Document:

Exhibit 10.21

                        DEVELOPMENT AND LICENSE AGREEMENT

                  DEVELOPMENT AND LICENSE  AGREEMENT,  dated April 19, 2000 (the
"Agreement"),  is made  between  Celgene  Corporation,  a  Delaware  corporation
("Celgene"), and Novartis Pharma AG, a Swiss corporation ("Novartis").

                  WHEREAS,  Celgene, a pharmaceutical company, has developed the
d-MPH Products (as defined herein).

                  WHEREAS,  Novartis  wishes to establish a  collaboration  with
Celgene for the marketing and distribution in the Territory (as defined herein),
and  Celgene  is willing to enter into a  collaboration  with  Novartis  for the
development of the d-MPH Products for their  marketing and  distribution  in the
Territory on the terms and conditions set forth below.

                  NOW  THEREFORE,  in  consideration  of the premises and of the
covenants herein contained, Celgene and Novartis mutually agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

                  For  purposes of this  Agreement,  the  following  capitalized
terms shall have the meanings specified below.

                           "ADD" shall mean Attention Deficit Disorder.

                           "ADHD"  shall mean  Attention  Deficit  Hyperactivity
Disorder.

                           "Adjusted  Oncology Net Sales" shall have the meaning
ascribed thereto in Section 4.6(c) hereof.

                           "Affiliate"  shall  mean  any  corporation  or  other
entity which  controls,  is  controlled  by, or is under  common  control with a
party.  A corporation or other entity shall be regarded as in control of another
corporation  or entity if it owns or  directly or  indirectly  controls at least
fifty percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses,  directly or indirectly, the power to
direct or cause the direction of the management and policies of the  corporation
or other entity or the power to elect or appoint  fifty percent (50%) or more of
the members of the governing body of the corporation or other entity.

                           "Celgene  Patent  Rights"  shall mean the patents and
patent  applications  listed on Exhibit A hereto,  including all  continuations,
divisionals  and  equivalents  or  counterparts  thereof  and  all  supplemental
protection certificates, extensions and reissues thereof.

<PAGE>

                           "Celgene   Technology"   shall   mean  all   patents,
know-how, registration data exclusivity, trademarks, copyrights, and other forms
of intellectual property, in the Territory,  that are owned by, controlled by or
licensed to Celgene,  relating  to the Field,  including  but not limited to the
patents listed on Exhibit A and all  continuations,  divisionals and equivalents
or  counterparts   thereof  and  all   supplemental   protection   certificates,
extensions, and reissues thereof.

                           "cGMP   requirements"   shall   mean   current   Good
Manufacturing Practices of the FDA.

                           "COGS"  shall mean,  with  respect to a product,  the
Fully Allocated Cost of goods manufactured for sale (as determined in accordance
with generally accepted accounting principles).

                           "Customer" shall mean any person or entity.

                           "d-MPH Products" shall mean d-MPH IR and d-MPH PR.

                           "d-MPH  IR" shall  mean  d-methylphenidate  immediate
release form.

                           "d-MPH  PR"  shall  mean   d-methylphenidate   pulsed
release form.

                           "Effective  Date"  shall  have the  meaning  ascribed
thereto in Section 3.5 hereof.

                           "Excluded  Countries" shall have the meaning ascribed
thereto in Section 7.2 hereof.

                           "FDA"  shall  mean the  United  States  Food and Drug
Administration.

                           "FDA  Approval"  shall  mean  approval  of the FDA to
market a product.

                           "Field" shall mean  administration of methylphenidate
for the treatment of ADD and ADHD, and all other human disease indications other
than disease indications in the field of oncology.

                           "First Commercial Sale" of a product in the Territory
shall  mean  the  first  sale to a Third  Party  in the  Territory  based on FDA
Approval or approval of an equivalent non-US regulatory authority.

                           "Fixed Commercial Multiple" shall mean 0.95.

                           "Fully   Allocated   Cost"  shall  have  the  meaning
ascribed thereto in Exhibit B hereto.

                           "Gross Profit" shall mean Net Sales less COGS.

                                      -2-

<PAGE>

                           "Gross Profit Margin" shall mean Net Sales less COGS,
expressed as a percentage of Net Sales.

                           "Gross Profit Margin Not Including Active  Substance"
shall mean Net Sales less COGS,  expressed  as a  percentage  of Net Sales,  not
including the cost of active substance.

                           "Launch Date" shall have the meaning ascribed thereto
in Section 4.4(b) hereof.

                           "Methylphenidate  Product"  shall  have  the  meaning
ascribed thereto in Exhibit C hereto.

                           "NDA" shall mean a New Drug Application  submitted to
the FDA.

                           "Net Sales" shall have the meaning  ascribed  thereto
in Exhibit D hereto.

                           "Novartis   Technology"   shall  mean  all   patents,
know-how, registration data exclusivity and other forms of intellectual property
(other than trademarks and  copyrights)  which are developed after the Effective
Date and which  are  owned or  controlled  by,  or  licensed  (with the right to
sublicense)  to,  Novartis  that are  necessary  or useful for the  manufacture,
registration, marketing, distribution, use or sale of the d-MPH Products.

                           "Oncologists" shall have the meaning ascribed thereto
in Section 4.6(c) hereof.

                           "Oncology  Base Sales"  shall mean the value of Total
Oncology Prescriptions for d-MPH Products existing at the time Celgene commences
clinical development of Oncology  Indications,  determined from data provided by
IMS or other provider that the parties hereto from time to time agree to use.

                           "Oncology  Fraction" shall have the meaning  ascribed
thereto in Section 4.6(c) hereof.

                           "Oncology Indication" shall have the meaning ascribed
thereto in Section 2.4(b) hereof.

                           "Oncology  Indication Purchase Price Increment" shall
have the meaning ascribed thereto in Section 4.6(c) hereof.

                           "Oncology  Royalty  Increment" shall have the meaning
ascribed thereto in Section 5.3(b) hereof.

                                       -3-

<PAGE>

                           "Patented  Sale"  shall  have  the  meaning  ascribed
thereto in Section 5.3(c) hereof.

                           "Pro Forma Net Selling  Price" shall have the meaning
ascribed thereto in Section 4.6(a) hereof.

                           "Purchase  Price"  shall  have the  meaning  ascribed
thereto in Section 4.6(b) hereof.

                           "Quarterly  Net Sales  Report" shall have the meaning
ascribed thereto in Section 4.6(b) hereof.

                           "Quarterly Net Sales Prescription  Report" shall have
the meaning ascribed thereto in Section 4.6(c) hereof.

                           "Ritalin(R)Line"    shall   mean   Novartis'    three
dl-methylphenidate  immediate release products  presently  marketed in 5 mg., 10
mg.,  and 20 mg.  strengths  under  the  mark  "Ritalin,"  as well as the  20mg.
sustained release strength branded as Ritalin-SR(R).

                           "Ritalin(R)      QD"     shall     mean     Novartis'
dl-methylphenidate pulsed release form.

                           "Royalty  Percentage"  shall  have  the  meanings  as
ascribed thereto in Section 5.3(a)(i) through 5.3(a)(iv) hereof.

                           "Termination  Date" shall have the  meaning  ascribed
thereto in Section 3.5 hereof.

                           "Territory"  shall mean worldwide,  excluding  Canada
and, from time to time, the Excluded Countries.

                           "Third  Party"  shall  mean  any  entity  other  than
Celgene or Novartis or their respective Affiliates.

                           "Total Prescriptions" shall have the meaning ascribed
thereto in Section 4.6(c) hereof.

                           "Total Oncology Prescriptions" shall have the meaning
ascribed thereto in Section 4.6(c) hereof.

                                   ARTICLE II.
                    SCOPE AND STRUCTURE OF THE COLLABORATION

            2.1. GENERAL. Celgene and Novartis wish to establish a collaborative
alliance to develop the d-MPH  Products and to market and  distribute  the d-MPH
Products in the Field in the Territory. During the course of this collaboration,
Celgene and Novartis shall communicate regularly and shall assume the respective
rights and  responsibilities  for the development,  marketing and manufacture of
the d-MPH Products described below.

                                       -4-

<PAGE>

            2.2.  MANUFACTURING.  Except as hereinafter provided,  Celgene shall
manufacture or cause to be  manufactured,  d-MPH IR and the active substance for
d-MPH PR for  Novartis.  Novartis  may,  by 12 months  prior  written  notice to
Celgene,  elect to manufacture or cause to be  manufactured  and market d-MPH IR
and the active  substance  for d-MPH PR pursuant to the  license  provisions  of
Article  V hereof  (i) at any time  after  Celgene  fails to ship  Novartis  its
requirements  of the d-MPH Products  pursuant to Section 4.4 hereof for a period
of at least two months, (ii) in the event of insolvency or bankruptcy of Celgene
or (iii) in any event, at any time after the fifth  anniversary of the Effective
Date  of  the  Agreement.  Celgene  shall  provide  Novartis  all  know-how  and
information  necessary  to enable  Novartis  to  manufacture  and to obtain  the
necessary regulatory approvals to manufacture the d-MPH Products. Alternatively,
at such time as either  (i),  (ii) or (iii)  above is  implemented,  Celgene (x)
agrees to permit  Novartis  to take over  manufacture  of the d-MPH  Products at
facilities operated by Celgene and (y) will use commercially  reasonable efforts
to permit Novartis to take over  manufacture of the d-MPH Products at facilities
operated by contract manufacturers for Celgene.

            In  addition,   Celgene  may,  at  its  sole  discretion,   transfer
responsibility  for the  manufacture  of d-MPH IR and the active  substance  for
d-MPH PR to  Novartis  in return  for the  Royalty  Percentage  upon at least 24
months prior written notice to Novartis and shall provide Novartis with all such
know-how,  information  and  reasonable  assistance  necessary  and available to
Celgene to enable Novartis to manufacture and to obtain the necessary regulatory
approvals to manufacture the d-MPH Products.

            Notwithstanding  anything to the contrary contained in the preceding
sentences,  Novartis'  election to  manufacture  pursuant  thereto  shall not be
effective  until either of the following are  satisfied:  (i) the  expiration or
early  termination  (without cost to Celgene) of any and all agreements  Celgene
may have with Third  Parties  with  respect to the  manufacture  of d-MPH IR and
active  substance for d-MPH PR, (ii) Novartis'  assumption of all obligations of
Celgene with respect to any such  agreements or (iii) until Novartis and Celgene
enter into a new  contract to  purchase  the d-MPH IR and active  substance  for
d-MPH PR from Celgene  based upon terms and  conditions  mutually  acceptable to
both  parties,  Novartis  negotiates in good faith with Celgene  concerning  the
terms and  conditions of the new contract and continues to purchase the d-MPH IR
and active substance for d-MPH PR from Celgene under the terms and conditions of
the existing  contract,  or (iv) the date of termination is 12 months after such
written notice.

            2.3. CELGENE RESERVED RIGHTS.

                 (a) Except  for the  licenses  expressly  granted by Celgene to
Novartis  pursuant to Section 5.1 hereof,  Celgene reserves all rights under the
Celgene Patent Rights and the Celgene Technology.  The foregoing reserved rights
shall include, but not be limited to, the rights to develop and file one or more
SNDAs for d-MPH Products for oncology  indications and to promote to oncologists
in accordance  with FDA  regulations  and all applicable  laws,  regulations and
approvals governing the distribution and sale of the d-MPH Products.

                                      -5-

<PAGE>

                 (b) Without  limiting the  generality of the foregoing  Section
2.3(a), Celgene shall have the exclusive right to develop the d-MPH Products for
any  and  all   indications  in  the  field  of  oncology  (each,  an  "Oncology
Indication").  If Celgene determines to pursue development of the d-MPH Products
for an Oncology Indication, it shall give Novartis notice thereof, Celgene shall
have sole  responsibility  for all costs  associated  with such  development and
Celgene and  Novartis  shall form a joint  committee to  coordinate  promotional
efforts. Celgene shall promote the d-MPH Products for Oncology Indications under
the  same  trademark  as is used  in the  promotion  of the  d-MPH  Products  by
Novartis,  and  Novartis  shall  establish  the  pricing  and  record  all sales
therefor.  Notwithstanding  the  foregoing,  through the  Development  Committee
referenced in Article 7.4,  Novartis  shall have the right to review and provide
input to Celgene in  advance  with  respect  to (i) all  protocols  for  studies
relating to the d-MPH Products for Oncology,  (ii) all promotional materials for
d-MPH  Products to Oncology,  and (iii) any plans for new  indications  or plans
which might otherwise affect the package insert for the Ritalin Line, Ritalin QD
or the d-MPH Products. If Novartis notifies Celgene that it believes that any of
Celgene's  planned or  ongoing  activities  relating  to the d-MPH  Products  in
Oncology might  adversely  affect the Ritalin branded  products,  Celgene agrees
that it will  develop  and  promote  the  d-MPH  Products  in  Oncology  under a
different,  mutually acceptable brand name. Furthermore,  Celgene shall have the
option to elect to develop and promote  the d-MPH  Products in Oncology  under a
different,  mutually  acceptable  brand  name.  In the event  Celgene  wishes to
promote  Ritalin(R)  QD to  Oncologists,  Celgene  may  raise  the  issue at the
Development Committee for discussion with the Novartis committee members.

                                  ARTICLE III.
                    REPRESENTATIONS AND WARRANTIES; COVENANTS

             3.1.  REPRESENTATIONS  AND  WARRANTIES  OF EACH  PARTY.  Each party
represents  and  warrants  to the other that it has the legal right and power to
enter into this  Agreement,  to extend the  rights and  licenses  granted to the
other in this Agreement,  and that the performance of such  obligations will not
conflict  with its  charter  documents  or any  agreements,  contracts  or other
arrangements to which it is a party.

             3.2. REPRESENTATIONS OF NOVARTIS.  Novartis represents and warrants
to, and covenants with, Celgene that:

                  (a) Novartis is a corporation duly organized, validly existing
and in good standing under the laws of  Switzerland  and has taken all necessary
action to authorize the execution,  delivery and  performance of this Agreement,
and

                  (b) upon the  execution and delivery of this  Agreement,  this
Agreement  shall   constitute  a  valid  and  binding   obligation  of  Novartis
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws affecting  creditors' and contracting parties' rights generally and
except  as  enforceability  may be  subject  to  general  principles  of  equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).

                                      -6-

<PAGE>

             3.3. REPRESENTATIONS  OF CELGENE.  Celgene represents and  warrants
to, and covenants with, Novartis that:

                  (a) Celgene is a corporation duly organized,  validly existing
and in good  standing  under the laws of the State of Delaware and has taken all
necessary  action to authorize the execution,  delivery and  performance of this
Agreement;

                  (b) upon the  execution and delivery of this  Agreement,  this
Agreement shall constitute a valid and binding obligation of Celgene enforceable
in  accordance  with its  terms,  except as  enforceability  may be  limited  by
applicable  bankruptcy,  insolvency,  reorganization,  moratorium or similar law
affecting  creditors' and contracting  parties'  rights  generally and except as
enforceability  may be subject to general  principles of equity  (regardless  of
whether such  enforceability is considered in a proceeding in equity or at law);
and

                  (c) Celgene has the right,  power and  authority  to grant the
worldwide  exclusive  licenses to the Celgene  Technology,  subject to Celgene's
pre-existing obligations to Biovail Laboratories, Inc. in Canada.

             3.4. DISCLAIMER OF WARRANTIES. NOTHING IN THIS AGREEMENT  SHALL  BE
CONSTRUED AS A  REPRESENTATION  MADE, OR WARRANTY GIVEN, BY CELGENE (A) THAT ANY
PATENT WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION, (B) THAT ANY PATENT
WHICH ISSUES WILL BE VALID, OR (C) THAT THE USE OF ANY LICENSE GRANTED HEREUNDER
OR THE USE OF ANY PATENT  RIGHTS  WILL NOT  INFRINGE  THE PATENT OR  PROPRIETARY
RIGHTS OF ANY OTHER PERSON.  FURTHERMORE,  CELGENE MAKES NO  REPRESENTATIONS  OR
WARRANTIES,  EXPRESS  OR  IMPLIED,  WITH  RESPECT  TO  PATENT  RIGHTS  EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT.

             3.5.  HART-SCOTT-RODINO  FILINGS.  Each  of  Celgene  and  Novartis
covenants and agrees to prepare and make  appropriate  filings under Title II of
the  Hart-Scott-Rodino  Antitrust  Improvements Act of 1976, as amended, and the
rules  promulgated  thereunder  as soon as reasonably  practicable.  The parties
agree to co-operate in the antitrust  clearance  process and to furnish promptly
to the  FTC  and  the  Antitrust  Division  of the  Department  of  Justice  any
additional  information  reasonably  requested by them in  connection  with such
filings.  The Agreement shall bind Celgene and Novartis upon execution until the
earlier  of the  Termination  Date  and the  termination  or  expiration  of the
Agreement by its terms,  but the  provisions  of the  Agreement  relating to the
grant of the exclusive license by Celgene to Novartis shall not become effective
until the waiting  period  provided by the Act shall have  terminated or expired
without any action by any government agency or challenge to the termination (the
date of such termination or expiration, the "Effective Date"). In the event that
antitrust clearance from the FTC and the Antitrust Division of

                                      -7-

<PAGE>

the Department of Justice is not obtained by October 10, 2000 or such other date
as the parties may agree,  the Agreement  may be  terminated in accordance  with
Section 11.3(f) (the date of such termination,  the "Termination  Date"). In the
event a provision of the Agreement needs to be deleted or substantially  revised
in order to obtain regulatory  clearance of this  transaction,  the parties will
negotiate in good faith in accordance  with Section 14.3 hereof for example,  by
substituting, by mutual consent, a new provision which in its economic effect is
sufficiently similar to the old provision that it can reasonably be assumed that
the parties would have entered into the Agreement with such new provision.

             3.6 COMPLIANCE  WITH LAWS.  Each of Celgene and Novartis  shall, in
the performance of its material  obligations  under this Agreement comply in all
material respects with all laws and regulations applicable to such performance.

                                   ARTICLE IV.
                           SALES, MARKETING AND SUPPLY

             4.1. SALES AND MARKETING DUTIES OF THE PARTIES.  In connection with
the sales and marketing of the d-MPH Products in the Territory, Novartis shall:

                  (a)  upon   receipt  of  FDA  Approval  (or  approval  of  the
applicable regulatory bodies) of any formulation of a d-MPH Product, at its sole
expense,  use such  efforts  to market  such  d-MPH  Product in the Field in the
Territory as it would use to market a product it had developed itself; provided,
however,  that in no event  shall  such  efforts  be less  than  those  that are
standard in the  industry.  Without  limiting the  generality  of the  preceding
sentence and subject to Section 7.2, (i) Novartis shall launch the d-MPH Product
in the United  States and in the Five Major  Markets  (as defined in Article VI)
and not later than three  months  after (x) such d-MPH  Product is approved  for
commercial use by the applicable regulatory authorities,  (y) there are adequate
launch supplies on hand and (z) any required pricing  approvals are obtained and
(ii) make such marketing  efforts as are at least as diligent as efforts made by
Novartis  with  respect  to other  Novartis  products  with  similar  commercial
potential and, in any event, not less than the industry standard;

                  (b) maintain the d-MPH Product, pending sale to Customer, in a
facility  that is  properly  secured and  equipped  (including  temperature  and
humidity control) to store the d- MPH Product and which is under the contractual
or direct  control of Novartis or its contract  manufacturer.  Celgene will have
the  right to  inspect,  from time to time,  such  facility  and all  government
inspection reports and certificates relating thereto;

                  (c) provide Celgene with  representative  samples of its sales
and  promotional  materials  as  requested  by Celgene  pertaining  to the d-MPH
Products and Ritalin(R)QD;

                  (d) conduct itself in a professional manner in accordance with
industry standards;

                                      -8-

<PAGE>

                  (e) maintain a  technically  competent and  experienced  sales
force  (including  a product or market  specialist)  itself or though a contract
sales  organization  assigned to promote the d-MPH  Products to the  appropriate
target audience,  and create and disseminate to the sales personnel  appropriate
sales aids and literature developed by Novartis relating to the d-MPH Product;

                  (f) meet with Celgene on a quarterly  basis to review relevant
secondary  marketing  data (and  Novartis'  analysis  thereof)  and any  primary
marketing research data, in each case relating to Methylphenidate  Products, and
concurrently provide such data to Celgene to the extent Novartis is permitted to
do so by the provider of such data.

             4.2.  DUTY  NOT TO  COMPETE.  In the  event  that  Novartis  or any
Affiliate of Novartis  sells,  markets or  distributes  any branded  competitive
product for the treatment of ADD/ADHD (other than the d-MPH Products) not either
currently  marketed or in development by Novartis or an Affiliate of Novartis as
of the date of execution of this Agreement,  Celgene and Novartis will negotiate
in good faith to reach an equitable business resolution.  Novartis is prohibited
from making sales of the d-MPH Products and  Ritalin(R) QD to Customers  outside
the Territory. Notwithstanding the preceding sentence, with respect to countries
within  the  European  Union  that  are  from  time to time  excluded  from  the
Territory,  Novartis shall be prohibited  from making active sales of the d- MPH
Products or Ritalin(R) QD to Customers in such country or countries, as the case
may be.

             4.3.  MARKETING  SUPPORT DUTIES OF CELGENE.  In connection with the
marketing of the d-MPH Products, Celgene shall:

                   (a) refer all  inquiries  to Novartis  which are  received by
Celgene from Customers in the Territory; and

                   (b) make  available  to  Novartis  at its request all data on
hand and  available to Celgene that are  necessary or useful to the marketing of
the  d-MPH  Products,  including  but  not  limited  to,  all  quality  control,
technical, manufacturing, pre-clinical and clinical data.

             4.4.  ORDERS AND SUPPLY

                   (a) Until such time as Novartis  has  assumed  responsibility
for the  manufacture of d-MPH IR and the active  substance for d-MPH PR pursuant
to Section 2.2 hereof,  Novartis or its contract manufacturer may order specific
quantities of the d-MPH Products (in the form and supply as described in Section
4.5) by transmitting a firm purchase order pursuant to Section 4.4(b) to Celgene
to the  location  set forth in Section  14.4  hereof or such other  location  as
Celgene may hereafter designate in writing.  The purchase order shall be binding
on Celgene unless  rejected in writing by Celgene  pursuant to the terms of this
Agreement  within ten days after receipt  thereof.  Celgene  agrees that it will
inform  Novartis of its rejection of any order and the basis for such  rejection
no later than 10 days after Celgene's receipt thereof.

                                      -9-

<PAGE>

                   (b) Novartis shall deliver to Celgene,  (i) at least 180 days
prior to the anticipated date of First Commercial Sale of the d-MPH Product (the
"Launch  Date"),  a good faith  forecast of the  quantity of d-MPH  Product that
Novartis  anticipates ordering from Celgene (in the form and supply as described
in Section 4.5) for the period ending one full calendar quarter after the Launch
Date,  and (ii) at least one full  calendar  quarter prior to the Launch Date, a
firm purchase order for the d-MPH Product for the first  calendar  quarter after
the Launch Date and a good faith forecast of its quantity  requirements  for the
three  successive  calendar  quarters  thereafter.  Thereafter,  Novartis  shall
deliver to Celgene, at least 90 days before any calendar quarter, Novartis' firm
order  for the  d-MPH  Product  for such  calendar  quarter  and a  forecast  of
Novartis' quantity requirements for the d-MPH Product (in the form and supply as
described in Section 4.5) for the following three calendar quarters. All of such
forecasted  and firm  ordered  quantities  are subject to  agreement by Celgene,
which agreement shall not be unreasonably withheld or delayed.

                   (c) The total amount of d-MPH Product  ordered by Novartis in
any  calendar  quarter  may  not be  less  than  75% of  Novartis'  most  recent
forecasted   quantity  for  such  calendar  quarter.   Additionally,   Celgene's
obligation to supply d-MPH Product to Novartis will not extend to more than 125%
of Novartis'  most recent  forecasted  quantity for such  calendar  quarter.  If
Novartis'  ordered  quantity  exceeds 125% of Novartis' most recent forecast for
such quarter, Celgene will in good faith attempt to fill the order, but is under
no obligation to do so. Novartis shall indemnify  Celgene and reimburse  Celgene
promptly  upon  request for all  reasonable  out-of-pocket  costs and  expenses,
including  costs of carrying  increased  inventory,  to the extent caused by any
deviation in order quantities from the limits imposed by the preceding sentence,
and Celgene will act reasonably to mitigate any such costs and expenses.

                   (d) If, due to any of the events  described  in Section  14.1
hereof,  Celgene  experiences  a shortage  of d-MPH  Product  thereby  rendering
Celgene's performance hereunder impracticable, then Celgene shall have the right
to allocate  deliveries  of the d-MPH  Product  among all of its  customers on a
pro-rata basis  determined by prior sales,  sales forecasts and purchase orders,
and subject to Section 2.2,  Celgene shall bear no liability  whatsoever for the
reduction or  suspension  of  deliveries  to Novartis and this  Agreement  shall
otherwise remain in full force and effect.

