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                                                                    EXHIBIT 10.1

                       RESEARCH AND DEVELOPMENT AGREEMENT

        This Research and Development Agreement (the "Agreement") is made as of
the 6th day of March, 1998 between Allergan, Inc., a Delaware corporation
("Allergan"), and Allergan Specialty Therapeutics, Inc., a Delaware corporation
("ASTI").

                                   BACKGROUND

        A. ASTI has been formed for the purpose of research and developing human
pharmaceutical products, including products using Allergan Technology (as
defined below) and commercializing such products, most likely through licensing
to Allergan.

        B. Allergan is engaged in the business of performing research,
development, marketing, manufacture and distribution of therapeutic and
prophylactic products.

        C. ASTI desires that Allergan perform, on behalf of ASTI, research and
development activities directed toward the research and development of ASTI
Products (as defined below) and related activities.

        Now, therefore, the parties agree as follows:

1.      DEFINITIONS.

        For the purposes of this Agreement, the following terms shall have the
meanings set forth below:

        1.1 "Affiliate" shall mean a corporation or any other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the designated party. "Control"
shall mean ownership of at least 50% of the shares of stock entitled to vote for
the election of directors in the case of a corporation, and at least 50% of the
interests in profits in the case of a business entity other than a corporation.

        1.2 "Allergan Technology" shall mean all Proprietary Rights licensed
and/or sublicensed by Allergan and/or its Affiliates pursuant to the Technology
License Agreement.

        1.3 "ALRT" shall mean Allergan Ligand Retinoid Therapeutics, Inc, a
Delaware corporation.

        1.4 "ASTI Product" shall mean any dosage form of a compound which is the
subject of research and development as a potential human pharmaceutical product
which has been recommended by Allergan and accepted by ASTI's Board of Directors
for development as such under this Agreement. Such recommendations may be made
on a Field of Use basis. The following compounds have been selected as the
initial ASTI Products as of the date hereof: (i) Tazarotene (oral), (ii)
Memantine, (iii) AGN 4310 and (iv) a compound to be selected from 

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the RAR alpha-selective agonist class of retinoid compounds for the treatment of
various cancers.

        1.5 "Available Funds" shall mean, as of any date of determination, $200
million plus any investment income earned thereon less (a) the aggregate amount
of all Research and Development Costs paid or incurred by ASTI as of such date,
(b) ASTI's aggregate reasonable ongoing administrative expenses paid or incurred
as of such date and, (c) the aggregate amount of all Technology Fee payments
paid or incurred by ASTI as of such date.

        1.6 "Developed Technology" shall mean Proprietary Rights that (a) are
first generated, conceived or reduced to practice, as the case may be, by
Allergan or by any third party in the course of performing activities undertaken
pursuant to this Agreement or (b) are, in any manner, acquired by, or otherwise
obtained on behalf of, ASTI during the term of this Agreement from persons other
than Allergan and are necessary or useful to the research, development or
commercialization of ASTI Products or Pre-Selection Products.

        1.7 "Developed Technology Product" shall mean any product (other than an
ASTI Product) (i) covered, at the time of sale in a country by one or more
unexpired patents issued in such country that are included in Developed
Technology and (ii) with respect to which Allergan receives any consideration.

        1.8 "Developed Technology Royalties" shall mean the payments made by
Allergan to ASTI with respect to Net Sales of Developed Technology Products.

        1.9 "Distribution" shall mean Allergan's distribution of all of the
outstanding shares of Class A Common Stock of ASTI to Allergan stockholders of
record on February 17, 1998.

        1.10 "Distribution Agreement" shall mean the Distribution Agreement
dated as of the date hereof between Allergan and ASTI.

        1.11 "FDA" shall mean the United States Food and Drug Administration or
any successor agency whose clearance is necessary to market an ASTI Product in
the United States.

        1.12 "Field of Use" shall mean a particular disease state or set of
related disease states.

        1.13 "License Option" shall mean the option granted to Allergan pursuant
to the License Option Agreement.

        1.14 "License Option Agreement" shall mean the License Option Agreement
dated as of the date hereof between Allergan and ASTI.

        1.15 "Major Market Country" shall mean any of the following countries:
United States, France, Germany, Italy, Japan or the United Kingdom.

        1.16 "Net Sales" shall mean, with respect to any Licensed Product,
Developed Technology Product or Pre-Selection Product, the amount billed by
Allergan or its Affiliates to a third party which is not an Affiliate of the
selling party (unless such Affiliate is the end user of 


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such product, in which case the amount billed therefor shall be deemed to be the
amount that would be billed to a third party in an arm's length transaction) for
sales of such Licensed Product, Developed Technology Product or Pre-Selection
Product to third parties less the following items, as allocable to such Licensed
Product, Developed Technology Product or Pre-Selection Product: (i) trade
discounts, credits or allowances, (ii) credits or allowances additionally
granted upon returns, rejections or recalls (except where any such recall arises
out of Allergan's or its Affiliate's gross negligence, willful misconduct or
fraud), (iii) freight, shipping and insurance charges, (iv) taxes, duties or
other governmental tariffs (other than income taxes) and (v) government mandated
rebates.

        1.17 "Pre-Selection Work" shall mean research and pre-clinical
development work involving one or more product candidates owned or controlled by
Allergan or a third party undertaken in order to determine the suitability of
such candidate for research and development by ASTI.

