COLLABORATION AGREEMENT



         THIS COLLABORATION AGREEMENT ("Agreement") is entered into as of May

26th, 1999 ("Effective Date") by and between RIGEL PHARMACEUTICALS, INC., a

Delaware corporation ("Rigel") with its offices at 240 East Grand Avenue,

South San Francisco, CA 94080, and NOVARTIS PHARMA AG, a Swiss corporation

("Novartis") with offices at Lichtstrasse 35, CH-4058, Basel, Switzerland

(collectively, "Parties"; individually, a "Party").



                                    RECITALS



         WHEREAS, Rigel is a leader in the discovery and validation of

intracellular target molecules involved in the modulation of human disease; and



         WHEREAS, Novartis is engaged in the research, development, marketing,

manufacture and distribution of pharmaceutical compounds useful in treating or

preventing human diseases and conditions; and



         WHEREAS, Rigel and Novartis desire to enter into a collaborative

relationship to conduct research on intracellular target molecules and to

discover, develop and manufacture pharmaceutical products useful for treating or

preventing diseases associated with human disease; and



         WHEREAS, Novartis is purchasing two million (2,000,000) shares of Rigel

Series D Preferred Stock with a total value of US$4 million pursuant to a stock

purchase agreement between the Parties of even date herewith (the "Stock

Purchase Agreement"), and the Parties are further entering into an Equity Option

Agreement pursuant to which Novartis may purchase up to an additional US$10

million in value of Rigel equity;



         NOW, THEREFORE, in consideration of the foregoing and the covenants and

promises contained in this Agreement, the Parties agree as follows:



1.       DEFINITIONS



         As used herein, the following terms (whether used in their singular or

plural form) shall have the following meanings:



         "AFFILIATE" shall mean, with respect to a Party to this Agreement, any

other entity, whether de jure or de facto, which directly or indirectly

controls, is controlled by, or is under common control with, such Party. A

business entity or Party shall be regarded as in control of another business

entity if it owns, or directly or indirectly controls, at least fifty percent

(50%) (or such lesser percentage which is the maximum allowed to be owned by a

foreign entity in a particular jurisdiction) of the voting stock or other

ownership interest of the other entity, or if it directly or indirectly

possesses the power to direct or cause the direction of the management and

policies of the other entity by any lawful means whatsoever.





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         "AT-NOVARTIS PROJECT" shall mean a Program of Research performed by

Novartis as provided in Section 4.2 hereof.



         "B-CELL PROJECT" shall mean the Program of Research directed to the

identification of Novel Validated Targets involved in the process of B-Cell

activation, as the Program of Research is more fully described in Exhibit A-2

hereto.



         "COLLABORATION PROJECT" shall mean a Joint Project or an At-Novartis

Project.



         "COMMENCEMENT DATE" shall mean the date upon which a Collaboration

Project shall commence as set forth in Exhibit B or as determined pursuant to

the provisions of Section 2.2 hereof.



         "COMPOUND SCREENING" shall mean the use of a primary assay for testing

biological or chemical materials, including chemical materials coming out of

high-throughput screening, to determine whether they show pharmaceutically

relevant activity.



         "CONFIDENTIAL INFORMATION" shall mean any invention, discovery, patent

application or claim, trade secret, idea, improvement or other work of

authorship, any process, formula, data, program, drawing, information, price,

technique, sample, compound, extract, media, vector and/or cell line and

procedures and formulations for producing any such sample, compound, extract,

media, vector and/or cell line, any process, formula or data relating to any

research project, work in process, future development, engineering,

manufacturing, marketing, servicing, financing or personnel matter relating to a

Party, its present or future products, sales, suppliers, clients, customers,

employees, investors, or business, whether in oral, written, graphic or

electronic form.



         "CONTROL" shall mean the possession of the ability to grant a license

or sublicense to know-how or patents without violating the terms of any

agreement or other arrangement with, or the rights of, any Third Party.



         "COOPERATION MANAGEMENT COMMITTEE" or "CMC" shall mean the committee

formed pursuant to Section 3.1.



         "EXCLUSIVITY TERM" shall have the meaning assigned to it in Section

5.2.



         "EXTENSION FEE" shall have the meaning assigned to it in Section 7.5.



