Document:

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                                               CONFIDENTIAL TREATMENT REQUESTED
                             UNDER 17 C.F.R. Sections 200.80(b)4, AND 240.24b-2

                            CLINICAL SUPPLY AGREEMENT

This Clinical Supply Agreement ("Agreement") between ISIS PHARMACEUTICALS, INC.
of 2292 Faraday Avenue, Carlsbad, CA 92008, USA ("ISIS") and ANTISENSE
THERAPEUTICS LTD., ACN 095 060 745 of Level 1, 10 Wallace Avenue, Toorak,
Victoria 3142, AUSTRALIA ("ATL") is entered into and made effective in
accordance with the provisions of the agreement entitled "Master Agreement"
between ATL and ISIS, dated October 30 2001. The effective date of this Clinical
Supply Agreement will be the date upon which all of the conditions in the Master
Agreement have been met (the "Effective Date"). If the Effective Date has not
occurred by March 28, 2002, this Agreement will be null and void and will not
become effective.

                            INTRODUCTION AND OVERVIEW

      ISIS and ATL will collaborate in the discovery and development of Products
pursuant to the related Collaboration and License Agreement. When ATL submits an
order to ISIS for a Collaboration Compound which ATL is committed to use in
IND-enabling studies, ISIS will manufacture active pharmaceutical ingredient
("API") for each such Collaboration Compound ordered, using ISIS Standard
Chemistry, for use by ATL in IND-enabling toxicology studies and subsequent
clinical studies, during the term of this Agreement.

      During the term of this Agreement, the parties will also work together to
facilitate the transfer of antisense drug manufacturing technology to ATL or its
Contractors. As of the Effective Date, ISIS will supply ATL with API, and ATL
will be responsible for the formulation, filling, finishing, labeling and
packaging of all Products, including stability studies. By the time the term of
this Agreement ends, however, it is the parties' intent that ATL will be solely
responsible for manufacturing its requirements of API and Product.

      Therefore, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows.

                                    ARTICLE 1

                                   DEFINITIONS

      Capitalized terms used in this Agreement have the meanings set forth in
Exhibit 1 hereto.

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                                    ARTICLE 2

           MANUFACTURE AND SUPPLY OF API AND ISIS 107248 PRODUCT

2.1   RESPONSIBILITIES OF ATL AND ISIS

      ISIS will provide API for Collaboration Compounds to ATL for use
      consistent with this Agreement and the Collaboration and License
      Agreement, and ISIS will also perform API stability studies on all API
      provided by ISIS. Except as provided in Section 2.3, ATL will be
      responsible for the formulation, filling, finishing, labeling and
      packaging of all Products, including stability studies.

2.2   FORMULATION, FILL AND FINISH OF PRODUCT

      The parties acknowledge that as of the Effective Date, a Third Party
      manufacturer typically performs the formulation, filling and finishing of
      Product. Following the Effective Date, ATL will be responsible for the
      formulation, filling and finishing of Product and will use commercially
      reasonable efforts to promptly establish, by itself or through a Third
      Party manufacturer, the manufacturing process for formulating, filling,
      and finishing Product. If requested by ATL, ISIS will cooperate with ATL,
      as appropriate, to enable ATL to enter into an agreement with the Third
      Party manufacturer used by ISIS to perform the formulation, filling and
      finishing of Product.

2.3   PURCHASE, FORMULATION AND CERTIFICATION OF ISIS 107248 PRODUCT FOR
      IND-ENABLING STUDIES

(a)   Within 30 days of the Effective Date, ATL will purchase from ISIS the
      [***] grams of ISIS 107248 API that ISIS has in its inventory and will pay
      ISIS for that API in the amount of [***], consistent with the provisions
      of Article 7. ISIS will hold such API for ATL's account in order to
      formulate and certify such ISIS 107248 API in January 2002, as further
      described herein.

(b)   Pursuant to ATL's request, and at ATL's expense, ISIS will formulate and
      certify the ISIS 107248 API referenced in (a) above. ATL and/or an ATL
      Contractor other than ISIS will participate in the formulation and
      certification process, at ATL's expense, to facilitate the Technology
      Transfer, as further described in Section 6.2.

(c)   As ISIS will be performing the formulation and certification of the ISIS
      107248 API and the release of Clinical Product for ATL as a Contractor,
      ATL is responsible for certain losses prior to Delivery, consistent with
      the provisions of Section 5.2.

2.4   FORMULATION AND RELEASE OF ISIS 107248 CLINICAL PRODUCT FOR HUMAN
      STUDIES

      ATL will bear sole responsibility for the formulation, fill, finish and
      release of ISIS 107248 Clinical Product for use in human studies pursuant
      to the Collaboration and License Agreement. ATL will use commercially
      reasonable efforts to promptly establish,

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      by itself or through a Third Party manufacturer, the manufacturing
      process for formulating, filling, finishing, and releasing ISIS 107248
      Clinical Product.

                                    ARTICLE 3

                         ORDERS AND LIMITATION OF SUPPLY

3.1   PRODUCTION AND DELIVERY PLANS AND ORDERS

(a)   With the exception of 2001, not later than July 1 of each year in
      which this Agreement is in effect, up to and including July 1, 2005,
      ATL will provide ISIS with a written API order estimate indicating
      the amount of API ATL will require during the subsequent Calendar
      Year, which estimate will indicate the quantity and identity of each
      Collaboration Compound for which API is requested.  ISIS has agreed,
      pursuant to the Collaboration and License Agreement, to supply API
      for up to [***] different Collaboration Compounds in active
      development by ATL each year from 2002-2006.  The total quantity of
      such API to be supplied by ISIS in any Calendar Year during the term
      of this Agreement will not exceed [***], and the minimum order of
      API for each Collaboration Compound must be at least [***] kg.  Each
      estimate and order submitted by ATL will indicate which
      Collaboration Compound API(s) is/are being ordered and the quantity
      of each such API ordered.

(b)   At the time ATL provides each API order estimate for Calendar Years
      2003 through 2006, ATL representatives will meet with ISIS
      representatives to discuss and agree upon a production and delivery
      plan for the next Calendar Year (the "Production and Delivery
      Plan").  Each year's agreed-upon Production and Delivery Plan will
      specify the quantity and identity of each Collaboration Compound for
      which ISIS will supply API to ATL during the subsequent Calendar
      Year, taking into account all relevant factors including, without
      limitation, ISIS' obligations to other parties.  Each such
      Production and Delivery Plan will be deemed a firm purchase order of
      ATL for the quantity of API for each Collaboration Compound
      specified therein, and a firm commitment of ISIS to Manufacture and
      supply such quantities of API to ATL. Each lot of API Manufactured
      and supplied to ATL by ISIS after the Effective Date and during the
      term of this Agreement will be for use in IND-enabling studies and
      human clinical studies.

(c)   [***]

(d)   The Production and Delivery Plan for Calendar Year 2002 is attached as
      Exhibit 3.1 hereto and is considered ATL's firm purchase order of API for
      Calendar Year 2002.

(e)   The Production and Delivery Plan will further specify one or more
      dates upon which Delivery of the API to be supplied by ISIS will
      occur during the relevant Calendar Year.  ISIS will use commercially
      reasonable efforts to Deliver the API to ATL according to the
      agreed-upon Delivery schedule set forth in the Production and
      Delivery Plan.  The Production and Delivery Plan will provide for
      Delivery of API promptly after completion

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      of Manufacture and release.  The date on which the parties agree upon a
      Production and Delivery Plan for the following Calendar Year will be
      referred to herein as the "API Order Date."

(f)   ISIS will perform a mutually agreed upon stability program for API
      Manufactured by ISIS at ATL's expense. ISIS will invoice ATL for such
      activities and for materials and expenses incurred in accordance
      therewith, as further described in Article 7.

3.2   LIMITATIONS OF SUPPLY

(a)   In the event that ISIS anticipates, at any time during the term of
      this Agreement, that it will be unable to supply in whole or in part
      the quantities of API set forth in an agreed-upon Production and
      Delivery Plan for any reason, including without limitation force
      majeure, ISIS will notify ATL in writing as soon as possible of such
      shortfall.  ISIS will also notify ATL of the underlying reason for
      the shortfall, proposed remedial measures, the date such inability
      to supply the full order of API is expected to end, and a proposed
      amount of API to be Delivered to ATL. [***]  The proposed amount of
      API to be made available to ATL hereunder will be no less than [***]
      of the amount of raw materials or other resources required for the
      Manufacture of API, taking into consideration the amount of such
      raw materials or other resources required by (i) ATL under this
      Agreement and (ii) ISIS and its other programs.

(b)   If ISIS cannot Manufacture as set forth in this Agreement, ISIS shall so
      inform ATL immediately upon the prediction or occurrence such non-supply.
      In such event, ATL shall have the right to Manufacture or have
      Manufactured API for ATL's needs and ISIS shall provide all assistance and
      relevant information, know-how and data necessary for ATL to establish and
      begin the Manufacture of API.

                                    ARTICLE 4

                                QUALITY STANDARDS

4.1   QUALITY STANDARDS

(a)   With respect to API Manufactured by ISIS after the Effective Date,
      ISIS will Manufacture such API in accordance with the API
      Specification in effect at the start of Manufacture, US cGMP, and
      other applicable rules and regulations of all Regulatory Authorities
      and other regulatory agencies with jurisdiction over the
      manufacture, use or sale of the API, as then in effect.  If cGMP for
      the U.S. and its foreign equivalent differ, ATL will specify in
      writing which cGMP will apply to each batch of Collaboration
      Compound API ordered from ISIS by ATL.  ISIS will be responsible for
      Manufacturing issues related to API safety and regulatory
      compliance.  Each party will promptly notify the other party of any
      relevant new instructions or specifications required by a Regulatory
      Authority, and of other applicable and regulations of which that
      party becomes aware.  The parties will confer with each other with
      respect to the best means to comply with

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      such requirement and will allocate any costs of implementing such
      changes on an equitable basis.

(b)   ISIS will perform quality control testing as is specified (i) in the API
      Specification; and (ii) as required by a Regulatory Authority and by the
      mutual written consent of the parties, on each lot of API supplied for use
      in Product, prior to shipment of such API.

(c)   As ATL develops Collaboration Compounds pursuant to the Collaboration and
      License Agreement, modified or expanded API Specifications appropriate to
      the stage of development may be required. Such API Specifications will be
      consistent with the API Specifications of other ISIS antisense compounds
      at a similar stage of development.

(d)   New API Specifications will be prepared and processed as follows.

      (i)   Not later than [***] days prior to its submission of an API order
            estimate for a new Collaboration Compound to ISIS, ATL will provide
            ISIS with written notice of its intent to order API for which API
            Specifications have not yet been prepared.

      (ii)  Upon receipt of such written notice, ISIS will initiate any required
            development work and subsequently prepare an API Specification for
            each new Collaboration Compound that ATL intends to order, which
            will be consistent with the API Specifications of other ISIS
            antisense compounds at a similar stage of development.

      (iii) Once a new API Specification has been prepared by ISIS, it will be
            added to this Agreement as an Exhibit thereto, and ATL will be
            provided with a copy, in advance of Delivery of the API.

