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EXHIBIT 10.54

               INSTRUMENT, ASSAY DEVELOPMENT AND LICENSE AGREEMENT

                                     BETWEEN

                                  WYETH-AYERST

                                       AND

                         AURORA BIOSCIENCES CORPORATION

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This Agreement is made by and between AMERICAN HOME PRODUCTS, acting through its
WYETH-AYERST LABORATORIES DIVISION ("Wyeth"), a Delaware corporation with
principal offices at P.O. Box 8299, Philadelphia, PA 19101 and AURORA
BIOSCIENCES CORPORATION ("Aurora"), a Delaware corporation with principal
offices at 11010 Torreyana Road, San Diego, California 92121.

                                    RECITALS

WHEREAS, Wyeth and Aurora wish to enter into an agreement involving the purcase
by Wyeth of a Voltage-Ion Probe Reader (VIPR) from Aurora, collaborative
research to develop *** assays, and licenses of rights from Aurora to Wyeth to
use the VIPR as well as Aurora's Voltage Sensor Probes (VSPs) and *** assays to
practice the technologies and the assays as set forth herein.

Now, therefore, in consideration of the foregoing and the covenants and premises
contained herein the parties agree as follows:

1. DEFINITIONS

         1.1 "AURORA PATENTS" means U.S. patent *** and patent applications ***0
         and *** set forth in Exhibit A and ***s and ***, *** with respect
         thereto and *** patents issuing therefrom.

         1.2 "AURORA TECHNOLOGY" *** the Collaborative Research Program.

         1.3 "COLLABORATIVE RESEARCH PROGRAM" means the collaboration between
         Aurora and Wyeth as set forth in Exhibit B for the development of ***
         which may be amended from time to time, by written agreement of the
         parties.

         1.4 "CONFIDENTIAL INFORMATION" means all information, data, and
         documentation received by either party from the other party pursuant to
         this Agreement and if in writing, designated as confidential at the
         time of disclosure, subject to the exceptions set forth in Section 9.1.

         1.5 "CONTROL" or "CONTROLLED" means, in the context of intellectual
         property, possession by a party of the ability to grant a license or
         sublicense in accordance with the terms of this Agreement, and without
         violating the terms of any agreement by such party with any Third
         Party.

         1.6 "EFFECTIVE DATE" means the latest date on which the Agreement is
         executed by a party hereto.

         1.7 "INVENTION" means any new and useful process, machine, manufacture,
         or composition of matter, or improvement thereto, whether or not
         patentable.

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         1.8 "KNOW-HOW" means information and data owned or Controlled by a
         party hereto, which is existing as of the Effective Date or which a
         party develops or acquires as part of the Collaborative Research
         Program which is not generally known to the public, comprising:
         designs, concepts, algorithms, formulae, techniques, practices,
         processes, methods, knowledge, skill, experience, expertise and
         technical information.

         1.9 "MATERIALS" means any reagents, cell lines, promoters, enhancers,
         vectors, plasmids, genes, proteins and fragments thereof, peptides,
         antigens, antibodies, agonists, antagonists, inhibitors and chemicals.

         1.10 "TRACKING RECORD" means tracking records referred to in
         Section 5(e).

         1.11 "PATENT RIGHTS" means all U.S. or foreign (including regional
         authorities such as the European Patent Office) regular or provisional
         patent applications, including any continuation, continuation-in-part,
         or division thereof or any substitute application therefor or
         equivalent thereof, and any patent issuing thereon, including any
         reissue, reexamination or extension thereof and any confirmation patent
         or registration patent or patent of additions based on any such patent,
         containing one or more claims to an Invention (and in the case of an
         issued patent, containing one or more claims), and for which a party
         hereto owns or Controls, individually or jointly, any title thereto or
         rights thereunder.

         1.12 "REAGENT AGREEMENT" ***.

         1.12 "TECHNOLOGY" means Materials and Know-How.

         1.13 "THIRD PARTY" means any person or entity other than Aurora and
         Wyeth.

         1.14 "VIPR" means Aurora's voltage-ion probe reader for use with VSP's
         and purchased by Wyeth ***.

         1.15 "VOLTAGE SENSOR PROBES OR VSPS" means *** Aurora Patents.

         1.16 "WYETH MATERIALS" means *** Collaborative Research Program.

2.       EQUIPMENT PURCHASE

Aurora *** VIPR *** pursuant to this Agreement. Subject to Wyeth's payments in
Section 5, Aurora will provide the following:

         - Ship *** VIPR *** or within *** of the Effective Date, ***.

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         - *** VIPR at Wyeth's facility ***) days of shipment, *** expense.

         - Comprehensive *** VIPR for up to *** San Diego site to be scheduled
           approximately one week before the ***, with *** to be ***.

         - Warranty of the VIPR for *** after the Effective *** Section 5 (a).

3.       COLLABORATIVE RESEARCH

Aurora will develop, in collaboration with Wyeth, ***, and *** for the *** (as
defined in the the "Collaborative Research Program"), and will *** of
representative *** and other Technology to Wyeth as described herein.

Wyeth will provide pursuant to this Agreement the following Wyeth Materials and
Confidential Information to Aurora within *** days of the Effective Date:

         - *** which ***.

         - *** data documenting ***.

         - *** for the *** for *** into Aurora- ***, if the *** responses ***
           (see Section 5.b).

         - Up to ***.

         - Up to *** determine *** in a *** format.

Aurora will perform pursuant to this Agreement the following:

         - ***l for development of the *** incorporating *** format on the ***
           within ***.

         - *** development of the *** so that it can be used to *** respect ***.

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         - ***, if necessary, to *** for *** development.

         - *** determine *** provided by Wyeth.

         - *** assays ***.

         - Make available *** with these assays *** for each *** for the first
           year, *** to be contracted for *** Wyeth and Aurora).

The Collaborative Research Program shall be managed by a joint steering
committee of a size and composition ***, with *** from both Wyeth and Aurora,
minimally to include key representatives of Wyeth's ***. Each party shall have
*** vote in the joint steering committee. The Joint Steering Committee shall be
chaired by a *** representative. The term of the Collaborative Research Program
is *** year from the Effective Date, except for *** as provided in Section 10
below.

