Document:

<PAGE>
                                                                    Exhibit 10.3

                                SUBLEASE CONSENT

     This Sublease Consent (the "CONSENT") is made as of May 6, 2004 by and
among THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body
having corporate powers under the laws of the State of California ("LANDLORD"),
INCYTE CORPORATION, a Delaware corporation, formerly known as Incyte
Pharmaceuticals, Inc. ("TENANT"), and CONNETICS CORPORATION, a Delaware
corporation ("SUBTENANT"), in the following factual context:

     A.   Landlord and Tenant are the parties to that certain Lease dated as of
June 19, 1997, as amended by (i) Notice of Commencement Date dated October 28,
1998, (ii) Notice of Base Rent and Rentable Area dated November 24, 1998, (iii)
Notice of Rent Commencement Date and Expiration Date dated November 24, 1998,
and (iv) First Amendment to Lease dated as of May 6, 2004 (as so amended, the
"LEASE"), under which Tenant leases from Landlord a two-story building commonly
known as 3160 Porter Drive in Palo Alto, California (the "PREMISES"), as more
particularly described in the Lease.

     B.   Tenant now desires to sublease the entire Premises to Subtenant
pursuant to a sublease in the form attached as EXHIBIT A (the "SUBLEASE").

     C.   Landlord is willing to consent to the Sublease, subject to the terms
and conditions set forth in this Consent.

     NOW THEREFORE, the parties agree as follows:

1.   CONSENT. Landlord hereby (a) consents to the execution and delivery of the
          Sublease, and to the subletting of the Premises from Tenant to
          Subtenant in accordance with the terms of the Sublease, and (b)
          acknowledges and agrees that Subtenant's proposed use of the Premises
          is permitted under the Lease.

2.   TERMS OF CONSENT. The Sublease is and shall remain at all times subject and
          subordinate in all respect to the Lease. This Consent shall not
          operate as a consent to or approval or ratification by Landlord of any
          specific provisions of the Sublease, and shall not modify or be deemed
          to modify or amend the Lease in any way, or to impose on Landlord any
          obligation to provide notice to, or obtain consent from, Subtenant
          with respect to amendments, defaults, waivers or any other matters
          pertaining to the Lease or the Premises. This Consent shall not be nor
          be deemed to be a consent to any future sublease requiring Landlord's
          consent under the Lease.

3.   RELEASE REGARDING HAZARDOUS SUBSTANCES. Subtenant represents to Landlord
          that Subtenant is aware that detectable amounts of hazardous
          substances and groundwater contaminants may have come to be located
          beneath and/or in the vicinity of the Premises, and is aware of
          Landlord's responsibility for such hazardous substances and
          groundwater contaminants under the terms of the Lease. Subtenant has
          made such investigations and inquiries (including, without limitation,
          indoor air quality

<PAGE>

          tests) as it deems appropriate to ascertain the effects, if any, of
          such substances and contaminants on its operations and persons using
          the Premises. Landlord makes no representation or warranty with regard
          to the environmental condition of the Premises. Subject to Section 8.4
          of the Lease, Subtenant, on behalf of itself and its affiliated
          entities and their respective partners, employees, successors and
          assigns (collectively, "RELEASORS"), hereby covenants and agrees not
          to sue and forever releases and discharges Landlord, and its trustees,
          officers, directors, agents and employees for and from any and all
          claims, losses, damages, causes of action and liabilities, arising out
          of hazardous substances or groundwater contamination presently
          existing on, under, or emanating from or to the Premises. Subject to
          Section 8.4 of the Lease, Releasors understand and expressly waive any
          rights or benefits available under Section 1542 of the Civil Code of
          California or any similar provision in any other jurisdiction. Section
          1542 provides substantially as follows: "A general release does not
          extend to claims which the creditor does not know or suspect to exist
          in his favor at the time of executing the release, which if known by
          him must have materially affected his settlement with the debtor."

4.   USE OF NAME. Subtenant shall not use any name, trademark or service mark of
          Stanford University without the prior written consent of Landlord,
          which consent may be given or withheld in Landlord's sole discretion.

