Document:

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                                                                   EXHIBIT 10.37

                          NEUROCRINE BIOSCIENCES, INC.
                             2001 STOCK OPTION PLAN
                 AS AMENDED AUGUST 6, 2002 AND OCTOBER 15, 2002

1.       PURPOSE OF THE PLAN. The purposes of this Incentive Stock Plan are to
attract and retain the best available personnel, to provide additional incentive
to the employees of Neurocrine Biosciences, Inc. (the "Company") and to promote
the success of the Company's business.

2.       DEFINITIONS.

                  (a) "Board" shall mean the Committee, if one has been
                  appointed, or the Board of Directors of the Company, if no
                  Committee is appointed.

                  (b) "Code" shall mean the Internal Revenue Code of 1986, as
                  amended.

                  (c) "Committee" shall mean the Committee appointed by the
                  Board of Directors in accordance with Section 4(a) of the
                  Plan, if one is appointed.

                  (d) "Common Stock" shall mean the common stock, $.001 per
                  share, of the Company.

                  (e) "Company" shall mean Neurocrine Biosciences, Inc.

                  (f) "Consultant" shall mean any person who is engaged by the
                  Company or any Parent or Subsidiary to render consulting
                  services and is compensated for such consulting services, and
                  any director of the Company whether compensated for such
                  services ; provided that (i) such person renders bona fide
                  services to the Company, (ii) the services rendered by such
                  person are not in connection with the offer or sale of
                  securities in a capital-raising transaction and do not
                  directly or indirectly promote or maintain a market for the
                  Company's securities, and (iii) such person is a natural
                  person who has contracted directly with the Company to render
                  such services. However, the term "Consultant" shall not
                  include members of the Board of Directors of the Company who
                  are either not compensated by the Company for their services
                  as directors or who are merely paid a fee by the Company for
                  their services as directors.

                  (g) "Continuous Status as an Employee or Consultant" shall
                  mean the absence of any interruption or termination of service
                  as an Employee or Consultant, as applicable. Continuous Status
                  as an Employee or Consultant shall not be considered
                  interrupted in the case of sick leave, military leave, or any
                  other leave of absence approved by the Board; provided that
                  such leave is for a period of not more than ninety (90) days
                  or reemployment upon the expiration of such leave is
                  guaranteed by contract or statute. Continuous Service shall
                  not be deemed to have terminated merely because of a change in
                  the capacity in which the Optionee renders service to the
                  Company as an Employee or Consultant, provided that the
                  Optionee's service is continuous.

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                  (h) "Employee" means any person employed by the Company. Mere
                  service as a member of the Board of Directors or payment of a
                  director's fee by the Company shall not be sufficient to
                  constitute "employment" by the Company.

                  (i) "Fair Market Value" means, as of any date, the value of
                  the Common Stock determined as follows:

                           (i)      If the Common Stock is listed on any
                           established stock exchange or traded on the Nasdaq
                           National Market or the Nasdaq SmallCap Market, the
                           Fair Market Value of a share of Common Stock shall be
                           the closing sales price for such stock (or the
                           closing bid, if no sales were reported) as quoted on
                           such exchange or market (or the exchange or market
                           with the greatest volume of trading in the Common
                           Stock) on the last market trading day prior to the
                           day of determination, as reported by The Nasdaq Stock
                           Market or such other source as the Board deems
                           reliable.

                           (ii)     In the absence of such markets for the
                           Common Stock, the Fair Market Value shall be
                           determined in good faith by the Board.

                  (j) "Nonstatutory Stock Option" shall mean an Option not
                  intended to qualify as an incentive stock option within the
                  meaning of Section 422 of the Code.

                  (k) "Officer" means a President, Secretary, Treasurer,
                  Chairman of the Board, Vice President, Assistant Secretary or
                  Assistant Treasurer of the Company, as such positions are
                  described in the Company's Bylaws, any other person designated
                  an "officer" of the Company by the Board of Directors in
                  accordance with the Company's Bylaws or any person who is an
                  "officer" within the meaning of Rule 16a-1(f) under the
                  Securities Exchange Act of 1934, as amended, or Nasdaq
                  Marketplace Rule 4350(i)(1)(A).

                  (l) "Option" shall mean a stock option granted pursuant to the
                  Plan.

                  (m) "Optioned Stock" shall mean the Common Stock subject to an
                  Option or Stock Purchase Right.

                  (n) "Optionee" shall mean an Employee or Consultant who
                  receives an Option.

                  (o) "Parent" shall mean a "parent corporation," whether now or
                  hereafter existing, as defined in Section 424(e) of the Code.

                  (p) "Plan" shall mean this 2001 Incentive Stock Plan.

                  (q) "Purchaser" shall mean an Employee or Consultant who
                  exercises a Stock Purchase Right.

                  (r) "Share" shall mean a share of the Common Stock, as
                  adjusted in accordance with Section 12 of the Plan.

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                  (s) "Stock Purchase Right" shall mean a right to purchase
                  Common Stock pursuant to the Plan or the right to receive a
                  bonus of Common Stock for past services.

                  (t) "Subsidiary" shall mean a "subsidiary corporation,"
                  whether now or hereafter existing, as defined in Section
                  424(f) of the Code.

