<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

(Mark One)
[X]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 1997

                                       OR

[ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from ____ to ____

Commission file number: 0-19311


                        IDEC PHARMACEUTICALS CORPORATION
             (Exact name of registrant as specified in its charter)


Delaware                                                              33-0112644
- -------------------------------                             --------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


                 11011 Torreyana Road, San Diego, CA       92121
               (Address of principal executive offices) (Zip code)

                                 (619) 550-8500
              (Registrant's telephone number, including area code)




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes   X   No      
    ----     ----

As of July 31, 1997, the Registrant had 18,826,904 shares of its common stock,
$.001 par value, issued and outstanding.







<PAGE>   2
                        IDEC PHARMACEUTICALS CORPORATION

                          FORM 10-Q -- QUARTERLY REPORT
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

                                TABLE OF CONTENTS




<TABLE>
<S>                                                                                                               <C>

PART I.    FINANCIAL INFORMATION


Item 1.    Financial Statements
           Condensed Consolidated Balance Sheets -- June 30, 1997 and December 31, 1996 .......................... 1
           Condensed Consolidated Statements of Operations -- Three months ended June 30, 1997 and 1996
                and six months ended June 30, 1997 and 1996 ...................................................... 2
           Condensed Consolidated Statements of Cash Flows -- Six months ended June 30, 1997 and 1996 ............ 3
           Notes to Condensed Consolidated Financial Statements .................................................. 4


Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations ................. 5

           Risk Factors .......................................................................................... 8


PART II.   OTHER INFORMATION


Item 1.    Legal Proceedings .....................................................................................14


Item 2.    Changes in Securities .................................................................................14


Item 3.    Defaults upon Senior Securities .......................................................................14


Item 4.    Submission of Matters to a Vote of Security Holders ...................................................14


Item 5.    Other Information .....................................................................................15


Item 6.    Exhibits and Reports on Form 8-K ......................................................................15
</TABLE>








<PAGE>   3

                         PART I -- FINANCIAL INFORMATION


Item 1.  FINANCIAL STATEMENTS.


IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)


<TABLE>
<CAPTION>
                                                           June 30,     December 31,
                                                            1997            1996
                                                          ---------      ---------
                                                         (unaudited)
<S>                                                       <C>            <C>      
ASSETS
Current assets:
   Cash and cash equivalents                              $  11,624      $  25,337
   Securities available-for-sale                             51,086         53,390
   Current portion of note receivable                           868            804
   Contract research revenue receivables                      3,585          3,635
   Due from related party                                     2,887          1,532
   Inventories                                                6,587          4,384
   Prepaid expenses and other current assets                  1,696          2,533
                                                          ---------      ---------
         Total current assets                                78,333         91,615

Property and equipment, net                                  23,442         21,453
Note receivable, less current portion                            --            445
Deposits and other assets                                       390            316
                                                          ---------      ---------
                                                          $ 102,165      $ 113,829
                                                          =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of notes payable                       $   3,588      $   3,830
   Accounts payable                                           2,322          3,106
   Accrued expenses and other liabilities                    10,339          6,751
                                                          ---------      ---------
         Total current liabilities                           16,249         13,687
Notes payable, less current portion                           3,495          5,015

Other long-term liabilities                                   1,821          1,513
Due to related party                                          1,000          1,000

Stockholders' equity:
   Convertible preferred stock, $.001 par value                  --             --
   Common stock, $.001 par value                                 19             18
   Additional paid-in capital                               177,614        176,448
   Unrealized losses on securities available-for-sale          (115)           (37)
   Accumulated deficit                                      (97,918)       (83,815)
                                                          ---------      ---------
         Total stockholders' equity                          79,600         92,614
                                                          ---------      ---------
                                                          $ 102,165      $ 113,829
                                                          =========      =========
</TABLE>



See accompanying notes to condensed consolidated financial statements.

                                        1



<PAGE>   4
IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(In thousands, except per share data) (unaudited)



<TABLE>
<CAPTION>
                                                 Three months ended          Six months ended
                                                     June 30,                    June 30, 
                                               ----------------------      ----------------------
                                                 1997          1996          1997          1996
                                               --------      --------      --------      --------
<S>                                            <C>           <C>           <C>                <C>
Revenues:
Revenue from unconsolidated joint business     $  1,878      $     --      $  1,878      $     --
   Contract research revenues                     2,524         3,064         5,188         6,000
   License fees                                   1,000         2,500         5,000         9,500
   Sales                                             --         1,505            --         1,505
                                               --------      --------      --------      --------
                                                  5,402         7,069        12,066        17,005

Operating expenses:
   Manufacturing expenses                         5,214         1,384         5,214         1,384
   Research and development                      10,292         7,078        17,766        12,719
   Selling, general and administrative            2,498         1,607         4,706         3,461
                                               --------      --------      --------      --------
                                                 18,004        10,069        27,686        17,564
                                               --------      --------      --------      --------
     Loss from operations                       (12,602)       (3,000)      (15,620)         (559)

Interest income (expense), net                      731          (490)        1,517        (1,084)
                                               --------      --------      --------      --------

Net loss                                       $(11,871)     $ (3,490)     $(14,103)     $ (1,643)
                                               ========      ========      ========      ========

Net loss per share common share                $  (0.63)     $  (0.22)     $  (0.76)     $  (0.11)
                                               ========      ========      ========      ========

Shares used in computing net loss
  per common share                               18,724        15,687        18,461        15,419
                                               ========      ========      ========      ========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                        2



<PAGE>   5
IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)


<TABLE>
<CAPTION>
                                                                     Six months ended
                                                                          June 30,
                                                                   ----------------------
                                                                     1997          1996
                                                                   --------      --------
<S>                                                                <C>           <C>      
Cash flows from operating activities:
           Net cash used in operating activities                   $(11,523)     $   (320)
                                                                   --------      --------

Cash flows from investing activities:
     Purchase of property and equipment                              (3,841)         (779)
     Purchase of securities available-for-sale                      (24,084)      (13,747)
     Sales and maturities of securities available-for-sale           26,311         4,816
                                                                   --------      --------
           Net cash used in investing activities                     (1,614)       (9,710)
                                                                   --------      --------

Cash flows from financing activities:
     Proceeds from issuance of common stock                           1,185        47,318
     Proceeds from issuance of preferred stock                           --        12,500
     Proceeds from notes payable                                         --         1,109
     Payments on notes payable                                       (1,761)       (1,721)
                                                                   --------      --------
           Net cash provided by (used in) financing activities         (576)       59,206
                                                                   --------      --------

Net increase (decrease) in cash and cash equivalents                (13,713)       49,176
Cash and cash equivalents, beginning of period                       25,337        18,828
                                                                   --------      --------
Cash and cash equivalents, end of period                           $ 11,624      $ 68,004
                                                                   ========      ========
</TABLE>



See accompanying notes to condensed consolidated financial statements.



                                        3



<PAGE>   6
IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)





NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
   The information at June 30, 1997, and for the three- and six-month periods
ended June 30, 1997 and 1996, is unaudited. In the opinion of management, these
condensed consolidated financial statements include all adjustments, consisting
of normal recurring adjustments, necessary for a fair presentation of results
for the interim periods presented. Interim results are not necessarily
indicative of results for a full year. These financial statements should be read
in conjunction with IDEC Pharmaceuticals Corporation's (the "Company") Annual
Report to Shareholders incorporated by reference in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, which was filed with the
United States Securities and Exchange Commission on March 31, 1997.

New Accounting Standard
   On March 3, 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 "Earnings per Share" ("Statement No.
128"). Statement No. 128 supersedes Accounting Principles Board Opinion No. 15
("APB No. 15") and replaces "primary" and "fully diluted" earnings per share
("EPS") under APB No. 15 with "basic" and "diluted" EPS. Unlike primary EPS,
basic EPS excludes the dilutive effects of options, warrants and other
convertible securities. Diluted EPS reflects the potential dilution of
securities that could share in the earnings of an entity, similar to fully
diluted EPS. Statement No. 128 is effective for years ending after December 15,
1997. The Company is currently evaluating the impact of the implementation of
Statement No. 128.

Reclassification
   The prior year balances in preferred stock, common stock and additional
paid-in capital have been reclassified to effect the change in par value to
$.001 per share resulting from stockholder approval on May 22, 1997, of a change
in the state of incorporation of the Company from the State of California to the
State of Delaware.

NOTE 2. RELATED PARTY ARRANGEMENTS

   In March 1995, the Company and Genentech, Inc. ("Genentech") entered into a
collaborative agreement for the clinical development and commercialization of
the Company's anti-CD20 monoclonal antibody, Rituxan(TM) (formerly IDEC-C2B8),
for the treatment of non-Hodgkin's B-cell lymphomas. In February 1996, the
parties extended this collaboration to include two radioconjugates, IDEC-Y2B8
and IDEC-In2B8, also for the treatment of B-cell lymphomas. Concurrent with the
collaborative agreement, the Company and Genentech also entered into an
expression technology license agreement for a proprietary gene expression
technology developed by the Company and a preferred stock purchase agreement
providing for certain equity investments in the Company by Genentech. Under the
terms of these agreements, the Company may receive payments totaling
$57,000,000, subject to the attainment of certain milestone events. Genentech
may terminate this agreement for any reason. For the six months ended June 30,
1997, the Company recognized $1,500,000, in license fees under these agreements.

   In addition, the Company and Genentech will co-promote Rituxan and IDEC-Y2B8
in the United States and the Company and Genentech's sublicensee will co-promote
Rituxan in Canada under a joint business arrangement, with the Company receiving
a share of the profits. Additionally, the Company has an obligation to supply
Rituxan for the first two years after regulatory approval of Rituxan with an
option to continue supplying Rituxan thereafter. Included in inventory at June
30, 1997, is $3,577,000 in finished goods inventory that will be sold to
Genentech. Included in revenue from unconsolidated joint business for the three
and six months ended June 30, 1997 is $1,878,000 for bulk Rituxan sold to
Genentech.

   Under the terms of separate agreements with Genentech, commercialization of
Rituxan outside the United States will be the responsibility of F. Hoffmann-La
Roche Ltd, one of the world's largest pharmaceuticals firms, except in Japan
where Zenyaku Kogyo Co., Ltd. ("Zenyaku") will be responsible for development,
marketing and sales. The Company will receive royalties on sales outside the
U.S. and Canada. Additionally, the Company will receive royalties on sales of
any Genentech products manufactured using the Company's proprietary gene
expression system.


                                       4


<PAGE>   7

I
TEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

OVERVIEW

   IDEC Pharmaceuticals Corporation (the "Company") is primarily engaged in the
research and development of targeted immunotherapies for the treatment of cancer
and autoimmune and inflammatory diseases. To date, the Company has not received
any revenues from the commercial sale of its products. The Company has funded
its operations primarily through the sale of equity securities as well as
through contract research and license fee revenues received in connection with
collaborative arrangements entered into with the Company's strategic partners.

   The Company has incurred increasing annual operating expenses and, as the
Company prepares for product commercialization, it expects such trends to
continue. The Company has incurred annual operating losses since its inception
in 1985, and the transition of the Company to profitability will be dependent
upon the timing of regulatory approval and the commercial success of Rituxan(TM)
(formerly IDEC-C2B8). As of June 30, 1997, the Company had an accumulated
deficit of $97.9 million.

RESULTS OF OPERATIONS

   Revenue from unconsolidated joint business consist of bulk Rituxan sales to
Genentech, Inc. ("Genentech"), the Company's development partner.

   Contract research revenues for the three and six months ended June 30, 1997
totaled $2.5 million and $5.2 million, respectively, compared to $3.1 million
and $6.0 million for the comparable periods in 1996. The decrease in contract
research revenues for the three and six months ended June 30, 1997 is primarily
due to the expiration in December 1996 of a collaborative and license agreement
with Mitsubishi Chemical Corporation.

   License fees for the three and six months ended June 30, 1997 totaled $1.0
million and $5.0 million, respectively, compared to $2.5 million and $9.5
million for the comparable periods in 1996. License fees for the six months
ended June 30, 1997 consist of a license fee received from Boehringer Ingelheim
GmbH for the license of the Company's proprietary gene expression technology for
the manufacture of recombinant proteins ("gene expression technology"). License
fees for the six months ended June 30, 1996, resulted from the achievement of a
$2.5 million patent milestone under the Company's collaboration with Genentech,
$4.5 million received for the license to Chugai Pharmaceutical Co., Ltd. of the
Company's gene expression technology, $1.5 million from Genentech for the
expansion of its collaboration with the Company to include two radioconjugates,
IDEC-Y2B8 and IDEC-In2B8 for the treatment and imaging, respectively, of B-cell
lymphomas and $1.0 million from Seikagaku Corporation ("Seikagaku") for the
achievement of a product development milestone event. The Company continues to
pursue other collaborative and license arrangements; however, no assurance can
be given that discussions in this regard will result in any such arrangements or
that the Company will receive significant revenues from any such collaborative
or license arrangements.

   Sales for the six months ended June 30, 1996 were a result of the Company
completing a contract manufacturing arrangement.

   Manufacturing expenses totaled $5.2 million for the three and six months
ended June 30, 1997, compared to $1.4 million for the comparable periods in
1996. Manufacturing expenses for 1997 consist of manufacturing costs related to
production of bulk Rituxan sold to Genentech and includes approximately $2.0
million of costs associated with the start-up of the Company's manufacturing
facility. Manufacturing expenses for 1996 were a result of the Company
completing a contract manufacturing arrangement. The Company expects to continue
incurring substantial additional manufacturing expenses as the Company continues
to build Rituxan inventory in anticipation of marketing clearance from the
United States Food and Drug Administration.

   Research and development expenses totaled $10.3 million and $17.8 million for
the three and six months ended June 30, 1997, respectively, compared to $7.1
million and $12.7 million for the comparable periods in 1996. Research and
development expenses for the three and six months ended June 30, 1997 increased
primarily due to an accrual of a $3.0 million up-front licensing fee to
Pharmacia & Upjohn for exclusive rights to 9-aminocamptothecin, a broad spectrum
anti-cancer agent, and $2.0 million of contract manufacturing costs representing
about two-thirds of the production costs, for IDEC-Y2B8 in preparation for Phase
III trials. These one-



                                       5

<PAGE>   8
time charges were partially offset by the utilization of the Company's
manufacturing facility for bulk production of Rituxan inventory in 1997 compared
to research and development manufacturing production in 1996 of clinical
material used for clinical trials. The Company expects to continue incurring
substantial additional research and development costs in the future, due to
expansion or addition of research and development programs; technology
inlicensing costs and regulatory-related costs; preclinical and clinical testing
of the Company's various products under development; and production scale-up and
manufacturing of products used in clinical trials.