        1.18 "Pre-Selection Product" shall mean a product, other than one which
becomes an ASTI Product, for which ASTI funds Pre-Selection Work.

        1.19 "Pre-Selection Product Payments" shall mean the payments made by
Allergan to ASTI pursuant to Section 7.4 with respect to Net Sales of
Pre-Selection Products.

        1.20 "Product Candidate" shall mean a potential ASTI Product or
potential Pre-Selection Product for which Allergan proposes a Work Plan in
accordance with Section 2.2.

        1.21 "Product Research and Development Program" shall mean a program to
conduct research and development with respect to an ASTI Product.

        1.22 "Proprietary Rights" shall mean data, inventions, information,
processes, know-how and trade secrets, and patents or patent applications
claiming any of the foregoing, owned by, licensed to or controlled by a person
and which such person has the right to license or sublicense. Proprietary Rights
shall not include trademarks.

        1.23 "Purchase Option" shall mean that certain option contained in
ASTI's Restated Certificate of Incorporation pursuant to which Allergan has the
right to purchase all of the outstanding shares of ASTI Class A Common Stock.

        1.24 "Research and Development Costs" shall mean the cost of the
activities undertaken pursuant to this Agreement, determined in accordance with
Exhibit A hereto.

        1.25 "Specialty Royalty Payments" shall mean front-end distribution
fees, prepaid royalties or similar one-time, infrequent or special payments from
a sublicensee to Allergan with respect to a Licensed Product, a Developed
Technology Product or a Pre-Selection Product.

        1.26 "Sublicensing Revenues" shall mean percentage-of-sales payments and
Specialty Royalty Payments received by Allergan from sublicensees with respect
to a Licensed Product, a Developed Technology Product or a Pre-Selection
Product.

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        1.27 "Technology Fee" shall mean payments to be made over a maximum
period of four (4) years by ASTI to Allergan pursuant to the Technology License
Agreement.

        1.28 "Technology License Agreement" shall mean the Technology License
Agreement dated as of the date hereof between Allergan and ASTI.

        1.29 "Therapeutic Agent" shall mean a drug, protein, peptide, gene,
compound or other pharmaceutically active ingredient.

        1.30 "Work Plan" shall mean a work plan for research and development of
a potential ASTI Product or potential Pre-Selection Product including cost
estimates.

2.      PRODUCT RESEARCH AND DEVELOPMENT PROGRAM.

        2.1 PRODUCT CANDIDATE IDENTIFICATION PROCESS. On or before March 31,
1998 and at least annually thereafter, Allergan shall provide ASTI with a
proposed Work Plan covering activities to be undertaken by Allergan to identify
and conduct research and development with respect to Product Candidates for
consideration by ASTI under Sections 2.2, 2.3 and, as applicable, Section 2.4.
Promptly after Allergan provides ASTI with such proposed Work Plan, ASTI shall
notify Allergan of its acceptance or rejection of such proposed Work Plan.

        2.2 PRODUCT CANDIDATE SELECTION.

               (A) From time to time during the term of this Agreement, Allergan
shall present ASTI with Product Candidates recommended by Allergan for research
and development as ASTI Products, together with preliminary lifetime plans that
provide, for each such Product Candidate, an estimate of the total Research and
Development Costs for the Product Research and Development Program for such
Product Candidate through FDA review for clearance to market the resulting
product, milestones (including the timetable for the development of the
resulting product), detailed Work Plans for the first proposed stage of the
Product Research and Development Program and any other factors that Allergan
deems appropriate to determine whether to recommend the Product Candidate for
research and development.

               (B) Promptly after Allergan recommends a Product Candidate for
research and development to ASTI, ASTI shall notify Allergan in writing of its
acceptance (in whole or in part) or rejection (in whole or in part) of the
initial Work Plan included with such recommendation. Upon written acceptance (in
whole or in part) of a Work Plan for a Product Candidate under this Section 2.2,
such Product Candidate shall be deemed to be an ASTI Product.

               (C) If ASTI fails to accept a recommended Product Candidate for
research and development as an ASTI Product within 120 days of recommendation by
Allergan, then, subject to Section 7.4, ASTI shall have no rights with respect
to such Product Candidate; provided, however, that, at any time during the term
of this Agreement, ASTI may request Allergan to perform a Product Research and
Development Program for such Product Candidate and Allergan shall undertake its
duties with respect to such Product Research and Development Program, all in


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accordance with this Section 2 and Section 3, unless, at the time of such
request, Allergan is then undertaking the research and development of such
Product Candidate for its own account or with a third party, or Allergan is
otherwise not permitted to undertake such research or development hereunder
because of an arrangement with a third party.

        2.3 ASTI PRODUCTS AND PRE-SELECTION WORK. ASTI shall fund the Research
and Development Costs under Allergan approved Work Plans in accordance with
Section 4.1 for each of the initial ASTI Products specified in Section 1.4 and
for the Pre-Selection Work described in Exhibit B during the period from the
date on which ALRT ceased such funding (October 23, 1997) through March 31,
1998. On or before March 31, 1998, Allergan shall provide ASTI with a proposed
Work Plan and a lifetime plan for the continued development of each of such
initial ASTI Products and such initial Pre-Selection Work. On or before March
31, 1998, ASTI shall notify Allergan in writing of its acceptance (in whole or
in part) or rejection (in whole or in part) thereof.

