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                          SECURITIES AND EXCHANGE COMMISSION

                                   WASHINGTON, D.C.









                                  PHARMAGENICS, INC.



                          ----------------------------------


                                    Exhibit 10.62

                                          to

                            QUARTERLY REPORT ON FORM 10-Q

                         For Quarter Ended September 30, 1996



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June 27, 1996


Michael I. Sherman, Ph.D.
314 Forest Avenue
Glen Ridge, New Jersey 07028


Dear Mike:

         This letter agreement (this "Agreement") sets forth the terms and
conditions of your employment by PharmaGenics, Inc., a Delaware corporation
(which corporation, including its successors and assigns, will be referred to in
this letter agreement as the "Company").

1.       TERM.     The Company hereby employs you and you hereby 
         accept employment by the Company subject to the terms and conditions
         in this Agreement.  Your employment shall be for a three-year period
         (the "Term") commencing July 1, 1996 and ending June 30, 1999, subject
         to earlier termination as provided in this Agreement.  The Term and
         each extension thereafter shall be automatically extended for
         successive one-year periods unless either party shall give written
         notice to the other party at least sixty (60) days prior to the
         expiration of the then present term that it elects not to extend such
         term.  The employment period as described in this paragraph shall be
         referred to in this Agreement as the "Employment Period."
         
2.       DUTIES.   (a)  The Company shall employ you as President 
         and Chief Executive Officer of the Company.  You shall perform well
         and faithfully such duties and services consistent with your positions
         with the Company as may be assigned to you from time to time by the
         Board of Directors of the Company or its designee.
         
         (b)  The Company shall use its best efforts to ensure your election as
         a member of the Board of Directors and of the Executive Committee
         thereof during the Employment Period.
         
         (c)  Except for reasonable vacations of a duration consistent with
         Company policy and absences for temporary illness, 

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 2


         you shall devote your full time and energy to the business of the
         Company during the Employment Period.  You shall not engage in any
         other business activity which in the Company's reasonable judgment
         conflicts with your duties to the Company during the Employment
         Period.
         
3.       COMPENSATION; REIMBURSEMENT.  (a)  During the Employment 
         Period, commencing July 1, 1996, the Company shall pay you initially
         an annual base salary (the "Base Salary") of $242,650, payable in such
         installments as is consistent with Company policy for senior
         executives.  It is understood, however, that in the event that prior
         to March 31, 1997 the Company undergoes a change in control and/or
         receives additional financing in the cumulative amount of three
         million dollars ($3,000,000), your annual base salary will be
         increased to $260,000 retroactive to July 1, 1996.  The Base Salary
         shall be increased, as of each July 1 during the Employment Period by
         (i)  a percentage corresponding to the percentage increase (the "CPI
         Increase"), if any, in the Revised Consumer Price Index (1967=100) --
         All Urban Consumers [New Series] since the last adjustment date, or,
         if no prior adjustment has been made, since July 1, 1996, and (ii) 
         such additional increases, if any, as determined by the Compensation
         Committee of the Board of Directors in its sole discretion.
         
         (b)  On a calendar year basis within the Employment Period, the
         Company shall pay you a cash bonus of at least $20,000, and may pay
         you such additional bonuses as determined by the Compensation
         Committee of the Board of Directors in its sole discretion.  Such
         bonus or bonuses shall be paid in such manner and at such times as is
         consistent with Company policy for senior executives.
         
         In addition, if, before the end of 1996, the Company (i)  has an
         Initial Public Offering with proceeds of at least twenty million
         dollars ($20,000,000), or (ii)  signs a definitive merger agreement in
         which the Company's valuation is sixty million dollars ($60,000,000)
         or greater, the Company shall pay you an additional one-time bonus of
         $25,000 or a greater amount at the discretion of the Board of
         Directors.

