Document:

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                                                                     EXHIBIT 4.7

                   LICENSE AND COLLABORATION AGREEMENT /1//

     THIS LICENSE AND COLLABORATION AGREEMENT (the "Agreement"), effective as of
                                                    ---------
September 27, 2000 (the "Effective Date"), is made between Genzyme Corporation,
                         --------------
a Massachusetts corporation having its principal place of business at One
Kendall Square, Cambridge, Massachusetts 02139, U.S.A. ("Genzyme") and Optein
                                                         -------
Inc., d/b/a Aptein Inc. ("Aptein"), a Delaware corporation and an Affiliate (as
                          ------
defined herein) of Cambridge Antibody Technology Limited ("CAT"), a company
                                                           ---
organized under the laws of England and Wales having its principal place of
business at The Science Park, Melbourne SG8 6JJ, Cambridgeshire, England.
Genzyme and Aptein are sometimes referred to herein individually as a "Party"
                                                                       -----
and together as the "Parties."
                     -------

                                R E C I T A L S

     A.   CAT is currently developing antibody-based antagonists of transforming
growth factor-B ("TGF-B") for the treatment and prevention of disease, including
                  -----
the human antibody shown as CAT-192.

     B.   Genzyme is currently developing antibody-based antagonists of TGF-B
for the treatment and prevention of disease, including the murine antibody known
as 1D11.

     C.   CAT and its Affiliates own or control intellectual property relating
to TGF-B antibodies, and have expertise relating to the isolation, research and
development of human monoclonal antibodies.

     D.   Genzyme owns or controls intellectual property relating to TGF-B
antibodies, and has expertise in developing, manufacturing and marketing
biopharmaceutical products.

     E.   The Parties desires to collaborate in developing and commercializing
the Collaboration Products (as defined herein) throughout the Territory (as
defined herein).

     NOW THEREFORE, in consideration of the premises and of the covenants herein
obtained, the Parties mutually agree as follows:

ARTICLE 1.                        DEFINITIONS

     For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below.  Certain other capitalized terms are defined
elsewhere in this Agreement.

     1.1. "Affiliate" shall mean any corporation or other entity which controls,
           ---------
is controlled by, or is under common control with a Party.  A corporation or
other entity shall be regarded as in

___________________________

/1// [***] indicates text deleted which is subject to confidential treatment
request.  This text has been filed with the SEC on a supplemental basis.

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control of another corporation or entity if it owns or directly or indirectly
controls fifty percent (50%) or more of the voting stock or other ownership
interest of the other corporation or entity, or if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the corporation or other entity or the power to elect or appoint
fifty percent (50%) or more of the members of the governing body of the
corporation or other entity.

     1.2. "Antibody" shall mean a molecule or a gene encoding such a molecule
           --------
which specifically binds to one or more isoforms of TGF-B and which comprises or
contains one or more immunoglobulin variable domains or functional parts of such
domains, or any existing or future fragments, variants, modifications or
derivatives thereof, provided that such fragments, variants, modifications or
derivatives retain at least a functional portion of an immunoglobulin variable
domain.

     1.3. "BLA" shall mean a Biologics License Application or similar
           ---
application filed with the FDA after completion of human clinical trials to
obtain marketing approval for a Collaboration Product or an External Product, as
the case may be.

     1.4. "Burnham" shall mean The Burnham Institute and any successor body
           -------
thereto.

     1.5. "Burnham License" shall mean the agreement effective as of September
           ---------------
27, 2000 among CAT, Burnham and Integra relating to the CAT Patent Rights, the
CAT Technology and the Genzyme Patent Rights.

     1.6. "CAT Background Patent Rights" shall mean the Patent Rights
           ----------------------------
corresponding to or claiming the inventions contained in the patents and patent
applications listed in Schedule 1.6 hereto.
                       ------------

     1.7. "CAT Patent Rights" shall mean all Patent Rights owned or controlled
           -----------------
by, or licensed (with the right to sublicense) to, Aptein and its Affiliates
during the term of this Agreement (other than the CAT Background Patent Rights
and the CAT Program Patent Rights), but only to the extent that such Patent
Rights claim Collaboration Products or relate to the research, development,
manufacture or commercialization of TGF-B antagonists, including the CAT Patent
Rights listed in Schedule 1.7 hereto.  The Parties acknowledge and agree that
                 ------------
the Whittier Patent shall be included in the CAT Patent Rights for all purposes
except for Sections 4.6.1 and 4.6.2 below, in which cases the Whittier Patent
shall be expressly excluded from the meaning of CAT Patent Rights.

     1.8. "CAT Product" shall have the meaning ascribed to it in Section 3.5
           -----------
hereof.

     1.9. "CAT Program Patent Rights" shall mean the Patent Rights that claim
           -------------------------
CAT Inventions (as such term is defined in Section 9.1.1 hereof).

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     1.10.     "CAT Program Technology" shall mean Technology discovered, made
               ----------------------
or conceived solely by employees of, or others acting on behalf of, Aptein and
its Affiliates during and in connection with the Program.

     1.11.     "CAT Technology" shall mean Technology owned or controlled by, or
                --------------
licensed (with the right to sublicense) to Aptein and its Affiliates during the
term of this Agreement (other than the CAT Program Technology), but only to the
extent that such Technology relates to the research, development, manufacture or
commercialization of Collaboration Products for use in the Field.

     1.12.     "Collaboration Product" shall mean any Antibody-based antagonist
                ---------------------
of TGF-B that is developed or acquired by either Party or its Affiliates for use
in the Field, and any and all improvements, combination products, delivery
systems and dosage forms related thereto.

     1.13.     "Combination Product" shall mean a product that contains an
                -------------------
External Product as one component and at least one other functional (whether it
be biological or mechanical) component.

     1.14.     "Commercialization Costs" with respect to a Collaboration Product
                -----------------------
shall mean the variable costs and fixed costs properly incurred by the Parties
with respect to work performed by the Parties and their Affiliates and
subcontractors in connection with the performance of the Commercialization Plan
for such Collaborating Product, including without limitation (a) the Fully
Absorbed Cost of Goods incurred in connection with the production of
Collaboration Products in bulk active ingredient and in finished dosage form,
including without limitation the performance of assay and purification work, for
use in connection with the performance of the Commercialization Plan, (b) sales
and marketing costs related to performing market research, advertising,
producing promotional literature, sponsoring seminars and symposia, training,
originating sales, providing reimbursement and other patient support services,
and (c) ordinary marketing and distribution expenses, including without
limitation recruitment costs and salaries and associated expenses for sales and
marketing personnel and support staff, advertising and promotion costs,
transportation expenses, including insurance (but only to the extent not charged
to customers and only such proportion of all such costs directly attributable to
support of the Commercialization Plan), irrecoverable duties and taxes, bad debt
expense, and costs associated with cash and other trade discounts and allowances
and other marketing concessions to customers actually allowed and taken.  For
the avoidance of doubt, Commercialization Costs shall exclude any transfer
pricing adjustments or taxes payable by a Party to one of its Affiliates in
connection with such Affiliates' performance of activities under a
Commercialization Plan.  For purposes of this Section 1.14, "variable costs"
                                                             --------------
shall be deemed to be the cost of labor, raw materials, supplies and other
resources directly consumed in the conduct of the Commercialization Plan and
manufacture of Collaboration Product for use in commercialization activities, as
well as royalties payable to Third parties (with such royalty obligations in
existence as of the Effective Date being set forth in Schedule 1.14), to the
                                                      -------------
extent not included in Development Costs or Fully Absorbed Cost of Goods.  For
purposes of this Section 1.14, "fixed
                                -----

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costs" shall be deemed to be the cost offacilities, utilities, insurance,
----
facility and equipment depreciation and other fixed costs directly related to
the conduct of the Commercialization Plan and the manufacture of Collaboration
Product for use in commercialization activities, allocated based upon the
proportion of such costs directly attributable to support of the
Commercialization Plan and the manufacture of Collaboration Product for use in
commercialization activities or by such other method of cost allocation as may
be approved by the Steering Committee. All cost determinations made hereunder
shall be made in accordance with GAAP.

     1.15.     "Commercialization Plan" shall mean the comprehensive plan for
                ----------------------
the commercialization of a Collaboration Product, as more specifically described
in Section 7.1 hereof.

     1.16.     "Competing Product" shall mean a non-Antibody-based antagonist of
                -----------------
TGF-B owned, controlled, developed or marketed by Genzyme or its Affiliates for
any use other than an Ophthalmic Application (i) that would compete with a
Collaboration Product and (ii) the manufacture, use or sale of which (a) would
infringe a claim within the CAT Program Patent Rights in the country in which
such product is manufactured, used or sold, or (b) is based on the CAT Program
Technology.

     1.17.     "Development Costs" with respect to a Collaboration Product shall
mean the variable costs and fixed costs properly incurred by the Parties with
respect to work performed by the Parties and their Affiliates and subcontractors
in connection with the conduct of the Development Plan for such Collaboration
Product, including without limitation (a) direct, out-of-pocket external costs,
including clinical grants, clinical laboratory fees, positive controls and the
cost of studies conducted and services provided by contract research
organizations and individuals, consultants, toxicology contractors, and
manufacturers necessary or useful for the purpose of obtaining Regulatory
Approvals for such Collaboration Product, (b) amounts properly incurred by the
Parties with respect to research and development and pre-commercialization sales
and marketing efforts as set forth in the Development Plan for such
Collaboration Product, including without limitation the efforts of the Parties
to develop a process for the manufacture of such Collaboration Product and the
Fully Absorbed Cost of Goods for batches of such Collaboration Product
manufactured and supplied for use in preclinical and clinical trials and pre-
commercialization activities, (c) costs related to data management, statistical
designs and studies, document preparation and other expenses associated with the
clinical testing program for such Collaboration Product, (d) costs for
preparing, submitting, reviewing or developing data or information for the
purpose of submission of applications to obtain Regulatory Approvals for such
Collaboration Product, (e) a pro rata share of license fees, milestone payments
and other amounts paid to Third Parties (including consultants) as a result of
performance of the Development Plan, allocated based on the proportion of such
costs directly attributable to such Collaboration Product, and (f) a pro rata
share of costs relating to the prosecution and maintenance of the CAT Patent
Rights, the CAT Program Patent Rights, the CAT Background Patent Rights, the
Genzyme Patent Rights, the Genzyme Program Patent Rights and the Joint Patent
Rights, allocated based on the proportion of such costs directly attributable to
such

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Collaboration Product. For the avoidance of doubt, Development Costs shall
exclude any transfer pricing adjustments or taxes payable by a Party to one of
its Affiliates in connection with such Affiliates' performance of activities
under a Development Plan. For purposes of this Section 1.17, "variable costs"
                                                              --------------
shall be deemed to be the cost of labor, raw materials, supplies and other
resources directly consumed in the conduct of the Development Program and the
manufacture of the Collaboration Product for use in preclinical and clinical
trials and pre-commercialization activities. For purposes of this Section 1.17,
"fixed costs" shall be deemed to be the cost of facilities, utilities,
 -----------
insurance, facility and equipment depreciation and other fixed costs directly
related to the conduct of the Development Program and the manufacture of the
Collaboration Product for use in precluded and clinical trials and pre-
commercialization activities, allocated based upon the proportion of such costs
directly attributable to support of the Development Program and the manufacture
of the Collaboration Product for use in preclinical and clinical trials and pre-
commercialization activities or by such other method of cost allocation as may
be approved by the Steering Committee. All cost determinations made hereunder
shall be made in accordance with GAAP.

     1.18.     "Development Plan" shall mean the comprehensive plan and budget
                ----------------
for the development of a Collaboration Product under the Development Program, as
more specifically described in Section 5.1.2 hereof.

     1.19.     "Development Program" shall mean the preclinical and clinical
                -------------------
development of Collaboration Products, including the preparation and filing of
all applications for Regulatory Approvals for each Collaboration Product.

     1.20.     "EMEA" shall mean the European Medicines Evaluation Agency, or
                ----
any successor agency with responsibilities comparable to those of the European
Medicines Evaluation Agency.

     1.21.     "Expert's Decision" shall mean the procedure for resolving
                -----------------
disputes set forth in Schedule 1.21.
                      -------------

     1.22.     "External Products" shall mean, individually and collectively,
                -----------------
Competing Products and Genzyme Products.

     1.23.     "FDA" shall mean the U.S. Food and Drug Administration or any
                ---
successor agency with responsibilities comparable to those of the U.S. Food and
Drug Administration.

     1.24.     "Field" shall mean all in vivo, ex vivo and in vitro uses of
                -----
Collaboration Products for therapeutic, diagnostic, prophylactic and monitoring
applications in the management of human disease, excluding Ophthalmic
Applications.

     1.25.     "Final Marketing Approval" shall mean receipt by Genzyme of final
                ------------------------
approval by either (i) the FDA of a BLA for a Collaboration Product or an
External Product, as the case may

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be, or (ii) the EMEA of both an MAA and pricing for a Collaboration Product or
an External Product, as the case may be.

     1.26.     "First Commercial Sale" shall mean the first sale for
                ---------------------
consideration following receipt of Final Marketing Approval of a Collaboration
Product or an External Product, as applicable.

     1.27.     "Fully Absorbed Cost of Goods" with respect to units of a
                ----------------------------
particular Collaboration Product shall mean (a) the variable costs and fixed
costs properly incurred by a Party associated with the manufacture (inclusive of
finishing processes including filling, packaging, labeling and/or other
preparation), quality assurance, quality control and other testing, storage and
shipping of batches of such units of Collaboration Product or (b) if such units
or portions of Collaboration Product are not manufactured by a Party or an
Affiliate thereof, the amounts paid to the vendor plus costs associated with
acquisition from such vendor.  For purposes of this Section 1.27, "variable
                                                                   --------
costs" shall be deemed to be the cost of labor, raw materials, supplies and
-----
other resources directly consumed in the manufacture, quality assurance, quality
control and other testing, storage and shipping of batches of such Collaboration
Product.  For purposes of this Section 1.27, "fixed costs" shall be deemed to be
                                              -----------
the cost of facilities, utilities, insurance, facility and equipment
depreciation and other fixed costs directly related to the manufacture, quality
assurance, quality control and other testing, storage and shipping of batches of
such Collaboration Product, as well as amounts paid to Third Parties as a result
of the manufacture, use or sale of such units of Collaboration Product. Fixed
costs shall be allocated to such Collaboration Product based upon the proportion
of such costs directly attributable to the support of the manufacturing, quality
assurance, quality control, and other testing, storage and shipping processes
for such Collaboration Product. If a facility is used to manufacture
Collaboration Products and products for other programs of a Party or an
Affiliate thereof, fixed costs shall be allocated in proportion to the use of
such facility for the manufacture of Collaboration Products and products for
such other programs. Fully Absorbed Cost of Goods shall exclude all costs
otherwise reimbursed pursuant to this Agreement. Except as otherwise provided in
this Agreement, all cost determinations made hereunder shall be made in
accordance with GAAP.

     1.28.     "GAAP" shall mean United States generally accepted accounting
                ----
principles, consistently applied.

     1.29.     "Genzyme Patent Rights" shall mean all Patent Rights owned or
                ---------------------
controlled by, or licensed (with the right to sublicense) to, Genzyme during the
term of this Agreement (other than the Genzyme Program Patent Rights), to the
extent such Patent Rights relate to the research, development, manufacture or
commercialization of Collaboration Products for use in the Field, including the
Genzyme Patent Rights listed in Schedule 1.29 hereto.
                                -------------

     1.30.     "Genzyme Product" shall mean any non-Antibody-based antagonist of
                ---------------
TGF-B owned, controlled, developed or marketed by Genzyme or its Affiliates for
any use other than an

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Ophthalmic Application, the manufacture, use or sale of which would infringe a
claim within the CAT Patent Rights in the country in which such product is
manufactured, used or sold.

     1.31.     "Genzyme Program Patent Rights" shall mean the Patent Rights that
                -----------------------------
claim Genzyme Inventions (as such term is defined in Section 9.1.1 hereof).

     1.32.     "Genzyme Technology" shall mean Technology owned or controlled
                ------------------
by, or licensed (with the right to sublicense) to Genzyme during the term of
this Agreement, to the extent that such Technology relates to the research,
development, manufacture or commercialization of Collaboration Products for use
in the Field.

     1.33.     "Insolvency Event" shall mean, in relation to a Party, that an
                ----------------
order is made or a resolution passed for the liquidation, administration,
winding-up, bankruptcy or dissolution of that entity (otherwise than for the
purpose of a solvent amalgamation or reconstruction) or an administrative or
other receiver, manager, trustee, liquidator, administrator, or similar officer
is appointed over all or any substantial part of the assets or revenues of the
entity or that entity enters into or proposes any composition or arrangement
with its creditors generally or anything analogous to the foregoing occurs in
any applicable jurisdiction, except in the case of a petition in bankruptcy
filed involuntarily against a Party in the United States or any statutory demand
or winding-up petition is served on a Party in the United Kingdom, if such
petition or demand is dismissed within sixty (60) days of the date of its
filing.

     1.34.     "Inventions" shall mean all writings, inventions, discoveries,
                ----------
improvements and other technology (including without limitation any proprietary
biological or other materials, compounds or reagents and computer software),
whether or not patentable or copyrightable and any patent applications, patents
or copyrights based thereon, that are discovered made or conceived by either
Party during and in connection with the Program.

     1.35.     "Integra" shall mean Integra Lifesciences Corporation and any
                -------
successor in title thereto.

     1.36.     "Joint Patent Rights" shall mean the Patent Rights that claim
                -------------------
Joint Inventions (as such term is defined in Section 9.1.1 hereof).

     1.37.     "Joint Technology" shall mean all Technology discovered, made or
                ----------------
conceived during and in connection with the Program jointly by employees of
Aptein or one of its Affiliates and Genzyme, or others acting on their behalf.

     1.38.     "License Rights" shall mean the rights granted by Aptein to
                --------------
Genzyme pursuant to Sections 3.1.1(b)(ii) and (iii) below.

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     1.39.     "MAA" shall mean a Marketing Authorization Application or similar
                ---
application filed with the EMEA after completion of human clinical trials to
obtain marketing approval for a Collaboration Product or an External Product, as
the case may be.

     1.40.     "Manufacturing Know-How" shall mean all information, techniques,
                ----------------------
inventions, discoveries, improvements, practices, methods, knowledge, skill,
experience and other technology, whether or not patentable or copyrightable, and
any copyrights based thereon, relating to or necessary or useful for the
production, purification, packaging, storage and transportation of Collaboration
Products, including without limitation manufacturing processes, specifications,
acceptance criteria, manufacturing batch records, standard operating procedures,
engineering plans, installation, operation and process qualification protocols
for equipment, validation records, master files submitted to the FDA and EMEA,
process validation reports, environmental monitoring processes, test data
(including pharmacological, toxicological and clinical test data), cost data and
employee training materials.

     1.41.     "Net Profits" for any period shall be equal to (a) the sum during
                -----------
such period of all revenues recognized and recorded by Genzyme and its
Affiliates during such period with respect to (i) the sale of Collaboration
Products and (ii) the grant or practice of sublicenses to Third Parties for the
manufacture, use, distribution or sale of Collaboration Products, less (b) all
                                                                  ----
expenses (including accruals legitimately chargeable against profits) incurred
by the Parties during such period in connection with the Program, including
without limitation expenses incurred in respect of Development Costs and
Commercialization Costs and facility and equipment depreciation costs not
otherwise accounted for.  All determinations made hereunder shall be made in
accordance with GAAP.

     1.42.     "Net Sales" shall mean the gross amount billed or invoiced by
                ---------
Genzyme or its Affiliates or sublicenses for the sale of each External Product
less (a) discounts actually allowed (b) credits for claims, allowances,
retroactive price reductions or returned goods; (c) prepaid freight charges; (d)
sales taxes or other governmental charges actually paid in connection with the
sale (but excluding what is commonly known as income taxes); and (e) brokerage,
commissions and other fees paid to others for or in connection with the sale of
an External Product. For purposes of determining Net Sales, a sale shall be
deemed to have occurred when payment is received for the sale.

     With respect to any transfers of External Products between Genzyme and an
Affiliate, Net Sales shall be calculated based on the final sale of such
External Product to an independent Third Party.  In the event that Genzyme or
its Affiliate receives non-monetary consideration for any External Products, Net
Sales shall be calculated based on the fair market value of such consideration.

     In the case of Combination Products, Net Sales means the gross amount
billed or invoiced on sales of such a Combination Product less the deductions
set forth above, multiplied by a proration factor.  The prorated component value
shall be mutually agreed upon by the

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Parties in writing prior to product launch of such a Combination Product. If all
components of the Combination Product were sold separately during the same or
immediately preceding Royalty Period, the proration factor shall be determined
by the formula [A/(A+B)], where A is the aggregate gross sales price of all
External Product components during such period when sold separately from the
other essential functional components, and B is the aggregate gross sales price
of the other essential functional components during such period when sold
separately from the External Product components.

     1.43.     "Ophthalmic Application" shall mean all in vivo, ex vivo and in
                ----------------------
vitro uses of Collaboration Products or External Products for therapeutic,
diagnostic, prophylactic and monitoring applications in the management of
diseases or conditions of the human eye and its related structures including,
but not limited to, the eyelids and the optic nerve.

     1.44.     "Patient Rights" shall mean United States and foreign patents,
                --------------
patent applications, provisional patent applications, certificates of invention
and applications therefor, divisions, continuations or continuations-in-part, or
continuing prosecution applications, together with any extensions,
registrations, confirmations, reissues, re-examinations, renewals, supplementary
protection certificates and other forms of government-issued patent protection
directed to the inventions claimed in the foregoing.

     1.45.     "Percentage Interest" shall mean the Parties' respective
                -------------------
interests in the Program, calculated in accordance with the formulae set forth
in Schedule 1.45.
   -------------

     1.46.     "Profitability Date" shall mean the first day of the calendar
                ------------------
quarter immediately following the second consecutive calendar quarter in which
Net Profits are positive.

     1.47.     "Program" shall mean the collaboration between Genzyme and Aptein
                -------
to develop and commercialize Collaboration Products described in this Agreement.

     1.48.     "Program Costs" shall mean all Program-related costs, including
                -------------
without limitation Development Costs and Commercialization Costs, in each case
as such costs are incurred or accrued on or after the Effective Date.

     1.49.     "Program Management Team" shall mean the joint team composed of
                -----------------------
representatives of Aptein or its Affiliates and Genzyme described in Section
8.1.1 hereof.

     1.50.     "Regulatory Approvals" shall mean all approvals from regulatory
                --------------------
authorities in any country required lawfully to market Collaboration Products in
any such country, including without limitation approval of any BLA, MAA, any
establishment license application filed with the FDA, EMEA or other appropriate
regulatory authority to obtain approval of the facilities and equipment to be
used to manufacture a Collaboration Product, and any product pricing approvals
where applicable.

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     1.51.     "Regulatory Scheme" shall mean U.S. Public Health Service Act and
                -----------------
the regulations, interpretations and guidelines promulgated thereunder by the
FDA or the regulatory scheme applicable to the Collaboration Products in any
country other than the United States, as such statutes, regulations,
interpretations and guidelines or regulatory schemes may be amended from time to
time.

     1.52.     "Royalty Period" shall mean the partial calendar quarter
                --------------
commencing on the date of the First Commercial Sale of a Collaboration Product
or an External Product, as applicable, and every complete or partial calendar
quarter thereafter during which Genzyme and its Affiliates maintain the right to
sell Collaboration Products and External Products under this Agreement.

     1.53.     "Specifications" with respect to a Collaboration Product shall
                --------------
mean the written specifications for such Collaboration Product determined by the
Program Management Team and approved by the Steering Committee; provided that
such specifications shall at all times comply with the relevant Regulatory
Scheme in the country of sale and in the country of use. The Specifications may
be amended from time to time by the Program Management Team, provided that such
amendments are approved by the Steering Committee or the written agreement of
the Parties, as the case may be, and subsequently approved by the relevant
regulatory authorities. Copies of such Specifications shall be maintained by
Genzyme and shall become a part of this Agreement as if incorporated herein.

     1.54.     "Steering Committee" shall mean the governing body of the Program
                ------------------
composed of representatives of Aptein or its Affiliates and Genzyme appointed as
described in Section 8.2.1 hereof.

     1.55.     "Technology" shall mean inventions, trade secrets, copyrights,
                ----------
know-how, data and other intellectual property of any kind (including without
limitation any proprietary biological or other materials, compounds or reagents
and computer software), but not including Patent Rights.