4.       LICENSES

As of the Effective Date this Agreement, Aurora will grant to Wyeth licenses and
rights as follows:

         a) A *** under the *** and *** to *** Wyeth's ***, except *** Aurora
         *** b) and c) ***. Such license grant is *** the ***. The license, ***.

         b) A *** under the *** to *** developed by Aurora *** Research ***.
         Such license grant is ***. The license, ***.

         c) A *** under the *** and *** to *** to *** developed *** or ***, and
         ***

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         research, ***, the *** is for *** only. The *** may not *** on ***. The
         payments for this license are set forth in Section 5. Such license
         grant is ***.

         d) If the license in Section 4 (c) *** the license grant of Section 4
         (c) will *** as ***. Aurora agrees that it *** including *** and/or ***
         for any purpose other *** under this Agreement, and will not *** to any
         Third Party without ***.

         4.1 Aurora is *** and *** Wyeth that directly arise from ***.

         4.2 RETAINED RIGHTS AND LIMITATIONS. The licenses under this Section 4
         are subject to Wyeth's obligations described herein including payments
         by Wyeth as set forth in Section 5. For clarity, the license rights
         granted to Wyeth in this Section 4 specifically exclude the right ***
         or ***; or 3) to *** or *** without the use of Wyeth Confidential
         Information or Wyeth Materials. As consideration for the rights
         received in Section 4, Wyeth *** Wyeth ***. ***.

5.       PAYMENTS

         a) EQUIPMENT PURCHASE. Wyeth *** Dollars ($***) for purchase ***.
         Shipping will be prepaid and added FOB San Diego to the invoice. The
         VIPR is provided ***, entitling Wyeth to *** of ***, prepaid and added
         ***. No one other than an Aurora factory certified engineer is
         authorized to service the VIPR, and any tampering with or modification
         of the instrument by any other party will nullify the warranty ***
         cause the license *** to terminate. *** approved by Aurora, in writing,
         which may include such

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         repairs described in training ("Authorized Maintenance"). ***.

         b) COLLABORATIVE RESEARCH. Wyeth will pay Aurora a *** fee of ***
         Dollars ($***) for the development of ***. This amount is payable in
         *** of *** Dollars ($***) each, the *** and the *** upon *** to Wyeth.
         In the event that the *** ***, as reasonably determined by Aurora,
         Aurora will notify the Joint Steering Committee. If the Joint Steering
         Committee agrees by *** as determined by Aurora, Aurora will notify the
         Joint Steering Committee, as soon as possible and prior to the date of
         *** from the Effective date. In the event, Wyeth is *** Aurora with ***
         from the Effective Date, (I) *** within *** of such ***; and (ii)
         Aurora shall ***. Aurora will provide reasonable telephone support for
         these assays as long as the license to them is maintained.

         c) LICENSE FEES. Wyeth *** license fee of *** Dollars ($***), *** on
         the anniversary of the Effective Date for *** years. After the initial
         ***, Wyeth may extend this license, ***, *** or *** for terms to be
         negotiated, in good faith, by the parties.

         d) ***. Upon designation by Wyeth *** on information *** with *** or
         *** above by virtue of such *** properties, Wyeth will pay Aurora ***.
         On the *** for each *** will pay *** of ***. On *** for each *** will
         pay *** Dollars ($***). ***. *** shall be due on *** by Wyeth as *** in
         a scientifically acceptable manner *** Wyeth, even if these ***
         subsequently *** VIPR or *** assays. *** the *** in either *** or
         unknown *** will be due.

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         e) PAYMENT AND TRACKING *** shall be paid within *** days after the end
         of each calendar quarter period in which *** are earned. The compounds,
         screens and targets tested using a screen developed under this
         Agreement will be recorded and stored by Wyeth using its customary
         means and in a computer searchable database on a storage device. The
         information stored *** upon in writing by the parties. Records of any
         *** subject to *** or *** by Wyeth in a *** or *** that may or may not
         *** related to the ***, or ***. Wyeth shall keep appropriate records of
         *** assays and *** including the VSPs ***. All the records described in
         this Section are collectively referred to as tracking records (the
         "Tracking Records"). Wyeth will *** Aurora and agreed to by Wyeth, and
         ***, to *** Tracking Records *** year upon reasonable prior *** Aurora
         for the *** the attainment of a milestone under this Section 5. The
         Tracking Records shall be securely retained according to Wyeth's ***
         than *** from *** VSPs. When a *** such as a *** or *** is *** safety
         or ***, Wyeth will *** Aurora under ***. On an annual basis, *** Aurora
         with a *** products that ***.

         f) ***. The parties acknowledge that the principal value contributed by
         Aurora under this Agreement is the ***, which the parties reasonably
         believe will lessen the time required to develop new products and to
         increase the efficiency of drug/target discovery and development
         processes and technologies. Wyeth acknowledges and agrees that the
         value it receives hereunder is in the access and use of ***;
         accordingly, Wyeth *** set forth herein. Additionally, the parties
         acknowledge that Aurora may not own or Control patent applications or
         patents covering the manufacture, sale, use or importation of a
         particular pharmaceutical product; provided, however, Wyeth ***
         pharmaceutical product or compound is *** Aurora Patents.

6.       OPTIONS

         a) LICENSE ***. As described in Section 4 (c), the *** *** Dollars
         ($***) plus

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         milestones ***. The license ***. ***, the license *** basis or for a
         *** negotiated in good faith by the parties.

         b) EXTENDED WARRANTY FOR THE VIPR. Aurora will provide an extended
         warranty package *** to Wyeth that includes *** and ***, prepaid and
         added to the service invoice ***. The price for *** Dollars ($***)***,
         increased annually by the Consumer Price Index (CPI), *** warranty
         within *** of the Effective Date; ***.

         c) SCIENTIFIC SUPPORT SERVICES. Aurora will provide Wyeth the
         opportunity to utilize a full range of scientific support services on
         licensed assays post transfer as mutually agreed in writing by the
         parties. A customized program can be designed for additional long-term
         support at commercially available rates beyond the scope of this
         project should Wyeth desire the same.

         d) TRAINING. Aurora will provide on-site training of Wyeth personnel in
         the use of the VIPR. Training will be for a maximum of *** people in a
         *** training program. Documentation and workbooks will be provided.
         ***. The price for this training program is *** Dollars ($***)***
         conducted in the continental US if requested *** of the Effective Date.

7.       INTELLECTUAL PROPERTY OWNERSHIP

PRE-EXISTING INTELLECTUAL PROPERTY. This agreement does not affect the ownership
of Inventions, Technology and Patent Rights of either party which existed prior
to the Effective Date.

INTELLECTUAL PROPERTY CREATED UNDER THE COLLABORATIVE RESEARCH PROGRAM. ***
developed by *** during the Collaborative Research Program will be owned by ***,
with *** as ***. ***, at its sole discretion, shall be responsible for the
filing and prosecution of all applicable patents and the expenses thereof. ***.