5.   ALTERATIONS. Landlord hereby agrees that to the extent Landlord's prior
          written consent is required under the Lease for any Alterations to the
          Premises by Subtenant during the Early Access Period or the Sublease
          Term (as such terms are defined in the Sublease), (a) provided that
          Subtenant delivers its plans and specifications for such Alterations
          simultaneously to Landlord and to Tenant, Landlord shall undertake its
          review of such plans and specifications simultaneously with Tenant,
          (b) Landlord's consent to such Alterations, which shall not be
          unreasonably withheld, shall be given or denied in writing within ten
          (10) business days after Landlord's receipt of such plans and
          specifications, and (c) Landlord shall notify Tenant and Subtenant in
          writing at the time of Landlord's consent to such Alterations whether
          such Alterations will be required to be removed upon the expiration or
          earlier termination of the Lease.

6.   ADDITIONAL SECURITY DEPOSIT. In consideration of and as a further condition
          to Landlord's consent to the Sublease, on or before the Commencement
          Date of the Sublease (as defined in the Sublease), Tenant shall
          deliver to Landlord an irrevocable stand-by letter of credit in the
          amount of Two Million Five Hundred Seventy Five Thousand and 00/100
          Dollars ($2,575,000.00) (the "LETTER OF CREDIT") as credit enhancement
          for Tenant's continued performance under the Lease and not as a
          security deposit, as more particularly described in this Section 6.

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          (a)  The Letter of Credit shall be in form and substance and issued by
          a bank that is reasonably satisfactory to Landlord. The Letter of
          Credit shall: (i) name Landlord as beneficiary; (ii) allow Landlord to
          make partial and multiple draws thereunder up to the face amount only
          for the purposes permitted under this Section 6, (iii) require the
          issuing bank to pay to Landlord the amount of a draw upon receipt by
          such bank of a sight draft signed by Landlord and presented to the
          issuing bank, accompanied by Landlord's statement that said draw is
          being made in accordance with the terms of this Section 6; and (iv)
          provide that Landlord can freely transfer it upon an assignment or
          other transfer of its interest in the Lease to the assignee or
          transferee without having to obtain the consent of Tenant or the
          issuing bank, provided that the assignee or transferee has agreed to
          be bound by Landlord's obligations under the Lease and this Section 6.
          Landlord shall be entitled to draw upon the Letter of Credit in
          accordance with this Section 6, or at any time within thirty (30) days
          prior to the expiration date of the Letter of Credit unless Tenant
          shall have delivered to Landlord a replacement Letter of Credit
          meeting the requirements of this Section 6 and with an expiration date
          not less than twelve (12) months after the date of delivery. The
          Letter of Credit (or a replacement thereof satisfactory to Landlord)
          shall remain in effect until the expiration (i.e., March 31, 2011) or
          the sooner termination of the Lease, howsoever arising.

          (b)  Landlord shall have the right (but shall not be obligated to)
          draw under the Letter of Credit for the following purposes only: (i)
          to remedy any monetary Event of Default by Tenant in the performance
          of its obligations under the Lease; and (ii) to compensate Landlord
          for any losses, costs, liabilities or damages incurred by Landlord as
          a result of Tenant's failure to perform its monetary obligations under
          the Lease (collectively, "Losses"); or (iii) in the event Landlord
          reasonably determines that there is a material impairment of Tenant's
          ability to meet its ongoing monetary obligations under the Lease. In
          the event Landlord draws under the Letter of Credit pursuant to
          subsections (b)(i) and (ii) above, Landlord shall use or apply the
          proceeds of such draw solely to, and only in such amount necessary to,
          remedy the monetary Event of Default by Tenant under the Lease and to
          compensate Landlord for Losses. In the event Landlord draws under the
          Letter of Credit pursuant to subsection (b)(iii) above, Landlord shall
          first apply the proceeds from the Letter of Credit to any rental
          obligations then due and unpaid under the Lease, and thereafter may
          apply the proceeds from the Letter of Credit to future, unpaid rental
          obligations due through the expiration date of the Lease, whether or
          not the Lease is terminated prior to such date. If, despite the intent
          of the parties that the Letter of Credit not be considered a security
          deposit, a court of competent jurisdiction determines that the Letter
          of Credit is in fact a security deposit, then Tenant hereby waives to
          the extent inconsistent with the foregoing any restriction on the uses
          to which the proceeds of a draw under the Letter of Credit may be
          applied as contained in Section 1950.7(c) of the California Civil Code
          and/or any successor statute, if applicable. If Landlord so uses or
          applies the proceeds of a draw under the Letter of Credit pursuant to
          this Section 6, Tenant shall, within ten (10) business days after
          demand therefor, deposit cash or other collateral with the issuing
          bank and as required by the issuing bank in an amount sufficient to

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          restore the Letter of Credit to the amount thereof in effect
          immediately prior to such draw, and Tenant's failure to do so shall,
          at Landlord's option, be an Event of Default under the Lease. In the
          event Landlord has drawn the entire Letter of Credit pursuant to
          subsection (b)(iii) above, and if Tenant subsequently provides
          adequate assurance, in Landlord's reasonable judgment, that Tenant
          will continue to perform its monetary obligations under the Lease,
          then upon Tenant's delivery of a replacement Letter of Credit for the
          full amount thereof in effect immediately prior to such draw, Landlord
          shall refund to Tenant that portion of the Letter of Credit proceeds
          not already applied to rent that has previously become due.

