COLLABORATION AGREEMENT

This Agreement is entered into as of January 4, 2002, by and between:

                                          SEATTLE GENETICS, INC., a Delaware corporation, having its principal place of business at 21823 30th Drive S.E., Bothell, Washington 98021

(hereinafter referred to as SGI)

and:

                                          GENENCOR INTERNATIONAL, INC., a Delaware corporation, having its principal place of business at 925 Page Mill Road, Palo Alto, CA 94304-1013.

(hereinafter referred to as GCOR).

WHEREAS, SGI and GCOR entered into a Mutual Non-Disclosure Agreement dated December 19, 2000 pursuant to which the parties have been discussing a potential relationship relating to the use of enzymes for the activation of prodrugs;

WHEREAS, SGI has developed and/or acquired technology and intellectual property relating to its ADEPT platform, including a lead ADEPT molecule referred to as SGN-17/19, and GCOR has developed technology and intellectual property relating to its TEPT platform, and each intends to continue developing its platform through the collaboration envisioned by this Agreement;

WHEREAS, SGI and GCOR desire to enter into an agreement to exclusively collaborate in the field of targeted enzyme technologies in combination with prodrugs for the treatment of cancer;

WHEREAS, SGI and GCOR each have ongoing research and/or development activities relating to cancer therapies outside the field of the collaboration envisioned by this Agreement and intend that nothing contained in this Agreement will preclude such other activities;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE I DEFINITIONS AND INTERPRETATION

1.1           Definitions:  For the purposes of this Agreement the following words and phrases shall have the following meanings:

ADEPT means SGIs antibody-directed enzyme prodrug therapy platform covered by SGI ADEPT Patents and the SGI [***] Patents.

Affiliate means, with respect to a Party, any person, corporation or business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, a Party.  For the purpose of this definition, control shall mean the direct or indirect ownership of at least [***] of the voting interest or equity in such corporation or other business entity.

Agreement means this agreement, all amendments and supplements to this Agreement and all exhibits to this Agreement, including the following:

Applicable Law means the applicable laws, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities that may be in effect from time to time.

BLA means a Biologics License Application, as defined in the U.S. Federal Food, Drug, and Cosmetics Act, as amended, and the regulations promulgated thereunder, and any corresponding foreign or domestic marketing authorization application, registration or certification, necessary or reasonably useful to market a Product, but not including pricing and reimbursement approvals.

[***] means the [***].

[***] means the [***].

[***] means any of the [***] periods beginning [***] in any year.

Collaboration means all research, development, manufacture and commercialization activities conducted by or on behalf of the Parties in the Field according to the terms of this Agreement.

Collaboration Product means any Product other than a [***] Product or a [***] Product.

Commercially Reasonable Efforts means, with respect to the research, development, manufacture or commercialization of Products, efforts and resources commonly used in the biotechnology industry for  a product of similar commercial potential at a similar stage in its lifecycle, taking into consideration its safety and efficacy, its cost to develop, the competitiveness of alternative products, its proprietary position, the likelihood of regulatory

2

approval, its profitability, and all other relevant factors.  Commercially Reasonable Efforts shall be determined on a market-by-market basis for each Product, as applicable.

Control means, with respect to any Information and Invention, Patent or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise, to assign, or grant a license, sublicense or other right to or under, such Information and Invention, Patent or right as provided for herein without violating the terms of any agreement with any Third Party.

Development Decision means a decision by the Steering Committee regarding whether a Development Program should be commenced for a Collaboration Product and/or whether a Collaboration Product should be advanced to the next stage of a Development Program such as for example, advancing a Collaboration Product from Phase I Clinical Trials to Phase II Clinical Trials or advancing a Collaboration Product to IND filing stage.

Development Program means any activities conducted by or on behalf of the Parties with respect to a Collaboration Product pursuant to a Development Decision, commencing upon identification of a [***] for such Collaboration Product, as determined by the Steering Committee, and ending upon First Commercial Sale of such Collaboration Product in a Major Country.  The Parties may also agree to initiate a Development Program for a Collaboration Product prior to the above by unanimous decision of the Steering Committee.

Effective Date means the date of this Agreement.

Exploit or Exploitation means to make, have made, import, use, sell, offer for sale, or otherwise dispose of, including all discovery, research, development, registration, modification, enhancement, improvement, manufacture, storage, formulation, exportation, transportation, distribution, promotion and marketing activities related thereto.