4.2   CERTIFICATE OF ANALYSIS

(a)   ISIS will provide a Certificate of Analysis to ATL or its designated
      Contractor with each lot of API supplied hereunder.  Consistent with
      Section 3.1(b), each lot of API supplied to ATL by ISIS after the
      Effective Date and during the term of this Agreement will be for use
      in IND-enabling studies and human clinical studies.  The foregoing
      provisions do not, however, apply to the ISIS 107248 Product for
      IND-enabling studies, which Product ISIS will formulate and certify,
      consistent with the provisions of Section 2.3.  Each Certificate of
      Analysis will contain the results of the analysis of API as required
      in the API Specification, and will certify with respect to each
      shipment and lot (identified by lot number):  (i) the quantity of
      the shipment, (ii) that the API delivered was Manufactured in
      accordance with the API Specification and in conformance with the
      applicable cGMP.  The Certificate of Analysis will contain any
      information in addition to that required herein as may be required
      by the Regulatory Authority of the country of destination of API or
      Product; provided, however, that ATL provides to ISIS, in a timely
      manner, sufficient documentation and information necessary or useful
      to enable ISIS to conform with such requirements.  ISIS will provide
      the results of such analysis to ATL, along with any supporting data.

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(b)   ATL will be under no obligation to accept any Delivered lot of API without
      an accompanying Certificate of Analysis that conforms to subsection (a)
      above. ISIS will also make available for ATL's review ISIS' Manufacturing
      records for the API, including its master and production batch records,
      for the purposes of assuring product quality and compliance with
      agreed-upon Manufacturing procedures.

4.3   CHANGES TO MANUFACTURING PROCESS

(a)   If ISIS proposes a material change to the Manufacturing Process, ISIS will
      notify ATL in writing and will provide information to ATL regarding the
      change at a level sufficient to allow ATL to understand any impact of such
      change on the Manufacturing Process.

(b)   The parties will obtain the prior Regulatory Approval(s), and any other
      approvals required to be obtained, before any changes are implemented.

4.4   COMPLIANCE WITH LAWS

      In performing their obligations under this Agreement, the parties will
      comply with all applicable present and future orders, regulations,
      requirements and laws ("Legal Requirements") of any and all U.S.
      authorities and agencies, including without limitation laws and
      regulations applicable to the transportation, storage, use, handling and
      disposal of hazardous materials (the "U.S. Legal Requirements"), and any
      Legal Requirements of other countries ("Foreign Legal Requirements"). ATL
      will inform ISIS of any such Foreign Legal Requirements. If the U.S. Legal
      Requirements conflict with the Foreign Legal Requirements, the parties
      will discuss and agree on how to resolve such conflict.

                                    ARTICLE 5

                   SUPPLY PRICE; DELIVERY; PAYMENT TERMS

5.1   SUPPLY PRICE

(a)   The API Supply Price will apply to all quantities of API supplied to ATL
      hereunder.

(b)   Within [***] days of each API Order Date, ISIS will invoice ATL for [***]
      of the projected API Supply Price of API to be Manufactured during the
      relevant Calendar Year pursuant to the Production and Delivery Plan. ATL
      will pay each invoice within [***] days after receipt. Payment terms are
      set forth in Section 5.5 below.

(c)   For each Calendar Quarter, ISIS will invoice ATL for the actual API
      Supply Price of API Delivered to ATL during such Calendar Quarter,
      minus the amount already paid by ATL pursuant to subsection (b)
      above.  Such invoice will reflect an adjustment equal to the amount
      by which the actual API Supply Price is greater than or less than
      the projected API Supply Price for API Delivered to ATL during such
      Calendar Quarter. ATL will pay each invoice within [***] days after
      receipt. Payment terms are set forth in Section 5.5 below.

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5.2   DELIVERY

(a)   ISIS will deliver API and ISIS 107248 Product for IND-enabling studies to
      a carrier designated by ATL FCA ISIS' Facility (Incoterms 2000). The
      shipping and packaging specifications will be agreed upon by the parties.

(b)   In the event of a loss of work in process or API prior to the transfer of
      title pursuant to the Delivery of API as provided in subsection (a) above,
      any uninsured portion of the loss will be shared by ATL and ISIS as
      follows: [***]. Any deductible will be applied ratably against all items
      damaged or lost.

5.3   ACCEPTANCE AND CLAIMS; MATERIALS REVIEW BOARD

(a)   If ATL claims that any sample of API did not meet the warranty specified
      in Section 10.1, ATL will notify ISIS in writing within 30 days of such
      Delivery, and a joint Materials Review Board formed under subsection (b)
      below will review the test data generated by ATL and ISIS under QA
      approved procedures mutually agreed upon by the parties within 30 days
      after ATL's notice to ISIS.

(b)   Promptly after the Effective Date, ISIS and ATL will each select 2 members
      of their in-house materials review boards (or other senior personnel or
      Contractors with appropriate qualifications) to participate in a joint
      Materials Review Board ("MRB") that will review and consider any test data
      generated by ATL and ISIS with respect to the Delivered lot of API.

(c)   If the members of the MRB are thereafter unable to agree as to
      whether the API met the warranty specified in Section 10.1, the
      parties will cooperate and have the test data reviewed by an
      independent third party selected by ATL and approved by ISIS, which
      approval will not be unreasonably withheld.  If the independent
      third party reviewer cannot determine whether the Delivered API in
      dispute met the warranty of Section 10.1, a sample of the batch of
      the Delivered API in dispute retained by ISIS will be analyzed in
      accordance with the API Specifications, under QA approved
      procedures, by an independent testing laboratory of recognized
      repute selected by ATL and approved by ISIS, which approval will not
      be unreasonably withheld.  Unless provided otherwise herein, the
      results of such laboratory testing will be final and binding on the
      parties on the issue of compliance of the API with such warranty.

(d)   If the API is determined to meet the warranty set forth in Section
      10.1, ATL will bear the cost of any third party review and/or
      independent laboratory testing performed pursuant to subsection (c)
      above and will pay for the API in accordance with the terms of this
      Agreement.  If the API is determined not to meet the warranty set
      forth in Section 10.1, ISIS will bear the cost of any third party
      review and/or independent laboratory testing performed pursuant to
      subsection (c) above.

(e)   If ISIS agrees, or if it is determined pursuant to subsection (c)
      above, that API did not conform to the warranty set forth in Section
      10.1, ISIS will use commercially reasonable efforts to Manufacture
      and Deliver a replacement batch of API to ATL for the batch of

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      API that did not conform to such warranty, and ATL will pay ISIS for any
      such replacement batch of API, including without limitation, all
      costs and expenses associated with such Manufacture, consistent with
      the provisions of Section 5.1 herein.  The API Supply Cost for the
      Manufacture of the batch of API that did not conform to such
      warranty will be shared by ATL and ISIS as follows: ISIS will be
      responsible for the [***] for such batch of API; and ATL will be
      responsible for the [***] for such batch of API.  Replacement of API
      will be ATL's sole and exclusive remedy for breach of the warranty
      set forth in Section 10.1.

(f)   Any Delivered API which ISIS agrees did not meet, or which was determined
      not to have met, the Section 10.1 warranty that is in ATL's control will,
      at ISIS' option, either be returned to ISIS or will be destroyed pursuant
      to ISIS' instructions and with ATL's approval, which approval will not be
      unreasonably withheld, at ISIS' expense.

(g)   Failure by ATL to notify ISIS within [***] after Delivery of API which
      does not meet the warranty under Section 10.1 will be a waiver of the
      remedies available to ATL under this Section 5.3.

(h)   Should either party identify any possible latent defect of API that is not
      revealed by the procedures set forth above within [***] of receipt of any
      shipment by ATL, it will so notify the other party immediately upon
      discovery. ATL and ISIS will discuss in good faith and agree upon the
      appropriate measures to be taken by the parties related to such latent
      defect.

5.4   TERMS OF SALE

      The terms and conditions of this Agreement will be controlling over any
      inconsistent terms or conditions included in any agreed-upon order for API
      or any other sales acknowledgment or document. No provision of any ATL
      forms purporting to be orders for API that may impose different conditions
      than those herein referenced upon ISIS, ATL or their respective
      Contractors will be of any force or effect unless expressly agreed to in
      writing by both parties.

5.5   PAYMENT TERMS

(a)   PAYMENTS. All payments to ISIS under this Agreement will be made in United
      States Dollars by bank wire transfer in next day available funds to such
      bank account in the United States designated in writing by ISIS from time
      to time. All amounts payable to ISIS hereunder are noncreditable and
      nonrefundable, unless specifically provided otherwise herein.

(b)   LATE PAYMENTS; COLLECTIONS.   In the event that any payment,
      including royalty, milestone or research payments, due hereunder is
      not made when due, the payment will bear interest from the date due
      at the lesser of (i) [***] per month, compounded monthly, or (ii)
      the highest rate permitted by law; provided, however, that in no
      event will such rate exceed the maximum legal annual interest rate.
      The payment of such interest will not

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      limit a party from exercising any other rights it may have as a
      consequence of the lateness of any payment.  [***]

                                    ARTICLE 6

                               TECHNOLOGY TRANSFER

6.1   TECHNOLOGY TRANSFER COMMITTEE

(a)   The Release Technology Transfer (as defined in Section 6.2) and the
      API Technology Transfer (as defined in Section 6.3) will be
      coordinated and implemented under the supervision of a joint
      committee (the "Technology Transfer Committee" or "TTC") comprised
      of 2 employees appointed by each of the parties.  ATL may appoint a
      Contractor instead of an employee, provided that any Contractor
      appointed by ATL is approved by ISIS, which approval will not
      unreasonably be withheld.  ATL warrants that any Contractor
      appointed by ATL will be bound by all applicable terms of this
      Agreement and by the confidentiality provisions of the Collaboration
      and License Agreement, which are incorporated herein and made part
      of this Agreement by reference.  Members of the Technology Transfer
      Committee will each have appropriate technical credentials,
      experience and knowledge; the TTC will be co-chaired by an ATL
      representative and an ISIS representative. The advice of additional
      employees of either party (or Contractors, in the case of ATL) may
      by mutual consent of the parties be obtained.

(b)   Decisions of the TTC will be made by unanimous decision of the
      two-co-chairs; provided however, in the event that the co-chairs do not,
      after good faith efforts, reach agreement on an issue, the resolution
      and/or course of conduct in issue will be determined in good faith by the
      Oversight Committee, as provided in Section 16.6.

(c)   Throughout the entire Technology Transfer Term, the TTC will meet as
      needed, but no less often than every 2 months, either in person or by
      teleconference, videoconference or by other mutually acceptable means, as
      necessary to implement effectively and efficiently the Release Technology
      Transfer Plan and the API Technology Transfer Plan.

6.2   TECHNOLOGY TRANSFER FOR CLINICAL PRODUCT RELEASE

(a)   Promptly after the Effective Date, the Technology Transfer Committee
      will establish a plan (the "Release Technology Transfer Plan") for
      the transfer to ATL or a Contractor designated by ATL of the Release
      Technology for ISIS 107248 and the Release Technology for other
      Collaboration Compounds, as specified in the Release Technology
      Transfer Plan (the "Release Technology Transfer").  Before any
      Release Technology is transferred to any Contractor of ATL, such
      Contractor must be approved by ISIS, which approval will not
      unreasonably be withheld.  The goal of the Release Technology
      Transfer Plan is to effect the Release Technology Transfer within
      the first year that this

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      Agreement is in effect to enable ATL to carry out its obligation to
      conduct release testing for all Products, including without limitation
      Clinical Products.

