Document:

MATERIAL TRANSFER AGREEMENT

This Material Transfer Agreement  (together with its Exhibits referred to herein
as the "Agreement") governs the transfer of certain substances from time to time
from  Ontogeny,  Inc.,  ("Ontogeny")  to Biosyntech  Limited having its place of
business  at 475,  bout,  Armand-Frappier,  Montreal  (Laval)  QC Canada H7V 4B3
("COMPANY").

1.   BACKGROUND.  Ontogeny  desires to obtain  samples of COMPANY's  proprietary
     delivery vehicle described in Exhibit A (such delivery  vehicle,  excluding
     the Materials,  together with its progeny,  derivatives or  improvements is
     referred to herein as the "Vehicle") to evaluate the Vehicle's  suitability
     in its animal  models set forth in  Exhibit  B.  COMPANY  desires to obtain
     samples of the material described in Exhibit A from Ontogeny for use in the
     research  described  in  Exhibit A under the terms and  conditions  of this
     Agreement.  Such  material,  together  with  its  progeny,  derivatives  or
     improvements  is referred to herein as "Material".  As part of the research
     described  in  Exhibit  A,  COMPANY  will  incorporate  the  Material  into
     COMPANY's Vehicle. The Vehicle containing the Material shall be referred to
     herein as the Vehicle/Material Product.  Additionally,  Ontogeny may desire
     to evaluate  Vehicle/Material  Product in  accordance  with  Exhibit B. The
     research set forth in Exhibits A and B shall be considered "Research" under
     this  Agreement.  COMPANY  shall own all title and  interest  in and to the
     Vehicle.

2.   THE MATERIAL  AND THE  RESEARCH.  COMPANY  acknowledges  that  Ontogeny has
     rights to the Material.  Ontogeny will supply COMPANY with such  quantities
     of the Material as COMPANY may reasonably  request and as Ontogeny may make
     available,  in its sole discretion,  from time to time.  However,  Ontogeny
     shall be under no  obligation  to supply any  Material  at any time and may
     cancel the supply of Material at any time without advance  notice.  COMPANY
     will use the  Material,  the  Vehicle/Material  Product  and any product or
     process  derived  from  the  use of the  Material  or the  Vehicle/Material
     Product,  solely in its  Research  set forth in  Exhibit A and for no other
     purpose. The Material and the Vehicle /Material Product will not be used by
     COMPANY in research that is subject to consulting or licensing  obligations
     to  another  party,  unless  Ontogeny  gives  its  prior,  express  written
     permission.  The  Research  will be  conducted  solely  by  COMPANY  at its
     research facilities.  None of the Material or Vehicle/Material Product will
     be transferred or sold to third parties.  COMPANY WILL NOT USE THE MATERIAL
     OR VEHICLE/MATERIAL  PRODUCT FOR TESTING IN OR TREATMENT OF HUMAN SUBJECTS.
     COMPANY  acknowledges  that the  Material and  Vehicle/Material  Product is
     experimental  and will comply with all laws and  regulations  applicable to
     its  handling  and use.  Any  Material  remaining  upon  completion  of the
     Research will be returned to Ontogeny.

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     Any Vehicle/Material Product remaining upon completion of the Research will
     be destroyed by COMPANY.

3.   THE VEHICLE  AND THE  RESEARCH.  COMPANY  will  supply  Ontogeny  with such
     quantities of the Vehicle as Ontogeny may reasonably request and as COMPANY
     may make available,  in its sole  discretion,  from time to time.  However,
     COMPANY  shall be under no obligation to supply any Vehicle at any time and
     may  cancel  the supply of  Vehicle  at any time  without  advance  notice.
     Additionally,  COMPANY will supply  Ontogeny  with such  quantities  of the
     Vehicle/Material  Product or other related  materials as needed by Ontogeny
     in order to conduct the  Research  set forth in Exhibit B hereto.  Ontogeny
     will use the  Vehicle,  the  Vehicle/Material  Product  and any  product or
     process  derived  from  the  use of  the  Vehicle  or the  Vehicle/Material
     Product,  solely in its  Research  set forth in  Exhibit  Band for no other
     purpose.  The Research will be conducted solely by Ontogeny at its research
     facilities or by a third party contractor at their facilities.  None of the
     Vehicle or  Vehicle/Material  Product will be  transferred or sold to third
     parties other than the aforesaid third party contractors. ONTOGENY WILL NOT
     USE THE VEHICLE OR VEHICLE/MATERIAL  PRODUCT FOR TESTING IN OR TREATMENT OF
     HUMAN SUBJECTS.  COMPANY acknowledges that the Vehicle and Vehicle/Material
     Product  is  experimental  and will  comply  with all laws and  regulations
     applicable to its handling and use. Any Vehicle  remaining upon  completion
     of the Research will be returned to COMPANY. Any  Vehicle/Material  Product
     remaining upon completion of the Research will be destroyed by Ontogeny.

