Document:

<PAGE>

                                                                    EXHIBIT 10.3

                               BIOMEDICINES, INC.

                        2000 EMPLOYEE STOCK PURCHASE PLAN

                APPROVED BY THE BOARD OF DIRECTORS JULY 27, 2000
                    APPROVED BY STOCKHOLDERS __________, 2000

1.        PURPOSE.

          (a) The purpose of this 2000 Employee Stock Purchase Plan (the "Plan")
is to provide a means by which employees of BioMedicines, Inc. (the "Company")
and its Affiliates, as defined in subparagraph 1(b), which are designated as
provided in subparagraph 2(b), may be given an opportunity to purchase common
stock of the Company (the "Common Stock").

          (b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").

          (c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.

          (d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.

2.        ADMINISTRATION.

          (a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.

          (b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

                    (i) To determine when and how rights to purchase stock of
the Company shall be granted and the provisions of each offering of such rights
(which need not be identical).

                    (ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.

                                       1.
<PAGE>

                    (iii) To construe and interpret the Plan and rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.

                    (iv) To amend the Plan as provided in paragraph 13.

                    (v) To terminate or suspend the Plan as provided in
paragraph 15.

                    (vi) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company and its Affiliates and to carry out the intent that the Plan be
treated as an "employee stock purchase plan" within the meaning of Section 423
of the Code.

          (c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

3.        SHARES SUBJECT TO THE PLAN.

          (a) Subject to the provisions of paragraph 12 relating to adjustments
upon changes in stock and subject to the increases in the number of reserved
shares described below, the stock that may be sold pursuant to rights granted
under the Plan shall not exceed in the aggregate Three Hundred Thousand
(300,000) shares of Common Stock (the "Reserved Shares"). On January 1 of each
year, starting with January 1, 2002, and continuing through and including
January 1, 2010, the number of Reserved Shares will be increased automatically
by the lowest of (i) one-half percent (0.5%) of the total number of shares of
Common Stock outstanding on such date, (ii) Two Hundred Thousand (200,000)
shares, or (iii) a smaller number of shares determined by the Board prior to
that January 1. If any right granted under the Plan shall for any reason
terminate without having been exercised, the Common Stock not purchased under
such right shall again become available for issuance under the Plan.

          (b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

4.        GRANT OF RIGHTS; OFFERING.

          The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate, which shall comply with the requirements of Section

                                       2.
<PAGE>

423(b)(5) of the Code that all employees granted rights to purchase stock under
the Plan shall have the same rights and privileges. The terms and conditions of
an Offering shall be incorporated by reference into the Plan and treated as part
of the Plan. The provisions of separate Offerings need not be identical, but
each Offering shall include (through incorporation of the provisions of this
Plan by reference in the document comprising the Offering or otherwise) the
period during which the Offering shall be effective, which period shall not
exceed twenty-seven (27) months beginning with the Offering Date, and the
substance of the provisions contained in paragraphs 5 through 8, inclusive.

5.        ELIGIBILITY.

          (a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be greater than two (2)
years. In addition, unless otherwise determined by the Board or the Committee
and set forth in the terms of the applicable Offering, no employee of the
Company or any Affiliate shall be eligible to be granted rights under the Plan
unless, on the Offering Date, such employee's customary employment with the
Company or such Affiliate is for at least twenty (20) hours per week and at
least five (5) months per calendar year.

          (b) The Board or the Committee may provide that each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering, which date coincides with the day on which such person becomes an
eligible employee or occurs thereafter, receive a right under that Offering,
which right shall thereafter be deemed to be a part of that Offering. Such right
shall have the same characteristics as any rights originally granted under that
Offering, as described herein, except that:

                    (i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right;

                    (ii) the period of the Offering with respect to such right
shall begin on its Offering Date and end coincident with the end of such
Offering; and

                    (iii) the Board or the Committee may provide that if such
person first becomes an eligible employee within a specified period of time
before the end of the Offering, he or she will not receive any right under that
Offering.

          (c) No employee shall be eligible for the grant of any rights under
the Plan if, immediately after any such rights are granted, such employee owns
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or of any Affiliate. For purposes
of this subparagraph 5(c), the rules of Section 424(d) of the

                                       3.
<PAGE>

Code shall apply in determining the stock ownership of any employee, and stock
which such employee may purchase under all outstanding rights and options shall
be treated as stock owned by such employee.

          (d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee to purchase stock of the
Company or any Affiliate at a rate that exceeds twenty-five thousand dollars
($25,000) of fair market value of such stock (determined at the time such rights
are granted) for each calendar year in which such rights are outstanding at any
time.

          (e) Officers of the Company and any designated Affiliate shall be
eligible to participate in Offerings under the Plan; PROVIDED, HOWEVER, that the
Board may provide in an Offering that certain employees who are highly
compensated employees within the meaning of Section 423(b)(4)(D) of the Code
shall not be eligible to participate.

6.        RIGHTS; PURCHASE PRICE.

          (a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to that
number of shares of Common Stock of the Company purchasable with up to twenty
percent (20%) (or such lower percentage as may be designated by the Board or
Committee) of such employee's Earnings (as defined in subparagraph 7(a)) during
the period which begins on the Offering Date (or such later date as the Board or
the Committee determines for a particular Offering) and ends on the date stated
in the Offering, which date shall be no later than the end of the Offering. The
Board or the Committee shall establish one or more dates during an Offering (the
"Purchase Date(s)") on which rights granted under the Plan shall be exercised
and purchases of Common Stock carried out in accordance with such Offering.

          (b) In connection with each Offering made under the Plan, the Board or
the Committee may specify a maximum number of shares that may be purchased by
any employee as well as a maximum aggregate number of shares that may be
purchased by all eligible employees pursuant to such Offering. In addition, in
connection with each Offering that contains more than one Purchase Date, the
Board or the Committee may specify a maximum aggregate number of shares that may
be purchased by all eligible employees on any given Purchase Date under the
Offering. If the aggregate number of shares issuable upon exercise of rights
granted under the Offering would exceed any such maximum aggregate number, the
Board or the Committee shall make a pro rata allocation of the shares available
in as nearly a uniform manner as shall be practicable and as it shall deem to be
equitable.

          (c) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:

                    (i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or

                                       4.
<PAGE>

                    (ii) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Purchase Date.

7.        PARTICIPATION; WITHDRAWAL; TERMINATION.

          (a) An eligible employee may become a participant in the Plan pursuant
to an Offering by delivering a participation agreement to the Company within the
time specified in the Offering, in such form as the Company provides. Each such
agreement shall authorize payroll deductions of up to the maximum percentage
specified by the Board or the Committee of such employee's Earnings during the
Offering. "Earnings" is defined as an employee's wages (including amounts
thereof elected to be deferred by the employee, that would otherwise have been
paid, under any arrangement established by the Company that is intended to
comply with Section 125, 401(k), 402(h) or 403(b) of the Code or that provides
non-qualified deferred compensation), overtime pay, bonuses, incentive pay,
commissions and other remuneration paid directly to the employee, but excluding
profit sharing, the cost of employee benefits paid for by the Company or an
Affiliate, education or tuition reimbursements, imputed income arising under any
group insurance or benefit program, traveling expenses, business and moving
expense reimbursements, income received in connection with stock options,
contributions made by the Company or an Affiliate under any employee benefit
plan, and similar items of compensation, as determined by the Board or the
Committee. The payroll deductions made for each participant shall be credited to
an account for such participant under the Plan and shall be deposited with the
general funds of the Company. A participant may reduce (including to zero) or
increase such payroll deductions, and an eligible employee may begin such
payroll deductions, after the beginning of any Offering only as provided for in
the Offering. A participant may make additional payments into his or her account
only if specifically provided for in the Offering and only if the participant
has not had the maximum amount withheld during the Offering.

         (b) At any time during an Offering, a participant may terminate his or
her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Offering except as provided by the Board or the Committee in the Offering. Upon
such withdrawal from the Offering by a participant, the Company shall distribute
to such participant all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participant's
interest in that Offering shall be automatically terminated. A participant's
withdrawal from an Offering will have no effect upon such participant's
eligibility to participate in any other Offerings under the Plan but such
participant will be required to deliver a new participation agreement in order
to participate in subsequent Offerings under the Plan.

          (c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company and any designated Affiliate, for any reason, and the Company
shall distribute to such terminated employee all of his or her accumulated
payroll deductions (reduced to the extent, if any, such

                                       5.
<PAGE>

deductions have been used to acquire stock for the terminated employee), under
the Offering, without interest.

          (d) Rights granted under the Plan shall not be transferable by a
participant otherwise than by will or the laws of descent and distribution, or
by a beneficiary designation as provided in paragraph 14 and, otherwise during
his or her lifetime, shall be exercisable only by the person to whom such rights
are granted.

8. EXERCISE.

          (a) On each Purchase Date specified in the relevant Offering, each
participant's accumulated payroll deductions and other additional payments
specifically provided for in the Offering (without any increase for interest)
will be applied to the purchase of whole shares of stock of the Company, up to
the maximum number of shares permitted pursuant to the terms of the Plan and the
applicable Offering, at the purchase price specified in the Offering. No
fractional shares shall be issued upon the exercise of rights granted under the
Plan. The amount, if any, of accumulated payroll deductions remaining in each
participant's account after the purchase of shares that is less than the amount
required to purchase one share of stock on the final Purchase Date of an
Offering shall be held in each such participant's account for the purchase of
shares under the next Offering under the Plan, unless such participant withdraws
from such next Offering, as provided in subparagraph 7(b), or is no longer
eligible to be granted rights under the Plan, as provided in paragraph 5, in
which case such amount shall be distributed to the participant after such final
Purchase Date, without interest. Any amount of accumulated payroll deductions
remaining in a participant's account after the purchase of shares that equals or
exceeds the amount required to purchase a whole share of stock on the final
Purchase Date of an Offering shall be distributed in full to the participant
after such Purchase Date, without interest.

          (b) No rights granted under the Plan may be exercised to any extent
unless the shares to be issued upon such exercise under the Plan are covered by
an effective registration statement pursuant to the Securities Act of 1933, as
amended (the "Securities Act") and the Plan is in material compliance with all
applicable state, foreign and other securities and other laws applicable to the
Plan. If, on the Purchase Date of any Offering hereunder, the shares to be
issued under the Plan are not so registered or the Plan is not in such
compliance, no rights granted under the Plan or any Offering shall be exercised
on such Purchase Date, and the Purchase Date shall be delayed until such shares
are subject to an effective registration statement and the Plan is in such
compliance, except that the Purchase Date shall not be delayed more than twelve
(12) months and the Purchase Date shall in no event be more than twenty-seven
(27) months from the Offering Date. If, on the Purchase Date of any Offering
hereunder, as delayed to the maximum extent permissible, such shares are not
registered and the Plan is not in such compliance, no rights granted under the
Plan or any Offering shall be exercised and all payroll deductions accumulated
during the Offering (reduced to the extent, if any, such deductions have been
used to acquire stock) shall be distributed to the participants, without
interest.

                                       6.
<PAGE>

9.        COVENANTS OF THE COMPANY.

          (a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.

          (b) The Company shall seek to obtain from each federal, state, foreign
or other regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of stock upon exercise of
the rights granted under the Plan. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved of any liability for
failure to issue and sell stock upon exercise of such rights unless and until
such authority is obtained.

10.       USE OF PROCEEDS FROM STOCK.

          Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.

11.       RIGHTS AS A STOCKHOLDER.

          A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until the participant's shares acquired upon exercise
of rights under the Plan are recorded in the books of the Company.

12.       ADJUSTMENTS UPON CHANGES IN STOCK.

          (a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan, due to a change in corporate
capitalization and without the receipt of consideration by the Company (through
reincorporation, stock dividend, stock split, reverse stock split, combination
or reclassification of shares), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject to the Plan pursuant to
subsection 3(a), and the outstanding rights will be appropriately adjusted in
the class(es) and number of securities and price per share of stock subject to
such outstanding rights. Such adjustments shall be made by the Board, the
determination of which shall be final, binding and conclusive.

          (b) In the event of: (1) a dissolution or liquidation of the Company,
(2) the sale of all or substantially all of the securities or assets of the
Company, (3) a merger or consolidation in which the Company is not the surviving
corporation or (4) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, then any surviving corporation may assume
outstanding rights or substitute similar rights for those under the Plans. If no
surviving corporation assumes outstanding rights or substitutes similar rights
therefor, participants' accumulated payroll deductions shall be used to purchase
Common Stock immediately prior to the transaction

                                       7.
<PAGE>

described above and the participants' rights under the ongoing Offering shall
terminate immediately following such purchase.

13.       AMENDMENT OF THE PLAN.

          (a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:

                    (i) Increase the number of shares reserved for rights under
the Plan;

                    (ii) Modify the provisions as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code; or

                    (iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code.

It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.

          (b) Rights and obligations under any rights granted before amendment
of the Plan shall not be impaired by any amendment of the Plan, except (i) with
the consent of the person to whom such rights were granted, (ii) as necessary to
comply with any laws or governmental regulations, or (iii) as necessary to
ensure that the Plan and/or rights granted under the Plan comply with the
requirements of Section 423 of the Code.

14.       DESIGNATION OF BENEFICIARY.

          (a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of an
Offering but prior to delivery to the participant of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death during an Offering.

         (b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of

                                       8.
<PAGE>

the Company), the Company, in its sole discretion, may deliver such shares
and/or cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

15.       TERMINATION OR SUSPENSION OF THE PLAN.

          (a) The Board in its discretion, may suspend or terminate the Plan at
any time. No rights may be granted under the Plan while the Plan is suspended or
after it is terminated.

          (b) Rights and obligations under any rights granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except (i) as expressly provided in the Plan or with the consent of the
person to whom such rights were granted, (ii) as necessary to comply with any
laws or governmental regulation, or (iii) as necessary to ensure that the Plan
and/or rights granted under the Plan comply with the requirements of Section 423
of the Code.

          (c) Notwithstanding the foregoing, the Plan shall terminate and no
rights may be granted under the Plan after the tenth anniversary of the
Effective Date.

16.       EFFECTIVE DATE OF PLAN.

          The Plan shall become effective simultaneously with the effectiveness
of the Company's registration statement under the Securities Act with respect to
the initial public offering of shares of the Company's Common Stock (the
"Effective Date"), but no rights granted under the Plan shall be exercised
unless and until the Plan has been approved by the stockholders of the Company
within twelve (12) months before or after the date the Plan is adopted by the
Board, which date may be prior to the Effective Date.

                                       9.

<PAGE>

                               BIOMEDICINES, INC.

                   2000 EMPLOYEE STOCK PURCHASE PLAN OFFERING

                             ADOPTED__________, 2000

1.   GRANT; OFFERING DATE.

     (a) The Board of Directors of BioMedicines, Inc. (the "Company"), pursuant
to the Company's 2000 Employee Stock Purchase Plan (the "Plan"), hereby
authorizes the grant of rights to purchase shares of common stock of the Company
("Common Stock") to all Eligible Employees (an "Offering"). The first Offering
shall begin simultaneously with the effectiveness of the Company's registration
statement under the Securities Act of 1933 with respect to the initial public
offering of the Company's Common Stock and end on [February 1, 2003] (the
"Initial Offering"). Offerings shall begin on the next following [August 1,
2001], and thereafter on each [February 1 and August 1] and each such Offering
shall end on the day prior to the second anniversary of its Offering Date. The
first day of an Offering is that Offering's "Offering Date." If an Offering Date
falls on a day during which the Common Stock is not actively traded, then the
Offering Date shall be the next succeeding day during which the Common Stock is
actively traded.

     (b) An Offering may consist of one purchase period or divided into shorter
purchase periods ("Purchase Periods"). Each Offering will be divided into four
(4) shorter Purchase Periods of approximately six (6) months in duration with
the exception of the Initial Offering which shall have as its first Purchase
Period the period beginning on the effective date of the Plan and ending [July
31, 2001].

     (c) Prior to the commencement of any Offering, the Board of Directors (or
the Committee described in subparagraph 2(c) of the Plan, if any) may change any
or all terms of such Offering and any subsequent Offerings. The granting of
rights pursuant to each Offering hereunder shall occur on each respective
Offering Date unless, prior to such date (a) the Board of Directors (or such
Committee) determines that such Offering shall not occur, or (b) no shares
remain available for issuance under the Plan in connection with the Offering.

