Document:

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                                                                   Exhibit 10.44

           Confidential Material omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                                    Agreement

Effective as of September 26, 1996 ("Effective Date"), The Johns Hopkins
University, a body having corporate powers under the laws of the State of
Maryland ("JOHNS HOPKINS"), the University of Washington (the "UNIVERSITY OF
WASHINGTON"), a body having corporate powers under the laws of the State of
Washington, and Ontogeny Inc., a Delaware corporation having a principal place
of business at 45 Moulton Street, Cambridge, MA 02138 ("ONTOGENY"), agree as
follows:

                                   Article 1
                                   Background

1.1   JOHNS HOPKINS represents and warrants that it is Owner by assignment from
      Philip A. Beachy and Jeffrey Porter (both investigators employed by Howard
      Hughes Medical Institute ("HHMI")) and HHMI, and that the UNIVERSITY OF
      WASHINGTON represents and warrants that it is the Owner by assignment from
      Randall T. Moon (also an investigator employed by HHMI) and HHMI of the
      entire right, title and interest in the United States and Foreign Patent
      Applications ("Hedgehog Patent Applications") set forth in Appendix A, and
      in the inventions described and claimed therein ("Invention"), and any
      Licensed Patent, defined in Article 2, which may issue to the Invention,
      and that JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON have the sole
      authority to grant the licenses granted hereunder.

1.2   JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON have certain technical data
      and information ("Technology") pertaining to Invention.

1.3   JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON want the Technology and
      Invention perfected and marketed in a reasonable period of time in order
      that resulting products will be available for public use and benefit.

1.4   ONTOGENY would like to practice the Invention and related Technology, and
      is therefore desirous of obtaining a license under Licensed Patent to
      develop, manufacture, use, and sell Licensed Product in the area of
      therapeutics, diagnostics and research reagents.

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1.5   The Technology and Invention were developed in the course of research
      supported by the HHMI in affiliation with each of JOHNS HOPKINS and the
      UNIVERSITY OF WASHINGTON.

1.6   JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON agree that all
      notifications and payments by ONTOGENY pursuant to this Agreement will be
      made to, and accepted by, JOHNS HOPKINS for the benefit of both JOHNS
      HOPKINS and the UNIVERSITY OF WASHINGTON.

                                    Article 2
                                   Definitions

2.1   "Licensed Patent(s)" means any U.S. Letters Patent issued upon the
      Hedgehog Patent Applications, or upon any divisions, continuations,
      reissues, reexamines, extensions, and any claims in continuations-in-part
      (CIPs) applications; and any and all foreign patents, extensions and
      supplemental protection certificates or patent applications corresponding
      thereto. All such divisions, continuations, reissues, reexaminations, CIPs
      and foreign applications and patents issuing thereon will be automatically
      incorporated in and added to this Agreement. CIP applications shall only
      be filed for new matter which supports claims to inventions described in
      the Hedgehog Patent Applications and could not be filed in a stand alone,
      original patent application.

2.2   "Licensed Materials" means those proprietary materials which are
      enumerated in Appendix B, and transferred from JOHNS HOPKINS through
      Philip A. Beachy to ONTOGENY pursuant to the terms of this Agreement.

2.3   "Licensed Product" means any product or process in the Licensed Field of
      Use, the importation, manufacture, use, offer for sale, or sale of which:

      (a)   is covered by a valid claim of an issued, unexpired Licensed Patent;
            a claim of an issued, unexpired Licensed Patent will be presumed to
            be valid unless it has been held to be invalid by a final judgment
            of a court of competent jurisdiction where no appeal can be or is
            taken; or

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      (b)   is covered by any claim being prosecuted in a pending application in
            Licensed Patents, provided the claim has not been pending for more
            than 7 years; or

      (c)   clauses (a) and (b) notwithstanding, is covered by any pending or
            issued claim to bioactive Hedgehog polypeptides issuing from Harvard
            University Patents/Applications or Columbia University
            Patents/Applications (defined infra); or

      (d)   incorporates, uses or could not have been manufactured or discovered
            but for the use of Licensed Materials or materials covered by
            Licensed Patents (including expression products thereof and
            antibodies to such polypeptides).

2.4   "Net Sales" means the gross revenue derived by ONTOGENY or affiliate from
      sale(s) of Licensed Product to unrelated third parties, less the following
      items but only as they actually pertain to the disposition of the Licensed
      Product by ONTOGENY or affiliate, are included in the gross revenue, and
      are separately billed:

      (a)   Taxes levied on and/or other governmental charges made as to
            production, sales, transportation, delivery or use and paid by or on
            behalf of ONTOGENY;

      (b)   Costs of insurance, packing, and transportation, where separately
            invoiced and not paid by the customer, from the place of manufacture
            to the customer's premises or point of installation;

      (c)   Credit for returns, allowances, or trades; and

      (d)   Trade, quantity or cash discounts and non-affiliated brokers' or
            agents' commissions allowed and actually taken.

2.5   "Licensed Field of Use" means (i) human therapeutics for cancer, (ii)
      human therapeutics for neurobiology, (iii) human therapeutics for
      skeletal, (iv) human therapeutics for all other areas, (v) veterinary
      therapeutics, (vi) drug discovery, (vii) in vivo diagnostics, (viii) in
      vitro diagnostics, and (ix) research reagents.

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2.6   "Exclusive" means that, subject to Article 3.3 and Article 4, neither
      JOHNS HOPKINS nor the UNIVERSITY OF WASHINGTON will grant additional
      licenses to Licensed Patents in the Licensed Field of Use.

2.7   "Sublicense" means any grant of rights under Licensed Patents, Harvard
      University Patents/Applications, Columbia University Patents/Applications,
      or Licensed Materials

2.8   "Sublicensee" means any party (excluding any corporation, partnership,
      joint venture or entity in which Ontogeny directly or indirectly owns or
      controls greater than fifty percent (50%) of the shares entitled to vote
      for election of directors) to which ONTOGENY has granted Sublicenses
      pursuant to this Agreement.

2.9   "Harvard University Patents/Applications" means U.S. Patent applications
      08/356,060 and 08/176,427, any divisions, continuations, reissues,
      reexamines, extensions, and CIPs thereof, and patents issuing therefrom
      and any and all foreign patents or patent applications or supplemental
      protection certificates corresponding thereto.

2.10  "Columbia University Patents/Applications" means U.S. Patent application
      08/202,040, any divisions, continuations, reissues, reexamines,
      extensions, and CIPs thereof, and patents issuing therefrom and any and
      all foreign patents or patent applications or supplemental protection
      certificates corresponding thereto.

                                    Article 3
                            License Grant to Ontogeny

3.1   JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON grant to ONTOGENY, upon and
      subject to the terms and conditions in this Agreement,

            (i)   a worldwide Exclusive license to Licensed Patents, in the
                  Licensed Field of Use, to import, make, use, offer for sale,
                  sell, have made, and have sold Licensed Products described
                  and/or claimed therein; and

            (ii)  a worldwide non-exclusive license to Licensed Materials.

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3.2   The period of the Exclusive license granted in Article 3.1, including the
      right to Sublicense pursuant to Article 14, in the Licensed Field of Use
      begins on the Effective Date and ends on the last to occur of:

      (a)   17 years from the Effective Date if no valid claims are issued in
            Licensed Patents or canceled pursuant to Article 7.5; or

      (b)   the expiration of the last patent under the Licensed Patents.

3.3   JOHNS HOPKINS, JOHNS HOPKINS HEALTH SYSTEMS, HHMI and the UNIVERSITY OF
      WASHINGTON have the right to practice the Invention for their own
      non-profit research purposes or in non-profit research collaborations with
      third party academic or not-for-profit research institutions. JOHNS
      HOPKINS, HHMI and the UNIVERSITY OF WASHINGTON also have the right to
      publish any information included in the Licensed Patent. In order that
      ONTOGENY may properly evaluate filing of CIP applications, JOHNS HOPKINS
      and the UNIVERSITY OF WASHINGTON agree to provide copies of manuscripts
      disclosing information that would be appropriate for filing a CIP
      application directly related to the Licensed Patents at least thirty (30)
      days in advance of any publication thereof (including any electronic
      publication), and copies of abstracts or oral disclosures disclosing
      information directly related to the Licensed Patents at least ten (10)
      days before public disclosure or publication. All manuscripts or abstracts
      provided to ONTOGENY shall only be shared on a confidential basis with
      employees of ONTOGENY except that ONTOGENY may share such information with
      its legal counsel prior to public disclosure or publication.

                                    Article 4
                   Rights of United States in Licensed Patents

This Agreement is subject to all of the terms and conditions of Title 35 United
States Code Sections 200 through 204. This includes the obligation that ONTOGENY
agrees that it shall manufacture and shall cause its Sublicensees (if any) to
manufacture, substantially in the United States all Licensed Product sold or
produced in the United States, and to take all reasonable action necessary to
enable JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON to satisfy their
obligations to the United States Federal Government, relating to Licensed
Products.

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                                    Article 5
                              Diligence by Ontogeny

5.1   As an inducement to JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON to
      enter into this Agreement, ONTOGENY or its Sublicensees (if any) will use
      reasonable effort and diligence to proceed with the development,
      manufacture, and sale or lease of Licensed Product and to diligently
      develop markets for the Licensed Product. Specific milestones or other
      measures of diligence are set forth in Appendix C. If ONTOGENY or its
      Sublicensees (if any) fails to meet any such milestone as enumerated in
      Appendix C, JOHNS HOPKINS may institute proceedings to terminate
      Ontogeny's rights to certain areas in the Licensed Field of Use. Such
      termination proceedings will involve reasonable written notice to ONTOGENY
      specifically detailing the basis for JOHNS HOPKINS' termination, and a
      reasonable opportunity, including a further ninety (90) day cure period,
      for ONTOGENY to refute or cure the basis for JOHNS HOPKINS' concern.
      Should unexpected impediments occur during development, these milestones
      may be renegotiated by the parties upon written request by ONTOGENY
      detailing its diligent efforts, or those of its Sublicensees (if any), and
      reasons requesting modification of the milestones. In making their
      decision to terminate certain of ONTOGENY's rights, JOHNS HOPKINS shall
      take into consideration the normal course of such programs conducted with
      sound and reasonable business practices and judgment and shall take into
      account the reports provided under this Agreement by ONTOGENY.

5.2   In the event JOHNS HOPKINS becomes aware of third parties that wish to
      license the Licensed Patents in the Licensed Field of Use pursuant to
      Articles 2.5(viii) or 2.5(ix) and such license to a third party would not
      result in competition to ONTOGENY, JOHNS HOPKINS shall so notify ONTOGENY,
      and ONTOGENY shall exercise one of the following options within sixty (60)
      days of notification to ONTOGENY by JOHNS HOPKINS:

      (a)   commence active research and development of Licensed Patents in the
            Licensed Field of Use pursuant to Articles 2.5(viii) or 2.5(ix);

      (b)   grant a sublicense to said third parties to make, use and sell
            Licensed Products in the Licensed Field of Use pursuant to Articles
            2.5(viii) or 2.5(ix); or

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      (c)   grant the right to JOHNS HOPKINS to directly license said third
            parties to make, use and sell Licensed Products in the Licensed
            Field of Use pursuant to Articles 2.5(viii) or 2.5(ix).

      In the event ONTOGENY selects the option outlined in Article 5.2(a),
      ONTOGENY or its Sublicensees (if any) will use reasonable effort and
      diligence to proceed with the development, manufacture, and sale or lease
      of Licensed Products in the Licensed Field of Use pursuant to Articles
      2.5(viii) or 2.5(ix) and to diligently develop markets for the Licensed
      Product in the Licensed Field of Use pursuant to Articles 2.5(viii) or
      2.5(ix). The diligence provisions of Article 5.2 above apply to the
      specific milestones or other measures of diligence that are set forth in
      paragraphs 8 and 9 of Appendix C.

5.3   Progress Report - On or before September 30 of each year until ONTOGENY or
      its Sublicensees (if any) markets a Licensed Product, ONTOGENY shall
      submit an annual report covering the preceding year ending June 30,
      regarding the progress of ONTOGENY or its Sublicensees (if any) toward
      commercial use of Licensed Product. Additionally, ONTOGENY will provide,
      upon written request from JOHNS HOPKINS, one additional interim report per
      year covering the time period subsequent the last previous annual report.
      The annual and interim reports will include, as a minimum, information
      sufficient to enable JOHNS HOPKINS to satisfy reporting requirements of
      the U.S. Government and for JOHNS HOPKINS to ascertain progress by
      ONTOGENY or its Sublicensees (if any) toward meeting the diligence
      requirements of Article 5.

                                    Article 6
                          Payments due to Johns Hopkins

6.1   In consideration for the rights granted in this Agreement, ONTOGENY will
      pay to JOHNS HOPKINS a noncreditable, nonrefundable license issue royalty
      of $200,000 upon signing this Agreement ($10,000 of which is considered a
      license processing fee paid to JOHNS HOPKINS), and issue to JOHNS HOPKINS
      fifty thousand (50,000) shares of ONTOGENY Common stock. At JOHNS HOPKINS'
      request, it may subsequently transfer and assign up to twenty five
      thousand (25,000) of said ONTOGENY Common stock to the UNIVERSITY OF
      WASHINGTON, which transfer is herein consented to by ONTOGENY.

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

6.2   In the first three years of this Agreement, provided this Agreement is not
      terminated sooner, ONTOGENY will pay to JOHNS HOPKINS a yearly royalty of
      $[**], with the first payment due in 1997. Beginning in the year 2000 and
      until the end of the period of the Exclusive license as set forth in
      Article 3.2, ONTOGENY will pay to JOHNS HOPKINS a yearly royalty of $[**].
      Said yearly royalties will be paid to JOHNS HOPKINS by ONTOGENY by
      November 30th of each year. Yearly royalty payments made in the year 2003
      and after will be fully creditable against the earned royalties payments
      provided by Articles 6.3.

6.3   In addition, ONTOGENY will pay to JOHNS HOPKINS earned royalties on Net
      Sales as follows:

      (a)   For sale of Licensed Product covered by 2.3(a), (b) or (c) as a
            human and/or veterinary therapeutic and/or in vivo diagnostic and/or
            research reagents:

            (i)   [**]% of Net Sales of such Licensed Product by ONTOGENY, which
                  royalty will be reduced by [**]% of other royalty payments
                  made upon the sale of Licensed Product, but which royalty
                  shall be no less than [**]% of Net Sales of Licensed Product;
                  and

            (ii)  [**]% of revenues received by ONTOGENY on sales of such
                  Licensed Product by a Sublicensee.

      (b)   For sale of Licensed Product covered by 2.3(a), (b) or (c) as in
            vitro diagnostic reagents:

            (i)   [**]% of Net Sales of such Licensed Product by ONTOGENY
                  wherein Licensed Product is the sole active ingredient of kit
                  or reagent sold;

            (ii)  The product of [**]% and (A/B) on Net Sales of Combination
                  Products. Combination Products are those products in which
                  Licensed Product is one of two or more Active Ingredients. In
                  this sense, Active Ingredient shall mean those ingredients
                  essential to the Combination Product and on which ONTOGENY has
                  either, (i) an obligation to pay royalties to a third party,
                  or (ii) owns issued and/or

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                  pending patent rights. If stand alone values are available for
                  all Active Ingredients in the Combination Product, then "A"
                  shall mean the stand alone value of the Licensed Product
                  incorporated into the Combination Product, and "B" shall mean
                  the aggregate of the stand alone values of all Active
                  Ingredients, including Licensed Product, in the Combination
                  Product. In the event that stand alone values are not
                  available for all Active Ingredients incorporated into the
                  Combination Product, then A shall mean the royalty of [**]%
                  owed JOHNS HOPKINS by ONTOGENY under this Agreement, and B
                  shall mean the aggregate of all royalties on Active
                  Ingredients incorporated into the Combination Product owed by
                  ONTOGENY to third parties. To the extent that B in this latter
                  case includes Active Ingredients covered by issued/pending
                  patents solely owned by ONTOGENY and on which ONTOGENY owes no
                  third party royalties, ONTOGENY and JOHNS HOPKINS will enter
                  into good faith negotiations to ascribe royalty values to the
                  Active Ingredients covered by such issued/pending patents; and

            (iii) [**]% of revenues received by ONTOGENY on sales of Licensed
                  Product by Sublicensee.

