Document:

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                                                                   Exhibit 10.12

          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

                              DEVELOPMENT AGREEMENT

      THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into and made on June
      29, 2001, by and between

      SUMITOMO PHARMACEUTICAL CO. LTD., a company organized and existing under
      the laws of Japan, with its principal place of business at 2-8, Doshomachi
      2-chome, Chuo-ku, Osaka, Japan (hereinafter "SUMITOMO") and

      NOVIRIO B.V., a company organized and existing under the laws of The
      Netherlands with its principal place of business at Locatellikade 1, 1076
      AZ Amsterdam, The Netherlands (hereinafter "NOVIRIO").

                                    RECITALS

      NOVIRIO, together with its affiliates Novirio Pharmaceuticals Limited,
Novirio Pharmaceuticals, Inc. and Novirio SARL, has developed the hepatitis B
drug candidate referred to by NOVIRIO as LdT ("LdT"), which is intended to be
used for indications relevant to the treatment of hepatitis B and is covered by
one or more patents, patent applications, know-how and other proprietary
technology.

      Pursuant to a license agreement between Novirio Pharmaceuticals Limited
and NOVIRIO dated as of May 25, 2001, NOVIRIO has licensed from Novirio
Pharmaceuticals Limited the exclusive rights to LdT with the right to grant
sublicenses for the use of LdT for the treatment of hepatitis B in humans (such
sublicenses as they relate to those to be granted to SUMITOMO hereunder shall be
referred to as "Licenses" for convenience sake).

      SUMITOMO is interested in sharing in the development and potential
commercialization of LdT.

      NOVIRIO desires to grant SUMITOMO rights to share in the development and
potential commercialization of LdT in accordance with the terms and conditions
set forth herein.

      In consideration of the Recitals and the mutual covenants set forth in
this Agreement, the Parties agree as set forth below.
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ARTICLE I. DEFINITIONS.

      I.1 "Affiliate" means any corporation, company, partnership, joint venture
and/or firm which controls, is controlled by, or is under common control with a
Party. For purposes of this paragraph I.1, "control" shall mean (a) in the case
of corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the stock or shares having the right to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities.

      I.2 "Approved Product" means an LdT Drug Product for which Regulatory
Approval has been obtained in the Territory.

      I.3 "Commercially Reasonable Efforts" means efforts and resources normally
used by a Party for a compound or product owned by it or to which it has rights,
which is of similar market potential at a similar stage in its product life,
taking into account the competitiveness of the marketplace, the proprietary
position of the compound or product, the regulatory structure involved, the
potential profitability of the applicable products, and other relevant factors.
It is anticipated that the level of efforts and resources may change at
different times during the product life cycle of a compound or product.

      I.4 "Commercialization Agreement" means one or more Commercialization
Agreement(s) relating to the manufacture, commercialization and sale in the
Territory of the Approved Product, which is to be executed and delivered by the
Parties in accordance with the Article II.9 below.

      I.5 "Confidential Information" means all Know-How, Technical Information
(as hereinafter defined) or other information (whether or not patentable),
including, without limitation, proprietary information and materials (including
tangible manifestations thereof) constituting to the extent applicable or
regarding a Party's technology, products, business information or objectives,
which is designated as confidential in writing by the disclosing Party, whether
by letter or by the use of an appropriate stamp or legend, prior to or at the
time any such material, trade secret or other information is disclosed by the
disclosing Party to the other Party. Notwithstanding the foregoing to the
contrary, materials, Know-How or other information which is disclosed by a Party
in tangible, oral, electronic, optical or other form, or is disclosed in writing
without an appropriate letter, stamp or legend, shall constitute Confidential
Information of a Party if the disclosing Party, within thirty (30) Days after
such disclosure, delivers to the other Party a written document or documents
describing the materials, Know-How or other information and referencing the
place and date of such oral, visual, electronic, optical, written or other
disclosure and the names of the persons to whom such disclosure was made.
Notwithstanding the foregoing, the Parties expressly agree that all information
and data relating to LdT Drug Product, results of Non-clinical Studies and
clinical studies of LdT Drug Product and all information contained in
submissions to the Regulatory Authorities shall for all purposes hereof be
deemed to be Confidential Information.

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      I.6 "Control" or "Controlled" in the context of intellectual property
rights means rights to intellectual property sufficient to allow a grant of
rights without any obligation to any Third Party.

      I.7 "Days" means days on which banks are open for business in both the
United States and Japan.

      I.8 "Development Plan" means the global clinical development plan of LdT
Drug Product.

      I.9 "Development Program" means the implementation of the Development
Plan, involving SUMITOMO and NOVIRIO working collaboratively and cooperatively
to optimize the design and performance of the Non-clinical and clinical trials
for the LdT Drug Product in the Territory and globally under the standards of
the International Conference on Harmonization (ICH).

      I.10 "Effective Date" means the execution date of this Agreement.

      I.11 "Executive Officers" means the Director, General Manager, Business
Development and Licensing Office of SUMITOMO and the Chief Executive Officer of
NOVIRIO.

      I.12 "Field" means the use of the LdT Drug Product for the treatment of
hepatitis B in humans.

      I.13 "Know-How" means any information, data and materials, including,
without limitation ideas, formulas, methods, procedures, compositions, compounds
and inventions, that are owned or otherwise Controlled by a Party relating to
the LdT Drug Product.

      I.14 "LdT Drug Product" means drug substance, formulation intermediate or
a product prepared from [**] including but not limited to finished dosage form
ready for administration to a patient as a pharmaceutical product.

      I.15 "Non-clinical Studies" means all studies other than clinical studies,
including but not limited to studies in relation to chemistry, pharmacology,
toxicology, ADME.

      I.16 "NOVIRIO Patent Rights" means all Patent Rights listed on the
attached Exhibit B (together with any subsequent modifications, amendments or
supplements thereto) relating to the LdT Drug Product, covering or relating to
NOVIRIO Technology, which NOVIRIO either owns or to which NOVIRIO otherwise has
the right to grant licenses during the Term that claim the LdT Drug Product or
its manufacture or method of use, respectively.

      I.17 "NOVIRIO Technology" means all Know-How which (a) NOVIRIO either
owns, Controls, or to which NOVIRIO otherwise has the right to grant a license,
whether patentable or otherwise, and (b) is either listed on Exhibit B to this
Agreement (together with any subsequent modifications, amendments or supplements
thereto) or is actually used by NOVIRIO in the course of the Development
Program.

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      I.18 "Party" means SUMITOMO or NOVIRIO; "Parties" means SUMITOMO and
NOVIRIO.

      I.19 "Patent Right" means a United States and/or foreign patent or patent
application listed on Exhibit B hereto (together with any subsequent
modifications, amendments or supplements thereto) and the patents issuing from
the pending applications, and any patent applications filed hereafter relating
to the LdT Drug Product, and all continuations, continuations-in-part,
divisions, reissues, reexaminations or extensions thereof.

      I.20 "Pharmaceutical Laws" means, with respect to the United States, the
United States Food, Drug and Cosmetic Act of 1938, as amended from time to time,
and the regulations and guidelines promulgated thereunder, and with respect to
any other governmental unit in the Territory (whether federal, state, municipal
or other), the laws, regulations and guidelines of such governmental unit
pertaining to pharmaceuticals, including the development, exportation,
importation, use, manufacture, distribution, marketing and/or sale thereof.

      I.21 "Program Director" means an executive appointed by each Party to
serve as such Party's principal coordinator and liaison for the Development
Program. The Program Director appointed by SUMITOMO is referred to as the
"SUMITOMO Program Director," and the Program Director appointed by NOVIRIO is
referred to as the "NOVIRIO Program Director."

      I.22 "Regulatory Approval" means the approval of the data submitted in the
original New Drug Application in Japan, or the equivalent application or filing
in other countries in the Territory, by or from the relevant Regulatory
Authority, which is necessary as a prerequisite for marketing the LdT Drug
Product for any indication relevant to the treatment of hepatitis B in a
particular country in the Territory.

      I.23 "Regulatory Authority" means the United States Food and Drug
Administration and any successor agency of the United States government ("FDA"),
and any other governmental authority (whether federal, state municipal or other)
regulating the development, exportation, importation, use, manufacture,
distribution, marketing and/or sale of pharmaceuticals in the United States or
any governmental regulatory authority in any country in the Territory
responsible for granting Regulatory Approval.

      I.24 "Regulatory Documents" means all regulatory submissions and
Regulatory Approvals.

      I.25 "Technical Information" means (a) techniques and data, including
ideas, inventions (including patentable inventions), practices, methods,
knowledge, Know-How, trade secrets, skill, experience, documents, apparatus,
clinical and regulatory strategies, test data, including pharmacological,
toxicological and clinical test data, analytical and quality control data,
manufacturing, patent data or descriptions relating to the LdT Drug Product, and
(b) chemical formulations, compositions of matter, product samples and assays
relating to the LdT Drug Product.

      I.26 "Term" means the period during which this Agreement is in effect.

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      I.27 "Territory" means the countries of Japan, Republic of Korea (South
Korea), Republic of China (Taiwan) and People's Republic of China (China,
including Hong Kong and Macau).

      I.28 "Third Party" means any Person other than a Party to this Agreement
or an Affiliate of a Party to this Agreement.

      I.29 "$" and "USD" means United States dollars.

      I.30 "Valid Claim" means a claim under Novirio Patent Rights that has not
been irrevocably abandoned or been held invalid in an unappealable decision of a
court or patent office.

ARTICLE II. JOINT DEVELOPMENT OF PRODUCT.

      II.1 Joint Development Committee. The Parties shall establish a Joint
Development Committee, comprised of two (2) representatives of NOVIRIO and two
(2) representatives of SUMITOMO. Each Party shall designate its initial
representatives prior to the Effective Date. Each Party may change any one or
more of its representatives to the Joint Development Committee at any time upon
notice to the other Party.

            (a) Responsibilities. The Joint Development Committee shall meet to
(i) review the efforts of the Parties in the conduct of the Development Program,
(ii) review and approve amendments to the Development Plan, (iii) address such
other matters as either Party may bring before the Joint Development Committee,
and (iv) attempt to resolve any disputes relating to this Agreement that may
arise between the Parties.

            (b) Meetings. The Joint Development Committee shall meet within
forty-five (45) Days after the Effective Date and, thereafter, not less than two
times each year, during the course of the Development Program. The location of
such meetings of the Joint Development Committee shall alternate between
NOVIRIO's principal place of business and SUMITOMO's principal place of
business, or as otherwise agreed by the Parties. The Joint Development Committee
may also meet by means of a telephone or video conference call. If a
representative of a Party is unable to attend a meeting, such Party may
designate an alternate to attend such meeting in place of the absent
representative, which alternate will have full authority to participate in and
discuss matters presented at the meeting. In addition, each Party may, at its
discretion, invite other employees, and, with the consent of the other Party,
consultants or scientific advisors, to attend the meetings of the Joint
Development Committee to, among other things, review and discuss the Development
Program, as the case may be, and its results. Either Party may propose a meeting
of the Joint Development Committee when deemed necessary, for example, for the
purpose of resolving disputes.

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            (c) Decision Making. The goal of all decision-making shall be to
achieve consensus. Decisions of the Joint Development Committee shall be made by
discussion in good faith by the Joint Development Committee; provided, however,
that in such discussion at the Joint Development Committee, due consideration
shall be paid to Sumitomo's view with respect to matters concerning the
Territory. If the Joint Development Committee is unable to reach agreement on
any matter within ten (10) Days after the matter is first referred to it, such
matter shall be referred for resolution to the Executive Officers. If the
Executive Officers are unable to resolve a matter referred to them under this
Section II.1(c) within thirty (30) Days after the matter is referred to them,
then the Dispute Resolution provisions of Article IX shall apply.

            (d) Term. The Joint Development Committee shall function from the
Effective Date until a date thirty (30) Days after the date on which Regulatory
Approval is obtained in the country within the Territory which is the last to
grant such approval.

      II.2 Management of Development Program.

            (a) Program Directors. NOVIRIO and SUMITOMO shall each appoint a
Program Director prior to the Effective Date. Each Party shall have the right,
after notice to the other Party, to designate a different Program Director. The
Program Directors shall jointly oversee the conduct of the Development Program,
shall report to the Joint Development Committee and shall be responsible for
recommending to the Joint Development Committee any changes to the Development
Plan.

            (b) Dispute Resolution. The Program Directors shall decide matters
appropriate to the scope of their responsibilities on a consensus basis. In the
event that the Program Directors are unable to reach agreement on any matter
within fifteen (15) Days after the matter is first considered by them, the issue
may be referred by either Program Director for resolution to the Joint
Development Committee.

      II.3 Development Plan. The Parties will enter into a good faith discussion
to formulate the initial version of the Development Plan, as quickly as
possible, using the proposal by Novirio as attached hereto as Exhibit A, as a
reference to start with. The Development Plan may be amended from time to time
by mutual consent of the Parties. Amendments to the Development Plan proposed by
NOVIRIO or, to the extent directly relevant to obtaining Regulatory Approval in
the Territory, by SUMITOMO will become incorporated in the Development Plan
within thirty 30 Days of formal proposal unless the other Party makes a
reasonable objection within thirty 30 Days of such formal proposal to the
inclusion of such amendment to the Development Plan; provided, however, that
upon request of the party who received the amendment proposal of the Development
Plan, such period of review by the Party who received the amendment proposals of
the Development Plan may be extended by another ten (10) Days. In the event of
such objection, the Parties will request that a meeting of the Joint Development
Committee be convened in an effort to resolve the objection by consultation.

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            (a) NOVIRIO Responsibilities. Subject to the oversight of the Joint
Development Committee, NOVIRIO agrees to use Commercially Reasonable Efforts to
(i) undertake the responsibilities assigned to it in the Development Plan, and
(ii) make available to SUMITOMO those resources set forth in the Development
Plan, which efforts shall include, but not be limited to:

                  (i) working collaboratively and cooperatively with SUMITOMO to
optimize the design and performance of the clinical studies for the LdT Drug
Product in the Territory and globally under the standards of the International
Conference on Harmonization (ICH), including the use of contract research
organizations or other clinical contractors; provided, that (x) SUMITOMO alone
shall be the contract party in cases where agreements with contract research
organization or other clinical contractors relate to clinical studies conducted
solely within the Territory; (y) NOVIRIO alone shall be the contract party in
cases where such agreements relate to clinical studies conducted solely outside
the Territory; and (z) in the case of global clinical studies involving sites
both within and outside the Territory, each of NOVIRIO and SUMITOMO shall be
contract parties to such agreements;

                  (ii) conducting clinical and Non-clinical studies outside the
Territory which are required to obtain Regulatory Approval of LdT Drug Product
in the Territory as part of the ICH global registration of the LdT Drug Product
in such a way as to satisfy the requirements of the Pharmaceutical Laws in the
Territory;

                  (iii) determining the nature and content of any submissions to
the Regulatory Authority which are necessary to obtain regulatory approval of
the LdT Drug Product outside the Territory and the preparation and filing of any
such submissions; provided that SUMITOMO, to the extent commercially reasonable,
shall have an opportunity to review in advance all regulatory submissions to be
made by NOVIRIO and shall be permitted to attend all preparatory and regulatory
meetings with the relevant Regulatory Authority concerning such submissions;

                  (iv) [**] SUMITOMO [**] and notifying SUMITOMO in advance of
meetings and interactions with relevant regulatory authorities; and

                  (v) making Commercially Reasonable Efforts to obtain Valid
Claims regarding the LdT Drug Product.

            (b) SUMITOMO Responsibilities. Subject to the oversight of the Joint
Development Committee, SUMITOMO agrees to use Commercially Reasonable Efforts to
(i) undertake the responsibilities assigned to it in the Development Plan, and
(ii) make available to NOVIRIO those resources set forth in the Development
Plan, which efforts shall include, but not be limited to:

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                  (i) working collaboratively and cooperatively with NOVIRIO to
optimize the design and performance of the clinical studies for the LdT Drug
Product in the Territory and globally under the standards of the International
Conference on Harmonization (ICH), including the use of contract research
organizations or other clinical contractors; provided, that (x) SUMITOMO alone
shall be the contract party in cases where agreements with contract research
organizations or other clinical contractors relate to clinical studies conducted
solely within the Territory; (y) NOVIRIO alone shall be the contract party in
cases where such agreements relate to clinical studies conducted solely outside
the Territory; and (z) in the case of global clinical studies involving sites
both within and outside the Territory, each of NOVIRIO and SUMITOMO shall be
contract parties to such agreements;

                  (ii) determining the nature and content of any submissions to
the relevant Regulatory Authorities which are necessary to obtain Regulatory
Approval of the LdT Drug Product in the Territory and the preparation, filing
and prosecution in the name of SUMITOMO of submissions necessary to obtain
Regulatory Approval in the Territory; provided that NOVIRIO, to the extent
commercially reasonable, shall have an opportunity to review in advance all
regulatory submissions to be made by SUMITOMO and shall be permitted to attend
all preparatory and regulatory meetings with the relevant Regulatory Authority
concerning such submissions;

                  (iii) conducting clinical trials and Non-clinical studies in
the Territory to obtain Regulatory Approval of LdT Drug Product in the
Territory;

                  (iv) assisting and supporting to a commercially reasonable
extent harmonized global registration of the LdT Drug Product outside the
Territory;

                  (v) [**] NOVIRIO [**] and notifying NOVIRIO in advance of
meetings and interactions with Regulatory Authorities.

            (c) Development and Registration Costs.

                  (i) [**] shall bear: (x) all costs relating to [**] LdT Drug
Product; and (y) all costs, including costs incurred prior to the Effective
Date, relating to [**] by or on behalf of either NOVIRIO or SUMITOMO or their
respective Affiliates; provided, however, that the costs [**] hereunder shall
not include [**] any portion of the costs [**].

                  (ii) [**] shall bear: (x) all costs relating [**] LdT Drug
Product ; and (y) all costs relating to [**] LdT Drug Product, [**]

                  (iii) Each Party can use [**] the LdT Drug Product [**]

                  (iv) SUMITOMO will reimburse NOVIRIO for costs actually
incurred by NOVIRIO in connection with the manufacture and supply of LdT Drug
Product for the conduct of clinical trials of LdT Drug Product in the Territory,
including costs actually incurred by or on behalf of NOVIRIO in connection with
the manufacture and supply of LdT Drug Product or the active ingredient therein
to SUMITOMO prior to the Effective Date; provided, however, that such costs to
be reimbursed by SUMITOMO to NOVIRIO hereunder shall not include any allocation
of overhead of NOVIRIO, nor any portion of the costs incurred due to the causes
reasonably attributed to NOVIRIO's material misconduct.

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                  (v) The Parties shall share actually incurred costs, including
those relating to the manufacture and supply of LdT Drug Product and those
actually incurred prior to the Effective Date, [**] for Non-clinical studies
which are necessary for the registration of the LdT Drug Product excluding,
unless NOVIRIO or its Affiliates transfers to SUMITOMO LdT formulation
technologies, those Non-clinical Studies relating to development of
manufacturing processes or formulation technologies; provided, however, that the
costs of such Non-clinical studies to be shared equally by SUMITOMO and NOVIRIO
hereunder shall not include any allocation of overhead of either Party, nor any
portion of the costs incurred due to the causes reasonably attributed to either
Party's material misconduct.

            (d) Compliance with Pharmaceutical Laws. Each Party agrees to use
Commercially Reasonable Efforts to carry out all work assigned to such Party in
the Development Plan in material compliance with all ICH guidelines and
Pharmaceutical Laws.