3.       STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares that may be issued upon
exercise of Options and Stock Purchase Rights under the Plan is one million, one
hundred fifty thousand (1,150,000) shares of Common Stock. The Shares may be
authorized but unissued, or reacquired Common Stock. If an Option or Stock
Purchase Right should expire or become unexercisable for any reason without
having been exercised in full, then the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant or sale under the Plan. Notwithstanding any other provision of the
Plan, shares issued under the Plan and later repurchased by the Company shall
not become available for future grant or sale under the Plan.

4.       ADMINISTRATION OF THE PLAN.

           (a) Procedure.

                           (i)      Multiple Administrative Bodies. The Plan may
                  be administered by different Committees with respect to
                  different groups of Employees and Consultants.

                           (ii)     Section 162(m). To the extent that the
                  Administrator determines it to be desirable to qualify Options
                  granted hereunder as "performance-based compensation" within
                  the meaning of Section 162(m) of the Code, the Plan shall be
                  administered by a Committee of two or more "outside directors"
                  within the meaning of Section 162(m) of the Code.

                           (iii)    Rule 16b-3. To the extent desirable to
                  qualify transactions hereunder as exempt under Rule 16b-3, the
                  transactions contemplated hereunder shall be structured to
                  satisfy the requirements for exemption under Rule 16b-3.

                           (iv)     Other Administration. Other than as provided
                  above, the Plan shall be administered by (A) the Board or (B)
                  a Committee, which committee shall be constituted to satisfy
                  applicable laws.

           (b) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant Nonstatutory
Stock Options or Stock Purchase Rights; (ii) to determine, upon review of
relevant information and in accordance with Section 7 of the Plan, the Fair
Market Value of the Common Stock; (iii) to determine the exercise price per
share of Options or Stock Purchase Rights, to be granted, which exercise price
shall be determined in accordance with Section 7 of the Plan; (iv) to determine,
subject to Section 5 below, the Employees or Consultants to whom, and the time
or times at which, Options or Stock Purchase Rights shall be granted and the
number of shares to be represented by each Option or Stock Purchase Right; (v)
to interpret the Plan; (vi) to prescribe, amend and rescind rules and
regulations relating to the Plan; (vii) to determine the terms and provisions of
each Option and Stock Purchase Right granted (which need not be identical)

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and, with the consent of the holder thereof, modify or amend any provisions
(including provisions relating to exercise price) of any Option or Stock
Purchase Right; (viii) to accelerate or defer (with the consent of the Optionee)
the exercise date of any Option, consistent with the provisions of Section 5 of
the Plan; (ix) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option or Stock Purchase Right
previously granted by the Board; (x) to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the statutory minimum amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined. All
elections by an Optionee to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may deem necessary
or advisable; and (xi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.

           (c) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees,
Purchasers and any other holders of any Options or Stock Purchase Rights granted
under the Plan.

5.       ELIGIBILITY.

                  (a) Options and Stock Purchase Rights may be granted to
Employees and Consultants. An Employee or Consultant who has been granted an
Option or Stock Purchase Right may, if such Employee or Consultant is otherwise
eligible, be granted additional Option(s) or Stock Purchase Right(s).
Notwithstanding anything herein to the contrary, the aggregate number of shares
issued or reserved for issuance pursuant to Options granted to persons other
than Officers must exceed fifty percent (50%) of the total number of shares
issued or reserved for issuance pursuant to Options granted under the Plan as
determined on the three-year anniversary of the adoption of the Plan by the
Board and on each yearly anniversary of the adoption of the Plan thereafter.

                  (b) Each Option shall be designated in the written option
agreement as a Nonstatutory Stock Option.

                  (c) The Plan shall not confer upon any Optionee or holder of a
Stock Purchase Right any right with respect to continuation of employment by or
the rendition of consulting services to the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate his or her
employment or services at any time, with or without cause.

                  (d) A Consultant shall not be eligible for the grant of an
Option if, at the time of grant, a Form S-8 Registration Statement under the
Securities Act ("Form S-8") is not available to register either the offer or the
sale of the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions

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6.       TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors. It shall continue in effect for a
term of ten (10) years unless sooner terminated under Section 14 of the Plan.

7.       EXERCISE PRICE AND CONSIDERATION.

                  (a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option or Stock Purchase Right shall be such price as
is determined by the Board, but shall be subject to the following:

                                 (i) the per Share exercise price shall be no
                              less than the par value per Share on the date of
                              grant.

                  (b) The consideration to be paid for the Shares to be issued
upon exercise of an Option or Stock Purchase Right, including the method of
payment, shall be determined by the Board and may consist entirely of cash,
check, promissory note bearing a market rate of interest, other Shares of Common
Stock which (i) either have been owned by the Optionee for more than six (6)
months on the date of surrender or were not acquired directly or indirectly,
from the Company, and (ii) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares as may be
permitted under applicable law.

8.       TERM OF OPTION. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof.

9.       EXERCISE OF OPTION.

                  (a) Procedure for Exercise; Rights as a Shareholder.

                           (i) Any Option granted hereunder shall be exercisable
                           at such times and under such conditions as determined
                           by the Board, including performance criteria with
                           respect to the Company and/or the Optionee, and as
                           shall be permissible under the terms of the Plan.

