Document:

EXHIBIT 10.9

CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. IN ACCORDANCE WITH RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS
BEEN INDICATED WITH AN ASTERISK(*).

                      DEVELOPMENT AND LICENSING AGREEMENT

     This Development and Licensing Agreement ("Agreement") is made and
entered into as of the 11th day of May, 1990, between TANOX BIOSYSTEMS, INC., a
Texas corporation ("Tanox"), and CIBA-GEIGY Limited, a body corporate of
Switzerland ("Ciba-Geigy").

                                   RECITALS:

     Tanox and Ciba-Geigy posses, have developed, and are developing certain
antibodies and related technology directed toward treatment of IgE-mediated
allergic reactions in humans. Each possesses certain trade secrets, know-how,
and other proprietary technology related thereto, including such proprietary
technology disclosed under the pending patent applications reference in Annex 1,
attached hereto.

     To continue research, development, and commercialization of anti-allergy
products within the Field, as hereinafter defined, Tanox and Ciba-Geigy desire
to enter into a joint cooperation. It is understood that the parties shall
contribute, subject to the provisions of this Agreement, to the cooperation all
of their existing and future rights or studies owned or to be owned in the
Field.

     Beyond the cooperation in the Field, Ciba-Geigy intends, subject to the
terms and conditions of that certain Stock Purchase Agreement of even date
herewith, to make an equity investment in Tanox.

     Therefore, Tanox and Ciba-Geigy have entered into this Agreement which sets
forth the terms and conditions of their cooperation and the respective rights
and licenses within the Field which each shall have as a result of such
cooperation.

1.  DEFINITIONS.

     1.1  Agreement Period shall mean the period of time commencing on the date
of execution of this Agreement and extending on a country by country basis until
a) the last to expire in each country of the patents issuing from the patent
applications of Tanox listed in Annex 1 or claiming its priorities thereof (such
expiration to occur only after expiration of extensions to such patents which
may be obtained under the Drug Price Competition and Parent Term Restoration Act
of 1984 in the U.S.A. and similar patent extension laws in other countries) or
b) the expiry of nine (9) years from the day of the first commercial sale of the
respective Product(s) in each country, whichever is later. Ciba-Geigy shall have
the right to extend the Agreement Period, by written notice to Tanox give within
ninety (90) days of Ciba-Geigy's receipt of written notice of the issuance of
such parent, in the event that Tanox obtains rights to a patent, not issuing
from the patent applications of Tanox listed in Annex 1 or claiming its
priorities thereof, upon which Ciba-Geigy relies in order to make, have made,
use or sell Product(s). Such notice shall effect an inclusion of such patent
under clause a) above of this Paragraph 1.1 for purposes of determining the
applicable agreement Period.

                Development and Licensing Agreement  -  Page 1.
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     1.2  Product(s) shall mean the monoclonal antibodies owned or controlled by
Tanox and Ciba-Geigy for use in the Field, as described in the U.S. patent
application(s) of Tanox and the U.K. patent application of Ciba-Geigy referenced
in Annex 1, and fragments, toxin conjugates, antibody toxin chimeric constructs,
humanized or reshaped antibodies derived from such monoclonal antibodies
including such forms as are ready to be administered in humans.

     1.3  Field shall mean anti-IgE antibody-based treatments in humans for
IgE-mediated reactions, *.

     1.4  Patent Rights shall mean any patent application or patent(s) owned or
controlled by Tanox or Ciba-Geigy whose claims cover the manufacture, use, or
sale of the Product(s), as well as any additional patents hereafter issuing from
additional patent applications relating to the Product(s), including, but not
limited to, a method of use of the Product(s), and any substitutions,
continuations, continuations-in-part, divisions, reissues, re-examinations,
renewals, or extensions of the terms thereof.

     1.5  Know-How shall mean any and all unpatented and/or non-patentable
technical data, information, materials, biological materials, such as plasmids,
vectors, DNA sequences, organisms, cell lines, and antibodies, samples and other
information owned or controlled by Tanox or Ciba-Geigy in the Field during the
Agreement Period which (i) relate to Product(s), including, without limitation,
its chemical, biological, pharmacological, toxicological, nonclinical and
clinical data, formulations, specifications and/or usage, or (ii) relate to
processes, techniques and specifications for the manufacture of Product(s),
including, without limitation, preparation, synthesis, culture, recovery and
purification and quality control processes, techniques and specifications.
Know-How shall not encompass Patent Rights. Know-How of Ciba-Geigy and Tanox
shall be limited, however, to only that information which is developed as part
of or in conjunction with CIGA-Geigy's and Tanox's program directed at
development of Product(s) in the Field; but shall not include such information
which relates to non-classical, non-conventional, high technology delivery
systems for the Product(s).

     1.6  Affiliate(s) shall mean all corporations or business entities which,
directly or indirectly, are controlled by, control, or are under common control
with Ciba-Geigy or Tanox, including, with respect to Ciba-Geigy, its Affiliate,
CIBA-GEIGY Corporation, headquartered in the United States of America (U.S.A.).

     For this purpose, the meaning of the word "control" shall mean the
ownership of fifty percent (50%) or more of the voting shares or interest of
such corporation or business entity, or any corporation or business entity, even
though the extent of ownership of a party in such corporation or business entity
is less than fifty percent

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(50%), as to which a party to this Agreement can demonstrate that the operation
and management of such corporation or business entity is carried out in
conformity with such party's standing policy; provided, that any such
corporation or business entity shall be deemed an Affiliate only so long as such
ownership of voting shares or interest or adherence to such standing policy
continues.

     1.7  Third Party(ies) shall mean any person or entity other than a party to
this Agreement, its Affiliate(s), and/or its respective employees.

     1.8  Net Sales shall mean the amount billed by Ciba-Geigy, its Affiliate(s)
or sublicensees to Third Parties for the sale of Product(s) less cash discounts
and/or quantity allowances actually allowed; credits for customers; returns and
allowances; charges for freight, handling and transportation separately billed;
and sales and use taxes and other similar taxes incurred, as reasonably and
fairly determined in accordance with Ciba-Geigy's standard accounting method.

     1.9  Exclusive Rights shall mean the sole right of the party possessing
such right, as expressly conferred by this Agreement, to sell Product(s) within
a territory for which such right is granted.

     1.10  Semi-Exclusive Rights shall mean the joint or shared right of the
parties possessing such right, as expressly conferred by this Agreement, to the
exclusion of all Third Parties, to sell Product(s) within a territory for which
such right is granted.

     1.11  Co-Promotion shall mean the promotion in accordance with Paragraph
8.3 by both parties of Product(s) under the same trademark. Products subject to
Co-Promotion shall be sold solely by Ciba-Geigy and shall be identified by a
trademark chosen by Ciba-Geigy with due consideration to trademark suggestions,
if any, from Tanox.

     1.12  Co-Marketing shall mean the marketing and sale of Product(s) by each
party under a separate trademark, chosen by each party; provided, that
Ciba-Geigy, at its option, may co-market Product(s) under the same trademark
used by the parties for Product(s) being co-promoted and, in such event, Tanox
may not use such trademark in those countries where the Product is being
co-marketed.

     1.13  Abandoned Product(s) shall mean any Product(s) with respect to which
Ciba-Geigy relinquishes its rights under this Agreement by notice of such
relinquishment.

     1.14  Major Country shall mean and include the following countries: Japan,
the United Kingdom, West Germany, Italy, France and the U.S.A.

     1.15  Other commonly used terms or abbreviations, such as Food and Drug
Administration ("FDA"), Phase I. Phase II, Phase III, Notice of Claimed
Investigational Exemption for a New Drug ("IND"), New Drug Application
("NDA"), Establishment License Application ("ELA"), and Product License
Application ("PLA"), shall mean or have the meanings indicated in the United
States Food, Drug and Cosmetic Act and

                Development and Licensing Agreement  -  Page 3
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applicable regulations promulgated thereunder, and all such terms or
abbreviations shall apply equally, as applicable, to any counterpart or
equivalent agencies or activities in countries outside the U.S.A.

     1.16  Exclusive Territories shall mean all countries of the world except
those included within the Semi-exclusive Territories.

     1.17  Semi-exclusive Territories shall mean the U.S.A., Taiwan, Hong Kong,
Singapore, China and Korea.

2.  GRANT OF LICENSE; SUBLICENSE; REPRESENTATIONS.

     2.1  Subject to the provisions of this Agreement, Tanox grants to
Ciba-Geigy during the Agreement Period a world-wide license under its Know-How
and Patent Rights, with the right to grant sublicenses, to make, have made, use
and sell the Product(s) for use in the Field. Said license shall be exclusive in
the Exclusive Territories and shall be co-exclusive with Tanox in the
Semi-exclusive Territories.

     2.2  Subject to the provisions of this Agreement, Ciba-Geigy grants to
Tanox during the Agreement Period a license under its Know-How and Patent
Rights, to make, have made, use and sell the Product(s) for use in the Field.
Said license shall be limited to the Semi-exclusive Territories and shall be
co-exclusive with Ciba-Geigy in said Territories.

     2.3  At the end of the Agreement Period in each respective country, the
licenses granted in Paragraphs 2.1 and 2.2 hereinabove shall be converted into
perpetual, royalty-free, non-exclusive licenses.

     2.4  Ciba-Geigy shall warrant the performance of any and all rights and
obligations of this Agreement by its Affiliate(s) and/or sublicensees. Tanox
shall warrant the performance of any and all rights and obligations of this
Agreement by its Affiliate(s).

     Tanox agrees, if Ciba-Geigy so requests, to enter into a separate agreement
with any Affiliate(s) of Ciba-Geigy granting a license in accordance with the
provisions of this Agreement. Such agreement shall incorporate all of the terms
of this Agreement to the extent that they are applicable. Ciba-Geigy shall
guarantee the performance of any and all responsibilities of the Affiliate(s)
under such separate agreement.

     Additionally, the parties may, by mutual written consent, license rights
granted or retained under this Agreement to a third party to manufacture the
commercial supply of Product(s) for itself and/or the other party.

     2.5  Each party warrants to the other that it is the owner of, or has
exclusive rights to commercialize, with the right to grant licenses under its
respective Patent Right(s) and Know-How and has not assigned, conveyed or
otherwise encumbered by any agreement, either oral or written, any right, title
or interest in and to the respective

                Development and Licensing Agreement  -  Page 4.
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Patent Rights and Know-How which would be inconsistent with the rights granted
hereunder. Each party warrants that it is free to enter into this Agreement and
is free to carry out all of its obligations under this Agreement. Except as
provided in Paragraphs 2.4, 2.5 and 7 and the Annexes hereto and as may be
otherwise agreed in writing between the parties, the parties expressly disclaim
all other warranties, express or implied, including without limitation,
warranties of merchantability or fitness for a particular purpose with respect
to the Product(s).

3.  PROJECT STEERING COMMITTEE/WORKING GROUPS

     3.1  A.  Upon execution of this Agreement, the parties hereto shall set up
a Project Steering Committee to which each party shall appoint up to three (3)
experts as its deputies.

     A member of the Project Steering Committee appointed by Ciba-Geigy shall
assume the chairmanship of this Project Steering Committee.

     Decisions of the Project Steering Committee shall be taken, if possible, by
unanimous vote and the chairman shall have a casting vote; provided, however,
that no action may be taken by the Project Steering Committee to impose or
increase upon either party financial or any other obligations not expressly
contained in this Agreement except with the prior written consent of such party.

     B.  The Project Steering Committee shall:

          (i)  agree from time to time, particularly before entering into a new
     research and/or development phase as hereinafter set forth, on the
     development and detailed working program (including timetable) to be
     carried out and the budgets thereto, whereby the Project Steering Committee
     shall set up the priorities and determine the various tasks of each partner
     as hereinafter described;

          (ii)  coordinate and monitor the progress of such development work;

          (iii)  provide for a free exchange of any relevant information and
     results relating to the development work under this Agreement and subject
     to the terms of this Agreement.

     C.  As necessary or required, the Project Steering Committee shall hold
meetings at intervals and locations to be mutually agreed upon, but at least
once a year. The minutes to the meetings shall be marked as "Confidential" and
shall be subject to the secrecy obligations and restrictions on use as per
Paragraph 6 hereinafter.

     3.2  A.  The Working Groups shall be responsible for proposing a detailed
development plan (setting forth the different steps and time frames, as well as
the budget for their respective activities) to the Project Steering Committee.
After approval of the development plan by the Project Steering Committee, which
must occur in a timely way

                Development and Licensing Agreement  -  Page 5.
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so as not to impede the progress of the Working Groups, the Working Groups shall
coordinate and implement all day-to-day activities of the parties, respectively,
under this Agreement. The Working Groups shall work openly and cooperatively and
shall meet periodically, as the parties reasonably determine may be necessary,
to coordinate research, preclinical and clinical development, process
development and production, and other activities conducted by the parties
according to the objectives and priorities of the cooperation under this
Agreement. The results of such meetings shall be recorded in writing. The
minutes shall be approved and signed by both parties' project leaders. The
minutes shall be marked as "Confidential" and shall be subject to the secrecy
obligations and restrictions on use as per Paragraph 6 hereinafter.

     B.  The Working Groups shall include those of its expert employees that
each party reasonably determines to be necessary or appropriate (such employees
may participate in more than one Working Group which, unless requested by a
party, need not include an equal number of each party's expert employees).

     The Working Groups shall include the following and such other Working
Groups as may be agreed from time to time by the Project Steering Committee.

          (i)  Research Group -- The Research Group shall be responsible for
     proposing research plans to the Project Steering Committee, supervising
     research activities, and coordinating and implementing all day-to-day
     activities in connection with those various research activities Annex 2.
     The Research Group shall report to the Project Steering Committee from time
     to time the research results for review of the work performed and for the
     discussion of and decision on the subsequent activities.

          (ii)  Clinical Development Group -- The Clinical Development Group
     shall be responsible for proposing the clinical development plans to the
     Project Steering Committee, supervising all clinical activities, and
     coordinating and implementing the clinical trials and regulatory
     submissions in connection with those various clinical trial activities
     identified in Annex 3. The Clinical Development Group shall report to the
     Project Steering Committee from time to time the results of development
     activities for review and for decisions on subsequent activities.

          (iii)  Process Development and Production (PDP) Group -- The PDP Group
     shall be responsible, as necessary from time to time, for proposing the
     process development and production activities to the Project Steering
     Committee supervising such activities, and coordinating and implementing
     initial, adaption and scale-up activities identified in Annex 4. The PDP
     Group also shall support with its activities the clinical development
     process as outlined in Annex 3. The PDP Group shall report to the Project
     Steering Committee from time to time the results of the work performed for
     decisions on subsequent activities.

Z                Development and Licensing Agreement  -  Page 6.
<PAGE>
4.  RESPONSIBILITIES OF THE PARTIES.

     4.1  Activities of the parties under this Agreement can be characterized as
follows: a) activities in which both parties will participate independently or
on an agreed basis at each party's own cost: b) activities for which Tanox will
have primary or sole responsibility at Tanox's cost; c) activities for which
Ciba-Geigy will have primary or sole responsibility at Ciba-Geigy's cost; d)
activities which can be undertaken with mutual agreement of the parties and for
which Tanox or Ciba-Geigy will be entitled to reimbursement of its costs and e)
activities for which Ciba-Geigy will have primary or sole responsibility at a
cost to be shared between the parties. Each party shall be responsible for
performing, in good faith, all activities for which it is responsible in a
commercially reasonable manner.

     4.2  Categories of activities in which the respective parties will
participate, and identification of the party which will have responsibility for
each of such activities is set forth in Annex 2 (Research Activities), Annex 3
(Clinical Development Activities), and Annex 4 (Process Development and
Production Activities), respectively. For activities in which both parties have
a major participation, the parties will share responsibility for such activities
or one party will have the overall responsibility, as the Project Steering
Committee may mutually agree (except as specified in Paragraph 4.4 below for
clinical development activities).

     4.3  Costs for each party's activities, as set forth in Annex 2, Annex 3,
and Annex 4, will be borne by such party or will be subject to reimbursement,
all as specified in each such Annex. Reimbursement of Tanox's reimbursable
activities will be made in accordance with the guidelines for reimbursement set
forth in Annex 5.

     4.4  The overall responsibility for IND Application -- U.S. and Clinical
Development -- U.S., as identified in Annex 3, along with the overall regulatory
strategy during clinical development, NDA approval and post-NDS approval phases,
is agreed to be with Ciba-Geigy. However, the parties will jointly participate
through the Clinical Development and PDP Groups in all of such activities. Both
parties will have full access to all submissions to, including clinical studies
and other supporting information, and communications with the FDA relating to
the Product(s). Ciba-Geigy, or its Affiliates, shall file and hold title to all
regulatory applications, approvals and supplements hereto in the U.S.A. Each
party, or its Affiliate(s) or (in the case of Ciba-Geigy and at its discretion,
sublicensees), shall have the irrevocable right to refer to and cross-reference
all such documents for registrations in such other countries, subject to the
terms of this Agreement.

     4.5  Ciba-Geigy and Tanox shall have continuing obligations to timely
advise each other of all adverse drug reactions and other similar matters
relevant to maintaining approvals and registrations of the Product(s).
Ciba-Geigy and Tanox shall have the continuing obligations to timely advise each
other of any governmental regulatory problems, notices, actions or
communications relating to the Product(s).

                Development and Licensing Agreement  -  Page 7.
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     4.6 Ciba-Geigy will bear overall responsibility for commercialization of
the Product(s) in all counties in which it desires to maintain the marketing
rights to the Product(s) set forth in Paragraph 8. Ciba-Geigy agrees to use
commercially reasonable efforts to obtain and maintain all Product(s) approvals,
registrations, and government authorizations necessary for commercial sale of
the Product(s) in all such countries (see 4.7), and will, subject to section
12.2A (ii), maintain commercial sales of Product(s) in those countries in which
such approvals are obtained. Ciba-Geigy shall notify Tanox as provided in
Paragraph 4.7 below should it elect not to exercise its rights to pursue
commercialization of a Product in a country. Ciba-Geigy shall be in compliance
with its responsibilities hereunder so long as it is proceeding with all such
activities in a commercially reasonable manner.

     4.7  A.  When the registration package requesting approval for commercial
sale of the Product(s) (including approval for reimbursement by the appropriate
health insurance authorities as well as price approvals where required) is first
filed in a Major Country, Ciba-Geigy will notify Tanox in writing of such filing
and will advise Tanox in such notice of any countries for which Ciba-Geigy holds
the Exclusive Rights, but does not intend to file for registration of the
Product(s). Such notice will effectuate Ciba-Geigy's voluntary abandonment of
its right hereunder to market Product(s) in such country. With respect to all
other countries outside the U.S., Ciba-Geigy shall submit the registration
package requesting approval for commercial sale of the Products as soon as
reasonably consistent with its normal practice for products within its
organization [currently approximately 3 to 9 months in countries where
Ciba-Geigy's Basic International Registration Dossier (BIRD) forms the basis of
the local submissions]. Thereafter, absent the occurrence of any events beyond
its control, including non-performance by Tanox, of its obligations under this
Agreement, Ciba-Geigy shall have the following maximum periods in which to
commence regular commercial sales of the Product(s) following the date of
approval for commercial sale (including reimbursement and price approval where
required) in each such country.

