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Employment Agreement - BioMedicines Inc. and Hana Berger Moran

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3 September 1999


Hana Berger Moran, Ph.D.
55 Orinda View Road
Orinda, Ca 94563
Tel.  (925) 299 1963
Fax   (925) 299 0349

Dear Hana:

On behalf of the Board of Directors of BioMedicines, Inc. (the "Company"), I
would like to offer you the position of Vice President Chemical Development &
Manufacturing. In this capacity you will report to the Chief Executive Officer.
As you're aware from recent discussions, however, the Board may appoint a
president or chief operating officer. In the event the Board does take this
action, reporting relationships within the senior management team may change.

In your role as Vice President, you will have principal responsibility for
planning and directing all activities related to manufacturing and the quality
thereof for all Company projects and for:

-    establishing a manufacturing and quality-assurance infrastructure that is
     both cost-effective and appropriate to the Company's needs at any given
-    hiring, teaching, leading, and managing personnel in your group(s)
-    selecting and directing external vendors of manufacturing or QA/QC services
     and products
-    evaluating potential product acquisitions for the Company
-    participating in partnering discussions for either in- or out-licensing
-    preparing accurate and timely budgets and then achieving agreed goals
     within budgets
-    contributing to safety management practices and activities for the Company
-    helping to ensure compliance with good scientific and regulatory practices,
     including ICH-related matters, in all areas for which you are responsible
     or to which you may reasonably contribute based on your experience and

In your role as Vice President you will also be a member of the Company's Senior
Management Team with joint responsibility for recommending Company strategy to
the Board as well as setting Company policies.

I would also like to share with you the particular desire of the Board of
Directors that you will contribute creatively, constructively and cordially to
the success of all of your colleagues and fellow members of the Senior
Management Team. In this regard, the performance of all Company officers will be
evaluated on the basis of both individual and cooperative achievements.

This letter will serve to confirm the terms of your employment with
BioMedicines, such employment to begin on Monday 18 October 1999 or earlier, by
mutual agreement. If the terms discussed below are acceptable to you, please
sign this confirmation letter where indicated and return it to me, retaining a
copy for your records.


Hana Berger Moran, Ph.D.
3 September 1999
Page 2


     (a)  SALARY, AND EXPENSE REIMBURSEMENTS. You will be paid a monthly salary
of $16,250.00. You will be eligible for a cash bonus of up to twenty percent
(20%) of your base pay. Changes in base pay or the payment of bonuses are made
at the discretion of the Board upon receipt of recommendations from the
Compensation Committee. Currently, salary payments are made twice a month. In
addition, all reasonable business expenses incurred by you will be reimbursed so
long as they are incurred in the ordinary course of business and consistent with
the then-applicable Company policies.

     (b)  STOCK OPTIONS. You will receive options to purchase up to one hundred
thirty thousand (130,000) shares of the Company's common stock at a strike price
of $0.225 per share,

It is anticipated that ninety thousand (90,000) shares of this grant, if
approved, will vest at the rate of approximately 2.083% per month (i.e., 25% per
year), subject to the condition that vesting for the first 12 months will occur
only after you have satisfactorily completed 12 months of employment (i.e.,
options on 20,000 shares will vest only on the first anniversary of your
employment). Thereafter, vesting will occur monthly as noted above, Options on
these ninety thousand shares shall be identified as "time-based options."

It is anticipated that up to forty (40,000) thousand additional shares will be
subject to accelerated vesting according to the following general schedule*:

-    substantive contribution to a successful United States (U.S.)
     Investigational New Drug Application (IND) filing defined as regulatory
     approval to begin clinical testing - 10,000 shares
-    substantive contribution to drug development such that the Board approves
     the initiation of phase III testing in the United States - 10,000 shares
-    substantive contribution to the acceptance of a U.S. New Drug Application
     (NDA) for filing - 15,000 shares
-    substantive contribution to the approval of a U.S. NDA - 20,000 shares
-    inventing a new use for a product such that a new patent application is
     filed in the United States and assigned to Company - 5,000 shares and if
     subsequently a patent issues - 10,000 shares
-    co-inventing with another Company employee a new use for a product such
     that a new patent application is filed in the United States and assigned to
     Company - 5,000 shares
-    personally identifying a new product licensing opportunity and then
     contributing substantially to the inlicensing of said product into the
     Company's portfolio - 25,000 shares

Options on these forty thousand shares shall be identified as "event-based

* Upon achievement of any of the goals stated above, vesting shall accelerate
such that the number of shares vests fully.