2.   ELIGIBLE EMPLOYEES.

     All employees of the Company and each of its Affiliates (as defined in the
Plan) incorporated in the United States shall be granted rights to purchase
Common Stock under each Offering on the Offering Date of such Offering, provided
that each such employee otherwise meets the employment requirements of
subparagraph 5(a) of the Plan (an "Eligible Employee"). Notwithstanding the
foregoing, the following employees shall not be Eligible Employees or be granted
rights under an Offering: 5% stockholders (including ownership through
unexercised options) described in subparagraph 5(c) of the Plan.

                                       1.

<PAGE>

     Each person who first becomes an Eligible Employee during any Offering
shall be granted a right to purchase Common Stock under such Offering on the
next [August 1 or February 1] during such Offering, which right shall thereafter
be deemed to be a part of such Offering. Such right shall have the same
characteristics as any rights originally granted under the Offering except that:

     (a) the date on which such right is granted shall be the "Offering Date" of
such right for all purposes, including determination of the exercise price of
such right; and

     (b) the Offering for such right shall begin on its Offering Date and end
coincident with the ongoing Offering.

3.   RIGHTS.

     (a) Subject to the limitations contained herein and in the Plan, on each
Offering Date each Eligible Employee shall be granted the right to purchase the
number of shares of Common Stock purchasable with up to twenty percent (20%) of
such Participant's Earnings (as defined in the Plan) paid during the period of
such Offering.

     (b) The maximum aggregate number of shares available to be purchased by all
Eligible Employees under an Offering shall be the number of shares remaining
available under the Plan on the Offering Date. If the aggregate purchase of
shares of Common Stock upon exercise of rights granted under the Offering would
exceed the maximum aggregate number of shares available, the Board shall make a
pro rata allocation of the shares available in a uniform and equitable manner.

     (c) Notwithstanding the foregoing, no employee shall be granted an option
under the Plan which permits such employee's right to purchase stock under the
Plan and all other employee stock purchase plans (described in Section 423 of
the Code) of the Company to accrue at a rate that exceeds twenty five thousand
dollars ($25,000) of fair market value of such stock (determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.

4.   PURCHASE PRICE.

     The purchase price of the Common Stock under the Offering shall be the
lesser of (a) eighty-five percent (85%) of the fair market value of the Common
Stock on the Offering Date (or eighty-five percent (85%) of the fair market
value of the Common Stock on the first day on which the Company's Common Stock
is actively traded that immediately follows the Offering Date if an Offering
Date falls on a day during which the Company's Common Stock is not actively
traded) or (b) eighty-five percent (85%) of the fair market value of the Common
Stock on the Purchase Date (or eighty-five percent (85%) of the fair market
value of the Common Stock on the first day on which the Company's Common Stock
is actively traded that immediately precedes the Purchase Date if a Purchase
Date falls on a day during which the Company's Common Stock is not actively
traded).

                                       2.

<PAGE>

5.   PARTICIPATION.

     (a) Except as otherwise provided herein or in the Plan, an Eligible
Employee may elect to begin payroll deductions under an Offering as of the
beginning of the Offering or as of the day after any Purchase Date (I.E., any
[January 31 or July 31 except for January 31, 2001]). Such an election shall be
made by delivering an agreement authorizing payroll deductions. Such deductions
shall be made each pay period and must be in whole percentages not to exceed
twenty percent (20%) of Earnings. The agreement shall be made on such enrollment
form as the Company or a designated Affiliate provides and must be delivered to
the Company or designated Affiliate ten (10) days before the Offering Date to be
effective for such Offering, unless a later time for filing the enrollment form
is set by the Company for all Eligible Employees with respect to a given
Offering Date. As to the Initial Offering, the time for filing an enrollment
form and commencing participation for individuals who are Eligible Employees on
the Offering Date for the Initial Offering shall be determined by the Company
and communicated to such Eligible Employees. A participant may not make
additional contributions under the Plan.

     (b) Generally, once during any Purchase Period, a participant may increase
or reduce (including to zero) his or her participation level as of the following
February 1 or September 1, except that no change may be made during the ten (10)
days immediately preceding each Purchase Date (or such shorter period of time
determined by the Company and communicated to participants). Any such change in
participation shall be made by delivering a notice to the Company or a
designated Affiliate in such form and at such time as the Company may provide.
Notwithstanding the foregoing, a participant may reduce (including to zero) his
or her participation level once (and only once) during any Purchase Period,
except that no change may be made during the ten (10) days immediately preceding
each Purchase Date (or such shorter period of time determined by the Company and
communicated to participants). Such change shall become effective as soon as
administratively practicable. In addition, a participant may withdraw from an
Offering and receive his or her accumulated payroll deductions from the Offering
(reduced to the extent, if any, such deductions have been used to acquire Common
Stock for the Participant on any prior Purchase Dates), without interest, at any
time prior to the end of the Offering, excluding the ten (10) day period
immediately preceding a Purchase Date (or such shorter period of time determined
by the Company and communicated to participants), by delivering a withdrawal
notice to the Company or designated Affiliate in such form as the Company
provides. A participant who has withdrawn from an Offering shall not again
participate in such Offering but may participate in subsequent Offerings under
the Plan by submitting a new participation agreement in accordance with the
terms thereof.

6.   PURCHASES.

     Subject to the limitations contained herein, on each Purchase Date, each
participant's accumulated payroll deductions (without any increase for interest)
shall be applied to the purchase of whole shares of Common Stock, up to the
maximum number of shares permitted under the Plan and the Offering. "Purchase
Date" shall be defined as [July 31, 2001, and each January 31 and July 31],
thereafter. If a Purchase Date falls on a day during which the Common Stock is
not actively traded then the Purchase Date shall be the nearest prior day on
which the Common Stock is actively traded. On a Purchase Date, each
participant's purchases will first be made under the Offering, for which
purchases are made on such date, that results in stock being

                                       3.

<PAGE>

purchased for such participant at the lowest price under all Offerings in which
such participant then has been granted rights and under which stock is purchased
on such Purchase Date.

7.   NOTICES.

     Any notices or agreements provided for in the Offering or the Plan shall be
given in writing, in a form provided by the Company and, unless specifically
provided for in the Plan or this Offering, shall be deemed effectively given
upon receipt or, in the case of notices and agreements delivered by the Company,
five (5) days after deposit in the United States mail, postage prepaid.

8.   EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.

     The rights granted under an Offering are subject to the approval of the
Plan by the stockholders of the Company as required for the Plan to obtain
employee stock purchase plan treatment under Section 423 of the Code.

9.   OFFERING SUBJECT TO PLAN.

     Each Offering is subject to all the provisions of the Plan, and its
provisions are hereby made a part of the Offering, and is further subject to all
interpretations, amendments, rules and regulations that may from time to time be
promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of an Offering and those of the Plan (including
interpretations, amendments, rules and regulations that may from time to time be
promulgated and adopted pursuant to the Plan), the provisions of the Plan shall
control.

                                       4.<PAGE>

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                                                    EXHIBIT 10.4

                                   ATAMESTANE
                                LICENSE AGREEMENT

<PAGE>

                             DRAFT LICENSE AGREEMENT

          This agreement ("Agreement") is made and entered into this 1st day
of February 1999 by and between SCHERING AKTIENGESELLSCHAFT, a German
corporation, with an address for purposes of this Agreement at
Berlin-Wedding, Mullerstralsse 178, Berlin, Germany ("Schering"), and
BIOMEDICINES, INC., a Delaware corporation, with an address for purposes of
the Agreement at 909 Marina Village Parkway #583, Alameda, California, United
States of America (U.S.) 94501 ("BioMedicines").

          WHEREAS, Schering is the owner of certain Patent Rights, Know-How, and
Manufacturing Process(es) as defined herein; and

          WHEREAS, Schering has the right to grant a license ("License") as set
forth herein and, moreover, has conducted limited preclinical and clinical
development of Atamestane as further defined herein; and

          WHEREAS, BioMedicines desires to establish whether the Licensed
Product as defined herein is useful in treating patients with breast cancer and,
if so, to complete the development of and to commercialise Licensed Product; and

          WHEREAS, BioMedicines desires to obtain an exclusive license in
respect of the Licensed Product in the Territory as defined herein under the
Patent Rights, Know-How, and the Manufacturing Process(es); and

          WHEREAS, Schering wishes to grant such an exclusive license to
BioMedicines subject to the Schering manufacturing and marketing option rights
and other terms hereinafter described;

          NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and other good and valuable consideration, Schering and
BioMedicines agree as follows:

1.        DEFINITIONS

          1.1       ACCOUNTING STANDARDS shall mean, for Schering, the
International Accounting Standards (so-called "IAS" accounting) as amended from
time to time and, for BioMedicines, Generally Accepted Accounting Principles
(so-called "GAAP" accounting), also as amended from time to time. The Parties
agree that if changes in GAAP or IAS after the date hereof result in
economically material differences between GAAP and IAS, the parties will attempt
to reach an equitable resolution of such differences through good faith
negotiations.

          1.2       ACTUAL MANUFACTURING COSTS shall mean the cost of producing
drug substance or drug product or Licensed Product, as the case may be,
calculated by using the manufacturer's standard accounting procedures computed
in accordance with Accounting Standards, applicable to the individual
manufacturer, and applied on a consistent basis. Such costs shall include,
without limiting the generality hereof, the fully-burdened cost of all raw
materials, labor and overhead for the synthesis, formulation, filling,
finishing, labeling, packaging, storing, testing, and quality control and
quality assurance activities. Such costs shall also include any value-

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       4.
<PAGE>

added taxes or reasonable transportation charges and any payments made to
unrelated third parties in connection with the manufacturing process or
materials used therein.

          1.3       AFFILIATE shall mean any person, corporation, partnership,
firm, joint venture or other entity which, directly or indirectly, through no
intermediary or through one or more intermediaries controls, is controlled by,
or is under common control with either BioMedicines or Schering, as the case may
be. Control is understood to mean the possession of the authority, power or
right to direct or to cause the direction of the management and/or policies and
actions of the Affiliate.

          1.4       ATAMESTANE shall mean the compounds described in Appendix A

          1.5       CMC DEVELOPMENT shall mean those activities associated with
the development of a process or processes for the manufacture of Atamestane
and/or Licensed Product, including but not limited to development of chemistry,
manufacturing and controls ("CMC") of Licensed Product (as defined herein),
including but not necessarily limited to the synthesis, formulation, filling,
finishing, labeling, packaging, storing, testing, and quality control and
quality assurance activities, completion of documentation, and compilation of
regulatory dossiers, and the like, where such activities are understood to be
necessary or desirable to facilitate the registration and approval of Licensed
Product in the Territory (as defined herein). CMC Development also includes
transfer of manufacturing processes to and validation at the manufacturing sites
as a pre-requisite for a successful Pre-approval inspection.

          1.6       CMC COSTS shall mean those fully-burdened costs incurred
either by Schering, by BioMedicines, by an Affiliate or by a third party, and
accounted for in accordance with the applicable Accounting Standards, in
carrying out CMC Development activities according to the CMC Plan (as defined
herein) and in accordance with this Agreement. Where Schering carries out
Manufacturing Improvements at BioMedicines' request, the costs of such
Manufacturing Improvements shall also constitute CMC Costs. Costs included under
Actual Manufacturing Costs shall in no event constitute CMC costs.

          1.7       CMC PLAN shall mean that plan jointly developed and jointly
approved by Schering and BioMedicines, and related specifically to CMC
Development matters, for the specific purpose of successfully developing,
registering and commercialising Licensed Product and shall also be understood to
mean a plan whose execution is overseen by the Schering-BioMedicines Joint
Development Committee.

          1.8       DEVELOPMENT shall mean all activities other than CMC
Development activities understood to be necessary or desirable to facilitate the
registration and approval of Licensed Product in the Territory and shall
include, without limiting the generality thereof: preclinical testing (such as
pharmacology, pharmacokinetics, absorption/distribution/metabolism/excretion,
toxicity or toxicology, or the like); clinical testing (such as design,
execution, data collection and analysis); technical, advisory, third-party
vendor support, and all related internal or external legal and regulatory
affairs activities.

          1.9       DEVELOPMENT COSTS shall mean those fully burdened costs
incurred either by Schering, by BioMedicines, by an Affiliate or by a third
party, and accounted for in accordance

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       5.
<PAGE>

with applicable Accounting Standards, in carrying out Development activities
according to the Development Plan (as defined herein).

          1.10      DEVELOPMENT PLAN shall mean that plan jointly developed by
Schering and BioMedicines, and specifically related to all Development
activities other than CMC Development activities, for the specific purpose of
successfully developing, registering and commercialising Licensed Product and
shall also be understood to mean a plan whose execution is overseen by the
Schering-BioMedicines Joint Development Committee (as defined herein).

          1.11      EFFECTIVE DATE shall mean the date of execution of the
Agreement as shown above.

          1.12      FIELD shall mean the treatment of humans for breast cancer.

          1.13      GOOD MANUFACTURING PRACTICES shall mean compliance with the
most stringent of:

                    a)        the regulatory requirements for current good
manufacturing practices ("GMP") promulgated by the United States Food and
Drug Administration ("FDA") under the United States Federal Food and Drug and
Cosmetic Act, as amended, 21 C.F.R. Section 210 et seq and 21 C.F.R. Sections
600-610, as now applicable, or any manufacturing standards set after the
Effective Date by the FDA; or

                    b)        the regulatory requirements for good manufacturing
practices as established in the European Union by applicable regulations,
directives, or decisions of the European Union (as now published in the Official
Journal of the European Community or its successor publication); or

                    c)        the regulatory requirements directed specifically
to Schering or Schering Affiliates by appropriate regulatory authorities.

          To these ends, "most stringent" shall be understood to mean those GMP
standards as mutually agreed and documented by Schering and BioMedicines during
the course of development and commercialisation with particular reference to
duties described in Sections 3.2 and 4.1 herein.

          1.14      JOINT DEVELOPMENT COMMITTEE (OR "JDC") shall mean that group
of individuals designated by Schering and by BioMedicines whose principal duty
shall be the collaborative oversight of the Development and CMC Development of
Licensed Product and whose other duties are described further herein. The
principle of good faith negotiations shall govern the activities of the JDC in
all matters between Schering and BioMedicines.

          1.15      KNOW-HOW shall mean:

                    a)        any and all technical data or non-technical
information, expertise, knowledge and the like which relates to the Licensed
Product, Patent Rights, or to the Manufacturing Process(es) and which is owned
or licensed by Schering or an Affiliate or which

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       6.
<PAGE>

becomes owned or becomes licensed by Schering or an Affiliate and which
Schering or an Affiliate is now or subsequently authorized to license or
transfer to a third party;

                    b)        data or information of the kind described in (a)
above which is recorded, or which could be or could have been recorded, in any
form including but not limited to on paper or using electronic or magnetic
media;

                    c)        all pharmacological, toxicological, formulation,
assay, chemical, manufacturing, control, clinical, regulatory and marketing or
sales-oriented information; of the kind described in (a) above;

                    d)        any other data, information, knowledge, or designs
used, or specifically useful, for the development or commercialisation of the
Licensed Product, and which are owned or licensed by Schering or an Affiliate,
or which become owned or become licensed by Schering or an Affiliate, and which
Schering or an Affiliate is authorized or becomes authorized to license or
transfer to a third party.

          1.16      LICENSED PRODUCT(S) shall mean one or more pharmaceutical
products containing Atamestane as active ingredient for use in the Field.

         1.17 MANUFACTURING IMPROVEMENTS shall mean those activities other than
CMC Development activities that are jointly approved by both Schering and
BioMedicines and for which the principal purpose of such other activities is to
improve the cost, efficiency, quality or quantity of manufacturing of Licensed
Product.

          1.18      MANUFACTURING PROCESS(ES) shall mean:

                    a)        any process for manufacturing Licensed Product
which is covered in whole or in part by any claim contained in the Patent Rights
(as defined herein) or by manufacturing Know-How;

                    b)        any information or description of any process for
manufacturing the Licensed Product contained in a Drug Master File or similar
document; or

                    c)        any modification or improvement to such processes
suggested, developed or introduced by Schering, BioMedicines or Affiliates
thereof during the course of either development or commercialisation of the
Licensed Product.