In the U.S.A.              -- 12 months
In each Major County       -- under normal circumstances 6 months
                                (outside the U.S.A.)
In each other country      -- 24 months

The abandonment of (a) Product(s) pursuant to this Paragraph 4 shall not be
construed to be a termination of this Agreement.

     B.  In the U.S., Ciba-Geigy may voluntarily abandon its right hereunder to
market a Product(s), upon written notice to Tanox, at any time prior to
submission of the NDA for such Product(s) to the FDA. Between the time of
submission and the time of approval of said NDA, Ciba-Geigy may voluntarily
abandon its right hereunder to market a Product(s) in the U.S., upon written
notice to Tanox, solely for the reasons set forth in Section 12.2A (ii) as
grounds for a termination.

     C.  With respect to the Territory outside the U.S.A., Ciba-Geigy shall be
obligated to establish, prior to the commercial introduction of the Product(s),
a

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reasonable minimum sales forecast for years 1 to 4 after introduction in the
Major Countries (established as 1/3 of the best estimate of expected sales);
whereby, if the minimum sales in an average of two consecutive years are not
achieved in a Major Country, Tanox shall have the right to grant a second
license in such Major Country, unless Ciba-Geigy shall pay the minimum royalties
so accrued based on the minimum sales forecast for such period or shall be able
to show that these sales figures have not been reached due to reasons beyond the
control of Ciba-Geigy.

     4.8  If Tanox at any time should advise Ciba-Geigy of its concern, and the
specific reasons for same, that Ciba-Geigy is not pursuing development,
commercialization and sale of the Product(s) outside the U.S.A. in the manner
required under this Agreement, then both parties shall discuss the situation in
good faith to reach a satisfactory resolution addressing Tanox's concerns, as
appropriate.

5.  EXCHANGE OF INFORMATION.

     5.1  Subject to the confidentiality of Paragraph 6, Tanox and Ciba-Geigy
shall share their Know-How with each other. If necessary, each party also will
provide such information to the other, to the extent reasonable, in suitable
form for regulatory approval and registration purposes. Know-How that is subject
to the confidentiality obligations of Paragraph 6 received by each party from
the other shall only be used for the Product(s) in the Field, except with the
express written consent of the other party, such consent not to be unreasonably
withheld. Prior to any use of such Know-How in products outside the Field, each
party agrees that it will discuss in good faith with the other any such intended
use and the possibility of compensation for such use as appropriate in view of
the source and the scientific inventiveness of such Know-How, the source of
funding, and other reasonable factors.

     5.2  The Project Steering Committee and Working Groups, as described in
Paragraph 3, shall be responsible for the exchange of Know-How between Tanox and
Ciba-Geigy. (As appropriate, written reports shall be prepared for the meetings
of the Project Steering Committee and Working Groups).

     5.3  Tanox will obtain, at its cost, its Patent Right(s) covering the
Product(s) in each country in which Tanox believes patent protection to be
appropriate. After the Agreement date, Tanox will advise Ciba-Geigy in writing
not later than four (4) months before the expiration date of the priority year
of the filing of any foreign patent applications, as to those countries where it
does not intend to timely file for patent protection and will offer at the same
time in writing to file in the remaining countries suggested by Ciba-Geigy
corresponding patent applications within such applicable priority year on
Ciba-Geigy's behalf and at Ciba-Geigy's cost. Ciba-Geigy shall collaborate and
share equally with Tanox the cost of preparing and filing patent applications
covering jointly made inventions. Ciba-Geigy will obtain, at its cost, patents
based upon its independent research activities for the Product(s) in each
country in which Ciba-Geigy believes such patent protection to be beneficial or
appropriate.

                Development and Licensing Agreement  -  Page 9.
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     The parties have communicated to each other, prior to the date of this
Agreement, the text of the priority patent applications, and
continuations-in-part, currently filed in the Field as listed in Annex 1. The
parties will communicate to each other, not later than ninety (90) days after
the filing thereof, the text of any additional priority patent applications
which are filed or notice of intention to abandon any such application so as to
permit the other party to assume prosecution of same at its own expense.

6.  CONFIDENTIALITY AND PUBLICATIONS.

     6.1  Unless otherwise provided for in this Agreement, both parties shall
treat the Know-How and any and all other information and data received or
derived under this Agreement as strictly confidential, and shall not disclose
the same to any Third Party during the Agreement Period and for five years
thereafter, except for information which:

          (1) is or shall have been known to the receiving party prior to the
     disclosure by the other party as evidenced by written record of other
     proof;

          (2) is or shall have been public knowledge through no fault of the
     receiving party;

          (3) has been received from a Third Party who did not acquire it
     directly or indirectly from the disclosing party;

          (4) needs to be disclosed to government officials for purposes of
     obtaining registration of the Product(s); or

          (5) is compelled to be disclosed in the course of litigation by a
     Third Party, provided that the party compelled to make such disclosure
     provides the other party to this Agreement with notice of such compulsion
     sufficiently in advance of disclosure so as to provide such other party a
     reasonable time period to seek a protective order.

     Notwithstanding the above, both parties may disclose such information (i)
to their legal representatives and employees, to Affiliates, to legal
representatives and employees of Affiliates, and to consultants to the extent
such disclosure is necessary to achieve the purposes of this Agreement and
provided such legal representatives, employees and consultants are covered by
obligations of confidentiality with respect to such information no less
stringent than those set forth herein; and (ii) as required by law.

     6.2  The parties acknowledge the legitimate interest of their respective
employees in publishing findings under this Agreement to the scientific
community. On the other hand, the parties recognize their mutual interest that
publications be made and lectures, seminars, or other presentations be given
only to the extent that both parties' commercial interests have been reasonably
safeguarded through patent protection or otherwise so that Third Parties cannot
make commercial and/or industrial use of the information contained in such
disclosures. For this purpose, each party shall ensure that the other shall have
the opportunity to comment in advance on any publication or oral

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presentation in public involving disclosure of any information under this
Agreement that may constitute confidential information and that no such
publication or presentation relating to such confidential information under this
Agreement shall be made without such other party's prior written consent. The
party from which such consent is requested shall not unreasonably withhold or
delay such consent. A request from the non-disclosing party that any such
publication or presentation be delayed until a patent application is filed
thereon shall be a reasonable request to delay; provided, that such delay lasts
no more than six (6) months from the date of such request.

7.  PRODUCT MANUFACTURING.

     7.1  In the interest of the competitive position of the Products emerging
from the cooperation, an economic, safe and reliable source of manufacture must
be identified. After the start of Phase I clinical trials, the PDP Group will
initiate the cooperative identification and development of suitable
manufacturing technology to provide the best reasonable conditions for
manufacturing the Product(s). Regulatory provisions which apply to biologicals
may have an impact on the final manufacturing arrangements. For example, it may
be required that Ciba-Geigy obtain and maintain the ELA for the Product(s) in
the U.S.A. to assume and maintain its governmental marketing approval for the
U.S.A. in accordance with this Agreement. If so, Ciba-Geigy may be required to
satisfy FDA requirements for ownership and/or control over the means of
manufacture in order to obtain and maintain such ELA. In that event, Ciba-Geigy
shall hold ownership and/or control over such means of manufacture. The parties
shall negotiate in good faith to reach mutually agreeable terms to permit
Ciba-Geigy to comply with its regulatory responsibilities.

     7.2  In accordance with Amex 4 (Process Development and Production), Tanox
will produce Product(s) required for pre-clinical and Phase I and Phase II
clinical development, subject to reimbursement of Tanox's manufacturing costs
(as defined in the third and fourth sentence of Paragraph 7.4) by Ciba-Geigy.
Production of Product(s) for Phase III clinical trials and subsequent commercial
production will be subject to the respective manufacturing rights of the parties
agreed under this Paragraph 7.

     7.3  Should neither Ciba-Geigy nor Tanox -- working in cooperation to
identify the best reasonable conditions for manufacturing the Product(s) -- be
capable of providing such manufacturing conditions and reasonably determine that
an alternative Third Party source of manufacturing is necessary, then Tanox and
Ciba-Geigy will negotiate in good faith on a reasonable compensation to Tanox
for relinquishing its manufacturing rights. Such compensation to Tanox shall be
established as an appropriate percentage of the estimated manufacturing profits
to Tanox, as mutually agreed.

     7.4  Subject to Paragraph 7.3 above, Tanox will retain manufacturing rights
for *. Ciba-Geigy shall
determine, in good faith, considering Tanox's input and the objectives of this
Agreement, which of Ciba-Geigy's Affiliates' requirements * shall
be supplied by Tanox. For all Product(s) manufactured by Tanox for sale to
Ciba-Geigy pursuant hereto, Ciba-Geigy will purchase such Product(s) from Tanox
at a price *

                Development and Licensing Agreement  -  Page 11.
<PAGE>
*

     In any event, all Product(s) supplied by Tanox shall satisfy the standards
set forth in Annex 3 and 4 and the specifications for the Product(s) to be
agreed upon between the parties. Payment for such Product(s) shall not be due
until after quality control evaluation by Ciba-Geigy determines that said
Product(s) satisfy said standards and specifications.

     7.5 In addition to quantities and pricing of the Product(s) agreed in
Paragraph 7.3 above, additional details concerning the commercial manufacturing
arrangements will be negotiated in good faith between the parties. These
discussions may cover Ciba-Geigy's financial support of Tanox's contribution
to acquisition and/or development of the Know-How for the commercial manufacture
of the Product(s). *

     7.6  If the parties reasonably determine that manufacture of the Product(s)
from one facility provides the best reasonable manufacturing conditions, then,
as an alternative, Tanox and Ciba-Geigy may agree to establish manufacturing
capability for the Product(s) in the form of a joint venture.

     7.7  In the event that (i) Tanox could not supply Ciba-Geigy's
requirements, in whole or in part, for the Product(s) or that (ii) Tanox should
not be able to supply, in whole or in part, the Product(s) in the quality as
agreed upon between the parties in writing at least twelve (12) months prior to
the delivery date established for the first commercial supplies by Tanox to
Ciba-Geigy, or that (iii) Ciba-Geigy or its Affiliates or sublicensees should be
compelled to manufacture the Product(s) locally in any country of the Territory
due to the laws or regulations by the government authorities in such country or
due to other compelling commercial reasons beyond the control of the parties,

                Development and Licensing Agreement  -  Page 12.
<PAGE>
Tanox or Ciba-Geigy, as the case may be, shall notify the other party
immediately to this effect and both parties hereto shall, as promptly as
possible, but not later than thirty (30) days after the receipt by Tanox or
Ciba-Geigy, as the case may be, shall notify the other party immediately to this
effect and both parties hereto shall as promptly as possible, but not later than
thirty (30) days after the receipt by Tanox or Ciba-Geigy, as the case may be,
of said notification by Tanox or Ciga-Geigy, start good faith negotiations with
the aim to find a quick solution to overcome the difficulties arisen. If the
parties hereto do not come to an agreement in this respect within ninety (90)
days after the date of notification, then Ciba-Geigy shall have the right to
manufacture itself such portion of its requirements of the Product(s) as may be
necessary without any compensation to Tanox.

     If Ciba-Geigy is manufacturing such Product(s) due to the occurrence of
event (iii) above, then Ciba-Geigy will agree to adjust purchases of its
requirements for other countries in a manner that will permit Tanox to continue
to supply * Regarding the occurrence of events (i) or (ii) above, Ciba-Geigy and
Tanox will negotiate in good faith in concluding the details of the
manufacturing and supply arrangements to establish the return of such
manufacturing responsibility to Tanox as soon as reasonable or to terminate its
manufacturing responsibility, in whole or in part, as appropriate under the
circumstances.

     7.8 Ciba-Geigy shall have the right to have, at its own expense, an
independent certified public accountant, to which Tanox has no reasonable
objection, inspect Tanox's books and records of account to determine and
communicate to Ciba-Geigy only whether Tanox has properly charged Ciba-Geigy
pursuant to Article 7 for supplies of Product(s) and for reimbursement of other
Tanox costs pursuant to this Agreement and the amount of any discrepancy. Tanox
agrees that such records are maintained or will be maintained in sufficient
detail to permit such determination for a period of at least three (3) years
from the date of their origin. If any review by the independent accountant of
Ciba-Geigy of such books and records should indicate that the amount(s) paid by
Ciba-Geigy has not been correct, the parties shall seek to mutually agree to
settle any discrepancies raised by Ciba-Geigy's accountants and, if the parties
mutually agree that the discrepancy is greater than one percent (1%) in Tanox's
favor, then Tanox shall agree to reimburse Ciba-Geigy for the expense of such
inspection.

8.  MARKETING

     8.1  Subject to the terms and conditions of this Agreement, Ciba-Geigy will
have Exclusive Rights in the Exclusive Territories during the Agreement Period.

     8.2  Subject to the terms and provisions of this Agreement, both Tanox and
Ciba-Geigy will have Semi-Exclusive, Co-Marketing Rights in the Semi-exclusive
Territories during the Agreement Period.

     8.3  Notwithstanding anything above to the contrary, in the U.S.A.,
Ciba-Geigy and Tanox will have Semi-Exclusive, Co-Promotion Rights to the
Product(s), subject, as applicable, to the following:

                Development and Licensing Agreement  -  Page 13.
<PAGE>
     A.  Tanox and Ciba-Geigy agree to negotiate in good faith the details of
their Co-Promotion agreement at a mutually agreeable time and in accordance with
the terms and conditions described in this Paragraph 8.3 and elsewhere in this
Agreement as applicable. Such negotiation, however, shall commence no later than
the date of filing of the NDA in the U.S. or at such other earlier time as Tanox
and Ciba-Geigy determine is commercially reasonable.

     B.  Tanox's and Ciba-Geigy's compensation shall be fairly determined based
on the profits from such Co-Promotion computed in a mutually agreeable manner
based on Ciba-Geigy's standard accounting procedures ("Ciba-Geigy Profits"),
which Ciba-Geigy Profits are defined as the difference between Net Sales of the
Product(s) in the U.S.A. and Ciba-Geigy's "Total Marketing Expense" in the
U.S.A. Ciba-Geigy's "Total Marketing Expense" shall include but not
necessarily be limited to the following costs incurred by Ciba-Geigy and by
Tanox, if any, as may be reasonable:

           (i)  Cost of goods to Tanox and Ciba-Geigy, as appropriately
     determined in accordance with Ciba-Geigy's standard accounting procedures:

           (ii)  Royalty payments from Ciba-Geigy to Tanox on that proportion of
     Net Sales attributable to Ciba-Geigy;

          (iii)  Product specific marketing expenses (PSME) which include but
     are not limited to costs for direct advertising, films, samples, exhibits,
     clinical conference aids, peer promotion activities, marketing reasearch
     and such other costs as are normally included in PSME according to
     Ciba-Geigy's standard accounting procedures;

           (iv)  Field force costs (FF) which are the direct and indirect costs
     of the combined Tanox and Ciba-Geigy field forces, such costs to be borne
     by Tanox and Ciba-Geigy respectively, properly allocated to the sale of the
     Product(s) and in accordance with Ciba-Geigy's (and Tanox's) standard
     accounting procedures; provided, that the FF costs may be included or
     excluded from Ciba-Geigy's Total Marketing Expenses as the parties may
     mutually agree;

           (v)  Other marketing expenses according to Ciba-Geigy's standard
     accounting procedures; and

           (vi)  Overhead costs and cost of services as determined in accordance
     with Ciba-Geigy's standard accounting procedures.

     C.  Tanox's compensation (TC) shall be a proportion of Ciba-Geigy Profits,
* of Ciba-Geigy Profits. Such proportion shall be determined by Ciba-Geigy
Profits, and the two factors described below:

                Development and Licensing Agreement  -  Page 14.
<PAGE>
           (i)  Relative field force time (RFFT) is that amount of Tanox's field
     force time spent in direct promotion of the Product(s) to the Product(s)
     target audience, divided by that time spent by the combined Ciba-Geigy and
     Tanox field forces.

          (ii)  Relative field force productivity (RFFP) is that amount of the
     Tanox field force experience, in terms of years, in promoting Product(s) in
     the indication(s) for which the Product(s) are approved, divided by that
     quantity for the Ciba-Geigy field force. RFFP shall at no time be less than
     0.75 or greater than 1.0.

     D.  Tanox acknowledges that it shall permit Ciba-Geigy to design and
implement the overall marketing and sales program as Ciba-Geigy determines is
commercially reasonable for the Product(s), with consideration of such input as
Tanox representatives may from time to time provide, for a reasonable time
following the launch of the Product(s).

     Ciba-Geigy acknowledges that after said reasonable time which shall be no
less than three (3) years following the launch of the Product(s), if Tanox gives
notice to Ciba-Geigy that it is not satisfied with the sales performance of the
Product(s), then in such case Ciba-Geigy, in its discretion, reasonably
exercised, may grant Tanox the right to imitate certain activities on its own in
order to increase the sales performance of the Product(s) and its relative
benefits therefrom.

     E.  Ciba-Geigy acknowledges that, in accordance with its sole right to
determine the overall marketing and sales strategy for the Product(s), and in
consideration of the input to same which, from time to time may be provided by
Tanox, it shall provide Tanox with a commercially reasonable opportunity to
achieve its * compensation of Ciba-Geigy Profits as defined above.

     8.4  If Ciba-Geigy abandons its right to market a Product in a country in
accordance with Paragraph 4.7 (without electing to sublicense), then such rights
shall be owned in full by Tanox and Tanox shall thereafter retain the Exclusive
Rights to market the Product in such country. If Ciba-Geigy has abandoned and
relinquished (either worldwide or in particular countries) its marketing rights
hereunder with respect to the Product(s) (one or more than one, as applicable),
without electing to sublicense, Tanox or a Third Party licensee or sublicensee
of Tanox may freely carry on future development and commercialization of the
Abandonment Product. If Tanox acquires any rights to an Abandoned Product, Tanox
may use any studies conducted by Ciba-Geigy and its Affiliate(s), and shall have
access and rights thereto, to the extent that such rights and access have not
already been provided under this Agreement.

                Development and Licensing Agreement  -  Page 15.
<PAGE>
     9.  Financial Commitments of Ciba-Geigy.

     9.1  Subject to the continuing interest of Ciba-Geigy in this project,
Ciba-Geigy shall pay the following amounts to Tanox upon the happening of the
events specified hereinafter.

                                                  PAYMENT
EVENT                                          (in millions)

  1.  On signing of the Agreement by both         *
      parties
  2.  Within 30 working days after receipt        *
      by Ciba-Geigy of a two (2) mg sample
      of a chimeric mAb developed by Tanox
      at a quality to be agreed upon in
      advance in writing between the
      parties
  3.  Within 30 working days after receipt        *
      by Ciba-Geigy of batch 0 of the
      Product at quantity / quality /
      specifications to be agreed upon in
      advance in writing between the
      parties
  4.  Start by Ciba-Geigy of phase I              *
      clinical trials
  5.  Start by Ciba-Geigy of phase II             *
      clinical trials
  6.  Start by Ciba-Geigy of phase III            *
      clinical trials
  7.  Upon submission of NDA/PLA/ELA in           *
      first Major Country (other than
      Japan) (50% creditable against
      royalties)
  8.  Upon submission of NDA/PLA in Japan         *
      (50% creditable against royalties)
  9.  Upon approval of NDA/PLA/ELA in first       *
      Major Country (other than Japan) (50%
      creditable against royalties)
 10.  Upon approval of NDA/PLA in Japan           *
      (50% creditable against royalties)

     The above payments under event numbers 1 and 4 to 10 shall be due within
thirty (30) days after occurrence of the event specified.