            (e) Disclosure of NOVIRIO Technology. Commencing on the Effective
Date and continuing during the Term, NOVIRIO (consistent with its applicable
confidential disclosure obligations, if any) shall disclose to SUMITOMO (i) all
NOVIRIO Technology specified in the Development Plan, and (ii) all NOVIRIO
Technology not specified in the Development Plan which NOVIRIO reasonably
believes to be pertinent to the Development Program.

      II.4 Manufacturing and Supply. NOVIRIO shall have the responsibility, and
shall use Commercially Reasonable Efforts, to manufacture and supply to
SUMITOMO, the LdT Drug Product to be used by SUMITOMO, its Affiliates and
sublicensees for all Non-clinical and clinical and other development purposes in
connection with the efforts of SUMITOMO to obtain Regulatory Approvals.

      II.5 Product Labeling. Within the Territory, all LdT Drug Products will
bear the SUMITOMO name and logo. And, unless otherwise requested by NOVIRIO and
to the extent legally permitted, the NOVIRIO name and logo (or any successor
name and logo) shall be incorporated on the product label, as the manufacturer
of L-dT Drug Products. SUMITOMO shall, in its reasonable discretion, determine
how the NOVIRIO name and logo shall be incorporated on the label. All written
materials associated with each LdT Drug Product will indicate that the LdT Drug
Product was developed with the use of NOVIRIO Technology. NOVIRIO and Sumitomo
shall have the right, prior to the first usage, to review the product labeling
and thereafter to monitor the LdT Drug Products.

      II.6 Progress Reports. Within [**] Days after the end of each calendar
quarter, each Party shall provide to the other Party a written report
summarizing the activities undertaken by such Party during the preceding
calendar quarter in connection with the development and registration of the LdT
Drug Product.

      II.7 Inspections.

            (a) Each Party shall have the right to arrange for its employees and
outside consultants involved in the development and registration of LdT Drug
Products to visit and audit the other Party at its offices and laboratories as
well as contractors, in the event clinical or

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Non-clinical studies or manufacturing are outsourced, and to discuss the
Development Program and its results in detail, as well as matters relating to
the registration of LdT Drug Products, with the technical and business personnel
and consultants of the other Party, provided that such visits shall be during
normal business hours and shall not unreasonably interrupt the operations of the
other Party, and further provided that all such employees, consultants and
contractors shall have existing obligations to maintain confidentiality as
provided in Article VII.4 herein.

            (b) In the event onsite inspections or submission of documents or
information relevant to Regulatory Documents or any other actions are requested
by a Regulatory Authority, the Party in contact with such Regulatory Authority
will, to the extent commercially practicable, prior to initiating the compliance
with the request of the Regulatory Authority, notify the other Party of such
request of the Regulatory Authority, and to the extent relevant to the
Non-clinical and clinical trials for which such other Party is responsible under
this Agreement, such other Party will accommodate such request by the Regulatory
Authority.

      II.8 Accounting and Internal Controls. SUMITOMO and NOVIRIO shall each
conduct the Development Program in accordance with high standards of business
ethics and maintain accounts in accordance with generally accepted accounting
principles consistently applied in Japan or in the United States, as the case
may be, and, specifically, shall: (a) maintain full and accurate books, records
and accounts which shall, in reasonable detail, accurately and fairly reflect
all transactions relating to the Development Program; (b) devise and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with general or
specific authorizations, and (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles in Japan or in the United States, as the case may be, and
as otherwise required to comply with all tax statutes, and to maintain
accountability for assets; and (c) promptly provide such records as may be
reasonably requested by the other Party in connection with periodic audits or
other financial matters.

      II.9 Exchange of safety and adverse event information. NOVIRIO and
SUMITOMO shall collaborate in the exchange and reporting to Regulatory Authority
of safety information and adverse event information relating to the LdT Drug
Product in accordance with a customary agreement to be separately agreed by the
Parties.

      II.10 Good Manufacturing Practice(GMP). NOVIRIO and SUMITOMO shall
manufacture and store LdT Drug Product to the GMP standard in accordance with an
customary agreement to be separately agreed by the Parties.

      II.11 Commercialization. The Parties shall make all reasonable efforts to
negotiate, execute and deliver the Commercialization Agreement(s) as quickly as
practically possible after the Effective Date, aiming to do so within [**] after
the Effective Date.

ARTICLE III. GRANT OF LICENSE.

      III.1 Grant by NOVIRIO of License.

            (a) Development License. Subject to the terms and conditions of this

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Agreement, and for the Term of this Agreement, NOVIRIO hereby grants to SUMITOMO
and its Affiliates an exclusive License in the Territory, without the right to
grant sub-Licenses except as provided in Article III.1(b), below, to the LdT
Drug Product for use in the Field under the NOVIRIO Technology and NOVIRIO
Patent Rights in the course of the Development Program.

            (b) Sub-License Rights. SUMITOMO shall have the right to enter into
sub-Licenses relating to the License- granted in Article III.1(a), above, with
Third Parties with which SUMITOMO has agreed to collaborate with respect to the
development and/or registration of LdT Drug Product. Each such sub-License shall
be subject and subordinate to, and consistent with, the terms and conditions of
this Agreement, and shall provide that any such sub-Licensee shall not further
sub-License except on terms consistent with this Article III.1(b). SUMITOMO
shall provide NOVIRIO with a copy of any sub-License granted pursuant to this
Section within [**] after the execution thereof. SUMITOMO shall remain
responsible for the performance of its sub-Licensees, and shall ensure that any
such sub-Licensees comply with the relevant provisions of this Agreement. In the
event of a material default by any sub-Licensee under a sub-License agreement,
SUMITOMO will inform NOVIRIO and take such action, after consultation with
NOVIRIO, which in SUMITOMO's reasonable business judgment will address such
default.

      III.2 Retained Rights. The rights of NOVIRIO to the LdT Drug Product,
NOVIRIO Technology and the NOVIRIO Patent Rights which are not specifically
Licensed to SUMITOMO will be retained by Novirio Pharmaceuticals Limited, and
nothing contained in this Agreement shall be interpreted to grant to SUMITOMO
any rights to the NOVIRIO Technology and NOVIRIO Patent Rights other than the
rights and License granted to SUMITOMO under this Article III.

      III.3 Developments and Discoveries. All developments, inventions and
discoveries relating to the NOVIRIO Technology and improvements to the NOVIRIO
Patent Rights ("Novirio Developments"), [**] shall be [**]. The Parties agree
that Novirio Developments will be deemed to be a part of the NOVIRIO Technology
and NOVIRIO hereby grants to SUMITOMO a paid-up License in the Territory to such
NOVIRIO Developments for use in the Field and a right to sub-License in
accordance with the provisions set forth in this Article III. Notwithstanding
the foregoing, the Parties agree that the License granted hereby to the NOVIRIO
Developments does not include any substances, compounds or drug products other
than the LdT Drug Product. All development, inventions and discoveries relating
to the NOVIRIO Technology and improvements to the NOVIRIO Patent Rights, [**]
shall be owned jointly by SUMITOMO and NOVIRIO (such developments etc. are
referred to as "Jointly-owned Developments"), and it is agreed by the Parties
that SUMITOMO and NOVIRIO may utilize such Jointly-owned Developments, including
filing of patent applications, in the Territory and outside of the Territory,
respectively.

ARTICLE IV. FINANCIAL PROVISIONS.

      IV.1 License Payment. In consideration of the grant by NOVIRIO of the
Licenses set forth in Article III above, SUMITOMO shall pay NOVIRIO a
non-refundable, non-creditable License fee of [**] USD ($[**]) on the Effective
Date.

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      IV.2 Milestone Payments. SUMITOMO shall make the following non-creditable
milestone payments to NOVIRIO upon the achievement of the following milestones,
subject to the reduction mechanism and penalty payments as set forth below:

<TABLE>
<CAPTION>
               Milestone                           Payment Due Upon
                                               Achievement of Milestone
--------------------------------------------------------------------------------
<S>                                            <C>
a) [**].                                              $[**] USD

b) [**].                                              $[**] USD

c) [**]                                               $[**] USD

d) [**].                                              $[**] USD

e) [**]                                               $[**] USD

f) [**]                                               $[**] USD
</TABLE>

Each milestone payment shall be deemed earned as of the date of achievement of
the related milestone and shall be paid by SUMITOMO within [**] after the date
of achievement of such milestone. Notwithstanding the foregoing,

      i) with regard to the basic milestone payment in the above a), in the
      event that [**] in any of the countries in the Territory, [**] will be
      made if the milestone is unpaid at the time [**], and if the milestone
      payment has already been made [**], [**] the milestone payment already
      made to NOVIRIO.

      ii) with regard to each of the country-specific milestone payments in the
      above b) through f), in the event that [**] in a country of the Territory,
      all unpaid milestone payments relevant to such country will be [**] and if
      milestone payments relevant to such country have already been made [**]
      the total milestone payments relating to such country which have been
      previously received by NOVIRIO.

      IV.3 Development Costs Payments. Within [**] of the Effective Date,
NOVIRIO shall provide SUMITOMO with an invoice, and a detailed statement, of the
development costs

                                      -12-
<PAGE>
which are to be borne by SUMITOMO according to Article II.3 (c) above which
NOVIRIO or its Affiliates have incurred as of the Effective Date. Thereafter,
NOVIRIO and SUMITOMO shall invoice, and a detailed statement, the other Party
quarterly for such costs which are to be borne by the other Party in accordance
with Article II.3. Payment by SUMITOMO or NOVIRIO of the invoiced amount of
costs will be due and payable within [**] of the date of the invoice.

      IV.4 Currency and Method of Payments. All payments under this Agreement
shall be made in United States dollars by electronic funds transfer to such bank
account as NOVIRIO or SUMITOMO, as the case may be, may designate from time to
time within no more than [**] of invoice or when such payment is due in
accordance with the provisions of this Agreement.

      IV.5 Late Payments and Interest. To the extent payments due under this
Agreement are not paid within the specified time period and are not timely, such
outstanding sums shall accrue interest from the date due. Interest shall be
computed on any sums that are late and outstanding on the last day of each
month, at the prime or other equivalent rate of Citibank N.A. or another
mutually acceptable bank as of the last day of the month immediately preceding
the current month, plus three percent (3%) (or the highest interest rate
permissible under applicable law, whichever is lower), compounded on a monthly
basis.

      IV.6 Tax Withholding. Either Party and its respective Affiliates shall use
all reasonable and legal efforts to reduce tax withholding on payments made to
the other Party hereunder. Notwithstanding such efforts, if either Party
concludes that tax withholdings under the laws of any country are required with
respect to payments to the other Party, such paying Party shall withhold the
required amount and pay it to the appropriate governmental authority. In such a
case, the paying Party will promptly provide the other Party with original
receipts or other evidence reasonably desirable and sufficient to allow the
other Party to document such tax withholdings adequately for purposes of
claiming foreign tax credits and similar benefits.

      IV.7 Blocked Payments. In the event that, by reason of applicable laws or
regulations in any country, it becomes impossible or illegal for either Party or
its Affiliates or sub-Licensees, to transfer, or have transferred on its behalf,
payments to the other Party, such payments shall be deposited to the extent
possible in USD (or in the absence of availability of USD, local currency) in
the relevant country to the credit of the Party to which the amount is due in a
recognized banking institution designated by the Party to which the amount is
due or, if none is designated by the Party to which the amount is due within a
period of [**], in a recognized banking institution selected by the paying
Party, as the case may be, and identified in a notice in writing given to the
Party to which the amount is due.

ARTICLE V. OPTIONS AND RIGHT OF FIRST REFUSAL.

      V.1 Option for Commercialization Rights to NOVIRIO's [**] Hepatitis B Drug
Candidates. NOVIRIO grants to SUMITOMO the [**] agreements with NOVIRIO
relating, as the case may be, to the development and commercialization in the
Territory of [**] NOVIRIO and/or its Affiliates' [**] which right may be
exercisable on the terms and conditions set forth below by SUMITOMO during the
period within which NOVIRIO and SUMITOMO are parties to any Development or
Commercialization Agreement relating to the development or

                                      -13-
<PAGE>
commercialization of NOVIRIO drug candidates in the Field. NOVIRIO will offer
such option to SUMITOMO in writing after NOVIRIO is in receipt of data from a
Phase I/II dose escalating or similar clinical trial of such hepatitis B drug
candidates. NOVIRIO shall [**] with respect to these drug candidates in the
Territory [**], SUMITOMO shall have [**] and [**] thereafter to finalize
definitive agreements relating to such transaction. If SUMITOMO does not
communicate [**] in writing within such initial [**] period, SUMITOMO shall be
deemed [**]. In that instance, NOVIRIO may, [**] in the Territory.

      V.2 Right of First Refusal for [**] Drug Candidates. NOVIRIO grants to
SUMITOMO, on and in accordance with the terms and conditions set forth in this
Section V.2, and in a good faith efforts to explore collaborative arrangement
with SUMITOMO in [**] field, [**] relating to the development and
commercialization of NOVIRIO's and/or its Affiliates' [**] drug candidates in
the Territory. NOVIRIO will provide a written notice (the "[**] Notice") to
SUMITOMO detailing the [**] development and commercialization [**] the
transaction, [**] drug candidate. SUMITOMO shall have [**] after receipt from
NOVIRIO of a [**] Notice to [**] NOVIRIO the [**] drug candidate [**] set forth
in the [**] Notice. If SUMITOMO does not communicate [**] in writing within such
period, SUMITOMO shall be deemed [**]. If SUMITOMO does [**], NOVIRIO shall [**]
drug candidate on [**] to NOVIRIO than the [**]drug candidate in any manner it
determines [**] drug candidates to SUMITIOMO. To the extent [**] pursuant to
which it [**] drug candidate, NOVIRIO shall, on terms and conditions similar to
those set forth in this Section V.2, [**] drug candidate [**].

ARTICLE VI. CONFIDENTIALITY.

      VI.1 Disclosure and Use of Confidential Information. Except as otherwise
provided herein, unless the party receiving the Confidential Information (the
"Receiving Party") has obtained the prior written consent of the party (the
"Disclosing Party") disclosing or on whose behalf Confidential Information is
disclosed, the Receiving Party will hold in confidence and not disclose any
Confidential Information. Further, the Receiving Party agrees to use the
Confidential Information only for the purpose of this Agreement or the
Commercialization Agreement and will not use or exploit the Confidential
Information, either directly or indirectly, for its own benefit or the benefit
of another without the prior written consent of the Disclosing Party. These
obligations of confidentiality and non-use shall continue during the Term, the
term of the Commercialization Agreement and for a period of five (5) years after
the termination of the Commercialization Agreement.

Notwithstanding the foregoing, these mutual obligations of confidentiality shall
not apply to any information to the extent that such information is:

                  (i) independently developed by such party as documented by
prior written records outside the scope and not in violation of this Agreement;

                  (ii) legally in the public domain at the time of its receipt
or thereafter legally becomes part of the public domain through no fault of the
Receiving Party;

                  (iii) received without an obligation of confidentiality from a
Third Party having the right to disclose such information;

                                      -14-
<PAGE>
                  (iv) released from the restrictions of this Article VI6 by the
prior written consent of the Disclosing Party; or

                  (v) as may be required for securing Regulatory Approval, as
may be required to be disclosed to a Regulatory Authority, or as otherwise
required by a court order or any law or regulation (including as may be required
in connection with any filings made with the Securities and Exchange Commission
or by the disclosure policies of a major stock exchange on which the securities
of the Receiving Party are or may be reasonably expected to be traded);
provided, however, that, at the Disclosing Party's request, the Receiving Party
shall request that the relevant legal or Regulatory Authority or major stock
exchange treat as confidential any Confidential Information of either party
included in any such disclosure and generally use diligent efforts to seek
confidential treatment where available.

      VI.2 Scope of Confidentiality. Unless the prior written consent of the
Disclosing Party has been received, each of NOVIRIO and SUMITOMO agree to limit
the disclosure of any Confidential Information received hereunder to such
Affiliates, employees, consultants and distributors as is necessary to carry out
the provisions of this Agreement and who are likewise bound by provisions
equivalent to this Article VI and to those Affiliates, employees, consultants or
third parties as may be required in connection with corporate financing
activities undertaken by or on behalf of the Receiving Party. The parties shall
take reasonable measures to assure that no unauthorized use or disclosure is
made by persons to whom access to such Confidential Information is granted.
Unauthorized use or disclosure by any person who has been given access to
Confidential Information by a Receiving Party hereunder shall be deemed to be
unauthorized use or disclosure by such Receiving Party, and the Receiving Party
shall be responsible to the Disclosing Party hereunder. The Receiving Party will
promptly report to the Disclosing Party any actual or suspected unauthorized use
of the Confidential Information of the Disclosing Party and the Receiving Party
will take all reasonable further steps requested by the Disclosing Party to
prevent, control or remedy any such violation.

ARTICLE VII. REPRESENTATIONS AND WARRANTIES.

      VII.1 Representations of Authority. SUMITOMO and NOVIRIO each represents
and warrants to the other that as of the Effective Date it has full right, power
and authority to enter into this Agreement and to perform its respective
obligations under this Agreement. NOVIRIO represents and warrants to SUMITOMO
that it has the right to grant to SUMITOMO the Licenses and such sub-Licenses as
may be granted pursuant to this Agreement, and that it has, as of the Effective
Date, access to and the right to use the technology necessary to perform its
obligations hereunder.

      VII.2 Consents. SUMITOMO and NOVIRIO each represents and warrants that all
necessary consents, approvals and authorizations of all government authorities
and other persons, including all requisite corporate approvals, required to be
obtained by such Party in connection with the execution, delivery and
performance of this Agreement have been obtained.

      VII.3 No Conflict. SUMITOMO and NOVIRIO each represents and warrants that,
the execution and delivery of this Agreement, the performance of such Party's
obligations

                                      -15-
<PAGE>
hereunder and the conduct of the Development Program (a) do not conflict with or
violate any requirement of applicable laws or regulations and (b) do not and
will not conflict with, violate or breach or constitute a default or require any
consent under, any contractual obligations of such Party, except such consents
as shall have been obtained prior to the Effective Date.

      VII.4 Employee Obligations. SUMITOMO and NOVIRIO each represents and
warrants that all of its employees, officers, and consultants have executed
agreements or have existing obligations under law requiring, in the case of
employees and officers, assignment to such Party of all inventions made during
the course of and as the result of their association with such Party and
obligating the individual to maintain as confidential such Party's Confidential
Information as well as confidential information of a Third Party which such
Party may receive, to the extent required to support such Party's obligations
under this Agreement.

      VII.5 Intellectual Property. To the knowledge of NOVIRIO, except as
disclosed in writing by NOVIRIO to SUMITOMO, as of the Effective Date, the
conduct by NOVIRIO of the Development Program in accordance with the Development
Plan does not and will not infringe or conflict with the rights of any Third
Party in respect of Know-How or issued patents or published patent applications
owned by such Third Party, except where such infringement or conflict would not
materially affect the ability of NOVIRIO to conduct the Development Program in
accordance with the Development Plan. To the knowledge of NOVIRIO, as of the
Effective Date, the NOVIRIO Technology that is expected to be utilized by
NOVIRIO in the Development Program in accordance with the Development Plan is
not being infringed by any Third Party, except where such infringement would not
materially affect the ability of NOVIRIO to conduct the Development Program in
accordance with the Development Plan. As of the Effective Date, there is, to the
knowledge of NOVIRIO, no claim or demand of any person pertaining to, or any
proceeding which is pending or threatened, that challenges the rights of NOVIRIO
in respect of NOVIRIO Technology or NOVIRIO Patent Rights, except where such
claim, notice, demand or proceeding would not materially adversely affect the
ability of NOVIRIO to conduct the Development Program in accordance with the
Development Plan.

