or pending patent application included within the Patent
Rights, which has not been held unenforceable, unpatentable or invalid by a
court or other governmental agency of competent jurisdiction from which no
appeal can be or is taken, and which has not been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise.

                                   ARTICLE 2

                                GRANT OF RIGHTS

                 2.1 License to PMC. (a) Subject to the terms and conditions of
this Agreement, VRI hereby grants to PMC (i) a license under the Patent Rights
and Licensed Know-How to make, have made, and use the Licensed Products which
are Exclusive Vaccines outside of the Territory but only for sale in the Field
in the Territory and to make, have made, use, sell and distribute the Licensed
Products which are Exclusive Vaccines in the Field in the Territory, which
license under this Section 2.l(a)(i) shall be exclusive with respect to sale of
Exclusive Vaccines in the Field in the Territory and in all other respects the
license granted under this Section 2.1(a)(i) is non-exclusive, and (ii) a
license under the Patent Rights and Licensed Know-How to make, have made, and
use the Licensed Products which are Co-Exclusive Vaccines outside of the
Territory but only for sale in the Field in the Territory and to make, have
made, use and sell a Licensed Product which is a Co-Exclusive Vaccine in the
Field in the Territory which license under this Paragraph 2.1(a) shall be
exclusive to PMC for use, sale and distribution of Co-Exclusive Vaccine in the
Field in each country of the Territory but for one other entity which may, at
VRI's option, be VRI or an entity licensed by VRI, and in all other respects the
license granted under this Section 2.l(a)(ii) is non-exclusive. It is expressly
understood that only one entity other than PMC will be or be permitted to be
licensed by VRI, to use or sell any Co-Exclusive Vaccine in the Field in any
country of the Territory.

                                      -4-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                          (b)     Subject to the terms and conditions of this
Agreement, VRI hereby grants to PMC a non-exclusive license under the Patent
Rights and Licensed Know-How (i) to use, sell and distribute the Licensed
Products set forth in Exhibit B in the countries set forth in Exhibit B, but
only to the extent that all of the antigens contained therein are covered by
patent rights of PMC and/or its Affiliates which give PMC an exclusive position
with respect to those antigens in those countries, and (ii) to make and have
made and use Licensed Products set forth in Exhibit B in any country of the
world but only for use, sale and distribution in the countries set forth in
Exhibit B, and only to the extent that all of the antigens contained therein are
covered by patent rights of PMC and/or its Affiliates, which give PMC an
exclusive position with respect to all of the antigens contained in the Licensed
Product of Exhibit B in those countries of Exhibit B. Exhibit B is intended to
set forth the countries in which PMC holds exclusive rights in respect of a
given antigen and the antigens as to which such exclusive rights are held in
that country. Such Exhibit B shall be amended from time to time to take account
of any additional countries and/or additional Licensed Products which contain
only antigens as to which PMC obtains exclusive rights during the term of this
Agreement but only to the extent that VRI is able to grant such a license and
only to the extent VRI has not previously granted to a third party rights which
would prevent VRI from granting such rights to PMC.

                          (c)     Upon written notice to VRI, PMC shall have
the right to be granted a non-exclusive license to use, sell and distribute each
Co-Exclusive Vaccine and each Exclusive Vaccine, in each country (other than
Japan) where PMC and/or its Affiliates have patent rights (as an owner or
exclusive licensee) which cover the antigen of such Exclusive Vaccine or
Co-Exclusive Vaccine provided that VRI has not granted rights to a third party
in such country which would prevent VRI from granting such license to PMC, which
non-exclusive license extension shall be limited to a Co-Exclusive Vaccine or
Exclusive Vaccine, as the case may be, which contains such antigen. The
non-exclusive license shall include the right to make and have made each such
Co-Exclusive Vaccine and Exclusive Vaccine but only for use and sale in the
countries specified in this Paragraph 2.1(c).

                          (d)     [****]

                          (e)     In order to assure PMC of the exclusive
rights granted in Section 2.1(a)(i), VRI shall not grant to a third party or
itself exercise any rights or licenses under Patent Rights and Licensed Know-How
to use, sell or distribute a mucosally administered vaccine [****] against Lyme
Disease, Meningococcus or Influenza in the Field in the Territory. In addition,
except as permitted in Section 2.1 (a (ii), VRI shall not grant to a third party
or itself exercise any rights or licenses under Patent Rights and Licensed
Know-How to use, sell or distribute a mucosally administered vaccine [****]
against RSV, Para Influenza, CMV Pneumo (including S. Pneumoniae, Branhamalla,
non-typable Haemophilus Influenza and Otitis Media) and Rabies in the Field in
the Territory.

                                      -5-

<PAGE>

                 2.2 Licenses to VRI. Subject to the rights granted to and
maintained by PMC and to any existing rights of third-parties, PMC hereby grants
to VRI a worldwide, royalty free, license to use PMC Mucosal Delivery Technology
to make, have made, use and sell vaccine products, including the right to
sublicense such license to Affiliates. Such license of PMC Mucosal Delivery
Technology may also be sublicensed to third parties with the prior written
consent of PMC, which consent shall not be unreasonably withheld.

                 2.3 Sublicenses. With respect to the rights granted under
Section 2.1(a)(i) PMC shall have the right to grant sublicenses under this
Agreement with the prior approval of VRI as to the sublicensee, which approval
shall not be unreasonably denied. With respect to the rights granted under
Section 2.1(a)(ii), PMC shall have the right (without the approval of VRI) to
grant a sublicense to one other party in any country where PMC is not selling or
does not intend to sell Licensed Product. PMC shall advise VRI of the name of
such sublicensee when such sublicensee is selected. The rights granted under
Section 2.1(b) and (c) are not sublicensable, except to Affiliates of PMC.