INTELLECTUAL PROPERTY ***. Any Inventions, Technology and Patent Rights relating
to the activities or properties of *** or other ***, *** of the licenses granted
by Aurora under Section 4. *** will be responsible for the filing and
prosecution of all applicable patents and for the expenses thereof. Any
improvements, Know-How, Inventions, Technology and Patent Rights

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developed *** VIPR or VSPs or their use will *** to Sections ***. ***.

TRANSFER OF RIGHTS. All rights not expressly licensed or assigned by Aurora are
retained by Aurora and no implied licenses are conveyed herein or were conveyed
before the Effective Date. Except as otherwise expressly provided in this
Agreement, nothing in this Agreement is intended to convey or transfer ownership
by one party to the other of any rights, title or interest in any Confidential
Information, Technology, copyrights or Patent Rights owned or Controlled by a
party. Except as expressly provided for in this Agreement, nothing in this
Agreement shall be construed as a license or sublicense by one party to the
other of any rights in any Technology, copyrights, or Patent Rights owned or
Controlled by a party.

INVENTORSHIP AND ASSIGNMENT. Inventorship of patentable inventions shall be
determined by U.S. patent law. Wyeth and Aurora ***.

COPYRIGHTS. The parties agree to treat and handle, to the maximum extent
practical, any copyrights owned or Controlled by a party in the same manner as
Patent Rights owned or Controlled by such party.

8.       PRODUCT DEVELOPMENT, COMMERCIALIZATION AND DILIGENCE

Wyeth will *** and such development and commercialization ***.

*** the Effective Date, and will *** Wyeth within ***of the Effective Date. The
*** will be made available to Wyeth in accordance with the *** between *** as
indicated in Section 3.

9.       CONFIDENTIALITY

     9.1 CONFIDENTIAL INFORMATION. Except as expressly provided herein, the
     parties agree that, for the term of this Agreement and five (5) years
     thereafter, the receiving party shall keep completely confidential and
     shall not publish or otherwise disclose to another party and shall not use
     for any purpose other than to perform the purposes contemplated by this
     Agreement any Confidential Information furnished to it by the disclosing
     party hereto pursuant to this Agreement, except that to the extent that it
     can be established by the receiving party by competent proof that such
     Confidential Information:

               was already known to the receiving party, other than under an
               obligation of confidentiality, at the time of disclosure;

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               was generally available to the public or otherwise part of the
               public domain at the time of its disclosure to the receiving
               party;
               became generally available to the public or otherwise part
               of the public domain after its disclosure and other than
               through any act or omission of the receiving party in breach
               of this Agreement;
               was lawfully disclosed to the receiving party by a person
               other than a party hereto,
               or was independently developed by the receiving party
               without the use of Confidential Information.

     9.2. PERMITTED USE AND DISCLOSURES. Each party hereto may use or disclose
     Confidential Information disclosed to it by the other party to the extent
     such use or disclosure is (i) reasonably necessary in filing or prosecuting
     patent applications, prosecuting or defending litigation, (ii) complying
     with applicable law, governmental regulation or court order, (iii)
     submitting information to tax or other governmental authorities, (iv)
     making a permitted sublicense or (v) otherwise exercising its rights
     hereunder, provided that if a party is required to make any such disclosure
     of another party's Confidential Information, other than pursuant to
     subsection (ii) hereof, it will give reasonable advance notice to the
     latter party of such disclosure and, shall obtain the prior written
     approval of said latter party, which approval shall not be unreasonably
     withheld.

     9.3 CONFIDENTIAL TERMS. Except as expressly provided herein, each party
     agrees not to disclose any material or financial terms of this Agreement to
     another party without the consent of the other party, not to be
     unreasonably withheld; provided, however, each party reserves the right to
     make reasonable disclosures (including the redaction of material or
     financial terms) as required by securities or other applicable laws, or to
     actual or prospective investors or corporate partners (including licensees
     and acquirers), or to accountants, attorneys and other professional
     advisors on a need-to-know basis under circumstances that reasonably ensure
     the confidentiality thereof, or to the extent required by law. If such
     Confidential Information is to become public information by such disclosure
     the disclosing party must obtain the written consent of the non-disclosing
     party in order to obtain protection of the Confidential Information if
     necessary.

     9.4 PRESS RELEASE. Notwithstanding the foregoing, the parties agree that
     Aurora will make a press release to announce the execution of this
     Agreement which shall be subject to prior written approval of Wyeth, such
     approval not to be unreasonably withheld. Thereafter, Wyeth and Aurora may
     each disclose to Third Parties the information contained in the mutually
     agreed upon press release without the need for further approval by the
     other.

10.      TERM AND TERMINATION OF THE RESEARCH COLLABORATION

         a) TERM. The Collaborative Research Program will terminate *** Wyeth,
         or after ***, unless extended by mutual written agreement of both
         parties through the Joint

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         Steering Committee. If the Collaborative Research Program *** Wyeth's
         ***, Wyeth will *** payment of *** Dollars ($***) described in Section
         *** above. In this case, the license described under Section *** and
         *** would *** Wyeth would *** for *** and to *** these assays under the
         terms of *** and pursuant to this Agreement, with *** or *** to Aurora,
         *** the VSPs, in which case it *** described in Section *** and ***.

         b) TERMINATION. Either party shall have the right to terminate this
         Agreement at any time during the term for a material breach of this
         Agreement by the other party, provided that the non-breaching party
         shall have first given *** days prior written notice (*** days in the
         event of non-payment of any amounts due under this Agreement) to the
         breaching party describing such breach and stating the non-breaching
         party's intention to terminate this Agreement if such breach remains
         uncured, and the breaching party thereafter fails to cure same within
         such *** day (***) period (*** day period in the event of non-payment
         of any amounts due under this Agreement).

         c) EFFECT OF EXPIRATION OR TERMINATION. Except as otherwise expressly
         provided in this Agreement, the rights and obligations of the parties
         hereof shall terminate and be of no further force or effect whatsoever
         upon any termination of this Agreement under Section 10 hereof.
         Sections *** shall survive termination or expiration of this Agreement.
         Upon expiration or other termination of the Agreement all licenses
         granted will thereby terminate and Materials will be destroyed or
         returned at the direction of the parties within *** days.

11.      MISCELLANEOUS

     11.1.BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon the
     parties' permitted successors and permitted assigns. Wyeth may not assign
     or otherwise transfer this Agreement or any of its rights or obligations
     hereunder without the prior written consent of Aurora *** such attempted
     assignment or transfer shall be void. Aurora may assign or otherwise
     transfer this Agreement without the consent of Wyeth.

