<PAGE>   1
                            SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                                (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X]  Preliminary Proxy Statement
[ ]  Confidential, for Use of the Commission Only (as permitted by Rule
     14a-6(e)(2)) 
[ ]  Definitive Proxy Statement 
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12



                        IDEC PHARMACEUTICALS CORPORATION
                        --------------------------------
                (Name of Registrant as Specified in its Charter)

           ----------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  No fee required.

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

     (1) Title of each class of securities to which transaction applies:

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

     (2) Aggregate number of securities to which transaction applies:

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

     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
         filing fee is calculated and state how it was determined):

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

     (4) Proposed maximum aggregate value of transaction:

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

     (5)  Total fee paid

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

[ ]  Fee paid previously with preliminary materials.
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

     (1) Amount Previously Paid:

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     (2) Form, Schedule or Registration Statement No.:

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     (3) Filing Party:

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     (4) Date Filed:

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<PAGE>   2
 
                                      LOGO
 
                                                                November 5, 1999
 
Dear Stockholder:
 
     Stockholders of record as of October 18, 1999 are encouraged to vote on the
enclosed proposal, which amends IDEC Pharmaceuticals Corporation's ("we," "our,"
or "us") Amended and Restated Certificate of Incorporation ("Certificate of
Incorporation") by increasing the total number of authorized shares in part to
accommodate the proposed two-for-one split of our common stock.
 
     The Board of Directors has approved this amendment, subject to stockholder
approval, and encourages stockholders to vote FOR this proposal.
 
     After reading the attached Notice of Special Meeting of Stockholders and
Proxy Statement, I urge you to sign, date, and promptly return the enclosed
proxy in the enclosed postage-paid envelope.
 
     To complete this vote, we will hold a special meeting of stockholders at
10:00 a.m. on Wednesday, December 1, 1999, at our corporate headquarters, 11011
Torreyana Road, San Diego, California.
 
     PLEASE NOTE THAT THE ONLY ITEM ON THE AGENDA FOR THIS SPECIAL MEETING WILL
BE VOTING ON THIS AMENDMENT. OTHER THAN MATTERS DIRECTLY RELATING TO THE
PROPOSED AMENDMENT, MANAGEMENT WILL BE MAKING NO PRESENTATIONS AT THE SPECIAL
MEETING, AND SENIOR MEMBERS OF MANAGEMENT MAY NOT BE IN ATTENDANCE. YOU MAY, OF
COURSE, ATTEND THIS SPECIAL MEETING IN PERSON TO VOTE YOUR SHARES.
 
     On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in our affairs.
 
                                          Sincerely,
 
                                          /s/ WILLIAM H. RASTETTER
 
                                          William H. Rastetter
                                          Chairman, President and
                                          Chief Executive Officer

<PAGE>   3
 
                        IDEC PHARMACEUTICALS CORPORATION
 
                            ------------------------
 
                   NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON DECEMBER 1, 1999
 
     A special meeting of the stockholders of IDEC Pharmaceuticals Corporation
will be held at our corporate headquarters, 11011 Torreyana Road, San Diego,
California on December 1, 1999, at 10:00 a.m. for the following purposes:
 
     1. To consider and vote upon a proposed amendment and restatement of our
        Amended and Restated Certificate of Incorporation to increase the number
        of shares of authorized common stock from 50,000,000 shares to
        200,000,000 shares, to halve the par value of the common stock from
        $0.001 per share to $0.0005 per share and to effect a two-for-one split
        of our common stock; and
 
     2. To transact such other business as may properly come before the meeting.
 
     Only stockholders of record at the close of business on October 18, 1999
are entitled to notice of, and to vote at, this meeting. Our stock transfer
books will remain open between the record date and the date of the meeting. A
list of stockholders entitled to vote at the meeting will be available for
inspection at our corporate headquarters.
 
                                          By Order of the Board of Directors
 
                                          Kenneth J. Woolcott
                                          Secretary
 
San Diego, California
November 5, 1999
 
                                   IMPORTANT
 
     All stockholders are invited to attend the meeting in person. Whether or
not you expect to attend in person, we urge you to sign, date, and return the
enclosed proxy at your earliest convenience. This will ensure the presence of a
quorum at the special meeting. PROMPTLY SIGNING, DATING, AND RETURNING THE PROXY
WILL SAVE US THE EXPENSE AND EXTRA WORK OF ADDITIONAL SOLICITATION. An addressed
envelope for which no postage is required if mailed in the United States is
enclosed for that purpose. Should you receive more than one proxy because your
shares are registered in different names and addresses, each proxy should be
signed and returned so that all your shares are voted. You may revoke your proxy
at any time prior to the meeting. Sending in your proxy will not prevent you
from voting your stock at the meeting if you desire to do so, as your proxy will
be automatically revoked if you vote by ballot at the meeting.

<PAGE>   4
 
                        IDEC PHARMACEUTICALS CORPORATION
                            ------------------------
 
                                PROXY STATEMENT
 
                            ------------------------
 
                    FOR THE SPECIAL MEETING OF STOCKHOLDERS
                          TO BE HELD DECEMBER 1, 1999
 
GENERAL
 
     This Proxy Statement, which was first mailed to stockholders on or about
November 5, 1999, is furnished in connection with the solicitation of proxies by
our Board of Directors, to be voted at a special meeting of our stockholders,
which will be held at 10:00 a.m. on December 1, 1999, at our corporate
headquarters, 11011 Torreyana Road, San Diego, California, 92121, for the
purposes set forth in the accompanying Notice of Special Meeting of
Stockholders.
 
VOTING
 
     Stockholders of record at the close of business on October 18, 1999 will be
entitled to vote at the meeting on the basis of one vote for each share held. On
October 18, 1999, there were [          ] shares of common stock, par value
$0.001 per share, outstanding, held of record by [          ] stockholders.
 
PROXIES
 
     If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented are to be voted, the proxy will be voted FOR the approval of the
proposal described in the accompanying Notice of Special Meeting of Stockholders
and in this Proxy Statement. You may revoke your proxy at any time before the
commencement of the meeting by filing with our Corporate Secretary at our
corporate headquarters, 11011 Torreyana Road, San Diego, California, 92121, a
notice of revocation or another signed proxy with a later date. You may
automatically revoke your proxy by attending the meeting and voting in person.
 
SOLICITATION
 
     We will bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of this Proxy Statement, the proxy and any
additional solicitation materials furnished to the stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, we may reimburse such persons for their costs in forwarding the
solicitation materials to such beneficial owner. The original solicitation of
proxies by mail may be supplemented by solicitation by telephone, telegram or
other means by our directors, officers or employees. No additional compensation
will be paid to these individuals for any such services. We have engaged Beacon
Hill Partners, Inc. ("Beacon Hill Partners") to solicit and distribute materials
to brokers, banks, custodians, fiduciaries and other nominee holders. We will
pay Beacon Hill Partners approximately $3,500 for these services. Except as
described above, we do not presently intend to solicit proxies other than by
mail.
 
PROPOSALS OF STOCKHOLDERS
 
     Stockholders who intend to have a proposal considered for inclusion in our
proxy materials for presentation at the 2000 Annual Meeting of Stockholders must
submit the proposal to us no later than December 18, 1999. Stockholders who
intend to present a proposal at the 2000 Annual Meeting of Stockholders without
inclusion of such proposal in our proxy materials are required to provide notice
of such

<PAGE>   5
 
proposal to us no later than March 2, 2000. We reserves the right to reject,
rule out of order, or take other appropriate action with respect to any proposal
that does not comply with these and other applicable requirements.
 
           PROPOSAL: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF OUR

               AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
            TO INCREASE THE NUMBER OF AUTHORIZED SHARES, ADJUST THE
             PAR VALUE AND EFFECT A STOCK SPLIT OF OUR COMMON STOCK
 
     The Board of Directors has approved, and is recommending to the
stockholders for approval at the special meeting, an amendment and restatement
of our Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") to (1) increase the number of shares of common stock which we
are authorized to issue from 50,000,000 shares to 200,000,000 shares, (2) halve
the par value of each share of common stock from $0.001 to $0.0005, and (3)
effect a two-for-one stock split with respect to each outstanding share of our
common stock. The Board of Directors determined that this amendment is advisable
and should be considered at the special meeting to be held December 1, 1999. The
full text of the proposed amendment and restatement of our Certificate of
Incorporation (the "Amended and Restated Certificate of Incorporation") is
attached hereto as Appendix A. We are currently authorized to issue 8,000,000
shares of preferred stock, par value $0.001 per share, and the proposed
amendment will not affect this authorization.
 