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 3


         (c)  During the Employment Period, the Company shall, at your option,
         either (i)  pay to you a car allowance of up to $650 per month payable
         upon your submission of appropriate documentation evidencing purchase
         and delivery of the car, (ii)  reimburse you for car rental or lease
         and related expenses not to exceed $650 per month, or (iii) rent or
         lease a car for you in which case you agree to reimburse the Company
         for all expenses paid by the Company related to such car rental to the
         extent such expenses exceed $650 per month.  Such payments to you
         shall be grossed up on an annual basis in an amount equal to federal
         and state income taxes on such payments.
         
         (d) During the Employment Period, you shall be entitled to such health
         and other benefits as are made available to senior executives of the
         Company.
         
         (e)  If at any time during the Employment Period the principal offices
         of the Company shall be moved to a site outside a fifty-mile radius of
         Glen Ridge, New Jersey, the Company shall reimburse you for reasonable
         relocation costs related thereto.
         
4.       TERMINATION.   (a)  The Company may terminate your 
         employment at any time, with or without "cause."
         
         (b)  In the event of termination by the Company of your employment
         without "cause," such termination shall be effective immediately upon
         notice to you, and, in such event, the Company shall pay you that
         portion of your Base Salary prorated to the date of termination which
         has not yet been paid to you within thirty (30) days of such notice,
         plus twelve months' Base Salary (at the rate and frequency in effect
         at the time of termination but with no additional increases), but
         neither you nor your assigns, beneficiaries or estate shall have any
         further rights or claims against the Company, other than any rights or
         claims to which you are entitled as a shareholder of the Company.
         
         Without limiting the generality of the foregoing, (i)  the Company's
         election not to extend the Employment Period at

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 4


         any time after the Term, unless for reasons set forth in Sections 4(c)
         and 4(d), shall be deemed to be a termination without "cause" under
         this Section 4(b), and (ii)  in the event that, at any time prior to
         the end of the six-month period following the date as of which the
         Company shall demote you from the office of President and Chief
         Executive Officer or appoint an officer of the Company to whom you
         will be subordinate, you shall terminate your employment (other than
         for "cause" or for a reason described in Section 4(d) below), such
         termination shall be deemed to be a termination by the Company without
         "cause" under this Section 4(b).
         
         (c)  In the event of termination of your employment for "cause," such
         termination shall be effective immediately upon notice to you  and, in
         such event or in the event of your "voluntary termination" (as defined
         in this Section 4(c) below), the Company shall pay you that portion of
         your Base Salary prorated to the date of termination which has not yet
         been paid to you, including any CPI increase due you but not paid, but
         neither you nor your assigns, beneficiaries or estate shall have any
         further rights or claims against the Company, other than any rights or
         claims to which you are entitled as a shareholder of the Company.
         
         As used in the letter agreement, "cause" means (i)  your willful
         misconduct or gross negligence with respect to the business and
         affairs of the Company (or any subsidiary or affiliate thereof), (ii) 
         your breach of the provisions of Section 5 or 6 hereof, or (iii)  your
         commission of an act involving embezzlement or fraud or conviction for
         any indictable crime.
         
         The termination of your employment for any reason other than as set
         forth in Section 4(a), 4(b), or 4(d) hereof, including any election by
         you not to extend the Employment Period after the Term, shall be a
         "voluntary termination."
         
         (d)  In the event of disability (under circumstances rendering you
         incapable of performing the services hereunder for a period of 180
         consecutive days or longer or

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 5


         180 days during any twelve-month period), or such longer period of
         time as necessary to qualify for disability benefits under the
         Company's long-term disability benefits plan, the Company may
         terminate your employment at any time thereafter, effective upon
         notice to you.  In the event of your death, your employment will be
         deemed terminated on the date of your death.  In each case, the
         Company shall pay you (or your estate or beneficiaries as the case may
         be) that portion of your Base Salary prorated to the date of
         termination which has not been paid to you, plus six months' Base
         Salary (at the rate and frequency in effect at the time of termination
         but with no additional increases), but neither you nor your assigns,
         beneficiaries or estate shall have any further rights or claims
         against the Company, other than any rights or claims to which you are
         entitled as a shareholder of the Company.
         
