{PAGE}

                              DIVESTITURE AGREEMENT



This DIVESTITURE AGREEMENT is dated as of January 24, 2003 (this "Agreement")

between Pharmacia & Upjohn Company, a Delaware corporation ("Pharmacia"), and

Nastech Pharmaceutical Company, Inc., a Delaware corporation ("Nastech").



      WHEREAS, Pharmacia and Nastech are parties to that certain Collaboration

and License Agreement dated as of February 1, 2002 (the "Collaboration and

License Agreement"), pursuant to which they have engaged in a licensing and

collaboration arrangement regarding the development and commercialization of

certain Collaboration Products containing Apomorphine delivered Intranasally for

the prevention, treatment, diagnosis or control of sexual dysfunction in humans,

including male erectile dysfunction and female sexual dysfunction;



      WHEREAS, Pharmacia and Nastech have, at the same time as the Collaboration

and License Agreement, also entered into the Supply Agreement, pursuant to which

Nastech agreed to manufacture and supply, and Pharmacia agreed to purchase from

Nastech, Collaboration Products in finished packaged form;



      WHEREAS, certain development activities have been, and are currently

being, conducted by each of the Parties pursuant to the Collaboration and

License Agreement for purposes of the development and commercialization of the

Collaboration Products;



      WHEREAS, Pfizer Inc. ("Pfizer"), Pilsner Acquisition Sub Corp. and

Pharmacia Corporation (the "Parent") have entered into that certain Agreement

and Plan of Merger dated as of July 13, 2002 (as amended, the "Merger

Agreement");



      WHEREAS, Pharmacia is a wholly owned subsidiary of the Parent;



      WHEREAS, the United States Federal Trade Commission has determined that

the Current Collaboration Product containing Intranasally-delivered Apomorphine

is directly competitive with Pfizer's product Viagra (sildenafil citrate) for

the treatment of erectile dysfunction, and that future uses and derivative

products of the Current Collaboration Product are likely to be directly

competitive with derivative uses and products of Viagra for the treatment of

sexual dysfunction in humans (including without limitation erectile dysfunction

and female sexual dysfunction);



      WHEREAS, the United States Federal Trade Commission has, therefore,

required that the Parent divest, among other specified assets, Pharmacia's and

its Affiliates' rights and licenses with respect to the Current Collaboration

Product and all other Nastech products containing Intranasally-delivered

Apomorphine; and



      WHEREAS, Pharmacia has elected to fulfill such divestiture requirement by

entering into this Agreement, and the Parties hereto are entering into this

Agreement in order to set forth their respective rights and obligations with

respect to such divestiture pursuant to the terms hereof, by which, among other

things:





                                       1

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            (a) the Collaboration and License Agreement and Supply Agreement

will each be terminated;



            (b) all foreign and domestic regulatory filings and Regulatory

Approvals, including all INDs, if any, with respect to Collaboration Product,

will be transferred to Nastech; and



            (c) Nastech will have an exclusive (even as to Pharmacia, Pfizer and

their respective Affiliates), fully paid-up, royalty-free, worldwide,

irrevocable license (including the right to sublicense):



                  (i) under the Pharmacia Know-How and Pharmacia Patents

existing as of the time immediately prior to the closing of the contemplated

Pharmacia-Pfizer merger, to Develop, make, have made, use, import, export, offer

for sale and sell for the prevention, treatment, diagnosis or control of male or

female sexual dysfunction in humans the Current Collaboration Product; and



                  (ii) under any Pharmacia Patent claiming any inventions or

discoveries conceived or reduced to practice by Nastech or Pharmacia (or one or

more of their respective employees, agents or consultants) in the Development of

an Intranasally-delivered Apomorphine product pursuant to the Collaboration and

License Agreement, to research, Develop, make, have made, use, import, export,

offer for sale and sell Intranasally-delivered Apomorphine products for the

prevention, treatment, diagnosis or control of sexual dysfunction in humans

(including male erectile dysfunction and female sexual dysfunction).



all as further described, and subject to the terms and conditions set forth, in

this Agreement



         NOW, THEREFORE, in consideration of the representations, warranties and

covenants contained herein, and for other valuable consideration, the receipt

and sufficiency of which are hereby acknowledged, the Parties hereto hereby

agree as follows:



                                   ARTICLE 1



                            DEFINITIONS; CONSTRUCTION



      1.1 Definitions. The following terms, when used in this Agreement, shall

have the respective meanings ascribed to them below.



            "Affiliate" means any corporation, company, partnership, joint

venture or firm which controls, is controlled by or is under common control with

a specified person or entity. For purposes of this definition, "control" shall

be presumed to exist if one of the following conditions is met: (a) in the case

of corporate entities, direct or indirect ownership of at least 50% of the stock

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