                   (e) Celgene shall  manufacture or have manufactured the d-MPH
Products in compliance with applicable law, including,  without limitation,  any
cGMP  requirements.  For purposes of verifying  Celgene's  compliance  with this
Section   4.4(e),   (i)  Novartis   shall  be  permitted   access  to  Celgene's
manufacturing  facilities  and  related  records  and  personnel  during  normal
business  hours,  on  reasonable  prior  notice  and not more  than  once in any
calendar  year and (ii) Celgene  shall use  commercially  reasonable  efforts to
cause,  by means of  contractual  provisions or  otherwise,  its current and any
future contract manufacturers to permit Novartis to have access to such contract
manufacturer's manufacturing facilities and related records and personnel during
normal business hours, on reasonable  prior notice and not more than once in any
calendar year.  Further,  Celgene shall supply Novartis with d-MPH Product which
conforms in all material respects to the specifications  upon which FDA Approval
was received or such other  specifications  as the parties may  hereafter  agree
upon,  and cause such d-MPH Product to be quality  control tested to assure such
conformity.  Novartis  may reject any shipment of d-MPH  Product  which does not

                                      -10-

<PAGE>

conform in all material respects to the  specifications  upon which FDA Approval
was  received.  In order to reject a shipment,  Novartis must within thirty (30)
days  after  receipt of such  shipment,  give  notice to  Celgene  of  Novartis'
rejection  of the  shipment,  (the  "Notice")  and the full basis  therefor.  If
Novartis fails to timely give Notice,  Novartis shall be deemed to have accepted
delivery of the  shipment;  provided,  however,  in the case of products  having
latent defects,  which upon diligent  examination in accordance with the quality
control testing  procedures set out in the FDA Approval by Novartis upon receipt
could not have been discovered, Novartis must give notice of Novartis' intent to
reject  within  twenty (20) days after  discovery of such defect,  provided such
notice  may in no event be given  later  than  180  days  after  receipt  of the
shipment.  After the Notice is given,  Novartis  shall  confer with  Celgene and
assist  Celgene in  determining  whether  rejection is  warranted.  If, after so
conferring,  Celgene and  Novartis  are unable to agree  whether the shipment is
nonconforming,   Novartis  and  Celgene  shall  jointly  engage  an  independent
laboratory  (the  "Independent  Laboratory")  to determine the conformity of the
shipment  to  specifications  and  the  fees  and  expenses  of the  Independent
Laboratory  shall  be borne by  Celgene  if the  shipment  is  determined  to be
non-conforming  and by Novartis if determined to be  conforming.  Whether or not
Celgene  agrees  that  a  shipment  is  nonconforming,  Celgene  shall  use  its
reasonable best efforts,  if requested by Novartis to provide  replacement d-MPH
Product  which shall be  purchased  by  Novartis as provided in this  Agreement.
Unless  Celgene  requests the return to it of a rejected  shipment  within sixty
(60) days of either (i) the date Celgene agrees the shipment is nonconforming or
(ii) the  Independent  Laboratory  determines the shipment to be  nonconforming,
Novartis shall destroy the shipment and provide  Celgene with  certification  of
such  destruction.  Novartis  shall  promptly  ship the shipment to Celgene,  at
Celgene's cost, if timely requested by Celgene to do so.

             4.5.  FORM OF PRODUCT SOLD; DELIVERY AND SHIPPING. Celgene will use
commercially  reasonable efforts to manufacture,  package and supply d-MPH IR to
Novartis  at a Purchase  Price as set forth in  Section  4.6.  Celgene  will use
commercially  reasonable  efforts to  manufacture  and  supply the d-MPH  active
substance to Novartis for d-MPH PR formulations at a Purchase Price as set forth
in Section  4.6.  All d-MPH IR will be shipped  F.O.B.  Celgene's  facility or a
facility  designated by Celgene.  Novartis will be responsible,  at its own cost
and  expense,  for  insuring  d-MPH IR  against  damage  after  d-MPH IR  leaves
Celgene's  facility or a facility  designated  by Celgene.  Novartis  shall take
title to, but not possession of, d-MPH IR at Celgene's facility.

             4.6.  PRICE OF AND PAYMENT FOR PRODUCT.  The purchase price for the
d-MPH  Products sold by Celgene to Novartis  shall be payable and  calculated as
follows:

                   (a) Celgene shall invoice Novartis on shipment of d-MPH IR in
finished packaged form, which invoiced amount shall be an amount equal to 35% of
the Pro Forma Net Selling  Price for d-MPH IR. Such amount  includes any royalty
otherwise due under 5.3(a)(i).  Notwithstanding  the foregoing,  with respect to
sales of d-MPH IR which are not Patented Sales, the Royalty  Percentage shall be
reduced by 50%.  Celgene  shall supply the d-MPH active  substance  for d-MPH PR
formulations  at no charge in return  for a Royalty  Percentage  as set forth in
Section  5.3(a)(ii).  For  purposes of this Section 4.6, the term "Pro Forma Net
Selling Price" shall mean (i) with respect to the initial  shipments of product,
an estimate of the price to be charged by  Novartis to Third  Parties,  less the
estimated  amounts  permitted to be deducted  pursuant to the definition of

                                      -11-

<PAGE>

"Net Sales" in Article I hereof,  and (ii) with respect to  shipments  made from
and after any Quarterly  Net Sales Report (as  hereinafter  defined),  the price
actually  charged by  Novartis  to Third  Parties  during the  calendar  quarter
covered by the  latest  Quarterly  Net Sales  Report,  less the  actual  amounts
deducted therefrom in accordance with the definition of "Net Sales" in Article I
hereof.  Payment of the amount invoiced pursuant to this Section 4.6(a) shall be
payable  within thirty (30) days after  receipt of the invoice.  Payment of such
amount,  in whole or in  part,  may be made in  advance  of such due  date.  Any
payments owing to Celgene pursuant to this Section 4.6 not made on or before the
due date  shall  bear  interest  from the due date to the date paid at the prime
rate announced from time to time by Citibank, N.A., plus 2%.

                   (b)  With  respect  to each  calendar  quarter  during  which
Celgene ships d- MPH Product to Novartis, Novartis shall, promptly following the
end of such quarter,  prepare and furnish  Celgene a report (the  "Quarterly Net
Sales  Report")  setting  forth with respect to such quarter the  aggregate  Net
Sales  (including  gross  sales and the  specific  deductions  permitted  by the
definition of "Net Sales" taken in connection  with the  calculation of such Net
Sales). If the invoiced amounts (pursuant to Section 4.6(a) hereof) with respect
to any quarter exceed the Purchase Price (as  hereinafter  defined) with respect
to such quarter, such excess shall be a credit against any outstanding or future
invoice issued to Novartis  pursuant to Section  4.6(a) hereof.  If the invoiced
amounts (pursuant to Section 4.6(a) hereof) with respect to any quarter are less
than the Purchase Price, Novartis shall remit such shortfall to Celgene with the
relevant Quarterly Net Sales Report. For purposes hereof, "Purchase Price" shall
mean 35% of  aggregate  Net  Sales,  in the case of d-MPH  Product  supplied  in
finished  packaged form for such quarter.  Celgene shall supply the d-MPH active
substance  for  d-MPH PR  formulations  at no  charge  in  return  for a Royalty
Percentage as set forth in Section 5.3(a)(ii).

                   (c) From and  after the date that  Celgene  advises  Novartis
that it commenced promoting a d-MPH Product for any Oncology Indication pursuant
to Section 2.3(b) hereof, Novartis shall, promptly following the availability of
prescription  data with  respect to any  calendar  quarter,  prepare and furnish
Celgene a report (the "Quarterly Net Sales  Prescription  Report") setting forth
with respect to such  quarter and with all  supporting  data  appended (i) total
prescriptions  for  d-MPH  Products  ("Total  Prescriptions"),  and  (ii)  total
prescriptions for d-MPH Products from  hematologists,  hematologist/oncologists,
oncologists,  neuro-  oncologists/neurosurgeons  and urologists  ("Oncologists")
("Total Oncology Prescriptions").  For purposes of the preceding sentence, total
prescriptions  and the value thereof  shall be determined  from data provided by
IMS or other provider that the parties hereto from time to time agree to use. If
the  parties  cannot  agree on a  provider  or  determine  that such data is not
available from any provider with sufficient accuracy,  the parties shall jointly
determine  and implement  the most  expedient and economic  means to obtain such
data on an ongoing basis.  With respect to the cost of any such data  subscribed
for by Novartis other than in the ordinary course of its business, Celgene shall
bear 50% of the cost of such information.

                   Notwithstanding   anything  to  the  contrary   contained  in
Sections  4.6(a) and (b) hereof,  for d-MPH IR,  Celgene shall be entitled to an
incremental  purchase price (the "Oncology Indication Purchase Price Increment")
equal to 65% of Adjusted Oncology Net Sales (as hereinafter

                                      -12-

<PAGE>

defined), and, for d-MPH PR, Celgene shall be entitled to an Oncology Indication
Purchase Price Increment equal to 100% of Adjusted Oncology Net Sales multiplied
by Novartis' Gross Profit Margin Not Including Active  Substance,  less Adjusted
Oncology Net Sales multiplied by the Royalty  Percentage as set forth in Section
5.3(a)(ii).  For purposes hereof,  "Adjusted  Oncology Net Sales" shall mean the
product of (x) Net Sales for any calendar  quarter which includes or follows the
date Celgene commences  marketing any d-MPH Product for an Oncology  Indication,
and (y) a fraction, the denominator of which is the value of Total Prescriptions
for such  quarter  and the  numerator  of which is the  value of Total  Oncology
Prescriptions for d-MPH IR or the d-MPH PR, as the case may be, for such quarter
or such other period as the parties may agree (the  "Oncology  Fraction"),  less
Oncology  Base Sales,  the  algebraic  sum of which is  multiplied  by the Fixed
Commercial  Multiple.  An  example  of the  Oncology  Purchase  Price  Increment
calculation  for d-MPH IR and d-MPH PR is  described  in  Schedule  4.6(c).  The
Oncology  Indication  Purchase Price  Increment shall be payable to Celgene with
the delivery of the Quarterly Net Sales Prescription Report.

                   (d) Novartis  shall pay Celgene,  in addition to the Purchase
Price (and any applicable Oncology Indication Purchase Price Increment) for each
d-MPH  Product  purchased  by  Novartis,  the  amount  of  any  and  all  sales,
withholding or similar taxes, if any,  imposed on Celgene in connection with the
sale,  production  and  delivery  of any  d-MPH  Product  by  Celgene  to or for
Novartis,  except to the extent  that  Celgene  receives a foreign tax credit or
other offsetting economic benefit.

                   (e) Novartis  shall  assume all credit risk in reselling  the
d-MPH Product.

                   (f) For  purposes of  verifying  the accuracy of the Purchase
Price (and any applicable Oncology Indication Purchase Price Increment), Celgene
shall be entitled,  from time to time, to have its independent  accountants (who
shall be bound by the  confidentiality  provisions of this Agreement) review, on
Celgene's  behalf,  the books and records of Novartis,  and Novartis  shall give
such  accountants  access to such books and records during  reasonable  business
hours and upon  reasonable  prior  notice  from  Celgene.  If a  calculation  of
Purchase Price (and any applicable Oncology Indication Purchase Price Increment)
with respect to any quarter was  erroneous and as a result  thereof,  Celgene is
entitled to an additional amount which exceeds 5% of the Purchase Price (and any
applicable  Oncology  Indication  Purchase Price Increment) with respect to such
quarter as originally determined by Novartis, then Celgene shall be entitled, in
addition  to such  deficiency,  to an  amount  equal  to its  reasonable  costs,
out-of-pocket  or otherwise,  in conducting  such review of Novartis'  books and
records  and its  reasonable  costs,  including  attorneys'  fees and  expenses,
incurred in collecting such additional amount.

             4.7.  SUPPLY OF CLINICAL MATERIAL AT COST.

                   (a) In the  event  that  Celgene  is  supplying  d-MPH IR and
Novartis  requires such d-MPH IR for clinical  development,  Celgene must supply
such d-MPH IR to Novartis at its Fully Allocated Cost.

                                      -13-

<PAGE>

                   (b)  In  the  event  that  Celgene  is  conducting   clinical
development for oncology and after Novartis has elected to manufacture  pursuant
to Section 2.2 hereof,  Novartis must either supply or must cause to be supplied
d-MPH IR to Celgene at its Fully  Allocated  Cost.  In the event that Celgene is
conducting  clinical  development  for oncology,  Novartis must either supply or
must cause to be supplied d-MPH PR to Celgene at its Fully Allocated Cost.

                   (c)  In  the  event   Novartis   has   elected   to   perform
manufacturing  of both the  d-MPH  Products  pursuant  to  Section  2.2  hereof,
Novartis must supply such d-MPH Product to Celgene for clinical  development for
oncology at its Fully Allocated Cost.

                                   ARTICLE V.
                         LICENSE GRANTS; RESERVED RIGHTS

             5.1.  GRANT  OF  LICENSE  RIGHTS  BY  CELGENE TO NOVARTIS.  Celgene
hereby  grants  to  Novartis,   and  Novartis  hereby   accepts,   an  exclusive
royalty-bearing  license  (with  the right to  sublicense  with the  consent  of
Celgene,  which consent shall not be unreasonably withheld or delayed), to make,
have made, use, import, sell and offer to sell the  Methylphenidate  Products in
the Field in the  Territory  under the  Celgene  Technology.  In the event  that
Novartis  manufactures the d-MPH Products,  (i) Celgene will provide to Novartis
all such know-how and information  that is available on hand to Celgene and that
is  necessary  to enable  Novartis to  manufacture  and to obtain the  necessary
regulatory approvals to manufacture the d-MPH Products; (ii) Celgene will assist
Novartis   in   securing   an   appropriate   contract   for  supply  of  active
d-methylphenidate  and  other  raw  materials  from  Celgene  or its  designated
suppliers;  and (iii)  Novartis  shall be solely  responsible  for all costs and
expenses associated with such  manufacturing,  including any costs of technology
transfer and/or compliance with associated regulatory requirements.

             5.2.  PRESERVATION OF LICENSES IN BANKRUPTCY.

                   (a) If Celgene should file a petition under  bankruptcy laws,
or if any involuntary petition shall be filed against Celgene, Novartis shall be
protected in the continued  enjoyment of Novartis' rights as licensee  hereunder
to the maximum feasible extent including,  without limitation,  if it so elects,
the protection  conferred upon licensees under Section 365(n) of Title 11 of the
U.S. Code, or any similar  provision of any applicable  law.  Celgene shall give
Novartis  reasonable prior notice of the filing of any voluntary  petition,  and
prompt notice of the filing of any  involuntary  petition,  under any bankruptcy
laws. If Novartis  should file a petition under the  bankruptcy  laws, or if any
involuntary petition shall be filed against Novartis, Celgene shall be protected
in the  continued  enjoyment  of Celgene's  rights as licensee  hereunder to the
maximum feasible extent,  including,  without  limitation,  if it so elects, the
protection conferred upon licensees under Section 365(n) of Title 11 of the U.S.
Code,  or any similar  provision  of any  applicable  law.  Novartis  shall give
Celgene  reasonable  prior notice of the filing of any voluntary  petition,  and
prompt notice of the filing of any  involuntary  petition,  under any bankruptcy
laws.  If the  bankruptcy  trustee of either  Celgene or Novartis  rejects  this
Agreement under Section 365(a) of Title 11 of the U.S. Code, the other party may
elect to retain  its  rights  licensed  hereunder  (and any other  supplementary
agreements  hereto)  pursuant to Section 365(n) of Title 11 of the U.S. Code for
the duration of this Agreement.

                                      -14-

<PAGE>

                   (b) Each party  recognizes that the Celgene  Technology,  the
Celgene Patent Rights and the Novartis Technology are "intellectual property" as
that term is defined in 11 U.S.C. Section 101(35(A)) or any successor provision.

             5.3.  ROYALTIES.

                   (a) In  consideration  of the licenses and rights  granted by
Celgene to Novartis  pursuant to this Article V, Novartis  shall pay to Celgene,
on a quarterly basis, the following royalties:

                       (i)   With respect to d-MPH  IR, a  royalty  equal to the
Royalty  Percentage  (as  hereinafter  defined)  multiplied by the aggregate Net
Sales for such  quarter.  For purposes of this  Section  5.3(a)(i)  hereof,  the
"Royalty  Percentage"  shall  be 35%,  less the  percentage  of Net  Sales  that
represented  Celgene's  COGS at the time  Novartis gave notice to Celgene of its
election  pursuant  to Section  2.2  hereof,  but in no event  shall the Royalty
Percentage be less than 25%. Further,  at such time as either Section 2.2 (i) or
(ii) is implemented,  in either case as described in Section 2.2 (x) or (y), the
Royalty  Percentage shall be adjusted to compensate  Novartis for any reasonable
direct out of pocket  expenses  incurred by Novartis  in  exercising  its rights
under that paragraph.  Notwithstanding  the foregoing,  with respect to sales of
d-MPH IR which are not Patented Sales,  the Royalty  Percentage shall be reduced
by 50%.

                       (ii)  With respect  to d-MPH  PR, a royalty  equal to the
Royalty Percentage  multiplied by the aggregate Net Sales for such quarter.  For
purposes of this Section 5.3(a)(ii)  hereof, the "Royalty  Percentage" shall be,
in the case where  Celgene is  manufacturing  the active  substance for d-MPH PR
formulations,  30%, and, in the case where  Novartis has elected to  manufacture
the active  substance for d-MPH PR formulations  pursuant to Section 2.2 hereof,
30% less the percentage of Net Sales that represented  Celgene's COGS for active
substance at the time Novartis gave notice to Celgene of its election, but in no
event shall the Royalty  Percentage be less than 25%.  Further,  at such time as
either  Section 2.2 (i) or (ii) is  implemented,  in either case as described in
Section 2.2 (x) or (y), the Royalty  Percentage  shall be adjusted to compensate
Novartis  fully for any  reasonable  direct out of pocket  expenses  incurred by
Novartis in  exercising  its rights under that  paragraph.  Notwithstanding  the
foregoing,  with respect to sales of d-MPH PR which are not Patented Sales,  the
Royalty Percentage shall be reduced by 50%.

                       (iii) With respect to the  Ritalin(R)Line on a country by
country basis, a royalty equal to the Royalty  Percentage.  For purposes of this
Section  5.3(a)(iii),  the Royalty Percentage shall be 7.5% of Net Sales for the
first 12 months  commencing  after the  earlier  of  commercial  launch or three
months after  approval of d-MPH IR and with respect to sales  outside the United
States,  regulatory  pricing  approval;  15% of Net Sales for the  following  12
months;  and 22.5% of Net Sales until d-MPH PR is launched  and 30% of Net Sales
thereafter.

                                      -15-

<PAGE>

                       (iv) With respect to Ritalin(R)QD, a royalty equal to the
Royalty  Percentage.  For  purposes  of this  Section  5.3(a)(iv),  the  Royalty
Percentage  shall be 10% of Net Sales for the first 12 months  after  commercial
launch;  20% of Net Sales for the following 12 months;  and 30% of Net Sales for
the following  third 12 months and  thereafter.  Notwithstanding  the foregoing,
with respect to sales of Ritalin(R) QD which are not Patented Sales, the Royalty
Percentage shall be reduced by 50%.

                   During  the  term  of this  Agreement,  following  the  First
Commercial  Sale  of any  product  manufactured  by  Novartis  pursuant  to this
Agreement,  Novartis  shall within thirty (30) days after each calendar  quarter
furnish to Celgene a written  quarterly  report showing:  (i) the gross sales of
the product sold by Novartis and its Affiliates  during the reporting period and
the  calculation  of Net Sales  from such  gross  sales;  and (ii) the  specific
deductions  permitted by the definition of "Net Sales" taken in connection  with
the  calculation  of Net  Sales.  If no royalty  is due for any  royalty  period
hereunder,  Novartis shall so report.  Novartis shall keep complete and accurate
records in sufficient  detail to properly  reflect all gross sales and Net Sales
and to enable the royalties payable hereunder to be determined.

                  (b)  Reference  is made to  Novartis'  obligation  pursuant to
Section  4.6(c)  hereof to prepare and furnish  Celgene the  Quarterly Net Sales
Prescription  Report.  Notwithstanding  anything to the  contrary  contained  in
Section  5.3(a)  hereof,  Celgene  shall be  entitled  to (A) for d- MPH IR,  an
incremental  royalty (the  "Oncology  Royalty  Increment")  equal to (i) 100% of
Adjusted  Oncology  Net  Sales as set forth in  Section  4.6(c),  multiplied  by
Novartis' Gross Profit Margin for d-MPH IR for the relevant  quarter,  less (ii)
the Royalty  Percentage  set forth in Section  5.3(a)(i)  multiplied by Adjusted
Oncology Net Sales;  and (B) for d-MPH PR, an additional  royalty (the "Oncology
Royalty  Increment") equal to (i) 100% of Adjusted Oncology Net Sales multiplied
by Novartis'  Gross Profit  Margin for d-MPH PR for the relevant  quarter,  less
(ii) the  Royalty  Percentage  set forth in  Section  5.3(a)(ii)  multiplied  by
Adjusted  Oncology  Net Sales.  An example of the  calculation  of the  Oncology
Royalty Increment for d-MPH IR and d-MPH PR is described in Schedule 5.3(b). The
Oncology Royalty  Increment shall be payable to Celgene with the delivery of the
Quarterly Net Sales Prescription Report.

                  (c)  Royalties  payable  pursuant to this Section 5.3 shall be
paid to Celgene on Net Sales from the date of the First  Commercial  Sale of any
product  pursuant to this Agreement  until the termination of this Agreement and
shall be net of any and all sales, withholding or similar taxes, if any, imposed
in connection with the sale,  production and delivery of any product,  except to
the extent Celgene receives a foreign tax benefit or other  offsetting  economic
benefit. Under no circumstances will sales of generic  methylphenidate by Geneva
Pharmaceuticals,  Inc. or its successor or another Affiliate of Novartis outside
the United States be subject to any royalties hereunder.  After ten years, there
shall be no  obligation  to pay any royalty  except  with  respect to sales of a
Methylphenidate  Product  covered by a Valid Claim of a Celgene issued patent or
supplemental  protection  certificate  in force in the country where the sale is
made (a "Patented  Sale"). A "Valid Claim" is a claim in a patent in force which
has not been held invalid,  revoked,  or  unenforceable  by any patent office or
court of competent jurisdiction in the relevant country.

                                      -16-

<PAGE>

             5.4.  AUDITS.  Upon the written request of Celgene,  Novartis shall
permit an independent  public  accountant  selected by Celgene and acceptable to
Novartis,  which acceptance shall not be unreasonably  withheld,  to have access
during  normal  business  hours to such records of Novartis as may be reasonably
necessary to verify the accuracy of the royalty  reports  described  herein,  in
respect of any fiscal year ending not more than  thirty-six (36) months prior to
the  date of such  request.  All such  verifications  shall  be  conducted  upon
reasonable  prior notice and not more than once in each  calendar  year.  In the
event such Celgene representative  concludes that additional royalties were owed
to Celgene during such period,  the additional royalty shall be paid by Novartis
within  thirty  (30)  days  of  the  date  Celgene  delivers  to  Novartis  such
representative's  written  report  so  concluding.  The  fees  charged  by  such
representative  shall be paid by  Celgene  unless the audit  discloses  that the
royalties  payable by Novartis for the audited  period are  understated  by more
than five percent (5%), in which case Novartis shall pay the reasonable fees and
expenses  charged by such  representative.  Novartis shall include in each Third
Party sublicense granted by it pursuant to this Agreement a provision  requiring
the  sublicensee  to make reports to Novartis,  to keep and maintain  records of
sales made  pursuant to such  sublicense  and to grant access to such records by
Celgene's  representatives  to the same extent  required by Novartis  under this
Agreement.  Celgene  agrees that all  information  subject to review  under this
Section 5.4 is confidential and that Celgene shall cause its  representatives to
retain all such information in confidence in accordance with Article IX hereof.

             5.5. ROYALTY PAYMENT TERMS. Royalties shown to have accrued by each
royalty report provided for under Section 5.3(a) hereof shall be due thirty (30)
days after the end of such quarter. Payment of royalties in whole or in part may
be made in  advance  of such due date.  Royalties  determined  to be owing  with
respect to any prior  quarter shall be added,  together  with  interest  thereon
accruing (at the prime rate announced from time to time by Citibank,  N.A., plus
2%) from the date originally due, to the next quarterly payment hereunder.

             5.6. STANDARDS. Novartis shall manufacture or have manufactured the
d-MPH Products pursuant to this Article V in accordance with specifications upon
which FDA Approval was received or such other  specifications as the parties may
hereafter agree upon and applicable law, including,  without lmitation, any cGMP
requirements.  For purposes of verifying Novartis'  compliance with this Section
5.6, (i) Celgene shall be permitted access to Novartis' manufacturing facilities
and related  records and personnel  during normal  business hours, on reasonable
prior notice and not more than once in any calendar year and (ii) Novartis shall
use commercially reasonable efforts to cause, by means of contractual provisions
or otherwise,  its contract  manufacturers  to permit  Celgene to have access to
such contract  manufacturers'  manufacturing  facilities and related records and
personnel  during normal business hours, on reasonable prior notice and not more
than once in any calendar year.

             5.7.  SUPPLY OF PRODUCT TO CELGENE.  When Novartis  manufactures or
has  manufactured  d-MPH PR and in the event that Novartis  manufactures  or has
manufactured  d-MPH IR,  Novartis shall provide such  quantities of d-MPH PR and
d-MPH IR in bulk finished  formulation F.O.B.  Novartis' facility as Celgene and
Celgene's  designated  licensees may require at a price equal to Novartis'  COGS
plus 5% for  markets  outside  the  Territory.  Celgene  shall pay all sales and
similar taxes, import duties in connection with such purchases.

                                      -17-

<PAGE>

             5.8.  SUBLICENSING.  Notwithstanding  any  sublicense  by  Novartis
hereunder,  Novartis  shall remain fully  responsible to Celgene with respect to
Novartis' obligations hereunder.

             5.9. SUPPLY OF ACTIVE  SUBSTANCE TO NOVARTIS.  Celgene shall supply
the d-MPH active  substance to Novartis at Celgene's COGS for the development of
d-MPH PR and d-MPH IR if additional studies are performed by Novartis.

                                   ARTICLE VI.
                                  LICENSE FEES

             6.1  LICENSE   FEES.   Novartis   shall  make  a  total  of  up  to
U.S.$100,000,000  of licensee fee payments to Celgene  pursuant to the following
schedule:

                      (a) On the  Effective  Date, a payment of  U.S.$10,000,000
plus interest  accrued at the rate of 8% per annum from the date of execution of
this  Agreement to the  Effective  Date;  provided,  however,  that if antitrust
clearance  from the FTC and the Antitrust  Division of the Department of Justice
is  not   received  by  the  parties  with   respect  to  this   Agreement   and
notwithstanding  any  termination of this Agreement  pursuant to Section 11.3(f)
hereof,  Novartis shall pay Celgene a payment of U.S.  $5,000,000  plus interest
accrued at the rate of 8% per annum from the date of execution of this Agreement
to the Termination Date.

                      (b) Upon the acceptance by the FDA of an NDA for d-MPH IR,
a payment of U.S.$5,000,000.

                      (c)  Upon  FDA   Approval   of  d-MPH  IR,  a  payment  of
U.S.$12,500,000.

                      (d) Upon the submission to FDA of an NDA for the d-MPH PR,
a payment of U.S.$7,500,000.

                      (e) Upon FDA  Approval  of the  d-MPH  PR,  a  payment  of
U.S.$20,000,000.

