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1346ictz                                                           Exhibit 10.56
Eo419
23 February 98
                                     LICENSE
                                     -------
                                       AND
                                       ---
                             COLLABORATION AGREEMENT
                             -----------------------

         THIS LICENSE AND COLLABORATION AGREEMENT ("Agreement") is entered into
as of February 27, 1998, between EPIMMUNE INC. ("Epimmune"), and G.D. SEARLE &
CO. ("Searle") (individually a "Party" or collectively the "Parties").

         WHEREAS, Epimmune is the owner of certain valuable know-how and patent
rights relating to certain technology platforms for the treatment and prevention
of cancer; and

         WHEREAS, Searle wishes to obtain licenses to make, have made, use and
sell in vivo and ex vivo immunotherapeutic and prophylactic products using such
technology and to collaborate with Epimmune in the research and identification
of such products for the treatment and/or prevention of cancer; and

         WHEREAS, Epimmune is willing to grant such licenses to Searle and to
collaborate with Searle to develop such pharmaceutical products, subject to the
terms and conditions set forth in this Agreement.

         NOW, THEREFORE, the Parties agree as follows:


ARTICLE 1.  DEFINITIONS.
------------------------

1.1      "ACT" means, as applicable, either (a) the United States Food, Drug and
         Cosmetics Act and applicable regulations thereunder, as amended from
         time to time, or (b) the comparable laws, rules and regulations
         governing the registration, approval and sale of pharmaceutical drugs
         and devices in countries outside of the United States, as amended from
         time to time.

1.2      "AFFILIATE(S)" means any entity which directly or indirectly controls,
         is controlled by or is under common control with a Party. For purposes
         of this definition, "control" shall mean the power to direct or cause
         the direction of the management and policies of an entity, whether
         through ownership of voting securities, by contract or otherwise.

1.3      "COLLABORATION" means the collaborative research activities of the
         Parties under this Agreement pursuant to the Research Plan during the
         Collaboration Term and the oversight by the JMC of the conduct of the
         Initial Development by the JPT.

1.4      "COLLABORATION TERM"  is defined in Section 15.1.1.


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1.5      "CONTROL" means possession of the ability to grant a license or
         sublicense as provided for herein without violating the terms of any
         agreement or arrangement with any Third Party.

1.6      "COST OF GOODS" means the cost of a Product or Product Component, as
         applicable, in bulk or finished form (including samples) calculated in
         accordance with GAAP. Cost of Goods shall include: (a) the cost of
         manufacture for a Product or Product Component, as applicable,
         manufactured by Searle or the amount paid for Product or Product
         Component manufactured by a Third Party; (b) the net cost or credit of
         any value-added taxes or duties actually paid or utilized in respect of
         the Product or Product Component; (c) the cost of freight, insurance
         and other transportation charges for the Product or Product Component
         to the extent not invoiced to Third Parties and (d) the cost of any
         royalty payments paid to Epimmune or Third Parties necessary for the
         manufacture, use or sale of [...***....] For purposes of this
         definition, "cost of manufacture" means the fully allocated cost of
         manufacturing a Product or Product Component, as applicable,
         (calculated in accordance with GAAP applied on a basis consistent with
         Searle's past practices), excluding start up expenses and including the
         direct and indirect cost of any raw materials, packaging materials and
         labor (including benefits) utilized in such manufacturing (including
         formulating, filling, finishing, labeling and packaging, as applicable)
         plus factory overhead (fixed and variable) allocated to such Product or
         Product Component.

1.7      "CYTOKINES" means a growth factor developed and/or owned by Searle or
         developed and/or owned by a Third Party.

1.8      "DEVELOPMENT" means all pre-clinical and clinical development
         activities with respect to a Product following the Product Alert,
         through and including obtaining Regulatory Approval.

1.9      "DEVELOPMENT BUDGET" means, with respect to each Product developed
         hereunder, the budget for the proposed costs to develop such Product
         under the Development Plan.

1.10     "DEVELOPMENT PLAN" means, with respect to each Product developed
         hereunder, the plan for the Development of such Product from the first
         Development activity to its Launch Date.

1.11     "EFFECTIVE DATE" means the later of the date on which this Agreement is
         executed by both Parties or the first business day following the day on
         which all required waiting periods under the Hart-Scott-Rodino
         Antitrust Improvements act of 1976, as amended, have expired or been
         terminated.

                                               CONFIDENTIAL TREATMENT REQUESTED

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1.12     "EPIMMUNE INITIAL TECHNOLOGY" means any Patent Rights and Know-How
         Controlled by Epimmune relating to the development, manufacture, use,
         marketing, sale and/or importation of Products in the Field which exist
         as of the Effective Date.

1.13     "EPIMMUNE PROJECT TECHNOLOGY" means any Patent Rights and Know-How
         invented solely by Epimmune during the course of performing work under
         the Research Plan and/or Development Plan during the Collaboration
         Term.

1.14     "EPITOPE" means the portion of an antigen that makes contact with a
         particular antibody or T cell receptor.

1.15     "FIELD" means in vivo and ex vivo immunotherapeutic and prophylactic
         therapies for the treatment and prevention of cancer.

1.16     "GAAP" means United States generally accepted accounting principles.

1.17     "IMPROVEMENT" means any invention or discovery, patentable or not,
         relating to the use, synthesis or manufacture of Products within the
         Field, that is dominated by the Epimmune Initial Technology, the
         Epimmune Project Technology or the Joint Technology and which comes
         under the Control of Epimmune.

1.18     "INITIAL DEVELOPMENT" means early stage development activities
         following Research up to the issuance of a Product Alert.

1.19     "INTELLECTUAL PROPERTY RIGHTS" means all Patent Rights, trademarks,
         copyrights and/or Know-How relating to the development, manufacture,
         use, marketing, or sale and/or importation of the Products in the Field
         which are Controlled by either Party as of the Effective Date or comes
         under the Control of either Party during the term of this Agreement or
         Controlled jointly by the Parties.

1.20     "JMC" means the Joint Management Committee described in Section 3.2.

1.21     "JPT" means the Joint Project Team described in Section 3.3.

1.22     "JOINT TECHNOLOGY" means any Patent Rights and Know-How invented
         jointly by Epimmune and Searle during the course of performing work
         under the Research Plan and/or Development Plan during the
         Collaboration Term.

1.23     "KEY MARKET(S)" means France, Germany, Italy, Japan, the United Kingdom
         and the United States.


1.24     "KNOW-HOW" means all proprietary, confidential technical information
         and data relating to Products, including, without limitation all data
         relating to synthesis, formulation, manufacture, analytical methods,
         clinical trials, pharmacology and toxicology.


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1.25     "LAUNCH DATE" means, with respect to each Product, the date of the
         first sale of a Product to a Third Party by Searle, its Affiliates or
         sublicensees through customary commercial channels of distribution.

1.26     "NET SALES" means:

                  (a) with respect to any Product, the gross amount invoiced on
         sales of a Product by a Party and/or its Affiliates and/or
         sublicensees, as applicable, to Third Parties, less the following
         items: (i) trade, cash and quantity and promotional discounts actually
         allowed and taken; (ii) excise, sales taxes or other taxes imposed upon
         and paid with respect to such sales (excluding national, state or local
         taxes based on income) as adjusted for rebates or refunds; (iii)
         freight, insurance and other transportation charges invoiced to Third
         Parties; (iv) amounts repaid or credited by reason of rejections,
         defects, recalls or returns; and (v) rebates (including pursuant to
         Medicaid or other similar governmental rebate, discount or chargeback
         programs).

                  (b) with respect to the [...***...] of any Product Type 2, the
         amount equal to the net amount invoiced on sales of a Product Type 2 by
         a Party and/or its Affiliates and/or sublicensees (determined in the
         manner described in (a)) multiplied by the [...***...] (as defined
         below) attributable to such Product Type 2; and

                  (c) with respect to the [...***...] of any Product Type 2, the
         amount equal to the net amount invoiced on sales of a Product Type 2 by
         a Party and/or its Affiliates and/or sublicensees (determined in the
         manner described in (a)) multiplied by the [...***...] (as defined
         below) attributable to such Product Type 2.

         The [...***...] shall mean a fraction, the numerator of which is the
         fair market value of the [...***...] included in the Product Type 2 and
         the denominator of which is the fair market value of all components
         included in the Product Type 2 (e.g., [...***...] and/or other
         ingredients). The [...***...] shall mean a fraction, the numerator of
         which is the fair market value of the [...***...] included in the
         Product Type 2 and the denominator of which is the fair market value of
         all components included in the Product Type 2 (e.g., [...***...] and/or
         any other ingredients). In the event that no market price is available
         for the [...***...], the fair market value shall be determined in good
         faith by the Parties, no later than the Launch Date for such




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         Product Type 2, taking into consideration, but not limited to, such
         factors as a cost/benefit analysis of each Product component and
         Product as a whole, drug profile, ease of use by patient and/or service
         provider, competition and other relevant market factors. In the event
         that the Parties disagree regarding the fair market value, the Parties
         shall resolve such dispute in accordance with Section 19.12 hereof.

1.27     "PADRE" means PAN DR Reactive Epitopes, as described in the Patent
         Rights included in the Epimmune Initial Technology.

1.28     "PATENT RIGHTS" means all claims contained in patents or patent
         applications and all divisions, continuations, continuations-in-part,
         reissues, extensions, renewals, supplementary protection certificates
         and foreign counterparts thereof, existing as of the Effective Date or
         filed or issuing during the Collaboration Term. The Patent Rights
         included in the Epimmune Initial Technology are set forth in Exhibit A.
         The Patent Rights included in the Searle Initial Technology are set
         forth in Exhibit B.

1.29     "PHASE I", "PHASE II", "PHASE III" AND "PHASE IV" means the phases of
         clinical development of pharmaceutical products and/or devices as
         defined in the Act.

1.30     "PRIOR AGREEMENTS" means the Confidentiality Agreement between the
         Parties dated December 3, 1996 and the Letter Agreement between the
         Parties dated September 5, 1997, as amended December 19, 1997.

1.31     "PRODUCT ALERT" is defined in Section 2.3.

1.32     "PRODUCT(S)" means any pharmaceutical product which is covered by at
         least one claim of the Patent Rights contained in Epimmune Initial
         Technology, Epimmune Project Technology and/or Joint Technology in any
         country.

1.33     "PRODUCT COMPONENT" means with respect to Searle, [...***...] and, with
         respect to Epimmune, [...***...] or other active component which is
         covered by at least one claim of the Patent Rights contained in
         Epimmune Initial Technology, Epimmune Project Technology and/or Joint
         Technology.

1.34     "PRODUCT TYPE 1" means a Product which contains an [...***...] alone
         and is not packaged in combination with a [...***...] nor sold at a
         single price in combination with a [...***....]

1.35     "PRODUCT TYPE 2" means a Product which contains [...***...] Component
         and is packaged in combination with one or more [...***...] or sold at
         a single price in combination with a [...***....]


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1.36     "PROJECT MANAGER" is defined in subsection 3.4.

1.37     "REGULATORY APPROVAL" means all authorizations by the relevant
         competent authorities required for marketing, promoting, pricing,
         reimbursing and selling of a Product in a given country of the
         Territory.

1.38     "REGULATORY AUTHORITY" means the United States Food and Drug
         Administration and/or such other similar and appropriate government
         regulatory authority or agency outside the United States, the approval
         of which is required for marketing, promoting, pricing, reimbursing and
         selling Products in the Territory.

1.39     "RESEARCH" means all discovery phase activities which precede
         pre-clinical and clinical development phases.

1.40     "RESEARCH BUDGET" is defined in Section 2.2.1.

1.41     "RESEARCH PLAN" is defined in Section 2.2.1.

1.42     "SEARLE INITIAL TECHNOLOGY" means any Patent Rights and Know-How
         Controlled by Searle and applicable to the Field which exist as of the
         Effective Date.

1.43     "SEARLE PROJECT TECHNOLOGY" means any Patent Rights and Know-How
         invented solely by Searle during the course of performing work under
         the Research Plan and/or Development Plan during the Collaboration
         Term.

1.44     "TERRITORY" means all the countries of the world.

1.45     "THIRD PARTY" means any person or entity other than Epimmune, Searle or
         their respective Affiliates.


ARTICLE 2.  RESEARCH COLLABORATION AND DEVELOPMENT.
---------------------------------------------------

2.1      SCOPE. The Parties shall collaborate to research and develop Products
         for use in the Field, making use of each Party's special expertise in
         the following manner:

         (a)    The Research and Initial Development phases will be conducted
                jointly by the Parties pursuant to a mutually agreed Research
                Plan, through one or more joint project teams ("JPTs") as
                described in Section 3.3. The Research Plan is more particularly
                described in Section 2.2.

