COLLABORATION AGREEMENT

This Collaboration Agreement (the Agreement) is entered into as of August 1st, 2002 (the Effective Date) by and between Rigel Pharmaceuticals, Inc., a Delaware corporation (Rigel) with its offices at 240 East Grand Avenue, South San Francisco, California 94080, and Daiichi Pharmaceutical Co., Ltd., a Japanese corporation (Daiichi) with offices at 14-10 Nihonbashi 3-chome, Chuo-ku, Tokyo 103-8234, Japan.  Rigel and Daiichi may be referred to herein individually as a Party or, collectively, as the Parties.

Recitals

Whereas, Rigel is a leader in the discovery and validation of target molecules involved in cancer;

Whereas, Daiichi is engaged in the research, development, marketing, manufacture and distribution of pharmaceutical products for the diagnosis, treatment or prevention of cancer;

Whereas, Rigel and Daiichi desire to enter into a collaborative relationship to identify small molecule inhibitors of a specific Target Molecule (hereinafter defined) useful for the development of such pharmaceutical products; and

Whereas, Rigel is prepared to grant Daiichi worldwide marketing rights with respect to any products arising from this collaboration, and Daiichi is prepared to grant to Rigel rights to co-develop and co-promote such products in North America, as specified below;

Now, Therefore, in consideration of the foregoing and the covenants and promises contained in this Agreement, the Parties agree as follows:

1.                                      Definitions

Each of the capitalized terms used in this Agreement (other than the headings of the Articles and Sections), whether used in the singular or the plural, shall have the meaning as set forth below or, if not listed below, the meaning as designated in places throughout this Agreement.

1.1          Affiliate means any company or entity controlled by, controlling, or under common control with a Party hereto and shall include without limitation any company fifty percent (50%) or more of whose voting stock or participating profit interest is owned or controlled, directly or indirectly, by a Party, and any company which owns or controls, directly or indirectly, fifty percent (50%) or more of the voting stock of a Party.

1.2          Assays means [*]

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1.3          Assay Know-How means all Information Controlled by Rigel during the Research Term that is necessary or reasonably useful to practice the Assay Patents or to make, perform or use the Assays.

1.4          Assay Patents means all Patents Controlled by Rigel during the Research Term that claim (a) the Assays or any component thereof, (b) a method of making the Assays or any component thereof or (c) a method of performing or using the Assays.

1.5          Assay Technology means the Assay Know-How and Assay Patents.

1.6          [*] means the [*] that are described in the Research Plan.

1.7          [*] means the [*] that are described in the Research Plan.

1.8          Co-Developed Product means a Product for which an IND has been filed in the North American Territory, and Rigel has not exercised any Non Co-Development Option and has not terminated, pursuant to Section 5.15(a), co-development in all countries of the North American Territory.

1.9          Co-Developed Territory means, with respect to a particular Co-Developed Product, the country or countries in the North American Territory for which (a) Rigel has not exercised its Non Co-Development Option, (b) Rigel has not terminated co-development pursuant to Section 5.15(a), and (c) Daiichi has not terminated co-development pursuant to Section 5.15(b).

1.10        Confidential Information means (a) all Information, and other information and materials, received by either Party from the other Party pursuant to this Agreement or pursuant to the Confidential Disclosure Agreement between the Parties dated November 1, 2000 and (b) all Rigel Restricted Information.  For clarity, Rigel Restricted Information shall be considered Confidential Information of Rigel.

1.11        Controlled means, with respect to any gene, protein, compound, material, Information or intellectual property right, that the Party owns or has a license to such gene, protein, compound, material, Information or intellectual property right and has the ability to grant to the other Party access, a license or a sublicense (as applicable) to such gene, protein, compound, material, Information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangements with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such access, license or sublicense.

1.12        Co-Promoted Product means a Co-Developed Product for which Rigel has not exercised any Non Co-Promotion Option and has not terminated, pursuant to Section 6.3(a), co-promotion in all countries in which such Product was co-developed by the Parties.

1.13        Co-Promoted Territory means, with respect to a particular Co-Promoted Product, the country or countries in the Co-Developed Territory for such product for which (a) Rigel has not exercised its Non Co-Promotion Option, (b) Rigel has not terminated co-promotion

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pursuant to Section 6.3(a), (c) Daiichi has not terminated co-promotion pursuant to Section 6.3(b), and (d) the [*] Co-Promotion Period has not expired.

1.14        Co-Promotion Period means, with respect to a particular Co-Promoted Product in a particular country in its Co-Promoted Territory, the period beginning on the receipt of approval of the Drug Approval Application for such Product in such country and ending [*] after the first commercial sale of such Product in such country.

1.15        Daiichi Product Know-How means all Information (other than Daiichi Product Patents) Controlled by Daiichi during the Term that is necessary or reasonably useful to (a) develop or offer for sale a Product or (b) practice the Daiichi Product Patents.

1.16        Daiichi Product Patents means all Patents Controlled by Daiichi during the Term that cover the manufacture, use or composition of matter of a Product.

1.17        Daiichi Technology means all Information and Patents Controlled by Daiichi during the Research Term that are necessary or reasonably useful for Rigel to carry out its responsibilities under the Research Program.

1.18        Daiichi-Alone Territory means all countries and territories of the world other than those countries and territories in the North American Territory.