(b)   The Release Technology Transfer applicable to ISIS 107248 will begin
      promptly after the Effective Date, in conjunction with the
      formulation and certification of ISIS 107248 Product for
      IND-enabling studies scheduled for [***].  ATL will appoint
      employees or ISIS-approved Contractors to participate with ISIS in
      the formulation and certification of ISIS 107248 Product for
      IND-enabling studies at the site at which the formulation and
      certification activities will take place.  It is anticipated by the
      parties that the Release Technology Transfer applicable to ISIS
      107248 Clinical Product will take place during the [***] this
      Agreement is in effect, in order to enable ATL to carry out its
      obligations hereunder.

(c)   The Release Technology Transfer Plan will include INTER ALIA (i)
      procedures designed to effect the prompt and efficient Release Technology
      Transfer; (ii) a list of events necessary to accomplish the Release
      Technology Transfer; (iii) a description of the training and support to be
      provided by ISIS to ATL during the Release Technology Transfer; and (iv)
      the time period during which ISIS will perform the Release Technology
      Transfer.

(d)   During the Technology Transfer Term with respect to the Release Technology
      Transfer, ISIS will (i) disclose and transfer to ATL all of the Release
      Technology as specified in the Release Technology Transfer Plan and (ii)
      provide to ATL the training and support described in the Release
      Technology Transfer Plan and in this Agreement.

(e)   ISIS will perform the Release Technology Transfer in accordance with the
      Release Technology Transfer Plan and the terms of this Agreement. The
      parties will cooperate so that the Release Technology Transfer may be
      completed as expeditiously as possible.

(f)   ATL and its Contractors will use commercially reasonable efforts, pursuant
      to the Technology Transfer Plan described above, to implement the Release
      Technology to be transferred by ISIS pursuant to this Section 6.2 and to
      make available all necessary personnel and other resources to enable such
      transfer without delay.

6.3   TECHNOLOGY TRANSFER PLAN FOR MANUFACTURE OF API

(a)   Within [***] of the Effective Date, the Technology Transfer
      Committee will establish a plan (the "API Technology Transfer Plan")
      for the transfer of the Manufacturing Process and the Manufacturing
      Technology for the Manufacture of API from ISIS to ATL and/or its
      Contractors (the "API Technology Transfer"). The goal of the API
      Technology Transfer Plan is to enable ATL to apply the Manufacturing
      Technology, implement the Manufacturing Process and Manufacture API
      as soon as practicable thereafter and in no event later than
      December 31, 2006.

(b)   The API Technology Transfer Plan will include, INTER ALIA, (i) procedures
      designed to effect the prompt and efficient API Technology Transfer; (ii)
      a list of events necessary to

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      accomplish the API Technology Transfer; (iii) a description of the
      training and support to be provided by ISIS to ATL during the API
      Technology Transfer; (iv) a budget and resource plan; and (v) the time
      period during which ISIS will perform the API Technology Transfer.

(c)   During the Technology Transfer Term with respect to the API Technology
      Transfer, ISIS will (i) disclose and transfer to ATL all of the
      Manufacturing Process and the Manufacturing Technology as specified in the
      API Technology Transfer Plan and (ii) provide to ATL the training and
      support described in the API Technology Transfer Plan and in this
      Agreement.

(d)   ISIS will perform the API Technology Transfer in accordance with the API
      Technology Transfer Plan and the terms of this Agreement. The parties will
      cooperate so that the API Technology Transfer may be completed as
      expeditiously as possible.

(e)   ATL and/or its Contractor will use commercially reasonable efforts to
      establish the Manufacturing Process for the Manufacture of API to be
      transferred by ISIS pursuant to this Section 6.3, and to make available
      all necessary personnel and other resources to enable such transfer
      without delay.

6.4   TRAINING AND SUPPORT

      The training and support to be provided by ISIS to ATL and its
      ISIS-approved Contractors in connection with the Release Technology
      Transfer and the API Technology Transfer (the "Technology Transfer") will
      include without limitation training and support in a mutually acceptable
      facility in all of the methods necessary to practice the Release
      Technology and the Manufacturing Technology, as detailed in the Release
      Technology Transfer Plan and the API Technology Transfer Plan. In
      addition, a reasonable number of employees or ISIS-approved Contractors of
      ATL will be entitled to visit ISIS facilities including, without
      limitation, pilot and commercial scale facilities and testing laboratories
      to observe relevant processes in operation.

                                    ARTICLE 7

                               FUNDING PROVISIONS

7.1   FUNDING FOR VARIOUS ACTIVITIES AND MATERIALS HEREUNDER

(a)   ATL will compensate ISIS for the following:

      (i)   ATL's purchase of the ISIS 107248 API referenced in Section 2.3(a);

      (ii)  the formulation and certification of ISIS 107248 Product for
            IND-enabling studies;

      (iii) ISIS' performance of a mutually agreed upon stability program for
            API Manufactured by ISIS, as set forth in Section 3.1(f);

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      (iv)  all future API supplied to ATL by ISIS, consistent with
            Section 5.1 herein;

      (v)   all ISIS' activities relating to the Release Technology
            Transfer and/or the API Technology Transfer pursuant to
            Article 6, [***];

      (vi)  preparation of CMC Reports and regulatory filings pursuant to
            Section 9.1; and

      (vii) analytical method development and stability program activities
            pursuant to Section 9.2.

(b)   ATL will submit payment to ISIS for the materials and activities
      referenced in subsections (a)(i) and (iv) above at the times
      indicated in the Sections specifically referenced therein.  Unless
      otherwise indicated herein, ISIS will invoice ATL on a quarterly
      basis for all activities performed and for materials and expenses
      incurred in accordance with the activities enumerated herein,
      including those listed in subsections (a)(ii), (iii), and (v) -
      (vii) above.  [***].  ATL will pay each invoice within [***] days
      after receipt.  The terms set forth in Section 5.5 will apply to all
      payments made hereunder and include, without limitation, the payment
      of interest on late payments.

                                    ARTICLE 8

                               RECORDS AND AUDITS

8.1   QUALITY STANDARDS

      ISIS will keep complete, accurate and authentic accounts, notes, data and
      records of all of ISIS' work performed under this Agreement, including,
      but not limited to, complete and adequate records pertaining to the
      methods and facilities used for the Manufacture in accordance with master
      production records, batch production records, product history documents
      (e.g., master formulae, validation packages, specifications,
      batch-specific deviation reports, COAs) Standard Operating Procedures
      ("SOPs"), as well as the applicable regulations, including in the United
      States, so that API may be used in the production of a substance to be
      used in humans. ISIS will maintain these records for 2 years after
      expiration of the Product that incorporates the particular API. ATL will
      notify ISIS in writing of the expiration of Products that incorporate
      specific API and if ATL changes the expiration date on any Product. SOPs
      will be maintained for 5 years after the document is superseded or
      deleted. Upon expiration of the retaining periods for the respective
      records as provided in this Section and in case ISIS wishes to cease
      retention of such records, ISIS will notify ATL so that ATL may, at its
      cost, retain such records.

8.2   API SUPPLY PRICE; RECORD KEEPING AND AUDIT

(a)   ISIS will keep accurate records in sufficient detail to enable the
      API Supply Price to be verified. Upon written request of ATL and not
      more than once in each Calendar Year, ISIS will permit ATL's
      independent certified public accountant (or equivalent) to have

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      access during normal business hours to such records of ISIS as may
      be reasonably necessary to verify the accuracy of the invoices for
      API Supply Price submitted to ATL hereunder for the preceding
      Calendar Year. Once specific records have been audited under this
      Section 8.2, no further audit of such records may be made.  The
      accounting firm will disclose to ATL only whether the invoiced
      amounts are correct or incorrect, the specific details concerning
      the basis for the invoiced amounts, and the corrected amount, if
      applicable.  No other information will be provided to ATL.

(b)   If such accounting firm concludes that any amounts invoiced were in
      error during such period and ATL is entitled to a refund of such
      amounts, ISIS will refund to ATL the amounts overcharged within
      [***] days of the date ATL delivers to ISIS such accounting firm's
      written report.  The fees charged by such accounting firm will be
      paid by ATL unless the additional refunded amounts owed by ISIS
      exceed [***] of the total amount for which ATL was invoiced during
      the time period subject to the audit, in which case ISIS will pay
      the reasonable fees and expenses charged by the accounting firm.

(c)   ATL and its accounting firm will treat all financial information
      subject to review under this Section 8.2 in accordance with the
      confidentiality provisions of Article 9 of the Collaboration and
      License Agreement, which provisions are incorporated herein and made
      part of this Agreement by reference, and will cause its accounting
      firm to enter into an acceptable confidentiality agreement with ISIS
      obligating such firm to retain all such financial information in
      confidence pursuant to such confidentiality agreement.

8.3   TECHNOLOGY TRANSFER RECORDS

      ISIS will maintain records, in sufficient detail and in good scientific
      manner appropriate for patent, regulatory and manufacturing purposes,
      which will fully and properly reflect all of the work done and the
      progress achieved in the performance of the Release Technology Transfer
      and the API Technology Transfer (the "Records"). The Records at all times
      will be available to the Technology Transfer Committee and ATL will have
      the right, during normal business hours and upon reasonable notice, to
      inspect and copy all such Records. ATL also will have the right to arrange
      for its employees and/or Contractors to visit ISIS at its offices and
      laboratories and other facilities during normal business hours on
      reasonable notice concerning or in furtherance of the Release Technology
      Transfer or the API Technology Transfer and/or to discuss the progress of
      the Release Technology Transfer or the API Technology Transfer and its
      results in detail with the technical personnel and consultants of ISIS.

                                       13

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                                    ARTICLE 9

                           OTHER SUPPORTING ACTIVITIES

9.1   CMC ACTIVITIES

      As of the Effective Date and during the first [***] years this Agreement
      is in effect, ISIS will support ATL's efforts to timely file an IND
      application for each Collaboration Compound with respect to the CMC
      activities described in Exhibit 9.1 for Collaboration Compounds for which
      ISIS supplied API.

9.2   ANALYTICAL METHOD DEVELOPMENT AND STABILITY PROGRAM ACTIVITIES

      As of the Effective Date, ISIS will undertake various development efforts,
      such as analytical methods development for raw materials, API, API
      stability programs, and process development in connection with MOE gapmers
      and other second generation oligonucleotides made using ISIS Standard
      Chemistry, which additional activities support the activities of ISIS and
      ATL with regard to ISIS 107248 and other Collaboration Compounds under the
      Collaboration and License Agreement.

                                   ARTICLE 10

                                PRODUCT WARRANTY

10.1  API SPECIFICATIONS; CGMPS; APPLICABLE LAWS

      Subject to Section 10.2 below, ISIS warrants that the API will, at the
      time of Delivery, be Manufactured in accordance with and meet (a) the API
      Specification; (b) cGMP; and (c) the Legal Requirements.

