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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000912057-01-004300.txt : 20010209
<SEC-HEADER>0000912057-01-004300.hdr.sgml : 20010209
ACCESSION NUMBER:		0000912057-01-004300
CONFORMED SUBMISSION TYPE:	S-2
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20010208

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VYREX CORP
		CENTRAL INDEX KEY:			0000933972
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				880271109
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-2
		SEC ACT:		
		SEC FILE NUMBER:	333-55214
		FILM NUMBER:		1528393

	BUSINESS ADDRESS:	
		STREET 1:		2159 AVENIDA DE LA PLAYA
		CITY:			LA JOLLA
		STATE:			CA
		ZIP:			92037
		BUSINESS PHONE:		6194544462

	MAIL ADDRESS:	
		STREET 1:		2159 AVENIDA DE LA PLAYA
		CITY:			LA JOLLA
		STATE:			CA
		ZIP:			92037
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-2
<SEQUENCE>1
<FILENAME>a2037372zs-2.htm
<DESCRIPTION>FORM S-2
<TEXT>

<HTML>
<HEAD>
<TITLE> Prepared by MERRILL CORPORATION www.edgaradvantage.com
</TITLE>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
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<FONT SIZE=3 ><A HREF="#01SAN1062_1">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="CENTER"><FONT SIZE=2><B>As filed with the Securities and Exchange Commission on February&nbsp;8, 2001  </B></FONT></P>

<P ALIGN="RIGHT"><FONT SIZE=2><B> Registration No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></P>

<HR NOSHADE>
<HR NOSHADE>
<P ALIGN="CENTER"><FONT SIZE=5><B>SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington D.C. 20549  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=5><B>FORM S-2<BR>  </B></FONT><FONT SIZE=2><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=5><B>VYREX CORPORATION<BR>  </B></FONT><FONT SIZE=2>(Exact Name of Registrant as specified in its charter) </FONT></P>

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<TD WIDTH="50%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><B>Nevada</B></FONT></TD>
<TD WIDTH="50%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><B>88-0271109</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="50%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2>(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD WIDTH="50%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2>(IRS Employer<BR>
Identification Number)<BR></FONT>
</TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2><B>2159 Avenida de la Playa, La Jolla, California 92037<BR>
TEL (858)&nbsp;454-4446 / FAX (858)&nbsp;459-9522<BR>  </B></FONT><FONT SIZE=2>(Address of principal executive offices) </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>Corporation Trust Company of Nevada<BR>
One East First Street, Reno, Nevada 89501 (702)&nbsp;688-3061<BR>  </B></FONT><FONT SIZE=2>(Name and address and telephone number of agent for service) </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>Copies to:<BR>
Fisher Thurber LLP<BR>
David&nbsp;A. Fisher<BR>  </B></FONT><FONT SIZE=2>4225 Executive Square, Suite 1600<BR>
La Jolla, California 92037-1483<BR>
TEL (858)&nbsp;535-9400<BR>
FAX (858)&nbsp;535-1616 </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>Approximate date of commencement of proposed sale to the public:<BR>
from time to time after the Registration Statement has become effective.  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
/&nbsp;/ </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest reinvestment plans, check the following box.&nbsp;/x/ </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;If
this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;/&nbsp;/ </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;If
this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.&nbsp;/&nbsp;/ </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;If
delivery of the prospectus is expected to be made pursuant to Rule&nbsp;434, please check the following box.&nbsp;/&nbsp;/ </FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TD WIDTH="100%" COLSPAN=9 VALIGN="BOTTOM"><BR><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="34%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=1><B>Title of Each Class of Securities to be Registered</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=1><B>Amount to be Registered</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=1><B>Proposed Maximum Offering Price per Share(1)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=1><B>Maximum Proposed Aggregate Offering Price</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=1><B>Amount of Registration Fee</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="100%" COLSPAN=9 VALIGN="BOTTOM"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="34%"><FONT SIZE=2>Common Stock, par value $.001 per share</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>1,949,167 shares</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>$0.50</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>$974,584</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>$250.00</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="100%" COLSPAN=9 VALIGN="BOTTOM"><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Estimated
solely for the purpose of computing the amount of the registration fee under Rule&nbsp;457(h) of the Securities Act of 1933, as amended, based on the average of the high
and low prices of the Company's Common Stock as reported on the OTC BB on February&nbsp;2, 2001. </FONT></DD></DL>
<BR>
<HR NOSHADE ALIGN="CENTER" WIDTH="120">

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section&nbsp;8(a) of the Securities Act or until the registration
statement shall become effective on such date as the Commission, acting pursuant to said section&nbsp;8(a), may determine.  </B></FONT></P>

<HR NOSHADE>
<HR NOSHADE>
<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=4><B>VYREX CORPORATION<BR>
1,949,167 Shares of Common Stock</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This offering consists of 1,949,167 shares of common stock of Vyrex Corporation ("Company" or "Vyrex"), par value $.001 per share ("Common
Stock"). See "Description of the Securities." The Common Stock is traded over the counter under the symbol OTC:BB-VYRX. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus ("the Prospectus") relates to the public offering, which is not being underwritten, and resale by the holders of 1,949,167 shares of Common Stock ("Selling
Shareholders"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Common Stock held by Selling Shareholders was received in private placement transactions of the Company and privately negotiated sales by affiliates of the Company. The Common
Stock was issued pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section&nbsp;3(b) and 4(2) thereof.
The Securities are being registered by the Company pursuant to registration covenants or registration rights agreements made to or existing with the holders thereof. See "Description of Securities"
and "Plan of Distribution." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company will not receive any of the proceeds from the sale of the Common Stock sold by the Selling Shareholders. The Company has agreed to bear certain expenses in connection with
the registration and sale of the Common Stock being offered by certain of the Selling Shareholders and to indemnify certain Selling Shareholders against certain liabilities, including liabilities
under the Securities Act. See "Plan of Distribution." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>THE SECURITIES OFFERED INVOLVE HIGH RISK. SEE "RISK FACTORS" STARTING ON PAGE&nbsp;4.</B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ADEQUACY OR
ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.  </B></FONT></P>

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<TABLE WIDTH="88%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Price to&nbsp;Public(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Underwriting<BR>
Discounts and<BR>
Commissions(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Proceeds to<BR>
Company(3)(4)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Proceeds to Selling<BR>
Shareholders(4)</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Per Share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>974.584</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>974,584</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>974,584</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>974,584</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Estimated
solely for the purpose of calculating the registration fee under Rule&nbsp;457 of the Securities Act, based upon $0.50 per Share sale price of the Registrant's Common
Stock as reported on OTC BB on February&nbsp;2, 2001.
<BR><BR></FONT></DD><DT><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Excludes
any costs of sale or commissions which may be incurred by Selling Shareholders, since such costs and expenses will be determined by negotiation between each Selling
Shareholder and his or her own representatives.
<BR><BR></FONT></DD><DT><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>The
Common Stock is held by the Selling Shareholders, who will be selling for their own account. The Company will not receive any proceeds of sales by Selling Shareholders, but will
incur expenses of the offering payable by the Company, estimated to be $18,000.
<BR><BR></FONT></DD><DT><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Assumes
sale by Selling Shareholders of 1,949,167 Shares of Common Stock at $0.50 per share. </FONT></DD></DL>
<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_bf1062_1_2"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><I>Continued from cover page  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock held by Selling Shareholders may be offered for resale by the Selling Shareholders from time to time in transactions on the
over-the-counter market, in privately negotiated transactions, or by a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Common Stock held by Selling Shareholders may be sold by the Selling Shareholders through one or more
of the following: (a)&nbsp;a block trade in which the broker or dealer so engaged will attempt to sell the Common Stock as agent but may position and resell a portion of the block as principal to
facilitate the transaction, (b)&nbsp;purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus, and (c)&nbsp;ordinary brokerage
transactions and transactions in which the broker solicits purchases. The Selling Shareholders may effect such transactions by selling Common Stock to or through broker-dealers and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders or the purchasers of the Common Stock for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular broker-dealer might be in excess of customary commissions). In addition, any Common Stock covered by this Prospectus which
qualifies for sale pursuant to Rule&nbsp;144 may be sold under Rule&nbsp;144 promulgated under the Securities Act rather than pursuant to this Prospectus. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Selling Shareholders and any broker-dealers or agents that participate with the Selling Shareholders in the distribution of the Common Stock may be deemed to be "underwriters"
within the meaning of Section&nbsp;2(a)(11) of the Securities Act, and any commissions or discounts received by them and any profits on the resale of the Selling Shareholders' shares, may be deemed
to be underwriting commissions or discounts under the Securities Act. Under applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), any
person engaged in a distribution of securities may not simultaneously bid for or purchase securities of the same class for a period of two (2)&nbsp;business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Selling Shareholders will be subject to the applicable provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Rule&nbsp;10b-5, in connection with transactions in the Common Stock during the effectiveness of the Registration Statement of which this Prospectus forms
a part. All of the foregoing may affect the marketability of the Common Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="bf1062_available_information"> </A>
<A NAME="toc_bf1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>Available Information    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company is subject to the informational requirements of the Exchange Act, and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street NW, Judiciary Plaza, Washington, DC 20549, and at the Commission's regional offices: Chicago Regional Office, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661;
and New York Regional Office, Suite 1300, 7 World Trade Center, New York, New York 10048. Copies of such materials can also be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, NW, Judiciary Plaza, Washington, DC 20549. The Commission maintains a Web Site that contains reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The Commission's Web Site is located at http://www.sec.gov. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This
Prospectus constitutes a part of a Registration Statement on Form&nbsp;S-2 (the "Registration Statement") filed by the Company with the Commission under the
Securities Act. Vyrex filed with the Commission a Registration Statement on Form SB-2 on December&nbsp;1, 1995, as amended by Amendment No.&nbsp;1, and Amendment No.&nbsp;2, as filed
with the Commission on February&nbsp;20, 1996, and March&nbsp;20, 1996, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

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<A NAME="page_bf1062_1_3"> </A>

<P><FONT SIZE=2>
respectively (collectively, the "IPO Registration Statement"), pursuant to the Securities Act. This Prospectus omits certain of the information set forth in the Registration Statement and the IPO
Registration Statement and the exhibits and schedules thereto. For further information with respect to the Company and the Common Stock offered hereby, reference is made to the Registration Statement
and the IPO Registration Statement and the exhibits and schedules filed as a part thereof. Statements contained in this Prospectus concerning the contents of any contract or any other document
referred to are not necessarily complete; reference is made in each instance to the copy of such contract or document filed as an exhibit to the Registration Statement or the IPO Registration
Statement. Each such statement is qualified in all respects by such reference to such exhibit. Each of the Registration Statement or the IPO Registration Statement, including all exhibits and
schedules thereto, may be inspected without charge at the Commission's principal office in Washington, D.C., and copies of all or any part thereof may be obtained from such office after payment of
fees prescribed by the Commission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Information
contained herein is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Registration Statement
becomes effective. This Prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="bf1062_documents_incorporated_by_reference"> </A>
<A NAME="toc_bf1062_2"> </A>
<BR></FONT><FONT SIZE=2><B>Documents Incorporated By Reference    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company regularly files documents with the Securities and Exchange Commission to comply with applicable government regulations, including
Form&nbsp;10-QSB and Form&nbsp;10-KSB. Vyrex will provide without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon written
or oral request of such person, a copy of any and all of the documents that have been or may be filed with the Securities and Exchange Commission (other than exhibits to such documents which are not
specifically incorporated by reference into such documents). Such requests should be directed to: </FONT></P>

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<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><FONT SIZE=2>Vyrex Corporation<BR>
Attn: G. Dale Garlow<BR>
Chief&nbsp;Executive&nbsp;Officer<BR>
2159&nbsp;Avenida&nbsp;de&nbsp;la&nbsp;Playa<BR>
La&nbsp;Jolla,&nbsp;California&nbsp;92037<BR>
(858)&nbsp;454-4446</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
following documents previously filed with the Commission, except as superseded or modified herein, are hereby incorporated by reference into this Prospectus: </FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>The
Company's Annual Report on Form&nbsp;10-KSB for the fiscal year ended December&nbsp;31, 1999.
<BR><BR></FONT></DD><DT><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>The
Company's Quarterly Reports on Form&nbsp;10-QSB for the quarters ended March&nbsp;31, 2000, June&nbsp;30, 2000, and September&nbsp;30, 2000.
<BR><BR></FONT></DD><DT><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>The
Company's definitive Schedule&nbsp;14a (Proxy) filed May&nbsp;1, 2000.
<BR><BR></FONT></DD><DT><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>The
Company's 1934 Act Registration Statement on Form&nbsp;8-A.
<BR><BR></FONT></DD><DT><FONT SIZE=2>5.</FONT></DT><DD><FONT SIZE=2>Certain
exhibits from the Company's 1933 Act Filings. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All
documents filed with the Commission pursuant to Section&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the
offering, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. The most recent Annual Report on
Form&nbsp;10-KSB and all Quarterly Reports on Form&nbsp;10-QSB dated thereafter must accompany delivery of this Prospectus. Any statement </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>iii</FONT></P>

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<A NAME="page_bf1062_1_4"> </A>