      (c)   For sale of Licensed Product covered by 2.3(d):

            (i)   [**]% of Net Sales of such Licensed Product by ONTOGENY; and

            (ii)  [**]% of revenues received by ONTOGENY on sales of such
                  Licensed Product by a Sublicensee.

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

      (d)   For sale of therapeutic cell preparations ("Cell Preparations")
            which could not have been made but for the Licensed Product:

            (i)   [**]% of Net Sales of Cell Preparations by ONTOGENY wherein
                  Licensed Product is the sole active ingredient used in cell
                  processing to generate the Cell Preparation;

            (ii)  The product of [**]% and (A/B) on Net Sales of Cell
                  Preparations of Combination Products. Combination Products are
                  those products in which Licensed Product is one of two or more
                  Active Ingredients. In this sense, Active Ingredient shall
                  mean those ingredients essential to the Combination Product
                  and on which ONTOGENY has either, (i) an obligation to pay
                  royalties to a third party, or (ii) owns issued and/or pending
                  patent rights. If stand alone values are available for all
                  Active Ingredients in the Combination Product, then "A" shall
                  mean the stand alone value of the Licensed Product
                  incorporated into the Combination Product, and "B" shall mean
                  the aggregate of the stand alone values of all Active
                  Ingredients, including Licensed Product, in the Combination
                  Product. In the event that stand alone values are not
                  available for all Active Ingredients incorporated into the
                  Combination Product, then A shall mean the royalty of [**]%
                  owed JOHNS HOPKINS by ONTOGENY under this Agreement, and B
                  shall mean the aggregate of all royalties on Active
                  Ingredients incorporated into the Combination Product owed by
                  ONTOGENY to third parties. To the extent that B in this latter
                  case includes Active Ingredients covered by issued/pending
                  patents solely owned by ONTOGENY and on which ONTOGENY owes no
                  third party royalties, ONTOGENY and JOHNS HOPKINS will enter
                  into good faith negotiations to ascribe royalty values to the
                  Active Ingredients covered by such issued/pending patents; and

            (iii) [**]% of revenues received by ONTOGENY on sales of Cell
                  Preparation by Sublicensee.

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

6.4   In addition, ONTOGENY will pay JOHNS HOPKINS non-creditable,
      non-refundable Milestone payments as follows:

      (a)   a one-time payment of $[**] to be made upon the first to occur of
            (i) issuance, in Licensed Patents, of patent claims in the United
            States, or (ii) allowance of a claim in Licensed Patents but
            cancelled pursuant to Article 7.5;

      (b)   for each Licensed Product to be marketed as a therapeutic, a
            one-time payment of $[**] to be made upon a filing of an
            investigational new drug application (IND) by ONTOGENY or its
            Sublicensees (if any);

      (c)   for each Licensed Product to be marketed as a therapeutic, a
            one-time payment of $[**] to be paid upon completion of Phase II
            clinical trials by ONTOGENY or its Sublicensees (if any);

      (d)   for each Licensed Product to be marketed as a therapeutic, a
            one-time payment of $[**] to be paid upon completion of Phase III
            clinical trials by ONTOGENY or its Sublicensees (if any);

      (e)   a one-time payment of $[**] to be made upon the first sale of a
            Licensed Product as an in vitro diagnostic reagent by ONTOGENY or
            its Sublicensees (if any); and

      (f)   Pursuant to ONTOGENY entering into a Sublicense, corporate
            partnership agreement or other similar strategic partnership
            agreement for development of Licensed Products to be marketed within
            the Licensed Field of Use, ONTOGENY will pay JOHNS HOPKINS, within
            sixty (60) days of execution of such partnership agreement, as
            follows:

                  (1)   If agreement involves non-cash consideration received by
                        ONTOGENY and the value of such non-cash consideration,
                        at the time the Sublicense is executed, represents
                        greater than [**]% of the total consideration received
                        by ONTOGENY, then ONTOGENY will pay JOHNS HOPKINS (i)
                        [**]%) of the value

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                        of such non-cash consideration received by ONTOGENY and
                        (ii) any other amounts due JOHN HOPKINS pursuant to
                        Article 6.3, Article 6.4(f)(2), or Article 6.4(f)(3).
                        The value of any non-cash consideration will be
                        determined by ONTOGENY and represent a commercially
                        reasonable value (the "Ontogeny Non-Cash Value"). Within
                        90 days of receipt of (i) a copy of a newly executed
                        Sublicense agreement provided to JOHNS HOPKINS by
                        ONTOGENY under Article 14.4 and (ii) a notice from
                        ONTOGENY stating the amount of the Ontogeny Non-Cash
                        Value, JOHNS HOPKINS must notify ONTOGENY in writing
                        that JOHNS HOPKINS wishes to hire a mutually agreed upon
                        third party to determine the accuracy of the Ontogeny
                        Non-Cash Value (the "Third Party Non-Cash Value"). If
                        JOHNS HOPKINS does not notify ONTOGENY in writing within
                        such 90 day period of Johns Hopkins' intent to hire a
                        third party to determine the Third Party Non-Cash Value,
                        then JOHNS HOPKINS waives its right to hire such third
                        party in the future for such specific newly executed
                        Sublicence agreement. If the Third Party Non-Cash Value
                        is less than [**] of the Ontogeny Non-Cash Value, then
                        (i) ONTOGENY will pay JOHNS HOPKINS [**] of whichever is
                        lower of the Ontogeny Non-Cash Value or the Third Party
                        Non-Cash Value, and (ii) JOHNS HOPKINS will pay all
                        costs in connection with obtaining the Third Party
                        Non-Cash Value. If the Third Party Non-Cash Value is
                        greater than [**] of the Ontogeny Non-Cash Value, then
                        (i) ONTOGENY will pay JOHNS HOPKINS [**] of the Third
                        Party Non-Cash Value, and (ii) ONTOGENY will pay all
                        costs in connection with obtaining the Third Party
                        Non-Cash Value.

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                  (2)   If agreement constitutes Committed Funds to ONTOGENY of
                        less than $[* * ], but greater than $[**], then JOHNS
                        HOPKINS will receive $[**].

                  (3)   If agreement constitutes Committed Funds to ONTOGENY of
                        greater than or equal to $[**], then JOHNS HOPKINS will
                        receive $[**].

                  (4)   Committed Funds shall include the sum of (i) half the
                        value of guaranteed equity payments, (ii) up-front
                        payments or other fees, and (iii) the total of
                        guaranteed research sponsorship payments. In calculating
                        Committed Funds, ONTOGENY shall keep a running total of
                        funds included within the definition of Committed Funds
                        and received from or guaranteed by each particular
                        Sublicensee. When the running total from any particular
                        Sublicensee is greater than $[**], but less than $[**],
                        ONTOGENY shall make a payment to JOHNS HOPKINS of $[**]
                        for that particular Sublicense, as under article
                        6.4(f)(2) herein. When the running total from any
                        particular Sublicensee exceeds $[**], then ONTOGENY
                        shall make a payment under Article 6.4(f)(3) to JOHNS
                        HOPKINS of an additional $[* * ] for that particular
                        Sublicense. Payments by Ontogeny under Article 6.4(f)(2)
                        and Article 6.4(f)(3) shall each only be made once with
                        respect to each particular Sublicensee.

      (g)   Pursuant to ONTOGENY entering into a Sublicense, corporate
            partnership agreement or other similar strategic partnership
            agreement for a Licensed Products approved for sale by FDA (or its
            equivalent regulatory authority) within the Licensed Field of Use,
            ONTOGENY will, within sixty (60) days of execution of such
            agreement, pay JOHNS HOPKINS [**] of all consideration received by
            ONTOGENY from the Sublicensee. The value of any consideration
            received by ONTOGENY from the Sublicensee will be determined by
            ONTOGENY and represent a commercially reasonable value (the
            "Ontogeny Consideration Value"). At JOHNS HOPKINS' option and such
            option to only be exercisable for the 90 day period after JOHN
            HOPKINS has been notified of such a Sublicense agreement, JOHN
            HOPKINS may hire a mutually agreed upon third

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          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

            party to determine the revised ONTOGENY Consideration Value (the
            "Third Party Consideration Value"). If the Third Party Consideration
            Value is less than [**] of the Ontogeny Consideration Value, then
            (i) ONTOGENY will pay JOHNS HOPKINS [**] of whichever is lower of
            the Ontogeny Consideration Value or the Third Party Consideration
            Value, and (ii) JOHNS HOPKINS will pay all costs in connection with
            obtaining the Third Party Consideration Value. If the Third Party
            Consideration Value is greater than [**] of the Ontogeny
            Consideration Value, then (i) ONTOGENY will pay JOHNS HOPKINS [**]
            of the Third Party Consideration Value, and (ii) ONTOGENY will pay
            all costs in connection with obtaining the Third Party Consideration
            Value.

      (h)   In consideration for the license granted in this Agreement, and in
            recognition of ONTOGENY recently entering into a Sublicense
            agreement with Biogen, Inc., ONTOGENY will pay to JOHNS HOPKINS an
            additional noncreditable, nonrefundable milestone payment of $[**]
            upon signing this Agreement.

      (i)   In consideration for the license granted in this Agreement and in
            recognition of ONTOGENY anticipating to enter into a Sublicense
            agreement with Boehringer Mannheim GmbH, ONTOGENY will pay to JOHNS
            HOPKINS an additional noncreditable, nonrefundable milestone payment
            of zero dollars ($0) upon the later of (i) signing this Agreement or
            (ii) closing the Sublicense agreement with Boehringer Mannheim.

      (j)   ONTOGENY represents that as of the Effective Date, ONTOGENY has not
            Sublicensed the Licensed Patents other than as disclosed in Article
            6.4(h) and 6.4(i).

6.5   If this Agreement is not terminated earlier in accordance with other
      provisions, ONTOGENY'S obligation to pay royalties under Article 6 will
      continue until the last to occur of:

      (a)   17 years from even date herewith, if no Licensed Patent issues
            covering sale of Licensed Product; or

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      (b)   the expiration of the last patent under the Licensed Patents or
            Harvard University Patents/Applications or Columbia University
            Patents/Applications of which ONTOGENY would infringe a valid claim
            thereof by sale of Licensed Product.

6.6   ONTOGENY will calculate royalties on sales in currencies other than U.S.
      Dollars using the appropriate foreign exchange rate quoted by the
      BankBoston (Boston) foreign exchange desk, on the close of business on the
      last banking day of each calendar quarter. Royalty payments to JOHNS
      HOPKINS must be in U.S. Dollars.

                                    Article 7
                         Prosecution of Licensed Patents

7.1   JOHNS HOPKINS and ONTOGENY will share responsibility for patent
      prosecution as follows:

            JOHNS HOPKINS will lead the management of prosecution of the
      Licensed Patent using patent counsel reasonably acceptable to ONTOGENY,
      which counsel will use diligent efforts to prosecute the Licensed Patents
      in the best interest of ONTOGENY, JOHNS HOPKINS, HHMI and the UNIVERSITY
      OF WASHINGTON. JOHNS HOPKINS agrees to use reasonable efforts to keep such
      patent costs reasonable for the benefit of ONTOGENY, provided however,
      that the quality and scope of the Licensed Patent will not be jeopardized
      by such minimization. JOHNS HOPKINS will require its patent counsel to
      provide an annual patent prosecution and maintenance budget to ONTOGENY
      with reasonable period for review. If in any year ONTOGENY disputes such
      annual patent prosecution and maintenance budget proposed by JOHNS
      HOPKINS, then ONTOGENY will be responsible for all legal bills, up to the
      annual budget limit proposed by JOHNS HOPKINS, until both parties resolve
      their dispute over such patent prosecution and maintenance budget for the
      year. JOHNS HOPKINS' patent counsel will directly notify ONTOGENY and
      ONTOGENY's patent counsel, and provide ONTOGENY and ONTOGENY's patent
      counsel copies of any official communications from United States and
      foreign patent offices relating to said prosecution, as well as copies of
      relevant communications to the various patent offices so that ONTOGENY may
      be informed and appraised of the continuing prosecution of Licensed
      Patent. In addition,

                                     - 15 -
<PAGE>

      JOHNS HOPKINS shall cause ONTOGENY to be directly copied on all
      correspondence between JOHNS HOPKINS and JOHNS HOPKINS' patent counsel
      with regard to the status of any and all patents and patent applications
      comprising Licensed Patents. ONTOGENY will have reasonable opportunities
      to participate in decision making on key decisions affecting filing,
      prosecution and maintenance of the Licensed Patent, including, without
      limitation reasonable opportunity to review the abandonment of any
      Licensed Patent or claims thereof, and JOHNS HOPKINS will use reasonable
      efforts to incorporate ONTOGENY's reasonable suggestions regarding said
      prosecution. JOHNS HOPKINS will use reasonable efforts to amend any patent
      application to include claims reasonably requested by ONTOGENY to protect
      Licensed Product. No case will be abandoned without giving ONTOGENY at
      least thirty (30) days notice and opportunity to pursue the application.

7.2   Except as by mutual agreement between the parties, patent applications
      comprising the Licensed Patent are to be filed in the major world markets,
      which filing will be satisfied by filing in the following patent offices:
      United States, Canada, Japan, Australia and Europe.

7.3   If ONTOGENY demonstrates that it is not being adequately informed or
      apprised of the continuing prosecution of Licensed Patent or that ONTOGENY
      is not being provided with reasonable opportunities to participate in
      decision making as indicated in the above paragraph, ONTOGENY will assume
      lead management of the prosecution of the Licensed Patent, using patent
      counsel reasonably acceptable to JOHNS HOPKINS (such patent counsel to
      understand that both JOHNS HOPKINS and ONTOGENY are its clients), and
      ONTOGENY will thereafter provide JOHNS HOPKINS with the same safeguards
      which ONTOGENY was due under Article 7.1 (except patents shall be
      prosecuted in the best interests of the patent owners). Any such
      demonstration will involve reasonable written notice to JOHNS HOPKINS
      specifically detailing ONTOGENY'S concern, and a reasonable opportunity,
      including a 90 day cure period, for JOHNS HOPKINS to refute or cure the
      basis for ONTOGENY'S concern. ONTOGENY agrees to diligently prosecute or
      assist in prosecuting Licensed Patent. If after the cure period JOHNS
      HOPKINS and ONTOGENY still cannot agree on a cure for ONTOGENY'S concern,
      both parties agree to submit the dispute to mediation as set forth in
      Article 17 below.

                                     - 16 -
<PAGE>

7.4   Within 45 days after receipt of a statement from JOHNS HOPKINS, ONTOGENY
      will reimburse JOHNS HOPKINS for all costs incurred by JOHNS HOPKINS,
      including those costs incurred prior to the Effective Date, in connection
      with the preparation, filing and prosecution of all patent applications
      and maintenance of patents corresponding to the Invention. Such fees and
      costs shall not include costs incurred by Johns Hopkins in the use of its
      own resources, such as employee time, and shall not extend to patenting
      fees and costs incurred by Johns Hopkins after termination of this
      Agreement. ONTOGENY will provide payment authorization to JOHNS HOPKINS at
      least one (1) month before an action is due, provided that ONTOGENY has
      received timely notice of such action from JOHNS HOPKINS. For the purposes
      of this Article 7.4, notice will be considered given to ONTOGENY when
      ONTOGENY and ONTOGENY's patent counsel is copied and is in receipt of
      material sent by JOHNS HOPKINS' patent counsel. ONTOGENY will provide
      written authorization to JOHNS HOPKINS and its patent attorney in response
      to all notices sent by JOHNS HOPKINS' patent counsel. Failure to provide
      written authorization, if adequate notice was given to ONTOGENY, shall
      constitute an ONTOGENY decision not to authorize an action. In any country
      where ONTOGENY elects not to authorize an action, have a patent
      application filed or to pay expenses associated with filing, prosecuting
      or maintaining a patent application or patent, JOHNS HOPKINS may file,
      prosecute and/or maintain a patent application or patent at its own
      expense and for its own exclusive benefit and ONTOGENY thereafter shall
      not be licensed under such patent or patent application.