10.2  FOREIGN MANUFACTURING REQUIREMENTS

      If the cGMP or the Legal Requirements applicable to the Manufacture of API
      for use in the U.S. (the "U.S. Manufacturing Requirements") are different
      from those applicable outside to the Manufacture of API for use in
      countries other than the U.S. (the "Foreign Manufacturing Requirements"),
      the warranty of Section 10.1 will include such Foreign Manufacturing
      Requirements only if ATL has informed ISIS thereof in writing as provided
      in Sections 4.1 and 4.4 and if the parties have adapted the Manufacturing
      Process, if necessary, as provided in Section 4.3.

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                                   ARTICLE 11

                                 QUALITY SYSTEMS

11.1  MATTERS RELATING TO THE FACILITY

(a)   ISIS will Manufacture API supplied by ISIS hereunder at the Facility,
      which ISIS represents and warrants has been and will be approved by
      Agencies which have inspected or will inspect the Facility for the
      manufacture of API. ISIS will perform release testing of API at the
      Facility and/or the facility of subcontractors approved by ISIS.

(b)   ISIS will arrange for one or more qualified technical specialists
      from ATL or one or more qualified Contractors of ATL approved by
      ISIS (which approval will not unreasonably be withheld), upon
      reasonable prior notice and during normal business hours, to conduct
      inspections of the Facility.  Observations and conclusions of ATL's
      audits or inspections will be issued to and promptly discussed with
      ISIS and such corrective action as ATL determines to be reasonably
      required will be promptly implemented by ISIS. ISIS will maintain
      complete and accurate records of all reasonably relevant information
      relating to the performance by ISIS of its obligations hereunder.
      ISIS will permit ATL or its ISIS-approved Contractors to review,
      during the inspection at the Facility, relevant cGMP documentation.
      The total number of inspections under this Section per CalendarYear
      will not exceed two.

11.2  TESTING

(a)    ISIS will perform, at its laboratories, such tests as are indicated
       in the API Specification. Such tests and methods will be qualified
       by ISIS and accepted by ATL prior to use and certain of such tests
       will be stability indicating. No production lot of API will be
       released for Delivery unless such tests show the API to meet the API
       Specification. Should any production lot fail to meet the API
       Specification, such lot will not be released, unless the failure is
       identified following release, in which case the identifying party
       will immediately notify the other party and they will cooperate on
       the actions to be taken.

(b)   ISIS is responsible for obtaining and retaining, at ATL's expense, the
      amount of API required for quality control release testing as indicated in
      the API Specification. Such amounts will be retained for a period of not
      less than one (1) year from the last retest date prescribed by ISIS, and
      thereafter shipped at ATL's request for longer term storage at a
      designated ATL facility.

(c)   After Technology Transfer with respect to analytical testing is
      complete in accordance with the terms contained herein and in the
      Collaboration and License Agreement, ATL may perform, at a
      designated quality control laboratory of recognized repute selected
      by ATL and approved by ISIS, which approval will not be unreasonably
      withheld, such quality control tests of API as specified in the API
      Specification and advise ISIS of any failure of such API to meet the
      API Specification.

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11.3  INFORMATION RELATING TO MANUFACTURING CONDITIONS

(a)   Each party will notify the other immediately of any health hazards with
      respect to API of which it becomes aware which may impact employees
      involved in the Manufacture or handling of API or Product.

(b)   Each party will promptly advise the other of any safety or toxicity
      problem that is not part of the knowledge base readily available in
      chemical manufacturing facilities of which either party becomes aware
      regarding the API or Product.

11.4  AGENCY INSPECTIONS

      ISIS hereby agrees to advise ATL of any visit or inspection by an Agency
      of the Facility relating to the Manufacture of API, provide copies of all
      communications relating thereto and will permit one or more qualified
      representative(s) of ATL to be present, when possible. If ATL is not
      present during such a visit or inspection for any reason, ISIS will
      promptly provide a copy of the actual report of the results of the
      inspection to ATL. ISIS will furnish ATL copies of all reports, documents
      or correspondence with respect to any such Agency inspections of the
      Facility.

11.5  STORAGE AND DELIVERY

      ISIS will store and Deliver API in accordance with the applicable API
      Specification and cGMP.

                                   ARTICLE 12

                               REGULATORY MATTERS

12.1  ISIS will prepare and promptly provide necessary and useful information,
      including without limitation Manufacturing information, as is needed to
      support filings of Registrations by ATL, its Contractors, sublicensees or
      distributors of Product. In addition, ISIS will participate as required in
      resolving regulatory concerns. ISIS will be responsible for maintaining
      current technical information needed to support such submissions of
      Registrations, and accordingly will promptly provide ATL with advance
      notification of all changes in such technical information required to be
      filed as amendment(s) to CMC. All such activities will be at ATL's
      expense, which will be agreed to in advance by the parties.

12.2  The mutual goal of ISIS and ATL will be to maintain an integrated approach
      to the content and timing of all submissions of Registrations made by ATL
      in an effort to obtain and maintain regulatory approvals of a Product. To
      ensure this mutual goal is met, with respect to issues pertaining to API
      or to a Product, ISIS will provide to ATL the right to review and
      reference all authorizations, certificates, methodologies and
      specifications in the possession or under the control of ISIS relating to
      the pharmaceutical/technical

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      development and Manufacture or any component thereof to the extent needed
      for ATL's filings of Registrations.

                                   ARTICLE 13

                          INDEMNIFICATION AND INSURANCE

13.1  INDEMNIFICATION

(a)   ISIS will defend, indemnify and hold harmless ATL, its Affiliates
      and their respective directors, officers, employees and agents, and
      their respective successors and permitted assigns, from any and all
      claims, actions, causes of action, liabilities, losses, damages,
      costs or expenses, including reasonable attorney's fees, which arise
      out of or relate to claims that may be brought or instituted against
      them by Third Parties to the extent based upon or arising out of (i)
      the failure by ISIS to meet the warranties set forth in Article 10;
      (ii) a material breach by ISIS of its obligations set forth in this
      Agreement; or (iii) gross negligence or willful misconduct of ISIS,
      its officers, employees and agents in the performance of its
      obligations hereunder.

(b)   ATL will defend, indemnify and hold harmless ISIS, its Affiliates
      and their respective directors, officers, employees and agents, and
      their respective successors and permitted assigns, from any and all
      claims, actions, causes of action, liabilities, losses, damages,
      costs or expenses, including reasonable attorney's fees, which arise
      out of or relate to claims that may be brought or instituted against
      them by Third Parties to the extent based upon or arising out of (i)
      a material breach by ATL of its obligations set forth in this
      Agreement; or (ii) gross negligence or willful misconduct of ATL,
      its officers, employees and agents in the performance of its
      obligations hereunder.

13.2  CLAIMS

      If a claim is made against a party entitled to indemnification under this
      Article 13, and if that party intends to seek indemnification with respect
      thereto under this Article 13, the party seeking indemnification (the
      "Indemnitee") will promptly notify the indemnifying party (the
      "Indemnifying Party") of such claim. The Indemnifying Party will defend,
      negotiate and settle such claim, and the Indemnitee will cooperate with
      the Indemnifying Party in connection therewith. The Indemnitee may
      participate in the defense of any claim with counsel of its own choice and
      at its own expense. Neither party will settle or compromise any such claim
      without the other party's prior written consent, which consent will not be
      unreasonably withheld. The indemnity agreement in this Article 13 will not
      apply to amounts paid in settlement of any claim if such settlement is
      effected without the consent of the Indemnifying Party, which consent will
      not be unreasonably withheld. Failure of the Indemnitee to deliver notice
      to the Indemnifying Party within a reasonable time after becoming aware of
      a claim will not relieve the Indemnifying Party

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      of any liability to the Indemnitee pursuant to this Article 13, except to
      the extent such delay prejudices the Indemnifying Party's ability to
      defend such claim.

13.3  INSURANCE

      Each party will maintain during the term of this Agreement and for [***]
      thereafter, at its own expense, (i) commercial general liability
      insurance, including contractual liability coverage, with a minimum limit
      of [***] per occurrence and [***] annual aggregate; (ii) property
      insurance with a minimum limit of [***]; and (iii) statutory workers'
      compensation coverage as required by law.

                                   ARTICLE 14

                              TERM AND TERMINATION

14.1  TERM

      This Agreement will be effective as of the Effective Date, and unless
      sooner terminated as provided herein, will continue in effect until
      December 31, 2006, unless extended by mutual agreement of the parties.

14.2  TERMINATION BY EITHER PARTY

This Agreement may be terminated with written notice by either party at any time
during the term of this Agreement:

(a)   if the other party is in breach of its material obligations hereunder and
      has not cured such breach within 90 days after written notice requesting
      cure of the breach has been given; provided, however, in the event of a
      good faith dispute with respect to the existence of a material breach, the
      90-day cure period will be tolled until such time as the dispute is
      resolved pursuant to Section 16.6; or

(b)   upon the filing or institution of bankruptcy, reorganization,
      liquidation or receivership proceedings by the other party or upon
      an assignment of a substantial portion of the assets for the benefit
      of creditors by the other party; provided, however, in the case of
      any involuntary bankruptcy proceeding such right to terminate will
      only become effective if the party consents to the involuntary
      bankruptcy or such proceeding is not dismissed within 90 days of the
      filing thereof.

14.3  TERMINATION OF COLLABORATION AND LICENSE AGREEMENT

      This Agreement will automatically terminate in the event the Collaboration
      and License Agreement is terminated for any reason.

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14.4  PAYMENT OF OUTSTANDING DEBTS

      Upon expiration or termination of this Agreement for whatever reason, ATL
      and ISIS will settle all outstanding invoices or monies owed to the other
      party in accordance with the terms of this Agreement.

14.5  EFFECT OF TERMINATION OR EXPIRATION

(a)   If this Agreement is terminated by ATL pursuant to Section 14.2(a),
      all orders will be automatically cancelled and ISIS will terminate
      the Manufacture of API as soon as practicable. ATL will have the
      option but not the obligation to (i) purchase all quantities of API
      stored at ISIS by paying the price of API, as applicable, as
      provided in Section 5.1, and (ii) undertake the Manufacture of API
      or seek a Third Party to do such Manufacture.  If ATL undertakes to
      Manufacture or have Manufactured API, then ISIS will continue the
      transfer of technology pursuant to Article 6 on an expedited basis,
      at ATL's expense.

(b)   If this Agreement is terminated by ATL pursuant to Section 14.2(b), ATL
      (i) will purchase all quantities of API stored at ISIS by paying the price
      of API, as applicable, as provided in Section 5.1, and (ii) will have the
      right to undertake the Manufacture of API or seek a Third Party to do such
      Manufacture.

(c)   If this Agreement is terminated by ISIS pursuant to Section 14.2(a), ISIS
      will have the option but not the obligation to supply under all
      outstanding quantities set forth in the Production and Delivery Plan at
      the API Supply Price. If ISIS elects to so supply, ATL's payment
      obligations relating thereto including, without limitation, those set
      forth in Section 5.1 will continue to apply until all outstanding
      obligations of ATL to ISIS are fulfilled.

(d)   If this Agreement is terminated pursuant to Section 14.3, all
      outstanding quantities of API set forth in the Production and
      Delivery Plan will be automatically cancelled and ISIS will
      terminate the Manufacture of API as soon as practicable.  In
      addition, ATL will be responsible for all other Manufacturing costs
      associated with API pursuant to Section 5.1 at the time of
      termination.  Notwithstanding the foregoing, ISIS will use its best
      efforts to mitigate any costs payable by ATL under this Section
      14.5(d).