     1.56.     "Territory" shall mean all of the countries of the world.
                ---------

     1.57.     "Third Party" shall mean any entity other than Parties and their
                -----------
respective Affiliates.

     1.58.     "Whittier Patent" shall mean U.S. Patent No. 5,958,411, together
                ---------------
with any Patent Rights corresponding thereto.

ARTICLE 2.                                   SCOPE AND STRUCTURE

      2.1.      Antibody Collaboration.  This Agreement describes the terms of a
                ----------------------
collaboration between Genzyme and Aptein to develop and commercialize
Collaboration Products in the Field and throughout the Territory.  The Parties
will undertake the Development Program for each

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Collaboration Product, with each of the Parties assuming responsibility for
those portions of the Development Program allocated to it under this Agreement.
Upon completion of the Development Program, Genzyme will manufacture or have
manufactured Collaboration Products in bulk active ingredient and in finished
dosage form for commercial sale, and Genzyme will market and sell Collaboration
Products in the Territory. Genzyme and Aptein will share the costs related to
the preclinical and clinical development of Collaboration Products, as well as
the costs incurred in connection with the manufacturing, regulatory,
commercialization and reimbursement activities conducted in connection with such
Collaboration Products, in the proportions set forth in this Agreement. Genzyme
and Aptein shall share Net Profits in proportion to their respective Percentage
Interests.

     2.2. License Arrangement.  This Agreement also describes the terms of a
          -------------------
license arrangement under which Genzyme may develop and commercialize External
Products under certain intellectual property owned or controlled by Aptein and
its Affiliates.  Genzyme shall be solely responsible, at its expense, for the
development and commercialization of External Products, and shall make milestone
payments and pay royalties to Aptein at such times and in such amounts set forth
in Sections 4.5 and 4.6 of this Agreement.

     2.3. Exclusive Relationship.  Except as provided by Section 3.5 below,
          ----------------------
neither Party nor any of their Affiliates shall independently, or with a Third
Party, conduct research or development activities or grant a license or
sublicense regarding, or engage in the manufacture, marketing, sale or
distribution in the Territory of Collaboration Products in the Field during the
term of the Program other than as part of the Program.  In addition, during the
[***] following termination of the Program, neither (a) the breaching Party and
its Affiliates in the case of termination pursuant to Section 13.2.1 hereof, (b)
the terminating Party and its Affiliates in the case of termination pursuant to
Section 13.2.2 hereof and (c) the non-terminating Party and its Affiliates in
the case of termination pursuant to Section 13.2.3 hereof shall independently,
or with a Third Party, conduct research regarding, or engage in the manufacture,
marketing, sale or distribution in the Territory of, Collaboration Products in
the Field; provided, however, that in the event that this Agreement is
terminated pursuant to Section 13.2.2 hereof and the non-terminating Party does
not exercise its option under Section 13.3.2 hereof, then the restrictions set
forth in this sentence shall not apply.

                 ARTICLE 1.  GRANTS AND RESERVATIONS OF RIGHTS

     2.4. License Grants.
          --------------

          2.4.1.    Grants from Aptein.
                    ------------------

                    (1)  Exclusive Grant.  Except otherwise expressly provided
                         ---------------
herein, Aptein hereby grants to Genzyme an exclusive, irrevocable (except as
provided in Section 13.3 below and subject to Section 3.5 below), royalty-free
right and license, with the right to grant

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sublicenses, in the Territory under the CAT Patent Rights, the CAT Program
Patent Rights, the CAT Technology, the CAT Program Technology, the Joint Patent
Rights, the Joint Technology, and Manufacturing Know-How owned or controlled by
Aptein and its Affiliates, to develop, make, have made, use, offer for sale,
sell, have sold, import, have imported, export, and have exported Collaboration
Products in the Field and in the Territory. The Parties intend for the foregoing
exclusive license to be covered by a block exemption under the applicable
antitrust directives of the European Union. Accordingly, such license shall
terminate (i) in the case of Patent Rights, on a claim-by-claim and country-by-
country basis upon the expiration, abandonment or invalidation of claims under
such Patent Rights in such country and (ii) in the case of Technology, when such
Technology enters the public domain.

                    (2)  Non-Exclusive Grants.  Except as otherwise expressly
                         --------------------
provided herein, Aptein hereby grants to Genzyme:

                    (1)  a non-exclusive, irrevocable (except as provided in
Section 13.3 below), royalty-free right and license, with the right to grant
sublicenses, in the Territory under the CAT Background Patent Rights solely to
the extent necessary for Genzyme to develop, make, have made, use, offer for
sale, sell, have sold, import and export Collaboration Products in the Field and
in the Territory;

                    (2)  a worldwide, non-exclusive, irrevocable (except as
provided in Section 13.6 below), royalty-bearing right and license, with the
right to grant sublicenses, under the CAT Patent Rights and the CAT Technology
to develop, make, have made, sell, offer for sale, have sold, import, have
imported, export and have exported Genzyme Products; provided, however, that the
foregoing license is limited solely to the CAT Patent Rights and CAT Technology
in existence as of the Effective Date and further limited in the case of the CAT
Technology to the extent that such Technology is necessary to practice CAT
Patent Rights licensed under this paragraph; and

                    (3)  a worldwide, non-exclusive, irrevocable (except as
provided in Section 13.6 below), royalty-bearing right and license, with the
right to grant sublicenses, under the CAT Program Patent Rights and the CAT
Program Technology to develop, make, have made, sell, offer for sale, have sole,
import, have imported, export and have exported Competing Products.

          2.4.2.    Grants from Genzyme.  Except as otherwise expressly provided
                    -------------------
herein, Genzyme hereby grants to Aptein a non-exclusive, irrevocable (except as
provided in Section 13.3 below), royalty-free right and license in the Field and
in the Territory under Genzyme's interest in the Genzyme Patent Rights, the
Genzyme Program Patent Rights, the Genzyme Technology, and the Manufacturing
Know-How owned or controlled by Genzyme solely to the extent necessary to permit
Aptein to perform its duties under this Agreement.  The foregoing license shall
include the right to grant sublicenses to an Affiliate of Aptein solely for the
purposes of permitting such Affiliate to perform duties allocated to Aptein
under a

                                       12
<PAGE>

Development or Commercialization Plan, provided that such Affiliate shall not
have the right to grant further sublicenses.

     2.5. Reservations of Rights by Aptein.  Notwithstanding the licenses
          --------------------------------
granted under Section 3.1.1(a), Aptein at all times reserves the rights under
its interest in the CAT Patent Rights, the CAT Program Patent Rights, the CAT
Technology, the CAT Program Technology, the Joint Patent Rights, the Joint
Technology, and Manufacturing Know-How owned or controlled by Aptein and its
Affiliates (i) to make, have made and use Collaboration Products only for the
internal research and development purposes of Aptein and its Affiliates, (ii) to
develop, make, have made, use, offer for sale, sell, have sold, import and
export products outside of the Field, (iii) subject to Section 3.5 below, to
develop, make, have made, use, offer for sale, sell, have sold, import and
export CAT Products, and (iv) to grant licenses to Third Parties for the
foregoing purposes.

     2.6. Assignment of Orphan Drug Designation.  Except to the extent
          -------------------------------------
prohibited by the applicable Regulatory Scheme, Aptein hereby agrees to assign,
and shall cause its Affiliates to assign, to Genzyme any "orphan drug"
designation (or similar designation outside of the United States) for
Collaboration Products in the Field and in the Territory that Aptein or any of
its Affiliates has received or may receive during the term of the Program.

     2.7. Burnham License.  Genzyme acknowledges and agrees that, in accepting
          ---------------
the grant of certain of the licenses hereunder, it shall be subject to and shall
assume certain terms and conditions of the Burnham License (as such agreement
may be amended from time to time) as if those terms and conditions were imposed
on Genzyme itself.  These terms and conditions include, without limitation, the
payment of royalties, the furnishing of reports, the retention of records, and
audit rights.  In the event of any conflict or inconsistency between any
applicable provision of this Agreement and the provisions of the Burnham
License, the provisions of the Burnham License shall prevail.

     2.8. CAT Products.  Aptein and Genzyme acknowledge and agree that the
          ------------
initial Development Plan describes each broad clinical or disease indication for
which the Parties intend to develop Collaboration Products during the full term
of such Development Plan.  At any time after [***], Aptein (with the support of
its representatives on the Steering Committee) may make a proposal to Genzyme's
representative on the Steering Committee to develop a Collaboration Product for
an additional disease indication.  If the Steering Committee accepts such
proposal within [***]of receipt thereof, the then-current Development Plan shall
be amended accordingly.  [***] Aptein and/or its Affiliates will be free to
develop, manufacture and/or commercialize a Collaboration Product for such
disease indication in the Field (a "CAT Product") independently of Genzyme,
                                    -----------
either by itself or with a Third Party, and such activities shall no longer be
considered to be part of the Program.  A CAT Product shall not be considered to
be a Collaboration Product for purposes of this Agreement.  The Parties shall
negotiate in good faith any license and royalty agreements necessary to permit
Aptein to develop, manufacture and commercialize a CAT Product in accordance
with this Section 3.5.  Without limitation of the

                                       13
<PAGE>

foregoing, all up-front payments received by Aptein and/or its Affiliates from a
Third Party with respect to the licensing of the CAT Patent Rights, CAT Program
Patent Rights, CAT Background Patent Rights, CAT Technology, CAT Program
Technology, Joint Patent Rights, Joint Technology, or Manufacturing Know-How
owned or controlled by Aptein and its Affiliates for use in developing,
manufacturing or commercializing such CAT Product, and all subsequent license
fees, milestones and royalty payments relating to, or revenues generated from
the sale of, such CAT Product, and any proceeds from the sale of all of the
rights to such CAT Product, will be distributed in accordance with a formula to
be mutually agreed upon by the Parties. [***]

               ARTICLE 3.  PROGRAM FUNDING; PERCENTAGE INTEREST

     3.1. Program Funding.  In connection with the preparation of the initial
          ---------------
Development Plan, the Parties have agreed upon a budget for the period beginning
on the Effective Date and ending on [***].  Further, Aptein hereby commits to
fund [***] of all Program Costs incurred by the Parties during the period
beginning on the Effective Date and ending on [***].  Genzyme hereby commits to
fund the remaining [***] of Program Costs during such period.  In connection
with each annual update to the Development Plan described in Section 5.1.3 below
and until the Profitability Date, Aptein will commit to fund a specified
percentage (not to exceed [***]) of Program Costs for the second year of the
rolling four-year budget (because it would have previously committed to the
first year of such budget), and Genzyme will fund the remaining budgeted amount;
provided, however, that if the actual budget approved for the second year of the
rolling four-year budget is higher than what had been projected when Aptein
committed to fund a percentage of such budget, Aptein may, [***].  Following the
Profitability Date, Genzyme will fund Program Costs from operations.  All
operating losses recognized in any calendar quarter after the Profitability Date
will be funded by the Parties in accordance with their Percentage Interests;
[***].  Each Party hereby undertakes to fund such percentage of the Program
Costs incurred by the Parties in accordance with the provisions of this Section
4.1.  The Parties' respective funding commitments shall be satisfied in the
manner set forth in Section 4.2 below.

     3.2. Payments.
          --------

          3.2.1.    Initial Payment.  Within five (5) business days of the
                    ---------------
Effective Date, (a) each Party shall pay the other, by payment or offset against
amounts then due from the other, an amount equal to the Program Costs budgeted
to be incurred by the Parties during the period beginning on the Effective Date
through and including the end of the calendar quarter in which the Effective
Date occurs and (b) Genzyme shall pay Aptein [***] in consideration for the
grant of rights under the Whittier Patent, which amount shall not be considered
a Program Cost.

          3.2.2.    Quarterly Payments.  With respect to each full calendar
                    ------------------
quarter after the Effective Date, each Party shall pay the other, by payment or
offset against amounts then due from the other, in advance, an amount equal to
the Program Costs budgeted to be incurred by the

                                       14
<PAGE>

Parties in any then-current Development Plan or Commercialization Plan for such
calendar quarter.

          3.2.3.    Quarterly Statements; Quarterly Reconciliation.  Within five
                    ----------------------------------------------
(5) business days after the end of each of the first three (3) calendar quarters
of each year and within two (2) calendar weeks after the end of each calendar
year, each of Genzyme and Aptein shall provide the other Party with a detailed
itemization of its Program Costs as follows: the itemization for the first two
months of each calendar quarter shall be the Program Costs actually incurred
during those two months and the itemization for the third month of each quarter
may include estimates.  The itemization for each subsequent calendar quarter
shall then include a reconciliation of all estimated amounts reported during the
prior quarter.  Each Party shall provide the other Party with estimates of such
costs upon the reasonable request of the other Party prior to the dates such
statements are due.  Within thirty (30) business days following receipt of the
statement of actual Program Costs provided by each of Genzyme and Aptein, each
Party shall pay the other, by payment or offset against amounts then due from
the other, its share of any actual Program Costs shown thereon and not yet paid
for which such Party has assumed funding responsibility pursuant to Section 4.1
above, but only to the extent that such amount, together with all prior
contributions to date during such year, does not exceed [***] of the total
Program Costs budgeted year-to-date through the end of the quarter to which such
statement relates (except to the extent such excess is approved by the Steering
Committee pursuant to Section 5.1.3 hereof).  If the aggregate amount stated to
be due from a Party in such quarterly statements for actual Program Costs is
less than the amount already contributed by such Party with respect to budgeted
Program Costs for such quarter, such excess shall be credited against the next
successive quarterly payment due from such Party hereunder.

     3.3. Enforceability of Sections 4.1 and 4.2.  The agreements regarding
          --------------------------------------
funding commitments set forth in Sections 4.1 and 4.2 above are by and between,
and for the benefit of, Genzyme, Aptein and their respective Affiliates only,
and are not enforceable by any Third Party.

     3.4. Profit Sharing.  Within forty-five (45) days following the end of each
          --------------
calendar quarter following the Profitability Date, Genzyme shall deliver to
Aptein a report setting forth all information necessary to calculate the amounts
due to Aptein pursuant to this Section 4.4.  All such reports shall be
considered confidential Information of Genzyme and shall be subject to audit
rights as set forth in Section 4.12 below, mutatis mutandis.  If no payments are
due to Aptein, the report shall so state.  Concurrent with each report, and
subject to Section 4.10 below, Genzyme shall pay to Aptein an amount equal to
the product obtained by multiplying aggregate Net Profits for such quarter by
Aptein's Percentage Interest.  The Parties will equitably adjust the foregoing
formula in the event that Aptein or any of its Affiliates is required under the
terms of any agreement with a Third Party to make payments to such Third Party
on Genzyme's behalf in respect of the sale of Collaboration Products.

     3.5. Milestone Payments.  Genzyme hereby agrees to pay the following
          ------------------
amounts to Aptein within ten (10) business days of the occurrence of the
following events:

                                       15
<PAGE>

          (1)    [***] upon commencement by Genzyme or an Affiliate of the first
     Phase I clinical trial of a Genzyme Product classified as a "biologic" by
     the FDA;

          (2)    [***] upon commencement by Genzyme or an Affiliate of the first
     Phase I clinical trial of a Genzyme Product classified as a "drug" by the
     FDA;

          (3)    [***] upon receipt by Genzyme or an Affiliate of the first
     Final Marketing Approval of a Genzyme Product classified as a "biologic" by
     the FDA; and

          (4)    [***] upon receipt by Genzyme or an Affiliate of the first
     Final Marketing Approval of Genzyme Product classified as a "drug" by the
     FDA.

     For the avoidance of doubt, the payments set forth above shall be made only
with respect to the first Genzyme Product to accomplish such milestone and no
milestone shall be payable by Genzyme more than once.

     3.6. Royalties.
          ---------

          3.6.1. Genzyme Products.
                 ----------------

                 (1)     In partial consideration for the grant by Aptein of the
License Rights, Genzyme shall pay Aptein a royalty of [***] on Net Sales of
Genzyme Products which are covered by an issued and unexpired claim within the
CAT Patent Rights in the country of sale, payable on a country-by-country basis
until the expiration in such country of all issued patents within the CAT Patent
Rights; provided, however, that if a claim within the CAT Patent Rights issues
in a country within [***] of the filing date of the patent application
containing such claim, Genzyme shall pay Aptein the foregoing royalty as of the
date on which such patent application was filed (or, if later, the date of First
Commercial Sale of a Genzyme Product), with such retroactive royalty payable
over the [***] period beginning with the date on which such claim was issued;
and provided, further, that if a claim within the CAT Patent Rights issues in a
country after [***] of the filing date of the patent application containing such
claim, Genzyme shall pay Aptein [***] of the foregoing royalty as of the date on
which such patent application was filed (or, if later, the date of First
Commercial Sale of a Genzyme Product), with such retroactive royalty payable
over the [***] beginning with the date on which such claim was issued. The
payment of royalties hereunder shall be limited to only [***] royalty payment
with respect to a single unit of Genzyme Product regardless of the number of
claims within the CAT Patent Rights such Genzyme Product, but for the License
Rights, would have infringed.

                 (2)     In the event Aptein or one of its Affiliates
successfully negotiates a decrease in the royalty rate payable under the Burnham
License after the Effective Date, the royalty payable by Genzyme on Net Sales of
Genzyme Products shall increase, for the length of

                                       16
<PAGE>

time Aptein would be obligated to pay royalties under such agreement
(notwithstanding Genzyme's obligation under Section 4.6.4 to pay such royalties
on Aptein's behalf), by an amount equal to [***] of the royalty rate decrease
negotiated by Aptein or its Affiliate (the "Incremental Royalty"). If Genzyme is
                                            -------------------
required to pay royalties to Third Parties (other than under the Burnham License
or agreements between Genzyme and Third Parties in existence as of the Effective
Date) in order to make, use or sell Genzyme Products, then Genzyme shall be
entitled to reduce the amount of aggregate Incremental Royalties payable to
Aptein by [***] of the amount of such Third Party royalties; provided, however,
that the Incremental Royalties shall not be reduced by [***]. For the avoidance
of doubt, an example of the application of this Section 4.6.1 is set forth in
Schedule 4.6.1.
--------------

          3.6.2.    Competing Products.  In partial consideration for the grant
                    ------------------
by Aptein of the License Rights and in addition to any royalties payable by
Genzyme pursuant to Section 4.6.1, Genzyme shall pay Aptein a royalty of [***]
on Net Sales of Competing Products which are covered by an issued and unexpired
claim within the CAT Program Patent Rights in the country of sale, payable on a
country-by-country basis until the later of: (i) the expiration in such country
of all issued patents within the CAT Program Patent Rights or (ii) the tenth
10/th/ anniversary of the First Commercial Sale of such Competing Product in
such country; provided, however, that if a claim within the CAT Program Patent
Rights issues in a country within [***] of the filing date of the patent
application containing such claim, Genzyme shall pay Aptein the foregoing
royalty as of the date on which such patent application was filed (or, if later,
the date of First Commercial Sale of a Competing Product), with such retroactive
royalty payable over the [***] period beginning with the date on which such
claim was issued; provided, further, that if a claim within the CAT Program
Patent Rights issues in a country after [***] of the filing date of the patent
application containing such claim, Genzyme shall pay Aptein [***] of the
foregoing royalty as of the date on which such patent application was filed (or,
if later, the date of First Commercial Sale of a Competing Product), with such
retroactive royalty payable over the [***] period beginning with the date on
which such claim was issued; and provided, further, that if such Competing
Product is not covered by an issued and unexpired claim within the CAT Program
Patent Rights in such country but is based on the CAT Program Technology, the
foregoing royalty shall be reduced to [***] of Net Sales.  The payment of
royalties hereunder shall be limited to only one royalty payment with respect to
a single unit of Competing Product regardless of the number of claims within the
CAT Program Patent Rights such Competing Product, but for the License Rights,
would have infringed and regardless of whether such Competing Product is both
covered by an issued claim within the CAT Program Patent Rights and is based on
the CAT Program Technology.

          3.6.3.    Whittier Patent.  In partial consideration for the grant by
                    ---------------
Aptein of the License Rights, Genzyme shall pay Aptein a royalty of [***] on Net
Sales of External Products which are covered by an issued and unexpired claim
within the Whittier Patent in the country of sale, payable on a country-by-
country basis until the expiration in such country of all issued patents within
the Whittier Patent.  The payment of royalties hereunder shall be limited to
only

                                       17
<PAGE>

one royalty payment with respect to a single unit of an External Product
regardless of the number of claims within the Whittier Patent such External
Product, but for the License Rights, would have infringed.

          3.6.4.    Third Party Payments.  Genzyme hereby undertakes: (i) to pay
                    --------------------
all royalties, sublicense fees and other costs or expenses payable to Third
Parties associated with the sale of Genzyme Products by Genzyme or its
Affiliates and sublicensees, either directly to such Third Party or through
Aptein or its Affiliates; (ii) to pay all amounts payable to Burnham pursuant to
Section 4.2.2 of the Burnham License, either directly to such Third Party or
through Aptein or its Affiliates; and (iii) to comply with the Burnham License
in making such payments in accordance with Section 3.4 above.

          3.6.5.    Payments and Reports.  Within forty-five (45) days following
                    --------------------
the conclusion of each Royalty Period, Genzyme shall deliver to Aptein a report
setting forth all information necessary to calculate the amount of royalties due
to Aptein pursuant to this Section 4.6.  All such reports shall be considered
confidential Information (as defined in Section 10.1) of Genzyme, and shall be
subject to audit rights as set forth in Section 4.12 below, mutatis mutandis.
If no royalties are due to Aptein for any Royalty Period, the report shall so
state.  Concurrent with each report, Genzyme shall remit to Aptein any royalty
payment due for the applicable Royalty Period.

     3.7. Burnham License.  If Aptein or any of its Affiliates is required to
          ---------------
pay cash or other consideration to reduce the royalty rates payable under the
Burnham License following the Effective Date, Genzyme shall pay Aptein, within
thirty (30) days following receipt of a written invoice therefor, in an amount
equal to [***] of the amounts paid by Aptein or its Affiliate to reduce such
royalty rates; provided, however, in no event shall Genzyme be required to pay
more than [***] in the aggregate pursuant to the provisions of this paragraph.
In the event that Aptein or any of its Affiliates pay non-monetary consideration
(e.g., stock) to reduce the royalty rates payable under the Burnham License,
Genzyme's obligations under this Section 4.7 shall be calculated based on the
fair market value of such consideration.  No amounts paid by Aptein, its
Affiliates or Genzyme pursuant to this Section 4.7 shall be considered Program
Costs.

     3.8. Payments in United States Dollars; Method of Payment.  All payments
          ----------------------------------------------------
due under this Agreement shall be payable in U.S. dollars.  All payments under
this Agreement shall be made by certified or bank check or by wire transfer in
immediately available funds to such account(s) as the Party owed such payment
may designate in writing to the Party making such payment, provided that such
accounts are located outside of the United Kingdom.

     3.9. Payments in Other Currencies.  If by law, regulation, or fiscal policy
          ----------------------------
of a particular country, conversion into United States dollars or transfer of
funds of a convertible currency to the United States is restricted or forbidden,
Genzyme shall give Aptein prompt written notice of such restriction, which
notice shall satisfy the forty-five (45) day payment deadline described in
Sections 4.4 and 4.6.5.  Genzyme shall pay any amounts due Aptein

                                       18
<PAGE>

through whatever lawful methods Aptein reasonably designates; provided, however,
that if Aptein fails to designate such payment method within thirty (30) days
after Aptein is notified of the restriction, Genzyme may deposit such payment in
local currency to the credit of Aptein in a recognized banking institution
selected by Genzyme and identified by written notice to Aptein, and such deposit
shall fulfil all obligations of Genzyme to Aptein with respect to such payment.

     3.10.  Withholding and Similar Taxes.  Any withholding of taxes levied by
            -----------------------------
tax authorities on the payments hereunder shall be deducted by the paying Party
from the sums otherwise payable by the paying party hereunder for payment to the
property tax authorities on behalf of the receiving Party and shall be paid by
the paying Party to such property tax authorities. The Parties agree to
cooperate with each other in the event a Party claims exemption from such
withholding or seeks deductions under any double taxation or other similar
treaty or agreement from time to time in force, such cooperation to consist of
providing receipts of payment of such withheld tax or other documents reasonably
available to the cooperating Party.

     3.11.  Late Payments.  Any payments by Genzyme or Aptein that are not paid
            -------------
on or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at the Prime Rate of interest as
reported by the Chase Manhattan Bank, New York, New York, on the date payment is
due, with interest calculated based on the number of days that payment is
delinquent.