        2.4 PRE-SELECTION WORK. From time to time during the term of this
Agreement, Allergan may provide ASTI with a proposed Work Plan covering one or
more Pre-Selection Work projects with respect to Product Candidates which
Allergan designates as Pre-Selection Products. Promptly after Allergan provides
ASTI with such proposed Work Plan, ASTI shall notify Allergan of its acceptance
(in whole or in part) or rejection (in whole or in part) of such proposed Work
Plan. Allergan may propose to ASTI at any time that any Pre-Selection Product
(including any Pre-Selection Product relating to the Pre-Selection Work referred
to on Exhibit B) become an ASTI Product by complying with the procedures set
forth in Section 2.2. So long as an IND has not been filed with respect to a
Pre-Selection Product, Allergan may at any time, by providing notice to ASTI
(the "Reversion Notice"), cause all rights with respect to such Pre-Selection
Product to revert to Allergan, subject to Allergan's obligations to pay
Pre-Selection Product Payments and Developed Technology Royalties.

        2.5 PARTIAL ACCEPTANCE. If ASTI accepts or rejects a Work Plan in part,
Allergan may either (i) perform the activities under the Work Plan as approved
by ASTI or (ii) propose a modified Work Plan to ASTI for approval.

3.      RESEARCH AND DEVELOPMENT PROGRAMS; ALLERGAN SERVICES.

        3.1 PRODUCT DEVELOPMENT--ASTI OBLIGATIONS. Once ASTI accepts a Work Plan
for an ASTI Product or a Pre-Selection Work pursuant to Section 2.2, 2.3 or 2.4,
ASTI shall use diligent efforts to complete such Work Plan, as amended from time
to time. ASTI shall request that Allergan or a third party perform the
activities under each such Work Plan; provided, however, that Allergan's prior
written consent shall be required for a third party to perform any activities
that involve Allergan Technology or that could affect Allergan's rights under
any agreement between Allergan and ASTI or Allergan's rights as holder of the
Class B Common Stock of ASTI. ASTI shall use diligent efforts to cause each
third party other than Allergan (or a third party engaged by Allergan) to
perform diligently the activities assigned it under a Work Plan.

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        3.2 PRODUCT DEVELOPMENT--ALLERGAN OBLIGATIONS; OTHER ALLERGAN
ACTIVITIES. ASTI hereby engages Allergan to perform product identification,
evaluation, research, development and related activities in accordance with the
tasks assigned to Allergan under the Work Plans accepted under Section 2, and to
undertake such other activities as the parties may agree. Allergan diligently
shall perform or cause to be performed such activities. In connection therewith,
Allergan shall make available such of its scientific and other personnel, and
shall take such steps as it deems necessary in order to perform its obligations
in accordance with the terms hereof, but Allergan is not obligated to devote any
specific amount of time or resources to activities hereunder. Allergan shall
have full discretion to determine from time to time the allocation of resources
of Allergan (facilities, equipment and personnel) that are available for
activities hereunder, and to determine from time to time the allocation of
resources of Allergan among such activities. ASTI understands, acknowledges and
agrees that Allergan may devote substantial time and resources to research and
development activities for other persons and for its own account, and as a
result, Allergan may develop and commercialize, or have commercialized, products
competitive with ASTI Products, Pre-Selection Products and Developed Technology
Products.

        3.3 WORK PLANS. The parties understand and acknowledge that it is
difficult to predict accurately the activities that will be necessary to
complete any Work Plan, including the Research and Development Costs thereof,
and that significant uncertainties exist in any product development effort. ASTI
and Allergan shall cooperate in good faith to devise mutually acceptable Work
Plans for Product Research and Development Programs, Pre-Selection Work,
candidate identification activities and such other activities as the parties may
agree. Allergan and ASTI shall review each such Work Plan from time to time, and
with respect to a Work Plan for an ASTI Product no less often than at the end of
each stage of research and development, and shall revise each Work Plan as
appropriate such that each Work Plan remains a best estimate of the work to be
performed to complete the development objectives identified therein and of the
Research and Development Costs thereunder. ASTI shall not be obligated to pay
Research and Development Costs in excess of those provided for in approved Work
Plans, and Allergan shall not be obligated to perform work which would result in
Research and Development Costs exceeding those in approved Work Plans.

        3.4 CONSULTATION. ASTI shall consult with Allergan and shall review with
Allergan from time to time the progress toward completion of the activities
under the Work Plans for each ASTI Product and Pre-Selection Work, including
without limitation, the status in each country for each ASTI Product for which
marketing clearance is being sought.

        3.5 THIRD PARTY RIGHTS. Subject to the terms and conditions of this
Agreement, ASTI shall have discretion to attempt to obtain, using Available
Funds, any Proprietary Rights from any third party that ASTI reasonably
determines to be necessary or useful to conduct any Product Research and
Development Program, Pre-Selection Work or related activities under this
Agreement. Such Proprietary Rights shall be included in the Developed
Technology. The costs of obtaining any such Proprietary Rights shall be included
in the calculation of Research and Development Costs paid by ASTI pursuant to
this Agreement.

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        3.6 DEVELOPMENT ASSETS. Allergan shall own and have the right to use any
clinical supplies, materials and other assets purchased, manufactured or
developed pursuant to approved Work Plans ("Development Assets") and, until such
time as the License Option is exercised with respect to the product to which any
particular Development Asset pertains, shall use such Development Assets solely
in the development of ASTI Products under approved Work Plans.