      VII.6 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE
PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, AND PARTICULARLY THAT PRODUCTS WILL BE SUCCESSFULLY
DEVELOPED HEREUNDER, AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE VIII. TERM AND TERMINATION.

      VIII.1 Term. This Agreement shall become effective as of the Effective
Date, until the end of SUMITOMO's obligations for payment of milestone and
development cost amounts as set forth in Article IV.

      VIII.2 Termination By SUMITOMO. On not less than sixty (60) Days prior
notice, SUMITOMO may discontinue support of clinical development and/or
Non-clinical studies and terminate its rights and obligations under this
Agreement at any time when, in good faith: (a)

                                      -16-
<PAGE>
SUMITOMO believes that the scientific data developed in clinical trials and/or
Non-clinical studies does not support further commercial development of LdT Drug
Product (including but not limited to conclusive evidence that the LdT Drug
Product cannot be proven effective against [**]); (b) SUMITOMO believes, after
consultation with Regulatory Authorities, that the opportunities for
commercialization of LdT Drug Product are substantially limited in the
Territory; or (c) SUMITOMO determines that NOVIRIO Patent Rights do not
constitute Valid Claims. In the event of termination by SUMITOMO, the License
granted to SUMITOMO by NOVIRIO pursuant to Article III of this Agreement will be
automatically terminated and SUMITOMO will waive any and all other rights
SUMITOMO, its Affiliates or sub-Licensees may then have to the LdT Drug Product
or any Novirio Developments. Notwithstanding the foregoing, SUMITOMO will not be
relieved of the obligation to pay for: (i) milestones achieved prior to
termination; (ii) costs incurred prior to and/or (iii) noncancellable
obligations existing at the time of termination of this Agreement.

      VIII.3 Termination For Material Breach. Upon any material breach of this
Agreement by either Party, the nonbreaching Party may terminate this Agreement
by providing forty-five (45) Days written notice to the breaching Party
specifying the material breach. The termination shall become effective at the
end of the forty-five (45) Day period unless (a) the breaching party cures such
breach during such forty-five (45) Day period, or (b) if such breach is not
susceptible to cure within forty-five (45) Days of the receipt of written notice
of the breach, the breaching party is diligently pursuing a cure (unless such
breach, by its nature, is incurable, in which case the Agreement may be
terminated immediately) and effects such cure within an additional sixty (60)
Days after the end of such forty-five (45) Day period. In the event of
termination by NOVIRIO in accordance with this Section VIII.3, the License
granted to SUMITOMO by NOVIRIO pursuant to Article III of this Agreement will be
automatically terminated and SUMITOMO will waive any and all other rights
SUMITOMO, its Affiliates or sub-Licensees may then have to the LdT Drug Product.
Notwithstanding the foregoing, the breaching Party will not be relieved of the
obligation to pay for: (i) milestones achieved prior to termination, in the case
where SUMITOMO is the breaching Party, (ii) costs incurred prior to and/or (iii)
noncancellable obligations existing at the time of termination of this
Agreement.

      VIII.4 Transfer of Documents. In the event that either NOVIRIO or SUMITOMO
terminates this Agreement and unless such termination is caused by NOVIRIO's
breach, NOVIRIO shall have the right to utilize any and all data generated prior
to such termination in the development of a LdT Drug Product without payment to
SUMITOMO, and, upon the written request of NOVIRIO, SUMITOMO shall transfer to
NOVIRIO any and all data as it relates to the LdT Drug Product and any Novirio
Developments and transfer and assign to NOVIRIO all Regulatory Documents
relating to the LdT Drug Product and any Novirio Developments. In the event that
no such assignment may legally be made in any country in the Territory, SUMITOMO
shall continue to maintain such Regulatory Documents and shall provide to
NOVIRIO and/or NOVIRIO's Affiliates and/or their designees the right to
cross-reference and rely upon all such Regulatory Documents.

      VIII.5 No Damages upon Expiration or Termination. Except as otherwise set
forth in this Agreement and without limiting either Party's claim for equitable
relief or damages incurred as a result of a material breach of the terms of this
Agreement, neither Party shall be entitled to any compensation, fees or damages
as a result of the expiration or termination of this

                                      -17-
<PAGE>
Agreement for reason other than material breach.

      VIII.6 Survival. Upon expiration or termination of this Agreement for any
reason, nothing in this Agreement shall be construed to release either Party
from any obligations that matured prior to the effective date of expiration or
termination; and the following provisions shall expressly survive any such
expiration or termination: Articles I, V (except for the case where this
Agreement is terminated by NOVIRIO pursuant to VIII.3 ), VI, IX, X and Sections
IV.2 and this Article VIII.6.

ARTICLE IX. DISPUTE RESOLUTION.

      IX.1 General. Any controversy, claim or dispute arising out of or relating
to this Agreement shall be settled, if possible, through good faith negotiations
between the Parties. If, however, the Parties are unable to settle such dispute
after good faith negotiations, the matter shall be referred to the Executive
Officers to be resolved by negotiation in good faith as soon as is practicable
but in no event later than thirty (30) Days after referral. Such resolution, if
any, of a referred issue shall be final and binding on the Parties.

      IX.2 Failure of Executive Officers to Resolve Dispute. If the Executive
Officers are unable to settle the dispute after good faith negotiation in the
manner set forth above, then the dispute shall be resolved in accordance with
Article IX.3 below, which resolution shall be final and binding upon the
Parties.

      IX.3 Alternative Dispute Resolution. If the dispute has not been resolved
by the Executive Officers within thirty (30) Days of referral in accordance with
Article IX.1, or if the Executive Officers fail to meet within such thirty (30)
Days, a Party may seek resolution of the dispute by initiating arbitration in
accordance with the following provisions.

            (a) All disputes arising out of this Agreement and referred to
arbitration pursuant to this Article IX shall be finally resolved by arbitration
conducted in English in accordance with the rules of the ICC not inconsistent
with the terms of this Agreement. The place of arbitration shall be Tokyo,
Japan, if arbitration is brought by NOVIRIO, or, Amsterdam, The Netherlands, if
arbitration is brought by SUMITOMO. The parties hereby irrevocably consent to
the jurisdiction, venue and convenience of such forum for the arbitration and
any judicial action to enforce the arbitration panel's award.

      The arbitration shall be heard within sixty (60) Days of one Party's
notice to the other Party of the inability to reach resolution on a matter in
dispute and demand for arbitration. There shall be no mandatory discovery prior
to the arbitration and no formal rules of evidence other than those as the
arbitrators may promulgate in their sole discretion by majority vote. The
arbitration shall consist of each party submitting their statement in a document
not longer than 20 pages of the facts of the dispute, a proposed resolution and
the grounds for such resolution. The arbitration will be held on one day's
hearing before the arbitration panel starting at 9:00 A.M. and concluding at
4:00 P.M., with the losing Party paying the full costs of the arbitration and
the reasonable costs and expenses of the prevailing Party including reasonable
attorney's fees and costs and the costs of the arbitrators. The arbitration
shall be resolved by the majority of the arbitration panel selecting one of the
two proposed resolutions as superior within two

                                      -18-
<PAGE>
hours of the close of the day's arbitration hearing. Upon selection of one of
the proposed resolutions, such selected resolution shall be the final and
binding award of the arbitration regarding the dispute. Such award shall be
immediately enforceable as the final and binding arbitration of the matter both
at the place of arbitration and any place of business or ownership of assets of
either of the Parties. Each of the Parties irrevocably waive to the extent
permitted by applicable law, any legal action for stay, review, injunction,
setting aside, appeal or other form of judicial challenge to the full faith and
credit recognition and full enforcement of all of the terms of such arbitration
award in whatever court in whatever jurisdiction such enforcement of the
arbitration award judgment may be sought.

      Any arbitration shall be conducted by an arbitration panel consisting of
three (3) members, one appointed by each party and the third appointed by the
first two members. Each Party shall, at its discretion, appoint one arbitrator
whose reputation for ethics, professionalism and knowledge of commercial dispute
resolution cannot be reasonably objected to by either Party and who are not in
conflict of interest with either Party.

            (b) The arbitrators shall be paid reasonable fees plus expenses
agreed to prior to the arbitration.

ARTICLE X. MISCELLANEOUS PROVISIONS.

      X.1 Indemnification.

            (a) SUMITOMO. SUMITOMO agrees to defend NOVIRIO and its Affiliates
at its cost and expense, and will indemnify and hold NOVIRIO and its Affiliates
and their respective directors, officers, employees and agents (the "NOVIRIO
Indemnified Parties") harmless from and against any losses, costs, damages, fees
or expenses (including to the extent applicable reasonable attorney's fees and
costs) arising out of any claim or Third Party action or proceeding relating to
any breach by SUMITOMO of any of its material representations, warranties or
obligations pursuant to this Agreement. In the event of any such claim or Third
Party action or proceeding against the NOVIRIO Indemnified Parties, NOVIRIO
shall promptly notify SUMITOMO in writing of the claim and SUMITOMO shall, at
its option have the right to manage and control, at its sole expense, the
defense of the claim and its settlement. The NOVIRIO Indemnified Parties shall
reasonably cooperate with SUMITOMO and may, at their option and expense, be
represented in any such action or proceeding. SUMITOMO shall not be liable for
any litigation costs or expenses incurred by the NOVIRIO Indemnified Parties
without SUMITOMO's prior written authorization, provided however that a NOVIRIO
Indemnified Party shall have the right to retain its own separate legal counsel
at the expense of SUMITOMO if: (i) SUMITOMO does not employ counsel reasonably
satisfactory to the NOVIRIO Indemnified Party to take charge of the defense of
such indemnifiable claim within a reasonable time after notice of commencement
of the action; or (ii) representation of both SUMITOMO and the NOVIRIO
Indemnified Party by the same counsel would be inappropriate due to actual or
potential conflicting interests in which case, when the NOVIRIO Indemnified
Party notifies SUMITOMO, SUMITOMO shall not have the right to assume defense of
the such action on behalf of the NOVIRIO Indemnified Party. SUMITOMO shall not
be responsible for the indemnification of any NOVIRIO Indemnified Party arising
from any negligent or intentional acts by such Party, or as the result of any

                                      -19-
<PAGE>
settlement or compromise by the NOVIRIO Indemnified Parties without SUMITOMO's
prior written consent, which shall not be unreasonably withheld.

            (b) NOVIRIO. NOVIRIO agrees to defend SUMITOMO and its Affiliates at
its cost and expense, and will indemnify and hold SUMITOMO and its Affiliates
and its respective directors, officers, employees and agents (the "SUMITOMO
Indemnified Parties") harmless from and against any losses, costs, damages, fees
or expenses (including to the extent applicable reasonable attorney's fees and
costs) arising out of any claim or Third Party action or proceeding relating to
(i) any breach by NOVIRIO of any of its material representations, warranties or
obligations pursuant to this Agreement or (ii) personal injury from the
development, manufacture, use, sale or other disposition of any LdT Drug
Products. In the event of any such claim or Third Party action or proceeding
against the SUMITOMO Indemnified Parties, SUMITOMO shall promptly notify NOVIRIO
in writing of the claim and NOVIRIO shall, at it option, have the right to
manage and control, at its sole expense, the defense of the claim and its
settlement. The SUMITOMO Indemnified Parties shall reasonably cooperate with
NOVIRIO and may, at their option and expense, be represented in any such action
or proceeding. NOVIRIO shall not be liable for any litigation costs or expenses
incurred by the SUMITOMO Indemnified Parties without NOVIRIO's prior written
authorization provided however that a SUMITOMO Indemnified Party shall have the
right to retain its own separate legal counsel at the expense of NOVIRIO if: (i)
NOVIRIO does not employ counsel reasonably satisfactory to the SUMITOMO
Indemnified Party to take charge of the defense of such indemnifiable claim
within a reasonable time after notice of commencement of the action; or (ii)
representation of both NOVIRIO and the SUMITOMO Indemnified Party by the same
counsel would be inappropriate due to actual or potential conflicting interests
in which case, when the SUMITOMO Indemnified Party notifies NOVIRIO, NOVIRIO
shall not have the right to assume defense of the such action on behalf of the
SUMITOMO Indemnified Party. NOVIRIO shall not be responsible for the
indemnification of any SUMITOMO Indemnified Party arising from any negligent or
intentional acts by such Party, or as the result of any settlement or compromise
by the SUMITOMO Indemnified Parties without NOVIRIO's prior written consent,
which shall not be unreasonably withheld.

            (c) The failure by an indemnified Party to comply with any provision
of this Article X.1 shall not relieve an indemnifying Party of their respective
obligations arising pursuant to this Article X.1 except to the extent the
indemnifying Party is adversely affected by such noncompliance.

      X.2 Governing Law. This Agreement shall be construed and the respective
rights of the Parties hereto determined (including in any arbitration proceeding
under Article IX, above) according to the substantive laws of Japan, except
matters of intellectual property law which shall be determined in accordance
with the national intellectual property laws relevant to the intellectual
property in question.

      X.3 Assignment. Neither NOVIRIO nor SUMITOMO may assign this Agreement in
whole or in part without the consent of the other, except, that NOVIRIO may
assign its rights and delegate its obligations pursuant to this Agreement in
whole to any of Novirio Pharmaceuticals, Inc., Novirio Pharmaceuticals Limited
or Novirio SARL, in such case NOVIRIO shall promptly notify SUMITOMO in writing
to that effect.

                                      -20-
<PAGE>
      X.4 Amendments. This Agreement constitutes the entire agreement between
the Parties with respect to the subject matter hereof, and supersedes all
previous arrangements with respect to the subject matter hereof, whether written
or oral, except for the continuing obligations of the Parties under that certain
Confidentiality Agreement dated November 30, 2000 by and between the Parties.
Any amendment or modification to this Agreement shall be made in writing signed
by both Parties.

      X.5 Notices.

Notices to NOVIRIO shall be addressed to:

      NOVIRIO B.V.
      Locatellikade 1
      1076 AZ Amsterdam
      The Netherlands
      Attention:  Ms. Roos Matzinger
      Facsimile No.:31 - 20 - 67 - 30 - 016

with a copy to:

      Novirio Pharmaceuticals, Inc.
      125 CambridgePark Drive
      Cambridge, MA 02140
      Attention: Sr. V.P. Business Development
      Facsimile No.: 617 - 250 - 3101

Notices to SUMITOMO shall be addressed to:

      SUMITOMO
      2-8, Doshomachi 2-chome,
      Chuo-ku, Osaka, Japan
      Attention: Director, General Manager, Business Development &
                 Licensing Office
      Facsimile No.: +81-6233-2288

with a copy to:

      SUMITOMO
      2-8, Doshomachi 2-chome,
      Chuo-ku, Osaka, Japan
      Attention: Director, General Manager, Product Development Divsion
      Facsimile No.: +81-6233-2399

Any Party may change its address by giving notice to the other Party in the
manner herein provided. Any notice required or provided for by the terms of this
Agreement shall be in

                                      -21-
<PAGE>
writing and shall be (a) sent by registered or certified mail, return receipt
requested, postage prepaid, (b) sent via a reputable overnight courier service,
or (c) sent by confirmed facsimile transmission, in each case properly addressed
in accordance with the paragraph above. The effective date of notice shall be
the actual date of receipt by the Party receiving the same.

      X.6 Exports. The Parties acknowledge that the export of technical data,
materials or products is subject to the exporting Party receiving any necessary
export licenses and that the Parties cannot be responsible for any delays
attributable to export controls that are beyond the reasonable control of either
Party. SUMITOMO and NOVIRIO agree not to export or re-export, directly or
indirectly, any information, technical data, the direct product of such data,
samples, compounds or equipment received or generated under this Agreement in
violation of any governmental regulations that may be applicable. SUMITOMO and
NOVIRIO agree to obtain similar covenants from their Affiliates, sublicensees
and contractors with respect to the subject matter of this Section.

      X.7 Force Majeure. No failure or omission by the Parties hereto in the
performance of any obligation of this Agreement shall be deemed a breach of this
Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of the Parties, including, but not limited to: acts of
God; acts or omissions of any government; any rules, regulations or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; and invasion and provided that such failure or
omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes.

      X.8 Press Release. The content and timing of any press release or similar
publicity with respect to the execution of this Agreement shall be agreed upon
by the Parties in advance of such announcement. Each Party understands that this
Agreement is likely to be of significant interest to investors, analysts and
others, and that either Party therefore may make such press release with respect
thereto. The Parties agree that any such press release will not contain
Confidential Information and, if disclosure of Confidential Information is
required by law or regulation, will make reasonable efforts to minimize such
disclosure. Each Party agrees to provide to the other Party a copy of any press
release as soon as reasonably practicable under the circumstances prior to its
scheduled release. Except under extraordinary circumstances, each Party shall
provide the other with an advance copy of any press release at least five (5)
Days prior to the scheduled disclosure. Each Party shall have the right to
expeditiously review and recommend changes to any announcement regarding this
Agreement or the subject matter of this Agreement, provided that such
announcement shall be advanced to the other Party at least two (2) Days before
the scheduled disclosure. Except as otherwise required by law, the Party whose
press release has been reviewed shall remove any information the reviewing Party
reasonably deems to be inappropriate for disclosure.

      X.9 Independent Contractors. It is understood and agreed that the
relationship between the Parties hereunder is that of independent contractors
and that nothing in this Agreement shall be construed as authorization for
either NOVIRIO or SUMITOMO to act as agent for the other. The Program Directors
shall remain employees of SUMITOMO or NOVIRIO, as the case may be.

                                      -22-
<PAGE>
      X.10 No Strict Construction. This Agreement has been prepared jointly and
shall not be strictly construed against any Party.

      X.11 Headings. The captions or headings of the sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.

      X.12 No Implied Waivers; Rights Cumulative. No failure on the part of
NOVIRIO or SUMITOMO to exercise, and no delay in exercising, any right, power,
remedy or privilege under this Agreement, or provided by statute or at law or in
equity or otherwise, shall impair, prejudice or constitute a waiver of any such
right, power, remedy or privilege or be construed as a waiver of any breach of
this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.

      X.13 Severability. If any provision hereof should be held invalid, illegal
or unenforceable in any respect in any jurisdiction, then, to the fullest extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intentions of the Parties as nearly as may be possible and (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, NOVIRIO and SUMITOMO hereby waive any
provision of law that would render any provision hereof prohibited or
unenforceable in any respect.

      X.14 Execution in Counterparts. This Agreement may be executed in
counterparts, each of which counterpart, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.

      X.15 English Version. In the event that this Agreement is translated into
a language other than English, the English version of this Agreement shall
control all questions of interpretation with respect thereto.

      IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.

                                    NOVIRIO B.V.

                                    By:   /s/Jean-Pierre Sommadossi
                                        ----------------------------------------
                                             Jean-Pierre Sommadossi, Ph.D.
                                    Title:   Authorized Signatory

                                    SUMITOMO PHARMACEUTICALS CO. LTD.