5.       CONFIDENTIALITY.    You agree that you will not, at any time 
         during the Employment Period, or for the five-year period immediately
         following the Employment Period, disclose to any person, firm,
         corporation or other business entity, except in furtherance of the
         Company's business or as required by law, any non-public information
         concerning the business, clients or affairs of the Company or any
         subsidiary or affiliate thereof for any reason or purpose whatsoever
         nor shall you make use of any of such non-public information for your
         own purpose or for the benefit of any person, firm, corporation or
         other business entity except the Company or any subsidiary or
         affiliate thereof.
         
6.       RESTRICTIVE COVENANT.    (a)  You hereby acknowledge and 
         recognize that during the Employment Period you will be privy to trade
         secrets and confidential proprietary information critical to the
         Company's business.  You further acknowledge and recognize that the
         Company would find it extremely difficult or impossible to replace you
         and accordingly you agree that, in consideration of the premises
         contained in this Agreement, the consideration to be received by you
         hereunder and in consideration of certain stock and stock options to
         be issued to you by the Company, you will not, (i)  from or after the
         date hereof through the 

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 6


         first anniversary of the termination of the Employment Period
         (provided, however, that in the event that for any reason you do not
         receive payment as specified in Section 4(b) or as a result of a
         termination of your employment by the Company without "cause," the
         period in this clause (i) shall terminate thirty (30) days after the
         termination date of your employment), (A)  be employed as an officer
         or director by any business which is engaged primarily in research and
         development activities which are fundamentally the same as those of
         the Company at the time of your termination (or time of determination
         if during the Employment Period) ("Competing R & D") and the marketing
         and/or distribution of products from Competing R & D (including
         products licensed from another entity and based on Competing R & D)
         (any such business or activity described in clause (A) being referred
         to in this Agreement as a "Competing Business"), excluding any
         employment with a "Fortune 500" corporation or activities by reason of
         your employment with a "Fortune 500" corporation (provided that you
         shall in any event be subject to the restrictions of Section 5 hereof)
         or (B)  from and after the date hereof through the first anniversary
         of the termination of the Employment Period induce other employees of
         the Company or any subsidiary or affiliate thereof to terminate their
         employment with the Company or any subsidiary or affiliate thereof, or
         engage in any Competing Business, except with the prior written
         approval of the Company.
         
         Notwithstanding anything to the contrary, it is explicitly understood
         that in the event the Company ceases R&D operations, all of your
         employment restrictions in this Section 6(a) will be waived, although
         all of your confidentiality obligations will remain in full effect.
         
         (b)  You understand that the foregoing restrictions may limit your
         ability to earn a livelihood in a Competing Business, but you
         nevertheless believe that you have received and will receive
         sufficient consideration and other benefits in connection with the
         Company's issuance of certain stock and stock options to you, as an
         employee of the Company and as otherwise provided hereunder to clearly 

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 7


         justify such restrictions which, in any event (given your education,
         skills and ability), you do not believe would prevent you from earning
         a living.
         
7.       COMPANY RIGHT TO INVENTIONS.    You shall promptly disclose, 
         grant and assign to the Company for its sole use and benefit any and
         all inventions, improvements and technical information relating in any
         way to the business of the Company, which you may develop or acquire
         during the Employment Period (whether or not during usual working
         hours), together with all patent applications, letters patent,
         copyrights and reissues thereof that may at any time be granted for or
         upon any such invention, improvement or technical information.  In
         connection therewith, during the Employment Period and the five-year
         period immediately following the Employment Period:
         
         (a)  You shall without charge, but at the expense of the Company,
         promptly at all times hereafter execute and deliver such applications,
         assignments, descriptions and other instruments as may be reasonably
         necessary or proper in the reasonable opinion of the Company to vest
         title to any such inventions, improvements, technical information,
         patent applications, patents, copyrights or reissues thereof in the
         Company and to enable it to obtain and maintain the entire right and
         title thereto throughout the world;
         
         (b)  You shall render to the Company at its expense (including a
         payment that is reasonable and customary in the industry for the time
         involved in case you are not then in employ) all such assistance as it
         may reasonably require in the prosecution of applications for said
         patents, copyrights or reissues thereof, in the prosecution or defense
         or interferences which may be declared involving any said
         applications, patent or copyrights and in any litigation in which the
         Company may be involved relating to any such patents, inventions,
         improvements or technical information; and
         
         (c)  You represent and warrant that your employment with the Company
         and your execution and delivery of this 

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 8


         Agreement and compliance with all the terms of this Agreement does not
         and will not breach any written or oral agreement you have entered
         into relating to intellectual property, noncompetition or otherwise,
         and you shall not enter into any written or oral agreement in conflict
         with this Agreement.
         