                 2.4 (a) In case of any sublicense by PMC or VRI of the rights
and licenses granted in this Agreement, the sublicensee shall agree to be bound
by the terms, obligations and conditions identical to those of Articles 7 and 10
and Sections 2.5 and 12.5 of this Agreement (substituting the name of the
Sublicensee for that of the sublicensing party), with the other party being
expressly made a third party beneficiary thereof, and the sublicensing party
shall be responsible for the performance by the appointed sublicensee of such
terms, obligations and conditions.

                     (b) Each sublicense agreement concluded by PMC will
include a requirement that the sublicensee maintain records and permit
inspection on terms essentially identical to Article 10.4 of this Agreement.
At VRI's request, PMC shall arrange for an independent certified accountant
selected by VRI to inspect the records of its sublicensee(s) for the purpose
of verifying royalties due to VRI and shall cause such accountant to report
the results thereof to VRI.

                     (c) All sublicenses granted for a Licensed Product or
for the PMC Mucosal Delivery Technology in a country shall terminate upon
termination of the licenses granted hereunder with respect to such Licensed
Product or to PMC Mucosal Delivery Technology as the case may be, provided
that upon expiration of the full term of this Agreement pursuant to Paragraph
5.1, all parties shall have fully paid-up, non-cancelable licenses.

                 2.5 To the extent Patent Rights licensed to PMC under this
Agreement have been licensed by VRI from another party under an agreement with
another party ("Another Party Agreement(s)"), PMC understands and agrees as
follows:

                                      -6-

<PAGE>

                          (i) The rights licensed to PMC by VRI are subject to
                 the terms, limitations, restrictions and obligations of the
                 Another Party Agreement(s).

                          (ii) PMC will comply with the terms, obligations,
                 limitations and restrictions of the Another Party Agreement(s)
                 to the extent PMC has been permitted to review such terms,
                 obligations, limitations and restrictions. VRI will give PMC,
                 upon request, a reasonable opportunity to review the same
                 except to the extent that confidentiality or other obligations
                 towards Another Party may prevent VRI from doing so. In any
                 event VRI shall act reasonably in advising PMC of the scope of
                 PMC's obligation pursuant to such Another Party Agreement. It
                 is expressly understood that PMC may refuse to accept a license
                 under one or more Another Party Agreements, in which case PMC
                 will not be bound thereby.

                 2.6 Disclosure of Technology. Upon the execution of this
Agreement, and periodically thereafter upon request by PMC, VRI shall provide to
PMC copies of all available information in tangible form within the Licensed
Know-How or related to the Patent Rights.

                 2.7 Subject to the terms and conditions of the Supply Agreement
to be negotiated under this Section 2.7, PMC is hereby granted a non-exclusive
right and license under the Patent Rights and Licensed Know-How to make and have
made polyphosphazene for use by PMC, its Affiliates and its sublicensees as part
of a mucosal delivery system in the manufacture of Licensed Product in
accordance with and to the extent that PMC retains its license to Licensed
Product under this Agreement.

                 PMC shall have the right at any time during the term of this
Agreement, but not the obligation, to exercise its right under the herein
granted manufacturing license. In the event that PMC decides to exercise such
rights, it shall so inform VRI in writing, and VRI shall promptly disclose to
PMC all applicable manufacturing technology in the possession of VRI at the time
of such disclosure. Subject to applicable confidentiality obligations, VRI and
PMC shall share and exchange any technology and know-how they shall generate
while establishing manufacturing processes and facilities.

                 When either PMC or VRI achieves manufacture of polyphosphazene
on a commercial basis, it shall have an obligation to use reasonable efforts in
good faith to assist the other to satisfy its reasonable requirements of
polyphosphazene for use as part of a vehicle for a mucosal delivery system for
vaccines on reasonable commercial terms, taking into account the respective
investments made and risks incurred by the parties in connection with such
manufacture.

                 PMC and VRI shall consult in good faith and in their mutual
interest as to an arrangement for the manufacture and supply of polyphosphazene
for clinical lots as well as in

                                      -7-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

commercial quantities for use as a part of a mucosal delivery system by PMC and
its Affiliates and authorized sublicensees in the Licensed Products as licensed
hereunder and for use by VRI, its Affiliates and licensees (other than PMC).

                 VRI shall use commercially reasonable efforts to establish a
process capable of yielding under GMP conditions consistent and validated
supplies of polyphosphazene in accordance with agreed upon specifications,
[****]

                 VRI shall use commercially reasonable efforts to obtain a
manufacturer of polyphosphazene. Thereafter, under the terms and conditions of a
supply agreement to be negotiated in good faith between the parties (the "Supply
Agreement"), VRI shall be

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

responsible for scaling-up the process in an efficient, cost-effective GMP
manufacturing facility for production of polyphosphazene according to
agreed-upon specifications at industrial scale, which Supply Agreement [****]

                 PMC shall render all reasonable assistance to VRI in
identifying and selecting a third-party manufacturer. In the event that VRI
retains such manufacturer, VRI shall then, subject to appropriate
confidentiality provisions, transfer to it all of VRI's technology for
manufacture of polyphosphazene.

                                   ARTICLE 3

                            MILESTONES AND ROYALTIES

                 3.1 Milestone Fees. PMC shall pay to VRI the non-refundable and
non-creditable amounts specified below within thirty (30) days following the
accomplishment by PMC, its Affiliates or sublicensees of the corresponding event
set forth below, or (ii) within thirty (30) days following receipt by PMC of
written notice of accomplishment by VRI or a VRI's Affiliate of such other
corresponding event set forth below:

                          (a)     [****]

                          (b)     [****]

                 3.2 Royalties.  [****]

                                      -8-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                          (a)     [****]

                          (b)     [****]

                          (c)     [****]

                          (d)     In the case of the earned royalties set forth
in paragraphs (a) and (b) above, the royalties would be adjusted in each country
for each calendar year for each Licensed Product in the event PMC was required
to pay royalties to a third party for use of polyphosphazene as part of a
mucosal delivery system in such Licensed Product in such a country for such year
utilizing the following method, but in no event shall [****]

         (1) First determine the relationship between Net Sales in the
applicable country for the year and the total worldwide Net Sales in that same
category of sales for the year for the Licensed Product, i.e., divide Net Sales
in a country for the applicable Licensed Product, where, [****] by worldwide Net
Sales in all countries for such Licensed Product [****].