                           (ii) An Option may not be exercised for a fraction of
                           a Share.

                           (iii) An Option shall be deemed to be exercised when
                           written notice of such exercise has been given to the
                           Company in accordance with the terms of the Option by
                           the person entitled to exercise the Option and full
                           payment for the Shares with respect to which the
                           Option is exercised has been received by the Company.
                           Full payment may, as authorized by the Board, consist
                           of any consideration and method of payment allowable
                           under Section 7 of, the Plan. Until the issuance (as
                           evidenced by the appropriate entry on the books of
                           the Company or of a duly authorized transfer agent of
                           the Company) of the stock certificate evidencing such
                           Shares no right to vote or receive dividends or any
                           other rights as a shareholder shall exist with
                           respect to the Optioned Sock, notwithstanding the
                           exercise of the Option. The Company shall issue

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                           (or cause to be issued) such stock certificate
                           promptly upon exercise of the Option. No adjustment
                           will be made for a dividend or other right for which
                           the record date is prior to the date the stock
                           certificate is issued, except as provided in Section
                           12 of the Plan.

                           (iv) Exercise of an Option in any manner shall result
                           in a decrease in the number of Shares which
                           thereafter may be available, both for purposes of the
                           Plan and for sale under the Option, by the number of
                           Shares as to which the Option is exercised.

                  (b) Termination of Status as an Employee or Consultant. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant (as the case may be), such Optionee may, but only within such period
of time as is determined by the Board, with such determination not exceeding six
(6) months after the date of termination, exercise the Option to the extent that
such Employee or Consultant was entitled to exercise it at the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement). To the extent that such
Employee or Consultant was not entitled to exercise the Option at the date of
such termination, or if such Employee or Consultant does not exercise such
Option (which such Employee or Consultant was entitled to exercise) within the
time specified herein, the Option shall terminate.

                  (c) Disability of Optionee. Notwithstanding the provisions of
Section 8(b)(ii) above, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of such Employee's or
Consultant's total and permanent disability (as defined in Section 22(e)(3) of
the Code), such Employee or Consultant may, but only within six (6) months (or
such other period of time as is determined by the Board) from the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent the right to exercise would have accrued had the Optionee continued
Continuous Status as an Employee or Consultant for a period of six (6) months
following termination of Continuous Status by reason of disability. To the
extent that such Employee or Consultant was not entitled to exercise an Option
in this period, or if such Employee or Consultant does not exercise such Option
(which such Employee or Consultant was entitled to exercise) within the time
specified herein, the Option shall terminate.

                  (d) Retirement of Optionee. Notwithstanding the provisions of
Section 8(b)(ii) above, in the event of termination of an Employee Optionee's
Continuous Status as an Employee as a result of such Employee's retirement from
the Company at age fifty five (55) or greater after having Continous Status for
(5) years or more, all Options held by such Optionee shall vest and such
Employee may, but only within three (3) years from the date of such termination
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), exercise the Option to the extent such
Employee was entitled to exercise it at the date of such termination.

                  (e) Death of Optionee. In the event of the death of an
Optionee:

                           (i) during the term of the Option who is at the time
                           of his or her death an Employee or Consultant of the
                           Company and who shall have been in Continuous Status
                           as an

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                           Employee or Consultant since the date of grant of the
                           Option, the Option may be exercised, at any time
                           within six (6) months (or at such later time as may
                           be determined by the Board but in no event later than
                           the date of expiration of the term of such Option as
                           set forth in the Option Agreement), by the Optionee's
                           estate or by a person who acquired the right to
                           exercise the Option by bequest or inheritance, but
                           only to the extent that the right to exercise would
                           have accrued had the Optionee continued living and
                           remained in Continuous Status as an Employee or
                           Consultant six (6) months (or such other period of
                           time as in determined by the Board) after the date of
                           death; or

                           (ii) within thirty (30) days (or such other period of
                           time as is determined by the Board), after the
                           termination of Continuous Status as an Employee or
                           Consultant, the Option may be exercised, at any time
                           within six (6) months (or such other period of time
                           as is determined by the Board at the time of grant of
                           the Option) following the date of death (but in no
                           event later than the date of expiration of the term
                           of such Option as set forth in the Option Agreement),
                           by the Optionee's estate or by a person who acquired
                           the right to exercise the Option by bequest or
                           inheritance, but only to the extent that the right to
                           exercise that had accrued at the date of termination.

10.      STOCK PURCHASE RIGHTS.

                  (a) Rights to Purchase. After the Board of Directors
determines that it will offer an Employee or Consultant a Stock Purchase Right,
it shall deliver to the offeree a stock purchase agreement or stock bonus
agreement, as the case may be, setting forth the terms, conditions and
restrictions relating to the offer, including the number of Shares which such
person shall be entitled to purchase, and the time within which such person must
accept such offer, which shall in no event exceed six (6) months from the date
upon which the Board of Directors or its Committee made the determination to
grant the Stock Purchase Right. The offer shall be accepted by execution of a
stock purchase agreement or stock bonus agreement in the from determined by the
Board of Directors.

                  (b) Issuance of Shares. Forthwith after payment therefor ,the
Shares purchased shall be duly issued; provided, however, that the Board may
require that the Purchaser make adequate provision for any Federal and State
withholding obligations of the Company as a condition to the Purchaser
purchasing such Shares.