     The above payments (except for the signing payment) shall be made for the
initial Product and for each different Product which the parties agree to pursue
which
                Development and Licensing Agreement  -  Page 16.
<PAGE>
is not a follow-up or second generation product initiated solely by
Ciba-Geigy's R&D activities; however, if the parties agree to replace a Product
being developed with another Product of the same type and function which shows
greater promise, then such payments will continue with the payment next due at
the time such initial product was replaced.

     9.2  A.  In consideration of the rights herewith granted, Ciba-Geigy shall
pay royalties to Tanox on Net Sales of the Product(s) based on the following:

     (i)  on all Net Sales within a calendar year in Exclusive
          Territories, in the aggregate, where Tanox's Patent Right(s)
          exist in the form of issued, valid, and unexpired patents:

          --  up to and including *:                                          *

          --  between * and up to
              and including *:                                                *

          --  over *:                                                         *

     (ii) on Net Sales in Semi-exclusive Territories where Tanox's
          Patent Rights exist in the form of issued, valid, and
          unexpired patents:                                                  *

    (iii) on Net Sales in countries outside of the U.S.A. in which
          there are no Tanox Patent Rights in the form of issued,
          valid, and unexpired patents:                                       *

     (iv) on Net Sales in the U.S.A. if there are no Tanox Patent
          Rights in the form of issued, valid, and unexpired patents:         *

Tanox, at its option on written notice to Ciba-Geigy, may permanently waive
prior to a commercial introduction of the Product(s) its Semi-Exclusive Rights
in one or more countries, from time to time, and such countries shall thereafter
be considered for purposes hereof as countries with Exclusive Rights held by
Ciba-Geigy.

B.  If the Product(s) contain one or more therapeutically active substances and
such substances are of comparable significance, or the added one(s) are of
greater significance than the original Product(s), then the parties shall in
good faith renegotiate a reduction to the above royalty rates applicable to such
Product(s).

C.  Where royalty payments to Tanox become due, Ciba-Geigy shall have the right
to receive a credit for * of the total amount of each such royalty
payment until such time as the cumulative credits received under this provision
shall equal * of the amounts paid under
Paragraph 9.1, event numbers 7, 8, 9 and 10), plus amounts as may be permitted
to be credited against royalty payments under Annex 3, paragraph number 4.

                Development and Licensing Agreement  -  Page 17.
<PAGE>
D.  If in any country any Product is covered by more than one of Tanox's Patent
Rights which entitles Tanox to royalty payments hereunder, the highest royalty
rate shall be applicable, but no cumulation of royalties shall be made.

E.  The royalties shall be payable in each country as follows: (i) until the
last to expire in each of the respective countries of the patents actually used
and covering the manufacture, use, or sale of Product(s) issuing from the patent
applications of Tanox listed in Annex 1 as of the date of the signature of this
Agreement or claiming its priorities thereof (such expiration to occur only
after expiration of extensions of any nature to such patents which may be
obtained under applicable statues or regulations in the respective countries of
Territory, such as the Drug Price Competition and Patent Term Restoration Act of
1984 in the U.S.A. and similar patent extension laws in other countries), or
(ii) for a duration of nine (9) years from the day of the first commercial sale
of the respective Product(s) in each of the respective sales countries if there
is no patent protection in such country at the expiration of such nine (9) year
period, whichever is longer. If a patent expires in a country prior to such nine
(9) year period, then the royalty rate shall drop to the rate applicable in
countries without patent protection.

F.  All royalty payments shall be made in U.S. Dollars for each calendar half
year (ending on June 30 and December 31, respectively) within ninety (90) days
after the end of such calendar half year. Such royalty payments shall be
accompanied by a written statement indicating Net Sales of the Product(s), as
applicable, by country.

If Ciba-Geigy is required to pay or withhold any income tax or other tax with
respect to royalty payments, Ciba-Geigy shall first (i) furnish Tanox, in
writing, with satisfactory evidence that such payment or withholding is
required, (ii) give Tanox its reasonable assistance to enable or assist Tanox to
claim exemption from any such deduction and (iii) shall provide satisfactory
documentation to confirm the payment of the tax.

To the extent and as long as the laws and/or regulations in force in any country
prohibit the payment, conversion or remittance of the royalties as hereby
contemplated, Ciba-Geigy's obligations under this Paragraph 9.2.F. shall be
discharged by the deposit thereof to the account of Tanox, or its designee, in
any commercial bank or trust company selected by Tanox located in such country;
provided, that no infraction of law or regulation occurs in making such deposit.

Tanox shall have the right to have, at its own expense, an independent certified
accountant, to which Ciba-Geigy has no reasonable objection, inspect
Ciba-Geigy's books and records of account to determine and communicate to Tanox
only whether appropriate payments have been made to Tanox and the amount of any
discrepancy. Ciba-Geigy agrees that such records are maintained or will be
maintained in sufficient detail to permit such determination for a period of at
least three (3) years from the date of their origin. If any review by the
independent accountant of Tanox of such books and records should indicate that
the amount(s) paid by Ciba-Geigy have not been correct, the parties shall seek
to mutually agree to settle any discrepancies raised

                Development and Licensing Agreement  -  Page 18.
<PAGE>
by Tanox's accountants and, if the parties mutually agree that the discrepancy
is greater than 1% in Ciba-Geigy's favor, then Ciba-Geigy shall agree to
reimburse Tanox for the expense of such inspection.

     9.3  Notwithstanding any set-offs or other reductions to royalties which
may be provided under this Agreement, the parties agree that the total annual
aggregate royalties payable to Tanox under this Agreement shall in no event be
reduced by greater than * of the total annual aggregate amount which would be
payable absent any such set-offs or reductions.

10.  INDEMNIFICATION; LIABILITY; INFRINGEMENT.

     10.1  Ciba-Geigy shall indemnify and hold Tanox harmless from and against
any and all damages, costs, expenses, and other liabilities, including, without
limitation, all liability claims and damages with respect to the Product(s) sold
by Ciba-Geigy (including sales under Co-Promotion Rights) provided that a) no
later than ten days after receipt of notice by Tanox of such claim, Tanox shall
notify Ciba-Geigy thereof; b) said damages, costs, expenses and other
liabilities do not arise out of the negligence or violation by Tanox of
applicable laws or of its obligations under this Agreement; c) Tanox fully
cooperates with Ciba-Geigy in the defense of such claims without out-of-pocket
cost to Tanox; and d) Ciba-Geigy shall control the defense and or settlement
thereof. Ciba-Geigy also agrees to add Tanox as an additional named insured on
any product liability insurance policy that Ciba-Geigy may have outside the
U.S.A. which covers such Product(s) and furnish satisfactory evidence of same
upon request from time to time.

     Tanox shall indemnify and hold Ciba-Geigy harmless from and against any and
all damages, costs, expenses, and other liabilities, including, without
limitation, all liability claims and damages with respect to the Product(s) sold
by Tanox under its Co-Marketing Rights (or any subsequent Exclusive Rights it
may obtain); provided that a) no later than ten days after receipt of notice by
Ciba-Geigy of such claim, Ciba-Geigy shall notify Tanox thereof; b) said
damages, costs, expenses and other liabilities do not arise out of the
negligence or violation by Ciba-Geigy of applicable laws or of its obligations
under this Agreement; c) Ciba-Geigy fully cooperates with Tanox in the defense
of such claims without out-of-pocket cost to Ciba-Geigy; and d) Tanox shall
control the defense and or settlement thereof. Tanox also agrees to add Ciba-
Geigy as an additional named insured on any product liability insurance policy
that Tanox may have outside the U.S.A. which covers such Product(s) and furnish
satisfactory evidence of same upon request from time to time.

     It is understood, however, that neither party nor their officers, directors
and employees shall be liable for any loss or damage caused by the negligence of
the other party while the latter party is performing its work under this
Agreement.

     10.2  Tanox shall indemnify and hold harmless Ciba-Geigy, its Affiliates
and sublicensees from and against any and all damages, costs, expenses, and
other liabilities incurred by them as the result of any infringement of patent
rights of any Third Party arising from the manufacture, use or sale of the
Product(s); provided that no later than

                Development and Licensing Agreement  -  Page 19.
<PAGE>
ten days after receipt of notice by Ciga-Geigy of any such claim, Ciga-Geigy
shall notify Tanox thereof and give Tanox the opportunity to undertake and
direct the defense and/or settlement thereof. Any amount due to Ciga-Geigy, its
Affiliates or sublicensees pursuant to this indemnification shall be paid solely
out of royalties thereafter due by Ciga-Geigy to Tanox hereunder.

     In the event of any such infringement, Tanox may obtain, or Ciga-Geigy may
require Tanox to use its best efforts to obtain, for Ciga-Geigy a license
applicable to such country of such Third Party's patent rights. If royalties
shall become payable to third parties under such a license obtained by Tanox or
under a license which Ciga-Geigy is compelled to execute with a Third Party to
market Product(s) without infringing the patent rights of that Third Party, such
royalties shall be deductible of the royalties due Tanox, but the royalties due
Tanox shall in any event at least be equal to those in countries of the
Territory without Tanox's Patent Rights.

     10.3  If Tanox, Ciga-Geigy, or its respective Affilite(s) or sublicensees
becomes aware of any actual or threatened infringement of any Patent Rights,
such party shall promptly notify the other party in writing. Ciga-Geigy and its
Affiliate(s) or sublicensees, shall have the first right to bring, at
Ciga-Geigy's own expense, an infringement action against any third party in its
own name, or if necessary in the name of Tanox. If Ciga-Geigy, or its
Affiliate(s) or sublicensees, do not bring a particular patent infringement
action within six (6) months from the date of notification, or within two months
prior to expiration of any applicable statute of limitations on such action,
Tanox, after notifying Ciga-Geigy in writing, shall be entitled to bring such
infringement action at Tanox's own expense. The party not conducting such suit
shall assist the other party and cooperate in any such litigation at the other's
reasonable request without out-of-pocket expense to the party providing such
assistance. The award or settlement in such litigation shall first be used to
pay the legal costs and expenses of such suit and any remaining amount shall be
divided between the parties in proportion to each party's respective injury
caused by the infringer.

     11.  RIGHT OF FIRST REFUSAL.  Ciba-Geigy will have the right of first
refusal to market any Product(s) with the Field that are independently developed
by Tanox as permitted under Annex 3, paragraph number 5. At such time as Tanox
desires to license out all or part of the rights to any such Product(s), Tanox
shall notify Ciba-Geigy in writing, specifying in such notice the terms and
conditions upon which such license will be offered. Ciba-Geigy will have sixty
(60) days after the date of receipt of all relevant information to review such
information regarding the Product(s) as Tanox has made or will make available to
interested Third Parties. If Ciba-Geigy desires to exercise its right of first
refusal hereunder, it will notify Tanox of same and negotiate any details
necessary to consummate such license transaction within one hundred and twenty
(120) days from the date of its decision to exercise such right of first
refusal. At the conclusion of such one hundred and twenty (120) days period,
unless Ciba-Geigy and Tanox have reached written agreement with respect to the
exercise of its rights (with closing to occur within thirty (30) days
thereafter), Tanox shall be free to conclude such license transaction with a
Third Party in accordance with its notice to Ciba-Geigy, provided, that if Tanox
should determine that it will conclude any such license transaction on terms and
conditions

                Development and Licensing Agreement  -  Page 20.
<PAGE>
materially more favorable than those stated in its notice to Ciba-Geigy, then
Tanox will permit Ciba-Geigy to have another right of refusal with respect to
such other terms and conditions.

     12.  TERM; TERMINATION

        12.1  A.  The term of this Agreement shall begin as of the date hereof
and, on a country by country basis, unless earlier terminated as permitted
hereunder, shall remain in effect for the Agreement Period.

     B.  Upon such expiration of the Agreement Period, each party shall continue
to have the right and license to sell Product(s) under any name, trademark, and
product label applicable to the Product(s) sold by such party during the term of
this Agreement so long as such party takes all actions reasonably necessary to
protect and maintain the goodwill associated with such names or marks; except
that in the U.S.A. only Ciba-Geigy shall have the right to continue to use the
previously used trademark. Actions to protect and maintain such goodwill shall
include, without limitation, (i) using and displaying such marks in the manner
required by law and consistent with the manner in which such name(s) or marks
were used or displayed during the term of this Agreement and (ii) using such
names or marks only in connection with Product(s) which meet standards,
specifications, and quality assurance requirements that are the same, in all
material respects, as were applicable to such Product(s) during the term of this
Agreement.

     12.2  A.(i) Prior to submission of a registration package requesting
approval for commercial sale of the Product(s) in the first Major Country, this
Agreement and the licenses granted hereunder may be terminated by Ciba-Geigy,
with or without cause, at any time upon * days prior
written notice thereof to Tanox. During such period, pending the effectiveness
of such termination notice, Ciba-Geigy agrees to withhold public disclosure of
such termination until it has provided the reasons for such termination to
Tanox. Any payments according to Paragraph 9.1 of this Agreement shall, however,
not become payable by Ciba-Geigy to Tanox during such * days' notice period.

     (ii)  Subsequent to submission of a registration package requesting
approval for commercial sales of the Product(s) in the first Major Country, if
Ciba-Geigy reasonably determines, in good faith, that there are unanticipated
limitations on the market opportunity represented by the Product(s) because of
restrictive labeling requirements, side effects, absence of medical needs,
conditions which in Ciba-Geigy's reasonable judgement make it commercially
unreasonable to launch the Product(s), or similar problems, then this Agreement
and the licenses granted hereunder, may be terminated by Ciba-Geigy upon one
hundred and twenty (120) days' prior written notice thereof to Tanox. During
such period, pending the effectiveness of such termination notice, Ciba-Geigy
agrees to withhold public disclosure of such termination until it has provided
the reasons for such termination to Tanox. Any payments according to paragraph
9.1 of this Agreement, shall, however, not become payable by Ciba-Geigy to Tanox
during such * days' notice period.

                Development and Licensing Agreement  -  Page 21.
<PAGE>
     B.  Either party may terminate this Agreement in the event of a material
breach by the other, provided, that the breaching party is given written notice
of such claimed breach and a reasonable time, not to exceed sixy (60) days, in
which to cure such breach or submit same to arbitration hereunder. Such period
to cure may be extended for up to one hundred twenty (120) days, upon written
request, if such additional time is reasonably necessary to effect such cure;
provided, that such breaching party is using its reasonable efforts to
diligently pursue such cure. If Tanox is the breaching party and fails to cure
its breach within such period allowed for cure, then Ciba-Geigy, at its election
in lieu of termination of this Agreement under Paragraph 12.2.A. above, shall be
entitled to setoff against the royalty payments due Tanox, without effect of the
limitation on aggregate reduction under Paragraph 9.3, the amount of damages
agreed or determined by arbitration to have resulted from such breach.

     12.3  A.  If this Agreement is terminated by Tanox pursuant to Paragraph
12.2.B. or by Ciba-Geigy pursuant to Paragraph 12.2.A., then Ciba-Geigy and its
Affiliate(s) and sublicensees, as applicable, shall return to Tanox all
documented or written Know-How provided by Tanox under this Agreement and Ciba-
Geigy, and its Affiliate(s) and sublicensees, shall have no further right or
license to Tanox's Know-How and Patent Rights. Upon such termination (other than
a termination by Ciba-Geigy pursuant to 12.2.B), Tanox shall retain and be
granted a non-exclusive, world-wide license to Ciba-Geigy's Patent Rights and
Know-How for the manufacture, use, and sale of the Product(s), with the right to
sublicense. If Ciba-Geigy terminates this Agreement in good faith under
Paragraph 12.2.A.(i) because adverse results obtained in the development
activities for the Product(s) make such termination reasonable under the
circumstances and, if Tanox or any of its licensees intends to use Ciba-Geigy's
Patent Rights or Know-How for the manufacture, use and/or sale of the
Product(s), the studies conducted by Ciba-Geigy and its Affiliates and
sublicensees relating to Product(s) may only be used if Tanox shall agree to
compensate Ciba-Geigy for such use in an aggregate amount equal to Ciba-Geigy's
payments to Tanox under Article 9.1, events 1-10 of this Agreement. If
Ciba-Geigy terminates this Agreement under Paragraph 12.2.A(i) for any other
reason and the foregoing use by Tanox or its licensees occurs, then Tanox shall
compensate Ciba-Geigy for such use in an aggregate amount equal to Ciba-Geigy's
payments to Tanox under 9.1, events 3-10, of this Agreement. Such compensation
shall be paid from Tanox's own Product(s) sales and/or from other payments made
by Third Parties for the rights under this Agreement and shall be paid in
installments equal to 3.3% of Tanox's Product(s) sales and/or one-third of such
other payments until Ciba-Geigy has obtained full recovery of the amounts agreed
above.

     If Ciba-Geigy terminates this Agreement under Paragraph 12.2.A.(ii), then:
(i) Ciba-Geigy and its Affiliate(s) and sublicensees, as applicable, shall
return to Tanox all documented or written Know-How provided by Tanox under this
Agreement and Ciba-Geigy, and its Affiliate(s) and sublicensees, shall have no
further right or license to Tanox's Know-How and Patent Rights; (ii) Tanox shall
retain and be granted a non-exclusive, worldwide license to Ciba-Geigy's Patent
Rights and Know-How for the manufacture, use and sale of the Product(s), with
the right to sublicense; and (iii) Tanox may use the studies conducted by
Ciba-Geigy and its Affiliates and sublicensees relating to Product(s) without
paying additional compensation to Ciba-Geigy. In addition, Ciba-

                Development and Licensing Agreement  -  Page 22.
<PAGE>
Geigy will provide Tanox with such additional reasonable assistance in
connection with transfer of development activities, product registrations and
applications, regulatory approvals, and other matters necessary to Tanox's
assumption of Ciba-Geigy's responsibilities under this Agreement as the parties
may mutually agree is appropriate.

     B.  Termination of this Agreement for any reason shall be without prejudice
to Tanox's right to receive all royalties accrued and unpaid on the effective
date of termination and shall not relieve either party of any liability from any
obligations which have accrued hereunder prior to such termination.

     C.  The confidentially obligations set forth in Paragraph 6 shall survive
the termination or expiration of this Agreement for the maximum period permitted
under Paragraph 6.

     13.  FORCE MAJEURE.  Neither party shall be liable to the other for failure
or delay in the performance of any of its obligations under this Agreement for
the time and to the extent such failure or delay is caused by riots, civil
commotions, wars, hostilities between nations, embargoes, acts of God, storms,
fires, accidents, labor disputes or strikes, sabotage, explosions or other
similar or different contingencies, in each case, beyond the reasonable control
of the respective parties. If the performance of any obligation under this
Agreement is delayed owing to a force majeure for any continuous period of more
than six (6) months, the parties hereto shall consult with respect to an
equitable solution, including the possible termination of this Agreement.