Hana Berger Moran, Ph.D.
3 September 1999
Page 3

In the event that, outside the U.S., the equivalent of a U.S. IND is filed,
phase III testing begins, a marketing application is filed or approved, then 50%
of the number of shares identified above shall be subject to accelerated vesting
with the remaining 50% becoming subject to such vesting when the related event
occurs in the U.S.

Other terms, or terms that become applicable after the date of this letter, will
appear either in the BioMedicines Stock Option Plan of which you will receive a
copy in the event you accept this offer or in a separate communication to you
from the Company.

Please note that in the event of a stock split or "reverse split" the number of
options and the option price may be adjusted accordingly.

Subject to the sole discretion of the Board, you may also be eligible to receive
additional options from time to time during your continued satisfactory
employment with the Company. In this event, the number of options and any
conditions of such grant(s) shall be communicated to you in due course.

     (c)  HEALTH BENEFITS. You will be entitled to all health and medical
benefits as are provided to other employees. In addition, you will be entitled
to participate in other Company benefit plans, such as a 401k plan or other such
plans, as and when such plans are adopted by BioMedicines.

     (d)  VACATION, HOLIDAYS AND SICK LEAVE. You will receive three (3) Weeks of
paid vacation per year as described in the Company's Policy Manual. You are
encouraged to plan for and to take, under appropriate circumstances, the
vacation time to which you are entitled. Sick leave and holidays will be
provided in accordance with the Company's policies, which will be announced from
time to time.

2.   TERMINATION. You or the Company may terminate the employment relationship
at any time, for any reason, with or without good cause. In the event that you
are terminated by the Company without good cause, then you will receive
termination payments as follows:

                col. #1                                 col. #2                                col. #3
         Number of months of                Number of months of salary                  Number of months of
         employment prior to                 and benefits to be paid              additional vesting of time-
      termination without cause            (minus required withholdings)                 based options
LESS THAN 12                                               3                                      3
GREATER THAN OR EQUAL TO 12 but LESS THAN 24               6                                      6
GREATER THAN OR EQUAL TO 24                                9                                      9

The salary-minus-withholdings shall be paid to you within thirty (30) days of
your termination. In the event that the Board of Directors shall approve
termination payments larger than these, such termination payments being made in
the event of a formal company downsizing, generalized laying off of employees,
or merger or acquisition-related events, or other similar events, then your
termination payments shall be adjusted accordingly.


Hana Berger Moran, Ph.D.
3 September 1999
Page 4

In addition, you shall be eligible for vesting of additional event-based options
for those events specified in paragraph 1(b) above that occur after your
termination but within the number of months specified in col. #3 above. The
Company agrees to act in good faith with respect to these potential event-based

serving as an employee of the Company, you will not engage in any activity which
is competitive with the Company and will give your sole and only loyalty to the
Company. It is understood that buying and selling of securities of any public
company does not constitute a violation of this agreement. An investment in a
private company other than, or not affiliated with, the Company may be construed
as a violation of this non-compete clause unless you have received the prior
approval of the Board of Directors or Chief Executive Officer of the Company, as
appropriate. It is understood that any reasonable obligations that you may have,
to assist or cooperate with a previous employer in legal proceedings, in the
issuance of patents or prosecution of patent applications, or in compliance with
requests from governmental authorities do not constitute violations of this
agreement, provided that these obligations are not fulfilled on Company time and
do not adversely impact in a material way the performance of your current duties
to the Company.

offer is contingent upon the execution of the Company's Proprietary Information
and Inventions Agreements, copies of which are enclosed for your review and

5.   ARBITRATION. Any controversy between the parties hereto involving the
construction or application of any terms, covenants or conditions of this
Agreement, or any claims arising out of or relating to this Agreement or the
breach thereof or with your employment with the Company or any termination of
that employment, except with respect to prejudgment remedies, will be submitted
to and settled by final and binding arbitration in San Francisco, California, in
accordance with the Model Employment Dispute Resolution Rules of the American
Arbitration Association (the "Rules") then in effect, any arbitrator shall be
selected pursuant to such Rules and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.