                                  (2)      Apply this percentage to total
royalties paid in all such countries for the Licensed Product for the year to
determine the VRI royalties in a country against which a credit for third party
royalties paid in such country may be taken.

                                  (3)      Subtract the amount of third party
royalties paid in the country in question from [****].

                          (e)     Royalties shall be calculated and paid on a
country-by-country and product-by-product basis [****] provided, however, that
if at any time after the expiration [****], the making, using or selling of the
product is covered by Patent Rights, the royalties shall be paid until the
expiration if the last to expire of any such patent(s).

                          (f)     [****]

                 3.3 Single Royalty: Non-Royalty Sales. It is understood that in
no event shall more than one royalty be payable under Section 3.2 with respect
to a particular unit of Licensed Product. No royalty be payable under Section 3
with respect to sales of Licensed Products among PMC, its Affiliates and/or
sublicensees, but royalty shall be due upon the subsequent sale of the Licensed
Product to an entity who is not an Affiliate or sublicensee provided, however,
that if there is no or is to be no subsequent sale of the Licensed Product to an
entity who is not an Affiliate or a sublicensee, then the royalty shall be due
and shall be based upon the higher of (i) the gross invoice price to such
Affiliate or sublicensee or (ii) the average gross invoice price with PMC
charges to its customers (other than Affiliates and

                                      -9-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

sublicensees) for the Licensed Product for the relevant reporting period of
Section 9.1 in the relevant country.

                 No royalty shall be payable for (i) Licensed Product used in
clinical trials, or (ii) Licensed Product used by PMC or its sublicensee for
research, or (iii) customary quantities of Licensed Product distributed by PMC
or its sublicensee as free samples.

                 3.4 Combination Products. In the event Licensed Products
contain vaccines licensed hereunder in combination, the royalty rate applicable
to said combination products shall be the rate [****]

                                   ARTICLE 4

                                RESEARCH PROGRAM

                 4.1 Object. Pursuant to the mutually agreed upon research
program attached hereto as Exhibit D (the "Research Program"), VRI agrees to
conduct the research described therein and PMC agrees to support and fund such
Research Program in accordance with the terms and conditions set forth below.

                 4.2 Oversight of the Research Program

                          (a)     Oversight.  The Research Program will be
overseen and monitored by the Research Steering Committee as described herein
(the "Committee").

                          (b)     Membership. [****] Such representatives will
be qualified, by reason of background and experience, to assess the scientific
progress of the Research Program. Each party will have the right to change its
representation on the Committee upon written notice sent to the other.

                          (c)     Chair. [****]

                          (d)     Responsibilities.  The Committee will have

authority to:

                                  (i) review and approve the draft
                          Research Program prepared by VRI and establish
                          the definitive Research Program;

                                      -10-

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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                                  (ii) make recommendations regarding the
                          performance of the Research Program and the conduct of
                          the research pursuant thereto, and monitor performance
                          thereunder;

                                  (iii) modify the Research Program as it
                          determines, for each twelve (12) month period during
                          the term thereof;

                                  (iv) review any and all proposed
                          publication[s] or communication[s] relating to the
                          Research Program and the results therefrom, in
                          accordance with the procedure set forth in this
                          Article 4;

                                  (v) review any and all proposed filing of
                          patent application[s] in connection with the Research
                          Program.

                 4.3 Meetings. [****] Meetings in person will normally take
place at VRI's premises or such other pace as may be mutually agreed upon.
Meetings may be held by telephone. At such meetings, the Committee will discuss
the Research Program and the status of performance by VRI under the program,
evaluate the results thereof and set priorities therefor. [****] The Committee
will prepare written minutes of each meeting and a written record of all
decisions whether made at a formal meeting or not. Such minutes will incorporate
semi-annual research reports prepared for the parties by VRI. A quorum for a
meeting shall require [****]

                 4.4 Committee Deadlock.  If there are issues on which the
Committee cannot reach agreement because of a Deadlock (as hereinafter
defined)[****]

                 4.5 The Principal Investigator.

                          (a)     Principal Investigator.  [****]

                          (b)     Duties.  The Principal Investigator will
direct the Research Program and coordinate the efforts of other researchers
involved in the performance of such Program. The Principal Investigator will sit
with the Committee as provided in Section 4.2 hereof, will perform the duties
set forth hereunder and will be afforded the opportunity to actively participate
in all Committee deliberations. The Principal Investigator will provide
reasonably detailed status reports of the Research Program to the Committee at
six-month intervals, as well as at the earliest practicable time whenever, in
the Principal Investigator's judgment, an invention is created or reduced to
practice. The Principal Investigator will devote such time and efforts as may be
required to fulfill his duties hereunder and to ensure the successful
administration and coordination of the Research Program.

                                      -11-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                          (c)     Replacement.  The Principal Investigator may
be replaced in the event the then existing Principal Investigator is no longer
able or is unwilling to so serve or fails to perform the duties assigned. In
such circumstances VRI, with the consent of PMC shall appoint a substitute
Principal Investigator. PMC will not unreasonably withhold its consent to a
substitute Principal Investigator proposed by VRI. [****]

                 4.6 (a) Conduct of Research Program. The Research Program will
be conducted by VRI at VRI's laboratories. VRI will use all reasonable efforts
to complete research in accordance with the said Research Program [****]. Any
research work performed by VRI pursuant hereto will be in compliance with Good
Laboratory Practices as applicable in the United States of America. [****]

                          (b)     Visitation.  For the purpose of facilitating
PMC's understanding of the research activities conducted by VRI hereunder, VRI
will permit duly authorized employees or representatives of PMC to visit its
facilities where the research is conducted, at reasonable times and with
reasonable notice.