                      (f) If either of the d-MPH  Products is  transferred  from
its  current  status of C-II under the  Controlled  Substances  Act of 1970 (the
"Act")  to a status of  either  C-IV or C-V  under the Act,  or if either of the
d-MPH  Products is determined  not to be a controlled  substance  under the Act,
Novartis will pay to Celgene,  upon the happening of either event,  a payment of
U.S.$15,000,000 (said milestone payable only once).

                      (g) Upon the  submission of  regulatory  dossier in Europe
for d-MPH IR:
                          (i)  Centralized (EMEA), US$5,000,000; or
                          (ii) Mutual  Recognition  for each of France, Germany,
Italy, Spain and  the  United  Kingdom (collectively, the "Five Major Markets"),
US$1,000,000 per market.

                                      -18-

<PAGE>

                      (h) Upon approval in Europe for d-MPH IR:
                          (i)  Centralized (EMEA), US$10,000,000; or
                          (ii) Mutual  Recognition  for  each  of the Five Major
Markets, US$2,000,000 per market.

                      (i) Upon  the  submission  of regulatory dossier in Europe
for d-MPH PR:
                          (i)  Centralized (EMEA), US$5,000,000; or
                          (ii) Mutual  Recognition  for  each  of the Five Major
Markets, US$1,000,000 per market.

                      (j) Upon approval in Europe for d-MPH PR:
                          (i)  Centralized (EMEA), US$10,000,000; or
                          (ii) Mutual  Recognition  for  each  of the Five Major
Markets, US$2,000,000 per market.

             6.2  NOTIFICATION OF MILESTONE  ACHIEVEMENT AND INVOICE  PROCEDURE.
Novartis  shall  notify  Celgene in  writing  within  ten  business  days of the
achievement  of  each  milestone   event  described  in  Section  6.1  Upon  the
achievement  of a  milestone  event,  Celgene  shall  send  Novartis  an invoice
substantially  in the form  contained in Schedule 6.2 for the milestone  payment
due as a result thereof in accordance with Section 6.1. Novartis shall make each
milestone payment within 15 days of its receipt of the invoice from Celgene.

                                  ARTICLE VII.
                         DEVELOPMENT; REGULATORY MATTERS

             7.1.  APPROVAL OF D-MPH IR. Celgene shall continue its  development
of d-MPH IR to obtain FDA Approval and will conduct required  additional studies
until such approval is obtained; provided, however, that Novartis shall promptly
reimburse  Celgene  for the  cost  of all  studies  described  in  Schedule  7.1
conducted  from the date of execution of the Agreement  until the Effective Date
or  Termination  Date,  such expenses not to exceed those listed in Schedule 7.1
with  respect to d-MPH IR without  the  approval of the  Development  Committee.
After the  Effective  Date,  Novartis  shall pay for all such studies  directly.
Celgene will make any  additional or  supplemental  submissions  required by the
FDA;  provided,  however,  that  Novartis  shall  pay for the  cost of any  such
submissions.

             7.2.  OTHER DEVELOPMENT EFFORTS AND FUNDING.

                   (a) (i)  Subject to Section  2.3  hereof,  Novartis  will use
commercially reasonable efforts to develop and seek FDA Approval of d-MPH PR for
ADD and ADHD indications  commencing on the date of execution of this Agreement.
Should Novartis choose to

                                      -19-

<PAGE>

develop additional formulations or indications for the d-MPH Products,  Novartis
will fully fund such development work. (ii) In addition,  Novartis will, subject
to Section 7.1 (A) fully fund all remaining  expenses related to NDA approval of
the  d-MPH  Products  for the  ADD/ADHD  indications  commencing  on the date of
execution  of this  Agreement,  (B) be  responsible  for payment of any Phase IV
commitments required by FDA as a condition of NDA approval of the d-MPH Products
and (C)  fully  fund all  remaining  expenses  relating  to  studies  that  have
commenced or under  contract as of the date of  execution  of this  Agreement as
described in Schedule 7.2(a)(ii)(C), such expenses not to exceed those listed in
Schedule  7.2(a)(ii)(C)  with  respect to d-MPH IR without  the  approval of the
Development Committee.  Provided,  however, that with respect to clauses (i) and
(ii) above,  that Novartis shall promptly  reimburse Celgene for the cost of all
such studies  conducted  from the date of execution of the  Agreement  until the
Effective Date or Termination Date. After the Effective Date, Novartis shall pay
for all such studies directly.

                   (b) For  countries  outside  of the United  States,  Novartis
shall  make  a  decision  (on a  country-by-country,  product-by-product  basis)
whether  to file  for  regulatory  approval  for  d-MPH  IR or PR  based  on its
commercial  assessment of the market potential for such d-MPH Product.  Novartis
shall notify Celgene of its decision in writing, as follows:

            (i)    for  European  Union  countries,  within  three months of FDA
                   Approval for such d-MPH Product;

            (ii)   for  Australia,  within six months of receipt of FDA Approval
                   for such d-MPH Product; and

            (iii)  for all other  non-U.S.  countries  (including  Japan) in the
                   Territory, within 12 months of FDA Approval.

If Novartis elects to file for regulatory approval for d-MPH IR or d-MPH PR in a
country,  Novartis shall use commercially reasonable efforts to develop and seek
regulatory  approval  for such d-MPH  Product  in such  country  and,  following
receipt of such regulatory approval, shall act in accordance with Section 4.1 in
connection with the sales and marketing of such d-MPH Product in the country.

                   (c) Upon  Novartis'  notification  to Celgene of its decision
not to file for regulatory  approval for a d-MPH Product for a non- U.S. country
in the Territory (each, an "Excluded  Country" and  collectively,  the "Excluded
Countries"),  Celgene  shall  have the  option  (exercisable  within one year of
Novartis' notice) to either: (i) renegotiate terms with Novartis for the sale by
Novartis or a sublicensee of such d-MPH Product in such Excluded Country or (ii)
terminate  Novartis' license for such d-MPH Product in such Excluded Country and
pursue such regulatory approval and  commercialization  of such d-MPH Product in
such Excluded Country at its own expense; provided, however, that nothing herein
shall be deemed to convey any  license  to the  Ritalin  trademark  or any other
trademark of Novartis.

             7.3.   DISTRIBUTION  AND  LICENSE  RIGHTS.   Any  formulations  and
indications  developed  pursuant  to Section  7.1 or 7.2 hereof  shall be deemed
included in d-MPH IR and d-MPH PR for  purposes of this  Agreement,  except that
Celgene  shall have the  exclusive  right to promote  any such  formulations  to
Oncologists.

                                      -20-

<PAGE>

             7.4. DEVELOPMENT  COMMITTEE.  Celgene and Novartis shall establish,
as soon as  practicable  after  the  Effective  Date,  a  Development  Committee
comprised  of no more than three (3) senior  representatives  of each of Celgene
and Novartis.  The  Development  Committee  shall be chaired by a member thereof
designated,  from time to time by  Novartis.  The  Development  Committee  shall
discuss development and registration issues and shall coordinate the development
and  registration  efforts  described  in  this  Article  VII.  Meetings  of the
Development  Committee shall be at such times and places and in such form (e.g.,
in person,  telephonic or video  conference)  as the members of the  Development
Committee shall determine.  Representatives  of both Parties shall be present at
any meeting of the Development Committee. Decisions of the Development Committee
shall be made by unanimous  vote or by a written  consent  signed by all members
thereof.  The  Development  Committee  shall keep  minutes of its  deliberations
setting forth, among other matters,  all proposed actions and all votes thereon.
All records of the Development Committee shall at all times be available to both
Parties.  The  Development  Committee may delegate to one Party or to a specific
representative the authority to make certain decisions. All disagreements within
the Development Committee shall be subject to the following:

                  (a) The members of the  committee  will endeavor in good faith
for a period of not less  than  thirty  (30)  days to  attempt  to  resolve  the
dispute; and

                  (b) If the members of the  committee are unable to resolve the
dispute by the end of such period,  the  committee  shall  promptly  present the
disagreement to the Chief  Operating  Officer of Celgene and the Chief Operating
Officer of Novartis or their  respective  designees,  and such executives  shall
endeavor to resolve the dispute.

             7.5.  REGISTRATIONS.  Celgene shall be responsible  for the NDA and
supplemental submissions related to d-MPH IR in the U.S. but Novartis shall have
the  right,  through  the  Development  Committee,  to  provide  input  into the
preparation of such submission materials.  Notwithstanding the foregoing,  after
submission of the NDA and  supplemental  submissions with respect to d-MPH IR in
the U.S. and after the Effective  Date,  Celgene shall notify the FDA in writing
that ownership of the Investigational New Drug and New Drug Application has been
transferred to Novartis and that Novartis is the responsible  party for purposes
of the related  Investigational New Drug and New Drug Application submission and
other regulatory issues. Novartis, in turn, shall notify the FDA in writing that
it has accepted  ownership of the  Investigational  New Drug Application and New
Drug  Application.  Novartis shall be responsible  for the NDA and  supplemental
submissions  related  to d-MPH IR in the U.S.  as well as any  submissions  made
outside the U.S.,  but  Celgene  shall have the right,  through the  Development
Committee, to provide input into the preparation of such submission materials.

             7.6.  ADVERSE EVENT  REPORTING.  Each of Novartis and Celgene shall
promptly  report any  serious or  unexpected  event (as that term is used by the
FDA) to the other  (after  first  reporting  such  event to the FDA) of which it
becomes aware during the clinical  development or commercialization of the d-MPH
Products,  and shall  reasonably  cooperate with the other in providing  related
information.  The parties  shall  negotiate in good faith  concerning a detailed
adverse  event  reporting  procedure  as soon as  practicable  after the date of
execution of this Agreement.

                                      -21-

<PAGE>

                                  ARTICLE VIII.
                          INTELLECTUAL PROPERTY RIGHTS

             8.1. NO OTHER  TECHNOLOGY  RIGHTS.  Except as  otherwise  expressly
provided in this Agreement,  under no circumstances  shall a party hereto,  as a
result of this Agreement, obtain any ownership interest in or other right to any
technology,  trade secrets,  know-how,  patents,  pending  patent  applications,
products,  or biological  materials of the other party,  including  items owned,
controlled or developed by the other party, or transferred by the other party to
said party, at any time pursuant to this Agreement.

             8.2. ENFORCEMENT OF PATENT RIGHTS.  Celgene and Novartis shall each
promptly  notify  the other in  writing of any  actual,  alleged  or  threatened
infringement  of patents or patent  applications  of either  party of which they
become aware.

             Celgene  may enforce any of the  Celgene  Patent  Rights  against a
third party and may defend any  declaratory  judgment action brought in relation
to such patents, all at its own expense. In the event that a third party sells a
product  that  infringes  any patent  included in the Celgene  Patent  Rights or
brings a declaratory  judgment  action  regarding any such patent(s) and Celgene
elects not to enforce or defend such patent(s),  the royalty due to Celgene with
respect to the relevant  country for sales of the d-MPH Products,  Ritalin(R) QD
and the Ritalin(R) Line covered by such patent(s) shall be reduced by 50%.

             8.3.  MAINTENANCE  OF PATENTS.  Celgene  shall be  responsible  for
paying the  maintenance  fees and annuities  with respect to the Celgene  Patent
Rights and Novartis  shall,  at all times during the term of this Agreement fund
the cost of such maintenance fees and annuities.

                                   ARTICLE IX.
                                 CONFIDENTIALITY

             9.1. NONDISCLOSURE OBLIGATIONS.

                  (a) Except as otherwise provided in this Agreement, during the
term of this  Agreement  and for a period  of ten (10)  years  thereafter,  both
Parties  shall  maintain in  confidence  and not use for any purpose  other than
those  contemplated by this Agreement (a) information and data received from the
other party resulting from or related to the d-MPH  Products,  Ritalin(R) QD and
the Ritalin(R) Line and (b) all information and data not described in clause (a)
but supplied by the other party under this Agreement marked  "Confidential." For
purposes of this Article IX, information and data described in clause (a) or (b)
shall be referred to as "Information."

                                      -22-

<PAGE>

                  (b) To the extent it is reasonably necessary or appropriate to
fulfill its obligations or exercise its rights under this Agreement, a party may
disclose  Information  it is  otherwise  obligated  under  this  Section  not to
disclose  to its  Affiliates,  consultants,  outside  contractors  and  clinical
investigators,  on a  need-to-know  basis on  condition  that such  entities  or
persons agree to keep the Information confidential for the same time periods and
to  the  same  extent  as  such  party  is  required  to  keep  the  Information
confidential;  and a party may disclose such  Information to government or other
regulatory  authorities  to  the  extent  that  such  disclosure  is  reasonably
necessary to obtain patents or authorizations to conduct clinical trials of, and
to  commercially  market,  the d-MPH  Products,  Ritalin(R) QD or the Ritalin(R)
Line. The obligation not to disclose  Information shall not apply to any part of
such Information that: (a) is or becomes part of the public domain other than by
unauthorized acts of the party obligated not to disclose such Information or its
Affiliates;  (b) can be shown by written documents to have been disclosed to the
receiving  party or its Affiliates by a Third Party,  provided such  Information
was not obtained by such Third Party directly or indirectly from the other party
pursuant to a  confidentiality  agreement;  (c) prior to  disclosure  under this
Agreement,  was  already  in  the  possession  of  the  receiving  party  or its
Affiliates,  provided such  Information was not obtained  directly or indirectly
from the other party pursuant to a confidentiality  agreement;  (d) can be shown
by written documents to have been independently developed by the receiving party
or its Affiliates without breach of any of the provisions of this Agreement; (e)
is disclosed by the receiving  party pursuant to  interrogatories,  requests for
information or documents, subpoena, civil investigative demand issued by a court
or  governmental  agency or as  otherwise  required  by law;  provided  that the
receiving party notifies the other party  immediately  upon receipt thereof (and
provided  that  the  disclosing   party  furnishes  only  that  portion  of  the
Information  which  it is  advised  by  counsel  is  legally  required);  or (f)
pharmacological  and clinical data used for marketing purposes following receipt
of FDA Approval.

             9.2. TERMS OF THIS  AGREEMENT.  Celgene and Novartis each agree not
to disclose any terms or conditions of this Agreement to any Third Party without
the prior consent of the other party,  except as required by applicable  law. If
Celgene  determines that it is required to file with the Securities and Exchange
Commission or other governmental  agency this Agreement for any reason,  Celgene
shall request  confidential  treatment of such portions of this  Agreement as it
and Novartis shall together determine.  Notwithstanding  the foregoing,  Celgene
and Novartis may use, as a routine  reference in the usual course of business to
describe the terms of this transaction, any statement containing information not
materially  different from the information set forth on Schedule 9.2 hereof,  as
such Schedule may be amended from time to time.

                                   ARTICLE X.
                                   INDEMNITY

             10.1.  NOVARTIS INDEMNITY  OBLIGATIONS.  Novartis agrees to defend,
indemnify and hold  Celgene,  its  Affiliates  and their  respective  employees,
officers,  directors,  counsel  and agents  harmless  from all  claims,  losses,
damages or expenses (including,  without limitation,  reasonable attorneys' fees
and expenses and costs of investigation)  arising as a result of: (a) the breach
by Novartis  of any  covenant,  representation  or  warranty  contained  in this
Agreement; (b) actual or asserted violations of any applicable law or regulation
by Novartis or its Affiliates by virtue of

                                      -23-

<PAGE>

which the d-MPH  Product,  Ritalin(R) QD or the  Ritalin(R)  Line  manufactured,
distributed  or  sold  shall  be  alleged  or  determined  to  be   adulterated,
misbranded, mislabeled or otherwise not in compliance with any applicable law or
regulation;  (c) claims for bodily injury, death or property damage attributable
to the manufacture,  distribution or sale of the d-MPH Product, Ritalin(R) QD or
the  Ritalin(R)  Line by Novartis or its  Affiliates;  (d) any  negligent act or
omission  of  Novartis  (or  any  Affiliate  or  sublicensee   thereof)  in  the
manufacture,  promotion,  marketing and sale of any d-MPH Product, Ritalin(R) QD
or the  Ritalin(R)  Line or any other  activity  conducted  by  Novartis  or its
Affiliates under this Agreement which is the proximate cause of injury, death or
property  damage to a third party; or (e) any failure of Novartis to comply with
any  recall  of  a  d-MPH  Product,   Ritalin(R)  QD  or  the  Ritalin(R)   Line
manufactured,  distributed or sold by Novartis or its Affiliates that is ordered
by a  governmental  agency or  required  by a  confirmed  failure  of such d-MPH
Product, Ritalin(R) QD or the Ritalin(R) Line.

             10.2.  CELGENE  INDEMNITY  OBLIGATIONS.  Celgene  agrees to defend,
indemnify and hold  Novartis,  its Affiliates  and their  respective  employees,
officers,  directors,  counsel  and agents  harmless  from all  claims,  losses,
damages or expenses (including,  without limitation,  reasonable attorneys' fees
and expenses, and costs of investigation) arising as a result of: (a) the breach
by  Celgene  of any  covenant,  representation  or  warranty  contained  in this
Agreement; (b) actual or asserted violations of any applicable law or regulation
by  Celgene  or its  Affiliates  by  virtue  of which  d-MPH  IR and the  active
substance  for d-MPH PR  manufactured,  distributed  or sold shall be alleged or
determined  to be  adulterated,  misbranded,  mislabeled  or  otherwise  not  in
compliance with any applicable law or regulation;  (c) claims for bodily injury,
death or property damage attributable to the manufacture,  distribution, sale or
use of the d-MPH Products by Celgene or its Affiliates; (d) any negligent act or
omission  of  Celgene  (or  any  Affiliate  or   sublicensee   thereof)  in  the
manufacture,  promotion,  marketing  and sale of any d-MPH  Product or any other
activity  conducted by Celgene or its Affiliates  under this Agreement  which is
the proximate cause of injury, death or property damage to a third party; or (e)
any  failure  of  Celgene  to  comply  with  any  recall  of  a  d-MPH   Product
manufactured,  distributed or sold by Celgene or its Affiliates  that is ordered
by a  governmental  agency or  required  by a  confirmed  failure  of such d-MPH
Product.

             10.3.  PROCEDURE.  A  party  or  any  of its  Affiliates  or  their
respective  employees  or  agents  (the  "Indemnitee")  that  intends  to  claim
indemnification  under this Article X shall promptly notify the other party (the
"Indemnitor")  of any loss,  claim,  damage,  liability  or action in respect of
which the Indemnitee intends to claim such  indemnification,  and the Indemnitor
shall  assume the defense  thereof  with counsel  mutually  satisfactory  to the
Parties;  provided,  however,  that an Indemnitee shall have the right to retain
its own  counsel,  with the fees and expenses to be paid by the  Indemnitor,  if
representation  of such  Indemnitee  by the counsel  retained by the  Indemnitor
would be inappropriate  due to actual or potential  differing  interests between
such  Indemnitee  and  any  other  party  represented  by such  counsel  in such
proceedings.  The  indemnity  agreement  in this  Article  X shall  not apply to
amounts paid in settlement of any loss,  claim,  damage,  liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably.  The Indemnitor may not settle, or otherwise
consent to an adverse  judgment with respect to, any loss,  claim,  liability or
action  without  the  consent  of the  Indemnitee,  which  consent  shall not be
withheld unreasonably.  The failure to deliver notice to the Indemnitor within

                                      -24-

<PAGE>

a reasonable time after the  commencement of any such action,  if prejudicial to
its  ability  to defend  such  action,  shall  relieve  such  Indemnitor  of any
liability  to the  Indemnitee  under  this  Article  X to  the  extent  of  such
prejudice,  but the  omission so to deliver  notice to the  Indemnitor  will not
relieve it of any liability  that it may have to any  Indemnitee  otherwise than
under this Article X. The Indemnitee,  its employees and agents, shall cooperate
fully with the Indemnitor and its legal  representatives in the investigation of
any action,  claim or liability  covered by this  indemnification.  In the event
that each party  claims  indemnity  from the other and one party is finally held
liable to indemnify the other,  the Indemnitor  shall  additionally be liable to
pay the reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.

             10.4.   INSURANCE.   Novartis  and  Celgene   shall  each  maintain
appropriate product liability insurance with respect to development, manufacture
and  sales  of the  d-MPH  Products,  Ritalin(R)  QD or the  Ritalin(R)  Line by
Novartis or Celgene,  as the case may be, in such amount as Novartis or Celgene,
respectively, customarily maintains with respect to sales of its other products.
Novartis and Celgene,  as applicable,  shall each maintain such insurance for so
long as it continues to manufacture or sell the d-MPH Products, Ritalin(R) QD or
the Ritalin(R)  Line, as the case may be, and thereafter for so long as Novartis
or  Celgene,  as  applicable,  maintains  insurance  for  itself  covering  such
manufacture or sales.

                                   ARTICLE XI.
                              TERM AND TERMINATION

             11.1. TERM. Unless sooner  terminated  pursuant to this Article XI,
the term of this Agreement is for the period  beginning on the date of execution
of the  Agreement  and  ending on the later of the  tenth  anniversary  of First
Commercial  Launch  or, on a country  by country  basis,  the last d-MPH  patent
listed in  Exhibit A (and all  continuations,  divisionals  and  equivalents  or
counterparts thereof and all supplemental  protection  certificates,  extensions
and  reissues  thereof) to expire (the  "Expiration  Date") with respect to that
country.  At the request of Novartis made not later than the date that is twelve
(12) months prior to the Expiration Date, Celgene and Novartis shall endeavor in
good faith to reach  agreement with respect to any extension or  modification on
commercially  reasonable  terms,  of all or any of the  rights  and  obligations
provided  for in this  Agreement.  If  despite  such good faith  endeavor,  such
agreement is not reached,  the parties  hereto shall have no further  obligation
pursuant to the preceding  sentence from and after the  Expiration  Date. At the
Expiration  Date,  Celgene  shall  grant  Novartis a  perpetual,  non-exclusive,
royalty-free license to make, have made, use, import, sell and offer to sell the
d-MPH Products and Ritalin(R) QD under the Celgene Technology.

             11.2. EXISTING OBLIGATIONS. Termination pursuant to Section 11.1 of
this  Agreement  for any reason shall not relieve the Parties of any  obligation
accruing prior to such expiration or termination.

             11.3.   TERMINATION  BY  EITHER  PARTY.  Celgene  or  Novartis,  as
applicable,  may terminate this Agreement on 60 days prior written notice to the
other party upon the occurrence of any of the following:

                                      -25-

<PAGE>

                  (a) by either  party in the event of a material  breach by the
other party of any covenant,  duty or  undertaking  herein,  which breach is not
cured within 30 days after receipt of notice thereof;

                  (b) by Celgene  if, on more than two  occasions  in any twelve
month period,  Novartis shall have failed to pay any amount  hereunder when due,
which failure shall have continued for at least ten (10) business days following
Celgene's delivery of notice thereof to Novartis;

                  (c) by Celgene in the event of Novartis' discontinuance of the
active conduct of its business for a period in excess of 30 days;

                  (d) by either  party,  on a product by product  and country by
country  basis,  in  the  event  of  the  withdrawal  of the  d-MPH  Product  or
Ritalin(R)QD from the marketplace due to any regulatory mandate;

                  (e) by either party in the event the other party or any person
controlling such party shall become insolvent or shall file or have filed by its
creditors  a  petition  in  bankruptcy  or  similar  proceeding,  or a court  of
competent  jurisdiction  appoints a receiver over the business or assets of such
other party,  or such other party makes a general  assignment for the benefit of
creditors; or

                  (f) by either party in the event that  antitrust  clearance is
not  received  from the FTC and the  Antitrust  Division  of the  Department  of
Justice with respect to the Agreement.

             11.4.  TERMINATION OF EXCLUSIVITY BY CELGENE. In the event Novartis
fails to meet its Minimum Sales (as hereinafter  defined),  Novartis may, at its
option,  pay Celgene an amount equal to thirty  percent  (30%) of any  shortfall
under that minimum net sales target that is not due to an event of force majeure
described  in  Section  14.1  hereof or  Celgene's  failure  to meet its  supply
obligations  to Novartis  under  Section 4.5 hereof.  In the event that Novartis
does not elect to pay such amount,  Celgene shall have the right, at its option,
to terminate the exclusive nature of the rights of Novartis under this Agreement
and  Novartis  shall  provide  Celgene  with  access to all  necessary  data and
otherwise   cooperate  with  Celgene  to  enable  Celgene  to  obtain   parallel
registrations.  The term "Minimum  Sales" shall mean the minimum sales listed on
Schedule 11.4 hereto.

             11.5.  TERMINATION  BY  CELGENE.  Notwithstanding  anything  to the
contrary  contained  herein,  with respect to the d-MPH Products,  in event that
Novartis has not made all required filings with the Japanese  Ministry of Health
and Welfare  within five years of the date of execution of this  Agreement,  all
licenses and rights  granted to Novartis  with respect to the d-MPH  Products in
Japan shall terminate.

                                      -26-

<PAGE>

             11.6.  TERMINATION  BY  NOVARTIS.  Notwithstanding  anything to the
contrary  contained  herein,  Novartis  shall have the right to  terminate  this
Agreement, effective twelve (12) months after written notice to Celgene.