          1.19      NET SALES shall mean the amount invoiced by Schering or
BioMedicines or by and Affiliate or Sublicensee (as described further herein),
as the case may be, for sales of Licensed Product to an unaffiliated third party
but less deductions for:

                    a)        reasonable shipping or freight charges prepaid or
allowed and other reasonable charges, such as insurance, relating thereto;

                    b)        sales or excise taxes or customs duties paid by
the selling party;

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       7.
<PAGE>

                    c)        any other non-refundable governmental charges
imposed upon the sale of Licensed Product;

                    d)        distributor's fees, rebates, non-cash rebates or
allowances actually granted, allowed or incurred, and not otherwise in violation
of local or international laws;

                    e)        quantity discounts, cash discounts or chargebacks
actually granted, allowed or incurred in the ordinary course of business in
connection with the sale of Licensed Product;

                    f)        allowances or credits to customers, but not in
excess of the selling price of Licensed Product, on account of governmental
requirements, rejection of Licensed Product for good reason, recalls made
because of Licensed Product becoming outdated, or for the value of returned
trade goods of Licensed Product; and

                    g)        an allowance for bad debts not to exceed one-half
percent (0.5%) of Net Sales, and otherwise in accordance with the selling
party's Accounting Standards and otherwise consistently applied within and
across all Affiliates or operating business units or divisions, such allowance
or any portion thereof to be refunded in the next quarter if such bad debts are
less than one-half percent (0.5%).

          For purposes of calculating Net Sales, Schering and BioMedicines also
recognize that:

                    1)        customers may include persons or entities in the
chain of commerce (such as so-called "Health Maintenance Organizations" in the
United States, for example) that enter into contractual and binding agreements
with the selling party to establish and set a price for Licensed Product even
though

                              (a)       title to Licensed Product does not
actually pass directly from selling party to such customers;

                              (b)       payment for the Licensed Product is not
made by such customers; and that

                    2)        in such cases, chargebacks paid by the selling
party to or through a third party such as a wholesale distributor can then be
deducted by the selling party from gross revenues in order to calculate the
selling party's Net Sales.

          In addition, the definition of Net Sales may be amended for sales
within the United States by the mutual consent of both Schering and BioMedicines
if Schering exercises its co-promotion option per Section 6.2 herein.

          1.20      PATENT RIGHTS shall mean all of the following intellectual
property:

                    a)        the patents and patent applications listed in
Appendix A;

                    b)        the patents issued from the applications listed in
Appendix A and from divisionals and continuations of these applications;

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       8.
<PAGE>

                    c)        any reissue or extension of patents in Appendix A;
and

                    d)        any improvement patent dominated by the claims of
the Patent Rights

                    e)        any patents, divisionals, continuations, reissues,
extensions or improvement patents subsequently added to Appendix A as further
described herein.

          1.21      PHASE III STUDY(-IES) shall mean the clinical study or
studies as reasonably judged by BioMedicines to be adequate by the results of a
meeting (or other communication) with the United States Food and Drug
Administration (or other similar regulatory authority) to support the filing of
a marketing application for the Licensed Product.

          1.22      REGISTRATION BATCH(ES) shall mean that batch or batches of
Atamestane drug substance and/or drug product made under GMP conditions that is
or are necessary to support the filing of a marketing application or a new drug
application for Licensed Product.

          1.23      SUBLICENSEE shall mean an unaffiliated third party to whom
Schering or BioMedicines grants a sub-license of any rights licensed to Schering
or BioMedicines respectively hereunder, in accordance with the terms of this
Agreement.

          1.24      TERRITORY. The territory ("Territory") shall be worldwide.
In addition, territorial rights as described in the Agreement shall not be
abridged because of a change in the official name of a country or principality
or the like or a change in geographic boundaries associated with same.

2.        GRANT

          2.1       LICENSE. Schering hereby grants to BioMedicines, and
BioMedicines hereby accepts from Schering, under the Patent Rights, Know-How and
Manufacturing Process(es) an exclusive right and license (the "License"), even
as to Schering (except as otherwise provided herein), to use, develop, market,
and sell Licensed Product in the Territory for one or more uses within the
Field, in accordance with the terms of this Agreement.

          2.2       RIGHT TO SUBLICENSE. Schering also hereby grants to
BioMedicines and BioMedicines hereby accepts from Schering the right to
sublicense Licensed Product to the extent and in accordance with the conditions
specified in other sections of this Agreement.

3.        DATA AND DUE DILIGENCE

          3.1       ACCESS TO SCHERING KNOW-HOW

                    3.1.1     KNOW-HOW. Schering will make available to
BioMedicines Know-How and Manufacturing Process information in Schering's
possession on the Effective Date and any modifications thereof or improvements
thereto which come into Schering's possession (with the right to transfer or
sublicense) after the Effective Date and that are necessary or desirable for
optimal Licensed Product development and registration. To achieve these goals,
Schering shall make available such Know-How, data, information and other
documents as may be reasonably requested by BioMedicines from time to time
during the term of the Agreement and shall make

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       9.
<PAGE>

available certain quantities of Atamestane and Licensed Product as provided in
Sections 4.4 and 4.5 below or otherwise as agreed between the Parties. Such
Know-How, data, information, documents and quantities of Atamestane will
ordinarily be made available as soon as reasonably possible, but in any event
within sixty (60) days of such reasonable request by BioMedicines unless
prevented by circumstances beyond the reasonable control of Schering.
BioMedicines may use such information, Know-How, data and documents solely for
the purposes of developing, manufacturing and commercializing Licensed Product
in the Territory in accordance with the terms of this Agreement.

                    Documents and data associated with any United States
Investigational New Drug application (IND) associated with manufacturing,
testing, safety or potential efficacy of Atamestane for one or more uses in the
Field in the possession of Schering or Affiliates or which come into the
possession of Schering or an Affiliate from time to time and which Schering or
an Affiliate is free to transfer to a third party will be transferred in a
timely manner to BioMedicines.

                    BioMedicines will update, amend, file or re-file, and/or
transfer the IND only between Divisions with the Food and Drug Administration
within the United States (or similar document outside the United States) in
order to facilitate development and registration of Licensed Product, but
BioMedicines shall not be entitled to otherwise transfer the IND (or similar
document outside the United States) without the prior written consent of
Schering.

                    Both Schering and BioMedicines acknowledge and agree that
all existing Know-How, in whatever form (paper, electronic or other) in
Schering's possession will be required to be made available in order to update
and to amend the existing IND, particularly with regard to preclinical and
clinical safety data.

                    3.1.2     SCHERING EXPERTISE. Schering will also provide
further expertise, and otherwise free of charge (and independent of that
described in Sections 5.4 and 5.6), on a reasonable basis, and if requested by
BioMedicines, so long as the provision of this service does not require a
significant capacity of the respective Schering employees. In this regard, it is
expected that "significant capacity" will not exceed in aggregate one-half
person-year unless otherwise approved by Schering.

                    3.1.3     REQUESTS BY REGULATORY AUTHORITIES. Both Schering
and BioMedicines acknowledge that regulatory authorities may request information
during the term of this Agreement. Should this occur, Schering and BioMedicines
agree to discuss in good faith and to agree on the actions to be taken by
BioMedicines and/or by Schering or by a Schering Affiliate in order to address
such requests in a timely and successful manner but subject always to the
limitation on Schering's obligation set out in Section 3.1.2 above.

                    3.1.4     TRANSLATION. Where English-language documents or
summaries exist, such materials will be provided to BioMedicines. Related
documents in German or other languages will also be provided. However, the cost
for translating documents from German or other languages into English will be
the responsibility of and will be paid for by BioMedicines. Where new documents
can be produced in either language by Schering, by an Affiliate, Sublicensee, or
by a third party vendor of services related to CMC Development or

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      10.
<PAGE>

Development, such documents will be produced in English unless otherwise
requested by BioMedicines.

          3.2       JOINT DEVELOPMENT COMMITTEE

                    3.2.1     PLANNING. Schering and BioMedicines agree to form
a joint development committee ("Joint Development Committee" or "JDC" as
previously noted). The purpose of the JDC will be to review, discuss in good
faith, and to decide all Development activities regarding Atamestane and
Licensed Product. Schering and BioMedicines agree to make available information
regarding developmental activities sufficient for each party to understand the
full scope of pre- or post-marketing clinical testing of Atamestane and Licensed
Product, whether conducted by Schering, by BioMedicines, or by an Affiliate or
agent of either party as well as any post-marketing surveillance data or
information that is reportable by regulation to any regulatory body.
Representation for Schering will be at the discretion of Schering.
Representation for BioMedicines will be at the discretion of BioMedicines. The
JDC will meet at times and places as reasonably agreed by the members of the JDC
but at least twice per calendar year. Written minutes of the meetings will be
agreed between the Parties.

                    3.2.2     DISAGREEMENTS REGARDING DEVELOPMENT OR CMC
DEVELOPMENT. In the event that the members of the JDC cannot reach a consensus
on matters related to Development or CMC Development, but excluding matters
related to human safety, which matters are addressed below, and subject always
to Section 3.2.3 below, BioMedicines will have the final responsibility for
deciding and carrying out Development and CMC Development activities in
accordance with its good business judgment and otherwise consistent with the
requirements of the Agreement. Both Schering and BioMedicines agree, however,
that both parties will endeavor to agree and to take into account the
recommendations and wishes of both parties.

                    3.2.3     PRELIMINARY CLINICAL DEVELOPMENT PLAN. The
essential features of the proposed clinical development of Licensed Product in
the Field ("Clinical Development Plan") are described in Appendix B.
BioMedicines may not make any change to the Clinical Development Plan which
would have the effect of altering the initial indication for which the Licensed
Product is to be developed without the prior consent of Schering, such consent
not to be unreasonably withheld.

                    3.2.4     REVISED CLINICAL DEVELOPMENT PLAN. Subject to
Sections 3.2.2 and 3.2.3 above and Section 3.2.5 below, a revised Clinical
Development Plan will be developed during the course of JDC deliberations. It is
anticipated that such revision, if any, will be provided principally by
BioMedicines as soon as reasonably possible after any meeting(s) by BioMedicines
with the Food and Drug Administration ("FDA"), or with similar governmental
authority, with the agreed goal to provide said revision within eight (8) weeks
after said meeting(s).

                   Subject to Sections 3.22 and 3.2.3 above and Section 3.2.5
below, BioMedicines may further modify the Clinical Development Plan from time
to time where such modifications are, in the reasonable judgement of
BioMedicines, necessary or desirable for efficient Development of the Licensed
Product.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      11.
<PAGE>

                    3.2.5     DISAGREEMENTS REGARDING ISSUES OF HUMAN SAFETY. In
the event that the members of the JDC cannot reach a consensus on matters
related to human safety during the clinical testing of Atamestane, Schering and
BioMedicines agree to assemble as rapidly as reasonably possible an
appropriately constituted panel of experts to review the relevant data and to
make recommendations to the JDC. The JDC and panel members shall then agree upon
modifications, if any, to the Clinical Development Plan. The expenses associated
with such expert panel, if any, shall be shared equally by Schering and
BioMedicines.

                    3.2.6     REPORTING AND SCHERING REQUESTS FOR INFORMATION.
In the context of meetings of the JDC, BioMedicines will provide at least
semi-annually to Schering a suitably detailed written status report of
Development activities regarding the Licensed Product. BioMedicines may,
however, submit reports at more frequent intervals should results from
Development activities warrant, in the reasonable judgment of BioMedicines, more
frequent reporting. Schering may make reasonable requests for additional
information and BioMedicines agrees to provide such additional information if
such information is already in the possession of BioMedicines, an Affiliate or a
Sublicensee. If such additional information is not available but becomes
available subsequently through execution of the Development Plan, the additional
information will be provided to Schering as soon as reasonably possible after
the information does become available. BioMedicines will supply Schering
promptly with copies of all new final clinical trial reports and with copies of
all material submissions to the FDA or other similar regulatory authorities. (In
this regard, "material submissions" are understood to include, without limiting
the generality hereof, Investigational New Drug applications (IND's),
significant amendments thereto, periodic reports required by regulation or
otherwise by regulatory authorities, all reports of serious safety events
whether in animals or in humans, and any special safety analyses or other
special or one-time safety reports requested by or otherwise provided to the
FDA.)

                    3.2.7     REPORTING AND BIOMEDICINES REQUESTS FOR
INFORMATION. In the context of meetings of the JDC, Schering will likewise
provide information to BioMedicines that is substantially similar to that
described in the preceding Section 3.2.6 and which relates to Atamestane.

          3.3       EXERCISE OF DILIGENCE BY BIOMEDICINES. Except as otherwise
provided for herein, BioMedicines will conduct its Development activities with
Licensed Product at its own expense and consistent with the Clinical Development
Plan or other agreements between Schering and BioMedicines made in the context
of JDC deliberations and recorded in writing and signed by both Parties.
BioMedicines will proceed with due diligence, consistent with good business
judgment, with those Development activities judged by BioMedicines as desirable
or necessary to achieve registration, at least for the United States of America
and/or within the European Union, including the activities described in the
Clinical Development Plan, without limiting the generality of the foregoing, as
soon as reasonably possible.

          It is understood, however, that not all of the countries in the
Territory will necessarily be subject to Development activities during the
course of pursuing the first marketing approval.

          3.4       NEED FOR APPROVAL OF REGULATORY AUTHORITIES. Schering
acknowledges that approval by or the consent of regulatory authorities may be
necessary prior to the

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      12.
<PAGE>

commencement of any clinical development activities by BioMedicines, Affiliates
or Sublicensees. Both Schering and BioMedicines acknowledge that there is no
guarantee that such approval or consent will be granted. Accordingly, while
development plans, protocols, protocol outlines, and the like will be provided
in good faith to Schering by BioMedicines, such plans or proposals must be
viewed as subject to modification subject always to Sections 3.2.2 and 3.2.3 and
3.2.5 above. It is expected, however, that BioMedicines will make reasonable and
good faith efforts to provide development plans, protocols, protocol outlines,
and the like that could reasonably be expected to be approved by the regulatory
authorities.

          3.5       DEVELOPMENT COSTS. Development Costs will be paid by
BioMedicines unless otherwise agreed by both Schering and BioMedicines.
Development Costs will be reported periodically during regular JDC meetings, and
at any rate in the semi-annual reports to be provided by BioMedicines to
Schering pursuant to Section 3.2.6 above

4.        CMC DEVELOPMENT

          4.1       PLANNING. Schering and BioMedicines have agreed upon a
preliminary CMC development plan ("Preliminary CMC Development Plan," Appendix
C) which sets out the next steps to be taken in CMC Development in order to
continue Development with the goal of obtaining approval of the Licensed Product
in the Territory.

          A more detailed CMC plan ("CMC Plan") will be devised jointly by
Schering and BioMedicines in the context of the JDC within four (4) months after
the Effective Date. The purpose of the CMC Plan will be to identify those steps
necessary or desirable for subsequent Development and necessary or desirable to
obtain approval of the Licensed Product in the Territory. The CMC Plan may be
modified from time to time as agreed by the JDC as further described above.

          4.2       IMPROVEMENTS TO MANUFACTURING. Schering and BioMedicines
also agree to discuss possible improvements to manufacturing and further agree
to incorporate plans, if judged appropriate, for such possible improvements into
the CMC Plan referred to in Section 4.1 above. In the event that BioMedicines
wishes Schering to develop or implement a different or improved synthesis for
the manufacture of the Licensed Product and Schering agrees, all activities
related to the development, scale-up, and validation of an improved synthesis
would be conducted at the expense of BioMedicines, and would constitute CMC
Development and the costs would be included as a part of CMC Costs.

          4.3       NEW PATENTS RELATED TO MANUFACTURING. Any new patent
applications resulting from the activities referred to in Section 4.2 above will
be filed by Schering and any patents that issue will be jointly owned by
Schering and BioMedicines. Such patent applications and patents will be
maintained in the same way as Patent Rights pursuant to Section 9 of this
Agreement.