     14.  NON-DISCLOSURE.  The existence and the terms of this Agreement shall
not be disclosed by Tanox or Ciba-Geigy to any Third Party or be published
unless both parties expressly agree otherwise in writing. However, this
restriction shall not apply to disclosure of information set forth in the form
of an agreed press release, which will be prepared in mutually agreeable format
and substance following the closing of this Agreement, and to announcements
required by law or regulation except that in such event the parties shall
coordinate to the extent possible with respect to the wording of any such
announcement. Also, this restriction shall not apply to disclosure of this
Agreement to certain private Third Parties such as the shareholders of Tanox,
investment bankers and other financial consultants, and prospective investors in
Tanox or its technology under development, if such disclosure is made under
confidentiality obligations extending for at least three (3) years and otherwise
similar in substance to the provisions of Paragraph 6. Except for disclosure
pursuant to the press release to be mutually agreed following closing, Tanox
expressly agrees that subsequent press releases or other disclosure for press
publication will be subject to the obligations of non-disclosure under this
paragraph, unless such disclosure includes, in substance, only the information
set forth in such agreed press release.

     15.  NOTICES.  All notices or communications sent or delivered hereunder by
one party to the other party shall be in writing and shall be deemed duly given
when delivered to the other party at the address set forth below or when sent by
electronic facsimile transmission (Fax), with receipt evidenced by Fax
transmission acknowledgement, to the Fax number set forth below. A party's
address or Fax number may be changed

                Development and Licensing Agreement  -  Page 23.
<PAGE>
upon notice of such change given to the other party as provided herein. Notice
to the parties shall be delivered to their respective addresses or Fax numbers,
as follows:

If to Tanox:                  Tanox Biosystems, Inc.
                              Attn: Nancy T. Chang, President
                              10301 Stella Link
                              Houston, Texas 77025
                              U.S.A.
                              FAX: (713) 664-8914

If to Ciba-Geigy:             Ciba-Geigy Limited
                              Pharma Licensing
                              CH-4002 Basle
                              Switzerland
                              FAX: 061-6963887

     16.  ARBITRATION AND JURISDICTION.  The parties agree to attempt to settle
any dispute, controversy or difference arising out of or relating to this
Agreement, or breach thereof, by friendly discussions, including concluding any
subsequent agreements required or contemplated by this Agreement. If and when
any such dispute, controversy, or difference is not settled by such means, then
any such dispute, controversy, or difference shall be subject to arbitration,
with three (3) arbitrators (one each selected by the parties and a neutral
arbitrator appointed by *) in accordance with the rules of the *. The parties
acknowledge that the arbitrators, if required to resolve any difference or
dispute of the parties with respect to the terms of any such subsequent
agreements should be guided by the purpose and intent of the parties reflected
in this Agreement and by general industry practices among companies of equal
bargaining power. The parties agree to be bound by the award and/or decision of
such arbitration and such award and/or decision may be enforced by any court of
competent jurisdiction. The place of arbitration shall be a mutually agreeable
site. This Agreement shall be construed in all respects and governed by
applicable laws *.

     17.  RELATIONSHIP OF PARTIES.  Both parties are independent contractors
under this Agreement. Nothing contained in this Agreement is intended nor is to
be construed so as to constitute Tanox or Ciba-Geigy as partners or joint
venturers with respect to this Agreement. Neither party shall have any express
or implied right or authority to assume or create any obligations on behalf of
or in the name of the other party or to bind the other party to any other
contract, agreement, or undertaking with any Third Party.

     18.  ASSIGNMENT.  The rights and obligations of the parties hereunder may
be assigned to Affiliates, but shall otherwise not be transferred or assigned by
either party, except as otherwise permitted in compliance with the requirements
of this Agreement, without the prior written consent of the other party. This
Agreement shall be binding upon and inure to the benefit of any such permitted
assigns or successors.

                Development and Licensing Agreement  -  Page 24.
<PAGE>
     19.  SEVERABILITY.  If any part of this Agreement shall be held
unenforceable, the remainder of the Agreement shall nevertheless remain in full
force and effect.

     20.  ENTIRE AGREEMENT AND AMENDMENT.  As of the date hereof, this Agreement
constitutes the entire understanding between the parties with respect to the
subject matter hereof and supersedes any previous understandings or agreement
between the parties. No modification or amendment of this Agreement shall be
valid or binding upon the parties unless made in writing and duly executed on
behalf of both of the parties. The parties also acknowledge execution of that
certain Stock Purchase Agreement of even date herewith and those additional
agreements to be entered into hereafter which are referenced herein.

     21.  WAIVER.  No failure or delay by any party to insist upon the
performance of any term or condition of this Agreement, or to exercise any
right, power, or remedy hereunder consequent upon a breach hereof, shall
constitute a waiver of any such term, condition, right, power, or remedy, or of
any such breach, or preclude such party from exercising any such right, power,
or remedy at any later time or times.

     22.  AGREEMENT TO PERFORM NECESSARY ACTS.  Each party agrees to perform any
further acts and execute and deliver any and all further documents, agreements,
and/or instruments which may be reasonably necessary or desirable to carry out
or effect the provisions of this Agreement.

     23.  APPLICABLE LAWS.  The parties hereby agree to comply with all laws,
rules, regulations, ordinances, and other governmental requirements in
connection with the performance of their respective rights, responsibilities,
and obligations hereunder, including, without limitation, laws governing export,
import, or other shipment of the Product(s), regulating approvals and
registrations of the Product(s), and requiring identification of Patent Rights
on labels and containers for the Product(s).

                Development and Licensing Agreement  -  Page 25.
<PAGE>
     IN WITNESS WHEREOF, this Agreement has been executed on the day and year
first above written.

                                          TANOX BIOSYSTEMS, INC.

                                          By:  Nancy T. Chang,
                                               Nancy T. Chang, President

                                          CIBA-GEIGY LIMITED

                                          By:   H.F. Mohr
                                          Name: H. F. Mohr
                                          Title: Head, Pharma Licensing

                                          By:   H. Gut
                                          Name: Herbert Gut
                                          Title: Counsel Pharma Div.

                Development and Licensing Agreement  -  Page 26.
<PAGE>
                                    ANNEX 1

                             PATENT RIGHTS IN FIELD

TANOX PENDING PATENT APPLICATIONS

<TABLE>
<S>             <C>            <C>                                    <C>           <C>
TNX37-12        Chang ET AL.   High affinity Anti-Human IgE-          12/31/87      S/N 140,036
  U.S.                         Monoclonal Antibody Which Bind
                               To Igge-Bearing B Cells And Not
                               Basophils
TNX87-12A       Change ET AL.  High affinity Anti-Human IgE-          7/29/88       S/N 226,421
  U.S.                         Monoclonal Antibody Which Binds
                               To IgE-Bearing B Cells And Not
                               Basophils
TNX87-12AA      Chang ET AL.   High affinity Anti-Human IgE-          12/28/88      S/N 291,068
  U.S.                         Monoclonal Antibody Which Binds
                               To IgE-Bearing B Cells And Not
                               Basophils
TNX87-12AAA     Chang          IgE-Specific Antibodies That Do        3/6/89        S/N 320,294
                               Not Bind IgE on B Lymphocytes
                               and Basophils
TNX87-12AAB     Chang ET AL.   High Affinity Anti-IgE Mono-           5/26/89       S/N 357,483
  U.S.                         clonal Antibody Which Binds
                               To IgE-Bearing B Cells And Not
                               Basophils
TNX88-03        Chang          Antigenic Epitopes Of IgE              8/5/88        S/N 229,178
  U.S.                         Present On B Cell But Not
                               Basophil Surface
TNX88-03A       Chang          Antigenic Epitopes Of IgE              11/16/88      S/N 272,243
  U.S.                         Present On B Cell But Not
                               Basophil Surface
TNX-03AA        Chang          Antigenic Epitopes Present             6/21/89       S/N 369,625
  U.S.                         On Membrane-Bound But Not
                               Secreted IgE
TNX87-12AA                     Antigenic Epitopes of Immunoglobulin   1/3/89        S/N 587,431-9
  Canada                       E Present On B Cell
                               But Not Basophil Surface
PCT (3)                        Unique Antigenic Epitopes On           12/29/88      PCT/US88/04706
                               IgE-Bearing B Lymphocytes
CIBA-GEIGY PENDING PATENT APPLICATIONS
Great Britain   Heusser        Monoclonal Antibodies Specific for     5/4/89        4-17570
                               an Immunoglobulin Isotype
</TABLE>
<PAGE>
                                     ANNEX 2

                        COOPERATIVE RESEARCH ACTIVITIES

                         UNDER DIRECTION/SUPERVISION OF
                    PROJECT STEERING COMMITTEE/WORKING GROUP

<TABLE>
<CAPTION>
         RESEARCH ACTIVITIES             MAJOR PARTICIPATION       FUNDING CODE
-------------------------------------   ---------------------    -----------------
<S>                                     <C>                     <C>
                                                                 (SEE SECTION 4.1)
Continuation of hybridoma research
  for new mAbs                                  T/C-G                    a
mAb characteristics and selection               T/C-G                    a
IN VITRO studies addressing
  therapeutic mechanism and
  efficiency                                    T/C-G                    a
Animal studies addressing therapeutic
  mechanism and efficacy                         C-G                     c
Development of chimeric
  antibody-producing cell lines                 T/CG                     a
Chimeric mAb characterization                   T/C-G                    a
</TABLE>

Tanox will be obligated to perform the above research activities indicated for
up to two other antibodies which the parties may mutually agree to pursue and,
specifically, is responsible for completion of such development for Tanox's
monoclonal antibody (mAb) 11-4-70 (the above mentioned other antibodies will be
selected by mutual agreement of Tanox and Ciba-Geigy for initial clinical
development).

If Ciba-Geigy reasonably believes that other approaches such as Fab or hybrid
derivatives or antibody conjugates should be pursued, Tanox and Ciba-Geigy can
establish a mutually acceptable product development plan, subject to
reimbursement of Tanox costs for its activities under the plan.
<PAGE>
                                    ANNEX 3

                  COOPERATIVE CLINICAL DEVELOPMENT ACTIVITIES

                         UNDER DIRECTION/SUPERVISION OF
                    PROJECT STEERING COMMITTEE/WORKING GROUP

1.    Tanox warrants that Tanox's *, to the extent tested:

      -    reacts specifically with *, not other serum substances
           (including specifically *).

      -    reacts with *, not other cell types.

      -    does not induce *.

      -    does not bind to *.

      -    does not bind to *

      -    has a high *

      Further, Tanox has provided Ciba-Geigy prior to the date of this Agreement
      with approximately 5 mg of the purified murine mAb 11 -- 70 and will
      provide Ciba-Geigy with an additional 7 mg of such mAb (+ or - 90% pure)
      upon the closing of this Agreement, if requested, so that Ciba-Geigy can
      perform additional confirmatory testing of the above.

2.    Subject to confirmation of the above characteristics by Ciba-Geigy, the
      parties agree that Tanox's mAb 11 -- 70 is a promising candidate and
      warrants initiation of clinical development with the comparable chimeric
      mAb 11 -- 70 as soon as such antibody has been developed and produced for
      initial clinical trials provided that the additional studies required for
      an IND confirm such assessment. Therefore, the parties agreed that the
      necessary studies outlined below will be completed and phase 1 trials in
      the U.S., Europe, or another country will be undertaken with such antibody
      (or such other antibody as Tanox and Ciba-Geigy may reasonably agree to
      substitute) as soon as sufficient quantities of the antibody have been
      produced by Tanox in accordance with GMP and GCP (as provided in Annex 4)
      to initiate the studies.

<TABLE>
<CAPTION>
                                                                                      FINANCIAL
                     PRODUCT DEVELOPMENT              ACTIVITY RESPONSIBILITY      RESPONSIBILITY
            -------------------------------------     ------------------------     ---------------
            <S>                                       <C>                          <C>
                                                                        (SEE SECTION
                                                                            4.1)
            Safety Pharmacology                                 C-G                       c
            Toxicological Studies
            (Preclinical)                                       C-G                       c
            (Clinical)                                          C-G                    c or a*
            Galenical Formulations
            (Clinical)                                          C-G                    c or a*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                      FINANCIAL
                     PRODUCT DEVELOPMENT              ACTIVITY RESPONSIBILITY      RESPONSIBILITY
            -------------------------------------     ------------------------     ---------------
            <S>                                       <C>                          <C>
                                                                        (SEE SECTION
                                                                            4.1)
            IND Application -- Europe, Japan and                C-G                   c or a**
              other countries
            IND Application -- U.S.                             C-G                       e
            Clinical Development -- Europe,                     C-G                   c or a***
              Japan and other countries
            Clinical Development -- U.S.                        C-G                       a
</TABLE>

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

            a*   --  If performed in U.S.

            a**  --  For countries where Tanox has Co-Marketing rights

            a*** --  For local clinical trials in countries where Tanox has
                     Co-Marketing rights.

3.    For clinical development activities outside the U.S., the Clinical
      Development Group will serve as a conduit by which Tanox will be able to
      review and stay informed with respect to progress and results of such
      activities. For clinical development within the U.S., however, it will be
      the responsibility of the Clinical Development Group, with the supporting
      participation of the PDP Group and its activities, to actively direct and
      supervise all such clinical development of the Product(s) and Tanox shall
      be a participant in such activities and decisions relating thereto. If any
      difference of opinion should exist with respect to such decisions,
      Ciba-Geigy shall retain final responsibility for such decisions, after
      considering in good faith Tanox's input, which shall be provided in such
      timely manner so as not to impede the progress of the program.

4.    Ciba-Geigy shall maintain a record of its costs for clinical development
      activities in the U.S. according to its standard accounting procedures,
      which shall reasonably and fairly establish such costs. Tanox shall
      contribute to said costs * provided, that Tanox's obligation for such
      costs will be paid solely out of credits against royalties and subject to
      the annual limitations contained in Paragraph 9.2.C. The measurement year
      for purposes of determining Tanox's contribution will be the first full
      calendar year following product introduction in the United States. To the
      extent Tanox has incurred any costs in connection with its activities
      hereunder for U.S. IND and clinical development, such costs will be
      included in the total U.S. IND and clinical development costs and Tanox
      shall be entitled to a credit against its required contribution hereunder
      for the total amount of its costs.

5.    If Tanox desires to pursue development of any Products(s) within the
      Field, in addition to Product(s) already being developed hereunder, which
      Ciba-Geigy believes is not sufficiently superior to justify a simultaneous
      clinical development program, then Tanox itself, without giving rights to
      any Third Party, will have the right to pursue development of such
      Product(s) at its sole expense; subject, however, to the right of first
      refusal of Ciba-Geigy to license the Product(s) as provided under
      Paragraph 11 of this Agreement.
<PAGE>
                                     ANNEX 4

            COOPERATIVE PROCESS DEVELOPMENT AND PRODUCTION ACTIVITIES

                         UNDER DIRECTION/SUPERVISION OF
                    PROJECT STEERING COMMITTEE/WORKING GROUP

1.    The PDP Group and Clinical Development Group will initially work closely
      together to establish specifications for the Product(s) and to assure the
      production of sufficient Product(s) to permit the parties to initiate
      Phase I clinical trials as soon as possible. Throughout the continuation
      of clinical trials, Process Development and Production Activities will be
      coordinated with Clinical Development Activities to assure completion of
      regulatory approvals and registrations in a commercially reasonable manner
      as required under the Agreement. Ciba-Geigy and Tanox shall share such
      activities. Tanox's in-house costs and necessary Third Party costs
      incurred by Tanox and agreed upon by both parties shall be reimbursed by
      Ciba-Geigy in accordance with the reimbursement guidelines set forth in
      Annex 5.

2.    Process development and production activities shall include the following:

      A.    Adaption of production cell lines, including cloning, screening and
            selecting with procedures designed to identify stable and high
            producing cell lines.

      B.    Scale-up of production cell lines, including adaption of cell lines
            to and optimization of production medium and analysis and selection
            of optimal cell culture production method (scale-up will occur in
            reasonable stages which will permit initial production of Product(s)
            for the start of clinical trials as soon as possible, with
            continuing scale-up activities as necessary for subsequent
            production of Product(s) in commercial quantities as contemplated by
            this Agreement).

      C.    Characterization and quality assurance, maintenance and improvement
            of the production cell lines, including Third Party costs necessary
            to testing and standardization of the production cell lines.

      D.    Development of purification processes and Product(s) specific
            analytical techniques necessary for characterization and required
            regulatory and QA/QC testing of Product(s), including final products
            for clinical trial production and for subsequent production of
            Product(s) in commercial quantities as contemplated by this
            Agreement.

      E.    Development and standardization of raw material and final product
            manufacturing procedures, including product formulation, vialing,
            labeling and packaging.
<PAGE>
3.    Tanox warrants that it will produce Product(s) for Ciba-Geigy in
      accordance with all applicable U.S. laws, including, but not limited to,
      U.S. guidelines for Good Manufacturing Practices (GMP) and Good Clinical
      Practices (GCP) and in accordance with all applicable laws in countries
      where Ciba-Geigy wishes to use (a) Product(s) produced by Tanox, provided
      such laws place no undue burden on Tanox, and within specifications to be
      mutually agreed to fulfill regulatory requirements for Phase I and Phase
      II clinical trials in the U.S., Europe, Japan, and such other countries as
      separate clinical trials may be reasonably determined to be necessary. The
      parties anticipate that Phase I clinical trials shall be initiated first
      in either the U.S. or a Major Country in Europe and that Phase I clinical
      trials will be initiated in any other Major Country in which they are
      determined to be necessary as soon as reasonably possible.

4.    The PDP Group, as provided by Paragraph 3.2, shall coordinate production
      of clinical trials material for Phase III studies in a manner that the
      parties mutually agree will best permit obtaining necessary regulatory
      approvals and Product(s) registrations.

5.    The PDP Group will be responsible for coordinating process development as
      provided in Paragraph 1 above, together with considering any technology
      acquisition and coordinating the establishment of necessary manufacturing
      facilities, in the manner reasonably designed to result in the
      uninterrupted continuation of clinical trials to conclusion and to permit
      the establishment of reasonable levels of Product(s) inventory by such
      time as the first approval to sell Product(s) commercially is obtained.
<PAGE>
                                     ANNEX 5

                            REIMBURSEMENT GUIDELINES

Reimbursement of Tanox activities, as applicable, shall be made in accordance
with the following guidelines and procedures:

1.    The total reimbursable cost of the Tanox activities subject to
      reimbursement will include the following categories of charges, as
      applicable: direct personnel and travel costs related to the activities
      except for IND filing and for clinical development in the U.S.A. through
      to NDA approval, overhead charges that are allocated to the production
      project according to accounting standards and practices generally
      acceptable within the industry, supplies and materials necessary for
      applicable research, production, testing, and regulatory requirements
      (including establishment of master and working cell banks), dedicated
      equipment costs (if desired, this equipment can be shipped to Ciba-Geigy,
      at its expense, upon completion of Tanox's production responsibilities),
      direct third party costs for storage, testing, and vialing and
      miscellaneous insured shipping costs. No General & Administrative charges
      will be included.

2.    Under its procedures for reimbursement, Tanox will send Ciba-Geigy
      semi-annual budgets, on a calendar year basis, in sufficient detail to
      reasonably identify general categories of costs. The activities and
      estimated budget for the first 6-month period (beginning for the period
      from the date of this Agreement through December, 1990) will be submitted
      for Ciba-Geigy's review and approval. The activities and budget estimates
      for the activities suggested for the second 6-month period are for general
      information only since schedules and activities may change based on
      project status and progress.