             11.7.  EFFECTS OF  TERMINATION  BY CELGENE.  If this  Agreement  is
terminated by Celgene,

                    (a) all  licenses and rights  granted to Novartis  hereunder
shall terminate and Novartis will immediately  cease to manufacture and sell the
d-MPH  Products and  Ritalin(R) QD if such products are covered by a Valid Claim
of a Celgene issued patent or  supplemental  protection  certificate;  provided,
however, that Novartis and Celgene shall negotiate in good faith with respect to
a mutually acceptable agreement to commercialize Ritalin(R) QD;

                    (b)  Novartis  shall  transfer and assign to Celgene any and
all registrations for the d-MPH Products;

                    (c) if such  termination  is pursuant to Section  11.3(a) or
(b) hereof,  Celgene  shall be entitled to claim from Novartis all damages which
would be due to Celgene under law and equity. If such termination is pursuant to
Section  11.3(c),  (d), (e) or (f) or Section 11.5 hereof,  neither  party shall
have any liability to the other, except as otherwise  specifically  provided for
herein;

                    (d)  Novartis  may  dispose  of its  inventory  of the d-MPH
Products and Ritalin(R) QD on hand as of the effective date of termination,  and
may fill any orders for the d-MPH  Products and  Ritalin(R) QD accepted prior to
the effective date of termination,  for a period of twelve (12) months after the
effective date of termination;

                    (e)  within  thirty  (30)  days  after  disposition  of such
inventory  and  fulfillment  of such orders  Novartis  will forward to Celgene a
final report and pay Celgene all amounts due for Net Sales in such period;

                    (f) Novartis  shall grant  Celgene a  worldwide,  perpetual,
non-exclusive,  fully-paid  and  royalty  free  right and  license to use in the
manufacture of the d-MPH Products the Novartis  Technology  that is necessary or
useful in the  manufacture  of the d-MPH Products and until such time as Celgene
can establish regulatory approval of an alternate  manufacturer,  supply Celgene
with the d-MPH Products on commercially reasonable terms;

             11.8.  SURVIVAL OF  TERMINATION.  The termination of this Agreement
shall not affect (i) Novartis' obligation to pay Celgene any amounts due Celgene
for  d-MPH  Product,  Ritalin(R)  QD  or  the  Ritalin(R)  Line  sold  prior  to
termination  or pursuant to Section 11.4 hereof;  (ii) Sections 2.4 and 7.6; and
(iii) Articles III, VIII, IX, X, XI, XII, XIII, and XIV.

                                      -27-

<PAGE>

             11.9.  EFFECTS OF  TERMINATION  BY NOVARTIS.  If this  Agreement is
terminated by Novartis,

                    (a) all  licenses  and  rights  granted  to  Novartis  shall
terminate and Novartis will immediately  cease to manufacture and sell the d-MPH
Product and  Ritalin(R)  QD if such  products  are covered by a Valid Claim of a
Celgene issued patent or supplemental protection certificate;

                    (b) if such  termination  is  pursuant  to  Section  11.3(a)
hereof, Novartis shall be entitled to claim from Celgene all damages which would
be due to Novartis  under law and  equity.  If such  termination  by Novartis is
pursuant to any other provision of this Agreement,  neither party shall have any
liability to the other, except as other wise specifically provided for herein;

                    (c)  Novartis  may  dispose  of its  inventory  of the d-MPH
Products and Ritalin(R) QD on hand as of the effective date of termination,  and
may fill any orders for d-MPH Product and  Ritalin(R)  QD accepted  prior to the
effective  date of  termination,  for a period of twelve (12)  months  after the
effective date of termination; and

                    (d)  within  thirty  (30)  days  after  disposition  of such
inventory  and  fulfillment  of such orders  Novartis  will forward to Celgene a
final report and pay all amounts due Celgene for Net Sales in such period; and

                    (e) if such  termination  is  pursuant  to  Section  11.3(a)
hereof or upon the  Expiration  Date,  Celgene shall grant Novartis a perpetual,
non-exclusive,  royalty-free  license to make, have made, use, import,  sell and
offer to sell the d-MPH Products and Ritalin(R) QD under the Celgene Technology.

                                  ARTICLE XII.
                          INTELLECTUAL PROPERTY RIGHTS

             12.1.  OWNERSHIP.  All  right,  title  and  interest  in and to the
Celgene Technology shall be owned by Celgene.

             12.2.  DEFENSE OF INDIVIDUAL  INFRINGEMENT  ACTIONS.  If Celgene or
Novartis,  or any of their  Affiliates or  sublicensees,  shall be  individually
named as a defendant in a legal  proceeding by a Third Party for infringement of
a  patent  because  of the  manufacture,  use or sale of the  d-MPH  Product  or
Ritalin(R)QD,  the party which has been sued (or whose  Affiliate or sublicensee
has been sued) shall  promptly  notify the other party  hereto in writing of the
institution  of such suit.  The party which has been sued may, at its option and
at its sole expense, control and defend such suit. The controlling party may not
settle such suit or otherwise  consent to an adverse  judgment in such suit that
diminishes  the rights or interests  of the  non-controlling  party  without the
express written consent of the non-controlling party (which consent shall not be
unreasonably withheld or delayed).

                                      -28-

<PAGE>

The party which has been sued shall keep the other party at all times reasonably
informed as to the status of the suit. The party which is not  controlling  such
legal  proceedings shall have the right to be represented by advisory counsel of
its own selection (and such counsel's opinion shall be reasonably  considered by
the  controlling  party),  at its own expense,  and shall cooperate fully in the
defense of such suit and furnish to the party controlling such legal proceedings
all evidence and assistance in its control.

             12.3.  DEFENSE  OF  JOINT  INFRINGEMENT  ACTIONS.  If  Celgene  and
Novartis, or any of their Affiliates or sublicensees,  shall be jointly named as
defendants for infringement of a patent for making using,  selling,  offering to
sell or importing the d-MPH Product or Ritalin(R) QD, Novartis shall be entitled
to control  the  defense  of such suit,  and all  expenses  including  costs and
attorney  fees,  shall be paid by Novartis.  Celgene  shall have the right to be
represented by counsel of its own selection,  but at its sole expense.  Novartis
will consult in good faith with Celgene regarding the litigation.  Celgene shall
cooperate fully in the defense of such suit and furnish to Novartis all evidence
and assistance in its control.

             12.4. CONTRIBUTION.  With respect to any judgments,  settlements or
damages  payable  with  respect to the  defense of joint  infringement  actions,
Celgene and Novartis  shall  contribute  to the amount owed in the same ratio as
the ratio of the Gross Profit  received by Novartis in connection  with sales of
the d-MPH Product or  Ritalin(R)  QD to the (a) Purchase  Price less COGS and/or
(b)  Royalties  received  by  Celgene in  connection  with the sale of the d-MPH
Product or Ritalin(R) QD. In the event a license from a third party is required,
the parties shall share the cost of such license equitably.  Notwithstanding the
foregoing,  Celgene shall not be obligated to contribute to any settlement costs
described  above unless it has given its express  written consent (which consent
shall not be unreasonably withheld) to such settlement.

                                  ARTICLE XIII.
                             STANDSTILL AND NO RAID

             13.1.  STANDSTILL.  Both  parties  agree that,  except as expressly
provided  in this  Agreement,  for a period of four  years from the date of this
Agreement unless such action shall have been specifically  invited in writing by
the Board of Directors of the other party (it being understood that execution of
this Agreement does not constitute such an invitation), neither party nor any of
their officers, directors,  employees, agents, consultants,  advisors, partners,
affiliates and other representatives (the  "Representatives") on its behalf will
in any manner,  including  but not limited to entering  into  communications  or
discussions  with,  the record or  beneficial  shareholders  of the other party,
directly or indirectly,  (a) effect or seek, offer or propose (whether  publicly
or otherwise) to effect,  participate in or cause or in any way assist any other
person to effect or seek,  offer or propose  (whether  publicly or otherwise) to
effect or participate  in, (i) any  acquisition of any securities (or beneficial
ownership thereof) or assets of the other party or any of its subsidiaries, (ii)
any tender or exchange offer or merger or other business  combination  involving
the other  party or any of their  subsidiaries,  or (iii) any  recapitalization,
restructuring,  liquidation, dissolution or other extraordinary transaction with
respect to the other  party or any of its  subsidiaries,  (b) make,  or

                                      -29-

<PAGE>

become a "participant"  in, any  "solicitation"  of "proxies" (as such terms are
defined in Regulation 14A promulgated by the Securities and Exchange Commission)
or consents to vote any voting  securities of the other party, (c) form, join or
in any way  participate in a "group" (as defined under the  Securities  Exchange
Act of 1934, as amended) with respect to the securities of the other party,  (d)
otherwise  act alone or in concert with others,  to seek to control or influence
the management, Board of Directors,  shareholders or policies of the other party
or its  subsidiaries,  (e) take any action  which might force the other party to
make a public  announcement,  or make or permit the  Representatives to take any
action that is likely to result in any public  disclosure,  regarding any of the
types of matters set forth in (a), (b), (c), (d) or (e) above, or (f) enter into
any discussions or arrangements  with any third party with respect to any of the
foregoing  prohibited  conduct,  except  in the  event  that a third  party  (1)
acquires  or makes a tender  offer or  exchange  offer to  acquire  over  twenty
percent (20%) of the  outstanding  voting  securities  of Celgene,  (2) publicly
announces  that it is seeking to acquire all or  substantially  all of Celgene's
assets or (3) enters into  discussions  with Celgene that would  require them to
issue a press release.  Notwithstanding the foregoing,  Novartis' acquisition of
no more than five percent (5%) of the outstanding  registered  voting securities
of Celgene shall not  constitute a violation of this Section 13.1.  Both parties
also  agree  during  any such  period  not to  request  the other  party (or its
directors,   officers,   employees  or  other   Representatives),   directly  or
indirectly, to amend or waive any provision of this Section 13.1 (including this
sentence).

             13.2.  NO RAID.  Both parties  agree that,  without  prior  written
consent, it will not for a period of five years from the date of this Agreement,
directly or  indirectly,  solicit for employment or employ any person who is now
or hereafter is employed by the other party or any of their  Affiliates  and who
is  identified  by the  party as a result  of its  evaluation  or  otherwise  in
connection  with  this  Agreement  or  the  transactions   contemplated  hereby;
provided,  however,  that neither party shall be prohibited  from  employing any
such  person  who  is  solicited  by   advertising  in  periodicals  of  general
circulation  to the public  generally and not  specifically  directed to solicit
such employees.

                                  ARTICLE XIV.
                                  MISCELLANEOUS

             14.1.  FORCE  MAJEURE.  Neither  party  shall  be  held  liable  or
responsible to the other party nor be deemed to have defaulted under or breached
this Agreement for failure or delay in fulfilling or performing any term of this
Agreement  when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party, including but not limited to fire,
floods,  embargoes,  war,  acts  of  war  (whether  war  is  declared  or  not),
insurrections,  riots,  civil  commotions,  strikes,  lockouts  or  other  labor
disturbances,  acts  of God or  acts,  omissions  or  delays  in  acting  by any
governmental authority or the other party; provided,  however, that the party so
affected shall use reasonable  commercial efforts to avoid or remove such causes
of  nonperformance,  and shall continue  performance  hereunder with  reasonable
dispatch whenever such causes are removed.  Either party shall provide the other
party with prompt  written notice of any delay or failure to perform that occurs
by reason of force majeure.  The Parties shall mutually seek a resolution of the
delay or the failure to perform as noted above.

                                      -30-

<PAGE>

             14.2. ASSIGNMENT.  Except as otherwise provided herein, neither the
rights nor the obligations hereunder of any party hereto may be assigned without
the prior written consent of the other party hereto. Either party may assign its
rights and obligations  hereunder to any Afffiliate,  subsidiary or successor to
its business.  This Agreement  shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assignees.

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

             14.4.  NOTICES.  All  notices and other  communications  under this
Agreement shall be in writing and may be given by any of the following  methods:
(a) personal delivery; (b) facsimile  transmission;  (c) registered or certified
mail,  postage  prepaid,  return receipt  requested;  or (d) overnight  delivery
service.  Notices  shall  be sent to the  appropriate  party at its  address  or
facsimile  number given below (or at such other address or facsimile  number for
such party as shall be specified by notice given under this Section 14.4):

             If to Celgene:
             -------------

             Celgene Corporation
             7 Powder Horn Drive
             Warren, New Jersey 07059
             Attention: President
             Tel:  (732) 271-1001
             Fax:  (732) 271-4184

             with a copy to:
             --------------

             Proskauer Rose LLP
             1585 Broadway
             New York, New York 10036-8299
             Attn:  Robert A. Cantone, Esq.
             Tel:  (212) 969-3235
             Fax:  (212) 969-2900

                                      -31-

<PAGE>

             If to Novartis:
             --------------

             Novartis Pharma AG
             Lichtstrasse 35
             CH 4002 Basel
             Switzerland
             Attn: Head, Business Development and Licensing
             Tel: 41.61.324.5618
             Fax: 41.61.324.2100

             with a copy to:
             --------------

             Herbert Gut
             General Counsel
             Lichtstrasse 35
             CH 4002 Basel
             Switzerland
             Tel: 41.61.324.6877
             Fax: 41.61.324.6859

All such notices and  communications  shall be deemed  received  upon (a) actual
receipt by the addressee,  (b) actual delivery to the appropriate address or (c)
in the case of a facsimile  transmission,  upon  transmission  by the sender and
issuance by the transmitting  machine of a confirmation slip confirming that the
number of pages constituting the notice have been transmitted  without error. In
the  case  of  notices  sent  by  facsimile   transmission,   the  sender  shall
contemporaneously  mail a copy of the  notice to the  addressee  at the  address
provided  for above.  However,  such  mailing  shall in no way alter the time at
which the facsimile notice is deemed received.

             14.5.  GOVERNING  LAW.  This  Agreement  shall be  governed  by and
construed in accordance  with the laws of the State of New York,  without giving
effect to the choice of laws provisions thereof.

             14.6.  DISPUTE  RESOLUTION,  CHOICE OF FORUM.  Any disputes arising
between the Parties  relating to,  arising out of or in any way  connected  with
this  Agreement or any term or condition  hereof,  or the  performance by either
party of its  obligations  hereunder,  whether  before or after  the  expiration
pursuant to Section 11.1 or termination pursuant to any other section of Article
XI of this Agreement, shall be promptly presented to the Chief Executive Officer
of Celgene and the Chief  Operating  Officer of Novartis for  resolution  and if
they or their designees cannot promptly resolve such disputes, then either party
shall have the right to bring an action to resolve such  dispute  before a court
of competent jurisdiction.  The parties hereby submit to the jurisdiction of the
federal or state courts  located within the State of New York for the conduct of
any suit, action or proceeding arising out of or relating to this Agreement.

                                      -32-

<PAGE>

             14.7.  ENTIRE  AGREEMENT.  This  Agreement  constitutes  the entire
understanding  of the Parties with  respect to the subject  matter  hereof.  All
express  or implied  agreements  and  understandings,  either  oral or  written,
heretofore made are expressly merged in and made a part of this Agreement.  This
Agreement  may be  amended,  or any  term  hereof  modified,  only by a  written
instrument duly executed by both Parties.

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

             14.9. INDEPENDENT CONTRACTORS.  Novartis and Celgene shall each act
as  independent  contractors.  Celgene  shall  not  exercise  control  over  the
activities   and  operations  of  Novartis;   accordingly,   Novartis  shall  be
responsible  for paying  all  applicable  social  security,  withholding,  other
employment  and income taxes for itself and its  employees.  Novartis shall bear
all expenses  incurred in its sales  endeavors,  except those for which  Celgene
agrees in writing to pay.  Novartis  and Celgene  shall each  conduct all of its
business in its own name and as it deems fit,  provided it is not in  derogation
of the other's interests. Neither party shall engage in any conduct inconsistent
with its status as an independent  contractor,  have authority to bind the other
with respect to any  agreement  or other  commitment  with any third party,  nor
enter into any commitment on behalf of the other.

             14.10.  WAIVER.  The  waiver  by either  party  hereto of any right
hereunder  or of the  failure to perform or of a breach by the other party shall
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.

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

                                 [END OF TEXT]

                                      -33-

<PAGE>

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

CELGENE CORPORATION

By:
   -------------------------------------------
   Name:  John Jackson
   Title: Chairman and Chief Executive Officer

NOVARTIS PHARMA AG

By:
   -------------------------------------------
   Name:
   Title:

                                      -34-

<PAGE>

                                    EXHIBIT A
                      TO LICENSE AND DISTRIBUTION AGREEMENT

o          U.S. PATENT:      5,733,756        PROCESS FOR BIOCATALYTIC
                                              RESOLUTION

o          U.S. PATENT:      5,936,091        PROCESS FOR OPTICAL RESOLUTION
                                              OF AMIDE (THREO) INTERMEDIATE

o          U.S. PATENT:      5,837,284        DELIVERY OF MULTIPLE DOSES OF
                                              METHYLPHENIDATE

o          U.S. PATENT:      5,908,850        METHOD OF TREATING ATTENTION
                                              DEFICIT DISORDERS WITH D-THREO-
                                              METHYLPHENIDATE

o          U.S. PATENT:      5,922,736        CHRONIC BOLUS ADMINISTRATION OF
                                              D-THREO-METHYLPHENIDATE

o          U.S. PATENT:      5,965,734        PROCESS FOR OPTICAL RESOLUTION
                                              OF AMIDE (ERYTHRO) INTERMEDIATES

o        U.S. DIVISIONAL APPLICATION (CELG-0085, the Divisional from CELG-0008);
         Serial No. 038470, filed March 11,1998.

<PAGE>

                                    EXHIBIT B
                      TO LICENSE AND DISTRIBUTION AGREEMENT

"Fully Allocated Cost" shall mean:

1.    Direct Materials;
2.    Salaries and wages of personnel directly  engaged  in  manufacturing   the
      product;
3.    Employee benefits associated with the above salaries and wages;
4.    Depreciation,  repairs  and  maintenance,  and  other  operating  costs of
      production machinery;
5.    Quality Control;
6.    Package Development;
7.    Import Department;
8.    Building operating costs assigned to production areas;

      NOTE:  Each  building is a cost center.  Operating  costs such as building
      depreciation  (assigned on a straight line basis),  property  taxes,  fire
      insurance,  light,  heat,  and power are  charged  to this  building  cost
      center.  The total building  operating  costs are then charged to the cost
      centers occupying the building as "rent."

9.    Administration costs incurred in the manufacturing process including:

      a.   Manufacturing Administration
      b.   Manufacturing Personnel Department
      c.   Material Management
      d.   Industrial Engineering (Incl. Mandated Environmental Costs)
      e.   Manufacturing Employee Training
      f.   Cost Accounting; and

10.   Inventory  losses  due  to  regulatory  revisions. Costs  associated  with
inventory maintenance, such  as  revaluation,  damaged  and  obsolete  material,
physical inventory readjustments, etc.

Fully allocated costs shall not include:

      a.   Inventory Carrying Costs;
      b.   Regulatory Affairs;
      c.   Start-up costs of new facilities;
      d.   Other  production/manufacturing   costs,  such  as  rework  expenses,
           unrelated to this product, returned goods and repackaging; and
      e.   Manufacturing Technology.

<PAGE>

                                    EXHIBIT C
                      TO LICENSE AND DISTRIBUTION AGREEMENT

"Methylphenidate Product"   shall   mean    d-threo-methylphenidate,    l-threo-
methylhphenidate,  d-erythro-methylphenidate  and  l-erythro-methylphenidate and
any salts thereof.

<PAGE>

                                    EXHIBIT D
                      TO LICENSE AND DISTRIBUTION AGREEMENT

"Net Sales" shall mean the gross invoice  price of product sold to  independent,
third party customers in bona fide, arms-length transactions,  less (i) quantity
and/or cash  discounts  actually  allowed or taken;  (ii)  freight,  postage and
shipping insurance  (allocated in accordance with NOVARTIS' standard  allocation
procedure); (iii) custom duties and taxes, if any, directly related to the sale;
(iv)  amounts  repaid or  credited  by reason  of  rejections,  return of goods,
retroactive price reductions  specifically  identifiable as relating to product;
(v) amounts incurred  resulting from  governmental (or agency thereof)  mandated
rebate programs; (vi) third party rebates and chargebacks related to the sale of
product to the extent actually allowed;  and (vii) as agreed by the parties, any
other specifically  identifiable  amounts included in product's gross sales that
were or ultimately will be credited and that are substantially  similar to those
listed above.

<PAGE>

                                 SCHEDULE 4.6(C)
                                    D-MPH IR

Example:     d-MPH IR Net Sales            $100.00
                                        X     0.10 (Oncology Fraction)
                                        ----------
                                        =   $10.00

             Less: Oncology Base Sales      $(2.00)
                                        ----------
                                        =   $ 8.00
                                        X     0.95 (Fixed Commercial Multiple)
                                        ----------
                                        =   $ 7.60 (Adjusted Oncology Net Sales)

                                        X     0.65
                                        ----------
                                        =   $ 4.94 (Oncology Indication Purchase
                                                   Price Increment)

<PAGE>

                                 SCHEDULE 4.6(C)
                                    D-MPH PR

Example:    d-MPH PR Net Sales            $100.00
                                         X   0.09 (Oncology Fraction)
                                         --------
                                         = $ 9.00

            Less: Oncology Base Sales      $(0.09)
                                         --------
                                         = $ 8.10
                                         X   0.95 (Fixed Commercial Multiple)
                                         --------
                                         = $ 7.70 (Adjusted Oncology Net Sales)

                                         X   0.87 (Novartis' Gross Profit Margin
                                         --------  Not Including Cost of Active)
                                         = $ 6.70

            Less:                          $ 7.70 (Adjusted Oncology Net Sales)
                                         X   0.30 (Royalty Percentage)
                                         --------
                                         =  (2.31)

                                         = $ 4.40 (Oncology Indication Purchase
                                                   Price Increment)

                                      -40-

<PAGE>

                                 SCHEDULE 5.3(B)
                                    D-MPH IR

Example:    d-MPH IR Net Sales           $100.00
                                      X     0.10 (Oncology Fraction)
                                      --------------------
                                      =  $ 10.00

            Less: Oncology Base Sales    $ (2.00)
                                      -----------------------
                                      =  $  8.00
                                      X     0.95 (Fixed Commercial Multiple)
                                      ----------------------
                                      =  $  7.60 (Adjusted Oncology Net Sales)

                                      X     0.90 (Novartis' Gross Profit Margin
                                      -----------------------

                                      =  $  6.84

            Less:                        $  7.60 (Adjusted Oncology Net Sales)
                                      X     0.25 (Royalty Percentage)
                                      ------------------------
                                      =    (1.90)

                                      =  $  4.94 (Oncology Royalty Increment)

<PAGE>

                                 SCHEDULE 5.3(B)
                                    D-MPH PR

Example:  d-MPH PR Net Sales             $100.00
                                      X     0.09 (Oncology Fraction)
                                      ----------
                                      =  $  9.00

          Less: Oncology Base Sales      $ (0.90)
                                      ----------
                                      =  $  8.10
                                      X     0.95 (Fixed Commercial Multiple)
                                      ----------
                                      =  $  7.70 (Adjusted Oncology Net Sales)

                                      X     0.83 (Novartis' Gross Profit Margin
                                      ----------

                                      =  $  6.39

          Less:                          $  7.70 (Adjusted Oncology Net Sales)
                                      X     0.25 (Royalty Percentage)
                                      ----------
                                      =    (1.92)

                                      =  $  4.46 (Oncology Royalty Increment)

<PAGE>

                                  SCHEDULE 6.2

                                 Sample Invoice

                         Celgene Corporation Letterhead

[Date]

Novartis Pharma AG
Zentraler Faktureneingang
Attn: Ms. M. Gnehm
Contract Administration
Lichtstrasse 35
CH 4002 Basel
Switzerland

Dear Ms. Gnehm:

Re: CELGENE CORPORATION/NOVARTIS PHARMA AG/License Agreement for
[PRODUCT]

To Whom It May Concern:

This is an invoice  requesting  payment in connection  with the  above-captioned
agreement between CELGENE and Novartis Pharma AG.

Novartis Contract Code No.:   [will be assigned by Novartis following execution]

Novartis Creditor No.:        [will be assigned by Novartis following execution]

Reason for Payment:           [please cite specific article in the agreement]

Amount and Currency:          [self-explanatory]

Bank Address and Account No.: [insert name and address  of  the  bank  to  which
                              payment should be sent and account number to which
                              it should be credited]

Sincerely yours,

CELGENE CORPORATION

<PAGE>

                                  SCHEDULE 7.1

Study                                                Budget

A.  PK

1.  PK 00-001                                      $180,000      (-$162,000)
2.  PK 99-001                                      $255,000      (-$  50,780)
3.  97- M - 01                                     $ 80,000
4.  Salamandra (Consultant)                        $125,000      (-$  50,000)

B.  CMC

1.  Stability - Current                            $60,000
2.  Post submission (12 mos., 18 mos., 24 mos.)    3 X $30,000

C.  Clinical

1.  97- M - 02                                     CRO: Three (3) months remain
                                                   @ $150,000/month

2.  97 - M - 03 + extension                        + Contract Amendment cost
3.  97 - M - 04                                    @ $355,000
4.  97 - 05                                        + Acceleration costs $225,000

D.  NDA Preparation

Hoyle & Assoc. or Salamandra                       $300,000

E.  Regulatory Consultants - General

1.  Hoyle & Assoc.                                 $120,000
2.  Salamandra                                     $ 60,000

<PAGE>

                             SCHEDULE 7.2(A)(II)(C)

Study                                                       Budget

A. Clinical

   6. d-methylphenidate in adults with               $145,000 (-$38,819)
      Attention Deficit/Hyperactivity Disorder

      Lenard Adler, M.D.
      NYU School of Medicine

   7. d-methylphenidate (once-a-day dosing) in       $146,000 (-$38,006)
      children and adolescents with
      Attention Deficit Disorder

B. Preclinical

   1. Proconvulsant Activity - Mice                  $ 50,000
      A test (or the ability of d-
      methylphenidate and l-methylphenidate
      to lower the seizure threshold in mice
      NIH

   2. Ninety-Day Repeated Dose Toxicity              $230,000 (-$89,160)
      Study (with thirty day recovery period)
      of l-methylphenidate  administered BiD
      via Oral Gavage to Sprague-Dawley
      Rats.

      Redfield

<PAGE>

                                  SCHEDULE 9.2

     o  Parties:            Celgene and Novartis

     o  Products:           Methylphenidate products including all Ritalin(R)and
                            chirally pure formulations

     o  Territory:          Worldwide (except for Canada)

     o  Rights:             Exclusive to Novartis except for oncology

     o  Royalties:          -    Ascending royalties each year for Ritalin(R)QD.

                        -   Fixed royalties on the d-MPH IR (including supply of
                            finished, packaged goods).

                        -   Fixed royalties on the d-MPH PR (including supply of
                            bulk material).