PURPOSES AND EFFECTS OF PROPOSED INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
 
     The proposed amendment would increase the number of shares of common stock
we are authorized to issue from 50,000,000 shares to 200,000,000 shares. The
additional 150,000,000 shares will be a part of the existing class of common
stock and, if and when issued, will have the same rights and privileges as the
shares of common stock presently issued and outstanding. On October 18, 1999,
[          ] shares of common stock were outstanding. The Board of Directors
believes it is desirable to increase the number of shares of common stock we are
authorized to issue to accomplish the proposed stock split, which stock split
cannot occur under Delaware law under our current Certificate of Incorporation,
and to provide us with adequate flexibility in the future. In addition to the
stock split, potential uses of the additional authorized shares may include
acquisition transactions, equity financings, stock dividends or distributions,
issuance of options pursuant to our stock option and stock purchase plans
without further action by the stockholders, unless such actions are specifically
required by law or rules of any stock exchange on which our securities may then
be listed. Except for the proposed stock split, we have no present commitments,
agreements, or intent to issue additional shares of common stock, other than
with respect to currently reserved shares, in connection with transactions in
the ordinary course of our business, or shares which may be issued under our
director stock option, employee stock option and employee stock purchase plans.
 
     The proposed increase in the authorized number of shares of common stock
could have a number of effects on our stockholders depending upon the exact
nature and circumstances of any actual issuances of authorized but unissued
shares. The increase could have an anti-takeover effect, in that additional
shares could be issued (within the limits imposed by applicable law) in one or
more transactions that could make a change in control or takeover of us more
difficult. For example, additional shares could be issued by us so as to dilute
the stock ownership or voting rights of persons seeking to obtain control of us.
Similarly, the issuance of additional shares to certain persons allied with our
management could have the effect of making it more difficult to remove our
current management by diluting the stock ownership or voting rights of persons
seeking to cause such removal. In addition, an issuance of additional shares by
us could have an effect on the potential realizable value of a stockholder's
investment. In the absence of a proportionate increase in our earnings and book
value, an increase in the aggregate number of our outstanding shares caused by
the issuance of the additional shares, would dilute the earnings per share and
book value per share of all outstanding shares of our common stock. If such
factors were reflected in the price per share of common stock, the potential
realizable value of a stockholder's investment could be adversely affected. The
common stock carries no preemptive rights to purchase additional shares.
 
                                        2

<PAGE>   6
 
     The proposed amendment and restatement of our Certificate of Incorporation
was approved by unanimous written consent of our directors on October 11, 1999.
 
PURPOSES AND EFFECTS OF PROPOSED TWO-FOR-ONE COMMON STOCK SPLIT
 
     The Board of Directors anticipates that the increase in the number of
outstanding shares of our common stock resulting from a two-for-one stock split
will place the market price of the common stock in a range more attractive to
investors, particularly individuals. The common stock is listed for trading on
The Nasdaq Stock Market, and we will apply for listing of the additional shares
of common stock to be issued in the event the proposed stock split is approved.
If the proposed amendment is adopted, each stockholder of record at 5:00 p.m.,
eastern standard time, on the date the Amended and Restated Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware,
which we expect to be December 1, 1999, will be the record owner of, and
entitled to receive, a certificate or certificates representing one additional
share of common stock, par value $0.0005 per share, for each share of common
stock then owned of record by such stockholder. In addition, certificates
representing shares of common stock, $0.001 par value, would be deemed to
represent the same number of shares of common stock having a par value of
$0.0005 per share. CONSEQUENTLY, CERTIFICATES REPRESENTING SHARES OF COMMON
STOCK SHOULD BE RETAINED BY EACH STOCKHOLDER AND SHOULD NOT BE RETURNED TO US OR
OUR TRANSFER AGENT. IT WILL NOT BE NECESSARY TO SUBMIT OUTSTANDING CERTIFICATES
FOR EXCHANGE. In addition, appropriate adjustments will be made to our stock
option, stock purchase plans and the conversion ratios of our convertible
preferred stock and our 20-year convertible zero coupon subordinated notes
("Notes"). Holders of our convertible preferred stock and Notes will be
separately notified of those adjustments.
 
TAX EFFECT AND BROKERAGE COSTS OF THE TWO-FOR-ONE STOCK SPLIT
 
     We have been advised by counsel that the proposed stock split will result
in no gain or loss or realization of taxable income to owners of common stock
under existing United States federal income tax laws. The cost basis for tax
purposes of each new share and each retained share of common stock would be
equal to one-half of the cost basis for tax purposes of the corresponding share
immediately preceding the stock split. In addition, the holding period for the
additional shares issued pursuant to the stock split would be deemed to be the
same as the holding period for the original share of common stock. The laws of
jurisdictions other than the United States may impose income taxes on the
issuance of the additional shares and stockholders are urged to consult their
tax advisors. If stockholders dispose of their shares after the stock split,
they may pay higher brokerage commissions on the same relative interest in us
because that interest is represented by a greater number of shares. Stockholders
may wish to consult their brokers to ascertain the brokerage commission that
would be charged for disposing of the greater number of shares. If the proposed
amendment is adopted, our stockholders' equity accounts will not change. The par
value of a share of common stock after the split will be halved, from the
current $0.001 per share to $0.0005 per share, while the number of shares issued
and outstanding will double.
 
EFFECTIVE DATE OF PROPOSED AMENDMENT AND ISSUANCE OF SHARES FOR STOCK SPLIT
 
     The proposed amendment and restatement of our Certificate of Incorporation,
if adopted by the required vote of stockholders, will become effective at 5:00
p.m., eastern standard time, on the date the amended Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware,
which we expect to be December 1, 1999, the proposed record date for the
determination of the owners of common stock entitled to receive a certificate or
certificates representing the additional shares. PLEASE DO NOT DESTROY OR SEND
TO US, YOUR PRESENT COMMON STOCK CERTIFICATES. IF THE PROPOSED AMENDMENT IS
ADOPTED, THOSE CERTIFICATES WILL REMAIN VALID FOR THE NUMBER OF SHARES SHOWN
THEREON, AND SHOULD BE CAREFULLY PRESERVED BY YOU. We expect that the additional
shares will be distributed on or about December 20, 1999 by book-entry in our
records. Stockholders will be entitled to receive physical stock certificates
upon request.
 
                                        3

<PAGE>   7
 
LANGUAGE OF THE PROPOSED AMENDMENT AND RESTATEMENT OF OUR CERTIFICATE OF
INCORPORATION
 
     If approved, our Certificate of Incorporation will be amended and restated
as set forth in Appendix A hereto.
 
VOTING TABULATION AND BOARD RECOMMENDATION
 
     The affirmative vote of a majority of the shares of common stock present in
person or represented by proxy and entitled to vote at the special meeting is
required to approve the proposed amendment. All votes will be tabulated by the
inspector of election appointed for the meeting, who will separately tabulate
affirmative and negative votes, abstentions and broker non-votes. Abstentions
with respect to any matter are treated as shares present or represented and
entitled to vote on that matter and thus have the same effect as negative votes.
If, however, shares are not voted by the broker who is the record holder of the
shares, or if shares are not voted in other circumstances in which proxy
authority is defective or has been withheld with respect to any matter, these
non-voted shares are not deemed to be present or represented for purposes of
determining whether stockholder approval of that matter has been obtained, but
are counted for quorum purposes. Brokers holding stock for the accounts of their
clients who have not been given specific voting instructions as to a matter by
their clients may vote their clients' proxies in their own discretion. If the
amendment is not approved by the stockholders, our Certificate of Incorporation,
which authorizes the issuance of 50,000,000 shares of common stock, will
continue as currently in effect and neither the adjustment of the par value per
share nor the two-for-one split of the common stock will take place.
 
           THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED
                 AMENDMENT TO OUR CERTIFICATE OF INCORPORATION.
 
     We know of no other matters that will be presented for consideration at the
meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the shares
they represent as the Board of Directors may recommend. Discretionary authority
with respect to such other matters is granted by the execution of the enclosed
proxy.
 
                                        4

<PAGE>   8
 
                 INFORMATION REGARDING BENEFICIAL OWNERSHIP OF
               PRINCIPAL STOCKHOLDERS, DIRECTORS, AND MANAGEMENT
 
     The following table sets forth certain information known to us with respect
to the beneficial ownership of the our common stock as of September 30, 1999,
unless otherwise noted, by (i) all persons who are beneficial owners of five
percent or more of our common stock, (ii) each director, (iii) certain executive
officers and (iv) all current directors and executive officers as a group.
Unless otherwise noted, each of the stockholders has sole voting and dispositive
power with respect to the shares beneficially owned, subject to community
property laws, where applicable.
 