                 4.7 Financial Conditions.

                          (a)     Support Commitment.  PMC will provide funding
for and during the term of the Research Program up to a maximum of two million
five hundred thousand United States dollars (2,500,000 US$) (the "Maximum
Commitment"). The Maximum Commitment will be inclusive of all costs incurred by
VRI implementing the Research Program.

                          (b)     Payment Schedule.  Support payments will be
made by PMC to VRI in four (4) equal half-year payments of six hundred
twenty-five thousand United States dollars (625,000 US$) in advance with the
first payment to be made within eight (8) days of the Effective Date hereof.

                 4.8 VRI will provide an annual budget for the research program
and semi-annual financial reports of actual and budgeted expenditure.

[****]

                 [****] the records on which these reports are based shall be
open, no more than once each year, for inspection by an independent certified
accountant selected by PMC and acceptable to VRI, upon reasonable notice during
normal business hours and at PMC's expense, for the sole purpose of verifying
the accuracy of the reports.

                 [****]



                                      -12-

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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                 4.9 No Conflict With Research Program. VRI agrees that the
Research Program funds provided by PMC will be applied to the Research Program
and may not, without PMC prior written approval, be used in support of any other
research at VRI.

                 4.10 Title to Equipment. VRI will retain title to any equipment
purchased with funds provided by PMC under this Agreement, if such purchase is
mutually agreed upon as part of the Research Program budget.

                 4.11 Term and termination.

                          (a)     The term of the Research Program will be two
(2) years as from the Effective Date hereof.

                          (b)     In addition to any other remedy which it may
have, PMC will be entitled to terminate the Research Program and cease funding
thereof in the event of a material breach by VRI of any of VRI's obligations and
covenants hereunder following written notice or such breach to VRI. If such
breach is not cured within thirty (30) days after written notice is given by PMC
to VRI specifying the breach, PMC may terminate the Research Program and cease
funding hereunder forthwith upon written notice to VRI after expiration of such
thirty (30) day period, and [****]

                          (c)     In the event that the Research Program is
terminated pursuant to this Section 4.11, VRI's right to receive any unpaid
balance otherwise committed by PMC as support commitment pursuant to Section 4.7
hereof will become forfeited and no further payments with respect to the
Research Program will be due to VRI by PMC except to the extent that such funds
are needed to pay actual and non-cancelable obligations of VRI accrued to that
date.

                 4.12 Confidentiality. In order to facilitate the operation of
the Research Program, either party may disclose confidential or proprietary
information owned or controlled by it to the other. It is hereby understood and
agreed that such information shall be deemed "Proprietary Information" and
treated as such in accordance with Article 7.

                 4.13 Results of the Research Program

                          (a)     [****]

                          (b)     [****]

                          (c)     [****]

                          (d)     [****]

                                      -13-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                          (e)     [****]

                          (f)     [****]

                          (g)     [****]

                          (h)     [****]

                 4.14         [****]

                                   ARTICLE 5

                              TERM AND TERMINATION

                 5.1 Term. This Agreement shall become effective as of the
Effective Date and, unless earlier terminated pursuant to the other provisions
of this Article 5, shall continue in full force and effect as long as PMC is
obligated to pay royalties under this Agreement. PMC's license under Section 2.1
with respect to the Licensed Know-How shall survive the expiration, but not an
earlier termination, of this Agreement.

                 5.2 Termination for Breach. In the event of a material breach
of this Agreement the nonbreaching party in addition to any other remedy which
it may have shall be entitled to terminate this Agreement following written
notice of such breach to the breaching party. If such breach is not cured within
sixty (60) days after written notice is given by the non-breaching party to the
breaching party specifying the breach, the non-breaching party may terminate the
Agreement forthwith upon written notice to the breaching party after expiration
of such sixty (60) day period.

                 5.3 Termination by PMC. (a) Any provision herein
notwithstanding, after completing PMC's funding obligation under Article 4, PMC
may terminate this Agreement at any time by giving VRI at least one hundred and
eighty (180) days prior written notice.

                          (b)     PMC may terminate its license with respect to
any Licensed Product by one hundred and eighty (180) days prior written notice
to VRI, and thereafter such Licensed Product(s) shall no longer be licensed
under this agreement.

                          (c)     In the event of a termination under Section
5.3 (a) all rights granted herein to PMC shall forthwith revert to VRI [****].

                                      -14-

<PAGE>

                 5.4 Survival.

                          5.4.1   Termination of this Agreement for any reason
shall not release either party hereto from any liability which at the time of
such termination has already accrued to the other party.

                          5.4.2   In the event this Agreement is terminated for
any reason, PMC and its Affiliates and sublicensees shall have the right to sell
or otherwise dispose of the stock of any Licensed Product then on hand, all
subject to the payment to VRI of fees and royalties pursuant to Article 3
hereof.

                          5.4.3   Articles 7, 11 and 12, and Sections 2.5, 5.,
5.5, 8.4, 10.3 and 10.4, shall survive the expiration and any termination of
this Agreement. Except as otherwise provided in Section 5.1 and Section 5.4.3,
all rights and obligations of the parties under this Agreement shall terminate
upon the expiration or termination of this Agreement.

                 5.5 In the event that PMC's rights and licenses under this
Agreement are terminated, PMC agrees not to make, use or sell Licensed Products
except as permitted by Article 5.4.2.

                 5.6 Either party may terminate this Agreement on notice if the
other party makes a general assignment for the benefit of creditors, is the
subject of proceedings in voluntary or involuntary bankruptcy or has a receiver
or trustee appointed for substantially all of its property; provided that in the
case of an involuntary bankruptcy proceeding such right to terminate shall only
become effective if the other party consents thereto or such proceeding is not
dismissed within ninety (90) days after the filing thereof. If, in connection
with bankruptcy proceedings involving a party, an election is made by or on
behalf of such party to reject the obligations of this Agreement and the other
party elects to retain its rights to intellectual property hereunder pursuant to
Section 365 n.1 of the Bankruptcy Code (USA), such other party shall be entitled
to enforce any rights exclusively granted to it in respect of intellectual
property hereunder by commencement of any action it deems necessary to that
effect against third-party infringers and may do so in the name and stead of the
bankrupt party.