          4.4       EXISTING DRUG SUBSTANCE. Schering will utilise up to three
hundred twenty (320) kilograms (kg) of micronized Atamestane (currently suitable
for final formulation and packaging) and up to three hundred seventy (370) kg of
pure, unmicronized Atamestane (which will require further processing) to produce
Atamestane drug product for use in clinical testing (otherwise known within
Schering as a "Clinical Service Form") of the drug. Such drug supplies

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      13.
<PAGE>

may not be sold by BioMedicines and will be utilised by BioMedicines only for
preclinical and clinical studies. There will be no charge to BioMedicines for
the provision of this maximum of six hundred ninety kilograms (690 kg)
Atamestane drug substance itself. However, any reasonable costs incurred by
Schering in re-testing or releasing Atamestane drug substance, and any costs of
any further micronization required, will constitute CMC Costs to be reimbursed
by BioMedicines in accordance with Section 4.7 below. If BioMedicines requires
further quantities of Atamestane drug substance Schering will use all reasonable
efforts to produce such further quantities and the terms of this Section 4.4
will apply.

          4.5       INITIAL DRUG PRODUCT. Using the initial drug substance
provided by Schering pursuant to Section 4.4 above, Schering or a Schering
Affiliate will also supply BioMedicines, as and when reasonably requested by
BioMedicines and where amounts and timing are agreed upon in the JDC but subject
always to a notice period of at least 6 months, with tested, released and
packaged one hundred (100) mg [*] produced in accordance with the current
manufacturing process in use at the Effective Date at Schering. If Schering or a
Schering Affiliate is unable or unwilling to produce such Initial Drug Product,
Schering may sub-contract the production of such Initial Drug Product to a third
party subject to the consent of BioMedicines such consent not to be unreasonably
withheld. {In this case, "100 mg" is understood to be the amount of active
Atamestane drug substance in the [*] exclusive of excipients.} In the event that
Schering is manufacturing initial drug product, costs for manufacturing these
[*] from drug substance will be the Actual Manufacturing Costs to Schering and
will be paid by BioMedicines in accordance with Section 4.7 below Such costs are
subject to verification according to the principles of Section 8.10 of this
Agreement.

          In the event that Schering does not, within the notice period referred
to in the preceding paragraph, elect to manufacture or have manufactured the
initial drug product required by BioMedicines, BioMedicines may obtain such
initial drug product from a third party subject to Schering's consent, such
consent not to be unreasonably withheld.

          In the event that such a third party is manufacturing initial drug
product for BioMedicines, the terms of the agreement governing the third party
activities will be the subject of joint approval by Schering and BioMedicines.
The costs related to said jointly approved third party sub-contractor activities
will be paid by BioMedicines and will be included in CMC Costs.

          Schering and BioMedicines also agree that periodic on-site monitoring
of the activities of the third party sub-contractor by BioMedicines or a
designated BioMedicines representative (with or without a Schering
representative at the discretion of Schering) will be accommodated in all
instances.

          4.6       COSTS OF CMC DEVELOPMENT COSTS Schering agrees that the
costs of CMC Development, where such costs are within the reasonable control of
Schering, will be the minimum reasonably necessary to accomplish the CMC Plan
and related Manufacturing Plan. Both Schering and BioMedicines acknowledge,
however, that certain developmental expenditures related to changes in
manufacturing scale, from pilot plant to commercial plant, will be necessary.
CMC Development Costs as related specifically to Licensed Product Development
and Approval shall be paid by BioMedicines and shall also be reported
periodically during the course of JDC meetings.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      14.
<PAGE>

          4.7       REIMBURSEMENT OF SCHERING. Schering shall invoice
BioMedicines on a monthly basis for CMC Costs incurred by Schering in the month
preceding the month of invoice. Such CMC Costs will be payable by BioMedicines
within 60 (sixty) days of the end of the month in which the invoice is sent.
This procedure will also apply to Actual Manufacturing Costs incurred by
Schering and payable by BioMedicines prior to the date of exercise by Schering
of its manufacturing option pursuant to Section 5 below

5.        SCHERING MANUFACTURING OPTION

          In addition to the rights and obligations of Schering in respect of
initial drug substance and drug product described in Section 4 above. Schering
will have the option to manufacture or have manufactured all of BioMedicines'
requirements of drug substance and drug product for Licensed Product as
described below.

          5.1       DRUG SUBSTANCE OPTION. Schering will have the option to
manufacture or have manufactured amounts of Licensed Product drug substance
necessary or useful in the development and/or commercialisation of Licensed
Product, such option to be exercisable within one (1) month after Schering has
been notified in writing of a decision by BioMedicines to manufacture the first
Registration Batch of drug substance for the Licensed Product, such decision to
be consistent with the Development Plan and the CMC Plan and such notification
to be at least six (6) months in advance of the reasonably projected start date
for such manufacture the avoidance of doubt, it is hereby expressly agreed. This
option applies to drug substance required for manufacture of the first
Registration Batch and for subsequent development and commercialization of
Licensed Product. The manufacture of drug substance for use in development prior
to the manufacture of the first Registration Batch is covered by the terms of
Section 4 of this Agreement.

          5.2       DRUG PRODUCT OPTION. Schering will have the option to
manufacture or have manufactured amounts of Licensed Product drug product
necessary or useful in the development and or commercialization of Licensed
product, such option to be exercisable within one (1) month after Schering has
been notified of a decision by BioMedicines to manufacture the first
Registration Batch of drug substance for the Licensed Product, such decision to
be consistent with the Development Plan and the CMC Plan and such notification
to be at least six (6) months in advance of the reasonably projected start date
for such manufacture. This option applies to drug product required for
manufacture of the first Registration Batch and for subsequent development and
commercialization of Licensed Product. The manufacture of drug product for use
in Development prior to the manufacture of the first Registration Batch is
covered by the terms of Section 4 of this Agreement.

                    5.2.1     PLACEBO [*]. If Schering or a Schering Affiliate
has exercised the manufacturing option for drug product pursuant to Section 5.2
above, then Schering also agrees to supply (or will obligate its Affiliate to
supply) matching placebo [*] as required to support the Development Plan.
"Matching placebo [*]" is understood to mean [*] that do not contain the active
ingredient Atamestane but are otherwise identical in size, shape and other
qualities and that contain the same excipients in approximately the same
proportions as are found in Atamestane-containing [*].

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      15.
<PAGE>

          5.3       PAYMENTS BY BIOMEDICINES TO SCHERING FOR MANUFACTURING. If
Schering exercises one or more of its manufacturing options according to
Sections 5.1 or 5.2 above, Schering will manufacture such drug substance or drug
product for BioMedicines. For drug substance or drug product supplied for
development purposes after exercise by Schering of the Manufacturing Option
BioMedicines will pay to Schering 120% of Schering's Actual Manufacturing Costs.
During commercialisation by BioMedicines, Schering may also recover additional,
administrative costs of 5% of Schering's Actual Manufacturing Costs. If a third
party, rather than Schering or a Schering Affiliate, is performing such
manufacturing services, Schering shall not be entitled to recover such
administrative costs. Such Costs are payable by BioMedicines in accordance with
Section 5.10 below and subject to verification according to the principles of
Section 8.10 of this Agreement.

          Current good faith estimates for the cost of manufacturing drug
substance by various synthetic routes and for formulating and manufacturing drug
product appear in Appendix C. Both Schering and BioMedicines acknowledge that
these estimates are made in good faith by Schering to BioMedicines on the basis
of existing information and are subject to change.

          5.4       MANUFACTURING DATA. Appropriate data regarding chemistry,
manufacturing, controls, stability, and the like, necessary or useful in
supporting development of Licensed Product will be obtained by Schering during
all manufacturing activities conducted by Schering. These data will be made
available in a timely manner to BioMedicines as required to support development,
registration and/or commercialisation of Licensed Product in accordance with the
Development Plan and the CMC Plan but will remain at all times the exclusive
property of Schering, subject, however, to the rights granted to BioMedicines
hereunder.

          5.5       SCHERING COMPLIANCE WITH GOOD MANUFACTURING PRACTICES.
Schering will conduct, or will obligate an Affiliate to conduct, all
manufacturing activities described herein in accordance with Good Manufacturing
Practices as defined in the Agreement. Appropriate documentation will be
maintained and provided to BioMedicines as required or otherwise reasonably
requested in order to facilitate development, registration, and
commercialisation of Licensed Product.

          5.6       BIOMEDICINES MANUFACTURING. Even if Schering does not
exercise its manufacturing option(s) per Sections 5.1 or 5.2 or has declined to
manufacture otherwise supply requested drug substance in support of Licensed
Product Development, Schering agrees to cooperate with, and to work in good
faith with, BioMedicines to facilitate third party manufacturing such that the
original manufacturing timelines remain reasonably intact.

          5.6.1     When Schering or an Affiliate manufactures raw materials or
intermediates used in the manufacture of Atamestane or Licensed Product such
cooperation will include, but will not be limited to, providing good faith and
fairly priced access (taking into account Schering's costs) to raw materials or
to chemical intermediates, made by Schering or by an Affiliate of Schering, that
are necessary or useful in the manufacture of Licensed Product.

          5.6.2     When Schering or an Affiliate does not manufacture useful
raw materials or intermediates used in the manufacture of Atamestane or Licensed
Product but such raw materials or intermediates are otherwise purchased or
obtained by Schering from a third party for

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      16.
<PAGE>

Schering's own use, then Schering shall use reasonable efforts to have such
materials or intermediates provided to BioMedicines at the same price as paid by
Schering ("raw materials price"). However, BioMedicines shall also pay an
additional sum to Schering which shall be an administrative fee of five percent
(5%) of said raw materials price.

                    In addition, such cooperation between Schering and
BioMedicines will include making available promptly to BioMedicines, or to a
third party(-ies) acting at the behest of BioMedicines and approved by Schering,
such approval not to be unreasonably withheld, necessary or useful manufacturing
methods and data, subject to appropriate undertakings of confidentiality by said
third party(-ies).

                    Schering also agrees to take no action that is designed to
create any impediment to manufacturing Licensed Product whether by BioMedicines
or by a third party on behalf of BioMedicines in accordance with the terms of
this Agreement. If any action by Schering or an Affiliate inadvertently creates
an impediment to such manufacture by BioMedicines or a third party, Schering and
BioMedicines agree to negotiate promptly and in good faith to endeavour to
eliminate such impediment within a reasonable period of time so as not to
prejudice ongoing manufacturing activities.

          5.7       BIOMEDICINES COMPLIANCE WITH GOOD MANUFACTURING PRACTICES.
In the event that Schering has exercised one of its marketing options as
described below and BioMedicines is responsible for manufacturing either
Atamestane drug substance or drug product, BioMedicines will conduct, or will
obligate an Affiliate or other third party vendor of such services to conduct,
all manufacturing activities described otherwise herein in accordance with the
mutually agreed Good Manufacturing Practices standards defined in the Agreement.
Appropriate documentation will be maintained and provided to Schering as
reasonably required or otherwise reasonably requested specifically in order to
facilitate development, registration, and commercialisation of Licensed Product
for use within the Field.

          5.8       NO INTENDED SURRENDER OF COMMERCIAL RIGHTS TO A THIRD PARTY.
In the event that Schering does not exercise its manufacturing option for either
drug substance or drug product BioMedicines shall be free to obtain drug
substance and/or drug product from a third party subject to Schering's prior
written consent, such consent not to be unreasonably withheld. Schering's
refusal to perform process development work related to Manufacturing
Improvements described in Section 4.2 shall not constitute a waiver of its
option to supply drug substance and/or drug product for commercial purposes.
BioMedicines shall not be entitled to sub-contract the manufacture of commercial
drug substance, or drug product, manufacturing rights to any party until such
time as Schering has waived its option(s) according to the terms of this
Agreement or the time for exercise of these options has expired per Section 5.1
or 5.2 respectively, and then only subject to appropriate confidentiality and
use restrictions. Should Schering exercise its manufacturing option for drug
substance or drug product hereunder, having declined to manufacture Initial Drug
Product pursuant to Section 4.5 above, Schering agrees to assume full financial
responsibility for the costs of resuming such manufacturing activities,
including such costs as may be incurred by BioMedicines in discontinuing
manufacturing activities, whether such activities are or have been conducted by
BioMedicines or by a third party, provided that BioMedicines agrees that such
costs, where they are under the reasonable

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      17.
<PAGE>

control of BioMedicines, will be the minimum reasonably necessary to achieve
such discontinuance.

          5.9       SCHERING MARKETING WITHOUT MANUFACTURING. If Schering has
exercised any of its marketing options as provided for in Sections 6.1 and 6.2
below and is not manufacturing Atamestane drug substance or is not manufacturing
Atamestane drug product and BioMedicines is manufacturing Atamestane drug
substance and/or drug product, then BioMedicines will supply Atamestane drug
substance and/or drug product to Schering, and Schering will pay BioMedicines at
one hundred twenty percent (120%) of BioMedicines' Actual Manufacturing Costs.
However, rather than one hundred twenty percent (120%), Schering shall be
obligated to pay BioMedicines one hundred percent (100%) of that portion of
BioMedicines' Actual Manufacturing Costs that are directly attributable to
purchases of goods or services by BioMedicines from Schering (or from a Schering
Affiliate) during the course of BioMedicines' manufacturing activities, plus a
five percent (5%) administrative fee. Such administrative fee shall be
calculated on the basis of the purchases of such goods and services by
BioMedicines from Schering. Such Costs are subject to verification according to
the principles of Section 8.10.

          5.10      REIMBURSEMENT OF ACTUAL MANUFACTURING COSTS. Schering shall
invoice BioMedicines in the month following the month in which any drug
substance or drug product has been supplied pursuant to an order from
BioMedicines. Such payments will be made by BioMedicines within 60 (sixty) days
of the end of the month in which the invoice is received by BioMedicines.

          Where Schering exercises one or both of its Manufacturing Options
pursuant to this Section 5 but does not exercise all of its Marketing Options
pursuant to Section 6 below, the parties shall, within three (3) months
following an NDA filing or equivalent agree upon procedures for forecasting,
order and supply of drug substance and/or drug product from Schering to
BioMedicines hereunder.

6.        MARKETING AND MARKETING OPTIONS

          6.1       SCHERING OPTION IN THE NON-US TERRITORY. Schering has an
option to obtain exclusive marketing rights in the Territory outside the United
States (hereinafter the "Non-US Territory"), such option to be exercisable at
any time by notice in writing prior to the expiry of ninety (90) days after
receipt by Schering of

(i) the final, audited report of the first Phase III Study carried out by
BioMedicines for the first clinical indication of the Licensed Product specified
in the Development Plan (hereinafter the "First Clinical Indication"); and

(ii) all available clinical or statistical information newly generated by
BioMedicines (including, without limitation, all raw data) Schering may
reasonably require to evaluate whether to exercise its option hereunder. The
costs of making available (but not of generating) such clinical information
shall be borne exclusively by Schering.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      18.
<PAGE>

          It is understood by both Schering and BioMedicines that the ninety day
period will only start to run at such time as Schering has received from
BioMedicines both the report referred to in (i) above and all of the information
referred to in (ii) above.

          Alternatively, Schering may, at its sole discretion, decide to forego
such rights prior to the point in time specified immediately above.

                    6.1.1     SCHERING EXERCISE OF OPTION. In the event that
Schering decides to exercise such rights in the Non-US Territory, Schering will
promptly inform BioMedicines in writing of this decision and Schering shall
thenceforth be responsible for completion and full funding of Development in the
Non-US Territory. Schering and BioMedicines agree to work diligently to complete
the registration of Licensed Product in the Non-US Territory as soon as
practicable. It is expected, however, that BioMedicines will compile the final
regulatory dossier(s) for purposes of seeking such marketing approval(s)
although Schering shall be free to assume this responsibility. Once Schering has
exercised its option hereunder, no decisions on development in the Non-US
Territory may be made without the consent of Schering.

                    In the event that Schering does exercise its option for the
Non-US Territory, then, within twelve (12) months following the first approval
to commercialise Licensed Product in the Non-US Territory, Schering shall be
obligated to inform BioMedicines in writing of Schering's intentions regarding
planned registrations in all countries in the Non-US Territory.