        3.7 NO USE OF AVAILABLE FUNDS. After either (i) such time as the License
Option for an ASTI Product in a country expires unexercised as to such country
or (ii) an investigational new drug application ("IND") is filed with the FDA
with respect to a Pre-Selection Product which has not been recommended by
Allergan and accepted by ASTI's Board of Directors as an ASTI Product, no
additional Available Funds shall be expended for the research or development of
such ASTI Product for sale in such country or such Pre-Selection Product, as
applicable.

        3.8 NOTICES. Allergan shall notify ASTI within three business days after
Allergan receives notice of clearance to market any ASTI Product in any country.
Allergan shall promptly notify ASTI of the first commercial sale of an ASTI
Product, Developed Technology Product or Pre-Selection Product in any country.

4.      PAYMENT FOR SERVICES; TIMING OF PAYMENTS.

        4.1 PAYMENT OF RESEARCH AND DEVELOPMENT COSTS. In consideration of the
work to be carried out by Allergan hereunder, ASTI shall reimburse Allergan for
all Research and Development Costs incurred by Allergan in accordance with
accepted Work Plans. ASTI shall also reimburse Allergan for (i) Research and
Development Costs incurred with respect to the initial ASTI Products referred to
in Section 1.4 and (ii) Pre-Selection Work described in Exhibit B, which costs
are incurred from the date on which ALRT ceased such funding (October 23, 1997)
through March 31, 1998 in accordance with the Allergan approved Work Plans
therefor in effect as of the date hereof.

        4.2 TIMING OF PAYMENTS. ASTI shall pay to Allergan monthly, in arrears,
all such Research and Development Costs incurred by Allergan during the
preceding calendar month, within 30 days after Allergan's invoice therefor.

        4.3 SUFFICIENCY OF FUNDS. Neither ASTI nor Allergan makes any warranty,
express or implied, that Available Funds will be sufficient to complete the
development of any or all ASTI Products or the other activities contemplated
hereunder.

5.      REPORTS AND RECORDS.

        5.1 PRODUCT RESEARCH AND DEVELOPMENT PROGRAM REPORTS. Within 45 days
after the end of each calendar quarter, Allergan shall provide to ASTI, and ASTI
shall require each third party engaged by ASTI pursuant to Section 3.1 to
provide to ASTI and to Allergan, a reasonably detailed report setting forth (a)
a summary of the work performed hereunder by Allergan or such third party, as
appropriate, and its employees and agents during such quarter; and (b) the total
Research and Development Costs of such activities during such quarter and
cumulatively to date, for each Work Plan.

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        5.2 AVAILABLE FUNDS STATEMENT. Within 45 days after the end of each
calendar quarter, ASTI shall provide to Allergan a statement setting forth, as
of the end of such quarter, the Available Funds remaining.

        5.3 PAYMENT REPORTS. Within 90 days after the end of each calendar
quarter for which payments are due under Section 7.4, Allergan shall render an
accounting to ASTI, on a product-by-product and country-by-country basis, with
respect to all payments due for such quarter under Section 7.4. Such report
shall indicate, for such quarter, the quantity and dollar amount of Net Sales
of, and Sublicensing Revenues with respect to, each Developed Technology Product
and each Pre-Selection Product by Allergan and its Affiliates, sublicensees,
distributors and marketing partners (and their Affiliates), with respect to
which payments are due; provided, however, that if Allergan shall not have
received from any foreign sublicensee, distributor or marketing partner a report
of its (and its Affiliates') sales for such quarter, then such sales shall be
included in the next quarterly report, and payments with respect to such report
shall be due in the next quarter. In case no payment is due for any calendar
quarter, Allergan shall so report. Allergan shall keep accurate records in
sufficient detail to enable the payments due hereunder to be determined.

        5.4 RECORDS; REVIEW BY ACCOUNTANTS. Each of ASTI and Allergan shall keep
and maintain, in accordance with generally accepted accounting principles,
proper and complete records and books of account documenting all Research and
Development Costs and amounts paid or payable by Allergan to ASTI under this
Agreement, in the case of Allergan, and remaining Available Funds, in the case
of ASTI. Each of ASTI and Allergan shall have the right, once in each calendar
year during regular business hours and upon reasonable notice to the other
party, and at its own expense, to examine or to have examined by a certified
public accountant or similar person reasonably acceptable to the other party,
pertinent books and records of one another, for the sole purpose of determining
the correctness of amounts invoiced, paid or due under this Agreement and the
application of Available Funds by ASTI. Such examination shall take place not
later than two years following the year in question, and only one examination
may take place with respect to any period as to which such books and records are
examined. Each party shall obtain, for itself and for the other party, similar
reasonable rights to audit the Research and Development Costs of, and payments
with respect to Net Sales by, each third party engaged by ASTI pursuant to
Section 3.1 or appointed or permitted by Allergan to commercialize any product
as to which payments are due to ASTI hereunder.

6.      TECHNOLOGY LICENSED FOR DEVELOPMENT.

        6.1 LICENSE TO USE ALLERGAN TECHNOLOGY. ASTI hereby grants to Allergan a
sublicense to use the Allergan Technology and the Developed Technology solely
for the purpose of conducting the activities contemplated hereunder.

        6.2 TERMINATION OF LICENSE. Termination of the license granted under the
Technology License Agreement automatically shall terminate the sublicense to the
Allergan Technology granted to Allergan pursuant to Section 6.1.