<TABLE>
<CAPTION>
                                                          SHARES            PERCENT OF SHARES
NAME AND ADDRESS, IF REQUIRED, OF BENEFICIAL OWNER  BENEFICIALLY OWNED    BENEFICIALLY OWNED(1)
--------------------------------------------------  ------------------    ---------------------
<S>                                                 <C>                   <C>
FMR Corp.(2).................................           2,340,919                 11.1%
  82 Devonshire Street
  Boston, MA 02109-3614
Wellington Management Company, LLP(3)........           1,652,590                  7.9%
  75 State Street
  Boston, MA 02109
Citigroup, Inc.(4)...........................           1,612,125                  7.7%
  153 East 53rd Street
  New York, NY 10043
Genentech, Inc.(5)...........................           1,508,293                  6.7%
  One DNA Way
  South San Francisco, CA 94080
Christopher J. Burman(6).....................             234,952                  1.1%
Charles C. Edwards, M.D.(7)..................              25,375                    *
Alan B. Glassberg, M.D.(8)...................              20,625                    *
Antonio J. Grillo-Lopez, M.D.(9).............             186,350                    *
Nabil Hanna, Ph.D.(10).......................             308,250                  1.4%
Kazuhiro Hashimoto(11).......................             696,667                  3.3%
Franklin P. Johnson, Jr.(12).................              86,737                    *
Robert W. Pangia(13).........................              23,500                    *
William H. Rastetter, Ph.D.(14)..............             558,898                  2.6%
William R. Rohn(15)..........................             241,633                  1.1%
Bruce R. Ross(16)............................              22,500                    *
The Honorable Lynn Schenk(17)................              39,500                    *
William D. Young(5)..........................           1,508,293                  6.7%
All directors and executive officers as a group
  (17 persons)(6 through 18).................           3,019,274                 18.5%
</TABLE>

 
---------------
  *  Less than one percent of our outstanding common stock.
 
 (1) Percentage of beneficial ownership is calculated assuming 20,997,819 shares
     of common stock were outstanding on September 30, 1999. Beneficial
     ownership is determined in accordance with the rules of the United States
     Securities and Exchange Commission ("SEC") and generally includes voting or
     dispositive power with respect to securities. Shares of common stock
     subject to stock options and non-voting convertible preferred stock
     currently exercisable or convertible or exercisable or convertible within
     60 days after September 30, 1999, are deemed outstanding for computing the
     percentage of the person holding such stock options and non-voting
     convertible preferred stock but are not deemed outstanding for computing
     the percentage of any other person.
 
 (2) Pursuant to a Schedule 13F filed with the SEC on August 16, 1999, FMR Corp.
     ("FMR") reported that, as of June 30, 1999, Fidelity Management & Research
     Company ("Fidelity"), a wholly-owned subsidiary of FMR and an investment
     advisor registered under Section 203 of the Investment Advisors Act of
     1940, Fidelity Financial Trust and Fidelity Mt. Vernon St. Trust had
     defined dispositive power and no voting power over 1,804,819 common shares.
     Fidelity Select Portfolios and Fidelity Advisor
 
                                        5

<PAGE>   9
 
Series I had defined dispositive power and no voting power over 448,600 common
shares. Fidelity Management Trust Company, a wholly-owned subsidiary of FMR and
a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934, was
     reported to have defined dispositive power and sole voting power over
     87,500 common shares.
 
 (3) Pursuant to a Schedule 13F filed with the SEC on August 16, 1999,
     Wellington Management Company, LLP ("WMC") reported that, as of June 30,
     1999, it had sole voting power over 78,600 common shares and no voting
     power over 1,135,500 common shares. Wellington Trust Company, NA was
     reported to have defined dispositive power and shared voting power over
     438,490 common shares.
 
 (4) Pursuant to a Schedule 13F filed with the SEC on August 17, 1999,
     Citigroup, Inc. reported that, as of June 30, 1999, it had sole voting
     power and defined dispositive power over 13,270 common shares. SSBC Fund
     Management Inc. (formerly Mutual Management Corp.) had sole voting power
     and defined dispositive power over 916,961 common shares. The
     Robinson-Humphrey Company, LLC had sole voting power and defined
     dispositive power over 5,092 common shares and no voting power and defined
     dispositive power over 7,081 common shares. Salomon Brothers Asset
     Management Inc. had sole voting power and defined dispositive power over
     63,000 common shares. Salomon Brothers Holding Company Inc. had sole voting
     power and defined dispositive power over 278,275 common shares and no
     voting power and defined dispositive power over 336,076 common shares.
     Salomon Smith Barney Holdings Inc. had sole voting power and defined
     dispositive power over 1,262,779 common shares and no voting power and
     defined dispositive power over 336,076 common shares. Salomon Smith Barney
     Inc. had sole voting power and defined dispositive power over 215,275
     common shares and no voting power and defined dispositive power over
     336,076 common shares. The Travelers Investment Management Company had sole
     voting power and defined dispositive power over 67,543 common shares.
 
 (5) Includes Non-voting Convertible Preferred Stock convertible into 1,390,793
     common shares held by Genentech, Inc. ("Genentech"). Mr. Young, a director
     of ours and the Chief Operating Officer of Genentech, disclaims beneficial
     ownership of the Non-voting Convertible Preferred Stock held by Genentech.
     Effective November 1, 1999, Mr. Young resigned his position as the Chief
     Operating Officer of Genentech to become Chairman of the Board and Chief
     Executive Officer of ViroLogic, Inc. Includes stock options to purchase
     17,500 common shares held by Mr. Young. Genentech disclaims beneficial
     ownership of such stock options.
 
 (6) Includes stock options to purchase 169,651 common shares held by Mr.
     Burman.
 
 (7) Includes stock options to purchase 24,375 common shares held by Dr.
     Edwards.
 
 (8) Includes stock options to purchase 20,625 common shares held by Dr.
     Glassberg.
 
 (9) Includes stock options to purchase 136,023 common shares held by Dr.
     Grillo-Lopez.
 
(10) Includes stock options to purchase 288,994 common shares held by Dr. Hanna.
 
(11) Includes 666,667 common shares held by Zenyaku Kogyo Co. Mr. Hashimoto, a
     director of ours and the President of Zenyaku Kogyo Co., disclaims
     beneficial ownership of such common shares. Includes stock options to
     purchase 30,000 common shares held by Mr. Hashimoto.
 
(12) Includes 34,303 common shares beneficially owned by Asset Management
     Partners. Mr. Johnson, a Director of ours and the General Partner of Asset
     Management Partners, disclaims beneficial ownership of such common shares
     except to the extent of his pecuniary interest arising from his interest in
     Asset Management Partners. Includes stock options to purchase 30,000 common
     shares held by Mr. Johnson.
 
(13) Includes stock options to purchase 23,500 common shares held by Mr. Pangia.
 
(14) Includes stock options to purchase 483,460 common shares held by Dr.
     Rastetter.
 
(15) Includes stock options to purchase 224,156 common shares held by Mr. Rohn.
 
(16) Includes stock options to purchase 22,500 common shares held by Mr. Ross.
 
(17) Includes stock options to purchase 28,750 common shares held by Ms. Schenk.
 
(18) Includes stock options to purchase 1,949,614 common shares and Non-voting
     Convertible Preferred Stock convertible into 1,390,793 common shares.
 
                                        6

<PAGE>   10


                                   APPENDIX A




                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                        IDEC PHARMACEUTICALS CORPORATION

                     PURSUANT TO THE GENERAL CORPORATION LAW
                            OF THE STATE OF DELAWARE



               IDEC Pharmaceuticals Corporation (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify:

               FIRST: The original Certificate of Incorporation of IDEC
Pharmaceuticals Corporation was filed with the Secretary of State of Delaware on
April 1, 1997.

               SECOND: The Amended and Restated Certificate of Incorporation,
as herein amended, and the Rights, Preferences and Restrictions of the Series X
Junior Participating Preferred Stock of the Corporation are hereby restated and
integrated into the single instrument which is hereinafter set forth, and which
is entitled Amended and Restated Certificate of Incorporation of IDEC
Pharmaceuticals Corporation, without any further amendments other than the
amendments herein certified and without any discrepancy between the provisions
of the Amended and Restated Certificate of Incorporation, as herein amended, and
the Rights, Preferences and Restrictions of the Series X Junior Participating
Preferred Stock and the provisions of the said single instrument hereinafter set
forth.

               THIRD: The amendment and the restatement of the Amended and
Restated Certificate of Incorporation set forth herein has been duly adopted in
accordance with the provisions of Sections 245, 242 and 211 of the General
Corporation Law of the State of Delaware by the directors and stockholders of
the Corporation.