4.   IN VIVA  STUDIES.  If COMPANY  or  Ontogeny  is using the  Vehicle/Material
     Product for non-human in vivo studies,  it will comply with all  applicable
     federal, state and local laws and regulations.

5.   INVENTIONS.

5.1  DISCLOSURE. COMPANY will promptly and fully disclose in writing to Ontogeny
     any and all inventions, (whether or not protectable under state, federal or
     local laws) related to the Material, the Vehicle/Material  Product or their
     use, or developed using the Material, or the Vehicle/Material Product which
     are conceived  and/or reduced to practice by COMPANY,  in the course of its
     Research  and  Ontogeny  will  promptly  and fully  disclose  in writing to
     COMPANY any and all inventions,  (whether or not  protectable  under state,
     federal or local laws) related to the Vehicle, the Vehicle/Material Product
     or their use,  or  developed  using the  Vehicle,  or the  Vehicle/Material
     Product which are conceived and/or reduced to practice by Ontogeny,  in the
     course of its Research (collectively, the "Invention(s)").

5.2  RIGHTS.Except  as provided  herein,  ownership  of any  Invention  shall be
     determined in accordance with the applicable  intellectual property laws of
     the United States of America. Notwithstanding any other provision contained
     in this Agreement (a) Ontogeny shall solely own those  Inventions

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     that are  directed  to  Material  or relate to the use  thereof,  except in
     combination  with the use of the Vehicle and (b) COMPANY  shall  solely own
     those  Inventions  that are  directed  to the  Vehicle or relate to the use
     thereof,  except in the combination with the use of the Material.  Ontogeny
     and  Company  hereby  agree that a party may not use  information  from the
     Research to file a patent application  without the prior written consent of
     the  other  party on any  Inventions  that  cover (i) the  Vehicle  and the
     Material,  (ii) the combination of the Vehicle and the use of the Material;
     (iii) the  combination of the Material and the use of the Vehicle,  or (iv)
     the  combination  of the use of the  Vehicle  and  the use of the  Material
     ("Joint Inventions").  COMPANY represents and warrants that no other person
     has any prior right to  ownership of Joint  Inventions  or a prior right to
     acquire a license  under such Joint  Inventions  by reason of any action or
     agreement by COMPANY, except as disclosed in the Agreement in Exhibit C.

5.3  PATENT APPLICATIONS. Subject to Section 5.2 any and all patent applications
     necessary to protect the proprietary position of solely owned Inventions by
     Ontogeny will be prepared,  filed and  maintained by Ontogeny with expenses
     paid by Ontogeny.  Subject to Section 5.2 any patent application  necessary
     to protect the proprietary  position of solely owned  Inventions by COMPANY
     will be prepared,  filed and  maintained  by COMPANY with  expenses paid by
     COMPANY.  For any and all patent  applications  on Joint  Inventions,  both
     Ontogeny and COMPANY  agree to  cooperate  jointly at each such party's own
     expense in the preparation,  prosecution  and/or maintenance of any patents
     or patent applications for a Joint Invention.

5.4  REPORTS. At Ontogeny's request,  COMPANY will advise and update Ontogeny on
     the progress and results of the Research subject to Section 7. At COMPANY's
     request,  Ontogeny  will  advise and update  COMPANY  on the  progress  and
     results of the Research subject to Section 7.

6.   NO LICENSE.  Ontogeny  retains all rights and title in and to the  Material
     and all related Ontogeny  intellectual  property rights,  including without
     limitation,  any patents,  patent  applications,  copyrights  and copyright
     applications, subject to the limited right of use granted to COMPANY herein
     to  carry  out  the   Research,   and   retains   the  right  to  have  any
     Vehicle/Material  Products  destroyed and any Material returned to Ontogeny
     or disposed of upon  request.  COMPANY  understands  that no other right or
     license to the Material,  the Vehicle/Material  Products or to their use is
     granted or implied as a result of  Ontogeny's  sending the  Material to it.
     Nothing  contained in this  Agreement  shall restrict  Ontogeny's  right to
     disclose,  use,  sell,  assign,  transfer or distribute the Material to any
     other entity for commercial or noncommercial purposes.  COMPANY retains all
     rights and title in and to the Vehicle and all related COMPANY intellectual
     property  rights,   including  without  limitation,   any  patents,  patent
     applications, copyrights and copyright applications, subject to the limited
     right of use  granted to  Ontogeny  herein to carry out the  Research,  and
     retains the right to have any  Vehicle/Material  Products destroyed and any
     Vehicle  returned  to  COMPANY  or  disposed  of  upon

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     request.  Ontogeny  understands  that no  other  right  or  license  to the
     Vehicle,  the  Vehicle/Material  Products  or to their  use is  granted  or
     implied as a result of  COMPANY's  sending the Vehicle or  Vehicle/Material
     Products to it. Nothing  contained in this Agreement shall restrict COMPANY
     's right to disclose, use, sell, assign, transfer or distribute the Vehicle
     to any other entity for commercial or noncommercial purposes.