<P><FONT SIZE=2>
contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as modified or superseded, to constitute a part of this Prospectus. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No
person is authorized in connection with any offering made hereby to give any information or make any representation not contained or incorporated by reference in this Prospectus,
and any information not contained or incorporated herein must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, by any person in any jurisdiction in which it is unlawful for such person to make such offer or solicitation. Neither the delivery of this Prospectus at any time nor any sale made
hereunder shall, under any circumstances, imply that the information herein is correct as of any date subsequent to the date hereof. </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="bf1062_forward-looking_statements"> </A>
<A NAME="toc_bf1062_3"> </A>
<BR></FONT><FONT SIZE=2><B>FORWARD-LOOKING STATEMENTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Prospectus contains forward-looking statements. When included in this Prospectus, the words "expects," "intends," "anticipates," "plans," "projects" and
"estimates," and analogous or similar expressions are intended to identify forward-looking statements. Such statements, which include statements contained in "Prospectus Summary," "Risk Factors" and
elsewhere are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. For a discussion
of certain of such risks, see "Risk Factors." These forward-looking statements speak only as of the date of this Prospectus. The Company expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>iv</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca1062_prospectus_summary"> </A>
<A NAME="toc_ca1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROSPECTUS SUMMARY    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>The following summary does not purport to be complete and is qualified in its entirety by reference to the more detailed information
appearing elsewhere in this Prospectus. Unless otherwise indicated, the information in this Prospectus does not give effect to the exercise of outstanding warrants and options.</I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca1062_the_company"> </A>
<A NAME="toc_ca1062_2"> </A>
<BR></FONT><FONT SIZE=2><B>The Company    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Vyrex Corporation is a development stage company seeking to discover and develop pharmaceuticals and nutraceuticals for the treatment and prevention of
respiratory, cardiovascular and neurodegenerative diseases. The Company's research has been focused on targeted antioxidant therapeutics for respiratory, neurological and cardiovascular diseases and
the development of nutraceuticals for the dietary support of certain age and general health related conditions. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company was incorporated on January&nbsp;2, 1991, in the State of Nevada. The Company's offices are located at 2159 Avenida de la Playa, La Jolla, California 92037. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
the Company's opinion, Vantox&reg; is currently its lead drug candidate. The Company's research with Vantox&reg; indicates it may have usefulness in the
treatment of asthma, ARDS, cystic fibrosis, oxygen toxicity, smoke inhalation and other respiratory diseases and conditions. The Company has demonstrated Vantox&reg;'s effects in
preventing and treating oxidative lung damage in three different animal models. Based on this growing data and growing evidence that oxidative stress and inflammation may be central to the pathogensis
of asthma and other respiratory conditions, the Company believes Vantox&reg; is an appropriate drug candidate to take forward into clinical trials. Due to the expense of completing
pre-clinical trials and conducting clinical trials, the Company is unable to fund necessary additional development internally and must seek outside sources to fund the further development
of the product. To date, the Company has not received a commitment for such funding from any potential partners. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
1997, the Company entered into an agreement with the Immune Response Corporation ("IRC") to develop the certain proprietary technology licensed by the Company for producing tagged
genes, transcripts and proteins under the trademark of CD-Tagging<SUP>TM</SUP>. The agreement was amended in 1998 to include research and development of certain proprietary
Vantox&reg; pro-drugs as potential treatments for
spinal cord and central nervous system trauma. The Company terminated its license covering CD-Tagging<SUP>TM</SUP> in conjunction with its decision to terminate its gene discovery
program. The Company and IRC continue to seek a pharmaceutical partner or outside financing for further development and commercialization of the spinal cord and central nervous system technology.
There can be no assurance that the Company and IRC will be able to secure funding in the future for this project. In 2000, IRC expanded its research and development activities to include neurological
applications of the Company's water-soluble pro-drugs of its Propofol patent. An additional U.S. patent for these indications was applied for in August, 2000. Although these indications
are promising, there is no assurance that the Company and IRC will be successful in funding further development and commercialization of these compounds. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;During
1998, the Company entered into an agreement with Retired Persons Services,&nbsp;Inc. ("RPS"), to allow RPS to produce and market four nutritional supplement products designed
by the Company. In exchange, the Company is to receive a royalty in the amount of 15% of RPS's gross sales of such products. The products were launched by RPS in January, 1999. The Company was
notified in September, 2000, that RPS was relinquishing their exclusive rights to the products and discontinuing the product line. The Company will continue to receive royalties on sales until the
inventory is depleted. Although the Company has the rights to market the formulas to other marketers, there is no assurance that can be accomplished. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<A NAME="page_ca1062_1_2"> </A>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;The Company's patent for Metallic Oligopeptide complexes was issued in June, 2000. The patent deals with a novel chromium complex, chromium carnosinate, which the Company feels is
superior to the other forms of chromium supplements currently on the market. This patent, coupled with the Company's Boron patent, provided the Company the opportunity in August, 2000, to enter into a
license agreement with the Futureceutical division of Van Drunen Farms to manufacture and market these patented and trademarked nutraceutical compounds. To date, a partial licensing fee of $25,000 has
been received. The Company will receive a supplemental license issue fee of $75,000 upon attaining $75,000 in initial sales of licensed products. The licensee shall owe the Company a total gross
royalty of 30% of gross revenue from the sale of licensed products. Of the 30% gross royalty, licensee shall credit and allocate 5% to further research and development of the products and pay the
remaining 25% to the Company. Product launch is anticipated in June, 2001. Futureceuticals will fund additional studies to enhance the marketability of these products. There can be no assurance that a
significant market will develop for the products or that any products will continue to be sold or will produce any revenue for the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Since
January, 2000, the Company's major activities consisted of reducing overhead and debt, in raising funds through financing activities, and seeking licensing opportunities for its
intellectual properties and joint ventures, to market its nutraceutical products and initiate the research necessary to take its drug candidates forward into clinical trials. During this period, the
Company generated $455,000 from financing activities consisting of $420,000 from the sale of common stock, $25,000 from the exercise of
stock options, and $10,000 from the exercise of warrants net of repayment of $6,114 on short term loans. To supplement its existing resources, the Company will require additional capital from the sale
of debt or equity. There can be no assurance that such capital will be available on favorable terms, or at all, and if additional funds are raised by issuing equity securities, dilution to existing
shareholders is likely to result. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
January, 2001, the Company agreed with the holder of two Company promissory notes having principal balances of $100,000 and $60,000, respectively, to extend the maturity of such
notes to March&nbsp;22, 2002. Interest on the $100,000 note in the amount of $8,000 will be due and payable on March&nbsp;22, 2001, and interest on the $60,000 note in the amount of $4,800 will be
due and payable on August&nbsp;17, 2001. All principal and accrued and unpaid interest at the rate of 8% per annum on each note will be due and payable on March&nbsp;22, 2002. In consideration of
such extension the Company issued the debt holder an option exercisable for two years to purchase 50,000 shares of Common Stock at a price of $0.50 per share. Furthermore, the Company amended the
$60,000 note to make it convertible at any time prior to maturity into 100,000 shares of Common Stock at a price of $0.60 per share in increments of not less than 20,000 shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Expenses
were minimal in 2000, and were comprised of patent fees, financial reporting fees, accounting fees, rents, utilities, general office fees, an initial animal study on the
chromium project, and limited marketing expense. The Company has reduced its staff to three people, and is dependent on its licensees and its scientific collaborations for its continuing research and
development activities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
2000, three officers of the Company forgave previously accrued compensation totaling $422,559. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company's success will depend in large part upon its ability to raise additional capital and maintain operations. There can be no assurance that the Company will succeed in
raising any additional capital. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<A NAME="page_ca1062_1_3"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca1062_the_offering"> </A>
<A NAME="toc_ca1062_3"> </A>
<BR></FONT><FONT SIZE=2><B>The Offering    <BR>  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Securities Offered(1)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" VALIGN="BOTTOM"><FONT SIZE=2>1,949,167 shares of Common Stock</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="49%" VALIGN="TOP"><FONT SIZE=2><BR>
Common Stock outstanding prior to this<BR>
offering(1)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
8,342,867</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%" VALIGN="TOP"><FONT SIZE=2><BR>
Common Stock outstanding after this offering(2)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
8,342,867</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Use of Proceeds</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
The offering is made by Selling Shareholders and will not result in receipt by the Company of any proceeds.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Trading Symbol</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
OTC:BB-VYRX</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Risk Factors</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
This offering involves a high degree of risk. See "Risk Factors."</FONT></TD>
</TR>
</TABLE>
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<DL compact>
<DT><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>For
a description of the voting and other rights of the Common Stock see "Description of Securities&#151;Common Stock."
<BR><BR></FONT></DD><DT><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Shares
are outstanding as of September 30, 2000. Does not include 2,875,000 shares of Common Stock reserved for issuance under the Company's stock-based compensation plans or any
shares of Common Stock which may be issuable upon exercise or conversion of other outstanding securities. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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NAME="page_cc1062_1_4"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cc1062_summary_financial_information"> </A>
<A NAME="toc_cc1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>SUMMARY FINANCIAL INFORMATION    <BR>  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Summary Financial Information set forth below should be read in conjunction with the financial statements included in the materials incorporated by
reference herein. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="97%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" COLSPAN=2 ROWSPAN=3 ALIGN="CENTER"><FONT SIZE=1><B>Cumulative<BR>
from<BR>
Inception<BR>
through<BR>
September 30,<BR>
2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" COLSPAN=3 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Nine Months<BR>
Ended<BR>
September 30,<BR>
2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Nine Months<BR>
Ended<BR>
September 30,<BR>
1999</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="27%" COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>Year Ended<BR>
December 31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" COLSPAN=3 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>1999</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>1998</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" COLSPAN=3 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>(unaudited)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>(unaudited)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>(unaudited)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Operating Data:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>50,570</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>64,159</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>77,690</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,600</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>439,860</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Operating expenses:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="24%" COLSPAN=2><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>13,277</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>290,781</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>294,502</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,779,009</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,427,498</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="24%" COLSPAN=2><FONT SIZE=2>Marketing &amp; selling</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>206,523</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>428,093</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="24%" COLSPAN=2><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>161,458</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>461,880</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>562,974</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,436,353</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>5,462,209</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="22%"><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>174,735</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>752,661</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>857,476</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3,421,885</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>12,317,800</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Loss from operations</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(124,165</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(688,502</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(779,786</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(3,420,285</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(11,877,940</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Other income (expense):</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Dividend income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Gain (Loss) on sale of fixed assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(6,376</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,875</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,137</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(7,366</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(12,605</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Interest expense</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(12,246</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(5,923</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(10,220</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(26,509</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(68,482</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Interest income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>3,754</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>321</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>321</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>65,748</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>468,281</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="24%" COLSPAN=2><FONT SIZE=2>Charge from issuance of stock options for arranging bridge financing</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,349,900</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="22%"><FONT SIZE=2>Totals</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(14,828</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(3,727</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(8,762</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>31,873</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(962,666</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(138,993</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(692,229</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(788,548</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(3,388,412</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(12,840,606</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Net loss per common share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(0.02</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(0.09</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(0.11</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(0.46</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1.94</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>Weighted average common and common equivalent shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>7,934,473</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>7,423,455</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>7,474,491</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>7,357,211</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,608,030</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%" COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="81%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>September 30, 2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="81%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>(Unaudited)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="81%"><FONT SIZE=2><B>Balance Sheet Data:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="81%"><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>297,278</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="81%"><FONT SIZE=2>Total assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>316,199</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="81%"><FONT SIZE=2>Current liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>291,065</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="81%"><FONT SIZE=2>Notes payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>160,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="81%"><FONT SIZE=2>Stockholders' deficiency</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(134,866</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<BR></FONT><FONT SIZE=2><B>RISK FACTORS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>An investment in the Common Stock being offered hereby is speculative in nature, involves a high degree of risk and should not be made
by any investor who cannot afford the loss of his/her entire investment. Accordingly, prospective investors should consider carefully the following factors, in addition to all of the other information
presented in this Prospectus before purchasing any of the Common Stock offered hereby. This Prospectus contains, in addition to historical information, forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include
those discussed below as well as those discussed elsewhere in this Prospectus.</I></FONT></P>


<P><FONT SIZE=2><B>Future Capital Requirements; Uncertainty of Additional Funding  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Substantial expenditures will be required to enable the Company to conduct planned product research and development, resume the FDA application process,
including conducting preclinical studies and clinical trials, and to manufacture and market its proposed products including its proposed nutraceutical products. The Company will need to raise
substantial additional funds to support its long-term proposed product development and commercialization programs including its nutraceutical product development programs. The Company has
no established bank financing arrangements and it is not anticipated the Company will secure any bank financing in the foreseeable future. Therefore, the Company will need to seek additional financing
through subsequent future public or private sales of its securities, including equity and debt securities. The Company may also seek funding for the development and marketing of its proposed products
through strategic alliances and other arrangements with corporate partners. There can be no assurance such collaborative arrangements or additional funds will be available when needed, or on terms
acceptable to the Company, if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, the Company may be required to
halt operations, or obtain funds through arrangements with collaborative partners or others that may require the Company to relinquish rights to certain of its technologies, potential product
candidates or potential products the Company would not otherwise relinquish. In an effort to conserve funds, the Company has curtailed its internal research efforts and is dependent on its licensees
and collaborations for continued studies and clinical trials. The Company's future cash requirements will be affected by the degree to which the Company is able to resume operations in the future, as
well as future results of research and development, preclinical studies and clinical trials, nutraceuticals product development and marketing costs, relationships with corporate partners, changes in
the focus and direction of the Company's research and development programs, competitive and technological advances, the regulatory approval process and other factors. </FONT></P>

<P><FONT SIZE=2><B>Early Stage of Development; Absence of Products  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company is in the development stage. Other than four nutritional supplements licensed to RPS, which have generated some royalty income since their
introduction in 1999, the Company has not completed the development of any product and, accordingly, has not begun to generate revenues from operations. Most of the Company's proposed pharmaceutical
products will require significant additional research and development, including extensive preclinical and clinical testing, before the Company will be able to apply for FDA approval. There can be no
assurance the Company can initiate or sustain any significant research and development efforts, and that such efforts, if undertaken, will be successful, that any of the Company's potential
pharmaceutical products under development will prove to be safe and effective in clinical trials, that the Company will be able to obtain FDA approval for any of its proposed pharmaceutical products,
that any such proposed pharmaceutical products can be manufactured at acceptable cost and with appropriate quality, or that any such proposed products, if they do receive regulatory approval, can be
successfully marketed. The Company cannot predict when, if ever, it will begin to market any proposed pharmaceutical products. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;The Company desires to develop nutraceutical products which the Company believes may be sold before any of its proposed pharmaceutical products will be sold. During 1998, the Company
entered into an agreement with Retired Persons Services,&nbsp;Inc. ("RPS") to allow RPS to produce and market four nutritional supplement products designed by the Company. In exchange, the Company
is to receive a royalty in the amount of 15% of gross sales. The products were launched by RPS in January, 1999. The Company was notified in September, 2000, that RPS was relinquishing its exclusive
rights to the products and discontinuing the product line. The Company will continue to receive royalties on sales until the inventory is depleted. Although the Company has the rights to market the
formulas to other marketers, there is no assurance that can be accomplished. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company's patent for Metallic Oligopeptide complexes was issued in June, 2000. The patent deals with a novel chromium complex, chromium carnosinate, which the Company feels is
superior to the other forms of chromium supplements currently on the market. This patent, coupled with the Company's Boron patent, provided the Company the opportunity in August&nbsp;2000, to enter
into a license agreement with the Futureceutical division of Van Drunen Farms to manufacture and market these patented and trademarked nutraceutical compounds. To date, a partial licensing fee of
$25,000 has been received. The Company will receive a supplemental license issue fee of $75.000 upon attaining $75,000 in initial sales of licensed products. The licensee shall owe the Company a total
gross royalty of 30% of gross revenue from the sale of licensed products. Of the 30% royalty gross royalty, the licensee shall credit and allocate 5% to further research and development of the
products and pay the remaining 25% to the Company. Product launch is anticipated in June, 2001. Futureceuticals will fund additional studies to enhance the marketability of these products. There can
be no assurance that a significant market will develop for the products or that any products will continue to be sold or will produce any revenue for the Company. </FONT></P>

<P><FONT SIZE=2><B>No Significant Operating Revenues; Accumulated Deficit; Expectation of Future Losses  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company has experienced significant operating losses since its inception in 1991. As of September&nbsp;30, 2000, the Company had a deficit accumulated in
the development stage of $12,840,606 (see the Summary Financial Information included herein). The Company expects operating losses to increase substantially in the future only if the Company decides
to restart its research and development and clinical trials internally. The financial information contained in this Prospectus, including documents incorporated by reference, have been prepared
assuming the Company will continue as a going concern. This assumption means that the Company will successfully recover its assets and satisfy its liabilities in the ordinary course of business. The
Company has generated no significant revenues from operations. The development of the Company's proposed pharmaceutical products will require the commitment of substantial resources to prepare and
submit applications to the FDA, and to conduct research, preclinical and clinical trials, and for both its proposed pharmaceutical and nutraceutical products the Company must either establish
commercial scale manufacturing processes and facilities or contract for such manufacturing facilities, and to establish additional quality control, regulatory, marketing, sales and administrative
capabilities. There can be no assurance the Company will be successful in these endeavors or will continue as a going concern, especially in light of the high failure rate of development stage
pharmaceutical and nutrition companies with limited resources. There can be no assurance the Company will not incur substantial and continuing net losses beyond the next several years or that the
Company will ever reach profitability. Furthermore, there can be no assurance the Company will apply for or obtain regulatory approvals, enter into arrangements with third parties for product
development and commercialization, or successfully market or license any additional products. To achieve profitable operations, the Company, alone or with others, must successfully identify, develop,
manufacture and market its proprietary products or technologies. There can be no assurance the Company will be able to accomplish these tasks. Significant delays in any of these matters could
materially adversely impact the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2><B>No Proceeds to Company  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As described above, the Company will receive no proceeds from this offering. The Company will bear all of the expenses associated with the offering, except
brokerage fees, if any, incurred by Selling Shareholders. Therefore, the expenses incurred by the Company in connection with the offering will not be offset by any proceeds received by the Company in
connection therewith. </FONT></P>