     11.2. EFFECT OF WAIVER. No waiver of any default, condition, provisions or
     breach of this Agreement shall be deemed to imply or constitute a waiver of
     any other like default, condition, provision or breach of this Agreement.

     11.3. REPRESENTATIONS AND WARRANTIES OF AURORA AND WYETH. Each Party hereby
     represents and warrants: Such party is duly organized and validly existing
     and in good standing under the laws of the state of its incorporation and
     has all requisite corporate power and authority to enter into this
     Agreement and to carry out the provisions hereof. Such party is duly
     authorized to execute and deliver this Agreement and to perform its
     obligations hereunder. This Agreement is a legal and valid obligation
     binding upon it and enforceable in accordance

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     with its terms. The execution, delivery and performance of this Agreement
     by such party does not conflict with any agreement, instrument or
     understanding, oral or written, to which it is a party or by which it may
     be bound, nor violate any law or regulation of any court, governmental body
     or administrative or other agency having jurisdiction over it.

         11.3.1 Aurora hereby represents and warrants to Wyeth that, to the best
         of its knowledge:

              (a) ***
              (b) as of the Effective Date, it has the full right, power and
              authority to grant the licenses granted to Wyeth hereunder;
              (c) ***;
              (d) it is the exclusive licensee of the Aurora Patents and Aurora
              Technology existing as of the Effective Date, ***.
              (e) ***

     11.4. ***

         11.4.1. ***

         11.4.2. ***

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         11.4.3.  ***

     11.5. FORCE MAJEURE. Neither party shall lose any rights hereunder or be
     liable to the other party for damages or losses (except for payment
     obligations) on account of failure of performance by the defaulting party
     if the failure is occasioned by war, strike, fire, act of God(s),
     earthquake, flood (including El Nino and La Nina), lockout, embargo and
     governmental acts or orders or restrictions.

     11.6. AMENDMENT. No modification, supplement to or waiver of this Agreement
     or any Addendum hereto or any of their provisions shall be binding upon a
     party hereto unless made in writing and duly signed by an authorized
     representative of both Wyeth and Aurora. In no event may the terms of this
     Agreement be changed, deleted, supplemented or waived by any notice,
     purchase order, receipt, acceptance, bill of lading or other similar form
     of document. A failure of either party to exercise any right or remedy
     hereunder, in whole or in part, or on one or more occasions, shall not be
     deemed either a waiver of such right or remedy to the extent not exercised,
     or of any other right or remedy, on such occasion, or a waiver of any right
     or remedy on any succeeding occasion.

     11.7. ENTIRE AGREEMENT. This Agreement and each supplemental written
     agreement contemplated hereunder, sets forth the entire understanding and
     agreement of the parties as to the subject matter thereof, and there are no
     other understandings, representations or promises, written or verbal, not
     set forth herein or on which either party has relied. If any provisions of
     any such Addendum or supplemental written agreement conflict with any
     provisions set forth in this Agreement, the provisions of this Agreement
     shall take precedence, unless such Addendum or supplemental written
     agreement expressly refers to the specific provision(s) of this Agreement
     that it is intended to replace or modify (and which shall be limited in
     force and effect to such Addendum or supplemental written agreement only).

     11.8. NOTICES. All Notices under this Agreement shall be given in writing
     and shall be addressed to the parties at the following addresses:

                           FOR WYETH:

                                    Wyeth-Ayerst Laboratories
                                    P.O. Box 8299
                                    Philadelphia, PA 19101
                           Attn: SVP, Global Business Development

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                           Copy to: American Home Products Corporation
                                    5 Giralda Farms
                                    Madison, NJ 07940
                                    Attn: SVP and General Counsel

                           FOR AURORA:

                                    Timothy J. Rink, M.D., D.Sc.
                                    CEO and Chairman
                                    Aurora Biosciences Corporation
                                    11010 Torreyana Road
                                    San Diego, CA.  92121

                                    COPIES TO:
                                    John D. Mendlein, Ph.D., J.D.
                                    Senior Vice President, Intellectual Property
                                    and Chief Knowledge Officer
                                    Aurora Biosciences Corporation
                                    11010 Torreyana Road
                                    San Diego, CA.  92121

     Notices shall be in writing and shall be deemed delivered when received, if
     delivered by a courier, or on the second business day following mailing, if
     sent by first-class certified or registered mail, postage prepaid.

     11.9. RESOLUTION. The parties recognize that disputes as to certain matters
     may from time to time arise during the term of this Agreement which relate
     to either party's rights and/or obligations hereunder. It is the objective
     of the parties to establish procedures to facilitate the resolution of
     disputes arising under this Agreement in an expedient manner by mutual
     cooperation and without resort to resolution by other means. The parties
     agree that prior to any resolution concerning this Agreement, *** will meet
     in person or by video-conferencing in a good faith effort to resolve any
     disputes concerning this Agreement. Within *** days of a formal request by
     either party to the other, any party may, by written notice to the other,
     have such dispute referred to their respective officers designated or their
     successors, for attempted resolution by good faith negotiations, such good
     faith negotiations to begin within *** after such notice is ***.

     11.10. GOVERNING LAW. This Agreement shall be governed by and construed in
     accordance with the laws ***, without regard or giving effect to its
     principles of conflict of laws.

     11.11. THIRD PARTY BENEFICIARIES. This Agreement and the rights and
     obligations created hereunder are for the sole benefit of the parties
     hereto and their respective successors or assigns as may be permitted under
     the terms of this Agreement. By entering into this Agreement, the parties
     agree that they are not creating and do not intend to create implied or
     incidental rights inuring to the benefit of Third Parties.

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     11.12. SEVERABILITY. This Agreement is intended to be severable. If any
     provision(s) of this Agreement are or become invalid, are ruled illegal by
     a court of competent jurisdiction or are deemed unenforceable under the
     current applicable law from time to time in effect during the term hereof,
     it is the intention of the parties that the remainder of the Agreement
     shall not be affected thereby and shall continue to be construed to the
     maximum extent permitted by law at such time. It is further the intention
     of the parties that in lieu of each such provision which is invalid,
     illegal, or unenforceable, there shall be substituted or added as part of
     this Agreement by such court of competent jurisdiction a provision which
     shall be as similar as possible, in economic and business objectives as
     intended by the parties to such invalid, illegal or unenforceable
     provision, but shall be valid, legal and enforceable.