                                      -23-
<PAGE>
                                    By:   /s/ Masaaki Yokotsuka
                                        ----------------------------------------
                                              Masaaki Yokotsuka

                                    Title:    President
                                           -------------------------------------

                                      -24-
<PAGE>
                                    EXHIBIT A

                   GLOBAL CLINICAL DEVELOPMENT PROGRAM FOR LDT

REGULATORY GOAL:

International registration of L-dT for treatment of adults with chronic
hepatitis B and evidence of viral replication [**], all disease stages including
[**]

[**] PHASE II & III TRIALS SUPPORTING LDT REGULATORY DOSSIERS BY [**] Study [**]
[**]chronic hepatitis B[**] Trial [**]
[**]chronic hepatitis B[**]

[**] Trial [**]
[**] Trial [**]
[**]

[**] chronic hepatitis B[**]
[**] study [**] hepatitis B[**] may also be necessary.

                      [**] STUDY [**][**] MAY BE NECESSARY.

                                      -25-
<PAGE>
                                    EXHIBIT B

                              NOVIRIO PATENT RIGHTS

<TABLE>
<CAPTION>
TITLE               COUNTRY       FILING      SERIAL       PATENT       STATUS
                                  DATE        NUMBER       NUMBER
--------------------------------------------------------------------------------
<S>                 <C>           <C>         <C>          <C>          <C>
[**]                [**]          [**]        [**]         [**]         [**]
[**]                [**]          [**]        [**]         [**]         [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]                      [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]          [**]        [**]                      [**]
                    [**]                      [**]                      [**]
[**]                [**]          [**]        [**]                      [**]
[**]                [**]          [**]        [**]                      [**]
</TABLE>

                                      -26-<PAGE>
                                                                   Exhibit 10.13

  Confidential Materials omitted and filed separately with the Securities and
                Exchange Commission. Asterisks denote omissions.

                           COMMERCIALIZATION AGREEMENT

         THIS COMMERCIALIZATION AGREEMENT ("Agreement") is entered into and made
as of September 14, 2001, by and between

         SUMITOMO PHARMACEUTICALS CO. LTD., a company organized, resident and
         existing under the laws of Japan, with its principal place of business
         at 2-8, Doshomachi 2-chome, Chuo-ku, Osaka, Japan (hereinafter
         "SUMITOMO") and

         NOVIRIO B.V., a company organized, resident and existing under the laws
         of The Netherlands, with its principal place of business at
         Locatellikade 1, 1076 AZ Amsterdam, The Netherlands (together with its
         Affiliates, hereinafter "NOVIRIO").

                                    RECITALS

         NOVIRIO and SUMITOMO are parties to a DEVELOPMENT AGREEMENT dated as of
June 29, 2001 relating to the development and registration of the LdT Drug
Product for indications related to the treatment of hepatitis B;

         NOVIRIO and SUMITOMO have agreed that SUMITOMO will have the exclusive
right to commercialize LdT Drug Product in the Territory.

         In accordance with the provisions of the DEVELOPMENT AGREEMENT, NOVIRIO
and SUMITOMO wish to enter into this COMMERCIALIZATION AGREEMENT, pursuant to
which the terms and conditions of the commercialization of LdT Drug Product in
the Territory are stipulated.

         In consideration of the Recitals and the mutual covenants set forth in
this Agreement, the Parties agree as set forth below.

         ARTICLE 1. DEFINITIONS.

1.1 "Affiliate" means any corporation, company, partnership, joint venture
and/or firm which controls, is controlled by, or is under common control with a
Party. For purposes of this paragraph 1.1, "control" will mean (a) in the case
of corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the stock or shares having the right to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities.
<PAGE>
1.2 "Adverse Drug Reaction" means the definition as provided in the ICH E2A
harmonized Clinical Safety Data Management guideline.

1.3 "Approved Product" means the LdT Drug Product for which Regulatory Approval
has been obtained in the Territory.

1.4 "Commercially Reasonable Efforts" means "best practices" efforts and
resources normally used by a party for a compound or product owned by it or to
which it has rights, which is of similar market potential at a similar stage in
its product life, taking into account the competitiveness of the marketplace,
the proprietary position of the compound or product, the regulatory structure
involved, the potential profitability of the applicable product, and other
relevant factors. It is anticipated that the level of efforts and resources may
change at different times during the product life cycle of a compound or
product. With respect to best practices for the LdT Drug Product the parties
will from time to time discuss in the Joint Committee those practices which are
appropriate in terms of profitability and effectiveness for the marketing
promotion and sales of LdT Drug Product in the Territory. Neither Party's
opinion regarding the best practice will be unreasonably rejected at the
discussion of the Joint Committee. In cases of reasonable disagreement of the
Parties, the informed opinion of independent third parties will be considered as
guidance for each of the Parties in the Joint Committee.

1.5 "Commercialization Plan" means the comprehensive plan for commercialization
of LdT Drug Product in the countries within the Territory to be prepared by
SUMITOMO. The Commercialization Plan will describe the overall plan for
commercializing, in each country within the Territory, the LdT Drug Product and
will, without limitation, detail (i) a comprehensive marketing, sales, pricing
and distribution strategy for LdT Drug Product in all countries within the
Territory; and (ii) anticipated Launch Date, estimated market and sales
forecasts in numbers of patients and local currency, and competitive analysis
for the LdT Drug Product.

1.6 "Confidential Information" means all Know-How, Technical Information (as
each is hereinafter defined) or other information (whether or not patentable),
including, without limitation, proprietary information and materials (including
tangible manifestations thereof) constituting to the extent applicable or
regarding a Party's technology, products, business information or objectives,
which is designated as confidential in writing by the disclosing Party, whether
by letter or by the use of an appropriate stamp or legend, prior to or at the
time any such material, trade secret or other information is disclosed by the
disclosing Party to the other Party. Notwithstanding the foregoing to the
contrary, materials, Know-How or other information which is disclosed by a Party
in tangible, oral, electronic, optical or other form, or is disclosed in writing
without an appropriate letter, stamp or legend, will constitute Confidential
Information of a Party if the disclosing Party, within thirty (30) Days after
such disclosure, delivers to the other Party a written document or documents
describing the materials, Know-How or other

                                     - 2 -
<PAGE>
information and referencing the place and date of such oral, visual, electronic,
optical, written or other disclosure and the names of the persons to whom such
disclosure was made. Notwithstanding the foregoing, the Parties expressly agree
that all information and data relating to the LdT Drug Product, results of
non-clinical and clinical studies of the LdT Drug Product, all information
contained in submissions to the Regulatory Authorities, LdT Drug Product
pricing, marketing and sales strategies, plans and related information will for
all purposes hereof be deemed to be Confidential Information.

1.7 "Control" or "Controlled" in the context of intellectual property rights
means rights to intellectual property sufficient to allow a grant of rights
without any obligation to any Third Party.

1.8 Current Good Manufacturing Practices ("cGMP") means "current good
manufacturing practices" as defined pursuant to the Pharmaceutical Laws and as
set forth in 21 CFR Part 211 and other applicable regulations promulgated
thereunder as in effect from time to time, and any other methods used in, and
facilities and controls used for, the manufacturing, testing, validation,
labeling, packaging, storage, shipment and installation of any and all
pharmaceutical products, equipment and related materials to ensure that such
products and materials meet the legal requirements for safety and effectiveness
as established by the U.S. Food and Drug Administration and any successor agency
of the United States government ("FDA") and such standards of good manufacturing
practices as are required by other organizations, governments and Regulatory
Agencies in countries within the Territory in which the LdT Drug Product is
intended to be sold, to the extent such standards are not inconsistent with
United States standards for cGMP.

1.9 "Days" means days [**]

1.10 "Development Agreement" means the Development Agreement by and between the
Parties dated as of June 29, 2001, as the same may be subsequently amended,
modified or supplemented.

1.11 "Effective Date" means the execution date of this Agreement.

1.12 "Field" means the use of the LdT Drug Product for the treatment of
hepatitis B in humans.

1.13 "First Calculation Period" has the definition given to such term in Section
3.6 (2c) of this Agreement.

1.14 "GMPI" has the definition given to such term in Section 3.11(c) of this
Agreement

1.15 "Know-How" means any information, data and materials, including, without
limitation ideas, formulas, methods, procedures, compositions, compounds and
inventions, that are owned or otherwise Controlled by a Party relating to the
LdT Drug Product.

                                     - 3 -
<PAGE>
1.16 "LdT Drug Product" means drug substance, formulation intermediate, or a
product prepared from [**] including but not limited to finished dosage form
ready for administration to a patient as a pharmaceutical product.

1.17 "Launch Date" means the date of first commercial shipment of the LdT Drug
Product by SUMITOMO, its Affiliates or Permitted Sub-Distributors as defined in
Section 1.22 to Third Parties in a country in the Territory.

1.18 "Net Sales" means, with respect to the LdT Drug Product, the gross amount
invoiced by SUMITOMO and/or its Affiliates or Permitted Sub-Distributors on
sales or other dispositions of LdT Drug Product to Third Parties, less the
following deductions if not already deducted in the amount invoiced:

                  (a) [**] by the [**], actually allowed and properly taken
directly with respect to sales of LdT Drug Product, as reflected in the amount
invoiced;

                  (b) [**] other taxes imposed upon and paid directly with
respect to the production, sale, delivery or use of the LdT Drug Product
(excluding national, state or local taxes based on income), as reflected in the
amount invoiced;

                  (c) amounts [**] of LdT Drug Product; and

                  (d) amounts [**] of LdT Drug Product provided however that any
such [**] amounts and are intended to promote the sale of LdT Drug Product and
[**], its Affiliates or Permitted Sub-Distributors.

         Additionally, (i) in the case of any sale or other disposal of LdT Drug
Product by SUMITOMO to its Affiliates [**], the Net Sales will be calculated as
[**] on the [**] which is not [**]; (ii) in the case of any sale [**], Net Sales
will be calculated [**] the LdT Drug Product is [**]; and (iii) in the case of
any sale or other disposal of the LdT Drug Product for [**], such as [**] Net
Sales will be calculated as above [**] of LdT Drug Product in the country within
the Territory where such sale or disposition occurred.

         Such amounts will be determined from the books and records [**], which
books and records will be maintained in accordance with generally accepted
accounting principles, consistently applied.

         In the event the LdT Drug Product is sold as part of a Combination
Product (as defined below), the Net Sales from the Combination Product will be
determined by [**] (as defined herein), during the applicable reporting period,
[**]e of the LdT Drug Product [**] and [**] in the Combination Product when sold
[**], in each case during the applicable reporting period or, if sales of both
the LdT Drug Product and the other product(s) did not occur in such period, then

                                     - 4 -
<PAGE>
\in the most recent reporting period [**]. In the event that [**] cannot be
determined for [**] the LdT Drug Product and [**] the Combination Product, Net
Sales will be calculated by [**] the Combination Product by [**] and [**] in the
Combination Product. In such event, NOVIRIO will in good faith make a
determination of the respective fair market values of the LdT Drug Product [**]
in the Combination Product, and will notify SUMITOMO of such determination and
[**]. SUMITOMO will have the right to review such determination and supporting
data.

As used above, the term "Combination Product" means any pharmaceutical product
that consists of a LdT Drug Product [**]

1.19 "NOVIRIO Patent Rights" means all United States and/or foreign patents or
patent applications listed on the attached Exhibit A (together with any
subsequent modifications, amendments or supplements thereto), the patents
issuing from the pending applications, any patent applications filed hereafter,
and all continuations, continuations-in-part, divisions, reissues,
reexaminations or extensions thereto relating to the LdT Drug Product, or
relating to NOVIRIO Technology, which NOVIRIO either owns or to which NOVIRIO
otherwise has the right to grant licenses during the Term that claim the LdT
Drug Product its manufacture or method of use, respectively.

1.20 "NOVIRIO Technology" means all Know-How which (a) NOVIRIO either owns,
Controls, or to which NOVIRIO otherwise has the right to grant a license,
whether patentable or otherwise, and (b) is either listed on Exhibit A to this
Agreement (together with any subsequent modifications, amendments or supplements
thereto) or is actually used by NOVIRIO in the course of the performance of its
obligations under this Agreement.

1.21 "Party" means SUMITOMO or NOVIRIO; "Parties," means SUMITOMO and NOVIRIO.

1.22 "Permitted Sub-Distributors" means Third Parties, which SUMITOMO appoints
as distributors of LdT Drug Product pursuant to ARTICLE 3.2(c).

1.23 "Pharmaceutical Laws" means, with respect to the United States, the United
States Food, Drug and Cosmetic Act of 1938, as amended from time to time, and
the regulations and guidelines promulgated thereunder, and with respect to any
other governmental unit in the Territory (whether federal, state, municipal or
other), the laws, regulations and guidelines of such governmental unit
pertaining to pharmaceuticals, including the development, exportation,
importation, use, manufacture, distribution, marketing and/or sale thereof.

1.24 "Procurement Cost" means the actual cost incurred by SUMITOMO in connection
with the packaging and labeling of LdT Drug Product provided that: (i) such
costs are reasonable and subject to audit by an independent, certified
accountant reasonably acceptable to SUMITOMO; (ii) the costs will not be
substantially different from the costs of packaging and labeling of other
similar products; and (iii) efforts to minimize the actual costs incurred will
be undertaken by SUMITOMO independently and upon the reasonable suggestion of
NOVIRIO.

                                     - 5 -
<PAGE>
1.25 "Regulatory Approval" means the approval of the data submitted in the
original New Drug Application in Japan, or the equivalent application or filing
in other countries in the Territory, by or from the relevant Regulatory
Authority, which is necessary as a prerequisite for marketing the LdT Drug
Product for any indication relevant to the treatment of hepatitis B in a
particular country in the Territory.

1.26 "Regulatory Authority" means any governmental authority (whether federal,
state, municipal or other) regulating the development, exportation, importation,
use, manufacture, distribution, marketing and/or sale of pharmaceuticals or
otherwise involved in the granting of Regulatory Approval in any country within
the Territory as well as the United States Food and Drug Administration and any
successor agency of the United States government ("FDA").

1.27 "Regulatory Documents" means all submissions to Regulatory Authorities and
Regulatory Approvals.

1.28 "Specifications" means the specifications for the LdT Drug Product as set
forth in accordance with the Regulatory Documents, or as otherwise required by a
Regulatory Authority.

1.29 "Technical Information" means (a) techniques and data, including ideas,
inventions (including patentable inventions), practices, methods, knowledge,
Know-How, trade secrets, skill, experience, documents, apparatus, clinical and
regulatory strategies, test data, including pharmacological, toxicological and
clinical test data, analytical and quality control data, manufacturing, patent
data or descriptions relating to LdT Drug Product, and (b) chemical
formulations, compositions of matter, product samples and assays relating to the
LdT Drug Product.

1.30 "Tentative Transfer Price" will have the meaning given to such term in
Section 5.3.

1.31 "Term" means the period during which this Agreement is in effect.

1.32 "Territory" means the countries of Japan, Republic of Korea (South Korea),
Republic of China (Taiwan) and People's Republic of China (China, including Hong
Kong and Macau).

1.33 "Third Party" means any person other than a Party to this Agreement or an
Affiliate of a Party to this Agreement

1.34 "Trademark" will have the meaning given to such term in Article 6.

1.35 "$" and "USD" means United States dollars.

                                     - 6 -
<PAGE>
1.36 "Unlawful Goods" means products containing LdT or a counterfeit thereof as
an active substance, which infringe NOVIRIO Patent Rights and are imported,
manufactured, or sold in any country in the Territory.

1.37 "Valid Claim" means a claim under Novirio Patent Rights that has not been
irrevocably abandoned or been held invalid in an unappealable decision of a
court or patent office.

         ARTICLE 2. EXCLUSIVITY.

2.1 Subject to the terms and conditions of this Agreement, during the Term, the
Parties agree that SUMITOMO and its Affiliates have and will have the sole and
exclusive right to commercialize or have commercialized, market or have marketed
and sell or have sold LdT Drug Product in the Territory under Novirio Technology
and Novirio Patent Rights. SUMITOMO agrees to exclusively purchase all of its
requirements of LdT Drug Product from NOVIRIO. SUMITOMO agrees to sell LdT Drug
Product: (i) only in the Territory; and (ii) only under product labeling adopted
pursuant to the provisions of this Agreement and Trademarks. Within the
Territory, NOVIRIO shall supply all requirements of LdT Drug Product for
SUMITOMO's marketing, sales, and distribution in the Territory.

2.2 SUMITOMO may enjoy the sole and exclusive right pursuant to Section 2.1
above through Permitted Sub-Distributors.

         ARTICLE 3. MANUFACTURING, SUPPLY, COMMERCIALIZATION, AND TRANSFER
PRICE.

3.1 Manufacturing and Supply. During the Term, NOVIRIO agrees to manufacture or
have manufactured and supply SUMITOMO with, and SUMITOMO agrees to purchase from
NOVIRIO LdT Drug Product in formulated finished form, unless the option in
Article 9 of this Agreement has been exercised.

3.2 Commercialization.

                  (a) Diligence. Promptly after the date of receipt of the first
Regulatory Approval of LdT Drug Product in each of the countries within the
Territory, and continuing thereafter during the Term of this Agreement, SUMITOMO
will use Commercially Reasonable Efforts to promote, market, distribute and sell
LdT Drug Product in accordance with the Commercialization Plan in each country
within the Territory in which Regulatory Approval has been obtained. SUMITOMO's
Commercially Reasonable Efforts in this regard will include keeping the LdT Drug
Product reasonably available to the public following initial market introduction
of the LdT Drug Product. During the Term, SUMITOMO agrees, at its own cost and
expense, to make Commercially Reasonable Efforts to maintain, or cause its
Affiliates or

                                     - 7 -
<PAGE>
Permitted Sub-Distributors to maintain marketing and sales organizations
adequate to enable SUMITOMO to promote, market, distribute and sell LdT Drug
Product in accordance with the Commercialization Plan in each country in the
Territory in which Regulatory Approval has been obtained. SUMITOMO will make
Commercially Reasonable Efforts to keep NOVIRIO advised of general market,
economic and regulatory conditions and developments in each country within the
Territory. Subject to the provisions of Section 3.2(d) and insofar as SUMITOMO
retains the sole and exclusive right pursuant to Section 2.1 hereinabove,
SUMITOMO will not and will not permit its Affiliates or Permitted
Sub-Distributors to promote other products of Sumitomo, its Affiliates or
Permitted Sub-Distributors in such a way as to cause material adverse effect on
the sales of LdT Drug Product in the Territory.

                  (b) Product Labeling. Within the Territory, all LdT Drug
Product will bear on the product label each of the SUMITOMO name and logo and,
to the extent legally permitted, unless otherwise requested by NOVIRIO, the
NOVIRIO name and logo (or any successor name and logo) written in English and in
the local language. SUMITOMO will, in its reasonable discretion, determine how
the NOVIRIO name and logo will be incorporated on the label. All written
materials associated with each LdT Drug Product will indicate that the LdT Drug
Product was developed and manufactured with the use of NOVIRIO Technology.
NOVIRIO will have the right to monitor the LdT Drug Product upon which the
NOVIRIO name and logo appear in accordance with reasonable procedures to be
agreed upon by the Parties. SUMITOMO will prepare all labeling and packaging for
the LdT Drug Product to be sold in any country within the Territory. Prior to
its first use, SUMITOMO will submit such labeling and packaging to NOVIRIO for
its approval, which approval will not be unreasonably withheld. NOVIRIO will be
deemed to have approved such submitted labeling and packaging unless NOVIRIO
provides to SUMITOMO reasonable written objection thereto within thirty (30)
Days after receipt thereof, provided, however, that NOVIRIO will appropriately
shorten such period of thirty (30) Days within which it provides reasonable
written objection if Sumitomo so requests in light of the requirements by
governments or other reasonable factors.