<P><FONT SIZE=2><B>Debt Service and Penalties  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company has two notes payable, one of $100,000 principal amount, and the other of $60,000 principal amount, which notes are secured by substantially all of
the assets of the Company. In January, 2001, the maturity date of both notes was extended to March&nbsp;22, 2002, provided the Company makes interest payments on such debt of $8,000 on
March&nbsp;22, 2001 and $4,800 on August&nbsp;17, 2001. All principal and accrued and unpaid interest at the rate of 8% per annum will be payable on March&nbsp;22, 2002. In connection with the
extension of the maturity of this debt, the Company will issue the notes' holder an option enforceable for two years to purchase 50,000 shares of Common Stock at a price of $0.50 per share.
Furthermore, the Company has amended the $60,000 note to make it convertible into Common Stock at a price of $0.60 per share in increments of not less than 20,000 shares. </FONT></P>

<P><FONT SIZE=2><B>Intense Competition and Rapid Technological Change  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company is engaged in rapidly evolving and highly competitive fields and competition is expected to increase. There are many companies, including large
pharmaceutical, chemical, and vitamin and nutrition supplement companies, engaged in developing, manufacturing and marketing products similar to those proposed to be developed by the Company, many of
which have established a significant presence in the markets which the Company's proposed products are designed to address. Virtually all of these companies have substantially greater capital
resources, research and development staffs, facilities and experience in obtaining regulatory approvals, as well as in the manufacturing, marketing and distribution of products, than the Company.
There can be no assurance the Company's competitors will not succeed in developing technologies and products that are more effective and less costly than any potential products of the Company or which
could render the Company's proposed products or technology obsolete. </FONT></P>

<P><FONT SIZE=2><B>Dependence Upon Key Personnel  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company has reduced its staff to three people, and is dependent on its licensees and its scientific collaborations for the bulk of its continuing research
and development activities. Consequently, further successful development of the Company's proprietary technology is dependent on the ability of the research and development efforts of its licensees
and scientific collaborations. Directing these efforts is Dr.&nbsp;Sheldon S. Hendler, Chairman of the Company's Board of Directors and the owner of approximately 18.5% of the outstanding Common
Stock of the Company. The ability to retain the services of Dr.&nbsp;Hendler is important to the success of the Company. The Company does not currently have an employment contract with
Dr.&nbsp;Hendler, nor does it maintain insurance on Dr.&nbsp;Hendler's life. Even if the Company succeeded in obtaining financing necessary to fund internal research and development, it would
continue its efforts to expand its research and development externally by means of outsourcing and expanding collaborations with current or new scientific partners. </FONT></P>


<P><FONT SIZE=2><B>Reliance on Collaborative Partners  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In 2000, the Company entered into new license agreements and expanded its research collaborations in an effort to expedite the development of its technology.
In 2000, Immune Response Corporation ("IRC") expanded its research and development activities to include neurological applications of the Company's water-soluble pro-drugs of its Propofol
patent. An additional U.S. patent </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>
for these indications was applied for in August, 2000. Although these indications are promising, there is no assurance the Company and IRC will be successful in funding further development and
commercialization of these compounds. In August, 2000, the Company entered into a license agreement with the Futureceutical division of Van Drunen Farms to manufacture and market patented and
trademarked nutraceutical compounds. To date, a partial licensing fee of $25,000 has been received. The Company will receive a supplemental license issue fee of $75,000 upon attaining $75,000 in
initial sales of licensed products. The licensee shall owe the Company a total gross royalty of 30% of gross revenue from the sale of licensed products. Of the 30% gross royalty, the licensee shall
credit and allocate 5% to further research and development of the products and pay the remaining 25% to the Company. Product launch is anticipated in June, 2001. Futureceuticals will fund additional
studies to enhance the marketability of these products. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There
can be no assurance the Company will be able to negotiate acceptable collaborative arrangements in the future, or that any collaborative arrangements will be successful. In
addition, there can be no assurance the Company's collaborative partners will not pursue alternative technologies or develop alternative compounds either on their own or in collaboration with others,
including the Company's competitors, as a means of developing treatments for the diseases targeted by the collaborative programs. </FONT></P>

<P><FONT SIZE=2><B>Governmental Regulation and Uncertainty of Product Approvals  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The production and marketing of the Company's proposed products are subject to strict regulation by federal and state governmental authorities in the United
States and in foreign countries where such potential products may be produced and marketed. In the United States, the FDA regulates, where applicable, development, testing, labeling, manufacturing,
registration, notification, clearance or approval, marketing, distribution, record keeping and reporting requirements for human and animal drugs, medical devices, biologies, cosmetics and food
additives. Most, if not all, of the Company's proposed pharmaceutical products, including Panavir&reg; and Vantox&reg;, will require FDA clearance prior to marketing. The
Federal Environmental Protection Agency ("EPA") has regulations covering certain
areas for some of the Company's proposed products. Comparable state and local agencies may have similar regulations. The FDA and EPA regulatory approval processes may take a number of years and both
FDA and EPA regulatory approval may require the expenditure of substantial resources. The processing, formulation, packaging, labeling and advertising of the Company's proposed nutraceutical products
is subject to regulation by one or more federal agencies, including the FDA, the Federal Trade Commission (the "FTC"), the Consumer Product Safety Commission, the United States Department of
Agriculture and the Environmental Protection Agency. These activities are also regulated by various agencies of the states and localities in which the Company's nutraceutical products may be sold,
including without limitation the California Department of Health and Human Services, Food and Drug branch. The Nutrition Labeling and Education Act and the Dietary Health Education Supplement Act
provide regulations which require that vitamin, mineral and dietary supplements labels have to provide the same basic nutritional information found on the labels on most conventional foods. The
regulations also require that health claims made for vitamins, minerals and dietary supplements be scientifically valid, and mandate nutrition information found on the label to state the nutrition
content per serving. Compliance with these regulations could adversely affect the Company's operations and its financial condition. There can be no assurance the production and marketing of the
Company's proposed products or other potential products which may be developed by the Company in the future, if any, will satisfy then current requirements of the FDA, EPA, FTC or comparable state,
local and foreign authorities. Delays in receiving or failure to receive governmental approvals may have a material adverse impact on the Company. In addition, there can be no assurance that
government regulations applicable to the Company or its proposed products or the interpretation thereof will not change and thereby prevent the Company from marketing some or all of its potential
products for a period of time or permanently, or otherwise materially and adversely affect the Company. Moreover, if </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>
regulatory approval of a product is granted, such approval may entail limitations on the indicated uses for which the product may be marketed. Even if such regulatory approval is obtained, a marketed
product, its manufacturer and the facilities in which the product is manufactured are subject to continual review and periodic inspections. Later discovery of previously unknown problems with a
product, manufacturer or facility may result in restrictions on such product or manufacturer, including withdrawal of the potential product from the market, product seizures, a halt in operation and
other materially adverse consequences. The Company is unable to predict the extent of adverse governmental regulation which might arise from future federal, state or foreign legislative or
administrative action, or the extent of the impact of such legislative changes on the business of the Company. </FONT></P>


<P><FONT SIZE=2><B>Patents and Proprietary Rights  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's eventual success may depend in large part on its ability to obtain patent protection for its proposed products, both in the United States and
other countries. The patent position of biotechnology and pharmaceutical companies is highly uncertain and involves complex legal and factual questions. There is no consistent policy regarding the
breadth of claims allowed in biotechnology and pharmaceutical patents. The Company currently has twelve patents issued, and several patent applications pending in the United States. There have been
foreign counterparts of certain of these
applications filed in other countries on behalf of the Company. The Company intends to file additional applications as appropriate for patents covering both its proposed products and processes. There
can be no assurance patents will issue from any of the pending applications, or for patents that have issued or may be issued, the claims allowed will be sufficiently broad to protect the Company's
technology. In addition, there can be no assurance any patents issued to the Company will not be challenged, invalidated or circumvented, or the rights granted thereunder will provide proprietary
protection to the Company. In addition, any patents obtained by the Company will be of limited duration. All United States patents issuing from patent applications applied for June&nbsp;8, 1995 or
thereafter will have a term of 20&nbsp;years from the date of filing. All United States patents in force before June&nbsp;8, 1995 will have a term of the longer of: (1)&nbsp;17&nbsp;years from
the date of issuance; or (2)&nbsp;20&nbsp;years from the date of filing. All United States patents issuing from patent applications applied for before June&nbsp;8, 1995 will have a term of the
longer of (1)&nbsp;17&nbsp;years from the date of issuance; or (2)&nbsp;20&nbsp;years from the date of filing. The commercial success of the Company will also depend in part on the Company's
neither infringing patents issued to competitors nor breaching the technology licenses upon which the Company's proposed products might be based. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;It
may become necessary for the Company to obtain licenses of potential products or other proprietary rights or trade secrets from other parties. Failure by the Company to obtain such
licenses may have a material adverse impact on the Company. Litigation, which could result in substantial costs to the Company, may also be necessary to enforce any patents issued to the Company or to
determine the scope and validity of others' proprietary rights. In addition, the Company may have to participate in interference proceedings declared by the U.S. Patent and Trademark Office to
determine the priority of inventions which could result in substantial costs to the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company also attempts to protect its proprietary technology and processes by seeking to obtain confidentiality agreements with its contractors, consultants, employees, potential
collaborative partners, licensees, licensors and others. There can be no assurance these agreements will adequately protect the Company, that these agreements will not be breached, or the Company will
have adequate remedies for any breach, or that the Company's trade secrets will not otherwise become known or be independently discovered by competitors. In addition the Company does not generally
require its principal scientific advisors to enter into confidentiality agreements, and to the extent there is collaboration between any of the scientific advisors and the Company, the aspects of such
collaboration will not necessarily remain the trade secrets of the Company. This approach could increase the risk to the Company that it may not be able to protect its proprietary information. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance others will not independently develop similar or more advanced technologies or design around aspects of the Company's technology which may be patented, or
duplicate the Company's trade secrets. In some cases, the Company may rely on trade secrets to protect its innovations. There can be no assurance trade secrets will be established, or secrecy
obligations will be honored, or that others will not independently develop similar or superior
technology. To the extent consultants, key employees or other third parties apply technological information independently developed by them or by others to Company projects, disputes may arise as to
the proprietary rights to such information which may not be resolved in favor of the Company. </FONT></P>

<P><FONT SIZE=2><B>Dilutive and Other Adverse Effects of Outstanding Options and Registration Rights  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of existing options issued under the Company's stock option plan and other outstanding options or other convertible securities, the holders
thereof are given an opportunity to profit from a rise in the market price of the Common Stock with a resulting dilution in the interests of the other Stockholders. The terms on which the Company may
obtain additional financing may be adversely affected by the existence of such options or other convertible securities. The holders of the options may exercise them at a time when the Company might be
able to obtain additional capital through a new offering of securities on terms more favorable than those provided by the options. In addition, the preparation of the registration statement of which
this Prospectus is a part on behalf of the Selling Shareholders involves substantial expense to the Company which will not be compensated since the Company will receive no proceeds from the offering. </FONT></P>


<P><FONT SIZE=2><B>Possible Depressive Effect on Price of Securities of Future Sales of Common Stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Actual sales or the prospect of sales of Common Stock under Rule&nbsp;144 or otherwise in the future may depress the prices of the Company's securities or
any market that may develop, and also make it difficult to sell the Company's securities purchased by investors herein. There are options outstanding both pursuant to the Company's Stock Option Plan
and options or other convertible securities not pursuant to any plan which are exercisable for up to 2,180,259 shares of Common Stock. The vast majority of all of these options and warrants are
currently exercisable although at prices exceeding the current market price of the Company's Common Stock. Exercise of any of these warrants or options could result in dilution to the purchaser of the
shares offered herein. Resale of shares acquired upon the exercise of these options may depress the prices of the Company's securities or make them more difficult to sell by the investors herein. The
sale or availability for sale of substantial amounts of Common Stock in the public market after this offering could adversely affect the prevailing market prices of the Company's securities and could
impair the Company's ability to raise additional capital through the sale of its equity securities. </FONT></P>

<P><FONT SIZE=2><B>Possible Adverse Effects of Authorization and Issuance of Preferred Stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Board of Directors is authorized to issue up to 10,000,000 shares of preferred stock. The Board of Directors has the power to establish the
dividend rates, liquidation preferences, voting
rights, redemption and conversion terms and privileges with respect to any series of preferred stock. The issuance of any series of preferred stock having rights superior to those of the Common Stock
may result in a decrease in the value or market price of the Common Stock and could further be used by the Board as a device to prevent a change in control favorable to the Company. Holders of
preferred stock to be issued in the future may have the right to receive dividends and certain preferences in liquidation and conversion rights. The issuance of such preferred stock could make the
possible takeover of the Company or the removal of management of the Company more difficult, discourage hostile bids for control of the Company in which stockholders may receive premiums for their
Common Stock and adversely affect the voting and other rights of the holder of the Common Stock, or depress the market price of the Common Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2><B>Delisting From Nasdaq Stock Market  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company was notified that it had been delisted from the Nasdaq SmallCap Market effective with the close of business October&nbsp;21, 1998. As of
October&nbsp;22, 1998, the company's Common Stock commenced trading over the counter under the symbol OTC:BB&#151;VYRX. As a result, investors may find it more difficult to dispose of or to
obtain accurate quotations as to the value of the Company's Common Stock. </FONT></P>

<P><FONT SIZE=2><B>Possible Volatility of Stock Price  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The market prices for securities of emerging and development stage companies such as Vyrex have historically been highly volatile. Future announcements
concerning the Company or its competitors, including the results of testing, technological innovations or new commercial products, government regulations, developments concerning proprietary rights,
litigation or public concern as to safety of potential products developed by the Company or others, may have a significant impact on the market price of the Company's securities. </FONT></P>

<P><FONT SIZE=2><B>Control by Present Stockholders; Possible Depressive Effect on the Company's Securities  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The current officers and directors of the Company own 22% of the outstanding Common Stock of the Company. Dr.&nbsp;Hendler individually owns approximately
18.5% of the outstanding Common Stock. This concentration of ownership could have an influence over the election of directors and could exert influence or control over the Company's operations. This
may discourage potential purchasers from
seeking control of the Company through purchase of Common Stock and this possibility could have a depressive effect on the price of the Company's securities. </FONT></P>

<P><FONT SIZE=2><B>Anti-Takeover Provisions&#151;Limitation on Voting Rights  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Articles of Incorporation and Bylaws contain provisions that may make it more difficult to acquire control of the Company by means of tender
offer, over-the-counter purchases, a proxy fight, or otherwise. The Articles of Incorporation also include provisions restricting stockholder voting rights. The Company's
Articles of Incorporation include a provision that requires that any action required by the stockholders may not be affected by a written consent, and that special meetings of the stockholders may
only be called by the Board of Directors. This provision makes it difficult for stockholders to pass any resolution not supported by the Board of Directors except at a regularly called meeting. The
Company's Articles of Incorporation provide for a staggered term of the Board of Directors, thus eliminating the ability to elect all of the directors in any one year. This provision may make the
implementation of a change in management a process requiring more than one year even if supported by a majority of the stockholders. The Company's Articles of Incorporation provide directors may only
be removed for cause and with a vote of 70% of the stockholders. Certain provisions of the Articles of Incorporation may only be amended by a vote of 70% of the stockholders. As a result of the number
of shares currently owned by Dr.&nbsp;Hendler, this provision may for some time have the effect of indirectly eliminating any possibility stockholders could pass a resolution unless approved by
Dr.&nbsp;Hendler, in connection with any question submitted or required to be submitted to a vote of the stockholders. The Company's Articles of Incorporation also require that stockholders give
advance notice to the Company of any directorship nominations or other business to be brought by the stockholders at any stockholder's meeting. This provision makes it more difficult for stockholders
to nominate candidates for the Board of Directors who are not supported by management. In addition, the Articles of Incorporation require advance notice for stockholder proposals to be brought before
the annual meeting. The requirements include that the notice must specify certain information regarding the stockholder and the meeting. This provision to implement stockholder proposals makes it more
difficult even if a majority of stockholders are in support thereof. The Company is also subject to certain provisions of California law if more than 50% of its outstanding securities are held of
record by </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2>
persons with addresses in California, and if more than 50% of its property, payroll and sales are from California. These provisions of California law will control the operations of the Company with
respect to certain of the anti-takeover provisions discussed herein, until such time as either (i)&nbsp;the Company is listed on the New York or American Stock Exchange or the National
Market System of Nasdaq, and it has 800 stockholders; or (ii)&nbsp;the Company no longer has either more than 50% of its outstanding securities held by persons with addresses in California, or less
than 50% of its property, payroll and sales are in California. Each of these provisions may also have the effect of deterring hostile take-overs or delaying changes in control or
management of the Company. In addition, the indemnification provisions of the Company's Bylaws and Articles of Incorporation may represent a conflict of interest with the stockholders since officers
and directors may be indemnified prior to any judicial determinations as to their conduct. </FONT></P>