                  (c) Repurchase Option. Unless the Board determines otherwise,
the stock purchase agreement or stock bonus agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the Purchaser's employment with the Company for any reason (including death or
disability). If the Board so determines, the purchase price for shares
repurchased may be paid by cancellation of any indebtedness of the Purchaser to
the Company. The repurchase option shall lapse at such rate as the Board may
determine.

                  (d) Other Provisions. The stock purchase agreement or stock
bonus agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Board of Directors.

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11.      NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

12.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

                  (a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

                  (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee or Purchaser at least fifteen (15) days prior to such proposed action.
To the extent it has not been previously exercised, the Option or Stock Purchase
Right shall terminate immediately prior to the consummation of such proposed
action.

                  (c) Merger or Asset Sale. In the event of a merger, sale of
all or substantially all of the assets of the Company, tender offer or other
transaction or series of related transactions resulting in a change of ownership
of more than fifty percent (50%) of the voting securities of the Company
("Change in Control"), approved by the majority of the members of the Board on
the Board prior to the commencement of such Change in Control, each outstanding
Option shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation;
provided however, in the event that within one year of the date of the
completion of the Change in Control, the successor corporation or a Parent or
Subsidiary of the successor corporation terminates the employment of an Optionee
without Cause (as defined below), such Optionee shall fully vest in and have the
right to exercise the options assumed or substituted for the Option as to all of
the Optioned Stock, including Shares as to which it would not otherwise be
exercisable. In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the

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Optioned Stock, including Shares as to which it would not otherwise be
exercisable. If an Option becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a Change of Control, the
Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option shall terminate upon the expiration
of such period. For the purposes of this paragraph, the Option shall be
considered assumed if, following the Change of Control, the option confers the
right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the Change in Control, the consideration (whether stock,
cash, or other securities or property) received in the Change of Control by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change of Control
is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change of Control. For
purposes of this paragraph, termination shall be for "Cause" in the event of the
occurrence of any of the following: (a) any intentional action or intentional
failure to act by employee which was performed in bad faith and to the material
detriment of the successor corporation or its Parent or Subsidiary; (b) employee
willfully and habitually neglects the duties of employment; or (c) employee is
convicted of a felony crime involving moral turpitude, provided that in the
event that any of the foregoing events is capable of being cured, the successor
corporation or its Parent or Subsidiary shall provide written notice to the
employee describing the nature of such event and the employee shall thereafter
have five (5) business days to cure such event.

                  In the event of a Change in Control which is not approved by
the majority of the members of the Board on the Board prior to the commencement
of a Change in Control, each Optionee shall fully vest in and have the right to
exercise all outstanding Options as to all of the Optioned Stock, including
Shares as to which it would not otherwise be exercisable.

13.      DATE OF GRANTING OPTIONS. The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Board makes the
determination granting such Option or stock Purchase Right. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

14.      AMENDMENT AND TERMINATION OF THE PLAN.

                  (a) Amendment and Termination. The Administrator may at any
time amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made which would impair the
rights of any Optionee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with
Section 422 of the Code (or any other applicable laws or regulation, the
requirements of the NASD or an established Stock exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.

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                  (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.

15.      CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Rights unless the exercise of
such Option or Stock Purchase Rights and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

As a condition to the exercise of an Option or Stock Purchase Right, the Company
may require the person exercising such Option or Stock Purchase Right to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.

16.      RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

17.      OPTION, STOCK PURCHASE AND STOCK BONUS AGREEMENTS. Options shall be
evidenced by written option agreements in such form as the Board shall approve.
Upon the exercise of Stock Purchase Rights, the Purchaser shall sign a stock
purchase agreement or stock bonus agreement in such form as the Board shall
approve.

18.      INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall provide to
each Optionee and Purchaser, during the period for which such Optionee or
Purchaser has one or more Options to Stock Purchase Rights outstanding, a
balance sheet and an income statement at least annually. The Company shall not
be required to provide such information to key employees whose duties in
connection with the Company assure there access to equivalent information.

                                      -10-<PAGE>

                                                                   EXHIBIT 10.42

                         NEUROCRINE BIOSCIENCES, INC.

                    NON-QUALIFIED DEFERRED COMPENSATION PLAN

                  Restatement effective as of February 22, 2000

         Neurocrine Biosciences, Inc. (the "Company") maintains the Neurocrine
Biosciences, Inc. Nonqualified Deferred Compensation Plan (the "Plan"),
consisting of the following provisions, for the exclusive benefit of the
participants and their beneficiaries (and to defray reasonable administrative
expenses thereunder). The Plan was originally established effective as of
December 1, 1996. Effective as of February 22, 2000 (the "Effective Date"),
except as otherwise stated herein, the Company hereby amends and restates the
Plan. Throughout, the term "Company" shall include wherever relevant any entity
that is directly or indirectly controlled by the Company, any entity in which
the Company has a significant equity or investment interest, or any subsidiary
of the Company, as determined by the Committee.

                                    RECITALS

         1.       The Company wishes to continue to maintain a supplemental
retirement plan for the benefit of its Board of Directors and a select group of
management or highly compensated employees of the Company.