                                   ARTICLE 6

                           PATENTS AND INFRINGEMENTS

                 6.1 Prosecution by VRI. VRI shall have the right, at PMC's
expense, to control the filing for, prosecution and maintenance of the Patent
Rights in the Territory. In the event that VRI grants any license in a country
of the Territory with respect to any Patent Right, then thereafter PMC's
obligation to pay patent costs for Patent Rights in such country shall be an
amount equal to the total cost therefor multiplied by a fraction having as a

                                      -15-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

numerator one and as a denominator the total number of licenses granted by VRI
in respect of such Patent Rights in such country. VRI hall keep PMC reasonably
informed as to the status of the Patent Rights in the Territory, and shall
provide PMC with copies of all proposed filings and correspondence of a
substantive nature with respect to patents or applications within the Patent
Rights to be made with or sent to the United Sates Patent and Trademark Office
or its counterpart in any country of the Territory (each, a "Patent Authority").
VRI shall also provide to PMC copies of all correspondence that it receives from
a Patent Authority with respect to the Patent Rights and shall consider any
comments of PMC with respect thereto.

                 6.2 Infringement Claims. If the production, sale or use of a
Licensed Product results in any claim for infringement of a patent or other
proprietary right of a third party against PMC, its Affiliates or sublicensees,
PMC shall promptly notify VRI thereof in writing. As between the parties to this
Agreement, PMC shall have the right at its own expense to defend and control the
defense of any such claim against PMC, by counsel of PMC's own choice.

                 6.3 Enforcement of Patent Rights. (a) In the event that any
Patent Rights are infringed by a third party with respect to an Exclusive
Vaccine or Co-Exclusive Vaccine in the Field in the Territory, with the consent
and approval of VRI (which shall not be unreasonably denied and shall be deemed
to have been granted if VRI shall be in voluntary or involuntary bankruptcy
proceedings, other than a proceeding such as Chapter 11 where the debtor
continues to operate the business), PMC and/or its Affiliates or sublicensees
shall have the right (except as provided below), but not the obligation, to
institute, and prosecute any action or proceeding under the Patent Rights with
respect to such infringement, by counsel of its choice, including any
declaratory judgment action arising from such infringement. Any amounts
recovered from third parties with respect to the Patent Rights in such action
shall be applied first to reimburse the expenses of the action; then to the
extent the award [****]. PMC shall not have the right to settle, compromise or
take any action in such litigation which diminish, limit or inhibit the scope,
validity or enforceability of the Patent Rights without the express written
permission of VRI. PMC shall keep VRI advised of the progress of such
proceedings.

                 6.4 In the event that a third party is infringing the Patent
Rights with respect to an Exclusive Vaccine or Co-Exclusive Vaccine in the
Territory in the Field and PMC does not elect to institute an action, VRI shall
have the right, but not the obligation, to commence an infringement suit under
the Patent Rights against such infringer and retain any recovery; provided that
it so notifies PMC. If VRI commences a suit in accordance with this Section 6.4,
PMC shall have the [****] expenses thereof. If PMC elects to so
participate,[****]. VRI shall have the right to control such action with counsel
of its choice.

                                      -16-

<PAGE>

                 6.5 VRI Participation. In VRI's sole discretion, VRI shall be
entitled to participate at its expense through counsel of its choosing in and
control any legal action by or against PMC affecting the validity or
enforceability of the patents on which Patent Rights are based, and PMC may
elect to participate in any such action to the extent necessary to defend its
own interests.

                 6.6 Each party agrees to cooperate with each other with respect
to any litigation under Sections 6.2, 6.3 or 6.4.

                                   ARTICLE 7

                                CONFIDENTIALITY

                 7.1 Nondisclosure. Except as otherwise provided in this
Agreement, a party receiving (the "Receiving Party") any business or technical
information ("Proprietary Information") that is disclosed to it by the other
party the ("Disclosing Party") shall for a period beginning on the Effective
Date and ending ten (10) years after the termination of this Agreement hold in
confidence and not disclose to any third party the "Proprietary Information". In
addition, the Receiving Party shall not use Proprietary Information that it
receives from the Disclosing Party, except as is reasonably necessary to
exercise the rights granted to the Receiving Party under Article 2 or Article 6
of this Agreement. Notwithstanding the foregoing, with the prior written
permission of the Disclosing Party (which shall not be unreasonably withheld),
the Receiving Party may disclose information concerning the Patent Rights and/or
the Licensed Know-How to actual or prospective sublicensees or to other third
parties with whom the Receiving Party is considering or has entered into a
business relationship, all of whom are similarly bound in writing under a
reasonable confidentiality agreement. Proprietary Information of a party shall
not include:

                          7.1.1   Information which is or was published or has
become generally available to the public through no fault of the Receiving
Party;

                          7.1.2   Information which the Receiving Party can
document is or was in its possession at the time of disclosure or was
independently developed by the Receiving Party; or

                          7.1.3   Information which is rightfully acquired by
the Receiving Party from a third party who is not under an obligation of
confidentiality to the disclosing party, and to the best of the Receiving
Party's knowledge and belief is entitled to rightfully make such disclosure, but
only to the extent the Receiving Party complies with any restrictions imposed by
the third party.

                 7.2 Exceptions. The Receiving Party may disclose Proprietary
Information of the other, in connection with the order of a court of law or
administrative or governmental authority provided that the Receiving Party
exerts reasonable efforts to preserve the

                                      -17-

<PAGE>

confidentiality thereof and the disclosing party is given an opportunity to
protect the confidentiality thereof, or as is reasonably necessary in connection
with the labeling of its products that are otherwise sold in compliance with
this Agreement or as required for obtaining regulatory approval of Licensed
Product, provided that the Receiving Party protects the confidentiality thereof
to the fullest extent possible.