               FOURTH: Effective upon the filing of this Amended and Restated
Certificate of Incorporation, each issued and outstanding share of Common Stock
of the Corporation shall be split into two shares of Common Stock.

               FIFTH: The text of the Corporation's Amended and Restated
Certificate of Incorporation so adopted reads in full as set forth in Exhibit A
attached hereto and is hereby incorporated herein by this reference.




<PAGE>   11


               IN WITNESS WHEREOF, IDEC Pharmaceuticals Corporation has caused
this Amended and Restated Certificate of Incorporation to be signed by the
President and the Secretary this ____ day of December, 1999.



                                    IDEC PHARMACEUTICALS CORPORATION



                                    By: ________________________________________
                                         William H. Rastetter, Ph.D.
                                         Chairman, President and Chief Executive
                                         Officer


ATTEST:


By: __________________________________
    Kenneth J. Woolcott, Secretary


















                                       2


<PAGE>   12

                                   EXHIBIT A


                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                        IDEC PHARMACEUTICALS CORPORATION



                                    ARTICLE I

               The name of this corporation is IDEC Pharmaceuticals Corporation.


                                   ARTICLE II

               The address of the registered office of the corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at such address is The Corporation
Trust Company.


                                   ARTICLE III

               The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the Delaware General Corporation Law.


                                   ARTICLE IV

               (A) Classes of Stock. This corporation is authorized to issue two
classes of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares which the corporation is authorized to issue
is Two Hundred Eight Million (208,000,000) shares. Two Hundred Million
(200,000,000) shares shall be Common Stock, par value $0.0005 per share, and
Eight Million (8,000,000) shares shall be Preferred Stock, par value $0.001 per
share.

               (B) Rights, Preferences and Restrictions of Preferred Stock. The
Preferred Stock authorized by this Certificate of Incorporation may be issued
from time to time in series. The rights, preferences, privileges, and
restrictions granted to and imposed on the Series A Preferred Stock, which
series shall consist of One Million Seven Hundred Fifty Thousand (1,750,000)
shares, which may be issued in seven subseries designated as (i) "Series A-1
Preferred Stock," consisting of One Hundred Thousand (100,000) authorized
shares; (ii) "Series A-2 Preferred Stock," consisting of One Hundred Fifty
Thousand (150,000) authorized shares; (iii) "Series A-3 Preferred Stock,"
consisting of Seven Hundred Thousand (700,000) authorized shares; (iv) "Series
A-4 Preferred Stock," consisting of Two Hundred Fifty Thousand (250,000)
authorized shares; (v) "Series A-5 Preferred Stock," consisting of Three Hundred
Fifty Thousand (350,000) authorized shares; (vi) "Series A-6 Preferred Stock,"
consisting of One Hundred Thousand (100,000) authorized shares; and (vii)
"Series A-7 Preferred Stock," consisting of One Hundred Thousand (100,000)
authorized shares; and on the Series X Junior Participating Preferred Stock,
consisting of Fifty-Eight Thousand (58,000) authorized shares, are as set forth






                                       1

<PAGE>   13

below in this Article IV(B). The Board of Directors is hereby authorized to fix
or alter the rights, preferences, privileges and restrictions granted to or
imposed upon additional series of Preferred Stock, and the number of shares
constituting any such additional series and the designation thereof, or of any
of them. Subject to compliance with applicable protective voting rights which
have been or may be granted to the Preferred Stock or series thereof in the
Corporation's Certificate of Incorporation, as amended and restated from time to
time, and requirements and restrictions of applicable law ("Protective
Provisions"), the rights, privileges, preferences and restrictions of any such
additional series may be subordinated to, pari passu with (including, without
limitation, inclusion in provisions with respect to liquidation and acquisition
preferences, redemption and/or approval of matters by vote or written consent),
or senior to any of those of any present or future class or series of Preferred
or Common Stock. Subject to compliance with applicable Protective Provisions,
the Board of Directors is also authorized to increase the number of shares of
any series (other than the Series A Preferred Stock), or decrease the number of
shares of any series prior or subsequent to the issue of that series, but not
below the number of shares of such series then outstanding. In case the number
of shares of any series shall be so decreased, the shares constituting such
decrease shall resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series. The Series A
Preferred Stock and the subseries thereof shall have the relative rights,
preferences and restrictions set forth in Annex A hereto, which is incorporated
by reference herein and made a part hereof. The Series X Junior Participating
Preferred Stock shall have the relative rights, preferences and restrictions set
forth in Annex B hereto, which is incorporated by reference herein and made a
part hereof.

               (C) Common Stock.

                   1. Dividend Rights. Subject to the prior rights of holders of
all classes of stock at the time outstanding having prior rights as to
dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.

                   2. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation shall be
distributed to the holders of the Common Stock as provided in Annex A and Annex
B hereto.

                   3. Redemption. The Common Stock is not redeemable.

                   4. Voting Rights. The holder of each share of Common Stock
shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of the Corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.


                                    ARTICLE V

               The Board of Directors may from time to time make, amend,
supplement or repeal the bylaws of the corporation by the requisite affirmative
vote of directors as set forth in the bylaws of the corporation; provided,
however, that the stockholders may change or repeal any bylaw adopted by the
Board of Directors by the requisite affirmative vote of stockholders as






                                       2

<PAGE>   14

set forth in the bylaws of the corporation; and, provided further, that no
amendment or supplement to the bylaws of the corporation adopted by the Board of
Directors shall vary or conflict with any amendment or supplement thus adopted
by the stockholders.


                                   ARTICLE VI

               The number of directors of the corporation shall be fixed from
time to time by, or in the manner provided in, the bylaws or amendment thereof
duly adopted by the board of directors or by the stockholders of the
corporation.


                                   ARTICLE VII

               Elections of directors need not be by written ballot unless the
bylaws of the corporation shall so provide. The directors shall be classified
into three classes, as nearly equal in number as possible as determined by the
board of directors, with (i) the term of office of the first class to expire at
the 1998 Annual Meeting of Stockholders, (ii) the term of office of the second
class to expire at the 1999 Annual Meeting of Stockholders and (iii) the term of
office of the third class to expire at the 2000 Annual Meeting of Stockholders.
At each Annual Meeting of Stockholders, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to expire at
the third succeeding Annual Meeting of Stockholders after their election.
Additional directorships resulting from an increase in the number of directors
shall be apportioned among the classes as equally as possible as determined by
the board of directors.


                                  ARTICLE VIII

               The Corporation is to have perpetual existence.


                                   ARTICLE IX

               Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws of the corporation may provide. The books of the
corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the board of directors or in the bylaws of the corporation.


                                    ARTICLE X

               A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is amended
after approval of this Article to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director






                                       3

<PAGE>   15

shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended. Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right or
protection of a director of the Corporation with respect to any acts or
omissions of such director occurring prior to such repeal or modification.


                                   ARTICLE XI

               To the fullest extent permitted by applicable law, the
Corporation is also authorized to provide indemnification of (and advancement of
expenses to) such agents (and any other persons to which Delaware law permits
the Corporation to provide indemnification) though bylaw provisions, agreements
with such agents or other persons, vote of stockholders or disinterested
directors or otherwise, in excess of the indemnification and advancement
otherwise permitted by Section 145 of the Delaware General Corporation Law,
subject only to limits created by applicable Delaware law (statutory or
non-statutory), with respect to actions for breach of duty to the Corporation,
its stockholders, and others. Any repeal or modification of any of the foregoing
provisions of this Article XI shall not adversely affect any right or protection
of a director, officer, agent or other person existing at the time of, or
increase the liability of any director of the Corporation with respect to any
acts or omissions of such director, officer or agent occurring prior to such
repeal or modification.


                                   ARTICLE XII

               The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.








                                       4


<PAGE>   16


                                                                         ANNEX A


                   RIGHTS, PREFERENCES AND RESTRICTIONS OF THE
           SERIES A-1, A-2, A-3, A-4, A-5, A-6 AND A-7 PREFERRED STOCK


               The rights, preferences, restrictions and other matters relating
to the Series A Preferred Stock are as follows:

                   1. Certain Definitions.

               "Affiliate" means an entity that, directly or indirectly, through
one or more intermediaries, is controlled by IDEC or Genentech. As used herein,
the term "control" will mean the direct or indirect ownership of fifty percent
(50%) or more of the stock having the right to vote for directors thereof or the
ability to otherwise control the management of the corporation or other business
entity.

               "Approval Process Event" means a determination by the Joint
Development Committee that the formulation of C2B8 and the process for C2B8
recovery are commercially viable as more fully described in Appendix I to the
Development Plan.