     11.13. HEADINGS. Captions and paragraph headings are for convenience only
     and shall not form an interpretative part of this Agreement. Unless
     otherwise specifically provided, all references to a Section incorporate
     all Sections or subsections thereunder. This Agreement shall not be
     strictly construed against either party hereto and maybe executed in two
     (2) or more counterparts, each of which will be deemed an original and the
     same instrument. Counterparts may be signed and delivered by facsimile,
     each of which shall be binding when sent, and in each case an original
     shall be sent via overnight courier. This Agreement will not be enforceable
     and shall have no effect if this Agreement is not executed by Wyeth and
     Aurora ***.

     IN WITNESS WHEREOF, the parties have executed, by duly authorized
representatives, this Agreement:

By: /s/ Egan E. Berg                         By: /s/ Michael J. Dunn
   ----------------------------                 ------------------------------
Date: 12/16/99                               Date: November 18, 1999
     --------------------------                   ----------------------------
Name: Egan E. Berg                           Name: Michael J. Dunn
    ---------------------------                   ----------------------------
Title: Vice President                        Title: V.P. Business Development
     --------------------------                    ---------------------------
For American Home Products                   For Aurora Biosciences Corporation
Acting through its Wyeth-Ayerst
Laboratories Division

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                                    EXHIBIT A

                                 AURORA PATENTS

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                                    EXHIBIT B

                  DESCRIPTION OF COLLABORATIVE RESEARCH PROGRAM

                                     [GRAPHIC]

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                                   EXHIBIT 1.1

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EXHIBIT 10.55

                                LICENSE AGREEMENT

                                     BETWEEN

                               ZYMOGENETICS, INC.

                                       AND

                         AURORA BIOSCIENCES CORPORATION

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                                LICENSE AGREEMENT

This License Agreement (the "Agreement") is made this 17th day of December 1999
(the "Effective Date"), by and between ZYMOGENETICS, INC. ("ZymoGenetics"), a
Washington corporation with principal offices at 1201 Eastlake Avenue East,
Seattle, WA 98102 and AURORA BIOSCIENCES CORPORATION ("Aurora"), a Delaware
corporation with principal offices at 11010 Torreyana Road, San Diego,
California 92121 to license certain technology.

                                    RECITALS

WHEREAS, Aurora has the right to sublicense the Aurora Patents and Stanford
Patents (both defined herein) relating to fluorescent proteins further described
herein, and desires to license the same to ZymoGenetics;

WHEREAS, ZymoGenetics seeks to obtain certain Materials, license rights under
the Aurora Patents and Stanford Patents *** according to the terms contained
herein (the "Agreement");

Now, therefore, in consideration of the foregoing and the covenants and premises
contained herein the parties agree as follows:

1.   DEFINITIONS

As used herein, the following terms shall have the following meanings:

     1.1   "AURORA MUTANT GFP" means ***.

     1.2   "AURORA PATENTS" means U.S. Patent Nos. 5,625,048, 5,777,079 and
           the patent applications listed on Exhibit A and *** U.S. patents
           issuing therefrom.

     1.3   "AURORA TECHNOLOGY" means the *** listed in Exhibit C and Aurora's
           proprietary technical manual for the same.

     1.4   "CONFIDENTIAL INFORMATION" means all information, data, and
           documentation received by either party from the other party
           pursuant to this Agreement, subject to the exceptions set forth in
           Section 8.

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     1.5   "CONTROL" or "CONTROLLED" means, in the context of intellectual
           property, right of a party to grant a license or sublicense in
           accordance with the terms of this Agreement, and without violating
           the terms of any agreement by such party with any Third Party.

     1.6   "EXCLUDED FIELDS" means ***.

     1.7   "FIELD" means:

           (1) ***;

           (2) ***

           (3) ***;

           (4) use of Aurora Mutant GFP for ***; and

           (5) use of Aurora Mutant GFP ***.

           Items (1)-(5) are ***.

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     1.8   "MATERIALS" means any reagents, promoters, enhancers, vectors,
           plasmids, genes, polynucleotides, cells, proteins and fragments
           thereof, peptides, antigens, antibodies, antagonists, agonists,
           inhibitors and chemicals.

     1.9   ***.

     1.10  "SCREENING" means ***.

     1.11  "STANFORD AGREEMENT" means that certain exclusive license agreement
           between Aurora and The Board of Trustees of the Leland Stanford
           Junior University ("Stanford"), dated as ***.

     1.12  "STANFORD LICENSED PRODUCT(S)" means any product or process, or
           part thereof, in the Field, the manufacture, use or sale of which
           is covered by a valid claim of an issued, unexpired Stanford
           Patent and shall be presumed to be valid unless and until it has
           been held to be invalid by a final judgment of a court of
           competent jurisdiction from which no appeal can be or is taken.

     1.13  "STANFORD PATENTS" means U.S. Patent No. 5,807,387, 5,968,738 and
           the patent applications listed on Exhibit B and *** U.S. patents
           issuing therefrom.

     1.14  "TARGET" means ***.

     1.15  "TERRITORY" means the United States.

     1.16  "THIRD PARTY" means any entity other than (i) Aurora and (ii)
           ZymoGenetics.

     1.17  "TERM" has the meaning set forth in Section 9.1.

     1.18  "ZYMOGENETICS PRODUCT" means ***.

2.   LICENSES AND SUPPLY

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     2.1   GRANT UNDER THE AURORA PATENTS, STANFORD PATENTS AND AURORA
           TECHNOLOGY

           2.1.1  NON-EXCLUSIVE LICENSE TO AURORA PATENTS. Aurora hereby
                  grants to ZymoGenetics, ***.

           2.1.2  NON-EXCLUSIVE LICENSE TO STANFORD PATENTS. Aurora hereby
                  grants to ZymoGenetics, ***.

           2.1.3  NON-EXCLUSIVE LICENSE TO AURORA TECHNOLOGY. Aurora hereby
                  grants to ZymoGenetics, ***.

           2.1.4  LIMITATIONS. Except as otherwise expressly provided in this
                  Agreement, nothing in this Agreement is intended to convey
                  or transfer ownership by one party to the other of any
                  rights, title or interest in any Confidential Information,
                  technology (e.g. ***), copyrights or patent rights owned or
                  Controlled by a party. Except as expressly provided for in
                  this Agreement, nothing in this Agreement shall be
                  construed as a license or sublicense by one party to the
                  other of any rights in any technology, copyrights, or
                  patent rights owned or Controlled by a party. All rights
                  not expressly licensed by Aurora are retained by Aurora.
                  The Aurora Mutant GFP *** are *** within the scope *** (i)
                  ***; (ii) ***; or (iii) ***. The license rights granted to
                  ZymoGenetics in Section *** do not include: (a) ***

     2.2   SUPPLY. Aurora shall deliver the Aurora Technology to ZymoGenetics
           within *** business days after the Effective Date in the
           quantities described on Exhibit C.