          (c)  The Letter of Credit, or so much thereof as has not theretofore
          been applied by Landlord in accordance with this Section 6 or reduced
          pursuant to the following provisions of this Section 6, shall be
          returned, without payment of interest or other increment for their
          use, to Tenant at the expiration (i.e., March 31, 2011) or sooner
          termination of the Lease. No trust relationship is created herein
          between Landlord and Tenant with respect to the Letter of Credit.

          (d)  Commencing on the second (2nd) month of the Sublease Term (as
          defined in the Sublease), the amount of the Letter of Credit shall be
          reduced by Thirty Four Thousand Seven Hundred Ninety Seven and 30/100
          Dollars ($34,797.30) per month, such that the Letter of Credit shall
          be reduced to a zero balance by the expiration of the Lease (i.e.,
          March 31, 2011).

7.   LANDLORD/SUBTENANT EXTENSION AGREEMENT. Concurrently herewith, Landlord and
          Subtenant are entering into that certain Agreement Regarding Sublease
          and Lease (the "EXTENSION AGREEMENT"), pursuant to which, among other
          things, Landlord and Subtenant have agreed that (a) if the Lease is
          terminated prior to the expiration of its term, Landlord shall
          recognize the Sublease and Subtenant's occupancy of the Premises and
          the Sublease shall become effective as a direct lease between Landlord
          and Subtenant, and (b) upon the expiration of the Sublease, the Lease
          shall be extended as a direct lease between Landlord and Subtenant,
          all on the terms and conditions set forth in the Extension Agreement.
          In light of the Extension Agreement, Landlord and Subtenant hereby
          agree that (i) if for any reason the Sublease and/or the Lease becomes
          effective as a direct lease between Landlord and Subtenant, Tenant
          shall have no surrender obligations under the Lease (including without
          limitation, under Section 40 of the Lease), and Subtenant shall be
          solely responsible for satisfying any surrender obligations under the
          Lease (or the Extension Agreement); and (ii) if for any reason the
          Sublease and/or the Lease becomes effective as a direct lease between
          Landlord and Subtenant, Tenant shall have no obligations under the
          Sublease or the Lease, as applicable, arising from and after the date
          the Sublease or

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          the Lease, as applicable, becomes effective as a direct lease between
          Landlord and Subtenant.

8.   LIMITATION ON LANDLORD'S ACCEPTANCE OF OFFER. Notwithstanding anything to
          the contrary in Section 6(c) of the Extension Agreement (which amends,
          as between Landlord and Subtenant only, Section 18.4 of the Lease),
          Landlord hereby agrees that it shall not accept any Offer (as such
          term is defined in the amended Section 18.4 of the Lease) made by
          Subtenant to Landlord during the Sublease term unless Landlord intends
          to retain or occupy the portion of the Premises that is the subject of
          the Offer for Landlord's own use and benefit (and does not intend to
          further assign or sublease such space to a third party).

9.   SUBTENANT'S INSURANCE. Landlord and Tenant acknowledge that they have each
          reviewed the certificate of insurance that Subtenant proposes to
          deliver in connection with the Sublease, and that subject to the
          actual insurance policies being issued in conformance with Section
          21.2 of the Lease, the certificate of insurance evidences the types
          and levels of insurance coverage required by the Lease.

     IN WITNESS WHEREOF, the parties have executed this Consent as of the date
first above written.