               "C2B8" means that certain monoclonal antibody to B cells more
particularly described on Exhibit B to the Collaboration Agreement.

               "Co-Promotion Territory" means the United States and Canada.

               "Collaboration Agreement" shall mean the Collaboration Agreement
dated the Effective Date between the Corporation and Genentech.

               "Controlled," unless specified otherwise herein, means possession
of the ability to grant a license or sublicense as provided for herein without
violating the terms of any agreement or other arrangement with any entity other
than the Corporation or Genentech.

               "Development Plan" means the comprehensive plan for the
development of C2B8, designed to generate the preclinical, process
development/manufacturing scale-up, clinical and regulatory information required
to obtain Regulatory Approval in the Co-Promotion Territory, and may be modified
from time to time by the JDC. Development shall refer to all activities related
to preclinical testing, toxicology, formulation, process development,
manufacturing scale-up, quality assurance/quality control, clinical studies and
regulatory affairs for a Licensed Product in connection with obtaining
Regulatory Approvals of such Products.

               "Effective Date" means March 16, 1995.

               "First Anniversary Date" means the date which is twelve (12)
calendar months following March 16, 1995.






                                      A-1.

<PAGE>   17

               "FDA Approval Date" means the date on which the United States
Food and Drug Administration grants Regulatory Approval of C2B8 for manufacture
and sale in the United States.

               "FDA Approval Event" means the FDA Approval Date occurs on or
before the Fifty-Four Month Anniversary Date.

               "Fifty-Four Month Anniversary Date" means that date which is
fifty-four (54) calendar months following March 16, 1995.

               "Genentech" means Genentech, Inc., a Delaware corporation, and
its Affiliates.

               "IDEC" means IDEC Pharmaceuticals Corporation, a Delaware
corporation, and its Affiliates.

               "Joint Development Committee" or "JDC" means that committee
established pursuant to Section 3.2 of the Collaboration Agreement.

               "Licensed Product(s)" means any compound or composition of matter
whose mechanism of action is initiated by interaction with the CD20 or CD19
B-cell determinant (including C2B8, but excluding Y2B8 (as defined in Section
2.2. of the Collaboration Agreement) and In2B8 (as defined in Section 2.2. of
the Collaboration Agreement) unless the option set forth in Section 2.3 of the
Collaboration Agreement is exercised) (a) developed by IDEC or (b) the
intellectual property rights to which are owned or Controlled, in whole or in
part, by IDEC, in either (a) or (b) as of the Effective Date or during the term
of the Collaboration Agreement.

               "Major European Country" means the United Kingdom, Italy,
Germany, France or Spain.

               "ML/MS Agreement" means the Preferred and Common Stock Purchase
Agreement dated March 16, 1995 by and between ML/MS Associates, L.P. and IDEC,
whereby IDEC reacquired the rights to certain technologies for the treatment of
B-cell lymphomas funded and developed by ML/MS Partners pursuant to a
Development Agreement and related agreements, dated as of February 17, 1988 and
October 27, 1988.

               "ML/MS Partners" shall mean ML Technology Ventures, L.P. and
Morgan Stanley Ventures, L.P., and any assignee or successor to ML/MS Partners.

               "National Exchange" shall mean the Nasdaq National Market or any
other national exchange on which the Common Stock of the Corporation is listed.

               "Option Agreement" means the Option Agreement to be dated as of
the Effective Date between Genentech and the Corporation.

               "Patent Milestone Event" means the notice of grant in the
European Patent Office or issuance in a Major European Country of the first
valid and enforceable letters patent covering C2B8.






                                      A-2.

<PAGE>   18

               "Preferred Stock Purchase Agreement" means the Preferred Stock
Purchase Agreement dated the Effective Date between the Corporation and
Genentech.

               "Regulatory Approval" means any approvals (including pricing and
reimbursement approvals), licenses, registrations or authorizations of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the manufacture and sale of a Licensed
Product in a regulatory jurisdiction.

               "Registration Rights Agreement" means the 1995 Registration
Rights Agreement dated as of the Effective Date between Genentech, ML/MS
Associates, L.P. and the Corporation.

               "Third Anniversary Date" means that date which is thirty-six
months following March 16, 1995.

                   2. Dividend Provisions.

                   a. Series A-1, A-2, A-3, A-4, A-5 and A-6 Preferred Stock
Dividend Provisions. No dividend or other distribution shall be paid, or
declared and set apart for payment (other than dividends of Common Stock on the
Common Stock of the Corporation and dividends payable on the Series A-7
Preferred Stock pursuant to Section 2(b) below), on the shares of any class or
series of capital stock of the Corporation unless and until a dividend of equal
or greater amount (calculated as if the shares of Series A-1, A-2, A-3, A-4, A-5
and A-6 Preferred Stock had been converted Common Stock on the date the dividend
is declared) is first declared and paid with respect to any series of Series A
Preferred Stock.

                   b. Series A-7 Preferred Stock Dividend Provisions. Cumulative
dividends shall accrue from the date of issuance of the Series A-7 Preferred
Stock at a fluctuating rate per annum equal to the sum of two percent (2%) plus
the "Prime Rate" as announced by the Bank of America, San Francisco Branch, from
time to time. Accrued dividends shall be payable quarterly in arrears on the
first day of each quarter, commencing with the first day of the first quarter
following the earlier of the FDA Approval Date or the Fifty-Four Month
Anniversary Date. On the earlier of the FDA Approval Date or the Fifty-Four
Month Anniversary Date, all dividends accrued through such date shall be paid.
Any accumulation of dividends on the Series A-7 Preferred Stock shall not bear
interest. No dividend or other distribution shall be paid, or declared and set
apart for payment (other than dividends of Common Stock on the Common Stock of
the Corporation), on the shares of any class or series of capital stock of the
Corporation unless and until such dividends have been paid. The Corporation
shall take any and all corporate action necessary to declare and pay such
dividends described in this Section 2(b).

                   3. Liquidation Preference. The holders of Series A Preferred
Stock share a liquidation preference as follows:

                   a. Series A-1, A-2, A-3, A-4, A-5, A-6 and A-7 Preferred
Stock Liquidation Preference. In the event of any liquidation, dissolution or
winding up of this Corporation, either voluntary or involuntary, subject to the
rights of series of Series A Preferred Stock that may from time to time come
into existence, the holders of Series A-1, Series A-2, Series A-3, Series A-4,
Series A-5, Series A-6 and Series A-7 Preferred Stock, shall be entitled to
receive, prior and in preference to any distribution of any of the assets of
this Corporation to






                                      A-3.

<PAGE>   19

the holders of Common Stock and any other series of Series A Preferred Stock by
reason of their ownership thereof, an amount per share equal to the Original
Issue Price (defined below) for such subseries plus an amount equal to (i) the
declared but unpaid dividends and distributions on such share in the case of the
Series A-1, Series A-2, Series A-3, Series A-4, Series A-5 and Series A-6
Preferred Stock and (ii) the accrued but unpaid dividends and distributions on
such share in the case of the Series A-7 Preferred Stock. If upon the occurrence
of such event, the assets and funds thus distributed among the holders of the
Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6 and
Series A-7 Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then, subject to the rights
of series of Series A Preferred Stock that may from time to time come into
existence, the entire assets and funds of the Corporation legally available for
distribution shall be distributed ratably among the holders of the Series A-1,
Series A-2, Series A-3, Series A-4, Series A-5, Series A-6 and Series A-7
Preferred Stock on an as-converted to Common Stock basis in proportion to the
amount of such stock owned by each such holder. The "Original Issue Price" for
each subseries shall mean the price at which the initial share of such subseries
is issued.

                   b. Upon the completion of the distribution required by
subparagraph (a) of this Section 3 and any other distribution that may be
required with respect to series of Series A Preferred Stock that may from time
to time come into existence, if assets remain in this Corporation, the holders
of the Common Stock of this Corporation, shall receive all of the remaining
assets of this Corporation.

                   c. If (i) a single shareholder or group of affiliated
shareholders, other than a holder of the Series A Preferred Stock, or a
Controlled Affiliate thereof, who would be required to file a Schedule 13D under
the Securities Exchange Act of 1934, as amended, acquires or obtains the right
to acquire voting stock of the Corporation so that its total holdings of such
stock equal or exceed fifty percent (50%) of the then outstanding voting stock
of the Corporation, or (ii) any third party (i.e., a party other than a holder
or a Controlled Affiliate) acquires or obtains the right to acquire all or
substantially all of the assets of the Corporation, then such event shall be
considered a liquidation under this Section 3. For purposes hereunder,
"Controlled Affiliate" shall mean a party that, directly or indirectly, through
one or more intermediaries, is controlled by such holder.

