Document:

<PAGE>
                                                                   EXHIBIT 10.26

                                           *** TEXT OMITTED AND FILED SEPARATELY
                                    PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
                                            UNDER 17 C.F.R. SECTION 200.80(b)(4)
                                               AND RULE 406 UNDER THE SECURITIES
                                                         ACT OF 1933, AS AMENDED

                                                                    CONFIDENTIAL

                             COLLABORATION AGREEMENT

      THIS COLLABORATION AGREEMENT (the "AGREEMENT") is effective as of March
18, 2004 (the "EFFECTIVE DATE") by and between STRUCTURAL GENOMIX, INC., a
Delaware corporation located at 10505 Roselle Street, San Diego, CA 92121
("SGX"), and SERONO INTERNATIONAL SA, a corporation organized under the laws of
Switzerland, located at 15bis chemin des Mines, 1202 Geneva, Switzerland
("SERONO"). SGX and Serono may be referred to herein individually as a "Party"
and collectively as the "Parties."

                                   BACKGROUND

      WHEREAS, SGX has expertise in the field of structure directed drug
discovery; and

      WHEREAS, Serono is in the business of, and has expertise in, developing,
manufacturing and commercializing biotechnology products; and

      WHEREAS, SGX and Serono wish to enter into a collaborative research
program to develop early lead compounds against certain Serono drug targets;

      NOW, THEREFORE, in consideration of the foregoing premises and the
covenants, agreements and promises contained in this Agreement, the Parties
hereby agree as follows:

1.    DEFINITIONS

      1.1   "Affiliate" means, with respect to a Party hereto, a corporation,
company or other entity that controls, is controlled by or under common control
with such Party. The term "control" means the direct or indirect possession of
the power to direct or cause the direction of the management and policies of a
party, whether through the ownership of voting securities, by contract or
otherwise. Control will be presumed if a party owns, either of record or
beneficially, more than fifty percent (50%) of the outstanding shares or
securities (representing the right to vote for the election of directors or
other managing authority) of a corporation, company or other entity. Such
corporation, company or other entity shall be deemed to be an Affiliate only so
long as such control exists.

      1.2   "Collaboration" means the research collaboration performed by the
Parties pursuant to Section 2.1.

      1.3   "Collaboration Plan" shall have the meaning ascribed in Section 2.1.

      1.4   "Collaboration Product" means any Product that incorporates an Early
Lead Compound.

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                                                                    CONFIDENTIAL

      1.5   "Collaboration Technology" means Patents and Know-How which are
made, conceived or reduced to practice or otherwise discovered or developed by
or on behalf of Serono or SGX, or jointly by or on behalf of Serono and SGX,
during and in the performance of the Collaboration.

      1.6   "Commercially Reasonable Efforts" means efforts to develop or
commercialize a product consistent with those efforts Serono would devote, with
the exercise of prudent scientific and business judgment, to a product at a
similar stage of development resulting from its own research efforts, that has
similar commercial potential, a similarly sized market and faces a similar
competitive environment, based on conditions then prevailing.

      1.7   "Confidential Information" shall have the meaning ascribed in
Section 6.1.

      1.8   "Controls" or "Controlled" means possession of the legal right of a
Party to grant the licenses or sublicenses as provided for herein or to
otherwise disclose proprietary or trade secret information to the other Party,
without violating the terms of any agreement or other arrangement with a Third
Party or misappropriating or infringing the proprietary or trade secret
information of a Third Party.

      1.9   "Early Lead Compound" means (a) the [...***...] identified in the
course of the Collaboration from an [...***...] or an [...***...], with the
following characteristics: [...***...], which have been identified in the course
of the Collaboration from an [...***...] or an [...***...], with the
characteristics ([...***...]) through ([...***...]) above, and which the
[...***...]; and (c) [...***...] identified in the course of the Collaboration
from the same [...***...] to which the [...***...] in clauses (a) and (b) belong
that have the characteristics described in clauses ([...***...]) through
([...***...]) above.

      1.10  "Early Lead Patent" shall have the meaning ascribed in Section
5.2(b).

      1.11  "Elaborated Fragment" means a compound identified in the course of
the Collaboration from an Initial Fragment Hit with the following
characteristics: (i) [...***...]; and (ii) [...***...].

      1.12  "First Commercial Sale" means the first sale of a Product to a Third
Party in any country after all required marketing and pricing and/or pricing
reimbursement approvals for such country have been obtained, other than a
transfer or disposition (whether or not for consideration) of such Product for
charitable or promotional purposes or for preclinical, clinical, manufacturing,
regulatory or governmental purposes.

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

      1.13  "GLP" means the standards set forth in the current Good Laboratory
Practices regulations promulgated by the U.S. Food and Drug Administration,
published at C.F.R. Part 58, as such regulations may be amended from time to
time, and equivalent foreign regulations or standards as applicable.

      1.14  "IND" means an Investigational New Drug application filed with the
U.S. Food and Drug Administration pursuant to 21 C.F.R. Part 312, or any
corresponding foreign application, registration or certification.

      1.15  "Initial Fragment Hit" means a compound from the SGX FAST(TM)
screening library shown in a co-crystal structure determined in the course of
the Collaboration to be bound to a Serono Target.

      1.16  "Initial Structure" means a [...***...] of a Serono Target which has
the following characteristics: [...***...].

      1.17  "Joint Patent" shall have the meaning ascribed in Section 5.2(b).

      1.18  "JSC" shall have the meaning ascribed in Section 2.7.

      1.19  "Know-How" means all inventions (whether patentable or not),
instructions, designs, formulas, software, materials, compositions, methods,
processes, techniques, improvements, trade secrets, information and data.

      1.20  "Milestone" means any or each of the milestone events described in
Sections 3.2 and 3.4.

      1.21  "Net Sales" means the total amount received by Serono or its
Affiliates or sublicensees, as the case may be, for sales of Products to Third
Parties (other than sublicensees) in arm's length transactions, less: (i)
ordinary and customary prompt payment and other trade or quantity discounts
actually allowed and taken; (ii) credits or allowances actually granted for
damaged goods, recalls, returns or rejections of Products or for retroactive
price reductions; (iii) charge back payments, reimbursements and rebates,
including government-mandated rebates (including Medicaid rebates); (iv)
freight, postage and duties (including insurance premiums) actually incurred;
and (v) excise taxes, other consumption taxes, customs duties and compulsory
payments to governmental authorities actually paid and separately identified on
the invoice or other documentation maintained in the ordinary course of
business. A "sale" shall include any transfer or other disposition for
consideration, and Net Sales shall include the fair market value of all other
consideration received by Serono or its Affiliates or sublicensees in respect of
any grant of rights to make, use, sell or otherwise distribute Products, whether
such consideration is in cash, payment in kind, exchange or other form.
Transfers or dispositions, whether or not for consideration, of Products for
charitable or promotional purposes or for preclinical, clinical, manufacturing,
regulatory or governmental purposes shall not be deemed "sales." For
clarification, sale of a Product by Serono, its Affiliates

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

or sublicensees to another of these entities for resale by such entity to a
Third Party shall not be deemed a sale for purposes of calculating "Net Sales"
hereunder, but the sale of such Product by such entity to such Third Party shall
be deemed to be a sale by such entity of a Product for purposes of calculating
Net Sales hereunder.

If a Product is sold in the form of a combination product containing one or more
products or active ingredients, devices, equipment or components which are
themselves not Products (a "Combination Product"), then for the purpose of
calculating royalties owed under this Agreement on sales of the Combination
Product, Net Sales shall be calculated as follows: first, Serono shall determine
the actual Net Sales of such Combination Product (calculated using the above
described deductions) and then such amount shall be multiplied by the fraction
A/(A+B), where A is the invoice price or fair market value, whichever is
greater, of the actual Product component of such Combination Product, and B is
the total invoice price(s) or fair market value, whichever is greater, of the
other product(s) or active ingredients, devices, equipment or components of such
Combination Product.

      1.22  "Patents" means patent applications filed in any country worldwide,
including provisionals, utilities, continuations, continuations-in-part,
divisionals, and substitutions thereof, any patents issued on such applications
as well as any reissue, reexamination, and renewal thereof, any extensions of
term, registrations or confirmation of such patents or patent of addition based
on any such patent, and all foreign counterparts of any of the foregoing.

     1.23 "Phase II Trial" and "Phase III Trial" means Phase II and Phase III
human clinical trials conducted in conjunction with the U.S. Food and Drug
Administration marketing approval process for a product, as more fully defined
in 21 C.F.R. Section 312.21(b) and (c), respectively, and (ii) equivalent human
clinical trials conducted pursuant to similar requirements in other countries in
the world.

      1.24  "Product" means any product developed by or on behalf of Serono or
its permitted sublicensees that incorporates or is derived from an Early Lead
Compound.

      1.25  "Project Team" shall have the meaning ascribed in Section 2.7.

      1.26  "Regulatory Approval" means the approval of a Regulatory Authority
necessary for the marketing and sale of a pharmaceutical or biotechnology
product in the United States, one or more countries in the European Union or
Japan.

      1.27  "Regulatory Authority" means (a) the U.S. Food and Drug
Administration or (b) any regulatory body with similar regulatory authority in
any other jurisdiction anywhere in the world.

      1.28  "Royalty Term" shall have the meaning ascribed in Section 3.6.

      1.29  "Serono Background Technology" means all Patents and Know-How owned
or Controlled by Serono which are: (a) existing on the Effective Date or
discovered or developed during the Term of the Collaboration (i) outside of the

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                                                                    CONFIDENTIAL

Collaboration or (ii) within the Collaboration but are of general application
(for example, have application to other proteins in addition to the Serono
Targets); and (b) necessary for the conduct of the Collaboration. Any Serono
Background Technology shall be deemed Confidential Information of Serono subject
to the rights and obligations set forth in Article 6 hereunder.

      1.30 "Serono Co-Crystal Structure" means the [...***...] of the
[...***...] of a [...***...] with a [...***...], made in the course of the
Collaboration, which has the following characteristics: (i) [...***...] (i.e.,
the last [...***...] or is [...***...]); (ii) [...***...] in the [...***...];
(iii) [...***...]% [...***...] and [...***...]% in the [...***...]; (iv)
[...***...]; (v) [...***...] ([...***...]) [...***...] and (vi) [...***...] of
the [...***...] of the [...***...] is [...***...] a [...***...].

      1.31  "Serono Compound" means an active small molecule ligand that is
provided by Serono to SGX for inclusion in the Collaboration that is not
publicly known to bind to, inhibit or modulate the Serono Target to which it is
intended to be bound under the Collaboration.

      1.32  "Serono Materials" means the biological and chemical materials
embodying Serono Targets, Serono Compounds and any protein, clone or vector used
to express Serono Targets, in each case, which are owned or Controlled by
Serono. Any Serono Materials shall be deemed Confidential Information of Serono
subject to the rights and obligations set forth in Article 6 hereunder.

      1.33  "Serono Target(s)" means the protein targets listed in the attached
Exhibit A, as this Exhibit may be amended from time to time under Section 2.4.

      1.34  "SGX Background Technology" means all Patents and Know-How owned or
Controlled by SGX which are (a) existing on the Effective Date or discovered or
developed during the Term of the Collaboration (i) outside of the Collaboration
or (ii) within the Collaboration but are of general application (for example,
have application to other proteins in addition to the Serono Targets); and (b)
necessary for the conduct of the Collaboration. Any SGX Background Technology
shall be deemed Confidential Information of SGX subject to the rights and
obligations set forth in Article 6 hereunder.

      1.35  "SGX Co-Crystal Structure" means a [...***...] of the [...***...] of
a [...***...] with an [...***...], an [...***...] or an [...***...], made in the
course of the Collaboration, which has the following characteristics: (i)
[...***...] (i.e., the [...***...] or is [...***...]); (ii) [...***...] in the
[...***...]; (iii) [...***...]% [...***...]and [...***...]% in the [...***...];
(iv) [...***...]; (v) [...***...] ([...***...]) [...***...] and (vi) the
[...***...] of the [...***...] of the [...***...], [...***...] or [...***...] is
[...***...] in a [...***...].

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

      1.36  "SGX Materials" means the biological and chemical materials
embodying any Initial Structure, SGX Co-Crystal Structure, Serono Co-Crystal
Structure or Early Lead Compound, in each case which are owned or Controlled by
SGX and are developed in the course of the Collaboration. Any SGX Materials
shall be deemed Confidential Information of SGX subject to the rights and
obligations set forth in Article 6 hereunder.

      1.37  "Term of the Collaboration" means the period commencing on the
Effective Date, and terminating twenty-four (24) months thereafter, unless
extended by mutual agreement of the Parties.

      1.38  "Third Party or Third Parties" means any individual, corporation,
limited liability company, partnership, association, trust, unincorporated
organization, other entity or government or political subdivision thereof other
than Serono or SGX or their respective Affiliates.

      1.40  "Valid Claim" means a claim of an issued and unexpired patent, which
has not been held invalid or unenforceable by a court or other governmental
agency of competent jurisdiction, after any applicable appeal, or time for
appeal, is concluded, and which has not lapsed, been abandoned, withdrawn,
canceled, disclaimed or admitted to be invalid or unenforceable through reissue,
reexamination or otherwise.

2.    COLLABORATION.

      2.1   Collaboration. Subject to the terms and conditions of this
Agreement, Serono and SGX will use commercially reasonable and diligent efforts
to conduct the Collaboration in accordance with the collaboration plan attached
to this Agreement as Exhibit A (the "Collaboration Plan") including the timeline
set forth therein. The Parties shall begin the performance of the Collaboration
promptly following the Effective Date but no later than thirty (30) days
thereafter. SGX shall have principal responsibility for the conduct of the
Collaboration, and Serono shall provide consultation, advice and such research
effort as may be deemed appropriate by the JSC and accepted by Serono. The JSC
shall review and coordinate each Party's activities with respect to the
Collaboration.

      2.2   Provision of Serono Materials and Background Technology. At Serono's
discretion, promptly following the Effective Date and during the Term of the
Collaboration, Serono will provide SGX, at Serono's expense, with reasonable
quantities of such available Serono Materials and other Serono Background
Technology as are necessary for the conduct of the Collaboration by SGX;
PROVIDED, HOWEVER, that Serono is able to provide such Serono Materials and
Serono Background Technology without paying any royalties or other fees to Third
Parties.

      2.3   Provision of SGX Materials, SGX Background Technology and
Collaboration Technology. Subject to payment by Serono to SGX under Sections
3.2(a), (d), (e) or (f) for achievement of the applicable Milestone, SGX will
promptly provide Serono with reasonable quantities of SGX Materials, and with
the SGX Background

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                                                                    CONFIDENTIAL

Technology and Collaboration Technology associated with such Milestone,
including those deliverables set forth on Exhibit B, to the extent reasonably
necessary for Serono to conduct research and development activities. SGX will
have no obligation to provide quantities of SGX Materials to Serono with respect
to the Initial Structures and SGX Co-Crystal Structures that are the subjects of
such Milestones beyond the quantities required for Serono to reproduce such
Initial Structures and SGX Co-Crystal Structures. Serono will not provide SGX
Materials to any Third Party without SGX's prior written consent. The SGX
Materials will be delivered to Serono Ex Works (Incoterms 2000). Nothing in this
Section 2.3 shall be construed as affecting in any way the scope of the licenses
granted to Serono under Section 4.1.

      2.4   Designation of Additional Targets. Prior to the first anniversary of
the Effective Date, Serono may in its discretion, nominate by written notice to
SGX up to an additional [...***...] ([...***...]) protein targets which Serono
would like to include in The Collaboration. SGX will have a period of two (2)
weeks from receipt of such notice to reject (in writing) the inclusion of such
nominated proteins if any such protein is the subject of an existing research
program at SGX, if SGX has existing contractual obligations to a Third Party
with respect to such protein that would prevent its inclusion in the
Collaboration or otherwise reasonably determines in good faith that such
inclusion would present a conflict of interest for SGX, or if SGX reasonably
determines in good faith that determination of an Initial Structure with respect
to such protein is unlikely to be completed with the resources and timelines
contemplated under this Collaboration (and in such event, SGX will provide
Serono with an explanation of the basis for such determination). Any protein
nominated by Serono and not rejected by SGX under this Section 2.4 will be
deemed a Serono Target. In the event any protein is rejected by SGX, then Serono
may nominate a replacement protein target in accordance with the terms of this
Section 2.4; PROVIDED, HOWEVER, that such nomination may occur after the
[...***...] anniversary of the Effective Date.

      2.5   Determination of Serono Co-Crystal Structures. In the event that
during the Term of the Collaboration Serono desires SGX to perform
co-crystallization of any Serono Targets with Serono Compounds, Serono will
provide SGX with at least thirty (30) days prior written notice and thereafter
will provide SGX with batches of at least [...***...] ([...***...]) Serono
Compounds per batch, which may be directed to any one or more of the Serono
Target(s) indicated in such notice, and upon receipt of each batch of
[...***...] ([...***...]) such Serono Compounds, SGX will use commercially
reasonable and diligent efforts to perform co-crystallization in accordance with
the Collaboration Plan within thirty (30) days of such receipt. Each Serono
Compound provided under this Section 2.5 wILL be provided in an amount of at
least five (5) milligrams and will have the following characteristics: (i)
solubility > 5mM in DMSO and (ii) potency against the Serono Target of <10mM.
Upon completion of each Serono Co-Crystal Structure, SGX will promptly provide
Serono with quantities of the SGX Materials associated with the Serono
Co-Crystal Structure, and with the SGX Background Technology and Collaboration
Technology associated with such Serono Co-Crystal Structure, including those
deliverables set forth on Exhibit B, to the extent reasonably necessary for
Serono to conduct research and development activities. SGX will have no
obligation to provide quantities of SGX Materials to Serono with respect to the
Serono Co-Crystal Structures

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

beyond the quantities required for Serono to reproduce such Serono Co-Crystal
Structures. The Serono Co-Crystal Structures will be delivered to Serono Ex
Works (Incoterms 2000). Prior to the expiration of the Term of the
Collaboration, the Parties will discuss in good faith extending the
Collaboration for [...***...] ([...***...]) [...***...] after the Term of the
Collaboration to permit SGX to perform co-crystallization of the additional
Serono Targets designated pursuant to Section 2.4 with Serono Compounds to be
proVIDED bY Serono. Nothing in this Section 2.5 shall be construed as affecting
in any way the scope of the licenses granted to Serono under Section 4.1.

      2.6   Records; Reports. SGX shall prepare and maintain complete and
accurate written records, accounts, notes, reports and data with respect to all
work conducted in the performance of the Collaboration in conformity with
standard industry practices. SGX shall notify Serono promptly upon the
completion of an Initial Structure for a Serono Target or upon the determination
of an SGX Co-Crystal Structure, and will provide the JSC, at its request, for
its review, all information regarding such SGX Co-Crystal Structures which is
reasonably required for the JSC to determine the achievement of Milestones.
Promptly upon completion of the Collaboration, SGX shall provide a final written
report of its activities during the Collaboration and the results thereof.

      2.7   Joint Steering Committee.

            (a)   Establishment. SGX and Serono will establish a Joint Steering
Committee ("JSC") to oversee the Collaboration promptly following the Effective
Date but no later than fifteen (15) days thereafter.

            (b)   Membership; Decisions. The JSC shall comprise two (2)
representatives from Serono and two (2) representatives from SGX, designated by
the Parties promptly following the Effective Date but no later than fifteen (15)
days thereafter. Each Party may replace its JSC representatives at any time,
with written notice to the other Party. Each Party shall have one vote on the
JSC. The JSC will strive to reach consensus on any matters requiring a decision
by it; PROVIDED, HOWEVER, that in the event of any dispute, the decision shall
be made by [...***...] reasonably taking into consideration the position of
[...***...].

            (c)   Project Team. The JSC shall establish a project team (the
"Project Team") comprising at least two (2) representatives from Serono and two
(2) representatives from SGX, designated by the Parties promptly following the
Effective Date. The JSC may expand the size of the Project Team, in its sole
discretion, provided that the Project Team shall always comprise an equal number
of representatives from Serono and SGX. Each Party may replace its Project Team
representatives at any time, with written notice to the other Party. The Project
Team will direct the performance of the Collaboration and shall meet to
discharge its responsibilities from time to time via videoconference or in
person, as the Project Team may agree. Meetings of the Project Team may be held
only if a quorum of at least one (1) representative of each Party participates.
Within thirty (30) days of the end of each calendar quarter the Project Team
shall submit a quarterly report to the JSC describing the performance of the
Collaboration

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

during such calendar quarter. Each Party will be responsible for paying its own
expenses in connection with participating in the meetings of the Project Team.