7.   CONFIDENTIALITY.  Subject to Section  5.3  hereof,  for a period of 5 years
     from the date of this Agreement, neither party will disclose or publish the
     results of the Research to third  parties  other than in  confidence to its
     directors,   officers,  employees,   consultants,   corporate  partners  or
     potential  corporate  partners.  With the  exception  of the results of the
     Research, any confidential or proprietary  information provided by Ontogeny
     to COMPANY shall be considered Ontogeny  Proprietary  Information and for a
     period of five years from the latest  date of  disclosure  of any  Ontogeny
     Proprietary  Information  hereunder,  COMPANY  agrees  that it will hold in
     confidence  and not  disclose or make  available  to any third  party,  any
     Ontogeny  Proprietary  Information  disclosed  to it by  or  on  behalf  of
     Ontogeny,  will  not use  such  Ontogeny  Proprietary  Information  for any
     purpose other than as advised or directed by Ontogeny, and will not exploit
     such Ontogeny Proprietary Information for its own benefit or the benefit of
     another without the prior written  consent of Ontogeny.  With the exception
     of the results of the Research, any confidential or proprietary information
     provided by COMPANY to Ontogeny  shall be  considered  COMPANY  Proprietary
     Information  and for a  period  of  five  years  from  the  latest  date of
     disclosure  of any  COMPANY  Proprietary  Information  hereunder,  Ontogeny
     agrees that it will hold in confidence  and not disclose or make  available
     to any third party, any COMPANY Proprietary  Information disclosed to it by
     or on behalf of COMPANY, will not use such COMPANY Proprietary  Information
     for any purpose other than as advised or directed by COMPANY,  and will not
     exploit such  COMPANY  Proprietary  Information  for its own benefit or the
     benefit of another without the prior written  consent of COMPANY.  Ontogeny
     Proprietary  Information  and  COMPANY  Proprietary  Information  shall not
     include information which:

     (a)  is known to the  public at the time of  disclosure  by the  disclosing
          party or becomes so known  through no wrongful  act on the part of the
          receiving party, but only after it becomes so publicly known:

     (b)  is in the  receiving  party's  possession at the time of disclosure by
          the disclosing party, as evidenced by written records;

     (c)  becomes known to the receiving party through disclosure by sources not
          under  an  obligation  to  the  disclosing   party  to  maintain  such
          information in confidence as evidenced by written records;

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     (d)  independently developed by or on behalf of the receiving party without
          reference  to or  reliance  on  the  Proprietary  Information  of  the
          disclosing party, as evidenced by written records.

8.   NO  WARRANTY.  THE  MATERIAL  IS  PROVIDED  TO  COMPANY  AS-IS AND  WITHOUT
     WARRANTY,  EXPRESS OR IMPLIED,  INCLUDING ANY WARRANTY OF  MERCHANTABILITY,
     TITLE OR FITNESS FOR A PARTICULAR PURPOSE AND WITHOUT ANY REPRESENTATION OR
     WARRANTY  THAT THE USE OF THE MATERIAL  WILL NOT  INFRINGE  ANY PATENT,  OR
     OTHER  RIGHTS.  THE  VEHICLE IS  PROVIDED  TO  ONTOGENY  AS-IS AND  WITHOUT
     WARRANTY,  EXPRESS OR IMPLIED,  INCLUDING ANY WARRANTY OF  MERCHANTABILITY,
     TITLE OR FITNESS FOR A PARTICULAR PURPOSE AND WITHOUT ANY REPRESENTATION OR
     WARRANTY THAT THE USE OF THE VEHICLE WILL NOT INFRINGE ANY PATENT, OR OTHER
     RIGHTS.

9.   INDEMNIFICATION.  To the extent permitted under governing law, COMPANY will
     indemnify and hold Ontogeny harmless from any claims or liability resulting
     from COMPANY's use, handling or storage of the Material or Vehicle/Material
     Product,  except insofar as such claims or liability result from Ontogeny's
     negligence  or  wrongdoing  subject to Ontogeny  providing  prompt  written
     notice of any such  claim or  liability  and  COMPANY  having  the right to
     control  the defense  and/or  settlement  of such claim;  and to the extent
     Ontogeny  has been  negligent  or engaged  in  wrongdoing,  Ontogeny  shall
     indemnify  COMPANY to the extent  permitted  under governing law subject to
     COMPANY  providing prompt written notice of any such claim or liability and
     Ontogeny having the right to control the defense and/or  settlement of such
     claim. To the extent permitted under governing law, Ontogeny will indemnify
     and hold  COMPANY  harmless  from any claims or  liability  resulting  from
     Ontogeny's  use,  handling  or storage of the  Vehicle or  Vehicle/Material
     Product,  except insofar as such claims or liability  result from COMPANY's
     negligence  or  wrongdoing,  subject to COMPANY  providing  prompt  written
     notice of any such  claim or  liability  and  Ontogeny  having the right to
     control  the defense  and/or  settlement  of such claim;  and to the extent
     COMPANY  has  been  negligent  or  engaged  in  wrongdoing,  COMPANY  shall
     indemnify  Ontogeny to the extent  permitted under governing law subject to
     Ontogeny providing prompt written notice of any such claim or liability and
     COMPANY having the right to control the defense  and/or  settlement of such
     claim.