     3.12.  Books of Account; Audit.  Each Party shall keep and maintain proper
            -----------------------
and complete records and books of account documenting (i) all Program Costs
incurred by it and its Affiliates and (ii) all information required to enable
Aptein to determine royalties and other amounts payable to Aptein hereunder.
Each Party shall permit independent accountants retained by the other Party to
have access to its records and books for the sole purpose of determining (i) the
appropriateness of Program Costs charged by the non-auditing Party hereunder and
(ii) verifying the profit sharing and royalty reports delivered pursuant to
Sections 4.4 and 4.6.5 above. Such examination shall be conducted during regular
business hours and upon reasonable notice, at the auditing Party's own expense
and no more than once in each calendar year during the term of this Agreement
and once during the three (3) calendar years following the termination hereof.
If such examination reveals that such Program Costs or royalties have been
misstated, any adjustment shall be promptly refunded or paid, as appropriate.
The auditing Party shall pay the fees and expenses of the accountant engaged to
perform the audit, unless such audit reveals an overcharge, accrual or
underpayment of [***] or more for the period examined, in which case the audited
Party shall pay all reasonable costs and expenses incurred by the auditing Party
in the course of making such determination, including the fees and expenses of
the accountant.

                      ARTICLE 4.  THE DEVELOPMENT PROGRAM

     4.1.   Conduct of the Development Program.
            ----------------------------------

                                       19
<PAGE>

          4.1.1.    General.  The Parties each agree to collaborate diligently
                    -------
in the development of Collaboration Products in the Field and to use
commercially reasonable and diligent efforts to develop, obtain Regulatory
Approvals for and bring to market Collaboration Products in the Field and in the
Territory as soon as practicable, all in accordance with the Development Plan
and the Commercialization Plan for such Collaboration Products.  The Parties
agree to execute and substantially perform and to cooperate with each other in
carrying out the Development Plan and the Commercialization Plan for each
Collaboration Product.  Neither Party shall be required to undertake activities
in furtherance of the Development Plan or Commercialization Plan if the other
Party is not meeting its Program funding commitments set forth in this
Agreement.  As used in this Agreement, the term "commercially reasonable and
                                                 ---------------------------
diligent efforts" will mean that level of effort which, consistent with the
----------------
exercise of prudent scientific and business judgment, is or would be applied by
the Party in question to its or its Affiliates' other therapeutic products at a
similar stage of development and with similar commercial potential, and in no
event shall that level of effort be less than that required under applicable
provisions of the Burnham Agreement.

          4.1.2.    Development Plan.  The Development Program shall be
                    ----------------
conducted by the Parties under a rolling four (4) year Development Plan which
shall describe the proposed overall program of development for each
Collaboration Product, including preclinical studies, toxicology, formulation,
clinical trials and regulatory plans and other key elements necessary to obtain
Regulatory Approvals for such Collaboration Product.  The Development Plan shall
include a summary of estimated Development Costs expected during the development
process and a detailed description of and budget for all development activities
proposed for each calendar year for each Collaboration Product.

          4.1.3.    Initial and Updated Development Plan.  A Development Plan
                    ------------------------------------
for the period beginning on the Effective Date and ending on December 31, 2003
has been agreed upon by the Parties and is attached hereto as Schedule 5.1.3.
                                                              --------------
The Development Plan shall be updated annually by Genzyme, in consultation with
Aptein, and submitted to the Steering Committee for review and approval not
later than October 31 of each year during the Development Program.  Each such
updated Development Plan shall include (a) an overall development plan for each
Collaboration Product which sets forth all major development tasks remaining to
be accomplished prior to submission of filings for Regulatory Approvals, (b) a
detailed description for the development and pre-commercialization activities
proposed for the following four (4) calendar years, and (c) a detailed, rolling
four-year financial forecast containing a committed budget for the first
calendar year and good faith estimates of the budget for the following three (3)
calendar years.  Each such updated Development Plan approved by the Steering
Committee shall be signed by an authorized representative of each of Genzyme and
Aptein.  The members of the Program Management Team shall actively consult with
on another throughout the term of the Development Plan so as to adjust the
specific work performed under the Development Plan to conform to evolving
developments in technology and the results of the development work performed.
While minor adjustments to the Development Plan may be made from time to time
upon approval of the Program Management Team, significant changes in the scope
or direction

                                       20
<PAGE>

of the work and any changes in funding exceeding [***] of the total amount
budgeted in any calendar year for the Development Program must be approved by
the Steering Committee, in the absence of which approval the most recently
approved Development Plan and budget shall remain in effect. Notwithstanding the
foregoing, if the Steering Committee does not approve the budget increase and
such increase is necessitated by a significant change in an activity for which
one of the Parties has primary responsibility as described in Section 5.1.4
below, the Party responsible for such activity may independently determine to
increase the applicable budget. The other Party shall then have the option,
exercisable within (30) days of the decision to increase the applicable budget,
to fund a percentage of such increased Development Costs at a level not to
exceed the percentage of such costs being funded by such Party during such year.
If such budget increase is necessitated by an activity for which the Parties
share joint responsibility, either Party may choose to fund such activity on its
own, provided that such funding will only be considered a Development Cost if
the aggregate amount funded by such Party in a calendar year under this sentence
does not exceed [***].

          4.1.4.    Execution and Performance.  The Development Program shall
                    -------------------------
allocate between the Parties responsibility for each of the activities described
therein.  Each Party may subcontract portions of the activities allocated to it
under a Development Plan to any of its Affiliates or to a Third Party with the
prior approval of the other Party (such Affiliate or Third Party being referred
to herein as a "Permitted Subcontractor"), provided that (i) the subcontracting
                -----------------------
Party shall be responsible for the performance of its Permitted Subcontractors
and (ii) all Inventions discovered, made or conceived by each Permitted
Contractor in the course of the performance of such activities shall be assigned
to the subcontracting Party in a manner consistent with Sections 9.1.1 and 9.1.3
below and licensed to the other Party pursuant to Article 3 above.  The Parties
shall use, and shall cause their Permitted Subcontractors to use, commercially
reasonable and diligent efforts to conduct the activities described in the
Development Plan and in so doing shall prepare and maintain proper records,
including laboratory notebooks prepared and maintained in accordance with
commercial scientific practice, detailing such activities.  The Parties
acknowledge and agree that each Development Plan shall allocate primary
responsibility for various activities as follows:

                    (1)  Antibody engineering: Aptein; provided, however, if the
process selected by Aptein for developing a human antibody does not result
within a reasonable period of time in a human antibody with properties
acceptable to both Parties, then decision-making with respect to such
humanization activities will become joint;

                    (2)  Preclinical development: Joint;

                    (3)  Product and process development: Joint;

                    (4)  Clinical development: Genzyme;

                    (5)  Biostatistics: Genzyme;

                                       21
<PAGE>

                    (6)  Regulatory: Genzyme; and

                    (7)  Manufacturing, quality control and quality assurance:
Genzyme.

Notwithstanding the foregoing allocations of responsibility, the Program
Management Team will coordinate and supervise activities under the Development
Plan.

          4.1.5.    Attendance at Regulatory Meetings.  Genzyme shall provide
                    ---------------------------------
Aptein with prior notice of all meetings between representatives of Genzyme and
regulatory authorities regarding any Co0llaboration Product.  Except as
otherwise provided herein, Aptein and its Affiliates shall have the right to
have representatives present at all such meetings.

     4.2. Development Information.
          -----------------------

          4.2.1.    Reports and Information Exchange.  Genzyme shall own all
                    --------------------------------
clinical trial data accumulated from all clinical trials of Collaboration
Products conducted as part of the Program or otherwise funded or partially
funded by the Parties.  Each Party shall use, and shall cause its Permitted
Subcontractors to use, commercially reasonable and diligent efforts to disclose
to the other Party all material information relating to any Collaboration
Product promptly after it is learned or its materiality is appreciated.  The
Party performing or supervising clinical trials of Collaboration Products in
accordance with the Development Plan shall maintain, and shall cause its
Permitted Subcontractors to maintain, the database of clinical trial data
accumulated from all clinical trials of Collaboration Products and of adverse
reaction information for all such Collaboration Products.  Such database shall
be maintained in accordance with the Medical Dictionary for Regulatory
Activities standard, as in effect from time to time.  Each Party shall also keep
the Program Management Team informed as or its or its Permitted Subcontractors'
progress in the Development Plan.  All protocols for clinical trials to be
conducted, and all product registration plans for Collaboration Products shall
be submitted to the Program Management Team for review and comment by the
Program Management Team prior to filing of such protocols or registrations with
any regulatory agency.  Within sixty (60) days following the end of each
calendar quarter during the Development Program, each Party shall provide the
other Party with a reasonably detailed written report which shall describe the
progress to date of all activities for which such Party and its Affiliates were
allocated responsibility during such quarter under the Development Plan.

          4.2.2.    Adverse Reaction Reporting.  Each Party shall notify, and
                    --------------------------
shall cause its Permitted Subcontractors to notify, the other Party of any
adverse reaction information relating to any Collaboration Product, CAT Product,
or Antibody-based antagonist of TGF-B developed for an Ophthalmic Application as
necessary for compliance with regulatory requirements and in accordance with
procedures to be established by the Program Management Team no later than the
date on which the first clinical trial for such Collaboration Product, CAT
Product, or Antibody-based antagonist of TGF-B developed for an Ophthalmic
Application is initiated.

                                       22
<PAGE>

"Adverse reaction information" includes without limitation information relating
 ----------------------------
to any experience that (a) suggests a significant hazard, contraindication, side
effect or precaution, (b) is fatal or life threatening, (c) is permanently
disabling, (d) requires or prolongs inpatient hospitalization, (e) involves a
congenital anomaly, or (f) is one not identified in nature, specificity,
severity or frequency in the current investigator brochure or the United States
labeling for the Collaboration Product.

          4.2.3.    Clinical and Regulatory Audits.  Each Party shall permit,
                    ------------------------------
and shall cause its Permitted Subcontractors to permit, the other Party or the
representatives of the other Party or any applicable regulatory authority
(including without limitation the FDA and the EMEA) to have access during
regular business hours and upon reasonable advance notice, at the auditing
Party's own expense, to the audited Party's and its Permitted Subcontractors'
records and facilities relating to the Development Program for the purpose of
monitoring compliance with current Good Clinical Practice and other applicable
requirements of the Regulatory Scheme.

     4.3. Regulatory Approval Filings.  Genzyme shall be responsible for all
          ---------------------------
activities relating to obtaining Regulatory Approvals for Collaboration Products
in the Territory.  Regulatory Approval filings in the Territory for the
Collaboration Products and for the facilities used to manufacture such
Collaboration Products shall be filed in the name of Genzyme or its Affiliates,
as reasonably determined by Genzyme.  Prior to submission to the FDA, EMEA, or
other applicable regulatory authority, the Parties, through the Program
Management Team, shall (i) consult, cooperate in preparing and mutually agree on
the content and scope of the Regulatory Approval filings and (ii) prepare
technical agreements outlining the responsibilities of the Parties regarding
compliance with the applicable Regulatory Scheme.

     4.4. Clinical Data.  In all agreements with Permitted Subcontractors
          -------------
involving the development of preclinical or clinical data for a Collaboration
Product, Genzyme and Aptein shall each require that such Permitted
Subcontractors provide the other Party access to all such data required to be
disclosed to the Japanese Ministry of Health and Welfare, the FDA, the Committee
of Proprietary Medicinal Products of the European Community, the EMEA or other
regulatory agency, in each case with respect to Regulatory Approvals.

     4.5. Facilities Visits.  Representatives of each Party, its Affiliates, or
          -----------------
any applicable regulatory authority (including without limitation the FDA and
the EMEA) may visit, upon reasonable notice and in the presence of the other
Party, all manufacturing sites and the sites of any clinical trials or other
experiments being conducted by the other Party and its Permitted Subcontractors
in connection with the Development Program.  Each Party shall, upon request of
the other Party, cause appropriate individuals working on the Development
Program on its and its Permitted Subcontractors' behalf to be available for
meetings at the location of the facilities where such individuals are employed
at times reasonably convenient to the Party responding to such request.

                      ARTICLE 5.  MANUFACTURE AND SUPPLY

                                       23
<PAGE>

Subject to the terms and conditions of this Agreement, Collaboration Products
shall be manufactured and supplied for preclinical and clinical testing and for
commercial sale upon the following terms and conditions.  For purpose of this
Article 6 and Article 12, the term "Collaboration Products" shall be deemed to
include Collaboration Products in bulk active ingredient and in finished dosage
form.

     5.1. Process Development.  The Parties will use, and shall cause their
          -------------------
respective Permitted Subcontractors to use, commercially reasonable and diligent
efforts to develop a process for the manufacture of each Collaboration Product
and to scale up that process to a scale sufficient to manufacture and supply (a)
the anticipated demand for preclinical studies and clinical trials of such
Collaboration Product in accordance with the projections set forth in the
Development Plan and (b) the anticipated market demand (plus a reasonable level
of inventory) for such Collaboration Product at the time Regulatory Approval is
obtained for such Collaboration Product in accordance with the projections set
forth in the Commercialization Plan for such Collaboration Product.  The
development of the process for the manufacture of Collaboration Products as well
as the scale up of such process and all material issues incident to the
development of the ability to produce Collaboration Products for commercial
purposes in sufficient quantity and in a timely manner will be within the
purview of the Program Management Team, and all changes to the manufacturing
process shall be subject to the approval of the Program Management Team and any
additional quality and regulatory personnel of the Parties whose approval is
deemed necessary or desirable.

     5.2. Manufacture and Supply of Collaboration Products.  Genzyme shall, or
          ------------------------------------------------
shall engage one of its Affiliates or a Third Party to manufacture and supply,
Collaboration Products for preclinical and clinical activities and commercial
sale.  Manufacturing activities to be performed by an Affiliate or Third Party
shall be performed pursuant to a supply agreement to be negotiated in good faith
and entered into by Genzyme and such Affiliate or Third Party.  Genzyme shall,
or shall cause its Affiliates or Third Parties engaged as contract manufacturers
to use commercially reasonable and diligent efforts to manufacture and supply
each Collaboration Product (i) for preclinical studies and clinical trials in
quantities and within a time period sufficient to conduct the activities set
forth in the Development Plan and (ii) to meet market demand for Collaboration
Products at the time Regulatory Approval is obtained for such Collaboration
Product in accordance with the projections set forth in the Commercialization
Plan for such Collaboration Product.  Notwithstanding the foregoing, the Parties
acknowledge and agree that [***] shall initially supply Collaboration Products
pursuant to [***] until such time as [***] determines to establish alternative
arrangements for the manufacture and supply of Collaboration Products; provided,
however, in so doing [***] shall take no action that would result in a breach
[***].

     5.3. Planning Meetings.  The Parties recognize that detailed and continuing
          -----------------
exchanges of information shall be necessary in order to optimize the sale of
Collaboration Products by Genzyme, consistent with their respective rights and
responsibilities under this Agreement.  To

                                       24
<PAGE>

that end, Genzyme shall keep the Program Management Team reasonably informed of
any and all issues that arise affecting the production of Collaboration
Products. The Program Management Team shall conduct a planning meeting at least
once per quarter to review projected demand for Collaboration Products and
levels of commercial sales of the Collaboration Products in the Territory and
address supply issues.

     5.4. Facilities.  Notwithstanding any provision of this Agreement to the
          ----------
contrary, the Parties acknowledge and agree that Aptein shall not bear any costs
relating to the construction by Genzyme of manufacturing facilities for a
Collaboration Product (other than through depreciation and authorization
included in Fully Absorbed Cost of Goods).

     5.5. U.S. Manufacture.  To the extent required by applicable law and the
          ----------------
Telios Agreements, Genzyme agrees that the Collaboration Products and Genzyme
Products will be manufactured substantially in the United States, subject to
such waivers as may be obtained from the U.S. Department of Health and Human
Services or is designee.

           ARTICLE 6.  SALES, MARKETING AND ADMINISTRATIVE SERVICES

     6.1. Commercialization Plans.  The commercialization of each Collaboration
          -----------------------
Product shall be governed by a Commercialization Plan which shall describe the
overall plan for commercializing such Collaboration Product, including without
(a) a comprehensive marketing, sales, pricing, manufacturing, distribution and
licensing strategy for such Collaboration Product in all applicable countries,
including the identification of any Third Parties engaged or to be engaged in
connection with such activities and the arrangements with them that have been or
are proposed to be agreed upon (including policies and procedures for
adjustments, rebates, bundling and the like), (b) estimated launch date, market
and sales forecasts, in numbers of patients and local currency, and competitive
analysis for such Collaboration Product, (c) a detailed budget for the
Commercialization Costs to be incurred in connection with performing such
Commercialization Plan, and (d) production and inventory forecasts.  Genzyme
shall be responsible for developing the Commercialization Plan in consultation
with Aptein and for updating it annually.  Genzyme shall provide Aptein a copy
of each Commercialization Plan promptly following its completion.

     6.2. Exclusive Engagement.  Genzyme shall have the exclusive right to
          --------------------
market and sell Collaboration Products within the Territory for use within the
Field and agrees (by itself or through its Affiliates) to use commercially
reasonable and diligent efforts to establish each Collaboration Product in the
markets, fulfil market demand and meet the marketing and distribution goals set
forth in the Commercialization Plan for such Collaboration Product.  Genzyme's
diligence obligations under this Section 7.2 shall exist regardless of whether
Genzyme is developing or commercializing a Genzyme Product.

                                       25
<PAGE>

     6.3. Marketing and Distribution Expenses.  All freight, insurance, duties
          -----------------------------------
and all other charges associated with shipment of the Collaboration Products
shall be considered Commercialization Costs for such Collaboration Products only
to the extent such costs are not charged to Genzyme's customers.  Genzyme's
ordinary expenses incurred in the course of performing its marketing and
distribution obligations hereunder shall constitute Commercialization Costs.

     6.4. Responsibilities of Genzyme.  Genzyme shall be solely responsible for
          ---------------------------
all aspects of the marketing of the Collaboration Products in accordance with
the strategy, policies and procedures established in the Commercialization Plan.
Genzyme shall comply with all applicable laws and regulations in connection with
such activities, including but not limited to those related to "off-label"
promotion of biopharmaceutical products.

     6.5. Responsibilities of Aptein.  Aptein shall not, and shall cause its
          --------------------------
Affiliates not to, solicit for its own account sales of Collaboration Products.
Any solicitations or requests to purchase Collaboration Products received by
Aptein or any of its Affiliates from any customer or prospective customer shall
be immediately referred to Genzyme.  In the event that Aptein or any of its
Affiliates develops or commercializes a TGF-B antagonist for an Ophthalmic
Application or a CAT Product, Aptein and its Affiliates shall comply with all
applicable laws and regulations in connection with such activities, including
but not limited to those related to "off-label" promotion of biopharmaceutical
products.

     6.6. General and Administrative Services.  General and administrative
          -----------------------------------
services required for the conduct of the Program shall be provided at cost by
any or all of Aptein, Genzyme or their respective Permitted Subcontractors as
determined by the Steering Committee.  All such costs, in addition to general
and administrative costs payable to Third Parties (such as accountants) and
general and administrative costs incurred by Aptein, Genzyme or their respective
Permitted Subcontractors in satisfying their respective obligations under this
Agreement, shall be considered to be Program Costs, provided that any such costs
that are incurred are charged in a manner consistent with the principles set
forth in Schedule 7.6.
         ------------

                            ARTICLE 7.  MANAGEMENT

     7.1. Program Management Team.
          -----------------------

                                       26
<PAGE>

          7.1.1.    General.  The Parties have established a Program Management
                    -------
Team to oversee and control development of Collaboration Products.  The Program
Management Team shall be composed of such number of representatives as may be
appointed by the Parties from time to time.  Such representatives will include
individuals with expertise and responsibilities in such areas as preclinical
development, clinical development, manufacturing, regulatory affairs, marketing,
sales management and reimbursement.  The Parties shall be entitled, but are not
obligated, to have an equal number of representatives on the Program Management
Team.  The Program Management Team shall meet as needed but not less than
quarterly.  Genzyme and Aptein shall each designate one (1) of their respective
representatives on the Program Management Team to act as Co-Chair.  The Program
Management Team shall appoint one of its members to act as Secretary.  Such
meetings shall be at times and places or in such form (e.g., telephone or video
conference) as the members of the Program Management Team shall agree.  A Party
may change one or more of its representatives to the Program Management Team at
any time.  Members of the Program Management Team may be represented at any
meeting by another member of the Program Management Team or by a deputy.  Any
approval, determination or other action agreed to by unanimous consent of the
members of the Program Management Team or their deputies present at the relevant
Team Meeting shall be the approval, determination or other action of the Program
Management Team, provided at least one (1) representative of each of Genzyme and
Aptein is present at such meeting.  Representatives of either Genzyme and Aptein
or their respective Affiliates who are not members of the Program Management
Team may attend meetings of the Program Management Team as agreed to by the
representative members of the other Party.  The Co-Chairs of the Program
Management Team may designate project leaders to the extent it deems it
necessary or advisable.  Each Party shall bear its own travel costs and expenses
relating to Program Management Team meetings, which costs and expenses shall not
be considered Program Costs.

          7.1.2.    Development Program Functions.  During the term of the
                    -----------------------------
Development Program, the Program Management Team shall coordinate, expedite and
control the development of Collaboration Products to obtain Regulatory
Approvals.  The Program Management Team will (a) develop and recommend to the
Steering Committee updates to the Development Plans (including annual
development budgets), (b) facilitate the flow of information with respect to
development work being conducted for each Collaboration Product throughout the
Territory and (c) discuss and cooperate regarding the conduct of such
development work.

          7.1.3.    Minutes.  The Program Management Team shall keep accurate
                    -------
minutes of its deliberations which shall record all proposed decisions and all
actions recommended or taken.  The Secretary shall be responsible for the
preparation of draft minutes.  Draft minutes shall be sent to all members of the
Program Management Team within ten (10) business days after each meeting and
shall be approved, if appropriate, at the next meeting.  All records of the
Program Management Team shall at all times be available to all of the Parties.

     7.2. Steering Committee.
          ------------------

                                       27
<PAGE>

          7.2.1.    General.  The Parties have established a Steering Committee
                    -------
to oversee and manage the collaboration contemplated by this Agreement.  The
Steering Committee shall be composed of three (3) representatives appointed by
Genzyme and three (3) representatives appointed by Aptein.  Such representatives
will be senior officers and/or managers of their respective companies or their
Affiliates.  Aptein's initial representatives on the Steering Committee shall be
David Glover, Nigel Burns and Duncan Casson.  Genzyme's initial representatives
on the Steering Committee shall be John McPherson, Alison Lawton and Gene
Williams.  Genzyme and Aptein shall each designate one (1) of their respective
representatives on the Steering Committee to act as Co-Chair.  The Steering
Committee shall appoint one (1) of its members to act as Secretary.  The
Steering Committee will meet as needed, but either Party may require that
meetings be held quarterly.  Such meetings shall be at times and places or in
such form (e.g., telephone or video conference) as the members of the Steering
Committee shall agree.  A Party may change one or more of its representatives to
the Steering Committee at any time.  Members of the Steering Committee may be
represented at any meeting by another member of the Steering Committee or by a
deputy.  Any approval, determination or other action agreed to by unanimous
consent of the members of the Steering Committee or their deputies present at
the relevant Steering Committee meeting shall be the approval, determination or
other action of the Steering Committee, provided at least two (2)
representatives of each of Genzyme and Aptein are present at such meeting.
Representatives of their Genzyme and Aptein or their respective Affiliates who
are not members of the Steering Committee may attend meetings of the Steering
Committee as agreed to by the representative members of the other Party.  Each
Party shall bear its own personnel and travel costs and expenses relating to
Steering Committee meetings, which costs and expenses shall not be considered
Program Costs.

          7.2.2.    Functions.  The Steering Committee shall perform the
                    ---------
following functions:  (a) determine the overall strategy for the Program in the
manner contemplated by this Agreement; (b) coordinate the activities of the
Parties hereunder; (c) settle disputes or disagreements that are unresolved by
the Program Management Team; (d) review and approve each Development Plan,
including each significant change and annual update thereto, submitted to it
pursuant to Section 5.1.3 hereof; (e) serve as the governing body of the
Program; and (f) perform such other functions as appropriate to further the
purposes of this Agreement as determined by the Parties.