                    For the avoidance of doubt, it is hereby agreed that
BioMedicines' sole remedy, in the event of any failure by Schering to pursue
Development or commercialization in any country of the non-US Territory, will be
the right to convert Schering's rights from exclusive to non-exclusive pursuant
to Section 6.5.1 of this Agreement.

                    6.1.2     REPORT ON DEVELOPMENT COSTS. Within 60 days of
exercise by Schering of the Marketing Option for the Non-US Territory,
BioMedicines will provide to Schering a written report detailing:

                              (i)       all CMC Costs and Development Costs
properly incurred and paid by BioMedicines, and assignable to the Non-US
Territory pursuant to Section 6.1.4 (c) below, up to the date of exercise by
Schering of the Marketing Option for the Non-US Territory;

                              (ii)      all CMC Costs and Development Costs
properly incurred and not yet paid by BioMedicines, and assignable to the Non-US
Territory pursuant to Section 6.1.4(c) below, up to the date of exercise by
Schering of the Marketing Option for the Non-US-Territory, listing the dates on
which such incurred costs will become payable,

                              (iii)     an allocation of the CMC Costs and
Development Costs described in sub-sections (i) and (ii) above between those
costs incurred for the First Clinical Indication and all other clinical
indications, such allocation to be made in accordance with the provisions of
Section 6.1.4 below

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      19.
<PAGE>

                              (iv)      all financial and supporting data
reasonably required by Schering to verify such CMC Costs and Development Costs
which BioMedicines is required to collect in accordance with Sections 6.1.4 and
8.10 below.

                    6.1.3     PAYMENT OF DEVELOPMENT COSTS.

                              (i)       Within 60 days of receipt by Schering of
all of the information required pursuant to Section 6.1.2. above, Schering shall
pay to BioMedicines 100% of the CMC costs and Development Costs described in
Section 6.1.2 (i) above.

                              (ii)      As and when the CMC Costs and
Development Costs described in Section 6.1.2 (ii) fall due and are paid by
BioMedicines, BioMedicines shall notify Schering in writing that BioMedicines
has made such payments and Schering will reimburse 100 % of such payments to
BioMedicines in each case within 60 days of receipt of such notice.

                              (iii)     Within 60 days of grant of regulatory
approval to market the Licensed Product in a Major Market in the Non-US
Territory for the First Clinical Indication, Schering will pay to BioMedicines
an additional sum (hereinafter the "Risk Premium") equal to 50% of that part of
the CMC Costs and Development Costs paid or payable pursuant to subsections
6.1.3(i) and (ii) above which is allocated to the First Clinical Indication in
accordance with subsection 6.1.2(iii) above.

                              (iv)      Within 60 days of grant of regulatory
approval to market the Licensed Product for any clinical indication other than
the First Clinical Indication in a Major Market in the Non-US Territory,
Schering will pay to BioMedicines a Risk Premium equal to 75% of that part of
the CMC Costs and Development costs paid or payable pursuant to Sub-sections
6.1.3(i) and (ii) above which has not been allocated to the First Clinical
Indication in accordance with sub-section 6.1.2

                              (v)       All Development Costs and CMC Costs
incurred by BioMedicines after the date of exercise by Schering of its Marketing
Option in the Non-US Territory will be incurred only with the prior consent of
Schering. Such costs will be fully reimbursed by Schering (without any Risk
Premium) within 60 days of notification.

                    6.1.4 CALCULATION OF DEVELOPMENT COSTS.

                    Without prejudice to the general provisions of this
agreement the following principles will apply to the calculation of Development
Costs and CMC Costs and their reimbursement under this Section 6.

                    a)        BioMedicines will maintain a project-specific cost
accounting system maintained according to Accounting Standards and subject to
verification according to Section 8.10

                    b)        The Licensed Product project will have its own
independent cost center. The Licensed Product cost center reports will be
provided to Schering on a regular basis as part of BioMedicines' routine
reporting of Development activities as otherwise described in the

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      20.
<PAGE>

Agreement. Such cost center reports will be provided only as long as Schering
has a potential obligation to pay any sum related to BioMedicines' CMC Costs or
Development Costs or both.

                    c)        for the purposes of Section 6.1.3 above, only
one-half (50%) of CMC Costs and Development Costs (in whatever country
contractually obligated or incurred) will be assignable to the Non-US Territory,
and the remaining one half (50%) will be assignable to the United States.

                    d)        As part of the project-specific cost accounting
referred to in Section 6.1.4(a) above, BioMedicines will allocate all CMC Costs
and Development Costs incurred specifically in the Development of the Licensed
Product for the First Clinical Indication to one account and all CMC Costs and
Development Costs incurred specifically for other clinical indications will be
allocated to another account. Where CMC Costs or Development Costs have not been
incurred specifically in the development of the Licensed Product for a specific
indication, such CMC Costs and Development Costs will be allocated to the
account specified for the First Clinical Indication.

                    e)        CMC Costs and Development Costs incurred but not
yet paid by BioMedicines at the date of exercise by Schering of the Marketing
Option for the Non-US Territory may only be included in Section 6.1.2(ii) as
properly incurred costs if:

                              (i)       BioMedicines is, at the date on which
Schering exercises its option, contractually committed to paying the costs in
question; and

                              (ii)      BioMedicines has acted reasonably, and
consistently with the usual practice in the pharmaceutical industry, in
committing itself contractually in advance to such CMC Costs or Development
Costs;

                    6.1.5     SCHERING DECISION NOT TO EXERCISE ITS OPTION. If
Schering decides to forego such rights for the Non-US Territory, before the date
on which Schering's option expires Schering will promptly inform BioMedicines in
writing of such decision. If Schering has so informed BioMedicines or if the
period described in Section 6.1 above expires without exercise by Schering of
its Marketing Option and BioMedicines is in compliance with the terms of this
Agreement, then exclusive marketing rights in the Non-US Territory will pass
immediately thereafter to BioMedicines.

                    In addition, if Schering has not yet exercised its rights,
and more than ninety (90) days have passed since Schering has received the Phase
III report, then marketing rights will pass immediately thereafter to
BioMedicines.

                    In the event that Schering does forego such rights, or
marketing rights otherwise pass to BioMedicines for the portion of the Territory
referenced in this subsection, then Schering shall have no obligation to pay
BioMedicines any sums related to BioMedicines' CMC or Development Costs or Risk
Premium associated therewith referable to said portion of the Territory.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      21.
<PAGE>

          6.2       SCHERING OPTION IN THE UNITED STATES. Schering has an option
to obtain co-promotion rights in the United States, such option to be
exercisable at any time by notice in writing prior to the expiry of ninety (90)
days after receipt by Schering of

                              (i)       the final, audited report of the first
Phase (III) Study carried out by BioMedicines for the First Clinical Indication;
and

                              (ii)      all available clinical or statistical
information newly generated by BioMedicines (including, without limitation, all
raw data) Schering may reasonably require to evaluate whether to exercise its
option hereunder. The costs of making available (but not of generating) such
clinical information shall be borne exclusively by Schering.

          It is understood by both Schering and BioMedicines that the 90 day
period will only start to run at such time as Schering has received from
BioMedicines both the report referred to in (i) above and all information
referred to in (ii) above.

          Otherwise, the terms, conditions, limitations, guidelines and timing
are the same as those described in Section 6.1 above. Further duties of both
parties with regard to Schering's exercise of its co-promotion rights, and
BioMedicines rights and responsibilities, are described in Section 6.3 below.

          6.3       OTHER RIGHTS AND OBLIGATIONS.

                    6.3.1     SCHERING EXERCISES ITS RIGHTS.

                              6.3.1.1   BOTH INSIDE AND OUTSIDE THE UNITED
STATES. In the event that Schering exercises both its marketing and its
co-promotion rights as described in Sections 6.1 and 6.2 above, and unless
otherwise subsequently agreed, Schering will have the right to decide all
Development and CMC Development activities and to revise the Development Plan
and CMC Development Plan in its sole discretion. Such rights could include, for
example, the initiation of new clinical trials or the cancellation of ongoing
studies. Schering agrees, however, to assume full financial responsibility for
such decisions and such CMC Development or other Development activities.

                              6.3.1.2   EITHER INSIDE OR OUTSIDE THE UNITED
STATES BUT NOT BOTH. In the event, however, that Schering exercises its
rights in only a portion of the Territory as described herein, then Schering
and BioMedicines will negotiate in good faith subsequent development activity
and any revisions to the CMC Plan and/or to the Development Plan.

                              6.3.1.3   EXCLUSIVE UNITED STATES RIGHTS. In the
event that Schering exercises its rights with respect to the United States (with
or without any other part of the Territory), BioMedicines may also, at
BioMedicines sole option, allow Schering to exercise exclusive commercialisation
rights in the United States, in which case the rights and obligations of
BioMedicines and Schering shall be those described herein that apply when
Schering alone is marketing Licensed Product.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      22.
<PAGE>

          6.4       DEVELOPMENT AFTER EXERCISE OF AN OPTION. Should Schering
exercise one or more of its marketing options and then elect to continue any
Developmental or CMC Development activity that BioMedicines does not otherwise
approve, such Development or CMC Development activity will be conducted by and
at the sole expense of Schering. The results of such CMC Development or other
Development activities will be the sole property of Schering and may not be used
by BioMedicines for any purpose without the prior written consent of Schering.
Specifically, use of such results by BioMedicines for marketing or for
commercial purposes is forbidden unless otherwise approved by Schering.

          Should BioMedicines elect to continue any developmental activity that
Schering does not approve, such activity will be conducted at the sole expense
of BioMedicines. The results of such activities will be the sole property of
BioMedicines and may not be used by Schering for any purpose without the prior
written consent of BioMedicines. Specifically, use of such results by Schering
for marketing or commercial purposes is forbidden unless otherwise approved by
BioMedicines.

          Schering and BioMedicines further agree to provide sufficient
information to the other party regarding these and other developmental
activities to facilitate full and appropriate compliance with regulatory laws,
guidelines, and the like. However, the provision of information to the receiving
party regarding developmental activities that are not mutually and jointly
approved shall not constitute a license or permission to utilise such
information in any manner other than for purposes of regulatory reporting.

                    6.4.1     SCHERING DOES NOT EXERCISE ITS RIGHTS. If Schering
does not exercise either or both of the above marketing options as described in
Sections 6.1 and 6.2, then BioMedicines may, in its sole judgment, continue the
development, registration and commercialisation of Licensed Product in
accordance with this and other provisions of the Agreement, provided however
that if BioMedicines fails to diligently pursue development or commercialization
then Schering may convert BioMedicines' license from exclusive to non-exclusive
and may sub-license the Licensed Product to a third party with ensuing royalties
being shared 50:50 between Schering and BioMedicines.

                    In the event that Schering does not exercise its option
outside the United States, then BioMedicines shall be obligated to inform
Schering in writing of BioMedicines' intentions regarding planned registrations
in all countries of this portion of the Territory within twelve (12) months
following the first approval for marketing of Licensed Product in said portion
of the Territory.

          6.5       FAILURE TO PURSUE COMMERCIALISATION.

                    6.5.1     BY SCHERING. If Schering exercises its marketing
rights per Section 6.1, or exercises its co-promotion rights per Section 6.2,
Schering shall pursue regulatory approvals and marketing with all due diligence,
i.e. Schering shall use the same diligence as it applies to its other
proprietary products of similar potential. Schering further agrees to inform
BioMedicines on a regular basis, and in any event at least semi-annually, of the
status of achieving approvals in the countries of the Territory.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      23.
<PAGE>

                    If after exercising its rights per Section 6.1 or Section
6.2 Schering fails without reasonable cause to pursue diligently regulatory
approvals of Licensed Product in a country in the Territory, or fails to market
the Licensed Product at least one year after registration and price approval in
a country, then, at the sole discretion of BioMedicines, Schering's rights will
be converted from exclusive to non-exclusive with royalties from any sub-license
being split 50:50 between Schering and BioMedicines. Schering and BioMedicines
agree that the conversion of Schering's rights from exclusive to non-exclusive
shall be the sole remedy available to BioMedicines for any failure by Schering
to develop or commercialize the Licensed Product in any country.

                    In the event that neither Schering nor BioMedicines decides
to actively pursue registration or marketing in any country, then Schering and
BioMedicines agree to discuss promptly and to decide whether to effect, on
mutually agreeable terms, a sublicense to a third party in said country.
Royalties shall still be due to the appropriate party.

          6.6       SUBLICENSING BY BIOMEDICINES.

                    6.6.1     EXCEPT FOR THE UNITED STATES OF AMERICA. If
Schering does not exercise or otherwise waives or foregoes the option described
in Section 6.1, then BioMedicines is free to sublicense the Licensed Product in
the Territory outside the United States of America, with the consent of
Schering, such consent not to be unreasonably denied. Such sub-license will not
relieve BioMedicines of its obligations to Schering under this Agreement.

                    6.6.2     FOR THE UNITED STATES OF AMERICA. If Schering does
not exercise or otherwise waives or foregoes the option described in Section
6.2, then BioMedicines is free to sublicense the Licensed Product in the United
States of America, with the consent of Schering, such consent not to be
unreasonably withheld. Such sub-license will not relieve BioMedicines of its
obligations to Schering under this Agreement

          6.7       SUB-LICENSING BY SCHERING. Schering shall be free to
sub-license any rights granted to it by BioMedicines under this Agreement but
such sub-license will not relieve Schering of its obligations to BioMedicines
under this Agreement.

7.        POTENTIAL COMPETITION FOR LICENSED PRODUCT

          7.1       INTERESTS OF BOTH PARTIES. Schering acknowledges that
BioMedicines has the exclusive right to Licensed Product within the Field
subject to the terms of this Agreement. BioMedicines acknowledges that Schering
has all rights to Atamestane and Licensed Product outside the Field Schering
further acknowledges, however, that Schering is obligated, in connection with
the development or commercialisation of any product containing Atamestane for
use outside the Field, to take such appropriate and active measures as are
commercially reasonable and permissible under law and regulatory obligations to
discourage or prevent the use of such product within the Field and to discourage
or prevent the sale of such product for use within the Field.

          7.2       PROTECTION OF INTERESTS. To protect these interests,
Schering and BioMedicines agree that, as long as BioMedicines is developing or
commercialising Licensed Product:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      24.
<PAGE>

                    a)        Schering will promptly inform BioMedicines of any
potential or planned product development activity for a use or uses outside the
Field and, unless Schering itself intends to develop exclusively such potential
product, will offer first BioMedicines an opportunity to negotiate rights to
develop and commercialise the potential product before offering such rights to
any other party.

                    b)        If BioMedicines declines to proceed with
development of said potential product(s) outside the Field, and Schering, an
Affiliate or other third party partner or licensee of Schering does so proceed,
then Schering agrees, to the extent commercially reasonable and to the extent
permissible under law and regulatory obligations, to obligate the appropriate
party to take every reasonable step to discourage or prevent "off-label" use
within the Field by, at a minimum:

                                        1)        utilising a formulation
different than any currently described in Know-How or otherwise currently known
to Schering or Schering Affiliate(s);

                                        2)        utilising a strength that is
different than that currently described in Know-How or otherwise then known to
Schering or Schering Affiliate(s); and

                                        3)        taking other reasonable such
steps as may be necessary to minimise the potential for "off-label" use within
the Field.

                    c)        if a new product containing Atamestane or
containing any substance covered by the claims of Appendix A is introduced by
Schering, a Schering Affiliate or by a third party and is used within the Field
and competes with a Licensed Product developed by BioMedicines, then Schering
and BioMedicines will negotiate in good faith and agree on the additional
compensation (if any) to be paid to BioMedicines, in the event that BioMedicines
has suffered loss or unrealized gains thereby.

8.       INITIAL FEE, MILESTONE AND ROYALTY PAYMENTS

          8.1       CURRENCY. All payments shall be made in United States
dollars ($). Any currency conversions shall be calculated from end-of-quarter
average data reported by the Deutsche Bank, Frankfurt am Main, the "Frankfurt
Fixing" or its successor. The average will be calculated by summing the exchange
rates for the final business day of each of the three (3) months in the
applicable calendar quarter and dividing by three (3). Any currency conversion
ratios will be extended to three (3) places after the comma (German numeric
system) or, equivalently, to three (3) places after the decimal point (American
numeric system).