10.  TERMINATION.  Either party may terminate this Agreement on thirty (30) days
     prior written notice to the other party.  Upon  termination,  COMPANY shall
     destroy any Vehide/Material  Products, shall immediately return to Ontogeny
     all Ontogeny Proprietary Information provided by Ontogeny, and all Material
     and all of COMPANY's  right to use the  Material  and the  Vehicle/Material
     Products   shall  end.  Upon   termination,   Ontogeny  shall  destroy  any
     Vehicle/Material  Product,  shall immediately return to

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     COMPANY all COMPANY Proprietary  Information  provided by COMPANY,  and all
     Vehicle  and  all  of   Ontogeny's   right  to  use  the  Vehicle  and  the
     Vehicle/Material  Products shall end. Following termination,  neither party
     shall have any  further  obligations  under  this  Agreement,  except  that
     Sections 5 through 10 shall survive termination.

11.  MODIFICATIONS.  This Agreement supersedes all prior agreements,  written or
     oral,  including the  Confidential  Disclosure  Agreement dated October 26,
     1999 between  COMPANY and Ontogeny  relating to the subject  matter of this
     Agreement  provided  that the  obligations  of  confidentiality  and nonuse
     attaching to the Proprietary  Information disclosed under such Confidential
     Disclosure Agreement shall survive its termination.  This Agreement may not
     be  modified,  changed  or  discharged,  in whole or in part,  except by an
     agreement in writing signed by the COMPANY and Ontogeny.

12.  THIRD  PARTIES.   The  COMPANY  and  Ontogeny  hereby  represent  that  the
     acceptance  of the  Material  and  Vehicle  in  accordance  with,  and  the
     performance  of all the terms of this  Agreement do not and will not breach
     or conflict with any other agreement or arrangement to which the COMPANY or
     Ontogeny is a party.

13.  BAILMENT.  It is the intent of the parties that the transfer of Material to
     COMPANY or the  transfer of Vehicle to Ontogeny be  considered  a bailment,
     and shall be considered  neither a conditional nor an  unconditional  sale.
     Any monies  transferred  in  conjunction  with the  transfer  of  Material,
     Vehicle and  information  shall be only to cover the costs  associated with
     the  transfer,  and shall not  represent  consideration  for an exchange of
     title thereto.

14.  MISCELLANEOUS. This Agreement (a) may not be assigned or transferred by any
     party  without the prior  written  consent of the other party,  except that
     Ontogeny or COMPANY may assign this  Agreement to an affiliated  company or
     in  connection   with  the  merger,   consolidation   or  sale  of  all  or
     substantially  all of its assets and (b) shall be governed by and construed
     in accordance with the laws of the Commonwealth of Massachusetts.

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IN WITNESS  WHEREOF,  Ontogeny  and COMPANY  have caused  this  Agreement  to be
executed  in their  names by their  properly  and duly  authorized  officers  or
representatives.

Ontogeny, Inc.

Name:       /s/ Raul Rodriguez
            ------------------
                Raul Rodriguez

Title:      Senior V.P., Business Development

Date:       12/03/99

Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138

Phone: (617) 876-0086
Facsimile: (617) 876-0866

Biosyntech Limited

Name:       /s/ Francois Binette
            --------------------
            Francois Binette

Title:      Vice President R&D

Date:       12/03/99

Biosyntech
475, boul. Armand Frappier
Montreal (Laval) QC H7V 4B3
Canada

Phone: (450) 686-2437
Facsimile: (450) 686-8952

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Exhibit A

1.   VEHICLE: Biosyntech's proprietary BST-gel delivery system

2.   MATERIAL:  Recombinant human hedgehog proteins.  The research will focus on
     the use of one  chemically  modified  form of  recombinant  human  hedgehog
     (shin) protein. However,  unmodified recombinant shh protein or other forms
     of the shh protein obtained by chemical  modification may also be used. The
     related human  recombinant  Indian  hedgehog  (ihh) protein or its modified
     forms may also be used.

3.   RESEARCH  BY COMPANY:  The  COMPANY  will  formulate  the  Vehicle/Material
     Product. The COMPANY will assist in assessing the in vitro release kinetics
     of Material  from the  Vehicle.  The COMPANY  will  provide  Ontogeny  with
     different  formulations  of the  Vehicle/Material  Product  to be tested in
     Ontogeny's in vitro and in viva assays.

Exhibit B

     Research   by   Ontogeny:   Ontogeny   will  test  the   Vehicle   and  the
     Vehicle/Material in various in vitro and in vivo assays.