   General and administrative expenses totaled $2.5 million and $4.7 million for
the three and six months ended June 30, 1997, compared to $1.6 million and $3.5
million for the comparable periods in 1996. General and administrative expenses
increased in 1997 due to higher personnel costs to support expanded
manufacturing operations and initial costs incurred for the creation of a
marketing and sales organization. General and administrative costs necessary to
support expanded manufacturing capacity, expanded clinical trials, research and
development and the creation of a marketing and sales organization are expected
to increase in the foreseeable future.

   Net interest income totaled $0.7 million and $1.5 million for the three and
six months ended June 30, 1997, respectively, compared to net interest expense
of $0.5 million and $1.1 million during the comparable periods in 1996. The
increase in net interest income in 1997 from net interest expense in 1996 is due
to higher balances in cash, cash equivalents and securities available-for-sale,
a decrease in noncash interest charges for common stock warrants issued in
connection with certain debt financings and a decrease in interest expense due
to lower balances in notes payable.

LIQUIDITY AND CAPITAL RESOURCES

   The Company has financed its operations and capital expenditures since
inception principally through the sale of equity securities, license fees,
contract research revenues, lease financing transactions and interest income.
The Company expects to finance its current and planned operating requirements
principally through cash on hand and with funds from existing collaborative
agreements and contracts which the Company believes will be sufficient to meet
its near-term operating requirements. Existing agreements and contracts,
however, could be canceled by the contracting parties. In addition, the Company
may pursue additional capital through a combination of new collaborative
agreements, strategic alliances and equity and debt financings. However, no
assurance can be provided that additional capital will be obtained through these
sources on favorable terms or at all. Should the Company not enter into any such
arrangements, the Company anticipates its cash, cash equivalents and securities
available-for-sale, together with the existing agreements and contracts, will be
sufficient to finance the Company's currently anticipated needs for operating
and capital expenditures through early commercialization of its first product.
If adequate funds are not available from additional sources of financing, or if
the commercialization of Rituxan is delayed, the Company's business could be
adversely affected.

   The Company's working capital and capital requirements will depend upon
numerous factors, including the progress of the Company's preclinical and
clinical testing; manufacturing; research and development programs; timing and
cost of obtaining regulatory approvals; levels of resources that the Company
devotes to the development of manufacturing and marketing capabilities;
technological advances; status of competitors; and the ability of the Company to
establish collaborative arrangements with other organizations.

   Until required for operations, the Company's policy under established
guidelines is to keep its cash reserves in bank deposits, certificates of
deposit, commercial paper, corporate notes, United States government instruments
and other readily marketable debt instruments, all of which are investment-grade
quality.

   At June 30, 1997, the Company had $62.7 million in cash, cash equivalents and
securities available-for-sale compared to cash, cash equivalents and securities
available-for-sale of $78.7 million at December 31, 1996. Sources of cash, cash
equivalents and securities available-for-sale at June 30, 1997 include $1.2
million from the issuance of common stock under employee stock option and
employee stock purchase plans. Uses of cash, cash equivalents and securities
available-for-sale during the six months ended June 30, 1997 include $11.5
million used in operations, $3.8 million used to purchase capital equipment and
$1.8 million used to pay notes payable.

   During the second quarter the Company completed the acquisition of worldwide
rights from Pharmacia & Upjohn to 9-aminocamptothecin, a broad spectrum
anti-cancer agent. Under the terms of the agreement, the Company will reimburse
Pharmacia & Upjohn for a portion of their development costs by making an initial
payment of $3.0 million during the third quarter of 1997. Terms of the agreement
require the Company to pay additional license fees upon the achievement of
certain development milestone events. No royalties are payable to Pharmacia &
Upjohn under 



                                       6

<PAGE>   9
the agreement. The acquisition costs for these technology rights are included in
research and development expenses in the condensed consolidated financial
statements as of June 30, 1997.

   In July 1997, the Company received a $3.0 million loan commitment to finance
planned equipment purchases. Although no assurances can be provided that such
loan will result, the Company anticipates finalizing the terms of this loan in
the third quarter of 1997.

   In August 1995, the Company completed receipt of funding under a $10.0
million lease financing agreement to finance both equipment and facility
improvements. Terms of the financing agreement require final principal payments
of $1.1 million and $0.4 million in July 1998 and January 1999, respectively.

   This quarterly report contains predictions, estimates and other
forward-looking statements that involve a number of risks and uncertainties.
While this outlook represents our current judgment on the future direction of
the business, such risks and uncertainties could cause actual results to differ
materially from any future performance suggested above. The Company undertakes
no obligation to release publicly the results of any revisions to these
forward-looking statements to reflect events or circumstances arising after the
date hereof other than as required by the Securities Exchange Act of 1934, as
amended.


                                       7

<PAGE>   10
                                  RISK FACTORS

        Lengthy Regulatory Process; No Assurance of Regulatory Approvals

   The testing, manufacturing, labeling, advertising, promotion, export, and
marketing, among other things, of IDEC Pharmaceuticals Corporation's ("IDEC
Pharmaceuticals" or the "Company") products are subject to extensive regulation
by governmental authorities in the United States and other countries. In the
United States, pharmaceutical products are regulated by the United States Food
and Drug Administration ("FDA") under the Federal Food, Drug, and Cosmetic Act
and other laws, including, in the case of biologics, the Public Health Service
Act. At the present time, with the exception of 9-aminocamptothecin, the Company
believes that its products will be regulated by the FDA as biologics.
Manufacturers of biologics may also be subject to state regulations.

   The steps required before a biologic may be approved for marketing in the
United States generally include (i) preclinical laboratory tests and animal
tests, (ii) the submission to the FDA of an Investigational New Drug application
("IND") for human clinical testing, which must become effective before human
clinical trials may commence, (iii) adequate and well-controlled human clinical
trials to establish the safety and efficacy of the product, (iv) the submission
to the FDA of a Biological License Application ("BLA"), (v) FDA review of the
BLA, and (vi) satisfactory completion of a FDA inspection of the manufacturing
facility or facilities at which the product is made to assess compliance with
current Good Manufacturing Practices ("cGMP"). The testing and approval process
requires substantial time, effort and financial resources and there can be no
assurance that any approval will be granted on a timely basis, if at all. The
FDA may suspend clinical trials at any time on various grounds, including a
finding that the subjects or patients are being exposed to an unacceptable
safety risk.

   The results of the preclinical studies and clinical studies, together with
detailed information on the manufacture and composition of the product, are
submitted to the FDA in the form of a BLA requesting approval to market the
product. Before approving a BLA, the FDA will inspect the facilities at which
the product is manufactured, and will not approve the product unless safety and
efficacy criteria and cGMP compliance is satisfactory. The FDA may deny a BLA if
applicable regulatory criteria are not satisfied, may require additional testing
or information, and/or may require postmarketing testing and surveillance to
monitor the safety or efficacy of a product. There can be no assurance that FDA
approval of any BLA submitted by the Company will be granted on a timely basis,
if at all. Also, if regulatory approval of a product is granted, such approval
may entail limitations on the indicated uses for which the product may be
marketed.

   Both before and after approval is obtained, violations of regulatory
requirements may result in various adverse consequences, including the FDA's
delay in approving or refusal to approve a product, withdrawal of an approved
product from the market, and/or the imposition of criminal penalties against the
manufacturer and/or license holder. For example, license holders are required to
report certain adverse reactions among patients who use the Company's products
to the FDA, and to comply with certain requirements concerning advertising and
promotional labeling for their products. Also, quality control and manufacturing
procedures must continue to conform to cGMP regulations after approval, and the
FDA periodically inspects manufacturing facilities to assess compliance with
cGMP. Accordingly, manufacturers must continue to expend time, monies and effort
in the area of production and quality control to maintain cGMP compliance. In
addition, discovery of problems may result in restrictions on a product,
manufacturer or holder, including withdrawal of the product from the market.
Also, new government requirements may be established that could delay or prevent
regulatory approval of the Company's products under development.

   The Company will also be subject to a variety of foreign regulations
governing clinical trials and sales of its products. Whether or not FDA approval
has been obtained, approval of a product by the comparable regulatory
authorities of foreign countries must be obtained prior to the commencement of
marketing of the product in those countries. The approval process varies from
country to country and the time may be longer or shorter than that required for
FDA approval. At least initially, the Company intends, to the extent possible,
to rely on foreign licensees, other than in Canada, to obtain regulatory
approval for marketing its products in foreign countries.

   In February 1997, the Company and Genentech, Inc. ("Genentech") submitted
BLAs to the FDA for Rituxan(TM) (formerly IDEC-C2B8) as a single agent therapy
for the treatment of relapsed low grade or follicular non-Hodgkin's lymphoma and
in July 1997, Rituxan was recommended unanimously for marketing clearance by the
Biological Response Modifiers Advisory Committee to the FDA. F. Hoffmann-La
Roche Ltd ("Hoffmann-La Roche"), also submitted, through one of its subsidiaries
in the European Union, a Marketing Authorization Application ("MAA") 



                                       8

<PAGE>   11
with the European Medicines Evaluation Agency ("EMEA") for marketing Rituxan in
Europe. There can be no assurance that the FDA and the EMEA approval of the BLAs
and MAA submitted by the Company, Genentech and Hoffmann-La Roche will be
granted on a timely basis, if at all, and delays in receipt or failure to
receive regulatory approval could have a material adverse effect on the
Company's business, financial condition and results of operations.

   Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs
intended to treat a "rare disease or condition," which generally is a disease or
condition that affects fewer than 200,000 individuals in the United States.
Orphan drug designation must be requested before submitting a BLA. After the FDA
grants orphan drug designation, the generic identity of the therapeutic agent
and its potential orphan use are publicly disclosed by the FDA. Orphan drug
designation does not convey any advantage in, or shorten the duration of, the
regulatory review and approval process. If a product that has an orphan drug
designation subsequently receives FDA approval for the indication for which it
has such designation, the product is entitled to orphan drug status, i.e., the
FDA may not approve any other applications to market the same drug for the same
indication, except in certain very limited circumstances, for a period of seven
years.

   In 1994, the Company obtained orphan drug designation for Rituxan, IDEC-Y2B8
and IDEC-In2B8 from the FDA to treat low grade B-cell lymphoma. There can be no
assurance that any of these compounds will receive orphan drug status for the
low grade B-cell lymphoma indication, and it is possible that competitors of the
Company could obtain approval, and attendant orphan drug status, for these same
compounds for the low grade B-cell lymphoma indication, thus precluding the
Company from marketing its products for the same indication in the United
States. In addition, even if the Company does obtain orphan drug status for any
of its compounds for low grade B-cell lymphoma, there can be no assurance that
competitors will not receive approval of other, different drugs or biologics for
low grade B-cell lymphoma. Although obtaining FDA approval to market a product
with orphan drug status can be advantageous, there can be no assurance that the
scope of protection or the level of marketing exclusivity that is currently
afforded by orphan drug status will remain in effect in the future.

         Reliance on Third Party Development and Marketing Efforts

   The Company has adopted a research, development and product commercialization
strategy that is dependent upon various arrangements with strategic partners and
others. The success of the Company's products is substantially dependent upon
the success of these outside parties in performing their obligations, which
include, but are not limited to, providing funding, performing research and
development, fulfilling long term manufacturing demands and marketing,
distribution and sales with respect to the Company's products. The Company's
strategic partners may also develop products that may compete with the Company.
Although the Company believes that its partners have an economic incentive to
succeed in performing their contractual obligations, the amount and timing of
resources that they devote to these activities is not within the control of the
Company. There can be no assurance that these parties will perform their
obligations as expected or that any revenue will be derived from such
arrangements. The Company has entered into collaborative research and
development and license agreements with Genentech, Zenyaku Kogyo, Ltd.
("Zenyaku"), SmithKline Beecham p.l.c. ("SmithKline Beecham"), Mitsubishi
Chemical Corporation ("Mitsubishi"), Seikagaku Corporation ("Seikagaku") and
Eisai Co., Ltd. ("Eisai"). These agreements generally may be terminated at any
time by the strategic partner, typically on short notice to the Company. If one
or more of these partners elect to terminate their relationship with the
Company, or if the Company or its partners fail to achieve certain milestones,
it could have a material adverse effect on the Company's ability to fund the
related programs and to develop and market any products that may have resulted
from such collaborations. There can be no assurance that these collaborations
will be successful. In addition, some of the Company's current partners have
certain rights to control the planning and execution of product development and
clinical programs, and there can be no assurance that such partners' rights to
control aspects of such programs will not impede the Company's ability to
conduct such programs in accordance with the schedules currently contemplated by
the Company for such programs and will not otherwise impact the Company's
strategy.

         Limited Manufacturing Experience and Dependence on Contact Manufacturer

   The Company has not yet commercialized any therapeutic products. To conduct
clinical trials on a timely basis, to obtain regulatory approval and to be
commercially successful, the Company must manufacture its products either
directly or through third parties in commercial quantities in compliance with
regulatory requirements and at an acceptable cost. Although the Company has
produced its products in the laboratory, scaled its production process to pilot
levels and has the ability to manufacture limited commercial bulk quantities of
certain of its products, the Company 



                                       9

<PAGE>   12
has not received regulatory approval for such commercial production. The Company
anticipates that production of its products in commercial quantities will create
technical as well as financial challenges for the Company. The Company has
limited experience in manufacturing and no fill/finish experience and capacity.
No assurance can be given as to the ultimate performance of the Company's
manufacturing facility in San Diego, its suitability for approval for commercial
production or the Company's ability to make a successful transition to
commercial production.

   The Company is dependent upon Genentech to fulfill long term manufacturing
demands for Rituxan and SmithKline Beecham to fulfill all of the manufacturing
requirements for IDEC-CE9.1 and IDEC-151. Genentech is currently constructing a
larger manufacturing plant to satisfy long term demands for Rituxan and
SmithKline Beecham has constructed a larger manufacturing plant for IDEC-CE9.1
and IDEC-151. The Company is considering the addition of another manufacturing
facility to meet its long term requirements for additional products under
development. Failure by the Company or its strategic partners to establish
additional manufacturing capacity on a timely basis would have a material
adverse effect on the Company.