          7.2.3.    Minutes.  The Steering Committee shall keep accurate minutes
                    -------
of its deliberations which shall record all proposed decisions and all actions
recommended or taken.  The Secretary shall be responsible for the preparation of
draft minutes.  Draft minutes shall be sent to all members of the Steering
Committee within ten (10) business days after each meeting.  All records of the
Steering Committee shall at all times be available to both Genzyme and Aptein.

     7.3. General Disagreements.  All disagreements within the Program
          ---------------------
Management Team and the Steering Committee shall be subject to the following:

                                       28
<PAGE>

          (1)    If any dispute relates to subject matter for which one of the
     Parties has primary responsibility pursuant to Section 5.1.4, the Party
     with such responsibility shall be entitled to unilaterally resolve such
     dispute, or if such dispute relates to commercialization activities not
     described in Section 5.1.4, Genzyme shall be entitled to unilaterally
     resolve such dispute.

          (2)    If such dispute relates to subject matter for which the Parties
     share joint responsibility pursuant to Section 5.1.4, the representatives
     to the Program Management Team or Steering Committee will negotiate in good
     faith for a period of not less than thirty (30) days to attempt to resolve
     the dispute.  In the case of the Program Management Team, any unresolved
     dispute shall be referred to the Steering Committee for good faith
     negotiations for an additional period of not less than thirty (30) days to
     attempt to resolve the dispute.

          (3)    In the event that the dispute is not resolved after the period
     specified in clause (b), the representatives shall promptly present the
     disagreement to the Chief Executive Officer of Genzyme and the President of
     Aptein, or a designee of such officer reasonably acceptable to the other
     Party.

          (4)    Such executives shall meet or discuss in a telephone or video
     conference each Party's views and explain the basis for such dispute.

          (5)    If such executives cannot resolve such disagreement within
     sixty (60) days after such issue has been referred to them, then such
     dispute shall be subject to the provisions of Section 15.6 hereof.

                   ARTICLE 8.  INTELLECTUAL PROPERTY RIGHTS

     8.1. Ownership.  The Parties acknowledge that the ownership rights set
          ---------
forth herein are subject to the license grants set forth in Article 3 above.

          8.1.1. Ownership of Inventions.  All right, title and interest in
                 -----------------------
all Inventions that are discovered, made or conceived solely by employees or
Genzyme or other acting on behalf of Genzyme ("Genzyme Inventions") shall be
                                               ------------------
owned by Genzyme.  All right, title and interest in all Inventions that are
discovered, made or conceived solely by employees of Aptein or others acting on
behalf of Aptein ("CAT Inventions") shall be owned by Aptein.  All right, title
                   --------------
and interest in all Inventions that are discovered, made or conceived jointly by
employees of Genzyme and Aptein or others acting on their behalf ("Joint
                                                                   -----
Inventions") shall be jointly owned by the Parties. Each of Genzyme and Aptein
----------
shall promptly disclose to other Party the making, conception or reduction to
practice of Inventions by its employees or others acting on behalf of such
Party.

          8.1.2. Ownership of Trademarks.  Genzyme shall own all trademarks
                 -----------------------
for the sale and use of Collaboration Products in the Territory (collectively,
the "Product Marks"), and all
     -------------

                                       29
<PAGE>

goodwill therein shall inure to the benefit of Genzyme, and all expenses thereof
shall be considered Program Costs. All Products Marks shall be registered in the
name of Genzyme if and when registered. In the event that the applicable laws
and regulations of any country in which the Steering Committee elects to
register any Product Marks require that such trademark(s) be registered in the
name of an entity other than Genzyme, or if the Steering Committee determines
that it is in the best interests of the Parties, then the Steering Committee
shall select such entity and ensure that a duly authorized officer of such
entity agrees in writing that such entity shall (a) grant Genzyme an exclusive,
fully-paid, royalty-free, irrevocable (during the term of this Agreement) right
and license (with the right to grant sublicenses) to use such Product Marks in
the Territory and (b) comply with the provisions of Article 13 hereof with
respect to the ownership and/or disposition of such Products Marks in the event
the Program is terminated and provide the level of cooperation described in
Section 14.1 hereof in connection therewith. Aptein hereby agrees that at no
time during the term of this Agreement shall it or any of its Affiliates
challenge or assist others in challenging the Product Marks or the registration
thereof or attempt register to any trademarks, marks or trade names confusingly
similar to such Product Marks.

          8.1.3.    Cooperation of Employees.  Each Party represents and agrees
                    ------------------------
that all employees or others acting on behalf (including without limitation its
Permitted Subcontractors) in performing its obligations under this Agreement
shall be obligated under a binding written agreement to assign to such Party, or
as such Party shall direct, all Inventions made or conceived by such employee or
other person.  In the case of non-employees working for other companies or
institutions on behalf of either Party, such Party, as applicable, shall obtain
licenses to the fullest extent available for all Inventions made by such non-
employees on behalf of such Party, as applicable, in accordance with the
policies of said company or institution.  The Parties agree to undertake to
enforce such agreements (including, where appropriate, by legal action)
considering, among other things, the commercial value of such Inventions.

     8.2. Filing, Prosecution and Maintenance of Patent Rights.
          ----------------------------------------------------

          8.2.1.    Filing, Prosecution and Maintenance.  Each Party shall be
                    -----------------------------------
responsible for the filing, prosecution and maintenance of all patent
applications and patents which make up its Patent Rights and which relate to the
Program.  The Steering Committee shall designate one of the Parties or one of
its Affiliates as the Party responsible for the filing, prosecution, maintenance
and enforcement of all patent applications and patents which make up the Joint
Patent Rights.  For so long as any of the license grants set forth in Article 3
hereof remain in effect and upon request of the other Party, each Party agrees
to file and prosecute patent applications and maintain the Patent Rights for
which it is responsible and which relate to the Program in all countries in the
Territory selected by the Steering Committee.  Each Party shall consult with and
keep the other fully informed of important issues relating to the preparation
and filing (if time permits), prosecution and maintenance of such patent
applications and patents, and shall furnish to the other Party copies of
documents relevant to such preparation, filing, prosecution or maintenance in
sufficient time prior to filing such document or making any payment due

                                       30
<PAGE>

thereunder to allow for review and comment by the other Party and, to the extent
possible in the reasonable exercise of its discretion, the filing Party shall
incorporate all such comments.

          8.2.2.    Patent Costs.  All costs incurred after the Effective Date
                    ------------
associated with filing, prosecuting and maintaining patent applications and
patents included within the Genzyme Patent Rights, the Genzyme Program Patent
Rights, the CAT Patent Rights, the CAT Program Patent Rights and the Joint
Patent Rights shall be deemed Development Costs; provided, however, that if
either Party or one of its Affiliates is exploiting any such Patent Rights to
develop or commercialize a product other than a Collaboration Product, then such
Party shall bear [***] of such costs itself and [***] costs shall be deemed
Development Costs.

     8.3. Cooperation.  Each Party shall make available to the other Party (or
          -----------
to the other Party's authorized attorneys, agents or representatives) its
employees, agents or consultants to the extent necessary or appropriate to
enable the appropriate Party to file, prosecute and maintain patent applications
and resulting patents with respect to Inventions owned by a Party and for
reasonable periods of time sufficient for such Party to obtain the assistance it
needs from such personnel.  Where appropriate, each Party shall sign or cause to
have signed all documents relating to said patent applications or patents at no
charge to the other Party.

     8.4. Notification of Patent Term Restoration.  Each Party shall notify the
          ---------------------------------------
other Party of (a) the issuance of each United States patent included within the
Patent Rights for which the notifying Party or one of its Affiliates is
responsible, giving the date of issue and patent number for each such patent,
and (b) each notice pertaining to any patent included within the Patent Rights
for which the notifying Party is responsible which it receives as patent owner
pursuant to the U.S. Drug Price Competition and Patent Term Restoration Act of
1984, including notices pursuant to (S)(S)101 and 103 of such Act from persons
who have filed an abbreviated New Drug Application. Such notice shall be given
promptly, but in any event within ten (10) business days after the issuance of
such patent or receipt of each such notice pursuant to such Act. Each Party
shall notify the other Party of each filing for patent term restoration under
such Act, any allegations of failure to show due diligence and all awards of
patent term restoration (extensions) with respect to the Patent Rights for which
the notifying Party or one of its Affiliates is responsible.

     8.5. No Other Technology Rights.  Except as otherwise expressly provided in
          --------------------------
this Agreement, under no circumstances shall a Party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to the Patent Rights,
Technology or Manufacturing Know-How of the other Party, including terms owned,
controlled or developed by the other Party, or transferred by the other Party to
said Party at any time pursuant to this Agreement.  It is understood and agreed
that this Agreement does not grant either Party any license or other right in
the Patent Rights or Technology of the other Party for uses other than as
specified in Article 3 hereof and this Article 9.

                                       31
<PAGE>

     8.6. Enforcement of Patent Rights; Defense of Infringement Actions.  Each
          -------------------------------------------------------------
Party shall promptly notify the other in writing of any Third Party infringement
in the Field of any patents or patent applications for which it or one of its
Affiliates is responsible pursuant to Section 9.2 above or if any allegation of
infringement is made against either Party or any of its Affiliates by a Third
Party because of the manufacture, use or sale of a Collaboration Product or
because of attempts to invalidate Patent Rights.

          8.6.1.    First Right to Respond.  Each Party shall have the first
                    ----------------------
right to respond to or defend (in consultation with the Steering Committee)
against such challenge or infringement of the Patent Rights for which it or one
of its Affiliates is responsible pursuant to Section 9.2 above or charge of
infringement.  In the event such Party elects to so respond or defend, the other
Party will cooperate with the responding Party's legal counsel, join in such
suits as may be brought by the responding Party to enforce its Patent Rights,
and be available at the responding Party's reasonable request to be an expert
witness or otherwise to assist in such proceedings.

          8.6.2.    Sharing of Litigation and Settlement Expenses.  The costs
                    ---------------------------------------------
incurred (a) in responding to or defending against a challenge to a Party's
Patent Rights that relate to the Program, or defending against a charge that the
manufacture, use or sale of Collaboration Products infringe the Patent Rights of
Third Parties, and in assisting in connection with any of the foregoing, (b) in
settling any such actions, which may not be done without the prior written
consent of the Steering Committee, which consent shall not be unreasonably be
withheld or delayed, and (c) as damages paid as a result of such actions, shall
be deemed Program Costs.

          8.6.3.    Second Right to Respond.  If a responsible Party does not
                    -----------------------
exercise its right to respond to or defend against challenges or infringements
of its Patent Rights as provided in Section 9.6.1 above within thirty (30) days
of becoming aware of or being notified of such challenges or infringements, then
the other Party shall have the option to do so at its sole costs (and the
responsible Party shall agree to be joined as a party plaintiff) following its
good faith determination that such action is in the best interest of the Program
after giving good faith consideration to the position of the responsible Party
in not so responding or defending; provided that in such case all amounts so
recovered from such Third Party shall be retained by the Party undertaking such
response or defense and the Party so responding shall have no further
obligations to the other Party with respect to the response or defense thereof.
Notwithstanding the foregoing, the provisions of this Section 9.6.3 shall be
subject to any countervailing provisions of applicable law and contractual
obligations to Third Parties existing as of the Effective Date.

          8.6.4.    Recovery of Costs.  If either Party recovers monetary
                    -----------------
damages from a Third Party in connection with any action described in this
Section 9.6, such damages shall be applied in the following manner: (i) first,
the Parties shall be reimbursed, on a pro rata basis, for all costs and expenses
incurred by them with such action; and (ii) any remaining recovery shall be
shared by the Parties in proportion with their respective Percentage Interests.

                                       32
<PAGE>

ARTICLE 9.  CONFIDENTIALITY

     9.1. Nondisclosure Obligations.  Except as otherwise provided in this
          -------------------------
Article 10, during the term of this Agreement and for a period of five (5) years
thereafter, the Parties shall, and shall cause their respective Permitted
Subcontractors to, maintain in confidence and use only for purposes specifically
authorized under this Agreement (a) confidential information and data resulting
from or related to the development of Collaboration Products and (b) all
information and data not described in clause (a) but supplied by the other Party
under this Agreement and marked or identified as "Confidential."

     For purposes of this Article 10, information and data described in clause
(a) or (b) of the preceding paragraph shall be referred to as "Information."  To
                                                               -----------
the extent it is reasonably necessary or appropriate to fulfil its obligations
or exercise its rights under this Agreement, a Party may disclose Information to
its Affiliates, sublicensees, consultants, outside contractors and clinical
investigators, on a need-to-know basis and on the condition that such entities
or persons agree to keep the Information confidential for the same time periods
and to the same extent as such Party is required to keep the Information
confidential; and a Party or its sublicensees may disclose such Information to
government or other regulatory authorities to the extent that such disclosure is
reasonably necessary to obtain patents or authorizations to conduct clinical
trials with and to market commercially Collaboration Products.  The obligation
not to disclose Information shall not apply to any part of such Information
that: (i) is or becomes patented, published or otherwise becomes publicly known
other than by acts of the Party obligated not to disclose such Information or
its Affiliates or sublicensees in contravention of this Agreement; (ii) can be
shown by written documents to have been disclosed to the receiving Party or its
Affiliates or sublicensees by a Third Party, provided that such Information was
not obtained by such Third Party directly or indirectly from the other Party
under this Agreement; (iii) prior to disclosure under this Agreement, was
already in the possession of the receiving Party or its Affiliates or
sublicensees, provided that such Information was not obtained directly or
indirectly from the other Party under this Agreement; (iv) can be shown by
written documents to have been independently developed by the receiving Party or
its Affiliates without breach of any of the provisions of this Agreement; or (v)
is required to be disclosed to comply with applicable laws or regulations, or
with a court or administrative order, provided that the original disclosing
Party receives prior written notice of such disclosure and that the receiving
Party takes all reasonable and lawful actions to obtain confidential treatment
for such disclosure and, if possible, to minimize the extent of such disclosure.

     9.2. Terms of this Agreement; Press Releases.  The Parties further agree to
          ---------------------------------------
seek confidential treatment for the filing of this Agreement with the U.S.
Securities and Exchange Commission, the London Stock Exchange, and any other
applicable regulatory authority or securities exchange, and shall agree upon the
content of the request for confidential treatment made by each Party in respect
of such filing.  Except as permitted by the foregoing provisions or as otherwise
required by law, Genzyme and Aptein each agree, and shall cause its Affiliates
to agree, not to disclose any terms or conditions of this Agreement to any Third
Party without the

                                       33
<PAGE>

prior consent of the other Party; provided that each Party and its Affiliates
shall be entitled to disclose the terms of this Agreement without such consent
to potential investors or other financing sources on the condition that such
entities or persons agree to keep such terms confidential for the same time
periods and to the same extent as such Party is required to keep such terms
confidential. The Parties agree that all press releases related to the Program
shall be issued jointly and that the Party preparing any such press release
shall provide the other Party with a draft thereof reasonably in advance of
disclosure so as to permit the other Party to review and comment on such press
release. Notwithstanding the foregoing, the Parties shall agree upon a press
release to announce the execution of this Agreement, together with a
corresponding backgrounder and/or question and answer outline for use in
responding to inquiries about this Agreement; thereafter, the Parties and their
respective Affiliates may disclose to Third Parties (including their respective
shareholders) the information contained in such press release, backgrounder and
question and answer outline without the need for further approval by the other.

     9.3. Publications.  Each Party recognizes the mutual interest in obtaining
          ------------
valid patent protection.  Consequently, a Party or any of its Affiliates, or any
of their respective employees or consultants, wishing to make a publication
(including any oral disclosure made without obligation of confidentiality)
relating to work performed as part of the Program (the "Publishing Party") shall
                                                        ----------------
transmit to the other Party (the "Reviewing Party") a copy of the proposed
                                  ---------------
publication at least forty-five (45) days prior to submission for publication.
The Reviewing Party shall have the right to (a) request a delay in publication
or presentation in order to protect patentable information, (b) propose
modifications to the publication for patent reasons or (c) request that the
information be maintained as a trade secret.

     If the Reviewing Party requests a delay as described in clause (a) above,
the Publishing Party shall delay submission or presentation of the publication
for a period of ninety (90) days to enable patent applications protecting each
Party's rights in such information to be filed.  Upon the expiration of forty-
five (45) days from transmission of such proposed disclosures to the Reviewing
Party, the Publishing Party shall be free to proceed with the written
publication or the oral presentation, respectively, unless the Reviewing Party
has requested the delay described above.

     To the extent possible in the reasonable exercise of its discretion, the
Publishing Party shall incorporate all modifications proposed under clause (b)
above.  If a trade secret that is the subject of a request made under clause (c)
above cannot be otherwise protected without unreasonable expense to the
Reviewing Party, such information shall be omitted from the publication.

ARTICLE 10.   REPRESENTATIONS AND WARRANTIES

     10.1.     Authorization.  Each Party warrants and represents to the other
               -------------
that (a) it has the legal right and power to enter into this Agreement, to
extend the rights and licenses granted to the other in this Agreement, and to
perform fully its obligations hereunder, (b) this Agreement has

                                       34
<PAGE>

been duly executed and delivered and is a valid and binding agreement of such
Party, enforceable in accordance with its terms, (c) such Party has obtained all
necessary approvals to the transactions contemplated hereby, (d) such Party has
not made nor will it make any commitments to others in conflict with or in
derogation of such rights or this Agreement, and (e) the execution and delivery
of this Agreement and the performance of such Party's obligations hereunder will
not conflict with or breach the terms of any agreement that such Party has with
any Third Party as of the Effective Date.

     10.2. Intellectual Property Rights.
           ----------------------------

          10.2.1.   Aptein hereby represents and warrants that, as of the
Effective Date, (a) it possesses an exclusive right, title and interest in or to
the CAT Patent Rights and the CAT Technology in the Field and in the Territory
and a non-exclusive right, title and interest in or to the CAT Background Patent
Rights, (b) that the CAT Patent Rights, the CAT Background Patent Rights and the
CAT Technology are free and clear of any lien or other encumbrance and (c) that
it has the right to (i) enter into the obligations set forth in this Agreement
and (ii) grant the rights and licenses set forth in Article 3 hereof.

          10.2.2.   Aptein hereby represents and warrants that (i) neither it
nor any of its Affiliates is aware of any valid, issued or granted patents that
would be infringed or misappropriated by the manufacture, distribution and/or
sale of Collaboration Products as contemplated by this Agreement; (ii) except
for the Burnham License and an agreement with Whittier Institute for Diabetes
and Endocrinology regarding the Whittier Patent, neither it nor any of its
Affiliates is currently negotiating, has engaged in negotiations within the
ninety (90) day period preceding the Effective Date, or has any current
intention of engaging in negotiations, with Third Parties regarding licenses to
intellectual property relating to TGF-B antagonists; (iii) it has provided to
Genzyme true and complete copies of all license agreements (including all
amendments thereto) existing as of the Effective Date relating to the CAT Patent
Rights, CAT Background Patent Rights and CAT Technology; and (iv) Schedule 1.14
                                                                  -------------
contains a complete and accurate list of all royalty obligations existing as of
the Effective Date with respect to the CAT Patent Rights and CAT Background
Patent Rights.

          10.2.3.   Genzyme hereby represents and warrants that, as of the
Effective Date, (a) it possesses a non-exclusive right, title and interest in or
to the Genzyme Patent Rights and the Genzyme Technology, (b) that the Genzyme
Patent Rights and the Genzyme Technology are free and clear of any lien or other
encumbrance and (c) that it has the right to (i) enter into the obligations set
forth in this Agreement and (ii) grant the rights and licenses set forth in
Article 3 hereof.

     10.3.  Warranties.  Genzyme warrants that (i) any Collaboration Products
            ----------
delivered by Genzyme pursuant to Section 6.2 hereof, if any, will conform in all
material respects to the Specifications, the conditions of any Regulatory
Approvals regarding the manufacturing process, and any applicable requirements
of the Regulatory Scheme regarding the manufacturing process,

                                       35
<PAGE>

and (ii) the Collaboration Products sold pursuant to Section 7.2 hereof will be
marketed and sold in all material respects in accordance with the conditions of
any applicable Regulatory Approvals and any applicable labeling claims.

     10.4.  Disclaimer of Representations and Warranties.  EXCEPT AS
            --------------------------------------------
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT OF ANY THIRD PARTY PATENTS OR
PROPRIETARY RIGHTS.  ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE EXPRESSLY
DISCLAIMED BY THE PARTIES.

     10.5.  Limitation of Liability. IT IS AGREED BY THE PARTIES THAT NO PARTY
            -----------------------
SHALL BE LIABLE TO ANOTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING
TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN
AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR
LIKELIHOOD OF SAME. Remedies shall be limited to claims for amounts due
hereunder or as otherwise provided in this Agreement, including claims for
indemnification as provided in Section 12.1 hereof.

ARTICLE 11.  INDEMNITY

     11.1.  Indemnity Obligations. Each Party (the "Indemnifying Party") shall
            ---------------------                   ------------------
indemnify the other Party and its Affiliates, directors, officers, employees and
agents and their respective successors, heirs and assigns (each an "Indemnified
                                                                    -----------
Person") against any liability, damage, loss or expense (including reasonable
------
attorneys' fees and expenses of litigation) incurred by or imposed upon them
arising from bodily injury or property damage claims made by Third Parties
asserted against the Indemnified Person and its Affiliates, directors, officers,
employees and agents under this Agreement or arising under any theory of
liability (including product liability actions in the form of tort, warranty or
strict liability) concerning a Collaboration Product or an External Product;
provided that it shall be a condition to such indemnity that (a) the Indemnified
Person seeking indemnification acted in good faith and in a manner reasonably
believed to be in, or not opposed to, the best interests of the Parties, (b) the
act for which indemnification is sought did not constitute gross negligence or
reckless or intentional misconduct by such Indemnified Person, (c) the
Indemnified Person provides the indemnifying Parties with prompt written notice
of any claim, suit, action, demand or judgment for which indemnification is
sought hereunder, (d) the Indemnified Person cooperates fully in the defense of
such claim, suit, action or demand, and (e) payment and indemnification of any
matter disposed of by a compromise payment by such Indemnified Person, pursuant
to consent decree or otherwise, shall have been approved by

                                       36
<PAGE>

the indemnifying Parties, which approval shall not be unreasonably withheld or
delayed, or by a court of competent jurisdiction.

     11.2.  Insurance.
            ---------

               (1) Each Party shall each maintain, or shall cause its Affiliates
to maintain, at its own cost product liability and comprehensive general
liability insurance coverage in amounts reasonably determined by the Steering
Committee from time to time, but in no event shall such insurance be for an
amount [***]. The insurance will contain a deductible to be determined by the
Steering Committee. The aforementioned product liability and comprehensive
general liability insurance shall be obtained as soon as practicable after the
Effective Date, but in no event later than ninety (90) days thereafter, from an
insurance carrier approved by the Steering Committee. Genzyme shall also provide
coverage under its property and transit insurance policies as approved by the
Steering Committee, and the costs of the insurance premiums associated with such
coverage shall be included in the Program Costs.

               (2) Each Party will furnish the other Party a certificate(s) from
an insurance carrier (having a minimum AM Best rating of A or better) showing
all insurance set forth above.

               (3) The certificate(s) with respect to the foregoing insurance
will include statements substantially to the effect that such insurance is
applicable to all contracts between the Parties and that such insurance may be
cancelled only after thirty (30) days' written notice to the other Party. The
insurance, and the certificate(s), will (a) name each of the Indemnified Parties
as additional insureds with respect to matters arising from this Agreement, (b)
provide that such insurance is primary to any liability insurance carried by the
other Party and (c) provide that underwriters and insurance companies of the
other Party may not have any right of subrogation against the insured Party
(including their respective officers, directors, employees, servants,
Affiliates, agents, successors and assigns) except in the event a claim results
from a Party's gross negligence or willful misconduct. Such certificate(s) shall
be made available to each Party upon reasonable advance request.

               (4) The Steering Committee shall review the adequacy of the
insurance described above on a quarterly basis and the Steering Committee shall
have the power to reasonably direct the modification of such insurance.

ARTICLE 12.  TERM AND TERMINATION

     12.1.  Term.  Subject to earlier termination according to its provisions
            ----
this Agreement shall remain in force and of effect until all of the obligations
of each Party to the other have expired.