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7. OWNERSHIP OF ASTI PRODUCTS AND DEVELOPED TECHNOLOGY; PATENTS; PAYMENTS TO
   ASTI.

        7.1 OWNERSHIP OF ASTI PRODUCTS. Unless ASTI agrees otherwise, all ASTI
Products will be owned by ASTI or, in the case of a product licensed from a
third party (or a product incorporating a Therapeutic Agent licensed from a
third party), exclusively licensed to ASTI on a worldwide basis, with the right
to sublicense, and otherwise on terms granting rights substantially similar to
those rights ASTI would have as an owner, in either case subject to the License
Option.

        7.2 OWNERSHIP OF DEVELOPED TECHNOLOGY. As between Allergan and ASTI,
Allergan shall own all Developed Technology, subject to the Technology License
Agreement.

        7.3 PATENTS COVERING DEVELOPED TECHNOLOGY. Allergan shall determine
whether and to what extent to seek and maintain United States and/or foreign
patents covering any Developed Technology. Any such patents and applications
therefor shall be in Allergan's name and shall be owned by Allergan. In the
event that Allergan declines to seek patent protection for any Developed
Technology, ASTI will not have the right to do so. ASTI and Allergan each shall
pay one-half of the costs of obtaining and maintaining any such patents during
the term of this Agreement.

        7.4 PAYMENTS BASED ON SALES OF DEVELOPED TECHNOLOGY PRODUCTS AND
PRE-SELECTION PRODUCTS.

               (A) Allergan shall pay Developed Technology Royalties to ASTI, on
a country-by-country basis, equal to the sum of (i) 1% of Allergan's Net Sales
in the relevant country of each Developed Technology Product plus (ii) 10% of
any Sublicensing Revenues with respect to such Developed Technology Product.
Only one payment under this Section 7.4 shall be payable by Allergan to ASTI
with respect to Net Sales of each Developed Technology Product in any country,
regardless of the number of patents covering such Developed Technology Product
in such country. Subject to Section 7.5, payments with respect to sales of a
Developed Technology Product in any country shall be made by Allergan until the
expiration of the last to expire of the patent or patents covering such
Developed Technology Product in any country.

               (B) Allergan shall make Pre-Selection Product Payments to ASTI
equal to the sum of (i) 1% of Allergan's Net Sales of each Pre-Selection Product
plus (ii) 10% of any Sublicensing Revenues with respect to such Pre-Selection
Product. Subject to Section 7.5, payments with respect to sales of a
Pre-Selection Product shall be made by Allergan until seven years after the
first commercial sale of such Pre-Selection Product in the first Major Market
Country in which such product is commercially sold.

               (C) In determining payments due under this Section 7.4, Net Sales
by Allergan shall be reduced by the dollar amount of any license or similar
payments made by or due from Allergan or its Affiliates to third parties with
respect to any such sales of such Developed Technology Product or Pre-Selection
Product. If license or similar payments are made to third 

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parties with respect to sales of such products and to sales of other products,
Allergan shall allocate such payments, if necessary, in a commercially
reasonable manner.

               (D) Notwithstanding the foregoing, if a product is both a
Developed Technology Product and a Pre-Selection Product, amounts payable under
this Section 7.4 with respect to such product for any period of time shall be
limited to the sum of (i) 1% of Allergan's Net Sales plus (ii) 10% of any
Sublicensing Revenues.

        7.5 BUY-OUT OF PAYMENTS BASED ON SALES OF DEVELOPED TECHNOLOGY PRODUCTS
AND PRE-SELECTION PRODUCTS.

               (A) Allergan shall have the option with respect to each Developed
Technology Product and each Pre-Selection Product, in its discretion, at any
time after the end of the twelfth calendar quarter during which such product was
commercially sold in a country, to buy out its remaining obligation to make
payments under Section 7.4 with respect to sales of such Developed Technology
Product or Pre-Selection Product in such country. The buy out price shall be an
amount equal to 15 times the payments made by or due from Allergan to ASTI under
Section 7.4 with respect to sales of such Developed Technology Product or
Pre-Selection Product in such country for the four calendar quarters immediately
preceding the quarter in which the buy out option is exercised.

               (B) Allergan shall have the option with respect to each Developed
Technology Product and each Pre-Selection Product, in its discretion, at any
time after the end of the twelfth calendar quarter during which such product was
commercially sold in either the United States or two other Major Market
Countries, to buy out its remaining worldwide obligations to make payments under
Section 7.4 with respect to sales of such Developed Technology Product or
Pre-Selection Product. The buyout price shall be an amount equal to (i) 20 times
(A) the payments made by or due from Allergan to ASTI under Section 7.4 with
respect to sales of such Developed Technology Product or Pre-Selection Product,
plus (B) such payments as would have been made by or due from Allergan to ASTI
if Allergan had not exercised any country-specific buy-out option with respect
to such Developed Technology Product or Pre-Selection Product, in each case, for
the four calendar quarters immediately preceding the quarter in which the
buy-out option is exercised, less (ii) any amounts previously paid to exercise
any country- specific buy-out option with respect to such Developed Technology
Product or Pre-Selection Product.