3.    Upon approval of the estimated budget by Ciba-Geigy for the next 6-month
      period, which Ciba-Geigy will complete as soon as possible (but in any
      event within thirty [30] days of receipt thereof), Tanox will submit an
      invoice, or other appropriate request for payment, for 80% of the
      estimated budget. Ciba-Geigy will pay this invoice in accordance with its
      normal procedures for 30-day payment obligations. Within 30 days (this
      would be December 1, 1990 for the next following budget) of the beginning
      of next 6-month budget period, Tanox will repeat the above budget approval
      procedures.

4.    Tanox also will include in each succeeding invoice an adjustment
      calculation for actual total costs incurred in the preceding six (6) month
      period, together with any other supporting documentation reasonably
      requested. The amount computed in this adjustment calculation will be
      added to (or possibly "deducted from" if excess payment was made) the
      amount to be invoiced for the next budget period.

5.    The above procedures will be repeated as long as Tanox reimbursable
      activities are continued.EXHIBIT 10.11

CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. IN ACCORDANCE WITH RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS
BEEN INDICATED WITH AN ASTERISK(*).

                  CHIRON-PANGENETICS RESEARCH AND DEVELOPMENT
                   LICENSE AND OPTIONS FOR COMMERCIAL LICENSE

THIS AGREEMENT, by and between PanGenetics B.V. ("PanGenetics B.V.") a company
organized and existing under the laws of the Netherlands and having its
principal place of business at E. van Calcarstraat 30, 1963 DG Heemskerk, the
Netherlands, and Panorama Research Inc. ("Panorama"), a company organized and
existing under the laws of California, and having its principal place of
business at 2462 Wyandotte Street, Mountain View, California 94043 (collectively
PanGenetics B.V. and Panorama shall be deemed "PanGenetics"), Mark de Boer
("de Boer"), and Chiron Corporation ("Chiron"), a Delaware corporation
having its principal place of business at 4560 Horton Street, Emeryville,
California 94608, is effective upon the last signature date (the "Effective
Date").

                                   BACKGROUND

WHEREAS, certain inventions relating to marine monoclonal antibodies against the
human antigen known as CD40 ("Anti CD40 Mabs") have been made by Chiron, and
by de Boer, subject to the provisions of a material transfer agreement between
Chiron's predecessor Cetus and de Boer dated December 16, 1991, (the "1991
MTA"), a consulting agreement between Chiron and de Boer dated January 1, 1993,
(the "1993 Consulting Agreement"), a consulting agreement between Chiron and
de Boer dated January 1, 1994 (the "1994 Consulting Agreement"), a material
transfer agreement between Chiron and Panorama dated November 9, 1994 (the
"1994 MTA") and their subsequent amendments.

WHEREAS, PanGenetics, Chiron and de Boer (the "Parties") now wish to provide
for the licensing of rights relating to such inventions and the further
development of anti-CD40 antibodies for human therapeutic uses;

                                   AGREEMENT

NOW, THEREFORE, PanGenetics, Chiron and de Boer agree as follows:

1  DEFINITIONS

     As used in this Agreement:

     1.1  "AFFILIATE" with respect to any person, means any company, entity,
joint venture or similar business arrangement which is controlled by,
controlling or under common control with such person, and shall include without
limitation any company fifty percent or more of whose voting stock or
participating profit interest is owned or controlled, directly or indirectly, by
such person, and any company which owns or controls, directly or indirectly,
fifty percent or more of such person. Without limiting the generality of the
foregoing, the Affiliates of Chiron expressly exclude Ciba-Geigy Limited, a
Switzerland corporation, or any wholly owned subsidiaries of Ciba-Geigy Limited
("Ciba"), unless and until such time as Ciba-Geigy and Chiron may mutually
agree upon the terms and conditions upon which Ciba may be deemed an Affiliate
of Chiron for the purposes of this Agreement.

     1.2  "ANTI-CD40 MABS" means monoclonal antibodies against human CD40

                                       1
<PAGE>
produced by the hybridomas 5D12, 3A8 and 3C6, or any monoclonal antibody derived
therefrom, including humanized anti-CD40 Mabs, and/or human anti-CD40 Mabs, and
fragments thereof capable of binding the Human CD40 Molecule.

     1.3  "CHIRON TECHNOLOGY" means all information, developments,
discoveries, inventions, know-how, products, substances, processes and
methodologies, and other proprietary information or technology developed or
otherwise acquired by Chiron relating to the Field as of the Effective Date,
including, but not limited to, the hybridoma cell lines described in Section
1.2, the Anti-CD40 Mabs produced therefrom, and the use of said Anti-CD-40 Mabs.

     1.4  "CHIRON PATENTS" means any U.S. patents or patent applications,
including any continuations, renewals, extensions or re-issues or divisions
thereof, relating to, or incorporating the Chiron Technology, together with any
foreign counterpart thereof and any divisional, continuation,
continuation-in-part and any reissue or extension thereof, to the extent they
claim or incorporate the Chiron Technology, including, but not limited to, U.S.
patent application USSN 08/070,158, and those patent applications filed in the
countries designated by PCT filing WO 94/01547 and are listed on the PCT Patent
Application Schedule attached as Exhibit 1, and any patentable improvements
invented by Chiron or relating to the lumanization of Anti-CD40 Mabs and
fragments thereof capable of binding the Human CD40 Molecule.

     1.5  "CHIRON TERRITORIES" shall mean all countries of the world, except
Europe and Japan.

     1.6  "DE BOER RIGHTS" shall mean de Boer's interest in inventions within
the Field (i) which are governed by the 1991 MTA, attached as Exhibit 3 to this
Agreement, and its subsequent amendments; and (ii) without limiting the
foregoing, inventions within the Field created by de Boer during the course of
this agreement. With respect to all de Boer inventions within the Field which
are governed by the terms and conditions of the 1993 Consulting Agreement, the
1994 Consulting Agreement, (collectively the "Consulting Agreements") and
their subsequent amendments, de Boer has assigned or will assign all right title
and interest in such inventions to Chiron in accordance with the terms of said
Consulting Agreements. de Boer rights arising from inventions within the Field
made by de Boer after the conclusion of the Consulting Agreements shall be
governed by the terms and conditions of this Agreement, including, without
limitation, the provisions of Article 3, relating to de Boer's assignment of de
Boer rights to PanGenetics, and Pan Genetics' obligations to assign to Chiron
patentable improvements relating to the humanization of Anti-CD40 Mabs and
fragments thereof capable of binding the Human CD40 Molecule for inclusion
within the Chiron Patents.

     1.7  "FIELD" means the use of Anti-CD40 Mabs or products based on or
derived from the use of Anti-CD40 Mabs in human therapeutic applications wherein
the Mab mediates a therapeutic effect by binding to the Human CD40 Molecule. The
Field shall not include the use of gene therapy, except to the extent
PanGenetics is permitted under the terms and conditions of this Agreement,
including, without limitation, the terms and conditions set forth in Article 7
to undertake activities relating to Second Generation Products which use gene
therapy solely for the endogenous local delivery and synthesis of Anti-CD40
Mabs. The following commercial applications are specifically excluded from the
Field: (i)

                                       2
<PAGE>
vaccines; (ii) diagnostics; (iii) gene therapy, anti-gene therapy, including,
without limitation, the use of antisense or ribozyme molecules, except as
provided in Article 7 and (iv) peptidomimetic or other synthetic,
small-molecular weight, non-peptide molecules. Without limiting the foregoing,
PanGenetics may use Anti-CD40 screening assays, provided that such assays are
used solely for non-commercial, internal research purposes.

     1.8  "HUMAN CD40 MOLECULE" means the type I transmembrane protein encoded
by the CD40 gene and known to be expressed on a number of cells including,
without limitation, B cells, dendritic cells, monocytes and macrophages.

     1.9  "JOINT TECHNOLOGY" shall mean Technology and inventions within the
Field which are invented jointly by employees of Panenetics (including persons
obligated to assign inventions to PanGenetics) and employees of Chiron
(including persons obligated to assign inventions to Chiron), whether or not
such inventions are also owned in conjunction with third parties pursuant to
this Agreement.

     1.10  "JOINT TECHNOLOGY PATENTS" shall mean U.S. patents or patent
applications claiming or incorporating Joint Technology, together with any
foreign counterpart thereof and any divisional, continuation,
continuation-in-part and any reissue or extension thereof, to the extent they
claim or incorporate Joint Technology.

     1.11  "LICENSED PRODUCT(S)" means any product, the manufacture, use or
sale of which, but for the license granted hereunder, would infringe any valid
and enforceable claim of any Chiron Patents or PanGenetics Patents in the
country of such manufacture, use or sale, or product, which relates to or
requires the use of Chiron Technology or Panorama Technology. Licensed Products
include, but are not limited to, any human therapeutic product(s), or one under
development, which is based directly or indirectly on an Anti CD40 Mab or
products based on or derived from the use of Anti-CD40 Mabs. The following
commercial applications are specifically excluded from the Field: (i) vaccines;
(ii) diagnostics; (iii) gene therapy, anti-gene therapy, including, without
limitation, the use of antisense or ribozyme molecules, except as provided with
respect to Second Generation Products as provided in Article 7 and (iv)
peptidomimetic or other synthetic, small-molecular weight, non-peptide
molecules.

     1.12  "NET SALES" shall mean the amount billed or invoices for each unit
of Licensed Products sold less:

       (i)  Customary trade, quantity or cash discounts;

      (ii)  Amounts repaid or credited by reason of rejection or return; and/or

     (iii)  To the extent separately stated on purchase orders, invoices or
            other documents of sale, taxes levied on and/or other governmental
            charges made as to production, or transportation or insurance
            charges.

      (iv)  sales and value-added taxes separately stated on invoices. Licensed
            Products shall be considered sold when shipped.

                                       3
<PAGE>
     In the event that Licensed Products are sold in combination with another
product or active component, (a "Combination Product") for a single price, Net
Sales from sales of Combination Products for purposes of calculating royalties
due or allocating profits under this Agreement shall be calculated by
multiplying the Net Sales of that Combination Product by the fraction A/(A+B),
where A is the gross selling price of the Licensed Product sold separately in
the country of sale and B is the gross selling price of the other product(s) or
components sold separately in the country of sale. In the event that no such
separate sales are made, Net Sales, for purposes of determining royalty payments
on such Combination Products, shall be a reasonable apportionment of the gross
amount invoiced therefor based upon the relative contribution of the Licensed
Products to the price of the Combination Product. Such apportionment shall be
negotiated in good faith between the parties and such apportionment shall be
established prior to the time that a party hereto shall have the right to sell
such Combination Products.

     1.13  "PANGENETICS TECHNOLOGY" shall mean all information, developments,
discoveries, inventions, know-how, products, substances, processes and
methodologies, and other proprietary information or technology developed or
otherwise acquired by PanGenetics relating to the development of Licensed
Products within the Field, including, but not limited to, methods for preparing
or using such materials as well as methodologies for testing their interaction
in biological systems, clinical and pre-clinical data and submissions,
discoveries and trade secrets, whether patentable or unpatentable, and other
proprietary information or technology developed by PanGenetics, or licensed to
PanGenetics with a right to sublicense, or otherwise acquired by PanGenetics
within the Field, prior to or after the Effective Date of this Agreement.

     1.14  PANGENETICS PATENTS" shall mean U.S. patents or patents issuing from
patent applications claiming or incorporating PanGenetics Technology, together
with any foreign counterpart thereof and any divisional, continuation,
continuation-in-part and any reissue or extension thereof, to the extent they
claim or incorporate PanGenetics Technology, as set forth in the PanGenetics'
Patent Schedule, attached as Exhibit 2 to this Agreement, and as may be amended
from time to time. In the event that PanGenetics Patents include any patentable
improvements relating to the humanization of Anti-CD40 Mabs and fragments
thereof capable of binding the Human CD40 Molecule, or any other improvements to
Chiron Patents, the provisions of Article 1.4 and Section 3.9 shall apply.

     1.15  "PANGENETICS TERRITORIES" shall mean Europe and Japan.

     1.16  "SECOND GENERATION PRODUCTS" shall mean products which involve the
use of gene therapy solely for the endogenous local delivery and synthesis of
Anti-CD40 Mabs. Second Generation Products shall be governed by the provisions
of Article 7 of this Agreement, and shall not be governed by the provisions of
the Commercial License contemplated in Article 6. This Agreement grants
PanGenetics no license, express or implied, to create Second Generation
Products.

2.  OWNERSHIP

     PanGenetics hereby acknowledges and confirms that Chiron is the owner of
the Chiron Technology and the Chiron Patents. PanGenetics hereby agrees to
assign to Chiron all right, title and interest PanGenetics might acquire,
invent, develop or claim in Chiron

                                       4
<PAGE>
improvements which fell within Claims Technology or Chiron Patents, or
improvements thereto, subject to the license rights granted to PanGenetics under
this Agreement. PanGenetics shall, without additional consideration from Chiron,
execute (or, if necessary, PanGenetics shall cause any of its employees to
execute) any assignment or other documentation reasonably required to record or
confirm such ownership by Chiron.

3.  RESEARCH AND DEVELOPMENT LICENSE

The Parties commit to the following:

     3.1  RESEARCH AND DEVELOPMENT LICENSE.  Subject to the terms hereof, Chiron
hereby grants PanGenetics an exclusive, (except as to Chiron) research and
development license (the "Research and Development License") under the Chiron
Patents and Chiron Technology, solely to carry on research and development
activities worldwide with respect to the Licensed Products. This Research and
Development License grants PanGenetics no rights to make, use or sell Licensed
Products for commercial purposes. The Research & Development License is subject
to the provisions of Section 3.6 relating to due diligence. As provided in
Section 3.6, upon the failure of PanGenetics to fulfill its due diligence
obligations, Chiron shall have the right, but not the obligation, to terminate
the Research and Development License granted pursuant to this Section 3.1. In
the Event of such termination, Chiron shall retain all rights under the Chiron
Technology and Chiron Patients, and shall be granted rights under PanGenetics'
Patents and Technology pursuant to Section 5.2 of this Agreement.

     3.2  EVALUATION OF PATENT RIGHTS.  Chiron shall undertake commercially
reasonable efforts to prosecute and maintain all United States and foreign
patent applications and patents defining Chiron's rights in the Chiron
Technology and Chiron Patents. A report from an outside patent counsel assessing
the Parties' freedom of operation to develop, use, manufacture or sell Licensed
Products has been prepared and received by PanGenetics.

     3.3 DE BOER PANGENETICS COUNSELING AGREEMENT. Subject to the rights and
obligations of Chiron and de Boer under the Consulting Agreements and their
subsequent amendments, PanGenetics and de Boer shall enter into a separate
agreement, (the "de Boer PanGenetics Consulting Agreement") to be effective on
the Effective Date, pursuant to which de Boer shall consult and collaborate with
PanGenetics, at no expense to Chiron, on research related to the Chiron
Technology, and the development of Licensed Product. The de Boer PanGenetics
Consulting Agreement may make provisions for coordinating the Anti CD40 Mab
related research activities of de Boer and PanGenetics with the anti CD40 Mab
related research activities of *. Any inventions made by de Boer within the
Field which relate to or result from collaborative activities, including,
without limitation, collaborative activities with *, shall be subject to terms
and conditions of this Agreement, and if applicable, the terms and conditions of
the 1991 MTA and Consulting Agreements. PanGenetics and de Boer represent and
warrant that any and all collaborative activities undertaken by PanGenetics and
de Boer shall comply in all respects with the terms and conditions of this
Agreement, including, without limitation, the provisions of Section 3.4.

     3.4  EMPLOYEE OBLIGATIONS.  PanGenetics and de Boer represent and warrant
that all

                                       5
<PAGE>
employees, representatives, agents or consultants who will be involved in
activities relating to this Agreement shall be bound by an obligation to assign
all inventions to PanGenetics and to cooperate with Chiron and/or PanGenetics in
connection with the patenting of any such inventions. Neither de Boer nor Pan
Genetics shall permit persons not bound by such obligations to work on the
Research.

     3.5  RESEARCH & DEVELOPMENT PLAN.  PanGenetics will product and submit to
Chiron for Chiron's review and approval a product development and business plan
(the "Research and Development Plan") which outlines the research and
development activities necessary to bring a Licensed Product to market. At a
minimum, PanGenetics' Research and Development Plan shall provide milestones
from early research activities though Phase III Clinical trials and evaluation,
which will permit Chiron to measure PanGenetics' diligence in complying with its
research and development obligations. The Research and Development Plan shall be
incorporated into this Agreement, and are attached as Exhibit 6.

     3.6 DUE DILIGENCE. PanGenetics shall exercise its best efforts and due
diligence in developing and bringing to market a Licensed Product. Within four
(4) years after the Effective Date of this Agreement, PanGenetics shall enter
into clinical trials directed toward evaluating candidates for a Licensed
Product for commercial use. PanGenetics shall be solely responsible for
acquiring, and, if applicable, maintaining, any third party patents relating to
humanized Mabs and/or human Mabs and processes for making humanized Mabs and/or
human Mabs required by PanGenetics for the development and commercialization of
a Licensed Product. If, on the date occurring at the end of five (5) years from
the Effective Date, PanGenetics has not filed an IND or equivalent submission
related to Licensed Products with either the Japanese Koseisho, or a
corresponding regulatory agency in the United Kingdom, Germany, France or other
major market country in the European Community, Chiron shall have the right to
determine whether PanGenetics has made diligent efforts to produce Licensed
Products. In the event that Chiron reasonably determines that PanGenetics has
not satisfied the criteria set forth above, and has not exercised the requisite
diligence in developing Licensed Products, PanGenetics's license grant shall
continue, but PanGenetics shall pay to Chiron an annual maintenance fee of * to
preserve its rights under this Agreement. If, on the date occurring at the end
of eight (8) years from the Effective Date, PanGenetics has not released a
Licensed Product in any major market, and PanGenetics cannot demonstrate
commercially reasonable diligence in developing Licensed Products, Chiron shall
have the right to terminate this Agreement, and all license grants made to
PanGenetics hereunder shall revert back to Chiron. Once initiated, PanGenetics'
obligation to pay the * annual maintenance fee shall continue until PanGenetics
pays to Chiron the registration payment referenced in Section 6.6 of this
Agreement. PanGenetics' rights to undertake research and development activities
shall be subject to Chiron's First Refusal Rights as referenced in the
provisions of Section 6.12 of this Agreement.

     3.7  PANGENETICS IMPROVEMENTS.  Upon Chiron's request, as promptly as
reasonably practicable, PanGenetics shall supply Chiron with reasonable
quantities of improvements to Chiron Technology, including Anti-CD40 Mabs,
developed by PanGenetics, for Chiron's use. Further, in the event PanGenetics
develops any improvements relating to the humanization of Anti-CD40 Mabs and
fragments thereof capable of binding the Human CD40 Molecule, or any other
improvements to Chiron Patents, (the "PanGenetics Improvements") PanGenetics
shall assign to Chiron all right title and interest in such

                                       6
<PAGE>
PanGenetics Improvements, including, without limitation, the right to file,
prosecute and maintain patients related to the PanGenetics Improvements. Chiron
shall grant back to PanGenetics licenses to such Pangenetics Improvements (the
"PanGenetics Improvement Grant-Back License"). During the term of the Research
and Development License, the PanGenetics Improvement Grant Back License(s) shall
be worldwide, co-exclusive and royalty free. Once the parties have concluded the
terms of the Commercialization License, the PanGenetics Improvement Grant-Back
Licenses shall be worldwide, co-exclusive and royalty free.