1.19        Development Budget shall have the meaning assigned in Section 5.9.

1.20        Development Costs means the total costs incurred by the Parties in the course of planning, conducting, managing or reviewing the results of a Phase I Trial or a Phase II Trial for any Co-Developed Product in its Co-Developed Territory, including (without limitation): (a) costs of producing bulk drug, filling and finishing, shipping, storing and administering all doses of such Co-Developed Product that are administered to patients during such trials (where such costs are allocated on a per gram basis), (b) payments made to hospitals, medical personnel and clinical trial management organizations in consideration for work performed on such trials, (c) costs incurred as a result of the preparation, review and filing of regulatory submissions for such clinical trials, and (d) wages and benefits to the extent employees work on such clinical trials and related regulatory submissions (calculated on a full-time equivalent basis), provided that such costs were incurred in accordance with each Partys responsibilities under the Development Plan for such Co-Developed Product.  Notwithstanding the foregoing, Development Costs shall exclude:  [*].

1.21        Development Plan shall have the meaning assigned in Section 5.9.

1.22        Diligent Efforts means the carrying out of obligations in a sustained manner consistent with the efforts a Party devotes to a product of similar market potential, profit potential or strategic value resulting from its own research efforts, based on conditions then prevailing.  Diligent Efforts requires that:  (a) each Party promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis, (b) each Party set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations, and (c) each Party consistently make

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and implement decisions and allocate resources designed to advance progress with respect to such objectives.

1.23        Drug Approval Application means an application for Regulatory Approval required before commercial sale or use of a Product as a drug in a regulatory jurisdiction.

1.24        FTE means the equivalent of one researcher working full time for or on behalf of Rigel for one 12-month period (including normal vacations, sick days and holidays).

1.25        Hit Compound means a Pre-Hit Compound that meets the criteria set forth in the Research Plan.

1.26        IND shall mean (a) with respect to the United States, an Investigational New Drug application, as defined in the U.S. Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or (b) with respect to any other regulatory jurisdiction, any corresponding or equivalent application, registration or certification in such jurisdiction.

1.27        Information means biological materials, information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation, gene sequences, vectors, cell lines, reagents, samples, chemical compounds, databases, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and patent and other legal information or descriptions.

1.28        Invention means any and all inventions and improvements thereto, made, conceived or reduced to practice by a Party in the performance of its duties under the Research Program or in the course of its practice of a license granted to it pursuant to Section 4.2 or 4.3.

1.29        Joint Development Committee or JDC means the committee formed pursuant to Section 5.2.

1.30        Joint Invention means any Invention made, discovered or developed jointly by employee(s) or agent(s) of both Parties.

1.31        Joint Research Committee or JRC means the committee formed pursuant to Section 2.1.

1.32        Lead Compound means a Hit Compound or a derivative, analog or congener of a Hit Compound or Lead Compound, wherein such Hit Compound or derivative, analog or congener meets the criteria set forth in the Research Plan.

1.33        NDA means (a) a New Drug Application filed with the United States Food and Drug Administration in conformance with applicable laws and regulations, or (b) the foreign equivalent of any such application in any country other than the United States.

1.34        Net Sales means the gross amount invoiced for sales of a Product in a particular territory by Daiichi, its Affiliates or their permitted sublicensees to an unrelated Third

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Party, less (to the extent incurred for such Product in such territory): (i) discounts, including cash discounts (including quantity discounts), charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers, including but not limited to, wholesalers and chain and pharmacy buying groups (with any such discounts or reductions which are based on sales to the customer of multiple products being allocated to such Product on the basis of a methodology approved by the Parties), (ii) credits or allowances actually granted upon claims, damaged goods, rejections or returns of such Product, including recalls, (iii) freight, postage, shipping and insurance charges actually allowed or paid for delivery of such Product, to the extent billed, (iv) commissions paid to Third Parties, (v) taxes, tariffs, duties or other governmental charges levied on, absorbed or otherwise imposed on sale of such Products, including without limitation value-added taxes, or other governmental charges measured by the billing amount, when included in billing, as adjusted for rebates and refunds and (vi) bad debts (determined in accordance with the normal accounting procedures of, and applied consistently within and across the operating units of, Daiichi, its Affiliates or their permitted sublicensees).  If Daiichi or its Affiliate or licensee sells any Product as a combination product containing one or more active ingredients in addition to the Product (which may be either combined in a single formulation or bundled with separate formulations), Net Sales for such combination product will be calculated by multiplying actual Net Sales of such combination product by the fraction A/(A+B) where A is the invoice price of the Product if sold separately, and B is the total invoice price of any other active ingredient or ingredients in the combination, if sold separately.  If, on a country-by-country basis, the other active ingredient or ingredients in the combination are not sold separately in said country, Net Sales for the purpose of determining royalties of the combination product shall be calculated by multiplying actual Net Sales of such combination product by the fraction A/C where A is the invoice price of the Product if sold separately, and C is the invoice price of the combination product.  If, on a country-by-country basis, neither the Product nor the other active ingredient or ingredients of the combination product is sold separately in said country or the mechanics provided above are otherwise inapplicable (as in the case of medical devices), Net Sales for the purposes of determining royalties of the combination product shall be determined by the Parties in good faith.

1.35        Non Co-Development Option shall have the meaning set forth in Section 5.1(b).

1.36        Non Co-Promotion Option shall have the meaning set forth in Section 6.1(b).

1.37        North American Territory means (a) the United States and its possessions and territories, (b) Canada and its provinces and territories, (c) Mexico and (d) any successor states to the foregoing.

1.38        Patent means (a) unexpired letters patent (including inventors certificates) which have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period, including without limitation any substitution, extension, registration, confirmation, reissue, re-examination, renewal or any like filing thereof and (b) pending applications for letters patent, including without limitation any continuation, division or continuation-in-part thereof and any provisional applications.

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