7.5   In the event that one or more of the Licensed Patents are the subject of a
      Declaration of Interference by the U.S. Patent and Trademark Office as
      interfering with claims in a Harvard University or Columbia University
      patent(s) or patent application(s) which is also exclusively licensed by
      ONTOGENY, JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON agree to
      negotiate, in good faith, a reasonable settlement agreement simplifying
      issues involved in determining priority and/or to resolve respective
      rights with regard to any such patent applications which may ultimately be
      the subject of interference proceedings, such that a mechanism for
      terminating the interference is developed which awards priority to the
      appropriate party.

                                     - 17 -
<PAGE>

                                    Article 8
                    Royalty Reports, Payments, And Accounting

8.1   ONTOGENY will make quarterly written reports and earned royalty payments
      to JOHNS HOPKINS beginning with the first sale of a Licensed Product by
      ONTOGENY or Sublicensee. These reports and payments will be due within 45
      days after the end of each of ONTOGENY'S fiscal quarters, except for the
      last quarter of each fiscal year, the reports and payments being instead
      due 90 days after the end of ONTOGENY'S fiscal year. The report will
      include the number, description and aggregate Net Sales of Licensed
      Product as well as the calculation of royalty payments due JOHNS HOPKINS
      under Article 6.3 and 6.4 for the completed calendar year. ONTOGENY will
      also include the payment of royalties for the calendar year covered by the
      report.

8.2   ONTOGENY must keep and maintain records and cause its Sublicensees to keep
      and maintain records for a period of 3 years showing the manufacture,
      sale, use, and other disposition of products sold or otherwise disposed of
      under this Agreement. These records will include general ledger records
      showing cash receipts and expenses, and records that include production
      records, customers, serial numbers and related information in sufficient
      detail to be able to determine the royalties owed to JOHNS HOPKINS.
      ONTOGENY shall also permit and shall use reasonable efforts to cause its
      Sublicensee to permit, JOHNS HOPKINS to examine books and records when
      necessary to verify reports described in Article 8.1. JOHNS HOPKINS or its
      designee will make the examination at JOHNS HOPKINS' expense. If the audit
      reveals 5% or more under reporting of royalties due JOHNS HOPKINS,
      ONTOGENY will pay the audit costs

                                    Article 9
                             Negation Of Warranties

9.1   Nothing in this Agreement can be construed as:

      (a)   A warranty or representation by JOHNS HOPKINS, HHMI or the
            UNIVERSITY OF WASHINGTON as to the validity or scope of any Licensed
            Patent;

                                     - 18 -
<PAGE>

      (b)   A warranty or representation that anything made, used, sold, or
            otherwise disposed of under any license granted in this Agreement is
            or will be free from infringement of other patents, copyrights, or
            any other rights not included in Licensed Patents;

      (c)   An obligation to bring or prosecute actions or suits against third
            parties for infringement, except as described in Article 13; or

      (d)   Granting by implication, estoppel, or otherwise any licenses or
            rights under existing patents or other rights of JOHNS HOPKINS,
            HHMI, the UNIVERSITY OF WASHINGTON or other persons other than
            Licensed Patent, regardless of whether the patents or other rights
            are dominant or subordinate to any Licensed Patent.

9.2   EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, JOHNS HOPKINS, HHMI AND
      THE UNIVERSITY OF WASHINGTON MAKE NO REPRESENTATIONS AND EXTEND NO
      WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR
      IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
      OR THAT THE MANUFACTURE, USE OR SALE OF THE LICENSED PRODUCT WILL NOT
      INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER
      EXPRESS OR IMPLIED WARRANTIES.

                                   Article 10
                                 Indemnification

10.1  ONTOGENY will indemnify, hold harmless, and defend JOHNS HOPKINS, HHMI and
      the UNIVERSITY OF WASHINGTON and their respective trustees, officers,
      employees, students, and agents against any and all claims, liability,
      costs, loss or obligations (including without limitation, reasonable
      attorney fees and costs), based upon, arising out of, or in connection
      with this Agreement.

10.2  JOHNS HOPKINS, HHMI and the UNIVERSITY OF WASHINGTON will not be liable
      for any indirect, special, consequential, or other damages whatsoever,
      whether grounded in tort, strict liability, contract or otherwise, with
      respect to the manufacture, use or sale of a Licensed Product

                                     - 19 -
<PAGE>

      by ONTOGENY or Sublicensee. JOHNS HOPKINS, HHMI and the UNIVERSITY OF
      WASHINGTON will not have any responsibilities or liabilities whatsoever
      with respect to Licensed Product.

10.3  ONTOGENY must at all times comply, through insurance or self-insurance,
      with all statutory workers' compensation and employers' liability
      requirements covering any and all employees with respect to activities
      performed under this Agreement.

10.4  In addition to the foregoing, ONTOGENY must maintain, during the term of
      this Agreement, Comprehensive General Liability Insurance, including
      Products Liability Insurance, with reputable and financially secure
      insurance carrier to cover the activities of ONTOGENY and its Sublicensee.
      This insurance must provide, by the date of first clinical testing,
      minimum units of liability of $2,000,000 and must include JOHNS HOPKINS,
      HHMI and the UNIVERSITY OF WASHINGTON, their trustees, directors,
      officers, employees, students, and agents as additional insureds. This
      insurance will be written to cover claims incurred, discovered,
      manifested, or made during or after the expiration of this Agreement. At
      JOHNS HOPKINS' request, ONTOGENY will furnish a Certificate of Insurance
      evidencing primary coverage and requiring 30 days prior written notice of
      cancellation or material change to JOHNS HOPKINS. ONTOGENY will advise
      JOHNS HOPKINS, in writing, that it maintains excess liability coverage
      (following form) over primary insurance for at least the minimum limits
      set forth above. All insurance of ONTOGENY must be primary coverage;
      insurance of JOHNS HOPKINS, HHMI and the UNIVERSITY OF WASHINGTON will be
      excess and noncontributory.

                                   Article 11
                                 Product Marking

ONTOGENY will mark Licensed Product (or their containers or labels) made, sold,
or otherwise disposed of by it under the license granted in this Agreement with
the words "Patent Pending," if no patent on the Invention has issued and with
the numbers of the Licensed Patent when a patent has issued.

                                     - 20 -
<PAGE>

                                   Article 12
                             Use of Names And Marks

Except as otherwise required by law, ONTOGENY or its Sublicensees (if any) will
not identify JOHNS HOPKINS, HHMI or the UNIVERSITY OF WASHINGTON in any
promotional advertising or other promotional materials to be disseminated to the
public or to use the name of any faculty member, employee, or student or any
trademark, service mark, trade name, or symbol of JOHNS HOPKINS, HHMI or the
UNIVERSITY OF WASHINGTON without prior written consent from the institution
whose name is proposed to be used, which institution shall be provided with at
least five (5) business days for review or consent for such public disclosure,
which consent shall not be unreasonably withheld; provided, however, that
ONTOGENY shall have the right, without obtaining consent, to confirm the
existence and general content of this Agreement.

                                   Article 13
                  Infringement By Others: Protection Of Patents

13.1  ONTOGENY will promptly inform JOHNS HOPKINS of any suspected infringement
      of a Licensed Patent. During the Exclusive period of this Agreement, JOHNS
      HOPKINS and ONTOGENY each have the right to institute an action for
      infringement of the Licensed Patent against a third party as follows:

      (a)   If ONTOGENY and JOHNS HOPKINS agree to institute suit jointly, the
            suit will be brought in both their names, the out-of-pocket costs
            and any recovery or settlement will be divided equally. ONTOGENY and
            JOHNS HOPKINS will agree to the manner in which they exercise
            control over the action. JOHNS HOPKINS may, if it so desires, also
            be represented by and pay for separate counsel;

      (b)   If there is no agreement to institute a suit jointly, ONTOGENY may
            institute suit, and, at its option, join JOHNS HOPKINS and/or the
            UNIVERSITY OF WASHINGTON as co-plaintiff(s). If ONTOGENY decides to
            institute suit, then it will notify JOHNS HOPKINS in writing.
            ONTOGENY will pay the entire cost of litigation and be entitled to
            retain the entire amount of any recovery or settlement. However any
            recovery in excess of litigation costs, and the basis for such
            awarded recovery, will be used to

                                     - 21 -
<PAGE>

            calculate lost Net Sales, and ONTOGENY will pay JOHNS HOPKINS
            royalties as indicated in Article 6.3(a)(i), 6.3(b)(i) or (ii),
            6.3(c)(i) and 6.3(d)(i) or (ii).

13.2  Should ONTOGENY commence a suit under Article 13.1 but then decide to
      abandon the suit, it will give timely notice to JOHNS HOPKINS. The other
      party may continue prosecution of the suit if such party (not ONTOGENY)
      will pay all future expenses.

13.3  In the event that any judgment action alleging invalidity or
      noninfringement of any of the Licensed Patents shall be brought against
      ONTOGENY, JOHNS HOPKINS, at its option, shall have the right, within
      thirty (30) days after commencement of such action, to intervene and take
      over the sole defense of the action at its own expense, provided, however,
      should ONTOGENY bring an invalidity action against Licensed Patents, JOHNS
      HOPKINS may immediately defend such suit.

                                   Article 14
                           Right to further Sublicense

14.1  ONTOGENY may grant Sublicenses to Licensed Patents and Licensed Materials
      during the exclusive period of this Agreement.

14.2  Any Sublicense granted by ONTOGENY under this Agreement must be subject
      and subordinate to terms and conditions of this Agreement, except:

      (a)   The Sublicensee may further Sublicense any rights under Licensed
            Patents or Licensed Materials only as not specifically rejected in
            writing by JOHNS HOPKINS within fifteen (15) days of written
            notification of sub-Sublicense by ONTOGENY, any such rejection not
            being unreasonably made by JOHNS HOPKINS; and

      (b)   The earned royalty rate specified in the Sublicense may be at higher
            rates than the rates in this Agreement and must be commercially
            reasonable.

      Any Sublicense also will expressly include the provisions of Articles 8,
      9, 10, and 12 for the benefit of JOHNS HOPKINS, HHMI and the UNIVERSITY OF
      WASHINGTON. In the event that this Agreement is terminated, ONTOGENY,
      subject to JOHNS HOPKINS approval, will

                                     - 22 -
<PAGE>

      provide for the transfer of all obligations, including the payment of
      royalties, to JOHNS HOPKINS or its designee.

14.3  ONTOGENY will provide JOHNS HOPKINS a copy of any Sublicense granted under
      this Agreement within thirty (30) days of the effective date of the
      Sublicense.

                                   Article 15
                            Termination of Agreement

15.1  ONTOGENY may terminate this Agreement by giving JOHNS HOPKINS a 90 day
      notice in writing.

15.2  Surviving any termination by ONTOGENY are:

      (a)   ONTOGENY'S obligation to pay royalties, milestones and any other
            material obligations accrued;

      (b)   In the event that claims in any Licensed Patent or Hedgehog Patent
            Application, or in any divisions, continuations, reissues,
            reexamines, extensions, or CIPs thereof, have been canceled pursuant
            to Article 7.5 prior to termination of this Agreement, ONTOGENY
            shall nevertheless continue to pay royalties and milestones pursuant
            to Article 2.3(c) and Article 6.

      (c)   Any cause of action or claim of ONTOGENY, JOHNS HOPKINS or the
            UNIVERSITY OF WASHINGTON, accrued or to accrue, because of any
            breach or default by the other party; and

      (d)   The provisions of Articles 8, 9, 10, and 12.

15.3  JOHNS HOPKINS may terminate this Agreement if ONTOGENY:

      (a)   Is in default in payment of any material obligation or providing of
            reports;

      (b)   Is in breach of any provision of this Agreement; or

      (c)   Provides any false report;

                                     - 23 -
<PAGE>

      and ONTOGENY fails to remedy the default, breach, or false report within
      90 days after written notice by JOHNS HOPKINS.

15.4  Surviving any termination by JOHNS HOPKINS are:

      (a)   ONTOGENY'S obligation to pay royalties milestones and other payments
            accrued;

      (b)   Any cause of action or claim of ONTOGENY, JOHNS HOPKINS or the
            UNIVERSITY OF WASHINGTON, accrued or to accrue, because of any
            breach or default by the other party; and

      (c)   The provisions of Articles 8, 9, 10, and 12.

                                   Article 16
                             Assignment of Agreement

This Agreement may be assigned to Affiliates of ONTOGENY upon written approval
by JOHNS HOPKINS and UNIVERSITY OF WASHINGTON. JOHNS HOPKINS and UNIVERSITY OF
WASHINGTON will not unreasonably withhold approval. For purposes of this
Agreement, "Affiliate" shall mean any corporation or other business entity which
directly or indirectly controls, is controlled by, or is under common control
with ONTOGENY. Control means ownership or other beneficial interest in 50% or
more of the voting stock or other voting interest of a corporation or other
business entity.

                                   Article 17
                              Mediation of Disputes

17.1  In the event of any controversy or any disputed claim arising from this
      Agreement, excluding any dispute relating to patent validity or
      infringement, the Parties shall first attempt in good faith to resolve the
      dispute by discussions and/or negotiations directly involving appropriate
      representatives of such of the Parties having authority to resolve the
      dispute.

17.2  In the event direct negotiations fail, the Parties shall attempt in good
      faith to resolve the dispute by mediation. Either party may initiate a
      mediation proceeding by request in writing to the other party. Thereupon,
      both Parties will be obligated to engage in a mediation. The proceeding
      will

                                     - 24 -
<PAGE>

      be conducted in accordance with the presently effective American
      Arbitration Association (the "AAA") Commercial Mediation Rules, a copy of
      which is attached as Appendix D. If the Parties have not agreed within
      thirty (30) days of the request for mediation on the selection of a
      mediator willing to serve, the AAA, upon the request of either party,
      shall appoint a qualified mediator. Efforts to reach a settlement will
      continue until the conclusion of the proceeding, which is deemed to occur
      when (a) a written settlement is reached, or (b) the mediator concludes
      and informs the Parties that further efforts would not be useful, or (c)
      the Parties agree in good faith that an impasse has been reached, or (d)
      ninety (90) days after the selection of a mediator in the case of
      termination proceedings initiated pursuant to Article 5.1 or longer as
      reasonably required by the mediator.

17.3  In the event the dispute should fail to be resolved by mediation, either
      party may seek any available remedies under law.

                                   Article 18
                                     Notices

      Notices are to be written and:

            (i)   deposited in the United States mail, registered or certified,
                  or

            (ii)  sent via reputable overnight courier service,

      and addressed as follows:

            TO JOHNS HOPKINS:               Office of Technology Licensing
                                            Johns Hopkins University
                                            2024 E. Monument Street, Ste 2-100
                                            Baltimore, Maryland 21205

                                            Attention: Director

            TO UNIVERSITY OF WASHINGTON:    Office of Technology Transfer
                                            University of Washington
                                            1101 Northeast 45th, Suite 200
                                            Seattle, Washington 98105

                                            Attention: Karen L. Deyerle

                                     - 25 -
<PAGE>

            TO HHMI:                        Howard Hughes Medical Institute
               (for purposes of             4000 Jones Bridge Road
               Article 12 Only)             Chevy Chase, Maryland 20815

                                            Attention: Office of General Counsel

            TO ONTOGENY:                    Ontogeny, Inc.
                                            45 Moulton Street
                                            Cambridge, MA 02138

                                            Attention: CEO

            TO ONTOGENY: with a copy to     Lahive & Cockfield
                                            Sixty State Street
                                            Boston, MA 02109

                                            Attention: Matthew P. Vincent, Ph.D.

      Either party may change its address upon written notice to the other
party.

                                   Article 19
                            No Waiver absent writing

      None of the terms of this Agreement can be waived except by written
consent.

                                   Article 20
                                 Applicable Law

      This Agreement is governed by the laws of the State of Massachusetts
applicable to agreements negotiated, executed and performed within
Massachusetts.

                                   Article 21
                                   Amendments

                                     - 26 -
<PAGE>

      The parties hereto acknowledge that this Agreement sets forth the entire
Agreement and understanding of the parties hereto as to the subject matter
hereof, and shall not be subject to any change or modification except by the
execution of a written instrument subscribed to by the parties hereto.