                    8.1.1     FORM OF PAYMENTS. All payments for any purpose by
either Schering or BioMedicines ("Payer") to the other party (a "Recipient")
will be made by the Payer using a wire transfer of funds into an account
designated by the Recipient.

          8.2       INITIAL FEE. Within sixty (60) days after the Effective
Date, BioMedicines shall pay to Schering the sum of [*].

          8.3       MILESTONES. BioMedicines shall also pay to Schering the
following sums within sixty (60) days of:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      25.
<PAGE>

a) the successful completion of the first Phase III Study in the Field: [ * ]
where "successful completion" is understood to mean the successful achievement
of valid clinical endpoints per the Clinical Development Plan.;

b) first filing of an application with a regulatory authority for marketing
approval for either the European Union or for the United States: [ * ];

c) first grant of marketing approval either for the European Union or for the
United States: [ * ];

d) on first grant of marketing approval for the European Union but only if
Schering has decided not to exercise its marketing rights per Section 6.1 an
additional [ * ];

e) on first grant of approval for the United States but only if Schering has
decided not to exercise its co-promotion rights per Section 6.2 an additional [
* ].

          Therefore, the maximal total of milestone payments per this section
and the initial fee of the preceding section is [ * ].

          8.4       ROYALTY PAYMENTS AND OTHER POTENTIAL AGREEMENTS.

                    a)        If Schering exercises its marketing rights per
Section 6.1 then Schering will pay BioMedicines a royalty on Net Sales by
Schering, Affiliates or Sublicensees as follows:

                              1)        a baseline royalty of [*] percent [*] on
all annual Net Sales

                              2)        a supplemental royalty of [*] percent
[*] only on that portion of aggregate annual Net Sales in the Non-US Territory
in the range of U.S. [*] dollars [*] to U.S. [*] dollars [*]

                              3)        a supplemental royalty of [*] percent
[*] only on that portion of aggregate annual Net Sales in the Non-US Territory
in excess of U.S. [*] dollars [*]

                    b)        If Schering exercises its co-promotion rights per
Section 6.2, then Schering (or a Schering Affiliate as the case may be) and
BioMedicines shall negotiate in good faith, and to execute as soon as
practicable, a new co-promotion contract. This co-promotion agreement will
follow the principles of cost- and profit-sharing. (50:50) BioMedicines may not
sub-contract the performance of co-promotion to a third party without Schering's
prior written consent, such consent not to be unreasonably withheld. Schering
will be the "lead partner" in any co-promotion agreement and, therefore, will be
responsible for booking sales.

                    C)        In case Schering does not exercise its marketing
rights per Section 6.1 or its co-promotion rights per Section 6.2, and the
Licensed Product has been commercialised in the respective Territory, then
BioMedicines or a BioMedicines Sublicensee or Affiliate, as applicable, will pay
Schering a royalty on Net Sales or by as follows:

                              1)        [*] percent [*] on aggregate Net Sales
of less than U.S. [*] dollars [*];

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      26.
<PAGE>

                              2)        [*] percent [*] on that portion of
aggregate Net Sales, in the territory where BioMedicines is commercializing
Licensed Product between U.S. [*] dollars [*];

                              3)        [*] percent [*] on that portion of
aggregate Net Sales in the territory where BioMedicines is commercializing
Licensed Product in excess of U.S. [*] dollars [*].

          8.5       POTENTIAL REDUCTION IN ROYALTIES. In the absence of patent
protection or marketing exclusivity, and in the presence of an approved generic
competitor drug, the amount of royalties described above shall be reduced by [*]
percent [*]. This means, for example, that a royalty due from one party to the
other of [*] percent [*] would be reduced to [*] percent [*].

          8.6       BIOMEDICINES REPORTS REGARDING ROYALTIES. BioMedicines
agrees that BioMedicines will continue to be responsible for and will be
obligated to deliver to Schering periodic financial reports. These reports will
be consistent with generally accepted accounting principles and in a format
consistent with Schering's internal accounting policies. The reports will be
delivered to Schering within sixty (60) days after the close of each calendar
quarter and will show separately for each Licensed Product:

                    a)        Net Sales, categorised by units sold and by total
revenue

                    b)        details of the quantities sold in each country;
and

                    c)        royalties or other like compensation due pursuant
to the Agreement Schering agrees to make available sufficient information
regarding its internal accounting policies to facilitate preparation of the
required reports.

          8.7       SCHERING REPORTS REGARDING ROYALTIES. Schering agrees that
any party marketing Licensed Product in the Territory on behalf of Schering
(also "Selling Party" for purposes of this Section 8) will be responsible for
and will be obligated to deliver to BioMedicines periodic financial reports.
These reports will be consistent with Accounting Standards and in a format
consistent with BioMedicines' internal accounting policies. The reports will be
delivered to BioMedicines within sixty (60) days after the close of each
calendar quarter and will show separately for each Licensed Product:

                    a)        Net Sales, categorised by units sold and by total
revenue

                    b)        details of the quantities sold in each country;
and

                    c)        royalties or other like compensation due pursuant
to the Agreement

          BioMedicines agrees to make available sufficient information regarding
its internal accounting policies to facilitate preparation of the required
reports.

          8.8       TIMELINESS OF PAYMENTS. Concurrently with the making of any
such financial reports as described above in either Section 8.6 or 8.7, the
Selling Party shall pay the amount due on Net Sales during the preceding
calendar quarter. If the Selling Party shall fail to make said

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      27.
<PAGE>

payment when due, such party shall have an additional five (5) business days
from the date such payment was due to cure such non-payment.

          8.9       TIMING AND DURATION OF ROYALTY PAYMENTS. Royalties shall be
paid within sixty (60) days of the end of each calendar quarter from which
royalties are due. For purposes of royalty payments, the end of the calendar
quarter shall occur in any year during the months of March, June, September, and
December.

          The duration of royalties due for sales in any country in the
Territory shall be ten years from the date of the launch of Licensed Product in
said country.

          8.10      FINANCIAL RECORDS AND VERIFICATION.

                    8.10.1    WHEN BIOMEDICINES IS SELLING LICENSED PRODUCT.
BioMedicines, or its Affiliates or Sublicensees as appropriate (a "Selling
Party"), shall keep sufficiently complete and accurate records to properly
reflect all sales and deductions from Net Sales; and to enable the amounts
payable hereunder to be determined.

                    Upon the written request of Schering, the Selling Party
shall permit an independent certified public accounting firm to verify the
accuracy of reports and amounts paid to Schering. This process of verification
may apply to either or both of the two most recent fiscal years of the Selling
Party. The accounting firm will be selected by Schering, will be of
international standing, and will be otherwise reasonably acceptable to the
Selling Party. The activities of the accounting firm will be paid for solely by
Schering except as provided below.

                    Representatives of the accounting firm will be permitted to
have reasonable access, for reasonable periods of time, to certain financial
records of the Selling Party. Such access will be limited to that reasonably
necessary for the accounting firm to verify the appropriateness of the payments
made previously to Schering. The accounting firm shall disclose in writing all
information gathered to the Selling Party. In the form of a written report, the
accounting firm shall disclose to Schering only whether or not payments made to
Schering were reasonably correct and the specific details concerning any
purported discrepancies. No other information shall be shared with Schering. The
accounting firm will provide its report simultaneously to Schering, to
BioMedicines, and to the BioMedicines Affiliate or the BioMedicines Sublicensee
as appropriate.

                    If, and only if, the accounting firm concludes that
additional royalties or other compensation are definitely owed for the audited
period, and the additional amount owed exceeds, in aggregate, three percent (3%)
of amount actually paid, then the Selling Party shall take additional actions to
remedy this underpayment. The Selling Party will then:

                    a)        pay all reasonable costs associated with the audit
that demonstrated the underpayment (or repay Schering for said audit costs, as
appropriate);

                    b)        pay the underpaid amount within thirty (30) days
of the date the accounting firm delivered the report to Schering and
BioMedicines; and

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      28.
<PAGE>

                    c)        pay interest on the underpaid amount only (The
interest rate will be the average prime rate of interest calculated from
end-of-quarter data reported by the Deutsche Bank, Frankfurt am Main, utilising
data from all quarters since the end of the audited period.)

                    Should, however, the accounting firm conclude that the
Selling Party has overpaid royalties or other compensation to Schering, then
Schering shall credit any such overpayment to BioMedicines (or otherwise to a
Selling Party as appropriate). This credit will be applied during the next
complete calendar quarter for which payments are due to Schering.

                    8.10.2    WHEN SCHERING IS SELLING LICENSED PRODUCT.
Schering, or its Affiliates or Sublicensees as appropriate (a "Selling Party"),
shall keep sufficiently complete and accurate records to properly reflect all
gross sales and deductions from Net Sales; and to enable the amounts payable
hereunder to be determined.

                    Upon the written request of BioMedicines, the Selling Party
shall permit an independent certified public accounting firm to verify the
accuracy of reports and amounts paid to BioMedicines. This process of
verification may apply to either or both of the two most recent fiscal years of
the Selling Party. The accounting firm will be selected by BioMedicines, will be
of international standing, and will be otherwise reasonably acceptable to the
Selling Party. The activities of the accounting firm will be paid for solely by
BioMedicines except as provided below.

                    Representatives of the accounting firm will be permitted to
have reasonable access, for reasonable periods of time, to certain financial
records of the Selling Party. Such access will be limited to that reasonably
necessary for the accounting firm to verify the appropriateness of the payments
made previously to BioMedicines. The accounting firm shall disclose in writing
all information gathered to the Selling Party. In the form of a written report,
the accounting firm shall disclose to BioMedicines only whether or not payments
made to BioMedicines were reasonably correct and the specific details concerning
any purported discrepancies. No other information shall be shared with
BioMedicines. The accounting firm will provide its report simultaneously to
BioMedicines, to Schering, and to the BioMedicines Affiliate or BioMedicines
Sublicensee as appropriate.

                    If, and only if, the accounting firm concludes that
additional royalties or other compensation are definitely owed for the audited
period, and the additional amount owed exceeds, in aggregate, three percent (3%)
of amount actually paid, then the Selling Party shall take additional actions to
remedy this underpayment. The Selling Party will then:

                    a)        pay all reasonable costs associated with the audit
that demonstrated the underpayment (or repay BioMedicines for said audit costs,
as appropriate);

                    b)        pay the underpaid amount within thirty (30) days
of the date the accounting firm delivered the report to BioMedicines and
Schering; and

                    c)        pay interest on the underpaid amount only (The
interest rate will be the average prime rate of interest calculated from
end-of-quarter data reported by Citibank, New York, utilising data from all
quarters since the end of the audited period.)

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      29.
<PAGE>

                    Should, however, the accounting firm conclude that the
Selling Party has overpaid royalties or other compensation to BioMedicines, then
BioMedicines shall credit any such overpayment to Schering (or otherwise to a
Selling Party as appropriate). This credit will be applied during the next
complete calendar quarter for which payments are due to BioMedicines.

                    8.10.3    COSTS. Costs related to Development (Development
Costs as herein defined), to CMC Development (CMC Development Costs as herein
defined), and other costs related to Manufacturing Improvements or to carrying
out the Manufacturing Plan shall all be subject to verification according to the
principles and practices described in this Section 8.10.

          8.11      TAXES. The Selling Party shall deduct any withholding taxes
from the payments due under the Agreement. Each Selling Party will then pay the
withheld amount to the proper tax authorities as required by the laws of the
country in the Territory applicable at the date of payment. All Selling Parties
shall use reasonable best efforts to ensure that any withholding taxes imposed
and paid are reduced or eliminated as far as possible under the terms of the
current or any future "double-taxation" agreement between Germany and the United
States of America or between Germany or the United States of America and any
other country.

9.        INTELLECTUAL PROPERTY AND RELATED MATTERS

          9.1       MAINTENANCE.

                    a)        Schering shall, subject to good business judgment,
at its sole cost and expense maintain the Patent Rights in Appendix A.

                    b)        If Schering shall elect not to maintain Patent
Rights in any country within the Territory, Schering shall inform BioMedicines
in writing at least three (3) months in advance of any action to abandon such
maintenance, and BioMedicines shall have the right to assume, at BioMedicines'
sole cost and expense, the maintenance of any Patent Rights abandoned by
Schering. If BioMedicines does assume such maintenance following abandonment by
Schering in any country, royalty or other payments, if any, shall be reduced by
the cost to BioMedicines of assuming the maintenance of Patent Rights. If
BioMedicines elects not to assume such maintenance or if, having assumed such
maintenance, BioMedicines subsequently decides not to continue such maintenance,
it must give Schering three months notice in advance and allow Schering, at
Schering's discretion, to assume such maintenance.

                    c)        Maintenance shall include the continuing effort,
on the basis of good business judgment, to obtain issued patents where patent
applications are pending.

                    d) Schering shall make information available to BioMedicines
on a regular and timely basis to ensure that patent maintenance is facilitated
and to provide BioMedicines the opportunity to take any desirable or necessary
actions in a timely manner.

          9.2       PATENT TERM EXTENSION OR EQUIVALENT.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      30.
<PAGE>

                    a)        In the event an extension of a patent(s) is
available, the company that is then responsible for maintaining said patent
shall have the right to designate the patent or patents for which such extension
will be applied.

                    b)        If the responsible company (Schering or
BioMedicines as the case may be) shall elect not to extend Patent Rights in any
country within the Territory, then the other company (BioMedicines or Schering,
respectively) shall have the right to extend, at its sole cost and expense, any
Patent Rights not otherwise extended. If one company does assume such
maintenance following abandonment by the other in any country, royalty or other
payments, if any, shall be reduced by the cost of assuming such
responsibilities. If one company elects not to extend such rights or, having
elected to extend, decides to abandon such rights, that company shall provide
the other company with at least three months written notice in advance and allow
the other company to execute such extension.

          9.3       NOTIFICATION REGARDING INFRINGEMENT. Each of the Parties
shall notify the other promptly in the event that it becomes aware of any:

                    a)        alleged infringement of the Patent Rights by a
third party and of any available evidence thereof; or

                    b)        alleged infringement of patent rights of third
parties specifically related to the matters described elsewhere in this
Agreement.

          9.4       LITIGATION.

                    a)        The company having patent maintenance rights
agrees, subject to good business judgment, to prosecute and/or defend Patent
Rights against challenge or infringement by any third party or parties.

                    b)        In the event that Schering shall elect not to
defend Patent Rights against challenge or infringement, BioMedicines, its
Affiliates or Sublicensees, may prosecute and/or defend any infringement and/or
challenge to the Patent Rights.

                    c)        In addition, in the event that Schering has not
exercised or has abandoned its marketing options in any portion of the
Territory, then BioMedicines shall have the first right to prosecute and/or
defend Patent Rights against challenge or infringement by any third party or
parties.

                    d)        In any infringement suit BioMedicines, its
Affiliates or Sublicensees may institute to enforce the Patent Rights pursuant
to the Agreement, or in any suit brought by a third party in which BioMedicines,
its Affiliates or Sublicensees is defending the Patent Rights, Schering shall
cooperate in all reasonable respects and, to the extent practicable, have its
employees and, if practicable, former employees, testify when requested.
Schering will also make available relevant records, papers, information,
samples, specimens and the like. Schering will obligate its own Affiliates to
cooperate in a similar manner.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      31.
<PAGE>

          9.5       PAYMENTS AND PATENT LITIGATION. If BioMedicines, its
Affiliates or Sublicensees, shall undertake the enforcement or defense by
litigation of the Patent Rights in any country in the Territory, any royalties
on Net Sales in such country or related milestone payments may be withheld. Such
withholding may be applied only toward the reimbursement of expenses, including
reasonable attorney's fees and related costs. Such withholding shall not,
however, exceed fifty percent (50%) of the amount that would otherwise have been
due to Schering. If such withheld sums are specifically recovered, however, from
an offending third party, then the withheld sum will be remitted to Schering.
The remission will occur within sixty (60) days of said recovery. No interest
shall be paid on such sums.

          9.6       OTHER INTELLECTUAL PROPERTY. Trademarks, service marks, and
tradenames, or any applications pertaining thereto, as shall be selected,
chosen, created or developed by BioMedicines, its Affiliates or Sublicensees
shall be the exclusive property of BioMedicines, its Affiliates or Sublicensees,
as appropriate.