     3.8  ASSIGNMENT OF DE BOER RIGHTS TO CHIRON.  de Boer grants Chiron all
right, title and interest in the de Boer Rights existing as of the Effective
date. Further, de Boer and PanGenetics agree to undertake all measures necessary
to perfect Chiron's interest in all present and future de Boer Rights,
including, without limitation, the execution of assignments to convey all de
Boer Rights existing as of the Effective Date of this Agreement.

     3.9  ASSIGNMENT OF DE BOER RIGHTS TO PANGENETICS AND CHIRON.  deBoer Rights
arising from inventions within the Field made by de Boer after the conclusion of
the Consulting Agreements shall be governed by the terms and conditions of this
Agreement. de Boer and PanGenetics agree that de Boer shall assign all such de
Boer Rights to PanGenetics. de Boer and PanGenetics shall assign to Chiron all
patentable improvements relating to the humanization of Anti-CD40 Mabs and
fragments thereof capable of binding the Human CD40 Molecule for inclusion
within the Chiron Patent. PanGenetics and de Boer agree, represent and warrant
that the CD40 License & Collaboration Agreement between de Boer and Panorama,
dated October 1, 1994, and attached as Exhibit 7, is null, void, and of no
further effect. PanGenetics and de Boer further agree, represent and warrant
that they have undertaken or will undertake all measures necessary to render
such agreement null, void and of no legal effect.

     3.10  PROGRESS MEETINGS  During the term of the Research and Development
License, Chiron and PanGenetics shall meet at least annually to discuss research
and development progress and potential clinical indications and applications for
Licensed Products.

     3.11  Except as set forth herein, PanGenetics shall have the sole
responsibility for, and shall bear the cost of, the research and development of
each Licensed Product. Chiron's sole responsibility shall be the prosecution and
maintenance of Chiron Patents, as provided herein. Prior to PanGenetics exercise
of its option rights as set forth in Article 4. Chiron shall pay for the
prosecution and maintenance of Chiron Patents in the United States all countries
listed in the PCT Patent Applications Schedule attached as Exhibit 1, to this
Agreement. After PanGenetics' exercise of its option rights as set forth in
Article 4, Chiron will pay for the prosecution and maintenance of Chiron Patents
in the Chiron Territories, and PanGenetics will reimburse Chiron for the cost of
filing, prosecution and maintenance of Chiron patents in the PanGenetics
Territories.

4.  OPTION TO OBTAIN COMMERCIAL LICENSE

     4.1  OPTION TO COMMERCIAL LICENSE.  Subject to completion of the
obligations of Chiron, PanGenetics and deBoer set forth in Article 3 of this
Agreement, Chiron hereby grants PanGenetics, and Pangenetics hereby grants
Chiron, an option to obtain a commercial

                                       7
<PAGE>
license (the "Commercial License"), subject to the provisions of Article 6. The
Commercial License shall grant Chiron and Pan Genetics all rights and licenses
necessary to make, use, have made and sell, market and otherwise commercialize
Licensed Product as provided in Article 6, including, without limitation,
licenses under the Chiron Technology, Chiron Patents, PanGenetics Technology,
PanGenetics Patents, any regulatory submissions and licenses. The Commercial
License shall be upon terms and conditions substantially similar to those set
forth below in Article 5 of this Agreement, and any additional terms of
conditions mutually acceptable to both parties and negotiated in good faith by
the parties. Such option shall be exercisable within six (6) months after the
injection of at least three patients with Licensed Product in a Phase I/II
clinical trial as referenced in the PanGenetics' Research and Development Plan
set forth in Exhibit 6.

5.  TERM AND TERMINATION OF RESEARCH AND DEVELOPMENT LICENSE AND OPTION RIGHTS

     5.1  TERM.  This Research and Development License and Option Agreement
shall survive until:

          5.1.1  the expiration of the options granted in Article 4 of this
     Agreement;

          5.1.2  the parties conclude the terms of the Commercial License in
     accordance with Article 6 of this Agreement;

          5.1.3  termination as provided below in Section 5.2.

     5.2  TERMINATION.  All licenses granted hereunder from one party to the
other may be terminated by written notice to the licensee party in the event
that the licensee breaches a provision of this Agreement and has failed to cure
or demonstrate the nonexistence of the breach within ninety (90) days of receipt
of a written notice and demand to cure such breach. Without limiting the
foregoing, if PanGenetics fails to perform its due diligence obligations
pursuant to Section 3.6, Chiron shall have the right, but not the obligation, to
terminate the Research and Development License or Option Right granted to
PanGenetics pursuant to this Agreement. In the event of such termination, the
following shall occur:

          5.2.1  Chiron shall retain all rights under the Chiron Patents;

          5.2.2  PanGenetics shall grant Chiron all licenses necessary to permit
     Chiron to commercialize Licensed product, including, without limitation,
     licenses to Pan Genetics Patents, PanGenetics Technology, regulatory
     submissions and regulatory submissions and regulatory licenses. Such
     licenses shall be worldwide and royalty free. Without limiting the
     foregoing, in the event that PanGenetics obtains third party patents,
     including, without limitation, any third party patents relating to
     humanized Mabs and/or human Mabs and processes for making humanized Mabs
     and/or human Mabs, PanGenetics shall (i) undertake commercially reasonable
     efforts to secure the right to sublicense such patents, and (ii) shall
     sublicense to Chiron Pangenetics' rights in such third party patents. With
     respect to such licenses to third party patents, in the event that Chiron
     wishes to exercise its right to obtain such sublicense, Chiron shall assume
     PanGenetics' obligations with respect to earned royalties, but shall not
     pay any milestone or other upfront fees.

                                       8
<PAGE>
6.  COMMERCIAL LICENSE AGREEMENT

     6.1  TERMS.  Upon the exercise of the option provided in Article 4 of this
Agreement, the Parties hereto shall enter into a commercial license agreement
(the "Commercial License") upon the terms and conditions set forth in this
Article 6.

     6.2  CHIRON LICENSE GRANTS TO PANGENETICS.  Chiron shall grant to
PanGenetics an exclusive Commercial License, with the right to sublicense
marketing rights only, to all rights and licenses necessary to make, have made,
use, sell market and otherwise commercialized Licensed Product(s) in the
PanGenetics' Territories, including, without limitation, licenses under the
Chiron Patents, Chiron Technology, and any regulatory submissions and approvals.

     6.3  PANGENETICS LICENSE GRANTS TO CHIRON/EXCLUSIVITY AND
TERRITORIES.  PanGenetics shall grant to Chiron an exclusive Commercial License,
to all rights and licenses necessary to make, have made, use, sell market and
otherwise commercialize Licensed Product(s) in the Chiron Territories, including
with the right to sublicense marketing rights, including, without limitation,
licenses under PanGenetics' Technology, PanGenetics Patents, and all regulatory
submissions and approvals.

     6.4  MANUFACTURING RIGHTS.  Chiron will have the right of negotiation to
manufacture the product for commercial sale world-wide. If the parties cannot
agree upon mutually acceptable terms for such manufacturing rights, each party
shall have the right to manufacture licensing products for commercial sale
within their respective territories.

     6.5  MARKETING ARRANGEMENTS.  Prior to the marketing of Licensed Product,
the parties shall agree on terms for the promotion and sale of Licensed Product.
The marketing provisions shall include appropriate termination and diligence
terms. In territories where the parties agree to co-promote or co-market
Licensed Product, the parties shall negotiate in good faith appropriate
compensation provisions that reflect the parties' relative contributions with
regard to the commercial sale of the Licensed Product. These negotiations shall
be subject to a time limit and the objective of the arrangements shall be to
maximize the economic return to both parties.

     6.6 REGISTRATION PAYMENT. Within ninety (90) days after successful
registration of a Licensed Product by PanGenetics in either Japan, the United
Kingdom, France, or Germany, PanGenetics shall pay to Chiron * (the
"Registration Payment").

     6.7 ROYALTIES. Following the first Commercial Sale of a Licensed Product by
PanGenetics or Chiron pursuant to the Commercialization Agreement and licenses
granted therein, the party making such sale (the "Paying Party") shall submit to
the other party (the "Payee") within sixty (60) days of the end of every
calendar quarter a quarterly report setting out Net Sales of each Licensed
Product by country, royalty credits accumulated or taken, and sublicense
receipts, if any. The Paying Party shall, at the same time such report is
submitted, pay the Payee an earned royalty (the "Earned Royalty") in the amount
of * of Net Sales by the Paying Party or its affiliates of sublicensees, and *
of any up-front or milestone fees or other similar value received from
sublicensees.

                                       9
<PAGE>
     6.8  MANNER OF PAYMENT.  All payments hereunder shall be made by bank
transfer to the bank account designated by the party to receive such payments.
Where required to do so by applicable law or treaty, the Paying Party shall
withhold taxes required to be paid to a taxing authority on account of such
income to the Payee, and the Paying Party shall furnish the Payee with
satisfactory evidence of such withholding and payment in order to permit the
Payee to obtain a tax credit or other relief as may be available under the
applicable law or treaty. If any sum due hereunder is not paid in full on the
due date, interest at the average prime rate for the month preceding payment of
the unpaid balance (as published from time to time by the THE WALL STREET
JOURNAL shall accrue and be payable on any unpaid balance from the date such
payment became due until the date paid.

     6.9  RECORDS OF ROYALTY OBLIGATIONS.  The Paying Party will keep and
maintain proper books and records as are required accurately to determine
royalties payable to the Payee for three (3) years following the date on which
such royalties were paid or reported. The Payee shall have the right, at its own
expense, to have such books and records examined by independent certified public
accountants acceptable to the Paying Party at reasonable times solely for the
purpose of verifying the accuracy of royalties paid or reported by the Paying
Party. The Payee shall bear the cost of any such inspection; provided, that in
the event the inspection discloses that any payments made to the Payee hereunder
for any accounting period were deficient by more than ten percent, the Paying
Party shall promptly reimburse the Payee for the cost of such independent audit
and shall pay to Payee the amount of such deficiency together with interest
thereon at the rate specified in Section 6.8 above.

     6.10  TERM AND TERMINATION OF COMMERCIAL LICENSE AGREEMENT.  Upon the later
of the expiration of the last to expire of the patent rights included in the
Chiron Parents, PanGenetics Patents, or Joint Technology Patents (if any), or
ten (10) years after the first commercial sale of Licensed Product, the
provisions of the Commercial License shall be of no further force and effect,
except for provisions of the Commercial License which impose obligations that
continue beyond the expiration of the agreement, including, without limitation,
provisions relating to confidentiality and indemnity. Prior to the expiration of
the last to expire of the Chiron Patents, PanGenetics Patents, or Joint
Technology Patents, neither party shall have the right to terminate the
Commercial License, except as follows:

          6.10.1  Upon mutual written agreement of the parties; or

          6.10.2  If a party materially breaches a material provision of the
     Commercial License and has failed to cure or demonstrate the nonexistence
     of the breach within ninety (90) days of receipt of a written notice and
     demand to cure such breach; or

          6.10.3  In the event that one of the parties becomes insolvent or
     files for bankruptcy protection or fails generally to pay its debts as they
     become due, makes an assignment of substantially all of its assets for the
     benefit of creditors or applies for or consents to the appointment of a
     custodian, trustee or receiver for such party or the majority of its
     property, or if any other proceeding for relief under any bankruptcy law or
     similar law for the relief of debtors is instituted by or against such
     party and, if instituted against such party, is consented to or not
     dismissed within ninety (90) days after such institution.

     6.11  LIMITATION OF LICENSE.  This license does not extend to any rights or
products other than those referred to herein.

                                       10
<PAGE>
     6.12  CHIRON'S FIRST REFUSAL RIGHTS.

          6.12.1  GRANT OF RIGHT OF FIRST REFUSAL.  PanGenetics grants Chiron a
     right-of-first-refusal to obtain rights related to PanGenetics inventions;
     provide funding for research or development activities; provide research or
     development services; manufacture licensed product for commercial sale; and
     market licensed product, within the Field of this Agreement in any country
     (the "First Refusal Rights.")

          6.12.2  NOTIFICATION TO CHIRON.  PanGenetics shall promptly send to
     Chiron, at the address specified herein, a reasonably detailed written
     notification of any event which would give rise to the Chiron First Refusal
     Rights referenced above. Chiron shall respond to PanGenetics within sixty
     (60) days of its receipt of such notification of its interest in exercising
     its First Refusal Rights.

          6.12.3  NEGOTIATION OF TERMS.  For a period of up to ninety (90) days
     after PanGenetics receives notice of Chiron's intention to exercise its
     First Refusal Rights, the parties shall negotiate in good faith a
     reasonable agreement mutually acceptable to both parties.

          6.12.4  COMMERCIALIZATION BY PANGENETICS.  In the event that Chiron
     fails to respond within sixty (60) days, or affirmatively indicates that it
     is not interested in exercising its First Refusal Rights with respect to
     the opportunity presented by PanGenetics, or the parties fail to reach a
     definitive terms of agreement pursuant to Section 6.12.3, PanGenetics shall
     be free to pursue other arrangements regarding the opportunity, either
     independently or with one or more third parties, provided that PanGenetics
     shall not offer to extend rights related to the opportunity to a third
     party on terms more favorable than those previously offered to Chiron with
     respect to such opportunity without first offering such more favorable
     terms to Chiron.

7.  SECOND GENERATION PRODUCTS

     With respect to the development of any Second Generation Product, Chiron
and PanGenetics agree as follows:

     7.1  NO LICENSE GRANTED FOR SECOND GENERATION PRODUCT.  Nothing in this
Agreement shall be construed to grant to PanGenetics an express or implied
license under the Chiron Patents or Chiron Technology to undertake activities
related to the research, development, or marketing of a Second Generation
Product.

     7.2  NOTICE.  Each party agrees to keep the other party reasonably informed
of its activities which relate to the development of a Second Generation
Product. In the event that either party undertakes activities relating to the
research or development a Second Generation Product, each party shall notify the
other of such activities. Such notification and disclosure shall be subject to
the confidentiality obligations set forth in Article 9.

     7.3  PANGENETICS' DEVELOPMENT OF SECOND GENERATION PRODUCT.  With respect
to activities related to the development of a Second Generation Product that may
be undertaken by PanGenetics, the following shall apply:

                                       11
<PAGE>
          7.3.1  PanGenetics shall not undertake the internal commercial
     development of any Second Generation Product without first obtained
     Chiron's prior written approval;

          7.3.2  PanGenetics shall not undertake any activities related to the
     research or development of a Second Generation Product with any third party
     without having obtained Chiron's prior written consent.

     7.4  CHIRON'S DEVELOPMENT OF SECOND GENERATION PRODUCT.  In the event that
Chiron undertakes activities related to the development of a Second Generation
Product, the following shall apply:

          7.4.1  Chiron shall notify PanGenetics of its activities which relate
     to Second Generation Product, as provided in Section 7.2.

          7.4.2  PanGenetics may, at its discretion, present Chiron with
     proposals regarding PanGenetics' participation in the Second Generation
     Product research and development being undertaken by Chiron.

          7.4.3  Chiron may, at its discretion, evaluate the PanGenetics
     proposals referenced in Section 7.4.2, and may, at its discretion, invite
     PanGenetics to enter into negotiations regarding the collaboration of
     Chiron and PanGenetics in Second Generation Product related activities.
     Neither party shall be obligated to collaborate with the other with respect
     to such activities except upon terms and conditions mutually acceptable to
     both parties.

          7.4.4 In the event that (i) Chiron brings a Second Generation Product
     to market in Europe or Japan, and (ii) Chiron and PanGenetics have not
     entered into a definitive collaboration arrangement pursuant to Section
     7.4.3 which provides additional compensation to PanGenetics in exchange for
     value contributed by PanGenetics to the development of said Second
     Generation Product, Chiron shall pay PanGenetics an earned royalty of * of
     net sales of such Chiron Second Generation Product.

8.  PATENT PROSECUTION, MAINTENANCE AND ENFORCEMENT

     8.1  Chiron shall have the right and obligation to prepare, file and
maintain the Chiron Patents in the United States and the countries listed in the
PCT Patent Applications Schedule, and, if applicable, in such other countries as
Chiron may elect. Chiron shall use reasonable efforts to prosecute and maintain
the Chiron Patents. PanGenetics shall, at its cost and expense, cooperate fully
in such effort, including providing documentary support from de Boer if
necessary. Chiron shall keep PanGenetics informed as to the status of such
patent applications and provide to PanGenetics, upon PanGenetics' written
request, all relevant information relating to such applications.

     8.2  PanGenetics shall, at its cost and expense, prepare, file and maintain
patent application(s) claiming the PanGenetics Technology in the United States
and all of the countries listed in the PCT Patent Application Schedule attached
as Exhibit 2, and such other countries as the parties mutually agree.
PanGenetics shall use diligent efforts toward the prosecution and maintenance of
the PanGenetics Patents. Chiron shall undertake reasonable cooperation in such
effort. In the event that PanGenetics files, prepares or otherwise

                                       12
<PAGE>
prosecute patents relating to any patentable improvements relating to the
humanization of Anti-CD40 Mabs and fragments thereof capable of binding the
Human CD40 Molecule, or files, prepares or otherwise prosecutes any other
improvements related to subject matter claimed by the Chiron Patents,
PanGenetics shall grant to Chiron an option to obtain a license to the de Boer
Rights, which license shall be of such scope and upon such terms and conditions
as the parties may mutually agree.

     8.3  Each party shall promptly notify the other if any legal proceedings
are commenced or threatened against either party or any purchaser of the
Licensed Products sold by either party on the ground that the manufacture,
possession, use, or sale of the Licensed Products is an infringement of a third
party's patent or other intellectual property rights. Each party shall, at its
own expense, conduct all suits brought against it as a result of the exercise of
the rights granted hereunder, and the other party shall, at the request and
expense of the party conducting such suit, give all reasonable assistance in any
such proceedings.

     8.4  The preparation, filing and prosecution of patent application(s)
relating to any Joint Technology, if any, and the maintenance and prosecution of
any patent(s) resulting therefrom, shall be performed by counsel mutually
acceptable to the parties (which may be inside counsel for either party) and
costs for such preparation, filing, prosecution and maintenance shall be borne
equally by the parties. Decisions to abandon patents or patent applications
shall be taken jointly. The party conducting such activities shall keep the
other party reasonably informed and provide the other party with copies of
substantive actions from the US, European and Japanese Patent Offices, and (to
the extent feasible) provide the other party with copies of draft responses
thereto sufficiently in advance of filing to allow reasonable period for review
and comment. Filing of priority patent applications is to be undertaken without
delay introduced through consultation with the other party; nonetheless the
other party should be informed thereof as quickly as possible so that comments
from the other party can be considered in time for subsequent updated priority
applications. Each party agrees that it will not bring a claim for any act,
omission, fault or neglect against either the other party or its inside patent
attorney relating to that party's handling of the preparation, filing and
prosecution of any Joint Technology patent application or the maintenance and
prosecution of any patent(s) resulting therefrom.