                                     - 27 -
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers or representatives. This Agreement may be signed in
triplicate counterparts, each of which is deemed an original.

Accepted by:

ONTOGENY, INC.                                THE JOHNS HOPKINS UNIVERSITY

/s/                                           /s/
------------------------------                ----------------------------------
Signature                                     Signature

------------------------------                ----------------------------------
Print Name                                    Print Name

------------------------------                ----------------------------------
Title                                         Title

THE UNIVERSITY OF WASHINGTON

   /s/  Robert C. Miller
------------------------------
Signature

Robert C. Miller
Director, Office of Technology Transfer

                                     - 28 -
<PAGE>

I have read and agree to abide by the terms of this Agreement

Inventors:

Philip A. Beachy                              Jeffrey Porter

/s/ Philip Beachy                             /s/ Jeffrey Porter
------------------------------                ----------------------------------
Signature                                     Signature

------------------------------                ----------------------------------
Date                                          Date

Randall T. Moon

/s/ Randall Moon
------------------------------
Signature

------------------------------
Date

                                     - 29 -
<PAGE>

                                   Appendix A

                          Hedgehog Patent Applications

o     U.S. patent application serial no. 08/349,498 filed on December 2, 1994.

o     U.S patent application serial no. 08/567,357 filed on December 4, 1995.

o     PCT application serial no. PCT/US95/15923 filed on December 4, 1995.

o     U.S. patent application serial no. ____________ [to be assigned] filed on
      October 7, 1996 with the title "Novel Hedgehog-Derived Polypeptides" and
      written by Philip A. Beachy, Randall T. Moon, and Jeffrey A. Porter.

                                     - 30 -
<PAGE>

                                   Appendix B

1.    Hedgehog genes and proteins encoded by the genes, including:

      Drosophila hedgehog
      Sonic hedgehog from mouse, frog, fish
      Xenopus Cephalic hedgehog
      Xenopus banded hedgehog
      Xenopus Hedgehog 4
      Twhh (Tiggiewinkle Hedgehog)

2.    Fragments and/or truncated forms of the above genes, including:

      Truncated forms of Banded Hedgehog, including delta N-C & N
      Truncated forms of mouse sonic hedgehog
      COOH terminal fragments of Drosophila hedgehog
      SHH-C terminal fragment
      Hh Delta 89-254

                                     - 31 -
<PAGE>

                                   Appendix C

                   Performance Milestones for Determination of
                Diligence in the Development of Licensed Products

1.    Human Therapeutics for Cancer. JOHNS HOPKINS has the authority to
      terminate ONTOGENY's rights to Article 2.5(i) if ONTOGENY does not meet
      the following objectives: (a) the identification of a lead compound within
      three (3) years of the Effective Date, (b) the submission of an IND (or
      equivalent) study within six (6) years of the Effective Date, (c) the
      commencement of Phase II (or equivalent) study within eight (8) years of
      the Effective Date, and (d) the commencement of Phase III (or equivalent)
      study within ten (10) years of the Effective Date.

2.    Human Therapeutics for Neurobiology. JOHNS HOPKINS has the authority to
      terminate ONTOGENY's rights to Article 2.5(ii) if ONTOGENY not does meet
      the following objectives: (a) the identification of a lead compound within
      one (1) year of the Effective Date, (b) the submission of an IND (or
      equivalent) study within three (3) years of the Effective Date, (c) the
      commencement of Phase II (or equivalent) study within six (6) years of the
      Effective Date, and (d) the commencement of Phase III (or equivalent)
      study within eight (8) years of the Effective Date.

3.    Human Therapeutics for Skeletal. JOHNS HOPKINS has the authority to
      terminate ONTOGENY's rights to Article 2.5(iii) if ONTOGENY does not meet
      the following objectives: (a) the identification of a lead compound within
      three (3) years of the Effective Date, (b) the submission of an IND (or
      equivalent) study within six (6) years of the Effective Date, (c) the
      commencement of Phase II (or equivalent) study within eight (8) years of
      the Effective Date, and (d) the commencement of Phase III (or equivalent)
      study within ten (10) years of the Effective Date.

4.    Human Therapeutics for Other Areas. JOHNS HOPKINS has the authority to
      terminate ONTOGENY's rights to Article 2.5(iv) if ONTOGENY does not meet
      the following objectives: (a) the identification of a lead compound within
      five (5) years of the Effective Date, (b) the submission of an IND (or
      equivalent) study within eight (8) years of the Effective Date, (c) the
      commencement of Phase

                                     - 32 -
<PAGE>

      II (or equivalent) study within ten (10) years of the Effective Date, and
      (d) the commencement of Phase III (or equivalent) study within twelve (12)
      years of the Effective Date.

5.    Veterinary Therapeutics. JOHNS HOPKINS has the authority to terminate
      ONTOGENY's rights to Article 2.5(v) if ONTOGENY does not meet the
      following objectives: (a) the identification of a lead compound within
      three (3) years of the Effective Date, (b) the submission of an IND (or
      equivalent) study within six (6) years of the Effective Date, (c) the
      commencement of Phase II (or equivalent) study within eight (8) years of
      the Effective Date, and (d) the commencement of Phase III (or equivalent)
      study within ten (10) years of the Effective Date.

6.    Drug Discovery. JOHNS HOPKINS has the authority to terminate ONTOGENY's
      rights to Article 2.5(vi) if ONTOGENY does not meet the following
      objectives: (a) the identification of a lead compound within five (5)
      years of the Effective Date, (b) the submission of an IND (or equivalent)
      study within eight (8) years of the Effective Date, (c) the commencement
      of Phase 11 (or equivalent) study within ten (10) years of the Effective
      Date, and (d) the commencement of Phase III (or equivalent) study within
      twelve (12) years of the Effective Date.

7.    In Vivo Diagnostics. JOHNS HOPKINS has the authority to terminate
      ONTOGENY's rights to Article 2.5(vii) if ONTOGENY does not meet the
      following objectives: (a) the identification of a lead compound within
      three (3) years of the Effective Date, (b) the submission of an IND (or
      equivalent) study within six (6) years of the Effective Date, (c) the
      commencement of Phase 11 (or equivalent) study within eight (8) years of
      the Effective Date, and (d) the commencement of Phase III (or equivalent)
      study within ten (10) years of the Effective Date.

8.    In Vitro Diagnostics. JOHNS HOPKINS has the authority to terminate
      ONTOGENY's rights to Article 2.5(viii) if ONTOGENY does not meet the
      following objectives: (a) the identification of a lead compound within
      three (3) years of the Effective Date, (b) the submission of an IND (or
      equivalent) study within four (4) years of the Effective Date, (c) the
      commencement of Phase 11 (or equivalent) study within six (6) years of the
      Effective Date, and (d) the commencement of Phase III (or equivalent)
      study within eight (8) years of the Effective Date

                                     - 33 -
<PAGE>

                                   Appendix C

                   Performance Milestones for Determination of
                Diligence in the Development of Licensed Products
                                   (continued)

9.    Research Reagents. JOHNS HOPKINS has the authority to terminate ONTOGENY's
      rights to Article 2.5(ix) if ONTOGENY does not initiate the sale of
      research reagents within three (3) years of the Effective Date.

                                     - 34 -
<PAGE>

                                   Appendix D

                                     Copy of
                     American Arbitration Association (AAA)
                           Commercial Mediation Rules
                          begins on the Following Page

                                     - 35 -
<PAGE>

                                   Commercial
53D                                Mediation Rules(1)

1.    Agreement of Parties

Whenever, by stipulation or in their contract, the parties have provided for
mediation or conciliation of existing or future disputes under the auspices of
the American Arbitration Association (AAA) or under these rules, they shall be
deemed to have made these rules, as amended and in effect as of the date of the
submission of the dispute, a part of their agreement.

2.    Initiation of Mediation

Any party or parties to a dispute may initiate mediation by filing with the AAA
a submission to mediation or a written request for mediation pursuant to these
rules, together with the appropriate administrative fee contained in the Fee
Schedule. Where there is no submission to mediation or contract providing for
mediation, a party may request the AAA to invite another party to join in a
submission to mediation. Upon receipt of such a request, the AAA will contact
the other parties involved in the dispute and attempt to obtain a submission to
mediation.

3.    Request for Mediation

A request for mediation shall contain a brief statement of the nature of the
dispute and the names, addresses, and telephone numbers of all parties to the
dispute and those who will represent them, if any, in the mediation. The
initiating party shall simultaneously file two copies of the request with the
AAA and one copy with every other party to the dispute.

--------
(1)   Reprinted with the permission of the American Arbitration Association.

                                   App. 53D-1

(Matthew Bender & Co., Inc.)                              (Rel. 8-1/93 Pub. 331)
<PAGE>

                 ALT. DISPUTE RESOLUTION       App. 53D-2

4.    Appointment of Mediator

Upon receipt of a request for mediation, the AAA will appoint a qualified
mediator to serve. Normally, a single mediator will be appointed unless the
parties agree otherwise or the AAA determines otherwise. If the agreement of the
parties names a mediator or specifies a method of appointing a mediator, that
designation or method shall be followed.

5.    Qualifications of Mediator

No person shall serve as a mediator in any dispute in which that person has any
financial or personal interest in the result of the mediation, except by the
written consent of all parties. Prior to accepting an appointment, the
prospective mediator shall disclose any circumstance likely to create a
presumption of bias or prevent a prompt meeting with the parties. Upon receipt
of such information, the AAA shall either replace the mediator or immediately
communicate the information to the parties for their comments. In the event that
the parties disagree as to whether the mediator shall serve, the AAA will
appoint another mediator. The AAA is authorized to appoint another mediator if
the appointed mediator is unable to serve promptly.

6.    Vacancies

If any mediator shall become unwilling or unable to serve, the AAA will appoint
another mediator, unless the parties agree otherwise.

7.    Representation

Any party may be represented by persons of the party's choice. The names and
addresses of such persons shall be communicated in writing to all parties and to
the AAA.

(Matthew Bender & Co., Inc.)                              (Rel. 8-1/93 Pub. 331)
<PAGE>

                 ALT. DISPUTE RESOLUTION       App. 53D-3

8.    Date, Time, and Place of Mediation

The mediator shall fix the date and the time of each mediation session. The
mediation shall be held at the appropriate regional office of the AAA, or at any
other convenient location agreeable to the mediator and the parties, as the
mediator shall determine.

9.    Identification of Matters in Dispute

At least ten days prior to the first scheduled mediation session, each party
shall provide the mediator with a brief memorandum setting forth its position
with regard to the issues that need to bc resolved. At the discretion of the
mediator, such memoranda may be mutually exchanged by the parties.

At the first session, the parties will be expected to produce all information
reasonably required for the mediator to understand the issues presented.

The mediator may require any party to supplement such information

10.   Authority of Mediator

The mediator does not have the authority to impose a settlement on the parties
but will attempt to help them reach a satisfactory resolution of their dispute.
The mediator is authorized to conduct joint and separate meetings with the
parties and to make oral and written recommendations for settlement. Whenever
necessary, the mediator may also obtain expert advice concerning technical
aspects of the dispute, provided that the parties agree and assume the expenses
of obtaining such advice. Arrangements for obtaining such advice shall be made
by the mediator or the parties, as the mediator shall determine.

The mediator is authorized to end the mediation whenever, in the judgment of the
mediator, further efforts at mediation would not contribute to a resolution of
the dispute between the parties.

(Matthew Bender & Co., Inc.)                              (Rel. 8-1/93 Pub. 331)
<PAGE>

                 ALT. DISPUTE RESOLUTION       App. 53D-4

11.   Privacy

Mediation sessions are private. The parties and their representatives may attend
mediation sessions. Other persons may attend only with the permission of the
parties and with the consent of the mediator.

12.   Confidentiality

Confidential information disclosed to a mediator by the parties or by witnesses
in the course of the mediation shall not be divulged by the mediator. All
records, reports, or other documents received by a mediator while serving in
that capacity shall be confidential. The mediator shall not be compelled to
divulge such records or to testify in regard to the mediation in any adversary
proceeding or judicial forum.

The parties shall maintain the confidentiality of the mediation and shall not
rely on, or introduce as evidence in any arbitral, judicial, or other
proceeding:

      (a)   views expressed or suggestions made by another party with respect to
            a possible settlement of the dispute;

      (b)   admissions made by another party in the course of the mediation
            proceedings;

      (c)   proposals made or views expressed by the mediator, or

      (d)   the fact that another party had or had not indicated willingness to
            accept a proposal for settlement made by the mediator.

13.   No Stenographic Record

There shall be no stenographic record of the mediation process.

(Matthew Bender & Co., Inc.)                              (Rel. 8-1/93 Pub. 331)
<PAGE>

                 ALT. DISPUTE RESOLUTION       App. 53D-5

14.   Termination of Mediation

The mediation shall be terminated:

      (a)   by the execution of a settlement agreement by the parties;

      (b)   by a written declaration of the mediator to the effect that further
            efforts at mediation are no longer worthwhile; or

      (c)   by a written declaration of a party or parties to the effect that
            the mediation proceedings are terminated.

15.   Exclusion of Liability

Neither the AAA nor any mediator is a necessary party in judicial proceedings
relating to the mediation.

Neither the AAA nor any mediator shall be liable to any party for any act or
omission in connection with any mediation conducted under these rules.

16.   Interpretation and Application of Rules

The mediator shall interpret and apply these rules insofar as they relate to the
mediator's duties and responsibilities. All other rules shall be interpreted and
applied by the AAA.

17.   Expenses

The expenses of witnesses for either side shall be paid by the party producing
such witnesses. All other expenses of the mediation, including required
traveling and other expenses of the mediator and representatives of the AAA, and
the expenses of any witness and the cost of any proofs or expert advice produced
at the direct request of the mediator, shall be borne equally by the parties
unless they agree otherwise.

(Matthew Bender & Co., Inc.)                              (Rel. 8-1/93 Pub. 331)
<PAGE>

                 ALT. DISPUTE RESOLUTION       App. 53D-6

Administrative Fees

The case filing or set-up fee is $300. This fee is to be borne equally or as
otherwise agreed by the parties.

Additionally, the parties are charged a fee based on the number of hours of
mediator time. The hourly fee is for the compensation of both the mediator and
the AAA and varies according to region. Check with your local office for
specific availability and rates.

There is no charge to the filing party where the AAA is requested to invite
other parties to join in a submission to mediation. However, if a case settles
after AAA involvement but prior to dispute resolution, the filing party will be
charged a $150 filing fee.

The expenses of the AAA and the mediator, if any, are generally borne equally by
the parties. The parties may vary this arrangement by agreement.

Where the parties have attempted mediation under these rules but have failed to
reach a settlement, the AAA will apply the administrative fee on the mediation
toward subsequent AAA arbitration, which is filed with the AAA within ninety
days of the termination of the mediation.

Deposits

Before the commencement of mediation, the parties shall each deposit such
portion of the fee covering the cost of mediation as the AAA shall direct and
all appropriate additional sums that the AAA deems necessary to defray the
expenses of the proceeding. When the mediation has terminated, the AAA shall
render an accounting and return any unexpended balance to the parties.

Refunds

Once the parties agree to mediate, no refund of the administrative fee will be
made.

(Matthew Bender & Co., Inc.)                              (Rel. 8-1/93 Pub. 331)
<PAGE>

                                  Attachment A

                             Subscription Agreement

      This Subscription Agreement (the "Subscription Agreement"), effective
September 26, 1996, is entered into by and between Ontogeny, Inc., a Delaware
corporation (the "Company") and the Johns Hopkins University (the "Investor").

      WHEREAS, the Investor desires to purchase from the Company 50,000 shares
(the "Shares") of the Company's Common Stock, par value $0.01 par value per
share;

      INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual
representation, warranties, covenants and agreements contained herein and in the
License Agreement, Company and Investor hereby agree as follows:

                                    Article 1
                               Issuance of Shares

1.1   The Company agrees to sell and issue to the Investor. and the Investor
      agrees to purchase from the Company, fifty thousand (50,000) shares of
      common stock, par value $0.01 per share.