            (d)   Responsibilities. The JSC will review and supervise the
performance of the Collaboration and supervise the Project Team. The JSC will be
responsible for (i) monitoring research progress during the Collaboration and
ensuring open exchange between the Parties with respect to Collaboration
activities; (ii) designating compounds as Early Lead Compounds in accordance
with the criteria in Section 1.9 and (iii) determining the achievement of
Milestones under Section 3.2. Any changes to the Collaboration Plan which
materially alter the nature or scope of the Collaboration must be agreed in
writing by the Parties. SGX will not engage the services of any Third Party to
perform any activities under the Collaboration outside of the United States
without the prior approval of the JSC.

            (e)   Meetings. The JSC shall meet via videoconference or in person,
on a quarterly basis (alternating between San Diego, CA, U.S.A., and Geneva,
Switzerland or as the JSC may otherwise agree), to discharge its
responsibilities. Serono may also direct that any additional meetings are held
that it reasonably believes are necessary for the optimal conduct of the
Collaboration. Meetings of the JSC may be held only if a quorum of at least one
(1) representative of each Party participates. SGX will call the JSC meetings
and will prepare the initial draft of an agenda for each meeting, which shall
include the most recent report from the Project Team, and will submit the draft
to Serono for comments a reasonable period before the scheduled meeting date.
Except as provided above, each Party will be responsible for paying its own
expenses in connection with participating in the meetings of the JSC. SGX shall
prepare and deliver to the members of the JSC, within thirty (30) days after the
date of each meeting, minutes of such meeting setting forth, among other things,
all decisions of the JSC. Serono may suggest changes or amendments to the
minutes, and may provide a supplement addressing activities at the meeting which
are not reported in the minutes, which shall be distributed to the Parties and
filed with the meeting minutes.

3.    CONSIDERATION

      3.1   Technology Access Payment. Within thirty (30) days of the Effective
Date, Serono will pay, or cause to be paid, to SGX the sum of U.S.$100,000.

      3.2   Research Milestone Payments. Within sixty (60) days of the date of
achievement of the applicable Milestone during the Term of the Collaboration,
Serono will pay, or cause to be paid, to SGX the following non-refundable
Milestone payments, on a Serono Target-by-Serono Target basis:

<TABLE>
<CAPTION>
MILESTONES                                                  AMOUNT
----------                                                  ------
<S>                                                         <C>
(a) Completion of [...***...] for a Serono Target           U.S. $[...***...] per Serono Target
</TABLE>

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

<TABLE>
<S>                                                         <C>
(b) Determination of an SGX Co-Crystal Structure            U.S. $[...***...] per Serono Target
containing the first [...***...] for a Serono Target

(c) Determination of an SGX Co-Crystal Structure            U.S. $[...***...] per Serono Target
containing the first [...***...] for a Serono Target

(d) Determination of an SGX Co-Crystal Structure            U.S. $[...***...] per Serono Target; PROVIDED,
containing the first [...***...] for a Serono Target        HOWEVER, if an [...***...] for a Serono Target is
                                                            identified directly from an [...***...], the payment
                                                            under this Section 3.2(d) will be U.S. $[...***...]

(e) Determination of a SGX Co-Crystal Structure for a       U.S. $[...***...] per Serono Target
 Serono Target containing the [...***...] as
described in Section 1.9 (b)

(f) Determination of a SGX Co-Crystal Structure for         U.S. $[...***...] per Serono Target
a Serono Target containing the [...***...] as
described in Section 1.9 (b)
</TABLE>

      3.3   Serono Co-Crystal Payments. As consideration for the
co-crystallization activities to be performed by SGX pursuant to Section 2.5,
Serono will pay, or cause to be paid, to SGX U.S. $[...***...] for each batch of
[...***...] ([...***...]) Serono compounds delivered to SGX pursuant to Section
2.5. SGX will invoice Serono on a quarterly basis for this amount upon delivery
of the Serono Compounds, and Serono will pay SGX within sixty (60) days of
receipt of such invoice.

      3.4   Development Milestones. Within sixty (60) days of achievement of
each of the applicable Milestones, in consideration of the rights granted
hereunder, Serono will pay, or cause to be paid, to SGX the following
non-refundable Milestone payments for each Product, on a Product-by-Product
basis:

<TABLE>
<CAPTION>
MILESTONES                                                  AMOUNT
----------                                                  ------
<S>                                                         <C>
(a) Initiation of [...***...]                               U.S. $[...***...]

(b) [...***...] of [...***...]                              U.S. $[...***...]

(c) The [...***...] of the [...***...] in a [...***...]     U.S. $[...***...]

(d) The [...***...] of the [...***...] in a [...***...]     U.S. $[...***...]

(e) [...***...] of  [...***...]                             U.S. $[...***...]
</TABLE>

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                                                    CONFIDENTIAL

Each Milestone payment under this Section 3.4 shall be due only if the Product
achieving such Milestone is the first Product derived from its corresponding
Early Lead Compound to achieve the Milestone associated with such payment and is
either: (i) if directed primarily against a Serono Target, the first Product
directed primarily against the Serono Target in connection with which its
corresponding Early Lead Compound was identified, to achieve the Milestone
associated with such payment, or (ii) if directed primarily against another
target, the first Product directed primarily against such other target to
achieve the Milestone associated with such payment.

      3.5   Royalties. In consideration of the rights granted hereunder, Serono
shall pay, or cause to be paid, to SGX the greater of the following royalty
payments, as applicable, on Net Sales on a Product-by-Product and
country-by-country basis:

            (a) [...***...] percent ([...***...]%) of Net Sales of Products in
the event that the use, import, offer for sale or sale of such Product is
covered in such country by an Early Lead Patent made, conceived or reduced to
practice solely by or on behalf of SGX; or

      (b)   [...***...] percent ([...***...]%) of Net Sales of Products in the
event that the use, import, offer for sale or sale of such Product is covered in
such country by a Joint Patent.

Notwithstanding the above, in the event that there is no Valid Claim of a Patent
that would be infringed by the use, import, offer for sale or sale of the
applicable Product in a particular country, then Serono shall pay or cause to be
paid to SGX [...***...] of the amounts otherwise due under subsections (a) and
(b) above for such Product in such country, and in the event that such a Valid
Claim of a Patent subsequently issues, upon such issuance, Serono shall pay or
cause to be paid to SGX [...***...] percent ([...***...]%) of the amounts due
under subsections (a) and (b) above and, in the event Serono receives a
[...***...] or [...***...] from a Third Party with respect to the Patent
including such Valid Claim pursuant to 35 U.S.C. Section. 154(d) or analogous
foreign rights, Serono shall further pay or cause to be paid to SGX the
remaining [...***...] percent ([...***...]%) of the amounts due under
subsections (a) and (b) above during the period from the [...***...] of the
applicable Product to the date of the issuance of such Valid Claim. In addition,
notwithstanding the foregoing, in the event that the use, import, offer for sale
or sale of a Product is covered by an [...***...] in the United States, Japan
and all countries in the European Union, then royalties shall be payable
pursuant to subsection (a) above for each country in which such Product is used,
imported, offered for sale or sold whether or not the use, import, offer for
sale or sale of such Product is covered by an [...***...] in such country.
Similarly, in the event that the use, import, offer for sale or sale of a
Product is covered by a [...***...] in the United States, Japan and all
countries in the European Union, then royalties shall be payable pursuant to
subsection (b) above for each country in which such Product is used, imported,
offered for sale or sold whether or not the use, import, offer for sale or sale
of such Product is covered by a [...***...] in such country.

      3.6   Royalty Term. The obligation of Serono to pay royalties under
Section 3.5 with respect to a Product shall begin with the First Commercial Sale
of such Product

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and continue for such Product, on a country-by-country basis, until the later of
(i) such time as there are no Valid Claims of an Early Lead Patent or Joint
Patent in such country that would be infringed by the use, import, offer for
sale or sale of such Product in such country or (ii) [...***...] ([...***...])
years after the First Commercial Sale of such Product in such country (such
period the "Royalty Term").

      3.7   Third Party Royalties. In the event that Serono, its Affiliates or
sublicensees are required to pay royalties to a Third Party for patent licenses
necessary to use or practice Collaboration Technology covering Early Lead
Compounds or SGX Co-Crystal Structures containing Early Lead Compounds for the
purpose of making, using, selling, offering to sell or importing Products,
Serono may offset up to [...***...] percent ([...***...]%) of such amounts due
Third Parties against payments due SGX under Section 3.5 above; PROVIDED,
HOWEVER, that Serono may not offset these amounts against more than [...***...]
percent ([...***...]%) of the royalties otherwise due SGX in any calendar
quarter. Any amount that has not been so offset may be offset against royalties
due in subsequent calendar quarters, subject to the limitation set forth in the
previous sentence.

      3.8   Withholding Taxes. SGX shall be responsible for any and all income
or other taxes required to be withheld from any of the royalty and other
payments made by Serono under this Agreement and shall provide Serono any
information necessary to determine the taxes that should be withheld and paid.
Any tax that Serono, its Affiliates or sublicensees are required to withhold and
pay on behalf of SGX with respect to the royalties and other payments due under
Sections 3.1 through 3.5 shall be deducted from and offset against said payments
prior to remittance to SGX; PROVIDED, HOWEVER, that in regard to any tax so
deducted, Serono shall give or cause to be given to SGX such assistance as may
reasonably be necessary to enable SGX to claim exemption therefrom or credit
therefor, and in each case, Serono shall furnish to SGX proper evidence of the
taxes paid on its behalf. In the event that Serono [...***...] by a party
located in a [...***...] or [...***...] and as a result [...***...] incremental
to that which it would have incurred if such payments were made by a party
located in the United States or [...***...], then Serono shall [...***...] to be
[...***...] to the extent necessary so that the [...***...] after the
[...***...] the [...***...] without the imposition of such [...***...].

      3.9   Reports; Payments. The royalties due under Section 3.5 shall be paid
quarterly within sixty (60) days after the close of each calendar quarter in
which such royalties are earned. With each such quarterly payment, Serono shall
furnish SGX a royalty statement setting forth in reasonable detail on a
country-by-country and Product-by-Product basis: (i) the total number of units
of each Product sold hereunder for the quarterly period for which the royalties
are due; (ii) the calculation of Net Sales pursuant to Section 1.19; (iii) the
royalties due SGX in such calendar quarter; and (iv) details of payments (if
any) to Third Parties pursuant to Third Party licenses as described in Section
3.7 above. For any calendar quarter after the First Commercial Sale of a
Product, if no royalties are due, Serono shall so report. Any such quarterly
report shall be deemed

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Confidential Information of Serono subject to the rights and obligations set
forth in Article 6.

      3.10  Currency Conversion. All amounts required to be paid under this
Agreement shall be paid in United States dollars. Royalties earned shall first
be determined in the currency of the country in which they are earned and then
converted to their equivalent in United States currency using the standard
exchange rate methodology for the translation of foreign currency sales into
United States dollars customarily used by Serono in its accounting practice.

      3.11  Late Payments. Any payments or portions thereof due hereunder which
are not paid on the date such payments are due shall bear interest until paid at
the rate equal to the lesser of the prime rate as reported by the Chase
Manhattan Bank, New York, New York, plus [...***...] percent ([...***...]%) or
the maximum amount permitted by law. This Section 3.11 shall in no way limit any
other remedies available to SGX.

      3.12  Legal Restrictions. If at any time legal restrictions prevent the
remittance by Serono of all or any part of royalties on Net Sales in any
country, Serono shall have the right and option to make such payment by
depositing the amount thereof in local currency to an account in the name of SGX
in a bank or other depository in such country. Serono shall consult with SGX
regarding, and promptly notify SGX of, any and all such arrangements.

      3.13  Audits. Serono shall maintain accurate books and records which
enable the calculation of royalties payable under this Agreement to be verified.
Serono shall maintain the books and records for each quarterly period for two
(2) years after the submission of the corresponding report under Section 3.9.
Upon [...***...] ([...***...]) [...***...] prior notice to Serono, independent
accountants selected by SGX, reasonably acceptable to Serono, may have access to
Serono's books and records after executing a reasonable confidentiality
agreement, during Serono's normal business hours at mutually agreed times to
conduct a review or audit no more than once per calendar year, for the sole
purpose of verifying the accuracy of Serono's payments and compliance with this
Agreement. Records for any calendar year may only be audited once. The
accounting firm shall report to SGX only whether there has been a royalty
underpayment or overpayment and, if so, the extent thereof. Any such inspection
shall be at SGX's expense; PROVIDED, HOWEVER, in the event that an inspection
reveals an underpayment of [...***...] percent ([...***...]%) or more for any
calendar year, Serono shall pay the costs of the inspection. Serono shall
promptly pay to SGX any underpayment identified in such audit, with interest
from the date such amount(s) were due at a rate equal to the lesser of the prime
rate reported by the Chase Manhattan Bank, New York, New York, plus [...***...]
percent ([...***...]%) or the maximum amount permitted by law. SGX shall
promptly pay to Serono any overpayment identified in such audit.

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4.    LICENSES

      4.1   License to Serono. Subject to the terms and conditions of this
Agreement, SGX hereby grants to Serono the following licenses:

            (a)   an exclusive, worldwide, royalty-bearing license (with the
right to grant sublicenses in accordance with Section 4.3 below) under SGX's
interest in the Collaboration Technology (other than that which constitutes SGX
Background Technology) covering Early Lead Compounds and SGX Co-Crystal
Structures containing Early Lead Compounds to make, have made, use, import,
offer for sale and sell Products.

            (b)   an exclusive, worldwide, perpetual, royalty-free license
(with the right to grant sublicenses in accordance with Section 4.3 below) under
SGX's interest in the Collaboration Technology (other than that which
constitutes SGX Background technology) covering Serono Co-Crystal Structures to
practice and use such Collaboration Technology for any purpose.

            (c)   a non-exclusive, worldwide, royalty-free license (with the
right to grant sublicenses in accordance with Section 4.3 below) under SGX's
interest in the Collaboration Technology (other than that which constitutes SGX
Background Technology) covering Initial Structures to practice and use such
Collaboration Technology for any purpose.

            (d)   a non-exclusive, worldwide, royalty-free license (with the
right to grant sublicenses in accordance with Section 4.3 below) under (i) SGX's
interest in all SGX Background Technology to practice and use the SGX Background
Technology solely to the extent necessary to reproduce Initial Structures,
Serono Co-Crystal Structures and SGX Co-Crystal Structures containing Early Lead
Compounds and to utilize Early Lead Compounds as contemplated under this
Agreement and (ii) SGX's interest in SGX Background Technology developed in the
course of the Collaboration to make, have made, use, import, offer for sale and
sell Products.

      4.2   Cross Licenses. Each Party hereby grants to the other, a
non-exclusive, non-transferable, royalty-free license to practice and use the
Serono Background Technology, the SGX Background Technology and such Party's
interest in the Collaboration Technology solely to conduct the Collaboration;
PROVIDED, HOWEVER, that Serono is able to grant such license to the Serono
Background Technology without paying any royalties or other fees to Third
Parties.

      4.3   Sublicenses. Serono may sublicense the rights granted in Section
4.1(b), (c) and (d) with respect to Serono Co-Crystal Structures to its
Affiliates and to Third Parties. Serono may sublicense the rights granted in
Sections 4.1(a), (c) and (d) with respect to Products, Early Lead Compounds and
SGX Co-Crystal Structures containing Early Lead Compounds to its Affiliates and
to Third Parties. Each such sublicense granted by Serono shall be consistent
with all of the terms and conditions of this Agreement. Serono as the
sublicensor shall remain responsible for all of each such sublicensee's
obligations under this Agreement.

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      4.4   Product Development. On or before January 1 of each year during the
term of the Agreement, Serono will provide SGX with a written report summarizing
its activities in connection with the development of Products. Serono will
provide prompt written notice to SGX of the achievement of Milestones under
Section 3.4.

      4.5   Diligence. With respect to each Serono Target, Serono will use, or
cause to be used, Commercially Reasonable Efforts to bring at least one Product
that is directed to inhibiting or modulating the activity of such Serono Target
to the market as soon as reasonably practicable, (ii) obtain regulatory
approvals to market such Product, and (iii) after obtaining regulatory approvals
to market such Product, to meet the market demand therefor; and will promptly
notify SGX in writing upon the discontinuance of any such activities.

      4.6   Lack of Diligence.

            (a)   Termination of Rights. In the event that Serono (i) fails to
use or cause to be used Commercially Reasonable Efforts to develop and meet
market demand for at least one Product for a particular Serono Target in
accordance with Section 4.5 above, or (ii) notifies SGX that it will not
conduct, or cause to be conducted, further activities with respect to at least
one Product for a particular Serono Target pursuant to Section 4.5 above, then
SGX may terminate Serono's rights and licenses under this Agreement with respect
only to Early Lead Compounds and corresponding Collaboration Products for such
Serono Target.

            (b)   Sole Remedy. In such event, Serono will have no further rights
and licenses to such Early Lead Compounds and corresponding Collaboration
Products pursuant to this Agreement and SGX will thereafter have the exclusive
right pursuant to the intellectual property licensed hereunder (subject to any
sublicenses previously granted by Serono) as its sole remedy and in lieu of any
other rights or remedies it may otherwise have under Section 9.2 of this
Agreement or by law or in equity, to develop and commercialize such Early Lead
Compounds and corresponding Collaboration Products, alone or with Third Parties.

            (c)   Collaboration Technology License. In addition to SGX's receipt
of the rights described in Section 4.6(b) above, at SGX's request, Serono shall
grant to SGX an exclusive (subject to any sublicenses previously granted by
Serono), worldwide, royalty bearing license (with the right to grant
sublicenses) under Serono's interest in any Collaboration Technology (other than
that which constitutes Serono Background Technology) owned or Controlled by
Serono to the extent necessary to make, have made, use, import, offer for sale
and sell an applicable Collaboration Product. Such license shall be subject to a
royalty obligation to Serono of [...***...] percent ([...***...]%) of Net Sales
(with SGX being substituted for Serono in the definition of "Net Sales") that
shall be payable with respect to each such Collaboration Product on a
country-by-country basis until the later of (i) such time as there are no Valid
Claims of an Early Lead Patent or Joint Patent in such country that would be
infringed by the use, import, offer for sale or sale of such

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Product in such country, (ii) ten (10) years after the First Commercial Sale of
such Product in such country or (iii) ten (10) years after the grant of such
license.

            (d)   Serono Intellectual Property License. In addition, at SGX's
request, the Parties shall negotiate in good faith a grant by Serono to SGX of
an exclusive (subject to any sublicenses previously granted by Serono),
worldwide, royalty-bearing license under Serono's interest in any Patents or
Know How (other than those within the Collaboration Technology) owned or
Controlled by Serono to the extent necessary to make, have made, use, import,
offer for sale and sell such Collaboration Product. Such license shall contain
such customary representations, warranties, covenants and agreements
satisfactory in form and substance to the Parties and their legal advisors as
are necessary or appropriate for transactions of this type. For the avoidance of
doubt, such obligation to negotiate in good faith does not impose on either
Party an obligation to enter into an agreement for the grant of such a license,
if the Parties cannot agree through such good faith negotiation on the terms and
conditions of such license.

      4.7   Non-Use.

            (a)   Non-Kinases. For a period of [...***...] ([...***...])
[...***...] from the date of determination by SGX in the course of the
Collaboration of an Initial Structure of a Serono Target which is not a protein
kinase, SGX will not use, or permit any Third Party to use, any Collaboration
Technology covering such Initial Structure for any purpose other than the
conduct of the Collaboration; PROVIDED, HOWEVER, that in the event that prior to
the determination by SGX of the Initial Structure of such Serono Target or
during the [...***...] ([...***...]) [...***...] period after such
determination, a crystal structure of such Serono Target enters the public
domain other than through a breach of this Agreement by SGX, the provisions of
this Section 4.7(a) will not apply to such Serono Target.

            (b)   Kinases. For a period of [...***...] ([...***...]) [...***...]
from the date of determination by SGX in the course of the Collaboration of an
Initial Structure of a Serono Target which is a protein kinase, SGX will not
engage in any drug discovery or co-crystallization activities with or for the
benefit of a Third Party utilizing any Collaboration Technology covering such
Initial Structure, and for a period of [...***...] ([...***...]) [...***...]
from the date of determination by SGX in the course of the Collaboration of such
an Initial Structure, SGX will not, subject to existing contractual obligations,
permit a Third Party to use any Collaboration Technology covering such Initial
Structure for any purpose; PROVIDED HOWEVER, that in the event that prior to the
determination by SGX of the Initial Structure of such Serono Target or during
the [...***...] ([...***...]) [...***...] period after such determination, a
crystal structure of such Serono Target enters the public domain other than
through a breach of this Agreement by SGX, the provisions of this Section 4.7(b)
will not apply to such Serono Target.

            (c)   Elaborated Fragments. For so long as Serono is continuing to
use [...***...] in accordance with Section 4.5 to [...***...] for a particular
[...***...] that is [...***...]the activity of a specific [...***...], SGX
[...***...] from

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which the [...***...] was derived to develop [...***...], [...***...].