9.  CONFIDENTIALITY

     9.1  CONFIDENTIALITY.  Chiron and PanGenetics agree that, during the term
of this Agreement and for a period of five (5) years following the expiration or
termination of this Agreement, each of them shall maintain in confidence and not
disclose by any means any Confidential Information (as hereinafter defined)
received from the other party and to use such Confidential Information only in
furtherance of this Agreement. "Confidential Information" means any
confidential and proprietary information which is provided by one party to the
other party in writing or, if initially disclosed in non-tangible form,
summarized in writing within thirty (30) days after disclosure in non-tangible
form. The confidentiality and nondisclosure obligations shall not apply to the
extent that such disclosure is necessary for the prosecution and enforcement of
patents pursuant to this Agreement, or to comply with judicial decrees or
government actions or regulations; provided that the disclosing party shall use
all reasonable efforts to obtain confidential treatment of such disclosure to
the maximum extent permitted by law. In addition, such obligation of
confidentiality and limitation of use shall not apply to Confidential
Information that the receiving party can demonstrate:

                                       13
<PAGE>
          9.1.1     is known to the receiving party or is independently
                    developed, discovered or arrived at by the receiving party,
                    in each case to the extent evidenced by written records; or

          9.1.2     was disclosed not subject to a confidentiality or similar
                    agreement to the receiving party by a third party that has
                    the right to make such disclosure; or

          9.1.3     becomes patented, published or otherwise part of the public
                    domain through no fault of the receiving party; or

          9.1.4     is required to be disclosed subject to a confidentiality
                    agreement or similar arrangement by order or regulation of
                    the FDA or similar authority in other countries of other
                    governmental or non-governmental authorities to facilitate
                    the issuance of marketing or safety approvals for products
                    licensed to either party or by order of a court of competent
                    jurisdiction; or

          9.1.5     to the extent that it is provided to third parties under
                    appropriate terms and conditions, including confidentiality
                    and use provisions equivalent to those in this Agreement,
                    for subcontracting or consulting activities necessary for
                    conducting research and development.

Each party agrees to take all reasonable steps to protect the Confidential
Information of the other party in the same manner it ensures protection of its
own confidential or proprietary information.

10.  MISCELLANEOUS

     10.1  PROVISIONS CONTRARY TO LAW.  In performing this Agreement, the
parties shall comply with all applicable laws. Nothing in this Agreement shall
be construed so as to require the violation of any applicable law, and wherever
there is any conflict between any provision of this Agreement and any applicable
law the law shall prevail, but in such event the affected provision of this
Agreement shall be affected only to the extent necessary to bring it within the
applicable law, provided that the resulting provisions are consistent with the
spirit and intent of the Agreement as originally entered into.

                                       14
<PAGE>
     10.2  NOTICES.  Any notices required or permitted to be given by this
Agreement shall be given by postpaid, first class, registered or certified mail
addressed as set forth below unless changed by notice so given:

For Chiron:                      For PanGenetics:         For Panorama:
Rajen Dalal                      James W. Larrick         James W. Larrick
Vice President                   President                President
Business Development             PanGenetics B.V.         Panorama Research Inc.
and Corporate Planning           E. van Calcarstraat 30   2462 Wyandotte Street
Chiron Corporation               1963 DG Heeniskerk       Mountain View,
4560 Horton Street               The Netherlands          California 94043
Emeryville, California 94608
U.S.A.

With a copy to:

General Counsel
Chiron Corporation
4560 Horton Street
Emeryville, California 94608
U.S.A.

     10.3  USE OF NAMES.  Neither party shall use the name of the other in any
promotional materials or advertising without the prior written consent of the
other.

     10.4  ASSIGNMENTS.  No license granted under this Agreement may be assigned
by the licensee except with the prior written consent of the licensor. The
licensor may assign its rights and obligations under such license upon
reasonable notice to the licensee.

     10.5  WAIVERS AND MODIFICATIONS.  The failure of any party to insist on the
performance of any obligation hereunder shall not act as a waiver of such
obligation. No waiver, modification, release or amendment of any obligation
under this Agreement shall be valid or effective unless in writing and signed by
both parties hereto.

     10.6  SUCCESSORS IN INTEREST.  This Agreement shall inure to the benefit of
and be binding on the parties' permitted assigns, successors in interest, and
subsidiaries.

     10.7  NO WARRANTY.  The licenses granted hereunder are provided WITHOUT
WARRANTY OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE OF ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. THE LICENSOR AS TO EACH LICENSE MAKES NO WARRANTY
THAT THE LICENSEE'S ACTIVITIES UNDER SAID LICENSES NOT NOT INFRINGE ANY PATENT
OR OTHER PROPRIETARY RIGHT OF A THIRD PARTY. The licensor will not be liable for
such infringement, or an allegation thereof, nor shall same be an excuse for
nonperformance of the licensee's obligations hereunder.

                                       15
<PAGE>
     10.8  MUTUAL INDEMNITIES.  PanGenetics (and its Affiliates) shall
indemnify, defend, and hold harmless Chiron and its affiliates and their
officers and directors for any claim, demand, or injury arising out of the
actions of PanGenetics or its affiliates or sublicensees arising from or
relating to this Agreement; provided however that such indemnity shall not
extend to damages arising directly from any breach or willful or negligent act
of Chiron. Chiron shall indemnify, defend, and hold harmless PanGenetics and its
affiliates and their officers and directors for any claim, demand, or injury
arising out of the actions of Chiron or its affiliates or sublicensees arising
from or related to this Agreement; provided however that such indemnity shall
not extend to damages arising directly from any breach or willful or negligent
act of PanGenetics. The provisions of this Section shall survive expiration or
termination of this Agreement.

     10.9 INSURANCE. PanGenetics shall at all times comply, through insurance or
self-insurance, with all statutory workers' compensation and employers'
liability requirements covering any and all employees with respect to activities
performed under this Agreement. In addition to the foregoing, PanGenetics shall
obtain and maintain, immediately prior to the first human clinical trial of a
Licensed Product, Comprehensive General Liability Insurance, including Products
Liability Insurance, with reputable and financially secure insurance carrier(s)
to cover the activities of PanGenetics and its sublicensee(s). Such insurance
shall provide minimum limits of liability of * per incident and shall name
Chiron as an additional insured party. Such insurance shall be written to cover
claims incurred, discovered, manifested, or made during or within five (5) years
after (a) the expiration of this Agreement, or (b) complete cessation of sales
of all Licensed Products, whichever is longer.

     10.10  CHOICE OF LAW AND JURISDICTION.  This Agreement is subject to and
shall be construed and enforced in accordance with the laws of the U.S.A. and
California. Chiron and PanGenetics shall attempt to settle any dispute or
controversy arising out of, or in connection with this Agreement without
resorting to litigation. If such attempts should fail, then the parties hereby
submit to arbitration in accordance with the rules then prevailing of the
American Arbitration Association ("AAA"), by one more arbitrator(s) appointed
in accordance with said rules as applicable at such time. The arbitration shall
be conducted in English and so shall be final, binding and enforceable.

     10.11  ENTIRE AGREEMENT.  Except as otherwise provided herein, this
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, and all prior or contemporaneous
agreements, whether written or oral, or proposals or understandings concerning
the subject matter hereof are superseded hereby. This Agreement may be amended
only in a writing executed by both parties.

                                       16
<PAGE>
     IN WITNESS WHEREOF, the parties have caused this agreement to be executed
as of the date first-above written.

CHIRON CORPORATION                               PAGENETICS, B.V.

By:   /s/ LEWIS T. WILLIAMS                      By: /s/ JAMES W. LARRICK
Name:  Lewis T. Williams                         Name:  James W. Larrick
Title:   Senior Vice President                   Title:   Director
Date:   September 25, 1995                       Date:   September 12, 1995

PANGENETICS B.V.                                 PANORAMA RESEARCH INC.

By: /s/ MARK DE BOER                             By: /s/ JAMES W. LARRICK
Name:  Mark de Boer                              Name:  James W. Larrick
Title:   Managing Director                       Title   President
Date:   September 17, 1995                       Date:   September 12, 1995

MARK DE BOER

By: /s/ MARK DE BOER
Name:  Mark de Boer
Date:   September 7, 1995

                                       17
<PAGE>
                                   EXHIBIT 1
                    WORLD INTELLECTUAL PROPERTY ORGANIZATION
         PCT                  INTERNATIONAL BUREAU

                   INTERNATIONAL APPLICATION PUBLISHED UNDER
                      THE PATENT COOPERATION TREATY (PCT)

(51)INTERNATIONAL PATENT                 (11) INTERNATIONAL PUBLICATION NUMBER:
    CLASSIFICATION(5):                        WO 94/01547
    C12N 15/06, C12P 21/08       A2
    C07K 15/00, C12N 15/86               (43) INTERNATIONAL PUBLICATION DATE:
    A61K 39/395                               20 JANUARY 1994 (20.01.94)

<TABLE>
<S>                                    <C>
(21) INTERNATIONAL APPLICATION         (81) DESIGNATED STATES: CA, JP, European patent (AT,
NUMBER:     PCT/US93/06432                   BE, CH, DE, DK, ES, FR, GB, GR, IE, IT, LU, MC,
                                             NL, PT, SE).
(22) INTERNATIONAL FILING DATE:
     8 July 1993 908.07.93)
(30) PRIORITY DATA:                    PUBLISHED
        07/910,222        9 July 1992        WITHOUT INTERNATIONAL SEARCH REPORT AND TO BE
      (09.07.92)        US                   REPUBLISHED UPON RECEIPT OF THAT REPORT.
(71) APPLICANT: CETUS ONCOLOGY
      CORPORATION [US / US]; 4560
      Horton Street, Emeryville, CA
      94608-2916 (US).
(72) INVENTORS: DE BOER, Mark; James
      Stewartstraat 50, NL-132 JG
      Almere (NL). CONROY, Leah, B.;
      515 Beaumont Boulevard,
      Pacifica, CA 94044 (US).
(74) AGENTS: McGARRIGLE, Philip, L.,
      Jr. et al.; Chiron Corpora-
      tion, 4560 Horton Street -
      R440, Emeryville, CA 94608-2916
      (US)
</TABLE>

(54) TITLE: A METHOD FOR GENERATION OF ANTIBODIES TO CELL SURFACE MOLECULES

(57) ABSTRACT

     The present invention relates to a method of generating antibodies directed
against cell surface antigens and its uses recombinant insect cells as
immunogens. The insect cells have been transfected with coding regions for a
molecule containing a cell surface antigen and these antigens are expressed on
the surface of the insect cells. Host animals are immunized with these
transfected insect cells to generate antibodies directed against the cell
surface antigen. Antibody-producing cells from the host animal are used to
generate monoclonal antibody-producing hybridoma cells. Sera and hybridoma
supernatants can be tested for the presence of antibodies against the surface
antigen, using the transfected cells in a screening assay. Specific antibodies
that have been generated by the present method are anti-B7 and anti-CD40
antibodies and they can be used to prevent or treat an antibody-mediated or
immune system disease in a patient. The anti-B7 antibodies can be used to cause
T cell anerty, treat allograft transplant rejection, treat graft versus host
disease, and prevent or treat rheumatoid arthritis. An immunosuppressive agent
may be co-administered with the antibody. The anti-CD40 antibodies which bind to
the CD40 antigen can be used to prevent the growth or differentiation of the B
cell. Monoclonal antibodies useful in these methods, and epitopes immunoreactive
with such monoclonal antibodies are also presented.
<PAGE>
                      FOR THE PURPOSES OF INFORMATION ONLY

     Codes used to identify States party to the PCT on the front pages of
pamphlets publishing international applications under the PCT.

<TABLE>
<S> <C>                                     <C>   <C>                          <C>   <C>
AT  Austria                                 FR    France                       MR    Mauritania
AU  Australia                               GA    Gabon                        MW    Malawi
BB  Barbados                                GB    United Kingdom               NE    Niger
BE  Belgium                                 GN    Guinea                       NL    Netherlands
BF  Burkina Faso                            GR    Greece                       NO    Norway
BG  Bulgaria                                HU    Hungary                      NZ    New Zealand
BJ  Benin                                   IE    Ireland                      PL    Poland
BR  Brazil                                  IT    Italy                        PT    Portugal
BY  Belarus                                 JP    Japan                        RO    Romania
CA  Canada                                  KP    Democratic People's          RU    Russian Federation
CF  Central African Republic                      Republic                     SD    Sudan
CG  Congo                                         of Korea                     SE    Sweden
CH  Switzerland                             KR    Republic of Korea            SI    Slovenia
CI  Cote d'Ivoire                           KZ    Kazakhstan                   SK    Slovak Republic
CM  Cameroon                                LI    Liechtenstein                SN    Senegal
CN  China                                   LK    Sri Lanka                    TD    Chad
CS  Czechoslovakia                          LU    Luxembourg                   TG    Togo
CZ  Czech Republic                          LV    Latvia                       UA    Ukraine
DE  Germany                                 MC    Monaco                       US    United States of America
DK  Denmark                                 MG    Madagascar                   UZ    Uzbekistan
ES  Spain                                   ML    Mali                         VN    Viet Nam
FI  Finland                                 MN    Mongolia

</TABLE>
<PAGE>
                                   EXHIBIT 2
                          PanGenetics' Patent Schedule
<PAGE>
                                   EXHIBIT 3

                          MATERIALS TRANSFER AGREEMENT

THIS AGREEMENT is made as of December 16, 1991, by and among Mark de Boer, Ph.D.
("Dr. de Boer") and Cetus Corporation ("Cetus").

     A.  During the course of his relationship with Cetus, Dr. de Boer has been
engaged in research in the area of T cell activation (the "Research").

     B.  Dr. de Boer wishes to continue certain aspects of the Research, and
Cetus desires to receive the benefits of the Research as set forth herein.

     C.  Therefore, Cetus is willing to provide Dr. de Boer with mouse
monoclonal antibody B7-24H4G12 and the related reagents/derivatives listed on
Attachment 1 hereto (which, together with any cell line, genetic material,
chemical or other substance derived by Dr. de Boer therefrom, constitute the
"Cetus Substances"); and confidential information, know-how, and data related
to the Cetus Substances (the "Cetus Confidential Information" which, together
with the Cetus Substances constitute the "Cetus Properties"). Cetus is willing
to allow Dr. de Boer to take the Cetus Properties with him under the terms of
this Agreement.

NOW, THEREFORE, the parties agree as follows:

1.  SCOPE OF USE The Cetus Properties are provided to Dr. Boer only for his use
in the Research. Dr. de Boer agrees to maintain in confidence and not to
distribute, disclose, or release the Cetus Properties to any person other than
laboratory personnel directly under Dr. de Boer's supervision and will ensure
that no one may copy, send, or take the Cetus Properties to any other location,
or use the Cetus Properties in research which is subject to a licensing or
consulting obligation to a third party (other than the U.S. Government), unless
written permission is obtained from an authorized representative of Cetus. Dr.
de Boer promises that the Cetus Properties will be used only in laboratory
animals or in IN VITRO experiments and will not be used in human beings.

2.  FREEDOM TO PUBLISH Dr. de Boer is free to present or publish the fundings of
the Research in a scientific publication, or public noncommercial conference, or
similar forum, provided that: (a) no Cetus Confidential Information is revealed
thereby; and (b) at lease 30 days prior to submission thereof to a publisher or
any third party, Dr. de Boer shall have delivered copies of the proposed
presentation or publication to Cetus for review. Cetus may, within 30 days of
such delivery, object to the publication or presentation because there would be
a disclosure of Cetus Confidential Information or because there is patentable
subject matter, in which Cetus has an interest under paragraph 4, which needs
protection. Upon Cetus' request, Dr. de Boer shall, for up to 60 days from
initial delivery to Cetus, delay disclosing such patentable subject matter in
order to permit the filing of patent applications thereon. The parties shall, in
any publication, acknowledge the contributions and publication of the other as
scientifically appropriate.

3.  DISCLOSURES Dr. de Boer will promptly provide a full written "Disclosure"
to Cetus of any invention, improvement, or discovery made in the Research using
the Cetus Properties (an "Invention"). Cetus shall be free to use such
findings for any purpose. Except as expressly set

LMTA (5/91)                           PAGE 1                            AGT 7655
<PAGE>
forth in this Agreement, neither party shall obtain rights in or a license to
any patent, copyright, trademark or other intellectual property right of the
other.

4.  TITLE AND INVENTIONS  All right, title, and interest in the Cetus Properties
shall belong to Cetus. Cetus shall be free, in its sole discretion, to
distribute the Cetus Properties to others and to use them for its own purposes.
In consideration of access to the Cetus Properties, Dr. de Boer hereby grants
Cetus and its affiliates an option to a non-exclusive royalty-free worldwide
license, and grants a further option to an exclusive license bearing a
reasonable royalty for such territories as Cetus may request, in any patent
issuing on an Invention. Cetus may exercise its option within one year of its
receipt of the written Disclosure described herein. A "reasonable royalty"
shall take into account the relative contributions of the parties to the
pertinent product and industry standards and shall be arbitrated by the American
Arbitration Association if the parties cannot in good faith agree on it.

5.  CONTACT WITH COLLABORATORS  Dr. de Boer may communicate and cooperate
regarding the Research with Cetus' collaborators who are rightfully possessing
and using the Cetus Properties, set forth in Attachment 2. To the extent, if
any, that an Invention arises from such collaboration, the rights in it shall be
governed by the respective agreements with Cetus. Dr. de Boer shall not initiate
new collaborations except through Cetus.

6.  NO WARRANTY  The Cetus Properties are investigational and experimental in
nature and are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. CETUS MAKES NO
REPRESENTATION OR WARRANTY THAT THE USE OF THE CETUS PROPERTIES WILL NOT
INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT. To the extent permitted by law,
Dr. de Boer will hold Cetus harmless from any claims or liability arising from
the use, handling or storage of the Cetus Substances.

7.  COMPLIANCE WITH LAW  Dr. de Boer shall use the Cetus Properties in
compliance with all applicable laws and regulations including, where applicable,
those relating to the treatment of laboratory animals and current NIH
guidelines.

8.  TERMS  This Agreement is the entire agreement between Cetus and Dr. de Boer
relating to the Cetus Properties, and may not be modified, assigned or
transferred without the written consent of an authorized representative of
Cetus. This Agreement shall be governed by the law of California.

     IN WITNESS WHEREOF, the Cetus and Dr. de Boer have executed this Agreement
as of the day and year first above written.

CETUS CORPORATION                             MARK DE BOER, PH.D.
By: /s/ JAMES H. MEADE                    /s/ MARK DE BOER, PH.D.
        James H. Meade, Ph.D.                 Signature
        Senior Director
        Scientific Administration

LMTA (5/91)                           PAGE 2                            AGT 7655
<PAGE>
                                   EXHIBIT 3

                                  ATTACHMENT 1

              cDNA for soluble B
              cDNA for full length B7
              cDNA for ICAM-1
              cDNA for ICAM-2
              cDNA for LFA-3
              cDNA for CD5G
              cDNA for ELAM
              cDNA for VCAM

              recombinant baculovirus for soluble B7
              recombinant baculovirus for full length B7

              hybridoma cell line B7-24

              3T6 cells expressing B7
              3T6 cells expressing ICAM-1

              Four PUC vectors with cloned VH and VL of B7-24

LMTA (5/91)                           PAGE 3                            AGT 7655
<PAGE>
                                   EXHIBIT 3

                                  ATTACHMENT 2

Agt. No.         Collaborator Name    Institution
----------       -----------------    ----------------------------------
    *                    *                            *

LMTA (5/91)                           PAGE 4                            AGT 7655
<PAGE>
                                   EXHIBIT 3

     C H I R O N

July 24, 1992

Mark de Boer, Ph.D
Innogenetics
Industriepark 7-box 4
B-9052 Zwijnaarde
BELGIUM

RE:  Letter Amendment #1 to Materials Transfer Agreement #7655

Dear Dr. de Boer:

Incorporating the terms and conditions of the Materials Transfer Agreement dated
December 16, 1991 by and among Cetus Corporation and you, we would like to add
murine B7 PCR primers GM546 through GM549 and murine library ML1019B to the
materials provided to you by Cetus. Accordingly, murine B7 PCR primers GM546
through GM549 and murine library ML1019B have been added to Attachment 1 of the
Agreement. The revised Attachment 1 is attached hereto.