                                     THE BOARD OF TRUSTEES OF THE
                                     LELAND STANFORD JUNIOR UNIVERSITY

                                     By Stanford Management Company

                                     By:  /s/ Jean Snider
                                          ------------------------------
                                          Jean Snider, Managing Director
                                             Stanford Research Park

                                     INCYTE CORPORATION

                                     By:  /s/ David Hastings
                                          ------------------------------

                                     Its: EVP, CFO
                                          ------------------------------

                                     CONNETICS CORPORATION

                                     By:  /s/ John L. Higgins
                                          ------------------------------

                                     Its: CFO
                                          ------------------------------

                                       5<PAGE>
                                                                    Exhibit 10.4

                     AGREEMENT REGARDING SUBLEASE AND LEASE

     This Agreement Regarding Sublease and Lease (the "AGREEMENT") is made as of
May 6, 2004 by and between THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
UNIVERSITY, a body having corporate powers under the laws of the State of
California ("LANDLORD"), and CONNETICS CORPORATION, a Delaware corporation
("SUBTENANT"). Landlord and Subtenant are each sometimes referred to in this
Agreement as a "Party", and collectively as "Parties".

     The Parties enter into this Agreement on the basis of the following facts,
understandings and intentions:

     A.   Landlord and Incyte Corporation, formerly known as Incyte
Pharmaceuticals, Inc. ("TENANT"), are the parties to that certain Lease dated as
of June 19, 1997, as amended by (i) Notice of Commencement Date dated October
28, 1998, (ii) Notice of Base Rent and Rentable Area dated November 24, 1998,
and (iii) Notice of Rent Commencement Date and Expiration Date dated November
24, 1998 (as so amended, the "ORIGINAL LEASE"), under which Tenant leases from
Landlord a two-story building commonly known as 3160 Porter Drive in Palo Alto,
California (the "PREMISES"), as more particularly described in the Lease. A copy
of the Lease is attached hereto as EXHIBIT A.

     B.   Pursuant to a sublease of even date herewith, Tenant and Subtenant
have entered into a sublease of the entire Premises (the "SUBLEASE"), a copy of
which is attached hereto as EXHIBIT B, and Landlord has consented thereto.

     C.   Subtenant acknowledges that Landlord and Tenant have agreed to certain
further amendments to the Original Lease pursuant to a First Amendment to Lease
(the "First Amendment") being entered into concurrently with the Sublease, a
copy of which is attached hereto as EXHIBIT C. The Original Lease, as amended by
the First Amendment, is referred to herein as the "LEASE".

     D.   Landlord and Subtenant desire to make certain additional amendments to
the Lease that will apply only as between Landlord and Subtenant pursuant to the
terms of this Agreement. In addition, Landlord and Subtenant desire to document
certain additional agreements between them with respect to the Lease and the
Sublease.

     NOW THEREFORE, IN CONSIDERATION of the mutual covenants and premises of the
Parties, the Parties agree as follows:

     1.   NON-DISTURBANCE.

          a)   If the Lease is terminated for any reason prior to the expiration
of its term, Landlord shall recognize the Sublease and shall recognize
Subtenant's occupancy of the Premises, provided that no event of default (beyond
any applicable notice and cure or grace period) on the part of Subtenant is then
existing under the Sublease, and provided further that Subtenant's continuing
rights under the Sublease and the Lease shall be contingent on Subtenant having
complied with the terms of Section 1(c) below and Landlord actually receiving
the additional consideration provided in Section 1(c). The Sublease shall
immediately become effective as a direct lease between Landlord and Subtenant as
of the date of termination of the

<PAGE>

Lease, and shall continue in effect until the expiration of the Sublease term,
whereupon the terms of Section 2 below shall govern Subtenant's continued
occupancy of the Premises. Subtenant's possession of the Premises and
Subtenant's rights and privileges under the Sublease shall not be disturbed,
diminished or interfered with by Landlord, so long as Subtenant is not in
default of its obligations under the Sublease. Subtenant shall attorn to
Landlord, such attornment to be effective and self-operative without the
execution of any further instrument, and Subtenant shall perform all of Tenant's
obligations under the Sublease directly to Landlord as if Landlord were the
sublessor under the Sublease.

          (b)  Subtenant agrees that if Landlord shall succeed to the interest
of Tenant as sublessor under the Sublease, and in any event upon the
commencement of the Extended Term (as defined in Section 2 below), Landlord
shall not be: (i) liable for any action or omission of Tenant under the
Sublease, (ii) subject to any offsets, claims or defenses that Subtenant might
have had against Tenant under the Sublease, (iii) bound by any rent or
additional rent that Subtenant might have paid for more than the current month
to Tenant under the Sublease, except for any such amounts transferred to
Landlord, or (iv) in any way responsible for any deposit or security deposit
delivered to Tenant, but not subsequently delivered to Landlord.