<P><FONT SIZE=2><B>Disclosures Relating to Low Priced Stocks; Possible Restrictions on Resale of Low Price Stocks and on Broker-Dealer Sale; Possible Adverse Effect of "Penny Stock" Rules on
Liquidity for the Company's Securities  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Since the Company's securities were delisted from the NASDAQ SmallCap Market and the Company has net tangible assets of $2,000,000 or less, transactions in the
Company's securities are subject to Rule&nbsp;15g-9 under the Exchange Act, which imposes additional sales practice requirements on broker-dealers who sell such securities to persons
other than established customers and "accredited investors" (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000 or $300,000 together with their
spouses). For transactions covered by this Rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction
prior to the sale. Consequently, this Rule may affect the ability of broker-dealers to sell the Company's securities, and may affect the ability of purchasers in this offering to sell any of the
securities acquired hereby in the secondary market. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Commission has adopted regulations which generally define a "penny stock" to be any non-NASDAQ equity security of a small company that has a market price (as therein
defined) less than $5.00 per share, or with an exercise price of less than $5.00 per share subject to certain exceptions, and which is not traded on any exchange or quoted on NASDAQ. For any
transaction by broker-dealers involving a penny stock (unless exempt), the rules require delivery, prior to a transaction in a penny stock, of a risk disclosure document relating to the penny stock
market. Disclosure is also required to be made about compensation payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly
statements are required to be sent disclosing recent price information for the penny stock held in an account and information on the limited market in penny stocks. </FONT></P>

<P><FONT SIZE=2><B>Lack of Marketing Experience; Dependence on Outside Parties for Marketing and Distribution; Uncertainty of Market Acceptance of Proposed Products  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If successfully developed and approved by applicable regulatory agencies, the Company intends to market its proposed products through contractual arrangements
with others such as joint venture, licensing or similar collaborative agreements or distribution agreements. This may result in a lack of control by the Company over some or all of the marketing and
distribution of such potential products. There can be no assurance the Company will be able to enter into any marketing arrangements on terms acceptable to the Company or that any marketing efforts
undertaken on behalf of the Company will be successful. The Company may, in the future, determine to directly market certain of its proposed products. The Company has limited marketing experience and
significant additional capital expenditures and management resources would be required to develop a direct sales force. In the event the Company elects to engage in direct marketing activities, there
can be no assurance the Company
would be able to obtain the requisite funds or attract and retain the human resources necessary to successfully market any of its potential products. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company's future growth and profitability will depend, in large part, on the success of its personnel and others conducting marketing efforts on behalf of the Company in fostering
acceptance among the various markets of the use of the Company's potential products as an alternative to other available products or otherwise. The Company's success in marketing its potential
products will be substantially dependent on educating its targeted markets as to the distinctive characteristics and perceived benefits of the Company's potential products. There can be no assurance
that the Company's efforts or the efforts of others will be successful or that any of the Company's proposed products will be favorably accepted among the targeted markets. </FONT></P>


<P><FONT SIZE=2><B>Lack of Manufacturing Capability; Dependence on Outside Parties for Manufacturing of Proposed Products  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company has no manufacturing facilities or expertise, and does not intend to manufacture any potential product or products. The Company initially intends
to enter into arrangements with others to manufacture all of its proposed products and has done so with respect to its nutraceutical products. The Company does not have any contracts or agreements
obligating any party to manufacture any quantity of nutraceuticals for any price. Failure to secure such contracts or agreements could have a material adverse impact on the business and operations of
the Company. There can be no assurance the Company will be able to enter into satisfactory arrangements for the manufacture of its proposed products with manufacturers whose facilities and procedures
comply with FDA or other regulatory requirements, that the manufacturers will continue to comply with such standards, or that such manufacturers will be able to adequately supply the Company with its
product needs. The Company's dependence on third parties for manufacturing may adversely affect the Company's ability to develop and deliver products on a timely and competitive basis. The Company may
in the future undertake to manufacture some or all of its proposed products directly. The Company has no experience with the manufacture of any of its proposed products. In the event the Company were
to undertake to manufacture any of its proposed products, the Company would be required to finance considerable additional capital expenditures, attract and retain experienced personnel, develop a
manufacturing capability, and comply with extensive government regulations with respect to its facilities, including among others, FDA manufacturing requirements. The Company would not be able to
develop any reasonable manufacturing capability without obtaining significant additional capital. There can be no assurance the Company would be able to successfully establish manufacturing
operations. </FONT></P>

<P><FONT SIZE=2><B>Dependence on Suppliers  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The materials used in the Company's potential products are currently available only from a limited number of suppliers. The Company anticipates there will
continue to be a limited number of suppliers
for its proposed products. In the event the Company could not obtain adequate quantities of necessary materials from its existing suppliers, there can be no assurance the Company would be able to
access alternative sources of supply within a reasonable period of time or at commercially reasonable rates. Regulatory requirements applicable to pharmaceutical products tend to make the substitution
of suppliers costly and time-consuming. The Company does not have any contracts or agreements with any of its raw material suppliers for its proposed nutraceutical products to provide
quantities of raw materials at specific prices. The Company believes there are a number of suppliers of raw materials for its proposed nutraceutical products. There can be no assurance adequate
suppliers will be available or that the lack of such contracts or agreements will not have a material adverse impact on the business and operations of the Company. The unavailability of adequate
commercial quantities, the inability to develop alternative sources, a reduction or interruption in supply or a significant increase in the price of materials could have a material adverse effect on
the Company's ability to manufacture and market its proposed products. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2><B>Product Liability; Availability of Insurance  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The design, development and manufacture of the Company's proposed products involve an inherent risk of product liability claims and associated adverse
publicity. The Company obtained clinical trial product liability insurance for its Panavir&reg; Phase I human clinical trial and intends to obtain insurance for any future clinical trials of
Panavir&reg;, Vantox&reg;, and other potential products, and for potential product liability associated with the eventual commercial sale of the Company's proposed products, if any.
There can be no assurance the Company will be able to obtain or maintain insurance for any of its proposed clinical trials or proposed commercial products. Such insurance is expensive, difficult to
obtain and may not be available in the future on acceptable terms or at all. The Company will also be exposed to product liability claims in the event that, among other things, the use of its proposed
nutraceutical products result in injury. </FONT></P>

<P><FONT SIZE=2><B>Hazardous Material; Environmental Matters  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company has historically contracted with outside vendors for manufacture of its proposed products. However, the Company's proposed research and development
processes at times may involve the controlled use of hazardous materials, chemicals, viruses and various radioactive compounds. In addition, various of such materials, chemicals, viruses and compounds
may be used by the Company in the future to the extent Vyrex undertakes to perform its own manufacturing. To the extent certain such materials, chemicals, viruses and compounds are or will be used by
the Company, Vyrex will be subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of certain materials and waste products. Although the
Company believes it could adopt safety procedures for handling and disposing of materials which would comply with the standards prescribed
by such laws and regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, the Company could be held liable
for any damages that result, and any such liability could exceed the resources of the Company. There can be no assurance the Company will not be required to incur significant costs to comply with
environmental laws and regulations in the future, or that the operations, business or assets of the Company will not be affected adversely or materially by current or future environmental laws or
regulations. </FONT></P>

<P><FONT SIZE=2><B>Health Care Reform  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Political, economic and regulatory influences are subjecting the health care industry in the United States to fundamental changes. Reforms under consideration
may include mandated basic health care benefits, controls on health care spending through limitations on the growth of private health insurance premiums and Medicare and Medicaid spending, the
creation of large insurance purchasing groups and fundamental changes to the health care delivery system. The Company anticipates Congress and certain state legislatures will continue to review and
assess alternative health care delivery systems and payment methods and public debate of these issues will likely continue in the future. Due to uncertainties regarding the ultimate features of reform
initiatives and their enactment and implementation, the Company cannot predict which, if any, of such reform proposals will be adopted, when they may be adopted or what impact they may have on the
Company. </FONT></P>

<P><FONT SIZE=2><B>Uncertainty of Health Care Reimbursement  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Vyrex's ability to commercialize its proposed products successfully may depend in part on the extent to which reimbursement for the cost of such proposed
products and related treatment will be available from government health administration authorities, private health insurers and other organizations. Third-party payers are increasingly challenging the
price of medical products and services. Significant uncertainty exists as to the reimbursement status of newly approved health care products, and there can be no assurance adequate third-party
coverage will be available to enable </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<P><FONT SIZE=2>
Vyrex to maintain price levels sufficient to realize an appropriate return on its investment in product development. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1062_use_of_proceeds"> </A>
<A NAME="toc_dg1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>USE OF PROCEEDS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company will not receive any proceeds from this offering. The proceeds of this offering will be received directly by the Selling Shareholders for their own
account. The offering price cannot be determined by the Company, since the price at which the Common Stock is sold will be determined by market conditions existing at the various times the Selling
Shareholders elect to sell the Common Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1062_certain_transactions"> </A>
<A NAME="toc_dg1062_2"> </A>
<BR></FONT><FONT SIZE=2><B>CERTAIN TRANSACTIONS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains a policy which requires that any transaction between the Company and any of its officers, directors or five percent or greater
shareholders must be on terms no less favorable than the Company could obtain from unaffiliated third parties, and that all such transactions are approved by resolution of the Board of Directors which
resolution is approved by the affirmative vote of a majority of disinterested directors. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1062_selling_shareholders"> </A>
<A NAME="toc_dg1062_3"> </A>
<BR></FONT><FONT SIZE=2><B>SELLING SHAREHOLDERS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information, as of the date hereof, with respect to the beneficial ownership of the Company's Common Stock registered
herein by each Selling Shareholder named below. The shares of Common Stock are being registered to permit public secondary trading of the Common Stock registered, and the Selling Shareholders may
offer the Common Stock for resale from time to time. Except as described below, none of the Selling Shareholders has had any position, office or other material relationship with the Company within the
past three years. The following table assumes each Selling Shareholder sells all of the Common Stock registered held by such Selling Shareholder in this offering. The Company is unable to determine
the exact number of shares of such Common Stock that will actually be sold. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="63%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="61%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER"><FONT SIZE=1><B>Number<BR>
Beneficially Owned</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER"><FONT SIZE=1><B>Number<BR>
Offered Hereby</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Martin&nbsp;J. Malone</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>George&nbsp;E. Williamson,&nbsp;II</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>R.&nbsp;Kirk Landon</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Henry Befeler</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>John McClure</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Sheldon&nbsp;B. and Myrna Palley</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>110,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Karl Bishopric</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>60,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>60,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Edward&nbsp;C. Gomez</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>150,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>150,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Richard Davis</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>150,835</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>150,835</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Richard McKee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>William Cook</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Dale Garlow</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Donald Leach</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>150,833</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>James Grant</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>125,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>125,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="61%" COLSPAN=2><FONT SIZE=2>Robert Rossi</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>200,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>200,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>1,949,167</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>1,949,167</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1062_plan_of_distribution"> </A>
<A NAME="toc_dg1062_4"> </A>
<BR></FONT><FONT SIZE=2><B>PLAN OF DISTRIBUTION    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The offering of Common Stock by the Selling Shareholders is not being underwritten. The Selling Shareholders will act independently of the Company in making
decisions with respect to the timing, manner and size of each sale. The Common Stock offered hereby may be sold by the Selling Shareholders from time to time in transactions (which may include block
transactions) in the over-the-counter market, in negotiated transactions, or a combination of such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, or at negotiated prices. The Selling Shareholders may effect such transactions by selling the Common Stock directly to purchasers or through broker-dealers that may act
as agents or principals. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the Securities for
whom such broker-dealers may act as agents or to whom they sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Selling Shareholders and any broker-dealers that act in connection with the sale of the Common Stock as principals may be deemed to be "underwriters" within the meaning of
Section&nbsp;2(11) of the Securities Act and any commission received by them and any profit on the resale of such Common Stock as principals might be deemed to be underwriting discounts and
commissions under the Securities Act. The Selling Shareholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the Common Stock against
certain liabilities, including liabilities arising under the Securities Act. The Company will not receive any proceeds from the sales by the Selling Shareholders. Sales of the Securities by the
Selling Shareholders, or even the potential of such sales, could have an adverse effect on the market price of the Company's outstanding Common Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;At
the time a particular offer of Common Stock is made, except as herein contemplated, by or on behalf of a Selling Shareholder or the Company, to the extent required, a prospectus
will be distributed which will set forth the number of shares of Common Stock being offered and the terms of the offering, including the name or names of any underwriters, dealers or agents, if any,
the purchase price
paid by any underwriter for Common Stock purchased from the Selling Shareholder and any discounts, commissions or concessions allowed or reallowed or paid to dealers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
order to comply with the securities laws of certain states, if applicable, the Common Stock may be sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Common Stock may not be sold unless such stock has been registered or qualified for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the Common Stock may not simultaneously engage in market making activities
with respect to the securities of the Company for a period of at least one, and possibly five business days prior to the commencement of such distribution. In addition and without limiting the
foregoing, each Selling Stockholder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation&nbsp;M,
Rule&nbsp;101, 102 and 107, which provisions may limit the timing of purchases and sales of shares of the Company's Common Stock by the Selling Shareholders. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A
portion of the Common Stock was originally issued to certain Selling Shareholders pursuant to an exemption from the registration requirements of the Securities Act provided by
Section&nbsp;3(b) thereof including Rules&nbsp;504 and 505 of Regulation&nbsp;D and Section&nbsp;4(2) thereof including without limitation Rule&nbsp;506 pursuant to Regulation&nbsp;D
thereunder. The remainder of the Common Stock was purchased in negotiated transactions between the Selling Shareholders and Sheldon&nbsp;S. Hendler. The Company agreed to register the Common Stock
under the Securities Act and to indemnify and hold such Selling </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2>
Shareholders harmless against certain liabilities under the Securities Act that could arise in connection with the sale by such Selling Shareholders of such Common Stock. In connection therewith the
Company has agreed to pay all reasonable fees and expenses except for fees and expenses for counsel to the Selling Shareholders and any underwriting discounts and commissions. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1062_description_of_securities"> </A>
<A NAME="toc_dg1062_5"> </A>
<BR></FONT><FONT SIZE=2><B>DESCRIPTION OF SECURITIES    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. </FONT></P>


<P><FONT SIZE=2><B>Common Stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As of September&nbsp;30, 2000, the Company had 8,342,867 shares of Common Stock issued and outstanding. The holders of Common Stock are entitled to one vote
for each share held of record on all matters submitted to a vote of the stockholders. Except as set forth below under the heading of "Application of Pseudo-Foreign Corporation Statute of California,"
the holders of Common Stock are not entitled to cumulative voting rights with respect to the election of directors, and as a consequence, minority stockholders will not be able to elect directors on
the basis of their votes alone. Subject to preferences that may be applicable to any then outstanding shares of Preferred Stock, holders of Common Stock are entitled to receive ratably such dividends
as may be declared by the Board of Directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, holders of the Common Stock are entitled
to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding Preferred Stock. Holders of Common Stock have no preemptive rights and no
right to convert their Common Stock into any other securities. There are no redemption or sinking fund provisions applicable to the Common Stock. All outstanding shares of Common Stock are, and all
shares of Common Stock to be outstanding upon completion of this offering will be, fully paid and nonassessable. See "Plan of Distribution." </FONT></P>