Please note that the offer is conditional until proof of eligibility for
employment in California according to all applicable local, state, and federal
laws has been provided by you to the Company.

To accept this offer, please sign in the space below within seven (7) days of
the date of this offer, indicating your acceptance and agreement to the terms
contained herein. No amendment or modification of the terms of this letter will
be valid unless made in writing and signed by you and an authorized officer of
the Company.

On a personal note, Hana, I think that your record of personal success is
particularly impressive and that your presence on the Company's management team
will help to guarantee the Company's success as well. The Board as a whole
shares this view.


Hana Berger Moran, Ph.D.
3 September 1999
Page 5

I also know that you are aware of and sensitive to the special responsibilities
that you will have as an officer in BioMedicines. Mark is likewise aware of the
Board's views regarding the responsibilities of senior management, and it is my
hope, and the Board's wish, that the entire senior management team will work
productively and in harmony.

I look forward to seeing you in action, Hana, and I will be happy to speak with
you or to see you regarding Company matters at any time.

                                          Warm regards,

                                          /s/ Brian G. Atwood

                                          Brian G. Atwood

Accepted by:

/s/ Hana Berger Moran
Hana Berger Moran, Ph.D.

October 12, 1999


Hana Berger Moran, Ph.D.
3 September 1999
Page 6


3 September, 1999

BioMedicines, Inc.
1301 Marina Village Parkway Suite 200
Alameda, CA 94501


The following confirms an agreement between me and BioMedicines, Inc., a
Delaware corporation (the "Company," which term includes the Company's
subsidiaries, successors and assigns), which is a material part of the
consideration for my employment by the Company:

1.   "Proprietary Information" is information that was or is developed by,
became or becomes known by, or was or is assigned or otherwise conveyed to the
Company, and which has commercial value in the Company's business. Proprietary
Information includes, without limitation, trade secrets, financial information,
product plans, customer lists, marketing plans and strategies, forecasts and
other business information, improvements, inventions, business strategies,
formulas, product ideas, works of authorship, processes, copyrightable or
patentable material, schematics, biological material (including cell lines,
antibodies, c-DNAs, antisense nucleotides, proteins, vectors, new chemical
entities, media, reagents and related materials) and techniques for their
handling and use, computer programs, algorithms, techniques, schematics,
know-how and data, and any other confidential or proprietary information of the
Company or its customers or clients which I have been, or may be exposed to, or
have learned or may learn of from time to time in connection with or as a result
of my capacity as a consultant to the Company or during the term of this
Agreement. Proprietary Information shall not include information that is through
no improper action or inaction by me, generally available to the public. I
understand that my employment creates a relationship of confidence and trust
between me and the Company with respect to Proprietary Information of the
Company or its customers which may be learned by me during the period of my

2.   In consideration of my employment by the Company and the compensation
received by me from the Company from time to time, I hereby agree as follows:

     (a)  All Proprietary Information and all patents, copyrights, trade secret
rights, and other rights (including throughout, without limitation, any
extensions, renewals, continuations or divisions of any of the foregoing) in
connection therewith shall be the sole property of the Company. I hereby assign
to the Company any rights I may have or acquire in such Proprietary Information.
At all times, both during my employment by the Company and after its
termination, I will keep in confidence and trust and will not use or disclose
any Proprietary Information or anything relating to it without the written
consent of the Company, except as may be necessary in the ordinary course of
performing my duties to the Company.


Hana Berger Moran, Ph.D.
3 September 1999
Page 7

     (b)  In the event of the termination of my employment by me or by the
Company for any reason, I shall return all documents, records, apparatus,
equipment and other physical property, or any reproduction of such property,
whether or not pertaining to Proprietary Information, furnished to me by the
Company or produced by myself or others in connection with my employment, to the
Company immediately as and when requested by the Company.