                        -   Ascending royalties on the  existing  Ritalin   line
                            following approval of d-MPH IR.

     o  Milestones:         Substantial  upfront  and  milestone  payments  upon
                            submission and approval of products.

     o  R& D costs:         Novartis to reimburse Celgene

<PAGE>

                                  SCHEDULE 11.4

                                  Minimum Sales

                                       d-MPH Products and Ritalin(R)QD Net Sales
                                        (excluding Adjusted Oncology Net Sales)

Twelve-month period ending:

       24 months after Launch                   $60 Million

       36 months after Launch                   $90 Million

       48 months after Launch                  $120 Million

       60 months after Launch                  $150 MillionEXHIBIT 10.22

                  COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

                                 EXECUTION COPY

         THIS  COLLABORATIVE  RESEARCH AND LICENSE AGREEMENT (the  "AGREEMENT"),
effective the 20 day of December, 2000 (the "EFFECTIVE DATE"), is by and between
NOVARTIS  PHARMA  AG, a  corporation  organized  under  the laws of  SWITZERLAND
("NOVARTIS"), having its principal place of business at Lichtstrasse 35, CH-4000
Basel, Switzerland, and CELGENE CORPORATION, a Delaware corporation ("CELGENE"),
having its principal place of business at 7 Powder Horn Drive, Warren, NJ 07059,
U.S.A. (each, a "PARTY" and, collectively, the "PARTIES").

                                    RECITALS

         WHEREAS,  Celgene  and its  Affiliates  (as  defined  below)  developed
expertise and acquired proprietary rights related to selective estrogen receptor
modulator   compounds  ("SERMS")  which  are  selective  for  Estrogen  Receptor
("ER")(alpha) ("ER(alpha)") in U2OS cells (the "ER(alpha)SELECTIVITY" as defined
in Section 1.16);

         WHEREAS,   Novartis  and  its  affiliates   engaged  in  the  research,
development, marketing, manufacture and distribution of pharmaceutical compounds
useful in treating or preventing human diseases and conditions; and

         WHEREAS,  the Parties  desire to engage in a joint  research  effort to
identify or  discover,  on the basis of  Celgene's  lead and library  compounds,
SERMs which are Er(alpha)Selective in U2OS cells (including, without limitation,
compounds in the SP500263 Series (as defined below),  as well as analogs thereof
made by Celgene  prior to the  Effective  Date as part of its internal  research
program  in the  Oncology  Fild (as  defined  below) to  develop  pharmaceutical
products from such  compounds  for the  treatment,  prevention  and diagnosis of
osteoporosis and for other indications as described herein.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
mutual covenants herein contained, Novartis and Celgene agree as follows:

1.       DEFINITIONS

         For the purposes of this Agreement,  the following terms,  whether used
in their singular or plural form,  shall have the respective  meanings set forth
below:

         1.1 "Active  Compound"  shall mean a Research  Compound  which has been
identified  or confirmed as meeting  those  criteria for  Er(alpha)  potency and
selectivity set forth in Exhibit A hereto in the Primary Field. Active Compounds
shall include,  without  limitation,  Celgene's  proprietary  compounds known as
SP500263,  SPC0001422 (formerly SP500290)and SPC0001426.  Active Compounds shall
specifically exclude Celgene's proprietary compound known as SPC0008490.

         1.2      "Additional  Field" shall mean the  treatment,  prevention and
diagnosis of a disease or disorder,  other than a disease or disorder within the
Primary Field or the Oncology Field.

                                       1
<PAGE>

         1.3      "Affiliate"  shall  mean,  with  respect  to a  Party  to this
Agreement,  any other  entity,  whether de jure or de facto,  which  directly or
indirectly  controls,  is controlled by, or is under common  control with,  such
Party.  A business  entity or Party  shall be  regarded as in control of another
business entity if it owns, or directly or indirectly  controls,  at least fifty
percent  (50%) (or such lesser  percentage  which is the  maximum  allowed to be
owned by a foreign entity in a particular  jurisdiction)  of the voting stock or
other  ownership  interest of the other entity,  or if it directly or indirectly
possesses  the  power to direct or cause the  direction  of the  management  and
policies of the other entity by any lawful means whatsoever.

         1.4      "Back-Up   Compound"  shall  mean  an  Active  Compound  which
Novartis  designates as a possible  replacement for a Final Selected Compound in
the event Novartis  abandons its development  and/or  commercialization  efforts
with respect to such Final Selected Compound.

         1.5      "Candidate  Compound"  shall mean an Active Compound which (a)
following the provisions set forth in Sections 4 and 5 hereof, has been selected
as a potential FSC Compound or a Back-Up Compound candidate but has not yet been
designated an FSC Compound or a Back-Up  Compound by Novartis,  and (b) has been
tested  in a  pharmacokinetic  study  or  other  primary  in vivo  study  (e.g.,
determination of plasma cholesterol).

         1.6      "Celgene  Approach"  shall mean primary  screening in any U2OS
cells to identify  compounds  that inhibit the IL-6 promoter in an  ER-dependent
fashion.

         1.7      "Celgene  Invention"  shall  have  the  meaning  set  forth in
Section 9.1.

         1.8 "Celgene  Patent  Rights"  shall mean all United States and foreign
patents (including, without limitation, all reissues, extensions, substitutions,
confirmations,  re-registrations,  re-examinations, revalidations and patents of
addition)  and  patent  applications   (including,   without   limitation,   all
continuations, continuations-in-part and divisions thereof) which are Controlled
by Celgene on the Effective Date or during the Research Term, or which cover any
Celgene  Inventions.  Celgene Patent Rights shall exclude,  without  limitation,
Patent Rights covering the CV Assay or the use thereof.

         1.9      "Celgene Products" shall have the meaning set forth in Section
5.4(a).

         1.10     "Collaboration"  shall  mean  the  Research  Program  and each
Party's  activities  with respect to compounds in the Primary Pool, the Oncology
Pool and the Remaining Pool.

         1.11     "Confidential  Information"  shall  the  meaning  set forth in
Section 10.1.

         1.12     "Control"  shall mean  possession  of the ability,  whether by
ownership or license,  to grant a license or  sublicense  as provided for herein
without  violating  the terms of any  agreement or other  arrangements  with any
Third Party.

         1.13     "CV Assay" shall mean Celgene's proprietary novel gene profile
assay for identifying cardiovascular-specific SERMs.

         1.14     "CV Field" shall mean the  treatment,  prevention or diagnosis
of diseases and disorders of the cardiovascular system.

                                        2

<PAGE>

         1.15  "Er(alpha)-Selectivity"  or "Er(alpha)-Selective"  shall mean the
selectivity  in Celgene's IL-6 release assay in U2OS Cells of greater than fifty
(50)-fold for ER(alpha) versus ER(beta).

         1.16     "FDA"   shall   mean   the   United   States   Food  and  Drug
Administration.

         1.17  "Field of  Cooperation"  shall  mean  research  with  respect  to
Research  Compounds for the  discovery,  development  and/or  identification  of
Active Compounds in the Primary Field.

         1.18     "Field of Use" shall mean, as applicable:

                  (a)      the Primary Field; and/or

                  (b)      any Additional Field; and/or

                  (c)      the Oncology Field.

         1.19     "Final Selected Compound" shall mean an Active Compound which,
following  Novartis' standard compound  development  procedures,  is declared an
"FSC Compound" or granted  equivalent  status by Novartis'  Research  Management
Board or some other similar body, which declaration authorizes the initiation of
preclinical   development   programs   aimed,   inter  alia,   at  the  detailed
investigation  of  those  toxicological,  bioavailability,  pharmacokinetic  and
formulation parameters whose successful completion will allow progression of the
Active Compound to Phase I Clinical Trials.

         1.20 "First Commercial Sale" shall mean, with respect to a Product, the
first sale, for payment in cash or in kind (but excluding  sales or transfers of
a Product  that is used in a  clinical  trial) to a Third  Party in a country or
jurisdiction after Regulatory  Approval has been granted by the governing health
authority of such country or jurisdiction.

         1.21     "FTE" shall mean the  equivalent  of a  full-time  twelve (12)
months'  (including normal vacations,  sick days and holidays) work of a person,
carried out by one or more employees of Celgene, who devotes a portion of his or
her time to the Research Program;  provided,  however, that Novartis understands
and agrees that Celgene retains complete discretion to change the identity,  the
frequency  and the time which any  individual  employee  devotes to the Research
Program so long as such changes shall not have a negative impact on the progress
of the Research Program.

         1.22     "IND" shall mean an investigational new drug application filed
with the FDA (pursuant to 21 CFR ss.312.3)  necessary to commence human clinical
trials of a pharmaceutical product, or the equivalent application filed with any
equivalent agency or governmental authority outside the United States (including
any  supra-national  agency such as in the European Union) necessary to commence
human clinical trials of a pharmaceutical product.

         1.23     "Independent  Research"  shall have the  meaning  set forth in
Section 4.2(a).

         1.24     "Invention" shall have  the meaning set forth in  Section 9.1.

         1.25     "Information"  shall  mean all  tangible  and  intangible  (i)
techniques,  technology,  practices,  trade secrets,  inventions (whether or not
patentable),  methods,  knowledge,  know-how,  skill, experience,  test data and
results  (including  pharmacological,

                                        3
<PAGE>

toxicological  and  clinical  test data and  results),  analytical  and  quality
control  data,   results  or  descriptions  and  software  and  (ii)  compounds,
compositions of matter,  cells, cell lines, assays, and physical,  biological or
chemical material.

         1.26     "Joint  Invention" shall have the meaning set forth in Section
9.1.

         1.27     Joint Patent  Rights" shall mean all United States and foreign
patents (including, without limitation, all reissues, extensions, substitutions,
confirmations,  re-registrations,  re-examinations, revalidations and patents of
addition)  and  patent  applications   (including,   without   limitation,   all
continuations,  continuations-in-part  and divisions  thereof)  claiming a Joint
Invention.

         1.28     "Know-How" shall mean all Information Controlled by a Party on
the  Effective  Date or during the Research Term that is necessary or useful for
the discovery,  identification,  synthesis,  development,  manufacture or use of
Active Compounds  and/or Products or, in the case of Know-How of Celgene,  after
the  Research  Term insofar and to the extent that it is necessary or useful for
the  development  or  manufacture  by Novartis  of Products  pursuant to Section
6.2(a) hereof.

         1.29     "Major  Market"  shall  mean the  United  States,  the  United
Kingdom, Germany, France, Italy, Spain, Switzerland, or Japan.

         1.30     "Materials" shall  have the meaning set forth  in Section 3.7.

         1.31     "NDA" shall mean a new Drug Application and all amendments and
supplements thereto filed with the FDA (as more fully defined in 21 C.F.R. 314.5
et seq.),  or the equivalent  application  filed with any  equivalent  agency or
governmental  authority outside the United States (including any  supra-national
agency such as in the  European  Union)  requiring  such filing,  including  all
documents, data, and other information concerning a pharmaceutical product which
are  necessary  for  gaining  Regulatory   Approval  to  market  and  sell  such
pharmaceutical product.

         1.32 "Net Sales" shall mean,  with  respect to any Product,  the amount
billed by Novartis or its Affiliate or sublicensee to a Third Party which is not
an  Affiliate r  sublicensee  of the selling  party  (unless  such  Affiliate or
sublicensee  is the end user of such  product,  in which case the amount  billed
therefore shall be deemed to be the amount that would be billed to a Third Party
in an arm's-length  transaction)  for sales of such Product,  less the following
items, as allocable to such Product: (i) trade discounts, credits or allowances,
(ii) credits or  allowances  additionally  granted upon  returns,  rejections or
recalls (except where any such recall arises out of Novartis' or its Affiliate's
or sublicensee's gross negligence,  willful misconduct or fraud), (iii) freight,
shipping and insurance charges, (iv) taxes, duties or other governmental tariffs
(other than income taxes) and (v) government  mandated  rebates,  if any; all in
accordance  with Novartis'  standard  accounting  methods,  which methods are in
accordance with generally accepted accounting principles.

         In the event that the Product is sold as a multi-component  product and
is not separately invoiced, then Net Sales shall be based on that portion of the
total amount billed for the multi-component  product which is fairly allocatable
to the Product in comparison  with the other  components.  Such portion shall be
set in good faith negotiations between the Parties at such time as the filing of
applications for Regulatory Approval for the  multi-component  product are being
seriously considered by Novartis and will take into account all relevant

                                       4

<PAGE>

factors including relative cost and therapeutic and diagnostic  contributions of
the components and the relative  contributions of the Parties to the development
of the components.

         1.33     "Novartis  Invention"  shall  have the  meaning  set  forth in
Section 9.1.

         1.34     "Novartis  Patent  Rights"  shall mean all  United  States and
foreign  patents  (including,  without  limitation,  all  reissues,  extensions,
substitutions, confirmations,  re-registrations,  re-examinations, revalidations
and patents of addition) and patent applications (including, without limitation,
all  continuations,  continuations-in-part  and  divisions  thereof)  which  are
Controlled  by Novartis on the  Effective  Date or during the Research  Term, or
which cover any Novartis Inventions.

         1.35     "Novartis  Review  Period" shall have the meaning set forth in
Section 4.2(b).

         1.36     "Oncology  Data"  shall have the  meaning set forth in section
4.2(a).

         1.37     "Oncology  Field"  shall mean the  treatment,  prevention  and
diagnosis of cancers and, unless Novartis  provides  Celgene with written notice
during the ninety (90) day period  following the Effective  Date that is in good
faith intends to pursue research and/or development in such area, the treatment,
prevention and diagnosis of ocular diseases and disorders.

         1.38     "OVX  Study"  shall  have the  meaning  set  forth in  Section
4.2(c).

         1.39     "Patent  Rights" shall mean Celgene  Patent  Rights,  Novartis
Patent Rights or Joint Patent Rights, as applicable.

         1.40 "Phase I Clinical  Trials" shall mean that portion of the clinical
development  program which generally  provides for the first  introduction  into
humans  of  a  pharmaceutical   properties  and  clinical  pharmacology  of  the
pharmaceutical product A

         1.41     "Phase II  Clinical  Trials"  shall  mean that  portion of the
clinical  development  program  which  provides  for  the  initial  trials  of a
pharmaceutical  product on a limited number of patients for the primary  purpose
of evaluating safety, dose ranging and efficacy in the proposed indication.

         1.42     "Phase III  Clinical  Trials"  shall mean that  portion of the
clinical  development  program  which  provides  for the  continued  trials of a
pharmaceutical product on sufficient numbers of patients to establish the safety
and efficacy of a pharmaceutical product for the desired claims and indications.

         1.43     "Pool" shall mean the Primary  Pool,  the Oncology Pool or the
Remaining Pool, as applicable, each as defined below:

                  (a)      "Primary  Pool"  shall have the  meaning set forth in
Section 4.1(b);

                  (b)      "Oncology  Pool"  shall  mean  the  pool of  Research
Compounds  and  Active  Compounds  not  selected  by  Novartis  for the  further
profiling, development and commercialization in the Primary Field, as more fully
described in Sections 4.1 and 5.1.

                                        5
<PAGE>

                  (c)      "Remaining  Pool"  shall  mean the  pool of  Research
Compounds and Active  Compounds not selected by Novartis for further  profiling,
development and  commercialization in the Primary Field, as more fully described
in Sections  4.1 and 5.1,  and not  selected  by Celgene for further  profiling,
development and commercialization in the Oncology Field, as more fully described
in Section 5.2(a).

         1.44     "Primary  Field"  shall  mean the  treatment,  prevention  and
diagnosis of osteoporosis.

         1.45     "Product"  shall mean a product,  whether  in  development  or
commercialized, containing any formulation or dosage of (a) a Candidate Compound
or a Final  Selected  Compound or a Back-Up  Compound  substituted  for any such
final  Selected  Compound  or (b) a compound  (i) which is a  derivative  of any
Research  Compound  discovered  by Novartis  after the  Research  Term,  or (ii)
identified,  discovered or developed at any time using Confidential  Information
of Celgene, in each of the cases described in Section 3.8 hereof; and shall mean
a Primary Product or an Additional Product, each as defined below:

                  (a)      "Primary  Product"  shall  mean  a  product  selected
pursuant  to the  provisions  of  Sections  4.1 and 5.1 hereof  for  development
primarily in the Primary Field and secondarily in Additional Fields.

                  (b)  "Additional  Product"  shall mean (a) a Product  selected
pursuant to the provisions of Section 5.3 hereof for  development in one or more
Additional  Fields and (b) a Product that was  initially  developed as a Primary
Product but whose  development in the Primary  Field,  but not in the Additional
Field(s)  for  which  it is also  being  developed,  had to be  discontinued  by
Novartis for scientific or commercial or strategic reasons.

         A  Primary  Product  and an  Additional  Product  may  also  be used in
combination  with  any  other  pharmaceutical  product  or as a  component  of a
multi-component product.

         1.46     "Project  Contact Persons" shall have the meaning set forth in
Section 2.6.

         1.47     "Regulatory Approval" shall mean any approval (including price
and reimbursement approvals),  licenses,  registrations or authorizations of any
supra-national, federal, state or local regulatory agency, department, bureau or
other government entity,  necessary for the manufacture,  use, storage,  import,
transport or sale of a pharmaceutical product in a regulatory jurisdiction.

         1.48   "Research   Compound"   shall   mean  (a)  any   SERM   that  is
Er(alpha)Selective  that is Controlled  by Celgene as of the  Effective  Date or
during the  Research  Term and (b) any  derivative  or isomer  thereof  which is
Controlled by a Party  whether  during or after the Research  Term,  and (c) any
other compound discovered,  identified or developed by a Party in the course and
as a result of the  Research  Program.  Research  Compounds  shall  specifically
exclude Celgene's proprietary compound known as SPC0008490.

         1.49     "Research  Management  Committee"  or  "RMC"  shall  mean  the
research  management  committee  composed  of  representatives  of  Celgene  and
Novartis described more fully in Section 2.1 hereof.

                                        6
<PAGE>

         1.50     "Research  Plan" shall mean the  detailed  description  of the
research  activities to be performed by the Parties in the Field of  Cooperation
set forth in Exhibit B hereto,  as revised from time to time by the RMC pursuant
to Section 2.5.

         1.51     "Research  Program"  shall mean the program of research in the
Field of Cooperation in which Celgene and Novartis will  participate  under this
Agreement  during the  Research  Term and which is  described  generally  in the
Research Plan.

         1.52     "Research  Term"  shall  mean the period of two (2) years from
the Effective Date, unless terminated earlier pursuant to Article 12, subject to
extension in accordance with Section 3.3.

         1.53     "Royalty  Term"  shall have the  meaning  set forth in section
7.3.

         1.54  "SP500263  Series"  shall mean  Celgene's  proprietary  compounds
claimed in U.S. Patent Application  Serial No.  09/475,776,  filed December 1999
(or any  continuation,  continuation-in-part  or division  thereof),  including,
without  limitation,  SP500263,  SPC0001422 and SPC0001426.  The SP500263 Series
shall specifically exclude Celgene's proprietary compound known as SPC0008490.

         1.55     "Territory" shall mean the entire world.

         1.56     "Third  Party"  shall mean a party  other than a Party and its
Affiliates.

         1.57     "U2OS Cells" shall mean (a)  Celgene's  patent U2OS cell line,
(b)  Celgene's  ER(alpha)-transfected  U2OS cell line  (clone #:  B-11),  or (c)
Celgene's ER(beta)-transfected U2OS cell line (clone#: 10).

         1.58     "Valid  Claim"  shall mean either (a) a claim of an issued and
unexpired  patent  included within the Celgene Patent Rights or the Joint Patent
Rights, which has not been held permanently revoked, unenforceable or invalid by
a decision of a court or other  governmental  agency of competent  jurisdiction,
unappealed  within the time allowed for appeal,  and which has not been admitted
to be invalid or unenforceable through reissue or disclaimer or otherwise or (b)
a claim of a pending  patent  application  included  within the  Celgene  Patent
Rights or the Joint Patent  Rights,  which claim was filed in good faith and has
not been abandoned or finally  disallowed  without the  possibility of appeal or
refiling of said application.

2.       RESEARCH PROGRAM GOVERNANCE.

         2.1      RESEARCH   MANAGEMENT   COMMITTEE.    The   Research   Program
established by this Agreement shall be overseen by a committee composed of three
(3)  representatives  of Novartis and three (3)  representatives of Celgene (the
"RESEARCH  MANAGEMENT  COMMITTEE" or "RMC").  The Parties shall  designate their
representatives  on the RMC within ten  business  (10) days after the  Effective
Date.  A Party may change one or more of its  representatives  to the RMC at any
time. An alternate  member  designated by a Party may serve  temporarily  in the
absence  of a  permanent  member of the RMC for such  Party.  Each  Party  shall
designate one of its  representatives as a Co-Chair of the RMC. Each Co-Chair of
the RMC will be responsible  for the agenda and the minutes of  alternating  RMC
meetings.

                                        7
<PAGE>

         2.2      MEETINGS OF THE RMC. The RMC shall hold meetings at such times
and places as shall be determined by the RMC, and may conduct meetings in person
or by video  conference or telephone  conference.  Face-to-face  meetings  shall
alternate between the research offices of each Party, and shall be held not less
frequently  than once every three (3) months  during the Research  Term.  Either
party may permit additional  employees and consultants to attend and participate
(on a  non-voting  basis) in the RMC  meetings,  subject to the  confidentiality
provisions of Article 10.

         2.3      MINUTES.  Promptly after each meeting  (whether held in person
or by  telecommunication),  the  responsible  Co-Chair  shall  prepare  or  have
prepared the minutes  reporting in  reasonable  detail the actions  taken by the
RMC,  the  status of the  Research  Program,  issues  requiring  resolution  and
resolutions  of previously  reported  issues,  which minutes are to be signed by
each Co-Chair of the RMC.

         2.4      RMC  ACTIONS.  Actions by the RMC  pursuant to this  Agreement
shall be taken, in person or by proxy, only with unanimous consent of all of the
representatives  of the RMC. Any  disagreement  among members of the RMC will be
resolved within the RMC based on the efficient  achievement of the objectives of
this  Agreement.  In the event that the RMC  cannot  reach  agreement  as to any
matter that is subject to its  decision-making  authority,  the matter  shall be
referred  to the  Chief  Executive  Officer  of  Celgene  and the Head of Global
Research of Novartis for resolution.

         2.5      RMC FUNCTIONS AND POWERS. The RMC shall be responsible for the
overall  supervision and management of the Research  Program and the regular and
prompt  determination  of whether an Active Compound shall be, or continue to be
(as applicable),  included in the Primarily Pool. The principal functions of the
RMC will be to foster the collaborative  relationship  between the Parties,  and
the RMC shall in particular:

                  (a)      develop and approve the  Research  Plan for each year
of the Research Term determining in detail the activities to be performed by the
Parties under the Research Program;

                  (b)      periodically  review the  Research  Plan and  approve
amendments thereto as necessary;

                  (c)      facilitate  and  monitor  the   technology   transfer
between the Parties;

                  (d)      monitor the progress of the Research Program;

                  (e)      create and maintain records of (i) Research Compounds
studied and Active Compounds  identified in the course of the Research  Program,
(ii)  Candidate  Compounds,  Final  Selected  Compounds  and  Back-Up  Compounds
selected by Novartis  from the Primary  Pool or the  Remaining  Pool for further
research and development, (iii) Research Compounds and Active Compounds selected
by Celgene from the Oncology Pool or the Remaining Pool for further research and
development,  (iv) the  Field(s)  of Use  being  pursued  by  Novartis  for each
Candidate  Compound,  Final Selected  Compound and Back-Up  Compound and (v) any
Additional  Field(s)  with respect to which  Celgene has  obtained  rights under
Section 5.4;

                  (f)      encourage  and  facilitate  ongoing  cooperation  and
information exchange between the Parties; and

                                       8
<PAGE>

                  (g)      review patent issues related to Inventions.

         2.6      PROJECT CONTACT  PERSONS.  Each Party shall appoint a "PROJECT
CONTACT  PERSON" to perform the day-to-day  interactions  with the other Party's
Project  Contact  Person and to manage the  day-to-day  conduct of the  Research
Program.

         2.7      OBLIGATIONS OF PARTIES. Novartis and Celgene shall provide the
RMC and its authorized  representatives  with  reasonable  access during regular
business hours to all records and documents of the respective  Parties  specific
to the Research Program that the RMC may reasonably  require in order to perform
its   obligations   hereunder,   subject  to  any  bona  fide   obligations   of
confidentiality to a Third Party.

3.       CONDUCT OF THE RESEARCH PROGRAM

         3.1      OBJECTIVES.  Subject  to the  terms  and  conditions  of  this
Agreement,  Celgene and Novartis shall conduct collaborative research activities
in the Field of Cooperation in accordance  with the Research Plan with the goals
of (a)  developing  and  commercializing  one or more  Active  Compounds  in the
SPS00263 Series, and (b) identifying,  through a chemical derivatisation program
conducted by Celgene with Novartis' participation, one or more Back-Up Compounds
with optimized properties and continuing to profile the effect of such compounds
biologically.

         3.2.     CONDUCT OF THE RESEARCH. Promptly after the Effective Date and
from time to time as necessary during the course of the Research  Program,  each
Party will disclose to the other the Know-How and Patent Rights of such Party as
the other Party  reasonably  needs to conduct its obligations and assigned tasks
assigned in the Research Plan. Each Party shall conduct its activities  assigned
in the Research  Plan in a good  scientific  manner,  and in  compliance  in all
material  respects with the  requirements of applicable laws and regulations and
with applicable good laboratory practices and good manufacturing  practices,  to
attempt to achieve its  objectives  efficiently  and  expeditiously.  Each Party
shall  maintain  laboratories,  offices  and  all  other  facilities  reasonably
necessary to carry out the  activities to be performed by such Party pursuant to
the Research Plan. In conformity with standard  pharmaceutical and biotechnology
industry  practices and the terms and conditions of this  Agreement,  each Party
shall  prepare  and  maintain,  or shall cause to be  prepared  and  maintained,
complete and accurate written records,  accounts,  notes,  reports and data with
respect to activities  conducted  pursuant to the Research Program and, upon the
other Party's written request, shall send legible copies of the aforesaid to the
other  Party.  Upon  reasonable  advance  notice,  each Party agrees to make its
employees and non-employee  consultants reasonably available at their respective
places of  employment to consult with the other Party on issues  arising  during
the Research  Program and in  connection  with any request  from any  regulatory
agency, including,  without limitation,  regulatory,  scientific,  technical and
clinical testing issues.

         3.3.     RESEARCH TERM EXTENSION.  Novartis shall have the option,  but
not the obligation,  in its sole discretion,  to extend the Research Team for an
additional  one (1) year period  subject to its payment of the funding  provided
for in Section 3.4.  Novartis shall  exercise such option,  if at all, by giving
Celgene  written notice not less than ninety (90) days prior to the second (2nd)
anniversary of the Effective Date.