1.2   At the time of entering into this Subscription Agreement, the Company and
      the Investor shall enter into a License Agreement upon mutually agreeable
      terms in consideration of the issuance of the Shares to the Investor.

                                    Article 2
                 Representations and Warranties of the Investor

2.1   The Investor hereby represents and warrants to the Company as of the date
      of this Agreement as follows:

      (a)   The Investor (i) is an Accredited Investor as that term is defined
            in 17 CFR ss.230.501(a); (ii) has been furnished with all
            information deemed necessary by the Investor to evaluate the merits
            and risks of the Shares; (iii) has had the opportunity to ask
            questions and receive answers concerning the Company and the Shares;
            and (iv) has been given the

                                       1
<PAGE>

            opportunity to obtain any additional information necessary to verify
            the accuracy of any information obtained concerning the Company.

      (b)   Ability to Bear Risk. The Investor is in a financial position to
            hold the Shares and is able to bear the economic risk and withstand
            a complete loss of the investment in the Shares.

      (c)   Risk Factors. The Investors recognizes that the Shares as an
            investment involve an extremely high degree of risk. There can be no
            assurance that the Company will be able to meets its projected goals
            and the Company may need significant additional capital to be
            successful, which capital may not be readily available or available
            only upon terms that are substantially dilutive to the Investor.

      (d)   Sophistication. The Investor is a sophisticated investor, is able to
            fend for itself in the transactions contemplated by this Agreement,
            and has such knowledge and experience in financial and business
            matters that it is capable of evaluating the merits and risks of the
            prospective investment in the Shares.

      (e)   Suitability. The investment in the Shares is suitable for the
            Investor based upon its investment objective and financial needs,
            and the Investor has adequate net worth and means for providing for
            it current financial needs and contingencies and has no need for
            liquidity of investment with respect to the Shares.

      (f)   Overall Commitment to Illiquid Investments. The Investor's overall
            commitment to investments which are illiquid or not readily
            marketable is not disproportionate to its net worth, and investment
            in the Shares will not cause such overall commitment to become
            excessive.

      (g)   Restricted Securities. The Investor realizes that (i) none of the
            Shares have been registered under the Securities Act of 1933, as
            amended (the "Act"), (ii) the Shares are characterized under the Act
            as "restricted securities" and, therefore, cannot be sold or
            transferred unless they are subsequently registered under the Act or
            an exemption from such registration is available and (iii) there is
            presently no public market for the Shares

                                       2
<PAGE>

            and the Investor may not be able to liquidate his investment in the
            event of an emergency or pledge the Shares as collateral security
            for loans. In this connection, the Investor represents that it is
            familiar with Rule 144 promulgated under the Act, and understands
            the resale limitations imposed thereby and by the Act. Each
            certificate representing the Shares shall bear a legend
            substantially in the following form:

                  "The shares represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended, and
                  may not be offered, sold or otherwise transferred, pledged or
                  hypothecated unless and until (i) such shares are registered
                  under such Act, (ii) such shares are sold pursuant to Rule
                  144, or (iii) an opinion of counsel satisfactory to the
                  Company is obtained to the effect that such registration is
                  not required."

            The forgoing legend shall be removed from the certificates
            representing any Shares, at the request of the holder thereof, at
            such time as they become eligible for resale pursuant to Rule 144(k)
            under the Securities Act.

      (h)   Exemption Reliance. The Investor has been advised that the Shares
            are not being registered under the Act or the applicable state
            securities laws but are being offered and sold pursuant to
            exemptions from such laws. The Investor understands that the
            Company's reliance on such exemptions is predicated in part upon the
            truth and accuracy of the Investor's representations in this
            Agreement.

      (i)   Investment Intent. The Investor represents and warrants that the
            Shares are being purchased for its own account, for investment and
            without the intention of reselling, redistribution or transferring
            the same, that it has made no agreement with others regarding any of
            such Shares and that its financial condition is such that it is not
            likely that it will be necessary to dispose of any such Shares in
            the foreseeable future. The above notwithstanding, Ontogeny consents
            to the transfer of up to 25,000 Shares to the University of
            Washington pursuant to Article 6.1 of the License Agreement.

                                       3
<PAGE>

                                    Article 3
                                    Covenants

3.1   The Investor agrees that:

      (a)   Transfer Restriction. The Investor will not transfer or assign this
            subscription or any of its interest herein. The Shares for which the
            Investor hereby subscribes shall be assigned or transferred only in
            accordance with all applicable laws and the provisions of Section
            3(b) below.

      (b)   Disposition of Shares. The Investor shall in no event make any
            disposition of all or any portion of the Shares which it is
            purchasing unless:

            (i)   There is then in effect a registration statement under the Act
                  covering such proposed disposition and such disposition is
                  made in accordance with said registration statement; or

            (ii)  (a) It shall have furnished the Company with an opinion of its
                  own counsel to the effect that such disposition will not
                  require registration of such shares under the Act, and (b)
                  such opinion of its counsel shall have been concurred in by
                  counsel for the Company, such concurrence not to be
                  unreasonably withheld or delayed, and the Company shall have
                  advised the Investor of such concurrence; or

            (iii) The above notwithstanding, Ontogeny consents to the transfer
                  of 25,000 Shares to the University of Washington pursuant to
                  Article 6.1 of the License Agreement.

            (iv)  No transfer of the Shares shall be effective unless and until
                  the proposed transferee makes the representations and
                  warranties to the Company contained in Article 2 above.

                                    Article 4
                                  Governing Law

4.1   The Investor agrees that this Subscription Agreement shall be enforced,
      governed and construed in all respects in accordance with the laws of the
      Commonwealth of Massachusetts.

                                       4
<PAGE>

                                    Article 5
                                     Notices

5.1   Notices are to be written and:

      (a)   deposited in the United States mail, registered or certified, or

      (b)   sent via reputable overnight courier service, and addressed as
            follows:

        TO JOHNS HOPKINS:              Office of Technology Licensing
                                       Johns Hopkins University
                                       2024 E.  Monument Street, Ste 2-100
                                       Baltimore, Maryland 21205

                                       Attention: Director

        TO ONTOGENY:                   Ontogeny, Inc.
                                       45 Moulton Street
                                       Cambridge, MA 02138

                                       Attention: CEO

Either party may change its address upon written notice to the other party.

                                    Article 6
                                  Miscellaneous

6.1   Survival of Representations and Warranties. This Agreement, and the rights
      and obligations of the Investor hereunder may be assigned by the Investor
      to any person or entity to which Shares are transferred by the Investor in
      accordance with the terms of this Agreement, and such transferee shall be
      deemed a "Purchaser" for purposes of this Agreement; provided that the
      transferee provides written notice of such assignment to the Company and
      agrees in writing to be bound by the obligations of the Purchaser
      contained herein and provided further that the transferee is not a
      competitor of the Company.

6.2   Entire Agreement. This Agreement embodies the entire agreement and
      understanding between the parties hereto with respect to the subject
      matter hereof and supersedes all prior agreements and understandings
      relating to such subject matter.

                                       5
<PAGE>

6.3   Amendments and Waivers. No term or provision of this Agreement shall be
      altered or amended except by a writing duly executed by the Company and
      the Investor. No waivers of or exceptions to any term, condition or
      provision of this Agreement, in any one or more instances, shall be deemed
      to be, or construed as, a further or continuing waiver of any such term,
      condition or provision.

6.4   Counterparts. This Agreement my be executed in one or more counterparts,
      each of which shall be deemed to be an original, but all of which shall be
      one and the same document.

6.5   Section Headings. This section headings of this Agreement are for the
      convenience of the parties and in no way alter, modify, amend, limit, or
      restrict the contractual obligations of the parties.

      IN WITNESS WHEREOF, the Investor has completed this Agreement by its duly
authorized officers or representatives and understands that this subscription is
subject to acceptance by the Company.

                                    ONTOGENY, INC.

                                          /s/  George A. Eldridge
                                    -----------------------------------
                                    Signature

                                    George A. Eldridge
                                    Vice President

THE JOHNS HOPKINS UNIVERSITY

      /s/
-----------------------------------
Signature

-----------------------------------
Print Name

-----------------------------------
Title

                                       6
<PAGE>

By signing below, the undersigned transferee makes the representations and
warranties to the Company contained in Article 2:

UNIVERSITY OF WASHINGTON

/s/
-----------------------------------
Signature

-----------------------------------
Print Name

-----------------------------------
Title

                                       7
<PAGE>

                      AMENDMENT NO. 1 TO LICENSE AGREEMENT

      This AMENDMENT No. 1 is made as of this 15th day of January, 1997, by and
between THE JOHNS HOPKINS UNIVERSITY, a body having corporate powers under the
laws of the State of Maryland ("JOHNS HOPKINS"), the University of Washington, a
body having corporate powers under the laws of the State of Washington
("UNIVERSITY OF WASHINGTON"), and ONTOGENY, INC., a Delaware corporation
("ONTOGENY").

      WHEREAS, JOHNS HOPKINS, UNIVERSITY OF WASHINGTON, and ONTOGENY are parties
to a License Agreement, dated as of September 26, 1996 (the "License
Agreement"); and

      WHEREAS JOHNS HOPKINS, UNIVERSITY OF WASHINGTON, and ONTOGENY wish to
amend the License Agreement as hereafter, provided.

      NOW, THEREFORE, in consideration of the mutual covenants of JOHNS HOPKINS,
UNIVERSITY OF WASHINGTON, and ONTOGENY and further good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
JOHNS HOPKINS, UNIVERSITY OF WASHINGTON, and ONTOGENY, intending to be legally
bound, hereby agree as follows:

      1. Appendix A of the License Agreement is hereby amended to read in full
as follows:

                                   Appendix A

      2. The written notices to Ontogeny, as provided for in Article 18, are
hereby amended to read as follows:

      TO ONTOGENY:              Ontogeny, Inc.
                                45 Moulton Street
                                Cambridge, MA 02138

                                Attention: CEO

                                   Page 1 of 2
<PAGE>

      TO ONTOGENY: with a copy to          Foley, Hoag & Eliot
                                           One Post Office Square
                                           Boston, MA  02109

                                           Attention: Matthew P. Vincent, Ph.D.

      3. Except as expressly amended by this Amendment No. 1, the License
Agreement shall remain in full force and effect as the same was in effect
immediately prior to the effectiveness of this Amendment No. 1.

      4. This Amendment No. 1 shall be governed by and construed on the same
basis as the License Agreement, as set forth therein.

      IN WITNESS WHEREOF, each of the parties hereto has fully executed this
Amendment No. 1 all as of the day and year first above written.

                                              ONTOGENY, INC.

                                              By:   /s/  Thomas D. Ignolia
                                                 -------------------------------
                                                 Thomas D. Ingolia, Ph.D.
                                                 Senior Vice President

THE JOHNS HOPKINS UNIVERSITY                  THE UNIVERSITY OF WASHINGTON

By:   /s/ N. Franklin Adkinson, Jr.           By:   /s/  Robert C. Miller
   ---------------------------------             -------------------------------
   N. Franklin Adkinson, Jr., M.D.               Robert C. Miller
   Interim Vice Dean for Research                Director, Office of Technology
                                                 Transfer

                                   Page 2 of 2<PAGE>

                                                                   Exhibit 10.46

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

                                LICENSE AGREEMENT

This Agreement is made and entered into between the President and Fellows of
Harvard College (hereinafter HARVARD) having offices at the Office for
Technology and Trademark Licensing, 124 Mt. Auburn Street, Suite 410, Cambridge,
Massachusetts 02138 and Ontogeny, Inc. (hereinafter LICENSEE), a corporation of
Delaware having offices at One Kendall Square, Bldg. 600, Cambridge, MA 02139.

Whereas HARVARD is Owner by assignment from Drs. Douglas Melton and Ali
Hemmati-Brivanlou of their entire right, title and interest in United States
Patent Application Serial No. 08/136,748, filed on October 14, 1993 entitled
'Method of Inducing and Maintaining Neural Cells', in the foreign patent
applications corresponding thereto, and in the inventions described and claimed
therein (HU Case no. 956-93); and

Whereas HARVARD is Owner by assignment from Drs. Clifford Tabin and Andrew
McMahon of their entire right, title and interest; and THE IMPERIAL CANCER
RESEARCH FUND (ICRF) is Owner by assignment from Dr. Philip Ingram of his entire
right, title and interest in United States Patent Application Serial No.
08/176,427, filed on December 30, 1993 entitled 'Vertebrate Embryonic
Pattern-Inducing Proteins and Uses Related Thereto', in the foreign patent
applications corresponding thereto, and in the inventions described and claimed
therein (HU Case no. 963-93); and

Whereas HARVARD has entered into an agreement with ICRF granting HARVARD
authority to act on ICRF's behalf and to bind ICRF in licensing ICRF's rights to
United States Patent Application Serial No. 08/176,427, filed on December 30,
1993, and to the foreign patent applications corresponding thereto, and in the
inventions described and claimed therein; and

Whereas HARVARD is committed to a policy that ideas or creative works produced
at HARVARD should be used for the greatest possible public benefit; and

Whereas LICENSEE is prepared and intends to diligently develop the invention and
to bring products to market which are subject to this Agreement; and

Whereas HARVARD accordingly believes that every reasonable incentive should be
provided for the prompt introduction of such ideas into public use, all in a
manner consistent with the public interest; and

Whereas LICENSEE is desirous of obtaining an exclusive worldwide license in
order to practice the above referenced inventions covered by PATENT RIGHTS in
the United States and in certain foreign countries, and to manufacture, use and
sell in the commercial market the products made in accordance therewith; and

Whereas HARVARD is desirous of granting such a license to LICENSEE in accordance
with the terms of this Agreement.

Now therefore, in consideration of the foregoing premises, the parties agree as
follows:
<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

1.1   PATENT RIGHTS shall mean United States patent application Serial No.
      08/136,748 filed October 14, 1993 and United States patent application
      Serial No. 08/176,427 filed December 30, 1993, the inventions described
      and claimed therein, and any divisions, continuations,
      continuations-in-part to the extent that their claims are dominated by
      existing PATENT RIGHTS, patents issuing thereon or reissues thereof, and
      any and all foreign patents and patent applications corresponding thereto,
      to the extent these are owned by or controlled by HARVARD; which will be
      automatically incorporated in and added to this Agreement and shall
      periodically be added to Appendix A attached to this Agreement and made a
      part thereof.

1.2   CLAIM shall mean (a) a valid and enforceable claim of an issued patent
      included in the PATENT RIGHTS and (b) with respect to a patent application
      of the PATENT RIGHTS, a claim of such patent application which has not
      been abandoned or rejected by an administrative agency from which no
      appeal can be taken.

1.3   BIOLOGICAL MATERIALS shall mean the proprietary materials developed in the
      laboratories of Drs. A. McMahon, C. Tabin and D. Melton as a result of
      research concerning the licensed subject matter, identified in Appendix B,
      such Appendix to be periodically updated by mutual agreement, and supplied
      to LICENSEE by HARVARD together with any progeny, mutants or derivatives,
      to the extent that they contain a substantial portion of the original
      BIOLOGICAL MATERIALS. Proprietary materials shall mean materials which are
      not generally available from another source and which are under the
      control of HARVARD.

1.4   ROYALTY PRODUCTS shall mean products, the manufacture, use or sale of
      which would, absent the license granted hereunder, infringe a CLAIM.

1.5   MILESTONE PRODUCTS shall mean products which are not ROYALTY PRODUCTS and
      (a) are identified or discovered in material part through the use of
      processes or subject matter covered in a CLAIM or (b) agonize or
      antagonize members of the hedgehog gene family or (c) agonize or
      antagonize follistatin or (d) incorporate a substantial portion of a
      BIOLOGICAL MATERIAL or which could not be made except by utilizing a
      BIOLOGICAL MATERIAL.

1.6   NET SALES shall mean the amount billed or invoiced for sales of ROYALTY
      PRODUCTS:

      (a)   Customary trade, quantity or cash discounts and non-affiliated
            brokers' or agents' commissions actually allowed and taken;

      (b)   Amounts repaid or credited by reason of rejection or return; and/or

      (c)   To the extent separately stated on purchase orders, invoices or
            other documents of sale, taxes levied on and/or other governmental
            charges made as to production, sale, transportation, delivery or use
            and paid by or on behalf of LICENSEE.
<PAGE>

      (d)   Amounts charged for shipping, packaging, insurance, storage or
            handling to the extent these are individually itemized on invoices.