         "FSC-STATUS" or "Final Selected Compound Status" shall mean the point

at which a Product is declared, following Novartis' standard compound

development procedures, an 'FSC Compound' or equivalent status by Novartis'

Research Management Board or some other similar body, which declaration

authorizes the initiation of preclinical development programs aimed, INTER ALIA,

at the detailed investigation of those toxicological, bioavailability,

pharmacokinetic and formulation parameters whose successful completion will

allow progression of the Product to Phase I Clinical Trials.



         "FTE" shall mean the equivalent of a full-time twelve (12) months

(including normal vacations, sick days and holidays) work of a person,

carried out by one or more employees or consultants of a Party, each of whom

devotes all or a portion of his or her time to a Collaboration Project;

provided, however, that each Party understands and agrees that the other

Party retains complete discretion to change the identity, the frequency and

time which





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any individual employee devotes to a Collaboration Project. Scientific work

on or directly related to a Collaboration Project to be performed by a

Party's employees or consultants can include, but is not limited to,

experimental laboratory work, recording and writing up results, reviewing

literature and references, holding scientific discussions, managing and

leading scientific staff, and carrying out Research Cooperation management

duties (including service on the Cooperation Management Committee).



         "JOINT INVENTION" shall have the meaning assigned to it in Section 8.1.



         "JOINT PROJECT" shall mean a Program of Research which Novartis and

Rigel agree will be conducted collaboratively as provided in Section 4.1 hereof.



         "JOINT TECHNOLOGY" shall mean Know-How and Patents conceived or reduced

to practice by at least one employee of Novartis and at least one employee of

Rigel during the course of a Program of Research.



         "KNOW-HOW" shall mean any and all tangible or intangible know-how,

trade secret, invention (whether or not patentable), data, pre-clinical and

clinical result, physical, chemical or biological material, and other

information.



         "LEAD COMPOUND" shall mean an active compound identified by Rigel in

the course of Compound Screening on the basis of a Novel Validated Target

pursuant to Section 5.6.



         "MILESTONE EVENT" shall have the meaning assigned to it in Section 7.2.



         "MILESTONE PAYMENT" shall have the meaning assigned to it in Section

7.2.



         "NOTICE DATE" shall have the meaning assigned to it in Section 4.1.4

and 4.2.4.



         "NOVARTIS KNOW-HOW" shall mean any Know-How that is necessary and

useful in a Program of Research and that Novartis owns or Controls on the

Effective Date, and any replication or any part of such information or material.



         "NOVARTIS PATENTS" shall mean all Patents which claim inventions or

discoveries necessary and useful in a Program of Research and that that Novartis

owns or Controls on the Effective Date.



         "NOVARTIS TECHNOLOGY" shall mean Novartis Know-How and Novartis

Patents, subject to any limitation contained in the agreements under which

Novartis' rights to the use of such Novartis Technology are derived.



         "NOVEL VALIDATED TARGET" shall mean a specific molecule in an

intracellular signaling pathway which, when bound by a specific peptide, changes

in a predetermined way the phenotype of a target cell with a degree of

specificity and in a manner meeting the predetermined validation criteria set by

the CMC for Joint Projects and by Novartis for At-Novartis Projects.



         "PATENTS" shall mean all foreign and domestic patents (including,

without limitation, extensions, reexaminations, reissues, renewals and inventors

certificates) and patents issuing from patent applications (including

substitutions, provisionals, divisionals, continuations and

continuations-in-part).





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         "PHASE I CLINICAL TRIALS" shall mean first clinical trial where the

Product is applied in healthy human volunteers to test safety of such Product.



         "PRODUCT" shall mean a molecule in the various stages of development

from identification in Compound Screening to and including commercialization,

which is useful to diagnose, treat or prevent human diseases or conditions and

whose principal mechanism of action by which it exerts its pharmacological

activity is based upon, derived from or discovered with the use of, a Novel

Validated Target.



         "PROGRAM OF RESEARCH" shall mean research utilizing Rigel Technology to

identify specific target molecules and peptides which bind thereto that alter a

selected phenotype of a target cell population, including the use of retroviral

vector and expression systems which express libraries of molecules in target

cells, high-speed fluorescent cell sorting systems to identify the cells in

which the selected phenotype change has occurred and two-hybrid screening assays

to elaborate the intracellular interactions of the specific target molecules and

other means and methods, whether or not utilizing Rigel Technology, appropriate

in a particular program.