                 7.3 Notwithstanding anything else to the contrary, PMC agrees
that Licensed Know-How, or Proprietary Information received from VRI shall be
used by PMC only in and for Licensed Products and their development for sale in
the Territory in the Field, all in accordance with this Agreement, and can only
be used by PMC for so long as and to the extent that PMC maintains a license
under this Agreement.

                 7.4 Notwithstanding anything else to the contrary and subject
to Section 5.1, in the event that PMC's rights and licenses under this Agreement
are terminated, PMC agrees a) not to use Licensed Know-How, or any Proprietary
Information provided to PMC by VRI or any information developed by PMC which is
derived from or is based on Licensed Know-How for the research, development,
making, or using or selling of any product or process, including, but not
limited to Licensed Products and (b) not to do any of the foregoing while this
Agreement is in force for any product except as licensed under this Agreement.

                 7.5 Notwithstanding anything else to the contrary, VRI agrees
that PMC Mucosal Delivery Technology licensed to it by PMC hereunder may be used
only in a manner consistent with the provisions of this Agreement. VRI's
licenses herein shall survive the expiration of the term hereof but not an
earlier termination of this Agreement except as provided in Section 5.3(c).

                                   ARTICLE 8

                         REPRESENTATIONS AND WARRANTIES

                          8.1.1 VRI and PMC each represents and warrants to
the other that each has the full right and authority to enter into this
Agreement and grant the rights and licenses granted herein;

                          8.1.2   VRI represents and warrants to PMC that it
has not previously granted and, prior to termination of this Agreement, will not
grant any rights in the Patent Rights or the Licensed Know-How that are
inconsistent with the rights and licenses granted to PMC herein;

                          8.1.3   To the best of VRI's knowledge, there is no
pending or threatened claim or litigation to which VRI is a party contesting the
validity or right to use any of the Patent Rights, and VRI has not received any
notice of infringement with respect to Patent Rights.

                                      -18-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                 8.2 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
SECTION 8.1 ABOVE, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT, OR VALIDITY OF ANY PATENT RIGHTS ISSUED OR PENDING.

                 8.3 Effect of Representations and Warranties. Subject to
Section 8.4, it is understood that if the representations and warranties under
this Article 8 are not true and accurate and PMC incurs liabilities, costs or
other expenses as a result of such falsity, VRI shall indemnify and hold PMC
harmless from and against any such liabilities, costs or expenses incurred,
provided that VRI receives prompt notice of any claim against PMC resulting from
or related to such falsity and the sole right to control the defense or
settlement thereof.

                 8.4 Limitation of Liability. Notwithstanding anything else to
the contrary, VRI's liability for any breach of this Agreement (including but
not limited to any liability which results from any breach of any representation
or warranty) is limited to the payments received or to be received from PMC
under this Agreement. This Limitation on Liability shall not be applicable to
intentional misconduct on the part of VRI or where PMC, as a result of such
breach, is liable to a third party in excess of such Limitation on Liability.

                                   ARTICLE 9

                                 DUE DILIGENCE

                 9.1 General. PMC shall use commercially reasonable efforts to
research, develop, register, market and sell and to continue to market and sell
each Licensed Product in each country of the Territory; [****]. Upon a failure
by PMC to meet its obligations under this Section 9.1 with respect to any
Licensed Product in any country (directly or through a sublicensee), VRI shall,
among other remedies available to it, [****]

                 9.2 PMC shall promptly notify VRI, in writing, if at any time
PMC does not intend to continue to research, develop and/or obtain regulatory
approval for and/or market and sell any Licensed Product in any country of the
Territory.

                 9.3 In the event that PMC provides VRI with notice pursuant to
Section 9.2 with respect to any Licensed Product or with respect to any
country(ies) the rights herein

                                      -19-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

granted by VRI to PMC to such Licensed Product in such country(ies), upon
written notice from VRI to PMC shall revert to VRI.

                 9.4 In the event that PMC does not meet any of the milestones
set forth in Exhibit C (as the same may be extended as indicated herein) for any
of the Licensed Products set forth in Exhibit C, VRI shall have the right to
[****]. PMC shall have the right to a [****] and the Parties shall agree on a
reasonable period for such extension. Exhibit C shall be appropriately revised
to reflect such extension. In addition, PMC shall have the right to extend each
of the milestones of Exhibit C, if not achieved, [****]. The parties agree to
set similar milestones for [****]

                 9.5 PMC shall provide written reports to VRI on June 30th and
December 31st of each year concerning the efforts being made in accordance with
Section 9.1 with respect to the Licensed Product. PMC shall provide VRI with any
additional information reasonably requested by VRI in this respect. Such reports
shall be considered to be Proprietary Information of PMC.

                                   ARTICLE 10

                             ACCOUNTING AND RECORDS

                 10.1 Reports. PMC agrees to make quarterly written reports to
VRI within sixty (60) days after the end of each calendar quarter in which
royalties are due under this Agreement, stating in each such report the number,
description, and aggregate Net Sales of Licensed Products sold during the
calendar quarter and upon which a fee or royalty is payable under Article 3
above. The report shall also include the calculation of Net Sales all on a
country by country and Licensed Product by Licensed Product basis. The report
shall be due with respect to sales of Licensed Product sold by PMC sixty (60)
days after the end of the calendar quarter and with respect to sales of Licensed
Product by sublicensees, ninety (90) days after the end of a calendar quarter.
If no such sales have been made, by PMC, its Affiliates and sublicensees, the
report shall so state.

                 10.2 Payment. Concurrently with the making of each such report
of Section 10.1, PMC shall pay to VRI the royalties at the rate specified in
Article 3 above. All payments by PMC to VRI hereunder shall be made in U.S.
Dollars. If any currency conversion shall be required in connection with the
calculation of royalties hereunder, such conversion shall be made by using the
rate of exchange published in the Wall Street Journal for the last business day
of the applicable calendar quarter.