<P><FONT SIZE=2><B>Preferred Stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The preferred Stock may be issued in series, and shares of each series will have such rights and preferences as are fixed by the Board in resolutions
authorizing the issuance of that particular series. In designating any series of Preferred Stock, the Board may, without further action by the holders of Common Stock, fix the number of shares
constituting that series and fix the dividend rights, dividend rate, conversion rights, voting rights (which may be greater or lesser than the voting rights of the Common Stock), rights and terms of
redemption (including any sinking fund provisions), and the liquidation preferences of the series of Preferred Stock. It is to be expected that the holders of any series of Preferred Stock, when and
if issued, will have priority claims to dividends and to any distributions upon liquidation of the Company, and that they may have other preferences over the holders of the Common Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Board may issue series of Preferred Stock without action of the stockholders of the Company. Accordingly, the issuance of Preferred Stock may adversely affect the rights of the
holder of the Common Stock. In addition, the issuance of Preferred Stock may be used as an "anti-takeover" device without further action on the part of the stockholders. Issuance of
Preferred Stock may dilute the voting power of holders of Common Stock (such as by issuing Preferred Stock with super-voting rights) and may render more difficult the removal of current management,
even if such removal may be in the stockholders best interest. The Company has no current plans to issue any of the Preferred Stock. </FONT></P>

<P><FONT SIZE=2><B>Debenture Warrants  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this prospectus, the Company has issued Debenture Warrants to purchase 17,000 shares of Common Stock issued in conjunction with the issuance
of Debentures in November&nbsp;1997, in </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>
the principal amount of $1,000,000. The Debentures were converted to Common Stock in 1998. The Debenture Warrants were exercisable for a period of three years from the date of issuance and were
exercisable at a price equal to $7.50 per share. These Warrants expired in November&nbsp;2000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company issued additional Warrants in March and August of 1999 in connection with entering into loan transactions with a single entity with an aggregate principal amount equal to
$160,000. Warrants were issued in this transaction entitling the lender to purchase 50,000 shares at an exercise price equal to $1.00 per share, 50,000 shares at an exercise price equal to $0.50 per
share, and 150,000 shares at an exercise price of $0.25 per share. In consideration of extending the maturity of this debt during February&nbsp;2000, the exercise price of the the warrants to
purchase an aggregate of 250,000 shares of common stock was reduced to $0.10. The lender purchased 100,000 shares during June and July&nbsp;2000 at a price of $0.10 per share. The warrant to
purchase 150,000 shares remains unexercised. This warrant expires on August&nbsp;16, 2002. In connection with an agreement reached in 2000 with the holder of this indebtedness to extend its maturity
to March&nbsp;22, 2002, the Company issued the holder an oprion exercisable over two years to purchase 50,000 shares of Common Stock at a purchase price of $0.50 per share. </FONT></P>

<P><FONT SIZE=2><B>Registration Rights  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company agreed with certain of the Selling Shareholders to use its best efforts to file a registration statement registering the Common Stock and to cause
such registration statement to be declared effective. </FONT></P>

<P><FONT SIZE=2><B>Nevada Takeover Legislation  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Sections&nbsp;78.411-78.444 of the General Corporation law of Nevada ("Business Combination Statute"), is applicable to the Company since it has
200 or more stockholders. These provisions may make it more difficult to effect certain transactions between a corporation and a person or group who owns 10% or
more of the corporation's outstanding voting stock, including rights to acquire stock, or a person who is an affiliate or associate of the corporation and who was the owner of 10% or more of such
voting stock at any time within three years immediately prior to the date in question ("Interested Stockholder"). The Business Combination Statute prevents the following transactions between the
corporation and the Interested Stockholder for three years following the date the stockholder became a 10% or more holder of the corporation's voting stock, unless certain conditions are met:
(i)&nbsp;any merger or consolidation; (ii)&nbsp;any sale, lease, exchange, mortgage, pledge, transfer or other disposition of the corporation's assets having a total market value equal to 10% or
more of the total market value of all the assets of the corporation; or 5% or more of the total market value of all outstanding shares of the corporation or representing 10% or more of the earning
power of the corporation; (iii)&nbsp;the issuance or transfer by the corporation of any shares of the corporation that have an aggregate market value equal to 5% or more of the aggregate market
value of all the outstanding shares of the corporation to stockholders except under the exercise of warrants or rights to purchase shares offered, or a dividend or distribution paid or made, pro rata
to all stockholders of the corporation; (iv)&nbsp;the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by, or under any agreement or arrangement or
understanding, whether or not in writing, with, the Interested Stockholder; (v)&nbsp;any reclassification of securities, recapitalization, merger or consolidation or other transaction which has the
effect, directly or indirectly, of increasing the proportionate share of the outstanding shares owned by the Interested Stockholder, and (vi)&nbsp;any receipt by the Interested Stockholder of the
benefit, except proportionally as a stockholder of the corporation, of any loan or other financial assistance or any tax credit or other tax advantage provided by or through the corporation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;The three year ban does not apply if either the proposed transaction or the transaction by which the Interested Stockholder became an Interested Stockholder is approved by the Board
of Directors of the corporation prior to the date the stockholder became an Interested Stockholder. </FONT></P>


<P><FONT SIZE=2><B>Application of Pseudo-Foreign Corporation Statue of California  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company is a Nevada corporation which is authorized to do business as foreign corporation in California. Under Section&nbsp;2115 of the California
General Corporation Law, certain foreign corporations (i.e.,&nbsp;corporations not organized under California law) are placed in a special category (referred to in this discussion as pseudo-foreign
corporation) if they have characteristics of ownership and operation which indicate they have significant contacts in California. So long as the Company is in this special category and does not
qualify for one of the statutory exemptions, it is subject to a number of key provisions of the California General Corporations Law applicable to corporations incorporated in California. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company is a pseudo-foreign corporation since more than 50% of the Company's shares are held by California residents, substantially all of its operations are in California, and no
exemptions from this statute are currently applicable to the Company. Therefore, certain provisions of the California General Corporations Law, pursuant to Section&nbsp;2115 thereof, will be
applicable to the Company. Among the more important provisions are those relating to the election and removal of directors, cumulative voting, classified boards of directors, standard of liability of
directors, distributions, dividends and repurchases of shares, stockholder meetings, approval of certain corporate transactions, appraisal rights, and inspection of corporate records. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1062_certain_articles_of_incorporat__cer03674"> </A>
<A NAME="toc_dg1062_6"> </A>
<BR></FONT><FONT SIZE=2><B>CERTAIN ARTICLES OF INCORPORATION AND BYLAW PROVISIONS WITH<BR>  POSSIBLE ANTI-TAKEOVER EFFECTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Articles of Incorporation contain several provisions that may make the acquisition of control of the Company by means of tender offer, open
market purchases, a proxy fight or otherwise more difficult. These provisions may also discourage transactions in which the stockholders might otherwise receive a premium for their shares over the
current market prices, and may limit the ability of the stockholders to approve transactions that they may deem to be in their best interests. The Company is subject to certain provisions of
California law as summarized above under "Application of Pseudo-Foreign Corporation Statute of California" until such time as either (i)&nbsp;it is listed on the New York or American Stock Exchange
or on the National Market System of Nasdaq and has 800 stockholders, or (ii)&nbsp;it is no longer a pseudo-foreign corporation pursuant to California law. To the extent the provisions discussed
below are inconsistent with California law, California law may control until it is no longer classified as a pseudo-foreign corporation. Set forth below is a description of certain provisions of the
Company's Articles of Incorporation. </FONT></P>

<P><FONT SIZE=2><B>Classified Board of Directors  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Articles of Incorporation divide the Board of Directors into three classes, with each class having a term of three years. Each such class is as nearly
equal in number as possible. At each annual meeting of stockholders, commencing with the next annual meeting of stockholders, directors in Class&nbsp;I will be elected to succeed those directors of
that class whose terms have expired, and each newly elected director will serve for a three-year term. At each subsequent regularly scheduled meeting of stockholders held to elect
directors, the directors of the next succeeding Class shall be elected to a three year term. Currently Directors Lori&nbsp;A. Robinson and Thomas&nbsp;K. Larson,&nbsp;Jr. are in Class&nbsp;I,
G.&nbsp;Dale Garlow and Richard&nbsp;G. McKee are in Class&nbsp;II, and Sheldon&nbsp;S. Hendler is in Class&nbsp;III. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company believes a classified Board of Directors will help to assure the continuity and stability of the Company's Board of Directors and its business strategies and policies. The
classified board provision could increase the likelihood that, in the event of a takeover of the Company, incumbent directors will retain their positions. In addition, the classified board provision
will help ensure the Company's Board of Directors, if confronted with an unsolicited proposal from a third party who has acquired a block of the voting stock of the Company, will have sufficient time
to review the proposal and appropriate alternatives, to seek the best available result for the Corporation. </FONT></P>

<P><FONT SIZE=2><B>No Stockholder Action by Written Consent; Special Meetings  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Articles of Incorporation provide that no action shall be taken by stockholders except at an annual or special meeting of stockholders. The
Company's Articles of Incorporation also provide that special meetings of stockholders can only be held pursuant to a resolution approved by the Board of Directors, and not by the stockholders and
only to consider such business as shall be provided in such resolution, or in the notice to stockholders of the special meeting. </FONT></P>

<P><FONT SIZE=2><B>Stockholder Nomination of Directors  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Articles of Incorporation establish an advance notice procedure with regard to the nomination (other than by or at the direction of the Board of
Directors or a committee thereof), of candidates for election as directors (the "Nomination Procedure"). Only persons who are nominated by the Board of Directors, a committee appointed by the Board of
Directors or by a stockholder who has given timely prior written notice to the Secretary of the Company prior to the meeting at which directors are to be elected, shall be eligible for election as
directors of the Company. Except in limited circumstances, such written notice must be received at the Company's principal executive office not less than 60&nbsp;days prior to the scheduled meeting,
and must contain specified information as to the nominee and the stockholder making the nomination. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the Nomination Procedure. Stockholders may be given relatively limited advance notice of the date of a stockholders meeting held to elect directors. In order to nominate a director
at such a meeting the stockholder must promptly comply with the prior notice provisions, resulting in only a short period to prepare and submit a nomination. This is likely to result in it being more
difficult for stockholders to nominate candidates to the Board of Directors who are not selected by management. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Although
the Company's Articles of Incorporation do not give the Board of Directors any power to approve or disapprove stockholder nominations for the election of the directors or any
other business properly bought by the Company stockholders before an annual or special meeting, this provision may have the effect of precluding a nomination for the election of directors or
precluding the conducting of business at a particular meeting if the proper procedures are not followed, or may discourage or deter a third party from conducting a solicitation of proxies to elect its
own slate of directors or otherwise attempting to obtain control of the Company. </FONT></P>

<P><FONT SIZE=2><B>Stockholder Proposals at Stockholder Meetings  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Articles of Incorporation establish an advance notice procedure for stockholder proposals brought before a regularly scheduled stockholders
meeting. Except in very limited circumstances, to be timely, a stockholder's notice must be received at the Company's principal executive offices not less than 60&nbsp;days prior to the scheduled
meeting. The stockholder's notice must set forth in writing each matter the stockholder proposes to bring before the meeting, including a brief description and the reasons for conducting such business
at the meeting, the names and addresses as they appear on the Company's books of the stockholder making the proposal, and any other stockholder known by the proponent to be supporting the proposal,
the class and number of shares beneficially owned by the stockholder making the proposal and any other stockholder known to be </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2>
supporting the proposal. This provision will preclude conducting business at a particular meeting if the proper notice procedures are not followed. </FONT></P>

<P><FONT SIZE=2><B>Certain Voting Requirements  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company's Articles of Incorporation require the affirmative vote of 70% of the outstanding voting stock to approve or authorize an amendment to certain of
the Articles of Incorporation. The Articles of Incorporation also provide that no director of the Company may be removed except for cause, and requires a vote of 70% of the outstanding shares to
remove a director. The 70% voting requirement may have the effect of delaying, deferring or preventing a change of control of the Company. </FONT></P>

<P><FONT SIZE=2><B>Transfer Agent and Warrant Agent  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;ChaseMellon Shareholder Services is the transfer agent for the Common Stock and warrant agent with respect to the Warrants. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di1062_information_with_respect_to_the_company"> </A>
<A NAME="toc_di1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>INFORMATION WITH RESPECT TO THE COMPANY    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is part of a Registration Statement on Form&nbsp;S-2 filed with the Securities and Exchange Commission, and is accompanied by
copies of the Company's latest Forms&nbsp;10-KSB and 10-QSB, filed pursuant to Section&nbsp;12(a) or 15(d) of the Exchange Act, which forms&nbsp;10-KSB and
10-QSB are incorporated into this Prospectus by this reference. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di1062_legal_matters"> </A>
<A NAME="toc_di1062_2"> </A>
<BR></FONT><FONT SIZE=2><B>LEGAL MATTERS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The validity of the issuance of the shares of Common Stock offered hereby will be passed upon for the Company by Fisher Thurber&nbsp;LLP,
4225&nbsp;Executive Square, Suite&nbsp;1600, La&nbsp;Jolla, California 92037-1483. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di1062_experts"> </A>
<A NAME="toc_di1062_3"> </A>
<BR></FONT><FONT SIZE=2><B>EXPERTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The statements of operations, stockholders' deficiency and cash flows of the Company for the period from January&nbsp;2, 1991 (inception) through
December&nbsp;31, 1999, except for the amounts related to the years ended December&nbsp;31, 1998, 1997, and 1996 included therein which were audited by other independent public accountants, and
the financial statements of the Company as of and for the year ended December&nbsp;31, 1999, which are incorporated by reference in this registration statement, have been incorporated herein in
reliance on the report, which includes an explanatory paragraph relating to the Company's ability to continue as a going concern, of J.H.&nbsp;Cohn&nbsp;LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
financial statements of the Company appearing in the Company's Annual Report on Form&nbsp;10-KSB for the fiscal year ended December&nbsp;31, 1998, have been
audited by Ernst&nbsp;&amp; Young&nbsp;LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements referred to
above are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>No dealer, salesman or any other person has been authorized to give any information or to make any representations other than those contained in this
Prospectus. If given or made, such information or representations must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any of the securities other than the securities to which it relates, or an offer or solicitation of an offer to buy any of the securities to which it relates, or an
offer or solicitation to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this Prospectus nor any sale make hereunder shall under any
circumstances create an implication that information contained herein is correct as of any time subsequent to the date hereof.  </B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B> TABLE OF CONTENTS  </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="93%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Prospectus Summary</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Risk Factors</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Use of Proceeds</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Certain Transactions</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Selling Shareholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Plan of Distribution</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Description of Securities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Certain Articles of Incorporation and<BR>
Bylaw Provisions with Possible<BR>
Anti-Takeover Effects</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Information with Respect to the Company</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Legal Matters</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Experts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Until&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, all dealers effecting transactions in the registered securities, whether or not participating in
this distribution, may be required to deliver a Prospectus, including copies of the Company's most recent Form&nbsp;10-KSB and Form&nbsp;10-QSB. This is in addition to the
obligation of dealers to deliver a Prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>[ Vyrex Logo ]  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=4><B>1,949,167<BR>
Shares of Common Stock  </B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=3><B> PROSPECTUS  </B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2001 </FONT></P>

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<A NAME="toc_ja1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>PART II<BR>  INFORMATION NOT REQUIRED IN PROSPECTUS    <BR>  </B></FONT></P>