(e)   If this Agreement expires pursuant to Section 14.1, ATL will purchase all
      API ordered by ATL during the term of this Agreement. ISIS will Deliver
      such API in accordance with Section 5.2.

                                   ARTICLE 15

                               DAMAGE LIMITATIONS

  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT WILL
  EITHER PARTY HERETO, OR ITS DIRECTORS, OFFICERS,

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  EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY OR SUCH OTHER
  PARTY'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, AFFILIATES OR SUBLICENSEES
  FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, COSTS OR
  EXPENSES (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOST REVENUES AND/OR
  LOST SAVINGS) SUFFERED OR INCURRED BY THE OTHER PARTY, WHETHER BASED UPON A
  CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR
  OTHERWISE, ARISING FROM THIS AGREEMENT.

                                   ARTICLE 16

                                  MISCELLANEOUS

16.1  FORCE MAJEURE

      Neither party will be held liable or responsible to the other party nor be
      deemed to have defaulted under or breached the Agreement for failure or
      delay in fulfilling or performing any term of the Agreement when such
      failure or delay is caused by or results from causes beyond the reasonable
      control of the affected party including without limitation embargoes, war,
      acts of war (whether war be declared or not), insurrections, riots, civil
      commotions, strikes, lockouts or other labor disturbances, or acts of God.
      The affected party will notify the other party of such force majeure
      circumstances as soon as reasonably practical and will make every
      reasonable effort to mitigate the effects of such force majeure
      circumstances.

16.2  ASSIGNMENT

      This Agreement will inure to the benefit of and be binding upon each
      party, its successors and assigns. The Agreement may not be assigned or
      otherwise transferred, nor, except as expressly provided hereunder, may
      any right or obligations hereunder be assigned or transferred by either
      party without the prior written consent of the other party; provided,
      however, that either party may, without such consent, assign the Agreement
      and its rights and obligations hereunder to an Affiliate or in connection
      with the transfer or sale of all or substantially all of its assets, or in
      the event of its merger or consolidation or change in control or similar
      transaction. Any permitted assignee will assume all obligations of its
      assignor under the Agreement. Any attempted assignment not in accordance
      with this Section 16.2 will be void.

16.3  SEVERABILITY

      In the event any one or more of the provisions contained in this Agreement
      should be held invalid, illegal or unenforceable in any respect, the
      validity, legality and enforceability of the remaining provisions
      contained herein will not in any way be affected or impaired thereby,
      unless the absence of the invalidated provision(s) adversely affect the
      substantive rights of the parties. The parties will in such an instance
      use their

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      best efforts to replace the invalid, illegal or unenforceable
      provision(s) with valid, legal and enforceable provision(s) which, insofar
      as practical, implement the purposes of this Agreement.

16.4  NOTICES

      All notices which are required or permitted hereunder will be in writing
      and sufficient if delivered personally, sent by facsimile or electronic
      mail (and promptly confirmed), sent by nationally-recognized overnight
      courier or sent by registered or certified mail, postage prepaid, return
      receipt requested, addressed as follows:

            if to ISIS, to:   ISIS PHARMACEUTICALS, INC.
                              Carlsbad Research Center
                              2292 Faraday Avenue
                              Carlsbad, CA 92008
                              Attention:  Executive Vice President
                              Fax No.: (760) 931-9639
                              E-Mail:  lparshall@isisph.com

            with a copy to:   Attention: General Counsel
                              Fax No.: (760) 603-3820
                              E-Mail:  gbryce@isisph.com

             if to ATL, to:   ANTISENSE THERAPEUTICS, LTD.
                              ACN 095 060 745 of Level 1
                              10 Wallace Avenue
                              Toorak, Victoria 3142
                              AUSTRALIA
                              Attention:  CEO
                              Fax No.: +61 3 9826 4399
                              E-Mail:____________________

            with a copy to:   Attention:  Research Director
                              Fax No.:  +61 3 9826 4399
                              E-Mail:____________________

      or to such other address as the party to whom notice is to be given may
      have furnished to the other party in writing in accordance herewith. Any
      such notice will be deemed to have been given when delivered if personally
      delivered or sent by facsimile or electronic mail on a business day, on
      the business day after dispatch if sent by nationally-recognized overnight
      courier and on the third business day following the date of mailing if
      sent by mail.

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16.5  GOVERNING LAW

      This Agreement will be governed by and construed in accordance with the
      laws of the State of Delaware without reference to any rules of conflict
      of laws.

16.6  DISPUTE RESOLUTION; OVERSIGHT COMMITTEE

      The parties recognize that disputes may from time to time arise between
      the parties during the term of this Agreement. In the event of such a
      dispute, either party, by written notice to the other party, may have such
      dispute referred to the Oversight Committee, the function of which is to
      attempt resolution of any disputes arising under this Agreement by good
      faith negotiations. The Oversight Committee will endeavor to resolve such
      disputes within 30 days after such notice is received. The Oversight
      Committee will be comprised of two designated executive officers (or their
      successors), one from each party. Said designated officers are as follows:

                  For ISIS:         Executive Vice President

                  For ATL:          CEO

16.7  REMEDIES

      In the event the parties are unable to resolve any disputes hereunder
      pursuant to the dispute resolution measures provided herein, each party
      may pursue its rights and remedies in law or equity in any court of
      competent jurisdiction.

16.8  ENTIRE AGREEMENT

      This Agreement and the Collaboration and License Agreement contain the
      entire understanding of the parties with respect to the license,
      development and commercialization of Products containing API and the
      Manufacture and supply of API. All express or implied agreements and
      understandings, either oral or written, heretofore made by the parties on
      the same subject matter are expressly superseded by this Agreement and the
      Collaboration and License Agreement. This Agreement may be amended, or any
      term hereof modified, only by a written instrument duly executed by both
      parties hereto.

16.9  HEADINGS

      The captions to the several Articles and Sections hereof are not a part of
      the Agreement, but are merely a convenience to assist in locating and
      reading the several Articles and Sections hereof.

16.10 INDEPENDENT CONTRACTORS

      It is expressly agreed that ISIS and ATL will be independent contractors
      and that the relationship between the two parties will not constitute a
      partnership, joint venture or

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      agency. Neither ISIS nor ATL will have the authority to make any
      statements, representations or commitments of any kind, or to take any
      action, which will be binding on the other, without the prior consent of
      the other party.

16.11 WAIVER

      The waiver by either party hereto of any right hereunder, or the failure
      to perform, or a breach by the other party will not be deemed a waiver of
      any other right hereunder or of any other breach or failure by said other
      party whether of a similar nature or otherwise.

16.12 COUNTERPARTS

      The Agreement may be executed in two or more counterparts, each of which
      will be deemed an original, but all of which together will constitute one
      and the same instrument.

16.13 WAIVER OF RULE OF CONSTRUCTION

      Each party has had the opportunity to consult with counsel in connection
      with the review, drafting and negotiation of this Agreement. Accordingly,
      the rule of construction that any ambiguity in this Agreement will be
      construed against the drafting party will not apply.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

ANTISENSE THERAPEUTICS, LIMITED    ISIS PHARMACEUTICALS, INC.

By: /s/ C. Belyea                  By: /s/ B. Lynne Parshall
   ----------------------------       ----------------------------------------
Name: C. Belyea                    Name: B. Lynne Parshall
     --------------------------         --------------------------------------
Title: CEO                         Title:  Executive Vice President and CFO
      -------------------------          -------------------------------------

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                                    EXHIBIT 1

                                   DEFINITIONS

1.1   "AFFILIATE" with respect to either party means any person, organization,
      corporation or other business entity (collectively, "Person") controlling,
      controlled by, or under common control with such party. For purposes of
      this definition, "control" refers to (a) the possession, directly or
      indirectly, of the power to direct the management or policies of a Person,
      whether through the ownership of voting securities, by contract or
      otherwise, and (b) the ownership, directly or indirectly, of at least 50%
      of the voting securities or other ownership interest of a Person.

1.2   "AGENCY" means the U.S. Food and Drug Administration. In the event ATL
      provides written notice to ISIS that ATL intends to conduct Development
      Program activities outside of the United States, the term "Agency" will
      mean with respect to such activities outside the United States the
      Regulatory Authority (as defined below) of the country specified in such
      notice involved in granting any approvals relating to such Development
      Program activities.

1.3   "API" means a drug substance made using ISIS Standard Chemistry, before
      formulation, filling and finishing and containing a Collaboration Compound
      developed pursuant to the Collaboration and License Agreement.

1.4   "API ORDER DATE" means the date on which the parties agree upon a
      Production and Delivery Plan for the following Calendar Year, as set forth
      in Section 3.1(d).

1.5   "API SPECIFICATION" means the specification applicable to each API, which
      may variously comprise a product description, methods, tests and
      acceptance criteria, or test limits on API, as appropriate to the stage of
      development. API Specifications may be amended from time to time by ISIS.
      API Specifications will change from time to time as compounds advance
      through development and as analytical methods evolve. Thus, the API
      Specification for an early stage compound may consist only of a product
      description. The API Specification for each API Manufactured hereunder
      will be attached as an exhibit hereto; such exhibits will be amended from
      time to time as appropriate.

1.6   "API SUPPLY COST" means the cost of Manufacture of API described in
      Exhibit 5.2.

1.7   "API SUPPLY PRICE" means [***] of the API Supply Cost.

1.8   "API TECHNOLOGY TRANSFER" has the meaning set forth in Section 6.3
      herein.

1.9   "CALENDAR QUARTER" means the respective periods of 3 consecutive calendar
      months ending on March 31, June 30, September 30 and December 31.

1.10  "CALENDAR YEAR" means each successive period of 12 months commencing on
      January 1 and ending on December 31.

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1.11  "CGMP" means the current good manufacturing practices described in Q7A ICH
      Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients
      and 21 CFR Parts 210 ET SEQ. as applicable to the Manufacture of API in
      the U.S., as are in effect on the Effective Date or as may subsequently be
      modified or supplemented. In the event ATL provides written notice to ISIS
      that ATL intends to conduct the Development Program activities in
      countries outside of the United States, the term "cGMP" will also include
      corresponding good manufacturing practices in such countries, provided
      that to the extent any conflict exists between cGMP applicable in the U.S.
      and in such countries, the cGMP of the U.S. will apply, unless the parties
      agree otherwise as provided in Sections 4.1, 4.4 and 10.2.

1.12  "CLINICAL PRODUCT" means a formulated and finished pharmaceutical product
      containing API for use in conducting clinical trials prior to Regulatory
      Approval.

1.13  "CMC ACTIVITIES" means the activities listed Exhibit 9.1 hereto.

1.14  "COLLABORATION COMPOUND" has the meaning set forth in Exhibit 1 of the
      Collaboration and License Agreement.

1.15  "COLLABORATION AND LICENSE AGREEMENT" means the agreement for the
      collaborative research, development and commercialization of ISIS 107248
      and other antisense drugs entered into by ISIS and ATL on even date
      herewith.