1.7   AFFILIATES shall mean any third party company, corporation, or business
      controlling, controlled by or under common control with LICENSEE. Control
      shall mean ownership or control of at least fifty percent (50%) of the
      voting stock.

                                   ARTICLE II
                                      GRANT

2.1   HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
      terms and conditions hereof, a worldwide license, under PATENT RIGHTS to
      make and have made, to use and have used, to sell and have sold the
      ROYALTY PRODUCTS for the life of PATENT RIGHTS, and a worldwide license to
      use BIOLOGICAL MATERIALS to make and have made, to use and have used, to
      sell and have sold or to identify the MILESTONE PRODUCTS. Such license
      shall include the right to grant sublicenses. In order to provide LICENSEE
      with a period of exclusivity, HARVARD agrees it will not grant licenses
      under PATENT RIGHTS to others except as required by HARVARD's obligations
      in paragraph 2.2(a) or as permitted in paragraph 2.2(b) and that it will
      not provide BIOLOGICAL MATERIALS to others for any commercial purpose.
      LICENSEE agrees during the period of exclusivity of this license in the
      United States that any product subject to this Agreement to be sold in the
      United States by LICENSEE or its AFFILIATES or sublicensees will be
      manufactured substantially in the United States.

2.2   The granting and acceptance of this license is subject to the following
      conditions:

      (a)   HARVARD's "Statement of Policy in Regard to Inventions, Patents and
            Copyrights" dated March 17, 1986, Public Law 96-517, Public Law
            98-620 and HARVARD's obligations under agreements with other
            sponsors of research. Any right granted in this Agreement greater
            than that permitted under Public Law 96-517 or Public Law 98-620
            shall be subject to modification as may be required to conform to
            the provisions of that statute.

      (b)   HARVARD shall have the right to make and to use and to grant
            non-exclusive licenses to make and to use, for research purposes
            only and not for any commercial purpose, the BIOLOGICAL MATERIALS
            and the subject matter described and claimed in PATENT RIGHTS.
            HARVARD, to the extent it is aware of any patent rights arising from
            such research conducted during the term of this Agreement, shall
            notify LICENSEE of said rights.

      (c)   LICENSEE shall use reasonable efforts to effect introduction of the
            ROYALTY PRODUCTS into the commercial market as soon as practicable,
            consistent with sound and reasonable business practices and
            judgment; thereafter, until the expiration of this Agreement,
            LICENSEE shall endeavor to keep such ROYALTY PRODUCTS reasonably
            available to the public.
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

      (d)   HARVARD shall have the right to terminate or render this license
            non-exclusive at any time after three (3) years from the date of
            license if, in HARVARD's reasonable judgment, LICENSEE fails to
            satisfy both of the following conditions, which such failure is not
            cured within ninety (90) days after written notice of such failure
            by HARVARD to LICENSEE:

            (i)   is not demonstrably engaged in research, development,
                  manufacturing, marketing or licensing program, as appropriate,
                  directed toward the development and commercialization of the
                  licensed subject matter, and

            (ii)  has not devoted at least the level of resources outlined below
                  to the development and commercialization of the licensed
                  subject matter:

            Year                    Total Number of FTEs        Annual Budget
            ----                    --------------------        -------------
            1                               [**]                    $[**]
            2                               [**]                    $[**]
            3                               [**]                    $[**]
            4 (and after)                   [**]                    $[**]

            FTEs are defined as full-time equivalent scientists and/or
            technicians and/or consultants. One half of the minimum number of
            total FTEs will be allocated to the development of each of the
            follistatin technology and the hedgehog technology. Of those FTEs
            dedicated to the development of the licensed subject matter, [**]
            ([**]%) will possess an advanced scientific degree.

            In making this determination, HARVARD shall take into account the
            normal course of such programs conducted with sound and reasonable
            business practices and judgment and shall take into account the
            reports provided hereunder by LICENSEE.

      (e)   HARVARD shall have the right to terminate this Agreement if LICENSEE
            does not adhere to the following performance milestones for at least
            one potential ROYALTY PRODUCT or MILESTONE PRODUCT.
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

                         Years from Date of
                             Agreement                Milestone
                             ---------                ---------
                                [**]                     [**]
                         [**] through [**]               [**]
                         [**] through [**]               [**]
                         [**] through [**]               [**]

      (f)   LICENSEE shall pay to HARVARD the following payments upon execution
            of the first corporate partnership in a field primarily relating to
            either the hedgehog or the follistatin technologies:

            (1)   [**] dollars ($[**]), if the partnership has a determined
                  value of between [**] and [**] dollars ($[**] and $[**]), or

            (2)   [**] dollars ($[**]), if the partnership has a determined
                  value of greater than [**] dollars ($[**]).

            Determined value shall include the sum of any equity payments,
            up-front payments or fees, and the total of committed research
            sponsorship payments. Such payments shall be creditable against
            royalty payments and/or milestone payments as defined in Section
            3.3. Deductions from royalty payments or milestone payments based on
            this credit may not exceed fifty percent (50%) of the royalty or
            milestone payment due HARVARD in any one year.

      (g)   All sublicenses granted by LICENSEE hereunder shall include a
            requirement that the sublicensee use reasonable commercial efforts
            to bring the subject matter of the sublicense into commercial use as
            quickly as is reasonably possible. Such sublicenses shall be subject
            and subordinate to the terms and conditions of this Agreement.
            Copies of all sublicense agreements shall be provided to HARVARD.

      (h)   If LICENSEE (or its sublicensees) do not devote resources equivalent
            to the full time of at least two FTEs (one of which shall possess an
            advanced scientific degree) for any calendar year (commencing in
            1995) to the development and/or commercialization, as appropriate,
            of any part of the subject matter of the PATENT RIGHTS for use in
            any specific field and if HARVARD requests in writing that LICENSEE
            grant a sublicense to a third party to develop and/or commercialize
            such part of the subject matter for use in such field, LICENSEE
            shall within ninety (90) days after receipt of such notice either
            (i) commit at least two FTEs toward such development and/or
            commercialization or (ii) grant such requested sublicense, unless
            LICENSEE reasonably satisfies HARVARD that such sublicense would be
            contrary to sound and reasonable business practice and
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

            that the granting of such sublicense would not materially increase
            the availability to the public of products manufactured under this
            license.

2.3   HARVARD hereby grants to LICENSEE the right to assign the licenses granted
      or to be granted in paragraph 2.1 to an AFFILIATE subject to the terms and
      conditions hereof.

2.4   All rights reserved to the United States Government and others under
      Public Law 96-517 and 98-620 shall in no way be affected by this
      Agreement.

                                   ARTICLE III
                                    ROYALTIES

3.1   Upon execution of this Agreement, LICENSEE shall pay to HARVARD a
      non-refundable, non-creditable fee of [**] ($[**]) dollars.

3.2   (a)   Upon execution of this Agreement, LICENSEE, shall issue to HARVARD
            four hundred and fifty thousand (450,000) shares (the "Shares") of
            LICENSEE'S Common Stock ("Common Stock"). Such shares shall be
            considered part of the royalty consideration for the grant of this
            license. As of the date hereof, LICENSEE has issued and outstanding
            1,680,000 shares of Common Stock and 4,737,778 shares of Series A
            Convertible Preferred Stock. The Shares issuable to HARVARD
            hereunder shall represent, as of the date hereof, at least 6.5% of
            the total voting power of the issued and outstanding capital stock
            of LICENSEE. The Common Stock issued to HARVARD shall have the
            characteristics, rights, preferences and privileges set forth in the
            Certificate of Incorporation of the LICENSEE and set forth herein in
            Appendix C.

      (b)   In the event that LICENSEE shall issue additional shares of capital
            stock, subsequent to the date hereof, LICENSEE shall notify HARVARD
            as to the number of shares proposed to be issued (the "Offered
            Shares") and the price per share of the Offered Shares. HARVARD
            shall have the right to elect to purchase, by written notice
            provided to LICENSEE within 30 days after the LICENSEE's notice, its
            pro rata share of the Offered Shares. HARVARD's pro rata share shall
            be a fraction, the numerator of which shall be the number of shares
            of Common Stock then held by HARVARD and the denominator of which
            shall be the total number of shares of Common Stock then outstanding
            (including shares issuable upon conversion or exercise of then
            outstanding convertible securities, options and warrants). "Offered
            Shares" shall not include: (i) shares issued to employees, directors
            or consultants of LICENSEE pursuant to authorization of the Board of
            Directors, (ii) shares issued in connection with any acquisition of
            the business or assets of a third party, (iii) shares issued in
            connection with a stock dividend, stock split or similar event or
            (iv) shares issued in connection with collaboration, licensing or
            equipment lease financing arrangements with third parties. The
            provisions of this Section 3.2(b) shall terminate upon, and not
            apply to, the LICENSEE's initial public offering of Common Stock
            pursuant to a registration statement under the Securities Act of
            1933.
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

      (c)   HARVARD represents and warrants to LICENSEE as follows:

            (i)   HARVARD is acquiring the Shares for its own account for
                  investment and not with a view to, or for sale in connection
                  with any distribution thereof, nor with any present intention
                  of distributing or selling the same; and HARVARD has no
                  present or contemplated agreement, undertaking, arrangement,
                  obligation, indebtedness or commitment providing for the
                  disposition thereof.

            (ii)  HARVARD has full power and authority to enter into and to
                  perform this Agreement in accordance with its terms.

            (iii) HARVARD has sufficient knowledge and experience in investing
                  in companies similar to LICENSEE so as to be able to evaluate
                  the risks and merits of its investment in LICENSEE and is able
                  financially to bear the risks thereof.

      (d)   Each certificate representing the Shares shall bear a legend
            substantially in the following form:

                  "The shares represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended, and
                  may not be offered, sold or otherwise transferred, pledged or
                  hypothecated unless and until such shares are registered under
                  such Act or an opinion of counsel satisfactory to the Company
                  is obtained to the effect that such registration is not
                  required."

            The foregoing legend shall be removed from the certificates
            representing any Shares, at the request of the holder thereof, at
            such time as they become eligible for resale pursuant to the
            Securities Act of 1933, as amended.

      (e)   If at any time LICENSEE proposes to register any of its Common
            Stock, under the Securities Act of 1933, LICENSEE shall offer
            HARVARD the opportunity to have its Shares registered under the
            registration statement to be filed at such time, in accordance with
            the terms set forth in Appendix C.

3.3   (a)   LICENSEE shall pay HARVARD during the term of this license a royalty
            of [**] percent ([**]%) of the NET SALES of all ROYALTY PRODUCTS
            sold by LICENSEE and its AFFILIATES; provided, however, that in the
            case of ROYALTY PRODUCTS covered by a pending patent claim, such
            royalty of [**] percent ([**]%) shall be due and payable as follows:
            [**] ([**]%) percent shall be payable to HARVARD pursuant to Section
            4.4(a), and the remainder shall accumulate and shall not be required
            to be paid by LICENSEE to HARVARD unless and until such claim is
            issued as part of a patent in the applicable jurisdiction. A ROYALTY
            PRODUCT that is a ROYALTY PRODUCT solely as a result of any such
            claim that has been abandoned, has been rejected by an
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

            administrative agency from which no appeal can be taken or has been
            pending for more than five years in any jurisdiction shall cease to
            be a ROYALTY PRODUCT in such jurisdiction unless and until such
            claim is issued as part of a patent.

      (b)   If LICENSEE grants a sublicense under this Agreement to a
            sublicensee (other than an AFFILIATE) for development of a product
            in a field as to which LICENSEE or an AFFILIATE has committed or
            provides a written commitment to devote within the succeeding six
            (6) month period the resources equivalent to the full time of at
            least two of its own FTEs, one having an scientific advanced degree
            (a "Joint Field"), LICENSEE shall pay to HARVARD [**] percent
            ([**]%) of any royalties, fees or other amounts received by LICENSEE
            or its AFFILIATES as a result of the sublicensee's development
            and/or sale of ROYALTY PRODUCTS or MILESTONE PRODUCTS, excluding (i)
            amounts paid in partial or full consideration of equity of LICENSEE
            or its AFFILIATES, (ii) amounts paid to fund research and
            development activities conducted by LICENSEE or its AFFILIATES and
            (iii) non-monetary considerations, including, without limitation
            intellectual property rights, noncompetition covenants and the like.

            If LICENSEE grants a sublicense under this Agreement to a
            sublicensee (other than an AFFILIATE) for development of a product
            in a field other than a Joint Field, LICENSEE shall pay to HARVARD
            [**] percent ([**]%) of any royalties, fees or other amounts
            received by the LICENSEE or its AFFILIATES as a result of the
            sublicensee's development and/or sale of MILESTONE PRODUCTS or
            ROYALTY PRODUCTS, excluding (i) amounts paid in partial or full
            consideration of equity of LICENSEE or its AFFLIATES, (ii) amounts
            paid to fund research and development activities conducted by
            LICENSEE or its AFFILIATES and (iii) non-monetary consideration,
            including, without limitation, intellectual property rights,
            noncompetition covenants and the like.

            LICENSEE shall not grant a sublicense hereunder (other than to an
            AFFILIATE) pursuant to a transaction in which LICENSEE surrenders
            substantially all of its legal rights and economic interest in the
            PATENT RIGHTS and ROYALTY PRODUCTS from either the hedgehog
            technology or the follistatin technology to a third party in
            exchange for the transfer by such third party to LICENSEE of rights
            to a different technology or products.

      (c)   If LICENSEE or its sublicensees, in order to make, use, sell or
            otherwise exploit the ROYALTY PRODUCTS in any jurisdiction,
            reasonably determine that they must make royalty payments ("Third
            Party Payments") to one or more independent third parties to obtain
            a license or similar right to make, use, sell or otherwise exploit
            the ROYALTY PRODUCTS such that the total royalty burden for such
            ROYALTY PRODUCT, excluding royalties payable to Columbia University
            or the Salk Institute, equals or exceeds [**] ([**]%) percent,
            LICENSEE may reduce the royalty due to HARVARD by [**] ([**]%) for
            [**]
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

            above [**] ([**]%) percent, but in no event shall any such payment
            due to HARVARD be reduced by more than 50% as a result of such
            reduction.

      (d)   If this license is converted to a non-exclusive one and if other
            non-exclusive licenses are granted, the above royalties shall not
            exceed and shall be reduced to the royalty being paid by other
            licensees during the term of the non-exclusive license.

      (e)   In the case of MILESTONE PRODUCTS, LICENSEE shall pay the following
            payments and shall not pay the royalties specified in Section 3.3a.
            Such payments are in recognition of LICENSEE's early and exclusive
            use of the licensed subject matter:

            [**] MILESTONE PRODUCT                      $[**]
            Cumulative Sales of
            MILESTONE PRODUCT of [**]                   $[**]
            Cumulative Sales of
            MILESTONE PRODUCT of [**]                   $[**]

            If this license is terminated by LICENSEE or its AFFILIATES, or is
            converted to a non-exclusive one or terminated by HARVARD for a
            financial default the above milestone payments shall still be due
            with respect to all MILESTONE PRODUCTS identified by LICENSEE or its
            AFFILIATES prior to such termination or conversion. If this license
            is converted to a non-exclusive one or terminated by HARVARD for any
            reason other than a financial default, the above milestone payments
            will be due on only the first MILESTONE PRODUCT sold after such
            termination or conversion and identified prior to such termination
            and conversion.

      (f)   On sales between LICENSEE and its AFFILIATES or sublicensees for
            resale, the royalty shall be paid only on the resale by the
            AFFILIATE or sublicensee, and a single royalty shall be paid by
            LICENSEE and its AFFILIATES with respect to amounts received by them
            as a result of such resale.