<P><FONT SIZE=2><B>Item 14.&nbsp;&nbsp;OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the various expenses in connection with the sale and distribution of the securities being registered. All of the amounts shown
are estimates except the Securities and Exchange Commission ("SEC") registration fee. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="67%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%" COLSPAN=2><FONT SIZE=2>SEC Filing Fee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>250.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="80%" COLSPAN=2><FONT SIZE=2>Printing and Engraving Expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>2,500.00</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%" COLSPAN=2><FONT SIZE=2>Accounting Fees and Expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>2,500.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="80%" COLSPAN=2><FONT SIZE=2>Legal Fees and Expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>10,000.00</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%" COLSPAN=2><FONT SIZE=2>Miscellaneous</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>2,750.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="74%"><FONT SIZE=2>Total (Estimated)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>18,000.00</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2><B>Item 15.&nbsp;&nbsp;INDEMNIFICATION OF DIRECTORS AND OFFICERS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The statutes, charter provisions, Bylaws, Indemnification Agreements or other arrangements under which any controlling person, director or officer of the
Registrant is insured or indemnified in any manner against any liability which he may incur in his capacity as such, are as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Section&nbsp;78.751
of the Nevada Corporation law provides for the indemnification of officers and directors of the Company against expenses, judgments, fines and
amounts paid in settlement under certain conditions and subject to certain limitations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Article&nbsp;VII
of the Bylaws of the Company provides that the Company shall have power to indemnify any person who was or is a party or is threatened to be made
a party to any proceeding by reason of the fact that such person is or was an agent of the Company, against expenses, judgments, fines, settlements and other amounts, actually and reasonably incurred
in connection with such proceeding if the person acted in good faith, reasonably believing the acts to be in the best interest of the Company, and acted having no reason to believe the conduct
unlawful. The Company shall advance the expenses reasonably expected to be incurred by such agent in defending any such proceeding upon receipt of the undertaking required by Nevada Corporation Code
Section&nbsp;78.751(5). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Article
Twelve of the Company's Articles of Incorporation provides that the liability of the directors of the Company for monetary damages shall be eliminated to
the fullest extent permissible under Nevada law. Accordingly, a director will not be liable for monetary damages for breach of duty to the Company or its shareholders in any action brought by or in
the right of the Company. However, a director remains liable to the extent required by law (i)&nbsp;for acts or omission that involve intentional misconduct or a knowing and culpable violation of
law, and (ii)&nbsp;for the payment of distributions in violation of Nevada law. The effect of the provisions in the Articles of Incorporation is to eliminate the rights of the Company and its
shareholder (through shareholders' derivative suits on behalf of the Company) to recover monetary damages against a director for breach of duty as a director, including breaches resulting from
negligent behavior in the context of transactions involving a change of control of the Company or otherwise, except in the situations described in clauses&nbsp;(i) and (ii)&nbsp;above. These
provisions will not alter the liability of directors under federal securities laws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Pursuant
to Authorization provided under the Articles of Incorporation, the Company has entered into indemnification agreements with each of its directors and
officers. Generally, the indemnification agreements attempt to provide the maximum protection permitted by Nevada law as it may be amended from time to time. Moreover, the indemnification agreements
provide for </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>II-1</FONT></P>

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<UL>

<P><FONT SIZE=2>
certain additional indemnification. Under such additional indemnification provisions, however, an individual will not receive indemnification for judgments, settlements or expenses if he or she is
found liable to the Company (except to the extent the court determines he or she is fairly and reasonably entitled to indemnity for expenses), for settlements not approved by the Company or for
settlements and expenses if the settlement is not approved by the court. The indemnification agreements provide for the Company to advance to the individual any and all reasonable expenses (including
legal fees and expenses) incurred in investigating or defending any such action, suit or proceeding. In order to receive an advance of expenses, the individual must submit to the Company copies of
invoices presented to him or her for such expenses. Also, the individual must repay such advances upon a final judicial
decision that he or she is not entitled to indemnification. The Company's Bylaws contain a provision of similar effect relating to advancement or expenses to a director or officer, subject to an
undertaking to repay if it is ultimately determined that indemnification is unavailable. </FONT></P>

</UL>

<P><FONT SIZE=2><B>Item 16.&nbsp;&nbsp;EXHIBITS  </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=1><B>Exhibit<BR>
Number</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="87%" ALIGN="CENTER"><FONT SIZE=1><B>Description<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Form of certificate for shares of Common Stock of the Registrant.(1)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Form of Underwriters Unit Purchase Option.(1)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Form of Warrant Agreement between the Registrant and ChaseMellon Shareholder Services,&nbsp;Inc.(1)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Form of Common Stock Purchase Warrant issued in 1994 and 1995 between the Registrant and the parties listed on the attached schedule.(1)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
5.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Opinion of Fisher Thurber&nbsp;LLP regarding the legality of the securities being registered.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Second Amendment to the March&nbsp;22, 1999 and August&nbsp;17, 1999 Promissory Notes between M.A.&nbsp;Robinson Charitable Remainder Trust and Marius&nbsp;A. Robinson and the Registrant dated January&nbsp;4, 2001.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Collaboration Agreement between the Immune Response Corporation and the Registrant dated August&nbsp;1, 1997.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
First Amendment to Collaboration Agreement dated August&nbsp;1, 1997 between the Registrant and the Immune Response Corporation effective June&nbsp;24, 1998.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Second Amendment to Collaboration Agreement dated August&nbsp;1, 1997 between the Registrant and the Immune Response Corporation effective April&nbsp;26, 1999.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
License Agreement between the Registrant and VDF&nbsp;Futureceuticals,&nbsp;Inc. dated August&nbsp;29, 2000.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Annual Report on Form&nbsp;10-KSB for the year ended December&nbsp;31, 1999.(3)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Quarterly Report on Form&nbsp;10-QSB for the quarter ended March&nbsp;31, 2000.(3)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Quarterly Report on Form&nbsp;10-QSB for the quarter ended June&nbsp;30, 2000.(3)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Quarterly Report on Form&nbsp;10-QSB for the quarter ended September&nbsp;30, 2000.(3)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
23.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Consent of J.H.&nbsp;Cohn,&nbsp;LLP, independent public accountants.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
23.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Consent of Ernst&nbsp;&amp; Young,&nbsp;LLP, independent auditors.(2)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><BR></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>

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<P ALIGN="CENTER"><FONT SIZE=2>II-2</FONT></P>

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23.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Consent of Fisher Thurber&nbsp;LLP (included in Exhibit&nbsp;5.1).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
24.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2><BR>
Power of attorney. Reference is made to the signature page of this Registration Statement.</FONT></TD>
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<DL compact>
<DT><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Incorporated
by reference to the Company's Registration Statement on Form&nbsp;SB-2 Registration No.&nbsp;33-99880 filed on December&nbsp;1, 1995, and
as subsequently amended.
<BR><BR></FONT></DD><DT><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Filed
herewith.
<BR><BR></FONT></DD><DT><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Incorporated
by reference. </FONT></DD></DL>

<P><FONT SIZE=2><B>Item 17.&nbsp;&nbsp;UNDERTAKINGS  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Registrant hereby undertakes: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;To
include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;To
reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule&nbsp;424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20&nbsp;percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;To
include any additional or changed material information on the plan of distribution. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That,
for determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered
and the offering of the securities at that time to be the initial bona fide offering. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act of 1933 ("Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>II-3</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;The Registrant hereby undertakes: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;For
determining any liability under the Securities Act, to treat the information omitted from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule&nbsp;430A and contained in a form of prospectus filed by the Registrant pursuant to Rule&nbsp;424(b)(l) or (4)&nbsp;or 497(h) under the Securities Act as part of this
Registration Statement as of the time the Commission declared it effective. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;For
determining any liability under the Securities Act, to treat each post-effective amendment that contains a form of prospectus as a new registration
statement for the securities offered in the Registration Statement, and the offering of the securities at that time as the initial bona fide offering thereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>II-4</FONT></P>

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<BR></FONT><FONT SIZE=2><B>SIGNATURES    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form&nbsp;S-2 and has authorized this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego,
State of California, on February&nbsp;2, 2001. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=3><FONT SIZE=2>VYREX CORPORATION<BR></FONT>
</TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/</FONT><FONT SIZE=2> G. DALE GARLOW<BR></FONT>
<HR NOSHADE><FONT SIZE=2> G. Dale Garlow,<BR></FONT> <FONT SIZE=2><I>Chief Executive Officer<BR>
and Chief Financial Officer</I></FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints G. Dale Garlow as his or her true and lawful
attorney-in-fact and agents, with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done
in connection therewith as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates stated. </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="38%" ALIGN="CENTER"><FONT SIZE=1><B>Signatures<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="37%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="21%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="38%" ALIGN="CENTER" VALIGN="TOP"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="38%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2>/s/</FONT><FONT SIZE=2> G. DALE GARLOW<BR></FONT>
<HR NOSHADE><FONT SIZE=2> G. Dale Garlow</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2>Chief Executive Officer and Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>February 2, 2001</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="38%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/</FONT><FONT SIZE=2> RICHARD G. MCKEE<BR></FONT>
<HR NOSHADE><FONT SIZE=2> Richard G. McKee</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
February 2, 2001</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="38%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/</FONT><FONT SIZE=2> SHELDON S. HENDLER<BR></FONT>
<HR NOSHADE><FONT SIZE=2> Sheldon S. Hendler, M.D., Ph.D.</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
February 2, 2001</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="38%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/</FONT><FONT SIZE=2> TOM K. LARSON, JR.<BR></FONT>
<HR NOSHADE><FONT SIZE=2> Tom K. Larson, Jr.</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
February 2, 2001</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="38%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/</FONT><FONT SIZE=2> LORI A. ROBINSON<BR></FONT>
<HR NOSHADE><FONT SIZE=2> Lori A. Robinson</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
February 2, 2001</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>II-5</FONT></P>

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<P><br><A NAME="01SAN1062_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_bf1062_1">Available Information</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_bf1062_2">Documents Incorporated By Reference</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_bf1062_3">FORWARD-LOOKING STATEMENTS</A></FONT><BR>
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<FONT SIZE=2><A HREF="#toc_ca1062_1">PROSPECTUS SUMMARY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ca1062_2">The Company</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ca1062_3">The Offering</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cc1062_1">SUMMARY FINANCIAL INFORMATION</A></FONT><BR>
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<FONT SIZE=2><A HREF="#toc_de1062_1">RISK FACTORS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dg1062_1">USE OF PROCEEDS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1062_2">CERTAIN TRANSACTIONS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1062_3">SELLING SHAREHOLDERS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1062_4">PLAN OF DISTRIBUTION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1062_5">DESCRIPTION OF SECURITIES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1062_6">CERTAIN ARTICLES OF INCORPORATION AND BYLAW PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_di1062_1">INFORMATION WITH RESPECT TO THE COMPANY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_di1062_2">LEGAL MATTERS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_di1062_3">EXPERTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ja1062_1">PART II INFORMATION NOT REQUIRED IN PROSPECTUS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_jc1062_1">SIGNATURES</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>a2037372zex-5_1.htm
<DESCRIPTION>EXHIBIT 5.1
<TEXT>

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<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT 5.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;
February&nbsp;6, 2001 </FONT></P>

<P><FONT SIZE=2>Board
of Directors<BR>
Vyrex Corporation<BR>
2159 Avenida de la Playa<BR>
La Jolla, CA 92037 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Re:
Form&nbsp;S-2 Registration Statement </FONT></P>

<P><FONT SIZE=2>Ladies
and Gentlemen: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We
have acted as special counsel for Vyrex Corporation (the "Company") in connection with the preparation and filing of a Registration Statement on Form&nbsp;S-2 (the
"Registration Statement"), and the Prospectus to be included therein (the "Prospectus") pursuant to which it is proposed to offer up to 1,949,167 shares of Common Stock, $.001 par value, as stated on
the facing page of the Registration Statement. Capitalized terms used herein have the meanings ascribed to them in the Registration Statement unless otherwise noted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We
are familiar with the proceedings by which the Common Stock has been authorized, and we have reviewed and are familiar with the Restated Articles of Incorporation and the
By-Laws of the Company and such other corporate records and documents as we have deemed necessary to express the opinion herein stated. We have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals, the conformity to original documents and all documents submitted to us as certified or photostatic copies, and the authenticity of
the originals of such latter documents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Based
upon the foregoing, we are of the opinion that the Common Stock to be sold and delivered as contemplated by the Registration Statement will be legally issued, fully paid and
nonassessable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We
hereby consent to the references to this firm in the Legal Matters section of the Registration Statement. We further consent to the use of this opinion as an exhibit to the
Registration Statement. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=3><FONT SIZE=2>Sincerely,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=3><FONT SIZE=2><BR>
Fisher Thurber LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>DAVID A. FISHER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David A. Fisher<BR>
<BR></FONT>
</TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>DAF:nlm
</FONT></P>

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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>a2037372zex-10_1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>

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<FONT SIZE=3 ><A HREF="#01SAN1062_3">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT&nbsp;10.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke1062_second_amendment_to_the_march___sec07944"> </A>
<A NAME="toc_ke1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECOND AMENDMENT TO THE MARCH&nbsp;22, 1999 AND AUGUST&nbsp;17, 1999 PROMISSORY<BR>  NOTES ("NOTES") BETWEEN M.A.&nbsp;ROBINSON CHARITABLE REMAINDER TRUST<BR>  ("TRUST"), AND MARIUS&nbsp;A. ROBINSON (COLLECTIVELY,
"ROBINSON") AND VYREX<BR>  CORPORATION ("THE COMPANY")    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke1062_recitals"> </A>
<A NAME="toc_ke1062_2"> </A></FONT> <FONT SIZE=2><B>RECITALS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, The Company entered into promissory notes with Robinson dated March&nbsp;22, 1999 and
August&nbsp;17, 1999. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, Robinson agreed on February&nbsp;29, 2000 to extend the notes for one year for specific considerations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, Robinson is willing, for the best interest of The Company, to extend both the March&nbsp;22, 1999 and the August&nbsp;17,
1999 notes to March&nbsp;22, 2002. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NOW THEREFORE</B></FONT><FONT SIZE=2>, in consideration for a second extension the Parties agree to the following terms. </FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>Based
on the terms of the February&nbsp;29, 2000 Amended Agreement interest on the notes at the agreed upon rate of 8% will be due and payable on March&nbsp;22, 2001 for the
$100,000.00 note and August&nbsp;17, 2001 for the $60,000.00 note.
<BR><BR></FONT></DD><DT><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>The
principal amount totaling $160,000.00, plus interest, at a rate of 8%, will be due and payable on March&nbsp;22, 2002 for both the March&nbsp;22, 1999 and August&nbsp;17,
1999 notes.
<BR><BR></FONT></DD><DT><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>Robinson
will be granted 50,000 options to purchase Vyrex stock at a price of $0.50 per share exercisable for a period of two years from the date of this agreement.
<BR><BR></FONT></DD><DT><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>The
Company grants The Trust the option to convert the August&nbsp;17, 1999 $60,000.00 note into 100,000 shares of Vyrex common stock at a price of $0.60 per share at any time
between the date of this agreement and March&nbsp;22, 2002 in increments of not less than 20,000 shares per transaction. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>IN WITNESS WHEREOF</B></FONT><FONT SIZE=2>, the Parties have executed this Second Amendment to the March&nbsp;22, 1999 and August&nbsp;17, 1999 Agreements
as of the 4th&nbsp;day of January, 2001. </FONT></P>

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<TD WIDTH="49%" COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>M.A. Robinson Charitable Remainder Trust</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>M.A. Robinson Individual</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>MARIUS&nbsp;A. ROBINSON</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><BR>
Marius&nbsp;A. Robinson</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>MARIUS&nbsp;A. ROBINSON</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><BR>
Marius&nbsp;A. Robinson</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" COLSPAN=3><FONT SIZE=2><BR>
Vyrex Corporation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>G.&nbsp;DALE GARLOW</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><BR>
G.&nbsp;Dale Garlow<BR></FONT>
</TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
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<FONT SIZE=2><A HREF="#toc_ke1062_1">SECOND AMENDMENT TO THE MARCH 22, 1999 AND AUGUST 17, 1999 PROMISSORY NOTES ("NOTES") BETWEEN M.A. ROBINSON CHARITABLE REMAINDER TRUST ("TRUST"), AND MARIUS A. ROBINSON (COLLECTIVELY, "ROBINSON") AND VYREX
CORPORATION ("THE COMPANY")</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke1062_2">RECITALS</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>a2037372zex-10_2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>