         The restrictions set forth in Sections 7(a) and 7(b) shall cease to
         apply five (5) years following termination of the Employment Period.
         
8.       NOTICES.    All notices and other communications which are 
         required or permitted hereunder shall be in writing and sufficient if
         delivered personally or by telefax or sent by air courier or first
         class certified or registered mail, return receipt requested and
         postage prepaid, addressed using the applicable address set forth in
         this letter agreement or to such other address as the party to whom
         notice is given may have furnished to the other party in writing in
         accordance herewith.  All notices and other communications given to
         any party hereto in accordance with the provisions of this Agreement
         shall be deemed to have been given on the date of delivery if
         personally delivered or delivered by telefax; on the business day
         after the date when sent if sent by air courier; and on the fifth
         business day after the date when sent if sent by mail, in each case
         addressed to such party as provided in this Section or in accordance
         with the latest unrevoked direction from such party.
         
9.       GOVERNING LAW.    This Agreement shall be governed by, and 
         construed and enforced in accordance with, the laws of the State of
         New Jersey.
         
10.      ENTIRE AGREEMENT.    This Agreement contains the entire 
         agreement between the parties with respect to the subject matter
         hereof and supersedes all prior agreements or understandings among the
         parties with respect thereto.
         
         

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 9


11.      REMEDIES; SURVIVAL  (a)  You acknowledge and understand 
         that the provisions of this Agreement are of a special and unique
         nature, the loss of which cannot be accurately compensated for in
         damages by an action at law; and that the breach or threatened breach
         of the provisions of this Agreement would cause the Company
         irreparable harm.  In the event of breach or threatened breach by you
         of the provisions of Section 5 or 6 hereof, the Company shall be
         entitled to an injunction restraining you from such breach.  Nothing
         herein contained shall be construed as prohibiting the Company from
         pursuing any other remedies available for any breach or threatened
         breach of this Agreement.
         
         (b)  Notwithstanding anything contained in this Agreement to the
         contrary, the provisions of Sections 5 and 6 and this Section 11 shall
         survive the expiration or other termination of this Agreement until,
         by their terms, such provisions are no longer operative.
         
         (c)  It is the intent of the Company and you that this Agreement shall
         be enforced to the fullest extent permitted by law.  Accordingly, any
         provision of this Agreement that is prohibited or unenforceable in any
         jurisdiction shall, as to such jurisdiction, be ineffective to the
         extent of such prohibition or unenforceability without invalidating
         the remaining provisions hereof, and any such prohibition or
         unenforceability in any jurisdiction shall not invalidate or render
         unenforceable such provisions in any other jurisdiction.
         
12.      ASSIGNMENT.    This Agreement is personal in its nature and 
         the parties hereto shall not, without the consent of the other, assign
         or transfer this letter agreement or any rights or obligations
         hereunder; provided, however, that the provisions hereof shall inure
         to the benefit of, and be binding upon (i)  each successor of the
         Company, whether by merger, consolidation, transfer of all or
         substantially all assets, or otherwise and (ii)  your heirs and legal
         representatives.
         

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Michael I. Sherman, Ph.D.
June 27, 1996
Page 10

         
         Please acknowledge your agreement with the provisions set forth in
this Agreement by executing this Agreement in the space provided below for your
signature.


                                  Very truly yours,

                                  PharmaGenics, Inc.


                                  By:  /s/ A. Steven Franchak
                                     -------------------------
                                       A. Steven Franchak
                                       Vice President


Agreed to as of June 27, 1996.


/s/ Michael I. Sherman
------------------------------
    Michael I. Sherman