                                       37
<PAGE>

     12.2.  Termination of Program.  The Program may be terminated in the
            ----------------------
following circumstances:

            12.2.1.   For Certain Material Breaches.  If (a) either Aptein or
                      -----------------------------
Genzyme fails to use commercially reasonable and diligent efforts to perform any
material duty imposed upon such Party under this Agreement or a Development Plan
or a Commercialization Plan (other than those duties relating solely to the
License Rights), (b) either Genzyme or Aptein fails to make [***] payments in
accordance with Section 4.2 hereof, or (c) Genzyme fails to make a payment in
accordance with Section 4.4, and in each case such failure to perform is not
cured with [***] of written notice thereof from the non-breaching Party, the
non-breaching Party may elect, in its sole discretion, to (i) enforce the terms
of this Agreement and seek any and all remedies available to it at law and in
equity, or (ii) terminate the Program on written notice to the other Party with
the consequences set forth in Section 13.3.1 below.  Save in the case of a
breach involving a failure to make three (3) or more payments in accordance with
Section 4.2 hereof or a breach by Genzyme by failing to make a payment in
accordance with Section 4.4, such [***] period shall be extended to [***] if the
breaching Party has engaged in good faith efforts to remedy such default within
such [***] period and indicated in writing to the non-breaching Party prior to
the expiration of such [***] period that it believes that it will be able to
remedy the default within such [***] period, but such extension shall apply only
so long as the breaching Party is engaging in good faith efforts to remedy such
default.  It is understood and agreed that the failure of a Permitted
Subcontractor to perform its obligations on behalf of a Party shall not excuse
the subcontracting Party from any obligation to the other Party hereunder
(except under the conditions described in Section 15.1 below), and that either
Party may exercise its rights under clause (a) above upon the failure of the
other Party's Permitted Subcontractor to use commercially reasonable and
diligent efforts to perform any material duty subcontracted to such Permitted
Subcontractor.

            12.2.2.   For Convenience.  Either Genzyme or Aptein may elect to
                      ---------------
terminate the Program for any reason at any time with the consequences set forth
in Section 13.3.2 below after the earlier of (i) such time as Genzyme has
received Final Marketing Approval for the first Collaboration Product or (ii)
December 31, 2006 if Genzyme has not received Final Marketing Approval for the
first Collaboration Product on or before such date, upon one (1) year prior
written notice to the other Party (during which one-year period the obligations
of the Parties, including without limitation obligations with respect to funding
Program Costs, shall continue in full force and effect).

            12.2.3.   Upon Bankruptcy. Either Genzyme or Aptein may terminate
                      ---------------
the Program with the consequences set forth in Section 13.3.3 below upon the
occurrence of an Insolvency Event of the other Party. Genzyme may also terminate
the Program with the consequences set forth in Section 13.3.3 below upon the
occurrence of an Insolvency Event of CAT.

            12.2.4.   Upon a Change of Control.  Either Aptein or Genzyme may
                      ------------------------
elect to terminate the Program with the consequences set forth in Section 13.3.4
upon [***] written notice

                                       38
<PAGE>

to the other Party in the event that the other Party is a party to a transaction
in which (a) any Third Party or group of related Third Parties shall directly or
indirectly become the beneficial owner of capital stock representing fifty
percent (50%) or more of the total voting rights of all the capital stock of the
other Party then outstanding or otherwise acquires the power to direct or cause
the direction of the management and policies of such Party or the power to elect
or appoint more than fifty percent of the members of the Board of Directors of
such Party, or (b) the other Party shall consolidate or merge with any other
person and the stockholders of such Party of record immediately prior to the
consummation of such transaction do not beneficially own capital stock
representing fifty percent (50%) or more of the total voting rights of the
surviving corporation after the consummation of such transaction. Genzyme may
also elect to terminate the Program with the consequences set forth in Section
13.3.4 upon [***] written notice to Aptein in the event that CAT is a party to
any of the foregoing transactions. Termination of the Program pursuant to this
Section 13.2.4 shall only be effective if the notice referred to above is
delivered to non-terminating Party within ninety (90) days following the
effective date of such transaction, as announced by the non-terminating Party.

            12.2.5.   Upon Failure to File BLA. Aptein may elect to terminate
                      ------------------------
the Program, with the consequences set forth in Section 13.3.5 below and upon
one hundred eighty (180) days prior written notice to Genzyme, at any time after
September 30, 2010 if Genzyme has not filed a BLA with the FDA for a
Collaboration Product on or before such date; provided, however, such date shall
be conditioned upon the continuing absence of any adverse condition or event
that warrants a delay in the development, clinical testing or commercialization
of a Collaboration Product including, but not limited to, any of the conditions
and events described in Section 15.1 below, the inability to produce preclinical
or clinical supplies, events that would cause delays in clinical studies (e.g.,
difficulties in patient recruitment, negative toxicological or pharmacological
test results or an adverse clinical event), challenges within the regulatory
process, or intellectual property impediments to marketing a Collaboration
Product that the Parties could not reasonably have foreseen; and provided,
further, that such date shall be extended by a period equal to the pendency of
any such adverse condition or event.

            12.2.6.   Upon Mutual Consent. The Parties may immediately terminate
                      -------------------
the Program at any time upon mutual written consent. In the event of such a
termination, the Parties shall mutually agree upon the disposition of the Patent
Rights, Technology and Manufacturing Know-How relating to the Program.

     12.3.  Effects of Termination of the Program.
            -------------------------------------

            12.3.1.   For Certain Material Breaches.  In addition to the rights
                      -----------------------------
and duties set forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall
have the following rights and duties upon termination of the Program pursuant to
Section 13.2.1(ii) above:

                      (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have

                                       39
<PAGE>

been terminated pursuant to Section 13.6), the non-breaching Party shall obtain
from the Breaching Party the irrevocable right and license, with the right to
grant sublicenses, under the breaching Party's Patent Rights, Technology and
Manufacturing Know-How to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products in the Field and in the
Territory, and the breaching Party shall execute such documents and take all
action as may be necessary or desirable to affect the foregoing; provided that
such license shall be for the same level of exclusivity as the rights granted
with respect thereto under Section 3.1 hereof; and provided, further, tha t any
license granted hereunder shall be subject to the obligation of the non-
breaching Party to use commercially reasonable and diligent efforts to develop
and market Collaboration Products pursuant to such license;

                      (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed by the breaching Party or its Affiliates shall be
(i) assigned or exclusively licensed to the non-breaching Party or any Third
Party or Affiliate designated by such Party until such time as the non-breaching
Party or its designee is qualified to hold such Regulatory Approvals, "orphan
drug" designations or trademarks under the applicable provisions of the
Regulatory Scheme and (ii) transferred or assigned to the non-breaching Party or
its designee, as appropriate, as soon as practicable thereafter; provided,
however, that in any country where such transfer or assignment is not possible,
the breaching Party shall use commercially reasonable and diligent efforts to
ensure that the non-breaching Party has the benefit of such Regulatory Approvals
and "orphan drug" designations and to this end consents to any regulatory
authority cross-referencing to the data and information on file with any
regulatory authority as may be necessary; and

                      (3) the non-breaching Party shall become obligated to pay
the breaching Party an amount equal to [***] of the Fair Value (as defined in
Section 13.3.6 below) of the breaching Party's interest in the Program as of the
effective date of termination, plus interest thereon at the Prime Rate of
interest reported from time to time by the Chase Manhattan Bank, New York, New
York, from the date of termination to the date payment is made (the "Breach
                                                                     ------
Buyout Amount"), payable as follows:
-------------

                      (1) if the non-breaching Party elects to sell, license or
     otherwise dispose of all or any portion of the breaching Party's (or its
     Affiliates') right, title and interest in the Program, then the non-
     breaching Party shall, upon any such sale, license or other disposition,
     pay the breaching Party an amount equal to [***] of the net proceeds of
     such sale, license or other disposition when such payments are actually
     paid;

                      (2) for as long as the non-breaching Party has not sold,
     licensed or otherwise disposed of all or a portion of its right, title and
     interest in the Program which is equal to or greater than the breaching
     Party's Percentage Interest as of the date of termination, the non-
     breaching Party shall pay the breaching Party [***]; and

                                       40
<PAGE>

               (3) on the later to occur of: (A) the [***] of the date of
     termination and (B) the [***] of the date of First Commercial Sale of a
     Collaboration Product, the non-breaching Party shall pay the breaching
     Party [***];

provided, that the aggregate amount of all payments made under clauses (1), (2)
and (3) shall not exceed the Breach Buyout Amount.

          12.3.2.   For Convenience.  In addition to the rights and duties set
                    ---------------
forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have the
following rights and duties upon termination of this Agreement pursuant to
Section 13.2.2 above:

                         (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
the non-terminating Party shall have an option exercisable upon written notice
to the terminating Party within the [***] hereof to obtain from the terminating
Party the irrevocable right and license, with the right to grant sublicenses,
under the terminating Party's Patent Rights, Technology and Manufacturing Know-
How to develop, make, have made, use, offer for sale, sell, have sold, import
and export Collaboration Products in the Field and in the Territory, and the
terminating Party shall execute such documents and take all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights granted with respect thereto
under Section 3.1; and provided, further, that any licensed granted hereunder
shall be subject to the obligation of the non-terminating Party to use
commercially reasonable and diligent effort to develop and market Collaboration
Products pursuant to such license;

                         (2) upon exercise of its license option provided in
paragraph (a) of this Section 13.3.2, any Regulatory Approvals filed, "orphan
drug" designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed the terminating Party shall be (i) assigned or
exclusively licensed to the non-terminating Party or any Third Party or
Affiliate designated by such Party until such time as the non-terminating Party
or its designee is qualified to hold such Regulatory Approvals, Aorphan drug"
designations or trademarks under the applicable provisions of the Regulatory
Scheme and (ii) transferred or assigned to the non-terminating Party or its
designee, as appropriate, as soon as practicable thereafter; provided, however,
that in any country where such transfer or assignment is not possible, the
breaching Party shall use commercially reasonable and diligent efforts to ensure
that the non-breaching Party has the benefit of such Regulatory Approvals and
"orphan drug" designations and to this end consents to any regulatory authority
cross-referencing to the data and information on file with any regulatory
authority as may be necessary;

                         (3) upon the exercise of its license option provided in
paragraph (a) of this Section 13.3.2 , the non-terminating Party shall become
obligated to pay to the terminating Party an amount equal to [***] of the Fair
Value (as defined in Section 13.3.6 below) of the terminating Party's interest
in the Program as of the effective date of termination,

                                       41
<PAGE>

plus interest thereon at the Prime Rate of interest reported from time to time
by the Chase Manhattan Bank, New York, New York, from the date of termination to
the date payment is made, payable on the terms and conditions and in accordance
with the schedule of payments set forth in Section 13.3.1(c), mutatis mutandis,
except each reference to the [***] in paragraph 13.3.1(c)(3) shall instead be
deemed to refer to the [***];

                         (4) (i) if the license option provided in paragraph (a)
of this Section 13.3.2 is not exercised, then the terminating Party shall have
the option, exercisable upon written notice to the non-terminating Party within
[***] of the expiration of the license option period described in Section
13.3.2(a), to obtain from the non-terminating Party the irrevocable right and
license, with the right to grant sublicenses, under the non-terminating Party's
Patent Rights, Technology and Manufacturing Know-How to develop, make, have
made, use, offer for sale, sell, have sold, import and export Collaboration
Products in the Field and in the Territory, and the non-terminating Party shall
execute such documents and take all actions as may be necessary or desirable to
affect the foregoing; provided that such license shall be for the same level of
exclusivity as the rights granted with respect thereto under Section 3.1; and
provided, further, that any license granted hereunder shall be subject to the
obligation of the terminating Party to use commercially reasonable and diligent
efforts to develop and market Collaboration Products pursuant to such license;
and (ii) upon the exercise of such option, the terminating Party shall be
granted the rights and become obligated to make the payments described in
Section 13.3.2(b) and (c), mutatis mutandis, except each reference to the
terminating Party shall instead be deemed to refer to the non-terminating party
and vice versa; and

                         (5) if neither Party exercises the license options
provided in Sections 13.3.2(a) and (d), the Parties shall then sell all right,
title and interest in the Program to the highest bidder within [***] from the
date of termination and the proceeds shall be allocated between the Parties in
proportion to their Percentage Interests as of the date of termination.

          12.3.3.   Upon Bankruptcy.  In addition to the rights and duties set
                    ---------------
forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have the
following rights and duties upon termination of the Program pursuant to Section
13.2.3 above:

                         (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
the terminating Party shall obtain from the non-terminating Party the
irrevocable right and license, with the right to grant sublicenses, under the
non-terminating Party's Patent Rights, Technology and Manufacturing Know-How to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field and in the Territory, and the non-
terminating Party shall execute such documents and take all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights granted with respect thereto
under Section 3.1 hereof; and provided, further, that any license granted
hereunder shall be subject to

                                       42
<PAGE>

the obligation of the terminating Party to use commercially reasonable and
diligent efforts to develop and market Collaboration Products pursuant to such
license;

                         (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed by the non-terminating Party or its Affiliates
shall be (i) assigned or exclusively licensed to the terminating Party or any
Third Party or Affiliate designated by such Party until such time as the
terminating Party or its designee is qualified to hold such Regulatory
Approvals, "orphan drug" designations or trademarks under the applicable
provisions of the Regulatory Scheme and (ii) transferred or assigned to the
terminating Party or its designee, as appropriate, as soon as practicable
thereafter, provided, however, that in any country where such transfer or
assignment is not possible, the breaching Party shall use commercially
reasonable and diligent efforts to ensure that the non-breaching Party has the
benefit of such Regulatory Approvals and Aorphan drug" designations and to this
end consents to any regulatory authority cross-referencing to the data and
information on file with any regulatory authority as may be necessary; and

                         (3) the terminating Party shall become obligated to pay
to the non-terminating Party an amount equal to [***] (as defined in Section
13.3.6 below) of the non-terminating Party's interest in the Program as of the
effective date of termination, plus interest thereon at the Prime Rate of
interest reported from time to time by the Chase Manhattan Bank, New York, New
York, from the date of termination to the date payment is made, payable on the
terms and conditions and in accordance with the schedule of payments set forth
in Section 13.3.1(c), mutatis mutandis.

          12.3.4.   Upon a Change of Control.  In addition to the rights and
                    ------------------------
duties set forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have
the following rights and duties upon termination of the Program pursuant to
Section 13.2.4 above:

                         (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
the terminating Party shall obtain from the non-terminating Party the
irrevocable right and license, with the right to grant sublicenses, under the
non-terminating Party's Patent Rights, Technology and Manufacturing Know-How to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field and in the Territory, and the non-
terminating Party shall execute such documents and make all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights granted with respect thereto
under Section 3.1; and provided, further, that any license granted hereunder
shall be subject to the obligation of the terminating Party to use commercially
reasonable and diligent efforts to develop and market Collaboration Products
pursuant to such license;

                         (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or

                                       43
<PAGE>

licensed by the non-terminating Party or its Affiliates shall be (i) assigned or
exclusively licensed to the terminating Party or any Third Party or Affiliate
designated by such Party until such time as the terminating Party or its
designee is qualified to hold such Regulatory Approvals, "orphan drug"
designations or trademarks under the applicable provisions of the Regulatory
Scheme and (ii) transferred or assigned to the terminating Party or its
designee, as appropriate, as soon as practicable thereafter, provided, however,
that in any country where such transfer or assignment is not possible, the
breaching Party shall use commercially reasonable and diligent efforts to ensure
that the non-breaching Party has the benefit of such Regulatory Approvals and
Aorphan drug" designations and to this end consents to any regulatory authority
cross-referencing to the data and information on file with any regulatory
authority as may be necessary; and

                         (3) the terminating Party (the "Offeror") shall,
                                                         -------
pursuant to the conditions set forth in this Section 13.3.4(c), give the other
Party (the "Offeree") at the time of termination written notice of the Offeror's
            -------
intention to purchase Offeree's entire interest in and to the Program (the
"Notice of Offer"). The Notice of Offer shall state therein the specific price,
 ---------------
terms and conditions under which the Offeror agrees to purchase Offeree's entire
interest in and to the Program; provided, however, that the purchase price shall
be paid in cash, publicly-traded and (to the extent permitted by applicable law)
registered securities, or as the Parties otherwise agree. The Offeree shall then
have [***] (the "Acceptance Period") from the receipt of the Notice of Offer to
                 -----------------
give notice (the "Notice of Acceptance") of the Offeree's intention to accept
                  --------------------
the offer of the Offeror and shall sell the Offeree's entire interest in and to
the Program to the Offeror for the price and upon such terms and conditions as
set forth in the Notice of Offer. In the event the Offeree gives such Notice of
Acceptance, a closing shall be held within thirty (30) days of the receipt of
the Notice of Acceptance by the Offeror. In the event the Offeree elects not to
accept the Offeror's offer to purchase, by giving the Offeror written notice
thereof, or by failing to give the appropriate Notice of Acceptance within the
Acceptance Period, the Offeree shall thereby automatically be bound to purchase
Offeror's entire interest in and to the Program for the same price (as adjusted
for the Parties' respective interest in the Program, if necessary) and upon such
terms and conditions as specified in the Notice of Offer; provided, however,
that if the Notice to Offer provides for a cash payment by Genzyme, the Offeree
may defer the cash payment to Offeror for a period not to exceed [***] from the
expiration of the Acceptance Period, with any amount so deferred bearing
interest at the Prime Rate reported from time to time by the Chase Manhattan
Bank, New York, New York, from the expiration of the Acceptance Period to the
date payment is made. In such event, a closing shall be held within thirty (30)
days of the earlier to occur of the expiration of the Acceptance Period and the
date of receipt of the written rejection, whichever is the first to occur. In
addition to any other remedies provided by this Agreement, in the event the
Offeree rejects the offer contained in the Notice of Offer, but thereafter fails
for any reason to timely close as provided herein above, the Offeree shall, by
such failure to close, be deemed to have accepted the original offer contained
in the Notice of Offer, and shall thereafter sell thereafter sell Offeree's
entire interest in and to the Program to the Offeror pursuant to the terms of
the Notice of Offer. For purposes of Section 2.3 and this Section 13.3.4, the
Party purchasing the other Party's interest in the Program shall be deemed to be
the terminating Party and the other party shall be deemed to be the non-
terminating Party.

                                       44
<PAGE>

          12.3.5.   Upon Failure to File BLA. In addition to the rights and
                    ------------------------
duties set forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have
the following rights and duties upon termination of the Program pursuant to
Section 13.2.5 above:

                    (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
Aptein shall obtain from Genzyme a non-exclusive, irrevocable right and license,
with the right to grant sublicenses, under the Genzyme Patent Rights, Genzyme
Program Patent Rights, Genzyme Technology and the Manufacturing Know-How owned
or controlled by Genzyme to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products in the Field and in the
Territory, and Genzyme shall execute such documents and take all action as may
be necessary or desirable to affect the foregoing; provided that any license
granted hereunder shall be subject to the obligation of Aptein to use
commercially reasonable and diligent efforts to develop and market Collaboration
Products pursuant to such license;

                    (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed by Genzyme or its Affiliates shall be (i) assigned
or exclusively licensed to Aptein or any Third Party or Affiliate designated by
Aptein until such time as Aptein or its designee is qualified to hold such
Regulatory Approvals, "orphan drug" designations or trademarks under the
applicable provisions of the Regulatory Scheme and (ii) transferred or assigned
to Aptein or its designee, as appropriate, as soon as practicable thereafter;
provided, however, that in any country where such transfer or assignment is not
possible, Genzyme shall use commercially reasonable and diligent efforts to
ensure that Aptein has the benefit of such Regulatory Approvals and "orphan
drug" designations and to this end consents to any regulatory authority cross-
referencing to the data and information on file with any regulatory authority as
may be necessary; and

                    (3) Aptein shall become obligated to pay to Genzyme an
amount equal to [***] (as defined in Section 13.3.6 below) of Genzyme's interest
in the Program as of the effective date of termination, plus interest thereon at
the Prime Rate of interest reported from time to time by the Chase Manhattan
Bank, New York, New York, from the date of termination to the date payment is
made, payable on the terms and conditions and in accordance with the schedule of
payments set forth in Section 13.3.1(c), mutatis mutandis.

          12.3.6.  Fair Value. For purpose of this Section 13.3, the "Fair
                   ----------                                         ----
Value" of a Party's interest in the Program shall be the amount an informed and
-----
willing buyer under no compulsion to buy would be willing to pay such Party on
the basis that it is an informed and willing seller under no compulsion to sell
for such Party's right, title and interest in the Program as set out in this
Agreement determined as of the date of termination, which determination shall be
made by the mutual agreement of Genzyme and Aptein. In the event that Genzyme
and Aptein are unable to agree upon the Fair Value within [***] of the date of
termination, the Fair

                                       45
<PAGE>

Value shall be determined by an investment banking firm selected by mutual
agreement of Genzyme and Aptein, and the costs and expenses incurred in
connection with the engagement of such investment banking firm shall be shared
equally by Genzyme and Aptein.

     12.4.  Inventory.  Upon the termination of this Agreement, if Aptein
            ---------
obtains a license pursuant to Section 13.3, Aptein shall have the option to
purchase Genzyme's inventory of Collaboration Products (not already paid for by
the Parties) as the date of termination.  Within ten (10) days after such
termination, Aptein shall elect in writing to either (a) permit Genzyme to sell
off its remaining inventory of Collaboration Products, provided that Genzyme
shall comply with all of the terms and conditions of this Agreement restricting
such selling activities as in effect immediately prior to such termination, or
(b) purchase Genzyme's inventory of Collaboration Products.  If Aptein fails to
make such an election, Genzyme shall be permitted to sell-off its remaining
inventory of Collaboration Products in accordance with clause (a) of this
Section 13.4.  Any purchase of Genzyme's inventory of Collaboration Products
shall be at the price as stated in the then-current price list, less a handling
                                                                ----
charge to be reasonably determined by the Parties in good faith.

     12.5.  Cooperation.  If either Genzyme or Aptein (the "Assuming Party")
            -----------                                     --------------
shall assume the Program rights from the other Party (the "Responsible Party")
                                                           -----------------
in accordance with the provisions of Article 13 hereof, the Responsible Party
shall promptly provide to the Assuming Party (or any Third Party or Affiliate
designated by the Assuming Party) all Technology, Manufacturing Know-How and
access to regulatory filings sufficient to allow the Assuming Party to perform
the duties assumed.  The Responsible Party shall further use its best efforts to
provide all assistance required by the Assuming Party with respect to such
transfer so as to permit the Assuming Party to begin to perform such duties as
soon as possible to minimize any disruption in the continuity of supply or
marketing of Collaboration Products.  In addition, if upon the date this
Agreement is terminated Collaboration Products are being manufactured in
facilities owned or leased by the Responsible Party, the Responsible Party
agrees to lease such facilities to the Assuming Party on commercially reasonable
terms for a period of up to [***].

     12.6.  Termination of License Rights.  The License Rights may be
            -----------------------------
terminated in the following circumstances, and upon the effective date of any
such termination Genzyme's right to practice under the License Rights shall
cease:

            12.6.1.   For Convenience.  Genzyme may terminate the License Rights
                      ---------------
at any time upon [***] notice to Aptein.

            12.6.2.   For Material Breach.  Aptein may terminate the License
                      -------------------
Rights in the event Genzyme shall have materially breached or defaulted in the
performance of any of its material obligations hereunder relating to the License
Rights, including without limitation the failure to make when due a payment
required under Sections 4.5 or 4.6, and such default is not cured with [***]
after written notice thereof was received by Genzyme from Aptein.  Any

                                       46
<PAGE>

termination shall become effective at the end of such [***] period unless
Genzyme (or any other party on its behalf) shall have cured any such breach or
default prior to the expiration of the [***].

            12.6.3.   For Insolvency.  Aptein may termination the License Rights
                      --------------
upon the occurrence of an Insolvency Event of Genzyme.

     12.7.  Survival of Rights and Duties. No termination of the Program, the
            -----------------------------
License Rights or this Agreement shall eliminate any rights or duties of the
Parties accrued prior to such termination. The provisions of Articles 1, 10 and
12 and Sections 2.3, 3.2, 4.3, 4.4, 4.6.5, 4.10, 4.12, 9.1.1, 9.1.3, 9.3, 9.5,
11.4, 11.5, 13.3, 13.4, 13.5, 13.6, 13.7, 15.4, 15.5, 15.6, and 15.7, hereof
shall survive any termination of this Agreement.