      (g)   If any of the ROYALTY PRODUCTS include one or more material, active
            components not covered by a CLAIM of PATENT RIGHTS (a "Combination
            Product"), NET SALES for purposes of determining royalties for the
            Combination Product shall be calculated by multiplying NET SALES for
            the Combination Product by a fraction, A/A+B, where A is the total
            invoice price of the component or components covered by a CLAIM of
            PATENT RIGHTS if sold separately in the relevant market and B is the
            total invoice price of any other material components in the
            combination if sold separately in the relevant market. In the event
            that the material component covered by a CLAIM of PATENT RIGHTS or
            any other material component in the Combination Product is not sold
            separately, NET SALES for purposes of determining royalties shall be
            calculated by multiplying NET SALES of the Combination Product by a
            fraction, n/C, where
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

            n is the number of components covered by a CLAIM of PATENT RIGHTS
            and C is the number of material, active components in the
            Combination Product.

3.4   On January 1 of each calendar year after the effective date of this
      Agreement, LICENSEE shall pay HARVARD a non-refundable license maintenance
      royalty and/or advance on royalties of [**] dollars ($[**]); such payment
      may be credited against running royalties due for that calendar year and
      royalty reports should reflect the use of this credit. None of these
      payments are creditable against milestone payments nor against royalties
      due for any subsequent calendar year. HARVARD shall have the right to
      terminate this license, subject to the cure period defined in Section 8.2,
      in the event that LICENSEE does not pay the following license maintenance
      fees and/or advance on royalties.

                                   ARTICLE IV
                                    REPORTING

4.1   Prior to signing this Agreement, LICENSEE has provided to HARVARD
      LICENSEE's corporate overview and will provide, within nine (9) months of
      the date of execution of this Agreement, a written business plan and a
      reasonable written research and development plan under which LICENSEE
      intends to bring the subject matter of the licenses granted hereunder into
      commercial use upon execution of this Agreement. Such plan, which is
      subject to change, shall include proposed marketing efforts.

4.2   LICENSEE shall provide written annual reports within sixty (60) days after
      June 30 of each calendar year which shall include but not be limited to:
      reports of progress on research and development, regulatory approvals,
      manufacturing, sublicensing, marketing and sales during the preceding
      twelve (12) months as well as plans for the coming year. If progress
      differs from that anticipated in the plan provided under Section 4.1,
      LICENSEE shall explain the reasons for the difference and submit a
      modified plan for HARVARD's review. LICENSEE shall also provide any
      reasonable additional data HARVARD requires to evaluate LICENSEE's
      performance.

4.3   LICENSEE shall report to HARVARD the date of first sale of ROYALTY
      PRODUCTS and MILESTONE PRODUCTS in each country within sixty (60) days of
      occurrence.

4.4   (a)   After the commencement of sales, LICENSEE agrees to submit to
            HARVARD within sixty (60) days after the calendar half years ending
            June 30 and December 31, reports setting forth for the preceding six
            (6) month period at least the following information:

            (i)   the number of the ROYALTY PRODUCTS sold by LICENSEE, its
                  AFFILIATES and sublicensees in each country;

            (ii)  total billings for such ROYALTY PRODUCTS;

            (iii) deductions applicable to determine the NET SALES thereof;

            (iv)  sublicense income subject to sharing with HARVARD
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

            (v)   such other information as shall be necessary to determine
                  royalty payments or other payments due to HARVARD

            (vi)  the amount of royalty due thereon;

            and with each such royalty report to pay the amount of royalty due.
            LICENSEE shall specify which PATENT RIGHTS are utilized for each
            ROYALTY PRODUCT included in the report. Such report shall be
            certified as correct by an officer of LICENSEE and shall include a
            detailed listing of all deductions from royalties as specified
            herein. If no royalties are due to HARVARD for any reporting period,
            the written report shall so state.

      (b)   All payments due hereunder shall be payable in United States
            dollars. Conversion of foreign currency to U.S. dollars shall be
            made at the conversion rate existing in the United States (as
            reported in the New York Times or, if not in the New York Times,
            then in the Wall Street Journal) on the last working day of each
            royalty period. Such payments shall be without deduction of
            exchange, collection or other charges.

      (c)   All such reports shall be maintained in confidence by HARVARD,
            except as required by law, including Public Law 96-517 and 98-620;
            however, HARVARD may include annual amounts of royalties paid in its
            usual financial reports.

      (d)   Late payments shall be subject to an interest charge of [**] percent
            ([**]%) per month.

                                    ARTICLE V
                                 RECORD KEEPING

5.1   LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to
      keep accurate and correct records of ROYALTY PRODUCTS and MILESTONE
      PRODUCTS made, used or sold under this Agreement, appropriate to determine
      the amount of royalties due hereunder to HARVARD. Such records shall be
      retained for at least three (3) years following a given reporting period.
      They shall be available during normal business hours for inspection at the
      expense of HARVARD by HARVARD's Internal Audit Department or by a
      Certified Public Accountant selected by HARVARD and approved by LICENSEE
      for the sole purpose of verifying reports and payments hereunder. Such
      accountant shall not disclose to HARVARD any information other than
      information relating to accuracy of reports and payments made under this
      Agreement. In the event that any such inspection shows an underreporting
      and underpayment in excess of five percent (5%) for any twelve (12) month
      period, then LICENSEE shall pay the cost of such examination as well as
      any additional sum that would have been payable to HARVARD had the
      LICENSEE reported correctly, plus interest.

                                   ARTICLE VI
                DOMESTIC AND FOREIGN PATENT FILING & MAINTENANCE
<PAGE>

6.1   Upon execution hereof, LICENSEE shall reimburse HARVARD for all reasonable
      expenses HARVARD has incurred for the preparation, filing, prosecution and
      maintenance of PATENT RIGHTS which amount HARVARD represents equals
      $33,384.56 as of December 29, 1994. LICENSEE shall also reimburse HARVARD
      for all such expenses it incurs prior to LICENSEE's assumption of these
      costs per Section 6.2.

6.2   As soon as reasonably possible after execution of this Agreement, LICENSEE
      shall assume primary responsibility for the filing, prosecution and
      maintenance of any and all patents and patent applications included in
      PATENT RIGHTS, using patent counsel reasonably acceptable to HARVARD, and
      LICENSEE shall be responsible for all costs relating thereto. Counsel will
      directly notify HARVARD and LICENSEE and provide them copies of any
      official communications from the United States and foreign patent offices
      relating to said prosecution. Counsel shall also provide HARVARD with
      advance copies of all relevant communications to the various patent
      offices, so that HARVARD may be informed and apprised of the continuing
      prosecution of patent applications in PATENT RIGHTS. HARVARD shall have
      reasonable opportunities to participate in decision making on all key
      decisions affecting filing, prosecution and maintenance of patents and
      patent applications in PATENT RIGHTS including, without limitation, the
      right to approve or disapprove the abandonment of any patent or claims
      thereof and LICENSEE will use reasonable efforts to incorporate HARVARD's
      reasonable suggestions regarding said prosecution. LICENSEE shall use all
      reasonable efforts to amend any patent application to include claims
      reasonably requested by HARVARD to protect ROYALTY PRODUCTS.

6.3   HARVARD and LICENSEE agree to cooperate fully in the preparation, filing,
      prosecution and maintenance of PATENT RIGHTS and of all patents and patent
      applications licensed to LICENSEE hereunder, executing all papers and
      instruments or requiring members of HARVARD to execute such papers and
      instruments so as to enable LICENSEE to apply for, to prosecute and to
      maintain patent applications and patents in HARVARD's name in any country.

6.4   If LICENSEE elects no longer to pay the expenses of a patent application
      or patent included within PATENT RIGHTS, LICENSEE shall notify HARVARD not
      less than sixty (60) days prior to such action, such date being at least
      30 (thirty) days prior to any pending action or expenditure, and shall
      thereby surrender its rights under such patent or patent application.

6.5   In the event that LICENSEE elects not to prosecute or maintain any of the
      patents or patent applications relating to the PATENT RIGHTS or any
      portion thereof in any jurisdiction, then HARVARD shall have the right, at
      its own expense to prosecute or maintain the patents or patent
      applications relating to the PATENT RIGHTS or portion thereof in such
      jurisdiction, but LICENSEE shall have no further rights to such patents or
      patent applications or portion thereof.

6.6   If HARVARD can demonstrate that it is not being adequately informed or
      apprised of the continuing prosecution of patents or patent applications
      in PATENT RIGHTS, or that it is
<PAGE>

      not being provided with reasonable opportunities to participate in
      decision making or that its interests are not being adequately protected,
      HARVARD shall be entitled to engage, at LICENSEE's expense, independent
      patent counsel to review and evaluate patent prosecution and filing of
      patents and patent applications included in PATENT RIGHTS. Henceforth
      HARVARD and LICENSEE shall share responsibility for patent prosecution,
      with LICENSEE reimbursing HARVARD in full for any patent expenses incurred
      by HARVARD.

                                   ARTICLE VII
                                  INFRINGEMENT

7.1   With respect to any PATENT RIGHTS under which LICENSEE is exclusively
      licensed pursuant to this Agreement, LICENSEE or its sublicensee shall
      have the right to prosecute in its own name and at its own expense any
      suspected infringement of such patent, so long as such license is
      exclusive at the time of the commencement of such action. HARVARD agrees
      to notify LICENSEE promptly of each infringement of such patents of which
      HARVARD is or becomes aware. Before LICENSEE or its sublicensees commences
      an action with respect to any infringement of such patents, LICENSEE shall
      give careful consideration to the views of HARVARD and to potential
      effects on the public interest in making its decision whether or not to
      sue and in the case of a LICENSEE sublicense, shall report such views to
      the sublicensee.

7.2   If LICENSEE or its sublicensee elects to commence an action as described
      above and HARVARD is a legally indispensable party to such action, HARVARD
      shall have the right to assign to LICENSEE all of HARVARD's right, title
      and interest in each patent which is a part of the PATENT RIGHTS and is
      the subject of such action (subject to all HARVARD's obligations to the
      government and others having rights in such patent). In the event that
      HARVARD makes such an assignment, such assignment shall be irrevocable,
      and such action by LICENSEE on that patent or patents shall thereafter be
      brought or continued without HARVARD as a party, if HARVARD is no longer
      an indispensable party. Notwithstanding any such assignment to LICENSEE by
      HARVARD and regardless of whether HARVARD is or is not an indispensable
      party, HARVARD shall cooperate fully with LICENSEE in connection with any
      such action. In the event that any patent is assigned to LICENSEE by
      HARVARD, pursuant to this paragraph, such assignment shall require
      LICENSEE to continue to meet its obligations under this Agreement as if
      the assigned patent or patent application were still licensed to LICENSEE.

7.3   If LICENSEE or its sublicensee elects to commence an action described
      above and HARVARD is a legally indispensable party to such action, HARVARD
      may join the action as a co-plaintiff. Upon doing so, HARVARD shall be
      consulted on any actions LICENSEE or its sublicensees intend with respect
      to the suspected infringement.

7.4   LICENSEE shall reimburse HARVARD for any reasonable costs it incurs as
      part of an action brought by LICENSEE or its sublicensee, irrespective of
      whether HARVARD shall become a co-plaintiff.
<PAGE>

7.5   If LICENSEE or its sublicensee elects to commence an action as described
      above, LICENSEE may reduce, by up to fifty percent (50%), the royalty due
      to HARVARD earned under the patent subject to suit by fifty percent (50%)
      of the amount of the expenses and costs of such action, including attorney
      fees. In the event that such fifty percent (50%) of such expenses and
      costs exceed the amount of royalties withheld by LICENSEE for any calendar
      year, LICENSEE may to that extent reduce the royalties due to HARVARD from
      LICENSEE in succeeding calendar years, but never by more than fifty
      percent (50%) of the royalty due in any one year.

7.6   No settlement, consent judgment or other voluntary final disposition of
      the suit may be entered into without the consent of HARVARD, which consent
      shall not be unreasonably withheld.

7.7   Recoveries or reimbursements from such action shall first be applied to
      reimburse LICENSEE and HARVARD for litigation costs not paid from
      royalties and then to reimburse HARVARD for royalties withheld. Any
      remaining recoveries or reimbursements shall be shared 75% to LICENSEE and
      25% to HARVARD.

7.8   In the event that LICENSEE and its sublicensee, if any, elect not to
      exercise their right to prosecute an infringement of the PATENT RIGHTS
      pursuant to the above paragraphs, HARVARD may do so at its own expense,
      controlling such action and retaining all recoveries therefrom.

7.9   In the event that a declaratory judgment action alleging invalidity of any
      of the PATENT RIGHTS shall be brought against LICENSEE, HARVARD, at its
      sole option, shall have the right to intervene, in which event both
      parties shall jointly control the defense of such action and share equally
      its expenses and costs.

                                  ARTICLE VIII
                            TERMINATION OF AGREEMENT

8.1   This Agreement, unless extended or terminated as provided herein, shall
      remain in effect until the last patent or patent application in the PATENT
      RIGHTS has expired or been abandoned.

8.2   In the event LICENSEE fails to make payments or stock transfers due
      hereunder, HARVARD shall have the right to terminate this Agreement upon
      forty-five (45) days written notice of such failure, unless LICENSEE makes
      such payments plus interest within the forty-five (45) day notice period.
      If payments are not so made, HARVARD may immediately terminate this
      Agreement, unless such occurs as a result of a bona fide dispute as to the
      amount due.

8.3   In the event that LICENSEE shall be in default in the performance of any
      obligations under this Agreement (other than as provided in 8.2 above
      which shall take precedence over any other default), and if the default
      has not been remedied within ninety (90) days after the date of notice in
      writing of such default, HARVARD may terminate this Agreement by written
      notice.
<PAGE>

8.4   In the event that LICENSEE shall become insolvent, shall make an
      assignment for the benefit of creditors, or shall have a petition in
      bankruptcy filed for or against it, which petition is not dismissed within
      90 days of filing, HARVARD shall have the right to terminate this entire
      Agreement immediately upon giving LICENSEE written notice of such
      termination.

8.5   Any sublicenses granted by LICENSEE under this Agreement shall provide for
      termination or assignment to HARVARD, at the option of HARVARD, of
      LICENSEE's interest therein upon termination of this Agreement.

8.6   LICENSEE shall have the right to terminate this Agreement by giving ninety
      (90) days advance written notice to HARVARD to that effect. Upon
      termination, a final report shall be submitted and any royalty payments
      and unreimbursed patent expenses due to HARVARD become immediately
      payable.

8.7   Sections 3.3(c), 8.6, 9.2, 9.3, 9.4 and 9.5 of this Agreement shall
      survive termination.

                                   ARTICLE IX
                                     GENERAL

9.1   HARVARD represents and warrants that Drs. D. Melton, A. Hemmati-Brivanlou,
      C. Tabin, A. McMahon and P. Ingham have assigned to HARVARD or ICRF their
      entire right, title, and interest in the patent applications or patents
      comprising the PATENT RIGHTS, and that ICRF has authorized HARVARD to
      license its rights and interest in the patent applications or patents
      comprising the PATENT RIGHTS, and that HARVARD has the authority to issue
      the licenses granted to LICENSEE hereunder under said PATENT RIGHTS.
      HARVARD does not warrant the validity of the PATENT RIGHTS licensed
      hereunder and makes no representations whatsoever with regard to the scope
      of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited
      by LICENSEE, an AFFILIATE, or sublicensee without infringing other
      patents.

9.2   HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
      MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
      ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS, BIOLOGICAL MATERIAL, OR
      INFORMATION SUPPLIED BY HARVARD OR ROYALTY PRODUCTS OR MILESTONE PRODUCTS
      CONTEMPLATED BY THIS AGREEMENT. Further HARVARD has made no investigation
      and makes no representation that the BIOLOGICAL MATERIALS supplied by it
      or the methods used in making or using such materials are free from
      liability for patent infringement.

9.3   LICENSEE shall not distribute or release the BIOLOGICAL MATERIALS to
      others except to further the purposes of this Agreement. LICENSEE shall
      protect the BIOLOGICAL MATERIAL at least as well as it protects its own
      valuable tangible personal property and shall take reasonable and legal
      measures in any bankruptcy
<PAGE>

      proceeding to protect the BIOLOGICAL MATERIAL from any claims by third
      parties including creditors and trustees in bankruptcy.