         2.       The Company wishes to provide that the supplemental
retirement plan, as restated, shall continue to be designated the Neurocrine
Biosciences, Inc. Nonqualified Deferred Compensation Plan.

         3.       The Company wishes to provide under the Plan for the payment
of accrued vested benefits to Plan participants and their beneficiaries.

         4.       Under the Plan, the Company is obligated to pay vested
accrued benefits to the Plan participants and their beneficiaries from the
Company's general assets.

         5.       The Company has entered into an agreement (the "Trust
Agreement") appointing a trustee (the "Trustee") under an irrevocable trust (the
"Trust") to be used in connection with the Plan.

         6.       The Company intends to make contributions to the Trust so that
such contributions will be held by the Trustee and invested, reinvested and
distributed, all in accordance with the provisions of the Plan and the Trust
Agreement.

         7.       The Company intends that amounts contributed to the Trust and
the income thereon shall be used by the Trustee to satisfy the liabilities of
the Company under the Plan with respect to each Plan participant for whom an
Account has been established and such utilization shall be in accordance with
the procedures set forth herein.

<PAGE>

         8.       The Company intends that the Trust be a "grantor trust" with
the principal and income of the Trust treated as assets and income of the
Company for Federal and state income tax purposes.

         9.       The Company intends that the assets of the Trust shall at all
times be subject to the claims of the general creditors of the Company, as
provided in the Trust Agreement.

         10.      The Company intends that the existence of the Trust shall not
alter the characterization of the Plan as "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and shall
not be construed to provide income to Plan participants under the Plan prior to
actual payment of the vested accrued benefits thereunder.

         NOW THEREFORE, the Company hereby establishes the Plan as follows:

SECTION 1.        TITLE.

         This Plan shall be known as the Neurocrine Biosciences, Inc.
 Nonqualified Deferred Compensation Plan.

SECTION 2.        DEFINITIONS.

                  (a)      "Account(s)" means the Deferred Compensation Account,
                  the Supplemental Contributions Account and/or the Matching
                  Contributions Account, as the context requires.

                  (b)      "Bonus" means any special and/or discretionary cash
                  compensation amounts in excess of Salary, determined by the
                  Company to be payable to a Participant with respect to
                  services rendered.

                  (c)      "Change of Control" means and shall be deemed to have
                  occurred if NBI is acquired by another entity, which shall be
                  defined herein as the merger of NBI with or into an acquiring
                  entity, with NBI not surviving the merger; the sale of
                  substantially all of NBI's assets; the acquisition of more
                  than twenty-percent (20%) of NBI's outstanding common stock or
                  other equity interest by an entity; the cash balance or asset
                  balance of NBI becomes less than twenty million dollars ($20
                  million); or any other change of control of NBI.

                  (d)      "Committee" means the Compensation Committee of the
                  Company's Board of Directors.

                  (e)      "Company" means Neurocrine Biosciences, Inc.

                  (f)      "Continuous Service" means a Participant's
                  uninterrupted services with the Company or any affiliate after
                  the effective date of the Plan. Service shall not be deemed
                  interrupted by a leave of absence authorized by the Committee,
                  an absence due to mandatory military service or an absence due
                  to disability while the Participant is receiving benefits
                  under any short-term or long-term disability plan or
                  arrangement maintained or sponsored by the Company.

                                       -2-

<PAGE>

                  (g)      "Deferred Compensation" means the sum of Salary and
                  Bonus that are the subject of an elective deferral under
                  Section 4.

                  (h)      "Deferred Compensation Account" means the bookkeeping
                  account established for a Participant under the Plan and to
                  which Deferred Compensation amounts with respect to such
                  Participant are credited from time to time, as adjusted from
                  time to time as provided in the Plan.

                  (i)      "Deferred Compensation Election Form" means the form
                  pursuant to which Eligible Executives elect to become
                  Participants in the Plan and defer compensation thereunder, in
                  such form as the Committee determines from time to time in its
                  sole discretion.

                  (j)      "Disability" means mental or physical disability as
                  determined by the Committee in accordance with standards and
                  procedures similar to those under the Company's broad-based
                  regular long-term disability plan, if any. At any time that
                  the Company does not maintain such a long-term disability
                  plan, Disability shall mean the inability of a Participant, as
                  determined by the Committee, substantially to perform such
                  Participant's regular duties and responsibilities due to a
                  medically determinable physical or mental illness which has
                  lasted (or can reasonably be expected to last) for a period of
                  six (6) consecutive months.

                  (k)      "Eligible Executive" means any member of the Board of
                  Directors and any employee of the Company who is selected for
                  participation by the Committee.

                  (l)      "Matching Contributions Account" means the
                  bookkeeping account established for a Participant under the
                  Plan and to which the Company's matching contributions under
                  Section 4(b) of the Plan are credited from time to time, as
                  adjusted from time to time under the Plan.

                  (m)      "NBI" means Neurocrine Biosciences, Inc.

                  (n)      "Participant" means an Eligible Executive who has
                  elected to defer Salary and/or Bonus amounts pursuant to the
                  Plan.

                  (o)      "Plan" means Neurocrine Biosciences, Inc.
                  Nonqualified Deferred Compensation Plan for Executives, as set
                  forth herein and as amended from time to time.