1.16  "CONTRACTOR" means ISIS or a Third Party to whom ATL or any of its
      Affiliates grants any right or obligation to manufacture, fill, finish,
      and/or release a Product, or to carry out any other obligations of ATL
      under this Agreement. Except as provided otherwise herein, each such
      Contractor must be approved by ISIS, which approval will not unreasonably
      be withheld.

1.17  "DELIVER" OR "DELIVERY" means the delivery of API by ISIS to the carrier
      pursuant to Section 5.2.

1.18  "FACILITY" means the Manufacturing facility of ISIS located in 2282
      Faraday Avenue, Carlsbad, California.

1.19  "ISIS 107248" means the oligonucleotide that targets human CD49d
      disclosed and claimed (as SEQ ID NO 81) in U.S. Patent No. 6,258,790.

1.20  "ISIS FTE RATE" means the compensatory rate to be paid per FTE at
      ISIS for all activities under this Agreement.  As used herein, "FTE"
      means [***].

1.21  "ISIS STANDARD CHEMISTRY" has the meaning set forth in Exhibit 1 of the
      Collaboration and License Agreement.

1.22  "LEGAL REQUIREMENTS" has the meaning set forth in Section 4.4 herein.

1.23  "MANUFACTURE" or "MANUFACTURED" or "MANUFACTURING" means all operations
      involved in the manufacturing, quality control testing (including
      in-process, certification,

                                       25

<Page>

      release and stability testing, if applicable), releasing, packaging and
      shipping of API under this Agreement.

1.24  "MANUFACTURING PROCESS" means the process steps set forth in master batch
      records for any API Manufactured for ATL hereunder during the term of this
      Agreement, including reasonable minor variants and extensions of process
      steps thereof.

1.25  "OVERSIGHT COMMITTEE" has the meaning set forth in Section 16.6
      herein.

1.26  "PRODUCT" means a formulated and finished pharmaceutical product
      containing API, including a Clinical Product and including formulated and
      finished product for use in toxicology studies.

1.27  "PRODUCTION AND DELIVERY PLAN" has the meaning set forth in Section
      3.1(b) herein.

1.28  "RAW MATERIALS" means any raw materials intended for use in the
      Manufacture of the Product, including those that may not appear in the
      Product.

1.29  "REGISTRATIONS" means the technical, medical and scientific licenses,
      registrations, authorizations and/or approvals of API or Product
      (including, without limitation, IND, DMF, NDA or other prerequisite
      manufacturing approvals or authorizations, and marketing authorization
      based upon such approvals or authorizations) that are required by any
      national, supranational (e.g., the European Commission or the Council of
      the European Union), regional, state or local regulatory agency,
      department, bureau or other governmental entity, as amended or
      supplemented from time to time.

1.30  "REGULATORY AUTHORITY" means any applicable government regulatory
      authority involved in granting approvals for the marketing, and/or pricing
      of a Product worldwide, including without limitation, in the United
      States, the Food and Drug Administration ("FDA"), and any successor
      government authority having substantially the same function, and foreign
      equivalents thereof.

1.31  "REGULATORY APPROVAL" means the act of a Regulatory Authority necessary
      for the Manufacture of Product in a country or regulatory jurisdiction.

1.32  "RELEASE TECHNOLOGY" means any and all scientific and technical data and
      information including without limitation formulas, methods, techniques,
      protocols, and processes controlled by ISIS as of the Effective Date
      regarding API release and Clinical Product release and any improvements
      therein during the term of this Agreement.

1.33  "RELEASE TECHNOLOGY TRANSFER" has the meaning set forth in Section
      6.2 herein.

1.34  "TECHNOLOGY TRANSFER COMMITTEE" has the meaning set forth in Section
      6.1 herein.

1.35  "TECHNOLOGY TRANSFER TERM" means the time period following the Effective
      Date, as determined by the Technology Transfer Committee, during which the
      Technology Transfer will take place.

                                       26

<Page>

1.36  "THIRD PARTY" means any party other than ISIS or ATL and their respective
      Affiliates.

                                       27

<Page>

                                   EXHIBIT 3.1

            PRODUCTION AND DELIVERY PLAN FOR CALENDAR YEAR 2002

[***]

                                       28

<Page>

                                   EXHIBIT 5.2

                         CALCULATION OF API SUPPLY COST

1) [***]

                                       29

<Page>

                                   EXHIBIT 9.1

                                 CMC ACTIVITIES
[***]

                                       30<Page>

                            ISIS PHARMACEUTICALS INC

                           ANTISENSE THERAPEUTICS LTD

                            STOCK PURCHASE AGREEMENT

                                 MINTER ELLISON
                                     Lawyers
                                  Rialto Towers
                               525 Collins Street
                             MELBOURNE VIC 3000

                                DX 204 Melbourne
                          Telephone (03) 8608 2000
                          Facsimile (03) 8608 1000

                                       JJS

<Page>

                            STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (the "Agreement") between ISIS PHARMACEUTICALS,
INC. of 2292 Faraday Avenue, Carlsbad, CA 92008, USA ("ISIS") and ANTISENSE
THERAPEUTICS LTD., ACN 095 060 745 of Level 1, 10 Wallace Avenue, Toorak,
Victoria 3142, AUSTRALIA ("ATL") is entered into and made effective in
accordance with the provisions of the agreement entitled "Master Agreement"
between ATL and ISIS, dated October 30, 2001. The effective date of this
Stock Purchase Agreement will be the date upon which conditions 1 and 3 in
the Master Agreement have been met (the "Effective Date"). If the Effective
Date has not occurred by March 28, 2002, this Agreement will be null and void
and will not become effective.

RECITALS

A.      The parties intend to enter into a Collaboration and Licence
        Agreement dated 30 October 2001 ('COLLABORATION AND LICENCE
        AGREEMENT').

B.      Under that Agreement Isis will licence intellectual property to ATL
        on the terms and conditions of the Collaboration and Licence
        Agreement.

C.      ATL has agreed to issue and grant to Isis, and Isis has agreed to
        subscribe for, shares and options in the capital of ATL on the terms
        and conditions of this Stock Purchase Agreement.

AGREEMENT

1.      DEFINITIONS

        In this agreement, unless the contrary intention appears:

        'ASX' means Australian Stock Exchange Limited ACN 008 624 691.

        'ASX LISTING' means admission of ATL to the ASX Official List and
        quotation by the ASX of shares in ATL.

        'ASX LISTING RULES' means the listing rules of the ASX as amended
        from time to time.

        'ATL SHARES' means fully paid ordinary shares in ATL.

        'BUSINESS DAY' means the day in which banks (as defined under the
        Banking Act 1959 (Cth)) are open for general banking business in
        Victoria, Australia excluding Saturdays and Sundays.

        'CIRCADIAN' means Circadian Technologies Limited ACN 006 340 567 of
        Level 1, 10 Wallace Avenue, Toorak, Victoria 3142, Australia.

        'COMPLETION' means completion of the subscription for, and issue of,
        the ATL Shares in accordance with clause 6.

        'COMPLETION DATE' means the date 2 Business Days after the ASX has
        approved of the ASX Listing of ATL and ATL has satisfied all
        conditions attaching to such approval, or such other date as the
        parties may agree in writing.

                                      2

<Page>

        'MURDOCH INSTITUTE' means the Murdoch Childrens Research Institute of
        Parkville, Victoria, Australia.

        'MURDOCH INTERESTS' means the Murdoch Institute or other party
        nominated by the Murdoch Institute.

        'OPTION' means an option to acquire by way of issue 1 ATL Share on
        the following terms:

        (a)    the exercise price for each option is 20 Australian cents per
               share;

        (b)    the exercise period will be the period commencing on the date
               of grant of the option and ending on 30 November 2006;

        (c)    such other terms as are set out in schedule 1 or as otherwise
               required by ASX.

        'RECORD DATE' means a date proximate to the date of ASX listing to be
        determined in accordance with ASX requirements.

        'RESTRICTION AGREEMENT' means the restriction agreement set out in
        Appendix 9A to the ASX Listing Rules as applies at Completion, the
        form of which (as at 3 September 2001) is set out in schedule 2.

        'POLYCHIP' means Polychip Pharmaceuticals Pty Ltd ACN 006 455 456 of
        Level 1, 10 Wallace Avenue, Toorak, Victoria, 3142, Australia, a
        wholly owned subsidiary of Circadian.

        'SUBSCRIPTION SHARES' means 30 million fully paid ordinary shares in
        ATL.

        'SYNGENE' means Syngene Ltd ACN 006 161 753 of Level 1, 10 Wallace
        Avenue, Toorak, Victoria, 3142, Australia, a company in which
        Polychip has a minority shareholding.

2.      CONDITION

2.1     CONDITION

        The provisions of clauses 3, 4 and 6 have no effect and the issue of
        the ATL Shares, and grant of the Options by ATL to Isis as
        contemplated by clause 3 of this agreement shall not occur, unless
        and until the following condition is satisfied (the 'Condition'):

               ASX approves an ASX Listing of ATL and ATL satisfies all
               conditions attaching to such approval (other than the issue of
               shares and grant of options to Isis, as contemplated by clause
               3), in each case on or before 26 March 2002 or such later date
               as the parties may agree in writing.

2.2     WAIVER OF CONDITION

        The Condition may not be waived except by a waiver in writing signed
        by each party and will be effective only to the extent specifically
        set out in that waiver.

2.3     CONDUCT OF THE PARTIES

        Each party must use its reasonable efforts within its own capacity to
        ensure that the Condition is satisfied.

                                      3

<Page>

2.4     FAILURE OF CONDITION

        (a)    Either party may terminate this agreement by giving notice in
               writing to the other party at any time before Completion if the
               Condition is not satisfied, or waived by each party, before 5.00
               pm on the Business Day immediately before the date set out in
               the Condition or such later date as may be agreed in writing by
               the parties.

3.      ISSUE OF SHARES AND GRANT OF OPTIONS

3.1     AGREEMENT TO ISSUE SHARES AND GRANT OPTIONS

        On and subject to the terms and conditions of this agreement:

        (a)    Isis agrees to subscribe for, and ATL agrees to issue to
               Isis, the Subscription Shares; and

        (b)    ATL agrees to grant to Isis 20 million Options.

3.2     ACKNOWLEDGMENT

        The parties acknowledge that:

        (a)    ATL will be capitalised by various shareholders prior to the ASX
               Listing of ATL on the basis set out below:

<Table>
<Caption>
               ----------------------------------------------------------------
                           ENTITY                   NUMBER OF ATL SHARES
               ----------------------------------------------------------------
               <S>                                  <C>
               Polychip                                54.375 million
               ----------------------------------------------------------------
               Syngene                                 54.375 million
               ----------------------------------------------------------------
               Murdoch Interests                       11.250 million
               ----------------------------------------------------------------
               Total                                     120 million
               ----------------------------------------------------------------
</Table>
        (b)    It is anticipated that, after the ASX Listing of ATL, ATL
               will:

               (i)    be capitalised as to approximately 190 million to
                      215 million ATL Shares; and

               (ii)   have granted between 105 million Options and 117.5
                      million Options.

        (c)    It is intended that ATL Shares will be offered to the public for
               a subscription price of 20 Australian cents per ATL Share, with
               a free Option attaching to each ATL Share at the rate of 1
               Option for every 2 ATL Shares issued.

