COLLABORATION AND LICENSE AGREEMENT



     THIS COLLABORATION AND LICENSE AGREEMENT (this "AGREEMENT") dated as of

June 17, 2005, (the "EFFECTIVE DATE") is by and between Avalon Pharmaceuticals,

Inc. ("AVALON"), a Delaware Corporation, having a place of business at 20358

Seneca Meadows Parkway, Germantown, MD 20876 and MedImmune, Inc. ("MEDIMMUNE"),

a Delaware corporation, having a place of business at One MedImmune Way,

Gaithersburg, MD 20878. Avalon and MedImmune may each be referred to herein

individually as a "PARTY" and collectively as the "PARTIES."



     WHEREAS, Avalon has developed and controls certain chemical genomics

technology related to facilitating drug discovery and development;



     WHEREAS, MedImmune wishes to obtain the benefit of Avalon's chemical

genomics technology for use in identifying compounds useful for treating

inflammatory and autoimmune disorders; and



     WHEREAS, Avalon and MedImmune have agreed to collaborate, on the terms and

conditions set forth herein, on the discovery and development of compounds for

treating inflammatory and autoimmune disorders of humans.



     NOW THEREFORE, in consideration of the mutual promises and covenants set

forth below and other good and valuable consideration, the receipt and

sufficiency of which is hereby acknowledged, the Parties hereby agree as

follows:





1.       DEFINITIONS.





1.1      "AFFILIATE(S)" means any Person that, directly or indirectly, owns, is

         owned by, or is under common ownership with a Party to this Agreement

         or any Person actually controlled by, controlling, or under common

         control with a Party to this Agreement. For the purposes of this

         definition, "ownership" or "control" means a Person owns or controls at

         least (a) fifty percent (50%) of the voting stock of a corporation, or

         (b) in the absence of the ownership of at least fifty percent (50%) of

         the voting stock of a corporation or in the case of non-corporate

         entity, has the power to direct or cause the direction of the

         management and polices of such corporation or non-corporate entity, as

         applicable.



1.2      "ANALOG" of a given Compound means a chemical compound derived by

         addition to or manipulation of the structure of such Compound.



1.3      "AVALON CHEMICAL LIBRARY" means the set of Compounds that Avalon owns

         or controls that are employed during Stage II of the Research Program

         and from which a Compound Hit is selected.



                                      - 1 -



* Confidential treatment has been requested for portions of this exhibit. The

copy filed herewith omits the information subject to the confidentiality

request. Omissions are designated as * . A complete version of this exhibit has

been filed separately with the Securities and Exchange Commission.



<PAGE>





1.4      "AVALON COMPOUND KNOW-HOW" means any Avalon Know-How covering the Lead

         Compounds, Optimized Lead Compounds and Compound Families.



1.5      "AVALON COMPOUND PATENT RIGHTS" means any Avalon Patent Rights covering

         the Lead Compounds, Optimized Lead Compounds and Compound Families.



1.6      "AVALON CORE TECHNOLOGY" means all proprietary apparatuses, materials,

         methods, processes, information, data, databases and analyses

         Controlled by either Avalon or its Affiliates as of the Effective Date

         or coming into the Control of Avalon or its Affiliates during the Term

         relating to the use of HITS, METS, RACETraCK and/or TSAR and all

         related screening methods and processes, including methods and

         processes useful or helpful to induce a desired profile across a gene

         signature set and its correlation with the inhibition or activation of

         a target.



1.7      "AVALON INDEMNIFIED PARTY" shall have the meaning set forth in SECTION

         11.1.



1.8      "AVALON TARGET KNOW-HOW" means   *









1.9      "AVALON KNOW-HOW" means all apparatuses, materials (including the

         Avalon Chemical Library), processes, information, data, databases and

         analyses controlled by either Avalon or its Affiliates as of the

         Effective Date or coming into the control of Avalon or its Affiliates

         during the Term relating to the Research Program, including Joint

         Inventions that are also Avalon Core Technology and including

         information, analyses and material (including RNA) derived from HITS,

         METS, RACETraCK and TSAR or relating to any Compound, Compound Families

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