         (b)    The Development phase will be conducted by a Searle Project Team
                pursuant to the applicable Development Plan with support from
                Epimmune pursuant to the Research Plan.  The Development Plan is
                more particularly described in Section 2.4.


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2.2      RESEARCH PLAN AND BUDGET.

         2.2.1      A preliminary research plan and research budget are attached
                    hereto as Exhibit C and Exhibit D, respectively. Epimmune
                    will prepare, in consultation with Searle, and provide to
                    the JMC within three (3) months following the Effective Date
                    a four (4) year finalized research plan covering the
                    calendar years 1998, 1999, 2000 and 2001 (as updated in
                    accordance with Section 2.2.2, the "Research Plan") and a
                    finalized budget for proposed Research costs (the "Research
                    Budget") during the Collaboration Term. The Research Plan
                    shall specify in detail all Research activities and
                    priorities, time frames for completion of activities, which
                    Party or Third Party is to be responsible for each activity,
                    and any other items reasonably required by the Parties.
                    Epimmune's financial obligation beginning [...***...] and
                    continuing through the [...***...] shall be [...***....]
                    which amount shall be expended in accordance with the
                    Research Plan and Research Budget. Such amount shall not be
                    increased without Epimmune's approval and shall not be
                    decreased without Searle's approval.

         2.2.2      The Research Plan shall be updated annually by the JPT(s),
                    and reviewed and approved by the JMC, during the
                    Collaboration Term. Not later than September 1st of each
                    year of the Collaboration Term (other than the last year of
                    the Collaboration Term unless the Collaboration Term is
                    extended), the JPT will prepare, in consultation with the
                    JMC, and provide to Searle a rolling, three (3) year
                    research plan (the "Rolling Research Plan") which updates
                    the Research Plan and details Epimmune's research activities
                    planned and/or required to support Searle's on-going
                    strategic, development and commercial objectives in
                    connection with the development of Products as set forth in
                    the Development Plan or otherwise. If the Collaboration Term
                    is extended by mutual agreement pursuant to Section 15.1.1,
                    then the Rolling Research Plan agreed to by the JMC in 2001
                    shall serve as the Research Plan for the calendar years
                    2002, 2003 and 2004, unless otherwise agreed by the parties.

2.3      PRODUCT ALERT. A product alert is the formal selection of a compound
         for clinical development based on criteria determined by Searle in
         accordance with the procedures set forth in its "Product Lead Team
         Document Outline and Approval Process" document dated February 7, 1997
         ("Product Alert"). Searle shall determine the criteria for each Product
         Alert and advise Epimmune as soon as practicable of such criteria for
         each Product to be developed hereunder and such criteria shall be
         included in the Research Plan. Each JPT is responsible for the
         conduct and management of the Research Plan and Initial Development
         relating to each Product developed within the technology platform
         applicable to such JPT until, with respect to individual potential
         Products, each such potential Product enters the Product Alert stage.
         Not later than the issuance of a Product Alert for each new Product
         entering the Product Alert stage, a "Searle Project Team" shall be
         formed for the implementation, conduct and management of the
         Development activities for such potential Product. The Searle Project
         Team shall be comprised of those Searle representatives responsible for
         the relevant Development activities and one Epimmune representative.


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2.4      DEVELOPMENT PLAN AND BUDGET.

         2.4.1      PREPARATION AND SUBMISSION. Promptly following the
                    constitution of the first JPT pursuant to the terms of
                    Section 3.3, the JPT shall prepare and submit, not later
                    than three (3) months following the Effective Date, to the
                    JMC the Development Plan for the first Product to be
                    developed hereunder and the Development Budget for such
                    Product. Promptly following Searle's approval of the
                    Development of Products under a new technology platform, a
                    JPT shall be formed, unless otherwise agreed by the JMC.
                    Within three (3) months after the formation of each such
                    JPT, the JPT (or, if no such JPT was formed, pursuant to the
                    decision of the JMC, the existing JPT(s)) shall submit to
                    the JMC the Development Plan and Development Budget for such
                    new Product. Each Development Plan and its Development
                    Budget shall be updated as deemed appropriate by the
                    applicable Searle Project Team, but in no event less
                    frequently than annually. Each Development Plan and its
                    annual update shall specify in detail all Development
                    activities and priorities, time frames for completion of
                    activities, which Party or Third Party is to be responsible
                    for each activity, and any other items reasonably required
                    by the Parties with respect to the Development of the
                    applicable Product, with the first twelve (12) months of
                    such Plan and/or updated Plan provided in detail, and with
                    as much detail as then available for the remaining years of
                    such Plan and/or updated Plan. Each Development Plan will
                    also include, to the extent practicable, the then-expected
                    profile for the Product being developed thereunder, the
                    desired labelling and the criteria for determining
                    acceptable requirements for any appropriate worldwide
                    applications for Regulatory Approval. In preparing each
                    Development Plan and Development Budget, the JPT (or Searle
                    Project Team, as appropriate) shall ensure that there is
                    adequate marketing input and shall give due consideration to
                    worldwide development of the Product.

         2.4.2      APPROVALS. During the Collaboration Term, each Development
                    Plan, its annual update and changes thereto shall be subject
                    to the approval of the JMC as provided in subsection 3.2.2.
                    Following the Collaboration Term, Searle shall have the
                    right, in its sole discretion, to change or amend the
                    Development Plan; provided, however no such change or
                    amendment shall alter Searle's obligations under Article 17,
                    except as otherwise provided in Sections 17.2.4 and 17.2.5.
                    Searle's financial obligation with respect to the
                    Development Plan shall be set forth in the Development
                    Budget. The Development Budget and any changes thereto shall
                    be subject to the sole approval of Searle.


                                      -8-      

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2.5      SEARLE RESPONSIBILITIES. Searle shall be responsible for conducting the
         following Research and Development activities in accordance with the
         requirements of the Research Plan and/or Development Plan(s):

         (a) to supply [...***...] used in Research and Development of the
             Products; 
         (b) to provide all analytics required for the Products; 
         (c) to provide preclinical development such as pharmacology, 
             toxicology, formulation, etc.; 
         (d) to perform stability and compatibility studies;
         (e) to develop worldwide clinical, regulatory and commercialization
             strategies for the Products; 
         (f) to prepare, submit and maintain all appropriate worldwide filings 
             for the initiation and conduct of clinical trials;
         (g) to develop a worldwide clinical plan;
         (h) to conduct, directly or via Third Parties, all clinical trials
             necessary to launch Products worldwide; 
         (i) to prepare, submit and maintain applications for Regulatory 
             Approvals and manage all communications with Regulatory 
             Authorities; and
         (j) to provide support for marketing of Products following Product
             launch (e.g., Phase IV Studies).

         For purposes of dispute resolution in accordance with subsection 3.3.4,
         Searle is hereby designated as the Lead Party for each of the
         responsibilities listed above.

 2.6     EPIMMUNE RESPONSIBILITIES. Epimmune shall be responsible for conducting
         the following Research activities in accordance with the requirements
         of the Research Plan:

         (a) to identify, test, and modify [...***...] of human tumor antigens;
         (b) to conduct research to define [...***...]; 
         (c) to conduct research to define [...***...]; and
         (d) to provide necessary support of development, clinical and
             marketing efforts as defined in the Development Plan.


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         For purposes of dispute resolution in accordance with subsection 3.3.4,
         Epimmune is hereby designated as the Lead Party for each of the
         responsibilities listed in (a), (b) and (c) above.

2.7      ON-SITE PRESENCE. Searle may have representative(s) occupy space at
         Epimmune's premises on an as-needed basis in order to participate in
         the Research Plan and, if necessary, Development Plan activities during
         the Collaboration Term.

ARTICLE 3.  MANAGEMENT.
-----------------------

3.1      COMMITTEES. The Parties agree that the Collaboration activities and
         relationship hereunder will be managed by the JMC and the JPT.

3.2      JOINT MANAGEMENT COMMITTEE.

         3.2.1      COMPOSITION. The JMC will be composed of three (3) members
                    from each Party. Promptly after the Effective Date, the
                    Parties will appoint their respective representatives to the
                    JMC. The position of chairperson shall rotate between the
                    Parties annually. The chairperson during the first year of
                    the term hereof will be a Searle representative. A Party may
                    change any of its representatives at any time by giving
                    written notice to the other Party. The JMC will continue in
                    existence through the end of the Collaboration Term.

         3.2.2      RESPONSIBILITIES. The JMC will oversee the Collaboration and
                    the Development Plan and manage the relationship hereunder,
                    including the JPT. In particular, the JMC will:

                    (a) oversee the JPT;
                    (b) review and approve the Research Plan and Initial
                        Development;
                    (c) provide recommendations relating to the conduct of the
                        Research Plan and Initial Development; 
                    (d) approve the terms of any agreements for the use or 
                        acquisition of Third Parties' enabling technology as it 
                        relates to an Epimmune technology platform;
                    (e) subject to the provisions of Sections 2.4.2 and 4.2, 
                        pre-approve any modification in the Development Budget;
                    (f) approve the Cytokine components, if any, to be used in
                        the final Products; 
                    (g) approve any material change in the Initial Development; 
                    (h) conduct program reviews at least twice yearly, or more 
                        frequently as determined by the JMC;
                    (i) review and approve Joint Technology patent strategies
                        and filings based on the recommendations of the
                        Parties' patent counsel pursuant to Article 11; and
                    (j) perform such other functions as agreed in writing by the
                        Parties.


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         3.2.3      MEETINGS AND VOTING. The JMC will meet at such times as
                    either Party may request, but in no event less frequently
                    than twice per calendar year, alternating between the
                    principal places of business of each Party (San Diego and
                    Skokie or St. Louis) and will otherwise communicate as
                    necessary by telephone, facsimile and video conference. The
                    chairperson shall appoint a secretary, who shall be
                    responsible for circulating minutes of the meeting within
                    ten (10) business days following the meeting. Each Party
                    recognizes the importance of the JMC in the success of the
                    Collaboration and will use diligent efforts to cause all its
                    representatives to attend all meetings. The JMC shall make
                    decisions by unanimous consent. Voting by proxy is
                    permissible. All decisions of the JMC shall be final and
                    non-appealable. Additional participants may be invited by
                    any member to attend meetings where appropriate, provided
                    such additional participants shall have no vote.

         3.2.4      DISPUTE RESOLUTION. If any dispute arises between the
                    Parties as a result of any decision made or not made by the
                    JMC or as a result of the JMC's failure to resolve an issue
                    reviewed by it, then Epimmune shall make the final decision
                    on Research matters relating to Epitope and PADRE
                    technologies, for which it has responsibility under the
                    Research Plan, and Searle shall make the final decision on
                    all other matters. If either Party in good faith believes
                    such final decision of the other Party will have a
                    materially adverse effect on the outcome of the Research
                    Plan and/or the Development Plan, then such Party may refer
                    the issue to the senior executives of each Party (i.e., the
                    President of Epimmune and the President of Searle R&D) for
                    resolution. If the senior executives are unable to resolve
                    such issue within thirty (30) days of the date it was
                    referred to them, the Parties shall resolve such dispute in
                    accordance with Section 19.12 hereof.

3.3      JOINT PROJECT TEAM.


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         3.3.1      COMPOSITION. The JPT will be composed of representatives
                    from each Party, including each Party's Project Manager, who
                    are directly involved with and responsible for Research and
                    Development activities. Promptly after the Effective Date,
                    the Parties will appoint their respective representatives to
                    the JPT. It is anticipated that the total number of
                    representatives on the JPT will fluctuate depending on the
                    then-current requirements under the Research Plan and the
                    Development Plan, however the total number of
                    representatives shall not exceed ten (10). The position of
                    chairperson shall rotate between the Parties annually. The
                    chairperson during the first year of the term hereof will be
                    an Epimmune representative. A Party may change any of its
                    representatives at any time by giving written notice to the
                    other Party. The JPT will continue in existence through the
                    end of the Collaboration Term.