ARTICLE 13. TAX PROVISIONS

     13.1.  Purpose. The Parties have determined that the Program will likely be
            -------
deemed to create a partnership for U.S. tax purposes. The sole purpose of this
Article 14 is to define the rights and obligations of the Parties in order to
enable them to comply with their reporting obligations as partners in such
deemed partnership for U.S. federal, state and/or other domestic or foreign
income tax purposes. The Parties do not intend hereby to form a partnership or
joint venture for any purpose, and neither Party shall be a partner for any
purpose other than the filing of tax returns in any jurisdictions in which the
operation of the Program requires partnership tax returns to be filed. Neither
Party shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other Party to do so.

     13.2.  Capital Accounts. A separate account (a "Capital Account") shall be
            ----------------
maintained for each Party and adjusted in accordance with U.S. Treasury
Regulations Section 1.704-1(b). Without limitation of the foregoing:

               (1) The Capital Account of each Party shall be increased by the
cash and/or property that each Party has agreed to contribute to the Program
pursuant to Sections 3.1 and 4.1. The cash and agreed value of any property
contributed by each Party as of the date hereof is as follows:

               Genzyme:       [***]
               Aptein:        [***]

               (2) The Capital Account of each Party shall be decreased by the
amounts distributed to the Party in accordance with Section 4.4 or treated as
distributed to such Party under Section 14.5 below.

                                       47
<PAGE>

     13.3.  Allocations.  Except as provided in Section 14.4 below, items of
            -----------
Program income, gain, loss or deductions for each taxable year shall be
allocated to the Parties and debited or credited to their Capital Accounts as
follows:

            (1) Costs or expenses shall be allocated to each Party according to
     its obligations to pay or contribute to the payment of such cost or
     expense.

            (2) Depreciation shall be allocated to each Party according to its
     obligations to contribute to the adjusted tax basis of the underlying
     asset, and depreciation recapture shall reflect each Party's share of
     depreciation.

            (3) Net income shall be allocated to the Parties in proportion to
     their Percentage Interests.

            (4) Gain or loss from the sale, exchange, distribution or other
     disposition of a depreciable asset shall be allocated to each Party
     according to its obligation to contribute to the adjusted tax basis of the
     underlying asset.  Gain or loss from the sale, exchange, distribution or
     other disposition of all other assets shall be allocated to the Parties in
     proportion to their Percentage Interests.

     13.4.  Compliance with the Code. All of the provisions of this Article 14
            ------------------------
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations promulgated under Section 704(b) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code") and shall be interpreted and
                                       ----
applied in a manner consistent with such Treasury Regulations.  The minimum gain
chargeback provisions of Treasury Regulations Section 1.704-2(f), partner
nonrecourse debt minimum gain provisions of Treasury Regulations Section 1.704-
2(i)(4), and the qualified income offset provision of Treasury Regulations
Section 1.704-2(b)(2) shall be considered to be part of this Article 14.  If any
Party contributes appreciated or depreciated property, allocations to the
Parties shall be adjusted as required by Section 704(c) of the Code to take into
account the built-in gain or loss at the time of such contribution.  If there
are any nonrecourse deductions, as defined in Treasury Regulations Section
1.704-2(i)(2), such deductions shall be allocated to the Party who bears the
economic risk of loss for the nonrecourse liability to which the deductions are
attributable.

     13.5.  Withholding. All amounts required to be withheld from undistributed
            -----------
income pursuant to Code Sections 1441, 1445 and 1446 or any other provision of
federal, state, local or foreign tax law shall be treated as amounts actually
distributed to the affected Party for all purposes under this Agreement.

     13.6.  Termination.  Upon termination of the Program, the deemed tax
            -----------
partnership, the terms of which are set forth in this Article 14, shall be
deemed to have been liquidated for tax purposes and its assets distributed to
the Parties as follows:

                                       48
<PAGE>

               (1) All cash representing unexpended capital contributions shall
be returned to the Party contributing such cash.

               (2) The fair market value of all partnership property shall be
determined and the gain or loss for such property allocated in accordance with
the provisions of Sections 14.3 and 14.4 above.

               (3) If a party has a negative Capital Account, it shall be
required to contribute an amount of cash necessary to achieve a Capital Account
equal to U.S.$0.

               (4) Next, proceeds from the deemed liquidation shall be
distributed to the Parties having positive Capital Accounts, pro rata, in
accordance with their relative positive Capital Accounts (after giving effect to
all contributions, distributions and allocations for all periods) until all such
positive Capital Accounts are reduced to U.S.$0.

               (5) Thereafter, proceeds shall be distributed to the Parties in
accordance with their respective Percentage Interests.

     13.7.  Tax Matters Partner.  Genzyme shall be designated as the tax
            -------------------
matters partner, as defined in Section 6231(a)(7) of the Code, for purposes of
this Article 14 and as such shall take all actions permitted to be taken by a
tax matters partner under the Code.  All costs incurred by the Tax Matters
Partner in performing such duties shall be Program Costs.  The Tax Matters
Partner shall cause all income and other required U.S. federal, state and/or
other domestic or foreign tax returns contemplated by this Article 14 to be
prepared and to be timely filed with the appropriate authorities and, in
connection therewith, shall make such elections and other determinations for
U.S. federal, state and/or other domestic or foreign tax purposes as it deems
appropriate, including, without limitation, elections of methods of depreciation
and elections to adjust the basis of property pursuant to Sections 754, 734(b),
and 743(b) of the Code, or comparable provisions of state, local or foreign law.
Notwithstanding the foregoing, Genzyme shall provide Aptein with a copy of all
tax returns filed hereunder and, if Aptein disagrees with any elections or other
determinations made in such returns, the Parties shall discuss such
disagreements in good faith.  If, following good faith discussions, the Parties
are unable to reach agreements as to any elections or other determinations made
in tax returns, such disagreement shall be referred to an Expert's Decision.

ARTICLE 14. MISCELLANEOUS

     14.1.  Force Majeure.  Neither Party shall be held liable or responsible
            -------------
to the other Party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected Party, including without limitation,
fire, floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God

                                       49
<PAGE>

or acts, omissions or delays in acting by any governmental authority or the
other Party; provided, however, that the Party so affected shall use
commercially reasonable and diligent efforts to avoid or remove such causes of
non-performance, and shall continue performance hereunder with reasonable
dispatch wherever such causes are removed. Each Party shall provide the other
Parties with prompt written notice of any delay or failure to perform that
occurs by reason of force majeure. The Parties shall mutually seek a resolution
of the delay or the failure to perform in good faith.

     14.2.  Assignment.  Subject to Article 13 above, this Agreement may not be
            ----------
assigned or otherwise transferred by any Party without the consent of the
other Party; provided, however, that either Party may, without such consent,
assign its rights and obligations under this Agreement (a) in connection with a
corporate reorganization, to any member of an affiliated group, all or
substantially all of the equity interest of which is owned and controlled by
such Party or its direct or indirect parent corporation or (b) in connection
with a merger, consolidation or sale of substantially all of such Party's assets
to an unrelated Third Party; and provided, further, that such Party's rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including without limitation
those business assets that are the subject of this Agreement.  Any permitted
assignee shall assume all obligations of its assignor under this Agreement.  Any
purported assignment in violation of this Section 15.2 shall be void.

     14.3.  Severability.  Each Party hereby agrees that it does not intend to
            ------------
violate any public policy, statutory or common laws, rules, regulations,
treaty or decision of any government agency or executive body thereof of any
country or community or association of countries.  Should one or more provisions
of this Agreement be or become invalid, the Parties hereto shall substitute, by
mutual consent, valid provisions for such invalid provisions which valid
provisions in their economic effect are sufficiently similar to the invalid
provisions that it can be reasonably assumed that the Parties would have entered
into this Agreement with such valid provisions.  In case such valid provisions
cannot be agreed upon, the invalidity of one or several provisions of this
Agreement shall not affect the validity of this Agreement as a whole, unless the
invalid provisions are of such essential importance to this Agreement that it is
to be reasonably assumed that the Parties would not have entered into this
Agreement without the invalid provisions.

     14.4.  Notices.  Any consent, notice or report required or permitted to be
            -------
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier), by a next business day delivery
service of a nationally recognized overnight courier service or by courier,
postage prepaid (where applicable), addressed to such other Party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor in accordance with this Section 15.4 and
shall be effective upon receipt by the addressee.

            ---------------------------------------------------------------
            If to Genzyme:               Genzyme Corporation
                                         One Kendall Square, 1400 Building

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

                                       50
<PAGE>

           ---------------------------------------------------------------------
                             Cambridge,  Massachusetts  02139-1562, U.S.A.
                             Attention:  President, Genzyme Therapeutics
                             Facsimile:  1-617-374-7333
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------
           with a copy to:   Genzyme Corporation
                             One Kendall Square, 1400 Building
                             Cambridge, Massachusetts  02139-1562, U.S.A.
                             Attention:  Chief Legal Officer
                             Facsimile:  1-617-252-7553
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------
           If to Aptein:     Aptein, Inc.
                             1201 Third Avenue, 40/th/ Floor
                             Seattle, Washington  98101, U.S.A.
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------
           with a copy to:   Cambridge Antibody Technology Limited
                             The Science Park
                             Melbourn SG8 6JJ
                             Cambridgeshire, England
                             Attention:  Company Secretary
                             Facsimile:  44-1763-263413
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------

     14.5. Applicable Law. This Agreement shall be governed by and construed in
           --------------
accordance with the laws of the State of New York, U.S.A. without regard to any
choice of law principle that would dictate the application of the laws of
another jurisdiction.

     14.6. Dispute Resolution. Any disputes arising between the Parties
           ------------------
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either Party of its obligations
hereunder, whether before or after termination of this Agreement (a "Dispute"),
                                                                     -------
which has not resolved in accordance with the provisions of Section 8.3 hereof,
shall be referred to an Expert's Decision. If the parties fail to reach
agreement in respect of any dispute within sixty (60) days of an expert being
appointed in accordance with Schedule 1.21 then such dispute may finally be
                             -------------
resolved by binding arbitration as herein provided. Except as otherwise provided
in this Section 15.6, any arbitration hereunder shall be conducted by the
International Chamber of Commerce. Each such arbitration shall be conducted in
the English language by a panel of three (3) arbitrators (the "Arbitration
                                                               -----------
Panel").  Each of Aptein and Genzyme shall appoint one (1) arbitrator to the
-----
Arbitration Panel and the third arbitrator shall be appointed by the two (2)
arbitrators appointed by Aptein and Genzyme. The Arbitration Panel shall apply
the then-current International Chamber of Commerce Arbitration Rules for the
resolution of any dispute submitted to arbitration. Any such arbitration shall
be held in Paris, France. The Arbitration Panel shall have the authority to
grant specific performance, and to allocate between the Parties the costs of
arbitration in such equitable manner as it shall determine. Judgment upon the
award so rendered may be entered in any court having

                                       51
<PAGE>

jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.

     14.7.   Injunctive Relief. The Parties hereby acknowledge that a breach of
             -----------------
their respective obligations under Article 10 hereof may cause irreparable harm
and that the remedy or remedies at law for any such breach may be inadequate.
The Parties hereby agree that, in the event of any such breach, in addition to
all other available remedies hereunder, the non-breaching Party shall have the
right to obtain equitable relief to enforce Article 10 hereof.

     14.8.   Entire Agreement. This Agreement (and the schedules hereto),
             ----------------
together with the Subscription Agreement of even date herewith between Genzyme
and Cambridge Antibody Technology Group plc (the "Subscription Agreement"),
                                                  ----------------------
contains the entire understanding of the Parties and their respective Affiliates
with respect to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly merged in
and made a part of this Agreement, including, but not limited to, the
Confidential Disclosure Agreement between Genzyme and CAT dated May 19, 1999, as
amended. This Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by the Parties hereto. Each of the Parties
hereby acknowledges that this Agreement is the result of mutual negotiation and
therefore any ambiguity in its terms shall not be construed against the drafting
Party.

     14.9.   Headings. The captions to the several Articles and Sections hereof
             --------
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.

     14.10.  Waiver. Except as expressly provided herein, the waiver by either
             ------
Party hereto of any right hereunder or of any failure to perform or any breach
by the other Party shall not be deemed a waiver of any other right hereunder or
of any other failure to perform or breach by said other Party, whether of a
similar nature or otherwise, nor shall any singular or partial exercise of such
right preclude any further exercise thereof or the exercise of any other such
right.

     14.11.  Counterparts. This Agreement may be executed in two or more
             ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     14.12.  Condition Subsequent. The Parties acknowledge and agree that this
             --------------------
this Agreement shall not become effective unless and until Genzyme executes the
Subscription Agreement.

                                       52
<PAGE>

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

                              GENZYME CORPORATION

                              By: ______________________________

                              Title: ___________________________

                              Date: ____________________________

                              OPTEIN INC.

                              By: ______________________________

                              Title: ___________________________

                              Date: ____________________________

                                       53
<PAGE>

                                 SCHEDULE 1.6

                         CAT BACKGROUND PATENT RIGHTS

1    "Single Domain Ligands, Receptors Comprising said Ligands, Methods for
     their Production and Use of Said Ligands and Receptors" PCT/GB89/01344,
     filed November 13, 1989.
2    "Co-expression of Heteromeric Receptors" PCT/US90/02890, filed May 16,
     1990.
3    "Method for Isolating Receptors Having a Preselected Specificity"
     PCT/US90/02835, filed May 16, 1990.
4    "A new method for tapping the immunological repertoire" PCT/US90/02836,
     filed May 16, 1990.
5    "Cell-free Synthesis and Isolation of Novel Genes and Polypeptides"
     PCT/US90/06582, filed October 4, 1990.
6    "Methods for producing members of specific binding pairs" PCT/GB91/01134,
     filed July 10, 1991.
7    "Methods for producing members of specific binding pairs" PCT/GB92/00883,
     filed May 15, 1992.
8    "Treatment of Cell Populations" PCT/GB92/01483, filed August 10, 1992.
9    "Production of chimeric antibodies -- a combinational approach"
     PCT/GB92/01755, filed September 23, 1992.
10   "Production of anti-self antibodies from antibody segment repertoires and
     displayed on phage" PCT/GB92/02240, filed December 2, 1992.
11   "Methods for producing members of specific binding pairs" PCT/GB93/00605,
     filed March 24, 1993.
12   "SBP members with a chemical moiety covalently bound within the binding
     site; production and selection thereof" PCT/GB94/01422, filed June 30,
     1994.
13   "Retargetting antibodies" PCT/GB94/02019, filed September 16, 1994.
14   "Recombinant Binding Proteins and peptides" PCT/GB94/02662, filed December
     5, 1994.
15   "Labelling and selection of Specified Binding Molecules" PCT/GB97/01835,
     filed July 8, 1997.

                                       54
<PAGE>

                                 SCHEDULE 1.7

                               CAT PATENT RIGHTS

[***]

<PAGE>

                                 SCHEDULE 1.14

                             THIRD PARTY ROYALTIES

1.   License Agreement dated January 7, 1997 between CAT and MRC, with certain
     royalty rates, as may be amended from time to time, which shall include all
     royalty payments due to the Scripps Research Institute and Stratagene
     pursuant to an agreement dated 25 June 1999.

2.   Therapeutic Antibodies Agreement, dated December 31, 1997 between CAT and
     Dyax Corp., with a royalty rate of [***], as such agreement may be amended
     from time to time.

3.   Diagnostic Antibodies Agreement dated December 31, 1997 between CAT and
     Dyax Corp., with a royalty rate of [***], as such agreement may be amended
     from time to time.

4.   The Burnham License, as such agreement may be amended from time to time,
     with royalty rates of:

     .    $[***] on Net Sales of Licensed Products payable to Burnham;
     .    $[***] on Net Sales of Licensed Products payable to Integra; and
     .    $[***] payable to Burnham on sales of a product, whether an antibody-
          based or non-antibody-based antagonist, which would infringe a Valid
          Claim in the Dasch Patents, but not infringe a Valid Claim in the
          Licensed Patent Rights

     Capitalized terms used above are as defined in the Burnham License.

5.   Agreement dated December 18, 1997 between Genzyme and Insmed
     Pharmaceuticals, Inc. (as successor to Celtrix Pharmaceuticals, Inc.), with
     a royalty rate of [***], as such agreement has been and may be amended from
     time to time.

                                       56
<PAGE>

                                 SCHEDULE 1.21

                               EXPERT'S DECISION

1.   Any matter or dispute to be determined by an expert under this Agreement
     ("Expert") shall be referred to a person suitably qualified to determine
     that matter or dispute who shall be nominated jointly by the parties or,
     failing agreement between the Parties within twenty (20) business days of a
     written request by either Party to the other seeking to initiate the
     Experts Decision procedure, either Party may (1) in the case of disputes
     relating to any financial aspect of this Agreement request the President
     for the time being of the American Institute of Certified Public
     Accountants or any successor body to it to nominate the Expert or (2) in
     the case of all other disputes request the President for the time being of
     the Biotechnology Industry Organization or any successor body to it to
     nominate the Expert.

2.   The Parties shall within fourteen (14) days of the appointment of the
     Expert (or such longer period as may be mutually agreed upon by the
     Parties) meet with him or her in order to agree to a program for the
     exchange of any relevant information and the structure to be adopted fr the
     negotiations.

3.   In all cases the terms of appointment of the Expert by whomsoever appointed
     shall include:

     3.1  a commitment by the Parties to share equally the Expert's fee;

     3.2  a requirement on the Expert to act fairly as between the Parties and
          according to the principles of natural justice;

     3.3  a requirement on the Expert to hold professional indemnity insurance
          both then and for three years following the date of his or her
          determination;

     3.4  a commitment by each Party to supply to the Expert in confidence (even
          as to the other Party) all such assistance, documents and information
          as he or she may require for the purpose of his or her determination;

     3.5  a commitment by the Parties that all negotiations connected with the
          dispute shall be conducted in confidence and without prejudice to the
          rights of the Parties in any further proceedings.

4.   If the Parties accept the Expert's recommendations or otherwise reach
     agreement on the resolution of the dispute, such agreement shall be reduced
     to writing and, once it is signed by their duly authorize representatives,
     shall be binding on the Parties (save in the case of negligence or manifest
     error).

                                       57
<PAGE>

5.   Failing agreement, either of the Parties may invite the Expert to provide a
     non-binding but informative opinion in writing.

                                       58
<PAGE>

                                 SCHEDULE 1.29

                             GENZYME PATENT RIGHTS

[***]

                                       59
<PAGE>

                                 SCHEDULE 1.45
                              PERCENTAGE INTEREST

     The Parties' respective Percentage Interests shall be calculated from time
to time in accordance with the following formulae; provided, however, that the
Parties' respective Percentage Interests on the Profitability Date shall be
fixed at such level for the remaining term of the Program, subject to adjustment
from time to time following the Profitability Date should Genzyme fund operating
losses allocable to Aptein as a result of the operation of the last clause of
the penultimate sentence of Section 4.1:

Aptein's Percentage Interest    =     [***]

     where

[***]

Genzyme's Percentage Interest ' [***]

     For purposes of this Schedule 1.45, a "Pivotal Trial" of a Collaboration
Product shall mean a human clinical trial of a Collaboration Product designed to
be of a size and statistical significance to support an BLA or MAA filing alone,
or in combination with other studies. If it is unclear whether or not a study
design will be sufficient to support an BLA or MAA filing (other than by virtue
of the uncertainty of efficacy data from that trial), the study will be deemed
to be a Pivotal Trial on the initiation of activities to support an BLA or MAA
filing. Initiation of a Phase III clinical trial will be deemed to be initiation
of a Pivotal Trial.

     If, as a result of the application of the foregoing formulae, Aptein's
Percentage Interest is less than [***], Aptein's Percentage Interest shall be
deemed to be [***]. Further, upon the earlier to occur of: (i) the Profitability
Date and (ii) the effective date of termination of the Program, Aptein's
Percentage Interest is [***] as a result of the application of the foregoing
formulae, [***].

     An example of the application of the foregoing formulae follows:

[***]

                                       60
<PAGE>

                                SCHEDULE 4.6.1

                          CALCULATION OF ROYALTIES ON
                         NET SALES OF GENZYME PRODUCTS

[***]

                                       61
<PAGE>

                                SCHEDULE 5.1.3

                           INITIAL DEVELOPMENT PLAN

                               [*** - 14 PAGES]<PAGE>

                                                                     EXHIBIT 4.8

                            Collaboration Agreement

                             Dated August 9, 1999

                      Between Human Genome Sciences Inc.

                                      And

                     Cambridge Antibody Technology Ltd./1/

/1/  [***] indicates that text has been deleted, which is subject to a
     confidential treatment request. This text has been filed with the SEC on a
     supplemental basis.
<PAGE>

                            COLLABORATION AGREEMENT

This Collaboration Agreement (the "Agreement") is made this 9/th/ day of August
1999 ("Effective Date") by and between Cambridge Antibody Technology, Ltd.,
("CAT") an English corporation having its registered office at The Science Park,
Melbourn, Cambridgeshire SG8 6JJ, United Kingdom and Human Genome Sciences Inc.
("HGS") a Delaware corporation having its principal offices at 9410 Key West
Avenue, Rockville, Maryland, United States of America.

WHEREAS, CAT is a leader in the field of rapid human antibody discovery,
engineering and other related activities in the use of antibodies for target
validation, drug design, and the development of proprietary therapeutic
products.

WHEREAS, HGS is a leader in the field of high throughput gene discovery and
cloning and other related activities leading to the discovery and development of
novel drugs.

WHEREAS CAT and HGS wish to collaborate upon the terms and conditions as set out
in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the Parties agree as follows:

ARTICLE 1 - DEFINITIONS

1.01  As used throughout this Agreement, the following words and phrases shall
      have the meanings ascribed to them in Sections 1.01 through 1.44.

1.02  "Affiliate(s)" means any corporation, company, partnership, joint venture
      and/or firm which controls, is controlled by or is under common control
      with a Party. "Control" means (a) in the case of corporate entities,
      direct or indirect ownership of at least fifty percent (50%) of the stock
      or shares entitled 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.

1.03  "Antibody or Antibodies" means a molecule or a gene encoding such a
      molecule comprising or containing one or more immunoglobulin variable
      domains or parts of such domains or any existing or future fragments
      variants modifications or derivatives thereof.

1.04  "Antigen(s)" means [***] or any future antigen selected by HGS pursuant to
      Article 20.

1.05  "BLA" means a Biologic License Application, or other application approving
      the marketing of Licensed Product, which is submitted to the FDA or its
      equivalent application in a Major Market.

1.06  "CAT Background IP" means Patent Rights, Know-How and Material which CAT
      owns
<PAGE>

       or which CAT is licensed to use which directly relate to the Target
       Antibodies at the Effective Date or Improvements which CAT owns after the
       Effective Date which directly relate to the Target Antibodies.

1.07   "CAT Antibody Patents" shall mean (1) the Winter II Patent Rights
       (European Patent Number (EPO368684/PCT/GB89/01334) and its US equivalents
       namely the Winter/Lerner Applications (US Numbers 07/933,958, 07/933,959,
       07/941,761, 07/941,762) and their European equivalents and (2) the
       McCafferty Patents Rights (European Patent Number
       EPO584877B1/PCTGB91/01134) and U.S. equivalents, and (3) the Griffiths
       Patent Rights (US Number 5,885,793) and its European equivalents all
       licensed to CAT pursuant to the license agreement dated January 7, 1997
       between CAT and the Medical Research Council ("MRC").

1.08   "CAT's Third Party Royalty Obligations" means all Royalties payable by
       CAT under license agreements with third parties as of the Effective Date
       and which cover activities conducted by CAT under the Research Programme
       including but not limited to the agreements set out in Appendix B.

1.09   "Clinical Development Antibody" means a Target Antibody which has
       achieved In-Vivo Proof of Concept within the Time Line.

1.10   "Clinical Indication" means an area of treatment of a condition in the
       Disease Area. Examples of Clinical Indications are, without limitation:
       [***].

1.11   "Competing Antibody Product" means a human Antibody owned or licensed by
       HGS or a third party which achieves In-Vivo Proof of Concept and which is
       directed to a given Target.

1.12   "Confidential Information" means any scientific, technical, trade or
       business information disclosed by one Party to the other Party which is
       (a) disclosed in writing or other tangible form and labeled
       "CONFIDENTIAL" at the time of disclosure or (b) disclosed verbally and
       identified as confidential at the time of disclosure and subsequently
       summarized and confirmed in writing as confidential within twenty (20)
       days of such oral disclosure. "Confidential Information" does not include
       information which (a) was known to the receiving Party at the time it was
       disclosed, other than by previous disclosure by the disclosing Party, as
       evidenced by written records at the time of disclosure; (b) at the time
       of disclosure or later becomes publicly known under circumstances
       involving no breach of this Agreement; (c) is lawfully and in good faith
       made available to the receiving Party by a third party who did not derive
       it from the disclosing Party and who imposes no obligation of confidence
       on the receiving Party; (d) is developed by the receiving Party
       independent of any disclosure by the disclosing Party, as evidenced by
       the receiving party's written records or (e) is required by law or
       regulation to be disclosed.