            (d)   Drug Discovery. During the Term of the Collaboration, SGX will
not conduct drug discovery directed at any Serono Target other than pursuant to
the Collaboration.

      4.8   Limitations. Notwithstanding anything to the contrary in this
Agreement, (i) SGX will have no obligation to provide Serono with any
information or materials relating to the Initial Structure of the Serono Target
[...***...] and (ii) the licenses granted by SGX to Serono under this Agreement
will not include any Collaboration Technology or SGX Background Technology
covering the Initial Structure of [...***...], until such time as SGX has
obtained the right to provide such information, materials and licenses to
Serono, at which point SGX will provide Serono with prompt written notice of
having obtained such right. In the event that SGX has achieved the Milestones
and Serono has paid SGX any or all of the applicable payments under Sections
3.2(b), (c) and (d) with respect to the Serono Target [...***...], SGX
represents that, as promptly as its Third-Party obligations in existence on the
Effective Date permit, SGX will obtain the right to provide Serono with SGX
Materials, Collaboration Technology and SGX Background Technology covering the
Initial Structure of [...***...] as described in Section 2.3 and to grant Serono
a license to Collaboration Technology and SGX Background Technology covering the
Initial Structure of [...***...] pursuant to Section 4.1, and upon provision to
[...***...] and [...***...] covering such [...***...] and the [...***...],
[...***...] under [...***...] with respect to [...***...].

5.    INTELLECTUAL PROPERTY

      5.1   Ownership of Technology.

            (a)   Ownership by SGX. Title to all Collaboration Technology made,
conceived, first reduced to practice or discovered or developed solely by or on
behalf of SGX shall be owned solely by SGX.

            (b)   Ownership by Serono. Title to all Collaboration Technology
made, conceived, first reduced to practice or discovered or developed solely by
or on behalf of Serono shall be owned solely by Serono.

            (c)   Joint Ownership. Title to all Collaboration Technology made,
conceived, first reduced to practice or discovered or developed jointly by or on
behalf of Serono and SGX shall be jointly owned by Serono and SGX, each with an
undivided one-half interest. Each Party agrees to execute in a timely manner
such documents as the other Party may request to document and perfect joint
ownership of such Collaboration Technology.

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            (d)   Law. Inventorship of inventions and, subject to the terms of
this Agreement, ownership rights with respect thereto shall be determined in
accordance with the patent laws of the United States.

      5.2   Patent Prosecution.

            (a)   Background Technology. SGX shall be responsible, at its sole
discretion and expense, for the preparation, filing, prosecution and maintenance
of the Patents within the SGX Background Technology, in countries selected by
SGX, and for conducting any interferences, reexaminations, reissues, and
oppositions, or requesting any patent term extensions relating thereto. Serono
shall be responsible, at its sole discretion and expense, for the preparation,
filing, prosecution and maintenance of the Patents within the Serono Background
Technology, in countries selected by Serono, and for conducting any
interferences, reexaminations, reissues, and oppositions, or requesting any
patent term extensions relating thereto.

            (b)   Collaboration Technology.

                  (i)   Joint Patents. [...***...] shall be responsible, at its
sole discretion and expense, for the preparation, filing, prosecution and
maintenance of Patents made, conceived or first reduced to practice jointly by
or on behalf of Serono and SGX that are within the Collaboration Technology or
that claim Know-How within the Collaboration Technology (other than that which
constitutes SGX Background Technology or Serono Background Technology) ("Joint
Patents"). Joint Patents include Patents on which at least one SGX Inventor is a
named inventor, and Patents that claim priority to an application on which at
least one SGX Inventor is a named inventor. An SGX Inventor is any person who
has a duty to assign inventions to SGX.

                  (ii)  Serono Patents. [...***...] shall also be responsible,
at its sole discretion and expense, for the preparation, filing, prosecution and
maintenance of Patents including Joint Patents within the Collaboration
Technology (other than that which constitutes SGX Background Technology or
Serono Background Technology) covering Serono Co-Crystal Structures ("Serono
Patents"). SGX shall assign all its right, title and interest in and to any
Serono Patents to Serono and shall execute such documents of transfer or
assignment and perform such acts as may be reasonably necessary to transfer
ownership of such Serono Patents to Serono and to enable Serono to file,
prosecute, and maintain the Serono Patents.

                  (iii) Early Lead Patents. [...***...] shall also be
responsible, at its expense, for the preparation, filing, prosecution and
maintenance of Patents (excluding Joint Patents) within the Collaboration
Technology (other than that which constitutes SGX Background Technology or
Serono Background Technology) covering Early Lead Compounds and SGX Co-Crystal
Structures containing Early Lead Compounds ("Early Lead Patents") in the United
States and in such other countries as it may determine in its sole discretion.

                  (iv)  SGX Patents. [...***...] shall be responsible, at its
sole discretion and expense, for the preparation, filing, prosecution and
maintenance of

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Patents (excluding Joint Patents) within the Collaboration Technology (other
than that which constitutes SGX Background Technology or Serono Background
Technology) with the exception of such Collaboration Technology covering Serono
Co-Crystal Structures, SGX Co-Crystal Structures containing Early Lead Compounds
or Early Lead Compounds ("SGX Patents").

            (v) Prosecution and Maintenance. The Parties will cooperate to
prepare and prosecute patent applications for Early Lead Patents with the goal
of obtaining a broad scope of protection for the relevant subject matter. Serono
will use commercially reasonable efforts to obtain a broad scope of protection
for Early Lead Compounds without compromising Serono's or SGX's interests in the
Collaboration and will consider in good faith all comments provided by SGX with
respect to the filing, prosecution and maintenance of Early Lead Patents. In the
event that Serono elects not to file a patent application for an Early Lead
Patent in the United States within [...***...] ([...***...]) [...***...] of the
date the underlying invention is reduced to practice, SGX shall have the right
to file, prosecute and maintain such patent application in any country. SGX
shall promptly notify Serono of the conception or reduction to practice of any
invention during and in the performance of the Collaboration. Furthermore, in
the event that Serono elects not to file any patent applications for an Early
Lead Patent in Japan or any country in Europe or to prosecute or maintain any
Patents that are Early Lead Patents in the United States, Japan or any country
in Europe, Serono shall give SGX not less than [...***...] ([...***...])
[...***...] notice before any relevant deadline, and SGX shall have the right to
pursue, at its sole discretion and expense, filing, prosecution and maintenance
of such Patents in such country. The Party responsible for prosecution and
maintenance of Patents under this Section 5.2(b) (the "Responsible Party"),
shall keep the other Party (the "Non-Responsible Party") informed as to the
status of such patent matters, including by providing the Non-Responsible Party
the opportunity, at the Non-Responsible Party's expense, to review documents
with respect to Early Lead Patents to be filed in any patent office at least
thirty (30) days before filing and to comment thereon, and the Responsible Party
shall consider in good faith any such comments. At the Responsible Party's
request and expense, the Non-Responsible Party will reasonably cooperate and
assist the Responsible Party in the preparation, filing and prosecution of
patent applications claiming Collaboration Technology and in the event of an
interference, reissue, reexamination, opposition or request for patent term
extension with respect to such patent applications or patents issuing therefrom,
including by making such Party's employees or agents available to the
Responsible Party and signing or causing to have signed all documents relating
to such Patents. At each Party's expense, patent counsel or any other
representative designated by each Party will meet (in person, by telephone or
videoconference) upon request by either Party, unless otherwise agreed in
writing, during the Term of the Collaboration, and the pendency of any Early
Lead Patents, to coordinate, discuss, review and implement patent filing and
prosecution strategy.

      5.3   Patent Enforcement. In the event either Party becomes aware of any
infringement of an Early Lead Patent or a Joint Patent or a claim that such
patent is invalid and unenforceable, it shall promptly notify the other Party
hereto. Serono shall have the sole right, at its sole discretion and expense, to
take any and all steps to abate the infringement or contest the challenge of
Early Lead Patents and Joint Patents. SGX will

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cooperate with Serono, at Serono's request, including by joining such proceeding
as a party if required by applicable law, with fees and costs related to the
litigation to be borne by Serono. In the event Serono elects not to pursue
abatement of infringement or challenge of an Early Lead Patent or Joint Patent,
Serono shall give SGX not less than [...***...] ([...***...]) [...***...] notice
before any relevant deadline and SGX shall have the right to pursue, at its sole
discretion and expense, such activitieS. Should SGX pursue such activities,
Serono will cooperate with SGX, at its request, with fees and costs related to
the litigation to be borne by SGX. Neither Party shall settle or otherwise
compromise any such proceeding in a way that adversely affects the other Party's
rights or interests with respect to Early Lead Compounds or Products without
such Party's prior written consent. [...***...] by the [...***...] pursuant to
this Section 5.3, [...***...], [...***...].

6.    CONFIDENTIALITY AND PUBLICITY

      6.1   Confidential Information. Except as provided herein, the Parties
agree that, for the term of this Agreement and for [...***...] ([...***...])
years thereafter, the receiving Party, or any Affiliate thereof, shall not
publish or otherwise disclose and shall not use except pursuant to this
Agreement, any information or material furnished to it by the other Party
pursuant to this Agreement which if disclosed in tangible form is marked
"Confidential" or with other similar designation to indicate its confidential or
proprietary nature, or if disclosed orally is confirmed as confidential or
proprietary by the Party disclosing such information at the time of such
disclosure or within thirty (30) days thereafter ("Confidential Information").
Collaboration Technology (other than that which constitutes SGX Background
Technology) covering Early Lead Compounds, SGX Co-Crystal Structures containing
Early Lead Compounds, and Serono Co-Crystal Structures shall be deemed to be
Confidential Information of Serono. Each Party shall have the right to disclose
Confidential Information to its Affiliates and shall obtain written agreements
from each of its and its Affiliates' employees and agents who perform the
Collaboration, which agreements shall obligate such persons to similar
obligations of confidentiality and non-use. Notwithstanding the foregoing, it is
understood and agreed that Confidential Information shall not include
information or material that, in each case as demonstrated by written
documentation:

            (a)   was already known to the receiving Party, or an Affiliate
thereof, other than under an obligation of confidentiality, at the time of
disclosure;

            (b)   was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;

            (c)   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, or an Affiliate thereof, in breach of this
Agreement; or

            (d)   was subsequently lawfully disclosed to the receiving Party, or
an Affiliate thereof, by a person other than a Party hereto or independently
developed by the

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receiving Party or an Affiliate thereof, without reference to any Confidential
Information disclosed by the disclosing Party.

            6.2   Permitted Disclosures. Notwithstanding the provisions of
Section 6.1 above, each Party hereto may use and disclose the other's
Confidential Information to the [...***...] in [...***...] or [...***...],
[...***...], complying with applicable [...***...], submitting information to
[...***...] or other [...***...], making a [...***...] of its rights hereunder,
filing for [...***...] of a Product or otherwise performing its [...***...] or
[...***...] hereunder, including [...***...] with respect to the [...***...];
PROVIDED, HOWEVER, that if a Party is required to make any such disclosure of
the other [...***...], to the extent it may legally do so, it will give
[...***...] to the other Party of such disclosure so that the other Party
[...***...] of such Confidential Information [...***...] (whether through
[...***...]).

            6.3   Publication. Any public disclosure (oral, written or graphic)
by either Party describing the scientific results of the Collaboration will
[...***...] and [...***...] of the other Party [...***...] ([...***...])
[...***...] for publication or other public disclosure; PROVIDED, HOWEVER, SGX
may [...***...] information regarding the [...***...] under the Collaboration
and the [...***...] in the course of the Collaboration, provided Serono is given
the opportunity to review in advance any such disclosure to ensure that
[...***...]. If the reviewing Party so requests, the proposed public disclosure
[...***...] ([...***...]) [...***...] from the date of each request for the
[...***...] related to the proposed public disclosure. Promptly following the
Effective Date, the parties will jointly discuss and agree on a press release to
be made by SGX regarding the execution and subject matter of this Agreement.
Thereafter, the Parties will [...***...] on any further statements to the public
regarding the subject matter of this Agreement, except with respect to
disclosures required by [...***...], and provided further that notwithstanding
the above, [...***...] will have the right to disclose the terms of this
Agreement [...***...]. Any disclosure by either Party of the subject matter of
this Agreement other than the disclosures specifically permitted pursuant to
this Section 6.3 [...***...] in the performance of such Party's obligations
hereunder. If in the [...***...] of a [...***...] a public disclosure with
respect to this Agreement is [...***...], then the disclosing Party will provide
the other Party [...***...] of such intended announcement, and [...***...] under
the circumstances will [...***...] relative to the nature and scope of such
intended announcement. If either Party concludes that a copy of this Agreement
must be filed with the [...***...], it will provide the other Party a
[...***...], will provide the other Party an [...***...] on such proposal and
will give [...***...] by the other Party relating to such filing.

                                             ***CONFIDENTIAL TREATMENT REQUESTED

                                 Page 21 of 41
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                                                                    CONFIDENTIAL

7.    INDEMNIFICATION

      7.1   Indemnification of SGX. Serono shall indemnify, defend, and hold
harmless SGX, its directors, officers, and employees and the successors and
assigns of any of the foregoing (the "SGX Indemnitee(s)") from and against all
losses, costs, expenses (including payment of reasonable attorneys' fees and
other expenses of litigation), liabilities and damages (including settlement
amounts) finally awarded, with respect to any claim, suit or proceeding (any of
the foregoing, a "Claim") brought by a Third Party against an SGX Indemnitee, to
the extent arising out of or relating to: (a) a breach of Serono's
representations and warranties under Section 8; (b) any Products developed,
manufactured, used, sold or otherwise distributed by or on behalf of Serono, its
Affiliates or sublicensees utilizing any Collaboration Technology (including
product liability claims); (c) the use pursuant to this Agreement by SGX of
Initial Structures, Serono Co-Crystal Structures, SGX Co-Crystal Structures
(except to the extent such Claim arises from the use of SGX Background
Technology), a Serono Target, DNA coding for a Serono Target, Serono Materials
or a Serono Compound; or (d) the negligence or willful misconduct of Serono,
except, in each case, to the extent caused by the negligence or willful
misconduct of an SGX Indemnitee.

      7.2   Indemnification of Serono. SGX shall indemnify, defend and hold
harmless Serono, its Affiliates, their directors, officers, employees and
licensees, and the successors and assigns of any of the foregoing (the "Serono
Indemnitee(s)") from and against any losses, costs, expenses (including payment
of reasonable attorneys' fees and other expenses of litigation), liabilities and
damages (including settlement amounts) finally awarded, with respect to any
Claims (as defined in Section 7.1 above) brought by a Third Party against a
Serono Indemnitee, to the extent arising out of or relating to: (a) a breach of
SGX's representations and warranties under Section 8; (b) the use pursuant to
this Agreement by Serono, its Affiliates or sublicensees of SGX Materials,
Initial Structures, Serono Co-Crystal Structures or SGX Co-Crystal Structures to
the extent such Claim arises from the use of SGX Background Technology; or (c)
the negligence or willful misconduct of SGX, except, in each case, to the extent
due to the negligence or willful misconduct of a Serono Indemnitee.

      7.3   Indemnification Procedures. An SGX Indemnitee or a Serono Indemnitee
(either an "Indemnitee") that intends to claim indemnification under this
Article 7 shall promptly notify the indemnifying Party (the "Indemnitor") in
writing of any claim in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall have sole control of the defense
and/or settlement thereof, provided that the Indemnitee may participate in any
such proceeding with counsel of its choice at its own expense. In no event,
however, may the Indemnitor compromise or settle any claim or suit in a manner
which admits fault or negligence on the part of any Indemnitee without the prior
written consent of such Indemnitee. The indemnity agreement in this Article 7
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the consent of the Indemnitor, which consent shall not be
withheld

                                 Page 22 of 41
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                                                                    CONFIDENTIAL

unreasonably. The failure to deliver written notice to the Indemnitor within a
reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 7 but the omission so to deliver written
notice to the Indemnitor shall not relieve the Indemnitor of any liability that
it may have to any Indemnitee other than under this Article 7. The Indemnitee
under this Article 7, its employees and agents or those of the affiliated Party,
as applicable, shall cooperate fully with the Indemnitor and its legal
representatives and provide full information in the investigation, defense or
settlement of any Claim covered by this indemnification. Neither Party shall be
liable for any costs or expenses incurred by the other Party without its prior
written authorization.

      7.4   No Consequential Damage. IN NO EVENT SHALL EITHER PARTY OR ANY OF
ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR
SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES,
WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE,
including loss of profits or revenue, or claims of customers of any of them or
other Third Parties for such or other damages; PROVIDED, HOWEVER, that the
foregoing limitation shall not apply to indemnification obligations under this
Article 7.

8.    REPRESENTATIONS AND WARRANTIES

      8.1   Each Party. Each Party represents, warrants and covenants to the
other (i) that it has the legal power, authority and right to enter into this
Agreement and to perform its respective obligations under this Agreement; (ii)
that it is not a Party to any agreement or arrangement with any Third Party or
under any obligation or restriction which in any way limits or conflicts with
its ability to fulfill any of its obligations under this Agreement (including
granting the licenses in Article 4), and that it shall not enter into any such
agreement or arrangement during the term of this Agreement; and (iii) that each
employee or person engaged in the Collaboration on behalf of Serono or SGX has
entered into a written agreement which provides for the assignment to Serono or
SGX, respectively, of all inventions and discoveries made, conceived or reduced
to practice by such employee or person during the course of his or her
employment or engagement with Serono or SGX.

      8.2   SGX. SGX represents and warrants to Serono that to its actual
knowledge as of the Effective Date it owns or possesses adequate licenses or
other rights to practice and use all SGX Background Technology and to grant the
licenses granted to Serono hereunder and that the practice and use of the SGX
Background Technology by SGX will not infringe or misappropriate the
intellectual property of any Third Party.

      8.3   Disclaimer. SGX and Serono specifically disclaim any guarantee that
the Collaboration will be successful, in whole or in part. The failure of the
Parties to solve structures or to identify compounds will not constitute a
breach of this Agreement. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, SERONO AND SGX MAKE NO REPRESENTATIONS AND EXTEND NO

                                 Page 23 of 41
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WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE SGX BACKGROUND
TECHNOLOGY, THE SERONO BACKGROUND TECHNOLOGY OR THE COLLABORATION TECHNOLOGY OF
EACH PARTY, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT OF THE INTELLECTUAL
PROPERTY OR OTHER RIGHTS OF ANY THIRD PARTY.

9.    TERM AND TERMINATION

      9.1   Term of the Agreement. The term of this Agreement shall commence on
the Effective Date and, unless terminated earlier, will terminate upon the
expiration of the Royalty Terms for all Products under Section 3.6 at which time
the licenses granted to Serono under Section 4.1 shall become fully paid,
irrevocable and perpetual.

      9.2   Termination for Cause. Either Serono or, subject to Section 4.6, SGX
may terminate this Agreement by written notice stating such Party's intent to
terminate, in the event the other Party shall have materially breached or
defaulted in the performance of any of its obligations hereunder, and such
default shall have continued for sixty (60) days after written notice thereof
was provided to the breaching Party by the nonbreaching Party.

      9.3   Effect of Termination.

            (a)   Accrued Rights and Obligations. Termination or expiration of
this Agreement for any reason shall be without prejudice to any rights which
shall have accrued to the benefit of a Party prior to such termination or
expiration. Termination or expiration of this Agreement for any reason shall not
release any Party hereto from any liability which, at the time of such
termination, has already accrued to the other Party, which is attributable to a
period prior to such termination or which is expressly indicated to survive
termination or expiration of this Agreement nor preclude either Party from
pursuing all rights and remedies it may have hereunder or at law or in equity
with respect to any breach of this Agreement, including rights under the United
States Bankruptcy Code.

            (b)   Return of Confidential Information. Upon any termination of
this Agreement, SGX and Serono shall promptly return to the other Party or
destroy all Confidential Information received from the other Party, except to
the extent required to exercise any continuing rights of such Party (and in any
event, except for one copy of such Confidential Information which may be
retained solely for archival purposes).

            (c)   Licenses.

                  (i)   In the event of termination of this Agreement by either
Party pursuant to this Article 9, the licenses granted to SGX and Serono in
Section 4.2 shall terminate concurrently.

                                 Page 24 of 41
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                  (ii)  In the event of termination of this Agreement by SGX
pursuant to Section 9.2, the licenses granted Serono under Sections 4.1 (a), (c)
and (d) (other than with respect to Serono Co-Crystal Structures) will terminate
concurrently.

            (d)   Inventory. Upon any termination of this Agreement, Serono and
its Affiliates and sublicensees shall be entitled, during the next nine (9)
months, to sell any inventory of Products which remains on hand as of the date
of the termination, so long as Serono pays to SGX the royalties applicable to
said subsequent sales in accordance with the terms and conditions set forth in
this Agreement.