         3.3.2      RESPONSIBILITIES. Each JPT shall be responsible for
                    overseeing and managing all aspects of the Research Plan and
                    Initial Development activities with respect to Products
                    within its technology platform. In particular, the JPT
                    shall:

                    (a) prepare and submit the first annual Development Plan,
                        the Initial Development activities and the Development 
                        Budget to the JMC for review and approval;
                    (b) prepare and submit to the JMC, the Rolling Research
                        Plan, the Research Plan and Research Budget relating to 
                        Products within its technology platform.
                    (c) allocate the Research activities among Epimmune, Searle
                        and Third Parties in accordance with this Agreement;
                    (d) implement the annual Research Plan and ensure that the
                        program stays within the Research Budget;
                    (e) review progress and recommend any necessary interim
                        changes to the Research Plan to JMC;
                    (f) discuss and resolve ongoing issues;
                    (g) provide annual and quarterly progress reports of budget
                        and program activities to the JMC;
                    (h) provide quarterly forecasts of budget and program
                        activities to the JMC;
                    (i) provide and/or support program reviews with Searle R&D
                        senior management as requested from time to time;
                    (j) develop and implement publication strategies;
                    (k) support development and implementation of the clinical,
                        regulatory and commercial strategies carried out by
                        Searle following each Product Alert; and
                    (l) perform such other functions as agreed in writing by the
                        Parties.

                    Following the transfer of a Product to the Searle Project
                    Team, the JPT's responsibilities with respect to such
                    Product shall be limited to discovery support during
                    Development as provided in the Development Plan for such
                    Product. Any of Epimmune's responsibilities therefor shall
                    be set forth in the Research Plan.


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         3.3.3      MEETINGS. The JPT will meet at such times as the chairperson
                    or either of the Project Managers may request, but in no
                    event less frequently than once every month. If possible,
                    the meetings shall be held in person, or where appropriate,
                    by telephone, facsimile and video conference. The
                    chairperson shall appoint a secretary, who shall be
                    responsible for circulating minutes of the meeting within
                    ten (10) business days following the meeting. Minutes of
                    each meeting shall be signed by both Project Managers. Each
                    Party recognizes the importance of the JPT in the success of
                    the collaboration contemplated hereunder and will use
                    diligent efforts to cause all its representatives to attend
                    all meetings. Additional participants may be invited by any
                    member to attend meetings where appropriate.

         3.3.4      DISPUTE RESOLUTION. If the JPT is unable to reach consensus
                    on any matter relating to an item for which a Lead Party has
                    been designated pursuant to Sections 2.4 or 2.5, then the
                    relevant Lead Party shall decide such matter.
                    Notwithstanding the foregoing sentence, if the non-Lead
                    Party in good faith believes the decision of the other Party
                    will have a materially adverse effect on the outcome of the
                    Research Plan and/or the Development Plan, then such Party
                    may refer the issue to the JMC for resolution.

3.4      PROJECT MANAGERS. Each Party shall designate one senior representative
         to serve as the primary contact person between the parties (the
         "Project Manager"). Both Project Managers shall be members of the JPT
         and shall be responsible for facilitating the exchange of all
         Collaboration information and data between the Parties.


ARTICLE 4.  COLLABORATION FUNDING
---------------------------------

4.1      EXPENSES. Each Party shall be responsible for bearing its own expenses
         associated with its obligations to carry out the Research Plan and
         Development Plan to the extent such expenses are contained in the
         Research Budget and Development Budget, respectively.

4.2      BUDGET CHANGES. The JMC shall not have the right to increase either
         party's portion of the Research Budget and/or Development Budget over
         the commitment of such Party contained therein, without the written
         consent of such Party. In any event, final approval of the Development
         Budget and any changes thereto shall reside with Searle, subject to the
         provisions of Section 2.4.2.


                                      -13-
<PAGE>


ARTICLE 5.  WARRANTY.
---------------------

5.1      Epimmune represents and warrants to Searle that:

         5.1.1      the grant of the license by Epimmune to Searle of the
                    Epimmune Initial Technology does not conflict with any other
                    agreement to which Epimmune is a party;

         5.1.2      other than as disclosed by Epimmune in writing prior to the
                    Effective Date, it has not received any notice that practice
                    of the inventions claimed under Epimmune Initial Technology
                    infringes on the patent or other legally protected
                    intellectual property rights of any Third Party in the
                    Territory and it is not aware of any basis therefor;

         5.1.3      there are no pending or threatened adverse claims of
                    ownership, and, to the best of Epimmune's knowledge, no
                    facts or circumstances exist which could give rise to
                    adverse claims of ownership, to the Epimmune Initial
                    Technology;

         5.1.4      all inventions, including all patents or patent applications
                    (and all divisions, continuations, continuations-in-part,
                    reissues, extensions, renewals, supplementary protection
                    certificates and foreign counterparts thereof), trademarks,
                    copyrights and proprietary, confidential technical
                    information and data existing as of the Effective Date and
                    materially relating to the license rights granted hereunder
                    which were originally owned by Cytel Corporation ("Cytel")
                    have been properly assigned irrevocably to Epimmune, and
                    documentation of the assignment of all such patents or
                    patent applications have been properly filed with the U.S.
                    Patent Office, submitted to foreign associates for filing
                    within five (5) days of the Effective Date with any
                    comparable government agencies outside of the United States,
                    and shall be diligently pursued by Epimmune; and

         5.1.5      As of the date of the assignment contemplated by Section
                    5.1.4, Epimmune has entered into proprietary information and
                    assignment of inventions agreements with each of its
                    employees and consultants who are to do work under the
                    Collaboration and any inventions relating to the license
                    rights granted hereunder conceived or reduced to practice
                    following such date by persons working for Epimmune (or
                    Cytel only through the Effective Date) will come under the
                    Control of Epimmune.

5.2      Each Party warrants to the other that:

         5.2.1      it has the corporate power and authority to execute and
                    deliver this Agreement and to perform its obligations
                    hereunder;


                                      -14-
<PAGE>

         5.2.2      the execution and delivery by it of this Agreement and the
                    performance of its obligations hereunder have been duly
                    approved by any necessary corporate action; do not require
                    any shareholder action or the approval and consent of any
                    trustee or the holders of any indebtedness which has not
                    been obtained; do not and will not contravene any law,
                    regulation, rules or order binding on it in any material
                    respect; and do not and will not contravene the provisions
                    of, or constitute an act of default under, any debenture,
                    mortgage contract or other agreement or instrument to which
                    it is a party in any material respect;

         5.2.3      it will perform all its obligations hereunder in compliance
                    in any material respects with all applicable laws, including
                    the Act; and

         5.2.4      it is not party to any Agreement in conflict with the rights
                    granted hereunder and that entering into and performing its
                    obligations under this Agreement will not conflict in any
                    material respect with its obligations to any Third Parties.

5.3      Searle represents and warrants to Epimmune that Searle will not use the
         Epimmune Initial Technology or the Epimmune Project Technology for any
         purpose other than the discovery and Development of royalty-bearing
         Products pursuant to this Agreement.

5.4      Except as expressly set forth in this Article 5, no other express or
         implied representation or warranty is made by either Party.


ARTICLE 6.  LICENSE GRANT TO SEARLE; REVIEW RIGHTS
--------------------------------------------------

6.1      Epimmune hereby grants to Searle:

         6.1.1      an exclusive license, with right to sublicense, in the
                    Territory to make, have made, use, sell and import Products
                    in the Field under the Epimmune Project Technology and under
                    Epimmune's rights in the Joint Technology; provided,
                    however, that such license of Epimmune Project Technology is
                    granted subject to the license granted to Takara Shuzo, Co.
                    Ltd. ("Takara") of certain Patent Rights Controlled by
                    Epimmune to the extent such Patent Rights are dominated by
                    Epimmune Initial Technology and are filed on or before
                    January 26, 2000, which rights are limited to the rights to
                    make, use and sell products and services in the field of ex
                    vivo cellular therapy for treatment of cancer in Japan.


                                      -15-
<PAGE>

         6.1.2      an exclusive license, with right to sublicense, in the
                    Territory to make, have made, use, sell and import Products
                    in the Field under the Epimmune Initial Technology;
                    provided, however, such grant of license shall not include
                    rights previously granted to Takara, which rights are
                    limited to the rights to make, use and sell products and
                    services in the field of ex vivo cellular therapy for
                    treatment of cancer in Japan.

         6.1.3      subject to the provisions of Section 6.3, an exclusive
                    license, with right to sublicense, for uses of Searle
                    Cytokines outside the Field in the Territory under the
                    Epimmune Project Technology and under Epimmune's rights in
                    the Joint Technology.

6.2      Except as provided in Section 3.2.2(d), the licenses granted to Searle
         herein shall include the right to sublicense, co-develop, co-promote
         and/or co-market Products with Third Parties without obtaining
         Epimmune's consent.

6.3      The grant of license by Epimmune under subsection 6.1.3 is not intended
         to restrict any use by Epimmune outside the Field of Epimmune Project
         Technology or, subject to the limitations contained in Section 11.1, of
         Joint Technology.

6.4      Epimmune hereby grants to Searle the right to review, within the first
         ninety (90) days following the Effective Date, its scientific data
         relating to infectious disease Epitopes utilizing Epimmune technology
         prior to disclosing such data to any Third Party (except those Third
         Parties to whom Epimmune and/or its Affiliates as of September 5, 1997
         may have already disclosed such information and/or with whom Epimmune
         and/or its Affiliates were already engaged in discussions regarding
         potential transactions relating to infectious disease Epitopes).
         Following such initial review, Epimmune shall present to Searle twice
         in each calendar year during the Collaboration Term, an update of such
         data, except for any such data the rights to which have been granted to
         a Third Party. Following such review by Searle, upon mutual agreement
         (but without any obligation to do so), the Parties may enter good faith
         negotiations for the license by Searle of the rights to some or all of
         such technology.


ARTICLE 7.  ROYALTIES; MILESTONE PAYMENTS
-----------------------------------------

7.1      In consideration of the grant of rights by Epimmune under Sections 6.1
         and 6.2 and subject to the provisions of Sections 7.2 and 7.3, Searle
         shall pay Epimmune royalties of:

         7.1.1  [...***...] of Net Sales of Product Type 1;

         7.1.2  [...***...] of Net Sales of the Epimmune Product Component
                included in each Product Type 2;


                                      -16-
<PAGE>

         7.1.3  [***] of net sales of a Searle Cytokine or Searle Product
                Component included in any product (determined in a manner
                consistent with that described in Section 1.26) if and only if 
                such Searle Cytokine is covered by at least one composition of 
                matter claim of the Patent Rights contained in Joint Technology.

7.2      The royalties due under Sections 7.1.1 and 7.1.2 shall be reduced by

         (i)    [...***...] of the total amount of royalties, if any, paid to
                Third Parties under licenses existing as of the Effective Date
                or future licenses granting rights to Epimmune and/or Searle
                which are necessary to make, have made, use or sell any Product
                Type 1 or the Epimmune Product Component of a Product Type 2;
                and

         (ii)   [...***...] of the dollar amount, if any, by which Searle's Cost
                of Goods for Product(s) containing either [...***...] or a
                [...***...] exceeds [...***...] of Searle's Net Sales of such
                Product.

         provided, however, in no event shall such royalties payable to Epimmune
         be reduced below [...***...] of Net Sales as a result of the
         application of the foregoing clauses (i) and/or (ii).

7.3      The royalty rates specified in Section 7.1 shall be reduced by
         [...***...] for any country of the Territory in which there are no
         Patent Rights or the Patent Rights relating to the Product expire, are
         declared invalid or no longer provide Searle the exclusive (subject to
         the limitations described in Section 6.1), right to make, use and sell
         the Product. A Patent Right shall be deemed invalid if the related
         patent is held invalid or unenforceable by any court of competent
         jurisdiction and of last resort or by any inferior court of competent
         jurisdiction, tribunal or agency from which no appeal is taken.

7.4      If the Collaboration Term expires on or after December 31, 2001 and
         upon such expiration, Epimmune has failed to meet its funding
         obligations set forth in Section 2.2.1, [...***....]

7.5      Searle shall make payments to Epimmune upon the occurrence of
         Development milestones in accordance with the provisions of Exhibit E.
         Searle may make a portion of such milestone payments in accordance with
         Section 8.1 of that certain Stock Purchase Agreement of even date
         herewith between Searle and Cytel.


                                      -17-
<PAGE>

ARTICLE 8.  PAYMENT; TAXES; AUDIT RIGHTS
----------------------------------------

8.1      Royalties due to Epimmune under this Agreement for each calendar
         quarter of the term hereof shall be paid by Searle or its sublicensees
         in United States Dollars within sixty (60) days following the end of
         each such calendar quarter. Each payment of royalties made to Epimmune
         hereunder shall be accompanied by a written report, clearly showing the
         Net Sales for the months of the quarter for which payment is being made
         and the calculation of royalties due. Foreign currency conversions into
         United States Dollars shall be made monthly at the rate of exchange
         published in the Midwest edition of The Wall Street Journal for the
         currency of the applicable country on the last business day of the
         calendar month for which Net Sales were made.