          (c)  As consideration for Landlord entering into this Agreement
(concurrently with the execution of this Agreement and effective as of the date
of this Agreement), Subtenant shall deliver to Landlord an irrevocable stand-by
letter of credit in the original amount of two million dollars ($2,000,000) (the
"LETTER OF CREDIT"), which Landlord may fully draw and retain upon termination
of the Lease during the Sublease term for any reason. The Letter of Credit shall
be in a form and substance and issued by a bank that is reasonably satisfactory
to Landlord. The Letter of Credit shall: (i) name Landlord as beneficiary; (ii)
allow Landlord to make partial and multiple draws thereunder up to the face
amount, as determined by Landlord; (iii) require the issuing bank to pay to
Landlord the amount of a draw upon receipt by such bank of a sight draft signed
by Landlord and presented to the issuing bank reciting that termination of the
Lease has occurred, giving rise to the ability of the Landlord to draw; and (iv)
provide that Landlord can freely transfer it upon an assignment or other
transfer of its interest in the Lease to the assignee or transferee, without
charge to Landlord and without recourse, and without having to obtain the
consent of Subtenant or the issuing bank. Landlord shall be entitled to draw
upon the Letter of Credit in accordance with the terms of this Section 1(c), or
at any time within thirty (30) days prior to the expiration date of the Letter
of Credit, unless Subtenant shall have delivered to Landlord a replacement
Letter of Credit meeting the requirements of this paragraph and with an
expiration date not less than twelve (12) months after the date of delivery. The
Letter of Credit (or, if applicable, a replacement thereof satisfactory to
Landlord) shall remain in effect until the expiration or the sooner termination
of the Sublease, subject to the reduction in face amount of the Letter of Credit
provided below. The Letter of Credit shall be held by Landlord as consideration
for its recognition of Subtenant as tenant under the Lease, and not as security
for Subtenant's performance under the Lease or the Sublease. No trust
relationship is created herein between Landlord and Subtenant with respect to
the Letter of Credit, and in no event shall the Letter of Credit or any proceeds
drawn thereunder be considered prepaid rent. Commencing on the nineteenth (19th)
month of the Sublease term, the Letter of Credit shall be reduced by Thirty Five
Thousand Eighty Seven Dollars and Seventy Two Cents ($35,087.72) per month, such
that the Letter of Credit shall be reduced to a zero balance by March 31, 2011
and will automatically expire. In the event of Landlord's receipt of a
replacement Letter of Credit in a reduced amount calculated at the time of
issuance of such replacement, Landlord shall surrender to Subtenant the Letter
of Credit previously held.

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     2.   LEASE EXTENSION. Landlord agrees that upon the expiration of the
Sublease, the Lease shall be extended as a direct lease between Landlord and
Subtenant, and by Subtenant's execution of this Agreement, Subtenant hereby
assumes all obligations of Tenant under the Lease as of the expiration date of
the term of the Sublease. The term of the Lease shall be extended for an
additional term commencing on April 1, 2011, and expiring on December 31, 2014
(the "EXTENDED TERM"). In consideration for Landlord's agreement to the
extension of the Lease term and Landlord's agreement to allow Subtenant to
assume the Extended Term of the Lease at the agreed-upon rental rate set forth
in this Agreement, on the Commencement Date of the Sublease, Subtenant shall pay
to Landlord the sum of One Million Six Hundred Fifty Thousand Dollars
($1,650,000).

     3.   AS-IS. Subtenant agrees and acknowledges that its assumption of
Tenant's obligations under the Lease during the Extended Term shall be based on
Subtenant's own knowledge of the Premises, and Subtenant shall accept the
Premises in its as-is condition existing as of the commencement of the Extended
Term, without any representation or warranty on the part of Landlord or any of
its agents, employees or contractors. Landlord shall have no obligation to
prepare the Premises for continued occupancy by Subtenant, and shall not be
obligated to make any contribution towards tenant improvements, alterations, or
any other items.