            (e)   Sublicenses. In the event this Agreement terminates for any
reason, each of Serono's sublicensees at such time shall continue to have the
rights and license set forth in their sublicense agreements; PROVIDED, HOWEVER,
that such sublicensee agrees in writing that SGX is entitled to enforce all
relevant terms and conditions of such sublicense agreement directly against such
sublicense.

            (f)   Survival. The provisions of Articles 5, 6, 7, 8, and 10 and
Sections 3.5, 3.7-3.13, 4.6, 4.8 and 9.3 and, subject to Section 9.3(c) above,
Section 4.1 shall survive the expiration or termination of this Agreement for
any reason.

      9.4   No Termination upon SGX's Bankruptcy. All licenses granted under
this Agreement by SGX are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties
agree that Serono, as licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under the U.S. Bankruptcy
Code. The Parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against SGX under the U.S. Bankruptcy Code, Serono
shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and the same, if not already in its possession, shall be
promptly delivered to it (i) upon any such commencement of a bankruptcy
proceeding upon Serono's written request therefor, unless SGX elects to continue
to perform all of its obligations under this Agreement, or (ii) if not delivered
under (i) above, following the rejection of this Agreement by or on behalf of
SGX upon written request therefor by Serono. In the event of the commencement of
a bankruptcy proceeding by or against SGX under the Bankruptcy Code and so long
as such proceeding continues, SGX will not, without Serono's prior written
consent, sell, transfer, assign or otherwise dispose of, or purport to sell,
transfer, assign or otherwise dispose of, any right, title or interest in, to or
under the Collaboration Technology (other than that which constitutes the SGX
Background Technology) or the SGX Background Technology that is necessary for
Serono to exercise its rights under this Agreement, if those rights would be
impaired in any material respect by such sale, transfer, assignment or other
disposition.

10.   MISCELLANEOUS

      10.1  Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the Parties hereto shall be governed,
construed

                                 Page 25 of 41
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                                                                    CONFIDENTIAL

and interpreted in accordance with the laws of the State of Delaware, without
reference to rules of conflicts or choice of laws. Any claim or controversy
arising out of or related to this Agreement or any breach hereof may be
submitted by either Party to a court of applicable jurisdiction in the State of
Delaware, and each Party hereby consents to the jurisdiction and venue of such
court

      10.2  Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be sent by internationally recognized courier or personal
delivery, or by fax with confirming letter sent under the conditions described
above, in each case addressed to the other Party at the address shown below or
at such other address for which such Party gives notice hereunder. Such notice
shall be deemed to have been given when delivered:

      If to SGX:

      Structural Genomix, Inc.
      10505 Roselle Street
      San Diego, CA  92121
      Facsimile:  858 558 3402
      Attn:  Chief Executive Officer
      Copy to:  Corporate Counsel

      If to Serono:

      Serono International S.A.
      15 bis chemin des Mines
      1202 Geneva, Switzerland
      Facsimile:  41-22-739-3060
      Attn:  Senior Executive Vice President, Business Development
      Copy to:  General Counsel

      10.3  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, civil commotion, acts of terrorism, fire, Act of God,
earthquake, flood, lockout, embargo, governmental acts or orders or
restrictions, failure or delay of transportation, failure of suppliers
(including energy suppliers), or any other reason where failure to perform is
beyond the reasonable control and not caused by the negligence, intentional
conduct or misconduct of the nonperforming Party and the nonperforming Party has
exerted all reasonable efforts to avoid or remedy such force majeure and to
resume performance of its obligations hereunder as soon as practicable;
PROVIDED, HOWEVER, that in no event shall a Party be required to settle any
labor dispute or disturbance.

      10.4  No Implied Rights. Only the rights granted pursuant to the express
terms of this Agreement shall be of any legal force or effect. No other rights
shall be created by implication, estoppel or otherwise.

                                 Page 26 of 41
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      10.5  Assignment. This Agreement shall not be assignable by either Party
to any Third Party without the written consent of the other Party hereto, except
either Party may assign this Agreement, without such consent, to (i) an
Affiliate or (ii) an entity that acquires all or substantially all of the
business or assets of such Party to which this Agreement pertains, whether by
merger, reorganization, acquisition, sale, or otherwise.

      10.6  Partial Invalidity. When possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid by a court of
competent jurisdiction, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement, unless the invalid provision is of such essential importance to this
Agreement that it may be reasonably presumed that the Parties would not have
entered into this Agreement without the invalid provision. The Parties agree to
renegotiate in good faith any provision held invalid and to be bound by the
mutually agreed substitute provision in order to produce to the maximum extent
possible the effect originally intended by the Parties.

      10.7  Independent Contractors. The relationship of Serono and SGX
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give either Party the
power to direct or control the day-to-day activities of the other, (ii)
constitute the Parties as partners, joint venturers, or otherwise as
participants in a joint or common undertaking, or (iii) allow a Party to create
or assume any obligation on behalf of the other Party for any purpose
whatsoever.

      10.8  No Waiver. No waiver of any term or condition of this Agreement
shall be valid or binding on either Party unless agreed in writing by the Party
to be charged. The failure of either Party to enforce at any time any of the
provisions of the Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
to affect the right of either Party to enforce each and every such provision
thereafter.

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

      10.10 English Language. This Agreement has been prepared in the English
language and the English language shall control its interpretation.

      10.11 Entire Agreement; Amendment. This Agreement, including the Exhibits
attached hereto, constitutes the entire agreement of the Parties with respect to
the subject matter hereof, and supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, between Serono and SGX
with respect to such subject matter. No amendment or modification hereof shall
be valid or binding upon the Parties unless made in a writing referencing this
Agreement and signed by the duly authorized representatives of both Parties.

                                 Page 27 of 41
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      10.12 Exports. This Agreement is made subject to any restrictions
concerning the export of materials and technology from the United States which
may be imposed upon either Party to this Agreement from time to time by the
United States Government. SGX and Serono agree not to export or re-export,
directly or indirectly, any information, technical data, the direct product of
such data, samples or equipment received or generated under this Agreement in
violation of any applicable export control laws or governmental regulations.

      10.13 Rules of Construction. The use in this Agreement of the term
"including" means "including, without limitation." Unless the context otherwise
requires, the use in this Agreement of the term "or" means "and/or." The words
"herein," "hereof," "hereunder," and other words of similar import refer to this
Agreement as a whole, including the Exhibits, and not to any particular section,
subsection, paragraph, subparagraph or clause contained in this Agreement. All
references to sections and Exhibits mean those sections of this Agreement and
Exhibits attached to this Agreement, except where otherwise stated. The use
herein of the masculine, feminine or neuter forms shall also denote the other
forms and any reference to the singular or plural shall include the other, in
each case unless the context otherwise requires.

      IN WITNESS WHEREOF, the undersigned are duly authorized to execute and
deliver this Agreement on behalf of Serono and SGX as applicable as of the day
and year first above written.

SERONO INTERNATIONAL S.A.                   STRUCTURAL GENOMIX, INC.

By: /s/ Ernesto Bertarelli                By: /s/ Tim Harris
    ----------------------------------        ----------------------------------

Name: Ernesto Bertarelli                  Name: Tim Harris
      --------------------------------          --------------------------------

Title: Authorized Representative          Title: Chief Executive Officer
       -------------------------------           -------------------------------

                                 Page 28 of 41
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                         EXHIBIT A - COLLABORATION PLAN

OVERALL GOAL

The initial goal of the collaboration is to generate Early Lead Compounds for
three targets; [...***...], [...***...], and [...***...]. The three initial
projects will proceed in parallel. Serono may nominate an additional [...***...]
targets for year [...***...]. the research plans for these targets will be
established upon their selection and shall include such activities as Serono may
direct, following consultation with SGX, including all or any of the following:
generation of Early Lead Compounds, determination of Initial Structures, and
determination of Serono Co-Crystal Structures.

Details for each target are given below.

                                  TARGET PLANS

                                   [...***...]

The projected timeline for this project is [...***...] months as illustrated in
Figure 1.

PROTEIN PRODUCTION AND CRYSTALLOGRAPHY

The crystal structure of [...***...] has been determined by a number of research
groups. Many of these structures have been deposited into the Protein Data Bank
(PDB) with diffraction in the [...***...] range. SGX will use information from
these publications to reproduce this crystal structure. SGX already has isolated
a [...***...] for the [...***...] of this protein. Specifically, SGX plans to:

-     Generate [...***...] with [...***...]. Since both [...***...] and
      [...***...] ([...***...]) [...***...], SGX believes it is essential to
      [...***...] in [...***...]. Based on [...***...], a [...***...]
      ([...***...]) [...***...] as the [...***...].[...***...] that end
      [...***...], [...***...] will also be chosen.

-     [...***...] these [...***...] into [...***...].[...***...] will allow
      production of [...***...] and [...***...]. In this way [...***...] can be
      produced for [...***...] many of which will [...***...] to [...***...] in
      [...***...],

-     Examine [...***...] and [...***...] of these [...***...].

-     [...***...] for [...***...] and [...***...]. The latter will include
      [...***...] to monitor [...***...] and [...***...].

-     Carry out [...***...] to obtain [...***...].

-     Carry out [...***...] around published conditions to [...***...] for
      [...***...]; [...***...] may [...***...] this [...***...]

-     [...***...] at SGX-CAT and [...***...].

-     Determine [...***...] is most suited to [...***...] and [...***...] for
      [...***...].

BIOCHEMISTRY

SGX will establish and validate a [...***...] biochemical enzymatic assay(s).
Serono and SGX shall consult regarding the identification of appropriate assays
and reagents that are available Serono Materials. Assays under consideration for
[...***...] are:

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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Continuous [...***...] Assay Using [...***...] Substrate

[...***...] will catalyze the hydrolysis of [...***...] to yield [...***...] and
[...***...] ([...***...]). The [...***...]-dependent production of [...***...]
can be monitored [...***...] by measuring the time-dependent increase of
fluorescence at [...***...]nm.

Fluorescence Polarization Assay

The availability of good commercial sources of [...***...] antibodies and
well-characterized substrate peptide should allow for the development of a
simple [...***...] assay for [...***...]. An efficient [...***...] substrate
such as [...***...] could be labeled at either the N- or C-terminus with a
[...***...] appropriate for [...***...] (i.e. [...***...] or [...***...]).
[...***...] antibody would then be added to measure the extent of [...***...] by
a decrease in the observed [...***...].

Commercial Assay Options

[...***...] sells a homogeneous [...***...] assay kit ([...***...], [...***...])
that uses their proprietary [...***...] technology with [...***...] as the
readout. This represents the fastest route to attaining an assay in the
short-term. This assay comes configured with purified enzyme from [...***...]
but that reagent could be substituted with SGX-produced protein. In addition,
SGX may opt to simply purchase the [...***...] reagent for use in SGX's
formatted [...***...] assay as described in the paragraph above. [...***...]
biotechnology sells a [...***...] based assay system for [...***...]. The
[...***...] and [...***...] reagent are both available from [...***...]
([...***...]).

IDENTIFICATION OF INITIAL FRAGMENT HITS

-     SGX will [...***...] screen compounds from the SGX FAST(TM) library by
      soaking approximately [...***...] samples into [...***...] crystals.

-     In parallel, SGX will screen the SGX FAST(TM) library (individually) at a
      compound concentration of [...***...] against [...***...] with a
      biochemical enzymatic assay. Hits will be followed up with [...***...]
      determination.

-     SGX will conduct the following studies as needed: (1) [...***...] for
      [...***...] detected from [...***...] if not [...***...] in the
      [...***...], (2) [...***...] measurement for [...***...] detected from
      [...***...] if not [...***...] in the [...***...].

-     A [...***...] search of the [...***...] will be conducted for a
      preliminary assessment of [...***...].

-     The results of the [...***...] search will be discussed by the JSC which
      shall agree upon those [...***...] to be selected for further elaboration
      after consideration of the recommendation of the Project team.

IDENTIFICATION OF ELABORATED FRAGMENTS

-     One or more [...***...] will be selected by the JSC for [...***...],
      [...***...], and [...***...] (appropriate presentation of [...***...]).

-     [...***...] are [...***...] into [...***...] and [...***...] on the
      [...***...]:

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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      1.    [...***...] from [...***...] at each [...***...] are [...***...].

      2.    [...***...] of each [...***...] are [...***...] in the [...***...]
            of the [...***...] and [...***...], based on the [...***...] of the
            [...***...].

      3.    Each [...***...] is [...***...] in the [...***...] of [...***...].

      4.    [...***...] with [...***...] ([...***...]) [...***...] or
            [...***...] ([...***...]) are [...***...].

      5.    [...***...] are [...***...] with [...***...] binding [...***...] and
            [...***...] for [...***...].

-     SGX will [...***...], [...***...], using the [...***...] (for example, for
      a [...***...], [...***...], [...***...] - approximately [...***...] per
      [...***...]).[...***...] will be [...***...] ([...***...]) [...***...].

-     SGX will [...***...] in the [...***...] at a compound concentration of
      [...***...] (the exact concentration will be based on the activity of the
      [...***...]) and follow up [...***...].

-     SGX will [...***...] and [...***...] their [...***...] to [...***...] and
      [...***...] the [...***...] for [...***...] of [...***...] and
      [...***...].

-     The results of the [...***...] search will be discussed by the JSC which
      shall agree upon those [...***...] to be selected for [...***...] after
      consideration of the recommendation of the [...***...].

-     As appropriate, and after discussion and agreement at the JSC, the
      selected [...***...] will be [...***...] ([...***...]) [...***...]
      (determined by the JSC). The JSC shall determine whether the [...***...]
      will be run by [...***...], [...***...] or an [...***...].

OPTIMIZATION OF [...***...] TO [...***...]

-     SGX will computationally select [...***...] for all points of [...***...]
      to design [...***...], [...***...] where [...***...] positions are
      [...***...] (approximately [...***...]).

-     SGX will synthesize [...***...].

-     SGX will test analogs against [...***...] at a compound concentration of
      [...***...] (the exact concentration will be based on the [...***...]) and
      follow up [...***...] and [...***...] for [...***...], as discussed and
      agreed upon by the JSC.

-     The [...***...] will be [...***...] of up to [...***...] ([...***...])
      [...***...] (determined by the JSC). The JSC shall determine whether the
      [...***...] will be run by [...***...], [...***...]or an [...***...].

-     SGX will conduct a [...***...] including [...***...] from [...***...]
      through [...***...].

                                             ***CONFIDENTIAL TREATMENT REQUESTED

                                 Page 31 of 41
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         [...***...]

         FIGURE 1. [...***...]

                                             ***CONFIDENTIAL TREATMENT REQUESTED

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                                   [...***...]

The projected timeline for this project is [...***...] to [...***...] months as
illustrated in figure 2.

PROTEIN PRODUCTION AND CRYSTALLOGRAPHY

The crystal structure of [...***...] is not in the [...***...]. However, SGX has
determined the structures of [...***...] and [...***...] at [...***...]. These
kinases, when compared to structures in the [...***...], are the closest to
[...***...], with identities in the kinase domain In the low [...***...]% range.
Based on this information, SGX believes that [...***...] and [...***...] are
likely to give good guidance both on the boundaries for [...***...] and on the
residues that likely will need to be deleted to remove the loop insert in the
[...***...] kinase domain.

SGX will use this information to attempt to produce the [...***...] crystal
structure. Specifically, SGX's goals will be to:

      -     [...***...] with [...***...] based on the [...***...] and
            [...***...]. Since both [...***...] and [...***...] for [...***...]
            are desired, it will be essential to test a [...***...] of
            [...***...] in [...***...],

      -     [...***...] for [...***...] based on the [...***...] and [...***...]
            shown below,

                                   [...***...]

      -     [...***...] and [...***...] into [...***...]. These [...***...] will
            allow production of [...***...]- and [...***...] and with
            [...***...]. In this way [...***...] of [...***...] for [...***...]
            and [...***...] and by so doing increase the likelihood of
            [...***...] a [...***...] of the [...***...] with [...***...] and
            [...***...],

      -     Examine [...***...] and [...***...] of [...***...],

      -     [...***...] for [...***...] and [...***...]. The latter will include
            [...***...] to monitor [...***...] and [...***...],

      -     [...***...] to obtain [...***...] for [...***...]. If none of the
            above [...***...] in a [...***...], [...***...], the effects of
            [...***...], for example, in the [...***...] of the [...***...],

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      -     [...***...] to [...***...] the [...***...]; [...***...] to
            [...***...],

      -     [...***...] at SGX-CAT and [...***...],

      -     Determine [...***...] is most suited to [...***...] and [...***...]
            for [...***...].

BIOCHEMISTRY

SGX will [...***...] and [...***...] a [...***...] assay. Serono and SGX shall
consult regarding the identification of [...***...] assays and [...***...] that
are available Serono Materials. Assays under consideration for [...***...] are:

Continuous [...***...] Coupled Assay

SGX will assess the feasibility of developing a continuous [...***...] assay for
[...***...] using the [...***...] ([...***...]) coupled system. SGX will first
determine which, if any, of [...***...] is [...***...]. It may be required for
[...***...] to use inactive [...***...] as the [...***...] in such a system.

[...***...] FRET Assay

SGX has developed a proprietary and [...***...] that does not require
[...***...]. SGX will initially evaluate the [...***...] by surveying
[...***...] under several [...***...] using several [...***...]. If suitable
conditions can be identified, a [...***...] will be employed.

IDENTIFICATION OF INITIAL FRAGMENT HITS

As described for [...***...]

IDENTIFICATION OF ELABORATED FRAGMENTS

As described for [...***...]

OPTIMIZATION OF ELABORATED FRAGMENTS TO EARLY LEAD COMPOUNDS

As described for [...***...]

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[...***...]

FIGURE 2. [...***...].

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[...***...]

The projected timeline for this project is [...***...] to [...***...] months as
illustrated in Figure 3.

PROTEIN PRODUCTION AND CRYSTALLOGRAPHY

To SGX's knowledge the crystal structure of [...***...] has not been previously
determined. Efforts are ongoing at SGX to obtain this structure. Once an initial
structure has been obtained SGX will determine if the crystal form is suited to
[...***...] and will [...***...]; if the [...***...] is [...***...] then
[...***...].

BIOCHEMISTRY

SGX will establish and validate an [...***...] assay. Serono and SGX shall
consult regarding the identification of [...***...] assays and [...***...] that
are available [...***...]. Assays under consideration for [...***...] are:

Continuous [...***...] Coupled Assay

SGX will assess the feasibility of developing a continuous enzymatic assay for
[...***...] using the [...***...] ([...***...]) coupled system. SGX will first
determine which, if any, of [...***...] is applicable. SGX will also assess the
ability of its [...***...] to [...***...] in the coupled assay system.

[...***...] FRET Assay

SGX will initially evaluate the feasibility of developing an [...***...] by
surveying our proprietary [...***...] under several [...***...] using
[...***...]. If suitable conditions can be identified, a [...***...] will be
employed.

Commercial Assay Options

[...***...] sells a homogeneous [...***...] ([...***...],[...***...]) that uses
their proprietary [...***...] technology with [...***...] as the readout. This
represents the fastest route to attaining an assay in the short-term. This assay
comes configured with [...***...] from [...***...] but that reagent [...***...]
with [...***...]. In addition, SGX may opt to simply [...***...] for use in
[...***...].

IDENTIFICATION OF INITIAL FRAGMENT HITS

As described for [...***...], subject to the section describing presentation to
the JSC below

IDENTIFICATION OF ELABORATED FRAGMENTS

As described for [...***...], subject to the section describing presentation to
the JSC below

OPTIMIZATION OF ELABORATED FRAGMENTS TO EARLY LEAD COMPOUNDS

As described for [...***...], subject to the section describing presentation to
the JSC below

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PRESENTATION OF INITIAL FRAGMENT HITS, ELABORATED FRAGMENTS AND EARLY LEAD
COMPOUNDS FOR [...***...] TO THE JSC

[...***...] will be communicated as [...***...]-[...***...], similar to
[...***...]: [...***...] for the [...***...] will be [...***...] and [...***...]
will be [...***...] with [...***...] including the [...***...] and [...***...]
([...***...], [...***...], [...***...]). The JSC will select [...***...] for
generating these [...***...], which may also include [...***...].

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[...***...]

FIGURE 3. [...***...].

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DETERMINATION OF SERONO [...***...]

Serono Compounds delivered to SGX by Serono will be [...***...] and/or
[...***...] with the [...***...], as appropriate, in order to [...***...] for
the [...***...] of [...***...].

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                            EXHIBIT B - DELIVERABLES

INITIAL STRUCTURES

-     Protocols for [...***...] and [...***...] and [...***...], these protocols
      should be [...***...] to [...***...] of the [...***...] by [...***...].

-     [...***...] (e.g., [...***...], [...***...]) [...***...] for [...***...]
      and [...***...].

-     [...***...] and [...***...] with [...***...].

-     [...***...] with [...***...] and [...***...]; [...***...], [...***...],
      etc.

-     [...***...], with [...***...].