8.2      All payments to be made by Searle pursuant to Article 7 shall be made
         in immediately available funds in United States dollars by wire
         transfer to such bank and account of Epimmune as may be designated from
         time to time by Epimmune.
8.3      Payments under Article 7 shall not be reduced by any taxes, licenses,
         fees or other withholdings levied upon such payments by the government
         of any country, or political subdivisions or agencies thereof, from
         which Searle makes the payment unless all of the following requirements
         are met:

         8.3.1      the amount, if any, by which the payments are reduced, is a
                    tax imposed on royalties or income and is not an excise,
                    franchise, privileges turnover, sales, production, value
                    added, or property tax, or any other type of levy or duty;

         8.3.2      the tax is imposed on Epimmune under the laws of the
                    relevant country in the Territory, and Searle is required by
                    law to withhold the tax from payments to Epimmune and to pay
                    such tax to the government, or political subdivision or
                    agency thereof, of such country; and

         8.3.3      Searle furnishes Epimmune with a tax receipt for the taxes
                    withheld within sixty (60) days of payment thereof or such
                    other documentation as Epimmune may reasonably require in
                    order that Epimmune may credit such amount in full against
                    its own tax liabilities.

         All taxes, licenses, fees or other levies or duties imposed upon Searle
         or which arise because of payments to Epimmune by Searle under this
         Agreement, other than those which meet the requirements of subsections
         8.3.1, 8.3.2, and 8.3.3, shall be paid and absorbed by Searle.


                                      -18-
<PAGE>


8.4      Searle shall keep and maintain for two (2) years after payment of
         royalties, complete and accurate books and records in sufficient detail
         so that royalties payable hereunder and/or any deductions thereto can
         be properly calculated.

8.5      No more frequently than once during each year of the term of this
         Agreement, Searle shall permit Epimmune's independent auditors, to whom
         Searle has no reasonable objection and with reasonable notice at any
         time during normal business hours, to inspect and audit such accounts
         and records of Searle for the sole purpose of verifying the accuracy of
         the royalty payments submitted to Epimmune and the reports which
         accompanied them. Epimmune's independent auditors shall not disclose to
         Epimmune or any Third Party any information other than information
         relating solely to the accuracy of the accounting and payments made by
         Searle. Any such inspection of Searle's records shall be at Epimmune's
         expense unless such audit discloses a deficiency in the amount of Net
         Sales reported by Searle of more than 5% of the actual amount of Net
         Sales, in which case Searle shall bear the full cost of such audit.


ARTICLE 9.  DISCLOSURE OF KNOW-HOW AND IMPROVEMENTS
---------------------------------------------------

9.1      Promptly after execution of this Agreement by both Parties and promptly
         after discovery or acquisition during the term of this Agreement,
         Epimmune shall disclose to Searle in writing all Know-How included in
         the Epimmune Initial Technology, the Epimmune Project Technology and/or
         the Joint Technology. Promptly after discovery or acquisition during
         the Collaboration Term, Searle shall disclose to Epimmune in writing
         all Know-How included in the Searle Project Technology and the Joint
         Technology.

9.2      During the Collaboration Term and for a period of [...***...]
         thereafter, Epimmune shall disclose to Searle in writing promptly after
         discovery or acquisition all Improvements which are dominated by the
         Epimmune Initial Technology, the Epimmune Project Technology and/or the
         Joint Technology. Searle, at its option, may include said Improvements,
         whether patented or not, within the rights granted hereunder,
         [...***....]


ARTICLE 10.  SUPPLY
-------------------

Each Party, at its own expense, shall supply to the other Party its Product
Component for the conduct of the Research activities, provided that [...***...]
required for activities under the Research Plan and Development Plan shall be
supplied, at Searle's expense, by Searle, Cytel or a Third Party. Searle shall
be responsible for manufacturing or causing to be manufactured Products and
Product Components required under the Development Plan and following Launch
Date(s).



                                      -19-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

ARTICLE 11.  INTELLECTUAL PROPERTY RIGHTS.
------------------------------------------

11.1     JOINT TECHNOLOGY.

         11.1.1     Each party shall have the royalty-free right to use Joint
                    Technology freely, subject to the licenses granted under the
                    provisions of Article 6 and to the provisions contained in
                    Sections 11.1.2 and 15.5.4.

         11.1.2     Except as provided in Section 15.5.4, Epimmune shall have no
                    right to practice or sublicense Joint Technology to the
                    extent it includes Searle Cytokines. For the avoidance of
                    doubt, in the event Joint Technology is useful for any
                    purpose other than in connection with Searle Cytokines, this
                    Section 11.1.2 is not intended to preclude Epimmune from
                    using Joint Technology in connection with such other
                    purposes.

11.2     PATENTABLE INVENTIONS.

         11.2.1     Searle shall own solely all Searle Project Technology,
                    including all Patent Rights with respect thereto, and
                    Epimmune shall own solely all Epimmune Project Technology,
                    including all Patent Rights with respect thereto.

         11.2.2     The Parties shall own jointly all Joint Technology including
                    all Patent Rights thereto. Each Party shall have the right
                    to make, have made, use or sell any such Joint Technology
                    only as permitted in Section 11.1.

         11.2.3     Enforcement of Intellectual Property Rights relating to any
                    such Project Technology or Joint Technology shall be
                    governed by Section 11.6.

11.3     PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.

         11.3.1     Except as provided in Section 3.2.2(j), each Party, at its
                    expense, shall be responsible for filing, prosecuting and
                    maintaining the Patent Rights included in its respective
                    Initial Technology and Project Technology. If a Party
                    decides not to pursue patent protection for any invention
                    claimed in any patent application or patent within such
                    Patent Rights in any country, it shall give the other Party
                    reasonable notice thereof. The other Party, at its expense,
                    may file, prosecute or maintain a patent application or
                    patent covering such invention, and the ownership of such
                    invention will not be affected.


                                      -20-
<PAGE>

         11.3.2     The Parties will develop a joint strategy for filing,
                    prosecution and maintenance worldwide of the Patent Rights
                    included in the Epimmune Project Technology, Searle Project
                    Technology and Joint Technology with the understanding that
                    they will attempt to reach mutual agreement upon such
                    matters. In the event that the Parties are unable to reach
                    mutual agreement, Epimmune will have responsibility with
                    respect to all Patent Rights included in the Epimmune
                    Project Technology and Joint Technology which cover Epitope
                    identification or compositions and PADRE, and Searle will
                    have responsibility for all Patent Rights included in the
                    Searle Project Technology and all other Joint Technology.
                    The Parties shall share equally all expenses for filing,
                    prosecution and maintaining the Patent Rights included in
                    Joint Technology.

         11.3.3     Searle will have the opportunity to provide significant
                    input to the filing and prosecution strategy for all Patent
                    Rights included in the Epimmune Initial Technology, Epimmune
                    Project Technology, and Joint Technology relevant to the
                    Field for which Epimmune has responsibility. Patent counsel
                    for each Party will meet regularly to discuss strategy, and
                    Searle shall have at least thirty (30) days to provide input
                    and comments on any significant patent actions. Epimmune
                    shall have the final say with respect to such actions. In
                    the event that Epimmune elects to abandon any of the Patent
                    Rights included in the Epimmune Initial Technology, Epimmune
                    Project Technology, or Joint Technology relevant to the
                    Field for which it is responsible in any country of the
                    Territory (unless such abandonment occurs because the
                    subject matter of the abandoned patent is covered by other
                    Patent Rights included in the Epimmune Initial Technology,
                    Epimmune Project Technology or Joint Technology), Searle
                    shall have the right to assume such patent or patent
                    application.

         11.3.4     Epimmune will have the opportunity to provide significant
                    input to the filing and prosecution strategy for all Patent
                    Rights included in the Searle Project Technology and Joint
                    Technology relevant to the Field for which Searle has
                    responsibility, and Searle agrees, within reason, to include
                    claims which might be useful for applications outside the
                    Field. In the event that Searle elects to abandon any of the
                    Patent Rights included in the Searle Project Technology or
                    Joint Technology relevant to the Field for which it is
                    responsible (or claims of interest to Epimmune) in any
                    country of the Territory, Epimmune shall have the right to
                    assume such patent or patent application.

11.4     PATENT EXTENSIONS. If agreed by the JMC, the Parties shall apply in a
         timely manner for such patent term extensions or supplemental
         protection certificates for the Patent Rights relating to an invention
         made hereunder as are available under any applicable legislation. All
         expenses incurred in connection with such patent term extensions or
         supplemental protection certificates shall be paid by the Party
         (or Parties in the case of Joint Technology) responsible for the
         prosecution and maintenance of the applicable Patent Rights.


                                      -21-
<PAGE>

11.5     COOPERATION. Each Party shall sign or have its appropriate employees
         and agents sign such documents as may be necessary to obtain, perfect
         or maintain any Patent Rights filed or to be filed pursuant to this
         Agreement, and shall furnish all information in its possession
         reasonably necessary in connection therewith.

11.6     INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

         11.6.1  (a)    If either Party becomes aware of any infringement or
                        threatened infringement or misappropriation of any
                        Intellectual Property Rights in the Field, it shall
                        promptly notify the other Party in writing. The Party
                        responsible for the prosecution and maintenance of such
                        Intellectual Property Rights under Section 11.3, at its
                        expense (subject to subsection 11.6.1(b)), shall have
                        the right, but not the obligation, to institute,
                        prosecute and control any legal proceeding in its name
                        and by its counsel to prevent or restrain such
                        infringement in the Field. If such Party declines to
                        institute legal proceedings, the other Party shall have
                        the right to institute, prosecute and control any legal
                        proceeding in its name and by its counsel to prevent or
                        restrain such infringement in the Field. The Party
                        asserting such Intellectual Property Rights will deduct
                        and retain from any and all amounts recovered from Third
                        Parties the amount of all reasonable costs and expenses
                        incurred by it in prosecuting such legal proceeding. Any
                        remaining amounts recovered from such Third Parties
                        shall be shared by the Parties; [...***...] to the Party
                        which asserted such Intellectual Property Rights and
                        [...***...] to the other Party.

                 (b)    The Parties shall determine which Party shall have the
                        primary right and responsibility (but not the
                        obligation) to institute, prosecute, and control any
                        proceeding with respect to infringement or
                        misappropriation of Joint Technology. If a Party brings
                        any such proceeding, the other Party agrees to be joined
                        as a party plaintiff if required to enforce Patent
                        Rights related to Joint Technology. In such case, the
                        other Party will give such Party reasonable assistance
                        and authority to file and prosecute such suit. Any
                        damages or monetary recovery shall be split equally
                        between the Parties, after payment of each Party's legal
                        costs and expenses.


                                      -22-
<PAGE>

         11.6.2     In connection with any proposed settlement with respect to
                    any infringement or threatened infringement of any
                    Intellectual Property Rights, the Party intending to settle
                    shall notify and consult with the other Party as to the
                    terms of settlement. The other Party's written consent,
                    which shall not be unreasonably withheld, shall be required
                    prior to any such settlement.

         11.6.3     In connection with any action taken by either Party against
                    a Third Party to protect or enforce any Intellectual
                    Property Rights, the other Party shall, if requested,
                    consult with the Party taking such action, and make
                    available as witnesses its employees or as evidence any
                    materials and/or data as are reasonably necessary for the
                    furtherance of such action. The expenses in connection with
                    the providing of witnesses and/or the making available of
                    any materials and/or data shall be borne by the Party
                    incurring them, and reimbursed by the Party bringing such
                    action pursuant to subsection 11.6.1(a).

11.7     INFRINGEMENT OF THIRD PARTY PATENT RIGHTS. If either Party is sued for
         patent infringement of any Third Party patents arising out of the
         manufacture, use, sale or importation of any Product, the Parties shall
         promptly meet to discuss the course of action to be taken to resolve or
         defend any such infringement litigation. Subject to the indemnification
         provisions of Article 16, a Party shall assume the defense of such
         action if the infringement relates solely to the use of such Party's
         Initial Technology; provided, however, if an action is brought alleging
         that Epimmune Initial Technology is infringing any Third Party patents,
         Searle shall have the right to participate fully at its expense in the
         defense of such action. Each Party shall provide the other with such
         assistance as is reasonably necessary and shall cooperate in the
         defense of any such action.

11.8     THIRD PARTY TECHNOLOGY. Searle will use commercially reasonable efforts
         to obtain rights to any Third Party patents it deems necessary to
         commercialize the Products.