   In November 1996, the Company contracted with Covance Biotechnology Services,
Inc. ("Covance") for the manufacture of the Company's antibody used in its
IDEC-Y2B8 and IDEC-In2B8 products, which are radiolabeled for the treatment of
non-Hodgkin's lymphoma. The Company is also developing this product in
partnership with Genentech. The Company is dependent upon Covance to fulfill its
manufacturing demands for clinical quantities of IDEC-Y2B8 and IDEC-In2B8. There
can be no assurance that Covance will be able to complete any such manufacturing
contract in a timely or cost-effective manner, if at all, or that the Company
could obtain such capacity from others. Failure by Covance to meet the Company's
manufacturing needs will result in delayed clinical trials for IDEC-Y2B8 and
IDEC-In2B8 and may have a material adverse effect on the Company.

         Patents and Proprietary Rights

   The Company's success will depend, in large part, on its ability to maintain
a proprietary position in its products through patents, trade secret and orphan
drug status. The Company has title or exclusive rights to two issued and nine
allowed United States patents, 27 United States patent applications and numerous
corresponding foreign patent applications, and has licenses to patents or patent
applications of other entities. No assurance can be given, however, that the
patent applications of the Company or the Company's licensors will be issued or
that any issued patents will provide competitive advantages for the Company's
products or will not be successfully challenged or circumvented by its
competitors. Moreover, there can be no assurance that any patents issued to the
Company or the Company's licensors will not be infringed by others or will be
enforceable against others. In addition, there can be no assurance that the
patents, if issued, would not be held invalid or unenforceable by a court of
competent jurisdiction. Enforcement of the Company's patents may require
substantial financial and human resources. Moreover, the Company may have to
participate in interference proceedings if declared by the United States Patent
and Trademark Office to determine priority of inventions, which typically take
several years to resolve and could result in substantial cost to the Company.

   A substantial number of patents have already been issued to other
biotechnology and biopharmaceutical companies. Particularly in the monoclonal
antibody field, competitors may have filed applications for or have been issued
patents and are likely to obtain additional patents and proprietary rights
relating to products or processes competitive with or similar to those of the
Company. To date, no consistent policy has emerged regarding the breadth of
claims allowed in biopharmaceutical patents, however, patents may issue with
claims that conflict with the Company's own patent filings or read on its own
products. There can be no assurance that patents do not already exist in the
United States or in foreign countries or that patents will not be issued that
would entail substantial costs to challenge and that, if unsuccessfully
challenged, would have a material adverse effect on the Company's ability to
market its products. Specifically, the Company is aware of several patents and
patent applications which may affect the Company's ability to make, use and sell
its products. Accordingly, the Company expects that commercializing monoclonal
antibody-based products may require licensing and/or cross-licensing of patents
with other companies in this field. There can be no assurance that the licenses,
which might be required for the Company's processes or products, would be
available, if at all, on commercially acceptable terms. The ability to license
any such patents and the likelihood of successfully contesting infringement or
validity of such patents are uncertain and the costs associated therewith may be
significant. If the Company is required to acquire rights to valid and
enforceable patents but cannot do so at a reasonable cost, the Company's ability
to manufacture or market its products would be materially adversely affected.

   The owners, or licensees of the owners, of these patents may assert that one
or more of the Company's products infringe one or more claims of such patents.
If legal action is commenced against the Company to enforce any of 



                                       10

<PAGE>   13
these patents and the plaintiff in such action prevails, the Company could be
prevented from practicing the subject matter claimed in such patents. In such
event or under other appropriate circumstances, the Company may attempt to
obtain licenses to such patents. However, no assurance can be given that any
owner would license the patents to the Company at all or on terms that would
permit commercialization of the Company's products. An inability to
commercialize such products could have a material adverse effect on the
Company's operations and ability to pursue its long term objectives.

       Limited Sales and Marketing Experience

   Commercialization of the Company's products is expensive and time-consuming.
The Company has adopted a strategy of pursuing collaborative agreements with
strategic partners that provide for co-promotion of certain of the Company's
products. In the event that the Company elects to participate in co-promotion
efforts in the United States or Canada, and, in those instances where the
Company has retained exclusive marketing rights in specified territories, the
Company will need to build a sales and marketing capability in the targeted
markets. The Company currently has limited marketing and sales personnel. There
can be no assurance that the Company will be able to establish a successful
direct sales and marketing capability in any or all targeted markets or that it
will be successful in gaining market acceptance for its products. To the extent
that the Company enters into co-promotion or other licensing arrangements, any
revenues received by the Company will be dependent on the efforts of third
parties and there can be no assurance that such efforts will be successful.
Outside of the United States and Canada, the Company has adopted a strategy to
pursue collaborative arrangements with established pharmaceutical companies for
marketing, distribution and sale of its products. There can be no assurance that
any of these companies or their sublicensees will successfully market,
distribute or sell the Company's products or that the Company will be able to
establish and maintain successful co-promotion or distribution arrangements.
Failure to establish a sales capability in the United States or outside the
United States may have a material adverse effect on the Company.

       Uncertainties Associated with Clinical Trials

   The Company has conducted and plans to continue to undertake extensive and
costly clinical testing to assess the safety, efficacy and applicability of its
potential products. The rate of completion of the Company's clinical trials is
dependent upon, among other factors, the rate of patient enrollment. Patient
enrollment is a function of many factors, including the nature of the Company's
clinical trial protocols, existence of competing protocols, size of the patient
population, proximity of patients to clinical sites, changes in managed care and
eligibility criteria for the study. Delays in patient enrollment will result in
increased costs, which could have a material adverse effect on the Company. The
Company cannot ensure that patients enrolled in the Company's clinical trials
will respond to the Company's product candidates. Setbacks are to be expected in
conducting human clinical trials. Failure to comply with the FDA regulations
applicable to such testing can result in delay, suspension or cancellation of
such testing, and/or refusal by the FDA to accept the results of such testing.
In addition, the FDA may suspend clinical trials at any time if it concludes
that the subjects or patients participating in such trials are being exposed to
unacceptable health risks. Thus, there can be no assurance that Phase I, Phase
II or Phase III testing will be completed successfully within any specific time
period, if at all, with respect to any of the Company's potential products.
Further, there can be no assurance that human clinical testing will show any
current or future product candidate to be safe and effective or that data
derived therefrom will be suitable for submission to the FDA or will support the
Company's submission of a BLA.

      Additional Financing Requirements and Uncertain Access to Capital Markets

   The Company has expended and will continue to expend substantial funds to
complete the research, development, manufacturing and marketing of its products.
The Company may seek additional funding for these purposes through a combination
of new collaborative arrangements, strategic alliances, additional equity or
debt financings or from other sources. There can be no assurance that such
additional funds will be available on acceptable terms, if at all. Even if
available, the cost of funds may result in substantial dilution to current
stockholders. If adequate funds are not available from operations or additional
sources of financing, the Company's business could be materially and adversely
affected.

      History of Operating Losses; Accumulated Deficit

   The Company has incurred annual operating losses since its inception in 1985.
As of June 30, 1997, the Company's accumulated deficit was approximately $97.9
million. 



                                       11

<PAGE>   14
Such losses have been principally the result of the various costs associated
with the Company's research and development, clinical and manufacturing
activities. The Company has not generated operating profits from the sale of its
products. All revenues to date have resulted from collaborative research,
development and licensing arrangements, contract manufacturing arrangements,
research grants and interest income. The Company has no products approved by the
FDA or any foreign authority and does not expect to achieve profitable
operations on an annual basis unless product candidates now under development
receive FDA or foreign regulatory approval and are thereafter commercialized
successfully.

         Possible Volatility of Stock Price

   The stock market has from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of the Company's common
stock, like the stock prices of many publicly traded biotechnology companies,
has been highly volatile. Announcements of technological innovations or new
commercial products by the Company or its competitors, developments or disputes
concerning patent or proprietary rights, publicity regarding actual or potential
medical results relating to products under development by the Company or its
competitors, regulatory developments in both the United States and foreign
countries, public concern as to the safety of biotechnology products and
economic and other external factors, as well as period-to-period fluctuations in
financial results may have a significant impact on the market price of the
Company's common stock. It is likely that, in some future quarter, the Company's
operating results will be below the expectations of public market analysts and
investors. In such event, the price of the Company's common stock would likely
be materially adversely affected.

         Uncertainties Regarding Health Care Reimbursement and Reform

   The future revenues and profitability of biopharmaceutical companies as well
as the availability of capital may be affected by the continuing efforts of
government and third party payors to contain or reduce costs of health care
through various means. For example, in certain foreign markets pricing or
profitability of prescription pharmaceuticals is subject to government control.
In the United States, there have been, and the Company expects that there will
continue to be, a number of federal and state proposals to implement similar
government controls. While the Company cannot predict whether any such
legislative or regulatory proposals will be adopted, the announcement or
adoption of such proposals could have a material adverse effect on the Company's
business, financial condition or prospects.

   The Company's ability to commercialize its products successfully will depend,
in part, on the extent to which appropriate reimbursement levels for the cost of
such products and related treatment are obtained from governmental authorities,
private health insurers and other organizations, such as health maintenance
organizations ("HMOs"). Third party payors are increasingly challenging the
prices charged for medical products and services. Also, the trend toward managed
health care in the United States and the concurrent growth of organizations such
as HMOs, which could control or significantly influence the purchase of health
care services and products, as well as legislative proposals to reform health
care or reduce government insurance programs may all result in lower prices for
the Company's products. The cost containment measures that health care payors
and providers are instituting and the effect of any health care reform could
materially adversely affect the Company's ability to operate profitably.

         Product Liability Exposure

   Clinical trials, manufacturing, marketing and sale of any of the Company's or
its strategic partners' pharmaceutical products or processes licensed by the
Company may expose the Company to product liability claims. The Company
currently carries limited product liability insurance. There can be no assurance
that the Company or its strategic partners will be able to continue to maintain
or obtain additional insurance or, if available, that sufficient coverage can be
acquired at a reasonable cost. An inability to obtain sufficient insurance
coverage at an acceptable cost or otherwise protect against potential product
liability claims could prevent or inhibit the commercialization of
pharmaceutical products developed by the Company or its strategic partners. A
product liability claim or recall would have a material adverse effect on the
business and financial condition of the Company.


                                       12

<PAGE>   15
     Environmental Concerns

   The Company's research and development involves the controlled use of
hazardous materials, chemicals and radioactive compounds. Although the Company
believes that its safety procedures for handling and disposing of such materials
comply with the standards prescribed by state and federal regulations, the risk
of accidental contamination or injury from these materials cannot be completely
eliminated. In the event of such an accident, the Company could be held liable
for any damages that result and any such liability could exceed the resources of
the Company. In addition, disposal of radioactive materials used by the Company
in its research efforts may only be made at approved facilities. Approval of a
site in California has been delayed indefinitely. The Company currently stores
such radioactive materials on site. The Company may incur substantial cost to
comply with environmental regulations.


                                       13

<PAGE>   16

 
                         PART II -- OTHER INFORMATION



ITEM 1.     LEGAL PROCEEDINGS.  None


ITEM 2.     CHANGES IN SECURITIES.  None


ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.  None


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

            On May 22, 1997, the Company held its Annual Meeting of Stockholders
            at which the stockholders approved all of the proposals listed below
            except for proposal number 2:

            (1)  The election of William H. Rastetter, Ph.D., Charles C.
                 Edwards, M.D., Alan B. Glassberg, M.D., John Groom, Kazuhiro
                 Hashimoto, Franklin P. Johnson, Jr., Lynn Schenk, and William
                 D. Young to the Board of Directors and to serve until the next
                 annual meeting, or until their successors shall have been duly
                 elected or appointed.

            (2)  The amendment to IDEC Pharmaceuticals Corporation's California
                 Amended and Restated Articles of Incorporation providing for
                 the classification of the Board of Directors into three
                 classes, with members of each class serving for staggered
                 terms.

            (3)  The amendment to change the state of incorporation from the
                 State of California to the State of Delaware by means of a
                 merger of the Company with and into a wholly-owned Delaware
                 subsidiary of the Company.

            (4)  A series of amendments to the 1988 Stock Option Plan (the
                 "Option Plan") of IDEC Pharmaceuticals Corporation, including
                 (i) an increase in the total number of common stock authorized
                 for issuance thereunder from 4,680,000 shares to a total of
                 5,480,000 shares and (ii) the extension of the term of the
                 Option Plan from July 19, 1998 to December 31, 2002.

            (5)  The amendment to the Company's 1995 Employee Stock Purchase
                 Plan to increase the total number of common stock authorized
                 for issuance thereunder from 345,000 shares to a total of
                 495,000 shares.

            (6)  The selection of KPMG Peat Marwick LLP as the Company's
                 independent public accountants for the fiscal year ending
                 December 31, 1997.

            The following directors received the number of votes set opposite
            their respective names:


<TABLE>
<CAPTION>
                                            For Election             Withheld
                                            ------------             --------
<S>                                           <C>                     <C>    
            William H. Rastetter, Ph.D.       17,137,813              146,435
            Charles C. Edwards, M.D.          17,137,813              141,985
            Alan B. Glassberg, M.D.           17,137,813              150,003
            John Groom                        17,137,813            2,038,394
            Kazuhiro Hashimoto                17,137,813            2,490,704
            Franklin P. Johnson, Jr.          17,137,813            3,112,103
            Lynn Schenk                       17,137,813              146,475
            William D. Young                  17,137,813              159,985
</TABLE>

            The proposal to amend and restate the California articles of
            incorporation to provide for classification of the Board of
            Directors into three classes received 8,197,925 affirmative votes
            (for the amendment and restatement), 6,347,460 negative votes
            (against the amendment and restatement), 2,680,328 broker non-votes
            and 51,305 votes abstained.



                                       14

<PAGE>   17

            The proposal to change the state of incorporation from the State of
            California to the State of Delaware received 9,572,194 affirmative
            votes (for the reincorporation), 4,598,045 negative votes (against
            the reincorporation), 3,079,813 broker non-votes and 26,966 votes
            abstained.

            The proposal to amend the Option Plan received 10,748,251
            affirmative votes (for the amendment), 6,085,606 negative votes
            (against the amendment), 387,913 broker non-votes and 55,248 votes
            abstained.