9.4   (a)   LICENSEE shall indemnify, defend and hold harmless HARVARD and ICRF
            and their directors, governing board members, trustees, officers,
            faculty, medical and professional staff, employees, students, and
            agents and their respective successors, heirs and assigns (the
            "Indemnitees"), against any liability, damage, loss or expenses
            (including reasonable attorneys' fees and expenses of litigation)
            incurred by or imposed upon the Indemnitees or any one of them in
            connection with any claims, suits, actions, demands or judgments
            arising out of any theory of product liability (including, but not
            limited to, actions in the form of tort, warranty, or strict
            liability) concerning any product, process or service made, used or
            sold pursuant to any right or license granted under this Agreement.
            The above indemnification shall apply whether or not such liability,
            damage, loss or expense is attributable to the negligent activities
            of the Indemnitees.

      (b)   LICENSEE agrees, at its own expense, to provide attorneys reasonably
            acceptable to HARVARD to defend against any actions brought or filed
            against any party indemnified hereunder with respect to the subject
            of the indemnity contained herein, whether or not such actions are
            rightfully brought.

      (c)   Beginning at the time as any such product, process or service is
            being commercially distributed or sold (other than for the purpose
            of obtaining regulatory approvals) by LICENSEE or by a sublicensee,
            AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and
            expense, procure and maintain comprehensive general liability
            insurance in amounts not less than $2,000,000 per incident and
            $2,000,000 annual aggregate and naming the Indemnitees as additional
            insureds. During clinical trials of any such product, process or
            service, LICENSEE shall, at its sole cost and expense, procure and
            maintain comprehensive general liability insurance in such equal or
            lesser amount as HARVARD shall require, naming the Indemnitees as
            additional insureds. Such comprehensive general liability insurance
            shall provide (i) product liability coverage and (ii) broad form
            contractual liability coverage for LICENSEE's indemnification under
            this Agreement. If LICENSEE elects to self-insure all or part of the
            limits described above (including deductibles or retentions which
            are in excess of $250,000 annual aggregate) such self-insurance
            program must be acceptable to HARVARD and the Risk Management
            Foundation of the Harvard Medical Institutions, Inc. The minimum
            amounts of insurance coverage required shall not be construed to
            create a limit of LICENSEE's liability with respect to its
            indemnification under this Agreement.

      (d)   LICENSEE shall provide HARVARD with written evidence of such
            insurance upon request of HARVARD. LICENSEE shall provide HARVARD
            with written notice at least fifteen (15) days prior to the
            cancellation, non-renewal or material reduction in coverage in such
            insurance; if LICENSEE does not obtain replacement insurance
            providing comparable coverage within such fifteen (15) day period,
            HARVARD shall have the right to terminate this Agreement effective
<PAGE>

            at the end of such fifteen (15) day period without notice or any
            additional waiting periods.

      (e)   LICENSEE shall maintain such comprehensive general liability
            insurance beyond the expiration or termination of this Agreement
            during (i) the period that any product, process, or service,
            relating to, or developed pursuant to, this Agreement is being
            commercially distributed or sold by LICENSEE or by a sublicensee,
            AFFILIATE or agent of LICENSEE and (ii) a reasonable period after
            the period referred to in (e) (i) above which in no event shall be
            less than ten (10) years.

9.5   LICENSEE shall not use HARVARD's name or any adaptation of it or the name
      or names of any of HARVARD's inventors in any advertising, promotional or
      sales literature without the prior written assent of HARVARD.

9.6   Without the prior written approval of HARVARD, the license granted
      pursuant to this Agreement shall not be transferred or assigned in whole
      or in part by LICENSEE to any party other than to an AFFILIATE or
      successor to the business interest of LICENSEE relating to the PATENT
      RIGHTS. This Agreement shall be binding upon the successors, legal
      representatives and assignees of HARVARD and LICENSEE.

9.7   The interpretation and application of the provisions of this Agreement
      shall be governed by the laws of the Commonwealth of Massachusetts.

9.8   LICENSEE agrees to comply with all applicable laws and regulations. In
      particular, it is understood and acknowledged that the transfer of certain
      commodities and technical data is subject to United States laws and
      regulations controlling the export of such commodities and technical data,
      including all Export Administration Regulations of the United States
      Department of Commerce. These laws and regulations, among other things,
      prohibit or require a license for the export of certain types of technical
      data to certain specified countries. LICENSEE hereby agrees and gives
      written assurance that it will comply with all United States laws and
      regulations controlling the export of commodities and technical data, that
      it will be responsible for any violation of such by LICENSEE or its
      AFFILIATES or sublicensees, unless its AFFILIATES and sublicensees so
      agree in a separate and binding arrangement, and that it will defend and
      hold HARVARD harmless in the event of any legal action of any nature
      occasioned by such violation.

9.9   LICENSEE agrees to obtain all regulatory approvals required for the
      manufacture and sale of ROYALTY PRODUCTS and MILESTONE PRODUCTS and to
      utilize appropriate patent marking on such ROYALTY PRODUCTS. LICENSEE also
      agrees to register or record this Agreement as is required by law or
      regulation in any country where the license is in effect.

9.10  Written notices required to be given under this Agreement shall be
      addressed as follows:

      If to HARVARD:           Office for Technology and Trademark Licensing
                               Harvard University
                               124 Mt. Auburn Street, Suite 410
<PAGE>

                               Cambridge, MA 02138-5701

      With a copy to:          Office of Technology Licensing and Industry
                               Sponsored Research
                               Harvard University
                               333 Longwood Avenue, Suite 640
                               Boston, MA 02115

      If to LICENSEE:          Ontogeny, Inc.
                               One Kendall Square; Bldg 600
                               Cambridge, MA 02139
                               Attn.  President

      With a copy to:          Hale and Dorr
                               60 State Street
                               Boston, MA 02109
                               Attn.  Mark G. Borden, Esq.

      or such other address as either party may request in writing.

9.11  Should a court of competent jurisdiction later consider any provision of
      this Agreement to be invalid, illegal, or unenforceable, it shall be
      considered severed from this Agreement. All other provisions, rights and
      obligations shall continue without regard to the severed provision,
      provided that the remaining provisions of this Agreement are in accordance
      with the intention of the parties.

9.12  In the event of any controversy or claim arising out of or relating to any
      provision of this Agreement or the breach thereof, the parties shall try
      to settle such conflicts amicably between themselves.

9.13  This Agreement constitutes the entire understanding between the parties
      and neither party shall be obligated by any condition or representation
      other than those expressly stated herein or as may be subsequently agreed
      to by the parties hereto in writing.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.

      The effective date of this Agreement is February 9,1995.

               PRESIDENT AND FELLOWS
                OF HARVARD COLLEGE                        ONTOGENY, INC.

       /s/ Joyce Brinton                          /s/
   -----------------------------------------    --------------------------------
             Joyce Brinton, Director                         Signature
       Office for Technology and Trademark
                    Licensing                   --------------------------------
                                                               Name

                                                --------------------------------
                                                               Title
<PAGE>

                                   APPENDIX A

The following comprise PATENT RIGHTS:

USSN 08/136,748
PCT/US94/11745

USSN 08/176,427
USSN 08/227,371 (CIP of USSN 08/176,427)
PCT/US94/14992
<PAGE>

                                   APPENDIX B

The following comprise BIOLOGICAL MATERIALS

From USSN 08/136,748/ Melton and Hemmati-Brivanlou

1XAR1
pSP64TXFS-319
XFS-319 (Seq. ID #1)

From USSN 08 /176,427/ McMahon, Tabin and Ingham

pCHA (Seq ID# 12)
pCHB (Seq ID #13)
pHH-2
W1-15.1
pWEXP2
[WRES4
WEXP2-CShh
pWEXP-CShh pHS-Shh

Sonic/RCAS-A1
Sonic/RCAS-A2
Sonic/RCAN-A1
Sonic/RCAN-A2
Sonic/RCAS-E1
Sonic/RCAS-E2

From USSN 08/227,371

Polypepetides

Gene                          Species                     Seq ID No
----                          -------                     ---------
Sonic hedgehog (shh)          mammalian                   11, 13
                              avian                       8
                              fish                        12

Indian hedgehog (Ihh)         human                       14
                              mouse                       10

Desert hedgehog (Dhh)         mouse                       9
<PAGE>

                                   APPENDIX C

                     Registration Rights for Ontogeny, Inc.

                                   Appendix C

                               Registration Rights

      1. Certain Definitions. For purposes of this Appendix C:

            (a) "Registrable Shares" means (i) the Shares, excluding any
Unvested Shares, and (ii) any other shares of Common Stock issued in respect of
such shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Registrable Shares shall cease to be Registrable Shares upon any
sale pursuant to a Registration Statement or Rule 144 under the Securities Act.

            (b) "Registration Statement" means a registration statement filed
with the United States Securities and Exchange Commission (the "Commission") for
a public offering and sale of Common Stock under the Securities Act of 1933, as
amended (the "Securities Act") (other than a registration statement on Form S-8
or Form S-4, or their successors, or any other form for a similar limited
purpose, or any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation).

            (c) "Company" means Ontogeny, Inc.

            (d) "Purchaser" means the President and Fellows of Harvard College.

      2. Incidental Registration.

            (a) Whenever the Company proposes to file a Registration Statement
for the registration of shares of Common Stock for its own account, it will,
prior to such filing, give written notice to the Purchaser of its intention to
do so and, upon the written request of the Purchaser given within 20 days after
the Company provides such notice (which request shall state the intended method
of disposition of such Registrable Shares), the Company shall use its best
efforts to cause all Registrable Shares which the Company has been requested by
the Purchaser to register to be registered under the Securities Act to the
extent necessary to permit their sale or other disposition in accordance with
the intended methods of distribution specified in the request of the Purchaser;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 2 without obligation to the
Purchaser.

            (b) In connection with any registration under this Section 2
involving an underwriting, the Company shall not be required to include (i) any
Registrable Shares in such registration unless the Purchaser accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, or (ii) except in the Company's initial public offering of
Common Stock, any Registrable Shares then eligible for resale under Rule 144(k)
under the Securities Act. If in the opinion of the managing underwriter it is
appropriate because of marketing factors to limit the number of Registrable
Shares to be included in the offering, then
<PAGE>

the Company shall be required to include in the registration only that number of
Registrable Shares, if any, which the managing underwriter believes should be
included in the offering in accordance with the foregoing is less than the total
number of shares which the Purchaser has requested to be included, then the
Purchaser and other holders of securities entitled to include them in such
registration shall participate in the registration pro rata based upon their
total ownership of shares of Common Stock (giving effect to the conversion into
Common Stock of all securities convertible thereinto).

      3. Allocation of Expenses. The Company will pay all expenses of all
registrations under this Agreement, other than expenses of the Purchaser's
counsel and underwriting discounts and commissions.

      4. Information by Purchaser. The Purchaser shall furnish to the Company
such information regarding the Purchaser and the distribution proposed by the
Purchaser as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Appendix C.

      5. "Stand-Off" Agreement. The Purchaser, if requested by the Company and
the managing underwriter of the Company's initial public offering of Common
Stock or other securities of the Company pursuant to a Registration Statement,
shall agree not to sell or otherwise transfer or dispose of any Registrable
Shares or other securities of the Company held by the Purchaser for a period of
180 days following the effective date of such Registration Statement.

      6. Termination. All of the Company's obligations to register Registrable
Shares under this Agreement shall terminate on the date three years after the
closing of the Company's initial public offering of Common Stock pursuant to a
Registration Statement.
<PAGE>

            Confidential Materials omitted and filed separately with
         Securities and Exchange Commission. Asterisks denote omissions.

                         Amendment to License Agreement

The President and Fellows of Harvard College and Ontogeny, Inc hereby amend the
License Agreement effective February 9, 1995 as follows:

1. To delete Section 2.2(d) and replace it with the following new Section 2.2(d)

If, in HARVARD's reasonable judgement, LICENSEE fails to satisfy both of the
following conditions for either the hedgehog technology or the follistatin
technology, which failure is not cured within ninety (90) days after written
notice of such failure by HARVARD to LICENSEE, HARVARD shall have the right to
terminate this license or render it non-exclusive with respect to the technology
which is not under development:

(i)   is demonstrably engaged in research, development, manufacturing, marketing
      or licensing program, as appropriate, directed toward the development and
      commercialization of the licensed subject matter, and

(ii)  has devoted at least the level of resources outlined below to the
      development and commercialization of the licensed subject matter:

           Year                Total Number of FTFs          Annual Budget
           ----                --------------------          -------------

1                                      [**]                      $[**]
2                                      [**]                      $[**]
3                                      [**]                      $[**]
4 (and after)                          [**]                      $[**]

      FTEs are defined as full-time equivalent scientists and/or technicians
      and/or consultants. One half of the minimum number of total FTEs will be
      allocated to the development of each of the follistatin technology and the
      hedgehog technology. Of those FTEs dedicated to the development of the
      licensed subject matter, fifty percent (50%) will possess an advanced
      scientific degree.

      In making this determination, HARVARD shall take into account the normal
      course of such programs conducted with sound and reasonable business
      practices and judgment and shall take into account the reports provided
      hereunder by LICENSEE.

2. To delete Section 8.6 and replace it with the following new Section 8.6:

      LICENSEE shall have the right to terminate this Agreement with respect to
      either the hedgehog or the follistatin technology by giving ninety (90)
      days advance written notice to HARVARD to that effect. Upon termination, a
      final report shall be submitted and any royalty payments and unreimbursed
      patent expenses due to HARVARD shall become immediately payable.

The effective date of this amendment is February 25, 1998.
<PAGE>

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE AUTHORIZED THIS AMENDMENT TO BE
EXECUTED BY THEIR DULY AUTHORIZED REPRESENTATIVES

PRESIDENT AND FELLOWS OF
    HARVARD COLLEGE

By:  /s/ Joyce Brinton
   -------------------------
   Joyce Brinton, Director, Officer of Technology
   and Trademark Licensing

Date:    02/27/98
     -----------------------

ONTOGENY, INC

by:  /s/ George Eldridge
   -------------------------

Title: Vice President
       ---------------------

Date:          3/6/98
     -----------------------
<PAGE>

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                                 AMENDMENT NO. 1
                              TO LICENSE AGREEMENT

      This AMENDMENT No. 1 is made as of this first day of January, 1997, by and
between THE PRESIDENT AND FELLOWS OF HARVARD COLLEGE, a non-profit Massachusetts
educational corporation ("HARVARD"), and ONTOGENY, INC., a Delaware corporation
("LICENSEE").

      WHEREAS, HARVARD and LICENSEE are parties to a License Agreement,
effective as of February 9, 1995 (the "License Agreement"); and

      WHEREAS HARVARD and LICENSEE wish to amend the License Agreement as
hereafter provided.

      NOW, THEREFORE, in consideration of the mutual covenants of HARVARD and
LICENSEE and further good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, HARVARD and LICENSEE, intending to
be legally bound, hereby agree as follows:

      1. Section 3.1 of the License Agreement is hereby amended to read in full
as follows:

      Upon execution of this Agreement, LICENSEE shall pay to HARVARD a
      non-refundable, non-creditable fee of [**] dollars. HARVARD hereby
      acknowledges receipt of [**] dollars of such fee.

      2. The "If to LICENSEE:" in the notice provisions of Section 9.10 of the
License Agreement is hereby amended to read in full as follows:

      If to LICENSEE:         Chief Executive Officer
                              Ontogeny, Inc.
                              45 Moulton Street
                              Cambridge, MA 02138-1118

      with a copy to:         Mark G. Borden, Esq.
                              Hale and Dorr LLP
                              60 State Street
                              Boston, MA  02109

      3. Except as expressly amended by this Amendment No. 1, the License
Agreement shall remain in full force and effect as the same was in effect
immediately prior to the effectiveness of this Amendment No. 1.

      4. This Amendment No. 1 shall be governed by and construed on the same
basis as the License Agreement, as set forth therein.
<PAGE>

      IN WITNESS WHEREOF, each of the parties hereto has fully executed this
Amendment No. 1 all as of the day and year first above written.

                            THE PRESIDENT AND FELLOWS
                            OF HARVARD COLLEGE

                            By: /s/ Joyce Brinton
                               -----------------------------------
                               Joyce Brinton
                               Director

                            ONTOGENY, INC.

By:  Thomas D. Ingolia
   -----------------------------
     Thomas D. Ingolia, Ph.D.
     Senior Vice President

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