ARTICLE 12.  LICENSE GRANT TO EPIMMUNE
--------------------------------------

12.1     Searle hereby grants to Epimmune a non-exclusive license, with right to
         sublicense, in the Territory to make, have made, use and sell Products
         outside of the Field under the Searle Project Technology; provided,
         however, except as provided in Section 15.5.5, Epimmune shall have no
         right to practice or sublicense Searle Project Technology to the extent
         it includes Searle Cytokines. For the avoidance of doubt, in the event
         Searle Project Technology is useful for any purpose other than in
         connection with Searle Cytokines, this Section 12.1 is not intended to
         preclude Epimmune from using Searle Project Technology in connection
         with such other purposes.

12.2     In consideration of the grant of license rights by Searle under Section
         12.1, Epimmune shall pay Searle (i) in the case where Epimmune and/or
         its Affiliates sell products which are covered by at least one claim of
         the Patent Rights contained in the Searle Project Technology outside of
         the Field directly to Third Parties, royalties on Epimmune's Net Sales
         of such products by Epimmune and/or its Affiliates at the rate of


                                      -23-
<PAGE>

         [...***...] and (ii) in the case where Epimmune licenses products which
         are covered by at least one claim of the Patent Rights contained in the
         Searle Project Technology outside of the Field to any Third Party,
         [...***...] of the royalties actually received by Epimmune from any
         such Third Party for the license of such product up to a maximum of
         [...***...] of such Third Party's Net Sales of such products.

12.3     In consideration of the disclosure of information to Takara permitted
         under Section 13.3, Epimmune shall pay or cause to be paid to Searle
         the following royalties, as applicable, on the net sales of products
         and services which use, incorporate or are developed based on such
         information:

         12.3.1     [...***...] if royalties owed to Epimmune by Takara, after
                    payment by Epimmune of all Third Party royalties except
                    those owed to Searle hereunder, are [...***...] or greater;

         12.3.2     [...***...] if royalties owed to Epimmune by Takara, after
                    payment by Epimmune of all Third Party royalties except
                    those owed to Searle hereunder, are [...***...] or greater;
                    and

         12.3.1     If royalties owed to Epimmune by Takara, after payment by
                    Epimmune of all Third Party royalties except those owed to
                    Searle hereunder, are between [...***...] and [...***...]
                    Searle's royalty shall be [...***...] less one third of the
                    amount royalties to Epimmune are reduced below [...***....]

12.4     The provisions of Sections 1.26 and 7.3 and Article 8 shall apply
         mutatis mutandis to Epimmune with respect to all royalties payable by
         Epimmune hereunder.


ARTICLE 13.  CONFIDENTIAL INFORMATION.
--------------------------------------

13.1     INFORMATION. Each Party shall keep all information received from the
         other Party hereunder or pursuant to any of the Prior Agreements or
         developed during the term hereof (the "Information") confidential and
         shall not disclose nor use the Information without the other Party's
         written consent except to the extent contemplated by this Agreement.
         This restriction shall not, however, prevent disclosure of the
         Information if and to the extent that disclosure is required by law,
         PROVIDED that the disclosing Party first informs the other Party
         without delay of any such requirement to allow such other Party to
         object to such disclosure and to seek an appropriate protective order
         or similar protection prior to disclosure. This obligation shall
         survive for five (5) years after termination or expiration of this
         Agreement.


                                      -24-      CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

13.2     EXCEPTIONS. The above obligations shall not apply or shall cease to
         apply if such Information:

         (a) has become generally available to the public otherwise than through
             violation of this Agreement; 
         (b) was already in the recipient's possession prior to its acquisition
             from the disclosing Party (other than Information provided under 
             the Prior Agreements);
         (c) has been received from a Third Party who is not under any
             obligation of confidentiality; or 
         (d) has been independently developed by the receiving Party (except for
             Information developed pursuant to this Agreement) without the aid 
             or use of Information of the disclosing Party as supported by 
             competent written proof.

13.3     PERMITTED DISCLOSURES. Information may be disclosed to a Party's
         Affiliates and agents, consultants, permitted sublicensees, suppliers
         or subcontractors of the recipient Party, but only to the extent
         required to accomplish the purposes of this Agreement and only if the
         receiving Party obtains prior written agreement from such individuals
         and/or entities to hold in confidence and not use such Information for
         any purpose other than those permitted by this Agreement. Subject to
         the provisions of the following sentence, information developed during
         the term hereof may be disclosed (a) by Epimmune to its potential
         partners or licensees in connection with a corporate partnership
         license or similar arrangement outside the Field, provided all clinical
         data developed hereunder is excluded from any such disclosure unless
         otherwise agreed in writing by Searle; and (b) by Searle to its
         potential corporate partners or sub-licensees in connection with a
         sublicense, co-development, co-promotion or similar arrangement in the
         Field. No such disclosure shall occur until the disclosing Party enters
         into a written confidentiality agreement with such potential corporate
         partner, licensee or sub-licensee to protect the confidentiality of
         such Information. Information that is preclinical and clinical data
         provided in the course of the Collaboration during the Collaboration
         Term may be disclosed by Epimmune to Takara under the Collaboration
         Agreement between Takara and Cytel (predecessor-in-interest to
         Epimmune), dated October 18, 1994, as amended, for use by Takara in the
         development of its program in the field of ex vivo cellular therapy for
         treatment of cancer in Japan, subject to the provisions of Section
         12.3. Each Party will use at least the same standard of care as it uses
         to protect proprietary or confidential information of its own to ensure
         that such individuals and/or entities do not disclose or make any
         unauthorized use of the Information.


                                      -25-
<PAGE>

13.4     PUBLICITY AND DISCLOSURE OF AGREEMENT. All publicity relating to this
         Agreement shall be subject to the approval of both Parties. Except as
         required by law, neither Party shall disclose any non-public
         information with respect to the terms of this Agreement or concerning
         the collaboration hereunder without the prior written consent of the
         other Party, which consent will not be unreasonably withheld or
         delayed. If either Party is required by securities laws or regulations
         to disclose the existence of this Agreement or its contents, then the
         disclosing Party shall notify the other Party of its disclosure
         obligations and shall obtain such other Party's consent, which may not
         be unreasonably withheld, to the form and content of such disclosure.
         Notwithstanding any other provision of this Agreement, each Party may
         disclose the terms of this Agreement to lenders, investment bankers and
         other financial institutions solely for purposes of financing its
         operations if the disclosing Party uses reasonable efforts to obtain a
         signed confidentiality agreement with such financial institution with
         respect to such information, upon terms substantially similar to those
         contained in this Section.

13.5     PUBLICATION. The Parties shall cooperate in appropriate publication of
         the results of Research and Development work performed pursuant to this
         Agreement, subject to the predominating interest in obtaining patent
         protection for any patentable subject matter. Prior to any public
         disclosure of such results, the Party proposing disclosure shall send
         the other Party a copy of the information to be disclosed. The other
         Party shall have thirty (30) days from receipt to determine whether the
         information to be disclosed contains subject matter for which patent
         protection should be sought prior to disclosure, or otherwise contains
         Information of the reviewing Party which such Party desires to maintain
         as a trade secret. If notification is not received during the thirty
         (30) day period, the Party proposing disclosure shall be free to
         proceed with the disclosure. If due to a reasonable belief by the
         non-disclosing Party that the disclosure contains confidential
         Information for which a patentable invention should be sought, then
         prior to the expiration of the thirty (30) day period, the
         non-disclosing Party shall so notify the disclosing Party, which shall
         then delay public disclosure of the Information for an additional
         period of up to six (6) months to permit the preparation and filing of
         a patent application on the Information to be disclosed or other action
         to be taken. The Party proposing disclosure shall thereafter be free to
         publish or disclose the Information. The determination of authorship
         for any paper shall be in accordance with accepted scientific practice.


ARTICLE 14.  TERM.
------------------

14.1     TERM. This Agreement shall be in effect from the Effective Date and,
         unless earlier terminated pursuant to the terms of Article 15, shall
         continue in effect, on a Product-by-Product and country by country
         basis, until the later of (i) the last to expire of the patents
         included in the Epimmune Initial Technology, Epimmune Project
         Technology or Joint Technology, or (ii) the tenth (10th) anniversary of
         the Launch Date. Epimmune's obligation to pay royalties to Searle for
         products outside the Field, and the provisions of Article 12 shall be
         in effect from the Effective Date and, unless earlier terminated
         pursuant to the terms of Article 15, shall continue in effect, on a
         product-by-product and country by country basis, until the later of (i)
         the last to expire of the patents included in the Searle Project
         Technology, or (ii) the tenth (10th) anniversary of the date of the
         first sale of a product to a Third Party by Epimmune, its Affiliates or
         sublicensees through customary commercial channels of distribution.


                                      -26-
<PAGE>

14.2     EXPIRY. Upon the expiration of this Agreement, on a country by country
         basis, (a) Searle shall have a fully paid up, perpetual, royalty-free,
         non-exclusive license under the Epimmune Initial Technology and the
         Epimmune Project Technology, and (b) Epimmune shall have a fully paid
         up, perpetual, royalty-free, non-exclusive license under the Searle
         Project Technology.


ARTICLE 15.  TERMINATION
------------------------

15.1     RESEARCH COLLABORATION.

         15.1.1     The Parties have agreed to participate in the Collaboration
                    until the earlier of the Completion of the Research Plan or
                    the date that Epimmune has met its obligation under the
                    Research Budget as contemplated under Subsection 2.2.1,
                    which is anticipated to be an initial four year period
                    ending December 31, 2001 (such period, as may be extended or
                    earlier terminated, is referred to herein as the
                    "Collaboration Term"). At least six (6) months prior to the
                    end of the Collaboration Term, Searle shall inform Epimmune
                    in writing whether it wishes to extend the Collaboration
                    Term. If, within three months following such notice from
                    Searle, the Parties have not agreed on the funding of the
                    Collaboration for an additional period, then the
                    Collaboration will terminate. In the event of any such
                    termination, all terms and conditions (except Articles 2, 3
                    and 4) of this Agreement shall continue in full force and
                    effect, and Searle may continue Development of the Products.
                    Epimmune shall provide Searle with all documentation in its
                    possession relevant to such Research and Development and
                    shall cooperate with Searle to transfer Epimmune's Research
                    and Development activities to Searle or its designee.

         15.1.2     Beginning at any time after the first anniversary of the
                    Effective Date, the Collaboration and the Collaboration Term
                    may be terminated by Searle at any time for any reason or no
                    reason by giving Epimmune at least ninety (90) days prior
                    written notice. In the event of any such termination, all
                    terms and conditions (except Articles 2, 3 and 4) of this
                    Agreement shall continue in full force and effect and,
                    Searle may continue Development of the Products. Epimmune
                    shall provide Searle with all documentation in its
                    possession relevant to such Research and Development and
                    shall cooperate with Searle to transfer Epimmune's Research
                    and Development activities to Searle or its designee.


                                      -27-
<PAGE>

15.2     VOLUNTARY TERMINATION. Searle shall have the right to terminate this
         Agreement without cause at any time by giving Epimmune at least ninety
         (90) days prior written notice.

15.3     BREACH. Either Party may terminate this Agreement upon sixty (60) days'
         written notice if the other Party commits a material breach of any of
         its obligations hereunder and such other Party does not remedy such
         breach within said sixty (60) days, or, if such breach is not capable
         of cure within said sixty (60) days, does not commence remedy of such
         breach within such sixty (60) days.

15.4     INSOLVENCY. Either Party shall have the right to terminate this
         Agreement at any time by giving the other Party written notice,
         effective immediately, if such other Party is dissolved or liquidated,
         files or has filed against it a petition under any bankruptcy or
         insolvency law, makes an assignment for the benefit of its creditors or
         has a receiver appointed for all or substantially all of its property.

15.5     EFFECT OF TERMINATION.

         15.5.1     INTELLECTUAL PROPERTY RIGHTS. Following the termination of
                    this Agreement for any reason (a) all Intellectual Property
                    Rights owned by each Party as of the Effective Date shall
                    continue to be owned exclusively by such Party, subject to
                    the rights of each Party contained in this Agreement, and
                    (b) any Intellectual Property Rights relating to Joint
                    Technology shall continue to be jointly owned, subject to
                    the rights of each Party contained in this Agreement.

         15.5.2     VOLUNTARY TERMINATION; BREACH.

                    15.5.2.1       If Searle terminates this Agreement under
                                   subsection 15.2, or if Epimmune terminates
                                   this Agreement under subsection 15.3, then,
                                   except as provided in subsection (d) below,

                                   (a)  with respect only to Products which were
                                        launched and Products for which
                                        applications for Regulatory Approvals
                                        were submitted as of the date such
                                        termination is effective, Searle shall
                                        continue to have the license rights
                                        granted hereunder and make all royalty
                                        payments and, if applicable, milestone
                                        payments for such Products in accordance
                                        with Articles 7 and 8 of this Agreement.