If you agree to this amendment, please sign both originals of this letter and
return one original to Ms. Gaye Engler, Contracts Administrator, Legal
Department. The second original is provided for you records.

This Amendment #1, together with the Materials Transfer Agreement dated December
16, 1991, constitutes the entire agreement between the parties hereto regarding
the subject matter thereof and supersedes any prior or contemporaneous
agreement, understanding or negotiations.

If you have any questions, please feel free to contact Ms. Engler at
(510)601-2916.

Sincerely,                             Agreed to and Accepted by:

CHIRON CORPORATION                     MARK DE BOER, PH.D.

By: /s/ PABLO D. T. VALENZUELA           /s/ MARK DE BOER
        Pablo D. T. Valenzuela, Ph.D.        Signature
        Senior Vice President
        Biological Research &
        Development

La-Amd. (Rev. 9/90)                                            Agt. 7655, Amd. 1
Chriron Corporation o 4560 Horton Street o Emeryville, CA o 94608-2916
 o 510-655-8730
Law Department  o  General Fax: 510-654-5360 o Intellectual Property Fax:
510-655-3542
<PAGE>
                                   EXHIBIT 3

                                  ATTACHMENT 1

              cDNA for soluble B7
              cDNA for full length B7
              cDNA for ICAM-1
              cDNA for ICAM-2
              cDNA for LFA-3
              cDNA for CD5G
              cDNA for ELAM
              cDNA for VCAM

              ML1019B murine library

              Murine B7 PCR primers GM 546 through GM 549

              recombinant baculovirus for soluble B7
              recombinant baculovirus for full length B7

              hybridoma cell line B7-24

              3T6 cells expressing B7
              3T6 cells expressing ICAM-1

              Four PUC vectors with cloned VH and VL of B7-24

LMTA (5/91)                           PAGE 3                            AGT 7655
<PAGE>
                                   EXHIBIT 3

                                AMENDMENT #2 TO
                          MATERIALS TRANSFER AGREEMENT
                                    BETWEEN
                    CHIRON CORPORATION AND DR. MARK DE BOER

Incorporating the terms and conditions of the Materials Transfer Agreement dated
December 16, 1991 and the Letter Amendment #1 dated July 24, 1992 by and between
Chiron Corporation and Dr. Mark de Boer, the Agreement is herein amended,
effective December 17, 1991, by adding anti-CD40 to Attachment 1 of the
Agreement. The revised Attachment 1 is attached hereto.

This Amendment #2, together with the Materials Transfer Agreement dated December
16, 1991 and the Letter Amendment #1 dated July 24, 1992, constitutes the entire
agreement between the parties hereto regarding the subject matter thereof and
supersedes any prior or contemporaneous agreement, understanding or
negotiations.

                                       Agreed to and Accepted by:

CHIRON CORPORATION                     MARK DE BOER, PH.D.

By: /s/  NIEK J. ROOSDORP              /s/  MARK DE BOER
         Niek J. Roosdorp, Ph.D.            Signature
         Vice President
         Business Development

<PAGE>
                                   EXHIBIT 3

                                  ATTACHMENT 1

              cDNA for soluble B7
              cDNA for full length B7
              cDNA for ICAM-1
              cDNA for ICAM-2
              cDNA for LFA-3
              cDNA for CD5G
              cDNA for ELAM
              cDNA for VCAM

              ML1019B murine library

              Murine B7 PCR primers GM546 through GM549

              recombinant baculovirus for soluble B7
              recombinant baculovirus for full length B7

              hybridoma cell line B7-24

              3T6 cells expressing B7
              3T6 cells expressing ICAM-1

              four PUC vectors with cloned VH and VL of B7-24

              anti-CD40
<PAGE>
                                   EXHIBIT 4

                              CONSULTING AGREEMENT

THIS AGREEMENT is effective as of January 1, 1993 by and between Chiron
Corporation ("Chiron"), and Dr. Mark de Boer ("Consultant").

     1.  CONSULTANCY.  Chiron hereby retains Consultant, and Consultant hereby
accepts such retention, commencing as of the date of this Agreement and
continuing for one (1) year thereafter.

     2.  SERVICES.  Consultant shall serve as a consultant to Chiron and its
subsidiaries and affiliates in the area to anti-CD40 (the "Field").

     3.  COMPENSATION.  In consideration of Consultant's provision of consulting
services to Chiron, Chiron will pay Consultant a quarterly fee of *. In
addition, Chiron will reimburse Consultant for reasonable expenses approved in
advance by Chiron.

     4.  OUTSIDE EMPLOYMENT.  (a) During the term of this Agreement Consultant
may be engaged by one or more other "Institutions(s)." Consultant represents
that he is not and shall not become a party to any agreement which conflicts
with the duties hereunder. Consultant shall use best effects to segregate work
done under this Agreement from work at an Institution, or done with Government
funding, so as to minimize any questions of disclosure or ownership of rights
under any Inventions or Confidential Information. Chiron may terminate this
Agreement if in its sole opinion the performance of such work will conflict with
its interests.

     (b) Consultant shall not disclose to Chiron any inventions, trade secrets,
or other information of third parties that Consultant does not have the right to
disclose and that Chiron is not free to use without liability.

     5.  INVENTIONS.  (a) "Invention" shall mean and refer to any composition
of matter, device, process, treatment, or improvement thereof discovered,
created, made, conceived, or reduced to practice ("Invented") by Consultant,
whether patentable or not, during the term of this Agreement and which: (i) was
Invented with the equipment, supplies, facilities, or Confidential Information
of Chiron or those acting on its behalf, or (ii) was Invented by Consultant
while performing services for Chiron, or (iii) resulted from any work performed
by Consultant for Chiron under this Agreement.

     (b) Chiron shall own all right, title and interest in any Invention.
Consultant shall promptly, and without royalty but at Chiron's expense: (i)
disclose to Chiron all information with respect to any Inventions, (ii) execute
all applications, assignments, and other instruments and do such other acts that
Chiron may deem necessary to obtain and maintain patents, copyrights, and
similar rights anywhere in the world, and (iii) provide Chiron evidence needed
in any legal proceedings regarding the Invention.

     6.  CONFIDENTIALITY.  (a) During the term of this Agreement and any
subsequent extensions, and for a period of one (1) year thereafter, Consultant
will not disclose without prior written consent of Chiron, any Chiron
Confidential Information. As used in this Agreement, "Confidential
Information" shall mean all data, technical information, commercial and
research strategies, trade secrets, and know-how disclosed by Chiron to
Consultant, directly or indirectly, whether in writing or orally except for such
information and know-how that (i) can be shown by contemporaneous documentation
to have been in Consultant's possession prior to disclosure by Chiron; (ii) at
the time of disclosure hereunder is, or thereafter becomes, through no fault of
Consultant, part of the public domain; or (iii) is furnished to Consultant by a
third party after the time of disclosure hereunder without the breach of any
duty to Chiron.

     (b) Consultant shall not use any Confidential Information except for the
purposes of this Agreement unless Chiron shall otherwise agree in writing.
Consultant may disclose Confidential Information only to employees or agents who
have a need to know the Confidential Information for the purposes of this
Agreement and who are bound in writing to maintain the secrecy of the
Confidential Information and assign to Chiron any Inventions which they may
make.

     (c) Consultant shall keep separate and segregated from other work all
documents, records, notebooks, correspondence, deposits of microorganisms, cells
or parts thereof, cell lines, part and progeny thereof, and

                                     Page 1              f:\wpgen\done\agt 11092
<PAGE>
all products made thereby, arising from the work under this Agreement. All
right, title, and interest therein shall belong to Chiron, and upon expiration
or termination of this Agreement, all such documents and material, including
copies thereof, whether prepared by Consultant or others, will be delivered to
Chiron.

     (d)  Consultant may lecture upon, disseminate, and publish under
Consultant's own name scientific papers arising from the work done in the course
of performance of services for Chiron hereunder, but only upon the prior written
approval of Chiron. Chiron will not unreasonably withhold its approval provided
Confidential Information will not be disclosed thereby. Appropriate credit will
be given to Chiron in any publication.

     7.  NOTICE.  ANY NOTICE TO CHIRON SHALL BE ADDRESSED AS FOLLOWS OR AS SHALL
BE SPECIFIED BY A PARTY IN WRITING:

If to Chiron:                          If Consultant:
  Chiron Corporation                     Mark de Boer, Ph.D.
  4560 Horton Street                     Meersenier Straat 13B
  Emeryville, California 94608           Ghent B9000
  Attention: Contracts Administrator     BELGIUM
              Legal Department

     8.  SURVIVAL AND TERMINATION.  The terms and obligations of paragraph 5 and
6 shall survive termination of this Agreement for any reason whatsoever. If
Consultant breaches any of term of this Agreement Chiron may, in addition to any
other remedy, terminate Consultant's services by notice to Consultant by letter,
facsimile, telephone call, in person, or other reasonable means by any officer
or agent of Chiron.

     9.  ENTIRE AGREEMENT.  This Agreement is the entire agreement of the
parties relating to the subject matter hereof, and supersedes all prior and
contemporaneous negotiations, correspondence, understandings, and agreements of
the parties relating to the subject matter hereof. It may be amended only by an
agreement in writing, signed by both parties.

     10.  NOT AN EMPLOYEE.  Consultant is an independent contractor and is not
an employee or agent of Chiron. Consultant shall be entitled to no benefits or
compensation from Chiron except as set forth in this Agreement and shall in no
event be entitled to any fringe benefits payable to employees of Chiron.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                       Agreed to and Accepted by:

CHIRON CORPORATION                     MARK DE BOER, PH.D.

By: /s/  NIEK J. ROOSDORP              /s/  MARK DE BOER
         Niek J. Roosdorp                   Signature
         Vice President
         Business Development

                                     Page 2              f:\wpgen\done\agt 11092
<PAGE>
                                   EXHIBIT 4

                    AMENDMENT #1 TO THE CONSULTING AGREEMENT
                                  MADE BETWEEN
                               CHIRON CORPORATION
                                      AND
                                DR. MARK DE BOER

Incorporating the terms and conditions of the Consulting Agreement dated January
1, 1993 made by and between Chiron Corporation and Dr. Mark de Boer, Section 1
and 2 of the Agreement is herein amended, effective January 1, 1994, to read as
follows:

     "1. CONSULTANCY. Chiron hereby retains Consultant, and Consultant hereby
     accepts such retention, commencing as of the date of this Agreement and
     continuing for two (2) years thereafter."

     "2. SERVICES. Consultant shall serve as a consultant to Chiron and its
     subsidiaries and affiliates in the area of anti-CD40 and *.

This Amendment #1, together with the Consulting Agreement dated January 1, 1993,
constitutes the entire agreement between the parties hereto regarding the
subject matter thereof and supersedes any prior or contemporaneous agreement,
understanding or negotiations.

CHIRON CORPORATION                     MARK DE BOER, PH.D.

By: /s/ PATRICIA A. OLSON, PH.D.       /s/ MARK DE BOER
        Patricia A. Olson, Ph.D.           Signature
        Director, Research Operations

                                            f:\wpgen\done\footer.amd\agt 11092.1
<PAGE>
                                   EXHIBIT 5

                          MATERIALS TRANSFER AGREEMENT

Chiron Corporation ("Chiron") and Panorama Research, Inc. ("Institution"),
agree effective as of November 9, 1994 as follows:

1.  RESEARCH.

a.  Chiron is furnishing the following Chiron properties (the "Chiron
Properties"): (i) baculovirus strains AcCD40B and AcCD40C, containing gene
sequences for the extracellular domain (ECD) of human CD40 with, respectively,
the "KT3" or "gluglu" peptide tag expressed at the C terminus of the ECD;
(ii) SF9 insect cells; and (iii) KT3 and E5 monoclonal antibodies, which
respectively bind the KT3 or gluglu peptides tags.

b.  These Chiron Properties are provided only for use in the following
non-commercial research activities (the "Research"): (i) AcCD40B and AcCD40C
may be used to produce soluble human CD40 ECD for use in screening and
characterizing humanized versions of anti-CD40 monoclonal antibodies; (ii) the
SF9 insect cell may be used to produce CD40 ECD; and (iii) KT3 or E5 monoclonal
anti-tag antibodies may be used for affinity purification.

2.  PROPERTIES.  The "Chiron Properties" are:

     a.  "Chiron Substances," including the materials provided by Chiron and
any part or portion of them, even if combined with other substances; if Chiron's
contributed materials have genetic material (such as a cell line, probe or
plasmid) then the Chiron Substances also include any progency, mutant, hybrid,
nucleic acid, or other material containing any portion of genetic material from
the Chiron Substances and any copy, complement, or transcription or expression
product of them; and

     b.  "Chiron Information," which includes Chiron's confidential
information, know-how, and data related to the Chiron Substances. Chiron
Information does not include information which: is shown by written records to
have been in Institution's possession before receipt from Chiron; is or becomes,
through no fault of Institution, part of the public domain; or is received from
a third party without breach of a duty to Chiron.

3.  CONFIDENTIALITY.  Institution shall maintain in confidence and not disclose
the Chiron Information to any third party without the written permission of an
authorized representative of Chiron.

4.  USE.  The Chiron Properties shall belong solely to Chiron and may only be
used by personnel of Institution under the terms hereof. The Chiron Properties
may not be taken to another location or used in research which is subject to a
licensing or consulting obligation to a third party (other than the U.S.
Government) unless Chiron has first consented in writing. The Chiron Properties
shall not be used in human beings, and shall be used in compliance with all
applicable laws and regulations including, where applicable, those relating to
the treatment of laboratory animals and current NIH guidelines. Upon Chiron's
request, Institutions shall stop using the Chiron Properties and shall, at
Chiron's election promptly return or destroy the Chiron Properties in their
possession, including all copies.

                                                              Chiron LMTA (6/94)
Page 1 of 2                                f:\wpgen\done\footer.mta\panorama.mta
<PAGE>
5.  PUBLICATION.  The Institution shall periodically report to Chiron the
results of the Research involving the Chiron Properties for Chiron's internal
use. Institution may also present or publish the findings of the Research in a
scientific publication, conference or similar not-for-profit forum, provided
that: (a) no Chiron Information is revealed thereby; and (b) at least 45 days
prior to submission to a publisher or presentation to any third party,
Institution delivers copies of the proposed presentation or publication to
Chiron for review. At Chiron's request, Institution will, for a reasonable
period up to 90 days from initial delivery to Chiron, delay revealing any
patentable subject matter in the disclosure in order to permit the filing of
patent applications. In any publication, the parties will consider joint
authorship and acknowledge the contributions and publications of the other as
scientifically appropriate.

6.  INVENTIONS.  If an invention results from the use of the Chiron Properties,
Chiron shall have a non-exclusive royalty-free license to use such invention for
internal research purposes. Chiron shall also have an option to a license
bearing a reasonable royalty for such territories and scope of exclusivity as
Chiron may request in any patents or patent applications relating to such
inventions, the terms of which license will be negotiated in good faith and will
be arbitrated if the parties cannot agree. The option will be exercisable no
later than six months after Chiron's receipt of Institution's written request
that Chiron exercise or waive its rights with respect to a particular patent
application. Chiron may, at its election and expense, pursue and obtain patent
protection in consultation with Institution for any invention as to which Chiron
is a joint assignee or as to which Chiron has a right to an exclusive license
hereunder.

7.  RISKS.  The Chiron Properties are experimental in nature and are provided
WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY
OTHER WARRANTY OF NONINFRINGEMENT OR TITLE, EXPRESS OR IMPLIED. To the extent
permitted by law, Institution will indemnify and hold Chiron harmless from any
claims or liability arising from the use, handling or storage of the Chiron
Properties by Institution. Chiron will indemnify and hold Institution harmless
arising from any claim arising from Chiron's use of the findings of the
Research.

8.  TERMS.  Except as expressly set forth, nothing in this Agreement grants
either party rights or a license to any patent, copyright, trademark or other
intellectual property rights of the other. This Agreement is governed by the
laws of the State of California, is the entire agreement of the parties relating
to the Chiron Properties, and may not be modified, assigned or transferred
without the written consent of an authorized representative of Chiron.

<TABLE>
<S>                                   <C>
CHIRON CORPORATION                    PANORAMA RESEARCH, INC.
By: /s/ LEWIS T. WILLIAMS             By: /s/ J.W. WARRICK
        Lewis T. Williams, M.D.,              Signature of Authorized Representative
        Ph.D.                         Name:   James W. Warrick
        Senior Vice President         Title:  President
        Research & Development
        President, Chiron
        Technologies
</TABLE>

                                                              Chiron LMTA (6/94)
Page 2 of 2                                f:\wpgen\done\footer.mta\panorama.mta
<PAGE>
                                   EXHIBIT 6

PANGENETICS B.V.                   ***CONFIDENTIAL***                  JULY 1995

PANGENETICS RESEARCH AND DEVELOPMENT PLAN

TITLE:   HUMANIZED MONOCLONAL ANTIBODIES TO CD40 FOR THE TREATMENT OF AUTOIMMUNE
         DISEASES

PROJECT CODE:   A1-01

                                       *

                                       1
<PAGE>
                                       *

                                       2
<PAGE>
                                       *

                                       3
<PAGE>
                                       *

                                       4
<PAGE>
                                       *

                                       5
<PAGE>
                                       *

                                       6
<PAGE>
                                       *

                                       7
<PAGE>
                                       *

                                       8
<PAGE>
                                       *

                                       9
<PAGE>
                                    EXHIBIT 7

                       C40 LICENSE\COLLABORATION AGREEMENT

DATE:          October 1, 1994

PARTIES:       1.  Mark Deboer Phd, "Deboer";
               E. van Calcarstraat 30; 1963 DG
               Heemskark; The Netherlands; T: 31
               2510 41356; F: 31 2510 50719.
               2.  Panorama Research Inc., "PRI";
               2462 Wyandotte St.; Mountain View, CA
               94043; T: 415-694-4996; F:
               415-694-7717.

DEBOER AGREES:

1.  To grant PRI a license to all of the rights of Dr. Mark Deboer in the Chiron
    CD40 technology.

PRI AGREES:

1.  To cooperate with Dr. Mark Deboer who will be responsible for the execution
    of the project plan and oversee the work of Dr. Lucien Aarden.

2.  To share ownership of the project with Dr. Mark Deboer on a 50:50 basis.

AGREED:

/s/ MARK DeBOER PhD                                                     10-1-94
    Mark DeBoer PhD                                                        DATE

/s/ JAMES W. LARRICK MD PhD                                             10-1-94
    James W. Larrick MD PhD                                                DATE
    CEO and President
    Panorama Research Inc.

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