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3.   COMPENSATION

     3.1   TECHNOLOGY ACCESS FEE. As consideration for the Aurora Technology
           provided to ZymoGenetics pursuant to ***, ZymoGenetics shall pay
           to Aurora within *** after the Effective Date, a *** Dollars
           ($***).

     3.2   ***. As consideration for the *** provided to ZymoGenetics
           pursuant to ***, ZymoGenetics shall pay to Aurora within *** after
           the Effective Date, *** fee of *** Dollars ($***). ***.

     3.3   ANNUAL MAINTENANCE FEE. As consideration for the rights granted in
           Section ***, ZymoGenetics will pay to Aurora a *** fee as payment
           for the upcoming year *** Dollars ($***) on the first anniversary
           of the Effective Date and then each anniversary of the Effective
           Date thereafter.

4.   PAYMENTS AND MILESTONES

     4.1   CURRENCY OF PAYMENT. All payments to be made under this Agreement
           shall be paid in U.S. dollars by wire transfer or other mutually
           acceptable means to a bank account designated by Aurora. Wiring
           instructions for payments are as follows:

                                       ***

     4.2   MILESTONES. When any ZymoGenetics Product reaches any of the
           following milestones, ZymoGenetics shall pay to Aurora the
           corresponding non-creditable, non-refundable milestone payment; ***

<TABLE>
<CAPTION>

              Milestone                                          Payment
             ----------                                          -------
<S>           <C>                                                  <C>
              1. ***                                               $ ***
              2. ***                                               $ ***
              3. ***                                               $ ***
              4. ***
</TABLE>

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           4.2.1  PAYMENT AND REPORTING. The milestones due under this
                  Section 4 shall be paid within *** days after the end of
                  each calendar quarter period in which such milestones are
                  reached for each ZymoGenetics Product or for a ZymoGenetics
                  Product earned and not previously reported.

           4.2.2  TRACKING. ZymoGenetics Products will be recorded and stored
                  by ZymoGenetics using its customary means and in a computer
                  searchable database on a storage device. Records of any ***
                  (including, ***) that would *** subject to additional ***
                  will be *** file or database that ***. ZymoGenetics shall
                  keep appropriate records of ZymoGenetics Products
                  discovered, identified or profiled under the rights granted
                  herein ***. All the records described in this Section are
                  collectively referred to as tracking records (the "Tracking
                  Records"). *** ZymoGenetics, and subject to a confidential
                  relationship with ZymoGenetics *** Tracking Records ***
                  year upon reasonable prior written request *** milestone
                  under ***. The Tracking Records shall be securely retained
                  according to ZymoGenetics' *** for no less than *** from
                  the date a ***. Until all of the milestones have been paid,
                  *** that may be used to calculate milestones. Such reports
                  shall be sent to the attention of SVP, Intellectual
                  Property via first class mail, overnight courier or
                  facsimile.

           4.2.3  TRADE SECRET MILESTONES. The parties acknowledge that a
                  significant value contributed by Aurora under this
                  Agreement is the ***. Additionally, the parties acknowledge
                  that Aurora may not own or Control patent applications or
                  patents covering the manufacture, offer for sale, sale, use
                  or importation of a particular product. ZymoGenetics
                  acknowledges and agrees that the value it receives
                  hereunder is in ***. ***

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                  *** patent application or patent within the Aurora Patents
                  or Stanford Patents.

     4.3   ***. If ZymoGenetics makes a payment to *** under such Third Party
           patent rights, biological materials or know-how, *** ZymoGenetics,
           *** payments in annual maintenance fees or milestones, described
           in Sections *** respectively, to Aurora totaling *** dollars
           ($***), ZymoGenetics *** made to *** amount payable under Section
           *** dollars ($***) ***.

5.       COVENANTS

     5.1   AURORA'S COVENANT. Subject to ZymoGenetics' obligations in
           accordance with Section ***

     5.2   COVENANTS OF ZYMOGENETICS:

           5.2.1  ***

           5.2.2  ***

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           5.2.3  Except as expressly licensed herein, ZymoGenetics covenants
                  not to make or use Aurora Technology or polynucleotides or
                  proteins under the Aurora Patents or Stanford Patents. ***

6.   REPRESENTATIONS AND WARRANTIES

     6.1   REPRESENTATIONS AND WARRANTIES OF AURORA AND ZYMOGENETICS

           Each Party hereby represents and warrants:

               CORPORATE POWER. Such party is duly organized and validly
               existing and in good standing under the laws of the state of its
               incorporation and has all requisite corporate power and authority
               to enter into this Agreement and to carry out the provisions
               hereof.

               DUE AUTHORIZATION. Such party is duly authorized to execute and
               deliver this Agreement and to perform its obligations hereunder.

               BINDING AGREEMENT. This Agreement is a legal and valid obligation
               binding upon it and enforceable in accordance with its terms. The
               execution, delivery and performance of this Agreement by such
               party does not conflict with any agreement, instrument or
               understanding, oral or written, to which it is a party or by
               which it may be bound, nor violate any law or regulation of any
               court, governmental body or administrative or other agency having
               jurisdiction over it.

     6.2   REPRESENTATIONS AND WARRANTIES OF AURORA. To the best knowledge of
           Aurora, as of the Effective Date, Aurora represents and warrants
           to ZymoGenetics, except as otherwise provided or disclosed herein:
           (i) it Controls under valid licenses or by virtue of ownership all
           right, title and interest in and to the Aurora Patents and
           Stanford Patents and Aurora Technology licensed hereunder; (ii)
           *** (iii) ***; and (iv) ***.

7.   NEGATION OF WARRANTIES

     7.1   Except as expressly set forth in this Agreement, Aurora MAKES NO

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           REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
           EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
           MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE
           USE OF THE AURORA TECHNOLOGY WILL NOT INFRINGE ANY PATENT,
           COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER EXPRESS OR
           IMPLIED WARRANTIES.

8.   CONFIDENTIALITY

     8.1   CONFIDENTIAL INFORMATION. Except as expressly provided herein, the
           parties agree that, for the Term and five (5) years thereafter,
           the receiving party shall keep completely confidential and shall
           not publish or otherwise disclose to another party and shall not
           use for any purpose other than to perform the purposes
           contemplated by this Agreement any Confidential Information
           furnished to it by the disclosing party hereto pursuant to this
           Agreement, except that to the extent that it can be established by
           the receiving party by written evidence that such Confidential
           Information:

           was already known to the receiving party, other than under an
           obligation of confidentiality, at the time of disclosure;
           was generally available to the public or otherwise part of the
           public domain at the time of its disclosure to the receiving party;
           became generally available to the public or otherwise part of the
           public domain after its disclosure and other than through any act
           or omission of the receiving party in breach of this Agreement;
           or was lawfully disclosed to the receiving party by a person other
           than a party hereto, or was independently developed by the
           receiving party.