         "PROGRAM PROPOSAL" shall mean a written description of a Program of

Research specifying in reasonable detail the specific goals of the project

including clinical objectives, target cells to be utilized, desired biologic

endpoints of assays of the target cells, project time frames and resource

requirements.



         "PROJECT CONTACT PERSON" shall have the meaning assigned to it in

Section 3.8.



         "PROJECT KNOW-HOW" shall mean Know-How developed, conceived or reduced

to practice by a Party in the course of a Collaboration Project.



         "PROJECT PATENT" shall mean a Patent claiming Project Know-How.



         "PROJECT TECHNOLOGY" shall mean Project Know-How and Project Patents.



         "RESEARCH COOPERATION" shall mean the Joint Projects and the

At-Novartis Projects.



         "RESEARCH PERIOD" shall mean, for each Joint Project and each

At-Novartis Project, five (5) years commencing as of the corresponding

Commencement Date, subject to earlier termination as permitted hereby.



          "RIGEL CORE TECHNOLOGY" shall mean Rigel's proprietary packaging cell

lines (e.g., without limitation, that designated as Phoenix), high-speed

functional genomic screening technology, two-hybrid screening assays, retroviral

vector systems and expression systems that utilize these vectors to express

libraries of molecules in target cells and high speed fluorescent cell sorting

systems and any improvements thereon, and any Patents and Know-How relating

thereto owned or Controlled by Rigel, subject to any limitation contained in the

agreements under which Rigel's rights to the use of such Rigel Core Technology

are derived.



         "RIGEL KNOW-HOW" shall mean any Know-How other than Rigel Core

Technology that is useful in a Collaboration Project and that Rigel owns or

Controls on the Effective Date and any replication or any part of such

information or material.





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          "RIGEL PATENTS" shall mean all Patents other than Rigel Core

Technology which claim inventions or discoveries useful in a Collaboration

Project and that are owned or Controlled by Rigel on the Effective Date.



          "RIGEL TECHNOLOGY" shall mean the Rigel Patents and Rigel Know-How,

subject to any limitation contained in the agreements under which Rigel's rights

to the use of such Rigel Technology are derived.



         "SOLE INVENTIONS" shall have the meaning assigned to it in Section 8.1.



         "T-CELL PROJECT" shall mean the Program of Research directed to the

identification of Novel Validated Targets involved in the process of T-Cell

activation, as the Program of Research is more fully described in Exhibit A-1

hereto.



         "TERM OF AGREEMENT" shall have the meaning assigned to it in Section

11.1.



          "TERRITORY" shall mean the entire world.



          "THIRD PARTY" shall mean any person or entity other than Novartis,

Rigel and Affiliates of either.



2.       SELECTION OF PROJECTS



         2.1 NOVARTIS ACCESS TO FIVE PROJECTS. Novartis may have access to up to

five (5) Programs of Research of which at least two (2) will be Joint Projects

and no more than three (3) will be At-Novartis Projects.



         2.2      PROPOSAL FOR A PROGRAM OF RESEARCH.



                  2.2.1 JOINT PROJECTS. A Program of Research for a Joint

Project may be proposed by Novartis or Rigel submitting to the other a Program

Proposal. Within thirty (30) days of receipt of a Program Proposal the receiving

party shall determine whether it has any agreement with a Third Party which

would prevent it from agreeing to conduct pursuant to this Agreement the Program

of Research identified in the Program Proposal and notify the proposing party

accordingly. If the receiving party is free to conduct the Program of Research

pursuant to this Agreement, the Parties shall meet to determine whether they

will agree to conduct such Program of Research pursuant to this Agreement. If

so, the CMC shall meet promptly to prepare a mutually agreeable description of

the Program of Research to be attached as an exhibit to this Agreement, to

specify the number of FTEs which will be utilized, the Commencement Date and the

number of FTEs as well as the resources to be allocated at Novartis. If the

receiving party is not free to conduct the Program of Research pursuant to this

Agreement, neither Party shall have any obligation or liability to the other

with respect to such Program of Research.



                  2.2.2    AT-NOVARTIS PROJECTS.



                           (a)      Novartis may propose a Program of Research

for an At-Novartis Project by submitting to Rigel a corresponding Program

Proposal.