                   4. Series A Preferred Stock Conversion. The holders of the
Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6 and
Series A-7 Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):

                   a. Series A-1, Series A-2, Series A-3, Series A-4 and Series
A-5, Preferred Stock Conversion. Each share of Series A-1, Series A-2, Series
A-3, Series A-4 and Series A-5 Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the date of issuance of such
share at the office of this Corporation or any transfer agent for such stock,
into ten (10) fully paid and nonassessable shares of Common Stock (the
"Conversion Rate" for the Series A-1 Preferred Stock, Series A-2 Preferred
Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock and the Series A-5
Preferred Stock).






                                      A-4.

<PAGE>   20

                   b. [Intentionally omitted.]

                   c. Series A-6 Preferred Stock Conversion.

                      (1) "Series A-6 Conversion Number" means the number
calculated according to the following formulas: (i) If the FDA Approval Date
occurs prior to the Fifty-Four Month Anniversary Date, then the Series A-6
Conversion Number shall equal the average closing price for the Common Stock
during the period beginning on the FDA Approval Date and ending on the date
which is twenty (20) trading days following the FDA Approval Date, as reported
on the National Exchange; or (ii) if the Fifty-Four Month Anniversary Date
occurs prior to the FDA Approval Date, then the Series A-6 Conversion Number
shall equal the average closing price for the Common Stock during the period
beginning on the date which is twenty (20) trading days prior to the Fifty-Four
Month Anniversary Date and ending on the Fifty-Four Month Anniversary Date, as
reported on the National Exchange.

                      (2) The Series A-6 Preferred Stock shall not be
convertible until the earlier of (i) twenty (20) trading days following the FDA
Approval Date or (ii) the Fifty-Four Month Anniversary Date. Thereafter, each
share of Series A-6 Preferred Stock shall be convertible, at the option of the
holder thereof, into the number of shares of fully paid and nonassessable shares
of Common Stock as equals seventy-five (75) divided by the Series A-6 Conversion
Number (the "Conversion Rate" for the Series A-6 Preferred Stock).

                   d. Series A-7 Preferred Stock Conversion.

                      (1) "Series A-7 Conversion Number" means the average
closing price for the Common Stock during the period beginning on the twentieth
(20th) trading day preceding the date on which the holder gives notice of such
holder's intention to convert (the "Notice Date") and ending on the Notice Date,
as reported on the National Exchange.

                      (2) Each share of Series A-7 Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the
Fifty-Four Month Anniversary Date at the office of this Corporation or any
transfer agent for such stock, into such number of shares of fully paid and
nonassessable shares of Common Stock as equals (A) one hundred (100) divided by
(B) the Series A-7 Conversion Number (the "Conversion Rate" for the Series A-7
Preferred Stock).

                   e. Automatic Conversion. (i) Each share of Series A-1, Series
A-2, Series A-3, Series A-4 and Series A-5 Preferred Stock; (ii) each share of
Series A-6 Preferred Stock that has become convertible at the option of the
holder pursuant to Section 4(c); and (iii) each share of Series A-7 Preferred
Stock that has become convertible at the option of the holder pursuant to
Section 4(d), shall, in each case, automatically be converted into shares of
Common Stock at its then effective Conversion Rate immediately upon the transfer
of ownership by the initial holder to a third party which is not an Affiliate of
such holder. For purposes hereunder, "Affiliate" shall mean a party that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by such holder.

                   f. Mechanics of Conversion of Series A Preferred Stock.
Before any holder of Series A Preferred Stock shall be entitled to convert the
same into shares of Common






                                      A-5.

<PAGE>   21

Stock, such holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of this Corporation or of any transfer agent for
the Series A Preferred Stock, and shall give written notice to this Corporation
at its principal corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or certificates for
shares of Common Stock are to be issued; provided, however, that in the event of
an automatic conversion pursuant to Section 4(e), the outstanding shares of
Series A Preferred Stock shall be converted automatically without any further
action by the holder of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent, and provided further that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such automatic
conversion unless the certificates evidencing such shares of Series A Preferred
Stock are delivered to the Corporation or its transfer agent as provided herein.
This Corporation shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Preferred Stock, or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid and shall promptly pay
in cash or, to the extent sufficient funds are not then legally available
therefor, in Common Stock (at the Common Stock's fair market value determined by
the Board of Directors as of the date of such conversion), any declared and
unpaid dividends on the shares of Series A-1, Series A-2, Series A-3, Series
A-4, Series A-5 and Series A-6 Preferred Stock being converted and any accrued
but unpaid dividends on the shares of Series A-7 Preferred Stock being
converted. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series A
Preferred Stock to be converted, or in the case of automatic conversion pursuant
to Section 4(e), on the date of transfer to the new non-Affiliate holder; and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date.

                   g. Conversion Rate Adjustments of Series A Preferred Stock
for Splits and Combinations. The Conversion Rate of the Series A-1, Series A-2,
Series A-3, Series A-4, Series A-5, Series A-6 and Series A-7 Preferred Stock
shall be subject to adjustment from time to time as follows:

                      (1) In the event the Corporation should at any time or
from time to time after the date upon which any shares of Series A Preferred
Stock were first issued (the "Purchase Date"), fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Rate of the Series A Preferred Stock shall be appropriately
increased so that the number of shares of Common Stock issuable on conversion of
each share of such series shall be increased in proportion to such increase of
the aggregate of shares of Common Stock outstanding and those issuable with
respect to such Common Stock Equivalents.






                                      A-6.

<PAGE>   22

                      (2) If the number of shares of Common Stock outstanding at
any time after the Purchase Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the Conversion Rate for the applicable series of Series A Preferred
Stock shall be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be decreased in
proportion to such decrease in outstanding shares. Any adjustment under Section
4(g)(1) or (2) shall become effective at the close of business on the date the
split, subdivision, stock dividend, other distribution or combination becomes
effective.

                   h. Distributions. In the event this Corporation shall declare
a distribution payable in securities of other persons, evidences of indebtedness
issued by this Corporation or other persons, assets (excluding cash dividends),
then, in each such case for the purpose of this subsection 4(h), the holders of
the Series A Preferred Stock shall be entitled to a proportionate share of any
such distribution as though they were the holders of the number of shares of
Common Stock of the Corporation into which their shares of Series A Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of the Corporation entitled to receive such
distribution.

                   i. Recapitalizations. If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than a subdivision
or combination provided for elsewhere in this Section 4 or a change in control
provided for in Section 3(c)) provision shall be made so that the holders of the
Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6 and
Series A-7 Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series A Preferred Stock the number of shares of stock or
other securities or property of the Corporation or otherwise, to which a holder
of Common Stock deliverable upon conversion would have been entitled on such
recapitalization, all subject to further adjustment as provided herein or with
respect to such other securities or property by the terms thereof. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 4 with respect to the rights of the holders of the Series A
Preferred Stock after the recapitalization to the end that the provisions of
this Section 4 (including adjustment of the applicable Conversion Rate then in
effect and the number of shares purchasable upon conversion of the Series A
Preferred Stock) shall be applicable after that event as nearly equivalent as
may be practicable.

                   j. No Impairment. This Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by this Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock against
impairment.

                   k. No Fractional Shares and Certificate as to Adjustments.

                      (1) No fractional shares shall be issued upon the
conversion of any share or shares of the Series A Preferred Stock, and the
number of shares of Series A Preferred Stock or Common Stock to be issued shall
be rounded to the nearest whole share.






                                      A-7.

<PAGE>   23

Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Series A Preferred
Stock the holder is at the time converting into Series A Preferred Stock or
Common Stock and the number of shares of Series A Preferred Stock or Common
Stock issuable upon such aggregate conversion.

                      (2) Upon the occurrence of each adjustment or readjustment
of the Conversion Rate of Series A Preferred Stock pursuant to this Section 4,
this Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. This Corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (a) such adjustment and
readjustment, (b) the Conversion Rate for such Series A Preferred Stock at the
time in effect, and (c) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the conversion
of a share of Series A Preferred Stock.

                   l. Notices of Record Date. In the event of any taking by this
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
Corporation shall mail to each holder of Series A Preferred Stock, at least 20
days prior to the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.

                   m. Reservation of Stock Issuable Upon Conversion. This
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A-1, Series A-2, Series A-3, Series A-4,
Series A-5, Series A-6 and Series A-7 Preferred Stock, respectively, such number
of its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Series A-1, Series A-2, Series
A-3, Series A-4, Series A-5, Series A-6 and Series A-7 Preferred Stock,
respectively, and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series A-1, Series A-2, Series A-3, Series A-4, Series
A-5, Series A-6 and Series A-7 Preferred Stock, respectively, in addition to
such other remedies as shall be available to the holder of such Preferred Stock,
this Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite
shareholder approval of any necessary amendment to its Certificate of
Incorporation.

                   n. Notices. Any notice required to be given to the holders of
shares of Series A Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of this Corporation.