      8.2  PERMITTED USE AND DISCLOSURES. Each party hereto may use or
           disclose Confidential Information disclosed to it by the other
           party to the extent such use or disclosure is reasonably necessary
           in filing or prosecuting patent applications, prosecuting or
           defending litigation, complying with applicable law, governmental
           regulation or court order, submitting information to tax or other
           governmental authorities, making a permitted sublicense or
           otherwise exercising its rights hereunder, provided that if a
           party is required to make any such disclosure of another party's
           Confidential Information, other than pursuant to a confidentiality
           agreement, it will give reasonable advance notice to the latter
           party of such disclosure and, save to the extent inappropriate in
           the case of patent applications, will use reasonable efforts to
           secure confidential treatment of such information prior to its
           disclosure (whether through protective orders or otherwise).

      8.3  CONFIDENTIAL TERMS. Except as expressly provided herein, each
           party agrees not to disclose

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           *** to another party without the consent of the other party, not
           to be unreasonably withheld; provided, however, each party
           reserves the right to make reasonable disclosures (including the
           mutually agreed redaction of material or financial terms) as
           required by securities or other applicable laws, or to actual or
           prospective investors or corporate partners, or to accountants,
           attorneys and other professional advisors on a need-to-know basis
           under circumstances that reasonably ensure the confidentiality
           thereof, or to the extent required by law. A party shall have the
           further right to disclose the material financial terms of this
           Agreement under strictures of confidentiality to any potential
           acquirer, bona fide potential strategic partner or collaborator,
           merger partner, bank, venture capital firm, or other financial
           institution to obtain financing. If any Confidential Information
           is to become public information by disclosure of the disclosing
           party (except by way of issuance of a patent), the disclosing
           party must obtain the written consent of the non-disclosing party
           in order to disclose the information or allow the non-disclosing
           party to obtain protection of the Confidential Information, if
           necessary.

9.    TERMINATION

      9.1  TERM. This Agreement shall continue until the date the last patent
           of the Aurora Patents or Stanford Patents expires ("Term").

      9.2  TERMINATION FOR MATERIAL BREACH. Either party shall have the right
           to terminate this Agreement at any time for a material breach of
           this Agreement by the other party, provided that the non-breaching
           party shall have first given thirty (30) days prior written notice
           (ten (10) days in the event of non-payment of any amounts due
           under this Agreement) to the breaching party describing such
           breach and stating the non-breaching party's intention to
           terminate this Agreement if such breach remains uncured, and the
           breaching party thereafter fails to cure same within a reasonable
           time. In no case will a party be liable for punitive or
           consequential damages.

     9.3   TERMINATION BY ZYMOGENETICS. ZymoGenetics may, at anytime after
           the date of the *** anniversary of the Effective Date, terminate
           the license rights granted in Section *** upon *** days written
           notice to Aurora and ***.

     9.4   Any termination pursuant to Section 9.2 or 9.3 shall not relieve
           ZymoGenetics of any obligation or liability accrued hereunder
           prior to such termination, including the obligation to pay
           applicable license fees and milestones. The licenses granted to
           ZymoGenetics under this Agreement shall terminate in the event the
           Agreement is terminated or otherwise

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           expired. Upon termination of the Agreement all licenses granted
           will thereby terminate and Materials with an Aurora Mutant GFP
           will be destroyed or returned to Aurora at the direction of Aurora
           within sixty (60) days.

10.  MISCELLANEOUS

     10.1  BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
           the parties' respective successors and permitted assigns.
           ZymoGenetics may not assign or otherwise transfer this Agreement
           or any of its rights or obligations hereunder without the prior
           written consent of Aurora *** and any such attempted assignment or
           other transfer shall be void. Aurora may assign this Agreement,
           upon notice to ZymoGenetics.

     10.2  EFFECT OF WAIVER. No waiver of any default, condition, provisions
           or breach of this Agreement shall be deemed to imply or constitute
           a waiver of any other like default, condition, provision or breach
           of this Agreement.

     10.3  LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE
           OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTIAL, OR INDIRECT
           DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY
           THEORY OF LIABILITY.

     10.4  INDEMNIFICATION. ZymoGenetics shall indemnify, hold harmless and
           defend Aurora, its officers, employees, and agents (collectively,
           the "Indemnities") against any and all ***

     10.5  FORCE MAJEURE. Neither party shall lose any rights hereunder or be
           liable to the other party for damages or losses on account of
           failure of performance by the defaulting party if the failure is
           occasioned by war, strike, fire, act of God(s), el nino, la nina,
           earthquake, flood, lockout, embargo, governmental acts or orders
           or restrictions, failure of suppliers, or any other reason where
           failure to perform is beyond the reasonable control and not caused
           by the gross negligence or intentional conduct or misconduct of
           the nonperforming party, and

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           such party has exerted all reasonable efforts to avoid or remedy
           such force majeure; provided, however, that in no event shall a
           party be required to settle any labor dispute or disturbance.

     10.6  AMENDMENT. No modification, supplement to or waiver of this
           Agreement or any Addendum hereto or any of their provisions shall
           be binding upon a party hereto unless made in writing and duly
           signed by an authorized representative of both ZymoGenetics and
           Aurora. In no event may the terms of this Agreement be changed,
           deleted, supplemented or waived by any notice, purchase order,
           receipt, acceptance, bill of lading or other similar form of
           document. A failure of either party to exercise any right or
           remedy hereunder, in whole or in part, or on one or more
           occasions, shall not be deemed either a waiver of such right or
           remedy to the extent not exercised, or of any other right or
           remedy, on such occasion or a waiver of any right or remedy on any
           succeeding occasion.

     10.7  ENTIRE AGREEMENT. This Agreement, and each Exhibit attached
           hereto, and each supplemental written agreement contemplated
           hereunder, sets forth the entire understanding and agreement of
           the parties as to the subject matter thereof, and there are no
           other understandings, representations or promises, written or
           verbal, not set forth herein or on which either party has relied.
           If any provisions of any such addendum or supplemental written
           agreement conflict with any provisions set forth in this
           Agreement, the provisions of this Agreement shall take precedence,
           unless such addendum or supplemental written agreement expressly
           refers to the specific provision(s) of this Agreement that it is
           intended to replace or modify (and which shall be limited in force
           and effect to such addendum or supplemental written agreement
           only).