            The proposal to amend the 1995 Employee Stock Purchase Plan received
            13,814,602 affirmative votes (for the amendments), 2,847,988
            negative votes (against the amendments), 545,431 broker non-votes
            and 68,997 votes abstained.

            The proposal to select KPMG Peat Marwick LLP as the Company's
            independent public accountants received 17,201,504 affirmative votes
            (for the selection), 48,007 negative votes (against the selection),
            and 27,507 votes abstained. This proposal did not receive any broker
            non-votes.


ITEM 5.     OTHER INFORMATION.  None


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.

   (a)      Exhibits.

            The following exhibits are referenced.


<TABLE>
<CAPTION>
            Exhibit
            Number                Description
            ------                -----------
<S>                  <C>
            10.69*   9-AC Asset Transfer Agreement between the Company, Pharmacia &
                     Upjohn S.p.A. and Pharmacia & Upjohn Company dated February 10,
                     1997. 

            10.70(1) Amended and Restated 1988 Stock Option Plan (Amended and Restated
                     through May 22, 1997)

            10.71(1) 1995 Employee Stock Purchase Plan (Amended through May 22, 1997)

            27.1     Financial Data Schedule.
</TABLE>

- -----------------

     *  Confidential treatment requested as to certain portions of this
        agreement.

   (1)  Incorporated by reference to exhibits 99.1 and 99.4, respectively,
        to the Company's Registration Statement on Form S-8, File No.
        333-2969.


   b)       Report on Form 8-K.

                  On June 16, 1997, the Company filed a current report on
Form 8-K reporting the reincorporation of the Company to the State of Delaware
by merging into IDEC Pharmaceuticals Corporation, a Delaware corporation ("IDEC
Delaware"), pursuant to the terms of an Agreement and Plan of Merger between the
Company and IDEC Delaware. There has been no change in the name, business,
management, fiscal year, location of principal facilities, assets or liabilities
of the Company as a result of the merger.



                                       15

<PAGE>   18

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                          IDEC PHARMACEUTICALS CORPORATION


Date: August 12, 1997                     By:  /s/ William H. Rastetter
      ---------------                        -----------------------------------
                                          William H. Rastetter
                                          Chairman of the Board, President and
                                          Chief Executive Officer
                                          (Principal Executive Officer)

Date: August 12, 1997                     By:  /s/ Phillip M. Schneider
      ---------------                        -----------------------------------
                                          Phillip M. Schneider
                                          Vice President and
                                          Chief Financial Officer
                                          (Principal Financial and Accounting 
                                          Officer)


                                       16






<PAGE>   1
                                                                   EXHIBIT 10.69



                         9-AC ASSETS TRANSFER AGREEMENT


         THIS AGREEMENT is entered into as of this 10th day of February, 1997
between IDEC PHARMACEUTICALS CORPORATION, a corporation organized and existing
under the laws of the State of California and having its principal place of
business at San Diego, California ("IDEC"); PHARMACIA & UPJOHN S.P.A., a
corporation organized and existing under the laws of Italy and having its
principal place of business at Milano, Italy ("P&U SPA") and PHARMACIA & UPJOHN
COMPANY, a company organized and existing under the laws of the State of
Delaware and having its principal place of business at Kalamazoo, Michigan ("P&U
CO") (collectively, P&U SPA and P&U CO are referred to herein as "Pharmacia").

                                   BACKGROUND

         Pharmacia possesses certain intellectual property rights and other
assets relating to 9-amino-20(S)-camptothecin, including patent rights and
rights under a Cooperative Research and Development Agreement with the National
Cancer Institute ("NCI"). As a consequence of the combination of Pharmacia AB
with The Upjohn Company (collectively, "Pharmacia & Upjohn"), Pharmacia & Upjohn
entered into an agreement containing a consent order with the United States
Federal Trade Commission ("FTC") under which Pharmacia is required to divest its
rights to sell 9-amino-20(S)-camptothecin in the United States. Additionally,
Pharmacia offered IDEC the related rights to sell 9-amino-20(S)-camptothecin
outside the United States. IDEC desires to acquire all such rights to
9-amino-20(S)- camptothecin and related assets. Subject to the approval of the
NCI, FTC and other third parties as provided for herein, the parties have agreed
for IDEC to acquire such rights and assets on the terms set forth below.

         NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound, the parties agree as follows:


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>   2
                                 1. DEFINITIONS
1.1      GENERAL DEFINITIONS.

For all purposes of this Agreement, except as otherwise expressly provided:

         (a) the terms defined in this Agreement include the plural as well as
the singular,

         (b) all references in this Agreement to designated "Articles,"
"Sections," "Subsections" and other subdivisions are to the designated Articles,
Sections, Subsections and other subdivisions of the body of this Agreement,

         (c) all references in this Agreement to "Exhibits" or "Schedules" are
to the Exhibits or Schedules attached to this Agreement,

         (d) pronouns of either gender or neuter shall include, as appropriate,
the other pronoun forms, and

         (e) the words "herein", "hereof" and "hereunder" and other words of a
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Subsection or other subdivision.

1.2      SPECIFIC DEFINITIONS.

As used in this Agreement and the Exhibits and Schedules, the following
definitions shall apply:

         (a) "Affiliate" means, as to any entity, any other entity that,
directly or indirectly, controls, or is controlled by, or is under common
control with, such entity. For purposes of the foregoing definition, "control"
shall mean the direct or indirect ownership of at least fifty percent (50%) of
the voting interest in such other entity or the power to direct the management
of such other entity.

         (b) "Agreement" means this 9-AC Assets Transfer Agreement by and
between IDEC and Pharmacia, as the same may be amended or supplemented in
writing signed by duly authorized representatives of both parties in accordance
with Section 12.5, together with all the Exhibits and Schedules.



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.

                                       2

<PAGE>   3
         (c) "Approval" means any approval, authorization or consent, or any
waiver of any of the foregoing, required to be obtained from, or any notice,
statement or other communication required to be filed with or delivered to, each
of the entities described in Section 4.2, the receipt of which is necessary to
the transfer of the 9-AC Assets (as defined below).

         (d) "Assumed Contract" means any contract assumed by IDEC pursuant to
Section 2.2.

         (e) "Closing" means the consummation of the transaction contemplated by
this Agreement; the Closing shall be deemed to have occurred effective as of
12:01 a.m. on the date on which the Closing occurs.

         (f) "Closing Date" means the date on which the Closing occurs, which
will be as soon as possible after this Agreement is executed and all conditions
precedent are satisfied or waived but no later than three business days after
receiving approval of the FTC, or such later date as the parties may set by
written agreement.

         (g) "CRADA" shall have the meaning set forth in Section 2.1(a)(1).

         (h) "FDA" means the United States Food and Drug Administration.

         (i) "FTC Consent Order" means that certain agreement containing a
consent order, dated as of February 8, 1996, among the United States Federal
Trade Commission, Pharmacia AB and The Upjohn Company (FTC File No. 951-0140).

         (j) "Governmental
 Authority" means any administrative body, agency,
authority, bureau, commission, court, department or other instrumentality of any
federal, state or local government, foreign or domestic, unless otherwise
indicated in this Agreement.

         (k) "Know How" means all design, product, manufacturing and other
specifications, methods, processes, and other information, 9-AC assay methods
and written protocols, clinical trial test data, quality assurance procedures,
regulatory submissions and other scientific, medical, technical and marketing
information, know-how, inventions and trade secrets, which now exist and which:
(1) are owned or licensed by Pharmacia (or any of their Affiliates) and (2) that
are reasonably necessary for the development, manufacture, use or sale of 9-AC.

         (l) "Loss" means any action, cost, damage, disbursement, expense,
liability, 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       3

<PAGE>   4

loss, deficiency, diminution in value, obligation, penalty, fine, assessment or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting or other professional fees or expenses incurred in the
investigation, collection, prosecution or defense of claims, inquiries, hearings
or other legal or administrative proceedings, and amounts paid in settlement,
that may be imposed on or otherwise incurred or suffered by the specified
person.

         (m) "Patent Rights" means all patent applications heretofore filed in
any country, including any divisionals, continuations and continuation-in-part
applications, which are owned by Pharmacia (or any of their Affiliates) which
claim 9-AC, its composition or formulation or its method of manufacture or use,
together with any and all patents that have issued or in the future issue
therefrom.

         (n) "Supply Agreement" means the agreement attached hereto as EXHIBIT
A.

         (o) "9-AC" means the compound 1-pyrano [3',4':6,7] indolizino [1,2-b]
quinoline-3,14 (4H,12H)-dione, 10-amino-4-ethyl-4-hydrozy-(S) in respect of its
therapeutic indication for the treatment of cancer.

         (p) "9-AC Assets" means the intellectual property, contractual and
other rights and assets transferred to IDEC pursuant to Section 2.1.


         2. TRANSFER OF 9-AC ASSETS AND ASSUMPTION OF LIABILITIES

         2.1 SALE AND LICENSE OF 9-AC ASSETS.

         (a) Assigned Assets. Subject to the receipt of the Approvals and the
satisfaction of the other conditions set forth below in Article 4, Pharmacia
hereby sells, conveys, assigns, transfers and agrees to deliver to IDEC, and
IDEC hereby purchases, acquires and agrees to accept from Pharmacia, the
following assets (which, together with the rights and assets licensed under
Subsection 2.1(b), shall constitute the "9-AC Assets"):

         (1)      all of P&U SPA's rights under that certain Cooperative
                  Research and Development Agreement *_________*, dated
                  *________*, as amended, between P&U SPA (as assignee of P&U
                  CO, successor in interest to Adria Laboratories Division of
                  Erbamont Inc.) and the National Cancer Institute (the
                  "CRADA");

         (2)      all of Pharmacia's rights under the CRADA to use any of the
                  National 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.





                                       4

<PAGE>   5

                  Cancer Institute's patents, trade secrets, technology,
                  know-how, specifications, designs, drawings, processes,
                  testing and quality control data, research materials,
                  technical information, stored on management information
                  systems (and specifications sufficient for the IDEC to use
                  such information), proprietary software used in connection
                  with 9-AC and all data, contractual rights, materials and
                  information relating to obtaining FDA approvals and other
                  government or regulatory approvals for 9-AC (the "NCI Data");

         (3)      all of P&U CO's rights under that certain Patent License
                  Agreement, dated as of *_________*, among
                  *________________________________*. (which was subsequently
                  merged into P&U CO) (the "Consortium License");

         (4)      all of P&U CO's rights under that certain Patent License
                  Agreement, dated as of *_________*, between
                  *_________________*. (which was subsequently merged into P&U
                  CO (the "*____* License"); and

         (5)      all of P&U CO's rights under the Patent Rights listed in
                  SCHEDULE 2.1(A).


         (b) Licensed Assets. Subject to the receipt of the Approvals and the
satisfaction of the other conditions set forth below in Article 4, the following
licenses are hereby granted to IDEC:

         (1)      P&U CO hereby grants to IDEC, and IDEC hereby accepts, an
                  exclusive, worldwide, paid up license (with right to
                  sublicense) to practice *_____* to develop, make, have made,
                  use, import, offer to sell and sell pharmaceutical products
                  containing 9-AC. P&U CO reserves the right to practice (and to
                  assign to or grant third parties the right to practice)
                  *_____*.

         (2)      P&U SPA hereby grants to IDEC, and IDEC hereby accepts, an
                  exclusive, worldwide, paid up license (with right to
                  sublicense) to practice the 9-AC Production Technology to
                  develop, make, have made, use, import, offer to sell and sell
                  pharmaceutical products containing 9-AC. P&U SPA reserves the
                  right to practice (and to assign to or grant third parties the
                  right to practice) the 9-AC Production Technology for all
                  other uses not related to the manufacture, use or sale of
                  9-AC. "9-AC Production Technology" means all Know How and
                  Patent Rights owned by Pharmacia relating to *______* together
                  with all improvements thereof developed by P&U SPA during the
                  course of performing its obligations under the Supply
                  Agreement.

         (3)      Each of P&U CO and P&U SPA hereby grants to IDEC, and IDEC
                  hereby accepts, an exclusive, worldwide, paid up license (with
                  right to sublicense) to use all of its (A) Know-How,
                  formulations, patents, trade secrets, 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       5

<PAGE>   6

                  technology, specifications, designs, drawings, processes,
                  testing and quality control data, research data, stability
                  test data, technical information stored on management
                  information systems (and specifications sufficient for the
                  IDEC to use such information), and proprietary software used
                  by it in connection with the research and development and
                  clinical testing of 9-AC, and (B) data, contractual rights,
                  materials and information relating to obtaining FDA approvals
                  and other government or regulatory approvals for 9-AC.

         (4)      To the extent required to conduct clinical testing of 9-AC
                  supplied by P&U SPA under the Supply Agreement, Pharmacia
                  hereby grants IDEC a right to reference its drug master files
                  relating to such 9-AC. Such drug master files shall be
                  maintained in accordance with all applicable FDA requirements.

         (c) Excluded Assets. No other assets of Pharmacia are included in the
9- AC Assets and no rights in connection with such other assets are to be
transferred pursuant to this Agreement. Notwithstanding anything to the contrary
in Subsections 2.1(a) or (b), the 9-AC Assets do not include:

         (1)      *______________________________________________________*

         (2)      any know how or inventions not existing on the Closing Date,
                  other than the improvements referred to in the last sentence
                  of Section 2.1(b)(2).

         (d) Reservation of Rights. Pharmacia hereby reserves the non-exclusive
right and license to practice any of the Know How or Patent Rights described in
Sections 2.1(a) and (b) to make, have made and sell to IDEC and the National
Cancer Institute such quantities of 9-AC as are required to fulfill Pharmacia's
obligations under each of the Supply Agreement, the FTC Consent Order and the
CRADA (collectively, the "9-AC Supply Obligations").


         2.2 ASSUMPTION OF CERTAIN LIABILITIES. Effective at the Closing, IDEC
hereby assumes the following obligations and liabilities of Pharmacia (the
"Assumed Liabilities"):

         (a) all obligations and liabilities under the CRADA, as amended and as
shall be amended on or prior to the Closing, only to the extent such obligations
arise and are to be performed on and after the Closing Date; and

         (b) all obligations under the *_______________* Licenses, as amended
and as 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       6

<PAGE>   7

shall be amended on or prior to the Closing, only to the extent such obligations
arise and are to be performed on and after the Closing Date.