     4.   BASE RENT DURING EXTENDED TERM. The Base Rent under the Lease during
the Extended Term shall be as follows:

<TABLE>
<CAPTION>
----------------------- -------------------------- ---------------------------
Months                  Lease Rate/Month           Monthly Base Rent
----------------------- -------------------------- ---------------------------
<S>                     <C>                        <C>
1-12                    $1.40 NNN                  $134,435
----------------------- -------------------------- ---------------------------
13-24                   $1.45 NNN                  $139,236.25
----------------------- -------------------------- ---------------------------
25-36                   $1.50 NNN                  $144,037.50
----------------------- -------------------------- ---------------------------
37-45                   $1.55 NNN                  $148,838.75
----------------------- -------------------------- ---------------------------
</TABLE>

     5.   OPTIONS TO RENEW. For no additional consideration, Landlord hereby
grants to Subtenant two (2) options to renew the Lease (the "RENEWAL
OPTION(S)"), each Renewal Option for a period of three (3) years (the "RENEWAL
Term(s)"). The Renewal Option(s) shall be void if an "Event of Default" (as
described in Article 19 of the Lease) by Subtenant exists under the Lease,
either at the time of exercise of either Renewal Option or the time of
commencement of either Renewal Term. The Renewal Options must be exercised, if
at all, by written notice from Subtenant to Landlord given not less than nine
(9) months prior to the expiration of the Extended Term (in the case of the
first Renewal Option), and nine (9) months prior to the expiration of the first
Renewal Term (in the case of the second Renewal Option). The Renewal Terms shall
be upon the same terms and conditions as the original Term, except that the Base
Rent applicable to each Renewal Term shall be equal to ninety-five percent (95%)
of the Prevailing Market Rent as of the commencement date of that Renewal Term,
as determined pursuant to the attached EXHIBIT D. The Renewal Options are
personal to

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Subtenant and shall be inapplicable and null and void if Subtenant assigns the
whole of its interest under the Lease.

     6.   AMENDMENTS TO LEASE. As between Landlord and Subtenant only, the
following Sections of the Lease shall be amended as follows:

          (a)  Landlord agrees and acknowledges that Subtenant's proposed use of
the Premises is permitted under the Lease. Notwithstanding the foregoing, the
use of the Premises by any assignee of Subtenant's interest in the Lease, and
any subtenant of all or any portion of the Premises or subtenant shall strictly
comply with the requirements of Article 7 of the Lease.

          (b)  Section 4.3 of the Lease shall be deleted in its entirety.

          (c)  Section 18.4 of the Lease shall be deleted in its entirety and
the following substituted therefor:

          "If Tenant desires to assign Tenant's interest in the Premises or to
          sublease twenty-five percent (25%) or more of the Premises for more
          than three (3) years or for the balance of the Term (collectively, a
          "TRANSFER"), Tenant's Notice of Proposed Transfer shall also include a
          written offer that includes all of the substantial business terms that
          Tenant has offered to a Transferee which Tenant would execute if
          Landlord does not accept Tenant's offer (the "OFFER") and shall offer
          to Transfer Tenant's interest in the Premises to Landlord on such
          terms and conditions. Landlord shall have fifteen (15) days from
          Landlord's receipt of the Offer to accept the Offer by written notice
          to Tenant or to approve or disapprove the Transfer as provided in
          Section 18.3. If Landlord accepts the Offer, Landlord and Tenant shall
          consummate the Transfer within fifteen (15) days after Landlord's
          written notice of acceptance. The Transfer shall be consummated by
          Tenant's delivery to Landlord of a good and sufficient assignment of
          lease or sublease. If Landlord does not accept the Offer, but approves
          the Transfer, then in the event the terms of the Transfer are
          materially changed during subsequent negotiations to be more favorable
          to the Transferee, Tenant shall again deliver to Landlord an Offer in
          accordance with this Section, offering the interest to Landlord on
          such more favorable terms. Landlord shall then have another period of
          fifteen (15) days after receipt of such Offer to accept such Offer."

In the event Subtenant seeks consent for a Transfer (as defined in the foregoing
Section 18.4) during the Sublease term, it shall first comply with the foregoing
requirements regarding the Offer to Landlord, and then seek Tenant's consent to
the Transfer (whether to Landlord or to a third party).

          (d)  Section 24.7 of the Lease shall be amended as follows:

               (i)  The existing provisions of Section 24.7 shall be identified
          as subsection (a).