        7.6 PAYMENTS. Payments shown by each calendar quarter report described
in Section 5.3 to have accrued shall be due and payable on the date the report
is due and shall be paid in United States dollars. Any and all taxes due or
payable on such payments or with respect to the remittance thereof shall be
deducted from such payments and shall be paid by Allergan to the proper taxing
authorities, and proof of payment shall be secured and sent to ASTI as evidence
of such payment. The rate of exchange to be used in computing the amount of
United States dollars due to ASTI in satisfaction of payment obligations with
respect to sales in foreign countries shall be calculated by converting the
amount due in such foreign currency into United States dollars based on the rate
for the purchase of United States dollars with such currency as published in the

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Wall Street Journal on the last business day of the calendar quarter for which
payment is being made.

        7.7 CERTAIN FOREIGN PAYMENTS. If governmental regulations prevent
remittance from any foreign country of any amounts due under Section 7.4 with
respect to that country, Allergan shall so notify ASTI in writing, and the
obligation under this Agreement to make payments with respect to sales in that
country shall be suspended (but the amounts due but not paid shall continue to
accrue) until such remittances are possible. ASTI shall have the right, upon
written notice to Allergan, to receive payment in any such country in the local
currency.

        7.8 LATE PAYMENTS. Any payments due hereunder that are not made when due
shall accrue interest at the lesser of 10% per annum or the maximum rate as may
be allowed by law, beginning on the date when ASTI notifies Allergan that such
payments are overdue.

8.      ACCESS TO INFORMATION; CONFIDENTIALITY.

        8.1 ACCESS. Subject to the terms of this Agreement, each party shall be
permitted access to the premises of the other during normal business hours, for
the purpose of monitoring the progress of activities under this Agreement. Each
party shall keep full and complete records and notebooks containing all
experiments performed during its work under this Agreement and the results
thereof. Such items and copies of all documentation shall be available during
normal business hours for inspection by the other party. In addition, each party
shall provide to the other such other information as reasonably may be
requested.

        8.2 THIRD PARTIES. ASTI and Allergan shall cause each third party
engaged pursuant to Section 3.1 or 3.2 to provide access similar to that to be
provided pursuant to Section 8.1, for the benefit of both ASTI and Allergan.

        8.3 PRODUCT LISTS. Allergan shall maintain a complete list of ASTI
Products, Developed Technology Products and Pre-Selection Products at all times.
Confirmation of the completeness and accuracy of such list shall be made at any
time upon the reasonable request of ASTI.

        8.4 CONFIDENTIALITY. During the term of this Agreement and for a period
of ten years following its termination, each party shall maintain in confidence
all Proprietary Rights of the other; provided, however, that nothing contained
herein shall prevent either party from disclosing any Proprietary Rights to the
extent that such Proprietary Rights (a) are required to be disclosed in
connection with researching and developing ASTI Products, conducting
Pre-Selection Work, conducting related activities, securing necessary
governmental authorization for the marketing of ASTI Products or Pre-Selection
Products, or directly or indirectly making, using or selling ASTI Products or
Pre-Selection Products, as permitted or provided for in the agreements between
the parties, (b) are required to be disclosed by law for the purpose of
complying with governmental regulations, (c) are disclosed to sublicensees,
distributors or marketing partners or potential sublicenses, distributors or
marketing partners permitted under the agreements between the parties in
connection with the proposed or actual research, development, manufacturing or
marketing of ASTI Products or Pre-Selection Products, subject to similar
obligations of 

                                      11.
<PAGE>   12
confidentiality on the part of such third parties as required by the agreements
between the parties, (d) are known to or used by the recipient prior to the date
hereof (other than through disclosure by or on behalf of the other party) as
evidenced by the recipient's written records, (e) are lawfully disclosed to the
recipient by a third party having the right to disclose such information to the
recipient, or (f) either before or after the time of disclosure to the
recipient, become known to the public other than by an unauthorized act or
omission of the recipient or any of the recipient's employees or agents;
provided that clause (d) does not give Allergan the right to disclose
Proprietary Rights that relate exclusively to ASTI Products; provided further
that, ASTI may disclose Allergan Proprietary Rights to third parties only in
accordance with the provisions of Section 10.3 hereof and in accordance with the
provisions of the Technology License Agreement. The obligations of each of the
parties pursuant to this Section 8.4 shall survive the termination of this
Agreement for any reason. Any breach of this Section 8.4 may result in
irreparable harm, and in the event of a breach, the aggrieved party shall be
entitled to seek injunctive relief (without the need to post a bond) in addition
to any other remedies available at law or in equity.

9.      PUBLIC DISCLOSURE.

        9.1 PUBLIC DISCLOSURE. The parties will work together with respect to
public statements disclosing the status of and results under Product Research
and Development Programs and related matters. Except to the extent previously
disclosed pursuant to the terms hereof, neither party shall disclose to third
parties nor originate any publicity, news release or public announcement,
written or oral, whether to the public, the press, stockholders or otherwise,
referring to activities conducted, or the parties' performance under, this
Agreement, except such announcements, as in the opinion of the counsel for the
party making such announcement, are required by law, including United States
securities laws, rules or regulations, without the prior written consent of the
other party. If a party decides to make an announcement it believes to be
required by law with respect to this Agreement, it will give the other party
such notice as is reasonably practicable and an opportunity to comment upon the
announcement.

10.     COVENANTS.

        10.1 USE OF AVAILABLE FUNDS. Unless Allergan agrees otherwise, ASTI
agrees to expend all Available Funds for activities undertaken pursuant to this
Agreement. Pending application of all Available Funds as set forth above,
Available Funds shall be invested in securities issued or guaranteed as to
principal and interest by the United States, or by a person controlled or
supervised by or acting as an instrumentality of the government of the United
States pursuant to authority granted by the Congress of the United States, or
any certificate of deposit for any of the foregoing, or any other types of high
quality marketable investment securities that are proposed by ASTI and are
approved by Allergan in its sole discretion.