                                      -28-

                                   (b)  except as provided in Subsection
                                        15.5.2.1(a),

                                        (i)   Searle shall (1) have no further
                                              rights under Epimmune Initial
                                              Technology or Epimmune Project
                                              Technology or Epimmune's rights in
                                              the Joint Technology and the
                                              licenses granted under Article 6
                                              shall terminate, (2) if necessary,
                                              grant Epimmune the license rights
                                              provided under Section 15.5.4, (3)
                                              return to Epimmune all data and
                                              technical information relating to
                                              such Technology, and (4) cooperate
                                              with Epimmune to transfer Searle's
                                              Development activities directly
                                              related to such Technology to
                                              Epimmune or its designee, except
                                              any such activities relating to
                                              Searle Cytokines other than as
                                              specifically provided in Section
                                              15.5.4, and

                                      -28-
<PAGE>

                                        (ii)  Epimmune shall (1) have the right
                                              to assume any agreements with any
                                              Third Party for the grant of
                                              license rights for the use of
                                              and/or supply of such Third
                                              Party's Cytokines, (2) upon the
                                              commercialization of any such
                                              Products, in consideration of the
                                              grant of license rights provided
                                              under Section 15.5.4, pay Searle:


                                              (A)  in the case where Searle
                                                   terminates this Agreement
                                                   under Section 15.2, a royalty
                                                   on the Net Sales of Product
                                                   Type 1 or the Epimmune
                                                   Product Component included in
                                                   any Product Type 2 sold by
                                                   Epimmune, its Affiliates or
                                                   sublicensees in the Field at
                                                   the following rates on a
                                                   Product-by-Product basis
                                                   depending on the stage of
                                                   Development achieved when
                                                   termination occurs:

                     Royalty      If termination occurs when the Product is 
                     -------      -----------------------------------------
                     Rate         in the following stage of Development:
                     ----         --------------------------------------

                     [...***...]  prior to the initiation of Phase I 
                     [...***...]  during Phase I or Phase II studies 
                     [...***...]  upon Phase II completion or during Phase III 
                     [...***...]  upon Phase III completion with a submittable
                                  application for Regulatory Approval in a Key 
                                  Market

                                                (B)   in the case where Epimmune
                                                      terminates this Agreement
                                                      under Section 15.3, a
                                                      royalty on the Net Sales
                                                      of Product Type 1 or the
                                                      Epimmune Product Component
                                                      included in any Product
                                                      Type 2 sold by Epimmune,
                                                      its Affiliates or
                                                      sublicensees in the Field
                                                      at the following rates on
                                                      a Product-by-Product basis
                                                      depending on the stage of
                                                      Development achieved when
                                                      termination occurs:


                                      -29-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>



                     Royalty      If termination occurs when the Product is 
                     -------      -----------------------------------------
                     Rate         in the following stage of Development:
                     ----         --------------------------------------

                     [...***...]  prior to the initiation of Phase I 
                     [...***...]  during Phase I or Phase II studies 
                     [...***...]  upon Phase II completion or during Phase III 
                     [...***...]  upon Phase III completion with a submittable
                                  application for Regulatory Approval in a Key 
                                  Market


                                               (C)    in the case where either
                                                      Searle terminates this
                                                      Agreement under Section
                                                      15.2 or Epimmune
                                                      terminates this Agreement
                                                      under Section 15.3, Net
                                                      Sales of the Searle
                                                      Product Component packaged
                                                      alone or included in any
                                                      Product Type 2 sold by
                                                      Epimmune, its Affiliates
                                                      or sublicensees in the
                                                      Field at the higher of the
                                                      following rates:

                                                      (i)     [ *** ] for a
                                                              Searle Cytokine
                                                              covered by at
                                                              least one
                                                              composition of
                                                              matter claim of
                                                              the Patent Rights
                                                              contained in Joint
                                                              Technology; and

                                                      (ii)    [ *** ] for a
                                                              Searle Cytokine
                                                              covered by at
                                                              least one claim of
                                                              the Patent Rights
                                                              contained in
                                                              Searle Initial
                                                              Technology or
                                                              Searle Project
                                                              Technology.

                                   (c)  The provisions of Sections 1.26, 7.2(i)
                                        (except with respect to Searle
                                        Cytokines) and 7.3 and Article 8 shall
                                        apply mutatis mutandis to Epimmune with
                                        respect to all royalties payable by
                                        Epimmune under this Section 15.5.2.

                                   (d)  Notwithstanding the provisions of
                                        subsection (a) above, if Epimmune
                                        terminates this Agreement under
                                        subsection 15.3 due to Searle's failure
                                        to make a royalty payment required
                                        hereunder which is not the subject of a
                                        good faith dispute, then subsection (a)
                                        above shall not apply and subsection (b)
                                        shall also apply to any Products which
                                        were launched and/or for which
                                        applications for Regulatory Approvals
                                        were submitted as of the date such
                                        termination is effective. With respect
                                        only to any such Products which were
                                        launched and/or for which applications
                                        for Regulatory Approvals were submitted
                                        as of the date such termination is
                                        effective, Epimmune shall pay Searle a
                                        royalty of [...***...] on the Net Sales
                                        of any Product Type 1 or the Epimmune
                                        Product Component included in any
                                        Product Type 2 sold by Epimmune, its
                                        Affiliates or sublicensees in the Field.


                                      -30-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                    15.5.2.2       If Searle terminates this Agreement under
                                   Subsection 15.3, Searle shall have the
                                   continuing right to make, have made, use,
                                   sell and import Products in the Field as
                                   provided in this Agreement, subject to the
                                   payment of all royalties and milestone
                                   payments due hereunder, except that all
                                   milestone payments which become due after the
                                   date such termination is effective shall be
                                   reduced by [...***....]

                    15.5.2.3       If Searle terminates this Agreement under
                                   Subsection 15.3 and Epimmune has failed to
                                   meet its funding obligations defined in
                                   Section 2.2.1 under the Collaboration,
                                   [...***...]

         15.5.3     INSOLVENCY.

                    15.5.3.1       In the event Epimmune becomes a debtor under
                                   the Bankruptcy Code, all rights and licenses
                                   granted under or pursuant to this Agreement
                                   by Epimmune to Searle are, and shall
                                   otherwise be deemed to be, for purposes of
                                   Section 365(n) of the Bankruptcy Code,
                                   licenses of rights to "intellectual property"
                                   as defined under Section 101(35)(a) of the
                                   Bankruptcy Code. The Parties agree that
                                   Searle, in addition to the rights granted to
                                   it under this Agreement, as licensee of
                                   rights under this Agreement, shall retain and
                                   may fully exercise all of its rights and
                                   elections under the Bankruptcy Code. If a
                                   bankruptcy proceeding is commenced by or
                                   against Epimmune under the Bankruptcy Code,
                                   Searle shall be entitled to a complete
                                   duplicate of (or complete access to, as
                                   appropriate) any such intellectual property
                                   and all embodiments of such intellectual
                                   property upon written request therefor by
                                   Searle. Such intellectual property and all
                                   embodiments thereof shall be promptly
                                   delivered to Searle: (a) upon any such
                                   commencement of a bankruptcy proceeding upon
                                   written request by Searle, unless Epimmune
                                   elects to continue to perform all of its
                                   obligations under this Agreement; or (b) if
                                   not delivered under (a) above, upon the
                                   rejection of this Agreement by or on behalf
                                   of Epimmune upon written request by Searle.
                                   Epimmune shall not interfere with the rights
                                   of Searle as provided in this Agreement, or
                                   any agreement supplementary hereto, to such
                                   intellectual property (including all such
                                   embodiments thereof), including any right of
                                   Searle to obtain such intellectual property
                                   (or such embodiment) from any other entity.


                                      -31-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                    15.5.3.2       The provisions of the following sentence
                                   shall apply if Epimmune becomes a debtor
                                   under the Bankruptcy Code and if, in any
                                   bankruptcy proceeding relating thereto,
                                   Searle should lose the license rights granted
                                   by Epimmune in Section 6.1 with respect to
                                   any of the top fifteen (15) pharmaceutical
                                   markets in the world based on published IMS
                                   data at the time of such loss. In such event,
                                   the cumulative milestone payments set forth
                                   on Exhibit E shall be reduced by (a)
                                   [...***...] if Searle loses such rights in
                                   one of such top fifteen (15) pharmaceutical
                                   markets, and (b) [...***...] if Searle loses
                                   such rights in two or more of such fifteen
                                   (15) pharmaceutical markets.

                    15.5.3.3       During the term of this Agreement, Epimmune
                                   shall not grant any Third Party, other than a
                                   banking institution or other similar
                                   institution engaged primarily in the business
                                   of lending money or extending credit, a
                                   security interest in the Intellectual
                                   Property Rights.

         15.5.4     GRANT OF LICENSE TO EPIMMUNE.

                    15.5.4.1       In the event this Agreement is terminated by
                                   Searle pursuant to Section 15.2 or by
                                   Epimmune pursuant to Section 15.3, then
                                   Searle shall grant to Epimmune a
                                   semi-exclusive, worldwide license, with right
                                   to sublicense, under

                                   (a)  Searle Project Technology and Searle's
                                        rights under Joint Technology to make,
                                        have made, use and sell Products in the
                                        Field; provided, however, Epimmune shall
                                        have no right to practice or sublicense
                                        Searle Project Technology or Joint
                                        Technology for uses of Searle Cytokines
                                        except to the extent necessary to use a
                                        Searle Cytokine that was included in the
                                        formulation of a Product in Development
                                        under the Development Plan at the time
                                        of notice of such termination, and


                                      -32-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                                   (b)  Searle Initial Technology for uses of
                                        Searle Cytokines only to the extent
                                        necessary to make, have made, use and
                                        sell Products in the Field which use a
                                        Searle Cytokine that was included in the
                                        formulation of a Product in Development
                                        under the Development Plan at the time
                                        of notice of such termination.

                                   For the avoidance of doubt, if more than one
                                   (1) Searle Cytokine was evaluated for use in
                                   the formulation of any Product, the license
                                   granted under this Section 15.5.4.1 shall
                                   apply only to the Searle Cytokine(s) selected
                                   by Epimmune for use in such Product. Also,
                                   for the avoidance of doubt, if Epimmune
                                   sublicenses the rights granted under this
                                   Section 15.5.4.1, any such sublicensee shall
                                   have no right whatsoever to use the Searle
                                   Initial Technology, Searle Project Technology
                                   or Searle's rights under the Joint Technology
                                   for any purpose other than the express grant
                                   of rights provided herein.

                                   Any such license shall contain applicable
                                   warranties by Searle to Epimmune similar to
                                   those made by Epimmune in Section 5.1. In
                                   connection with the grant of such license,
                                   Searle shall disclose to Epimmune in writing
                                   all Know-How included in the Searle Project
                                   Technology and Joint Technology licensed to
                                   Epimmune that was not previously disclosed to
                                   Epimmune and all Know-How included in the
                                   Searle Initial Technology relating to the
                                   specific Searle Cytokine(s) evaluated in
                                   connection with the Development of the
                                   Products described in Sections 15.5.4.1(a)
                                   and (b).

                    15.5.4.2       In consideration of the license granted under
                                   Section 15.5.4.1, Epimmune shall pay Searle
                                   the royalties provided in Section
                                   15.5.2.1(b)(C).

                    15.5.4.3       In connection with the license granted under
                                   Section 15.5.4.1, Searle shall have the
                                   option, in its sole discretion and upon
                                   commercially reasonable terms to be agreed by
                                   the Parties, to either (i) provide Epimmune
                                   with the enabling technology to manufacture
                                   any Searle Cytokines contained in any Product
                                   covered by such license, or (ii) supply
                                   Epimmune with any such Searle Cytokines on
                                   such commercially reasonable terms, which
                                   terms shall be no less favorable than those
                                   granted by Searle to Third Parties for the
                                   purchase of Searle Cytokines or, if no Third
                                   Parties purchase Searle Cytokines, of a
                                   compound or product utilizing novel
                                   technology similar to Searle Cytokines.


                                      -33-
<PAGE>


15.6     SURVIVAL AND EFFECT OF TERMINATION. The provisions of Sections 11.1 and
         14.2 and Articles 8, 12, 13 (excluding Sections 13.4 and 13.5), 15 and
         16 shall survive termination or expiration of this Agreement.
         Termination or expiration of this Agreement shall not deprive either
         Party of any rights or remedies either at law or in equity or relieve
         either Party of any of its obligations incurred prior to such
         termination or expiration. The Parties shall cooperate in good faith to
         wind-down the Development in order to minimize disruption of the
         Development and/or commercialization efforts.