EARLY LEAD COMPOUNDS

-     Protocols for [...***...] and [...***...], these protocols should be clear
      enough to [...***...] of the [...***...] ([...***...]).

-     [...***...] (e.g., [...***...], [...***...]) [...***...] for [...***...]
      and [...***...] ([...***...]).

-     [...***...] and [...***...] with [...***...] ([...***...] and [...***...])

-     [...***...] with [...***...] and [...***...]; [...***...], [...***...],
      etc.

-     [...***...] containing [...***...], with relevant [...***...].

-     [...***...] (i.e. [...***...], [...***...], etc.).

-     [...***...] with [...***...], [...***...], etc.

-     [...***...] performed on [...***...] ([...***...], [...***...], etc.).

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SERONO CO-CRYSTAL STRUCTURES

-     Protocols for [...***...] and [...***...], these protocols should be clear
      enough to [...***...] of the [...***...] ([...***...]).

-     [...***...] (e.g., [...***...], [...***...]) [...***...] for [...***...]
      and [...***...] ([...***...]).

-     [...***...] and [...***...] with [...***...] ([...***...] and
      [...***...]).

-     [...***...] with [...***...] and [...***...]; [...***...], [...***...],
      etc).

-     [...***...] containing [...***...], with [...***...].

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                                                                 EXHIBIT 10.27

                                           *** TEXT OMITTED AND FILED SEPARATELY
                                    PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
                                            UNDER 17 C.F.R. SECTION 200.80(b)(4)
                                               AND RULE 406 UNDER THE SECURITIES
                                                         ACT OF 1933, AS AMENDED

                                                                    CONFIDENTIAL

                             COLLABORATION AGREEMENT

      THIS COLLABORATION AGREEMENT (the "AGREEMENT") is made and entered into as
of December 1, 2003 (the "EFFECTIVE DATE") by and between STRUCTURAL GENOMIX,
INC. a Delaware corporation located at 10505 Roselle Street, San Diego, CA
92121, U.S.A., ("SGX"), and UROGENE, S.A., a corporation incorporated under the
laws of France with a principal place of business at 4 Rue Pierre Fontaine -
Genopole, 91058 Evry, Cedex, France, ("UG"). SGX and UG may be referred to
herein individually as a "Party" and collectively as the "Parties".

                                   BACKGROUND

      WHEREAS, SGX has expertise in the field of structure directed drug
discovery;

      WHEREAS, UG has research and development programs in the area of urology;

      WHEREAS, the Parties wish to collaborate in the development of therapeutic
products directed at inhibiting the protein kinase RON, primarily for
application in the field of bladder cancer;

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

1.    DEFINITIONS

      1.1 "Active Party" has the meaning ascribed to such term in Section 6.1.

      1.2 "Affiliate" means, with respect to a Party hereto, a corporation,
company or other entity that is owned or controlled by such Party by virtue of
such Party's direct or indirect ownership or control of fifty percent (50%) or
more of the outstanding shares or securities (representing the right to vote for
the election of directors or other managing authority) of such corporation,
company or other entity, but such corporation, company or other entity shall be
deemed to be an Affiliate only so long as such ownership or control exists.

      1.3 "Clinical Development" means development activities conducted on a
Collaboration Product commencing upon the filing of an IND, up to and including
generation of an International Registration Dossier.

      1.4 "Collaboration" means the activities conducted by the Parties under
the Research Plan and the Development Plan.

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      1.5 "Collaboration Product" means any product that comprises or contains
or is developed or manufactured based on a Safety Assessment Candidate, and is
directed at inhibiting, modulating or altering the activity of the Target.
Collaboration Products do not include SGX Products or UG Products.

      1.6 "Collaboration Technology" means Patent Rights and Know-How which are
conceived or reduced to practice or otherwise developed by or on behalf of UG or
SGX, or jointly by UG and SGX, in each case during and in the performance of the
Collaboration, including without limitation, Collaboration Products and
Information but excluding SGX Compounds, UG Compounds, SGX Background
Technology, and UG Background Technology.

      1.7 "Collaboration Term" means the period commencing on the Effective Date
and ending on a Collaboration Product-by-Collaboration Product and
country-by-country basis, upon Registration of each such Collaboration Product.

      1.8 "Competing Product" means a product developed outside of the
Collaboration for application in the Therapeutic Field, which has activity in an
[...***...] against the Target.

      1.9 "Controls" or "Controlled" means possession of the ability to grant
the licenses or sublicenses as provided for herein, without violating the terms
of any agreement or other arrangement with a Third Party.

      1.10 "Development Budget" has the meaning ascribed to such term in Section
3.7.

      1.11 "Development Plan" means, with respect to a particular Collaboration
Product, the plan prepared by the JDC and approved by the Parties pursuant to
Section 3.7 setting forth the detailed plan, Development Budget and process for
the Parties' collaborative efforts to conduct development of, and seek
Registration for, such Collaboration Product in the UG Territory and SGX
Territory.

      1.12 "Drug Candidate" means a Safety Assessment Candidate selected by the
JDC for Clinical Development under Section 3.2(b).

      1.13 "Excess Expenses" means, with respect to a particular Collaboration
Product, the costs and expenses associated with such Collaboration Product that
the Parties have agreed pursuant to Section 3.9 shall be creditable against
certain royalty payments in accordance with Section 4.3.

      1.14 "Expanded Therapeutic Field" means the Therapeutic Field, [...***...]
cancer, [...***...] carcinomas, and [...***...] cancer.

      1.15 "FTE" means a full time equivalent person year (consisting of
[...***...] hours per year) of scientific or technical work carried out by or on
behalf of SGX or UG under the Collaboration.

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      1.16 "First Commercial Sale" means the first sale of a Collaboration
Product to a Third Party in a Territory after all Registrations required to
permit such sale have been granted, or such sale is otherwise permitted by the
regulatory authority in such country.

      1.17 "IND" means an Investigational New Drug application, as defined in
the U.S. Food, Drug and Cosmetic Act ("FDCA") and the regulations promulgated
thereunder or any corresponding foreign application, registration or
certification.

      1.18 "Inactive Party" has the meaning ascribed to such term in Section
6.1.

      1.19 "Information" means data specifically relating to research,
development, Registration, manufacture, sale or use of Collaboration Products,
including without limitation, pharmacological, toxicological and clinical test
data, analytical and quality control data, regulatory submissions,
correspondence and communications, and data relating to adverse events.

      1.20 "International Registration Dossier" means the collection of
Information comprising the requirements for applications for Registration of
Collaboration Products under the FDCA and any regulations promulgated
thereunder, and as required by the Committee for Proprietary Medicinal Products
representing the medicine authorities of the European Community member states.

      1.21 "Joint Research Committee" or "JRC" means the Joint Research
Committee established pursuant to Section 2.4.

      1.22 "Joint Development Committee or "JDC" means the Joint Development
Committee established pursuant to Section 3.2.

      1.23 "Know-How" means all ideas, data (including without limitation data
from clinical and preclinical studies and test data including pharmacological,
toxicological and clinical test data), inventions, information, (including
without limitation information related to compounds and their structure,
function and formulation, regulatory filings and submissions), instructions,
designs, processes, formulas, software, materials, methods, processes and
techniques.

      1.24 "Lead Compound" means a compound with the properties designated by
the JRC as required properties for a Lead Compound, which is designated by the
JRC as a Lead Compound in accordance with Section 2.4(b)(v).

      1.25 "Net Sales" means the total amount received by UG or SGX or their
respective Affiliates or sublicensees, as the case may be, for sales to third
parties (other than sublicensees) in arm's length transactions of Products less:
(i) ordinary and customary prompt payment and other trade or quantity discounts
actually allowed and taken; (ii) credits, rebates and returns (including, but
not limited to, wholesaler and retailer returns) actually extended and taken;
(iii) freight, postage and duties (including insurance premiums) actually
incurred; (iv) excise taxes, other consumption taxes, customs duties and
compulsory payments to governmental authorities actually paid and separately
identified on the invoice or other documentation maintained in the ordinary

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course of business. A "sale" shall include any transfer or other disposition for
consideration, and Net Sales shall include the fair market value of all other
consideration received by UG or SGX or their respective Affiliates or
sublicensees in respect of any grant of rights to make, use, sell or otherwise
distribute Products, whether such consideration is in cash, payment in kind,
exchange or other form.

      1.26 "NDA" means a New Drug Application, as defined in the U.S. Food, Drug
and Cosmetic Act and the regulations promulgated thereunder, and any
corresponding foreign application, registration or certification.

      1.27 "Patent Rights" means patent applications filed in any country
worldwide, including provisionals, utilities, continuations (in whole or in
part), divisionals, reissues, reexaminations and foreign counterparts thereof,
any patents issued on such applications and any extensions of term,
registrations or confirmations of such patents.

      1.28 "Phase 1", "Phase 2", "Phase 3" and "Phase 4" means Phase 1, Phase 2,
Phase 3 and Phase 4 clinical trials, respectively, in each case as prescribed by
the U.S. Food and Drug Administration or any successor entity (the "FDA"), and
agencies of other governments of other countries having similar jurisdiction
over the development, manufacturing and marketing of pharmaceuticals.

      1.29 "Phase 2A" means the Phase 2A or Phase 1/2 clinical trials, as
prescribed by the FDA and agencies of other governments of other countries
having similar jurisdiction over the development, manufacturing and marketing of
pharmaceuticals, designed to evaluate efficacy and initial clinical proof of
concept.

      1.30 "Preclinical Development" means drug development activities conducted
by the Parties from the nomination by the JRC of a Safety Assessment Candidate
for Preclinical Development, and up to but not including filing of an IND.

      1.31 "Product" means a Collaboration Product, SGX Product or UG Product.

      1.32 "Registration" means any approvals (including supplements, amendments
and post-approvals and price approvals), licenses, registrations or
authorizations of any national, supra-national (e.g., the European Commission or
the Council of the European Union), regional or local regulatory agency,
department, bureau, or other governmental entity, necessary for the manufacture,
distribution, use, sale, pricing or reimbursement, of Collaboration Products in
a regulatory jurisdiction.

      1.33 "Research Plan" has the meaning ascribed to such term in Section 2.1

      1.34 "Safety Assessment Candidate" or "SAC" means a Lead Compound with the
properties designated by the JRC as required properties for a SAC, which is
designated by the JRC as a SAC in accordance with Section 2.4(b)(vi).

      1.35 "SGX Background Technology" means all Patent Rights and Know-How
which are: (a) owned or Controlled by SGX prior to the Effective Date or during
the Collaboration Term; (b) developed by or on behalf of SGX (i) outside the
Collaboration

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or (ii) within the Collaboration and comprise methodologies, protocols or
technologies which have application to targets or compounds in addition to the
Target and compounds the subject of the Collaboration; and (c) necessary for the
conduct of the Collaboration.

      1.36 "SGX Compounds" means all Patent Rights and Know-How which are
conceived or reduced to practice or otherwise developed by or on behalf of SGX
during and in the performance of the Collaboration, covering compounds
identified and developed by SGX, which are not selected by the JRC as Lead
Compounds.

      1.37 "SGX Product" means any product that comprises or contains or is
developed or manufactured based on or utilizing or is derived from, a Lead
Compound or any part thereof which was selected by the JRC for lead
optimization, and which has primary application in the SGX Retained Field.

      1.38 "SGX Retained Field" means kinase inhibitors (other than MET)
developed for clinical indications other than the Expanded Therapeutic Field.

      1.39 "SGX Territory" means the United States, Canada and Mexico.

      1.40 "Sublicensee Information" has the meaning ascribed in Section 4.6.

      1.41 "Sublicensing Revenue" means all amounts (including, without
limitation, payments received for the purchase of equity in excess of the fair
market value of such equity, license fees, milestone and other time or event
based payments and royalties on sales of products, but excluding any research
funding payments received and actually used for such purpose) received by a
Party under an agreement or license attributable to Collaboration Products or
from sales of Collaboration Products to end users less any withholding tax or
other tax related reductions.

      1.42 "Target" means the human protein kinase RON.

      1.43 "Territory" means UG Territory or SGX Territory.

      1.44 "Therapeutic Field" means superficial and invasive bladder cancer.

      1.45 "Third Party" or "Third Parties" means any entity other that UG or
SGX or their respective Affiliates.

      1.46 "UG Background Technology" means all Patent Rights and Know-How which
are: (a) owned or Controlled by UG prior to the Effective Date or during the
Collaboration Term; (b) developed by or on behalf of UG (i) outside the
Collaboration or (ii) within the Collaboration and comprises methodologies,
protocols or technologies which have application to targets or compounds in
addition to the Target and compounds that are the subject of the Collaboration;
and (c) necessary for the conduct of the Collaboration.

      1.47 "UG Compounds" means all Patent Rights and Know-How which are
conceived or reduced to practice or otherwise developed by or on behalf of UG
during

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and in the performance of the Collaboration, covering compounds
identified and developed by UG, which are not selected by the JRC as Lead
Compounds.

      1.48 "UG Product" means any product that comprises or contains or is
developed or manufactured based on or utilizing or is derived from, a Lead
Compound or any part thereof which was selected by the JRC for lead
optimization, and which has primary application in the UG Retained Field.

      1.49 "UG Retained Field" means non-kinase inhibitors developed for
urological clinical application other than the Therapeutic Field.

      1.50 "UG Territory" means the countries listed in the attached Exhibit A
("Europe")

      1.51 "Valid Claim" means a claim of a pending patent application within
the Patent Rights or an issued and unexpired patent within the Patent Rights
which has not been held unenforceable or invalid by a court or other
governmental agency of competent jurisdiction, and which has not been disclaimed
or admitted to be invalid or unenforceable through reexamination, reissue,
opposition, or otherwise.

2.    RESEARCH COLLABORATION.

      2.1 Research Collaboration. Subject to the terms and conditions of this
Agreement UG and SGX will use commercially reasonable efforts to perform under
the Research Plan attached to this Agreement as Exhibit B ("Research Plan"),
based on the budget attached as Exhibit B1 ("Research Budget"). Research Plan
activities will be overseen by the JRC. The JRC will review the Research Plan on
an ongoing basis and may make changes to the Research Plan then in effect,
provided that the JRC may not increase the applicable Research Budget without
the written approval of each Party. On an annual basis commencing on the first
anniversary of the Effective Date and continuing until the conclusion of the
Parties' activities under the Research Plan, the JRC shall review the Research
Budget to ensure that the number of full time equivalent personnel (FTEs) of
each Party engaged under the Research Plan and the other costs of the Research
Plan activities, are being shared between the Parties on a 50/50 basis, and
shall make adjustments to each Party's responsibilities under the Research Plan
in order to effect such sharing to the greatest extent possible, taking into
account each Party's experience and expertise in the various Research Plan
activities.

      2.2 Performance Standards; Records. Each Party shall conduct its
activities under the Collaboration in good scientific manner, and in compliance
in all material respects with the requirements of applicable laws and
regulations, to attempt to achieve its objectives efficiently and expeditiously.
Each Party shall maintain laboratories, offices and other facilities reasonably
necessary to carry out the activities to be performed by such Party pursuant to
the Collaboration. In conformity with standard pharmaceutical and biotechnology
industry practices and the terms and conditions of this Agreement, each Party
shall prepare and maintain, or shall cause to be prepared and maintained,

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complete and accurate written records, accounts, notes, reports and data with
respect to activities conducted pursuant to the Research Plan and Development
Plan and all results (including without limitation any inventions, discoveries
and developments) made pursuant to its efforts under the Collaboration, and,
upon the other Party's written request, shall send legible copies of the
aforesaid to the other Party. Such records shall be complete and accurate and
shall fully and properly reflect all work done and results achieved in the
performance of the Collaboration in sufficient detail and in good scientific
manner. Upon reasonable advance notice, each Party agrees to make its employees
and non-employee consultants reasonably available at their respective places of
business to consult with the other Party on issues arising in connection with
any request from any regulatory agency with respect to activities under this
Agreement, including, without limitation, regulatory, scientific, technical and
clinical testing issues. At least quarterly during the performance of the
Research Plan, the Parties shall have the obligation to prepare and provide to
the JRC written reports summarizing the progress of the work performed by such
Party in connection with the Research Plan during the preceding quarter.

      2.3 Provision of Materials and Know-How. In the course of the
Collaboration, the Parties will provide each other, promptly upon request, with
materials and data within Collaboration Technology, as required for each Party
to perform its respective obligations under the Research Plan and Development
Plan. Neither Party will have the right to transfer or disclose materials
received from the other Party to any Third Party other than permitted
sublicensees or approved Third Party contractors under the Research Plan,
without the other Party's prior written consent.

      2.4 Joint Research Committee

            (a) Membership; Decisions. SGX and UG will establish a JRC to
oversee, review and recommend direction of the Research Plan. The JRC shall be
comprised of six (6) members, with three (3) members being appointed by SGX and
three (3) members being appointed by UG. Additional representatives of each
Party (for example the members of the individual project teams or consultants)
may attend JRC meetings at the election of each Party. The Parties may
subsequently agree to change the size of the JRC as appropriate to meet the
needs of the Parties' collaborative efforts under this Agreement. Each Party may
replace its JRC representatives at any time, with written notice to the other
Party. Each representative of SGX and UG shall have one vote on the JRC, which
vote may be cast by proxy. Decisions of the JRC shall be made by unanimous vote.
Any matter upon which the JRC is unable to agree shall be submitted to a senior
executive officer designated by each Party for such purpose.

            (b) Responsibilities. The JRC will review, direct and supervise the
performance of the Research Plan. The JRC will be responsible for (i)
coordinating, monitoring and reporting research progress and ensuring open
exchange between the Parties with respect to Collaboration activities; (ii)
determining the research strategy, budget and time lines for the Research Plan;
(iii) determining whether to obtain licenses from Third Parties with respect to
intellectual property useful for the conduct of the Research Plan; (iv)
determining the required properties for compounds to be deemed

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Lead Compounds, including without limitation, potency, selectivity, in vivo
efficacy and bioavailability; and (v) selecting Lead Compounds for entry into
lead optimization; provided that no more than four (4) Lead Compound series will
be pursued in lead optimization under the Collaboration at any one time; and
(vi) determining the required properties for Lead Compounds to be deemed Safety
Assessment Candidates and selecting Safety Assessment Candidates for entry into
Preclinical Development.

            (c) Meetings. During the term during which the Parties are
performing under the Research Plan, the JRC shall meet quarterly, in person or
via video-conference, or as the JRC may otherwise agree, to discharge its
responsibilities, with the expectation that meetings will alternate between
appropriate offices of each Party. Each Party will be responsible for paying its
own expenses in connection with participating in the meetings of the JRC. The
JRC shall prepare written minutes of each meeting and a written record of all
JRC decisions, whether made at a JRC meeting or otherwise.

3.    DEVELOPMENT

      3.1 Overview. SGX and UG agree that they will collaborate on development
of Collaboration Products pursuant to the terms of this Agreement, in a
coordinated international program aimed at producing an International
Registration Dossier and obtaining Registration of Collaboration Products in the
UG Territory and SGX Territory. All such collaborative development efforts of
the Parties, or either Party, shall be in accordance with the Development Plan
for each Collaboration Product. Except as otherwise provided in this Agreement,
each Party agrees that neither Party may conduct Preclinical Development or
Clinical Development on a Collaboration Product for sale or distribution, or
license any Third Party to do so, except collaboratively with the other Party or
as permitted by this Agreement. However, as discussed further in Article 6, it
is agreed that, if one Party determines that it does not wish to proceed with
such joint development of a particular Collaboration Product, the other Party
shall be permitted to do so on its own pursuant to the terms of Article 6.

      3.2 Joint Development Committee. On a Collaboration Product-by-
Collaboration Product basis, once a Safety Assessment Candidate is selected by
the JRC for progression to Preclinical Development, the Parties shall form a JDC
for the development of such SAC, comprised of six (6) members, with three (3)
members being appointed and replaced by SGX and three (3) members being
appointed and replaced by UG. Additional representatives of each Party (for
example members of the individual project teams or consultants) may attend JDC
meetings at the election of each Party. The Parties may subsequently agree to
change the size of each JDC, as appropriate to meet the needs of the Parties in
managing the joint efforts under this Agreement. The JDC shall (a) prepare the
Development Plan for the Preclinical Development of the SAC, and modify or amend
it as appropriate, based on the results of the development efforts on such SAC,
during the development process; (b) select one or more SACs for Clinical
Development and prepare the Development Plan for such Clinical Development, (c)
determine whether and when to commence Phase 1, Phase 2 and Phase 3 for each
Collaboration Product; (d) oversee the Parties' activities under the Development
Plan, including supervision of

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regulatory activities and (e) perform such other duties and obligations as the
Parties specifically delegate to it in writing by mutual written agreement of
the Parties.

      3.3 JDC Meetings. JDC meetings shall take place at such mutually
convenient times and places as determined by the JDC, with the expectation that
meetings will alternate between appropriate offices of each Party. Each Party
will be responsible for paying its own expenses in connection with participating
in JDC meetings. The JDC shall determine the frequency of its meetings and how
such meetings will be conducted and recorded.