        10.2 NEGATIVE PLEDGE. ASTI shall not create, incur, assume or suffer to
exist any lien upon or with respect to, or otherwise take any action with
respect to, Available Funds so as to prevent or interfere with full expenditure
of such funds for activities under this Agreement in accordance with Section
10.1.

                                      12.
<PAGE>   13
        10.3 NO INCONSISTENT AGREEMENTS. Without the written consent of
Allergan, ASTI shall not enter into any agreement or arrangement that is in any
way inconsistent with or that could adversely affect Allergan Technology or
Allergan's rights under any agreement between Allergan and ASTI, or that is in
any way inconsistent with or that could adversely affect Allergan's rights as
holder of the Class B Common Stock of ASTI. ASTI must include in any agreement
between ASTI and a third party relating to ASTI Products and/or activities
hereunder such provisions as Allergan reasonably deems appropriate to protect
Allergan Technology and to protect Allergan's rights under any agreement between
Allergan and ASTI and as a holder of the Class B Common Stock of ASTI (including
Allergan's rights under the Purchase Option).

11.     EFFECTIVE DATE;  TERM AND TERMINATION.

        11.1 EFFECTIVE DATE. The effective date of this Agreement shall be the
date of the Distribution.

        11.2 AUTOMATIC TERMINATION. This Agreement shall terminate upon exercise
or expiration of the Purchase Option, except that Allergan's obligations to make
payments to ASTI with respect to Developed Technology Products and Pre-Selection
Products shall continue after expiration of the Purchase Option as provided in
Section 7 hereof.

        11.3 OTHER TERMINATION. Either party may, in its discretion, terminate
this Agreement in the event that the other party:

               (A) breaches any material obligation hereunder or under the
Technology License Agreement, the License Option Agreement, or any license
thereunder, and such breach continues for a period of 60 days after written
notice thereof by the terminating party to the other party; or

               (B) enters into any proceeding, whether voluntary or otherwise,
in bankruptcy, reorganization or arrangement for the appointment of a receiver
or trustee to take possession of its assets or any other proceeding under any
law for the relief of creditors, or makes an assignment for the benefit of its
creditors.

12.     FORCE MAJEURE.

        12.1 FORCE MAJEURE. Neither party to this Agreement shall be liable for
failure or delay in the performance of any of its obligations hereunder, if such
failure or delay is due to causes beyond its reasonable control including,
without limitation, acts of God, earthquakes, fires, strikes, acts of war, or
intervention of any governmental authority, but any such delay or failure shall
be remedied by such party as soon as possible after the removal of the cause of
such failure or delay.

13.     MISCELLANEOUS.

        13.1 WAIVER, REMEDIES AND AMENDMENT. Any waiver by either party hereto
of a breach of any provisions of this Agreement shall not be implied and shall
not be valid unless 

                                      13.
<PAGE>   14
such waiver is recited in writing and signed by such party. Failure of any party
to require, in one or more instances, performance by the other party in strict
accordance with the terms and conditions of this Agreement shall not be deemed a
waiver or relinquishment of the future performance of any such terms or
conditions or of any other terms and conditions of this Agreement. A waiver by
either party of any term or condition of this Agreement shall not be deemed or
construed to be a waiver of any other term or condition of this Agreement. All
rights, remedies, undertakings, obligations and agreements contained in this
Agreement shall be cumulative and none of them shall be a limitation of any
other remedy, right, undertaking, obligation or agreement of either party. This
Agreement may not be amended except in a writing signed by both parties.

        13.2 ASSIGNMENT. Neither party may assign its rights and obligations
hereunder without the prior written consent of the other party, which consent
may not be unreasonably withheld; provided, however, that Allergan may assign
such rights and obligations hereunder to an Affiliate of Allergan or to any
person or entity with which Allergan is merged or consolidated or which acquires
all or substantially all of the assets of Allergan.

        13.3 DISPUTE RESOLUTION. In the event of any dispute, the parties shall
refer such dispute to the CEO of ASTI and the CEO of Allergan for attempted
resolution by good faith negotiations within sixty (60) days after such referral
is made. During such period of good faith negotiations, any applicable time
periods under this Agreement shall be tolled. In the event such executives are
unable to resolve such dispute within such sixty (60) day period, the parties
shall submit their dispute to binding arbitration before a retired California
Superior Court Judge at J.A.M.S./Endispute located in Orange, California, such
arbitration to be conducted pursuant to the J.A.M.S./Endispute procedure rules
for commercial disputes then in effect. The award of the arbitrator shall
include an award of reasonable attorneys' fees and costs to the prevailing
party.

        13.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute this Agreement.

        13.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of California as applied to residents of
that state entering into contracts to be performed in that state.

        13.6 HEADINGS. The section headings contained in sections of this
Agreement are included for convenience only and form no part of the Agreement
between the parties.