                                      -20-

<PAGE>

                 10.3 Withholding Taxes. Any withholding or other tax that PMC
or any of its Affiliates are required by statute to withhold and pay on behalf
of VRI with respect to the royalties payable to VRI under this Agreement shall
be deducted from said royalties and paid contemporaneously with the remittance
to VRI; provided, however, that in regard to any tax so deducted PMC shall
furnish VRI with proper evidence of the taxes paid on its behalf. VRI will
furnish PMC with appropriate documents to secure application of the favorable
rate of withholding tax under applicable tax treaties.

                 10.4 Records; Inspection.

                          10.4.1    PMC shall keep complete, true and accurate
books of account and records for the purpose of determining the amounts payable
to VRI under this Agreement. Such books and records shall be kept at PMC's
principal place of business for at least three (3) years following the end of
the calendar quarter to which they pertain, and will be open for inspection
during such three (3) year period by a representative of VRI for the purpose of
verifying PMC's royalty statements. Such inspections may be made no more than
once each calendar year, during normal business hours and upon thirty (30) days
prior notice. Any such information shall be considered to be Proprietary
Information of PMC.

                          10.4.2    Inspections conducted under this Section
10.4 shall be at the expense of VRI, unless an underpayment exceeding five
percent (5%) of the amount paid for the period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
thereto will be paid by PMC, as well as any unpaid royalties within the thirty
(30) days after requested by VRI.

                                   ARTICLE 11

                         INDEMNIFICATION AND INSURANCE

                 11.1 PMC shall defend, indemnify and hold harmless VRI,
Affiliates or VRI and its licensors, and its respective directors, officers,
shareholders, agents, consultants and employees (collectively, the
"Indemnitees") from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, costs or judgments which may be made or instituted against any of the
Indemnitees arising out of the manufacture, design, possession, distribution,
use, testing, sale or other disposition by or through PMC and/or Affiliates of
PMC and/or licensees of either PMC or Affiliates of PMC of any Licensed Product
and/or any product or process in connection with or arising out of the Patent
Rights or Licensed Know-How and/or any material provided by PMC or Affiliates of
PMC under this Agreement (in each case, other than any claims, demands, costs or
judgments arising out of, based upon or resulting from infringement of the
intellectual property rights of a third party based upon the use of
polyphosphazene as a part of a mucosally delivered vaccine PMC's obligation to
defend, indemnify and hold harmless shall include any and all such claims,
demands, costs or judgments, including but not limited to

                                      -21-

<PAGE>

money damages arising from alleged personal injury (including death) to any
person or alleged property damage. PMC shall have the right to control the
defense of any action which is to be indemnified in whole by PMC hereunder,
including the right to select counsel (which shall be reasonably acceptable to
VRI) to defend the Indemnitees and to settle any claim as to which the
Indemnitees are fully indemnified by PMC. Notwithstanding the foregoing, PMC
shall have no obligation to indemnify or hold any Indemnitee harmless with
respect to any claim, demand, cost or judgment that results or is alleged to
result from the willful misconduct or negligence of an Indemnitee nor to the
extent that VRI has the obligation to indemnify under a Supply Agreement entered
into between the parties pursuant to Section 2.7. If PMC does not provide
counsel to defend the Indemnitees, VRI shall have the right to select counsel
and PMC shall pay the reasonable costs and expenses of said counsel. The
provisions of this paragraph shall survive and remain in full force and effect
after any termination, expiration or cancellation of this Agreement and PMC's
obligation hereunder shall apply whether or not such claims are rightfully
brought.

                                   ARTICLE 12

                                 MISCELLANEOUS

                 12.1 Publicity. VRI and PMC shall cooperate in the preparation
of a mutually agreeable press release and other publicity disclosing the
existence of this Agreement and their business relationship. Except for
information disclosed in such a mutually agreed press release or publicity,
neither PMC nor VRI shall disclose the existence or any terms of this Agreement
without the prior written consent of the other party, except for such limited
disclosure as may be reasonably necessary to either party's bankers, investors,
attorneys or other professional advisors, or in connection with a merger or
acquisition, or as may be required by law in the offering of securities or in
securities regulatory filings or otherwise.

                 12.2 Waiver. It is agreed that no waiver by either party hereto
of any breach or default of any of the covenants or agreements herein set forth
shall be deemed a Waiver as to any subsequent and/or similar breach or default.

                 12.3 Independent Contractors. The relationship of the parties
hereto is that of independent contractors. Neither party hereto is an agent,
partner or joint venturer of the other for any purpose.

                 12.4 Compliance with Laws. In exercising its rights under this
license, PMC shall fully comply with the requirements of any and all applicable
laws, regulations, rules and orders of any governmental body having jurisdiction
over the exercise of rights under this license.

                 12.5 Notices. Any notice required or permitted to be given to
the parties hereto shall be deemed to have been properly given if delivered in
person or when received if

                                      -22-

<PAGE>

mailed by first-class certified mail or sent by facsimile to the other party at
the appropriate address as set forth below or to such other addresses as may be
designated in writing by the parties from time to time during the term of this
Agreement.

                     VRI:                  VIRUS RESEARCH INSTITUTE, INC.

                                           61 Moulton Street
                                           Cambridge, Mass. 02138
                                           Attention:  Chief Executive Officer

                     PMC:                  PASTEUR MERIEUX SERUMS El VACCINS
                                           58 Avenue Leclerc
                                           Lyon, France
                                           Attention:  V.P. Product Development

                     With Copy to:         V.P.  Secretary & General Counsel

                 12.6 Complete Agreement. It is understood and agreed between
VRI and PMC that this Agreement constitutes the entire agreement with respect to
the subject matter of this Agreement, both written and oral, between the
parties, and that all prior agreements respecting the subject matter hereof,
either written or oral, expressed or implied, shall be abrogated, cancelled, and
are null and void and of no effect. No amendment or change hereof or addition
hereto shall be effective or binding on either of the parties hereto unless
reduced to writing and executed by the respective duly authorized
representatives of each of the parties hereto.