     (c)  I will promptly disclose to the Company, or any persons designated by
it, all "Inventions," which includes all improvements, inventions, formulas,
ideas, works of authorship, processes, computer programs, algorithms,
techniques, schematics, know-how and data, whether or not patentable, made or
conceived or reduced to practice or developed by me, either alone or jointly
with others, during the term of my employment and for three (3) months
thereafter. To the extent the Company does not have rights therein hereunder,
such disclosure shall be received by the Company in confidence and does not
extend the assignment made in Section (e) below.

     (d)  During the term of my employment and for one (1) year thereafter, I
will not encourage or solicit any employee of the Company to leave the Company
for any reason or to devote less than all of any such employee's efforts to the
affairs of the Company, provided that the foregoing shall not affect any
responsibility I may have as an employee of the Company with respect to the bona
fide hiring and firing of Company personnel.

     (e)  I agree that all Inventions which I make, conceive, reduce to practice
or develop (in whole or in part, either alone or jointly with others) during my
employment shall be the sole property of the Company to the maximum extent
permitted by Section 2870 of the California Labor Code, a copy of which is
attached herewith, and to the extent permitted by law shall be "works made for
hire." The Company shall be the sole owner of all patents, copyrights, trade
secret rights, and other intellectual property or other rights in connection
therewith. I hereby assign to the Company any rights I may have or acquire in
such Inventions. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and assist it, at the
Company's expense, in obtaining and enforcing patents, copyrights, trade secret
rights or other rights on such Inventions and/or any other Inventions I have or
may at any time assign to the Company in any and all countries. Such acts may
include, but are not limited to, execution of documents and assistance or
cooperation in legal proceedings. With respect to any and all matters arising
out of or relating to my employment or consultancy with the Company, I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents, as my agents and attorneys-in-fact to act for and in my behalf and
instead of me, to execute and file any applications or related filings and to do
all other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights, trade secret rights or other rights thereon with the same
legal force and effect as if executed by me.

     (f)  I attach hereto a complete list of all Inventions or improvements to
which I claim ownership and/or that I desire to remove from the operation of
this Agreement, and I covenant that such list is complete. If no such list is
attached to this Agreement, I represent that I have no such Inventions and
improvements at the time of signing this Agreement. I understand that any such
list shall not contain information that breaches an obligation of
confidentiality with a former employer.


Hana Berger Moran, Ph.D.
3 September 1999
Page 8

     (g)  I represent that my performance of all the terms of this Agreement
will not breach any agreement or obligation to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my employment by
the Company. I have not entered into, and I agree I will not enter into, any
agreement either written or oral in conflict herewith or in conflict with my
employment with the Company.

3.   In consideration of the foregoing, the Company agrees that it will not
request as part of my employment that I divulge or make use of confidential
information of any of my former employers that has commercial value to the
former employer who developed such information.

4.   This Agreement shall be effective as of the first day of my employment by
the Company, and shall be binding upon me, my heirs, executors, assigns, and
administrators and shall inure to the benefit of the Company, its subsidiaries,
successors and assigns.

Accepted and Agreed to:

Dated: October 12, 1999

/s/ Hana Berger Moran                           By: /s/ Brian G. Atwood
-------------------------------------              ---------------------------
Hana Berger Moran, Ph.D.                               Brian G. Atwood


Hana Berger Moran, Ph.D.
3 September 1999
Page 9

                                    EXHIBIT A

1.   The following is a complete list of all inventions or improvements relevant
to the subject matter of my employment by BioMedicines, Inc. (the "Company")
that have been made or conceived or first reduced to practice by me alone or
jointly with others prior to my employment by the Company that I desire to
remove from the operation of the Company's Proprietary Information and
Inventions Agreement.

 X   No inventions or improvements.

2.   I propose to bring to my employment the following materials and documents
of a former employer:

 X   No materials or documents.

/s/ Hana Berger Moran
Hana Berger Moran, Ph.D.


Hana Berger Moran, Ph.D.
3 September 1999
Page 10

                                    EXHIBIT B


(a)  Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

     (1)  Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer.

     (2)  Result from any work performed by the employee for the employer.

(b)  To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.