         3.4.     RESEARCH  COMMITMENT  AND  PRIMARY  DATA  ACCESS.  During  the
Research  Term,  the Parties shall  diligently  conduct the Research  Program in
accordance  with the  Research  Plan as  revised  from  time to time by the RMC.
Without limiting the generality of

                                       9
<PAGE>

the  foregoing,  Celgene  shall  devote to the Research  Program  eight (8) FTEs
during each year of the Research Term; provided,  however,  that Celgene may, in
its sole  discretion,  devote  such  additional  number of FTEs to the  Research
Program as it deems appropriate;  and provided, further, that if Novartis elects
to extend the Research  Term in  accordance  with Section  3.3,  Novartis  shall
provide,  unless  otherwise  agreed by the Parties in writing,  funding for such
eight (8)  Celgene  FTEs for such third (3rd) year of the  Research  Team at the
rate to be  agreed by the  Parties,  which  rate  shall in no event be less than
$250,000 per FTE. The amounts due to Celgene under the preceding  sentence shall
be payable in advance in equal quarterly  installments  for the third (3rd) year
of the Research Term,  within twenty (20) business days of receipt of an invoice
from Celgene.

         Celgene shall grant Novartis access to all primary data generated by or
on behalf of Celgene in the course of the Research Program.  Novartis shall have
the  right,  at  reasonable  intervals  (but not more  frequently  than once per
quarter), at Novartis' own expense and subject to the confidentiality provisions
of this  Agreement,  to make copies of Celgene's  primary data for archiving and
regulatory purposes.

         3.5      RESEARCH  REPORTS.  Each Party each shall keep the other Party
fully  informed as to all  discoveries  and technical  developments  (including,
without  limitation,  any  Inventions)  made  under  the  Research  Program.  In
particular,  Celgene and Novartis  each shall  prepare,  and  distribute  to all
members of the RMC, no later than ten (10)  business  days prior to the next RMC
meeting,  a reasonably  detailed written summary report, in such form and format
and setting forth such information  regarding the Research Program as determined
from time to time by the RMC.  Nothing  herein  shall  require  either  Party to
disclose  information  received from a Third Party which remains subject to bona
fide confidentiality obligations to such Third Party.

         3.6      SUBCONTRACTS.  Novartis  and Celgene may perform some of their
obligations under the Research Plan through one or more subcontractors, provided
that  (i) none of the  rights  of  either  Party  hereunder  are  diminished  or
otherwise  adversely affected as a result of such  subcontracting,  and (ii) the
subcontractor  undertakes in writing  obligations of confidentiality and non-use
regarding  Confidential  Information  which are  substantially the same as those
undertaken  by the Parties  pursuant to Article 10 hereof.  In the event  either
Party performs one or more of its obligations  under the Research Plan through a
subcontractor,  then  such  Party  will  at all  times  be  responsible  for the
performance and payment of such subcontractor.

         3.7      MATERIALS  TRANSFER.  In  order  to  facilitate  the  Research
Program,  either  Party  may  provide  to the  other  Party  certain  biological
materials  or  chemical  compounds  including,  but  not  limited  to,  Research
Compounds,   receptors,   reagents  and  screens   (collectively,   "MATERIALS")
Controlled by the supplying  Party (other than under this  Agreement) for use by
the other Party in  furtherance  of the  Research  Program.  Except as otherwise
provided under this Agreement,  all such Materials  delivered to the other Party
will  remain the sole  property  of the  supplying  Party,  will be used only in
furtherance  of the  Research  Program and solely under the control of the other
Party,  will not be used or  delivered  to or for the benefit of any Third Party
without the prior written consent of the supplying  Party,  and will not be used
in research or testing involving human subject unless  specifically agreed to by
the supplying  Party in writing.  The Materials  supplied under this Section 3.7
must be used with prudence and  appropriate  caution in any  experimental  work,
because  not all of  their  characteristics  may be  known.  THE  MATERIALS  ARE
PROVIDED "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
INCLUDING

                                       10

<PAGE>

WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY
PARTICULAR  PURPOSE  OR ANY  WARRANTY  THAT  THE USE OF THE  MATERIALS  WILL NOT
INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

     3.8  RESTRICTED ACTIVITIES.

          (A) Each Party  shall be free to  conduct  research,  development  and
commercialization   in  any  field  with   respect  to   compounds   other  than
ER(alpha)-Selective SERMs.

          (B) Celgene Provisions during Research Term: During the Research Term,
Celgene shall collaborate exclusively with Novartis to identify  ER(alpha)-SERMs
in the Primary Field.

          (C) Novaris Provisions during Research Term: During the Research Term,
neither  Novartis  nor any of its  Affiliates  shall  (i)  identify  or  conduct
research with respect to any ER(alpha)-Selective SERM in the Primary Field using
the Celgene  Approach except as part of the Research  Program or (ii) develop or
commercialize any  ER(alpha)-Selective  SERM in the Primary Field except as part
of the  Research  Program.  Novartis is free,  however,  to identify and develop
ER(alpha)-Selective  SERMs  covered by the terms of this  Agreement in any other
indication (including oncology); provided that Novartis does not use the Celgene
Approach,  provided further that to the extent such compounds are derivatives of
the  SP500263  Series or  derivatives  of  Research  Compounds,  or  discovered,
identified or developed  using any  Confidential  Information  of Celgene,  such
compounds  shall be subject to the  provisions  of Sections 7.2, 7.3 and 7.4 and
Article 8 hereof.

          During the Research Term,  Novartis shall not be allowed to enter into
research    alliances    with   any   Third   Parties   aimed   at   identifying
ER(alpha)-Selective SERMs in the Primary Field using the Celgene Approach.

          (D) Novartis Provisions after Research Term:  Following  expiration of
the Research Term and subject to Section  3.8(e) below,  Novartis shall have the
right to conduct,  internally or in collaboration with Third Parties,  research,
development   or   commercialization    with   respect   to   SERMs   that   are
ER(alpha)-Selective,   provided  that  (a)  Novartis   and/or  its  Third  Party
collaborators,  as applicable,  do not use the Celgene Approach,  and (b) to the
extent such compounds are  derivatives of the SP500263  Series or derivatives of
Research  Compounds,  or discovered,  identified or developed using Confidential
Information  of Celgene,  such  compounds  shall be subject to the provisions of
Sections 7.2, 7.3 and 7.4 and Article 8 hereof. If, following the Research Term,
Novartis pursues,  internally or in collaboration  with Third Parties,  any such
research,    development    or    commercialization    of    SERMS    that   are
ER(alpha)-Selective,  then  Novartis  shall keep  Celgene  informed on important
pre-clinical and clinical  milestones for  ER(alpha)-Selective  SERM development
compounds not covered by this Agreement,  both internally  developed by Novartis
or licensed in by Novartis (such as initiation of toxicology and safety studies,
IND filing, commencement of Phase I, Phase II and Phase III Clinical Trials, NDA
filing and Regulatory  Approval),  in order to permit Celgene to ascertain:  (x)
Novartis' diligence in pursuing  development and  commercialization  of Products
hereunder relative to such other compounds; and (y) whether any payments are due
to Celgene  under  Sections  7.2,  7.3 and/or  7.4 hereof  with  respect to such
compounds.

                                       11

<PAGE>
          (E) Development  Compounds  Licensed-In by Novartis: In the event that
Novartis,  during the term of this  Agreement,  licenses  from a Third Party any
ER(alpha)-Selective SERM that is at the same or at a more advanced developmental
stage in an indication  for which also a Product is being  developed by Novartis
(unless such licensed compound is at a development stage so significantly  ahead
of such Product that it can be reasonably  assumed in both Parties' opinion that
it will not negatively  affect the  commercial  potential of a Product) then all
rights to such  Product  with  respect to such  indication  shall revert back to
Celgene.

4.   ACTIVE COMPOUNDS

     4.1  IDENTIFICATION OF ACTIVE COMPOUNDS IN THE PRIMARY FIELD.

          (A)  Celgene,   with  such  participation  of  Novartis  personnel  as
determined by the RMC, shall perform  chemical  derivatisation  activities  with
respect to the  SP500263  Series and other  Research  Compounds  in the Field of
Cooperation in accordance with the Research Plan.  Research  Compounds shall, as
promptly as practicable,  be tested as provided in the Research Plan in order to
identify  compounds  which meet the  criteria for Active  Compounds.  Each Party
shall promptly  disclose the results of such activities to the RMC in accordance
with Section 3.5 hereof.

          (B) Upon the  determination  that a Research  Compound  satisfies  the
criteria for an Active Compound,  then such Active Compound shall become part of
a  pool  of   Active   Compounds   for   potential   further   development   and
commercialization  by Novartis in the Primary Field in accordance with the terms
of this Agreement (the "PRIMARY POOL").

               (i) Any Research  Compound  which is determined by the RMC (which
determination  shall be noted in the minutes of the  applicable RMC meeting) not
to meet the  criteria  for  Active  Compounds  shall,  upon such  determination,
automatically  be excluded  from the Primary  Pool and  included in the Oncology
Pool, subject to Section 5.2(a) and 5.2(b).

               (ii) On a regular and prompt basis during the Research  Term, the
RMC shall  determine in good faith which of the Active  Compounds in the Primary
Pool are no longer viable  candidates  for further  profiling,  development  and
commercialization  for use in the Primary  Field (which  determination  shall be
noted  in  the  minutes  of  the  applicable   RMC  meeting),   and,  upon  such
determination,  such Active  Compounds shall  automatically be excluded from the
Primary  Pool and  included in the  Oncology  Pool,  subject to Section  5.2(a);
provided,  however,  that Novartis  shall have the continued  right to study all
Oncology  Pool  compounds  for their  potential in the Primary  Field and in any
Additional Field (it being understood that Novartis may only obtain a license to
develop or  commercialize  any such compound after such compound becomes part of
the Remaining Pool).

     4.2  CELGENE ACTIVITIES.

          (A) Celgene shall have the right,  in its  discretion  and at its sole
expense,  to perform  chemical  derivatisation  activities  outside the Research
Program  with  respect  to  compounds  in the  SP500263  Series in  addition  to
Celgene's  proprietary compounds known as SP500263,  SPC0001422,  and SPC0001426
and other Research Compounds  (including,  without limitation,  Active Compounds
within the Primary Pool) in the Oncology Field (the

                                       12
<PAGE>

"INDEPENDENT RESEARCH"). Novartis hereby acknowledges that Celgene has, prior to
the Effective Date, made analogs of the compounds in the SP500263 Series as part
of Celgene's internal research program and that such analogs shall be subject to
the provisions of this Section 4.2. Celgene shall promptly  disclose to Novartis
any Active  Compounds  identified or discovered by Celgene in the course of such
activities.  Without  limiting the  generality of the  foregoing,  Celgene shall
disclose to Novartis in writing, with respect to each Active Compound identified
or discovered by Celgene in the course of the Independent  Research  information
regarding  the potency of such Active  Compound for  inhibition  of II-6 release
from ER(alpha) or  ER(beta)-transferred  U2OS cells, and the chemical  structure
and MCF7 cell and, optionally,  other  selected  tumor cell line profile of such
Active Compound  (collectively,  the "ONCOLOGY DATA"). Upon Celgene's disclosure
to Novartis  of, the  Oncology  Data with  respect to an Active  Compound,  such
Active Compound shall become part of the Primary Pool, subject to the provisions
of this Section 4.2.

          (B) As soon as  practicable  (and in any event within thirty (30) days
or such longer period as noted in the RMC minutes)  following  Novartis' receipt
of Oncology Data regarding any Active  Compound  pursuant to Section 4.2(a) (the
"NOVARTIS  REVIEW  PERIOD"),  Novartis  shall in good  faith  either  (i) inform
Celgene of its intention to enter such Active  Compound  into a  pharmacokinetic
study or (ii) inform Celgene of its intention to enter such Active Compound into
another  primary in vivo study (e.g.,  determination  of plasma  cholesterol) or
(iii)  notify  Celgene in writing  that  Novartis  declines  to conduct  further
research  and  development  thereon.  Novartis  shall,  within  two  (2)  months
following  any such notice  under  either (i) or (iii) above with respect to any
Active  Compound,  enter such Active  Compound into a  pharmacokinetic  study or
other  primary  in vivo  study,  as  applicable.  Any Active  Compound  of which
Novartis  does not inform  Celgene  during  the  Novartis  Review  Period of its
intention  to enter into  either (i) or (ii) above in the Primary  Field  shall,
upon the earlier of Novartis' notice to Celgene pursuant to the preceding clause
(iii)  or the  expiration  of the  Novartis'  Review  Period,  automatically  be
excluded from the Primary Pool and included in the Oncology Pool, subject to the
provisions of Section 5.2(b).

          (C)  With  respect  to each  Active  Compound  with  respect  to which
Novartis  informs  Celgene during the Novartis Review Period of its intention to
enter into a  pharmakinetic  study or another  primary in vivo study pursuant to
Section 4.2(b),  Novartis shall have twenty (20) business days after  completion
of such  study to notify  Celgene in writing  either (i) that  Novartis  in good
faith  intends to enter such Active  Compound into a 28-day  ovariectomized  rat
model in the Primary Field (each, an "OVX STUDY") or (ii) that Novartis declines
to  conduct  further  research  and  development  thereon.  Upon the  earlier of
Novartis'  notice to Celgene  pursuant to the preceding clause (ii) or Novartis'
failure to provide Celgene with any notice pursuant to the preceding  clause (i)
or (ii) prior to the  expiration  of such twenty (20)  business  day period with
respect to such Active  Compound,  such Active Compound shall  automatically  be
excluded from the Primary Pool and included in the Oncology Pool, subject to the
provisions of Section 5.2(b).

          (D) With respect to each Active Compound that Novartis elects to enter
into  an OVX  Study  pursuant  to  Section  4.2(c),  Novartis  shall  as soon as
practicable  (and in any event with  three (3)  months  after the date of notice
pursuant to Section  4.2(c)(i))  complete  such OVX Study and review the results
thereof.  On or prior to the end of such three (3) month period.  Novartis shall
disclose to the RMC the results of such OVX Study.  The RMC shall then  promptly
and in good faith  determine  whether  such Active  Compound  (x) shall become a
Candidate Compound in the Primary Field or (y) may be pursued by

                                       13

<PAGE>
Celgene  in the  Oncology  Field,  in which  case  such  Active  Compound  shall
automatically  be excluded  from the Primary  Pool and  included in the Oncology
Pool, subject to the provisions of Section 5.2(b).

          (E)  Notwithstanding  the  conditions in Sections  4.2(b)  through (d)
above, in the event that the number of Active Compounds  exceeds the capacity of
the in vivo  resources  assigned by Novaris to meet the timelines  determined in
Section 4.2(b),  4.2(c) and 4.2(d),  Celgene and Novartis shall agree such other
timelines  as both parties feel are  appropriate,  such amended  timelines to be
subsequently confirmed in writing by the Parties.

5.   SELECTION AND DEVELOPMENT OF COMPOUNDS

     5.1  SELECTION  AND  DEVELOPMENT  OF CANDIDATE  COMPOUNDS,  FINAL  SELECTED
COMPOUNDS AND BACK-UP COMPOUNDS BY NOVARTIS IN THE PRIMARY FIELD.

          (A) Novartis shall use its commercially  reasonable efforts to conduct
development on Active  Compounds within the Primary Pool in the Primary Field to
determine  whether  one or more of such  compounds  meet the  criteria  Novartis
applies to compounds to qualify for selection as Candidate  Compounds or Back-Up
Compounds or for  development as Final Selected  Compounds in the Primary Field.
Novartis  shall  keep  Celgene  informed  as to the  progress  of the  profiling
activities of all such Active Compounds.  Without limiting the generality of the
foregoing,  Novartis shall regularly,  promptly and in good faith notify Celgene
in writing of those Active Compounds as to which Novartis is no longer pursuing,
or does not  intend to  pursue,  development  in the  Primary  Field.  Upon such
notification  with respect to an Active  Compound,  such Active  Compound  shall
automatically  be excluded  from the Primary  Pool and  included in the Oncology
Pool, subject to the provisions of Section 5.2(b).

          (B) Novartis shall select from the Primary Pool those Active Compounds
which  Novartis  desires,  and in good  faith  intends,  to select as  Candidate
Compounds for  development  as Final  Selected  Compounds (or Back-Up  Compounds
therefor) in the Primary Field,  and shall give prompt notice to Celgene of each
Compound  which  has been  selected  as a  Candidate  Compound,  Final  Selected
Compound  or  Back-Up  Compound.  Novartis  hereby  agrees  that it shall not be
permitted to file an IND for the Primary Field, or for any other Field of Use as
to which  Novartis has rights  hereunder,  with  respect to any Active  Compound
hereunder without first designating such compound as a Candidate Compound, Final
Selected Compound or Back-Up Compound.  The Candidate Compounds,  Final Selected
Compounds and Back-Up Compounds  identified by Novartis as such from the Primary
Pool shall be noted in the  minutes of the RMC  meeting  immediately  succeeding
such identification.  Novartis shall use its commercially  reasonable efforts to
conduct such  preclinical and human clinical trials of Final Selected  Compounds
as Novartis determines are necessary or desirable to obtain Regulatory Approvals
to manufacture and market Products incorporating such Final Selected Compound in
the  Primary  Field  in the  Territory.  Novartis  shall  use  its  commercially
reasonable  efforts to seek all  necessary  Regulatory  Approvals  required  for
marketing  a Product in the  Primary  Field in the Major  Markets and such other
countries  where  Novartis  markets  its  own  products  of  similar  commercial
potential.

          (C) With respect to any Candidate Compounds or Final Selected Compound
or Product that Novartis is  diligently  developing  or  commercializing  in the
Primary  Field,  Novartis  may also  develop and  commercialize  such  Candidate
Compound or Final Selected Compound or Product in one or more Additional Fields,
subject to Section 5.4.

                                       14
<PAGE>

          (D)  Novartis  shall keep  Celgene  informed as to the progress of the
development of all Candidate Compounds and Final Selected Compounds and Products
in the Primary Field (and any  Additional  Field also being pursued with respect
thereto) by providing to Celgene reasonably detailed written six-monthly reports
which shall describe the progress of the development and regulatory filings with
respect to Candidate  Compounds  or Final  Selected  Compounds  or Products,  as
applicable.

          (E) Any  Active  Compounds  remaining  in the  Primary  Pool as of the
expiration  of the  Research  Term which  have not been  selected  as  Candidate
Compounds or Final  Selected  Compounds or Back-Up  Compounds  shall,  upon such
expiration,  automatically be excluded from the Primary Pool and included in the
Oncology Pool, subject to Section 5.2(a).

     5.2 SELECTION AND  DEVELOPMENT  OF COMPOUNDS BY CELGENE WITHIN THE ONCOLOGY
POOL IN THE ONCOLOGY FIELD.

          (A) Celgene may select from the Oncology Pool those Research Compounds
and/or Active  Compounds which Celgene  desires,  and in good faith intends,  to
develop as  products in the  Oncology  Field,  and shall give  prompt  notice to
Novartis of each compound which has been so selected. The Research Compounds and
Active  Compounds  selected by Celgene from the Oncology Pool for development as
products in the Oncology  Field shall be noted in the minutes of the RMC meeting
immediately  succeeding  such  selection.  Celgene  may in its  sole  discretion
develop  and  commercialize  products  containing  any  such  selected  Research
Compound or Active  Compound in the Oncology  Field.  Celgene  shall  regularly,
promptly  and in good  faith  notify  Novartis  in  writing  of  those  Research
Compounds and/or Active Compounds as to which Celgene is no longer pursuing,  or
does not  intend  to  pursue,  development  in the  Oncology  Field.  Upon  such
notification  with respect to an Active  Compound,  such Active  compound  shall
automatically  be excluded  from the Oncology Pool and included in the Remaining
Pool, subject to the provisions of Sections 5.3 and 5.4. On a regular and prompt
basis during the Research Term,  Celgene shall  determine in good faith which of
the Research  Compounds  and/or  Active  Compounds  in the Oncology  Pool are no
longer viable candidates for further development and  commercialization  for use
in the Oncology Field (which  determination shall be noted in the minutes of the
applicable RMC meeting),  and, upon such determination,  such Research Compounds
or Active  Compounds shall  automatically be excluded from the Oncology Pool and
included in the Remaining Pool.

          (B)  Novartis  shall have the right to conduct  research  outside  the
Oncology  Field with respect to Research  Compounds and Active  Compounds in the
Oncology Pool,  provided that so long as such  compounds  remain in the Oncology
Pool, they shall remain subject to the provisions of Section 5.2(a).

          (C) Any Research  Compounds and Active  Compounds  remaining in the on
Oncology  Pool as the  expiration  of the  Research  Term  which  have  not been
selected by Celgene for development and  commercialization in the Oncology Field
shall,  upon such expiration,  automatically be excluded from the Oncolgoy Pool
and included in the Remaining Pool.

                                       15

<PAGE>

     5.3 SELECTION AND DEVELOPMENT OF COMPOUNDS BY NOVARTIS WITHIN THE REMAINING
POOL IN ADDITIONAL FIELDS (ADDITIONAL PRODUCTS).

          (A) During the term of this Agreement,  Novartis may conduct  research
and development on Research  Compounds and Active Compounds within the Remaining
Pool in one or more Additional  Fields to determine  whether one or more of such
compounds  meet the  criteria  Novartis  applies to  compounds  to  qualify  for
selection as Candidate  Compounds for development as Final Selected Compounds or
for  designation as Back-Up  Compounds  therefor as Additional  Products in such
Additional Field(s). Novartis shall keep Celgene informed, in writing, as to the
progress of the research and  development  of all such  Research  Compounds  and
Active Compounds,  including,  without limitation, the Additional Field(s) being
pursued by Novartis with respect thereto.

          (B)  Novartis  may  select  from the  Remaining  Pool  those  Research
Compounds  and/or Active  Compounds  which Novartis  desires,  and in good faith
intends,  to declare as Candidate  Compounds for  development  as Final Selected
Compounds (or Back-Up Compounds  therefor) as Additional Products in one or more
Additional  Fields,  and shall give  prompt  notice to Celgene of each  compound
which has been selected as a Candidate  Compound or Final  Selected  Compound or
Back-Up Compound,  including,  without limitation, the Additional Field(s) being
pursued by Novartis with respect thereto.  Novartis hereby agrees that it shall
not be  permitted to file an IND for the  applicable  Additional  Field(s)  with
respect to any Research  Compound or Active  Compound  hereunder  without  first
designating such compound as a FInal Selected Compound or Back-Up Compound.  The
Candidate   Compounds  and  Final  Selected   Compounds  and  Back-Up  Compounds
identified by Novartis as such from the Remaining  Pool during the Research Term
shall be noted in the minutes of the RMC  meeting  immediately  succeeding  such
identification,  together with the applicable  Additional Field(s) for each such
compounds.  To the extent that Novartis  identifies  any Candidate  Compound or
Final  Selected  Compound or Back-Up  Compound from the Remaining Pool after the
expiration of the Research  Term,  Novartis  shall  provide  Celgene with prompt
written notice of such  identification and the applicable  Additional  Field(s).
Novartis  shall  use  its  commercially   reasonable  efforts  to  conduct  such
preclinical  and  human  clinical  trials  of Final  Selected  Compounds  in the
applicable Additional Field(s) as Novartis determines are necessary or desirable
to obtain Regulatory Approvals to manufacture and market Products  incorporating
such Final  Selected  Compound in such  Additional  field(s)  in the  Territory.
Novartis  shall use its  commercially  reasonable  efforts to seek all necessary
Regulatory  Approvals  required  for  marketing  a  Product  in such  Additional
Field(s) in the Major Markets and such other  countries  where Novartis  markets
its own products of similar commercial potential.

          (C)  Novartis  shall keep  Celgene  informed as to the progress of the
development of all Final Selected Compounds and Primary and Additional  Products
in any  Additional  Field by providing to Celgene  reasonably  detailed  written
six-monthly  reports which shall  describe the progress of the  development  and
regulatory  filings  with  respect  to  Candidate  Compounds  or Final  Selected
Compounds or Products, as applicable.

     5.4 SELECTION AND  DEVELOPMENT  OF COMPOUNDS  WITHIN THE REMAINING  POOL BY
CELGENE IN ADDITIONAL FIELDS.

          (A) Subject to the  provisions of Sections  6.1(a) and 6.1(b)  hereof,
Celgene may, at any time during the term of this  Agreement,  notify Novartis of
Celgene's  interest in pursuing  research and development of Research  Compounds
and/or Active Compounds

                                       16
<PAGE>

included in the Remaining  Pool (to the extent that such  compounds are not then
Candidate Compounds or Final Selected Compounds or Back-Up Compounds of Novartis
in one or more  Additional  Fields) in any  Additional  Field  which is not then
being pursued by Novartis,  as reflected in Novartis'  six-monthly reports under
Sections 5.1(d) and 5.3(c).  Promptly  following such notice,  the Parties shall
discuss in good faith their respective  interests in pursuing such compounds and
such Additional  Field and, if Novartis is neither  pursuing,  nor in good faith
planning to commence,  research and development of (x) any Research Compounds or
Active Compounds in such Additional  Field and (y) such Research  Compound(s) or
Active  Compound(s),  as the  case may be,  in any  Additional  Field,  then (i)
Celgene shall have the right to pursue research and development of such Research
Compound(s)  and/or Active  Compound(s)  within the Remaining  Pool that are not
being  pursued by Novartis in such  Additional  Field and to  commercialize  any
resulting products (''CELGENE PRODUCTS'') in such Additional Field, and (ii) for
so long as Celgene is using  commercially  reasonable  and  diligent  efforts to
develop  and  commercialize  Celgene  Products  in such  Additional  Field,  the
Research  Compound(s)  and/or  Active  Compound(s)  contained  in  such  Celgene
Products  shall be excluded from the license  granted to Novartis  under Section
6.2(a).