                  (c) Permitted Sub-Distributors.

                         (1) In Japan, SUMITOMO agrees to sell LdT Drug Product
directly to wholesalers without use of any intermediate distributor, unless
agreed by the Parties prior to sale of LdT Drug Product to any intermediate
distributor.

                         (2) In each other country within the Territory,
SUMITOMO may, with NOVIRIO's prior written consent, which shall not be
unreasonably withheld, engage Permitted Sub-Distributors as distributors of LdT
Drug Product. For purposes hereof, Permitted Sub-Distributors are distributors
in the relevant countries in the Territory, which are part of normal, and
customary distribution channels and with which SUMITOMO has existing
distribution arrangements, which will be identified at an appropriate date prior
to commercialization. If

                                     - 8 -
<PAGE>
SUMITOMO wishes to appoint any other party as a distributor of LdT Drug Product,
SUMITOMO will seek prior written approval of NOVIRIO, which approval will not be
unreasonably withheld or delayed. Such other party will after the consent of
Novirio has been obtained be recognized for purposes of this Agreement as a
Permitted Sub-Distributor.

                         (3) For avoiding any doubt, this Article 3.2 (c)(3)
shall not be construed as preventing SUMITOMO from marketing or co-marketing LdT
Drug Product through or with Affiliates or any Third Parties.

                  (d) Compliance with Law. In marketing, distributing, offering
to sell or selling the LdT Drug Product, SUMITOMO will, and will make
Commercially Reasonable Efforts to cause its Affiliates and any Permitted
Sub-Distributors to comply with all applicable Pharmaceutical Laws, Laws (as
hereinafter defined), and all other applicable laws, rules, regulations and
guidelines generally accepted in the pharmaceutical industries in the Territory.
SUMITOMO will make Commercially Reasonable Effort to notify NOVIRIO of any
material changes to applicable Pharmaceutical Laws, Laws and other applicable
laws, rules, regulations and guidelines generally accepted in the pharmaceutical
industries in the Territory promptly after becoming aware of any change that may
affect activities relating to the marketing, distributing, offering to sell or
selling of the LdT Drug Product by SUMITOMO, its Affiliates or Permitted
Sub-Distributors.

                  (e) No Export. The Parties agree that rights granted hereby to
SUMITOMO do not include the right for SUMITOMO to export LdT Drug Product
outside of the Territory or to permit or allow Third Parties acquiring LdT Drug
Product from SUMITOMO to export LdT Drug Product from the Territory. In the case
of bulk purchases of LdT Drug Product by Third Parties, SUMITOMO will not
conclude any sale to such Third Party if SUMITOMO has reason to believe that
such Third Party is buying LdT Drug Product for export, sale or consumption
outside of the Territory, unless the prior express written consent of NOVIRIO
has been obtained. Any indication that any party or its affiliates has bought
LdT Drug Product for export, sale or use outside of the Territory will be a
presumption that such party or affiliate will engage in such acts in the future.
NOVIRIO agrees not to export LdT Drug Product to any entities in the Territory
except to or at the direction of SUMITOMO nor permit or allow Third Parties to
buy LdT Drug Product from NOVIRIO to export such product into the Territory. In
the case of bulk purchases of LdT Drug Product by Third Parties, NOVIRIO will
not conclude any sale to such Third Party if NOVIRIO has reason to believe that
such Third Party is buying LdT Drug Product for export to, sale or consumption
inside the Territory, unless the prior express written consent of SUMITOMO has
been obtained. Any indication that any Third Party or its affiliates has bought
LdT Drug Product for export to, sale or use inside the Territory will be a
presumption that such party or entity will engage in such acts in the future.

                                     - 9 -
<PAGE>
                  (f) Pricing. The Parties acknowledge that [**] the commercial
value of a pharmaceutical product asset by [**]. SUMITOMO agrees to [**]
maximize the long-term commercial value of the LdT Drug Product asset.

                  (g) Collaboration in Commercialization. NOVIRIO and SUMITOMO
agree that both parties shall cooperate in maximizing the commercial value and
profitability of the LdT Drug Product. Such cooperation between the parties will
include an exchange of market and other information on LdT Drug Product. NOVIRIO
agrees to promptly refer to SUMITOMO any solicitations or requests to purchase
LdT Drug Product it may receive from any customer, prospective customer or sales
prospect that has a principal address or place of business within the Territory.
NOVIRIO will also refer to SUMITOMO any customer, prospective customer or sales
prospect which NOVIRIO knows or has reason to know intends to use the LdT Drug
Product in the Territory or which intends to ship LdT Drug Product into the
Territory. SUMITOMO agrees to promptly refer to NOVIRIO any solicitations or
requests to purchase LdT Drug Product it may receive from any customer,
prospective customer or sales prospect, which has a principal address or place
of business outside the Territory. SUMITOMO will also refer to NOVIRIO any
customer, prospective customer or sales prospect which SUMITOMO knows or has
reason to know intends to use the LdT Drug Product outside the Territory or
which intends to ship LdT Drug Product outside the Territory.

                  (h) Unlawful Goods

                         (1) With a view to preventing or minimizing the sale of
Unlawful Goods within the Territory, SUMITOMO will use Commercially Reasonable
Efforts to actively monitor the markets in each country within the Territory and
to take other steps and actions which are reasonably expected of SUMITOMO in
light of its capacity and position of SUMITOMO under this Agreement. NOVIRIO
agrees to support to the extent commercially reasonable such efforts of
SUMITOMO. If, notwithstanding such efforts, SUMITOMO becomes aware of the
presence of any Unlawful Goods in the Territory, SUMITOMO will notify NOVIRIO as
promptly as possible and propose a meeting of the Joint Committee. At such
meeting, the Parties will consult as to what actions may be undertaken to
minimize the sale of Unlawful Goods and coordinate their efforts to maximize the
prospect of effective enforcement against the sale in the Territory of Unlawful
Goods.

                         (2) In the event that at any time more than [**]
percent ([**]%) of the total units of pharmaceutical products sold in any
country in the Territory are Unlawful Goods, as determined by an independent
Third Party method of assessment which method of assessment is mutually agreed
upon by the Parties, the Parties will enter into a good-faith discussion to make
new arrangements in such country to minimize sales of Unlawful Goods, and to,
where appropriate, improve the business viability of the LdT business of the
Parties. Such arrangements may include bringing in a Third Party collaborator in
case either Party, in its

                                     - 10 -
<PAGE>
reasonable opinion based on facts, evidenced in writing that Sumitomo's efforts
with respect to Unlawful Goods as set forth in above (1) have not been adequate,
and in that circumstance, the Parties agree that the exclusive right granted to
SUMITOMO pursuant to Article 2 of this Agreement will then automatically convert
from an exclusive to semi-exclusive right; provided, however, that in such
instance, both Parties also agree to discuss in good faith the needs to modify
other commercial terms and conditions of this Agreement in consideration of the
viability of SUMITOMO's business of LdT.

                  (i) Non-Compete. With respect to any other biological or
pharmaceutical product for the treatment of indications relevant to the
treatment of hepatitis B infection in humans, the Parties agree as follows:

                         (1) Existing Products. SUMITOMO and its Affiliates are
at all times allowed to promote, market or sell or assist another Third Party
(including Permitted Sub-Distributors) in marketing or selling in any country
within the Territory such other products which are currently marketed and sold
by SUMITOMO and its Affiliates which products are identified on Exhibit B to
this Agreement.

                         (2) Future New Products.

                                    (i) For [**] years after the Launch Date in
each country of the Territory, SUMITOMO and its Affiliates will not promote,
market or sell or assist another Third Party (including Permitted
Sub-Distributors) in promoting, marketing or selling in any country within the
Territory any [**] products for the treatment of hepatitis B virus in humans. In
the event that SUMITOMO and/or its Affiliates do so after [**] years from the
Launch Date in a country of the Territory, the sole and exclusive right granted
to SUMITOMO in such country under Article 2 of this Agreement will automatically
convert from exclusive to non-exclusive right.

                                    (ii) Notwithstanding the foregoing, nothing
set forth herein is intended to or will prohibit SUMITOMO and its Affiliates
from promoting, marketing or selling or assisting another Third Party (including
Permitted Sub-Distributors) in marketing or selling in any country within the
Territory any product for the treatment of hepatitis B [**]

                  (j) Post-marketing Clinical Trials. The Parties will comply
with all post-marketing clinical trials and drug-monitoring requirements as may
be required by applicable Pharmaceutical Laws and Regulatory Approvals in each
country within the Territory. The Parties also agree to cooperate in the conduct
of any other post-marketing clinical trials, which may be deemed by the Joint
Committee (as described in Section 3.3) to be useful or helpful to the marketing
and sale of LdT Drug Product. The costs of any post-marketing clinical trials
and drug-monitoring requirements, including but not limited to the cost of
clinical trial drug supply, will be borne by each Party in relation to its
proportionate anticipated benefit therefrom.

                                     - 11 -
<PAGE>
                  (k) Marketing Costs and Product Samples. SUMITOMO acknowledges
that NOVIRIO will not be obligated to bear or otherwise have responsibility for
payment of any marketing costs incurred by SUMITOMO in connection with
SUMITOMO's efforts to market and promote LdT Drug Product.

                  (l) Maintenance of Regulatory Approvals. SUMITOMO will, and
SUMITOMO will cause any party, which owns the Regulatory Approval of the LdT
Drug Product, as appropriate, to, take any and all necessary steps to maintain
Regulatory Approval of the LdT Drug Product in each country within the Territory
where such approval is obtained.

                  (m) Implementation of Commercialization Plan. Subject to
discussion at the Joint Committee, within the Territory, SUMITOMO will make
Commercial Reasonable Efforts to market, distribute and sell LdT Drug Product in
accordance with the strategy, policies and procedures set forth in the
Commercialization Plan.

3.3 Joint Committee.

                  (a) Establishment. The Parties will establish a Joint
Committee, comprised of an equal number of representatives of each of NOVIRIO
and SUMITOMO (not to exceed 3 persons from each Party) who will have experience
in marketing, distribution and sales. Each Party may include as such
representatives those personnel having experience in regulatory affairs or other
relevant functions.

                  (b) Purpose. The Joint Committee will be used by the Parties
to facilitate the commercialization of LdT Drug Product under this Agreement. At
the Joint Committee, the Parties will (i) review the Commercialization Plan,
(ii) monitor, discuss and give advice (especially in light of the experiences
gained by Novirio in commercialization outside of the Territory) on the
commercialization of LdT Drug Product within the Territory pursuant to the
Commercialization Plan, including the planning, manufacturing, marketing, sales
and distribution and efforts undertaken to maintain required Regulatory
Approvals, (iii) address such other matters as either Party may bring before the
Joint Committee.

                  (c) Meetings. The Joint Committee will meet as soon as
practicable after the first filing in the country within the Territory first
seeking Regulatory Approval of LdT, and thereafter, at least semi-annually
during the Term; provided, however, that the Parties agree to hold meetings of
the Joint Committee on a quarterly basis for the first two (2) years after the
first launch of LdT Drug Product in a country within the Territory. The location
of such meetings of the Joint Committee will alternate between NOVIRIO's
principal place of business and SUMITOMO's principal place of business, or as
otherwise agreed by the Parties. The Joint Committee may also meet by means of a
telephone or video conference call. If a representative of a Party is unable to
attend a meeting, such Party may designate an alternate to attend such meeting
in place of the absent representative, which alternate will have full authority
to

                                     - 12 -
<PAGE>
participate in and discuss matters presented at the meeting. In addition, each
Party may, at its discretion, invite other employees or employees of its
Affiliates, and, with the consent of the other Party, consultants or scientific
advisors, to attend the meetings of the Joint Committee to, among other things,
review and discuss the Commercialization Plan, its implementation and results.
Either Party may propose a meeting of the Joint Committee when deemed necessary,
for example, for the purpose of resolving disputes.

                  (d) Results of Discussion. SUMITOMO will give due
consideration to the results of the discussion at meetings of the Joint
Committee (including the reasonable opinions of NOVIRIO's representatives) in
fulfilling its obligations under this Agreement.

                  (e) Term. The Joint Committee will function during the Term
from the date of its first meeting until the date of termination or expiration
of this Agreement, unless otherwise agreed by the Parties.

                  (f) Commercialization Plan. As soon as practicable, but in any
event not less [**] prior to the earliest anticipated Launch Date, SUMITOMO will
submit a Commercialization Plan to the Joint Committee for review. The
Commercialization Plan will be updated at least annually by SUMITOMO and each
update will be submitted to the Joint Committee for review.

3.4 Program Directors. To oversee and facilitate the implementation of the
Commercialization Plan, NOVIRIO and SUMITOMO will each designate a program
director prior to the Effective Date. Each Party, at its discretion may, after
notice to the other Party, designate a different program director. The program
directors will oversee the day-to-day implementation and execution of the
Commercialization Plan, will report to the Joint Committee and will be
responsible for recommending to the Joint Committee any changes required to
effect the implementation of the Commercialization Plan and the maximization of
the value of the LdT Drug Product in the Territory.

3.5 Promotional Materials. SUMITOMO will formulate and prepare all marketing and
promotional material with respect to both form and content in accordance with
the objectives and guidelines set forth in the Commercialization Plan. Each
Party will cooperate with the other to minimize the inclusion of information in
such Party's marketing and promotional materials, which is or may be
inconsistent with the information set forth in the other Party's marketing and
promotional materials. The Parties agree to provide final copies of all of its
respective marketing and promotional material to the other Party as soon as
practicable after production or use.

3.6 Transfer Price.

                  (a) The price payable by SUMITOMO to NOVIRIO for LdT Drug
Product (the "Transfer Price") will be computed at the rate and in the manner as
set forth below. In each

                                     - 13 -
<PAGE>
instance, for purposes of computing the Transfer Price, sales and dispositions
of LdT Drug Product will be aggregated. The Transfer Price will be calculated
[**] based on Net Sales of LdT Drug Product within the entire Territory as
follows:

                                     - 14 -
<PAGE>
         Transfer Price shall mean (Aggregate annual Net Sales) x (the
applicable percentage set forth under the caption A below) less the related
Procurement Costs.

<TABLE>
<CAPTION>
                  Aggregate annual Net Sales of LdT Drug Product                            (A)
                  in the Territory
<S>                                                                                        <C>
                  Less than $[**] million                                                  [**]%

                  Equal to or greater than $[**] million, but less than $[**]              [**]%
                  million

                  Equal to or greater than $[**] million, but less than $[**]              [**]%
                  million

                  Equal to or greater than $[**] million, but less than $[**]              [**]%
                  million

                  Equal to or greater than $[**] million, but less than $[**]              [**]%
                  million

                  Equal to or greater than $[**] million                                   [**]%
</TABLE>

                  (b) Notwithstanding the foregoing, [**] the Transfer Price
resulting from the Net Sales as calculated in accordance with the formula set
forth in 3.6 (a) above [**]the Transfer Price [**] indicated by NOVIRIO [**]
NOVIRIO [**] LdT Drug Product to SUMITOMO based on currently available
information), the Transfer Price payable by SUMITOMO to NOVIRIO [**], SUMITOMO
[**] to NOVIRIO [**] such Transfer Price [**], SUMITOMO [**] and further which
[**] of the [**] SUMITOMO and the [**] of the Parties to this Agreement, the
Parties agree [**] in light of the circumstances. If, at such discussion,
NOVIRIO is [**] of the [**] to the [**] of NOVIRIO [**], NOVIRIO, [**], will,
[**] SUMITOMO, [**] Sumitomo to [**] of NOVIRIO through the appointment of [**]
NOVIRIO.

                  (c) As an inducement for NOVIRIO to enter into this Agreement,
in addition to the Transfer Price determined in accordance with either
subsections (a) or (b) above, when, in the first instance, the annual, aggregate
Net Sales of LdT Drug Product in the entire Territory (as computed for purposes
of determining the Transfer Price) reaches the thresholds set forth below,
SUMITOMO will make the following one (1) time bonus payments upon the
confirmation of the achievement of each of the aggregate Net Sales levels set
forth below to NOVIRIO in accordance with the calculation as set forth below:

                         (1) Thresholds.

<TABLE>
<CAPTION>
                         Aggregate Net Sales of LdT Drug
                         Product in the Territory               Bonus Amount Due
                         ------------------------               ----------------
<S>                                                             <C>
                         Equal to $[**] million                 $[**] million

                         Equal to $[**] million                 $[**] million

                         Equal to $[**] million                 $[**] million
</TABLE>

                                     - 15 -
<PAGE>
                         (2) Calculation. The aggregate Net Sales for the
determination of the bonus payment as referred to in the above is calculated
with respect to the 12-month period in the following way:

                  (a) First Year. The relevant calculation period is the
12-month period starting with the first day of the month in which the Launch
Date occurs ("First Calculation Period"). SUMITOMO will determine the actual
aggregate Net Sales on the basis of its fiscal [**] calculation; provided, that
with regard to the portion of the Net Sales corresponding to the months which is
a part of a [**] period, a reasonable appropriation will be made based on the
average rates of rebates or other means.

                                    By way of example, if the Launch Date occurs
on [**], the First Calculation Period is [**]. The aggregate Net Sales in the
entire Territory for that period will be determined by a summation of the
following portions, which are calculated in the following manner:

                              (i) for the Net Sales during [**] -- based on
calculation of the actually realized Net Sales, done at timing of the interim
book closing of SUMITOMO's fiscal [**].

                              (ii) for the Net Sales during [**] -- based on
calculation of the actually realized Net Sales, done at the timing of the book
closing of SUMITOMO's fiscal [**])

                              (iii) for the Net Sales during [**] -- without the
formal book closing, the Net Sales for this two-month period will be
approximated based on the sales data for this period and by using average rebate
rate during the immediately previous [**] and other items, as appropriate.

                  (b) Subsequent Years. Subsequently, the relevant calculation
period is the 12-month period of a fiscal year (April to March), starting with
the fiscal year during which the last day of the First Calculation Period
occurs.

                  (c) In the event that [**] any country of the Territory, the
applicable rate of Transfer Price in such country shall be [**]%; provided,
however, that if in NOVIRIO's

                                     - 16 -
<PAGE>
reasonable opinion, evidenced in writing, sales of [**] LdT Drug Product in the
country of the Territory [**], the mechanism of the Transfer Price as referred
to in Section 3.6(a) shall continue to apply. For purposes of clarification, the
Parties agree that the following computation is an example of the manner in
which the Transfer Price will be calculated in the event the applicable rate of
the Transfer Price [**] in any one or more countries within the Territory:

                  If Net Sales are $[**] million in China [**] and Net Sales in
each of the other countries within the Territory [**] aggregates $[**] million,
the Transfer Price payable by SUMITOMO to NOVIRIO prior to deduction of
applicable Procurement Costs will be equal to $[**] million.

3.7 Forecasts.

                  (a) As soon as practicable after filing for Regulatory
Approval in each country within the Territory and not less than [**] prior to
the Launch Date in each country in the Territory, SUMITOMO will, for long-term
manufacturing planning purposes, provide to NOVIRIO a non-binding rolling [**]
year forecast (based on months within the period and updated at least [**]) of
LdT Drug Product supply requirements for each country within the Territory in
which filings for Regulatory Approvals have been made or obtained as the case
may be.