1.13   "Development Plan" means a detailed Report prepared by HGS pursuant to
       Clause 11 in
<PAGE>

       respect of each Clinical Development Antibody which contains estimated
       timelines for the development and commercialisation of a Licensed Product
       together with the dates by which HGS believes in good faith it can: (i)
       initiate Phase I / IIa clinical trials, (ii) initiate Phase III clinical
       trials, and (iii) file a BLA in a Major Market ("the HGS Milestones").

1.14   "Diagnostic Licensed Products" means any product in the form of a device
       compound kit or service with utility in the diagnosis prognosis
       prediction or monitoring of progress of a disorder (1) incorporating part
       of at least one variable region of a Target Antibody or (2) whose
       biological activity was identified by a Target Antibody and whose
       potential medical utility was first demonstrated by a Target Antibody.

1.15   "Disease Areas" mean (a) Malignant disease of cells of a [***], (b)
       Nonmalignant disease of cells of the [***], (c) Malignant disease of
       cells of the [***] and (d) Nonmalignant disease of cells of the [***].

1.16   "FDA" means the United States Food and Drug Administration or any
       successor United States governmental agency or any other foreign
       governmental agency performing similar regulatory functions with respect
       to pharmaceutical Licensed Products in a Major Market.

1.17   "Field" means any human therapeutic or diagnostic use.

1.18   "First Commercial Sale" means the first sale or other disposition for
       value of the Licensed Products, in a final dosage form, to an independent
       third party following regulatory approval. The term "First Commercial
       Sale" shall not include sales and disposals for experimental purposes or
       for purposes of clinically or otherwise testing any Licensed Product.

1.19   "FTE" shall mean a full time equivalent employee assigned to the Research
       Programme.

1.20   "HGS Background IP" means Patent Rights, Know-How and Material which HGS
       owns or which HGS is licensed to use which directly related to the Target
       at the Effective Date.

1.21   "HGS Know-How" means all unpatented information, whether or not
       patentable, relating to Materials, methods, processes, techniques and
       data for the development, manufacture, use or sale of the Target, Target
       Antibodies or Licensed Product which is known to HGS or developed
       independently by HGS or received by HGS from a third party and not from
       CAT at any time during the Term of this Agreement and which HGS if free
       to transfer or disclose without violating contractual obligations to any
       third party.

1.22   "Improvement" means any improvements, modifications and adaptations
       (whether patentable or otherwise) to any party of either CAT Background
       IP or HGS Background IP which may arise in connection with performance of
       the Research Programme. It is recognized and agreed that a Target
       Antibody or Clinical Development Antibody and any improvements,
       modifications or adaptations to such Antibody will not be considered
<PAGE>

       Improvements for the purposes of this Agreement.

1.23   "In-Vivo Proof of Concept" means an objective demonstration of the
       efficacy of a Target Antibody as agreed by the JMC. In respect of Target
       1 it means demonstration of the efficacy of a Target Antibody in an
       animal model which has been specified by HGS and agreed not later than
       [***] from the Effective Date.

1.24   "Management Committee" means the Joint Management Committee established
       pursuant to the terms of Article 4.

1.25   "Know-How" means all unpatented information, whether or not patentable,
       relating to materials, methods, processes, techniques and data for the
       development, manufacture, use or sale of the Target, Target Antibodies or
       Licensed Product which is known to a Party and which a Party is free to
       transfer or disclose without violating contractual obligations to any
       third party.

1.26   "Licensed Product(s)" means Therapeutic Licensed Products, Therapeutic
       Antibody Licensed Products and Diagnostic Licensed Products.

1.27   "Insolvency Event" in relation to either Party, means any one of the
       following: (i) a notice shall have been issued to convene a meeting for
       the purpose of passing a resolution to wind up that Party or such a
       resolution shall have been passed other than a resolution for the solvent
       reconstruction or reorganisation of the Party of for the purpose of
       inclusion of any part of the share capital of that Party in the Official
       List of the London Stock Exchange or in the list of the American Stock
       Exchange or quotation of the same on the National Association of
       Securities Dealers Automated Quotation System; or (ii) a resolution shall
       have been passed by that Party's directors to seek a winding up or
       administration order or a petition for a winding up or administration
       order shall have been presented against that Party or such an order shall
       have been made; or (iii) a receiver, administrative receiver, receiver or
       manager, interim receiver, custodian, sequestrator or similar officer is
       appointed in respect of that Party or over a substantial part of its
       assets or any third party takes steps to appoint such an officer in
       respect of that Party of an encumbrance takes steps to enforce or
       enforces its security; or (iv) a proposal for a voluntary arrangement
       shall have been made in relation to that Party under Part I Insolvency
       Act 1986; or (v) a step or event shall have been taken or arisen outside
       the United Kingdom which is similar or analogous to any of the steps or
       events listed at (i) to (iv) above; or (vi) that Party takes any step
       (including starting negotiations) with a view to readjustment,
       rescheduling or deferral of any part of that Party's indebtedness, or
       proposes or makes any general assignment, composition or arrangement with
       or for the benefit of all or some of that Party's creditors or makes or
       suspends or threatens to suspend making payments to all or some of that
       Party's creditors of the Party submits to any type of voluntary
       arrangements; or (vii) where that Party is resident in the United Kingdom
       it is deemed to be unable to pay its debts within the meaning of Section
       123 Insolvency Act 1986.
<PAGE>

1.28   "Major Market" means United States, European Community, France, Italy,
       Germany, the United Kingdom or Japan.

1.29   "Material" means any chemical or biological substance, including but not
       limited to any: (a) organic or inorganic chemical element or compound;
       (b) nucleotide or nucleic acid sequence, including DNA and RNA sequences,
       derived by natural or synthetic means; (c) gene; (d) vector or construct,
       including but not limited to plasmids, phagemids, phages or viruses; (e)
       host organism, including bacteria, fungi, algae, protozoa and yeast; (f)
       other genetic material or micro-organism; (g) gene product, including but
       not limited to any peptide or amino acid sequence, protein, enzyme or
       antibody and any fragment thereof conferring targeting properties in
       vitro and/or in vivo; (h) eukaryotic or prokaryotic cell line or
       expression system or any development strain or produce of that cell line
       or expression system; (i) Antibody or Antibody producing cell line,
       including hybridomas; (j) drug or pro-drug; or (k) assay or reagent.

1.30   "Net Sales" means the amounts invoiced on the sales of Licensed Product
       or Non-Antibody Product by HGS, its sublicencees and Affiliates to
       independent, unrelated third parties in bona fide arms length
       transactions, less the following deductions properly documented actually
       allowed and taken by such third parties and not otherwise recovered by or
       reimbursed by HGS, its Affiliates or sublicencees: (a) trade, cash and
       quantity discounts, including charge backs; (b) taxes on sales (such as
       sales or use taxes) to the extent added to the sales price and set forth
       separately as such in the total amount invoiced; (c) freight, insurance
       and other transportation charges to the extent added to the sales prices
       and set forth separately as such in the total amount invoiced; (d)
       amounts repaid or credited by reason of rejections, defects or returns,
       or because of retroactive price reductions, or due to governmental laws
       or regulations requiring rebates; (e) import duties; and means further
       the amount of fair market value of all other consideration received by
       HGS, or its sublicencees or Affiliates in respect of the Licensed Product
       or Non-Antibody Product, whether such consideration is in cash, payments
       in kind, exchange or other forms; but does not mean sales of the Licensed
       Product or Non-Antibody Product between or among HGS and its sublicencees
       and/or Affiliates. In the event a Licensed Product or Non-Antibody
       Product is sold in combination with other active components ("Combination
       Licensed Products"), Net Sales for purposes of royalty payments on the
       Combination Licensed Products shall be calculated by multiplying the Net
       Sales of the Combination Licensed Product by the fraction A/(A+B), where
       A is the gross selling price of the Licensed Product sold separately
       (i.e. without the other active components) and B is the gross selling
       price of the other active components. In the event that no such separate
       sales are made Net Sales for royalty payments shall be calculated by
       multiplying Net Sales of the Combination Licensed Product by C/(C+D)
       where C is the fully allocated cost of the Licensed Product (not
       including the other active components) and D is the fully allocated cost
       of such other active components such costs being determined using
       generally accepted accounting procedures consistently applied.

1.31   "Non-Antibody Product" means any product in whatever form (including
       without limitation bulk active formulated or unformulated bulk, final or
       packaged and final
<PAGE>

       labelled forms) for any human therapeutic or diagnostic use which is not
       a Licensed Product or a Competing Antibody Product.

1.32   "Patent Rights" means patent applications or patents, author
       certificates, inventor certificates, utility certificates, improvement
       patents and models and certificates of addition, and all foreign
       counterparts of them and includes divisions renewals continuations,
       continuations-in-part, extensions, reissues, substitutions,
       confirmations, registrations revalidation or additions of or to them as
       well as any supplementary protection certificate or any other post patent
       expiry extension of patent protection in respect of them.

1.33   "Research Programme" shall have the meaning set forth in Article 2 with
       respect to the research and development done with respect to each Target.

1.34   "Research Programme IP" means all Patent Rights and Know-How that arises
       under the Research Programme.

1.35   "Research Programme Support Payment" shall mean the payments made by HGS
       to CAT in support of the Research Programme.

1.36   "Target" shall mean the Antigen(s) for which CAT and HGS have agreed to
       conduct a collaborative Research Programme pursuant to Article 2 of this
       Agreement.

1.37   "Target Antibodies" means an Antibody or Antibodies derived under the
       Research Programme to the Target.

1.38   "Target 1" shall mean [***].

1.39   "Target 2" and "Target 3" means the Target(s) corresponding to each
       subsequent Antigen designated by HGS pursuant to Clause 20 of the
       Agreement.

1.40   "Technical Performance Criteria" means for Target 2 and Target 3 such
       Technical Performance Criteria as shall be agreed by the JMC in respect
       of each such Target.

1.41   "Time Line" means the period agreed by the JMC by which the Clinical
       Development Antibody shall be completed. In respect to Target 1 it shall
       be 12 months from the Effective Date.

1.42   "Term" means the term of this Agreement under Article 18.

1.43   "Therapeutic Antibody Licensed Products" means all products in whatever
       form (including without limitation bulk active, formulated or
       unformulated bulk, final or packaged, and final labelled forms) for any
       human therapeutic incorporating part of at least one variable region of a
       Target Antibody.
<PAGE>

1.44  "Therapeutic Licensed Products" means all products in whatever form
      (including without limitations bulk active, formulated or unformulated
      bulk, final or packaged, and final labeled forms) for any human
      therapeutic whose biological activity was identified by a Target Antibody
      and whose potential medical utility was first demonstrated by a Target
      Antibody.

ARTICLE 2 RESEARCH PROGRAMME

2.01  CAT and HGS will conduct collaborative research and development with
      respect to Target 1 and to each subsequent Target designated pursuant to
      Clause 20 ("the Research Programme").

2.02  Each Party will mutually disclose all information concerning Target
      Antibodies and the Target, which is necessary for each to perform their
      duties under the Research Programme, including information relating to
      selection, derivation and assays relating to Target Antibodies and the
      Target as developed under the Research Programme. HGS shall specify the
      animal model for demonstration of In-Vivo Proof of Concept in respect of
      Target 1 not later than [***] after the Effective Date. HGS shall specify
      the animal model for demonstration of In-Vivo Proof of Concept in respect
      of Targets 2 and 3 by a date to be agreed by the JMC.

2.03  The Parties will establish a Joint Management Committee ("JMC") pursuant
      to Article 4 and each Party shall fund its own costs of the Research
      Programme. The Parties will collaborate and if required by the JMC
      employees will work with employees of the other Party at that Party's
      premises.

2.04  The purpose of the Research Programme will be to generate diverse panels
      of Target Antibodies and to use them to explore in vivo and in vitro
      biological characteristics and disease association of the Target and to
      generate a lead Target Antibody for pre-clinical and subsequent
      development of a Clinical Development Antibody.

2.05  The parties shall use reasonable efforts to fulfill their obligations as
      set out in Exhibit A to develop a Clinical Development Antibody and in
      respect of Targets 2 and 3 to meet any applicable Technical Performance
      Criteria in respect of Targets 2 and 3.

ARTICLE 3 PRE-CLINICAL DEVELOPMENT

3.01  After the development of a Clinical Development Antibody HGS shall be
      solely responsible for all further pre-clinical development costs. If HGS
      requires additional work to be done by CAT with respect to a Clinical
      Development Antibody on terms to be mutually agreed by the JMC CAT agrees
      to perform such work and HGS agrees to reimburse CAT for its costs at the
      rate of [***] per FTE for Target 1. For Targets 2 and 3 the FTE rates
      shall be mutually agreed.

ARTICLE 4 JOINT MANAGEMENT COMMITTEE
<PAGE>

4.01  Promptly after the Commencement Date, the Parties shall establish a JMC
      which shall oversee the Research Programme and supervise all other aspects
      of the collaboration hereunder. Certain specific functions of the JMC are
      as follows:

      (a)  to design a work plan for each Target Antibody including performance
      criteria in respect of any further Antigens selected pursuant to Clause 20
      ("Technical Performance Criteria") and to select the Time Line, the
      appropriate definition of In-Vivo Proof of Concept for Targets 2 and 3 and
      any Clinical Indications;
      (b)  allocate the work between the Parties and, if appropriate, third
      parties; oversee the performance of the Research Programme and monitor
      progress against the timetables of each Target;
      (c)  hold review meetings on progress in the Research Programme not less
      than once every three calendar months and at any time upon the mutual
      agreement of both Parties;
      (d)  provide a written report on the progress of the Research Programme
      once every three months to HGS and CAT management;
      (e)  identify any patentable inventions or other intellectual property
      requiring protection arising out of the Research Programme;
      (f)  amend the Research Programme from time to time as may be necessary or
      desirable; and
      (g)  determine when the obligations of Parties in respect of the Research
      Programme have been carried out and when that Research Programme is
      completed.

4.02  The JMC shall be established and run by the Parties as follows:

      (a)  the JMC shall be comprised of four persons ("Members") and HGS and
      CAT shall each be entitled to appoint two Members, to remove any Member
      appointed by it and to appoint any person to fill a vacancy arising from
      the removal or retirement of such Member;
      (b)  HGS and CAT shall each notify the other in writing of the identities
      of their Members from time to time. Both Parties shall use reasonable
      endeavours to keep the same Members on the JMC throughout the duration of
      the Research Programme;
      (c)  the quorum for meeting of the JMC shall be two Members, provided that
      there is at least one Member from each of HGS and CAT present;
      (d)  the JMC shall meet promptly after the Commencement Date. The venue
      for all meetings shall be agreed in advance and will generally alternate
      between the U.K. and U.S.A., unless audio and video conferences are used.
      Each Party shall be responsible for its own expenses, including travel and
      accommodation costs incurred in connection with JMC meetings;
      (e)  the Minutes of each meeting shall be kept, approved by the JMC and
      distributed to the Parties. The JMC shall appoint a secretary for each
      meeting who need not be a member of the JMC. Such appointment shall
      alternate between CAT and HGS. The Secretary shall provide an agenda seven
      days prior to the meeting and circulate minutes of the meeting within
      fourteen days after the meeting.

4.03  Decisions of the JMC shall be made by unanimous agreement of all the
      Members present at the meeting at which there is a quorum. If agreement
      cannot be reached then the
<PAGE>

      Parties shall discuss the position in good faith in an effort to resolve
      their differences. If it is not possible to obtain agreement, then either
      Party may require that the outstanding matters requiring resolution shall
      be deferred to the CEOs of the Parties (or their nominees) for resolution,
      who together shall use reasonable efforts to resolve such matters
      promptly.

ARTICLE 5 INTELLECTUAL PROPERTY OWNERSHIP

5.01  Nothing in this Agreement transfers or licenses any right, title or
      interest to CAT Background IP or HGS Background IP save as expressly set
      out herein.

5.02  Any and all Research Programme IP shall be owned by HGS from the moment of
      its development or other origination, and CAT hereby assigns and will
      assign any and all rights, title and interest in Research Programme IP to
      HGS.

5.03  Provided however that any and all Improvements shall be owned by the Party
      who owns the underlying technology to which the Improvements are made
      regardless of which Party makes the Improvement.

ARTICLE 6 GRANTS, RESERVED RIGHTS AND EXCLUSIVITY

6.01  CAT grants to HGS a royalty free non-exclusive worldwide license under the
      CAT Background IP solely to carry out the Research Programme.

6.02  CAT grants to HGS an option ("the Option") to a world-wide royalty bearing
      exclusive sub-licensable license under the CAT Background IP to develop,
      make, have made, use and have used, import, sell and have sold Licensed
      Product for use in the Field. Subject to 6.03 if CAT develops a Clinical
      Development Antibody then HGS shall exercise its option provided that HGS
      had paid the Research Programme Support Payment pursuant to Article 7.
      However if (1) CAT does not develop a Clinical Development Antibody or (2)
      if HGS has not exercised its Option within the Time Line then the Option
      shall lapse.

6.03  In the event the [***] then there shall be no obligation for the parties
      to be exclusive to each other and in the event that HGS does not exercise
      its Option then the obligations of Article 11 shall not apply.

6.04  Subject to Clause 6.03 if CAT develops a Clinical Development Antibody
      then neither party shall develop Antibodies against the Target for the
      Clinical Indication identified by the JMC in the In-Vivo Proof of Concept
      with any third parties and shall be exclusive to each other in the future
      development and commercialisation of Target Antibodies to that Target for
      the Clinical Indication identified by the JMC.

6.05  Subject to Clause 6.03 if CAT develops a Clinical Development Antibody
      then both parties shall use their good faith effort to assess whether the
      Clinical Development Antibody may be appropriate for a different Clinical
      Indication pursuant to the provisions
<PAGE>

      of Clause 3.01. In the event that the [***] then the parties shall have no
      obligation to be exclusive to each other in respect of the development and
      commercialization for that different Clinical Indication. In assessing
      whether a Competing Antibody Product performs better the JMC shall base
      its decision on objective criteria such as [***] of the Clinical
      Development Antibody and the Competing Antibody Product as deemed
      appropriate. If the JMC cannot agree within [***] they shall refer the
      decision to the Chief Executive Officers of the parties or their appointed
      representative. If they cannot agree within [***] from the referral to the
      CEOs then the parties shall appoint an expert whose decision shall be
      binding on both the parties.

6.06  In the event a Clinical Development Antibody does not achieve a mutually
      agreed pre-defined clinical endpoint and HGS stops development of the
      Clinical Development Antibody in that Clinical Indication then HGS's
      license shall be converted to a non-exclusive license and the parties
      shall no longer be exclusive to each other in respect of that Clinical
      Development Antibody in that Clinical Indication.

6.07  HGS grants to CAT a royalty free non exclusive worldwide license under the
      HGS Background IP and Research Programme IP solely to carry out the
      Research Programme for the benefit of HGS.

6.08  Except for the research right granted under 6.01 HGS shall have the right
      to sublicense any and all of the rights provided that it shall notify CAT
      within [***] of the grant of any sublicense and that HGS shall not have
      the right to sublicense the right to select or engineer Target Antibodies.

ARTICLE 7 RESEARCH PROGRAMME SUPPORT, ROYALTIES AND MILESTONES

7.01  HGS shall pay to CAT a Research Programme Support Payment which in respect
      of Target 1 shall be [***] for the support required to fulfil its
      obligations, deemed equivalent to at least [***] FTEs. Payment shall be
      made in advance on a monthly basis for the first [***] from the Effective
      Date at a rate of [***] per month. Thereafter the balance due shall be
      payable [***].

7.02  In the event that HGS in its sole discretion notifies CAT that it wishes
      to designate a Target Antibody candidate as a Clinical Development
      Antibody at any time prior to achievement of In-Vivo Proof of Concept HGS
      shall pay CAT the balance of any unpaid Research Programme Payment
      Support. In no event shall CAT receive more than [***] by operation of
      this clause.

7.03  CAT shall have the sole responsibility for payment, and shall pay all of
      CAT's Third Party Royalty Obligations owed on Licensed Products under this
      Agreement.

7.04  HGS shall pay to CAT the following milestones with respect to Therapeutic
      Licensed Products and Therapeutic Antibody Licensed Products for the
      following events in a
<PAGE>

      Major Market:

          -  Initiation of the first Phase I/IIa clinical trial   [***]
          -  Initiation of the first Phase III clinical trial     [***]
          -  Filing of a BLA for the first Clinical
             Indication in the first Disease Area                 [***]
          -  Approval by the FDA of the first Clinical
             Indication in the first Disease Area                 [***]
          -  Approval by the FDA of a Clinical
             Indication in a second Disease Area                  [***]

      HGS shall pay to CAT royalty payments of [***] of Net Sales of Therapeutic
      Antibody Licensed Products by HGS or its Affiliates or sublicensees. HGS
      shall pay to CAT royalty payments of [***] of Net Sales of Therapeutic
      Licensed Products by HGS or its Affiliates or sublicensees.

7.05  If the parties agree that royalties should be paid to third parties other
      than CAT's Third Party Royalty Obligations to practise or have practised
      the technology claimed in the CAT Antibody Patents such royalties will be
      borne equally by HGS and CAT and HGS shall be able to offset its share of
      such third party royalties against the royalties owed to CAT under Clause
      7.04 provided however that the royalties payable to CAT on Therapeutic
      Antibody Licensed Products pursuant to Clause 7.04 shall not be reduced
      below [***] of Net Sales in any year for which a royalty is owed to CAT.
      It is agreed and acknowledged that the provisions of this section shall
      not apply to third party royalty payments outside the scope of the CAT
      Antibody Patents nor shall it apply to royalties payable in respect of
      Therapeutic Licensed Products, Diagnostic Licensed Products or Non-
      Antibody Products.

7.06  HGS shall pay to CAT the following milestones with respect to Diagnostic
      Licensed Products for the following events in a Major Market:

      -    Filing of PMA or 510k               US$ [***]
      -    Approval by the FDA                 US$ [***]

7.07  HGS shall pay to CAT royalty payments in respect of Net Sales of
      Diagnostic Licensed Products equal to the amount of [***].

7.08  Subject to Clause 7.04 in the event that HGS, its affiliates or
      sublicensees require additional licenses from third parties in order to
      develop manufacture or commercialise a Licensed Product or a Non-Antibody
      Product any consideration or royalties payable shall be the sole
      responsibility of HGS, its Affiliates or Sublicensees and shall not be
      creditable against any royalty or other payments due to CAT under this
      Agreement.

7.09  All royalties shall be payable until the later of 10 years from the date
      of the First Commercial Sale or until the expiry of the last of the
      patents in the CAT Background IP
<PAGE>

      which patents would be infringed by a Licensed Product.

ARTICLE 8 PAYMENTS

8.01  HGS shall make payments to CAT with respect to the sale of Licensed
      Product by HGS, its sublicensees and its affiliates, on a country-by-
      country basis, commencing six months after the First Commercial Sale and
      to continue every six months thereafter. Such payments shall be due forty-
      five days after the close of each six month period.

8.02  Each payment or credit shall be accompanied by a report setting forth the
      calculations of the amounts to be paid or credited on a country-by-country
      basis.

8.03  All payments shall be in United States dollars. Payments due on Net Sales
      made in currency other than United States dollars shall first be
      calculated in the foreign currency and then converted to United States
      dollars on the basis of the monthly average exchange rate for the
      preceding six months in effect in the purchase of United States dollars
      with such foreign currency as set forth in the Key Currency Cross Rates
      Tables of the Wall Street Journal (or comparable publication if not quoted
      in the Wall Street Journal) with respect to the currency of the country of
      origin of such payment prior to the date of payment.

8.04  HGS shall maintain true and complete books of account for a period of 3
      years containing an accurate record of all data necessary for the proper
      computation of payments due from it or charges made by it under this
      Agreement.

8.05  Upon request by CAT, HGS agrees to make such books of account available,
      upon reasonable notice and at reasonable times, for inspection by an
      independent Certified Public Accounting firm which is acceptable to both
      parties. Such inspection may take place at any time within 3 years after
      the date of payment or charges to which they relate (but not more than
      once in each calendar year) for the sole purpose of verifying the amount
      of such payments or charges and the accuracy of such books of account.