     10.8  NOTICES. All Notices under this Agreement shall be given in
           writing and shall be addressed to the parties at the following
           addresses:

                           FOR ZYMOGENETICS:
                           -----------------
                               Senior Director, Legal Affairs
                               ZymoGenetics, Inc.
                               1201 Eastlake Avenue East
                               Seattle, WA  98102
                               ***

                               COPIES TO:
                               Bruce Carter, Ph.D.
                               CEO and President
                               ZymoGenetics, Inc.
                               1201 Eastlake Avenue East
                               Seattle, WA  98102

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                               ***

                           FOR AURORA:
                           -----------
                               Stuart J. M. Collinson, Ph.D., M.B.A.
                               CEO and President
                               Aurora Biosciences Corporation
                               11010 Torreyana Road
                               San Diego, CA.  92121

                               COPIES TO:
                               John D. Mendlein
                               Chief Knowledge Officer
                               Aurora Biosciences Corporation
                               11010 Torreyana Road
                               San Diego, CA.  92121

           Notices shall be in writing and shall be deemed delivered when
           received, if delivered by a courier, or if by facsimile, with
           confirmation copy or on the second business day following mailing,
           if sent by first-class certified or registered mail, postage
           prepaid. Notice delivered upon receipt of fax (confirmation copy
           follows to support date of notice).

     10.9  ARBITRATION. The parties recognize that disputes as to certain
           matters may from time to time arise during the term of this
           Agreement which relate to either party's rights and/or obligations
           hereunder, including, but not limited to attempted termination of
           the Agreement. It is the objective of the parties to establish
           procedures to facilitate the resolution of disputes arising under
           this Agreement in an expedient manner by mutual cooperation and
           without resort to arbitration. The parties agree that prior to any
           arbitration concerning this Agreement, *** in a good faith effort
           to resolve any disputes concerning this Agreement. Within *** days
           of a formal request by either party to the other, any party may,
           by written notice to the other, have such dispute referred to
           their respective officers designated or their successors, for
           attempted resolution by good faith negotiations, such good faith
           negotiations to begin within *** days after such notice is
           received and not to be continued for more than *** days after
           initiation of such negotiations unless the parties mutually agree
           to an extension thereto. Except as otherwise provided specifically
           herein, any controversy or claim under this Agreement shall be
           solely settled by arbitration by one arbitrator pursuant to the
           Commercial Arbitration Rules of the American Arbitration
           Association (the "Association"); provided that the parties shall
           first use their best efforts to resolve such dispute by
           negotiation. Arbitration shall be initiated by a written request
           for arbitration proceedings by one party to the other after such
           *** day good faith negotiation

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           period. The arbitration shall be conducted ***. The arbitrator
           shall be selected by the joint agreement of the parties, but if
           they do not so agree within *** days of the date of a request for
           arbitration, the selection shall be made pursuant to the rules of
           the Association. The decision reached by the arbitrator shall be
           conclusive and binding upon the parties hereto and may be filed
           with the clerk of any court of competent jurisdiction, and a
           judgment confirming such decision may, if desired by any party to
           the arbitration, be entered in such court. Each of the parties
           shall pay its own expenses of arbitration and the expenses of the
           arbitrator(s) shall be equally shared; provided, however, that if
           in the opinion of the arbitrator(s) any claim hereunder or any
           defense or objection thereto was unreasonable, the arbitrator(s)
           may assess, as part of the award, all or any part of the
           arbitration expenses (including reasonable attorneys' fees)
           against the party raising such unreasonable claim, defense or
           objection. Nothing herein set forth shall prevent the parties from
           settling any dispute by mutual agreement at any time.
           Notwithstanding anything to the contrary in this Section 10,
           either party may seek immediate injunctive or other interim relief
           from any court of competent jurisdiction with respect to
           enforcement and protection of the patent rights, copyrights,
           trademarks, or other intellectual property rights owned or
           Controlled by such party. For clarity, this arbitration provision,
           Section ***, shall not apply to any claim of infringement or a
           lawsuit to determine the enforceability or validity of
           intellectual property, including patents. In no event shall a
           demand for arbitration be made after the date when the institution
           of a legal or equitable proceeding based on such claim, dispute or
           other matter in question would be barred by the applicable statute
           of limitations.

    10.10  GOVERNING LAW. This Agreement shall be governed by and construed
           in accordance with the laws of the State of ***.

    10.11  SEVERABILITY AND SURVIVAL. This Agreement is intended to be
           severable. If any provision(s) of this Agreement are or become
           invalid, are ruled illegal by a court of competent jurisdiction or
           are deemed unenforceable under the current applicable law from
           time to time in effect during the term hereof, it is the intention
           of the parties that the remainder of the Agreement shall not be
           affected thereby and shall continue to be construed to the maximum
           extent permitted by law at such time. It is further the intention
           of the parties that in lieu of each such provision which is
           invalid, illegal, or unenforceable, there shall be substituted or
           added as part of this Agreement by mutual agreement of the parties
           or arbitration, a provision which shall be as similar as possible,
           in economic and business objectives as intended by the parties to
           such invalid, illegal or unenforceable provision, but shall be
           valid, legal and enforceable. Unless expressly stated otherwise,
           the provision of Sections *** and any other provision intended by
           its meaning to survive, will survive the expiration or any other
           termination of this Agreement.

    10.12  HEADINGS. Captions and paragraph headings are for convenience
           only and shall not form

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           an interpretative part of this Agreement. Unless otherwise
           specifically provided, all references to a Section incorporate all
           Sections or subsections thereunder. This Agreement shall be
           construed without regard to the drafting or non-drafting party
           hereto and may be executed in two or more counterparts, each of
           which will be deemed an original and the same instrument.
           Counterparts may be signed and delivered by facsimile, each of
           which shall be binding when sent, and in each case an original
           shall be sent via overnight courier. ***.

IN WITNESS WHEREOF, Aurora and ZymoGenetics have executed, by duly authorized
representatives, this Agreement.

For ZymoGenetics, Inc.

By:/s/ Bruce Carter                    Date: 12/17/99
   --------------------------               -------------------------
Name: Bruce Carter
     ------------------------
Title: President
      -----------------------
For Aurora Biosciences Corporation

By: /s/ John Mendlein                  Date: 12/16/99
   ---------------------------              -------------------------
Name: John Mendlein
     -------------------------
Title: CKO
      ------------------------

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                                    EXHIBIT A
                                 AURORA PATENTS

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                                    EXHIBIT B
                                STANFORD PATENTS

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                                    EXHIBIT C

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                                       ***

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