                  (p)      "Plan Year" means the calendar year, except for the
                  first Plan Year which shall be (i) from December 1, 1996
                  through December 31, 1996 in the case of employee Eligible
                  Executives and (ii) March 15, 2000 through December 31, 2000
                  in the case of members of the Company's Board of Directors who
                  are Eligible Executives.

                  (q)      "Retirement" means termination of services to the
                  Company at any time on or after the attainment of age 60.

                                       -3-

<PAGE>

                  (r)      "Salary" means the regular base compensation paid by
                  the Company to a member of the Board of Directors or to an
                  employee (without regard to any reduction thereof pursuant to
                  the Plan or any thrift or savings plan maintained by the
                  Company), exclusive of Bonus payments and any other incentive
                  payments made by the Company to such member of the Board of
                  Directors or employee.

                  (s)      "Supplemental Contributions Account" means the
                  bookkeeping account established for the Participant under the
                  Plan and to which the Company's supplemental contributions
                  under Section 4(c) of the Plan are credited from time to time,
                  as adjusted from time to time under the Plan.

                  (t)      "Unforeseeable Emergency" means a severe financial
                  hardship to the Participant resulting from a sudden and
                  unexpected illness or accident of the Participant or a
                  dependent of the Participant, loss of the Participant's
                  property due to casualty, or other similar extraordinary
                  unforeseeable circumstances arising as a result of events
                  beyond the control of the Participant.

SECTION 2.        ELIGIBILITY. Individuals eligible to participate in the Plan
shall consist of the Eligible Executives of the Company.

SECTION 3.        ADMINISTRATION.

                  (a)      The Plan shall be administered by the Committee. The
                  Committee is authorized to construe and interpret the Plan and
                  promulgate, amend and rescind rules and regulations relating
                  to the implementation, administration and maintenance of the
                  Plan. Subject to the terms and conditions of the Plan, the
                  Committee shall make all determinations necessary or advisable
                  for the implementation, administration and maintenance of the
                  Plan including, without limitation, determining the Eligible
                  Employees and correcting any technical defect(s) or technical
                  omission(s), or reconciling any technical inconsistency (ies),
                  in the Plan. The Committee may designate persons other than
                  members of the Committee to carry out the day-to-day
                  ministerial administration of the Plan under such conditions
                  and limitations as it may prescribe; provided, however, that
                  the Committee shall not delegate its authority with regard to
                  the determination of Eligible Employees. The Committee's
                  determinations under the Plan need not be uniform and may be
                  made selectively among Participants, whether or not such
                  Participants are similarly situated. Any determination,
                  decision or action of the Committee in connection with the
                  construction, interpretation, administration, implementation
                  or maintenance of the Plan shall be final, conclusive and
                  binding upon all Participants and any person(s) claiming under
                  or through any Participants.

                  (b)      The Company will indemnify and hold harmless the
                  Committee and each member thereof against any cost or expense
                  (including without limitation attorney's fees) or liability
                  (including without limitation any sum paid in settlement of a
                  claim with the approval of the Company) arising out of any act
                  or omission to act, except in the case of willful gross
                  misconduct or gross negligence.

                                       -4-

<PAGE>

SECTION 4.        PARTICIPATION; ELECTIVE DEFERRALS; MATCHING CONTRIBUTIONS.

                  (a)      To elect to participate in the Plan for a particular
                  Plan Year, an Eligible Executive must execute a Deferred
                  Compensation Election Form and file such form with the
                  Committee (or its designee) before the commencement of such
                  Plan Year. To participate in the Plan during the year in which
                  the Plan is first implemented, the Eligible Executive must
                  make an election to defer Salary compensation for services to
                  be performed subsequent to the election and/or to defer Bonus
                  compensation, in each case, within 30 days after the effective
                  date of the Plan. To participate in the Plan during the first
                  year in which an individual becomes eligible to participate in
                  the Plan, the new Eligible Executive must make an election to
                  defer Salary compensation for services to be performed
                  subsequent to the election and/or to defer Bonus compensation,
                  in each case, within 30 days after the date the new Eligible
                  Executive becomes eligible. Such election shall:

                           (i)   contain a statement that the Eligible Executive
                                 elects to defer a portion of the Eligible
                                 Executive's Salary (up to one hundred percent
                                 (100%) thereof, in increments of one-percent
                                 (1%)) and/or Bonus (up to 100% thereof, in
                                 increments of one-percent (1%)) for a specified
                                 Plan Year that becomes payable to the Eligible
                                 Executive after the filing of such;

                           (ii)  apply only to the Salary otherwise payable to
                                 the Eligible Executive during the Play Year for
                                 which such election is made and to any Bonus
                                 payment that is attributable to the Eligible
                                 Executive's services rendered to the Company
                                 during the Plan Year for which such election is
                                 made (whether or not actually payable in such
                                 Plan Year); and

                           (iii) be irrevocable with respect to the Plan Year to
                                 which it applies.

                  Upon receipt of an Eligible Executive's deferral election, the
                  Company shall establish as an accounting entry an individual
                  Deferred Compensation Account for such Eligible Executive and
                  such Eligible Executive shall become a Participant under the
                  Plan. Thereafter, the Company shall credit the Executive's
                  Deferred Compensation Account with all Deferred Compensation
                  which would otherwise have been payable to the Eligible
                  Executive in the absence of an election under the Plan. The
                  Deferred Compensation Account shall be credited no less
                  frequently than the first day of each month in an amount equal
                  to the sum of the Deferred Compensation that would otherwise
                  have been paid by the Company in accordance with the Company's
                  normal payroll practices for the immediately preceding month.