8.06  The fees and expenses of the audit shall be borne by CAT, unless a net
      discrepancy of more than [***] in CAT's favor is discovered in which case
      HGS shall bear the fees and expenses. If any such audit shows any
      underpayment or overpayment, a correcting payment or credit, respectively,
      shall be made within thirty days after receipt of the written statement of
      the audit.

8.07  Any income or other tax that HGS, its Affiliates or sublicensees are
      required by law to withhold and pay on behalf of CAT with respect to
      Royalties paid to CAT under this Agreement shall be deducted from said
      Royalties prior to remittance to CAT; provided however, that in regard to
      any such tax so deducted, HGS, its Affiliates or sublicensees shall give
      or cause to be given to CAT such assistance as may reasonably be necessary
      to enable CAT to claim exemption therefrom or credit therefor, and in each
      case shall furnish CAT proper evidence of such taxes paid on its behalf.
<PAGE>

8.08 All payments made to CAT under the Agreement shall be made to the account
     of Cambridge Antibody Technology Limited at [***] by telephonic transfer.

8.09 If HGS fails to make any payments to CAT hereunder within 15 days on the
     due date for payment, without prejudice or any other right or remedy
     available to CAT, CAT shall be entitled to charge HGS interest (both before
     and after judgement) on the amount unpaid at the rate or LIBOR [***]
     calculated on a daily basis until payment in full is made without prejudice
     to CAT's right to receive payment on the due date.

ARTICLE 9  LIABILITY

9.01 Each Party (the "Indemnifying Party") shall be responsible for and
     indemnify the other Party and its Affiliates and their officers, servants
     and agents (collectively the "Indemnified Party") against any and all
     liability, loss, damage, cost or expense incurred or suffered by the
     Indemnified Party as a result of a claim that use of any Licensed Product
     or Non-Antibody Product supplied or made available by the Indemnifying
     Party has caused death or bodily injury except where the claim arises
     through the negligence or intentional wrongdoing of the Indemnified Party.
     An Indemnified Party that intends to claim indemnification under this
     Clause shall promptly notify the Indemnifying Party of any claim, loss,
     damage, or expense in respect of which the Indemnified Party intends to
     claim indemnification reasonably promptly after the Indemnified Party
     becomes aware of its claim.  The Indemnifying Party shall assume the
     defense of any related third-party action, suit or proceedings with counsel
     mutually satisfactory to the Parties; provided, however, that an
     Indemnified Party shall have the right to retain its own counsel with the
     fees and expenses to be paid by the Indemnifying Party, if representation
     of that Indemnified Party by the counsel retained by the Indemnifying Party
     would be inappropriate due to actual or potential differing interests
     between the Indemnified Party and any other party represented by that
     counsel in the proceedings.  The indemnity in this Clause shall not apply
     to amounts paid in settlement of any claim, loss, damage or expense if that
     settlement is effected without the consent of the Indemnifying Party, which
     consent shall not be unreasonably withheld.  The failure of an Indemnified
     Party to deliver notice to the Indemnifying Party within a reasonable time
     after becoming aware of any claim, loss, damage or expense in respect of
     which it intends to claim indemnification under this Clause, if prejudicial
     to the Indemnifying Party's ability to defend the action, shall relieve the
     Indemnifying Party of any liability to the Indemnified Party under this
     Clause.  The Indemnifying Party shall not have any liability to any
     Indemnified Party otherwise than under this Clause.  The Indemnified Party
     and its employees and agents shall cooperate fully with the Indemnifying
     Party and its legal representatives in the investigation of any matter
     covered by this indemnification.

9.02 Neither Party shall be liable to the other in contract, tort, negligence,
     breach of statutory duty or otherwise for any economic loss or other loss
     or turnover, profits, business or goodwill or any loss, damages, costs or
     expenses of any nature whatsoever incurred or suffered by the other or its
     Affiliates of an indirect or consequential nature arising out of or in
     connection with this Agreement.
<PAGE>

9.03 The maximum limit of CAT's liability under this Agreement shall be the
     amounts paid by HGS to CAT hereunder provided however that this clause will
     not be applicable if CAT receives a licence from HGS pursuant to the
     provisions of Clause 11.03.

9.04 During the term of this Agreement and for a period of [***] following the
     expiration or earlier termination of this Agreement HGS shall maintain
     adequate liability insurance, including Licensed Product liability and
     contractual liability insurance each with coverage of [***] for each claim
     and in the aggregate to cover HGS's obligations under this Agreement.  Such
     insurance cover shall be maintained with a nationally recognised insurance
     carrier reasonably acceptable to CAT.

ARTICLE 10 CONFIDENTIALITY

10.01 The receiving party will retain all of the Confidential Information in
          confidence during the term of this Agreement and for a period of five
          years after termination of this Agreement and will not, without the
          prior written permission of the other party or pursuant to Article 10
          hereof, disclose it to third parties, or use it for any purpose other
          than in accordance with the terms of this Agreement.

10.02 Each party shall have the right to disclose to others Confidential
          Information to the extent such disclosure is reasonably necessary, in
          filing or prosecuting patent applications, prosecuting or defending
          litigation, complying with governmental regulations, conducting
          preclinical or clinical trials, or seeking approval from or complying
          with the FDA, provided that if a party is required to make any non-
          confidential disclosure of the other party's Confidential Information,
          the disclosing party will give reasonable advance notice to the other
          party of such disclosure requirement, and will use reasonable efforts
          to secure confidential treatment of such Confidential Information
          required to be disclosed.

ARTICLE 11 DUE DILIGENCE

11.01 Subsequent to the development of a Clinical Development Antibody HGS will
          prepare and deliver a Development Plan to CAT. HGS will use reasonable
          efforts to meet the HGS Milestones set out in the Development Plan and
          to develop marketable Licensed Products of good merchantable quality,
          including reasonable efforts to develop Licensed Products in multiple
          Clinical Indications of a Disease Area, and to bring those Licensed
          Products to market within the time set out in the Development Plan and
          to satisfy market demand for those Licensed Products.

11.02 Subsequent to the development of a Clinical Development Antibody if HGS
          its Affiliate or sublicensee does not file an application with the FDA
          for permission to test in humans (or where a filing is not required
          has not initiated human Clinical trials) and HGS its Affiliates or
          sublicensees by itself or with a third party develops a Non-Antibody
          Product which is a competing antagonist of [***] action in a Clinical
          Indication then HGS shall pay to CAT the following milestone payments:
<PAGE>

          -  Initiation of the first Phase III clinical trial    US$[***]
          -  Filing for approval of a BLA in the first Clinical
             Indication                                          US$[***]
          -  Approval of the first Clinical Indication           US$[***]
          -  Approval of a Clinical Indication in
             subsequent Disease Area                             US$[***]

      In addition HGS shall pay CAT Royalties on Net Sales of Non-Antibody
      Products of [***]

11.03 If HGS (a) within [***] from the delivery of a Clinical Development
          Antibody does not file an application with the FDA for permission to
          test in humans a Licensed Product or a Non-Antibody Product in the
          field of antagonists to action of the Antigen or where a filing is not
          required has not initiated human clinical trials or (b) notifies CAT
          that it is not initiating or terminating all clinical trials in the
          field of an antagonist to a Target then the Licenses granted to HGS
          shall terminate and HGS shall grant to CAT under HGS Background IP,
          Research Programme IP and HGS Know How a world-wide royalty bearing
          exclusive sub-licensable license to develop, make, have made, use and
          have used, import, sell and have sold the Licensed Product
          incorporating such Clinical Development Antibody for use in the Field
          and provide CAT with all Material and related data to the Clinical
          Development Antibody.

11.04 If the Licenses referred to above are granted then CAT shall pay to HGS
          any future applicable milestones as set out in Article 7 and a Royalty
          of [***] on Therapeutic Licensed Products and [***] on Net Sales of
          Diagnostic Licensed Products.

ARTICLE 12 PUBLICATIONS

12.01 The parties agree that any proposed publications (including, but not
          limited to abstracts posters and the like) or public disclosure on the
          research conducted under this Agreement shall be submitted to the
          other party at least thirty days prior to submission to a journal or
          other third party. A proposed submission or disclosure shall be
          reviewed promptly; however, where necessary, submission of disclosure
          may be delayed for an additional ninety days following the initial
          thirty day period for the purposes of preparing related patent
          applications and for deleting particularly Confidential Information
          from said proposed disclosure if in the reasonable judgment of the
          other party such patent applications are considered necessary and
          disclosure would jeopardize potential protection.

ARTICLE 13 GOVERNING LAW

13.01 This Agreement shall be governed by and construed in accordance with the
          law of England.

ARTICLE 14 PATENT PROSECUTION AND INFRINGEMENT
<PAGE>

14.01 HGS shall have the sole right and responsibility, at its sole discretion
          and with reasonable assistance from CAT, for the filing of and any
          prosecution and maintenance of patents and any other rights related to
          the Research Programme IP and for the conduct of any claims or
          proceedings relating to them in all countries, including any
          interference or opposition proceedings. All applicable costs,
          including that of the patent attorneys retained by HGS, shall be the
          responsibility of HGS.

14.02 Each Party shall promptly report in writing to the other during the term
          of this Agreement any (i) known infringement or suspected infringement
          of any of the Research Programme IP or (ii) unauthorised use or
          misappropriation of the Confidential Information by a third party of
          which it becomes aware, and shall provide the other party with all
          available evidence supporting said infringement, suspected
          infringement or unauthorised use or misappropriation.

14.03 If during the term of this Agreement if a third party in any country where
          the Licensed Product is being imported, manufactured, used, or sold,
          notifies any of the Parties, their Affiliates or licensees that such
          activity infringes or is alleged to infringe any issued patent either
          assigned to or licensed to such third party, then the Party so
          notified shall promptly notify the other Party in writing.

14.04 Each Party shall co-operate with the other Party, to the extent reasonably
          requested, in any legal action brought by or against the other Party
          or both of them or against their Affiliates or sublicensees in
          connection with the making, using or selling of Licensed Product(s)
          ("Action").

14.05 HGS shall have the sole responsibility at its sole expense to defend or
          prosecute any Action. CAT shall provide all reasonable assistance in
          connection with any Action at HGS expenses (including CAT's reasonable
          attorneys' fees). If HGS finds it necessary to join CAT in such suit
          or action. CAT shall execute all papers and perform such other acts as
          may be reasonably required. Unless HGS and CAT otherwise agree any
          amount recovered in any such action or suit whether by judgement or
          settlement shall be retained by HGS. In the event HGS fails to take
          action within ninety days of learning of such infringement, CAT shall
          have the sole right, but not obligation, to bring, defend and maintain
          any appropriate suit or action involving infringement of such a patent
          by manufacture, use or sale of the Licensed Product. If CAT finds it
          necessary to join HGS in such suit or action, HGS shall execute all
          papers and perform such other acts as may be reasonably required. HGS
          may, at its option, join as a party in such suit and, at its expense,
          be represented by counsel of its choice. Unless HGS and CAT otherwise
          agree, any amount recovered in any such action or suit, whether by
          judgement or settlement, [***].

14.06 HGS shall mark the Licensed Products or Non-Antibody Products sold in the
          United States with all applicable patent numbers. All Licensed
          Products or
<PAGE>

          Non-Antibody Products shipped to and/or sold in other countries shall
          be marked and labelled in such a manner as to conform with all
          applicable laws of the country where the Licensed Products or Non-
          Antibody Products are sold.

ARTICLE 15 DISPUTE RESOLUTION

15.01 All other disputes between the Parties arising out of the circumstances
          and relationships contemplated by this Agreement including disputes
          relating to the validity, construction or interpretation of this
          Agreement and including disputes relating to pre-contractual
          representations shall be in the first instance referred to the
          respective Chief Executive Officers of the Parties. If they fail to
          agree then any dispute shall be settled by arbitration as follows:

15.02 The arbitration shall be conducted in the English language in accordance
          with the Commercial Arbitration Rules of the International Chamber of
          Commerce (ICC). The arbitration shall be conducted by one arbitrator
          chosen by mutual agreement of the parties. If the parties are unable
          to agree on an arbitrator, they shall each pick one arbitrator and the
          two arbitrators shall choose a third arbitrator. The parties will
          cooperate with each other in using the arbitration to be held in as
          efficient and expeditious a manner as practicable. Any arbitration
          proceeding instituted under this Agreement shall be brought in London,
          England if instituted by HGS and in Washington D.C. if instituted by
          CAT.

15.03 Any award rendered by the arbitrator(s) shall be final and binding upon
          the parties hereto. Judgement upon the award may be entered in any
          court of record of competent jurisdiction. Each party shall pay its
          own expenses of arbitration and the expenses of the arbitrator(s)
          shall be equally shared unless the arbitrator(s) assesses as part of
          his, her or their award all or any part of the arbitration expenses of
          one party (including reasonable attorney's fees) against the other
          party.

ARTICLE 16 WARRANTIES

16.01 Each Party represents and warrants to the others as follows:-

     (a)  HGS represents and warrants that it is a corporation, duly organised,
     validly existing and in good standing under the laws of the Delaware, and
     has all requisite corporate power and authority to execute, deliver and
     perform this Agreement.  CAT represents and warrants that it is a
     corporation, duly organised, validly existing and in good standing under
     the laws of England and Wales and has all requisite corporate power and
     authority to execute, delivery and perform this Agreement;

     (b)  This Agreement when executed and delivered by the Parties will be
     legal, valid and binding obligation of such Party, enforceable against such
     Party in accordance with its terms; and

     (c)  The execution, delivery and performance of this Agreement by either
     Party does not
<PAGE>

      conflict with, or constitute a breach or default under, (i) the charter
      documents of such party, (ii) any law, order, judgement or governmental
      rule or regulation applicable to such Party or its property, or, (iii) any
      provision of any agreement, contact, commitment or instrument to which it
      is a Party (and the execution, delivery and performance of this Agreement
      by the Party does not require the consent, approval or authorisation of,
      or notice, declaration, filing or registration with, any governmental or
      regulatory authority).

16.02 CAT represents to HGS that to the best of its belief as of the Effective
          Date the CAT Antibody Patents are the main patents required from CAT
          to operate CAT's antibody phage display technology.

ARTICLE 17 NOTICES

17.01 All notices or other communications required or permitted to be given by
          either party under this Agreement shall be in writing and shall,
          unless otherwise specifically set forth herein, be sufficiently given
          by either party when deposited in the mail, registered or certified,
          postage prepaid, or by telefacsimile, and addressed as hereinafter set
          forth or to such other addressee and/or address as or shall
          subsequently be designated by either party by notice given in
          accordance with this Section.

      To HGS:

      Human Genome Sciences

      9410 Key West Avenue

      Rockville

      Maryland

      Attn: General Counsel

      Fax (1) 301 309 8439

      To CAT:

      Cambridge Antibody Technology Ltd.

      The Science Park

      Melbourn, Cambridgeshire SG8 6JJ

      Attn:  Company Secretary
<PAGE>

      Fax: (44) 1763 263413

17.02 Either party may change the address or the recipient to which notice is to
          be provided by written notice pursuant to this Clause.

ARTICLE 18 TERM AND TERMINATION

18.01  Unless and until earlier terminated as provided in this Article this
          Agreement shall commence on the Effective Date and shall continue
          until the last to expire of the patents in the CAT Background IP which
          patents would be infringed by a Licensed Product or the expiry of ten
          years from the date of First Commercial Sale of a Licensed Product by
          HGS or its Affiliates or sublicensees (whichever is the later).

18.02  If either party breaches or defaults in the performance or observance of
          any of its material obligations under this Agreement, and such breach
          or default is not cured within 30 days after receipt by such party of
          a written notice from the non-breaching party specifying the breach or
          default (or such longer period as is reasonably necessary if the
          breach is of such a nature that it cannot be reasonably cured within
          30 days) then the non-breaching party shall have the right to
          terminate this Agreement.

18.03  If CAT has failed to provide to HGS a Clinical Development Antibody, HGS
          may terminate this agreement upon written notice to CAT. If HGS has
          failed to provide an animal model for the In-Vivo Proof of Concept
          within [***] in respect of Target 1 and within the time period as
          agreed by the JMC in respect of Target 2 and 3 or has failed to
          indicate a Clinical Indication within [***] of the Effective Date in
          respect of Target 1 and within the time period agreed by the JMC in
          respect of Target 2 and 3 then CAT may terminate this Agreement upon
          written notice to HGS provided that termination based on Target 2 or
          Target 3 shall be effective only with respect to that Target.

18.04  Either party may terminate this Agreement by written notice to the other
          party in the event the other party shall have become subject to an
          Insolvency Event.

18.05  No exercise by CAT or HGS of any right of termination shall constitute a
          waiver of any right of CAT or HGS for recovery of any monies then due
          to it hereunder or any other right or remedy may have at law, in
          equity or under this Agreement.

ARTICLE 19 CONSEQUENCES OF TERMINATION

19.01  The provisions of Articles 5 8 9 10 12 and 14 shall survive the
          termination for any reason of this Agreement.

19.02  In addition the obligation to make payments under this Agreement with
          respect to any
<PAGE>

          period prior to its termination shall survive the termination of this
          Agreement. Termination of this Agreement is to be without prejudice to
          rights of either party which have accrued and are due prior to
          termination.

ARTICLE 20 ADDITIONAL PROGRAMMES & AREAS OF EXCLUSIVITY

20.01  CAT agrees to conduct additional Research Programmes directed to 2
          further Targets in addition to the Target on behalf of HGS on the
          terms specified in this Agreement, adding the new Target(s) to the
          definition of the Antigen in Clause 1.04 and throughout this
          Agreement, and defining a Research Programme for each such Target 2
          and Target 3 pursuant to Article 2, with the following limitations:

       (a) The JMC shall agree that Target 2 and Target 3 is suitable to enter a
       Research Programme. In reaching such a determination the JMC shall give
       weight to the fact that any new Target shall meet similar criteria to the
       Antigen in terms of availability of the Antigen and relevant assay,
       supporting background biology and empirical support for an antibody based
       therapeutic intervention. In addition the JMC shall be satisfied that the
       Time Line is appropriate and that CAT is aware of any competing
       technologies that HGS has initiated or is considering initiating in
       respect of any new Target.

       (b)  CAT shall have the right to reject a proposed Target 2 or 3 within
       [***] of the date of said proposal if:

       [***]

       In the case of any Target rejected by CAT, HGS shall have a right but not
       an obligation to propose a substitute Target.

20.02  CAT shall use reasonable endeavours to commence a Research Programme
          promptly after agreement of the JMC to accept a Target.

20.03  HGS's right to initiate any subsequent Research Programme hereunder shall
          terminate [***] from the Effective Date.

20.04  Royalty payments, milestone payments and other terms for Target 2 and
          Target 3 will be as specified herein except that the set of milestone
          payments with respect to Target 2 and Target 3 shall be increased from
          the milestone payments specified herein for the Target by [***] for
          each subsequent twelve month period between the Effective Date and the
          initiation of the Research Programme directed to such subsequent
          Target.

ARTICLE 21 FORCE MAJEURE

21.01  Each of the parties hereto shall be excused from the performance of its
          obligations
<PAGE>

             (except the obligations of confidentiality and non-disclosure
             imposed in Article 10 above) hereunder in the event such
             performance is prevented by force majeure. For the purpose of this
             Agreement, force majeure is defined as follows:

       a) Strikes, lockouts, or other industrial action taken by the employees
          of any party or any third party (whether or not the party against whom
          such action is taken could have avoided the same by acceding to the
          demands of the employees responsible for such action);

       b) Civil commotion, embargo, governmental legislation or regulation,
          riot, invasion, war, threat of or preparation of war;

       c) Fire, explosion, storm, flood, earthquake, subsidence, epidemic or
          other natural physical disaster.

       If the period of force majeure extends beyond six months then this
       Agreement may be terminated by either party upon written notice.

ARTICLE 22 WAIVER AND ASSIGNMENT

22.01  The right of either party at any time to require strict performance by
          the other party hereto of all the terms and conditions hereof shall
          not in any way be affected or impaired by prior waiver, forbearance or
          course of dealing.

22.02  This Agreement shall not be assigned by either party without the prior
          written consent of the other party, such consent not to be
          unreasonably withheld, provided however that a party may assign this
          Agreement or any of its rights or obligations hereunder to any
          affiliate or to any third party with which it may merge or consolidate
          or to which it may transfer all or substantially all of its assets to
          which this agreement relates, without obtaining the consent of the
          other party, provided that the assigning party remains liable under
          this agreement and that the third party, assignee or surviving entity
          assumes in writing all of its obligations under this agreement.

22.03  This Agreement shall be binding upon any permitted assignee of either
          party.

ARTICLE 23 ANNOUNCEMENTS

23.01  Subject to Clause 23.02 no press release announcement or other
          communication to any third party concerning the transaction
          contemplated by this Agreement or the financial terms of this
          Agreement or any ancillary matters shall be made or permitted or
          authorised to be made by either Party without the prior written
          approval of the other, such approval not to be unreasonably withheld
          or delayed.

23.02  Either Party may make an announcement concerning the transactions
          contemplated by this Agreement or any ancillary matter if required by:
<PAGE>

       (a) law or regulation
       (b) existing contractual obligations; or
       (c) any Securities Exchange or Regulatory Authority or governmental body
           to which either party is subject or submits, wherever situated,
           including (without limitation) the US Securities Exchange Commission,
           The UK Stock Exchange or The Panel on Take-overs and Mergers, whether
           or not the requirement has the force of law

ARTICLE 24 MISCELLANEOUS

24.01  If any provision of this Agreement is held by a court of competent
          jurisdiction to be invalid or unenforceable, it shall be modified, if
          possible, to the minimum extent necessary to make it valid and
          enforceable or, if such modification is not possible, it shall be
          stricken and the remaining provisions shall remain in full force and
          effect; provided, however, that if a provision is stricken as to
          materially affect the economic benefits of this Agreement, the party
          adversely affected may terminate this Agreement upon sixty days prior
          written notice to the other party.

24.02  The headings set forth at the beginning of the various Articles and
          Sections of this Agreement are for reference and convenience and shall
          not affect the meanings of the provisions of this Agreement.

24.03  If so advised the parties shall co-operate in notification of this
          Agreement to the Commission of the European Community pursuant to
          Council Regulation 17/62 of the Council of Ministers of the European
          Community as soon as reasonably practicable after the Commencement
          Date. Each Party shall be responsible for its own costs and expenses
          related to such notification. Each Party will give the other full and
          prompt co-operation in providing any information which the other may
          require in order to prepare such notification.

24.04  Nothing herein shall be deemed to establish a relationship of principal
          and agent between CAT and HGS, not any of their agents or employees
          for any purpose whatsoever. This Agreement shall not be construed as
          constituting CAT and HGS as partners, or as creating any other form of
          legal association or arrangement with could impose liability upon one
          party for the act or failure to act of the other party.

24.05  Nothing contained in this Agreement shall be construed as conferring any
          right to use in advertising, or other promotional activities, any
          name, trade name, trademark, or
<PAGE>

          other designation of either party thereto.

24.06  This Agreement may be executed in multiple counterparts, each of which
          shall be deemed an original and which together shall constitute one
          and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the Effective Date.

Human Genome Sciences, Inc.

By:_________________________________________________

Title:______________________________________________

Cambridge Antibody Technology Ltd.

By:_________________________________________________

Title:______________________________________________
<PAGE>

                                   EXHIBIT A

In the course of the Research Programme pertaining to the Target, the Parties
shall have the following obligations as modified from time to time by agreement
of the JMC.

                             Human Genome Sciences
                                     [***]

                         Cambridge Antibody Technology
                                     [***]
<PAGE>

                                   EXHIBIT B
                  EXISTING CAT THIRD PARTY ROYALTY OBLIGATIONS

1.   License Agreement, dated January 7, 1997, between CAT and MRC, with certain
     royalty rates, as may be amended from time to time which shall include all
     royalty payments due to The Scripps Research Institute and Stratagene
     pursuant to an agreement dated 25 June 1999 (the "MRC License").

2.   Therapeutic Antibodies Agreement, dated December 31, 1997, between CAT and
     Dyax Corp., with a royalty rate of [***], as may be amended from time to
     time (the "Dyax License").

3.   Diagnostic Antibodies Agreement, dated December 31, 1997, between CAT and
     Dyax Corp., with a royalty rate of [***], as may be amended from time to
     time (the "Dyax License").

1/   [***] indicates that text has been deleted, which is subject to a
confidential treatment request. This text has been filed with the SEC on a
supplemental basis.

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