ARTICLE 16.  INDEMNIFICATION.
-----------------------------

16.1     IN FAVOR OF SEARLE. Epimmune agrees to indemnify, defend and hold
         Searle harmless from and against any and all damages, losses,
         liabilities (including without limitation product liability with
         respect to Epimmune Technology) costs and expenses (including
         reasonable costs and attorneys fees) arising from any claim, lawsuit or
         other action made or brought against Searle as a result of (a) any
         negligent or willful act or omission of Epimmune, or (b) the breach of
         any provision, term, warranty or representation made by Epimmune
         herein; or (c) any claim alleging the infringement of a Third Party's
         intellectual property rights by the importing, making, using or selling
         Epimmune Initial Technology in the importing, making, using or selling
         of any Product.

16.2     IN FAVOR OF EPIMMUNE. Searle agrees to indemnify, defend and hold
         Epimmune harmless from and against any and all damages, losses,
         liabilities (including without limitation product liability with
         respect to Searle Technology) costs and expenses (including reasonable
         costs and attorneys fees) arising from any claim, lawsuit or other
         action made or brought against Epimmune as a result of (a) any
         negligent or willful act or omission of Searle, or (b) the breach of
         any provision, term, warranty or representation made by Searle herein;
         or (c) any claim alleging the infringement of a Third Party's
         intellectual property rights by the importing, making, using or selling
         Searle Initial Technology in the importing, making, using or selling of
         any Product.

16.3     LIMITATION. Notwithstanding anything to the contrary set forth above or
         elsewhere herein, in no event shall either Party be (a) required to
         indemnify the other party for such other Party's negligence or
         intentional misconduct, or (b) responsible for the lost profits,
         consequential or indirect damages of the other Party.

16.4     NOTICE. Should any claim arise which could reasonably lead to a claim
         or demand for indemnification, the Party seeking indemnification
         ("Indemnified party") shall promptly notify the other Party
         ("Indemnifying party") of the claim and the facts constituting the
         basis for such claim. The Indemnified party shall not settle or
         compromise any such claim without the prior written consent of the
         Indemnifying party, which consent shall not be unreasonably withheld.


                                      -34-
<PAGE>

16.5     DEFENSE. The Indemnifying party may, upon written notice to the
         Indemnified party, assume the defense of any claim at its sole cost and
         expense. The Indemnified party shall provide reasonable assistance in
         the defense of such claim in the event the Indemnifying party assumes
         the defense as set forth above.


ARTICLE 17.  DILIGENT PERFORMANCE; NEW OPPORTUNITIES.
-----------------------------------------------------

17.1     DILIGENCE STANDARDS. Each Party shall use commercially reasonable and
         diligent efforts to perform its respective obligations under the
         Research Plan and the Development Plan, as either or both may be
         amended from time to time pursuant to the term of this Agreement, and
         shall ensure that such responsibilities are carried out adhering to the
         highest ethical and safety standards. Each Party shall provide
         qualified, experienced personnel to carry out its respective
         obligations under the Research Plan and the Development Plan. As used
         herein, "commercially reasonable and diligent efforts" means, unless
         the parties agree otherwise, those efforts consistent with the exercise
         of prudent scientific and business judgment as applied to activities
         conducted with regard to other programs or products of similar
         potential and market size in the pharmaceutical industry.

17.2     SEARLE DILIGENCE.

         17.2.1  Epimmune may provide 90 days written notice to Searle if, in
                 its opinion, Searle is not using commercially reasonable and
                 diligent efforts in the performance of its obligations under
                 the Research Plan and the Development Plan, in order for the
                 parties to discuss the situation and for Searle to make
                 diligent and continuing efforts to rectify the situation during
                 such 90 day period. In the event that the parties are unable to
                 resolve their differences within such 90 day period, such
                 dispute shall be submitted for resolution to the senior
                 executive of each Party (i.e., the President of Epimmune and
                 the President of Searle R&D). If the senior executives are
                 unable to satisfactorily resolve such dispute within 30 days of
                 the date it was submitted to them, then the dispute shall be
                 submitted for binding arbitration in accordance with Section
                 19.12.

         17.2.2  Searle shall (i) make a determination to pursue research and
                 development of Products which are [...***...] and commit
                 sufficient resources to enable pre-clinical development of a

                                      -35-      CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                 Product which is a [...***...] [...***...] by [...***...] and
                 (ii) issue a Product Alert for a Product which is a [...***...]
                 by [...***...] provided the Product candidate offered by
                 Epimmune meets the Product specifications provided by Searle,
                 such specifications to be provided as soon as practicable
                 following the Effective Date, and if such Product candidate
                 fails to meet such specifications then such date shall be
                 extended on a day-by-day basis for each day after [...***...]
                 until the date such Product candidate meeting such
                 specifications is provided. In the event that Epimmune has not
                 provided data regarding the [...***...] in accordance with the
                 requirements of the Research Plan by [...***...] the dates set
                 forth in (i) and (ii) of the preceding sentence shall be
                 extended on a day-by-day basis for each day after [...***...]
                 until the date such data is provided. In the event that Searle
                 does not satisfy the diligence requirements set forth in this
                 Section 17.2.2, then Epimmune may terminate the license granted
                 to Searle by Epimmune in Section 6.1 with respect to the PADRE
                 technology for the development of [...***...] upon written
                 notice to Searle.

         17.2.3  In the event that, as of [...***...] Searle is not pursuing
                 development of any Product that is a [...***...] or has not
                 paid the milestone associated with a Product Alert for any
                 Product that is a [...***...] then Searle shall issue a Product
                 Alert with respect to at least one Product [...***...] and pay
                 the associated milestone payment by [...***....] In the event
                 that Searle does not satisfy the diligence requirements set
                 forth in this Section 17.2.3, then Epimmune may terminate the
                 license granted to Searle by Epimmune in Section 6.1 with
                 respect to [...***...] upon written notice to Searle.

         17.2.4  If Searle decides not to proceed with the Development of a
                 Product in Development under the Development Plan, or if no
                 significant Development action has been taken by Searle with
                 respect to a Product in Development under the Development Plan,
                 as updated, for a period of [...***...] the provisions of this
                 Section 17.2.4 shall apply with respect to such Product (an
                 "Abandoned Product"). Searle shall promptly provide notice to
                 Epimmune of any decision not to proceed with a Product in
                 Development under the Development Plan. Upon written notice to
                 Searle, Epimmune may elect to conduct further development of
                 any such Abandoned Product for any indication that is not
                 included in any launched Product or in any Product for which
                 Regulatory Approval applications have been submitted or in any
                 Product in development under the Development Plan and the
                 license granted to Searle by Epimmune in Section 6.1 shall
                 terminate with respect to any such Abandoned Product.
                 Notwithstanding the foregoing, an Abandoned Product shall not
                 be deemed to include any (i) back-up compound, the development
                 of which depends on the success of the lead compound, or (ii)
                 Product or compound, the development of which has been delayed
                 as part of the overall pipeline management strategy in order to
                 optimize the applicable technology platform.



                                      -36-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

         17.2.5  If any failure to act diligently as required in Sections
                 17.2.1, 17.2.2, 17.2.3 and/or 17.2.4 is due to scientific
                 and/or technical results, clinical study problems outside of
                 Searle's control, action by any Regulatory Authority or mutual
                 agreement of the parties, then the time periods for such
                 diligence requirements set forth therein shall be adjusted
                 accordingly.

17.3     EPIMMUNE DILIGENCE.

         17.3.1  Searle may provide 90 days written notice to Epimmune if
                 Epimmune has failed to complete Research activities for which
                 it is responsible under the Research Plan, as amended from time
                 to time, within six (6) months following the date such activity
                 was scheduled for completion, in order for Epimmune to make
                 diligent and continuing efforts to rectify the situation during
                 such 90 day period. In the event that the parties are unable to
                 resolve their differences within such 90 day period, such
                 dispute shall be submitted for resolution to the senior
                 executive of each Party (i.e., the President of Epimmune and
                 the President of Searle R&D). If the senior executives are
                 unable to satisfactorily resolve such dispute within 30 days of
                 the date it was submitted to them, then the dispute shall be
                 submitted for binding arbitration in accordance with Section
                 19.12.

         17.3.2  In the event, for the first Product [...***...] appropriate for
                 clinical trials which cover [...***...] has not occurred by
                 [...***...] then the amount due for the achievement of the
                 milestone event(s) provided in Item I.1. of Exhibit E shall be
                 reduced by [...***...] following such date that such [...***...
                 .] As of the [...***...] no payment shall be due Epimmune for
                 the achievement of the milestone event(s) provided in Item I.1.
                 of Exhibit E.

         17.3.3  In the event, for the first Product under the [...***...]
                 appropriate for clinical trials which cover [...***...] has not
                 occurred by [...***...] then the amount due for the achievement
                 of the milestone event(s) provided in Item I.1. of Exhibit E
                 shall be reduced by [...***...] following such date that such
                 [...***....] As of the [...***...] no payment shall be due
                 Epimmune for the achievement of the milestone event(s) provided
                 in Item I.1. of Exhibit E.


                                      -37-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

         17.3.4  If any failure to act diligently as required in Sections
                 17.3.1, 17.3.2 and 17.3.3 is due to scientific and/or technical
                 results, action by any Regulatory Authority or mutual agreement
                 of the parties, then the time periods for such diligence
                 requirements set forth therein shall be adjusted accordingly.

17.4     NEW OPPORTUNITIES. Following the [...***...] Epimmune may present ideas
         for Products or technology not already contained in the Research Plan
         or Development Plan(s) for inclusion in the Collaboration in reasonable
         detail as is normally included in order to make a decision on compound
         research within the pharmaceutical industry for consideration by Searle
         (a "Proposal"). Searle shall consider any such Proposal in a timely
         manner. If Searle determines in good faith that it is interested in
         pursuing the Proposal under the Collaboration, the Parties will agree
         on how to proceed with research and development of the Product or the
         Development Plan. In the event that the Parties are unable to agree,
         such dispute shall be submitted for resolution to the senior executive
         of each Party (i.e., the President of Epimmune and the President of
         Searle R&D). If the senior executives are unable to satisfactorily
         resolve such dispute within 30 days of the date it was submitted to
         them, then the dispute shall be submitted for binding arbitration in
         accordance with Section 19.12. In the event Searle elects not to pursue
         such Proposal under the Collaboration [...***...] upon written notice
         to Searle, Epimmune may pursue the development of Products or
         technology as described in the Proposal and the license granted to
         Searle by Epimmune in Section 6.1 shall terminate solely with respect
         to such Products or technology so rejected by Searle. For purposes of
         this Section 17.4, a "Proposal" shall include a product concept for one
         or more indications, with as much information as can be reasonably
         determined about product specifications, and all relevant internal
         data, relevant data from the literature, summary competitive analysis
         and an overview at the target market(s).


ARTICLE 18.  ASSIGNMENT.
------------------------

Neither this Agreement nor any of the rights or obligations hereunder may be
assigned by either Party without the prior written consent, which shall not be
unreasonably withheld, of the other Party, except to an Affiliate of the
assigning Party or to any Third Party who acquires all or substantially all of
the business of the assigning Party by merger, sale of assets or otherwise, so
long as such Affiliate or Third Party agrees in writing to be bound by the terms
of this Agreement. The assigning Party shall remain primarily liable hereunder
notwithstanding any such assignment.


                                      -38-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

ARTICLE 19.  MISCELLANEOUS.
---------------------------

19.1     WAIVER. The failure by either Party to require performance by the other
         Party of any of its obligations hereunder shall in no manner affect the
         right of such Party to enforce the same at a later time. No waiver by
         either Party of any condition, or of the breach of any provision of
         this Agreement, whether by conduct or otherwise shall be deemed to be
         or construed as a further or continuing waiver thereof.

19.2     AMENDMENTS. This Agreement may not be amended except in writing, signed
         by both Parties.

19.3     SEVERABILITY. If any provision of this Agreement is held invalid or
         unenforceable, such provision shall be deleted, and, if possible,
         replaced by a provision which achieves the intent of the Parties.

19.4     RELATIONSHIP BETWEEN THE PARTIES. Nothing in this Agreement is intended
         nor shall be construed to create a partnership or joint venture between
         Epimmune and Searle. Neither Party shall have the express or implied
         authority to assume or create any obligations on behalf of or in the
         name of the other Party.

19.5     CORRESPONDENCE AND NOTICES. Extraordinary notices and communications
         (including but not limited to notices of termination, force majeure,
         material breach, change of address) shall be in writing and sent by
         prepaid registered or certified air mail, or by facsimile confirmed by
         prepaid registered or certified air mail letter, and shall be deemed to
         have been properly served to the addressee upon receipt of such written
         communication.