                           (b)      Novartis shall have the right to proceed

with such Program of Research, unless Rigel notifies Novartis in writing within

thirty (30) days of receipt of a





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Program Proposal (i) that in Rigel's opinion, the Program of Research as

proposed by Novartis is scientifically not feasible, or (ii) that Rigel is

engaged in advanced negotiations with a Third Party regarding a collaboration

on a Program of Research which would conflict with the Program of Research

proposed by Novartis under this Agreement, or (iii) that Rigel has initiated

an internal Program of Research, as evidenced by written records, which would

conflict with the Program of Research proposed by Novartis.



                           (c)      If Rigel provides to Novartis a notice

pursuant to subsection (b)(i) above, the Parties shall meet to discuss and

revise the proposed Program Proposal as appropriate to address Rigel's comments

and suggestions, whereafter Novartis shall have the right to proceed with such

Program of Research based on the revised Program Proposal. If Rigel provides to

Novartis a notice pursuant to subsection (b)(ii) or (b)(iii) above, such Program

of Research may not be pursued by Novartis, and neither Party shall have any

obligation or liability to the other with respect to such Program of Research.



                           (d)      If Novartis has the right to proceed with a

Program of Research as provided in this Section 2.2.2, Novartis will provide to

Rigel a mutually agreeable description of the Program of Research, including the

validation criteria to be applied for determining whether a molecule is a Novel

Validated Target, to be attached as an exhibit to this Agreement which

description shall specify the Commencement Date of the At-Novartis Project.

Thereafter, the Parties will meet promptly to specify the Rigel Technology and

Rigel Core Technology to be transferred and the time of the transfer thereof to

Novartis pursuant to Section 4.2.5 hereof.



         2.3 NUMBER AND KIND OF ADDITIONAL PROGRAMS OF RESEARCH. The parties

hereby agree that the Commencement Date of the T-Cell Project shall be the

Effective Date of this Agreement. Subject to Section 2.2, Novartis and Rigel

will add to this Agreement two (2) additional Programs of Research prior to the

first (1st) anniversary of the Effective Date and two(2) Programs of Research

prior to the second (2nd) anniversary of the Effective Date.



         2.4 T-CELL PROJECT. Novartis and Rigel hereby agree that the T-Cell

Project is to be conducted as a Joint Project as provided in Section 4.1 and is

one of the Programs of Research referred to in Section 2.1. A mutually agreeable

description of the Program of Research is set forth in Exhibit A-1. The number

of FTEs and the Commencement Date for the T-Cell Project are set forth in

Exhibit B-1.



         2.5 B-CELL PROJECT. Novartis hereby acknowledges that Rigel has

proposed the B-Cell Project as the second Joint Project in compliance with

Section 2.2, and that Novartis has no agreement with a Third Party which would

prevent it from agreeing to engage in the B-Cell Project pursuant to this

Agreement. A mutually agreeable description of the Program of Research for the

B-Cell Project is set forth in Exhibit A-2. The number of FTEs and the

Commencement Date for the B-Cell Project are set forth in Exhibit B-2. Novartis

will notify Rigel within ninety (90) days after the Effective Date whether it

agrees that the B-Cell Project shall be conducted as the second Joint Project.

If Novartis does not so agree, Rigel's proposal of the B-Cell Project shall be

considered withdrawn as of the ninety-first (91st) day after the Effective Date

and neither Novartis nor Rigel shall thereafter have any obligation or liability

to the other with respect to the B-Cell Project.



3.       RESEARCH COOPERATION GOVERNANCE





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         3.1 JOINT COOPERATION COMMITTEE FORMATION. The Research Cooperation

established by this Agreement shall be overseen or monitored, pursuant to the

provisions of Section 3.7 hereof, by a Cooperation Management Committee composed

of an equal number of representatives from each Party (the "Cooperation

Management Committee"). Each Party shall initially designate three (3)

representatives on the CMC within ten (10) business days after the Effective

Date. The addition of further representatives to the CMC, if any, shall occur

pursuant to the provisions of Section 3.3.6 hereof. Each Party may, upon notice

to the other Party, change its representatives to the CMC to allow for the

participation of different research groups within Novartis or Rigel, as the case

may be. The Parties shall agree upon the appropriate qualifications for members

of the CMC. An alternate member designated by a Party may serve temporarily in

the absence of a permanent member of the CMC for such Party. Each Party shall

designate one of its representatives as a Co-Chair of the CMC. Each Co-Chair of

the CMC will be responsible for the agenda and the minutes of alternating CMC

meetings.