          Any new invention within the Field made by and paid for BioMedicines,
a BioMedicines Affiliate or Sublicensee and which is not based on Schering
Know-How shall be the property of BioMedicines but shall be promptly disclosed
to Schering.

          Any new invention within the Field made by and paid for by Schering or
by a Schering Affiliate shall be the property of Schering or the Affiliate as
appropriate but shall be promptly disclosed to BioMedicines.

          Any new invention within the Field made by BioMedicines or by a
BioMedicines Affiliate or made by Schering or a Schering Affiliate, but which is
paid for by the other, i.e., Schering or BioMedicines, respectively, shall be
fully disclosed to both Schering and BioMedicines. Said new invention shall be
jointly owned by both Schering and BioMedicines. Any such new invention shall be
added to Appendix A and the terms of the Agreement shall govern.

          Notwithstanding the foregoing, however, Schering and BioMedicines will
then negotiate in good faith regarding the subsequent use and disposition of any
such new invention made by either party or the Affiliates or Sublicensees
thereof.

          9.7       OTHER PATENT-RELATED MATTERS. Should any payments be due to
current or former employees of Schering or a Schering Affiliate because of
successful commercialisation of Licensed Product, Schering or the Schering
Affiliates, as appropriate, shall be solely responsible for making said payments
to current or former employees.

10.      REPRESENTATIONS AND WARRANTIES

          10.1      FREEDOM TO EXECUTE AGREEMENT. Each of Schering and
BioMedicines represent and warrant to the other that:

                    a)        it is free to enter into the Agreement and has the
full right and authority to do so;

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      32.
<PAGE>

                    b)        it has taken all corporate action necessary to
authorise the execution and delivery of the Agreement and the performance of its
obligations under the Agreement;

                    c)        it is not aware of any impediment that would
inhibit its ability to perform in all material respects its obligations under
the Agreement; and

                    d)        the execution, delivery and performance of the
Agreement will not violate any provision of, conflict with or result in any
breach of any of the terms of, or constitute a default under either party's:

                    e)        respective certificate of incorporation or
by-laws;

                    f)        a material indenture, lease, any other agreement
 or material instrument;

                    g)        an applicable decree, judgment or order; or

                    h)        any applicable law, statute, rule or regulation.

          10.2      PATENT RIGHTS. Schering hereby represents and warrants to
BioMedicines that:

                    a)        it is the legal assignee of the Patent Rights
covered by the Agreement;

                    b)        the patents and patent applications listed in
Appendix A include all of those currently related in any manner to the
synthesis, analysis, manufacturing or use of Licensed Product;

                    c)        it has the full legal power to convey the rights
granted to BioMedicines in the Agreement;

                    d)        it has no knowledge of any facts which would rebut
the presumption of validity accorded any issued patents within the Patent
Rights;

                    e)        it has disclosed to the United States Patent and
Trademark Office, or to other similar offices in other countries, all
information "material to patentability," as such is defined in 37 C.F.R.
Section 1.56;

                    f)        it has no knowledge of any adverse claims to the
Patent Rights;

                    g)        all patent applications included in the Patent
Rights are pending and have not been abandoned and are enforceable as of the
Effective Date pursuant to a valid assignment;

                    h)        to its best knowledge and belief, as of the
Effective Date, there is no asserted or unasserted claim or demand which may be
enforced against any of the Patent Rights;

                    i)        to its best knowledge and belief, on the Effective
Date the practice of any processes and/or products disclosed in the Patent
Rights do not infringe upon any third party patents; and, in addition, that

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      33.
<PAGE>

                    j)        Schering has not entered into, and will not enter
into, any agreement with any other party which is in conflict with the rights
granted to BioMedicines pursuant to the Agreement.

          10.3      KNOW-HOW. Schering hereby represents and warrants to
BioMedicines that Know-How and related information now in the possession of
Schering or a Schering Affiliate and subsequently provided to BioMedicines by
Schering or its Affiliates or Sublicensees is, to the best of its knowledge,
materially complete and accurate. Schering also represents and warrants that no
materially important Know-How or related information previously in the
possession of Schering or a Schering Affiliate has been deliberately destroyed.
In the event that application to a third party is necessary to ensure that the
Know-How or information to be provided to BioMedicines is materially complete
and accurate, then Schering represents and warrants that it will take all
reasonable actions which are necessary or desirable to ensure such material
completeness and accuracy. Schering also represents and warrants that
information required to be obtained under conditions of United States Code of
Federal Regulations Good Laboratory Practices, Good Manufacturing Practices, or
Good Clinical Practices (or the equivalent) has, in fact, been so obtained. The
representation and warranty given in this Section 10.3 is subject expressly to
the proviso that the Know-How in existence at the date of this Agreement can
only comply with the regulations and practices applicable at the date of
generation of said Know-How and not those subsequently enacted or agreed.

          10.4      NO WARRANTY ON FITNESS FOR USE. Any materials provided by
Schering to BioMedicines or by BioMedicines to Schering (or to an Affiliate or
Sublicensee thereof), as the case may be, are provided "as is" and specifically
without any warranty of fitness or merchantability for any particular use. In
addition, to the extent provided by law, the party providing the said materials
shall not be liable under any contract, negligence, strict liability or other
legal or equitability theory for any incidental or consequential damages.

          10.5      PAST COMPLIANCE WITH GOOD MANUFACTURING PRACTICES. Schering
hereby represents and warrants to BioMedicines that all manufacturing activities
associated with the existing drug substance of Section 4.4 were conducted in
compliance with Good Manufacturing Practices applicable at the date of
manufacture.

11.       LIABILITY AND INDEMNIFICATION

          11.1      BIOMEDICINES OBLIGATIONS. BioMedicines shall be liable for
and shall indemnify Schering against all claims arising from the manufacturing,
development or commercialisation of Licensed Product by BioMedicines, its
Affiliates or Sublicensees. BioMedicines will provide Schering with a copy of
the relevant insurance policy. The only exceptions shall be those caused by or
attributable to:

                    a)        fraudulent or deliberately false or misleading
information provided by Schering or its Affiliates to BioMedicines and acted
thereon in good faith by BioMedicines;

                    b)        gross negligence by Schering or its Affiliates or
Sublicensees; or

                    c)        any illegal actions by Schering or its Affiliates
or Sublicensees.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      34.
<PAGE>

          11.2      BIOMEDICINES AFFILIATE(S) OR SUBLICENSEE(S). BioMedicines
represents and warrants that it will contractually obligate its Affiliate(s) and
Sublicensee(s) to adhere substantially to the terms of the Agreement regarding
any responsibilities transferred by BioMedicines to said Affiliate(s) or
Sublicensee(s) pursuant to the Agreement. BioMedicines further warrants and
represents that it will indemnify Schering against financial losses, direct or
indirect, incurred by Schering because of breach of any contractual obligations
of any BioMedicines Affiliate to Schering or because of gross negligence by a
BioMedicines Affiliate with regard to its duties to Schering.

          11.3      SCHERING OBLIGATIONS. Likewise, Schering shall indemnify
BioMedicines against all claims arising from the development or
commercialisation of Licensed Product by Schering, its Affiliates or
Sublicensees. The only exceptions shall be those caused by or attributable to:

                    a)        fraudulent or deliberately false or misleading
information provided by BioMedicines or its Affiliates to Schering and acted
thereon in good faith by Schering;

                    b)        gross negligence by BioMedicines or its Affiliates
or Sublicensees; or

                    c)        any illegal actions by BioMedicines or its
Affiliates or Sublicensees.

          11.4      SCHERING AFFILIATE(S) OR SUBLICENSEE(S). Schering represents
and warrants that it will obligate its Affiliates to adhere to the terms of the
Agreement regarding any responsibilities transferred by Schering to said
Affiliate pursuant to the Agreement. Schering further warrants and represents
that it will indemnify BioMedicines against financial losses, direct or
indirect, incurred by BioMedicines because of breach of any contractual
obligations of any Schering Affiliate to BioMedicines or because of gross
negligence by a Schering Affiliate with regard to its duties to BioMedicines.

          11.5      UNALLOCATED LIABILITY. Should any liability remain
unallocated after assumption of liability and provision of indemnification as
described herein, such unallocated liability shall be divided between Schering
and BioMedicines according to the fraction of net financial benefits from the
commercialisation of the product individually obtained by Schering, BioMedicines
or to Affiliates thereof, if any.

12.       ASSIGNMENT, CHANGE IN CONTROL

          12.1      ABILITY OF BIOMEDICINES TO ASSIGN AGREEMENT. The Agreement
shall not be assignable by BioMedicines without the prior written consent of
Schering, such consent not to be unreasonably withheld.

                    12.1.1    TERRITORY OUTSIDE THE UNITED STATES OF AMERICA. If
Schering does not exercise the option described in Section 6.1, then
BioMedicines is free to assign the Licensed Product in the Territory outside the
United States of America, with the consent of Schering, such consent not to be
unreasonably denied.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      35.
<PAGE>

                    12.1.2    UNITED STATES OF AMERICA. If Schering does not
exercise the option described in Section 6.2, then BioMedicines is free to
assign the Licensed Product in the United States of America, with the consent of
Schering, such consent not to be unreasonably denied.

          12.2      CHANGE IN CONTROL. A change in control in BioMedicines (as
evidenced by the acquisition by one person or entity of more than fifty percent
{50%} of voting stock), except for that occasioned by the bankruptcy of
BioMedicines, shall not be treated as an assignment. BioMedicines agrees,
however, to inform Schering promptly upon any such change in control. In
addition, acquisition of voting control of BioMedicines by any or all of current
BioMedicines shareowners shall not, for purposes of the Agreement, constitute a
change in control.

13.       TERM AND TERMINATION

          13.1      DURATION OF AGREEMENT

                    13.1.1    DURATION. Except as otherwise specifically
provided herein, or unless sooner terminated pursuant to other provisions within
the Agreement, the Agreement and the licenses and rights granted to BioMedicines
hereunder shall remain in full force and effect for as long as royalties, or
other like compensation, is payable to Schering or to BioMedicines in any
country of the Territory.

                    13.1.2    AFTER EXPIRATION OF AGREEMENT. At the end of said
term, BioMedicines shall have a fully paid-up License in the countries of the
Territory in which Licensed Product was commercialized by BioMedicines prior to
termination of the Agreement pursuant to Section 13.1 above. In addition,
Schering agrees to cooperate in good faith with BioMedicines to ensure a
continuing supply of Licensed Product to permit continuing commercialisation.

          13.2      TERMINATION BECAUSE OF UNREMEDIED BREACH. Either Schering or
BioMedicines shall have the right to terminate the Agreement with thirty (30)
days' notice in written form to BioMedicines or Schering, respectively, in the
event that:

a) BioMedicines or Schering, respectively, fails to remedy any material failure
to fulfill its obligations under the Agreement; or

b) there is a material breach of the terms of conditions hereof within sixty
(60) days after receipt of notice in written form specifying the circumstances
giving rise to failure or breach.

          Termination for such causes shall not preclude seeking redress or
injunctive relief.

          13.3      TERMINATION BECAUSE OF INSOLVENCY. Either Schering or
BioMedicines may terminate the Agreement with immediate effect by notice in
written form in the event that BioMedicines or Schering, respectively, becomes
insolvent, is declared bankrupt or adopts a plan of liquidation or dissolution.

          13.4      SCHERING SPECIAL OPTION.

                    13.4.1    SPECIAL OPTION RIGHT. In addition to the options
described in Sections 6.1 and 6.2, Schering shall also have the option to regain
full control of the development and

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      36.
<PAGE>

marketing of Licensed Product in the event: (a) Dr. Moran is no longer active in
the Development and CMC Development of Licensed Product in a managerial or
clinical advisory capacity for reasons other than death or disability and (b)
BioMedicines is unable to engage another person reasonably acceptable to
Schering to lead such development within six (6) months after such cessation of
activity by Dr. Moran.

                    13.4.2    TERM OF OPTION; EXERCISE. The foregoing option
shall expire, whether or not it has become exercisable pursuant to Section 13.1,
if not exercised prior to the earlier of: (a) the second anniversary of the
Effective Date, (b) delivery of the Phase III clinical trial report described in
Sections 6.1 and 6.2 or (c) the exercise or waiver of either of Schering's
options under Section 6.1 or 6.2. The parties also agree to confer on or about
the first anniversary of the Effective Date in order to consider in good faith
whether the foregoing option of Section 13.4.1 may be terminated at that time by
mutual agreement. Such option may be exercised by Schering upon written notice
to BioMedicines.

                    13.4.3    SCHERING OBLIGATIONS AFTER EXERCISE OPTION. In the
event that Schering exercises the foregoing option, then Schering agrees as
follows:

                    a)        Schering or a Schering Sublicensee will continue
to diligently pursue Development and CMC Development of Licensed Product, i. e.
Schering shall use the same diligence as it applies to its other proprietary
products of similar potential.

                    b)        Schering or a Schering Sublicensee will, within
thirty (30) days of the decision by Schering to exercise the foregoing option,
pay to BioMedicines fifty percent (50%) of the Development and CMC Development
Costs incurred by BioMedicines through the date of said exercise.

                    c)        On resumption of Development or CMC Development
activities, Schering or a Schering Sublicensee will then repay the remaining
fifty percent (50%) of Costs previously incurred by BioMedicines.

                    d)        Schering shall also be obligated to pay royalties
or other payments to BioMedicines, as required by other Sections of this
Agreement, with the exception that no Risk Premium shall be due to BioMedicines.

          13.5      COURT-AWARDED DAMAGES. Any court-awarded damages granted to
Schering or BioMedicines arising from material breach or bankruptcy of
BioMedicines or Schering, respectively, may be deducted from milestone, royalty,
or other like payments which may be subsequently due to BioMedicines or
Schering, respectively.

          13.6      CONTINUATION OF OBLIGATIONS. Upon termination of the
Agreement pursuant to provisions contained herein, nothing herein shall be
construed to release either Schering or BioMedicines from any obligation that
matured prior to the termination.

14.       CONFIDENTIALITY

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      37.
<PAGE>

          14.1      TRANSMITTAL OF INFORMATION. Any information which is
transmitted by one party to the other party in connection with the entering into
or the performance of the Agreement, shall be kept confidential by the receiving
party and its Affiliates and/or Sublicensees prior to the expiration or
termination of the Agreement and for a period of five (5) years after its
expiration.

          The foregoing obligation shall not apply to:

                    a)        any information which at the time of disclosure or
acquisition is part of the public knowledge or literature, or thereafter becomes
part of the public knowledge or literature otherwise than by unauthorised
disclosure by the recipient;

                    b)        any disclosure of information to the United States
Food and Drug Administration or other similar governmental authority for the
purpose of complying with regulatory requirements regarding Licensed Product;

                    c)        any information which at the time of disclosure or
acquisition was in the recipient's rightful possession as evidenced by its
written records;

                    d)        any information which became rightfully available
to the recipient from another source not bound to secrecy to the disclosing
party with respect to such information;

                    e)        disclosure by the recipient to third parties under
provisions of confidentiality similar to those contained in the Agreement for
the purposes of development or marketing of the Licensed Product or financing
thereof; and

                    f)        any disclosure of information required by law.

          14.2      APPROVAL OF PUBLIC DISCLOSURE. Notwithstanding the
provisions of Section 14.1 such party shall present to BioMedicines or Schering,
as appropriate, a written request for such disclosure. The recipient of the
request to permit disclosure shall have a period of five (5) calendar days to
approve the requested disclosure. The requested approval shall not be
unreasonably withheld.

          14.3      ACKNOWLEDGMENT OF PRIVATE DISCLOSURE. BioMedicines may
disclose to a third party or parties confidential or nonconfidential information
regarding the Licensed Product or the Agreement only where necessary and then
under conditions of confidentiality in the pursuit of development or
commercialisation of the Licensed Product otherwise consistent with the terms of
the Agreement.