          (B) In the event that  during the term of this  Agreement,  subject to
the provisions of Sections  6.1(a) and 6.1(b) hereof,  Celgene  desires to grant
any development and commercialization license to a Third Party with respect to a
Celgene  Product in its  applicable  Additional  Field,  Celgene  shall  provide
Novartis with written notice thereof and hereby grants  Novartis the first right
of negotiation with respect to such Celgene Product in the applicable Additional
Field in accordance with this Section 5.4(b).  With respect to each such Celgene
Product that Celgene may offer pursuant to this Section  5.4(b),  Novartis shall
within thirty (30) business days after receipt of such notice notify  Celgene in
writing either that (i) Novartis is interested in  negotiating  for an exclusive
commercialization license with respect to such Celgene Product in the applicable
Additional  Field or (ii)  Novartis  has no interest and  therefore  waives such
right of first  negotiation.  If Novartis  notifies Celgene within (30) business
days that  Novartis  desires to negotiate  for such  license,  the parties shall
negotiate  in good faith for up to ninety  (90) days from such  notification  or
such longer period as agreed between the Parties regarding the terms pursuant to
which Novartis would obtain such license.  Failure by Novartis to give notice of
its interest or lack of interest in negotiating for such license with respect to
a Celgene  Product  within  thirty (30)  business  days after receipt of written
notice from Celgene as described  in the first  sentence of this Section  5.4(b)
shall be  deemed  to  constitute  a waiver  by  Novartis  of its  right of first
negotiation  with respect to such Celgene Product.  In addition,  failure of the
Parties to agree within such ninety(90) day  negotiation  period (or such longer
period as agreed  between the Parties) shall be deemed to constitute a waiver by
Novartis of such right of first negotiation. If Novartis waives or its deemed to
waive its right of first  negotiation  with respect to any such Celgene Product,
then Celgene shall be free to license such Celgene  Product to a Third Party and
Novartis shall have no further rights with respect to such Celgene Product.

          (C) Any Research Compound,  Active Compound and/or Additional Field to
which a Party obtains  rights under  Sections 5.1 through 5.4 (whether by notice
or by failure to provide  notice within the allowed time period,  if any) during
the Research  Term shall be noted in the minutes of the RMC meeting  immediately
succeeding such event. Any Research Compound.  Active Compound and/or Additional
Field to which a Party obtains rights under Sections 5.1 through 5.4 (whether by
notice or by failure to provide notice within

                                       17
<PAGE>

the allowed time period,  if any) after the Research Term shall be documented in
a writing signed by each Party.

    5.5 CV ASSAY.

         (A) Novartis  hereby  acknowledges  that Celgene has  developed  the CV
Assay and agrees that,  notwithstanding  any other  provision of this Agreement,
Celgene shall have the right, in its sole discretion and at its expense,  to use
the CV Assay outside the Research  Program to conduct  optimization  and related
activities  with respect to Research  Compounds  (excluding  Research  Compounds
within the SP500263  Series).  The  foregoing  right shall not affect  Novartis'
rights  under this  Agreement  to optimize  Research  Compounds,  whether or not
within the SP500263 Series, for cardiovascuylar  properties or indications using
Novartis  resources.  Promptly  following  the  Effective  Date,  Celgene  shall
disclose information  regarding the CV Assay to Novartis,  and the parties shall
discuss in good faith a separate  collaborative  arrangement with respect to the
CV Assay  should  Novartis  have  interest  in such an  arrangement.  Except  as
expressly set forth in a written  agreement  memorializing  such an arrangement,
Novartis  shall have no right or license to use,  or to cause  Celgene to use on
its behalf, the CV Assay.

          (B) In the  event  that  the  Parties  do not  enter  into a  separate
collaborative  arrangement  with respect to the CV Assay and, during the term of
this  Agreement,  Celgene  desires to grant any  commercialization  license to a
Third Party with respect to a Research  Compound  discovered  through the use of
the CV Assay in the CV Field, Celgene shall provide Novartis with written notice
thereof and hereby grants  Novartis the first right of negotiation  with respect
to such  Research  Compound  in the CV Field in  accordance  with  this  Section
5.5(b).  With  respect to each such  Research  Compound  that  Celgene may offer
pursuant to this Section 5.5(b). Novartis shall within thirty (30) business days
after receipt of such notice notify  Celgene in writing either that (i) Novartis
is interested in  negotiating  for an exclusive  commercialization  license with
respect  to such  Research  Compound  in the CV  Field or (ii)  Novartis  has no
interest  and  therefore  waives  such right of first  negotiation,  if Novartis
notifies  Celgene  within thirty (30)  business  days that  Novartis  desires to
negotiate for such license,  the parties shall negotiate in good faith for up to
ninety (90) days from such  notification or such longer period as agreed between
the Parties  regarding the terms  pursuant to which  Novartis  would obtain such
license.  Failure by Novartis to give notice of its interest or lack of interest
in  negotiating  for such  license with  respect to any such  Research  Compound
within thirty (30) business days after receipt of written notice from Celgene as
described  in the  first  sentence  of this  Section  5.5(b)  shall be deemed to
constitute a waiver by Novartis of its right of first  negotiation  with respect
to such Research Compound.  In addition,  failure of the Parties to agree within
such ninety (90) day negotiation period (or such longer period as agreed between
the Parties) shall be deemed to constitute a waiver by Novartis of such right of
first  negotiation.  If Novartis waives or is deemed to waive its right of first
negotiation with respect to any such Active Compound, then Celgene shall be free
to license such Research  Compound to a Third Party in the CV Field and Novartis
shall have no further rights with respect to such Research Compound.

     6. LICENSE GRANTS

     6.1 RESEARCH TERM LICENSE GRANTS.

         (A)  GRANTS BY  CELGENE.  Subject  to the terms and  condition  of this
Agreement:

                                       18

<PAGE>

              (i)  Celgene  hereby  grants  to  Novartis  and its  Affiliates  a
worldwide, non-exclusive, non-transferable, royalty-free research license during
the Research  Term under  Celgene  Patent  Rights,  Celgene's  interest in Joint
Patent  Rights and  Know-How of Celgene  solely for the purpose of carrying  out
Novartis' responsibilities under the Research Program.

              (ii)  Celgene  hereby  grants to  Novartis  and its  Affiliates  a
worldwide non-exclusive, non-transferable,  royalty-free research license during
the Research  Term under  Celgene  Patent  Rights,  Celgene's  interest in Joint
Patent  Rights and  Know-How  of Celgene  solely for the  purpose of  conducting
research in one or more Additional Fields.

         (B) GRANT BY  NOVARTIS.  Subject  to the terms and  conditions  of this
Agreement,  Novartis  hereby  grants to Celgene and its  Affiliates a worldwide,
non-exclusive   non-transferable,   royalty-free  research  license  during  the
Research Term under Novartis Patent Rights,  Novartis'  interest in Joint Patent
Rights and Know-How of Novartis solely for the purpose of carrying out Celgene's
responsibilities under the Research Program.

     6.2 ADDITIONAL RESEARCH AND COMMERCIALIZATION LICENSE GRANTS.

         (A) GRANT BY  CELGENE.  Subject  to the terms  and  conditions  of this
Agreement (including,  without limitation, the obligations under Sections 6.4(a)
and (b)), Celgene hereby grants to Novartis and its Affiliates (x) an exclusive,
royalty-bearing  license in the Territory,  with the right to sublicense,  under
Celgene Patent Rights, Celgene's interest in Joint Patent Rights and Know-How of
Celgene to  develop,  make,  have  made,  use,  sell,  offer for sale and import
Products  in  all  Fields  of  Use,  and  (y)  non-exclusive,  non-transferable,
royalty-free  research  license in the Terriroty  under Celgene  Patent  Rights,
Celgene's interest in Joint Patent Rights and Know-How of Celgene solely for the
purpose  of  conducting  research  on  Research  Compounds,   Active  Compounds,
Candidate  Compounds,  Final  Selected  Compounds  and Back-Up  Compounds in all
Fields of Use; provided, however, that:

              (i) with respect to Additional  Products,  Novartis' license under
this Section 6.2(a) to develop,  make, have made, use, sell,  offer for sale and
import such Additional  Products in any Additional Field shall be subject to the
provisions of Sections 5.2, 5.3 and 5.4; and

              (ii) with respect to Primary  Products,  Novartis shall be free to
develop,  make,  have made,  use,  sell,  offer for sale and import such Primary
Products in any  Additional  Field,  but  Novartis'  license  under this Section
6.2(a) to  develop,  make,  have made,  use,  sell,  offer for sale and import a
Primary Product in the Oncology Field shall become effective

                   (1) for the  prevention  of  cancer,  only upon  start of the
Phase III Clinical Studies with such Primary Product in the Primary Field; and

                   (2) for the therapy of cancer: only upon the First Commercial
Sale of such Primary Product in a Major Market in the Primary Field.

         (B) GRANT BY  NOVARTIS.  Subject  to the terms and  conditions  of this
Agreement,  Novartis  hereby grants to Celgene and its  Affiliates an exclusive,
fully-paid  license  in the  Territory,  with  the  right to  sublicense,  under
Novartis Patent Rights, Novartis'

                                       19
<PAGE>

interest in Joint Patent Rights and Know-How of Novartis to develop,  make, have
made, use, sell, offer for sale and import:

         (i) pharmaceutical  products  containing  Research Compounds and Active
Compounds  selected by Celgene from the Oncology Pool pursuant to Section 5.2 in
the Oncology Field; and

         (ii) Celgene Products in each Additional Field to which Celgene obtains
rights under Section 5.4.

     6.3  SUBLICENSING.  Novartis shall inform Celgene of each sublicense  under
the  license  granted in Section  6.2(a)  above  promptly  after  granting  such
sublicense.  Celgene shall inform Novartis of each sublicense  under the license
granted in Section  6.2(b) above promptly  after  granting such  sublicense.  No
sublicense shall relieve a Party of any obligations  under this Agreement.  Each
Party shall ensure that the rights of the other Party are not adversely affected
by any sublicense granted pursuant to this Section 6.3.

     6.4 EXCLUSIVITY.

         (A) As long as Novartis  is using  commercially  reasonable  efforts to
diligently  develop  and/or  commercialize  at least one Primary  Product in the
Primary Field;

             (i) the  licenses  granted  to  Novartis  in Section  6.2(a)  shall
continue to be effective with respect to any Candidate Compounds, Final Selected
Compound or Back-Up  Compound  licensed  to Novartis in the Primary  Field under
this  Agreement,  subject to the milestone and royalty  payment  obligations  of
Novartis described in Article 7; and

             (ii)  Celgene  shall not  develop,  make,  have made,  use and sell
itself or through a Third Party and Er(alpha)-Selective  compound for use within
the Primary Field.

         (B) As long as Novartis  is using  commercially  reasonable  efforts to
diilgently  develop  and/or  commercialize  at least one Primary  Product in the
Primary  Field  (unless  for such  Product  initially  developed  for use in the
Primary Field, development in the Primary Field is subsequently discontinued for
scientific, commercial or strategic reasons) and at least one Additional Product
in a specific Additional Field;

             (i) the  licenses  granted  to  Novartis  in Section  6.2(a)  shall
continue  to be  effective  with  respect to any  Candidate  Compounds  or Final
Selected  Compound or Back-Up  Compound  licensed to Novartis in such Additional
Field  under  this  Agreement,  subject to the  milestone  and  royalty  payment
obligations of Novartis described in Article 7; and

             (ii)  Celgene  shall not  develop,  make,  have made,  use and sell
itself or through a Third Party and Er(alpha)-Selective  compound for use within
such Additional  Field;  provided;  however,  that Celgene shall be permitted to
pursue  the  development  and  commercialization  in the CV  Field  of  Research
Compounds  (excluding  Research Compounds within the SP500263 Series) discovered
through the use of the CV Assay in accordance with Section 5.5 hereof.

         (C)  Novartis  shall  be  deemed  to be using  commercially  reasonable
efforts  with  respect  to the  provisions  of  Section  6.4(a) and (b) above if
Novartis is actively

                                       20

<PAGE>
undertaking diligent, commercially reasonable efforts, similar to those used for
other Novartis products of comparable commercial  potential,  for the continuing
development and the  commercialization  of a Product in the applicable  Field of
Use, including,  without limitation,  the development and/or optimization and/or
further  characterization of Active Compounds within the Primary Pool, Candidate
Compounds  and/or  Final  Selected  Compounds  and/or  Products  to  which it is
licensed under Section 6.2(a),  the performance of an active derivation and lead
optimization  program with respect to Active  Compounds within the Primary Pool,
the designation of Candidate  Compounds and Final Selected Compounds and Back-Up
Compounds,  initiation of clinical trials,  submission of regulatory filings and
commercial launch of a Product.

              (d) In the event  Novartis  fails to use  commercially  reasonable
efforts as provided in Section 6.4(a) or (b) above,  as such efforts are defined
in Section  6.4(c),  and provided  that Novartis is not prevented in meeting its
obligations to use commercially reasonable efforts by force majeure,  government
regulation or intervention  or institution of a lawsuit by a Third Party),  then
Novartis'  licenses to those  indications in the Field of Use for which Novartis
fails to use commercially  reasonable  efforts shall terminate and Celgene shall
be free to research,  develop and commercialize such Research  Compound,  Active
Compound,  Final Selected Compound,  Back-Up Compound or Product alone or with a
Third Party in the applicable Field of Use.

              (e) During the Research Term,  Novartis shall provide  information
regarding its commercially  reasonable  efforts under Sections 6.4(a) and (b) to
the RMC on a quarterly  basis.  Thereafer,  during the  remainder of the term of
this  Agreement,   Novartis  shall  on  at  least  a  quarterly   basis  provide
documentation  to the reasonable  satisfaction of Celgene that Novartis is using
commercially  reasonable  efforts with respect to all Final Selected  Compounds,
Back-Up Compounds and Products.

7.        PAYMENTS

          7.1 UPFRONT FEE. In partial consideration of the grant of the licenses
set forth in Sections 6.1(a) and 6.2(a) above, Novartis agrees to pay to Celgene
on the Effective Date (subject to Section 8.1(a)) a one-time, non-refundable fee
of ten million U.S. dollars ($10,000,000).

          7.2 MILESTONE PAYMENTS.

              (a)  PRECLINICAL  MILESTONE.  Novartis  shall pay to  Celgene  the
nonrefundable  milestone  payment set forth  below in  accordance  with  Section
8.1(a):

         -----------------------------------------------------------------------
          MILESTONE EVENT                                    MILESTONE PAYMENT

          Designation of the first Final Selected Compound     $1.0 million
          in the Primary Field
         -----------------------------------------------------------------------

The foregoing milestone payment shall be payable only once.

              (b)   CLINICAL   MILESTONES.   With   respect   to  each   Product
(irrespective  of the Field of Use in which such event  occurs),  Novartis shall
pay  to  Celgene  the  nonrefundable  milestone  payments  set  forth  below  in
accordance with Section 8.1(a):

                                       21

<PAGE>

         -----------------------------------------------------------------------
          MILESTONE EVENT                                   MILESTONE PAYMENT
         -----------------------------------------------------------------------
          Submission of IND for Product                        $3.0 million
         -----------------------------------------------------------------------
          Commencement of Phase II Clinical Trials of Product  $2.0 million
         -----------------------------------------------------------------------
          Commencement of Phase III Clinical Trials of Product $4.0 million
         -----------------------------------------------------------------------
          Submission of an NDA for Product                     $6.0 million
         -----------------------------------------------------------------------
          Regulatory Approval of Product in the United States  $8.0 million
         -----------------------------------------------------------------------
          Regulatory Approval of Product in a Major Market     $4.0 million
          other than the United States or Japan
         -----------------------------------------------------------------------
          Regulatory Approval of Product in Japan              $2.0 million
         -----------------------------------------------------------------------

provided,  however,  that if (i) a Product is abandoned during development after
one or more of the milestone  payments  under this Section  7.2(b) has been made
and (ii) a Product  comprising or containing a Back-Up Compound is developed for
the same indication as the abandoned Product to replace such abandoned  Product,
then only those  milestone  payments  under this  Section  7.2(b)  that were not
previously  made with respect to such  abandoned  Product  shall be payable with
respect to the Product comprising or containing such Back-Up Compound.  Payments
made to Celgene pursuant to this Section 7.2 are  non-refundable  and may not be
credited  against any other  payments  payable by Novartis to Celgene under this
Agreement.

         7.3  ROYALTIES.  Subject to the  provisions of this Article 7, Novartis
shall pay to Celgene  royalties on Net Sales of Products in the Territory at the
following rates:

              (a) Ten percent (10%) of that portion of total annual Net Sales of
Products that is less than $500 million;

              (b) Eleven percent (11%) of that portion of total annual Net Sales
of  Products  that is equal to or  greater  than $500  million  but less than $1
billion; and

              (c) Twelve percent (12%) of that portion of total annual Net Sales
of Products that is equal to or greater than $1 billion.

provided,  however,  that royalties under this Section 7.3 shall be payable on a
country-by-country  basis for the longer of (i) the period that such  Product or
its manufacture, use or sale is covered by a Valid Claim in such country or (ii)
ten (10) years from the date of First  Commercial  Sale of such  Product in such
country (the "ROYALTY TERM").

         7.4 THIRD PARTY  ROYALTIES.  With respect to payment of royalties under
Third Party  licenses that are  necessary for Novartis'  practice of the license
granted by Celgene  under  Section  6.2(a).  Novartis  may reduce the  royalties
otherwise  owing to Celgene  hereunder on Net Sales of Products by forty percent
(40%) of the royalty  payments  made under such Third Party  license;  provided,
however,  that the royalties  otherwise  payable to Celgene under this Agreement
shall not be reduced by more than thirty percent (30%).

                                       22

<PAGE>

8.       PAYMENTS; REPORTS; AUDITS

         8.1 PAYMENT; REPORTS.

             (a) Upfront Fee and Milestone  Payments:  The payment to be made by
Novartis  to  Celgene  pursuant  to  Section  7.1  shall be made on or after the
Effective Date within ten (10) days of receipt of an invoice from Celgene, which
invoice may be delivered in advance of the  Effective  Date.  All payments to be
made by Novartis to Celgene  pursuant to Sections 7.2 and 12.2(a)  shall be made
within twenty (20) business days of receipt of an invoice from Celgene. Novartis
shall  promptly  (and in any event  within  (5)  business  days)  following  the
occurrence of any event triggering a milestone  payment under Section 7.2 above,
notify Celgene in writing of such occurrence.

             (b) Royalty Payments and Reports:  Royalty payments and reports for
the sale of Products shall be calculated and reported for each calendar quarter.
All royalty  payments due to Celgene under this  Agreement  shall be paid within
sixty  (60)  days  of  the  end  of  each  calendar  quarter,  unless  otherwise
specifically  provided herein. Each payment of royalties shall be accompanied by
a report of Net Sales of Products in sufficient detail to permit confirmation of
the accuracy of the royalty payment made, including, without limitation and on a
country-by-country  basis,  the Net  Sales  of  Products  in Swiss  Francs,  the
royalties,  in U.S. dollars,  payable,  the method used to calculate the royalty
and the exchange rates used.

         8.2 EXCHANGE RATE; MANNER AND PLACE OF PAYMENT.  All payments hereunder
shall  be  payable  in U.S.  dollars.  With  respect  to each  quarter,  for the
countries other than the United States, whenever conversion of payments from any
foreign currency shall be required, such conversion shall be made at the rate of
exchange  broadly  applied  by  the  Novartis  Group  to  all  foreign  currency
conversions  into  U.S.  dollars,  on the last  business  day of the  applicable
quarter.  All payments owed under this Agreement  shall be made by wire transfer
to a bank and  account  designated  in  writing  by  Celgene,  unless  otherwise
specified in writing by Celgene.

         8.3 PROHIBITED  PAYMENTS.  Notwithstanding  any other provision of this
Agreement,  if Novartis is  prevented  from paying any such royalty by virtue of
the statutes,  laws, codes or governmental regulations of the country from which
the payment is to be made, then such royalty may be paid by depositing  funds in
the  currency in which  accrued to  Celgene's  account in a bank  acceptable  to
Celgene in the country whose currency is involved.

         8.4 LATE PAYMENTS.  In the event that any payment,  including  royalty,
milestone and research payments, due hereunder is not made when due, the payment
shall accrue interest from the date due at the rate of one and one-half  percent
(1.5%) per month; provided, however, that in no event shall such rate exceed the
maximum legal annual interest rate. The payment of such interest shall not limit
a Party from  exercising  any other rights it may have as a  consequence  of the
lateness of the payment;  provided,  however,  that any late payment will not be
considered  a material breach of this Agreement unless such payment is more than
three (3) months overdue.

         8.5 TAXES. The party receiving  royalties and other payments under this
Agreement  will pay any and all taxes levied on account of such payment.  If any
taxes are required to be withheld by the paying  party,  it will (a) deduct such
taxes from the remitting payment,  (b) timely pay the taxes to the proper taxing
authority,  and (c) send  proof of payment to the other  Party and  certify  its
receipt by the taxing authority within sixty (60) days following such payment.

                                       23

<PAGE>

         8.6 RECORDS AND AUDITS. During the Royalty Term and for a period of six
(6)  years  thereafter,  Novartis  shall  keep  complete  and  accurate  records
pertaining  to the  development  and sale or other  disposition  of  Products in
sufficient  detail to permit Celgene to confirm the accuracy of all payments due
hereunder.  Celgene  shall  have the  right to cause an  independent,  certified
public  accountant  reasonably  acceptable  to Novartis to audit such records to
confirm Net Sales and royalty and other payments for a period  covering not more
than the preceding three (3) years.  Such audits may be exercised  during normal
business  hours  upon  reasonable  prior  written  notice  to  Novartis.  Prompt
adjustments  shall be made by the  Parties to reflect the results of such audit.
Celgene  shall bear the full cost of such audit  unless  such audit  discloses a
variance  of more than  five  percent  (5%) from the  amount of the Net Sales or
royalties or other  payments due under this  Agreement.  In such case,  Novartis
shall bear the full cost of such audit and shall  promptly  remit to Celgene the
amount of any underpayment.

9.       INVENTIONS AND PATENTS.

         9.1 OWNERSHIP OF  INVENTIONS.  Ownership of inventions  conceived of or
reduced to practice in the course of the Research Program  ("INVENTIONS")  shall
be determined in accordance with the rules of  inventorship  under United States
patent  laws.  Celgene  shall own all  Inventions  conceived  of and  reduced to
practice  during the Research Term solely by its employees and agents  ("CELGENE
INVENTIONS"),   and  all  patent   applications  and  patents  claiming  Celgene
Inventions  ("Celgene  Patent  Rights").   Novartis  shall  own  all  Inventions
conceived  of and reduced to  practice  during the  Research  Term solely by its
employees and agents ("NOVARTIS  INVENTIONS"),  and all patent  applications and
patents claiming Novartis Inventions ("Novartis Patent Rights").  All inventions
conceived  of and reduced to practice  jointly by employees or agents of Celgene
and employees or agents of Novartis ("JOINT INVENTIONS"), and all Joint Patents,
shall be owned jointly by Celgene and Novartis ("Joint Patent Rights").

         9.2  PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.

              (a) Celgene  shall be  responsible,  at its own  expense,  for the
filing,  prosecution  and  maintenance  of all patent  applications  and patents
within the Celgene Patent  Rights.  Novartis  shall be  responsible,  at its own
expense, for the filing,  prosecution and maintenance of all patent applications
and patents within the Novartis Patent Rights. Each Party shall consider in good
faith the requests and suggestions of the other Party with respect to strategies
for filing,  prosecuting and maintaining  such patent  applications and patents.
The  responsible  Party  shall keep the other Party  informed  of progress  with
regard to the  filing,  prosecution,  maintenance,  enforcement  and  defense of
patents  applications  and patents subject to this Section 9.2(a).  In the event
that  Celgene  desires to abandon any patent  application  or patent  within the
Celgene  Patent  Rights that  claims a Celgene  Invention,  or if Celgene  later
declines responsibility for any such patent application or patent, Celgene shall
provide reasonable prior written notice to Novartis of such intention to abandon
or decline  responsibility,  and  Novartis  shall  have the  right,  but not the
obligation,  as its own expense,  to file,  prosecute,  and maintain such patent
application or patent.

              (b) The Parties shall  determine by mutual  agreement which Party
shall be responsible  for the  filing,  prosecution  and  maintenance  of patent
applications and patents

                                       24

<PAGE>

within  the Joint  Patent  Rights on a case by case  basis.  In the event that a
party  responsible  for the filing,  prosecution  and  maintenance of any patent
application  or patent  within the Joint Patent  Rights  desires to abandon such
patent application or patent, or if such Party later declines responsibility for
such patent  application or patent,  such Party shall provide  reasonable  prior
written  notice  to the other  Party of its  intention  to  abandon  or  decline
responsibility,  and  the  other  Party  shall  have  the  right,  but  not  the
obligation,   to  prepare,  file,  prosecute,   and  maintain  any  such  patent
application  or patent within the Joint Patent  Rights.  The Parties shall share
equally  the costs of  filing,  prosecuting  and  maintaining  patents or patent
applications within the Joint Patent Rights.

         9.3 COOPERATION OF THE PARTIES. Each Party agrees to cooperate fully in
the  preparation,  filing,  and  prosecution  of any  Patent  Rights  under this
Agreement. Such cooperation includes, but is not limited to:

              (a)  executing  all  papers  and  instruments,  or  requiring  its
employees  or  agents,   to  execute  such  papers  and  instruments,  so  as to
effectuate the ownership of Patent Rights set forth in Section 9.1 and to enable
the  other  Party to  apply  for and to  prosecute  patent  applications  in any
country;

              (b) promptly  informing  the other Party of any matters  coming to
such Party's  attention that may affect the preparation,  filing, or prosecution
of any such patent applications; and

              (c) in the  event  that  applicable  law  in  any  country  of the
Territory  provides for the extension of the term of any Celgene  Patent Rights,
Novartis Patent Rights or Joint Patent Rights, applying for and using reasonable
efforts to obtain such an extention and cooperating in obtaining such extension.