                  (b) During the Term of this Agreement, SUMITOMO will provide
NOVIRIO: (i) on a quarterly basis, with a non-binding [**] year rolling
forecast; and (ii) a written estimate of the quantities of the LdT Drug Product
required on a [**] basis during the next [**] [**]. Each such quantity estimate
will contain an update of the immediately preceding estimate with respect to the
[**] referred to in such preceding estimate. Notwithstanding the foregoing, for
the initial [**] period subsequent to the Launch Date in each country within the
Territory, SUMITOMO will on a [**] basis, deliver to NOVIRIO updates on the
quantity estimates for succeeding [**] and a review of the quantity estimate for
the immediately preceding [**] compared to the actual usage.

                  (c) During the Term of this Agreement, SUMITOMO will provide
to NOVIRIO all data relating to sales and prescriptions of LdT Drug Product in
each country within the Territory within not more than [**] after such data
becomes available.

3.8 Firm Orders. SUMITOMO will place firm orders with NOVIRIO for LdT Drug
Product requirements at least, [**] in advance of the expected delivery date for
the LdT Drug Product, unless otherwise agreed by the parties. NOVIRIO will
supply the LdT Drug Product to SUMITOMO as required hereunder, provided
SUMITOMO's firm order for the LdT Drug Product is in accordance with the terms
and conditions of this Agreement. Such firm orders for the LdT Drug Product
placed by SUMITOMO will be made pursuant to a purchase order authorizing
manufacture of the LdT Drug Product.

                                     - 17 -
<PAGE>
3.9 Delivery; Title. NOVIRIO will ship the LdT Drug Product to a central
location at the address supplied by SUMITOMO to NOVIRIO in such quantities and
on the dates specified in the SUMITOMO purchase orders via Airfreight CIF
INCOTERMS 2000 accompanied by all necessary bills of lading, packing slips,
certificates of analysis, certificates of free sale and other reasonably
required materials necessary to support the expeditious importation of LdT Drug
Product and title to the LdT Drug Product will pass from NOVIRIO to SUMITOMO at
the point of destination. SUMITOMO will hold the importer's shonin for the LdT
Drug Product and the registration with the Koseiroudousho in Japan and
equivalent registration materials in other countries in the Territory. NOVIRIO
will be responsible for the cost of freight and insurance.

3.10 Cancellation of Orders. If SUMITOMO cancels a firm order made pursuant to
Section 3.6 hereof, then SUMITOMO will reimburse NOVIRIO for all costs incurred
by NOVIRIO as a result of such cancellation, including costs relating to
materials, labor, work in progress, obsolete inventory disposal and overhead;
however, this obligation will not cover capital costs.

3.11 Quality Assurance.

                  (a) Prior to shipment of LdT Drug Product to SUMITOMO, NOVIRIO
will test representative samples of each batch of LdT Drug Product, which is
intended for shipment to SUMITOMO. NOVIRIO will conduct or cause such testing to
be conducted in accordance with validated approval methods of analysis defined
in the Specifications. NOVIRIO will supply SUMITOMO with a certificate of
analysis for each batch of LdT Drug Product shipped to SUMITOMO stating that the
LdT Drug Product so shipped conforms to the Specifications. The certificate of
analysis will be sent in a format mutually agreed upon in writing by the parties
at least [**] prior to the first shipment of LdT Drug Product to SUMITOMO.

                  (b) NOVIRIO will retain production samples and batch records
from each batch of LdT Drug Product shipped to SUMITOMO for the longer of (i)
[**] years after the manufacture of each such batch of LdT Drug Product or (ii)
the time period required under cGMP. Upon request, NOVIRIO will provide
SUMITOMO's Quality Control Department with production samples of LdT Drug
Product and/or copies of completed batch records.

                         (1) Master batch process documentation will be prepared
and approved by NOVIRIO as per its normal procedures. The Parties agree that
deviations from master batch process documentation may be necessary from time to
time. NOVIRIO agrees to discuss such deviations with SUMITOMO before any
proposed shipment of LdT Drug Product involving such deviations. Individual
batch process documentation will be photocopied from the approved master and
issued for each batch as per NOVIRIO's routine system. Original batch records
will be filed securely by NOVIRIO. NOVIRIO will perform all in-process control
tests demanded by the approved batch process.

                                     - 18 -
<PAGE>
                         (2) SUMITOMO will have the right to test LdT Drug
Product to verify compliance with Specifications and applicable Regulatory
Approvals, and NOVIRIO will supply SUMITOMO with its testing procedures.
SUMITOMO may, by written notice provided to NOVIRIO within [**] of SUMITOMO's
receipt of a shipment of LdT Drug Product, reject all or part of such shipment
of LdT Drug Product if, based upon the testing of such LdT Drug Product
conducted under this Section 3.11, such LdT Drug Product does not conform with
the Specifications or applicable Regulatory Approvals. If SUMITOMO fails to
notify NOVIRIO within such [**] period that it is rejecting such LdT Drug
Product, SUMITOMO will be deemed to have accepted such LdT Drug Product unless
any later notified non-conformance defect or other grounds for rejection can be
demonstrated by SUMITOMO as arising from any cause or condition under NOVIRIO's
control and the basis for such non-conformance could not have reasonably been
discovered by performance of standard acceptance testing by SUMITOMO.

                         (3) Subject to paragraph (f) below, in the event that
testing at SUMITOMO indicates that LdT Drug Product does not conform with
Specifications or applicable Regulatory Approvals: (i) SUMITOMO will immediately
notify NOVIRIO, (ii) SUMITOMO and NOVIRIO will mutually agree upon a program to
determine the cause of the discrepancy and the outcome of such investigation
will be used to determine the disposition of the batch; (iii) where appropriate,
given the timetable for the agreed upon program, NOVIRIO will take all
reasonable steps to ensure expeditious manufacture and shipment of conforming
LdT Drug Product; and (iv) shipment of replacement LdT Drug Product will take
place the next shipping day following completion of analytical work to
demonstrate conformance with Specifications. Shipment will be by the quickest
agreed route. At NOVIRIO's expense and NOVIRIO's sole option, the nonconforming
shipment will be (i) returned to NOVIRIO or (ii) disposed of by SUMITOMO subject
to appropriate issuance of certificates of destruction.

                         (4) If NOVIRIO, after prompt and good faith
consultation with SUMITOMO, disputes any finding by SUMITOMO that the LdT Drug
Product does not comply with Specifications, samples of such LdT Drug Product
will be forwarded to a Third Party jointly selected by SUMITOMO and NOVIRIO for
analysis, which analysis will be performed in compliance with applicable
regulatory requirements. The findings of such Third Party regarding the
compliance of LdT Drug Product with the Specifications will be binding upon the
parties for purposes of this Section 3.11. The cost of such analysis by such
Third Party will be borne by the Party whose findings differed from those
generated by such Third Party.

                         (5) If, as determined in accordance with this Section
3.11, a shipment of LdT Drug Product does not conform to the Specifications,
NOVIRIO will replace such shipment free of charge with a substitute shipment,
which meets such Specifications and applicable Regulatory Approvals. If the LdT
Drug Product is in inventory, conforming LdT Drug Product will be shipped to
SUMITOMO so as to arrive as soon as practicable. If the LdT Drug Product is not
in inventory, NOVIRIO will take all reasonable steps to ensure expeditious
manufacture of

                                     - 19 -
<PAGE>
conforming LdT Drug Product, which will be shipped to SUMITOMO on the next
shipping day after completion of analytical work to demonstrate conformance with
the Specifications in a manner to arrive as soon as possible thereafter.

                  (c) To the extent the obligations of each Party set forth in
this Section 3.11 do not comply with the Good Manufacturing Practice Import
("GMPI") guidelines relating to procedures for assuring the quality of the LdT
Drug Product, the GMPI guidelines will supercede the procedures set forth above
and the Parties will enter into a separate agreement to further detail the
respective obligations of each Party to ensure compliance with the applicable
GMPI guidelines.

3.12. Regulatory Notices, Inquiries and Inspections. Each Party agrees to notify
the other as soon as practicable after its receipt of notifications, inquiries,
notifications of or inspection activity by any Regulatory Authority or other
authority in regard to or affecting LdT Drug Product. The recipient Party will
provide a reasonable description to the other Party of any such inquiries,
notifications or inspections promptly. The recipient Party will furnish to the
other Party (i) as soon as practicable after receipt thereof, all reports or
correspondence issued by the Regulatory Authority in connection with such visit
or inquiry, including, but not limited to, any FDA Form 483, Establishment
Inspection Reports or warning letters or similar forms of the respective
Regulatory Authorities in the countries within the Territory and (ii) unless an
immediate response is required, not less than [**] prior to providing a response
to Regulatory Authority, copies of any and all documents, responses, or
explanations relating to the notifications, inquiries, notification of or
inspections set forth above, in each case purged only of trade secrets of the
recipient Party that are unrelated to its obligations under this Agreement or
are unrelated to LdT Drug Product which the responding Party intends to provide
to the respective Regulatory Authority. In the event such Regulatory Authority
requests or requires any action to be taken to address any citations, the
responsible Party agrees, after consultation with the other Party, to take such
action as necessary to address such citations and agrees to cooperate with the
other Party with respect to any such citation and/or action taken with respect
thereto which affects the responsible Party's ability to perform its obligations
arising pursuant to this Agreement or relates to the LdT Drug Product.

3.13 Inspection by SUMITOMO. NOVIRIO will permit SUMITOMO (at its own expense)
to visit, during normal business hours and with reasonable advance notice,
NOVIRIO's manufacturing facility(ies) and warehouse or any of NOVIRIO
subcontractor's facility(ies), subject to the confidentiality provisions of this
Agreement, for the purposes of (i) observing the manufacture, packaging, testing
and warehousing of LdT Drug Product and to inspect (not more frequently than
once per year during the term hereof) for compliance with Pharmaceutical Laws,
Laws, cGMPs, applicable regulatory requirements, and the requirements of any
applicable Regulatory Approvals; (ii) solving technical or quality problems;
(iii) examining the premises, equipment, procedures and personnel used when
producing, testing or controlling LdT Drug

                                     - 20 -
<PAGE>
Product; and (iv) inspecting all books and records relating to (i), (ii) or
(iii) maintained by NOVIRIO. NOVIRIO representatives may accompany SUMITOMO's
representatives on any such inspection. Upon NOVIRIO's request, SUMITOMO will
share the results of any environmental inspection with NOVIRIO. Such inspection
does not relieve NOVIRIO of its obligation to comply with the Laws and does not
constitute a waiver of any right otherwise available to SUMITOMO.

3.14 Compliance with Environmental and Other Laws and Regulations.

                  (a) In carrying out its obligations under this Agreement,
NOVIRIO will comply with all applicable environmental, health and safety laws
(current or as amended or added, collectively referred to hereinafter as
"Laws"), and will be solely responsible for determining how to comply with such
Laws. NOVIRIO represents and warrants that it has, and will use Commercially
Reasonable Efforts to cause any contractors with which it engages for purposes
of fulfillment of NOVIRIO's obligations under this Agreement to have the
appropriate skills, personnel, equipment, permits or approvals necessary to
perform its services under this Agreement in compliance with all applicable
Laws.

                  (b) NOVIRIO will notify SUMITOMO, in writing, as soon as
practicable after the event, of any circumstances, including the receipt of any
notice, warning, citation, finding, report or service of process, relating to
compliance with the Laws.

3.15 Amendments to Manufacturing Conditions. The manufacturing conditions will
be amended or supplemented to comply with cGMPs and to comply with any
applicable Regulatory Authority directive and may also be amended or
supplemented (including, without limitation, for the purpose of incorporating
improvements) from time to time. In the event NOVIRIO intends to amend any
manufacturing conditions, including without limitation Specifications or
manufacturing process, which amendments may impact the quality of or regulatory
matters relating to LdT Drug Product, SUMITOMO will receive prompt advance
notice of any such amendments. No such amendment will be filed with any
applicable Regulatory Authority or otherwise become effective without the prior
written approval of SUMITOMO, which will not be unreasonably withheld. [**] any
change which NOVIRIO requests and implements unless the amendment results from
changes outside of NOVIRIO's control, including the availability of starting
material. In the event that, after the parties have initially agreed upon the
manufacturing conditions, SUMITOMO requests that the such conditions be amended,
NOVIRIO will receive prompt advance notice of any such amendment for the purpose
of determining what, if any, impact the proposed amendment would have on the
manufacture of LdT Drug Product to be supplied to SUMITOMO hereunder, and [**]
NOVIRIO [**] by NOVIRIO (provided that [**] by SUMITOMO [**] by NOVIRIO) because
such amendment requires changes to be made in the processes, equipment, testing
procedures or components or manufacture of LdT Drug Product to be supplied to
SUMITOMO hereunder. [**]. In the event costs are incurred by

                                     - 21 -
<PAGE>
NOVIRIO in implementing an amendment of the manufacturing conditions or
Specifications that has been proposed by SUMITOMO or is proposed by NOVIRIO as a
result of matters outside of its control and the implementation of such
amendment results in an increase in the costs incurred by NOVIRIO to manufacture
and supply to SUMITOMO LdT Drug Product, the parties agree to negotiate in good
faith an adjustment to the Transfer Price. To the extent applicable, the Parties
will comply with GMPI guidelines in connection with any change to the
manufacturing conditions or Specifications either Party may request.

3.16 Subcontractors. NOVIRIO will use Commercially Reasonable Efforts to ensure
that any contract manufacturers engaged by NOVIRIO or its Affiliates to
manufacture LdT Drug Product have sufficient knowledge and expertise to carry
out the manufacture of LdT Drug Product and other subcontracted
responsibilities. In addition, NOVIRIO will use Commercially Reasonable Efforts
to ensure that (i) each such contract manufacturer will be in compliance with
cGMPs and will be under the inspection of all relevant Regulatory Authorities
and (ii) SUMITOMO will have the right to inspect each such subcontractor's
facilities and records as is provided for in Section 3.13 hereof.

         ARTICLE 4. REGULATORY COMPLIANCE.

4.1 Adverse Drug Reaction. The Parties acknowledge that as of the Effective Date
and during the Term, each of the Japanese Ministry of Health, Labor & Welfare
(Koseiroudousho), US FDA, European and other applicable Regulatory Authorities
do and will require reporting of Adverse Drug Reactions wherever they may occur
globally in accordance with ICH harmonized guidelines. The Parties will
collaborate in such reporting which occurs in relation to LdT Drug Product in
accordance with pharmacovigilance arrangements and procedures to be separately
agreed by the Parties which arrangements and procedures are designed to
facilitate compliance by each Party with applicable Pharmaceutical Laws, ICH
harmonized guidelines, GMPI guidelines and other applicable regulations.

4.2 LdT Drug Product Complaints. SUMITOMO will be solely responsible for
responding to customer complaints regarding LdT Drug Product in the countries in
the Territory. With respect to any such complaints, each Party will have the
responsibility for promptly conducting an investigation of any activities
conducted by it under this Agreement, which may be relevant to the complaint.
Each Party will inform the other Party of the nature, scope and details of such
complaint, which requires an investigation by the other Party, and each Party
will promptly report the results of such investigation to the other Party. Each
Party will cooperate in any investigation by the other Party of each such
complaint, which involves the Parties' duties under this Agreement. With regard
to customer complaints, the Parties agree to detail procedures in compliance
with GMPI and other applicable guidelines in a separate agreement between the
Parties.

                                     - 22 -
<PAGE>
         ARTICLE 5. REPORTS, AUDITS AND PAYMENTS.

5.1 Reports. SUMITOMO will deliver to NOVIRIO, within [**] after the end of each
[**], reasonably detailed written accounting of Net Sales of LdT Product during
such preceding [**]. Such [**] reports will indicate: (i) gross sales on a
country-by-country basis; (ii) exchange rates used in calculating Net Sales and
Transfer Price; and (iii) the calculation of the Transfer Price due to NOVIRIO
from such gross sales. [**] of the end of the calendar quarter, SUMITOMO will
deliver to NOVIRIO an estimate of the: (i) gross sales on a country-by-country
basis; (ii) exchange rates used in calculating Net Sales and Transfer Price; and
(iii) a calculation of the Transfer Price expected to be due to NOVIRIO from
such gross sales. SUMITOMO will also deliver to NOVIRIO a market progress report
within [**] of the end of each [**] indicating the quantities of LdT Drug
Product it has in inventory in each country within the Territory.

5.2 Audits by NOVIRIO. SUMITOMO will keep, and will require its Affiliates or
Permitted Sub-Distributors to keep, complete and accurate books of accounts and
records for the purpose of detailing the gross sales of LdT Drug Product, Net
Sales of LdT Drug Product, the applicable Transfer Price and other amounts
payable to NOVIRIO under this Agreement. Such books and records will be
maintained at SUMITOMO's principal place of business and/or the place designated
by SUMITOMO which will be a location no less convenient than SUMITOMO's
principal place of business and be kept for at least three (3) years following
the end of the [**] to which they pertain. For the sole purpose of verifying
amounts payable hereunder to NOVIRIO, NOVIRIO has a right to cause an
independent, certified public accountant reasonably acceptable to SUMITOMO to
audit the relevant books, records and accounts of SUMITOMO to confirm the
correctness of the report; provided, however, that such auditor shall only
report to NOVIRIO whether or not it confirms the correctness, and such auditor
shall not provide NOVIRIO with any further findings of the audit. If the review
reflects an underpayment of amounts due to NOVIRIO, such underpayment will be
promptly remitted to NOVIRIO, together with interest calculated in the manner
provided in Section 5.4 below. If the underpayment is equal to or greater than
five percent (5%) of the amount that was due, NOVIRIO will be entitled to have
SUMITOMO pay all of the costs and expenses of such review. In any other event,
NOVIRIO will be responsible for the cost and expense of such audit.

5.3 Payments by SUMITOMO. At the time of receipt by SUMITOMO of LdT Drug Product
formulated in accordance with the Specifications at the location in Japan
specified by SUMITOMO, SUMITOMO will remit to NOVIRIO, payment of the Tentative
Transfer Price. For purposes hereof, the Tentative Transfer Price will be the
Transfer Price, which is estimated by SUMITOMO every [**] in view of actual
and/or expected sales in the Territory (the "Tentative Transfer Price"). The
Parties will reconcile the Tentative Transfer Price with the actual Transfer
Price within [**] after SUMITOMO delivers to NOVIRIO the applicable [**] report
provided for pursuant to Section 5.1. To the extent any amounts are then deemed
due

                                     - 23 -
<PAGE>
from NOVIRIO to SUMITOMO, such amount will be credited against the next payment
of the Tentative Transfer Price due from SUMITOMO to NOVIRIO.

         With respect to sales or other dispositions invoiced in U.S. Dollars,
the Net Sales and Transfer Price payable will be expressed in U.S. Dollars. With
respect to sales and other disposition invoiced in a currency other than U.S.
Dollars, the Net Sales and Transfer Price payable will be expressed in their
U.S. Dollar equivalent, calculated using the applicable daily average exchange
rate on the last business day of the each [**] to which the accounting relates
which is quoted by any large money center bank in the Territory nominated by
NOVIRIO, to whose reputation for professionalism and reliability SUMITOMO cannot
reasonably object.

5.4 Currency and Method of Payments. All payments under this Agreement will be
made in United States dollars by electronic funds transfer to such bank account
as NOVIRIO or SUMITOMO, as the case may be, may designate from time to time
within no more than twenty (20) Days of invoice or when such payment is due in
accordance with the provisions of this Agreement.