                                      A-8.

<PAGE>   24

                      5. Voting Rights. The holders of shares of Series A
Preferred Stock shall not have any voting rights, except as required under the
General Corporation Law of Delaware.

                      6. Status of Unissued, Converted or Redeemed Stock. In the
event any shares shall be converted pursuant to Section 4 hereof, the shares so
converted shall be cancelled and shall not be issuable by the Corporation. The
Certificate of Incorporation of this Corporation shall be appropriately amended
to effect the corresponding reduction in the Corporation's authorized capital
stock. In the event the Corporation issues less than the number of authorized
shares of any subseries of Series A Preferred Stock, the Certificate of
Incorporation of this Corporation shall be appropriately amended to effect a
corresponding reduction in such subseries of Preferred Stock.

                      7. Cancellation of Series A-3 Preferred Stock. If the
Approval Process Event has not occurred on or before the First Anniversary Date
and if the Patent Milestone Event occurs prior to the Third Anniversary Date,
then this Corporation may, at its option, cancel that number of shares of Series
A-3 Preferred Stock (or if an insufficient number of shares of Series A-3
Preferred Stock are outstanding, then an equivalent number of outstanding shares
of other subseries of Series A Preferred Stock or Common Stock) equal to
$2,500,000 divided by the Series A-3 Cancellation Price, where the "Series A-3
Cancellation Price" equals the higher of the (i) price paid per share for the
Series A-3 Preferred Stock on the date of issuance, or (ii) fair market value of
the Series A-3 Preferred Stock calculated as (A) the average closing price for
the Corporation's Common Stock during the period beginning twenty-three (23)
trading days prior to the date of cancellation and ending three (3) trading days
prior to the date of cancellation, as reported on the National Exchange,
multiplied by (B) the Conversion Rate for the Series A-3 Preferred Stock.

                      8. Cancellation of Series A-7 Preferred Stock. If the FDA
Approval Date occurs on or before the Fifty-Four Month Anniversary Date, the
Corporation shall cancel all of the then outstanding shares of Series A-7
Preferred Stock by crediting therefor an amount equal to the liquidation
preference of such shares (including accrued but unpaid dividends) against the
milestone payments due the Corporation pursuant to the Collaboration Agreement,
such amount to be credited first to the milestone payment payable upon
Regulatory Approval in the United States (as described in Section 7.4 of the
Collaboration Agreement) and second, to the extent the aforesaid liquidation
preference remains unpaid, to the milestone payment then payable on the date of
regulatory approval in the first Major European Country (as described in Section
7.4 of the Collaboration Agreement) (collectively, the "Milestone Payments"). If
at any time there is a Default Event (defined below), the Corporation shall
immediately cancel all of the outstanding shares of Series A-7 Preferred Stock
by paying the holders in cash an amount equal to the liquidation preference of
such shares (including accrued but unpaid dividends) (an "Acceleration Event").
If the Corporation is unable to cancel such shares of Series A-7 Preferred Stock
within seven (7) calendar days from the occurrence of the Default Event, then
notwithstanding any provision herein to the contrary, the holder of such shares
may, at its sole election, convert such shares into shares of Common Stock of
the Corporation equal to the liquidation preference of such shares (including
accrued but unpaid dividends) divided by the Original Issue Price for such
subseries multiplied by the Conversion Rate for the Series A-7 Preferred Stock.
If there is an Acceleration Event and the holder receives cash or converts to
Common Stock in exchange for cancellation of the outstanding shares of Series
A-7 Preferred Stock as described in the preceding






                                      A-9.

<PAGE>   25

sentence, the holder shall be obligated to pay, in cash, to the Corporation, any
and all Milestone Payments as such payments become due under the Collaboration
Agreement.

               A "Default Event" shall mean the occurrence of any of the
following events:

                      (i) Distributions. Failure to make a required payment or
distribution hereunder;

                      (ii) Material Adverse Event. At the end of any fiscal
quarter, the total cash, cash equivalents and marketable debt investments of the
Corporation shall be valued at less than the sum of the principal of and unpaid
accrued interest on (i) all indebtedness of the Corporation to banks, insurance
companies or financial institutions regularly engaged in the business of lending
money, which is for money borrowed by the Corporation; (ii) all purchase money
security interests in an amount not to exceed $5,000,000 (as defined in the
California Uniform Commercial Code); and (iii) the liquidation preference of the
outstanding Series A-7 Preferred Stock. In such event, the Corporation shall
provide holder with written notice thereof within twenty-four (24) hours of
determining that such event has occurred.

                      (iii) Bankruptcy Commenced by the Corporation. If the
Corporation:

                            (a) shall commence any proceeding in bankruptcy or
seek reorganization, arrangement, readjustment of its debts, dissolution,
liquidation, winding-up, composition or any other relief under the United States
Bankruptcy Act, as amended, or under any other insolvency, liquidation,
dissolution, arrangement, composition, readjustment of debt or any other similar
act or law, of any jurisdiction, domestic or foreign, now or hereafter existing;

                            (b) shall admit is inability to pay its debts as
they mature in any petition or pleading in connection with any such proceeding;

                            (c) shall apply for, or, in writing, consent to or
acquiesce in, an appointment of a receiver, conservator, trustee or similar
officer for it or for all or substantially all of its assets;

                            (d) shall make a general assignment for the benefit
of creditors; or

                            (e) shall admit in writing its inability to pay its
debts as they mature;

                      (iv)  Bankruptcy Commenced Against the Corporation. If any
proceedings are commenced or any other action is taken against the Corporation
in bankruptcy or seeking reorganization, arrangement, readjustment of its debts,
dissolution, liquidation, winding-up, composition or any other relief under the
United States Bankruptcy Act, as amended, or under any other insolvency,
reorganization, liquidation, dissolution, arrangement, composition, readjustment
of debt or any other similar act or law, of any jurisdiction, domestic or
foreign, now or hereafter existing; or a receiver, conservator, trustee or
similar officer for the






                                     A-10.

<PAGE>   26

Corporation or for all or substantially all of its assets is appointed; and in
each such case, such event continues for ninety (90) days undismissed, unbounded
and undischarged; and

                            (v) Material Breach. (A) Any breach of any material
representation, warranty, covenant or obligation of the Corporation under (i)
the Collaboration Agreement, which breach is not cured within sixty (60) days of
written notice thereof from Genentech (or if such breach is not susceptible of
cure within such period, the Corporation is not making diligent good faith
efforts to cure such breach); (ii) the Preferred Stock Purchase Agreement, the
Option Agreement or the Registration Rights Agreement, which breach is not cured
within thirty (30) days after receipt of written notice of such breach from
Genentech to the Corporation; or (iii) the ML/MS Agreement, to the extent such
breach materially adversely affects the Corporation's ability to perform its
obligations under the Collaboration Agreement; or (B) if, at any time, any of
the Collaboration Agreement, the Series A Preferred Stock Agreement, the Option
Agreement or the Registration Rights Agreement ceases to be in full force and
effect.























                                     A-11.


<PAGE>   27

                                                                         ANNEX B


                   RIGHTS, PREFERENCES AND RESTRICTIONS OF THE
                  SERIES X JUNIOR PARTICIPATING PREFERRED STOCK


               The rights, preferences, restrictions and other matters relating
to the Series X Junior Participating Preferred Stock shall be as follows:

               Section 1. Designation and Amount. The shares of such series
shall be designated as "Series X Junior Participating Preferred Stock" (the
"Series X Preferred Stock") and the number of shares constituting the Series X
Preferred Stock shall be Fifty Eight Thousand (58,000). Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series X Preferred Stock
to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation which are convertible into Series X Preferred Stock.

               Section 2. Dividends and Distributions.