                 12.7 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties shall exert best efforts to amend
this Agreement to include a provision which is valid, legal and enforceable and
which carries out the original intent of the parties. In the event that such a
provision cannot be included in the Agreement and the absence thereof materially
changes a party's obligations or rights under this Agreement, such party shall
have the right to terminate this Agreement.

                 12.8 Counterparts and Headings. This Agreement may be executed
in counterparts, each of which shall be deemed to be an original and both
together shall be deemed to be one and the same agreement. All headings and any
cover page or table of contents are inserted for convenience of reference only
and shall not affect its meaning or interpretation.

                 12.9 Governing Law. All matters affecting the interpretation,
validity and performance under this Agreement shall be governed by the internal
laws of the Commonwealth of Massachusetts without regard for its conflict of
laws principles.

                                      -23-

<PAGE>

                 12.10 Force Majeure. If and to the extent that either party
hereto is prevented, by circumstances not now reasonably foreseeable and not
within its reasonable ability to control, from performing any of its obligations
under this Agreement (other than payment obligations) and promptly so notifies
the other party giving full particulars of the circumstances in question, then
the party affected shall be relieved of liability to the other for failure to
perform such obligations, but shall nevertheless use its best efforts to resume
full performance thereof without avoidable delay, and pending such resumption
shall consult with the other party and shall permit and shall use its best
efforts to facilitate any efforts the other party may make to effect the
performance of such obligations by other means. If such failure to perform
continues for a period of more than one (1) year, the other party may terminate
this Agreement by written notice to the non-performing party with respect to the
rights and licenses with respect to those Licensed Products and with respect to
the failure to obtain regulatory approval for a Licensed Product shall not be
considered to be circumstances within this Section 12.10.

                                   ARTICLE 13

                             ASSIGNMENT; SUCCESSORS

                 13.1 This Agreement shall not be assignable by either of the
parties without the prior written consent of the other party (which consent
shall not be unreasonably withheld), except that either party may assign this
Agreement to an Affiliate or to a successor in interest or transferee of all or
substantially all of the portion of the business to which this Agreement
relates.

                 13.2 Subject to the limitations on assignment herein, this
Agreement shall be binding upon and inure to the benefit of said successors in
interest and assigns of VRI and PMC. In order for such assignment to be
effective any such successor or assignee of a party's interest shall expressly
assume in writing the performance of all the terms and conditions of this
Agreement to be performed by said party and such Assignment shall not relieve
the Assignor of any of its obligations under this Agreement.

                 IN WITNESS WHEREOF, both VRI and PMC have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, the day and year first above written.

VIRUS RESEARCH INSTITUTE, INC.       PASTEUR MERIEUX SERUMS ET VACCINS

By:  /s/ J. Barrie Ward              By:  /s/ Herve Tainturier
     ---------------------------          --------------------------------------

Print Name:  J. Barrie Ward          Print Name:  Herve Tainturier
             -------------------                  ------------------------------

                                             Corporate Vice President, Secretary
Title:  Chairman & CEO               Title:  and General Counsel
        ------------------------             -----------------------------------




                                      -24-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                                   EXHIBIT A
                                 PATENT RIGHTS

1.      [****]

2.      [****]

3.      U.S. PATENT NO. 5,053,451 licensed from The Pennsylvania Research
        Corporation

4.      U.S. APPLICATION SERIAL NO. [****]

I.      M.I.T. Case No. 5400

        U.S.  Patent 5,149,543
        "Ionically Cross-Linked Polymeric Mirocapsules"
        By Samdar Cohen, Carmen Bano, Karyn B. Visscher, Marie Chow, Harry B.
        Allcock and Robert S. Langer

        U.S. Patent 5,308,701
        "Ionically Cross-Linked Polymeric Microcapsules"
        By Samdar Cohen, Carmen Bano, Karyn B. Visscher, Marie Chow, Harry B.
        Allcock and Robert S. Langer

        Foreign Patent Applications pending:
        [****]

II.     M.I.T. Case 5743

        U.S. Patent 4,880,662
        "Water-Soluble Phosphazene Polymers Having Pharmacological Applications"
        By Harry R. Allcock, Paul E. Austin and Sukky Kwon

        U.S.S.N.:  434,145 - ABANDONED
        "Water-Soluble Phosphazene Polymers Having Pharmacological Applications"
        By Harry K. Allcock, Paul E. Austin and Sukky Kwon
        Jointly owned with Pennsylvania Research Corporation.

II.     M.I.T. Case No. 3985
        U.S. Patent No. 4,900,556
        "Systems For Delayed And Pulsed Release of Biologically Active
        Substances"

                                      -25-

<PAGE>

         By Herman N. Eisen, Robert S. Langer, Jr. and Margaret A. Wheatley

         U.S. Patent No. 4,921,757
         "System and Apparatus For Delayed And Pulsed Release of Biologically
         Active Substances"
         By Herman N. Eisen, Robert S. Langer, Jr. and Margaret A. Wheatley

IV.      M.I.T. Case No. 3986
         U.S. Patent No. 4,933,185
         "System For Controlled Release of Biologically Active Compounds"
         By Herman N. Eisen, Robert S. Langer, Jr. and Margaret A. Wheatley

Explanatory Notes

         M.I.T. Case No. 4433 -- All patent rights abandoned.
         "Polyphosphazene Matrix System for Drug Delivery Applications"
         By Cato T. Laurencin, Robert S. Langer, Harry R. Allcock and Thomas X.
         Neenan U.S.S.N. 737,921


                                      -26-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                                   EXHIBIT B

                             PMC PROPRIETARY RIGHTS

                                     [****]





                                      -27-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                                   EXHIBIT C

                          MILESTONES TO BE MET BY PMC

                                    [****]




                                      -28-

<PAGE>

The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.

                                   EXHIBIT D

                                RESEARCH PROGRAM

                                     [****]





                                      -29-