Exhibit C

     (Please insert any prior right to ownership exceptions,  as they pertain to
     Section 5.2)

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                           ONTOGENY CORPORATE PROFILE

Company        Ontogeny, Inc., founded in 1994 is a privately held biotechnology
Background     company developing  therapies to combat disorders associated with
               loss of cell  function,  aging and  degeneration.  Some  areas of
               therapeutic focus are:

               o    neurological disorders: Alzheimer's and Parkinson's disease,
                    peripheral neuropathies
               o    orthopedic  disorders:  osteoarthritis,   osteoporosis;  and
                    cartilage/bone injuries
               o    dermatological  disorders:  skin cancer,  wound  healing and
                    hair growth
               o    diabetes:  cell  therapy for juvenile  onset;  factors/small
                    molecules for adult insulin dependent diabetes.

                    The company is  developing  drugs  based on small  molecules
                    that  are  key  inducers  of  cell  and  tissue  growth  and
                    differentiation.  The  company has  already  identified  and
                    possesses  proprietary  rights  to an  important  family  of
                    inducing  molecules called the hedgehog family.  Ontogeny is
                    developing  several of these  proteins  into  organ-specific
                    therapeutics  intended to repair tissue and thereby  restore
                    function to the damaged  system of a patient's  body. As the
                    aging population increases worldwide, the need for effective
                    and safe  treatments  for many  degenerative  disorders will
                    increase.  Ontogeny intends to become a leader in developing
                    therapies for these degenerative disorders.

Developmental  In the last ten years, access to the tools of molecular biology a
Biology        and classical  embryology  has enabled  developmental  biology to
               make  great  strides   towards   discovering   and  defining  the
               mechanisms  and  processes  by  which  organisms  develop.  These
               discoveries  have positioned  developmental  biology to become an
               integral  component of drug discovery.  The key control molecules
               of development are called inducing molecules.

Ontogeny      The determining molecules of development, inducing molecules, have
Technology    recently  been  identified  and have proven to be potent  secreted
              proteins that act at the level of the cell  surface.  Ontogeny has
              sole  proprietary  rights to a number of the  inducing  molecules,
              including an important  group known as the  hedgehog  family.  The
              hedgehog family of molecules include the following.

              o     Sonic hedgehog plays a major role in the  differentiation of
                    the central nervous system (CNS).  Ontogeny has demonstrated
                    that  sonic  hedgehog  has  inductive,   growth  factor  and
                    neuroprotective   properties,   which  offer  potential  for
                    treating neurodegenerative disorders.
              o     Indian  hedgehog is implicated in the development of bone
                    and  cartilage  and has the  potential  to treat  orthopedic
                    disorders   including   osteoarthritis   and   osteoporosis.
              o     Desert  hedgehog  appears to play a role in normal  nerve
                    signaling  through its effect on the cells that  support the
                    peripheral   nerves.   Ontogeny  is  exploring  its  use  in
                    disorders  where  normal  nerve  signaling is damaged due to
                    chemotherapy-induced      neuropathy,       diabetic-induced
                    neuropathy,  and multiple sclerosis, for example.
              o     Patched  is  critical  for normal  skin and hair  formation.
                    Aberrant and excessive  activation of its signaling  pathway
                    can result in basal cell  nevus  syndrome  and in basal cell
                    carcinoma (BCC). BCC, a skin cancer,  results from excessive
                    exposure to sunlight  and is the most common  human  cancer,
                    affecting more people than all other cancers combined.

Ontogeny      Neurological  Disorders. One of  Ontogeny's  lead programs is in
Programs      the  area of  neurodegenerative  disorders,  such  as  Parkinson's
              disease,  Alzheimer's disease and peripheral  neuropathies,  where
              the technical strategy is to restore normal function that has been
              destroyed by disease. With a corporate partner,  Ontogeny has made
              key progress in moving  toward the clinic with products to address
              treatment  for these  diseases.

              Orthopedic Disorders. Ontogeny's strategy focuses on the fact that
              Indian  hedgehog is implicated in normal  development  of bone and
              cartilage.  It has been  demonstrated  that  Indian  hedgehog  can
              stimulate and regulate bone formation.  This important finding has
              direct implications for potential  pharmacological use in fracture
              repair  and  implant  fixation,  and  Ontogeny  is  proceeding  to
              preclinical work in these areas.

              Dermatological Disorders.  Congenital or acquired  patched defects
              commonly  result in a skin  cancer  known as basal cell  carcinoma
              (BCC). BCC is the most common human cancer and affects one-quarter
              to one-half of all  Caucasians.  Ontogeny is using insights gained
              to screen for new chemical entities for the non-surgical treatment
              of this common  disorder.

              Diabetes.  In the areas of both juvenile and adult onset  diabetes
              Ontogeny's   technical   strategy   is  to   use   insights   from
              developmental  biology to identify  molecules  and stem cells that
              will restore insulin production.