         2.3 MONETARY CONSIDERATION. Pharmacia has expended substantial sums to
support the CRADA, develop 9-AC formulations and production methods and to
conduct additional clinical trials. As partial reimbursement of such
expenditures, and as the total monetary consideration to be paid to Pharmacia by
IDEC for the 9-AC Assets, IDEC shall pay P&U SPA *__________*, payable as
follows:

         (a) 3 MUSD on the Closing Date after receipt of the Approvals

         (b) *____________________________________*

         (c) *____________________________________*

All payments shall be made *___________________________* to a bank account to be
designated in writing by P&U SPA. If payments are not made when due, IDEC shall
pay, in addition to the overdue payment, a late charge equal to the lesser of
*___________* or the highest applicable rate allowed by law on all such overdue
amounts.


                                    3. CLOSING

         3.1 CLOSING DATE. The Closing shall take place on the Closing Date at
P&U SPA in Milano, Italy, or at such other place as the parties may agree.

         3.2 ITEMS TO BE DELIVERED AT THE CLOSING BY PHARMACIA. At the Closing,
Pharmacia shall deliver or cause to be delivered to IDEC at Pharmacia's cost and
expense:

         (a) Evidence of all Approvals;

         (b) Assignment of the CRADA in the form reasonably acceptable to
             both parties; and

         (c) Assignments of the *____* License and of the *_____________*
             License in the forms reasonably acceptable to both parties.

         3.3 ITEMS TO BE DELIVERED AT THE CLOSING BY IDEC. At the Closing, IDEC
shall deliver or cause to be delivered to P&U SPA:

         (a) the cash amount *________________* as specified in Section 2.3(a);



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       7

<PAGE>   8

         (b) Assumption of the CRADA in the form reasonably acceptable to both
             parties; and

         (c) Assumption of the *_____* License and of the *______________*
             License in the forms reasonably acceptable to both parties.

         3.4 ASSURANCES. At the Closing and thereafter: (1) Pharmacia shall
perform, or cause to be performed, all such other actions and shall execute,
acknowledge and deliver, or cause to be executed, acknowledged or delivered, all
such other assignments, transfers, consents and other documents as IDEC may
reasonably request to vest in IDEC, and protect IDEC's right, title and interest
in, and enjoyment of the 9-AC Assets; and (2) IDEC shall similarly perform, or
cause to be performed, all such other action and shall execute, acknowledge and
deliver, or cause to be executed, acknowledged or delivered, such other
documents as Pharmacia may reasonably request to perfect and protect Pharmacia's
rights under this Agreement. At least 10 days prior to the Closing Date,
Pharmacia shall also deliver a list containing its reasonable determination of
the internal reports, other documents and tangible assets which shall be
delivered to IDEC as part of the Know How to be transferred hereunder.


                             4. CONDITIONS PRECEDENT

         The obligations of IDEC and of Pharmacia under this Agreement are
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, unless waived in writing by IDEC or Pharmacia, respectively:

         4.1 REPRESENTATIONS TRUE AT THE CLOSING DATE. The representations and
warranties of the other party contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date, as if made on
and as of such date, and the other party shall have performed and fulfilled all
covenants, obligations and conditions of this Agreement required to be performed
or fulfilled by them as of the Closing.

         4.2 APPROVALS. All Approvals from each of the following shall have been
obtained:

         (a) National Cancer Institute in respect to the assignment of the CRADA
             (including the execution of the pending amendment);

         (b) United States Federal Trade Commission pursuant to the FTC Consent
             Order;



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       8

<PAGE>   9

         (c) *_______________* in respect to assignment of the *___* License;
             and

         (d) each of the *_______________________________________________* in
             respect to assignment of the Consortium License.

         4.3 LEGAL PROCEEDINGS. No statute, rule or regulation shall have been
enacted or promulgated and no injunction or other order shall have been entered
after the date hereof, and not vacated, in any proceeding or action, which
enjoins, restrains, makes illegal or prohibits consummation of the transactions
contemplated hereby or places material restrictions on IDEC's ownership or use
of the 9-AC Assets, and no action shall be pending or threatened which seeks to
do any of the foregoing. Each party shall advise the other party promptly of any
information with respect to any such action.

         4.4 CLOSING DOCUMENTS. All items required to be delivered by the other
party pursuant to Subsections 3.2 or 3.3 shall have been delivered.


                  5. REPRESENTATION AND WARRANTIES OF PHARMACIA

Each of P&U CO and P&U SPA represents, warrants and agrees as of the date hereof
(except as otherwise indicated) as follows:

         5.1 ORGANIZATION AND RELATED MATTERS. It is a corporation and is duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction. It has all necessary corporate power and authority to
own and use the 9-AC Assets it owns, and is duly qualified or licensed to do
business and is in good standing in all jurisdictions where the 9-AC Assets are
used, or are subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction.

         5.2 POWER AND AUTHORIZATION. It has full corporate power and authority
to carry out the transactions contemplated by this Agreement, and has taken all
necessary and proper corporate action authorizing the execution, delivery and
performance of this Agreement and the Supply Agreement. This Agreement has been
duly executed and delivered by it and this Agreement constitutes, and the Supply
Agreement, upon execution, will constitute, valid and binding obligations of it
enforceable in accordance with its terms.

         5.3 LITIGATION. There are no actions, suits, arbitrations or
proceedings pending against it, or to the best of its knowledge, threatened
against it, by or before any Governmental Authority or private arbitration
tribunal which, if adversely decided, could 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       9

<PAGE>   10

have an adverse effect on the 9-AC Assets, or which seek to prohibit, restrict
or delay consummation of this Agreement or any transaction contemplated hereby
or to limit in any manner its right to control or use any 9-AC Assets.

         5.4 TITLE TO ASSETS. It has good and marketable title to all of the
9-AC Assets to be assigned by it to IDEC hereunder, free of any mortgages,
liens, pledges, charges or encumbrances which could, individually or in the
aggregate, prohibit its transfer of the 9-AC Assets. It makes no representation
in this Article 5 about the NCI Data. The 9-AC Assets to be assigned to IDEC
hereunder constitute all material rights owned or otherwise held by Pharmacia
with respect to the development, manufacture or sale of 9-AC, except for its
physical facilities and other tangible assets, and the drug master file relating
to the 9-AC production facilities.

         5.5 INTELLECTUAL PROPERTY RIGHTS. Except for the FTC Consent Order and
the Assumed Contracts, to the best of its knowledge, there are no claims or
demands of any person, firm or corporation pertaining to its rights in the 9-AC
Assets, and no proceedings have been instituted or are pending or threatened
against it, which challenge its rights in respect thereof, and none of the 9-AC
Assets is subject to any outstanding order, decree, judgment, injunction, or
agreement to which it is bound that restricts its use by it. To the best of its
knowledge, there are no inventorship disputes concerning any of the Patent
Rights owned by Pharmacia and no opposition, interference, re-examination or
revocation proceedings pending in respect to any of such Patent Rights. To the
best of P&U SPA's knowledge, no third party infringes any of the United States
Patent Rights and *___________________________________________________* does not
infringe any existing United States patent rights of third parties.
*_____________________*.

         5.6 CONTRACTS AND OTHER AGREEMENTS. Complete copies of each of the
Assumed Contracts were provided to IDEC or its counsel. Each of the Assumed
Contracts is in full force and effect, and Pharmacia is not aware of any default
thereunder.

         5.7 COMPLIANCE WITH INSTRUMENTS; NO DEFAULTS. Neither the execution and
delivery of this Agreement nor the consummation at the Closing by it of the
transactions contemplated hereby will (a) violate or conflict with, result in
the acceleration or termination of, or loss of a material benefit with respect
to, or constitute a default under (i) its Certificates of Incorporation or
By-laws (or equivalent governing instrument) or (ii) subject to the receipt of
the Approvals, any term or provision of any note, bond, indenture, mortgage,
license, permit, approval, agreement, contract, lease, or other instrument or
any statute, rule, regulation, writ, judgment, ordinance, decree, order or other
restriction binding upon or applicable to it or any of the 9-AC Assets, or (b)
result in the creation at or after the Closing Date of any mortgage, lien,
charge or encumbrance upon all or any part of the 9-AC Assets.



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       10

<PAGE>   11
         5.8 GOVERNMENTAL CONSENTS. Except for the Approvals, to the best of its
knowledge, no consents, approvals or authorizations of, declarations or filings
with, any Governmental Authority in connection with the execution, delivery or
performance of this Agreement are required by it.

         5.9 LIMITATIONS OF WARRANTIES. NOTWITHSTANDING ANYTHING TO THE CONTRARY
UNDER THIS AGREEMENT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE
SUPPLY AGREEMENT, PHARMACIA MAKE NO OTHER REPRESENTATIONS AND WARRANTIES, AND
DISCLAIM ANY WARRANTIES IMPLIED BY LAW.


                    6. REPRESENTATIONS AND WARRANTIES OF IDEC

IDEC hereby represents and warrants to Pharmacia as follows:

         6.1 ORGANIZATION. IDEC is a corporation duly organized, validly
existing and in good standing under the laws of the State of California.

         6.2 CORPORATE POWER AND AUTHORIZATION. IDEC has full corporate power
and authority to carry out the transactions contemplated by this Agreement and
has taken all necessary and proper action authorizing the execution, delivery
and performance of this Agreement and the Supply Agreement and the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by IDEC and this Agreement constitutes and the Supply Agreement,
upon execution, will constitute valid and binding obligations of IDEC,
enforceable in accordance with their terms.

         6.3 COMPLIANCE WITH INSTRUMENTS; NO DEFAULTS. Neither the execution and
delivery of this Agreement nor the consummation at the Closing by IDEC of the
transactions contemplated hereby will violate or conflict with, result in the
acceleration or termination of, or loss of a material benefit with respect to,
or constitute a default under (i) the Certificates of Incorporation or By-laws
(or equivalent governing instrument) of IDEC or (ii) any term or provision of
any note, bond, indenture, mortgage, license, permit, approval, agreement,
contract, lease, or other instrument or any statute, rule, regulation, writ,
judgment, ordinance, decree, order or other restriction binding upon or
applicable to IDEC.

         6.4 GOVERNMENTAL CONSENTS. Except for the Approvals, to the best of
IDEC's knowledge, no consents, approvals or authorizations of, declarations or
filings 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       11

<PAGE>   12

with, any Governmental Authority in connection with the execution,
delivery or performance of this Agreement are required by IDEC.


                            7. COVENANTS OF PHARMACIA

Pharmacia covenant that:

         7.1 CONDUCT PENDING CLOSING. Pharmacia shall not take any actions prior
to the Closing which are likely to cause any of its representations or
warranties contained in the Agreement to be untrue in any material respect.

         7.2 ACCESS. From the date hereof until the Closing, Pharmacia shall
make available to and allow IDEC and its authorized agents, accountants and
advisors access to all of the 9-AC Assets, and cause the employees of Pharmacia
to cooperate with IDEC in an examination of the 9-AC Assets and to disclose to
and discuss with IDEC any matters related to the 9-AC Assets.

         7.3 TECHNICAL ASSISTANCE.

         (a) Upon reasonable notice and request from the IDEC to P&U SPA, P&U
SPA shall provide information, technical assistance and advice to the IDEC with
respect to 9-AC Assets such that the IDEC will be capable of continuing the
research and development currently conducted by P&U SPA. Such assistance shall
include reasonable consultation with knowledgeable employees of P&U SPA and
training at the IDEC's facility for a period of time sufficient to satisfy the
IDEC's management that its personnel are adequately knowledgeable about the 9-AC
Assets. However, P&U SPA shall not be required to continue providing such
assistance *___________________________*.

         (b) Upon reasonable notice and request from the IDEC, P&U SPA shall
provide information, technical assistance and advice sufficient to assist the
IDEC in obtaining all necessary FDA approvals to manufacture 9-AC for use in
clinical trials in the United States. Upon reasonable notice and request from
the IDEC, P&U SPA shall also provide consultation with knowledgeable employees
of P&U SPA and training at the IDEC's facility for a period of time,
*__________________________* from the Closing Date, sufficient to satisfy the
IDEC's management that its personnel are adequately trained in the manufacture
of 9-AC. P&U SPA further agrees to continue to provide such technical assistance
and advice for up to *_____________________*; provided, that IDEC compensates
P&U SPA for all such services at the rate of *____________*.

         (c) IDEC shall reimburse P&U SPA for *__________________________*. 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       12

<PAGE>   13

All such payments shall be made within 30 days after receipt of invoice.

         (d) P&U SPA shall not be required to provide technical assistance: (1)
in a manner which unreasonably interferes with P&U SPA' performance of its
obligations under this Agreement or the Supply Agreement; or (2) of more than
*___________*.

         (e) To the extent personnel are then available, P&U SPA shall also
provide reasonable consultation to assist IDEC in compiling the manufacturing
data required in connection with the preparation of PLA's or other regulatory
submissions *__________* provided, that IDEC compensates P&U SPA for all such
services at the rate of *_____________________________*.

         7.4 9-AC SUPPLY AGREEMENT. P&U SPA shall manufacture or have
manufactured and supply to IDEC 9-AC in accordance with the terms set forth in
the Supply Agreement attached as EXHIBIT C.


                              8. COVENANTS OF IDEC

IDEC covenants that:

         8.1 CLINICAL PROGRESS. Prior to the full payment of the amounts
required under Section 2.3, IDEC shall provide Pharmacia biannual progress
reports of the development of 9-AC, including summary reports of the clinical
studies conducted by NCI under the CRADA and information sufficient to indicate
the extent of progress, if any, toward demonstration of Clinical Efficacy and
submission and approval of the NDA for 9-AC.

         8.2 AMENDMENT OF THE CRADA. IDEC shall not amend the CRADA in any
manner which adversely affects Pharmacia's 9-AC Supply Obligations without the
prior written consent of Pharmacia. IDEC shall not transfer its rights under the
CRADA without the consent of Pharmacia, which consent shall not be unreasonably
withheld, unless Pharmacia is released from its 9-AC Supply Obligations.