                  (b)      At the beginning of each month, the Company may, in
                  its sole discretion, if on the first day of any such month the
                  Participant is employed by the Company, credit matching
                  contributions to the Participant's Matching Contributions
                  Account.

                  (c)      From time to time, the Company may, in its sole
                  discretion, credit Supplemental Contributions to the
                  Participant's Supplemental and Matching Contributions Account
                  in such amounts as the Company shall determine in its sole
                  discretion.

                                       -5-

<PAGE>

SECTION 5.        PAYMENT OF DEFERRED COMPENSATION. The vested accrued balances
in a Participant's Account shall be paid to a Participant, or, in the case of
any Participant's death prior to payment, the Participant's designated
beneficiary (ies), in cash in one lump sum or annually up to fifteen (15) years
no later than fifteen (15) business days after the end of the month in which the
termination of the Participant's services to the Company occurs. Such election
shall be made at the time of deferral and may be changed at any time prior to
the Participant's termination of services to the Company as long as it is made
twelve (12) months prior to Retirement if the Participant's termination of
services to the Company is due to the Participant's Retirement from the Company.

SECTION 6.        INVESTMENT OF ACCOUNT BALANCES. During and for each Plan Year,
the accrued balances in each Deferred Compensation Account, Supplemental
Contributions Account and Matching Contributions Account will be deemed to be
invested, as of the first day of the month immediately succeeding the month in
which elective deferrals, supplemental contributions and matching contributions
are credited to their respective Accounts under the Plan, in one or a
combination of more than one of the following investments; (a) Company's common
stock including dividends; (b) mutual funds available under the Company's 401(k)
savings plan; (c) guaranteed account (six percent (6%) annual appreciation
compounded monthly). At the end of each Plan Year, the Accounts shall be
adjusted and increased by the results of such deemed investment for such Plan
Year pursuant to Section 7 below and such adjusted Account balances shall then
be reinvested for the immediately succeeding Plan Year.

SECTION 7.        VALUATION. At the end of each Plan Year, the vested and
unvested balances in the Account of each Participant shall be determined by the
Company, taking into account any increase therein for such Plan Year under
Section 6. The balance determined, as of the end of each Plan Year, shall be
communicated in writing to each Participant as soon as practicable after the end
of the Plan Year. In the case of any termination under Section 5 above, the
vested and unvested balances in the Account of any affected Participant shall be
determined by the Company as of the end of the date in which occurs any such
termination, also taking into account any increase therein for such Plan Year to
date under Section 6.

SECTION 8.        DISTRIBUTION IN CASES OF HARDSHIP. The Committee may make
distributions to a Participant from the vested balances in such Participant's
Deferred Compensation Account, Supplemental Contributions Account or Matching
Contributions Account upon a showing by such Participant that an Unforeseeable
Emergency has occurred. Such distributions shall be limited to the amount shown
to be necessary to meet the Unforeseeable Emergency.

SECTION 9.        VESTING. Notwithstanding anything contained herein to the
contrary, a Participant's accrued balance in such Participant's Deferred
Compensation Account (and the amounts payable with respect thereto) shall be
fully vested at all times. A Participant's accrued balance in such Participant's
Matching Contributions Account (and the amounts payable with respect thereto)
and in such Participant's Supplemental Contributions Account (and the amounts
payable with respect thereto) shall, in each case, be vested in twenty-five
percent (25%) increments for each of the first four (4) years of a Participant's
uninterrupted service with the Company commencing on the last date

                                       -6-

<PAGE>

of hire. Notwithstanding the immediately preceding sentence, if (a) the
Participant dies, (b) the Participant's services to the Company is terminated
due to Disability or (c) a Change of Control occurs, such Participant's accrued
balance in the Matching Contributions Account and Supplemental Contributions
Account shall be fully vested as of the date of death, the date of such
termination or the date of any such Change of Control, as the case may be.

SECTION 10.       FORFEITURE. If a Participant's services to the Company are
terminated for any reason (other than death) prior to such Participant's vesting
under Section 9, such unvested Participant's accrued balance in such
Participant's Matching Contributions Accounts (and the amounts payable with
respect thereto) and in such Participant's Supplemental Contributions Account
(and the amounts payable with respect thereto) shall, in each case, be forfeited
by such Participant.

SECTION 11.      AMENDMENT. The Plan may be amended, modified or terminated at
any time by the Committee except that no such amendment, modification or
termination shall have a material adverse effect on the accrued balance of any
Participant's Deferred Compensation Account, Supplemental Contributions Account
and/or Matching Contributions Account as of the effective date of any such
amendment, modification or termination (without the consent of the Participant
(or, if the Participant is dead, his or her beneficiary (ies))).