15.       COMMUNICATIONS

          15.1      INSTRUCTIONS FOR COMMUNICATIONS. Any payment, notice or
other communication pursuant to the Agreement shall be sufficiently made or
given on the date of mailing if sent to such party by certified or registered
first class mail, postage prepaid, or by recognised public courier (for example,
"Federal Express") addressed to it at the address below or as it shall otherwise
subsequently designate by written notice:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      38.
<PAGE>

          In the case of Schering:             Schering AG
                                               D-13342 Berlin
                                               Germany
                                               Attention: Corporate Licensing
                                               with a copy to: Legal Department

          In the case of BioMedicines:         BioMedicines, Inc.
                                               909 Marina Village Parkway #583
                                               Alameda, CA 94501
                                               with a copy to: Legal Department

16.       MISCELLANEOUS PROVISIONS

          16.1      GOVERNANCE OF AGREEMENT. The Agreement shall be construed,
governed, interpreted and applied in accordance with the laws of Germany, except
that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted; and
disputes arising out of the Agreement which cannot be settled between Schering
and BioMedicines will be brought before the courts of Germany. Place of
proceedings shall be Berlin.

          16.2      ENTIRE AGREEMENT. Both Schering and BioMedicines acknowledge
that the Agreement sets forth the entire agreement and understanding of both
Schering and BioMedicines as to the subject matter hereof. No other previous
oral or written communications between Schering and BioMedicines with respect to
the License granted hereunder shall be of any force or effect. In addition, the
Agreement may be modified only by the execution of a subsequent written
amendment approved by both Schering and BioMedicines.

          16.3      SEVERABILITY. The provisions of the Agreement are severable.
In the event that any provision of the Agreement shall be invalid or
unenforceable under any controlling body of the law, the validity or
enforceability of the remaining provisions shall remain unaffected.

          16.4      ORIGINAL AGREEMENT AND COUNTERPARTS. The Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

          16.5      NO WAIVER OF RIGHTS. The failure of either Schering or
BioMedicines to assert a right hereunder or to insist upon compliance with any
term or condition of the Agreement shall not constitute a waiver of that right
or excuse a subsequent failure to perform any term or condition by BioMedicines
or Schering, respectively.

          16.6      SECTION TITLES. The titles or headings of various numbered
or unnumbered Sections in the Agreement are for reference only and do not limit
or modify the substance of the Agreement in any way.

          16.7      FORCE MAJEURE. Neither party shall be held liable or
responsible to the other party nor be deemed to have defaulted under or breached
this agreement for failure or delay in fulfilling or performing any term of this
Agreement, other than an obligation to make a payment,

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      39.
<PAGE>

when such failure or delay is caused by or results from fire, floods, embargoes,
government regulations, prohibitions or interventions, war, acts of war,
insurrections, riots, civil commotions, lockouts, acts of God or any other cause
beyond the reasonable control of the affected party.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      40.
<PAGE>

          IN WITNESS WHEREOF, Schering and BioMedicines have hereunto duly
executed the Agreement as of the day and year set forth above.

SCHERING AKTIENGESELLSCHAFT

By:  /s/ Ulrich Koch
   ------------------------------
Name:  Dr. Ulrich Koch
     ----------------------------
Title:  Head Corporate Licensing
      ---------------------------

By:  /s/ B. Baldus
   ------------------------------
Name:  Berthold Baldus
     ----------------------------
Title:  Head Office of Technology
      ---------------------------

BIOMEDICINES, INC.

By:  /s/ S. M. Moran
   ------------------------------
Name:  Dr. Mark Moran
     ----------------------------
Title:  Chief Executive Officer
      ---------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      41.
<PAGE>

                                   APPENDIX A

                                       [*]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       1.
<PAGE>

                                   APPENDIX B

                  ATAMESTANE FOR THE TREATMENT OF BREAST CANCER
               SUMMARY OF PROPOSED CLINICAL DEVELOPMENT ACTIVITIES

PREPARATION FOR A PRE-IND MEETING WITH THE FDA
This meeting will be of critical importance. We propose to prepare, if possible,
an integrated summary of safety and an integrated summary of efficacy for the
consideration of the Oncology Division.

Since the U.S. IND contains only a fraction of the total clinical data, some of
the work for the pre-IND meeting will also be useful in preparing a revised IND.

The goal will be to obtain agreement with the Agency on:

-    requirements for registering Atamestane for the second-line treatment
     of tamoxifen- or toremifene-resistant breast cancer
-    the number of patients needed for a demonstration of efficacy
-    the number of patients needed for a demonstration of safety
-    key phase III design criteria: number of studies (1 or 2); blinded
     versus open-label; active control (e.g., anastrozole) vs historical
     controls; endpoints
-    preclinical and clinical considerations for registering Atamestane for
     combined use with tamoxifen or tormifene as first-line treatment

We believe that a satisfactory preparation will require 4-6 months after the
Effective Date.

CHEMISTRY, MANUFACTURING, AND CONTROLS
Stability testing should continue according to a regular schedule. We need to
agree on the timing and particulars of preparing finished drug product for the
phase III studies. We also need to discuss the steps needed to complete
validation of analytical methods. Preliminary discussion regarding the synthesis
of registration batches will be appropriate as well.

CLINICAL
SECOND LINE THERAPY

We will review in detail with the FDA the current phase II data. Currently we
intend to discuss with the FDA the following design for phase III:

-    [*]
-    standard measures of clinical response

         -    objective response rates
         -    duration of response
         -    time to progression
         -    time to treatment failure

The [*] Atamestane regimens proposed above are intended to address [*] and [*].

We will propose that no more than [*] patients per group will be adequate to
examine the relative rates of objective response and the adverse event profiles
of the [*] drugs.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2.
<PAGE>

We will also, of necessity, discuss with the FDA a proposed definition of [*] We
will propose that [*] should include the demonstration of [*].

The total time from end of FDA meeting to end of the required studies could be
[*] months. The goal will be to complete the analysis and writing of the
marketing applications within [*] months thereafter.

[*] FIRST LINE THERAPY (WITH TAMOXIFEN OR TOREMIFENE)
Preclinical studies will be required first. The time required to discover the
[*] regimen may be as short as [*] months or as long as [*]. The possibility
also exists that there is [*] drug or regimen to which Atamestane may be [*].

If preclinical studies are "positive," suggesting a [*] for Atamestane, then
a second discussion will be held with the FDA. The purpose of the second
discussion will be to define the clinical study or studies required to obtain
an approval for [*] first line therapy. In this regard, a very interesting
potential study design to consider would be [*].

If scientifically appropriate, one additional clinical study, or more likely two
additional clinical studies, will be required in order to establish the safety
and efficacy of the [*]. Survival may be the required endpoint; however,
objective response rates with standard additional indices of duration of
response, time to progression and time to treatment failure are projected to be
sufficient.

ENDOCRINOLOGY OR SPECIAL GROUP STUDIES
It is possible that additional endocrinological studies or studies of "special
groups" of patients [*] may be required. We will raise this topic with the FDA.
Our hope is that the answer will be "no."

MARKETING APPLICATION(S)
Assuming that additional clinical testing will be required as described, the
earliest marketing application would occur [*]. Making certain other assumptions
about the duration of recruiting, dosing and follow-up, a filing [*] might be
feasible.

SCHEDULE A preliminary Gantt chart is attached.

[*]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       3.
<PAGE>

                                   APPENDIX C

            CONSIDERATIONS FOR CHEMISTRY, MANUFACTURING, AND CONTROLS
                             (PRELIMINARY CMC PLAN)

TERMINOLOGY
For consistency the terminology employed during the [*] meeting will be
utilised. The current synthesis is designated as the [*] synthesis and the two
alternatives are designated as the [*] synthesis and the [*] synthesis.

I.       CONSIDERATIONS FOR THE [*] SYNTHESIS
Based on calculations made in 1991, the estimated cost of goods at that time was
approximately [*] per kg when using the "current" [*] synthesis.

IMPROVEMENTS IN THE CURRENT [*] SYNTHESIS
[*] 1:            [*]
At the moment, there are no proposals to significantly alter this [*].

[*] 2:            [*]
This [*] requires further stabilization. Alteration of stirring parameters,
changing the solvent from [*], and possibly eliminating [*] are possible
modifications. Certain preliminary work has been carried out successfully at
laboratory scale. One scale-up synthetic campaign in the pilot plant will be
useful, followed thereafter by a transfer of the new method to commercial
facilities in Bergkamen.

[*] 3:            [*]
At the moment, there are no proposals to significantly alter this [*].

[*] 4:            [*]
At the moment, there are no proposals to significantly alter this [*].

[*] 5:            [*]
A second crop is a primary consideration versus a "better" first crop that might
be associated with a slightly lower, but still acceptable, purity. To obtain a
second crop with comparable purity to the first crop may, however, require an
additional [*].

ESTIMATE OF LOWEST COST OF GOODS WITH IMPROVED [*] SYNTHESIS
If the cost of [*] acetate can be lowered substantially and improvements in
yield can also be achieved, then there is the reasonable potential to lower the
cost of goods with a modified [*] synthesis to [*] per kg, with the best current
estimate being [*] per kilogram (kg) when the annual amount manufactured is
approximately [*] kg.

ESTIMATION OF COSTS FOR MANUFACTURING IMPROVEMENTS
To be developed during the course of CMC planning

II.      CONSIDERATIONS REGARDING THE [*] SYNTHESIS
The first estimate of the cost of goods with the new [*] synthesis was
approximately [*] per kg.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       4.
<PAGE>

An early comparison of the [*] to the [*] synthesis, requiring approximately [*]
months, is appropriate. This comparison will involve primarily a re-examination
of existing data rather than the generation of new data.

[*] is used in the [*] synthesis and is [*] less [*] than [*] used in the
current [*] synthesis. There is also a [*] involved in purification of
Atamestane with the [*] synthesis. Although the [*] is a [*] rather than the
more expensive [*], there is still the potential for significant loss of [*]
in this [*].

In addition, the generation of increased amounts of [*], a known impurity, may
obligate additional toxicological work. The precise change in the amount of this
impurity, among other impurities, needs further assessment.

There is no estimate at this time regarding the minimal "target" cost of goods
for the [*] synthesis.

One possible improvement to the first [*] of the [*] synthesis is the use of
[*] and [*] in the presence of a [*]. The cost of [*] may be declining from
approximately [*] per kg (or possibly less). However, there would be a need
to accommodate the handling of [*]. The older technology for cuprate addition
is more secure. Currently, the only manufacturing process that would utilize
[*]would be Atamestane.

ESTIMATE OF THE LOWEST COST OF GOODS WITH THE [*] PROCESS
There is currently no estimate.

ESTIMATION OF COSTS FOR MANUFACTURING IMPROVEMENTS
There is no current estimate regarding the costs for these preliminary [*].
Such estimates will be provided in more detail in the final CUC Development
Plan.

III.     CONSIDERATIONS REGARDING THE [*] SYNTHESIS

[*] of [*] currently yields [*] Atamestane with [*] and standard [*]. Optimizing
yield will involve a careful consideration of yield versus time and the
avoidance of "parallel reactions", as well as secondary reactions that diminish
Atamestane successfully synthesised. Recapture of starting materials and
recycling need further evaluation.

One parallel reaction that has been observed is [*] of the [*]. It is
possible to first [*] the [*] as a [*]. Higher yields of Atamestane have been
achieved using the [*], but the costs of the added protection/deprotection [*]
need to be considered.

[*] is utilized in the [*] synthesis. As noted, the cost of this material may be
declining from [*] per kg or possibly less. However, there would still be a need
to invest in the handling of [*]. Currently, the only manufacturing process that
would utilize [*] would be Atamestane.

A [*] is also used in the [*] synthesis. The presence of [*] and [*] is a
potential problem. It is unknown whether or not significant levels of these [*]
are present in the [*] from the reaction. Additional study will be required to
determine whether or not the concentrations of [*] can be

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       5.
<PAGE>

reduced sufficiently to avoid excessive [*] costs. There would be a potential
need to find a [*] for these [*].

Study of the [*] reaction with a university research group, particularly with
regard to finding alternative [*], is a possibility worth considering.

Due to the complexity of the reaction, more expensive [*] is needed to produce
pure Atamestane from the [*] synthesis. There is a question regarding the
required purity of the crude product to optimize [*]. This [*] currently
utilizes [*] as a solvent. Optimally, this solvent should be avoided to minimize
[*] treatment costs. Whether avoidance is possible is unknown. The cost of the
large-scale [*] will need further evaluation.

In addition, there is the generation of a [*] using the [*] procedure. This
impurity, while new to Atamestane synthesis, is well known within Schering, and
significant toxicological data may already exist.

ESTIMATE OF LOWEST COST OF GOODS WITH [*] SYNTHESIS
Despite these issues, if the cost of [*] could be reduced to [*] per kg, and the
low-yield [*] SIGNIFICANTLY improved, then there is the potential to lower the
cost of goods to less than [*] per kg. The current optimistic best estimate
would be [*] per kg.

ESTIMATION OF COSTS FOR MANUFACTURING IMPROVEMENTS
There is no current estimate regarding the costs for these preliminary [*].
Such estimates will be provided in more detail in the final CMC Development
Plan.

IV.      CONSIDERATIONS FOR DRUG PRODUCT
All clinical work to date has been performed with [*] containing [*] film
coating.

Current recommendations are that new [*] (possibly the final formulation) be
manufactured that will contain [*] film coating [*].

In this case, it is recommended that drug product be manufactured with the more
modern standard of [*].

Based on historical data with other low-potency steroids, the larger [*] would
be predicted to be more stable and to have less variable dissolution and
disintegration. Specific consideration of Atamestane CSF data will be necessary.
Detailed review of existing batch records for the CSF will be useful in further
assessing the risk of retaining the CSF as a possible formulation for commercial
purposes.

Preliminary data suggest that the larger [*] would produce more [*] and might,
as a result, generate a pharmacokinetic profile that would not favor [*]. If
[*], then conversion at a later date from the smaller [*] to a larger but
possibly more stable [*] may not be feasible without additional clinical work.
Accordingly, the topic of [*] will need to be addressed carefully.

Additional work will be necessary to shift to the [*] F formulation. If done
within Schering, some [*] FTE's are estimated to be required to effect the
change. If the [*] is retained, then possibly only [*] FTE's would be required
to manage developmental activities in both

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       6.
<PAGE>

pharmaceutics and analytics. The fully burdened costs for these activities are
dependent upon the final dosage form and could range from [*] to [*].

If a third party vendor is required, then [*] manufacturing will be needed. This
service should be available. [*] will be necessary at a cost of approximately
[*] per kg. This cost is dependent on scale. Within Schering, the cost of making
the [*] and packaging is estimated to be approximately [*] per kg drug substance
([*] per [*]).

These drug product costs are independent of the cost of drug substance.

V.       GENERAL CMO ISSUES
There is a Drug Master File (DMF) at the FDA. The DMF was filed in [*]. The DMF
has not been [*]. The DMF has not been [*]. Accordingly, both the manufacturing
and the sampling sections of the DMF require [*]. The reference standard needs a
new Certificate of Analysis. All batch records for every batch exist and are in
the possession of Schering [*].

Stability data are available, but additional work to comply with the newest ICH
guidelines will be needed, particularly with regard to the effect of humidity.
There are sixty (60) months of supporting stability data for drug substance.
Whether one or three production batches will be required for additional study
will need to be addressed.

VI.      SUMMARY
As discussed in the preliminary CMC meeting between Schering and BioMedicines on
05.08.1998, an outline of the general plan would be:

REGARDING DRUG SUBSTANCE
-    To utilise the [*] synthesis with the proposed modifications at the pilot
     plant scale to demonstrate the effectiveness of the new process.
-    To re-evaluate the [*] new syntheses [*] and to design the experiments
     needed to make a "final" decision about the synthetic route.
-    To agree on [*], costs and timelines for the work described in [*] above.
-    To perform the work of [*]
-    To evaluate the results of [*] and then to decide whether a new synthetic
     route is feasible and, if feasible, preferable to the [*] process.
-    If a new synthetic route is preferable, to perform the required pilot plant
     work and then to transfer the process to Bergkamen.
-    If the improved [*] process remains preferable, to transfer this improved
     process to Bergkamen.

REGARDING DRUG PRODUCT
-    To review existing CSF data and to make a decision regarding the
     manufacture of the larger or smaller [*] for phase III and
     commercialisation.
-    To select a mutually acceptable site for the preparatory work and the
     actual manufacturing of drug product.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       7.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]