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OntoScreen(TM)To   identify   inducing   molecules,   Ontogeny   has  devised  a
              developmental  biology-based functional screening system. With the
              OntoScreen screening system, researchers can sift through the vast
              amount of  sequence  information  being  generated  by the  genome
              project  to  identify  sequences  of  therapeutic  interest.  This
              screening system uses proprietary  assays to identify new entities
              that  regulate  the  mechanisms  of  development  and repair.  The
              automated system allows for medium-to-high throughput of materials
              including genes, gene sequences, proteins and chemical entities to
              rapidly identify those with therapeutic potential.

Ontogeny      Ontogeny  has  raised   approximately  $70  million  from  private
Financial     placements  and upfront  payments from  collaborators.  This total
History       consists of proceeds  from the  founding  round in August  1994, a
              second round in January 1996, a mezzanine round in March 1997, and
              most recently,  the completion of a private  placement in December
              1998.

Ontogeny      Ontogeny has collaboration with the following:
Alliances     o     Biogen.  The principal  focus of this recently  extended and
                    expanded   partnership   is  on   developing   products  for
                    neurological disorders.
              o     Roche.  This alliance is focused on developing a product for
                    local bone and cartilage disorders.
              o     Becton  Dickinson  and Ontogeny are focusing on a cell-based
                    therapy  for  diabetes.
              o     Genzyme  Molecular  Oncology is producing Serial Analysis of
                    Gene  Expression  (SAGE)  libraries that enable  Ontogeny to
                    analyze    differential    gene   expression   for   product
                    identification.
              o     Tropix will perform ultra-high-throughput screening of large
                    combinatorial   compound   libraries  for  activity  against
                    Ontogeny's  unique  biological  targets.
              o     ComGenex and Oxford  Asymmetry  (OAI) provide  Ontogeny with
                    access to diverse chemical  products in their  combinatorial
                    chemistry libraries. In addition, OAI will provide medicinal
                    chemistry services to optimize Ontogeny's therapeutic leads.
              o     Ontogeny   has    organized   a   consortium   of   academic
                    dermatological oncology centers for the development of leads
                    in the  areas of skin  cancer  and  skin  and  hair  growth.
                    Participating are Stanford  University,  Brigham and Women's
                    Hospital  in  conjunction   with  the   Dana-Farber   Cancer
                    Institute, the University of California San Franciso and San
                    Francisco General Hospital.

Ontogeny  Scientific Advisors Board
Team      Douglas A. Melton, Ph.D., Chair, Harvard University
          Philip A. Beachy, Ph.D., Johns Hopkins University School of Medicine
          Anders Bjorklund, Ph.D., University of Lund
          Helena Edlund, Ph.D., University of Umea
          Thomas Edlund, Ph.D., University of Umea
          Curt R. Freed, M.D., University of Colorado School of Medicine
          Brigid Hogan, Ph.D., Vanderbilt Uniuersity
          Philip Ingham, Ph.D., University of Sheffield
          Thomas M. Jessell, Ph.D., Columbia University
          Andrew McMahon, Ph.D., Haruard Uniuersity
          Roel Nusse, Ph.D., Stanford University School of Medicine
          Matthew P. Scott, Ph.D., Stanford University School of Medicine
          Cliff Tabin, Ph.D., Haruard Medical School
          Christopher V. E. Wright, Ph.D., Vanderbilt Uniuersity
          Board of Directors
          William W. Helman, Chair, Greylock Management
          Christopher E. Bogan, Best Practices
          Roger W. Brimblecombe, Ph.D., Vanguard Medica Limited
          Thomas D. Ingolia, Ph.D., Ontogeny, Inc.
          Edwin M. Kania, Jr., One Liberty Ventures
          Ruth B. Kunath, Vulcan Northwest, Inc.
          Douglas A. Melton, Ph.D., Haruard University
          Doros Platika, M.D., Ontogeny, Inc.
          W. Leigh Thompson, M.D., Ph.D., Profound Quality Resources Ltd.
          Key Personnel
          Doros Platika, M.D., President and Chief Executive Officer
          Raul R. Rodriguez, Sr. Vice President, Business Development
          Lee L. Rubin, Ph.D., Sr. Vice President, Research
          George A Eldridge Vice President, Finance and Chief Financial Officer
          Marlene A. Thayer Director, Human Resources
          Cynthia G. Clayton, Mgr., Corporate Communications and Investor
            Relations

November, 1999MATERIAL TRANSFER AGREEMENT

This Material Transfer Agreement  (together with its Exhibits referred to herein
as the "Agreement") governs the transfer of certain substances from time to time
from   Biosyntech   Limited   having  its  place  of  business  at  475,   boul.
Armand-Frappier,  Laval,  QC Canada,  H7V 4B3 to BIOMET  Corporation  ("BIOMET")
Airport Industrial Park, P.O. Box 587, Warsaw, IN 46581-0587.