         9.4  INFRINGEMENT  OF THIRD PARTY  RIGHTS.  Celgene and Novartis  shall
promptly notify the other in writing of any allegation by a Third Party that the
exercise by either of the Parties of any license granted hereunder  infringes or
may infringe the intellectual property rights of such Third Party. Celgene shall
have the right to control the defense of any claims with  respect to the Celgene
Patent  Rights at its own  expense  and by counsel of its own  choice.  Novartis
shall have the right to control the  defense of any claims  with  respect to the
Novartis  Patent Rights at its own expense and by counsel of its own choice.  In
the event that such  matter  includes  claims with  respect to the Joint  Patent
Rights,  the Party responsible for prosecution and maintenance of the applicable
Joint  Patent  Rights under  Section  9.2(b) shall have the right to control the
defense of such claims by counsel of its own choice and the Parties  shall share
equally the costs with respect thereto.  If Celgene fails to proceed in a timely
fashion  with regard to the  defense of any claims  with  respect to the Celgene
Patent Rights that are likely to have a material  adverse  effect on any Product
being  developed or  commercialized  by Novartis  pursuant to a license  granted
hereunder,  Novartis  shall have the right to control  any such  defense of such
claim at its own  expense and by counsel of its own  choice,  and Celgene  shall
have the right,  at its own  expense,  to be  represented  in any such action by
counsel of its own choice. If Novartis fails to proceed in a timely fashion with
regard to the defense of any claims with respect to the Novartis  Patent  Rights
that are likely to have a material adverse effect on any product being developed
or  commercialized by Celgene pursuant to a license granted  hereunder,  Celgene
shall  have the  right to  control  any such  defense  of such  claim at its own
expense and by counsel of its own choice,  and Novartis shall have the right, at
its own  expense,  to be  represented  in any such  action by counsel of its own
choice.  If the responsible  Party with respect to any Joint Patent Rights fails
to proceed

                                       25

<PAGE>

in a timely fashion with regard to the defense of any claims with respect to the
Joint  Patent  Rights,  the other Party shall have the right to control any such
defense of such claim at its own expense  and by counsel of its own choice,  and
the first Party shall have the right,  at its own expense,  to be represented in
any such action by counsel of its own choice. Neither Party shall have the right
to settle any patent infringement  litigation under this Section 9.4 in a manner
that  diminishes  the rights or interests  of the other Party or  obligates  the
other  Party to make any payment or take any action  without  the prior  written
consent of such other Party.

         9.5 INFRINGEMENT BY THIRD PARTIES.  Celgene and Novartis shall promptly
notify the other in writing of any  alleged or  threatened  infringement  of any
patent  included in the Celgene Patent Rights,  Novartis  Patent Rights or Joint
Patent  Rights of which they become  aware.  Both  Parties  shall use their best
efforts in cooperating  with each other to terminate such  infringement  without
litigation.  Celgene  shall  have the right to bring and  control  any action or
proceeding  with respect to  infringement  of any patent included in the Celgene
Patent  Rights at its own  expense  and by counsel of its own  choice.  Novartis
shall have the right to bring and control any action or proceeding  with respect
to  infringement of any patent included in the Novartis Patent Rights at its own
expense  and by counsel of its own choice.  In the event any patent  included in
the Joint Patent Rights is infringed by a Third Party, the Party responsible for
prosecution and maintenance of the applicable  Joint Patent Rights under Section
9.2(b) shall have the right to bring and control any action or  proceeding  with
respect to such  patent,  and the Parties  shall share  equally in the  expenses
thereof.  With  respect to  infringement  of any patent  included in the Celgene
Patent  Rights that is likely to have a material  adverse  effect on any Product
being  developed or  commercialized  by Novartis  pursuant to a license  granted
hereunder,  if Celgene fails to bring an action or  proceeding  within (a) sixty
(60) days  following  the  notice of alleged  infringement  or (b) ten (10) days
before the time limit, if any, set forth in the appropriate laws and regulations
for the filing of such actions,  whichever comes first,  Novartis shall have the
right to bring and  control any such action at its own expense and by counsel of
its own choice,  and Celgene  shall have the right,  at its own  expense,  to be
represented  in any such  action by counsel of its own choice.  With  respect to
infringement of any patent included in the Novartis Patent Rights that is likely
to  have  a  material   adverse  effect  on  any  product  being   developed  or
commercialized by Celgene pursuant to a license granted  hereunder,  if Novartis
fails to bring an action or proceeding  within (a) sixty (60) days following the
notice of alleged  infringement  or (b) ten (10) days before the time limit,  if
any, set forth in the  appropriate  laws and  regulations for the filing of such
actions,  whichever  comes  first,  Celgene  shall  have the  right to bring and
control any such action at its own expense and by counsel of its own choice, and
Novartis shall have the right, at its own expense, to be represented in any such
action by counsel of its own choice.  With respect to infringement of any patent
included in the Joint Patent Rights,  if the responsible Party fails to bring an
action or proceeding  within (a) sixty (60) days following the notice of alleged
infringement  or (b) ten (10) days before the time limit,  if any,  set forth in
the appropriate  laws and regulations for the filing of such actions,  whichever
comes first,  the other Party shall have the right to bring and control any such
action at its own expense and by counsel of its own choice,  and the first Party
shall have the right,  at its own expense,  to be represented in any such action
by  counsel  of its own  choice.  In the event a Party  brings  an  infringement
action,  the other Party shall cooperate  fully,  including if required to bring
such action, the furnishing of a power of attorney. Neither Party shall have the
right to settle any patent  infringement  litigation under this Section 9.5 in a
manner that  diminishes the rights or interests of the other Party without prior
written  consent  of such  other  Party.  Except as  otherwise  agreed to by the
Parties as part of a cost-sharing arrangement, any recovery realized as a result
of such litigation, after reimbursement of any litigation expenses of

                                       26

<PAGE>

Celgene and Novartis, shall belong to the Party who brought the action, provided
that any such recovery  realized by Novartis and  representing  damages for lost
sales of Products shall be treated as Net Sales for purposes of this Agreement.

10.      CONFIDENTIALITY; PUBLICATIONS

         10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, the Parties agree that,
for the term of this Agreement and for five (5) years thereafter,  the receiving
Party (the "RECEIVING  PARTY") shall keep  confidential and shall not publish or
otherwise  disclose and shall not use for any purpose other than as provided for
in this  Agreement  any  Information  furnished  to it by the other  Party  (the
"DISCLOSING PARTY") pursuant to this Agreement (the "CONFIDENTIAL  INFORMATION")
unless the Receiving Party can demonstrate by contemporaneous, competent written
proof that such Confidential Information:

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

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

              (c) became generally  available to the public or otherwise part of
the  public  domain  after its  disclosure  and other  than  through  any act or
omission of the Receiving Party in the breach of the Agreement;

              (d) was  disclosed  to the  Receiving  Party,  other than under an
obligation of  confidentiality  to the Third Party,  by a Third Party who had no
obligation  to the  Disclosing  Party or any Third  Party not to  disclose  such
information to others; or

              (e) was  independently  discovered  or developed by the  Receiving
Party without the use of  Confidential  Information  belonging to the Disclosing
Party.

         10.2  AUTHORIZED  DISCLOSURE.  Each  Party  may  disclose  Confidential
Information  belonging  to the other  Party to the  extent  such  disclosure  is
reasonably necessary in the following instances:

              (a)  filing  or  prosecuting   patent   applications   under  this
Agreement;

              (b) regulatory filings;

              (c) prosecuting or defending litigation;

              (d) complying with applicable governmental regulations;

              (e) conducting preclinical or clinical trials of Products; and

              (f) disclosure to Affiliates, sublicensees, employees, consultants
or agents who are bound by similar terms of confidentiality and non-use at least
equivalent in scope to those set forth in this Article 10.

         Notwithstanding the foregoing, in the event a Party is required to make
a disclosure  of the other  Party's  Confidential  Information  pursuant to this
Section 10.2 it will, except where

                                       27

<PAGE>

impracticable,  give  reasonable  advance  notice  to the  other  Party  of such
disclosure  and use  best  efforts  to  secure  confidential  treatment  of such
information.  In any event,  the Parties agree to take all reasonable  action to
avoid disclosure of Confidential Information hereunder. The Parties will consult
with each other and agree on the  provisions of this Agreement to be redacted in
any filings made by the Parties with the Securities  and Exchange  Commission or
as otherwise required by law.

         10.3 PUBLICATIONS. Each Party recognizes that the publication of papers
regarding results of the research and development activities performed under the
Collaboration,  including oral presentations and abstracts, may be beneficial to
both Parties provided such  publications  are subject to reasonable  controls to
protect  Confidential  Information.  In  particular,  it  is the  intent  of the
Parties to maintain the confidentiality of any Confidential Information included
in any foreign patent application until such foreign patent application has been
published.  Accordingly,  each Party  shall have the right to review and approve
any  paper  proposed  for  publication  by  the  other  Party,   including  oral
presentations   and   abstracts,   which   utilizes  data   generated  from  the
Collaboration  and/or  includes  Confidential  Information  of the other  Party.
Before  any  such  paper is  submitted  for  publication,  the  Party  proposing
publication shall deliver a complete copy to the other Party at least forty-five
(45) days prior to  submitting  the paper to a publisher.  The  receiving  Party
shall review any such paper and give its comments to the publishing Party within
thirty (30) days of the  delivery  of such paper to the  receiving  Party.  With
respect to oral  presentation  materials  and  abstracts, the Parties shall make
reasonable efforts to expedite review of such materials and abstracts, and shall
return  such  items  as  soon  as  practicable  to  the  publishing  Party  with
appropriate  comments,  if any, but in no event later than 30 days from the date
of delivery to the receiving  Party.  The publishing Party shall comply with the
other Party's  request to delete  references to such other Party's  Confidential
Information in any such paper and agrees to withhold  publication of same for an
additional  one hundred eighty (180) days to permit the Parties to obtain patent
protection,  if either of the Parties deem it necessary,  in accordance with the
terms of this  Agreement,  provided  however  that  the  structure  of  Research
Compounds may in any case only be disclosed  with the written  agreement of both
Parties.

         10.4  PUBLICITY.  It is understood  that the Parties  intend to issue a
joint press release  announcing  the execution of this  Agreement and agree that
each Party may desire or be required to issue subsequent press releases relating
to the  Agreement or  activities  thereunder.  The Parties agree to consult with
each other  reasonably  and in good faith with respect to the text and timing of
such press releases prior to the issuance thereof, provided that a Party may not
unreasonably withhold consent to such releases,  and that either Party may issue
such press releases as it determines, based on advice of counsel, are reasonably
necessary  to  comply  with  laws  or  regulations  or  for  appropriate  market
disclosure.  In addition,  following the initial joint press release  announcing
this  Agreement,  either  Party  shall be free to  disclose,  without  the other
Party's prior written consent, the existence of this Agreement,  the identity of
the  other  Party and those  terms of the  Agreement  which  have  already  been
publicly disclosed in accordance herewith.

                                       28

<PAGE>

11.      REPRESENTATIONS AND WARRANTIES

         11.1 REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants
to the other that:

              (a) CORPORATE  POWER.  It is duly  organized and validly  existing
under the laws of its state or country of incorporation,  and has full corporate
power and authority to enter into this Agreement and to carry out the provisions
hereof.

              (b)  DUE  AUTHORIZATION.  It is duly  authorized  to  execute  and
deliver this Agreement and to perform its obligations hereunder,  and any person
executing this Agreement on its behalf has been duly  authorized to do so by all
requisite corporate action.

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

              (d) GRANT OF RIGHTS.  It has not,  and will not during the term of
this Agreement, grant any right to any Third Party which would conflict with the
rights granted to the other Party hereunder.

              (e)  EMPLOYEE  OBLIGATIONS.  All of its  employees,  officers  and
consultants  participating  in the Research  Program  have  executed  agreements
requiring  assignment to such Party of all inventions  made during the course of
and as a result  of  their  association  with  such  Party  and  obligating  the
individual  to maintain as  confidential  the  confidential  information  of the
Party, as well as the confidential information of a Third Party which such Party
may receive.

         11.2 CELGENE REPRESENTATION. Celgene represents that to the best of its
knowledge as of the Effective  Date,  the Celgene  Patent Rights do not infringe
any Third Party patents.

         11.3  DISCLAIMER OF  WARRANTIES.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTY
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING,  WITHOUT LIMITATION, ANY WARRANTY OF
NON-INFRINGEMENT,  MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  Without
limiting the generality of the foregoing,  each Party expressly does not warrant
(a) the success of any research  commenced under the Research Program or (b) the
safety or usefulness for any purpose of the technology it provides hereunder.

         11.4  LIMITATION  OF  LIABILITY.  NEITHER  PARTY  SHALL BE  ENTITLED TO
RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL,  CONSEQUENTIAL OR PUNITIVE
DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER.

         11.5  INDEMNIFICATION.

               (a) Novartis hereby  agrees to save,  defend,  indemnify and hold
harmless Celgene and its officers, directors, employees,  consultants and agents
from and against any

                                       29

<PAGE>

and all losses, damages,  liabilities,  expenses and costs, including reasonable
legal  expense  and  attorneys'  fees  ("LOSSES"),  to which  Celgene may become
subject  as a result of any claim,  demand,  action or other  proceeding  by any
Third Party to the extent such Losses arise  directly or  indirectly  out of (a)
the  practice  by  Novartis  of  any  license  granted  hereunder,  or  (b)  the
development,  manufacture,  use, handling, storage, sale or other disposition of
any Product by Novartis,  its Affiliates or  sublicensees,  except to the extent
such Losses result from the gross negligence or willful misconduct of Celgene.

              (b) Celgene  hereby  agrees to save,  defend,  indemnify and  hold
harmless Novartis and its officers, directors, employees, consultants and agents
from and against any and all  Losses  to which  Novartis may become subject as a
result of any claim,  demand,  action or other  proceeding by any Third Party to
the extent such Losses arise  directly or indirectly  out of (a) the practice by
Celgene of any license granted hereunder,  or (b) the development,  manufacture,
use, handling, storage, sale or other disposition of any product by Celgene, its
Affiliates  or  sublicensees,  except to the extent such Losses  result from the
gross negligence or willful misconduct of Novartis.

              (c) In the event a Party seeks  indemnification under this Section
11.5, it shall inform the other Party (the  "INDEMNIFYING  PARTY") of a claim as
soon as  reasonably  practicable  after it receives  notice of the claim,  shall
permit the Indemnifying  Party to assume direction and control of the defense of
the  claim  (including  the  right to  settle  the  claim  solely  for  monetary
consideration),  and  shall  cooperate  as  requested  (at  the  expense  of the
Indemnifying Party) in the defense of the claim.

12.      TERM AND TERMINATION

         12.1 TERM.  This Agreement  shall commence as of the Effective Date and
shall continue until the last day of the Royalty Term, unless terminated earlier
as provided herein.

         12.2 TERMINATION BY NOVARTIS.

              (a) During the  Research  Term,  Novartis  may at any time without
cause terminate this Agreement by giving ninety (90) days prior notice.

              (b) After the Research  Term and up to the  submission  of an NDA,
Novartis may terminate this Agreement regarding any Compound/Field/Country or in
its  entirety at any time  without  cause with  ninety  (90) days prior  written
notice.

              (c)  Following  NDA   submission,   Novartis  may  terminate  this
Agreement  at any time  partially  or in its  entirety  without  cause  with one
hundred eighty (180) days prior written notice.

              (d)  In  addition  Novartis  may  terminate  this  Agreement  on a
Product-by-Product and  country-by-country  basis or in its entirety with ninety
(90)  days  prior  written  notice  in the  event  that the  Product  cannot  be
reasonably commercialized in such country or the major part of the Territory, as
the case may be. For the  purpose of this  Section  12.2(d),  it will  be deemed
that the Product cannot be reasonably commercialized in case of, but not limited
to one of the following events:  safety issues,  lack of efficacy,  unacceptable
pharmaceutical properties, issues on Regulatory Approvals, infringement of Third
Party intellectual property rights.

                                       30

<PAGE>

                  (E) Celgene will provide  written notice to Novartis of any of
the following proposed events: (i) a merger,  reorganization or consolidation of
Celgene  which  results  in  the  voting   securities  of  Celgene   outstanding
immediately  prior to such transaction  ceasing to represent at least 50% of the
combined  voting  power  of  the  surviving   entity   immediately   after  such
transaction;  or (ii) any Third Party (other than any trustee or other fiduciary
holding securities under an employee benefit plan of Celgene, or any corporation
or other entity owned directly or indirectly by the  stockholders  of Celgene in
substantially  the same  proportion  as their  ownership  of stock of  Celgene),
together with its affiliates,  becoming the beneficial owner of more than 50% of
the combined  voting power of the  outstanding  securities of Celgene.  Novartis
may, at any time during the  forty-five  (45) day period  after the date of such
notice from Celgene, terminate this Agreement with immediate effect upon written
notice to Celgene.

         12.3     TERMINATION  FOR  CAUSE.   Either  Party  may  terminate  this
Agreement  prior  to  the  expiration  of  the  term  of this Agreement upon the
occurrence of any of the following:

                  (A)      Upon or after the bankruptcy, insolvency, dissolution
or winding up of the  other  Party (other than dissolution or winding up for the
purposes of reconstruction or amalgamation); or

                  (B) Upon or after the breach of any material provision of this
Agreement  by the other  Party if the  breaching  Party has not cured such beach
within sixty (60) days after written notice thereof by the non-breaching Party.

         12.4     EFFECT OF EXPIRATION OR TERMINATION

                  (A) Upon termination of this Agreement by Novartis pursuant to
Section 12.2 (with respect to that portion of the Agreement  that is terminated)
or by Celgene pursuant to Section 12.3 (i) all rights under the licenses granted
by Celgene to Novartis  hereunder  shall  automatically  terminate and revert to
Celgene,  (ii) any  sublicenses  granted  hereunder by Novartis  shall remain in
effect,  but shall be  assigned  to Celgene  and (iii) the  licenses  granted by
Novartis to Celgene hereunder shall survive in accordance with their terms.

                  (B) Upon termination of this Agreement by Novartis pursuant to
Section 12.3,  (i) all rights under the licenses  granted by Novartis to Celgene
hereunder  shall  automatically  terminate  and  revert  to  Novartis,  (ii) any
sublicenses  granted  hereunder by Celgene shall remain in effect,  but shall be
assigned to Novartis and (iii) the license  granted under  Section  6.2(a) shall
remain  in  effect,  subject  to  compliance  by  Novartis  with all  applicable
provisions  of  this  Agreement  (including,  without  limitation,  the  payment
obligations set forth in Article 7).

                  (C)  Notwithstanding  any other provision of this Agreement to
the contrary,  in the event that Novartis terminates this Agreement with respect
to any  Compound/Field/Country  or in its entirety  pursuant to Section 12.2(a),
(b), (c) or (d),  Novartis shall remain obligated to make payments to Celgene in
accordance  with  Sections  7.3,  7.4 and 7.5 and Article 8 hereof to the extent
that Novartis continues to develop and/or  commercialize any product included in
the definition of "Product" hereunder.

                  (D)  Expiration or  termination  of this  agreement  shall not
relieve the  Parties of any  obligation  accruing  prior to such  expiration  or
termination.  Except as set forth  below or  elsewhere  in this  Agreement,  the
obligations and rights of the Parties under Sections 8.6, 9.1, 11.3,  11.4, 11.5
and 12.4  (including the provisions  therein that are  contemplated  to continue
following  termination) and Article 8, 10, 13 and 14 shall survive expiration or
termination of this Agreement.
                                       31.
<PAGE>

                  (E)  Within  thirty  (30) days  following  the  expiration  or
termination of this  Agreement,  except to the extent and for so long as a Party
retains  license rights under Sections  12.4(a) or (b), each Party shall deliver
to the other Party any and all  Confidential  Information  of the other Party in
its possession.

                  (F) Upon expiration of this  Agreement,  Novartis shall have a
perpetual, fully paid-up, royalty-free license to Product(s).

13.      DISPUTE RESOLUTION

         13.1  DISPUTES.  The  Parties  recognize  that  disputes  as to certain
matters may from time to time arise which relate to either Party's rights and/or
obligations  hereunder.  It  is  the  objective  of  the  Parties  to  establish
procedures to facilitate the resolution of such disputes in an expedient  manner
by mutual  cooperation  and without  resort to  litigation.  To accomplish  this
objective,  the Parties agree to follow the procedures set forth in section 13.2
if and when such a dispute arises between the Parties.

         13.2 PROCEDURES.  If any dispute arises between the Parties relating to
the  interpretation,  breach or performance of this Agreement or the grounds for
the  termination  thereof,  and the Parties  cannot  resolve the dispute  within
thirty (30) days of a written  request by either Party to the other  Party,  the
Parties  agree to hold a meeting,  attended  by the Chief  Executive  Officer of
Celgene and the CEO of Novartis or their assignees,  to attempt in good faith to
negotiate  a  resolution  of the  dispute  prior  to  pursuing  other  available
remedies.  If,  within sixty (60) days after such written  request,  the Parties
have not  succeeded in  negotiating  a resolution  of the dispute,  such dispute
shall be  submitted  to final and  binding  arbitration  under the then  current
commercial rules and regulations of the American Arbitration association ("AAA")
relating to voluntary arbitrations. The arbitration proceedings shall be held in
New York, New York. The arbitration shall be conducted by one arbitrator, who is
knowledgeable  in the  subject  matter at issue in the  dispute and who shall be
selected by mutual agreement of the Parties or, failing such agreement, shall be
selected in accordance  with the AAA rules.  Each Party shall initially bear its
own costs and legal fees associated with such arbitration.  The prevailing Party
in any such  arbitration  shall be entitled to recover  from the other Party the
reasonable  attorneys' fees, cost and expenses incurred by such prevailing Party
in connection  with such  arbitration.  The decision of the arbitrator  shall be
final and binding on the Parties.  The  arbitrator  shall prepare and deliver to
the Parties a written, reasoned opinion conferring its decision. Judgment on the
award so  rendered  may be entered in any court  having  competent  jurisdiction
thereof.

14.      MISCELLANEOUS

         14.1 ASSIGNMENT.  Except as expressly provided hereunder,  neither this
Agreement nor any rights or  obligations  hereunder may be assigned or otherwise
transferred by either Party without the prior written consent of the other Party
(which consent shall not be  unreasonably  withheld);  provided,  however,  that
either Party may assign this Agreement and its rights and obligations  hereunder
without the other Party's consent (a) in connection with the transfer or sale of
all or  substantially  all of the business of such Party to which this Agreement
relates to another Party,  whether by merger,  sale of stock,  sale of assets or
otherwise, or (b) to any Affiliate.  In the event of such transaction,  however,
intellectual  property rights of a party to such  transaction  other than one of
the Parties to this Agreement (the "ACQUIRING PARTY"),  shall not be included in
the technology  licensed  hereunder.  Notwithstanding  the  foregoing,  any such
assignment  to an  Affiliate  shall  not  relieve  the  assigning  Party  of its
responsibilities  for performance of its obligations  under this Agreement.  The
rights and obligations of the Parties under this Agreement shall be binding upon
and inure to the benefit of the successors and permitted assigns of the Parties.
Any assignment not in accordance with this Agreement shall be void. 32.
<PAGE>

         14.2 FORCE  MAJEURE.  Neither Party shall he held liable or responsible
to the  other  Party  nor be deemed to have  defaulted  under or  breached  this
Agreement  for failure or delay in  fulfilling  or  performing  any term of this
Agreement  (other than  non-payment)  when such failure or delay is caused by or
results  from  causes  beyond  the  reasonable  control of the  affected  Party,
including,  but not  limited  to,  fire,  floods,  embargoes,  war,  acts of war
(whether  war be  declared  or not),  insurrections,  riots,  civil  commotions,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental authority or the other Party.

         14.3  SEVERABILITY.  In case any provision of this  Agreement  shall be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

         14.4  NOTICES.  All  notices  and  other  communications  provided  for
hereunder shall be in writing and shall be mailed by first-class,  registered or
certified mail,  postage paid, or delivered  personally,  by overnight  delivery
service or by facsimile, with confirmation of receipt, addressed as follows:

         If to Novartis, addressed to:

                           Novartis Pharma AG
                           P.O. Box
                           CH-4002 Basel-Switzerland
                           Attn.:  General Counsel
                           Fax:  +41-61-6859

         If to Celgene, addressed to:

                           Celgene Corporation
                           7 Powder Horn Drive
                           Warren, New Jersey 07059, USA
                           Attn.:  Chief Executive Officer
                           Fax:  (732) 805 3931

Either  Party may by like notice  specify or change an address to which  notices
and communications  shall thereafter be sent. Notices sent by facsimile shall be
effective  upon  confirmation  of  receipt,  notices  sent by mail or  overnight
delivery  service shall be effective upon receipt,  and notices given personally
shall be effective when delivered.

         14.5     GOVERNING LAW.   This  Agreement  shall  be  governed  by, and
construed and enforced in accordance  with,  the  laws  of the State of New York
without regard to conflicts-of-laws principles.

         14.6 INDEPENDENT  CONTRACTORS.  It is expressly agreed that Celgene and
Novartis shall be independent  contractors and that the relationship between the
two Parties shall not  constitute a partnership  or agency of any kind.  Neither
Celgene  nor  Novartis  shall  have  the  authority  to  make  any   statements,
representations  or commitments of any kind, or to take any action,  which shall
be binding on the other Party,  without the prior  written  consent of the other
Party.

         14.7     ENTIRE AGREEMENT; AMENDMENT.   This  Agreement  (including the
exhibits attached hereto) sets forth all of the covenants, promises, agreements,
warranties, representations, conditions and

                                       33.
<PAGE>

understandings  between the Parties  hereto with  respect to the subject  matter
hereof and supersedes and  terminates  all prior  agreements and  understandings
between the Parties. There are no covenants, promises,  agreements,  warranties,
representations  conditions or understandings,  either oral or written,  between
the Parties other than as set forth herein. No subsequent alteration, amendment,
change or addition to this  Agreement  shall be binding upon the Parties  hereto
unless  reduced to writing and signed by the respective  authorized  officers of
the Parties.

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

         14.9 WAIVER.  Except as  specifically  provided for herein,  the waiver
from  time to time by  either  of the  Parties  of any of their  rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waive of same or of any other of such  Party's  rights or  remedies  provided in
this Agreement.

         14.10  COUNTERPARTS.   This  Agreement  may  be  executed  in  multiple
counterparts  (which may be  delivered  by  facsimile),  each of which  shall be
deemed an original,  but all of which together shall constitute one and the same
instrument.

                                       34.
<PAGE>

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

CELGENE CORPORATION                                NOVARTIS PHARMA AG

By:      /s/ Sol J. Barer                          By:      /s/ V. Hartmann
         ---------------------------------                  ---------------

Name:    Sol J. Barer                              Name:    V. Hartmann
         ---------------------------------                  -----------
Title:   President/Chief Operating Officer         Title:   Head BDIL
         ---------------------------------                  ---------

EXHIBITS

A        Active Compound Criteria
B        Research Plan

                                       35.

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