         8.3 CLINICAL EFFICACY. "Clinical Efficacy" shall mean *____________*.
The "Registration Trial" shall mean *_______________*. Promptly after its
agreement with the FDA, IDEC shall submit to P&U SPA a copy of *____________*.
If a *___________* with the FDA, the parties shall agree upon reasonable
alternative criteria to demonstrate clinical efficacy in any tumor type. IDEC
shall promptly notify Pharmacia upon the occurrence of Clinical Efficacy. If
Pharmacia has reasonable reason to believe that Clinical 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       13

<PAGE>   14

Efficacy has occurred prior to receipt of such notice from IDEC, it shall so
notify IDEC and explain the basis for its conclusion. IDEC shall allow Pharmacia
to review all clinical investigator reports, patient case forms and other
records and data relevant to determining whether Clinical Efficacy was achieved.


                       9. ADDITIONAL COVENANTS AND RIGHTS

         9.1 APPROVALS. (a) Pharmacia and IDEC each agree to cooperate and use
commercially reasonable efforts to obtain (and will promptly prepare all filings
and applications, requests and notices preliminary to obtaining) all Approvals,
including:

         (1) each party shall prepare and submit (jointly, if deemed preferable
             by Pharmacia or NCI) such statements of qualifications or other
             information as the NCI may require to approve of the assignment of
             the CRADA to IDEC; and

         (2) IDEC shall provide such business and financial information as
             Pharmacia may reasonably request to prepare a petition to the FTC
             seeking its approval of the transactions contemplated under this
             Agreement and the divestment of the 9-AC Assets to IDEC.

         (b) IDEC shall participate in any presentations, hearings or other
meetings with the FTC or the NCI requested by Pharmacia or the NCI or FTC for
the purpose of obtaining the approval of such agencies. IDEC shall respond
promptly and fully to all direct inquiries from such agencies.

         (c) Any amendment of this Agreement, the Supply Agreement or the CRADA
required by the NCI or FTC shall require the written consent of all parties
hereto.

         (d) Each party shall cooperate in a similar manner to obtain consents
to assign the *_____* License and the *__________* License.

         9.2 LITIGATION ARISING FROM THE 9-AC ASSETS. The parties recognize
that, in the future, litigation may arise relating to the 9-AC Assets which may
relate in part, directly or indirectly, both to the period prior to the Closing
and the period subsequent to the Closing. Each of the parties agrees that, to
the extent the parties' interests are similar or not adverse and at the request
of the other party, it will provide to the other party information, records and
documents in its possession relating to the 9-AC Assets to assist the other
party in connection with any such litigation or potential litigation in which
such other party is involved. The foregoing obligation shall in no way limit any
party's discovery rights in such litigation or potential litigation.



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       14

<PAGE>   15

         9.3 ACCESS TO RECORDS. Pharmacia agree that upon reasonable request and
as required to respond to any court order, subpoena, inquiry, investigation,
audit or any other proceeding of any Governmental Authority, Pharmacia will
provide to IDEC reasonable access to information from the books and records in
their possession relating to the 9-AC Assets prior to the Closing Date (the
"Records"). Pharmacia agree to preserve the Records in their possession for a
period consistent with their document retention policies and procedures followed
in the regular course of business. IDEC shall provide similar access to
Pharmacia in respect to all of IDEC's books and records relating to the 9-AC
Assets, including any books and records acquired from Pharmacia hereunder.

         9.4 CONFIDENTIALITY. "Proprietary Information" means: all technical,
scientific, marketing and financial information and data which is either
non-public, confidential or proprietary in nature (disclosed, directly or
indirectly, by either party (the "Disclosing Party") to the other party (the
"Recipient")), unless such information: (1) is or becomes public knowledge
through no fault of the Recipient; (2) is in the future legally received by the
Recipient from a third party, which the Recipient reasonably believes is free of
any obligation to keep it confidential; or (3) is known by the Recipient prior
to receipt from the Disclosing Party, which fact may be proven only by
documentary evidence. All Proprietary Information disclosed, directly or
indirectly, by either party to the other party shall remain the property of the
Disclosing Party. Without limiting any obligation arising under law, during the
duration of this Agreement and for at least ten (10) years thereafter, neither
party shall disclose to third parties any Proprietary Information of the other
party. Each party shall take all reasonable steps to minimize the risk of
disclosure of Proprietary Information of the other party.

         9.5 LICENSED PATENTS.

         (a) Responsibility for Patent Filings. Pharmacia will continue to
prosecute and maintain the Patent Rights described on Schedule 2.1(b) (the
"Licensed Patents"). Pharmacia will endeavor to provide promptly IDEC drafts and
copies of all such Patents and related material Patent prosecution documents. As
soon as practical subsequent to any filing of a material patent prosecution
document relating to 9-AC, Pharmacia will provide promptly IDEC a copy of any
such filings. In addition, Pharmacia will provide IDEC copies of any substantive
official action and Pharmacia's material submissions of responses thereto with
respect to such Patents. Should Pharmacia determine not to prosecute or maintain
a Licensed Patent, Pharmacia will notify promptly IDEC of that determination
and, upon IDEC's written request and within thirty (30) calendar days of receipt
of such written request, grant in writing any necessary authority to IDEC to
prosecute or maintain such Patent in the name of IDEC at IDEC's expense. IDEC
shall reimburse Pharmacia for *______________________________________________*.

         (b) Enforcement Rights. Upon learning of the possible infringement of
any of the Licensed Patents by a third party making, using or sell 9-AC, each
party hereto shall immediately 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       15

<PAGE>   16

inform the other party of that fact, and shall supply the other party with any
evidence available to it pertaining to the possible infringement. Pharmacia may
at its sole expense and discretion take all necessary steps to enjoin the
infringement and recover damages therefor, and shall be entitled to retain all
damages recovered; provided, that Pharmacia may, at its discretion, offer IDEC
the opportunity to join in any legal proceedings relating to the possible
infringement and if IDEC joins in such legal proceedings, IDEC shall share
equally in the expenses and the recovery, if any, but control of the conduct of
the litigation shall remain with Pharmacia. If Pharmacia fails or refuses within
a reasonable time not to exceed ninety (90) days after receipt of written notice
from IDEC to institute legal action against any alleged infringer, IDEC shall
then have the right, but not the obligation, to institute appropriate legal
action in the name of Pharmacia (or as its assignee of such infringement claim).
IDEC shall retain all sums recovered in such legal action. In any such legal
action, whether instituted by either party, both parties shall fully cooperate
with the other in the preparation and signing of documents and in providing (at
each party's respective expense) reasonable assistance, including technical and
management witnesses, technical assistance and all relevant records, reports,
data and other information.

         (c) Infringement of Third Party Patents. If any third party asserts a
claim of patent infringement against IDEC on account of IDEC's use, manufacture,
or sale of Licensed Products, IDEC shall promptly notify Pharmacia of the
existence and details of such claim. Pharmacia shall reasonably cooperate with
IDEC, at IDEC's expense and request, in defending against such claim.


                      10. SURVIVAL AND INDEMNITY; REMEDIES

         (c) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties provided for or made pursuant to this Agreement shall survive the
Closing Date for a *______________________________*

         10.2 INDEMNIFICATION BY PHARMACIA. Pharmacia agrees to indemnify and
hold IDEC, its Affiliates, owners, officers, directors, agents and
representatives harmless against and in respect of all Losses (including
reasonable attorneys' fees) incurred by any of them as a result of (a) any
misrepresentation or breach by Pharmacia of any of their representations and
warranties contained herein or (b) any failure by Pharmacia to perform their
covenants and agreements contained herein or the Supply Agreement or in any
Schedule, Exhibit or instrument delivered pursuant hereto.

         10.3 INDEMNIFICATION BY IDEC. IDEC agrees to indemnify and hold
Pharmacia, their Affiliates, officers, directors, agents and representatives
harmless against and in respect of all Losses (including reasonable attorneys'
fees) incurred by any of them as a result of (a) any misrepresentations or
breach by IDEC of any of its representations and warranties contained herein or
(b) of any failure of IDEC to perform its covenants and agreements contained
herein or 



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       16

<PAGE>   17
the Supply Agreement or in any Schedule, Exhibit or instrument delivered
pursuant hereto, or (c) any claim (including patent infringement and products
liability) arising out of the use of the 9-AC Assets after the Closing,
including any claim arising out of the clinical testing, development, marketing,
promotion, advertising, sale, supply, use or misuse (including failure to warn)
of 9-AC (or products containing 9-AC), except as provided in the Supply
Agreement or (d) any Assumed Liabilities.

         10.4 LIMITATIONS. Neither party shall be required to indemnify under
clause (a) of Section 10.2 or 10.3 unless and until the aggregate amount of all
such indemnifiable claims *____________________________________________*.

         10.5 EMPLOYEES. Each party shall indemnify and hold the other parties
harmless, and hereby forever releases and discharges the other parties, from and
against all claims, demands, liabilities, damages and expenses (including
attorney's fees) arising out of personal injury (including death) or property
damage incurred or suffered by employees or consultants of the indemnifying
party, its Affiliates or contractors in the performance of or under this
Agreement or the Supply Agreement (including providing or obtaining technical
assistance or training at either party's facilities), except to the extent
caused by the sole negligence, recklessness or willful misconduct of such other
party, its employees or agents.

         10.6 CLAIM PROCEDURE. Upon obtaining knowledge of the institution of
any action, proceeding, or other claim or demand of indemnity hereunder, the
party seeking indemnification (the "Indemnified Party") shall promptly notify in
writing the other party thereof (the "Indemnifying Party"). If such claim or
demand relates to a claim or demand asserted by a third party, the Indemnifying
Party shall have the right at its expense to employ counsel to defend such claim
or demand and the Indemnified Party shall have the right, but not the
obligation, at its expense to participate in the defense of any such claim or
demand. So long as the Indemnifying Party is defending such claim or demand in
good faith, the Indemnified Party will not settle such claim or demand without
the Indemnifying Party's consent. The Indemnified Party shall make available to
the Indemnifying Party all records and other materials reasonably required by it
in contesting a claim or demand asserted by a third party against the
Indemnified Party and shall cooperate in the defense thereof.

         10.7 INSURANCE. *_______________________________________________*.

         10.8 LIMITATIONS. IN NO EVENT SHALL EITHER PARTY, OR ANY OF ITS
AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE,
FAILURE TO WARN OR FAILURE TO TEST), STRICT LIABILITY OR OTHERWISE, including,
but not limited to, loss of profits or revenue, cost of capital, cost of
substitute equipment, facilities or services, 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       17

<PAGE>   18

downtime costs, delays, or claims of customers or other third parties for such
loss or damage.


                                 11. TERMINATION

         11.1 PRIOR TO CLOSING. This Agreement may, by notice given on or prior
to the Closing Date, in the manner hereinafter provided, be terminated and
abandoned:

         (a) by Pharmacia or IDEC if there has been a material misrepresentation
or a material default or breach by any other party with respect to its
representations in this Agreement or in any ancillary document or the due and
timely performance of any of its covenants and agreements contained in this
Agreement or in any ancillary document, and such misrepresentation, default or
breach shall have not been cured within ten business days after receipt of
notice specifying particularly such misrepresentation, default or breach; or

         (b) by mutual written consent of Pharmacia and IDEC; or

         (c) by either party if the Approval of the NCI or FTC is not received
on or prior to May 15, 1997 or such later date as the parties may agree in
writing, and the FTC then elects to appoint a trustee under the terms of the FTC
Consent Order or proceed with other available remedies.

         11.2 EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to Section 11.1, all further obligations of the parties hereunder shall
terminate, except that nothing in this Section 11.2 shall relieve any party
hereto of any liability for breach of this Agreement.


                             12. GENERAL PROVISIONS

         12.1 EXPENSES. Each party hereto shall bear its own expenses incident
to or incurred in connection with the transactions contemplated hereby,
regardless of whether such contemplated transactions are consummated or fail to
be consummated, for any reason whatsoever.

         12.2 NOTICES. All notices which are permitted or required under this
Agreement shall be in writing and shall be deemed given when delivered
personally, two (2) business days after being sent by overnight air courier, one
(1) business day after being sent by facsimile transmission, or if sent by mail,
five (5) business days after being mailed by registered or certified mail,
postage prepaid, addressed as follows, or to such other person or address as may
be designated by notice to the other party:



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       18

<PAGE>   19

If to IDEC:
                  IDEC Pharmaceuticals Corporation
                  11011 Torreyana Road
                  San Diego, CA 92121
                  Attn: Secretary
                  Fax: (619) 550-8755

         with a copy to:

                  IDEC Pharmaceuticals Corporation
                  11011 Torreyana Road
                  San Diego, CA 92121
                  Attn: President
                  Fax: (619) 550-8750


If to Pharmacia:

                  Pharmacia & Upjohn S.p.A.
                  Via Robert Koch 1.2
                  20152 Milano
                  ITALY
                  Attn: Managing Director
                  Fax: +39 2 4838 2023

         with a copy to:

                  James F. Farrington, Jr.
                  Wiggin & Dana
                  301 Tresser Blvd.
                  Stamford, Connecticut 06901
                  Fax: (203) 363-7676

         12.3 PUBLIC DISCLOSURE. Except in connection with obtaining the
Approvals, the parties will advise and confer with each other prior to the
issuance of any reports, releases or other disclosures of the terms of this
Agreement and the implementation hereof and no press release or other
written statement or other disclosures, whether or not written, relating to the
transactions contemplated by this Agreement shall be disseminated publicly or
delivered to any other person without the specific consent of the other parties,
except to the extent such public disclosure is required by any law, or rule or
regulation of any Governmental Authority, including without limitation, the
United States Securities and Exchange Commission or any securities 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


                                       19

<PAGE>   20

exchange on which securities of the disclosing party are then listed; provided,
that in the case of any such disclosure, the disclosing party shall endeavor to
obtain confidential treatment of information to be disclosed to the extent
reasonably requested by the other party. Notwithstanding the foregoing, the
parties shall agree upon the text of a press release which each party may
publicly release.

         12.4 BENEFIT. Neither party or its sublicensees shall assign this
Agreement nor any of their respective rights or obligations hereunder without
the prior written consent of the other party, which consent shall not be
withheld unreasonably. The foregoing shall not restrict IDEC in the sublicensing
of its rights as permitted under Section 2.1(b). Any such attempted assignment
without such consent shall be void. Notwithstanding the foregoing, either party
or its sublicensees may assign this Agreement to a third party without such
consent upon thirty (30) days' prior notice, if such third party (a) acquires
(by purchase or merger) all or substantially all of such party's business, stock
or assets to which this Agreement pertains, and (b) assumes all of the
obligations of such party hereunder. When duly assigned in accordance with the
foregoing, this Agreement shall be binding upon and inure to the benefit of P&U
SPA, IDEC and their respective successors and permitted assigns. Any assignment
by IDEC of the 9-AC Assets shall require the assignment of this Agreement;
provided, that IDEC shall not be released from its obligations hereunder without
the prior written consent of Pharmacia.