        (d)    It is intended that, after the ASX Listing of ATL, the ATL
               Shares issued and Options granted by ATL will be as follows:

<Table>
<Caption>
               ----------------------------------------------------------------
                       PARTY          NUMBER OF ATL SHARES  NUMBER OF OPTIONS
               ----------------------------------------------------------------
               <S>                    <C>                   <C>
               Polychip                  54.375 million
               ----------------------------------------------------------------
               Syngene                   54.375 million
               ----------------------------------------------------------------
               Murdoch Interests         11.250 million
               ----------------------------------------------------------------
</Table>

                                      4

<Page>

<Table>
               <S>                    <C>                   <C>
               ----------------------------------------------------------------
               Isis                        30 million           20 million
               ----------------------------------------------------------------
               Public Subscribers       40 to 65 million    20 to 32.5 million

               Circadian                                        42 million
               Shareholders*
               ----------------------------------------------------------------
               Syngene Shareholders*                            23 million
               ----------------------------------------------------------------
               TOTAL**                 190 TO 215 MILLION   105 TO 117.5 MILLION**
               ----------------------------------------------------------------
</Table>

               *The number of Options to be granted to Circadian Shareholders
               and Syngene Shareholders respectively are approximate only, based
               on the issued capital of each of Circadian and Syngene as at the
               Record Date. It is intended that those shareholders will be
               issued Options on the basis of 1 Option for every share held by
               the shareholders in Circadian and Syngene (as the case may be) on
               payment to ATL of 1 cent per Option. The Isis and Public Options
               will be free.

               **This total will be increased by any options granted pursuant to
               the share option scheme described in clause 3.2(e).

        (e)    ATL intends putting in place a share option scheme in which
               senior originators inventors, employees and directors will
               participate.  These options will have the same terms and
               conditions as the Options to be granted to the public under
               the prospectus, except it is intended there will be
               additional vesting conditions which will provide for gradual
               vesting for up to 5 years, restrictions on transfer and
               conditions on continued employment or involvement in ATL's
               projects.  It is currently intended that the following
               entitlements will be granted under that scheme:

<Table>
<Caption>
               -----------------------------------------------------------------
                            INDIVIDUAL                     NUMBER OF OPTIONS
               -----------------------------------------------------------------
               <S>                                       <C>
               Stanley Crooke (Non-executive Director)       2 million

               -----------------------------------------------------------------
               Chris Belyea (Managing Director and           2 million
               Originator)
               -----------------------------------------------------------------
               George Tachas (Research Director (non-       1.5 million
               Board position), inventor and Originator)
               -----------------------------------------------------------------
               Christopher Wraight (inventor)                2 million
               -----------------------------------------------------------------
               George Werther (inventor)                     2 million
               -----------------------------------------------------------------
               other Directors of ATL                    to be determined by ATL
               -----------------------------------------------------------------
               other Executives/Scientists               to be determined by ATL
               ----------------------------------------------------------------
</Table>

4.      CONSIDERATION

        The parties acknowledge and agree that the consideration to be
        provided by Isis to ATL for the Subscription Shares and Options to be
        granted under clause 3 is the grant of the licences and provisions of
        the other services provided by Isis pursuant to the Collaboration and
        Licence Agreement.

5.      ASX RESTRICTION AGREEMENT

5.1     The parties acknowledge that the ATL Shares and Options to be held by
        Polychip, Syngene, Murdoch Interests and Isis are likely to be
        regarded by the ASX as restricted securities for the purposes of the
        Chapter 9 of the ASX Listing Rules, to be placed in

                                      5

<Page>

        escrow for a period of 2 years. Isis must sign a Restriction
        Agreement (and Isis must procure any controller (as that term is
        defined in the ASX Listing Rules) to sign a Restriction Agreement) in
        the form required by ASX and forward such documents (together with
        any other documents required under that agreement) to ATL within 2
        Business Days of being requested in writing by ATL to do so for the
        purposes of facilitating the proposed ASX Listing of ATL.

6.      COMPLETION

6.1     TIME AND PLACE

        Completion will take place on the Completion Date at the office of
        Minter Ellison, Lawyers at Level 23, Rialto Towers, 525 Collins
        Street, Melbourne, Victoria, Australia or another place agreed by the
        parties.

6.2     SIMULTANEOUS ACTIONS AT COMPLETION

        All actions at Completion will be treated as taking place
        simultaneously and no delivery will be regarded as having been made
        until all deliveries due to be made by Completion have been made.

6.3     OBLIGATIONS OF ISIS

        At or before Completion, Isis must do all of the things listed below:

        (a)    provide to ATL a Restriction Agreement duly signed by Isis and
               any controller of Isis (as defined by the ASX Listing Rules) in
               accordance with clause 5;

        (b)    provide to ATL all such other documents as are required
               pursuant to the terms of the Restriction Agreement;

        (c)    provide to ATL an application for the ATL Shares to be
               subscribed for by Isis pursuant to clause 3.1;

        (d)    provide to ATL an application for Options to be granted to
               Isis pursuant to clause 3.1.

6.4     OBLIGATIONS OF ATL

        At Completion, ATL must, subject to compliance by Isis with the
        provisions of clause 6.3, issue to Isis the Subscription Shares and the
        Options to be granted pursuant to clause 3.1.

6.5     WAIVER

        If any of the obligations set out in clauses 6.3 and 6.4 above are
        not complied with in any respect on the date set for Completion, the
        other party may in its absolute discretion:

        (a)    waiver compliance with that provision;

        (b)    defer Completion to a date not more than 5 Business Days
               after the date set for Completion;

        (c)    proceed to Completion as far as its practicable (without
               prejudice to any of its rights under this agreement); or

                                      6

<Page>

        (d)    terminate this agreement by notice in writing to the other
               party.

6.6     ACCRUED RIGHTS

        Termination of this agreement does not affect any accrued rights or
        remedies of a party.

7.      ASSIGNMENT

        A party may not assign any of its rights under this agreement without
        the consent of the other parties.

8.      WAIVER

8.1     WAIVER

        A provision of or right under this agreement may not be waived except
        by a waiver in writing signed by the party granting the waiver, and
        will be effective only to the extent specifically set out in that
        waiver.

8.2     RIGHTS EXERCISABLE

        The failure of a party at any time to require performance of any
        obligation under this agreement is not a waiver of that party's right:

        (a)    to insist on performance of, or claim damages for breach of,
               that obligation unless that party acknowledges in writing that
               the failure is a waiver; and

        (b)    at any other time to require performance of that or any other
               obligation under this agreement.

9.      NOTICES

9.1     SERVICE OF NOTICES

        A party giving or serving notice or notifying under this agreement
        must do so in writing:

        (a)    directed to the recipient's address specified in this
               clause, as varied by any notice; and

        (b)    hand delivered or sent by prepaid post or facsimile to that
               address.

        The parties' addresses and facsimile numbers are:

        Isis Pharmaceuticals, Inc
        2292 Faraday Avenue
        Carlsbad, CA 92008
        United States of America
        Facsimile No:  +1 760 931 9639

        Antisense Therapeutics Ltd
        Level 1, 10 Wallace Avenue
        Toorak, Victoria 3000
        Australia
        Facsimile No:  +61 3 9824 0083

                                      7

<Page>

9.2     DEEMED RECEIPT

        A notice given in accordance with clause 9.1 is taken to be received:

        (a)    if hand delivered, on delivery;

        (b)    if sent by prepaid post, two Business Days after the date of
               posting; or

        (c)    if sent by facsimile, when the sender's facsimile system
               generates a message confirming successful transmission of the
               total number of pages of the notice unless, within one Business
               Day after the transmission, the recipient informs the sender
               that it has not received the entire notice.

9.3     EXECUTION

        A notice given in accordance with clause 9.1 is sufficiently signed
        for or on behalf of a party if:

        (a)    in the case of a company, it is signed by a director,
               secretary or other officer of the company; or

        (b)    in the case of an individual, it is signed by that party.

9.4     OTHER MODES OF SERVICE PERMITTED

        The provisions of this clause 9 are in addition to any other mode of
        service permitted by law.

10.     GOVERNING LAW AND JURISDICTION

        This agreement is governed by the law applicable in Victoria,
        Australia and each party irrevocably and unconditionally submits to
        the non-exclusive jurisdiction of the courts of Victoria, Australia.

11.     GENERAL

11.1    DURATION OF PROVISIONS

        On completion of the transactions contemplated in this agreement, the
        provisions of this agreement will not merge and, to the extent any
        provision has not been fulfilled, will remain in force.

11.2    FURTHER ACTION

        Each party must use reasonable efforts to do all things necessary or
        desirable to give full effect to this agreement.

11.3    COUNTERPARTS

        This agreement may be executed in any number of counterparts.

11.4    ALTERATIONS

        This agreement may be altered only in writing signed by each party.

11.5    COSTS

                                      8

<Page>

        Each party must bear its own costs of negotiating, preparing and
        executing this agreement.

11.6    ATTORNEYS

        Where this agreement is executed on behalf of a party by an attorney,
        that attorney by executing declares and warrants that the attorney
        has been duly appointed and has no notice of the revocation of the
        power of attorney under the authority of which the attorney executes
        the agreement on behalf of that party.

11.7    INTERPRETATION

        In this agreement, unless the contrary intention appears:

        (a)    headings are for ease of reference only and do not affect
               the meaning of this agreement;

        (b)    the singular includes the plural and vice versa and words
               importing a gender include other genders;

        (c)    other grammatical forms of defined words or expressions have
               corresponding meanings;

        (d)    a reference to a clause, paragraph, schedule, annexure or
               attachment is a reference to a clause or paragraph of or
               schedule, annexure or attachment to this agreement and a
               reference to this agreement includes its schedules, annexures
               and attachments;

        (e)    a reference to a document or agreement, including this
               agreement, includes a reference to that document or agreement as
               novated, altered or replaced from time to time;

        (f)    a reference to `A$', `$A', `dollar' or `$' is a reference to
               Australian currency;

        (g)    a reference to a specific time for the performance of an
               obligation is a reference to that time in Melbourne, Australia
               even if the obligation is to be performed elsewhere;

        (h)    a reference to a party includes a reference to the party's
               executors, administrators, successors, substitutes and
               assigns;

        (i)    words and expressions importing natural persons include
               partnerships, bodies corporate, associations, governments and
               governmental and local authorities and agencies, and vice versa;

        (j)    a reference to any legislation or statutory instrument or
               regulation is construed in accordance with the ACTS
               INTERPRETATION ACT 1901 (Cth) or the equivalent State
               legislation, as applicable;

        (k)    a reference to writing includes typewriting, printing,
               lithography, photography and any other method of representing or
               reproducing words, figures or symbols in a permanent and visible
               form;

        (l)    if a day for payment under this agreement falls on a day
               which is not a Business Day, payment is due on the next
               Business Day;

                                      9

<Page>

        (m)    if a provision of this agreement binds two or more parties
               (including any representation, warranty or indemnity given, made
               or undertaken by two or more parties), that provision binds (and
               that representation, warranty or indemnity is given, made or
               undertaken by) those parties jointly and severally; and

        (n)    if a party comprises two or more persons, the provisions of this
               agreement binding that party bind those persons jointly and
               severally.

EXECUTED as an agreement.