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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_kf1062_1_1"> </A> </FONT> <FONT SIZE=2><B>EXHIBIT 10.2  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>COLLABORATION AGREEMENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;THIS COLLABORATION AGREEMENT effective as of August&nbsp;1, 1997 (the "Agreement"), is entered into between THE IMMUNE RESPONSE CORPORATION, a Delaware
corporation ("IRC"), having a place of business located at 5935 Darwin Court, Carlsbad, California 92008, and VYREX CORPORATION, a Nevada corporation ("Vyrex"), having a place of business located at
2159 Avenida de la Playa, La Jolla, California 92037. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>W&nbsp;I&nbsp;T&nbsp;N&nbsp;E&nbsp;S&nbsp;S&nbsp;E&nbsp;T&nbsp;H:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Vyrex is the exclusive worldwide licensee of the patent rights and know-how relating to certain technology referred to as CD-Tagging&#153;. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
IRC has expertise in the research and development of compounds for use in the diagnosis, monitoring, prevention and treatment of diseases, states and conditions in humans. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the parties desire to enter into a collaborative relationship to design and develop compounds utilizing CD-Tagging&#153; technology for use in the treatment of injury
to the human central and peripheral nervous systems. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties agree as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 1<BR>
DEFINITIONS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Agreement, the terms defined in this Article&nbsp;1 shall have the respective meanings set forth below: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Affiliate"</I></FONT><FONT SIZE=2>&nbsp;shall mean, with respect to any Person, any other Person which directly or indirectly
controls, is controlled by, or is under common control with, such Person. A Person shall be regarded as in control of another Person if it owns, or directly or indirectly controls, at least forty
percent (40%) of the voting stock or other ownership interest of the other Person, or if it directly or indirectly possesses the power to direct or cause the direction of the management and policies
of the other Person by any means whatsoever. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"CD-Tagging&#153; Improvement"</I></FONT><FONT SIZE=2>&nbsp;shall mean any process, method, procedure or use which
constitutes an improvement to the CD-Tagging&#153; Methods conceived by or on behalf of IRC or Vyrex during and in the performance of the Program and which, if patentable, claims priority of
U.S. Patent Application Serial No.&nbsp;08/000,619, entitled "Method for Producing Tagged Genes, Transcripts and Proteins," filed January&nbsp;5, 1993, and exclusively licensed to Vyrex on
November&nbsp;1, 1995 by its inventor Jonathan Jarvik, Ph.D. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"CD-Tagging&#153; Know-How"</I></FONT><FONT SIZE=2>&nbsp;shall mean all information and data, which is not generally known
including, but not limited to, formulae, procedures, protocols, techniques and results of experimentation and testing, which are necessary or useful to use or practice any CD-Tagging&#153;
Method or CD-Tagging&#153; Improvement, or to make or use a CD-Tagging&#153; Vector in connection with the use or practice of any CD-Tagging&#153; Method or
CD-Tagging&#153; Improvement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"CD-Tagging&#153; Method"</I></FONT><FONT SIZE=2>&nbsp;shall mean any process, method, procedure or use which is the
subject of a Valid Claim of (a)&nbsp;U.S. Patent Application Serial No.&nbsp;08/000,619, entitled "Method for Producing Tagged Genes, Transcripts and Proteins," filed January&nbsp;5, 1993, and
exclusively licensed to Vyrex on November&nbsp;1, 1995 by its inventor Jonathan Jarvik, Ph.D. and all foreign counterpart patent </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<P><FONT SIZE=2>
applications thereto; (b)&nbsp;any patents that have issued or in the future issue therefrom, including utility, model and design patents and certificates of invention; and (c)&nbsp;any
divisionals, continuations, continuations-in-part, reissues, renewals, extensions or additions to any such patent applications and patents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"CD-Tagging&#153; Patent Rights"</I></FONT><FONT SIZE=2>&nbsp;shall mean (a)&nbsp;all patent applications heretofore or
hereafter filed or having legal force in any country which claim any CD-Tagging&#153; Method, CD-Tagging&#153; Improvement or CD-Tagging&#153; Vector; (b)&nbsp;all patents that
have issued or in the future issue therefrom, including utility, model and design patents and certificates of invention; and (c)&nbsp;all divisionals, continuations, continuations-in-part, reissues,
renewals, extensions or additions to any such patent applications and patents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"CD-Tagging&#153; Vector"</I></FONT><FONT SIZE=2>&nbsp;shall mean any vector which is owned by or licensed to Vyrex or
conceived or synthesized by IRC or Vyrex during and in the performance of the Program, and which is necessary or useful to use or practice the CD-Tagging&#153; Method. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Commencement Date"</I></FONT><FONT SIZE=2>&nbsp;shall mean August&nbsp;1, 1997. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Confidential Information"</I></FONT><FONT SIZE=2>&nbsp;shall mean, as to a party (the "Disclosing Party"), all information of
the Disclosing Party of any kind whatsoever, and all tangible and intangible embodiments thereof of any kind whatsoever, which is disclosed to the other party under the Agreement and identified as, or
acknowledged to be, confidential. Notwithstanding the foregoing, Confidential Information of the Disclosing Party shall not include such information as the other party can establish by written
documentation (a)&nbsp;to have been publicly known prior to disclosure of such information by the Disclosing Party to the other party; (b)&nbsp;to have become publicly known, other than through
any acts or omissions of the other party in breach of the Agreement, subsequent to disclosure of such information by the Disclosing Party to the other party; (c)&nbsp;to have been lawfully obtained
by the other party at any time from sources unrelated to, and not under a duty of confidentiality to, the Disclosing Party; (d)&nbsp;to have been otherwise rightfully known by the other party prior
to disclosure of such information by the Disclosing Party to the other party; or (e)&nbsp;to have been independently developed by employees or others acting on behalf of the other party without
access to or use of such information. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Field"</I></FONT><FONT SIZE=2>&nbsp;shall mean the treatment of injury to the human central or peripheral nervous systems. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"First Commercial Sale"</I></FONT><FONT SIZE=2>&nbsp;shall mean, with respect to any Product, the first sale for use or
consumption by the general public of such Product in any country after required marketing approval, and pricing approval (if any), has been granted by the governing health authority of such country. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Gross Margin"</I></FONT><FONT SIZE=2>&nbsp;shall mean, with respect to any Product, the remainder of (a)&nbsp;the Net Sales
of such Product, less (b)&nbsp;the direct costs to IRC and its Affiliates of such Product, including without limitation
direct costs for manufacturing, material, labor, storage, sales, overhead and other direct costs associated with such Product. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Gross Revenues"</I></FONT><FONT SIZE=2>&nbsp;shall mean, with respect to any Product, the remainder of (a)&nbsp;the revenues
actually received by IRC or its Affiliates from Third Parties in consideration for the grants of a (sub)license or other rights under the Patent Rights or Know-How to develop or commercialize such
Product, including any amounts received by IRC or its Affiliates as payment or reimbursement for research, development, patent or related expenses, but excluding any amounts received by IRC or its
Affiliates in consideration for the issuances of equity securities of IRC or its Affiliates (to the extent of the fair market value of such equity securities), less (b)&nbsp;the amount of the
royalties and other payments owing by IRC or its Affiliates to Third Parties in connection therewith. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Know-How"</I></FONT><FONT SIZE=2>&nbsp;shall mean, collectively, the CD-Tagging&#153; Know-How and the Program Know-How. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;1.14</FONT><FONT SIZE=2><I>&nbsp;&nbsp;"Net Sales"</I></FONT><FONT SIZE=2>&nbsp;shall mean, with respect to any Product, the invoiced sales price of such Product sold
by IRC or its Affiliates to customers who are not Affiliates, less (a)&nbsp;credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers for spoiled, damaged,
out-dated and returned Product; (b)&nbsp;actual freight and insurance costs incurred in transporting such Product to such customers; (c)&nbsp;cash, quantity and trade discounts, rebates and other
price reduction programs; (d)&nbsp;sales, value-added and other direct taxes incurred; and (e)&nbsp;custom duties, surcharges and other governmental charges incurred in connection with the
exportation or importation of such Product. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.15</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Patent Rights"</I></FONT><FONT SIZE=2>&nbsp;shall mean, collectively, the CD-Tagging&#153; Patent Rights and the Program
Patent Rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.16</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Person"</I></FONT><FONT SIZE=2>&nbsp;shall mean an individual, corporation, limited liability company, partnership, trust,
business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated, organization, governmental authority or any other form of entity not specifically
listed herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.17</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Product"</I></FONT><FONT SIZE=2>&nbsp;shall mean a product which incorporates or contains a Program Compound. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.18</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Program"</I></FONT><FONT SIZE=2>&nbsp;shall mean the program to conduct research within the Scope and to conduct preclinical
development of Products for use in the Field, all as described generally in the Program Workplan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.19</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Program Compound"</I></FONT><FONT SIZE=2>&nbsp;shall mean a compound (or an analogue or derivative thereof) which (a)&nbsp;is
conceived or synthesized by IRC or Vyrex during and in the performance of the Program; (b)&nbsp;based upon testing conducted by or on behalf of the parties during and in the performance of the
Program, has demonstrated, in the reasonable discretion of the Steering Committee, potential utility in the Field; and (c)&nbsp;(i)&nbsp;if made, used or sold absent the license granted under the
Agreement would infringe a Valid Claim of the CD-Tagging&#153; Patent Rights, or (ii)&nbsp;is conceived, developed or made using CD-Tagging&#153; Know-How. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.20</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Program Inventions"</I></FONT><FONT SIZE=2>&nbsp;shall mean, collectively, all inventions, discoveries, technology, information
and data (other than CD-Tagging&#153; Improvements and CD-Tagging&#153; Vectors) conceived or produced by or on behalf of IRC or Vyrex during and in the performance of the Program. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.21</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Program Know-How"</I></FONT><FONT SIZE=2>&nbsp;shall mean all discoveries, inventions, information and data, which is not
generally known including, but not limited to, compositions, uses, methods, processes, formulae, procedures, protocols, techniques and results of experimentation and testing (other than
CD-Tagging&#153; Improvements and CD-Tagging&#153; Vectors), which are conceived or produced by or on behalf of IRC or Vyrex during and in the performance of the Program; all to the
extent and only to the extent that IRC or Vyrex has the right to grant licenses, immunities or other rights thereunder; </FONT><FONT SIZE=2><I>provided, however,</I></FONT><FONT SIZE=2> the Program
Know-How shall exclude the CD-Tagging&#153; Know-How. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.22</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Program Patent Rights"</I></FONT><FONT SIZE=2>&nbsp;shall mean (a)&nbsp;all patent applications heretofore or hereafter filed
or having legal force in any country, which claim a discovery or invention (other than CD-Tagging&#153; Improvements and CD-Tagging&#153; Vectors) conceived or produced by or on behalf
of IRC or Vyrex during and in the performance of the Program; (b)&nbsp;all patents that issue therefrom, including utility model and design patents and certificates of invention; and (c)&nbsp;all
divisionals, continuations, continuations-in-part, reissues, renewals, extensions or additions to any such patent applications and patents; all to the extent and only to the extent that IRC or Vyrex
has the right to grant licenses, immunities or other rights thereunder; </FONT><FONT SIZE=2><I>provided, however, </I></FONT><FONT SIZE=2>the Program Patent Rights shall exclude the
CD-Tagging&#153; Patent Rights. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.23</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Program Workplan"</I></FONT><FONT SIZE=2>&nbsp;shall mean the workplan initially prepared by the parties pursuant to
Section&nbsp;3.1 below, as revised from time to time as provided in the Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;1.24</FONT><FONT SIZE=2><I>&nbsp;&nbsp;"Royalty Term"</I></FONT><FONT SIZE=2>&nbsp;shall mean, with respect to each Product in each country, the period equal to
(a)&nbsp;if the manufacture, use or sale of such Product in such country was at the time of the First Commercial Sale in such country covered by a Valid Claim, the term for which such Valid Claim
remains in effect and would, if it an issued patent, be infringed but for the license granted by the Agreement, or (b)&nbsp;otherwise, ten (10)&nbsp;years from the date of the First Commercial
Sale of such Product in such country. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.25</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Scope"</I></FONT><FONT SIZE=2>&nbsp;shall mean the discovery of proteins, small molecules and compounds involved in nerve
growth and repair. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.26</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Steering Committee"</I></FONT><FONT SIZE=2>&nbsp;shall mean the joint research and preclinical development committee,
comprising representatives of IRC and Vyrex, as described in Section&nbsp;4.1 below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.27</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Third Party"</I></FONT><FONT SIZE=2>&nbsp;shall mean any Person other than IRC, Vyrex and their respect Affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.28</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;"Valid Claim"</I></FONT><FONT SIZE=2>&nbsp;shall mean either (a)&nbsp;a claim of an issued and unexpired patent 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 or (b)&nbsp;a claim of a pending patent application which claim was filed in good faith and
has not been abandoned or finally disallowed without the possibility of appeal or refiling of such application. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 2<BR>
REPRESENTATIONS AND WARRANTIES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each party hereby represents and warrants to the other party as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Corporate Existence.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Such party is a corporation duly organized, validly existing and in good
standing under the laws of the state in which it is incorporated and the State of California. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Authorization and Enforcement of Obligations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Such party (a)&nbsp;has the corporate power and
authority and the legal right to enter into the Agreement and to perform its obligations hereunder, and (b)&nbsp;has taken all necessary corporate action on its part to authorize the execution and
delivery of the Agreement and the performance of its obligations hereunder. The Agreement has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding
obligation, enforceable against such party in accordance with its terms. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Consents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;All necessary consents, approvals and authorizations of all governmental authorities and
other Persons required to be obtained by such party in connection with the Agreement have been obtained. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;No Conflict.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The execution and delivery of the Agreement and the performance of such party's
obligations hereunder (a)&nbsp;do not conflict with or violate any requirement of applicable laws or regulations, and (b)&nbsp;do not conflict with, or constitute a default under, any contractual
obligation of such party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;DISCLAIMER OF WARRANTIES.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;NOTHING IN THE AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE, OR
WARRANTY GIVEN, BY EITHER PARTY THAT ANY PATENT WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION WITHIN THE PATENT RIGHTS, THAT ANY PATENT WITHIN THE PATENT RIGHTS WHICH ISSUES WILL BE VALID, OR
THAT THE USE OF ANY LICENSE GRANTED HEREUNDER OR THAT THE USE OF ANY PATENT RIGHTS OR KNOW-HOW WILL NOT INFRINGE THE PATENT OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER PERSON. FURTHERMORE,
NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>
EXPRESS OR IMPLIED, WITH RESPECT TO THE PATENT RIGHTS OR THE KNOW-HOW, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 3<BR>
PROGRAM  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Program Workplan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Within forty-five (45)&nbsp;days after the date of the Agreement, the parties
shall meet and prepare a mutually acceptable workplan summarizing the research and preclinical development of Product to be conducted by IRC pursuant to the Agreement. The Program Workplan may be
amended from time to time only by the mutual written agreement of the parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Conduct of the Program.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each party shall conduct its obligations under the Program in good
scientific manner and in compliance in all material respects with all requirements of applicable laws and regulations and all applicable good laboratory, clinical and manufacturing practices, to
attempt to achieve its objectives efficiently and expeditiously. Each party shall allocate sufficient time, effort, equipment, facilities and personnel with sufficient skills and experience to the
Program to conduct its obligations under the Program and to accomplish the objectives thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Subcontracts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each party may subcontract portions of the Program to be performed by it in the
normal course of its business without the prior consent of the other party; </FONT><FONT SIZE=2><I>provided, however, </I></FONT><FONT SIZE=2>that (a)&nbsp;such subcontracting shall not involve the
transfer of Confidential Information of the other party to Third Parties; (b)&nbsp;the subcontracted party shall enter into a confidentiality agreement with the subcontracting party in accordance
with Article&nbsp;8 below; (c)&nbsp;the subcontracting party shall supervise such subcontract work; and (d)&nbsp;the subcontracted party shall be in compliance in all material respects with all
requirements of applicable laws and regulations and all applicable good laboratory, clinical and manufacturing practices. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Costs of the Program.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as otherwise set forth in this Section&nbsp;3.4, each party shall be
solely responsible for paying all costs and expenses of conducting its obligations under the Program. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.4.1&nbsp;&nbsp;As
of the Commencement Date, IRC has provided Vyrex with access to and the use of approximately one hundred eighty (180)&nbsp;square feet of