         12.5 INTERPRETATION OF THIS AGREEMENT. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement. Any provision of the Agreement
which is invalid or unenforceable shall be ineffective to the extent of such
invalidity or unenforceability, without affecting in any way the remaining
provisions hereof. This Agreement, including all Schedules and Exhibits hereto,
and the Supply Agreement, constitute the entire agreement of the parties,
superseding and extinguishing all prior agreements and understandings,
representations and warranties, relating to the subject matter hereof, except
for the Confidentiality Agreement, among Pharmacia & Upjohn, Inc., NCI and IDEC,
dated as of October 29, 1996. This Agreement may not be modified, amended or
terminated except by written agreement specifically referring to this Agreement
signed by the parties hereto. No waiver of a breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.

         12.6 GOVERNING LAW. This Agreement shall be governed by the laws of
State of New York applicable to contracts made and to be performed therein,
without giving effect to the conflicts of laws provisions thereof.

         12.7 DISPUTES. Any dispute arising between the parties relating to,
arising out of or in any way connected with this Agreement or any term or
condition hereof, the performance by either party of its obligations hereunder,
whether before or after termination of this Agreement, shall be first referred
to the CEO's or principal executive of IDEC and P&U SPA for negotiation 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       20

<PAGE>   21

and resolution. If such matter is not resolved within 90 days after notice from
either party calling for such procedure, then such matter shall be finally
resolved by binding arbitration. Whenever a party shall decide to institute
arbitration proceedings, it shall give notice to that effect to the other
parties. The party giving such notice shall refrain from instituting the
arbitration proceeding for a period of sixty (60) calendar days following such
notice. Any arbitration hereunder shall be conducted in Washington, D.C., under
the then current Commercial Arbitration Rules of the American Arbitration
Association. Each such arbitration shall be conducted in the English language by
a panel of three arbitrators appointed in accordance with such rules. The
arbitrators shall have the authority to grant specific performance, and to
allocate between the parties the fees and expenses in such equitable manner as
they determine. Any monetary award shall bear interest at a rate fixed by the
arbitrators from the date of arbitration proceeding is commenced to the date on
which the award is paid in full. Judgment upon the award so rendered may be
entered in any court having jurisdiction or application may be made to such
court for judicial acceptance of any award and an order of enforcement, as the
case may be.


         12.8 COUNTERPARTS. This Agreement may be executed simultaneously in
several counterparts, by manual or facsimile signature, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement shall be deemed to have been executed upon receipt by
each party hereto of a signature page, as aforesaid, signed by the other party.



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


                                       21

<PAGE>   22

         IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.


IDEC PHARMACEUTICALS CORPORATION



By:  /s/ William R. Rohn
   -----------------------------

PHARMACIA & UPJOHN S.P.A



By: /s/  Lamberto Andreotti
   -----------------------------

PHARMACIA & UPJOHN COMPANY



By: /s/ Jack J. Jackson
    ----------------------------



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       22

<PAGE>   23
                                                                 SCHEDULE 2.1(a)
                                                                         ANNEX A

                     9-AC FORMULATION (COLLOIDAL DISPERSION)


Patent Application          Filing date                       Country
Number

*________________*




*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.





<PAGE>   24
*________________*                                     SCHEDULE 2.1(b)
                    *________________*              *________________*


*_________*   Title: Prep. of 9-Aminocamptothecin    9-Amino Camptothecin/


<TABLE>
<CAPTION>
                      Application    Filing      Patent   Issue      Expiration
Type Country          No.            Date        No.      Date       Date
- -------------------------------------------------------------------------------
<S>                   <C>            <C>         <C>      <C>        <C>
</TABLE>


*________________*




*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.





<PAGE>   25
*________________*                                      SCHEDULE 2.1(b)
                     *________________*              *________________*


*_________*   Title: Prep. of 9-Amino camptothecin  9-Amino Camptothecin/Process


<TABLE>
<CAPTION>
                      Application    Filing      Patent   Issue      Expiration
Type Country          No.            Date        No.      Date       Date
- -------------------------------------------------------------------------------
<S>                   <C>            <C>         <C>      <C>        <C>
</TABLE>


*______________*


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.





<PAGE>   26
*________________*                                      SCHEDULE 2.1(b)
                     *________________*              *________________*


*_______*   Title: Method form PRPN 9-Amino campt.  Process 9-Amino Camptothecin


<TABLE>
<CAPTION>
                      Application    Filing      Patent   Issue      Expiration
Type Country          No.            Date        No.      Date       Date
- -------------------------------------------------------------------------------
<S>                   <C>            <C>         <C>      <C>        <C>
</TABLE>

*________________*



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   27
                                                                       EXHIBIT A

                                SUPPLY AGREEMENT


         THIS AGREEMENT, dated as of February 10, 1997, but effective as of the
Effective Date (as provided for in Section 1 below) between IDEC PHARMACEUTICALS
CORPORATION, a corporation organized and existing under the laws of the State of
California and having its principal place of business at San Diego, California
("IDEC"); and PHARMACIA & UPJOHN S.P.A., a corporation organized and existing
under the laws of Italy and having its principal place of business at Milano,
Italy ("P&U SPA").

                                   BACKGROUND

         Pharmacia possesses certain intellectual property rights and other
assets relating to 9- amino-20(S)-camptothecin, including patent rights and
rights under a Cooperative Research and Development Agreement with the National
Cancer Institute ("NCI"). As a consequence of the combination of Pharmacia AB
with The Upjohn Company (collectively, "Pharmacia & Upjohn"), Pharmacia & Upjohn
entered into an agreement containing a consent order with the United States
Federal Trade Commission ("FTC") under which Pharmacia is required to divest its
rights to sell 9-amino-20(S)-camptothecin in the United States. Additionally,
Pharmacia offered IDEC the related rights to sell 9-amino-20(S)- camptothecin
outside the United States. IDEC desires to acquire all such rights to 9-amino-
20(S)-camptothecin and related assets. Subject to the approval of the NCI, FTC
and other third parties as provided for herein, the parties have agreed for IDEC
to acquire such rights and assets on the terms set forth in that certain 9-AC
Assets Transfer Agreement, dated as of the date hereof, among the parties hereto
and Pharmacia & Upjohn Company (the "Transfer Agreement").

         Pursuant to the FTC Consent Order (as such and other capitalized and
otherwise undefined terms in this Agreement as defined in the Transfer
Agreement), P&U SPA has agreed to supply 9-AC to IDEC to permit it to continue
the research and development of 9- AC and to fulfill its obligations under the
CRADA.

         NOW, THEREFORE, the parties hereto agree as follows:


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       1

<PAGE>   28
                           SECTION 1. EFFECTIVE DATE.

         1.1 EFFECTIVE DATE OF THIS AGREEMENT. This Agreement shall be legally
effective upon the completion of the Closing on the Closing Date of the Transfer
Agreement following the receipt of all Approvals and the satisfaction of all
other conditions set forth in Article 4 of the Transfer Agreement. The Closing
Date shall be referred to as the "Effective Date" hereunder.

         1.2 TERMINATION PRIOR TO THE EFFECTIVE DATE. If the Transfer Agreement
is terminated under Section 11.1 thereof, this Agreement shall be automatically
void ab initio.

                   SECTION 2. SUPPLY AND PURCHASE OF PRODUCT.

         2.1 P&U SPA SUPPLY. IDEC shall purchase, and P&U SPA shall supply, such
quantities of 9-AC (as further described and specified in EXHIBIT A) in the
forms described in EXHIBIT A (the "Product") as IDEC may order from time to time
for use in its further research and development of 9-AC or in fulfilling its
obligations to supply 9-AC to the NCI under the CRADA.

         2.2 QUANTITIES. P&U SPA will manufacture the Product in its
*_____________*.

         2.3 NCI SUPPLY. P&U SPA acknowledges that IDEC is required under the
CRADA to supply the Product to the NCI. P&U SPA's undertakings under this
Agreement are intended, in part, to allow IDEC to fulfill those obligations to
the NCI.

         2.4  TERMS AND CONDITIONS.  THE SUPPLY OF PRODUCT HEREUNDER IS
EXPRESSLY LIMITED TO AND CONDITIONED UPON THE TERMS AND CONDITIONS OF SALE
ATTACHED HERETO AS EXHIBIT B AND NO TERMS ADDITIONAL TO OR DIFFERENT FROM THOSE
IN OR INCORPORATED BY REFERENCE IN THIS AGREEMENT ARE BINDING ON P&U SPA UNLESS
AGREED TO IN WRITING BY P&U SPA.

         2.5 MANUFACTURING LICENSE. Subject to the terms and conditions hereof,
IDEC hereby grants to P&U SPA under the 9-AC Assets a non-exclusive right to
make and have made for and sell to IDEC and NCI the Products as provided for
herein. P&U SPA shall not grant any sublicenses (other than to Affiliates)
without IDEC's prior written consent, except that it may permit third parties to
formulate the bulk material into finished product and, if its production
facilities are not available to manufacture 9-AC, it may permit third parties to
manufacture the bulk material under a contract manufacturing arrangement. The
license granted hereunder shall automatically terminate upon the termination of
this Agreement, and the fulfillment of P&U SPA's 



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       2

<PAGE>   29

obligations to supply 9-AC to IDEC and the NCI.


                              SECTION 3. DELIVERY.

         3.1 ORDERS. (a) FORECASTS. At least 90 days prior to the beginning of
each calendar quarter, IDEC shall furnish to P&U SPA a written report containing
*_____________*.

         (b) SUPPLY AND DELIVERY TIME. P&U SPA shall supply and deliver the
Product *_____________*.

         3.2 DELIVERY. P&U SPA shall ship the Product to *_____________*

         3.3 ACCEPTANCE OF PRODUCT. In accordance with agreed upon testing
procedures and within 60 days after delivery, IDEC shall test each lot of
Product delivered to it to determine whether it conforms to the specifications
attached hereto as Exhibit A. If any Product fails to conform to such
specifications (other than for any of the reasons set forth in Paragraph 1(B) of
Exhibit B), IDEC shall promptly inform P&U SPA. P&U SPA shall then promptly
correct such nonconformity in the manner set forth in Paragraph 1(A) of Exhibit
B. If the parties dispute whether the Product so fails to conform, the matter
shall be referred to a mutually acceptable independent testing laboratory for
final resolution.

                        SECTION 4. PAYMENTS FOR PRODUCT.

         4.1 PURCHASE PRICE. The purchase price for Product (the "Purchase
Price") shall be *_____________*.

                      SECTION 5. REGULATORY RESPONSIBILITY.

         5.1 REGULATORY RESPONSIBILITY. P&U SPA shall be responsible, at its
sole expense, for complying with all applicable regulatory requirements relating
to the manufacture of the Products, including good manufacturing practices
promulgated from time to time by the United States Food and Drug Administration.
IDEC shall be responsible, at its sole expense, for complying with all other
applicable regulatory requirements relating to the use or resale of the Products
(including any other product incorporating the Product).

         5.2 IMPORT AND EXPORT LAWS. With P&U SPA's reasonable assistance in
respect to the execution of documents and other ministerial actions, IDEC shall
comply with all export and import regulations and laws necessary to export and
import the Products to IDEC, including, without limitation, procuring and
maintaining all import and export licenses necessary to ship Products from the
point of manufacture to IDEC in accordance herewith and the payment of all
duties, tariffs, surcharges and other customs and other governmental fees levied
in connection with the exportation and importation of the Products from P&U SPA
to IDEC.



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       3

<PAGE>   30

                           SECTION 6. CONFIDENTIALITY.

          6.1 "PROPRIETARY INFORMATION" means: all technical, scientific,
marketing and financial information and data which is either non-public,
confidential or proprietary in nature (disclosed, directly or indirectly, by
either party (the "Disclosing Party") to the other party (the "Recipient")),
unless such information: (a) is or becomes public knowledge
through no fault of the Recipient; (b) is in the future legally received by the
Recipient from a third party, which the Recipient reasonably believes is free of
any obligation to keep it confidential; or (c) is known by the Recipient prior
to receipt from the Disclosing Party, which fact may be proven only by
documentary evidence. To the extent practical, the parties shall furnish their
Proprietary Information in documentary or tangible form marked as proprietary or
confidential; however, if disclosure of Proprietary Information is in
nondocumentary form, or if the disclosure is first made orally or by visual
inspection, the Disclosing Party shall have the right or, if requested by the
Recipient, the obligation to confirm in writing the fact and general nature of
such disclosure within a reasonable time after such disclosure is made.

         6.2 CONFIDENTIALITY. All Proprietary Information disclosed, directly or
indirectly, by either party to the other party shall remain the property of the
Disclosing Party. The Recipient shall not acquire any proprietary rights or
other interests therein, and nothing contained herein shall be construed as
granting or implying any right or license to use any Proprietary Information.
Without limiting any obligation arising under law, *_____________*, neither
party shall disclose to third parties any Proprietary Information of the other
party. Each party shall take all reasonable steps to minimize the risk of
disclosure of Proprietary Information of the other party, including without
limitation:

         (a) ensuring that only its employees and other representatives whose
duties require them to possess such information or materials have access
thereto;

         (b) exercising at least the same degree of care that it uses for its
own proprietary information; and

         (c) providing proper and secure storage for the Proprietary
Information. Upon request by the Disclosing Party, at any time, the Recipient
shall return all Proprietary Information of the other in its possession and
shall make no further use of such Proprietary Information.

         6.3 INJUNCTIVE RELIEF. Each of the parties hereto agree that the
disclosure of Proprietary Information without the Disclosing Party's express
written permission will cause the Disclosing Party's irreparable harm and that
any breach or threatened breach of this Agreement by the Recipient will entitle
the Disclosing Party to injunctive relief, in addition to any other legal
remedies available to it, in any court of competent jurisdiction.



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       4

<PAGE>   31
                          SECTION 7. TERM; TERMINATION.