FDA means the United States Food and Drug Administration and any successor agency thereto or its equivalent in other countries or regulatory jurisdiction.

Field means the use of [***] for the treatment and diagnosis of cancer in humans.

First Commercial Sale means, in each country, the first commercial sale of a Product following, if required by law, Regulatory Approval and, when Regulatory Approval is not required by law, the first commercial sale in that country, in each case for use or consumption of such Product in such country by the general public; for avoidance of doubt, First Commercial Sale of a given Product cannot occur more than once in any particular country.

GCOR Background Know-How means all Information and Inventions in the Control of GCOR as of the Effective Date or at any time during the Term that [***] are deemed necessary or reasonably useful for the Collaboration or for the exercise of the GCOR Background Patents, including without limitation all Information and Inventions relating to [***], but excluding: (a) any [***]; and (b) any [***].

3

GCOR Background Patents means: (a) all Patents listed in Exhibit E to this Agreement; and (b) any other Patents in the Control of GCOR during the Term that are necessary or reasonably useful for the Collaboration or for the practice of the GCOR Background Know-How, but excluding: (a) any [***]; (b) any [***]; and (c) any [***].

GCOR Background Technology means GCOR Background Patents and GCOR Background Know-How.

GCOR Expression Technology means GCOR Background Technology relating to microbial production systems for the expression of proteins, peptides or antibodies.

GCOR i-mune Technology means GCOR Background Technology relating to its in vitro method used to determine allergenic epitope(s) in a protein.

GCOR Patents means GCOR Background Patents and GCOR TEPT Patents.

GCOR Technology means GCOR Background Technology and GCOR TEPT Technology.

GCOR TE Patents means (a) all Patents listed in Exhibit D to this Agreement; and (b) any other Patents in the Control of GCOR at any time that relate to TE.

GCOR TEPT Know-How means all Information and Inventions in the Control of GCOR or its Affiliates as of the Effective Date or at any time during the Term that: (a) relate to [***]; and (b) are necessary or reasonably useful for the Collaboration or for the exercise of the GCOR TEPT Patents.

GCOR TEPT Patents means: (a) all Patents listed in Exhibit C to this Agreement; and (b) any other Patents in the Control of GCOR during the Term that: (i) relate to [***]; and (ii) are necessary or reasonably useful for the Collaboration.

GCOR TEPT Technology means GCOR TEPT Patents and GCOR TEPT Know-How.

Improvement means any modification to an antibody, compound, product or technology or any discovery, device, process or formulation related to such antibody, compound, product or technology, whether or not patented or patentable, including any enhancement in the efficiency, operation, manufacture, ingredients, preparation, presentation, formulation, means of delivery, packaging or dosage of an antibody, compound, product or technology, any discovery or development of any new or expanded indications or applications for an antibody, compound, product or technology, or any discovery or development that improves the stability, safety or efficacy of an antibody, compound, product or technology.

IND means an investigational new drug application filed with the FDA for authorization to commence human clinical trials, and its equivalent in other countries or regulatory jurisdictions.

4

Information and Inventions means all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including high-throughput screening, gene expression, genomics, proteomics and other drug discovery and development technology, pre-clinical and clinical trial results, manufacturing procedures, test procedures and purification and isolation techniques, (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed, and all Improvements, whether to the foregoing or otherwise, and other discoveries, developments, inventions and other intellectual property (whether or not confidential, proprietary, patented or patentable).

Joint Know-How means all Information and Inventions made jointly by employees of SGI and GCOR under this Agreement, but excluding any Improvements to either Partys Background Technology which shall remain the sole property of the Party contributing said Background Technology.

Joint Patents means any Patents jointly owned by the Parties that relate to Joint Know-How and cover the manufacture, use or sale of Products.

Joint Technology means Joint Patents and Joint Know-How, but excluding SGI Technology and GCOR Technology.

Major Country means any of [***].

NDA means a New Drug Application filed with the FDA and its equivalent in other countries or regulatory jurisdictions.

Net Sales shall mean [***] amounts [***] from or in connection with the sale or other disposition of Product [***]:[***]

In the event a Party or its Affiliates or Sublicensees sells or otherwise disposes of a Product in combination with other active ingredients or components which are not Products, Net Sales for purposes of royalty payments on the combination shall be calculated as follows:

In the event the Product is sold [***], the applicable royalty for such Product shall be determined by [***].