5.5 Late Payments and Interest. To the extent payments due under this Agreement
are not paid within the specified time period and are not timely, such
outstanding sums will accrue interest from the date due. Interest will be
computed on any sums that are late and outstanding on the last day of each
month, at the prime or other equivalent rate of Citibank N.A. or another
mutually acceptable bank, as of the last day of the month immediately preceding
the current month, plus three percent (3%) (or the highest interest rate
permissible under applicable law, whichever is lower), compounded on a monthly
basis.

5.6 Tax Withholding. Each Party and its respective Affiliates will use all
reasonable and legal efforts to reduce tax withholding on payments made to the
other Party hereunder. Notwithstanding such efforts, if either Party concludes
that tax withholdings under the laws of any country are required with respect to
payments to the other Party, such paying Party will withhold the required amount
and pay it to the appropriate governmental authority. In such a case, the paying
Party will promptly provide the other Party with original receipts or other
evidence reasonably desirable and sufficient to allow the other Party to
document such tax withholdings adequately for purposes of claiming foreign tax
credits and similar benefits.

5.7 Blocked Payments. In the event that, by reason of applicable laws or
regulations in any country, it becomes impossible or illegal for either Party,
its Affiliates or, in the case of SUMITOMO, Permitted Sub-Distributors, to
transfer, or have transferred on its behalf, payments to the other Party, such
payments will be deposited to the extent possible in USD (or in the absence of
availability of USD, local currency) in the relevant country to the credit of
the Party to which the amount is due in a recognized banking institution
designated by the Party to which the amount is due or, if none is designated by
the Party to which the amount is due within a

                                     - 24 -
<PAGE>
period of ten (10) Days, in a recognized banking institution selected by the
paying Party, as the case may be, and identified in a notice in writing given to
the Party to which the amount is due.

         ARTICLE 6. TRADEMARKS, LOGOS AND PATENTS

6.1 Trademarks. Not less than [**] prior to the intended use, SUMITOMO will
propose to NOVIRIO trademarks SUMITOMO intends to use in connection with the
marketing, sale and distribution of LdT Drug Product in the Territory. Upon
receipt of NOVIRIO's written approval, which approval may not be unreasonably
withheld, such proposed trademark(s) will become the trademark (the "Trademark")
for the LdT Drug Product in the Territory.

6.2 Trademark Ownership. In the Territory, the Trademark will be owned by
SUMITOMO.

6.3 Rights upon Termination of Agreement. In the event that this Agreement is
terminated for reasons other than a breach by NOVIRIO of its obligation
hereunder, SUMITOMO will assign to NOVIRIO the right to use the Trademark in
such countries or all countries, as the case may be, within the Territory.
SUMITOMO further agrees to perform all acts and execute and deliver any and all
documents, instruments and assignments to effect such assignment without cost or
expense to NOVIRIO.

6.4 Use and Maintenance of Trademark. At its cost and expense, SUMITOMO will
comply with all legal requirements pertaining to the filing, prosecution and
maintenance of the Trademark in each country within the Territory.

6.5 Infringement of Trademark. If SUMITOMO becomes aware of any infringement of
the Trademark within the Territory, SUMITOMO will, at its own cost and expense,
utilize Commercially Reasonable Efforts and take such measures as are determined
by it to be appropriate for the protection of its rights in the Trademark.

6.6 Ownership of Inventions. All developments, inventions and discoveries
relating to the NOVIRIO Technology and improvements to the NOVIRIO Patent Rights
("Novirio Developments"), [**] during the Term shall be [**]. The Parties agree
that Novirio Developments will be deemed to be a part of the NOVIRIO Technology
and NOVIRIO hereby grants to SUMITOMO a paid-up License in the Territory to such
NOVIRIO Developments for use in the Field. Notwithstanding the foregoing, the
Parties agree that the rights granted hereby to the NOVIRIO Developments do not
include any substances, compounds or drug products other than the LdT Drug
Product. All NOVIRIO Developments, [**] shall be owned jointly by SUMITOMO and
NOVIRIO (such developments etc. are referred to as "Jointly-owned
Developments"), and it is agreed by the Parties that SUMITOMO and NOVIRIO may
utilize such Jointly-owned Developments, including filing of patent
applications, in the Territory and outside of the Territory, respectively.

                                     - 25 -
<PAGE>
6.7 Third Party Infringement.

                  (a) Infringement Action. SUMITOMO will notify NOVIRIO of any
actual or alleged Third Party infringement of NOVIRIO Patent Rights in the
Territory. Within ninety (90) Days of becoming aware of the actual or alleged
infringement in the Territory of the NOVIRIO Patent Rights, NOVIRIO will
institute an infringement suit or take other appropriate action that it believes
is reasonably required to protect the NOVIRIO Patent Rights.

                  (b) Costs. [**] will assume and pay [**] incurred in
connection with any litigation or proceedings described in this Section 6.7,
including, without limitation, the fees and expenses of counsel [**].

                  (c) Recoveries. Any recovery obtained by NOVIRIO as a result
of any proceeding described in this Section 6.7 or from any counterclaim or
similar claim asserted in a proceeding described in Section 6.8, by settlement
or otherwise, will be applied in the following order of priority:

                           (i) first, to reimburse each Party for all litigation
costs in connection with such proceeding paid by that Party and not otherwise
recovered (on a pro rata basis based on each Party's respective litigation
costs, to the extent the recovery was less than all such litigation costs); and

                           (ii) second, the remainder of the recovery will be
paid seventy-five percent (75%) to the Party bringing the lawsuit and
twenty-five percent (25%) to the other Party.

                  (d) Cooperation; Settlements. In the event that NOVIRIO is
required to take action pursuant to subsection (a) above, SUMITOMO will
cooperate with NOVIRIO to the extent commercially reasonable, including the
joining of suit if necessary or desirable. NOVIRIO agrees not to settle or
compromise any claim or proceeding relating to NOVIRIO Patent Rights in the
Territory without obtaining the prior written consent of SUMITOMO, which consent
will not to be unreasonably withheld.

6.8 Patent Invalidity Claim. If a Third Party at any time asserts a claim that
any NOVIRIO Patent Right in the Territory is invalid or otherwise unenforceable
(an "Invalidity Claim"), NOVIRIO will so notify SUMITOMO as soon as practically
possible. NOVIRIO, at it's own expense, will prepare and formulate a response to
and defend such Invalidity Claim. To the extent commercially reasonable,
SUMITOMO agrees to cooperate with NOVIRIO in preparing and formulating a
response and defending such Invalidity Claim. NOVIRIO will not settle or
compromise any Invalidity Claim without the consent of SUMITOMO which consent
will not be unreasonably withheld.

                                     - 26 -
<PAGE>
6.9 Patent Term Extensions. Wherever applicable in the Territory, the Parties
will cooperate, if necessary and appropriate, with each other extend the term of
the NOVIRIO Patent Rights. All filings for such extensions will be made by
NOVIRIO.

6.10 Patent Marking. SUMITOMO agrees to comply with the patent marking statutes
in each country in the Territory.

         ARTICLE 7. CONFIDENTIALITY.

7.1 Disclosure and Use of Confidential Information. Except as otherwise provided
herein, unless the party receiving the Confidential Information (the "Receiving
Party"), has obtained the prior written consent of the party (the "Disclosing
Party") disclosing or on whose behalf Confidential Information is disclosed, the
Receiving Party will hold in confidence and not disclose any Confidential
Information. Further, the Receiving Party agrees to use the Confidential
Information only for the purpose of this Agreement and will not use or exploit
the Confidential Information, either directly or indirectly, for its own benefit
or the benefit of another without the prior written consent of the Disclosing
Party. These obligations of confidentiality and non-use will continue during the
Term, and for a period of five (5) years after the termination of the
Commercialization Agreement.

         Notwithstanding the foregoing, these mutual obligations of
confidentiality will not apply to any information to the extent that such
information is:

                  (i) independently developed by the Receiving Party as
documented by prior written records outside the scope and not in violation of
this Agreement;

                  (ii) legally in the public domain at the time of its receipt
or thereafter legally becomes part of the public domain through no fault of the
Receiving Party;

                  (iii) received without an obligation of confidentiality from a
Third Party having the right to disclose such information;

                  (iv) released from the restrictions of this Article 6 by the
prior written consent of the Disclosing Party; or

                  (v) as may be required for securing Regulatory Approval, or as
may be required to be disclosed to a Regulatory Authority or as otherwise
required by a court order or any law or regulation (including as may be required
in connection with any filings made with the Securities and Exchange Commission
or by the disclosure policies of a major stock exchange on which the securities
of the Receiving Party are or may be reasonably expected to be traded);
provided, however, that, at the Disclosing Party's request, the Receiving Party
will request that the

                                     - 27 -
<PAGE>
relevant judicial body, regulatory agency or Regulatory Authority or major stock
exchange treat as confidential any Confidential Information of either Party
included in any such disclosure and generally use diligent efforts to seek
confidential treatment where available.

7.2 Scope of Confidentiality. Unless the prior written consent of the Disclosing
Party has been received, each of NOVIRIO and SUMITOMO agree to limit the
disclosure of any Confidential Information received hereunder to such
Affiliates, employees, consultants and Permitted Sub-Distributors as is
necessary to carry out the provisions of this Agreement and who are likewise
bound by provisions equivalent to this Article 7 and to those Affiliates,
employees, consultants or Third Parties as may be required in connection with
corporate financing activities undertaken by or on behalf of the Receiving
Party. The parties will take reasonable measures to assure that no unauthorized
use or disclosure is made by persons to whom access to such Confidential
Information is granted. Unauthorized use or disclosure by any person who has
been given access to Confidential Information by a Receiving Party hereunder
will be deemed to be unauthorized use or disclosure by such Receiving Party, and
the Receiving Party will be responsible to the Disclosing Party hereunder. The
Receiving Party will promptly report to the Disclosing Party any actual or
suspected unauthorized use of the Confidential Information of the Disclosing
Party and the Receiving Party will take all reasonable further steps requested
by the Disclosing Party to prevent, control or remedy any such violation.

         ARTICLE 8. REPRESENTATIONS AND WARRANTIES.

8.1 Authority. SUMITOMO and NOVIRIO each represents and warrants to the other
that as of the Effective Date it has full right, power and authority to enter
into this Agreement and to perform its respective obligations under this
Agreement. NOVIRIO represents and warrants to SUMITOMO that it has, as of the
Effective Date, access to and the right to use the technology necessary to
perform its obligations hereunder.

8.2 Consents. SUMITOMO and NOVIRIO each represents and warrants that all
necessary consents, approvals and authorizations of all government authorities
and other persons, including all requisite corporate approvals, required to be
obtained by such Party in connection with execution, delivery and performance of
this Agreement have been obtained.

8.3 Product Quality. NOVIRIO represents and warrants that the LdT Drug Product
it supplies to SUMITOMO will be manufactured in accordance with the
Specifications (to the extent applicable) and in full compliance with applicable
Pharmaceutical Laws and regulations including without limitation cGMP as may be
applicable in any country within the Territory.

8.4 No Conflict. SUMITOMO and NOVIRIO each represents and warrants that the
execution and delivery of this Agreement, the performance of such Party's
obligations hereunder and the implementation and execution of the
Commercialization Plan (a) do not conflict with or violate any requirement of
applicable laws or regulations and (b) do not and will not conflict

                                     - 28 -
<PAGE>
with, violate or breach or constitute a default or require any consent under,
any contractual obligations of such Party, except such consents as will have
been obtained prior to the Effective Date.

8.5 Employee Obligations. SUMITOMO and NOVIRIO each represents and warrants that
all of its employees, officers, and consultants have executed agreements or have
existing obligations under law requiring, in the case of employees and officers,
assignment to such Party of all inventions made during the course of and as the
result of their association with such Party and obligating the individual to
maintain as confidential the other Party's Confidential Information as well as
confidential information of any Third Party which such Party may receive, to the
extent required to support such Party's obligations under this Agreement.

8.6 Intellectual Property. To the knowledge of NOVIRIO, except as disclosed in
writing by NOVIRIO to SUMITOMO, as of the Effective Date, the manufacture and
sale of LdT Drug Product by NOVIRIO does not and will not infringe or conflict
with the rights of any Third Party in respect of Know-How or issued patents or
published patent applications owned by such Third Party, except where such
infringement or conflict would not materially affect the ability of NOVIRIO to
manufacture, use and sell LdT Drug Product. To the knowledge of NOVIRIO, as of
the Effective Date, the NOVIRIO Technology is not being infringed by any Third
Party, except where such infringement would not materially affect the ability of
NOVIRIO to manufacture and supply SUMITOMO's requirements of LdT Drug Product.
As of the Effective Date, there is, to the knowledge of NOVIRIO, no claim or
demand of any person pertaining to, or any proceeding which is pending or
threatened, that challenges the rights of NOVIRIO in respect of NOVIRIO
Technology or NOVIRIO Patent Rights, except where such claim, notice, demand or
proceeding would not materially adversely affect the ability of NOVIRIO to
manufacture and supply to SUMITOMO's requirements of LdT Drug Product.

8.7 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE PARTIES
MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, AND PARTICULARLY THAT LDT DRUG PRODUCT WILL BE SUCCESSFULLY DEVELOPED,
AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY OR MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE.

         ARTICLE 9. OPTIONS FOR SUPPLY

         In the event that SUMITOMO desires to formulate LdT Drug Product by
itself, SUMITOMO may notify NOVIRIO of its intention. Upon such notification,
the Parties will enter into a good-faith discussion on the switch of the LdT
Drug Product supply from formulated product to active ingredient form, including
without limitation, the terms and conditions with

                                     - 29 -
<PAGE>
respect to: (i) supply of the active ingredient form; (ii) product yield; (iii)
supply; and (iv) inventory requirements.

         ARTICLE 10. OPTIONS AND RIGHT OF FIRST REFUSAL FOR OTHER DRUG
CANDIDATES.

10.1 Option for Commercialization Rights to NOVIRIO's [**]Hepatitis B Drug
Candidates. NOVIRIO grants to SUMITOMO the [**] agreements with NOVIRIO
relating, as the case may be, to the development and commercialization in the
Territory of [**] NOVIRIO and/or its Affiliates' hepatitis B drug candidates
which right may be exercisable on the terms and conditions set forth below by
SUMITOMO during the period within which NOVIRIO and SUMITOMO are parties to this
Commercialization Agreement relating to the development or commercialization of
NOVIRIO drug candidates in the Field. NOVIRIO will offer such option to SUMITOMO
in writing after NOVIRIO is in receipt of data from a Phase I/II dose escalating
or similar clinical trial of such hepatitis B drug candidates. NOVIRIO shall
[**] with respect to these drug candidates in the Territory [**]. [**], SUMITOMO
shall have [**] and [**] thereafter to finalize definitive agreements relating
to such transaction. If SUMITOMO does not communicate [**] in writing within
such initial [**] period, SUMITOMO shall be deemed [**]. In that instance,
NOVIRIO may[**] in the Territory.

10.2 [**] Drug Candidates. NOVIRIO grants to SUMITOMO, on and in accordance with
the terms and conditions set forth in this Section 10.2, and in a good faith
efforts to explore collaborative arrangement with SUMITOMO in [**] field, [**]
relating to the development and commercialization of NOVIRIO's and/or its
Affiliates' [**] drug candidates in the Territory. If, prior to the Effective
Date of this Agreement, NOVIRIO has presented to SUMITOMO [**] drug and SUMITOMO
[**], the provisions set forth in this Section 10.2 will be inoperative and
without effect. If no such event has occurred prior to the Effective Date,
during the Term, NOVIRIO agrees to provide a written notice (the "[**] Notice")
to SUMITOMO detailing the [**] development and commercialization [**] the
transaction[**] drug candidate. SUMITOMO shall have [**] after receipt from
NOVIRIO of a [**] Notice to [**] NOVIRIO the [**] drug candidate [**] set forth
in the [**] Notice. If SUMITOMO does not communicate [**] in writing within such
period, SUMITOMO shall be deemed [**]. If SUMITOMO does [**], NOVIRIO shall
[**]drug candidate on [**] to NOVIRIO than the [**] drug candidate in any manner
it determines [**] drug candidates to SUMITOMO. To the extent SUMITOMO [**]
pursuant to which it [**] drug candidate, NOVIRIO shall, on terms and conditions
similar to those set forth in this Section 10.2, [**] drug candidate [**].

         ARTICLE 11.  TERM AND TERMINATION.

                                     - 30 -
<PAGE>
11.1 Term. This Agreement will become effective as of the Effective Date and,
unless otherwise agreed by the parties, will continue in full force and effect
in each country in the Territory for the longer of: (a) a period of ten (10)
years after the Launch Date of LdT Drug Product in the Territory; (b) the date
of expiration of the NOVIRIO Patent Rights which are the last to expire within
the Territory; and thereafter as long as SUMITOMO continues to market, sell and
distribute the LdT Drug Product in the Territory.

11.2 Automatic Termination. If the Development Agreement is terminated for any
reason other than expiration, then this Agreement will automatically terminate.

11.3 Termination For Material Breach. Upon any material breach of this Agreement
by either Party, the non-breaching party may terminate this Agreement by
providing forty-five (45) Day written notice to the breaching party specifying
the material breach. The termination will become effective at the end of the
forty-five (45) Day period unless (a) the breaching party cures such breach
during such forty-five (45) Day period, or (b) if such breach is not susceptible
to cure within forty-five (45) Days of the receipt of written notice of the
breach, the breaching party is diligently pursuing a cure (unless such breach,
by its nature, is incurable, in which case the Agreement may be terminated
immediately) and effects such cure within an additional sixty (60) Days after
the end of such forty-five (45) Day period. Additionally, either Party may
terminate this Agreement by notice in writing to the other Party if: (i) the
non-terminating Party ceases for any reason to carry on its business or function
as a going concern; or (ii) such Party is unable to pay its debts, becomes
bankrupt or insolvent or enters into liquidation whether compulsorily or
voluntarily, or convenes a meeting of its creditors, has a receiver appointed
over all or part of its assets or takes or suffers any similar action in
consequence of a debt which is either consented to by such Party or such action
remains undismissed for more than one hundred twenty (120) Days. In the event of
termination pursuant to this Section 11.3, the breaching Party, will not be
relieved of any obligation to, in the case of SUMITOMO, pay for (i) milestones
achieved and transfer price payments accrued prior to termination of this
Agreement, (ii) noncancellable obligations existing at the time of termination
of this Agreement and (iii) costs incurred prior to the termination of this
Agreement, and in the case of NOVIRIO, to fulfill LdT Drug Product supply
obligations arising prior to the termination of this Agreement.

11.4 Termination for reason other than Material Breach. In the event that
SUMITOMO determines that it is unable to effectively market and sell LdT Drug
Product due to a material reason, including without limitation unexpected
occurrence of material side effect, which is beyond the reasonable control of
SUMITOMO or the patent situation. SUMITOMO may, with the prior written approval
of NOVIRIO, which shall not be unreasonably withheld, terminate this Agreement
provided that such termination will not take effect earlier than six (6) months
after notice of intended termination is given by SUMITOMO to NOVIRIO. In the
event of termination by SUMITOMO pursuant to this Section 11.4, SUMITOMO for
itself and its Affiliates agrees not to and to use Commercially Reasonable
Efforts to not permit its Permitted

                                     - 31 -
<PAGE>
Sub-Distributors to promote, market or sell any generic product for a period of
three (3) years after the termination pursuant to this Section 11.4 becomes
effective.