         3.2 CMC ACTIONS. Actions by the CMC pursuant to this Agreement shall be

taken only with unanimous approval of all of the representatives of the CMC. If

the CMC fails to reach unanimity on a matter before it for decision, the matter

shall be referred for resolution to the designated executives of the Parties

identified in Section 13.2.



         3.3      MEETINGS OF THE CMC.  The CMC:



                  3.3.1 shall hold meetings at such times and places as shall be

determined by the CMC (it being expected that meetings will alternate between

one of Novartis' research sites on the one hand and Rigel's head offices on the

other hand) but in no event shall such meetings be held in person less

frequently than once every three (3) months during the entire period during

which the Research Period of at least one Collaboration Project is not yet

expired or terminated;



                  3.3.2    may conduct meetings in person or by telephone or

video conference;



                  3.3.3 by mutual consent of the representatives of each Party,

may invite other personnel of either Party to attend meetings of the CMC;



                  3.3.4 may act without a meeting if prior to such action a

written consent thereto is signed by all members of the CMC;



                  3.3.5 may form and subsequently disband subcommittees with

appropriate representation from each Party;



                  3.3.6 may increase or decrease the equal number of CMC

representatives each Party can designate; and



                  3.3.7 may amend or expand upon the foregoing procedures for

its internal operation by unanimous written consent.



         3.4 MINUTES. Subject to the provisions of Section 3.1 hereof, one of

the Co-chairs of the CMC will prepare, within ten (10) business days after each

meeting (whether held in person or by telephone or video conference), the

minutes reporting in reasonable detail the actions taken by the CMC, the status

of each Collaboration Project, the then current list of Novel Validated Targets,

issues requiring resolution and resolutions of previously reported





                                       7.

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issues, which minutes are to be approved by the signature of the CMC Co-Chair

of the other Party.



         3.5 SUBCOMMITTEES. Any subcommittee established by the CMC shall have

appropriate representation of each Party and may include representatives of a

Party who are not members of the CMC. Any such subcommittee shall be subject to

the CMC and shall report its activities and actions to the CMC. At the request

of either Party at any time, any such committee shall be dissolved and its

powers and functions returned to the CMC.



         3.6 REPORTS. Novartis and Rigel shall each provide written reports at

or before each CMC meeting describing its activities and results under the

Research Cooperation. Such reports shall be in such form and contain such detail

as the CMC shall determine.



         3.7 CMC FUNCTIONS AND POWERS. The activities of the Parties under this

Agreement shall be managed by the CMC only to the extent set forth herein

(unless otherwise mutually agreed by the Parties). The CMC shall:



                  3.7.1    foster the collaborative relationship between the

Parties;



                  3.7.2    facilitate and monitor the technology transfer under

the Collaboration Projects;



                  3.7.3 approve the validation criteria for a Novel Validated

Target within sixty (60) days of each Commencement Date;



                  3.7.4 pursuant to Section 5.4 and provided Novartis has

requested Rigel screening thereunder, approve in advance the criteria for a Lead

Compound identified by Rigel and to be reported to Novartis;



                  3.7.5    monitor the progress of the research in the Joint

Projects;



                  3.7.6 monitor the status of At-Novartis Projects to allow

assessment of whether or when a Milestone Payment is due;



                  3.7.7 review and allocate annual FTEs in the Joint Projects,

within the framework of the contractually agreed funding level;



                  3.7.8 clear scientific publications relating to the Joint

Projects, and, insofar as containing work from both Parties, relating to

At-Novartis Projects, subject to the review and approval of both Parties

pursuant to Section 10.3;



                  3.7.9 perform such other functions as elsewhere explicitly

provided in this Agreement and as appropriate to further the purposes of this

Agreement as mutually determined by the Parties.



         3.8 PROJECT CONTACT PERSONS. Subject to the CMC, the day-to-day

communication between the Parties and project coordination of each Joint Project

will be performed by two (2) "Project Contact Persons", one to be appointed by

each Party.



         3.9 OBLIGATIONS OF PARTIES. Each one of the Parties shall have the

right to inspect the other Party's records through a qualified independent Third

Party, reasonably acceptable to the other Party, to determine whether the other

Party's performance complies with the





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