<Table>
<S>                                       <C>
ANTISENSE THERAPEUTICS, LIMITED           ISIS PHARMACEUTICALS, INC.

By:    /s/ C. Belyea                      By:     /s/ B. Lynne Parshall
   -------------------------------           ---------------------------------
Name:      C. BELYEA                      Name:       B. LYNNE PARSHALL
     -----------------------------             -------------------------------
Title:     CEO                               Title:   EXECUTIVE VICE PRESIDENT
      ----------------------------              ------------------------------
                                                AND CHIEF FINANCIAL OFFICER
                                                ------------------------------
</Table>

                                      10

<Page>

                SCHEDULE 1 - TERMS AND CONDITIONS OF OPTIONS

Each option ('OPTION') shall entitle the holder of the Option ('OPTION
HOLDER') to acquire by way of issue one fully paid ordinary share ('SHARE')
in Antisense Therapeutics Limited ('COMPANY') on the terms and conditions set
out below:

1.      Each Option is exercisable at any time after the date of grant to a
        date up to and including 30 November 2006.

2.      If the Option is not exercised on or prior to the expiry of the
        Option Period, the Option shall lapse.

3.      The Options may be exercised wholly or in part by giving notice in
        writing ('NOTICE OF EXERCISE') to the Board at any time during the
        Option Period.

4.      Options shall only be exercisable in multiples of 100. Within 10
        business days of the exercise of the Option the Company shall apply
        for the shares to be admitted for quotation on the Official List of
        Australian Stock Exchange Limited.

5.      The exercise price for each Option is $0.20 per share ('EXERCISE
        PRICE') and is payable immediately on exercise.

6.      On receipt by the Company of the Notice of Exercise and payment of
        the relevant Exercise Price, the Company must, within 14 days, issue
        to the Option Holder the number of Shares in respect of which the
        Option is exercised and despatch the relevant share certificate or
        other appropriate acknowledgment as soon as reasonably practicable
        thereafter.

7.      Shares issued on the exercise of any Options will rank equally in all
        respects with the then existing issued ordinary fully paid shares in
        the Company and will be subject to the provisions of the Constitution
        of the Company.

8.      An Option does not confer rights to participate in new issues of
        securities of the Company, unless the Option Holder has first
        exercised the Option.

9.      Adjustments to the number of shares over which Options exist and/or
        the Exercise Price will be made to take account of changes to the
        capital structure of the Company by way of pro rata bonus and cash
        issues as follows:

        (a)    Pro-Rata Cash issues

               Where a pro-rata issue is made (except a bonus issue) to the
               holders of underlying securities, the Exercise Price of an
               option may be reduced according to the following formula:

               O' =     O -   E[P-(S+D)]
                              ----------
                                N + 1
               where:
               O' =   the new exercise price of the option.
               O  =   the old exercise price of the option.
               E  =   the number of underlying securities into which one
                      option is Exercisable.
               P  =   the average Market Price per security (weighted by
                      reference to volume) of the underlying securities
                      immediately prior to the time of determining entitlements
                      to participate in the issue.

                                      11

<Page>

               S  =   the Subscription price for a security under the pro
                      rata issue.
               D  =   the Dividend due but not yet paid on the existing
                      underlying securities (except those to be issued
                      under the pro rata issue).
               N  =   the Number of securities with rights or entitlements
                      that must be held to receive a right to one new security.

        (b)    Pro-Rata Bonus Issues

               If there is a bonus issue to the holders of the underlying
               securities, on the exercise of any options, the number of shares
               received will include the number of bonus shares that would have
               been issued if the options had been exercised prior to the date
               established to determine entitlements to participate in the
               bonus issue. The Exercise Price will not change.

        (c)    For the purposes of the definition of 'P' in paragraph (a),
               'Market Price' in relation to a security means the arm's length
               value of the security as specified in a written report given to
               the Company by a person who is registered as a company auditor
               under a law in force in a State or a Territory and who is not a
               director, secretary or employee of the Company.

10.     In the event of any reorganisation (including consolidation,
        sub-division, reduction or return) of the issued capital of the
        Company, the rights of the Option Holder including the number of
        options or the Exercise Price or both shall be reorganised (as
        appropriate):

        (a)    in the event of a consolidation of the share capital of the
               Company, the number of options will be consolidated in the same
               ratio as the ordinary share capital of the Company and the
               Exercise Price will be amended in inverse proportion to that
               ratio;

        (b)    in the event of a subdivision of the share capital of the
               Company, the number of options will be subdivided in the same
               ratio as the ordinary share capital of the Company and the
               Exercise Price will be amended in inverse proportion to that
               ratio;

        (c)    in the event of a return of the share capital of the Company,
               the number of options will remain the same and the Exercise
               Price will be reduced by the same amount as the amount returned
               in relation to each ordinary share;

        (d)    in the event of a reduction of the share capital of the Company
               by a cancellation of paid up capital that is lost or not
               represented by available assets where no securities are
               cancelled the number of options and the Exercise Price of each
               option will remain unaltered;

        (e)    in the event of a pro rata cancellation of shares in the
               Company, the number of options will be reduced in the same
               ratio as the ordinary share capital of the Company and the
               Exercise Price of each option will be amended in inverse
               proportion to that ratio; and

        (f)    in the event of any other reorganisation of the issued capital
               of the Company, the number of options or the Exercise Price or
               both will be reorganised (as appropriate) in a manner which will
               not result in any benefits being conferred on Option Holders
               which are not conferred on shareholders.

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11.     Notices may be given by the Company to the Option Holder in the
        manner prescribed by the Constitution of the Company for the giving
        of notices to the Shareholders of the Company and the relevant
        provisions of the Constitution of the Company will apply with all
        necessary modification to notices to be given to the Option Holder.

12.     The Option Holder will be sent all reports and accounts required to
        be laid before Shareholders in general meeting and all notices of
        general meeting of Shareholders, but he will not have any right to
        attend or vote at these meetings.

                                      13

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                       SCHEDULE 2 - RESTRICTION AGREEMENT

                                   APPENDIX 9A

                              RESTRICTION AGREEMENT

Introduced 1/7/96.  Origin:  Appendix 11.  Amended 1/7/98.

We, the persons in:

-     Item 1 of the schedule ("entity");

-     Item 2 of the schedule ("holder");

-     Item 3 of the schedule ("controller"),

agree as follows.

INTRODUCTION

A.      The entity wants to be listed and has issued restricted securities.
        The holder will hold the restricted securities as set out in this
        agreement on the basis that the entity will take the steps necessary
        to be admitted to the +official list of ASX.

B.      We have provided ASX with all the information necessary to properly
        form an opinion about who is a +controller of the holder and who is
        required to execute this agreement.

C.      We enter this agreement for the purpose of complying with chapter 9
        of the listing rules.

AGREEMENT

Escrow restrictions

1.    During the escrow period, the holder will not do any of the following.

        (a) +Dispose of, or agree or offer to +dispose of, the restricted
            securities.

        (b) Create, or agree or offer to create, any security interest in
            the restricted securities.

        (c) Do, or omit to do, any act if the act or omission would have the
            effect of transferring effective ownership or control of the
            restricted securities.

2.    During the escrow period, a controller will not do any of the following.

        (a) +Dispose of, or agree or offer to +dispose of, the controller
            interests.

        (b) Create, or agree or offer to create, any security interest in
            the controller interests.

        (c) Do, or omit to do, any act if the act or omission would have the
            effect of transferring effective ownership or control of the
            controller interests.

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3.      We will comply with chapter 9 of the listing rules. If any of us is
        not a listed entity, we will comply as if we were a listed entity.
        Each of us will take any steps we are able to take that are necessary
        to enable any of the others to comply.

4.      The holder will deposit the certificates for the restricted
        securities with a bank or +recognised trustee for the escrow period.

Warranties

5.      If only the holder and the entity are parties to this agreement, one
        of the following applies.

        (a)    The holder is an individual.

        (b)    The holder has no +controller.

        (c)    The holder has the +controllers set out in item 3 with the
               interests identified in item 6, and each +controller comes
               within an exception set out in rule 9.1.4.

        The holder gives this warranty.

6.      If the holder, the entity and any +controller are parties to this
        agreement, the holder has the +controllers set out in item 3 with the
        controller interests identified in item 6, and any +controller who is
        not a party to this agreement comes within an exception set out in
        rule 9.1.4. The holder and each +controller give this warranty.

7.      If item 7 of the schedule is completed, the full particulars of
        security interests which have been created, or are agreed or offered
        to be created, in the restricted securities are set out. A release of
        the security interests is attached. Apart from this, before the
        escrow period begins, the holder has not done, or omitted to do, any
        act which would breach clause 1 if done or omitted during the escrow
        period. The holder gives this warranty.

8.      If item 8 of the schedule is completed, the full particulars of
        security interests which have been created, or are agreed or offered
        to be created, in the controller interests are set out.  A release of
        the security interests is attached.  Apart from this, before the
        escrow period begins, the +controller has not done, or omitted to do,
        any act which would breach clause 2 if done or omitted during the
        escrow period.  Each +controller gives this warranty.

9.      A breach of any of these warranties is a breach of this agreement.

Consequences of breaching this agreement

10.     If it appears to the entity that the holder or a +controller may
        breach this agreement, the entity must take the steps necessary to
        prevent the breach, or to enforce the agreement.

11.     If the holder or a +controller breach this agreement, each of the
        following applies.

        (a) The entity must take the steps necessary to enforce the agreement,
            or to rectify the breach.

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        (b) The entity must refuse to acknowledge, deal with, accept or
            register any sale, assignment, transfer or +conversion of any of
            the restricted securities. This is in addition to other rights and
            remedies of the entity.

        (c) The holder of the restricted securities ceases to be entitled to
            any dividends, distributions or voting rights while the breach
            continues.

Amendment

12.     This agreement will not be changed or waived without ASX's written
        consent.

Jurisdiction

13.     The laws of the State of the home branch of the entity apply to this
        agreement.  We submit to the jurisdiction of the courts of that State.

Definitions and interpretation

In this agreement:

ASX  means Australian Stock Exchange Limited.

CONTROLLER INTERESTS means the +securities, substantial economic interest or
other interests in the restricted securities and each intermediate entity
through which that interest occurs, full particulars of which are set out in
item 6 of the schedule.

ESCROW PERIOD  means the period set out in item 4 of the schedule.

RESTRICTED SECURITIES means the +securities set out in item 5 of the schedule
and any +securities attaching to or arising out of those +securities that are
restricted securities because of the definition of restricted securities in
the listing rules.

The singular includes the plural and vice versa.

A reference to a party includes its successors, personal representatives and
transferees.

Words and expressions defined in the listing rules of ASX, and not in this
agreement, have the meanings given to them in the listing rules.

Every warranty or agreement (expressed or implied) in which more than one
person joins, binds them individually and any combination of them as a group.

                                    Schedule

1.    Entity's name and address:

2.    Holder's name and address:

3.    Each +controllers' name and address:

4.    Escrow period (the date from which the initial restricted securities
      are escrowed):

5.    Particulars of restricted securities:

                                      16

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6.    Particulars of controller interests:

7.    Particulars of security interests over restricted securities:

8.    Particulars of security interests over controller interests:

Dated:
[Proper execution as a deed]

                                      17

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