               (A) Subject to the rights of the holders of any shares of any
        series of Preferred Stock (or any similar stock) ranking prior and
        superior to the Series X Preferred Stock with respect to dividends, the
        holders of shares of Series X Preferred Stock, in preference to the
        holders of the Common Stock of the Corporation (the "Common Stock"), and
        of any other junior stock, shall be entitled to receive, when, as and if
        declared by the Board of Directors out of funds legally available for
        the purpose, quarterly dividends payable in cash on the first day of
        March, June, September and December in each year (each such date being
        referred to herein as a "Quarterly Dividend Payment Date"), commencing
        on the first Quarterly Dividend Payment Date after the first issuance of
        a share or fraction of a share of Series X Preferred Stock, in an amount
        per share (rounded to the nearest cent) equal to, subject to the
        provision for adjustment hereinafter set forth, 1000 times the aggregate
        per share amount of all cash dividends, and 1000 times the aggregate per
        share amount (payable in kind) of all non-cash dividends or other
        distributions, other than a dividend payable in shares of Common Stock
        or a subdivision of the outstanding shares of Common Stock (by
        reclassification or otherwise), declared on the Common Stock since the
        immediately preceding Quarterly Dividend Payment Date or, with respect
        to the first Quarterly Dividend Payment Date, since the first issuance
        of any share or fraction of a share of Series X Preferred Stock. In the
        event the Corporation shall at any time declare or pay any dividend on
        the Common Stock payable in shares of Common Stock, or effect a
        subdivision or combination or consolidation of the outstanding shares of
        Common Stock (by reclassification or otherwise than by payment of a
        dividend in shares of Common Stock) into a greater or lesser number of
        shares of Common Stock, then in each such case the amount to which
        holders of shares of Series X Preferred Stock were entitled immediately
        prior to such event under the preceding sentence shall be adjusted by
        multiplying such amount by a






                                      B-1.

<PAGE>   28

        fraction, the numerator of which is the number of shares of Common Stock
        outstanding immediately after such event and the denominator of which is
        the number of shares of Common Stock that were outstanding immediately
        prior to such event.

               (B) The Corporation shall declare a dividend or distribution on
        the Series X Preferred Stock as provided in paragraph (A) of this
        Section immediately after it declares a dividend or distribution on the
        Common Stock (other than a dividend payable in shares of Common Stock).

               (C) Dividends shall begin to accrue and be cumulative on
        outstanding shares of Series X Preferred Stock from the Quarterly
        Dividend Payment Date next preceding the date of issue of such shares,
        unless the date of issue of such shares is prior to the record date for
        the first Quarterly Dividend Payment Date, in which case dividends on
        such shares shall begin to accrue from the date of issue of such shares,
        or unless the date of issue is a Quarterly Dividend Payment Date or is a
        date after the record date for the determination of holders of shares of
        Series X Preferred Stock entitled to receive a quarterly dividend and
        before such Quarterly Dividend Payment Date, in either of which events
        such dividends shall begin to accrue and be cumulative from such
        Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
        bear interest. Dividends paid on the shares of Series X Preferred Stock
        in an amount less than the total amount of such dividends at the time
        accrued and payable on such shares shall be allocated pro rata on a
        share-by-share basis among all such shares at the time outstanding. The
        Board of Directors may fix a record date for the determination of
        holders of shares of Series X Preferred Stock entitled to receive
        payment of a dividend or distribution declared thereon, which record
        date shall be not more than 60 days prior to the date fixed for the
        payment thereof.

               Section 3. Voting Rights. The holders of shares of Series X
Preferred Stock shall have the following voting rights:

               (A) Subject to the provision for adjustment hereinafter set
        forth, each share of Series X Preferred Stock shall entitle the holder
        thereof to 1000 votes on all matters submitted to a vote of the
        stockholders of the Corporation. In the event the Corporation shall at
        any time declare or pay any dividend on the Common Stock payable in
        shares of Common Stock, or effect a subdivision or combination or
        consolidation of the outstanding shares of Common Stock (by
        reclassification or otherwise than by payment of a dividend in shares of
        Common Stock) into a greater or lesser number of shares of Common Stock,
        then in each such case the number of votes per share to which holders of
        shares of Series X Preferred Stock were entitled immediately prior to
        such event shall be adjusted by multiplying such number by a fraction,
        the numerator of which is the number of shares of Common Stock
        outstanding immediately after such event and the denominator of which is
        the number of shares of Common Stock that were outstanding immediately
        prior to such event.

               (B) Except as otherwise provided herein, in any other Certificate
        of Designation creating a series of Preferred Stock or any similar
        stock, or by law, the holders of shares of Series X Preferred Stock and
        the holders of shares of Common Stock






                                      B-2.

<PAGE>   29

        and any other capital stock of the Corporation having general voting
        rights shall vote together as one class on all matters submitted to a
        vote of stockholders of the Corporation.

               (C) Except as set forth herein, or as otherwise provided by law,
        holders of Series X Preferred Stock shall have no special voting rights
        and their consent shall not be required (except to the extent they are
        entitled to vote with holders of Common Stock as set forth herein) for
        taking any corporate action.

               Section 4. Certain Restrictions.

               (A) Whenever quarterly dividends or other dividends or
        distributions payable on the Series X Preferred Stock as provided in
        Section 2 are in arrears, thereafter and until all accrued and unpaid
        dividends and distributions, whether or not declared, on shares of
        Series X Preferred Stock outstanding shall have been paid in full, the
        Corporation shall not:

                   (i) declare or pay dividends, or make any other
               distributions, on any shares of stock ranking junior (either as
               to dividends or upon liquidation, dissolution or winding up) to
               the Series X Preferred Stock;

                   (ii) declare or pay dividends, or make any other
               distributions, on any shares of stock ranking on a parity (either
               as to dividends or upon liquidation, dissolution or winding up)
               with the Series X Preferred Stock, except dividends paid ratably
               on the Series X Preferred Stock and all such parity stock on
               which dividends are payable or in arrears in proportion to the
               total amounts to which the holders of all such shares are then
               entitled;

                   (iii) redeem or purchase or otherwise acquire for
               consideration shares of any stock ranking junior (either as to
               dividends or upon liquidation, dissolution or winding up) to the
               Series X Preferred Stock, provided that the Corporation may at
               any time redeem, purchase or otherwise acquire shares of any such
               junior stock in exchange for shares of any stock of the
               Corporation ranking junior (either as to dividends or upon
               dissolution, liquidation or winding up) to the Series X Preferred
               Stock; or

                   (iv) redeem or purchase or otherwise acquire for
               consideration any shares of Series X Preferred Stock, or any
               shares of stock ranking on a parity with the Series X Preferred
               Stock, except in accordance with a purchase offer made in writing
               or by publication (as determined by the Board of Directors) to
               all holders of such shares upon such terms as the Board of
               Directors, after consideration of the respective annual dividend
               rates and other relative rights and preferences of the respective
               series and classes, shall determine in good faith will result in
               fair and equitable treatment among the respective series or
               classes.

               (B) The Corporation shall not permit any subsidiary of the
        Corporation to purchase or otherwise acquire for consideration any
        shares of stock of the Corporation






                                      B-3.

<PAGE>   30

        unless the Corporation could, under paragraph (A) of this Section 4,
        purchase or otherwise acquire such shares at such time and in such
        manner.

               Section 5. Reacquired Shares. Any shares of Series X Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

               Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series X
Preferred Stock unless, prior thereto, the holders of shares of Series X
Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series X
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series X Preferred Stock, except distributions made ratably on the Series X
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series X Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

               Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series X Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth






                                      B-4.

<PAGE>   31

in the preceding sentence with respect to the exchange or change of shares of
Series X Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

               Section 8. No Redemption. The shares of Series X Preferred Stock
shall not be redeemable.

               Section 9. Rank. The Series X Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.

               Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series X Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series X Preferred Stock, voting
together as a single class.

























                                      B-5.


<PAGE>   32
                    PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
                        IDEC PHARMACEUTICALS CORPORATION
           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

   The undersign appoints WILLIAM H. RASTETTER and KENNETH J. WOOLCOTT, and each
of them, proxies with full power of substitution, to vote all shares of common
stock of IDEC Pharmaceuticals Corporation ("our") held of record by the
undersigned as of October 18, 1999 at our Special Meeting of Stockholders
("Special Meeting") to be held at our corporate headquarters, 11011 Torreyana
Road, San Diego, California, 92121, on December 1, 1999, at 10:00 a.m., local
time, and at all adjournments thereof, upon the following matters:

(1)  Proposal to approve an amendment and restatement of our Amended and
     Restated Certificate of Incorporation to increase the number of shares of
     authorized common stock from 50,000,000 shares to 200,000,000 shares, to
     halve the par value of the common stock from $0.001 per share to $0.0005
     per share, and to effect a two-for-one stock split of our common stock.

           [ ] FOR               [ ] AGAINST               [ ] ABSTAIN

(2)  In accordance with the discretion of the proxy holders, to act upon all
     matters incident to the conduct of the Special Meeting and upon other
     matters as may properly come before the Special Meeting.


   THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL.

                                        Dated:____________________________, 1999

                                        ________________________________________

                                        ________________________________________
                                        Signature or Signatures of Stockholder

                                        (This signature should conform to your
                                        name as printed hereon. Co-owners should
                                        both sign.)


IMPORTANT - PLEASE SIGN AND RETURN PROMPTLY. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by an authorized person.