1.  Background.  BIOMET  desires to obtain samples of  Biosyntech's  proprietary
biomaterial  described  in  Exhibits  A (such  biomaterial,  together  with  its
progeny, derivatives or improvements is referred to herein as the "Biomaterial")
to  evaluate  the  Biomaterial's  suitability  in its  orthopaedic  applications
research, referred herin as "research" set forth in Exhibit A.

2. The  Biomaterial  and the research.  Biosyntech  will supply BIOMET with such
quantities of the Biomaterial as BIOMET may reasonably request and as Biosyntech
may  make  available,  in its  sole  discretion,  from  time to  time.  However,
Biosyntech  shall be under no obligation to supply any  Biomaterial  at any time
and may cancel the supply of  Biomaterial  at any time without  advance  notice.
BIOMET will use the  Biomaterial and any product or process derived from the use
of the  Biomaterial  solely in its  Research  set forth in Exhibits A and for no
other purpose.  The Research will be conducted  solely by BIOMET at its research
facilities  or by a third  party  contractor  at their  facilities.  None of the
Biomaterial  will be  transferred  or sold  to  third  parties  other  than  the
aforesaid  third  party  contractors.  BIOMET WILL NOT USE THE  BIOMATERIAL  FOR
TESTING  IN OR  TREATMENT  OF  HUMAN  SUBJECTS.  BIOMET  acknowledges  that  the
Biomaterial  is  experimental  and will  comply  with  all laws and  regulations
applicable to its handling and use. Any Biomaterial remaining upon completion of
the Research will be returned to Biosyntech.

3. In Vivo  Studies.  If  Biosyntech  or  BIOMET is using  the  Biomaterial  for
non-human in vivo studies, it will comply with all applicable federal, state and
local laws and regulations.

4. Inventions

In the course of evaluation of the Biomaterial's  suitability in its orthopaedic
applications  research,  inventions may be developed which may be patentable due
to  the  superior   characteristics  and  properties  of  Biosyntech's  product.
Therefore,  the parties shall jointly own inventions that are either made by the
parties' employees or consultants  jointly or inventions that are made solely by
Biomet's employees and consultants where the patentability of such inventions is
attributable in whole or in part to the use of Biosyntech's material.

At  Biosyntech's  request,  BIOMET  will  advise  and update  Biosyntech  on the
progress and results of the Research subject to Section 6.

5. No Licence. Biosyntech retains all rights and title in and to the Biomaterial
and all related  Biosyntech  intellectual  property  rights,  including  without
limitation,   any  patents,   patent  applications,   copyrights  and  copyright
applications,  subject to the limited  right of use granted to BIOMET  herein to
carry out the Research,  and retains the right to have any Biomaterial destroyed
and any Biomaterial  returned to Biosyntech or disposed of upon request.  BIOMET
understands  that no other  right or  license to the  Biomaterial  is granted or
implied as a result of  Biosyntech's  sending  the  Biomaterial  to it.  Nothing
contained in this Agreement shall restrict Biosyntech's right to disclose,  use,
sell,  assign,  transfer or distribute  the  Biomaterial to any other entity for
commercial or non-commercial purposes. BIOMET retains all right and title in and
to  the  Instruments  and  all  related  BIOMET  intellectual  property  rights,
including without limitation,  any patents, patent applications,  copyrights and
copyright  applications.  Nothing  contained in this  Agreement  shall  restrict
BIOMET's  right to

<PAGE>

disclose,  use, sell assign, transfer or distribute the Instruments to any other
entity for commercial or non commercial purposes.

6. Confidentiality.  Subject to Section 4.3 hereof, for a period of 5 years from
the date of this  Agreement,  neither party will disclose or publish the results
of the Research to third  parties  other than in  confidence  to its  directors,
officers,  employees,  consultants,  corporate  partners or potential  corporate
partners. With the exception of the results of the Research, any confidential or
proprietary  information  provided by  Biosyntech  to BIOMET shall be considered
Biosyntech's  Proprietary  Information  and for a period of five  years from the
date of disclosure of any Biosyntech Proprietary  Information hereunder,  BIOMET
agrees that it will hold in confidence and not disclose or make available to any
third party,  any Biosyntech  Proprietary  Information  disclosed to it by or on
behalf of Biosyntech,  will not use such Biosyntech Proprietary  Information for
any purpose other than as advised or directed by Biosyntech and will not exploit
such  Biosyntech  Proprietary  Information for its own benefit or the benefit of
another without the prior written  consent of Biosyntech.  With the exception of
the  results  of the  Research,  any  confidential  or  proprietary  information
provided  by  BIOMET  to  Biosyntech  shall  be  considered  BIOMET  Proprietary
Information and for a period of five years from the latest date of disclosure of
any BIOMET  Proprietary  Information  hereunder,  Biosyntech agrees that it will
hold in confidence  and not disclose or make  available to any third party,  any
BIOMET Proprietary  Information  disclosed to it by or on behalf of BIOMET, will
not use such  BIOMET  Proprietary  Information  for any  purpose  other  than as
advised or directed  by BIOMET,  and will not  exploit  such BIOMET  Proprietary
Information  for its own  benefit or the  benefit of another  without  the prior
written  consent  of  BIOMET.  Biosyntech  Proprietary  Information  and  BIOMET
Proprietary Information shall not include information which:

a) is known to the public at the time of disclosure by the  disclosing  party or
become so known through no wrongful act on the part of the receiving  party, but
only after it becomes so publicly known;

b) is in the  receiving  party's  possession  at the time of  disclosure  by the
disclosing party, as evidenced by written records;

c) becomes known to the receiving party through  disclosure by sources not under
an obligation to the disclosing party to maintain such information in confidence
as evidenced by written records;

d) is  independently  developed by or on behalf of the  receiving  party without
reference to or reliance on the Proprietary Information of the disclosing party,
as evidenced by written records.

7. NO WARRANTY. THE BIOMATERIAL IS PROVIDED TO BIOMETAS-IS AND WITHOUT WARRANTY,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY , TITLE OR FITNESS
FOR A PARTICULAR PURPOSE AND WITHOUT ANY REPRESENTATION OR WARRANTY THAT THE USE
OF THE BIOMATERIAL WILL NOT INFRINGE ANY PATENT, OR OTHER RIGHTS.

8.  Indemnification.  To the extent  permitted  under governing law, BIOMET will
indemnify and hold  Biosyntech  harmless from any claims or liability  resulting
from BIOMET's use, handling or storage of the Biomaterial except insofar as such
claims or liability result from Biosyntech's  negligence or wrongdoing,  subject
to Biosyntech providing prompt written notice of any such claim or liability and
BIOMET having the right to control the defence and/or  settlement of such claim;
and to the extent  Biosyntech  has been  negligent  or  engaged  in  wrongdoing,
Biosyntech  shall indemnify  BIOMET to the extent  permitted under governing law
subject to BIOMET providing prompt written notice of any

<PAGE>

such claim or liability and  Biosyntech  having the right to control the defence
and/or settlement of such claim.

9.  Termination.  Either party may terminate  this Agreement on thirty (30) days
prior written notice to the other party. Upon termination,  BIOMET shall destroy
any  Biomaterial,   shall  immediately   return  to  Biosyntech  all  Biosyntech
Proprietary  Information provided by Biosyntech,  and all Biomaterial and all of
BIOMET's right to use the Biomaterial shall end. Following termination,  neither
party  shall have any  further  obligation  under this  Agreement,  except  that
Section 5 through 10 shall survive termination.

10.  Modifications.  This Agreement supersedes all prior agreements,  written or
oral,  including the Confidential  Disclosure Agreement dated __________ between
Biosyntech and BIOMET  related to the subject matter of this Agreement  provided
that the obligations of confidentiality and non-use attaching to the Proprietary
Information disclosed under such Confidential Disclosure Agreement shall survive
its termination.  This Agreement may not be modified,  changed or discharged, in
whole or in part, except by an agreement in writing signed by the Biosyntech and
BIOMET.

11. Third Partie.  Biosyntech and BIOMET hereby represent that the acceptance of
the Biomaterial in accordance with, and the performance of all the terms of this
Agreement  do not and will not breach or conflict  with any other  agreement  or
arrangement to which Biosyntech or BIOMET is a party.

12.  Bailment.  It is the intent of the parties that the transfer of Biomaterial
to  BIOMET  be  considered  a  bailment,  and  shall  be  considered  neither  a
conditional  nor an  unconditional  sale. Any monies  transferred in conjunction
with the transfer  Biomaterial and information  shall be only to cover the costs
associated  with the  transfer,  and shall not  represent  consideration  for an
exchange of title thereto.

13. Miscellaneous.  This Agreement (a) may not be assigned or transferred by any
party  without  the prior  written  consent  of the  other  party,  except  that
Biosyntech  or BIOMET may assign this  Agreement to an  affiliated  BIOMET or in
connection with the merger, consolidation or sale of all or substantially all of
its assets and (b) shall be governed by and  construed  in  accordance  with the
laws of the Province of Quebec, Canada.

<PAGE>

IN WITNESS  WHEREOF,  Biosyntech  and BIOMET have caused  this  Agreement  to be
executed in their properly and duly authorized officers or representatives.

Biosyntech Limited

Name: /s/ Francois Binette
      --------------------
          Francois Binette

Title:   Vice-President Research and Development

Date: __________________________________

Biosyntech Limited
475, boul. Armand-Frappier
Laval (QC) H7V 4B3
Canada

Phone: (450) 686-2437
Facsimile: (450) 686-8952

BIOMET Corporation*

Name:  /s/
       -----------------------------

Title: _____________________________

Date: ______________________________

Airport Industrial Park
P.O. Box 587
Warsaw, IN 46581-0587
Phone: (219) 267-6639
Facsimile: (219) 268-2742

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