         In the case of Epimmune, such address shall be:

                  Epimmune Inc.
                  6555 Nancy Ridge Drive
                  Suite 200
                  San Diego, California  92121
                  Attn:     President
                  Fax:      (619) 404-7177



                                      -39-    
<PAGE>

         with a copy to:

                  Cooley Godward LLP
                  4365 Executive Drive, Suite 1100
                  San Diego, California  92121
                  Attn:  Frederick T. Muto, Esq.
                  Tel:      (619) 550-6000
                  Fax:      (619) 453-3555

         and in the case of Searle, such address shall be:

                  G. D. Searle & Co.
                  P. O. Box 5110
                  Chicago, IL 60680-5110
                  Attn:     Vice President, Business Development
                  Fax:      (847) 967-2070

         with a copy to:

                  Attn:     General Counsel
                   Fax:     (847) 967-2045

19.6     CHOICE OF LAW. This Agreement is subject to and governed by the laws of
         Illinois (except the choice of laws rules thereof). The venue for any
         legal proceedings shall be Illinois for legal proceedings brought by
         Epimmune against Searle and California for legal proceedings brought by
         Searle against Epimmune.

19.7     FORCE MAJEURE. Neither Party shall be liable to the other for delay or
         failure in performing any of its obligations if and to the extent that
         such failure or delay is due to circumstances beyond its control which
         it could not have avoided by the exercise of reasonable diligence. It
         shall notify the other Party promptly should such circumstances arise,
         giving an indication of the likely extent and duration thereof, and
         shall use all commercially reasonable efforts to resume performance of
         its obligations as soon as practicable.

19.8     REGISTRATION AND FILING OF THE AGREEMENT. To the extent, if any, that a
         Party concludes in good faith that it is required to file or register
         this Agreement or a notification thereof with any governmental
         authority, including without limitation the U.S. Securities and
         Exchange Commission, the Competition Directorate of the Commission of
         the European Communities or the U.S. Federal Trade Commission, in
         accordance with applicable laws and regulations, such Party may do so,
         and the other Party shall cooperate in such filing or notification and
         shall execute all documents reasonably required in connection
         therewith. In such situation, the Parties will request confidential
         treatment of sensitive provisions of the Agreement, to the extent
         permitted by law. The Parties shall promptly inform each other as to
         the activities or inquiries of any such governmental authority relating
         to this Agreement, and shall cooperate to respond to any request for
         further information therefrom. Without limiting the foregoing, the
         Parties agree to make all necessary filings required under the
         Hart-Scott-Rodino Antitrust Improvements act of 1976, as amended, and
         to cooperate with each other so as to comply therewith on a timely
         basis in light of the provisions of this Agreement.



                                      -40-     CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

19.9     EXPORT. The Parties agree to abide by the export laws and regulations
         of the United States and to cooperate with each other in obtaining any
         required export license applicable to the subject matter of this
         Agreement.

19.10    ENTIRE AGREEMENT. This Agreement together with its Exhibits and further
         agreements mentioned herein constitutes the entire agreement of the
         Parties with respect to the subject matter hereof as of its date, and
         supersedes all prior agreements (including the Prior Agreements),
         understandings, representations and proposals, written or oral,
         relating thereto.

19.11    COUNTERPARTS. This Agreement may be executed in one or more
         counterparts, each of which shall be deemed an original.

19.12    ARBITRATION. Any dispute arising under Section 1.26, 3.2.4 or Article
         17 will be finally settled by arbitration in accordance with the then
         existing Commercial Arbitration Rules of the American Arbitration
         Association ("AAA"). Upon the written request of either party,
         arbitration will be by one arbitrator with relevant experience in the
         pharmaceutical industry selected within 30 days of such arbitration
         request by mutual agreement of the Parties (or in accordance with AAA
         rules if the Parties are unable to reach agreement on the selection of
         such arbitrator). Judgment upon the award rendered by the panel, or
         single arbitrator as the case may be, shall be final and nonappealable
         and may be entered in any court having jurisdiction thereof. The
         location for any arbitration initiated by either party shall be Dallas,
         Texas, or at such other place as the parties may mutually agree.


              [the remainder of this page intentionally left blank]



                                      -41-    
<PAGE>


         IN WITNESS WHEREOF, the parties have signed this Agreement effective as
of the year first set forth above.

G.D. SEARLE & CO.                        EPIMMUNE INC.



By:/s/ R.V. De Schutter                  By:/s/ Deborah Schueren
   --------------------                     --------------------
     R. U. De Schutter                      Deborah Schueren
     Chairman and Chief Executive           President
     Officer and President

                                    EXHIBITS
                                    --------


                             A            EPIMMUNE PATENT RIGHTS
                             B            SEARLE PATENT RIGHTS
                             C            PRELIMINARY RESEARCH PLAN
                             D            PRELIMINARY RESEARCH BUDGET
                             E            MILESTONE PAYMENTS





                                      -42-
<PAGE>



                                    EXHIBIT A
                                    ---------
                             EPIMMUNE PATENT RIGHTS

                                   [...***...]

                        CONFIDENTIAL TREATMENT REQUESTED











                                      -43-
<PAGE>



                                    EXHIBIT B
                                    ---------
                              SEARLE PATENT RIGHTS

                                   [...***...}

                        CONFIDENTIAL TREATMENT REQUESTED












                                      -44-
<PAGE>


                                    EXHIBIT C
                                    ---------
                            PRELIMINARY RESEARCH PLAN

                                   [...***...}

                        CONFIDENTIAL TREATMENT REQUESTED








                                      -45-


<PAGE>


                                    EXHIBIT D
                                    ---------
                           PRELIMINARY RESEARCH BUDGET














                                      -46-
<PAGE>



                                    EXHIBIT E
                                    ---------
                               MILESTONE PAYMENTS


For purposes of this Exhibit E, the following definitions shall apply:

(a)      "First Product" means (i) for purposes of Articles I and II, the first
         Product developed hereunder containing a [...***...] and (ii) for
         purposes of Article III, the first Product developed hereunder
         containing [...***....]

(b)      "New Product" means any Product, whose composition (based on components
         or formulation) is not identical to the First Product, for the
         treatment of a specific type of cancer or cancers.

(c)      "Additional Indication" means any indication, other than the specific
         cancer(s) treated in the first indication of the First Product or of
         any New Product. By way of illustration or example, if [...***...] is
         the specific cancer treated as the first indication in either the First
         Product or a New Product, then each of [...***...] shall be "Additional
         Indications".

Subject to the provisos contained in Article IV of this Exhibit E, Searle shall
pay Epimmune the following amounts upon the occurrence of each of the following
milestone events with respect to each of [...***...]

  I.  [...***...]
      -----------

      1.   Subject to sections 17.3.2 and 17.3.3 of the Agreement, [...***...]
           upon the issuance of the first to occur of either (i) a single
           Product Alert for a compound containing epitopes appropriate for
           clinical trials which cover [...***...] for the treatment of
           [...***...] or (ii) the last of separate Product Alerts for compounds
           containing epitopes appropriate for clinical trials which cover,
           [...***...] for the treatment of [...***...] or (iii) twelve (12)
           months after selection of epitopes appropriate for clinical trials
           which cover [...***...] for the treatment of [...***....]

      2.   [...***...] upon the start of Phase I/II clinical studies for (A) the
           First Product, and (B) each New Product.


                                      -47-      CONFIDENTIAL TREATMENT REQUESTED

<PAGE>


      3.   [...***...] upon (A) the completion of Phase II clinical studies for
           the first indication of the First Product, where completion of such
           studies shall be deemed to occur upon the determination by Searle
           that the data resulting therefrom supports the start of Phase III
           studies and no additional Phase II studies are required, and (B) the
           start of Phase III clinical studies for the first indication of each
           New Product.

      4.   [...***...] upon the start of Phase III clinical studies for each
           Additional Indication of (A) the First Product and (B) each New
           Product.

      5.   [...***...] upon the submission in the first of the Key Markets to
           the Regulatory Authority of the application for Regulatory Approval
           of the first indication of the (A) First Product and (B) each New
           Product.

      6.   [...***...] upo
n the Launch Date in the first of the Key Markets of
           the first indication of the (A) First Product and (B) each New
           Product.

      7.   [...***...] upon the Launch Date in the first of the Key Markets of
           each Additional Indication of (A) the First Product and (B) each New
           Product.

II.   [...***...]
      -----------

           1.    [...***...] upon the issuance of the First Product Alert
                 [...***...]

           2.    [...***...] upon the start of Phase I/II clinical studies for
                 (A) the First Product, and (B) each New Product.

           3.    [...***...] upon the start of Phase III clinical studies for
                 the first indication of (A) the First Product, and (B) each New
                 Product.

           4.    [...***...] upon the start of Phase III clinical studies for
                 each Additional Indication of (A) the First Product and (B)
                 each New Product.

           5.    [...***...] upon the submission in the first of the Key Markets
                 to the Regulatory Authority of the application for Regulatory
                 Approval of the first indication of the (A) First Product and
                 (B) each New Product.

           6.    [...***...] upon the Launch Date in the first of the Key
                 Markets of the first indication of the (A) First Product and
                 (B) each New Product.

           7.    [...***...] upon the Launch Date in the first of the Key
                 Markets of each Additional Indication of (A) the First Product
                 and (B) each New Product.


                                      -48-      CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

III.  [...***...]
      -----------

           1.    [...***...] upon the issuance of a Product Alert satisfying the
                 Product specifications defined by Searle for the First Product.

           2.    [...***...] upon the start of Phase I/II clinical studies for
                 (A) the First Product, and (B) each New Product.

           3.    [...***...] upon the start of Phase III clinical studies for
                 the first indication of (A) the First Product, and (B) each New
                 Product.

           4.    [...***...] upon the start of Phase III clinical studies for

                 each Additional Indication of (A) the First Product, and (B)
                 each New Product.

           5.    [...***...] upon the submission in the first of the Key Markets
                 to the Regulatory Authority of the application for Regulatory
                 Approval of the first indication of (A) the First Product, and
                 (B) each New Product.

           6.    [...***...] upon the Launch Date in the first of the Key
                 Markets of the first indication of (A) the First Product, and
                 (B) each New Product.

           7.    [...***...] upon the Launch Date in the first of the Key
                 Markets of each Additional Indication of (A) the First Product,
                 and (B) each New Product.

IV.   PROVISOS
      --------

      1.   If, [...***...] a compound under Development fails and a back-up
           compound is selected for Development in place thereof for the same
           indications as the failed compound, then milestone payments will be
           payable (upon the occurrence of the applicable triggering event) only
           for those milestone events for which a payment was not previously
           made with respect to the failed compound. For the avoidance of doubt,
           no milestone payments shall be made for any back-up compound except
           in the event a back-up compound replaces a lead compound in
           Development.

      2.   It is the intention of the parties to begin Research and Development
           of Products [...***...] then to [...***...] for pursuing Research and
           Development of Products [...***...] If, for any technical, commercial
           and/or strategic reasons, the parties agree to abandon Development of
           Products within [...***...] in favor of the Research and Development
           of Products within the [...***...] then, for any milestone events
           achieved within the [...***...] which are for the same milestone
           events (i.e. for the same indication) already achieved within the
           [...***...] Searle shall pay Epimmune [...***...] of the amount
           otherwise due for achievement of such [...***...] events provided
           that this [...***...] cutback shall not apply to any Product Alert
           milestone. For example, if the first three clinical milestone
           payments have been made for the First Product developed within the
           [...***...] prior to the abandonment of such platform, then Searle
           shall pay Epimmune [...***...] of the first three clinical milestones
           payments for the First Product developed within the [...***...].


                                      -49-      CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      3.   Under Articles I, II and III above, the milestones stated are
           milestones owed for the first achievement of a milestone event for
           each Product indication without regard to the technology platform
           under which such Product was developed. The milestones due upon each
           subsequent achievement of a milestone event for the same indication
           within the same technology platform for second generation Products or
           within another technology platform shall be reduced by [...***...].
           For example, the milestone payments would be [...***...] for the
           start of Phase I/II clinical studies for a Product for the treatment
           of [...***...] developed under the [...***...] and [...***...] for
           the subsequent start of Phase I/II clinical studies for a Product for
           the treatment of [...***...] developed under the [...***...] or a
           second generation Product for the treatment of [...***...] developed
           under the [...***...]

      4.   Payments made by Searle for milestone events achieved for [...***...]
           Products under Article III shall in no event exceed [...***...] for
           each such Product developed under this Agreement.









                                      -50-      CONFIDENTIAL TREATMENT REQUESTED