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               (ii) Section 24.7 shall be amended to add the following:

          "(b) Except for Hazardous Materials in the structural components of
the Building, and Hazardous Materials released to the environment (which are
dealt with in subsection (a) above), upon the expiration or earlier termination
of this Lease Tenant shall remove all Hazardous Materials from the Premises as
required by the City of Palo Alto closure ordinance. Tenant shall be responsible
for obtaining final certification of compliance with the Palo Alto facility
closure ordinance from the Palo Alto Fire Department and shall perform any work
requested by the Palo Alto Fire Department. Tenant shall coordinate all work to
be performed pursuant to this subsection through the Environmental Manager for
the Stanford Management Company, shall keep Landlord fully apprised of all work
performed, and shall provide Landlord with copies of reports documenting the
removal and proper disposal of Hazardous Materials under this Lease and in
compliance with the Palo Alto facility closure ordinance (referred to
hereinafter as "DOCUMENTATION OF COMPLETED FACILITY CLOSURE"). If, after
receiving Documentation of Completed Facility Closure, Landlord subsequently
finds additional Hazardous Materials at the Premises that are attributable to
activities at the Premises during the term of the Lease, Tenant shall reimburse
Landlord for the cost to remove and remediate any such Hazardous Materials.
Tenant shall be solely responsible for the proper handling, transport,
manifesting and disposal of any Hazardous Materials removed from the Premises
under this Section 24.7. Further, Tenant shall be identified as the generator of
any Hazardous Materials removed from the Premises, whether removed by Landlord
or Tenant, and Tenant's EPA generator ID number shall be used for manifesting
such material for offsite disposal.

          (c)  Tenant shall terminate, or amend to exclude the Premises from,
all environmental or health and safety permits it holds with the Bay Area Air
Quality Management District, the City of Palo Alto Fire Department, the City of
Palo Alto Sanitary Sewer District, the Department of Health Services and any
other agency for the Premises or activities at the Premises, and provide written
confirmation of such to Landlord. Tenant shall be responsible for any
notifications required to environmental, health or safety agencies and for
performing any obligations associated with termination of permits it holds or
held and closure of related equipment, structures and facilities."

          (e)  Article 30 of the Lease shall be deleted in its entirety.

          (f)  Article 31 of the Lease shall be deleted in its entirety and the
following substituted therefor:

          "Tenant agrees to pay as Additional Rent under this Lease its
          proportionate share of the reasonable cost of any transit services or
          traffic mitigation programs which Landlord implements in the Stanford
          Research Park, including without limitation charges for service and
          surcharges imposed directly or indirectly on the Premises by any
          governmental agencies on or with respect to transit (including transit
          services which may be provided in the future to occupants of the
          Stanford Research Park) or automobile usage or parking facilities
          (collectively, "TRANSIT FEES"). Tenant's

                                       5
<PAGE>

          share of Transit Fees shall be assessed pro rata and on a
          non-discriminatory basis, based on a reasonable standard applied in a
          non-discriminatory manner by Landlord (for example, based on the
          rentable area of the Improvements as compared to the total rentable
          area of the Stanford Research Park (or the area being served by the
          service, if less than the entire Stanford Research Park), or based on
          the average employee headcount in the Premises as compared to the
          overall employee density of the Stanford Research Park). Tenant shall
          not be required to pay any Transit Fees for programs that do not serve
          the Premises. In no event shall Tenant's share of Transit Fees exceed
          twenty cents ($.20) per year per square foot of Rentable Area in the
          Premises, subject to annual adjustment (as of April 1, 2005 and each
          April 1 thereafter during the Term) to reflect percentage increases in
          the Consumer Price Index published by the U.S. Department of Labor,
          Bureau of Labor Statistics (San Francisco, Oakland, San Jose Area, All
          Urban Consumers, All Items, 1982-84 - 100), or if such index is no
          longer published, a successor or substitute index designated by
          Landlord in its reasonable discretion, which shall be published by a
          governmental agency and reflecting changes in consumer prices in the
          San Francisco Bay Area."

          (g)  The following paragraph shall be added to the Lease as a new
Section 42.16:

          "Tenant shall use commercially reasonable efforts to do business with
          vendors located in the City of Palo Alto for the purchase of personal
          property, furniture, equipment and supplies used in connection with
          Tenant's operations at the Premises. To the maximum extent permitted
          under applicable laws and regulations, Tenant shall also book all
          sales made from the Premises and orders taken at the Premises as
          occurring in the City of Palo Alto, even though the account may be
          transferred elsewhere for collection or the delivery of merchandise
          sold or the performance of services ordered may be made elsewhere.
          Tenant agrees and acknowledges that the foregoing requirements are
          intended to maximize sales and use tax revenues to the City of Palo
          Alto."

     7.   INTENTIONALLY OMITTED.

     8.   SUBTENANT'S WALKWAY RIGHTS. Subtenant agrees and acknowledges that by
assuming the rights and obligations of Tenant under the Lease, Subtenant shall
also assume all obligations of Tenant, as successor-in-interest to Incyte
Genomics, Inc., under that certain First Amendment to the Lease dated as of July
19, 2000 by and between Interval Research Corporation and Incyte Genomics, Inc.,
a copy of which is attached as EXHIBIT E.