Parties means GCOR and SGI, and Party means either of them.

Patents means: (a) patents and patent applications; (b) any substitutions, divisions, continuations, continuations-in-part, reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary protection certificates and the like, and any

5

provisional applications, of any such patents or patent applications; and (c) any foreign or international equivalent of any of the foregoing.

Phase I Clinical Trial means a clinical study in subjects to evaluate the pharmacokinetic and pharmacodynamic properties, maximum tolerated dose, dosing interval, and absorption, distribution, metabolism and excretion of a candidate drug.

Phase II Clinical Trial means a controlled dose clinical trial to evaluate the efficacy and safety of a candidate drug in the targeted patient population and to define the optimal dosing regimen.

Phase III Clinical Trial means a controlled, pivotal, multi-center clinical trial, involving patients with the disease or condition of interest to obtain sufficient efficacy and safety data to support regulatory submission of a BLA or NDA and labeling of a candidate drug.

Product means any targeted enzyme plus prodrug combination product(s) developed pursuant to the Collaboration.

Product Trademarks means the Trademarks developed for the Products by the Steering Committee and owned jointly be the Parties, all packaging designs and other trade dress used in connection with the Products and such other Trademarks relating thereto and any registrations thereof or any pending applications relating thereto.

Regulatory Approval means final regulatory approval (including, where applicable, pricing approval in the event that actual sales do not take place before such approval) required to market a Product for a disease or condition in accordance with the applicable laws and regulations of a given country.  In the United States, its territories and possessions, Regulatory Approval means approval of a BLA or its equivalent by the FDA.

Regulatory Authority means any applicable government entities regulating or otherwise exercising authority with respect to the Exploitation of the Products.

Regulatory Documentation means all applications, registrations, licenses, authorizations and approvals (including all Regulatory Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority), all supporting documents and all clinical studies and tests, relating to any Product, and all data contained in any of the foregoing, including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.

Research Program means the research program conducted pursuant to Section 3.2.

Royalty Term means, on a Product-by-Product and country-by-country basis, the period of time equal to the longer of: (a) [***] from the date of First Commercial Sale of the Product in such country; or (b) the expiration of the last to expire of the Valid Patent Claims necessary for the manufacture, use or sale of a Product in such country.

6

SGI ADEPT Know-How means all Information and Inventions in the Control of SGI as of the Effective Date or at any time during the Term that: (a) relate to SGN-17/19 or ADEPT; and (b) are necessary or reasonably useful for the Collaboration or for the exercise of the SGI ADEPT Patents or SGI [***] Patents.

SGI ADEPT Patents means: (a) all Patents listed in Exhibit A to this Agreement; and (b) any other Patents in the Control of SGI during the Term that: (i) relate to SGN-17/19 or ADEPT; and (ii) are necessary or reasonably useful for the Collaboration.

SGI ADEPT Technology means SGI ADEPT Patents, SGI [***] Patents and SGI ADEPT Know-How.

SGI Background Know-How means all Information and Inventions in the Control of SGI as of the Effective Date or at any time during the Term that [***] are deemed necessary or reasonably useful for the Collaboration or for the exercise of the SGI Background Patents, but excluding: (a) any [***]; and (b) any [***].

SGI Background Patents means any Patents in the Control of SGI during the Term that are necessary or reasonably useful for the Collaboration or for the practice of the SGI Background Know-How, but excluding: (a) any [***]; (b) [***]; and (c) any [***].

SGI Background Technology means SGI Background Patents and SGI Background Know-How.

SGI [***] Patents means [***] and all Patents relating thereto [***] to SGI pursuant to the [***] and all other Patents listed on Exhibit B.

SGI Patents means SGI Background Patents, SGI ADEPT Patents and SGI [***] Patents.

SGI Technology means the SGI Background Technology and the SGI ADEPT Technology.

SGN-17 means SGIs proprietary protein containing monoclonal antibody and enzyme components that incorporates the binding site of the monoclonal antibody L49 and the enzyme -lactamase, as well as [***].

SGN-19 means SGIs proprietary form of the chemotherapeutic prodrug melphanan that has been inactivated through the addition of a chemical group that can be removed by the enzyme -lactamase.

SGN-17/19 means a combination of SGN-17 and SGN-19.

Stock Purchase Agreement means the Common Stock Purchase Agreement of even date herewith by and between SGI and GCOR attached hereto as Exhibit G.