      3.4 Decision-Making and Issue Resolution. All decisions of the JDC shall
be unanimous by the members of such committee. If the JDC fails to reach
unanimous agreement on an issue needing resolution, the matter shall be referred
for good faith discussion and resolution by a senior executive officer
designated by each Party for such purpose.

      3.5 Joint Development. For each SAC selected by the JRC for joint
development as a Collaboration Product hereunder by mutual written agreement,
SGX and UG agree that they will collaborate to generate an International
Registration Dossier, and will conduct, or have conducted, all Preclinical
Development and Clinical Development on such Collaboration Product in accordance
with the Preclinical and Clinical Development Plans developed by the JDC for
such Collaboration Product. The Parties will work together to develop a common
brand name for each Collaboration Product to be marketed under worldwide. Each
Party agrees not to incur any expenses or costs in excess of the Development
Budget (as defined below) within such Development Plan except as mutually agreed
in writing by the Parties. The collaborative development program will follow the
most expeditious path to the production of an International Registration Dossier
and Registration of Collaboration Products in the UG Territory and SGX
Territory, provided however it is understood that unless otherwise agreed by the
Parties, all commercialization activities with respect to such Collaboration
Product once Registration has been obtained, will be conducted by the Parties
independently, in each Party's respective Territory for such Collaboration
Product and that each Party will bear its own costs of such commercialization
activities. On a Collaboration Product-by-Collaboration Product basis, each
Party will be primarily responsible for regulatory activities in its applicable
Territories after Registration in such Territory, comprising regulatory
compliance, safety surveillance, adverse event reporting and all other necessary
support services, however the Parties will keep each other informed of such
activities and will work together in the conduct of such activities where
necessary or useful. The Parties will mutually agree on (i) the
commercialization strategy for countries outside of the Territories, including
outlicensing as necessary; and (ii) the engagement of a Third Party(ies) to
manufacture and supply bulk drug substance for Collaboration Product
development, and Collaboration Products for commercialization purposes, in the
Territories.

      3.6 Access to Information. During the term of this Agreement each Party
(the "Providing Party") will provide the other Party (the "Recipient") in
English, for use in the Recipient's development and commercialization efforts
relating to a Collaboration

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Product, all Information that the Providing Party owns or Controls regarding
such Collaboration Product (including, without limitation, Sublicensee
Information), necessary or useful for making regulatory filings and seeking and
maintaining Registration, for Collaboration Products in the Recipient's
Territory for such Collaboration Product, as such Information becomes available.
The Recipient will have a right of access, and the right to use and incorporate
all Information provided by the Providing Party in regulatory filings for such
Collaboration Products in the Recipient's Territory. The Parties will report and
take other actions in relation to, adverse events with Collaboration Products,
to each other in accordance with a reporting protocol in a form to be agreed by
the JDC. Each Party will be entitled to receive copies of all correspondence
with regulatory authorities and will be entitled to be present at all meetings
with regulatory authorities in any Territory related to Collaboration Products.

      3.7 Development Plans and Budgets. Promptly after the selection by the JRC
of a SAC for development as a Collaboration Product by the Parties, the JDC
shall prepare and provide to each Party for final approval a development plan
for such SAC (the "Development Plan"). The Development Plan shall include all
needed details regarding the Preclinical and Clinical Development, and other
work to be undertaken to develop and produce the International Registration
Dossier for such Collaboration Product, including an allocation of all such work
as appropriate to each Party (or to selected Third Party contractors, as
agreed), and shall establish a budget (the "Development Budget") for all costs
and expenses to be incurred by each Party in conducting the work allocated to it
under such Development Plan. The budget will be based on (i) an allocation of
Full Time Equivalent (FTE) personnel of each Party working under the Development
Plan, with each FTE costed at an annualized rate of U.S.$[...***...] (which rate
will be increased on each anniversary of the Effective Date by [...***...]%);
(ii) the actual extraordinary direct costs approved by the JDC, and (iii) the
actual costs of work performed by Third Parties as approved by the JDC. Each
Party shall diligently review the proposed Development Plan and shall either
approve the plan or provide the JDC any requested changes and comments. If a
Party provides such requested changes or comment to a proposed Development Plan,
the JDC shall review the proposed changes within thirty (30) days, and as
appropriate, thereafter prepare a revised draft of the Development Plan,
accommodating such changes and comments, and resubmit such revised Development
Plan for approval by the Parties as provided above. Once the Parties have agreed
on the Development Plan proposed by the JDC, such Development Plan shall be
effective and shall control and govern the Parties' development effort with
respect to the applicable Product, subject to any subsequent amendments or
modifications to such Development Plan as provided below. From time to time
during the development of such Collaboration Product, the JDC shall review the
Development Plan in light of the results of the development work and any other
relevant Information and shall amend or modify the Development Plan as
appropriate, provided that the JDC may not increase the applicable Development
Budget without the written approval of each Party. At least sixty (60) days
prior to January 1 of any year in which the Parties are developing a particular
Collaboration Product hereunder, the JDC shall review the applicable Development
Budget for such Collaboration Product and shall submit a revised and updated
Development Budget for the coming calendar year to each of the Parties for
approval as provided above. Upon such approval, the Development Budget shall be

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effective for the development of such Collaboration Product during such calendar
year, subject further to amendment of the applicable Development Plan.

      3.8 Costs of the Collaboration. All costs and expenses incurred or
expended by a Party hereunder under the Research Budget and Development Budget
("Collaboration Costs") shall initially be borne by the Party incurring such
costs and expenses, subject to creditability of Excess Expenses as provided in
Section 4.3, provided however, on a Collaboration Product-by-Collaboration
Product basis, the costs of any country specific regulatory requirement (outside
of the International Registration Dossier and any Phase 4 studies required by a
regulatory body in a Territory), will be borne by the Party whose Territory for
such Collaboration Product includes such country. Each Party shall calculate and
maintain records of all the Collaboration Costs incurred or expended by the
Party during its performance of development on a Collaboration Product, in
accordance with generally accepted accounting procedures consistently applied
throughout such Party's organization and such other procedures to be agreed upon
between the Parties. Commencing on the formation of the JDC, each Party shall
report quarterly to the other on the Collaboration Costs it has incurred in each
calendar quarter, on a Collaboration Product-by- Collaboration Product basis,
and the purpose (referencing the activities within the applicable Development
Plan) for which such costs were incurred or expended, with such reports to be
submitted within sixty (60) days after the end of each of the first three (3)
calendar quarters and ninety (90) days after the end of the calendar year. The
Parties shall seek to resolve promptly and in good faith any questions or issues
related to such accounting statements, and in any event within ninety (90) days
following receipt.

      3.9 Excess Expenses.

            (a) For each particular calendar year during which Collaboration
Costs are incurred hereunder, and promptly following the First Commercial Sale
of each Collaboration Product hereunder, each Party shall review the
Collaboration Costs report submitted by the other Party and compare such
submission to the applicable Research Budget and Development Budget. The Parties
will then meet, if necessary, via designated senior officers from each Party
with financial accounting responsibility, to discuss the reports and reach
agreement on the total amount of Collaboration Costs that each Party may
properly apply to the Collaboration activities hereunder. It is understood and
agreed that a Party will not be entitled to obtain credit for any Collaboration
Costs incurred by the Party in excess of the amount set forth in the applicable
Research Budget or Development Budget for accomplishing the relevant task or
objective unless approved by the JRC or JDC. If such officers cannot reach
agreement promptly, the matter will be submitted to senior executive officers of
each Party for prompt resolution, with the understanding that each Party will
provide access to any information relating to the Collaboration activities
undertaken by such Party, and the actual calculation of costs and expenses
incurred therefor, with respect to Collaboration Products during such calendar
year for which such Party seeks credit hereunder for the related Collaboration
Costs .

            (b) UG and SGX will share the total amount of Collaboration Costs
incurred by the Parties within the applicable Research Budget and Development
Budget

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for each Collaboration Product, up to and including the costs of Clinical
Development, on a 50/50 basis. Any Collaboration Costs incurred by a Party in
excess of [...***...]% of the total amount of Collaboration Costs incurred by
both Parties, will be deemed Excess Expenses of such Party (the "First Party")
and in the event that the Party which has not incurred Excess Expenses (the
"Second Party") does not elect to pay the First Party the amount of the Excess
Expenses in cash within [...***...] ([...***...]) months of the First Commercial
Sale of a Collaboration Product, the First Party may credit such Excess Expenses
in accordance with Section 4.3.

      3.10 Audit Rights. Each Party shall have the right to have an independent
accounting firm audit the other Party's relevant records to determine the
accuracy of the Collaboration Costs reported by such other Party under Section
3.8 above. Such audit right shall be exercised under the terms of the audit
provisions set forth in Section 4.11 below.

      3.11 Diligence. Each Party shall use commercially reasonable diligent
efforts to (i) develop and bring Safety Assessment Candidates nominated by the
JRC for Preclinical Development, to the market as Collaboration Products in such
Party's applicable Territory as soon as reasonably practicable, (ii) obtain such
Registrations as may be necessary to market such Collaboration Products in such
Territory, and (iii) after obtaining Registration for any such Collaboration
Products, launch such Collaboration Products and promote and meet the market
demand therefore. In connection with the above, each Party shall use efforts not
less than those efforts made by similarly situated companies in the
biotechnology industry with respect to comparable products of comparable
commercial potential, stage of development and patent protection.

      3.12 Lack of Diligence. In the event that either Party fails to use or
continue to use diligent efforts to actively develop and commercialize a
Collaboration Product in accordance with Section 3.11 above (the "First Party"),
and the First Party fails to initiate diligent efforts within sixty (60) days of
receipt of notice from the other Party (the "Second Party") of such failure,
then the Second Party may terminate the First Party's rights under this
Agreement with respect to such Collaboration Product and, in such event, the
Second Party shall have the exclusive right to commercialize any such
Collaboration Product in the First Party's Territory and the Second Party shall
make payments to the First Party in accordance with Section 6.3.

      3.13 Competing Products. During the period from the Effective Date to the
tenth anniversary of the Effective Date, each Party agrees not to, and to cause
its Affiliates not to, directly or indirectly, develop and commercialize a
Competing Product in any country in the other Party's Territory for the
applicable Collaboration Product. In the event that a Party (an "Acquiring
Party") purchases or otherwise takes control of a Third Party ("Acquisition")
which has developed or commercialized (and is continuing to produce or sell), or
is developing or commercializing a Competing Product (directly or indirectly) in
any such case, within the other Party's Territory for the applicable
Collaboration Product, the Parties will negotiate in good faith to agree on the
appropriate sharing between the Parties of the Acquiring Party's rights and
obligations in connection with the development and commercialization of the
Competing Product, and in the event

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that such agreement is not reached within twelve months after such Acquisition,
the Acquiring Party shall divest, or cause its applicable Affiliate to divest,
the Competing Product.

4.    ROYALTY PAYMENTS

      4.1 Royalties on Net Sales of Collaboration Products. No later than six
(6) months prior to the filing of the International Registration Dossier for the
first Collaboration Product, the Parties will negotiate in good faith a
commercialization plan for Collaboration Products including an agreement on the
appropriate royalty payments and shares of Sublicensing Revenue due to each
Party, recognizing the guiding principle of a 50/50 collaboration with equal
sharing of expenses and returns. In the event that no agreement is reached by
the Parties by the date that is six (6) months prior to the First Commercial
Sale of the first Collaboration Product, (i) UG will pay to SGX a royalty of
[...***...]% of Net Sales of Collaboration Products by or on behalf of UG in the
UG Territory or [...***...]% of Sublicensing Revenue received by UG in
connection with Collaboration Products; and (ii) SGX will pay to UG a royalty of
[...***...]% of Net Sales of Collaboration Products by or on behalf of SGX in
the SGX Territory or [...***...]% of Sublicensing Revenue received by SGX in
connection with Collaboration Products.

      4.2 Royalties on Net Sales of UG Products and SGX Products. In
consideration of the rights granted hereunder:

            (a) SGX shall pay to UG [...***...]% of Net Sales of SGX Products by
or on behalf of SGX in the SGX Territory or [...***...]%] of Sublicensing
Revenue received by SGX in connection with SGX Products; and

            (b) UG shall pay to SGX [...***...]% of Net Sales of UG Products by
or on behalf of UG worldwide or [...***...]% of Sublicensing Revenue received by
UG in connection with UG Products.

      4.3 Creditable Payments. Each Party may credit any Excess Expenses
(including interest calculated at the rate equal to the prime rate as reported
by the Chase Manhattan Bank, New York, New York, plus [...***...] percent
([...***...]%), compounded annually) it has incurred, as determined in
accordance with Section 3.9, against any royalty payments it is required to make
under Section 4.1, up to a maximum of [...***...]% of the royalties due from
such Party in any calendar quarter. In the event that a Collaboration Product
has been registered in one Party's Territory but the First Commercial Sale of a
Collaboration Product in the other Party's Territory is delayed or likely to be
delayed by more than twelve (12) months, and such delayed Party has Excess
Expenses the Parties will negotiate in good faith an agreement to ensure that
during such period until there is Registration and Net Sales of such
Collaboration Product in each Party's Territory, the Parties will share expenses
and returns under the Collaboration recognizing the guiding principle of a 50/50
collaboration with equal sharing of expenses and returns.

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      4.4 Royalty Term. The obligation of each Party to pay royalties under
Sections 4.1 and 4.2 shall continue for each Product on a Product-by-Product
basis, until the later of (i) such time as there are no Valid Claims in such
country covering such Product and (ii) [...***...] ([...***...]) years from the
First Commercial Sale of such Product.

      4.5 Third Party Royalties. UG shall be responsible for the payment of any
amounts due from UG to third parties for intellectual property necessary for the
manufacture, use, import or sale of Products in UG Territory and SGX shall be
responsible for the payment of any amounts due from SGX to third parties for
intellectual property necessary for the manufacture, use, import or sale of
Products in SGX Territory; provided that, in the event that Third Party licenses
are required for a particular Collaboration Product in the applicable UG
Territory and SGX Territory, the Parties will share the costs of obtaining such
licenses in accordance with Section 3.9(b).

      4.6 Sublicensees. Each Party shall include in each permitted sublicense
granted according to Article 5, a provision requiring the sublicensee to make
reports to the sublicensor, to exchange and permit each Party to use,
Information owned or Controlled by the sublicensee ("Sublicensee Information")
in accordance with Section 3.8, to keep and maintain records of sales made
pursuant to such sublicense and to grant access to such records by the other
Party's accounting firm to the same extent required of the sublicensor under
Section 4.8.

      4.7 Withholding Taxes. Any income or other tax that either Party is
required to withhold and pay on behalf of the other Party with respect to the
milestone and royalties payable under this Agreement, shall be deducted from and
offset against said milestone and royalty payments prior to remittance to the
receiving Party; provided however, that in regard to any tax so deducted, the
paying Party shall give or cause to be given to the receiving Party such
assistance as may reasonably be necessary to enable the receiving Party to claim
exemption or credit, and in each case, the paying Party shall furnish to the
receiving Party proper evidence of the taxes paid on its behalf.

      4.8 Reports; Payments. The royalties due under Sections 4.1 and 4.2 shall
be paid quarterly within sixty (60) days after the close of each calendar
quarter, or earlier if practicable, immediately following each quarterly period
in which such royalties are earned. With each such quarterly payment, the paying
Party shall furnish the receiving Party a royalty statement setting forth in
reasonable detail on a country-by-country and Product-by-Product basis: (i) the
total number of units of each Product sold hereunder for the quarterly period
for which the royalties are due; (ii) the calculation of Net Sales pursuant to
Section 1.23; (iii) the calculation of Excess Expenses pursuant to Section 3.9
and the amount of Excess Expenses to be credited against royalties pursuant to
Section 4.3; (iv) the royalties due the receiving Party in such quarter; and (v)
details of payments (if any) to third parties pursuant to third party licenses
as described in Section 4.5 above. If no royalties are due, the paying Party
shall so report.

      4.9 Currency Conversion. All amounts required to be paid under this
Agreement by UG to SGX shall be paid in United States dollars and all amounts
required to be paid by SGX to UG shall be paid in Euros. Royalties earned shall
first be

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determined in the currency of the country in which they are earned and then
converted to its equivalent in United States dollars or Euros, as applicable,
using the average daily exchange rate for the last month of the quarterly period
in which royalties were earned, as customarily used by each Party in its
respective accounting practice.

      4.10 Late Payments. Any payments or portions thereof due hereunder which
are not paid on the date such payments are due, shall bear interest at the rate
equal to the lesser of the prime rate as reported by the Chase Manhattan Bank,
New York, New York, plus [...***...] percent ([...***...]%) or the maximum
amount permitted by law, compounded monthly. This Section 4.10 shall in no way
limit any other remedies available to each Party.

      4.11 Audits. Each Party shall maintain accurate books and records which
enable the calculation of Excess Expenses and royalties payable under this
Agreement to be verified. Each Party shall maintain the books and records for
each quarterly period for three (3) years after the submission of the
corresponding reports under Sections 3.8 and 4.8. Upon thirty (30) days prior
notice, independent accountants selected by a Party (the "Inspecting Party"),
reasonably acceptable to the other Party, may have access to such Party's books
and records after executing a reasonable confidentiality agreement, during such
Party's normal business hours at mutually agreed times to conduct a review or
audit no more than once per calendar year, for the sole purpose of verifying the
accuracy of such Party's payments and compliance with this Agreement. The
accounting firm shall report to the Inspecting Party whether there has been a
royalty underpayment and, if so, the extent thereof. In the event such
accounting firm concludes that amounts were overpaid by the other Party during
such period, the Inspecting Party shall repay the other Party the amount of such
overpayment within ninety (90) days of the date the Inspecting Party delivers to
the other Party such accounting firm's written report so concluding. Any such
inspection shall be at the Inspecting Party's expense, however, in the event
that an inspection reveals underpayment of five percent (5%) or more in any
audit period or a similar discrepancy or deviance in any Excess Expenses, the
other Party shall pay the costs of the inspection. Any underpayments identified
in such an inspection shall be promptly paid to the Inspecting Party, with
interest calculated in accordance with Section 4.10.

5.    LICENSES

      5.1 License to UG. Subject to the terms and conditions of this Agreement,
SGX hereby grants to UG, the following licenses:

            (a) an exclusive license (with the right to grant sublicenses in
accordance with Section 5.4 below) under SGX'S interest in Collaboration
Technology to make, have made, use, import, offer for sale and sell
Collaboration Products in the UG Territory;

            (b) an exclusive, worldwide license (with the right to grant
sublicenses in accordance with Section 5.4 below) Under SGX's interest in
Collaboration Technology, to make, have made, use, import, offer for sale and
sell UG Products;

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            (c) a non-exclusive, worldwide, royalty-free license under SGX's
interest in SGX Background Technology, solely as necessary to conduct the
Collaboration; and

            (d) solely in the event that UG becomes an Active Party under
Section 6.1, an exclusive, worldwide license (with the right to grant
sublicenses in accordance with Section 5.4 below) under SGX's interest in
Collaboration Technology, to make, have made, use, import, offer for sale and
sell Collaboration Products.

            (e) an exclusive, worldwide, royalty-free license (with the right to
grant sublicenses under Section 5.4 below), under SGX's interest in UG
Compounds, to make, have made, use, import, offer for sale and sell products.

      5.2 License to SGX. Subject to the terms and conditions of this Agreement,
UG hereby grants to SGX, the following licenses:

            (a) an exclusive license (with the right to grant sublicenses in
accordance with Section 5.4 below) under UG's interest in Collaboration
Technology to make, have made, use, import, offer for sale and sell
Collaboration Products in the SGX Territory;

            (b) an exclusive, worldwide license (with the right to grant
sublicenses in accordance with Section 5.4 below) under UG's interest in
Collaboration Technology to make, have made, use, import, offer for sale and
sell SGX Products;

            (c) a non-exclusive, worldwide, royalty-free license under UG's
interest in UG Background Technology, solely as necessary to conduct the
Collaboration; and

            (d) solely in the event that SGX becomes an Active Party under
Section 6.1, an exclusive, worldwide license (with the right to grant
sublicenses in accordance with Section 5.4 below) under UG's interest in
Collaboration Technology, to make, have made, use, import, offer for sale and
sell Collaboration Products.

            (e) an exclusive, worldwide, royalty-free license (with the right to
grant sublicenses in accordance with section 5.4 below), under UG's interest in
SGX Compounds, to make, have made, use, import, offer for sale and sell
products.

      5.3 Cross Licenses. Each Party hereby grants to the other:

            (a) a non-exclusive, non-transferable, license to use and practice
such Party's interest in Collaboration Technology solely to conduct the
Collaboration; and

            (b) subject to Section 5.6(d), a non-exclusive, worldwide license
(with the right to grant sublicenses in accordance with Section 5.4 below) under
each Party's interest in Collaboration Technology to make, have made, use,
import, offer for sale and

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sell products directed at inhibiting, modulating or altering the activity of MET
for application outside the Therapeutic Field.