SECTION 12.       PARTICIPANT'S RIGHT UNSECURED; NO DUTY TO INVEST. The right of
a Participant to receive any distribution hereunder shall be an unsecured claim
against the general assets of the Company. No Company assets shall in any way be
subject to any prior claim by any Participant. The Company shall have no duty
whatsoever to set aside or invest any amounts credited to any Deferred
Compensation Account, Supplemental Contributions Account or Matching
Contributions Account established under the Plan. Nothing in the Plan shall
confer upon any Eligible Executive of the Company any right to continued
employment by the Company, nor shall it interfere in any way with the right, if
any, of the Company to terminate the employment of any Eligible Executive at any
time for any reason. A Participant shall have no right, title, or interest
whatsoever in or to any specific assets of the Company, nor any investments, if
any, which the Company may make to aid it in meeting its obligations hereunder.
Nothing contained in this Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Company and any Participant or any other person. The
Company may enter into a "rabbi" trust agreement to provide for a source of
funds out of which all or any portion of the benefits under the Plan may be
satisfied.

 SECTION 13.      RESTRICTIONS ON ALIENATION. No amount deferred or credited to
any Account under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, levy or charge. Any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
levy or charge the same shall be void; nor shall any amount be in any manner be
subject to any claims for the debts, contracts, liabilities, engagements or
torts of the Participant (or the Participant's beneficiary or personal
representative) entitled to such benefit. No Participant shall be entitled to
borrow at any time any portion of the Participant's Account balances under the
Plan.

                                       -7-

<PAGE>

SECTION 14.       WITHHOLDING. There shall be deducted from all payments under
the Plan the amount of any taxes required to be withheld by any Federal, state
or local government. The Participants, their beneficiaries and personal
representatives shall bear any and all Federal, foreign, state, local, income,
or other taxes imposed on amounts paid under the Plan.

SECTION 15.       PARTICIPANTS BOUND BY TERMS OF THE PLAN. By electing to become
a Participant, each Eligible Executive shall be deemed conclusively to have
accepted and consented to all terms of the Plan and all actions or decisions
made by the Company with regard to the Plan. Such terms and consent shall also
apply to and be binding upon the beneficiaries, personal representatives and
other successors in interest of each Participant. Each Participant shall receive
a copy of the Plan.

SECTION 16.       DESIGNATION OF BENEFICIARY (IES). Each Participant under the
Plan may designate a beneficiary or beneficiaries to receive any payment which
under the terms of the Plan becomes payable on, after or as a result of the
Participant's death. At any time, and from time to time, any such designation
may be changed or canceled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Committee and shall not be effective until
received by the Committee. If no beneficiary has been designated by a deceased
Participant, the beneficiary shall be the Participant's estate. If the
Participant designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be made in equal shares unless the Participant has
expressly designated otherwise, in which case the payments shall be made in the
shares designated by the Participant.

SECTION 17.       SEVERABILITY OF PROVISIONS. In the event any provision of the
Plan would serve to invalidate the Plan, that provision shall be deemed to be
null and void, and the Plan shall be construed as if it did not contain the
particular provision that would make it invalid. The Plan shall be binding upon
and inure to the benefit of (a) the Company and its respective successors and
assigns, and (b) each Participant, his or her designees and estate. Nothing in
the Plan shall preclude the Company from consolidating or merging into or with,
or transferring all or substantially all of its assets to, another corporation,
or engaging in any other corporate transaction.

SECTION 18.       GOVERNING LAW AND INTERPRETATION. The Plan shall be construed
and enforced in accordance with, and the rights of the parties hereto shall be
governed by, the laws of the state of California. This Plan shall not be
interpreted as either an employment or trust agreement.

SECTION 19.       OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and
other benefits received by a Participant under the Plan shall not be deemed a
part of a Participant's compensation for purposes of the determination of
benefits under any other employee welfare or benefit plans or arrangements, if
any, provided by the Company or any affiliate of the Company. The existence of
the Plan notwithstanding, the Company may adopt such other compensation plans or
programs and additional compensation arrangements as it deems necessary to
attract, retain and motivate employees. The Committee is authorized to cause to
be established a trust agreement or several trust agreements or similar
arrangements from which the Committee may make payments of amounts due or to
become due to any Participants under the Plan.

                                       -8-

<PAGE>

SECTION 20.       ARBITRATION. Except as otherwise provided in this Plan, any
controversy between the parties arising out of this Plan shall be submitted to
the American Arbitration Association for arbitration in San Diego, California.
The costs of the arbitration, including any American Arbitration Association
administration fee, the arbitrator's fee, and costs for the use of facilities
during the hearings, shall be borne equally by the parties to the arbitration.
Attorneys' fees may be awarded to the prevailing or most prevailing party at the
discretion of the arbitrator. The provisions of Sections 1282.6, 1283, and
1283.05 of the California Code of Civil Procedure shall apply to the
arbitration. The arbitrator shall not have any power to alter, amend, modify or
change any of the terms of this Plan nor to grant any remedy which is either
prohibited by the terms of this Plan, or not available in a court of law.

SECTION 21.       EFFECTIVE DATE OF THE PLAN. The Plan shall be restated
effective as of February 22, 2000 upon its adoption by the Company.

         IN WITNESS WHEREOF, the restated Plan is hereby adopted by the Company
on this 22 day of February, 2000.

                                                    Neurocrine Biosciences, Inc.

                                                    By:  /s/ Paul W. Hawran
                                                    ----------------------------

                                       -9-

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