7

Sublicensee means any person acting pursuant to a permitted sublicense granted to it by the Parties pursuant to Section 6.4 or Section 15.6.3(c) and the other terms and conditions of this Agreement.

Technology means SGI Technology, the GCOR Technology and/or the Joint Technology, as applicable.

TE means GCORs [***] and covered in GCOR TE Patent(s).

TEPT means GCORs targeted enzyme prodrug therapy platform covered by GCOR TEPT Patents expressly [***].

Term means the Initial Term and any Renewal Term(s).

Therapeutics Field shall mean the use of [***] for the treatment and diagnosis of diseases in humans.

Third-Party means any person or entity other than GCOR, SGI and their respective Affiliates.

Trademark means any word, name, symbol, color, designation or device or any combination thereof, including any trademark, trade dress, service mark, service name, brand mark, trade name, brand name, logo or business symbol.

Valid Patent Claim means a claim of an issued and unexpired patent included in SGI Patents, GCOR Patents or Joint Patents which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

Work Plan means the plan developed by the Parties and attached hereto in draft form setting forth the roles, responsibilities, timelines and deliverables for each of the Parties during the Collaboration, which, when finalized and approved by the Steering Committee no later than ninety (90) days from the Effective Date, shall be attached to this Agreement as Exhibit F, including any amendments or modifications made by agreement of the Steering Committee.

1.2           Terms Defined Elsewhere in this Agreement.  In addition to the foregoing definitions, the following terms are defined in the applicable Sections of this Agreement:

8

1.3           Certain Rules of Interpretation in this Agreement and the Schedules.

(a)           Unless otherwise specified, all references to monetary amounts are to United States of America currency (U.S. Dollars);

(b)           The descriptive headings of Articles and Sections are inserted solely for convenience of reference and are not intended as complete or accurate descriptions of the content of such Articles or Sections;

(c)           The use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits;

(d)           The words include and including have the inclusive meaning frequently identified with the phrases without limitation and but not limited to;

(e)           Subject to Article 17, whenever a provision of this Agreement requires an approval or consent by a Party to this Agreement and notification of such approval or consent is not delivered within the applicable time limit, then, unless otherwise specified, the Party whose approval or consent is required shall be conclusively deemed to have withheld its approval or consent;

9

(f)            Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next business day following if the last day of the period is not a business day in the jurisdiction of the Party to make such payment or do such act; and

(g)           Whenever any payment is to be made or action to be taken under this Agreement is required to be made or taken on a day other than a business day, such payment shall be made or action taken on the next business day following such day to make such payment or do such act.

ARTICLE 2 STEERING COMMITTEE

2.1           Formation of Steering Committee.  Within [***] of the Effective Date, the Parties shall establish a joint committee (the Steering Committee) to make certain decisions regarding the Collaboration.  The Steering Committee will be composed of [***] representatives of each Party, who shall be appointed (and may be replaced at any time) by such Party on written notice to the other in accordance with this Agreement.  Such representatives shall possess the requisite experience and seniority to enable them to make decisions on behalf of the Parties with respect to the Collaboration.  Development Decisions, and such other decisions as expressly set forth herein, shall be subject to approval of the Parties.

2.2           Responsibilities of the Steering Committee.  The Steering Committee will be responsible for, among other things:

(a)           determining the overall strategy for the Collaboration in the manner contemplated by this Agreement;

(b)           within [***] of the Effective Date, formulating a final Work Plan, which shall be attached to this Agreement as Exhibit F and may be amended from time to time by the Steering Committee;

(c)           preparing a Project Plan and Project Budget for each Collaboration Product;

(d)           coordinating, expediting, overseeing and controlling all development of Collaboration Products in the Field, including pre-clinical research, clinical research, manufacturing, regulatory filings and post approval development studies;

(e)           monitoring, reviewing and directing the commercialization of Collaboration Products within the Field, including developing annual marketing and sales budgets, annual forecasts or sales and production requirements, an annual marketing plan, product positioning, creative campaign strategies, pricing and managed care contract strategies;

10

(f)            evaluating additional technologies that may be necessary or beneficial to the Collaboration and recommending the acquisition or in-licensing of these technologies;

(g)           addressing, financial issues which arise in connection with the Collaboration in the areas of accounting, cost allocation, budgeting and financial reporting

Home        Intelligence        Services