      5.4 Sublicenses. Each Party may sublicense the rights granted in Sections
5.1(a), (b) and (d), 5.2(a), (b) and (d) and 5.3(b) to its Affiliates and to
Third Parties, provided that (i) prior to entering into any such sublicense with
a Third Party (other than under Sections 5.1(d) or (e) or 5.2(d) or (e)), the
other Party is first offered such rights on terms no less favorable than those
offered or proposed to be offered to the Third Party, and the Parties then
negotiate in good faith the terms of such agreement during the following
forty-five day period; and (ii) such sublicense granted is consistent with all
of the terms and conditions of this Agreement. The sublicensing Party shall
remain responsible for all of each such sublicensee's obligations under this
Agreement.

      5.5 No Unauthorized Use. UG hereby covenants to SGX that it will not use
or practice the SGX Background Technology or SGX Compounds for any purpose other
than as expressly permitted under this Agreement. SGX hereby covenants to UG
that it will not use or practice the UG Background Technology or UG Compounds
for any purpose other than as expressly permitted under this Agreement.

      5.6 Retained Rights. Notwithstanding anything in this Agreement to the
contrary:

            (a) SGX will have the right to develop and commercialize SGX
Compounds, without accounting to UG, for any therapeutic indication and UG will
have the right to develop and commercialize UG Compounds, without accounting to
SGX, for any therapeutic indication;

            (b) SGX will have the right to develop and commercialize any Lead
Compounds selected by the JRC for lead optimization, in the SGX Retained Field,
provided that: (i) such Lead Compound is at least [...***...] in an [...***...]
against another kinase (other than MET), as it is against RON; (ii) such lead
compound is not selected by the JRC as a SAC and (iii) SGX does not develop such
Lead Compound solely for application in the Expanded Therapeutic Field;

            (c) UG will have the right to develop and commercialize any Lead
Compounds selected by the JRC for lead optimization, in the UG Retained Field,
provided that: (i) such Lead Compound is at least [...***...] in an [...***...]
against a non-kinase target, as it is against RON; (ii) such lead compound is
not selected by the JRC as a SAC and (iii) UG does not develop such Lead
Compound solely for application in the Expanded Therapeutic Field;

            (d) Each Party (the "Developing Party") will have the right to
develop and commercialize any Lead Compound selected by the JRC for lead
optimization, as a MET inhibitor, provided that (i) such Lead Compound is at
least [...***...] in an [...***...] against MET as it is against RON; and (ii)
prior to commencing any preclinical development activities with such Lead
Compound, the Developing Party first offers the other Party (the "Other Party")
the right to collaborate with the Developing

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Party on the development of such Lead Compound, on substantially the same terms
and conditions as under this Agreement, which right the Other Party has sixty
(60) days to evaluate and accept or decline.

            (e) SGX and UG will jointly and equally own any Safety Assessment
Candidates and Drug Candidates identified under the Collaboration provided that
neither Party will have the right to develop or commercialize such SACs or Drug
Candidates outside of the Collaboration without the other Party's prior written
consent.

      5.7 Third Party Licenses. In the event that the JRC determines that it is
necessary or useful to acquire a license from any Third Party specifically for
the conduct of the Collaboration, the Parties shall discuss which Party shall
acquire such license provided however, that the costs of any such license shall
be shared equally by the parties.

      5.8 Reports. Each Party shall keep the other Party fully informed of its
activities subject to this Agreement, including its activities in connection
with the development and commercialization of SGX Products and UG Products and
the commercialization of Collaboration Products. On or before January 31 and
July 31 of each year during the term of this Agreement, each Party shall provide
the other with a written report summarizing such events and activities.

6.    SINGLE PARTY DEVELOPMENT

      6.1 Single Party Development. Subject to the terms of this Article 6, if
the JDC cannot agree on whether to clinically develop a particular Safety
Assessment Candidate pursuant to Section 2.4, or if a Party decides to terminate
its Preclinical or Clinical development activities with regard to a particular
Collaboration Product pursuant to Section 6.2, the Party which wants to proceed
with or continue such clinical development (the "Active Party") may do so, at
its discretion, without the financial support or involvement of the other Party
(the "Inactive Party"). If a Party becomes an Inactive Party, the Active Party
shall have the rights under Section 5.1(d) or 5.2(d), as applicable.

      6.2 Termination of Preclinical or Clinical Development. Each Party may
terminate in its sole discretion, its research, Preclinical Development or
Clinical Development obligations with regard to a particular Collaboration
Product upon written notice, within the ninety (90) day period immediately
following the completion of any of the events described in paragraphs (a)
through (g) below. Upon any such termination, the terms of Sections 6.1, 6.3 and
6.4 will apply and the Active Party shall have no further obligations to the
Inactive Party with regard to such Collaboration Product, except as set forth in
such Sections.

            (a) Failure to obtain, as determined by the JRC, a crystal structure
of the Target at better than [...***...] resolution within [...***...]
([...***...]) months following the Effective Date.

                                       18    ***CONFIDENTIAL TREATMENT REQUESTED
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            (b) Selection by the JRC of a [...***...] for entry into
[...***...].

            (c) Selection by the JRC of a [...***...] for [...***...].

            (d) Decision by the JDC to [...***...].

            (e) Completion of [...***...] for [...***...].

            (f) Decision of the JDC to [...***...].

            (g) [...***...] of a [...***...].

      6.3 Royalties. The Active Party shall pay the Inactive Party a royalty on
the sales of Collaboration Products as follows. No royalties will be payable to
the Inactive Party in the event that a Party becomes an Active Party under
Section 6.2(a):

            (a) Where a Party became an Active Party under Section 6.2(b):
[...***...]% of Net Sales by the Active Party or [...***...]% of Sublicensing
Revenue received by the Active Party in connection with such Collaboration
Product.

            (b) Where a Party became an Active Party under Section 6.2(c):
[...***...]% of Net Sales by the Active Party or [...***...]% of Sublicensing
Revenue received by the Active Party in connection with such Collaboration
Product.

            (c) Where a Party became an Active Party under Section 6.2(d):
[...***...]% of Net Sales by the Active Party or [...***...]% of Sublicensing
Revenue received by the Active Party in connection with such Collaboration
Product.

            (d) Where a Party became an Active Party under Section 6.2(e):
[...***...]% of Net Sales by the Active Party or [...***...]% of Sublicensing
Revenue received by the Active Party in connection with such Collaboration
Product.

            (e) Where a Party became an Active Party under Section 6.2(f):
[...***...]% of Net Sales by the Active Party or [...***...]% of Sublicensing
Revenue received by the Active Party in connection with such Collaboration
Product

            (f) Where a Party became an Active Party under Section 6.2(g):
[...***...]% of Net Sales by the Active Party or [...***...]% of Sublicensing
Revenue received by the Active Party in connection with such Collaboration
Product.

      6.4 Recovery of Investments. If a Party becomes the Inactive Party
pursuant to Section 6.2, the Active Party shall pay the Inactive Party, in
addition to the royalties set forth in Section 6.3, a royalty equal to
[...***...]% of the Net Sales based upon sales of the applicable Collaboration
Product sold by the Active Party, its Affiliates, or any of its

                                       19    ***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                                                                    CONFIDENTIAL

Sublicensees in the Party's applicable Territory, or [...***...]% of
Sublicensing Revenue, until such time as the sum of the royalties paid to the
Inactive Party pursuant to this Section 6.4 is equal to the sum of any Excess
Expenses incurred by the Inactive Party in accordance with the applicable
Development Budget for the applicable Collaboration Product prior to such
Party's inactivity.

7.    INTELLECTUAL PROPERTY

      7.1 Ownership of Technology.

            (a) By SGX. SGX Background Technology, and Collaboration Technology
made solely by SGX will be owned solely by SGX.

            (b) By UG. UG Background Technology, and Collaboration Technology
made solely by UG will be owned solely by UG

            (a) Joint. Collaboration Technology made jointly by SGX and UG will
be owned jointly by SGX and UG. Notwithstanding any joint ownership of any
Collaboration Technology under this Agreement, neither Party will have the right
to exploit such Collaboration Technology other than as expressly permitted under
the terms and conditions of this Agreement.

            (d) Law. Inventorship of inventions and, subject to the terms of
this Agreement, ownership rights with respect thereto, shall be determined in
accordance with the patent laws of the United States.

      7.2 Patent Prosecution.

            (a) Background Technology. UG shall be responsible, at its expense,
for the preparation, filing, prosecution and maintenance of the patent
applications and patents claiming inventions within UG Background Technology, in
countries selected by UG, and for conducting any interferences, reexaminations,
reissues, oppositions, or request for patent term extension relating thereto.
SGX shall be responsible, at its expense, for the preparation, filing,
prosecution and maintenance of the patent applications and patents claiming
inventions within SGX Background Technology in countries selected by SGX, and
for conducting any interferences, reexaminations, reissues, oppositions, or
request for patent term extension relating thereto.

            (b) Collaboration Technology. The JRC or the JDC, as applicable
shall have initial responsibility for reviewing all potentially patentable
inventions and determining the strategy for the filing, prosecuting and
maintaining of inventions within Collaboration Technology, (collectively
"Collaboration Inventions"), and the JRC or JDC shall then recommend to the
Parties whether to file Collaboration Inventions applications, and in which
countries such Collaboration Inventions shall be first filed and will develop a
global filing strategy for each Collaboration Invention. Unless the JRC or JDC,
as applicable, otherwise agrees, SGX shall be responsible for filing,
prosecuting and maintaining such Collaboration Inventions and the cost and
expense of filing, prosecuting

                                       20    ***CONFIDENTIAL TREATMENT REQUESTED
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                                                                    CONFIDENTIAL

or maintaining patent application with respect to any Collaboration Inventions
shall be borne equally by the Parties. SGX shall provide UG with copies of all
documents, correspondence, materials and proof of costs relating to the
prosecution by SGX of such Collaboration Invention. Such copies shall be
provided promptly after receipt, with respect to communications to or from
applicable patent authorities, and sufficiently in advance of SGX's filing or
otherwise communicating any such documents to allow UG reasonable time to review
such materials and comment thereon prior to filing.

            (c) Cooperation. Each Party agrees to cooperate with the other and
take all reasonable additional actions as may be reasonably required to achieve
the intent of this Article 7, including, without limitation, the execution and
provision of necessary and appropriate instruments and documents.

            (d) Patent Enforcement. In the event either Party becomes aware of
any interference, opposition, or request for reexamination, or similar
proceedings, involving a patent application or patent filed in accordance with
Section 7.2(b) within Collaboration Technology (a "Collaboration Patent"), it
shall promptly notify the other Party hereto, and the Parties shall agree on the
steps which shall be taken to protect the pertinent Collaboration Patent. In the
event either Party becomes aware of any possible infringement of a Collaboration
Patent or misappropriation of an invention within the Collaboration Technology,
it shall promptly notify the other Party hereto, providing a written description
of the potentially infringing or misappropriation activities. SGX shall have the
right, but not the obligation to institute, prosecute and control any action or
proceeding with respect to infringement of Collaboration Patents in the SGX
Territory. UG shall have the right, but not the obligation, to institute,
prosecute and control any action or proceeding with respect to infringement of
Collaboration Patents in the UG Territory. If a Party given the right to enforce
a Collaboration Patent pursuant to this Section fails to bring an action or
proceeding against a suspected infringer within a period of ninety (90) days
after having notice of such infringement in the Party's Territory, the other
Party shall have the right to bring and control an action against such infringer
by counsel of its own choice, and the non-enforcing Party shall have the right
to be represented in any such action by counsel of its own choice at its own
expense. The Party controlling an action involving any infringement of a
Collaboration Patent shall consider in good faith the interests of the other
Party in so doing, and shall not settle or consent to an adverse judgment in any
such action which would have a material adverse effect on the rights or
interests of the other Party without the prior express written consent of such
other Party. If one Party brings any such action or proceeding, the other Party
agrees to be joined as a Party plaintiff if necessary to prosecute the action
and to give the first Party reasonable assistance and authority to file and
prosecute the suit. In each case relating to infringement of a Collaboration
Patent, each Party shall bear the costs of its enforcement of the Patent rights
discussed in this section and retain for its own account any amounts received
from Third Parties; provided, however, that any such recovery over the costs of
the enforcement of the Patent Rights shall be deemed Net Sales of the infringed
Collaboration Product, subject to a royalty of [...***...]%.

                                       22    ***CONFIDENTIAL TREATMENT REQUESTED
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                                                                    CONFIDENTIAL

8.    CONFIDENTIALITY AND PUBLICITY

      8.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the Term of the Agreement, the receiving Party shall not
publish or otherwise disclose and shall not use for any purpose, except as
expressly permitted herein, any information or material furnished to it by the
other Party hereto pursuant to this Agreement which if disclosed in tangible
form is marked "Confidential" or with other similar designation to indicate its
confidential or proprietary nature, or if disclosed orally is confirmed as
confidential or proprietary by the Party disclosing such information at the time
of such disclosure or within thirty (30) days thereafter ("Confidential
Information"). Notwithstanding the foregoing, it is understood and agreed that
Confidential Information shall not include information or material that, in each
case as demonstrated by written documentation:

            (a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure;

            (b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;

            (c) 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

            (d) was subsequently lawfully disclosed to the receiving Party by a
person other than a Party hereto or developed by the receiving Party without
reference to any Confidential Information disclosed by the disclosing Party.

      8.2 Permitted Disclosures. The restrictions contained in Section 8.1 shall
not apply to Confidential Information that is (i) provided by the receiving
Party to a Third Party or sublicensee under confidentiality provisions at least
as stringent as those in this Agreement, for consulting, research, development,
manufacturing, external testing or marketing trials; or (ii) reasonably required
to be disclosed in filing or prosecuting patent applications within the Patent
Rights, prosecuting or defending litigation, complying with applicable
governmental regulations or conducting preclinical or clinical trials, or
submitting information to tax or other governmental authorities, provided that
if a Party is required to make any such disclosure of another Party hereto's
Confidential Information, to the extent it may legally do so, it will give
reasonable advance written notice to the other Party of such disclosure and
except to the extent inappropriate in the case of patent applications, will use
its reasonable efforts to secure confidential treatment of such Confidential
Information prior to its disclosure (whether through protective orders or
otherwise).

      8.3 Publication. Any public disclosure (oral, written or graphic) by
either Party describing the scientific results of the Research Collaboration
will require prior review and approval of the other Party at least thirty (30)
days prior to its submission for publication or other public disclosure. If the
reviewing Party so requests, the proposed

                                       22
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                                                                    CONFIDENTIAL

public disclosure will be delayed for forty-five (45) days from the date of each
request for the filing of patent application(s) related to the proposed public
disclosure.

      8.4. Publicity. The parties agree to make a mutually agreed press release
regarding this Agreement promptly following the Effective Date. Except as
expressly provided in this Agreement, each Party agrees not to disclose any
terms of this Agreement to any third party without the prior written consent of
the other Party; provided however, that disclosures may be made as required by
securities or other applicable laws, or to actual or prospective investors or
strategic partners under obligations of confidence, or to a party's professional
advisors.

9.    INDEMNIFICATION

      9.1 Indemnification of SGX. UG shall indemnify, defend, and hold harmless
SGX, the directors, officers, and employees of SGX and the successors and
assigns of any of the foregoing (the "SGX Indemnitee(s)") from and against all
claims, losses, costs, and liabilities (including, without limitation, payment
of reasonable attorneys' fees and other expenses of litigation), and shall pay
any damages (including settlement amounts) finally awarded, with respect to any
claim, suit or proceeding (any of the foregoing, a "Claim") brought by Third
Party against a SGX Indemnitee, arising out of or relating to: (a) the
performance by UG of the Collaboration; (b) the exercise by UG of the rights
granted UG under this Agreement; (c) a material breach by UG of its obligations
under this Agreement; (d) a breach of UG's representations and warranties under
Section 10; (e) any Products developed, manufactured, use, sold or otherwise
distributed by or on behalf of UG, its Affiliates or permitted sublicensees
pursuant to Article 5, (including without limitation, product liability claims),
(f) the handling, storage or transfer by UG or UG's permitted transferee of
materials provided by SGX to UG hereunder, (g) the negligence or willful
misconduct of UG or (h) a claim that the use by SGX or UG of the UG Background
Technology, infringes the intellectual property rights of a Third Party, except,
in each case, to the extent caused by the gross negligence or willful misconduct
of a SGX Indemnitee.

      9.2 Indemnification of UG. SGX shall indemnify, defend and hold harmless
UG, the directors, officers, and employees of UG, and the licensors, successors
and assigns of any of the foregoing (the "UG Indemnitee(s)") from and against
all Claims (as defined in Section 9.1) brought by third Party against a UG
Indemnitee, arising out of or relating to: (a) the performance by SGX of the
Collaboration; (b) the exercise by SGX of the rights granted SGX under this
Agreement; (c) a material breach by SGX of its obligations under this Agreement;
(d) a breach of SGX's representations and warranties under Section 10; (e) any
Products developed, manufactured, use, sold or otherwise distributed by or on
behalf of SGX, its Affiliates or permitted sublicensees pursuant to Article 5,
(including without limitation, product liability claims) (f) the handling,
storage or transfer by SGX of materials provided by UG to SGX hereunder; (g) the
negligence or willful misconduct of SGX, or (h) a claim that the use by SGX or
UG of the SGX Background Technology, infringes the intellectual property rights
of a Third Party, except, in each case, to the extent due to the gross
negligence or willful misconduct of a UG Indemnitee.

                                       23
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                                                                    CONFIDENTIAL

      9.3 Indemnification Procedures. An Indemnitee that intends to claim
indemnification under this Article 9 shall promptly notify the other Party (the
"Indemnitor") in writing of any claim in respect of which the Indemnitee intends
to claim such indemnification, and the Indemnitor shall have sole control of the
defense and/or settlement thereof, provided that the indemnified Party may
participate in any such proceeding with counsel of its choice at its own
expense. The indemnity agreement in this Article 9 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 9 but the omission so to deliver written notice to
the Indemnitor shall not relieve the Indemnitor of any liability that it may
have to any Indemnitee other than under this Article 9. The Indemnitee under
this Article 9, its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives and provide full information in the
investigation of any Claim covered by this indemnification. Neither Party shall
be liable for any costs or expenses incurred by the other Party without its
prior written authorization.

10.   REPRESENTATIONS AND WARRANTIES

      10.1 Each Party. Each Party represents and warrants to the other (i) that
it has the legal power, authority and right to enter into this Agreement and to
perform its respective obligations under this Agreement; (ii) that it is not a
Party to any agreement or arrangement with any Third Party or under any
obligation or restriction which in any way limits or conflicts with its ability
to fulfill any of its obligations under this Agreement, (including without
limitation, the licenses granted in Article 5), and shall not enter into any
such agreement or arrangement during the term of this Agreement; (iii) each
employee or person engaged in the Collaboration on behalf of UG or SGX has
entered into a written agreement which provides for the assignment to UG or SGX,
respectively, of all inventions and discoveries made by such employee or person
during the course of his or her employment or engagement with UG or SGX.

      10.2 Representations and Warranties of UG. UG represents and warrants that
to the knowledge of UG, (i) it is not aware of any asserted or unasserted
claims, interference, oppositions or demands of any Third Party against the
Target in existence as of the Effective Date and (ii) the Parties' use of the
Target as contemplated under this Agreement will not infringe any patent or any
other proprietary rights of any Third Party.

      10.3 Disclaimer. SGX and UG specifically disclaim any guarantee that the
Collaboration will be successful, in whole or in part. The failure of the
parties to develop Products or to meet any of the estimated time lines in the
Research Plan or Development Plan will not constitute a breach of any
representation or warranty or other obligation under this Agreement. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, UG AND SGX MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE SGX BACKGROUND TECHNOLOGY, UG BACKGROUND

                                       24
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                                                                    CONFIDENTIAL

TECHNOLOGY, OR COLLABORATION TECHNOLOGY OR PRODUCTS OF EACH PARTY, INCLUDING
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY OR OTHER RIGHTS OF ANY
THIRD PARTY.

11.   TERM AND TERMINATION

      11.1 Term of the Agreement. The term of this Agreement shall commence on
the Effective Date and unless terminated earlier, will terminate on a
Product-by-Product basis upon the later of (i) expiration of the last to expire
patent within the Patent Rights covering such Product and (ii) fifteen years
after the First Commercial Sale of such Product.

      11.2 Termination for Cause. Either UG or SGX may terminate this Agreement
by written notice, stating such Party's intent to terminate in the event the
other Party shall have materially breached or defaulted in the performance of
any of its obligations hereunder, and such default shall have continued for
sixty (60) days after written notice thereof was provided to the breaching Party
by the nonbreaching Party.