11.5 Transfer of Documents. In the event that either NOVIRIO or SUMITOMO
terminates this Agreement, NOVIRIO will, without further payment to SUMITOMO,
have the right to utilize any and all data generated by SUMITOMO relating to the
commercialization of LdT Drug Product within the Territory prior to such
termination. Upon the written request of NOVIRIO, SUMITOMO will transfer to
NOVIRIO any and all data as it relates to LdT Drug Product and transfer and
assign to NOVIRIO all Regulatory Documents relating to LdT Drug Product. In the
event that no such assignment may legally be made in any country in the
Territory, SUMITOMO will continue to maintain such Regulatory Documents and will
provide to NOVIRIO and/or NOVIRIO's Affiliates and/or their designees the right
to cross-reference and rely upon all such Regulatory Documents.

11.6 No Damages upon Expiration or Termination. Except as otherwise set forth in
this Agreement and without limiting either Party's claim for equitable relief or
damages incurred as a result of a material breach of the terms of this
Agreement, neither Party shall be entitled to any compensation, fees or damages
as a result of the expiration or termination of this Agreement for reason other
than material breach.

11.7 Survival. Upon expiration or termination of this Agreement for any reason,
nothing in this Agreement will be construed to release either Party from any
obligations that have matured prior to the effective date of expiration or
termination; and the following provisions will survive such termination or
expiration: Articles 1, 6.3, 6.6, 7, 10.2 (except in the event this Agreement is
terminated by NOVIRIO pursuant to Section 11.3 hereof) and 11 and 13.

         ARTICLE 12.  DISPUTE RESOLUTION.

12.1 General. Any controversy, claim or dispute arising out of or relating to
this Agreement will be settled, if possible, through good faith negotiations
between the Parties. If, however, the Parties are unable to settle such dispute
after good faith negotiations, the matter will be referred to the Executive
Officers to be resolved by negotiation in good faith as soon as is practicable
but in no event later than thirty (30) Days after referral. Such resolution, if
any, of a referred issue will be final and binding on the Parties.

12.2 Failure of Executive Officers to Resolve Dispute. If the Executive Officers
are unable to settle the dispute after good faith negotiation in the manner set
forth above, then the dispute will be resolved in accordance with Section 12.3,
below, which resolution will be final and binding upon the Parties.

12.3 Alternative Dispute Resolution. If the dispute has not been resolved by the
Executive Officers within thirty (30) Days of referral in accordance with
Section 12.1, or if the Executive

                                     - 32 -
<PAGE>
Officers fail to meet within such thirty (30) Days, a Party may seek resolution
of the dispute by initiating arbitration in accordance with the following
provisions.

                  (a) All disputes arising out of this Agreement and referred to
arbitration pursuant to this Article 12 will be finally resolved by arbitration
conducted in English in accordance with the rules of the International Chamber
of Commerce ("ICC") not inconsistent with the terms of this Agreement. The place
of arbitration will be Tokyo, Japan if arbitration is brought by NOVIRIO, or
Amsterdam, The Netherland, if arbitration is brought by SUMITOMO. The Parties
hereby irrevocably consent to the jurisdiction, venue and convenience of such
forum for the arbitration and any judicial action to enforce the arbitration
panel's award.

                  The arbitration will be heard within sixty (60) Days of one
Party's notice to the other Party of the inability to reach resolution on a
matter in dispute and demand for arbitration. There will be no mandatory
discovery prior to the arbitration and no formal rules of evidence other than
those as the arbitrators may promulgate in their sole discretion by majority
vote. The arbitration will consist of each party submitting their statement in a
document not longer than 20 pages of the facts of the dispute, a proposed
resolution and the grounds for such resolution. The arbitration will be held on
one day's hearing before the arbitration panel starting at 9:00 A.M. and
concluding at 4:00 P.M., with the losing Party paying the full costs of the
arbitration and the reasonable costs and expenses of the prevailing Party
including reasonable attorney's fees and costs and the costs of the arbitrators.
The arbitration will be resolved by the majority of the arbitration panel
selecting one of the two proposed resolutions as superior within two hours of
the close of the day's arbitration hearing. Upon selection of one of the
proposed resolutions such selected resolution will be the final and binding
award of the arbitration regarding the dispute. Such award will be immediately
enforceable as the final and binding arbitration of the matter both at the place
of arbitration and any place of business or ownership of assets of either of the
Parties. Each of the Parties irrevocably waives to the extent permitted by
applicable law, any legal action for stay, review, injunction, setting aside,
appeal or other form of judicial challenge to the full faith and credit
recognition and full enforcement of all of the terms of such arbitration award
in whatever court in whatever jurisdiction such enforcement of the arbitration
award judgment may be sought.

                  Any arbitration will be conducted by an arbitration panel
consisting of three (3) members, one appointed by each party and the third
appointed by the first two members. Each Party will, at its discretion, appoint
one arbitrator whose reputation for ethics, professionalism and knowledge of
commercial dispute resolution cannot be reasonably objected to by either Party
or who are not in conflict of interest with either Party.

                  (b) The arbitrators will be paid reasonable fees plus expenses
agreed to prior to the arbitration.

                                     - 33 -
<PAGE>
         ARTICLE 13. MISCELLANEOUS PROVISIONS

13.1 INDEMNIFICATION.

                  (a) SUMITOMO. SUMITOMO agrees to defend NOVIRIO and its
Affiliates at its cost and expense, and will indemnify and hold NOVIRIO and its
Affiliates and their respective directors, officers, employees and agents (the
"NOVIRIO Indemnified Parties") harmless from and against any losses, costs,
damages, fees or expenses (including to the extent applicable reasonable
attorney's fees and costs) arising out of any claim or Third Party action or
proceeding relating to: (i) any breach by SUMITOMO of any of its material
representations, warranties or obligations pursuant to this Agreement; or (ii)
the development, use, marketing, sale or other disposition of LdT Drug Product
by SUMITOMO, its Affiliates or Permitted Sub-Distributors to the extent that
such losses, costs, damages, fees or expenses arise from the acts or failure to
act of SUMITOMO and not from any defect, non-compliance with Specifications or
any quality, condition or activity of the LdT Drug Products present when NOVIRIO
supplied such LdT Drug Product to SUMITOMO which is the causative agent of the
injury from which the claim or Third Party action or proceeding arises. In the
event of any such claim or Third Party action or proceeding against the NOVIRIO
Indemnified Parties, NOVIRIO will promptly notify SUMITOMO in writing of the
claim and SUMITOMO will, at its option have the right to manage and control, at
its sole expense, the defense of the claim and its settlement. The NOVIRIO
Indemnified Parties will reasonably cooperate with SUMITOMO and may, at their
option and expense, be represented in any such action or proceeding. SUMITOMO
will not be liable for any litigation costs or expenses incurred by the NOVIRIO
Indemnified Parties without SUMITOMO's prior written authorization provided
however that a NOVIRIO Indemnified Party will have the right to retain its own
separate legal counsel at the expense of SUMITOMO if: (i) SUMITOMO does not
employ counsel reasonably satisfactory to the NOVIRIO Indemnified Party to take
charge of the defense of such indemnifiable claim within a reasonable time after
notice of commencement of the action; or (iii) representation of both SUMITOMO
and the NOVIRIO Indemnified Party by the same counsel would be inappropriate due
to actual or potential conflicting interests in which case, when the NOVIRIO
Indemnified Party notifies SUMITOMO, SUMITOMO will not have the right to assume
defense of the such action on behalf of the NOVIRIO Indemnified Party. SUMITOMO
will not be responsible for the indemnification of any NOVIRIO Indemnified Party
arising from any negligent or intentional acts by such party, or as the result
of any settlement or compromise by the NOVIRIO Indemnified Parties without
SUMITOMO's prior written consent, which will not be unreasonably withheld.

                  (b) NOVIRIO. NOVIRIO agrees to defend SUMITOMO and its
Affiliates at its cost and expense, and will indemnify and hold SUMITOMO and its
Affiliates and its respective directors, officers, employees and agents (the
"SUMITOMO Indemnified Parties") harmless from and against any losses, costs,
damages, fees or expenses (including to the extent applicable

                                     - 34 -
<PAGE>
reasonable attorney's fees and costs) arising out of any claim or Third Party
action or proceeding relating to (i) any breach by NOVIRIO of any of its
material representations, warranties or obligations pursuant to this Agreement
or (ii) personal injury arising from the use or sale of the LdT Drug Product
when such product is handled, stored, delivered and used by SUMITOMO in
accordance with appropriate procedures mutually agreed upon by the Parties. In
the event of any such claim or Third Party action or proceeding against the
SUMITOMO Indemnified Parties, SUMITOMO will promptly notify NOVIRIO in writing
of the claim and NOVIRIO will, at it option, have the right to manage and
control, at its sole expense, the defense of the claim and its settlement. The
SUMITOMO Indemnified Parties will reasonably cooperate with NOVIRIO and may, at
their option and expense, be represented in any such action or proceeding.
NOVIRIO will not be liable for any litigation costs or expenses incurred by the
SUMITOMO Indemnified Parties without NOVIRIO's prior written authorization
provided however that a SUMITOMO Indemnified Party will have the right to retain
its own separate legal counsel at the expense of NOVIRIO if: (i) NOVIRIO does
not employ counsel reasonably satisfactory to the Sumitomo Indemnified Party to
take charge of the defense of such indemnifiable claim within a reasonable time
after notice of commencement of the action; or (iii) representation of both
NOVIRIO and the SUMITOMO Indemnified Party by the same counsel would be
inappropriate due to actual or potential conflicting interests in which case,
when the Sumitomo Indemnified Party notifies NOVIRIO, NOVIRIO will not have the
right to assume defense of the such action on behalf of the SUMITOMO Indemnified
Party. In addition, NOVIRIO will not be responsible for the indemnification of
any SUMITOMO Indemnified Party arising from any negligent or intentional acts by
such party, or as the result of any settlement or compromise by the SUMITOMO
Indemnified Parties without NOVIRIO's prior written consent, which will not be
unreasonably withheld.

                  (c) The failure by an indemnified Party to comply with any
provision of this Article 13.1 will not relieve an indemnifying Party of its
obligations arising pursuant to this Article 13.1 except to the extent the
indemnifying Party is adversely affected by such noncompliance.

13.2 Official Language. English will be the official language of this Agreement
and all communications between the parties will be conducted or provided in that
language.

13.3 No Grant of Licenses. Nothing contained in this Agreement will be deemed to
grant SUMITOMO either expressly or impliedly, a license or other right or
interest in any NOVIRIO Patent Rights, NOVIRIO Technology, NOVIRIO Inventions,
Know-How, trademarks, trade name, logo or other similar property of NOVIRIO,
except as may be necessary for SUMITOMO to market, sell and promote the LdT Drug
Product in countries within the Territory during the Term.

                                     - 35 -
<PAGE>
13.4 Governing Law. This Agreement will be construed and the respective rights
of the Parties hereto determined (including in any arbitration proceeding under
Article 12, above) according to the substantive laws of the country of Japan,
except matters of intellectual property law which will be determined in
accordance with the national intellectual property laws relevant to the
intellectual property in question.

13.5 Assignment. Neither NOVIRIO nor SUMITOMO may assign this Agreement in whole
or in part without the consent of the other Party. Notwithstanding the
foregoing, any Party may assign its rights (but not its obligations) pursuant to
this Agreement in whole or in part to an Affiliate of such Party.

13.6 Amendments. This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter hereof, and supersedes all previous
arrangements with respect to the subject matter hereof, whether written or oral,
except for the continuing obligations of the Parties under that certain
Confidentiality Agreement dated November 30, 2000 by and between the Parties.
Any amendment or modification to this Agreement will be effective only if made
in writing signed by both Parties.

13.7 Notices.

         Notices to NOVIRIO will be addressed to:

                  NOVIRIO B.V.
                  Locatellikade 1
                  106 AZ Amsterdam
                  The Netherlands
                  Attention:  Ms. Roos Matzinger
                  Facsimile No.:  31-20-67-30-016

                                     - 36 -
<PAGE>
         with a copy to:

                  Novirio Pharmaceuticals, Inc.
                  125 Cambridge Park Drive
                  Cambridge, MA  02140
                  Attention:  Sr. Vice President, Business Development
                  Facsimile No.:  617-250-3101

         Notices to SUMITOMO will be addressed to:

                  Sumitomo Pharmaceuticals Co., Ltd.
                  2-8, Dosomachi 2-chome
                  Chuo-ku, Osaka, Japan
                  Attention:  Director, General Manager, Business Development
                  and Licensing Office
                  Facsimile No.:  81-6233-2288

         with a copy to:

                  Sumitomo Pharmaceuticals Co., Ltd.
                  2-8, Dosomachi 2-chome
                  Chuo-ku, Osaka, Japan
                  Attention:  Director, General Manager, Pharmaceuticals Sales
                  Division
                  Facsimile No.:  81-6233-4643

         Any Party may change its address by giving notice to the other Party in
the manner herein provided. Any notice required or provided for by the terms of
this Agreement will be in writing and will be (a) sent by registered or
certified mail, return receipt requested, postage prepaid, (b) sent via a
reputable overnight courier service, or (c) sent by confirmed facsimile
transmission, in each case properly addressed in accordance with the paragraph
above. The effective date of notice will be the actual date of receipt by the
Party receiving the same.

13.8 Exports. The Parties acknowledge that the export of technical data,
materials or products is subject to the exporting Party receiving any necessary
export licenses and that the Parties cannot be responsible for any delays
attributable to export controls that are beyond the reasonable control of either
Party. SUMITOMO and NOVIRIO agree not to export or re-export, directly or
indirectly, any information, technical data, the direct product of such data,
samples, compounds or equipment received or generated under this Agreement in
violation of any governmental regulations that may be applicable. SUMITOMO and
NOVIRIO agree to obtain similar covenants from their Affiliates, Permitted
Sub-Distributors s and contractors with respect to the subject matter of this
Section 13.8.

                                     - 37 -
<PAGE>
13.9 Force Majeure. No failure or omission by either Party hereto in the
performance of any obligation of this Agreement will be deemed a breach of this
Agreement or create any liability if the same will arise from any cause or
causes beyond the control of the nonperforming Party, including, but not limited
to: acts of God; acts or omissions of any government; any rules, regulations or
orders issued by any governmental authority or by any officer, department,
agency or instrumentality thereof; fire; storm; flood; earthquake; accident;
war; rebellion; insurrection; riot; and invasion and provided that such failure
or omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes. A
Party asserting such a force majeure event will notify the other Party promptly
after the occurrence of an event resulting in the inability to perform. In
addition to indicating the nature of such event, such notice will provide an
assessment of the likely extent and duration of the event.

13.10 Press Release. The content and timing of any press release or similar
publicity with respect to the execution of this Agreement will be agreed upon by
the Parties in advance of such announcement. Each Party understands that this
Agreement is likely to be of significant interest to investors, analysts and
others, and that either Party therefore may make such press release with respect
thereto. The Parties agree that any such press release will not contain
Confidential Information and, if disclosure of Confidential Information is
required by law or regulation, will make reasonable efforts to minimize such
disclosure. Each Party agrees to provide to the other Party a copy of any press
release as soon as reasonably practicable under the circumstances prior to its
scheduled release. Except under extraordinary circumstances, each Party will
provide the other with an advance copy of any press release at least five (5)
Days prior to the scheduled disclosure. Each Party will have the right to
expeditiously review and recommend changes to any announcement regarding this
Agreement or the subject matter of this Agreement, provided that such
announcement will be advanced to the other Party at least two (2) Days before
its scheduled disclosure. Except as otherwise required by law, the Party whose
press release has been reviewed will remove any information the reviewing Party
reasonably deems to be inappropriate for disclosure.

13.11 Independent Contractors. It is understood and agreed that the relationship
between the Parties hereunder is that of independent contractors and that
nothing in this Agreement will be construed as authorization for either NOVIRIO
or SUMITOMO to act as partners or as agents for the other. The Program Directors
will remain employees of SUMITOMO or NOVIRIO, as the case may be.

13.12 No Strict Construction. This Agreement has been prepared jointly and will
not be strictly construed against any Party.

                                     - 38 -
<PAGE>
13.13 Headings. The captions or headings of the sections or other subdivisions
hereof are inserted only as a matter of convenience or for reference and will
have no effect on the meaning of the provisions hereof.

13.14 No Implied Waivers; Rights Cumulative. No failure on the part of NOVIRIO
or SUMITOMO to exercise, and no delay in exercising, any right, power, remedy or
privilege under this Agreement, or provided by statute or at law or in equity or
otherwise, will impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this
Agreement or as an acquiescence therein, nor will any single or partial exercise
of any such right, power, remedy or privilege preclude any other or further
exercise thereof or the exercise of any other right, power, remedy or privilege.

13.15 Severability. If any provision hereof should be held invalid, illegal or
unenforceable in any respect in any jurisdiction, then, to the fullest extent
permitted by law, (a) all other provisions hereof will remain in full force and
effect in such jurisdiction and will be liberally construed to carry out the
intentions of the Parties as nearly as may be possible and (b) such invalidity,
illegality or unenforceability will not affect the validity, legality or
enforceability of such provision in any other jurisdiction. The Parties will
negotiate in good faith to replace any provision determined to be invalid,
illegal or unenforceable with a provision which effects to the extent possible
the intent of the original provision. To the extent permitted by applicable law,
NOVIRIO and SUMITOMO hereby waive any provision of law that would render any
provision hereof prohibited or unenforceable in any respect.

13.16 Execution in Counterparts. This Agreement may be executed in counterparts,
each of which counterparts, when so executed and delivered, will be deemed to be
an original, and all of which counterparts, taken together, will constitute one
and the same instrument.

                                     - 39 -
<PAGE>
         IN WITNESS WHEREOF, the Parties have executed this Agreement effective
as of the date first set forth above.

                                        NOVIRIO B.V.

Witness: [illegible]                    By:     /s/Jean-Pierre Sommadossi
-----------------------------                -----------------------------------
                                                   Jean-Pierre Sommadossi, Ph.D.
                                                   Authorized Signatory

                                        Place of Signing:    Tokyo, Japan
                                                             -------------------

                                        Date of Signing:     September 17, 2001
                                                             -------------------

                                        SUMITOMO PHARMACEUTICALS CO., LTD.

         [illegible]                    By:     /s/Masaaki Yokotsuka
-----------------------------                -----------------------------------
                                                   Masaaki Yokotsuka
                                                   President

                                        Place of Signing:    Tokyo, Japan
                                                             -------------------

                                        Date of Signing:     September 17, 2001
                                                             -------------------

                                     - 40 -
<PAGE>
                                    EXHIBIT A

                                  PATENT RIGHTS

<TABLE>
<CAPTION>
TITLE                       COUNTRY           FILING         SERIAL                    PATENT             STATUS
                                              DATE           NUMBER                    NUMBER
<S>                         <C>               <C>            <C>                       <C>                <C>
[**]                        [**]              [**]           [**]                      [**]               [**]
[**]                        [**]              [**]           [**]                      [**]               [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]                             [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]              [**]           [**]                                         [**]
                            [**]                             [**]                                         [**]
[**]                        [**]              [**]           [**]                                         [**]
[**]                        [**]              [**]           [**]                                         [**]
</TABLE>

                                     - 41 -
<PAGE>
                                    EXHIBIT B

                                EXISTING PRODUCTS

                     SUMIFERON(R) (NATURAL ALPHA INTERFERON)

                                     - 42 -

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