        13.7 NOTICES. Notices required under this Agreement shall be in writing
and sent by registered or certified mail, postage prepaid, or by facsimile and
confirmed by registered or certified mail, postage prepaid, and addressed as
follows:

        If to Allergan:   Allergan, Inc.
                          2525 Dupont Drive
                          Irvine, CA 92715
                          Facsimile: (714) 246-4774
                          Attention:  Corporate Vice President, General Counsel

                                       14.
<PAGE>   15
        If to ASTI:       Allergan Specialty Therapeutics, Inc.
                          2525 Dupont Drive
                          Irvine, CA 92612
                          Facsimile: (714) 246-4774
                          Attention:  President and Chief Executive Officer

All notices shall be deemed to be effective five days after the date of mailing
or upon receipt if sent by facsimile (but only if followed by certified or
registered confirmation). Either party may change the address at which notice is
to be received by written notice pursuant to this Section 13.7.

        13.8 SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable, it shall be modified,
if possible, to the minimum extent necessary to make it valid and enforceable
or, if such modification is not possible, it shall be stricken and the remaining
provisions shall remain in full force and effect.

        13.9 RELATIONSHIP OF THE PARTIES. For purposes of this Agreement, ASTI
and Allergan shall be deemed to be independent contractors, and anything in this
Agreement to the contrary notwithstanding, nothing herein shall be deemed to
constitute ASTI and Allergan as partners, joint venturers, coowners, an
association or any entity separate and apart from each party itself, nor shall
this Agreement constitute any party hereto an employee or agent, legal or
otherwise, of the other party for any purposes whatsoever. Neither party hereto
is authorized to make any statements or representations on behalf of the other
party or in any way obligate the other party, except as expressly authorized in
writing by the other party. Anything in this Agreement to the contrary
notwithstanding, no party hereto shall assume or be liable for any liabilities
or obligations of the other party, whether past, present or future.

        13.10 SURVIVAL. The provisions of Sections 1, 7, 8.3, 8.4, 11, 13.1,
13.3, 13.5, 13.6, 13.7, 13.8, 13.9, and this Section 13.10, and of Sections 4
and 5 to the extent of obligations under such sections relating to periods prior
to termination of this Agreement, shall survive the termination for any reason
of this Agreement. Any payments due under this Agreement with respect to any
period prior to its termination shall be made notwithstanding the termination of
this Agreement. Neither party shall be liable to the other due to the
termination of this Agreement as provided herein, whether in loss of good will,
anticipated profits or otherwise.


                                      15.
<PAGE>   16
        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.

                                 ALLERGAN, INC.


                                 By: /s/ LESTER J. KAPLAN
                                     -------------------------------------------
                                 Title: Corporate Vice President, 
                                        Science & Technology
                                        ----------------------------------------

                                 ALLERGAN SPECIALTY THERAPEUTICS, INC.


                                 By: /s/ LESTER J. KAPLAN
                                     -------------------------------------------
                                 Title: Chief Executive Officer
                                        ----------------------------------------

                                       16.
<PAGE>   17
                                    EXHIBIT A

                  CALCULATION OF RESEARCH AND DEVELOPMENT COSTS

        Allergan shall charge ASTI for both "direct" and "indirect" Research and
Development Costs based on Allergan's internal R&D Project Accounting System or
such other comparable successor system as Allergan may use to gather such costs.
Direct costs include third party contract costs, such as those expenses paid to
outside vendors which can be directly identified to a specific research and
development program or project (see Exhibit A1). Indirect costs include the
fully absorbed cost of labor (labor plus overhead) which can be specifically
identified with or physically traced to a project using the Allergan Project
Reporting System. The allocation of such indirect costs is based on timecards
which all Allergan R&D employees who work directly on research and development
projects complete each month (see Exhibit A2).

        In order to fully and fairly allocate all allocable overhead to projects
undertaken by Allergan hereunder, an amount equal to 10% of the total Research
and Development Costs determined in accordance with the above provisions
(exclusive of the costs charged to Allergan or ASTI pursuant to contracts with
third parties for the performance of services related to research and
development hereunder) will also be added to the amount charged to ASTI.

                                      17.
<PAGE>   18
                                   EXHIBIT A1

                      RESEARCH AND DEVELOPMENT DIRECT COSTS

The following is a list of the types of expenses which are considered as
"direct" in Exhibit A and would be billable to ASTI when they can be directly
identified with ASTI research and development:

Collaborative research agreement payments 
Payments for compound supply 
Payments for biologicals 
Payments for chemical precursors 
Payment for clinical studies
Payment for toxicological, pharmacokinetic studies and other outside services
Payment for other Allergan functions (non-R&D) which provide services 
Payment for research grants 
Payment for consulting services 
Hiring expenses for people who will work predominantly on ASTI projects 
Milestone payments to third parties
Project travel, entertainment and related expenses 
Capital equipment purchased exclusively for ASTI projects 
Miscellaneous project expenses 
Regulatory and filing fees 
Telephone and communications 
Patent and trademark expenses 
Software

                                      18.
<PAGE>   19
                                   EXHIBIT A2

                     RESEARCH AND DEVELOPMENT INDIRECT COSTS

The following is a list of the types of expenses which are considered as
"indirect" in Exhibit A and would be billable to ASTI when they can be
identified with ASTI research and development:

Salaries and fringe benefits of people working directly on ASTI projects
Salaries and fringe benefits of people managing and supporting those working
        directly on ASTI projects
General supplies and chemicals
General Information Systems and communications support 
General equipment depreciation 
General facilities depreciation, utilities, rent 
Miscellaneous indirect expenses 
Miscellaneous general and administrative expenses

                                      19.