     9.   RIGHT OF FIRST OFFER. Landlord hereby grants to Subtenant a right of
first offer (the "RIGHT OF FIRST OFFER") to lease any one of those certain
parcels of improved real property

                                       6
<PAGE>

that are adjacent to the Premises and which are commonly known as 3170 Porter
Drive, 3150 Porter Drive and 3145 Porter Drive (hereinafter referred to
individually and collectively as the "ADJACENT PREMISES") in the event that
during the term of the Sublease or the Extended Term (but not during any Renewal
Term except as provided in subsection (d) below) any current tenant of an
Adjacent Premises (hereinafter individually and collectively referred to as an
"ADJACENT TENANT") elects not to renew or extend the term of its lease in
existence as of the date of this Agreement.

          (a)  The Right of First Offer shall not apply to any renewal or
extension of a lease for an Adjacent Premises between Landlord and an Adjacent
Tenant that is granted to such Adjacent Tenant in its lease. In the event an
Adjacent Tenant has no right to such renewal or extension but desires to enter
into negotiations with Landlord regarding a renewal or extension, Landlord shall
deliver written notice to Tenant that Landlord intends to enter into such
negotiations. In the event Tenant desires to make a competing offer to lease the
Adjacent Premises, Tenant shall deliver written notice to Landlord within ten
(10) business days after receipt of Landlord's notice. Upon receipt of such
notice from Tenant, Landlord agrees that it will engage in concurrent
negotiations with such Adjacent Tenant and Tenant for a period of at least
fifteen (15) business days; provided that Landlord shall have no obligation to
give priority or preference to Tenant over the Adjacent Tenant.

          (b)  In the event Landlord desires to enter into an agreement with a
third party (other than an Adjacent Tenant) for the lease of the Adjacent
Premises during the term of the Sublease or the Extended Term of the Lease (but
not any Renewal Term), Landlord shall deliver to Subtenant a notice setting
forth the terms and conditions upon which Landlord would be willing to lease the
Adjacent Premises (the "NOTICE"), which terms and conditions shall be based on
Landlord's reasonable determination of the fair market rental value of the
Adjacent Premises, whereupon Subtenant shall have ten (10) business days in
which to elect by delivery of written notice to Landlord whether to lease the
Adjacent Premises on all of the terms and conditions of the Notice.

          (c)  If Subtenant does not exercise its Right of First Offer with
regard to the Notice within the ten (10) business day period, Landlord may lease
the Adjacent Premises to any third party upon any terms and conditions Landlord
elects, and the Right of First Offer shall terminate and have no further force
or effect during the term of the Sublease or the Extended Term of the Lease with
respect to the particular Adjacent Premises that was the subject of the Notice.

          (d)  If Subtenant exercises its Right of First Offer with regard to
the Notice, the Parties shall enter into a new lease with respect to the
Adjacent Premises (separate and apart from the Lease) on the terms of the Notice
and using the Lease as the basis for the lease of the Adjacent Premises, and
making only such changes as are reasonably necessary to conform the new lease to
the terms and conditions of the Notice. The execution of a lease for any portion
of the Adjacent Premises shall not terminate the Right of First Offer as to the
remaining buildings comprising the Adjacent Premises. Additionally, the Right of
First Offer as to 3170 Porter Drive (but no other Adjacent Premises) shall
remain in effect during any Renewal Term. The Right of First Offer is personal
to Subtenant and shall be inapplicable and null and void if Subtenant assigns
its interest under the Sublease or Lease.

     10.  SUPERSEDING EFFECT. The Parties agree that in the event of any
conflict between the terms of this Agreement and the terms of the Lease, or the
terms of this Agreement and the terms of the Sublease, the terms of this
Agreement shall prevail as between the Parties only.

                                       7
<PAGE>

     IN WITNESS WHEREOF, the Parties have executed this Agreement Regarding
Sublease and Lease as of the date first above written.

                                THE BOARD OF TRUSTEES OF THE LELAND
                                STANFORD JUNIOR UNIVERSITY

                                By Stanford Management Company

                                By: /s/ Jean Snider
                                    -------------------------------
                                    Jean Snider, Managing Director
                                        Stanford Research Park

                                CONNETICS CORPORATION

                                By: /s/ John L. Higgins
                                    -------------------------------

                                Its: CFO
                                     -------------------------------

                                       8

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