      11.3 Termination for Insolvency. Either Party may terminate this
Agreement, if at any time the other Party files in any court or agency pursuant
to any statute or regulation of any state or country, a petition in bankruptcy
or insolvency or for reorganization or for any arrangement of for the
appointment of a receiver or trustee of the Party or of substantially all of its
assets, or if the other Party is served with an involuntary petition against it
in any insolvency proceeding and such petition is not dismissed within six (6)
months after the filing thereof, or if the other Party makes an assignment of
substantially all of its assets for the benefit of creditors.

      11.4 Bankruptcy Code Section 365(n). All rights and licenses granted under
or pursuant to this Agreement are, and will otherwise be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code, licenses of
rights to "intellectual property" as defined under Section 101 of the United
States Bankruptcy Code. The Parties agree that the Parties, as licensees of such
rights under this Agreement, will retain and may fully exercise all of their
rights and elections under the United States Bankruptcy Code. The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against a Party under the United States Bankruptcy Code, the non-bankrupt
Party will be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, which, if not already in the non-bankrupt Party's
possession, will be promptly delivered to it unless the Party subject to such
proceeding continues to perform all of its obligations under this Agreement.

      11.5 Effect of Termination.

            (a) Accrued Rights and Obligations. Termination of this Agreement
for any reason shall not release any Party hereto from any liability which, at
the time of

                                       25
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                                                                    CONFIDENTIAL

such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude either Party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.

            (b) Licenses. In the event of termination of this Agreement by the
non-breaching or non-bankrupt Party pursuant to Sections 11.2 or 11.3, the
licenses granted the breaching Party or bankrupt Party under Article 5 shall
terminate concurrently and the non-breaching Party or non-bankrupt Party shall
have an exclusive, royalty free right under Collaboration Technology, to make,
have made, use, sell and import, Collaboration Products in the non-breaching or
non-bankrupt Party's applicable Territory. The breaching or bankrupt Party will
assist the non-breaching or non-bankrupt Party in every proper way to effect the
license granted above. The breaching Party shall further deliver to the
non-breaching Party such relevant tangible materials embodying Collaboration
Technology as may be necessary or useful to the exercise by the non-breaching
Party of the license hereunder.

            (c) Survival. The provisions of Sections 3.9, 3.10, 3.13, 5.5, 5.6,
5.8, 6.3, 6.4, and Articles 4, 7, 8, 9, 10 and 12 shall survive the expiration
or termination of this Agreement for any reason.

12.   MISCELLANEOUS

      12.1 Arbitration. If the Parties are unable to resolve any dispute,
controversy or claim between them arising out of or relating to the validity,
construction, enforceability or performance of this Agreement, including
disputes relating to alleged breach or to termination of this Agreement (each, a
"Dispute"), the Dispute shall be finally settled under the Rules of Arbitration
of the International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules. Such arbitration shall be held in Geneva, and
shall be conducted in the English language. Pending the establishment of the
arbitral tribunal or pending the arbitral tribunal's determination of the merits
of the controversy, either Party may seek from a court of competent jurisdiction
any interim or provisional relief that may be necessary to protect the rights or
property of that Party.

      12.2 Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Delaware,
without reference to rules of conflicts or choice of laws.

      12.3 Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be sent by prepaid registered or certified mail, return
receipt requested, internationally recognized courier or personal delivery, or
by fax with confirming letter mailed under the conditions described above in
each case addressed to the other Party at the address shown below or at such
other address for which such Party gives notice hereunder. Such notice shall be
deemed to have been given when delivered:

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                                                                    CONFIDENTIAL

      If to SGX:

      Structural GenomiX, Inc.
      10505 Roselle Street,
      San Diego, CA  92121
      Fax: + 1 858 558 3402
      Attn:  Chief Executive Officer
      Copy to:  Corporate Counsel

      If to UG:

      UroGene S.A.
      4, Rue Pierre Fontaine - Genopole
      91058 Evry Cedex
      France
      Fax:  + 33 1 60 87 89 89
      Attn:  Chief Executive Officer

      12.4 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, act of terrorism, fire, Act of God, earthquake,
flood, lockout, embargo, governmental acts or orders or restrictions, failure of
suppliers (including, without limitation, energy suppliers), or any other reason
where failure to perform is beyond the reasonable control and not caused by the
negligence, intentional conduct or misconduct of the nonperforming Party and the
nonperforming 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.

      12.5 No Implied Rights. Only the rights granted pursuant to the express
terms of this Agreement shall be of any legal force or effect. No other rights
shall be created by implication or otherwise.

      12.6 Assignment. This Agreement shall not be assignable by either Party to
any third Party hereto without the written consent of the other Party hereto,
except either Party may assign this Agreement, without such consent, to (i) an
Affiliate or (ii) an entity that acquires all or substantially all of the
business or assets of such Party to which this Agreement pertains, whether by
merger, reorganization, acquisition, sale, or otherwise.

      12.7 Partial Invalidity. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
shall remain, nevertheless, in full force and effect. The Parties agree to
renegotiate in good faith any provision held invalid and to be bound by the
mutually agreed substitute provision in order to give the most approximate
effect originally intended by the Parties. This Agreement has been prepared in
the English language and the English language shall control its interpretation

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                                                                    CONFIDENTIAL

      12.8 Independent Contractors. The relationship of UG and SGX established
by this Agreement is that of independent contractors, and nothing contained in
this Agreement shall be construed to (i) give either Party the power to direct
or control the day-to-day activities of the other, (ii) constitute the Parties
as partners, joint venturers, co-owners or otherwise as participates in a joint
or common undertaking, or (iii) allow a Party to create or assume any obligation
on behalf of the other Party for any purpose whatsoever.

      12.9 No Waiver. No waiver of any term or condition of this Agreement shall
be valid or binding on either Party unless agreed in writing by the Party to be
charged. The failure of either Party to enforce at any time any of the
provisions of the Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the validity of either Party to enforce each and every such provision
thereafter.

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

      12.11. English Language. This Agreement has been prepared in the English
language and the English language shall control its interpretation.

      12.12 Entire Agreement; Amendment. This Agreement, including the Exhibits
attached hereto, constitutes the entire agreement of the Parties with respect to
the subject matter hereof, and supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, between UG and SGX with
respect to such subject matter. No amendment or modification hereof shall be
valid or binding upon the parties unless made in writing and signed by the duly
authorized representatives of both Parties.

      IN WITNESS WHEREOF, the undersigned are duly authorized to execute this
Agreement on behalf of UG and SGX as applicable.

UROGENE S.A.                                      STRUCTURAL GENOMIX, INC.

By:  /s/ [Illegible]                              By: /s/ Mike Grey
    ----------------------------------               ---------------------------

Name:  [Illegible]                                Name: MG Grey

Title:  CEO Chairman of the Board                 Title: President

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                                    EXHIBIT A

                              [COUNTRIES IN EUROPE]

FRANCE
GERMANY
ITALY
BELGIUM
LUXEMBOURG
NETHERLANDS
UNITED KINGDOM
IRELAND
DENMARK
GREECE
SPAIN
PORTUGAL
AUSTRIA
SWEDEN
FINLAND
SWITZERLAND
TURKEY
ICELAND
NORWAY
ANDORRA
MONACO
LIECHTENSTEIN
MALTA
SAN MARINO
VATICAN
POLAND
CZECH REPUBLIC
SLOVAKIA
HUNGARY
MACEDONIA
ROMANIA
BULGARIA
SLOVENIA
ALBANIA
MONTENEGRO
LATVIA
ESTONIA
LITHUANIA
BELARUS
UKRAINE
MOLDAVIA
GEORGIA

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                                    EXHIBIT B

                                  RESEARCH PLAN

         [...***...]ST, [...***...] - [...***...]ST [...***...] RESEARCH PLAN

GOALS FOR [...***...] (END [...***...])
The overall Project goal for [...***...] is to obtain [...***...] of the
[...***...] kinase for the treatment of bladder cancer. This will be
accomplished by:

1. Solving the [...***...] of [...***...], either in the "[...***...]" form or
with a [...***...] [...***...] or [...***...],

2. Screening for [...***...] using [...***...] and [...***...]

3. Employing an [...***...] and [...***...] guided by [...***...],[...***...]
and [...***...] assays

4. Optimizing [...***...] and [...***...]

[...***...] DETERMINATION

A [...***...] encompassing the [...***...] kinase [...***...] ([...***...]) has
been identified that produces modest yields of [...***...]. Since different
[...***...] of a kinase domain can show substantial differences in (i)
[...***...], (ii) [...***...], (iii) [...***...], (iv) [...***...], and (v)
[...***...], several new constructs will be examined in parallel. Various
versions of the isolated kinase domain of [...***...], produced in [...***...],
will be purified and submitted for [...***...] and [...***...] to determine the
structure (see appendix, Figure 1). The following scheme will be followed:

      -     [...***...] additional constructs of the [...***...] of [...***...]
            will be [...***...] and expressed using a [...***...] (see FIGURE
            1). Different [...***...] will be used to produce proteins with
            either [...***...]. This experiment will include one construct,
            [...***...], which represents the [...***...] of [...***...]
            ([...***...],[...***...][...***...], see Figure 1).

      -     All proteins will be tested for solubility after [...***...] and
            [...***...] on a small scale. All soluble proteins will be passed to
            [...***...].

      -     A [...***...] kinase domain will be identified using an SGX
            [...***...] and [...***...] ([...***...]) method, preferably using
            [...***...] if it proves soluble.

      -     Based on the combined data at this stage new constructs may be made
            to modify the exact [...***...] based on the [...***...] data and,
            if necessary, [...***...] will be tried to alter the [...***...]
            and/or solubility of the protein (see Figure 1).

      -     If necessary a variety of protocols to purify the most promising
            soluble proteins will be explored. At this stage the effect of
            parameters such as (i) [...***...], (ii) [...***...], and (iii)
            [...***...] on the [...***...] behavior will be

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            investigated. The optimal conditions will be used to generate
            sufficient [...***...] for [...***...] trials.

      -     Suitable protein samples will be subjected to a broad series of
            [...***...] to identify [...***...]. Information from these initial
            [...***...] is used in [...***...] to home in on a suitable set of
            conditions to produce [...***...].

      -     [...***...] that [...***...] to <[...***...] will be sent to SGX-CAT
            at the APS to collect [...***...] that will be used to determine the
            structure by [...***...] ([...***...]). Alternative strategies are
            available in the unlikely event that no suitable [...***...] search
            model is found.

      -     At this stage a validation set of [...***...] well-characterized
            [...***...] will be used in the development of [...***...] and
            soaking protocols. The [...***...] may include [...***...]
            identified at UG or SGX and may include [...***...] kinase
            [...***...] such as [...***...] and [...***...]. Such protocols will
            form the basis of our ability to rapidly determine the structures of
            [...***...] bound to (i) [...***...] (see below), (ii) [...***...]
            (or [...***...]) [...***...] and (iii) the [...***...].

[...***...] DETERMINATION

A plan similar to that detailed for [...***...] will be pursued. Figure 2 in the
appendix illustrates the construct plans.

[...***...] SCREENING

UG and SGX will share experience in establishing [...***...] and [...***...]
activity assays and in establishing a screening regimen to identify [...***...]
hits (see Figure 3). For the SGX-FAST(TM) library screening a suitable substrate
will be identified from the SGX kinase substrate library. [...***...] and,
potentially, "[...***...]"[...***...] and/or [...***...], will be developed.
Alternative proteins of both [...***...] and [...***...] will be evaluated as
well as various [...***...] of each in the assays. The JRC will determine which
assay format(s), including which protein forms, to employ at the two sites and
establish a work flow for testing collaboration compounds.

      -     SGX-FAST(TM)

The FAST(TM) method will be employed to identify potent lead compounds. Two
screening systems will be used to survey the SGX FAST(TM) scaffold deck
([...***...] compounds) for [...***...] (which may be [...***...] binders), a
[...***...] at [...***...] and a [...***...] with [...***...]. From these
[...***...] the JRC will select [...***...] to pursue with FAST(TM) chemistry.
[...***...] will be elaborated by an [...***...] of [...***...], [...***...],
[...***...] and [...***...]. [...***...] will be continued until the [...***...]
meet the specifications determined by the JRC as required for a Lead Compound
(see Table 1). The Lead Discovery process is schematically represented in the
appendix, Figure 3.

      -     [...***...] Screening

A [...***...] will be screened against [...***...] using the UG technology.

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CELL ASSAYS: [...***...], [...***...] AND [...***...] ASSAYS

[...***...] is an [...***...] form of [...***...] which is [...***...] of
[...***...] for activation. [...***...] has been shown to enhance the
[...***...] and [...***...] capacities of [...***...] cells, a human
[...***...]. When [...***...] meet criteria determined by the JRC, these
compounds will be tested on stable bladder cell lines expressing [...***...] or
[...***...] cell lines expressing [...***...]. Control cell lines will be
[...***...] that do not express [...***...]. Three assays will be employed:

      -     The [...***...] measures the capacity of [...***...] to [...***...]
            a [...***...] with [...***...] (a mixture of [...***...],
            [...***...] and [...***...]).

      -     The [...***...] determines the ability of cells to [...***...] a
            [...***...]

      -     [...***...] will be used to determine [...***...] levels by
            [...***...] of [...***...].

            The [...***...] activity of [...***...] in these assays will be
            measured and calculated as an [...***...].

To investigate broader opportunities for selected lead candidates we may employ
a panel of cell lines (e.g. the [...***...]) to identify [...***...] or
[...***...] systems [...***...] by the [...***...].

In addition to [...***...] assays, other assays may be employed to characterize
compounds. Examples include [...***...] assays, [...***...] assays, [...***...]
assays and [...***...] assays.

SELECTIVITY SCREENING

UG and SGX will determine the details of how, and at what stage, to investigate
the selectivity profiles of the collaboration [...***...]. Generally, the SGX
kinase biochemical selectivity screen, which comprises a collection of kinases
for which both [...***...] and [...***...] are established, will be employed.
The exact composition of the assay panel will be determined by the JRC. Third
party selectivity paneling may also be utilized (e.g. from [...***...]) to
obtain information of the activity of lead compounds against a broader selection
of protein kinases.

The "[...***...]" and [...***...] may also be employed to determine the
[...***...] of the [...***...]. These cell lines have been established to
determine the [...***...] of kinase [...***...] on [...***...]: [...***...],
[...***...] [...***...] and [...***...].

[...***...] AND [...***...]
The [...***...] and [...***...] activities will follow the scheme illustrated in
Figure 3.

IN VITRO [...***...]

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When [...***...] meet criteria determined by the JRC, these compounds will be
evaluated for their effects on [...***...] and [...***...],[...***...], and
[...***...].[...***...] will also be determined using [...***...],[...***...]
and [...***...] as appropriate. Stability will be determined at [...***...] and
[...***...]. [...***...] will be checked using the [...***...] assay and by
measuring the effects on the [...***...] and [...***...] of selected cell lines.
[...***...] and [...***...] will be examined in [...***...] ([...***...]) and
other [...***...].

[...***...] ASSAYS

1. [...***...] in [...***...] or [...***...]
The [...***...] expressing [...***...] (see "Cell Assays" above) and control
cell lines will be used to establish [...***...] in [...***...]. These
[...***...] will receive compounds after a period of [...***...] to allow tumors
to reach a certain size. [...***...] will be administered at [...***...],
[...***...] or by [...***...]. Tumor weight and size will be monitored. The
[...***...] will be [...***...] and [...***...] checked by Western blot of
[...***...] with [...***...] or by [...***...] on [...***...].

2. [...***...] in [...***...]

To estimate efficacy via the [...***...] expressing [...***...] (see "Cell
Assays" above) and control cell lines will be [...***...] inside the [...***...]
and, after tumors reach a suitable size, compounds will be administered by
[...***...]. Depending on the chosen [...***...], the [...***...] may be used in
place of the [...***...].

3. [...***...] models

[...***...] ([...***...]) and [...***...] ([...***...]) [...***...] will be
[...***...] inside the [...***...] of the [...***...] model. After tumors reach
A suitable size [...***...] will be tested in [...***...] with [...***...] or
[...***...] to check for [...***...] or [...***...] effects on tumor regression.

[...***...] models 2 and 3 will be developed according to the [...***...]
selected.

[...***...]

Standard [...***...] and [...***...] will be monitored during the process of
lead optimization as outlined in Figure 3. [...***...] will be evaluated by
standard [...***...] and [...***...] will be monitored using [...***...].
[...***...] determined will include [...***...], [...***...], [...***...],
[...***...] and [...***...], [...***...], [...***...], and [...***...].
[...***...] will be examined to check [...***...]. An [...***...] will be
determined in [...***...] and/or [...***...].

APPENDIX

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[...***...]

Figure 1. ([...***...])

[...***...]

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[...***...]

      Figure 1. [...***...] diagram of the [...***...] primary sequence (the
[...***...] of the [...***...] are not shown). The predicted [...***...] is in
white-on-black. Residues conserved in the kinase family are highlighted
red-on-grey and listed in the row labeled "conserved". The kinase domain
[...***...], as [...***...] by [...***...] ([...***...],[...***...]), are shown
on the row labeled "[...***...]". [...***...], based on the [...***...]
structure, is shown above the primary sequence (sheets are numbered, helices
alphabetized). Positions of forward (F) aND reverse (R) primers for [...***...]
constructs are shown green-on-grey (F) or red-on-grey (R) below the sequence.

         Construct Plan:

The following combination of [...***...] and [...***...] will be used to
generate the initial set of [...***...]: [...***...], [...***...], [...***...],
[...***...] and [...***...]. These will be tested for [...***...] and used to
determine the [...***...] of the [...***...] kinase [...***...] by [...***...]
as described in the research plan and for [...***...]. (Note: one of these, the
[...***...] construct has been tested and shows [...***...] and [...***...]).

Figure 2. ([...***...])

[...***...]

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[...***...]

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[...***...]

Figure 2. [...***...] diagram of the [...***...] primary sequence (the first
[...***...] of the [...***...] are not shown). The predicted [...***...] is in
white-on-black. [...***...] in the kinase family are highlighted red-on-grey and
listed in the row labeled "conserved". The kinase domain [...***...], as defined
by [...***...] and [...***...] ([...***...] and [...***...],[...***...]), are
shown on the row labeled "[...***...]".[...***...], based on the [...***...]
structure, is shown above the primary sequence (sheets are numbered, helices
alphabetized). Positions of forward (F) and reverse (R) primers for [...***...]
constructs are shown green-on-grey (F) or red-on-grey (R) below the sequence.

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[...***...]

Figure 3. [...***...].

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[...***...]

Figure 3. [...***...].

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Table 1. Definition of a [...***...] (see also Figure 3).

[...***...]     [...***...] to [...***...]
[...***...]     [...***...]
[...***...]     [...***...]
[...***...]     [...***...]
[...***...]     [...***...]

         [...***...]
         [...***...]
         [...***...]
         [...***...]
         [...***...]
         [...***...]
         [...***...]
         [...***...]

Table 2. Definition of an [...***...] (see also Figure 3).

[...***...]     [...***...]available
[...***...]     [...***...]
[...***...]     [...***...]
[...***...]     [...***...] and [...***...]
[...***...]     [...***...]
[...***...]     [...***...]
[...***...]     [...***...] on [...***...])
[...***...]     [...***...]; no [...***...];
[...***...]     [...***...]
[...***...]     [...***...] on [...***...] and [...***...]
[...***...]     [...***...]; [...***...]

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Table 3. [...***...] Resources

<TABLE>
<CAPTION>
   Goal                                  FTE ESTIMATE (UG)                    FTE ESTIMATE (SGX)
   ----                                  -----------------                    ------------------
<S>                                      <C>                                  <C>
[...***...]                                                                      [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                                                      [...***...]
[...***...]                                [...***...]
[...***...]                                                                      [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]                           [...***...]
</TABLE>

Table 4 [...***...] Resources

<TABLE>
<CAPTION>
    Goal                                 FTE ESTIMATE (UG)                   FTE ESTIMATE (SGX)
    ----                                 -----------------                   ------------------
<S>                                      <C>                                 <C>
[...***...]                                                                      [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                                                      [...***...]
[...***...]                                [...***...]
[...***...]                                                                      [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]
[...***...]                                [...***...]                           [...***...]
</TABLE>

Table 5. Goals and Timelines.

<TABLE>
<CAPTION>
   Goal                            EXPECTED COMPLETION DATE (UG)         EXPECTED COMPLETION DATE (SGX)
   ----                            -----------------------------         ------------------------------
<S>                                <C>                                   <C>
[...***...]                                                                      [...***...]
[...***...]                                [...***...]
[...***...]                                                                      [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                [...***...]                           [...***...]
[...***...]                                                 [...***...]
[...***...] of [...***...]                                  [...***...]
[...***...]                                                 [...***...]
[...***...]                                                 [...***...]
</TABLE>

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