         7.1 TERM. Unless terminated earlier under the provisions of this
Section 7, this Agreement shall expire *_____________*.

         7.2  TERMINATION BY IDEC.  IDEC may terminate this Agreement
*_____________*.

         7.3 TERMINATION FOR CAUSE. Without prejudice to any other rights it may
have hereunder or at law or in equity, either party may terminate this Agreement
immediately by written notice to the other party if, *_____________* from the
terminating party, the other party fails to remedy any material breach of this
Agreement.

         7.4  RIGHTS AND DUTIES UPON TERMINATION.

         (a) Notwithstanding anything to the contrary contained herein,
termination of this Agreement, for whatever reason, shall not affect any rights
or obligations accrued by either party prior to the effective date of
termination, nor prejudice any other rights or remedies that either party may
have at law or in equity.

         (b) Upon any termination, both parties shall immediately cease using
the other party's Proprietary Information and, at the request of the other
party, shall return or destroy all such Proprietary Information.

         (c) Section 4 of Exhibit B and Section E of Exhibit C shall survive any
termination of this Agreement.

                           SECTION 8. MISCELLANEOUS.

         8.1 CHOICE OF LAW. This Agreement and all purchase orders issued
hereunder shall be governed by, and all rights and obligations of the parties
shall be determined in accordance with the laws of the State of New York, U.S.A.
without regard to its conflict of laws rules (and without limiting the
foregoing, the United Nations Convention On Contracts for International Sale of
Goods [1980] shall not govern this Agreement).

         8.2 ARBITRATION. Any dispute arising between the parties relating to,
arising out of or in any way connected with this Agreement or any term or
condition hereof, the performance by either party of its obligations hereunder,
whether before or after termination of this Agreement, shall be first referred
to the CEO's or principal executive of IDEC and P&U SPA for negotiation and
resolution. If such matter is not resolved within 90 days after notice from
either party calling for such procedure, then such matter shall be finally
resolved by binding arbitration. Whenever a party shall decide to institute
arbitration proceedings, it shall give notice to that effect to the other
parties. The party giving such notice shall refrain from instituting the
arbitration proceeding for a period of sixty (60) calendar days following such
notice. *_____________*. Each such arbitration shall be conducted in the English
language by a panel of three arbitrators appointed in accordance with such
rules. The arbitrators shall have the authority to grant specific performance,
and to allocate between the parties the fees and expenses in such equitable
manner as they 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       5

<PAGE>   32

determine. Any monetary award shall bear interest at a rate fixed by the
arbitrators from the date of arbitration proceeding is commenced to the date on
which the award is paid in full. Judgment upon the award so rendered may be
entered in any court having jurisdiction or application may be made to such
court for judicial acceptance of any award and an order of enforcement, as the
case may be.

         8.3 NOTICES. All notices which are permitted or required under this
Agreement shall be in writing and shall be deemed given when delivered
personally, two (2) business days after being sent by overnight air courier, one
(1) business day after being sent by facsimile transmission, or if sent by mail,
five (5) business days after being mailed by registered or certified mail,
postage prepaid, addressed as follows, or to such other person or address as may
be designated by notice to the other party:

If to IDEC:
                  IDEC Pharmaceuticals Corporation
                  11011 Torreyana Road
                  San Diego, CA 92121
                  Attn: Secretary
                  Fax: (619) 550-8755

         with a copy to:

                  IDEC Pharmaceuticals Corporation
                  11011 Torreyana Road
                  San Diego, CA 92121
                  Attn: President
                  Fax: (619) 550-8750

If to Pharmacia:

                  Pharmacia & Upjohn S.p.A.
                  Via Robert Koch 1.2
                  20152 Milano
                  ITALY
                  Attn: Managing Director
                  Fax: +39 2 4838 2023

         with a copy to:

                  James F. Farrington, Jr.
                  Wiggin & Dana
                  301 Tresser Blvd.
                  Stamford, Connecticut 06901
                  Fax: (203) 363-7676

         8.4 BENEFIT. Neither party shall assign this Agreement nor any of their
respective rights or obligations hereunder without the prior written consent of
the other party, which consent shall not be withheld unreasonably. Any such
attempted assignment without such consent shall be void. Notwithstanding the
foregoing, either party may assign this Agreement to a third party without 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




                                       6


<PAGE>   33

such consent upon thirty (30) days' prior notice, if such third party (a)
acquires (by purchase or merger) all or substantially all of such party's
business, stock or assets to which this Agreement pertains, and (b) assumes all
of the obligations of such party hereunder. When duly assigned in accordance
with the foregoing, this Agreement shall be binding upon and inure to the
benefit of P&U SPA, IDEC and their respective successors and permitted assigns.

         8.5 INTERPRETATION OF THIS AGREEMENT. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement. Any provision of this Agreement
which is invalid or unenforceable shall be ineffective to the extent of such
invalidity or unenforceability, without affecting in any way the remaining
provisions hereof. This Supply Agreement, including all Exhibits hereto, and the
Transfer Agreement, constitute the entire agreement of the parties, superseding
and extinguishing all prior agreements and understandings, representations and
warranties, relating to the subject matter hereof, except the Confidentiality
Agreement, among Pharmacia & Upjohn, Inc., NCI and IDEC, dated as of October 29,
1996. This Supply Agreement may not be modified, amended or terminated except by
written agreement specifically referring to this Agreement signed by the parties
hereto. No waiver of a breach or default hereunder shall be considered valid
unless in writing and signed by the party giving such waiver, and no such waiver
shall be deemed a waiver of any subsequent breach or default of the same or
similar nature.

         8.6 COUNTERPARTS. This Agreement may be executed simultaneously in
several counterparts, by manual or facsimile signature, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement shall be deemed to have been executed upon receipt by
each party hereto of a signature page, as aforesaid, signed by the other party.

         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first above written.

                             PHARMACIA & UPJOHN S.P.A.

                             By /s/ Lamberto Andreotti
                                ------------------------------------

                             IDEC PHARMACEUTICALS CORPORATION

                             By /s/ William R. Rohn
                               -------------------------------------

*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



                                       7

<PAGE>   34
                                                                       EXHIBIT A


                             PRODUCT SPECIFICATIONS


                            SEE THE ATTACHED 5 PAGES:

                           1.       *_____________*
                           2.       *_____________*
                           3.       *_____________*



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   35
*____________*: CONTROL OF STARTING MATERIALS

                                 *_____________*



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   36
*_____________*            *_____________*


- --------------------------------------------------------------------------------
*_____________*                    PHARMACY                  OCTOBER 1995
- --------------------------------------------------------------------------------

*_____________*


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   37



*_____________*            *_____________*


*_____________*:  CONTROL TESTS ON THE FINISHED PRODUCT

I. *_____________*

II. *_____________*



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   38
*_____________*                                               *_____________*

Type II DMF for 9-Aminocamptothecin Colloidal Dispersion and Diluent

*_____________*


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   39
*_____________*                                                *_____________*

Type II DMF for 9-Aminocamptothecin Colloidal Dispersion and Diluent

*_____________*



*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.


<PAGE>   40
                                    EXHIBIT B

                          TERMS AND CONDITIONS OF SALE

         1. WARRANTY. A. P&U SPA warrants to IDEC that the Product shall at the
time of delivery conform with the specifications attached hereto as Exhibit A,
and shall not be "adulterated" or, to the extent applicable to drugs used for
only clinical testing, "misbranded" (as defined under 21 U.S.C. Section 351 and
Section 352, respectively). IDEC represents THAT: (a) its further use of the
Product shall be at its sole risk; (b) it has evaluated the use of the Product;
and (c) its sole recourse to P&U SPA shall be as provided herein. Should any
failure to conform with this warranty appear within one (1) year from its date
of delivery, and if given prompt written notice by IDEC, but in no event later
than ten (10) business days following the end of the warranty period, P&U SPA
shall, promptly correct such nonconformity, at its option, by (i) replacement
of the nonconforming Product; or (ii) crediting IDEC with the Purchase Price of
the nonconforming Product.

         B. Exclusions. These warranties shall not apply to any Product which,
through no fault of P&U SPA, (i) has been tampered with or otherwise altered;
(ii) has been subjected to misuse, negligence or accident; or (iii) has been
stored, handled or used in a manner contrary to the specifications or P&U SPA's
written instructions.

         C. Limitations on Warranty. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND
IN LIEU OF ALL OTHER WARRANTIES OF QUALITY AND PERFORMANCE, WRITTEN, ORAL OR
IMPLIED, AND ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR FREEDOM FROM
INFRINGEMENT, ARE HEREBY DISCLAIMED BY P&U SPA. Except as provided in Paragraph
4B below, replacement of nonconforming Product or credit of the purchase price
therefor in the manner and for the period of time provided above shall be IDEC's
exclusive remedy and shall constitute fulfillment of all liabilities of P&U SPA
(including any liability for direct, indirect, special, incidental or
consequential damages), whether in warranty, contract, negligence, tort, strict
liability, or otherwise with respect to any non-conformance of or defect or
deficiency in the Product.

         2. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE including, but not
limited to, loss of profits of revenue, delays, or claims of customers of the
other party or its affiliates or other third parties for such or other damages.
The foregoing shall not limit IDEC's liability for damages incurred by P&U SPA
in fulfilling IDEC's obligations to supply 9-AC to the NCI.

         3. TAXES. The price for the Product does not include any national,
state or local property, license, privilege, sales, service, use, excise, value
added, gross receipts, or other like taxes. IDEC agrees to pay or reimburse P&U
SPA for any such taxes which P&U SPA is required to pay or collect or which are
required to be withheld.

         4. INDEMNITY. A. IDEC. IDEC shall indemnify and hold harmless P&U SPA
from and against any and all liability, loss, damage, expense, causes of action,
suits, claims or judgments arising from injury or death to persons or damage to
property, of any nature whatsoever, resulting from: (a) the clinical testing or
other use (or misuse) or resale of the Product (or any other product
incorporating the Product), (b) IDEC's failure to comply with any applicable
regulatory requirements, (c) the failure to provide adequate warnings concerning
the use of the Product (or any product incorporating the Product), (d) any
willful act or omission or negligence of IDEC or its employees or agents, or (e)
any other act or omission of IDEC for which IDEC is liable to P&U SPA under the
terms of this Agreement, except, in each case, to the extent caused by a breach
by P&U SPA of the warranty provisions set forth in Paragraph 1 hereof; and IDEC
shall defend or settle at its own expense any suit or action which may be
brought against P&U SPA with respect to any such claim or liability; provided,
that P&U SPA shall have given prompt notice in writing to IDEC of any such
claim, and shall permit 


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.





<PAGE>   41

IDEC by its counsel to defend or settle the same.

         B. P&U SPA. P&U SPA shall indemnify, defend and hold the IDEC harmless
from any and all suits, claims, actions, demands, liabilities, expenses or
losses alleged to result from (a) the failure of the Product manufactured for
the IDEC by P&U SPA to meet the FDA specifications accepted by both parties or
the product specifications attached as Exhibit A, (b) P&U SPA's failure to
comply with any applicable regulatory requirements, or (c) any willful act or
omission or negligence of P&U SPA or its employees or agents. This obligation
shall be contingent upon IDEC giving P&U SPA prompt, adequate notice of such
claim, cooperating fully in the defense of such claim, and permitting P&U SPA to
assume the sole control of all phases of the defense and/or settlement of such
claim, including the selection of counsel. This obligation shall not require P&U
SPA to be liable for any negligent act or omission of IDEC or for any
representations and warranties, express or implied, made by IDEC that exceed the
representations and warranties made by P&U SPA to the IDEC.

         5. FORCE MAJEURE. Neither party shall be liable for loss, damage, or
delay, nor be deemed to be in default from causes beyond its reasonable control
or from acts of God, fire, strikes, labor difficulties, acts or omissions of any
third party, any governmental authority or of the other party, compliance with
governmental regulations, insurrections or riots, embargoes, delays or shortages
in transportation or inability to obtain necessary labor, materials or
manufacturing facilities from usual sources, defects or delays in the
performance of its suppliers or subcontractors due to any of the foregoing
enumerated causes or any other cause similar or dissimilar to the foregoing. The
foregoing shall not apply to failures or delays in the payment of sums of money.


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.




<PAGE>   42
                                                                       EXHIBIT C



                               ACTUAL COST OF 9-AC



*_____________*


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.



<PAGE>   43
         D.       ACCOUNTING STANDARDS AND PROCEDURES.

         Except as otherwise stated herein, Costs shall be determined in
accordance with generally accepted cost accounting principles applied on a
consistent basis. Within 60 days after the end of each calendar year, the
parties shall determine the variance between the aggregate of the Actual Costs
and the aggregate Costs paid by IDEC for the Product purchased during such year.
If such variance is positive, IDEC shall pay such amount within *_____________*;
and if such variance is negative, P&U SPA shall issue IDEC a credit. Costs for
the succeeding twelve months shall be based on the actual Costs at the end of
the preceding year with appropriate standard cost adjustments for IDEC's
purchase forecasts, planned manufacturing efficiencies, and expected cost
variations in raw materials, labor and overhead.

         Any method of allocating a particular cost under this Agreement shall
be consistent with the method of allocating that cost for any other product
manufactured at that same location. *_____________*. In no event shall
reimbursement for costs or overhead be duplicated in any manner.

         E.       BOOKS AND RECORDS

         P&U SPA shall maintain adequate books and records to verify all items
of cost in effect at any time and the calculation and derivation thereof. Such
books and records shall be available for inspection by IDEC at reasonable times
and on reasonable notice, *_____________*.


*Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with the
Secretary of the Commission in the Company's Application Requesting Confidential
Treatment pursuant to Rule 246-2 under the Securities Exchange Act of 1934, as
amended.






<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS CONTAINED IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTER ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO 
SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                          11,624
<SECURITIES>                                    51,086
<RECEIVABLES>                                    3,585
<ALLOWANCES>                                         0
<INVENTORY>                                      6,587
<CURRENT-ASSETS>                                78,333
<PP&E>                                          33,899
<DEPRECIATION>                                  10,457
<TOTAL-ASSETS>                                 102,165
<CURRENT-LIABILITIES>                           16,249
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<TOTAL-LIABILITY-AND-EQUITY>                   102,165
<SALES>                                              0
<TOTAL-REVENUES>                                12,066
<CGS>                                                0
<TOTAL-COSTS>                                    5,214
<OTHER-EXPENSES>                                17,766
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 560
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