laboratory space, and approximately seventy-five (75)&nbsp;square feet of office space, at IRC's facilities located at 5935 Darwin Court, Carlsbad, California 92008. IRC shall provide Vyrex with
such laboratory and office space, on a rent-free basis, for use by Vyrex employees solely in the performance its obligations under the Program for the term of the Program; </FONT> <FONT SIZE=2><I>provided, however, </I></FONT><FONT SIZE=2>if the
parties mutually agree to expand the laboratory or office space provided by IRC to Vyrex hereunder, Vyrex shall pay to IRC a
mutually acceptable rent therefor. All Vyrex employees using such laboratory or office space at IRC's facilities shall enter into a confidentiality agreement (in a form mutually acceptable to IRC and
Vyrex) and shall be bound by all policies and procedures of IRC applicable to visitors to IRC's facilities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.4.2&nbsp;&nbsp;IRC
shall be solely responsible for paying the cost of all laboratory and office supplies ordered by Vyrex employees at the IRC facilities
described in Section&nbsp;3.4.1 above prior to the Commencement Date. Vyrex shall be solely responsible for paying the cost of all laboratory and office supplies ordered
by Vyrex employees at the IRC facilities described in Section&nbsp;3.4.1 above on or after the Commencement Date. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Records and Reports.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;IRC shall maintain records reflecting the work performed by IRC and the
results achieved in the performance of the Program. IRC shall prepare, and provide to each member of the Steering Committee and Vyrex, quarterly summary written reports which shall describe the work
performed by IRC and the results achieved in the performance of the Program since the last report. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;3.6</FONT><FONT SIZE=2><I>&nbsp;&nbsp;Term of the Program.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as provided in Article&nbsp;11 below, the term of the Program shall
commence on the Commencement Date and terminate on the third anniversary thereof; </FONT><FONT SIZE=2><I>provided, however,</I></FONT><FONT SIZE=2> if IRC gives written notice to Vyrex prior to such
third anniversary date, the term of the Program shall continue until the fourth anniversary of the Commencement Date. Termination of the Program pursuant to this paragraph shall not serve to terminate
or otherwise affect the rights and obligations of the parties pursuant to any other Article under the Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 4<BR>
STEERING COMMITTEE  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Composition.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Steering Committee shall be comprised of two (2)&nbsp;named representatives of
IRC and two (2)&nbsp;named representatives of Vyrex. Each party shall appoint its respective representatives to the Steering Committee from time to time, and may substitute one or more of its
representatives, in its sole discretion, effective upon notice to the other party of such change. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Meetings.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Steering Committee shall meet not less than once each calendar quarter during the
term of the Program, on such dates and at such times and places as agreed to by IRC and Vyrex. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Responsibilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;At such meetings, the Steering Committee shall (a)&nbsp;review the work
performed to date under the Program and the results thereof; (b)&nbsp;evaluate the results of the Program in relation to the goals of the Program; (c)&nbsp;make recommendations to the parties to
modify the Program Workplan; (d)&nbsp;make recommendations to the parties regarding the filing, prosecution and maintenance of patent
applications claiming discoveries and inventions conceived during and in the performance of the Program; (e)&nbsp;review the results of the testing of compounds conducted by or on behalf of the
parties during and in the performance of the Program; (f)&nbsp;determine which compounds have demonstrated potential utility in the Field and as a result shall be Program Compounds; and
(g)&nbsp;within thirty (30)&nbsp;days following each Steering Committee meeting, prepare quarterly reports to the parties summarizing the status of the Program and the results thereof, together
with any determinations and recommendations by the Steering Committee and the reasons therefor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 5<BR>
DEVELOPMENT AND COMMERCIALIZATION  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Licenses to IRC.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex hereby grants to IRC an exclusive worldwide license (with the exclusive
right to grant sublicenses) under Vyrex' rights in the Patent Rights and Know-How (a)&nbsp;to conduct the Program, and (b)&nbsp;to develop, make, use, offer for sale, sell and import Products. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Licenses to Vyrex.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;IRC hereby grants to Vyrex an exclusive worldwide fully-paid license (with the
exclusive right to grant sublicenses) under IRC's rights in the Program Patent Rights, and a non-exclusive license (with the right to grant sublicenses) under IRC's rights in the Program Know-How, for
use outside the Field; </FONT><FONT SIZE=2><I>provided, however,</I></FONT><FONT SIZE=2> that IRC expressly reserves the right (with the right to grant sublicenses) under the Program Patent Rights to
develop, make, use, offer for sale, sell and import Products. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Sublicenses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;IRC and Vyrex shall provide to the other party a copy of any sublicense under the
licenses granted under the Agreement promptly upon execution of the same. Any such sublicense shall be subject to the provisions of the Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 7<BR>
ROYALTIES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Royalties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;In consideration for the license granted to IRC herein, during the Royalty Term, IRC
shall pay royalties to Vyrex equal to (a)&nbsp;fifty percent (50%) of the Gross Margin of Products for those Products sold by IRC and its Affiliates, or (b)&nbsp;fifty percent (50%) of the Gross
Revenues for those Products (sub)licensed to Third Parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Royalty Reports.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;During the term of the Agreement following the First Commercial Sale of a Product,
IRC shall furnish to Vyrex a quarterly written report showing in reasonably specific detail (a)&nbsp;the gross sales, Net Sales and Gross Margin of Products for those Products sold by IRC and its
Affiliates during such calendar quarter; (b)&nbsp;the Gross Revenues received by IRC or its Affiliates during such calendar quarter for those Products (sub)licensed to Third Parties; (c)&nbsp;the
royalties payable, if any, which shall have accrued hereunder; and (d)&nbsp;the withholding taxes, if any, required by law to be deducted. With respect to sales invoiced or revenues received in a
currency other than United States dollars, such amounts shall be expressed in the domestic currency in which the sales are made (or the revenues are received, as applicable) together with the United
States dollar equivalent, calculated using the average closing buying rate for such currency quoted in the continental terms method of quoting exchange rates (local currency per US$1) by Bank of
America NT&amp;SA in London, England on each of the last business day of each month in the calendar quarter prior to the date of payment. Reports shall be due on the ninetieth (90<SUP>th</SUP>) day
following the close of each calendar quarter. IRC shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Audits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Upon the written request of Vyrex and not more than once in each calendar year, IRC shall
permit an independent certified public accounting firm of nationally recognized standing selected by Vyrex and reasonably acceptable to IRC, at Vyrex's expense, to have access during normal business
hours to such of the records of IRC as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any year ending not more than twenty-four (24)&nbsp;months prior to the
date of such request. The accounting firm shall disclose to Vyrex only whether the reports are correct or not and the specific details concerning any discrepancies. No other information shall be
shared. If such accounting firm concludes that additional royalties were owed during such period, IRC shall pay the additional royalties within thirty (30)&nbsp;days of the date Vyrex delivers to
IRC such accounting firm's written report so concluding. The fees charged by such accounting firm shall be paid by Vyrex; </FONT><FONT SIZE=2><I>provide, however, </I></FONT><FONT SIZE=2>if the audit
correctly discloses that the royalties payable by IRC for the audited period are more than one hundred ten percent (110%) of the royalties actually paid for such period, then IRC shall pay the
reasonable fees and expenses charged by such accounting firm. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Confidential Financial Information.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex shall treat all financial information subject to review
under this Article7 as confidential, and shall cause its accounting firm to retain all such financial information in confidence under Article&nbsp;8 below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Payment Terms.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Royalties shown to have accrued by each royalty report provided for under
Section&nbsp;7.2 above shall be due and payable on the date such royalty report is due. Payment of royalties inwhole or in part may be made in advance of such due date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Payment Method.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;All payments by IRC to Vyrex under the Agreement shall be paid in United States
dollars by bank wire transfer in immediately available funds to such account as Vyrex shall designate before such payment is due. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Exchange Control.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;If at any time legal restrictions prevent the prompt remittance of part or all
royalties with respect to any country where the Product is sold, IRC shall have the right, at its option, to make such payments by depositing the amount thereof in local currency to Vyrex's account in
a bank or other depository in such country. If the royalty rate specified in the Agreement should </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>
exceed the permissible rate established in any country, the royalty rate for sales in such country shall be adjusted to the highest legally permissible or government-approved rate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Withholding Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;IRC shall be entitled to deduct the amount of any withholding taxes, value-added
taxes or other taxes, levies or charges with respect to such amounts, other than United States taxes, payable by IRC, its Affiliates or sublicensees, or any taxes required to be withheld by IRC, its
Affiliates or sublicensees, to the extent IRC, its Affiliates or sublicensees pay to the appropriate governmental authority on behalf of Vyrex such taxes, levies or charges. IRC shall use reasonable
efforts to minimize any such taxes, levies or charges required to be withheld on behalf of Vyrex by IRC, its Affiliates or sublicensees. IRC promptly shall deliver to Vyrex proof of payment of all
such taxes, levies and other charges, together with copies of all communications from or with such governmental authority with respect thereto. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 8<BR>
CONFIDENTIALITY  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Confidential Information.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;During the term of the Agreement and for a period of five
(5)&nbsp;years following the expiration or earlier termination hereof, each party shall maintain in confidence the Confidential Information of the other party, and shall not disclose, use or grant
the use of the Confidential Information of the other party except on a need-to-know basis to its directors, officers, employees and agents to the extent such disclosure is reasonably necessary in
connection with such party's activities as expressly authorized by the Agreement. To the extent that disclosure to any Person is authorized by the Agreement, prior to disclosure, a party shall obtain
written agreement of such Person to hold in confidence and not disclose, use or grant the use of the confidential Information of the other party except as expressly permitted under the Agreement. Each
party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other party's Confidential Information. Upon the expiration or earlier termination of the Agreement,
each party shall return to the other party all tangible items regarding the Confidential Information of the other party and all copies thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Permitted Disclosures.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The confidentiality obligations under this Article&nbsp;8 shall not apply
to the extent that a party is required to disclose information by applicable law, regulation or order of a governmental agency or a court of competent jurisdiction, provided that such party shall
provide written notice thereof to the other party and sufficient opportunity to object to any such disclosure or to request confidential treatment thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Terms of the Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as otherwise provided in this Article&nbsp;8, neither party shall
disclose any terms or conditions of the Agreement to any Third Party without the prior express written consent of the other party. Notwithstanding the foregoing, prior to execution of the Agreement,
Vyrex and IRC shall agree upon the substance of information that can be used to describe the terms of this transaction, and Vyrex and IRC may disclose such information, as modified by mutual agreement
from time to time, without the other party's consent. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 9<BR>
PUBLICATION  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;9.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Notice of Publication.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;During the term of the Agreement, IRC and Vyrex each acknowledge the other
party's interest in publishing certain of its results to obtain recognition within the scientific community and to advance the state of scientific knowledge. Each party also recognizes the mutual
interest in obtaining valid patent protection and protecting business interests. Consequently, either party, its employees or consultants wishing to make a publication (including any oral disclosure
made without obligation of confidentiality) relating to work performed by such party as part of the Program </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>
(the "Publishing Party") a copy of the proposed written publication at least forty-five (45)&nbsp;days prior to submission for publication, or an outline of such oral disclosure at least fifteen
(15)&nbsp;days prior to presentation. The Reviewing Party shall have the right to (a)&nbsp;propose reasonable and necessary modifications to the publication for patent reasons and (b)&nbsp;to
request a reasonable delay in publication in order to protect patentable information. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;9.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Timing of Publication.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;If the Reviewing Party requests such a delay, the Publishing Party shall
delay submission or presentation of the publication for a period of ninety (90)&nbsp;days to enable patent applications protecting each party's rights in such information to be filed in accordance
with Article&nbsp;13 below. Upon the expiry of forty-five (45)&nbsp;days, in the case of proposed written disclosures, or fifteen (15)&nbsp;days, in the case of proposed oral disclosures, from
transmission to the Review Party, the Publishing Party shall be free to proceed with the written publication or the presentation, respectively, unless the Reviewing Party has requested the delay
described above. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 10<BR>
PROGRAM INVENTION AND PATENT RIGHTS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Ownership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex shall solely own the entire right and title in all CD-Tagging&#153;
Improvements and CD-Tagging&#153; Vectors, whether or not patentable (and any patent or other intellectual property rights therein), which are conceived or produced during and in the
performance of the Program. IRC and Vyrex shall jointly own all Program Inventions, whether or not patentable (and any patent or other intellectual property rights therein) (collectively the "Program
Inventions"), which are conceived or produced during and in the performance of the Preogram. Each party promptly shall disclose to the other party the making, conception or reduction to practice of
CD-Tagging&#153; Improvements, CD-Tagging&#153; Vectors or Program Inventions by employees or others acting on behalf of such party. IRC and Vyrex each hereby represents that all
employees and other Persons acting on its behalf in performing its obligations under the \agreement shall be obligated under a binding written agreement to assign to it,
or as it shall direct consistent with the provisions of this Section&nbsp;10.1, all CD-Tagging&#153; Improvement, CD-Tagging&#153; Vectors and Program Inventions made or developed by
such employees or other Persons. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Prosecution and Maintenance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;CD-Tagging&#153; Patent Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex, at its sole cost, shall be responsible for and
shall have the sole right to control the preparation, filing, prosecution and maintenance of the CD-Tagging&#153; Rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Program Patent Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;IRC,
at its sole cost, shall be responsible for and shall have the sole right to control the preparation, filing, prosecution, and maintenance of all Program Patent
Rights which claim Program Inventions which have utility in the Field. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Vyrex,
at its sole cost, shall be responsible for and shall have the sole right to control the preparation, filing, prosecution and maintenance of all Program
Patent Rights which claim solely Program Inventions which have no utility in the Field. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Cooperation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The party controlling the preparation, filing, prosecution and maintenance of any
Patent Rights shall consider in good faith the interests of the non-controlling party, and shall provide the non-controlling party with a copy of each patent application subject to this
Section&nbsp;10.2. The non-controlling party shall cooperate with the controlling party, execute all lawful papers and instruments and make all rightful oaths and declarations as may be necessary in
the preparation, prosecution and maintenance of the Patent Rights. Each party shall cooperate with the other party, execute all lawful papers and </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>
instruments and make all rightful oaths and declarations as may be necessary in the preparation, prosecution and maintenance of the Patent Rights. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Enforcement of Patent Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The party controlling the preparation, filing, prosecution and
maintenance of any Patent Rights shall have the right, in its sole discretion and at its sole expense, to enforce the Patent Rights against infringers. If such party does not, within six
(6)&nbsp;months of receipt of
notice from the other party of a substantial continuing infringement of such Patent Rights in the Field, abate the infringement or file suit to enforce the Patent Rights against at least one
infringing party in the Field in a country, the other party shall have the right, in its sole discretion and at its sole expense, to take whatever action it deems appropriate in its own name or, if
required bylaw, in the name of the first party, to enforce such Patent Rights in the Field. The party controlling the enforcement of the Patent Rights may not settle any action or otherwise consent to
an adverse judgment in such action that diminishes the rights or interest of the non-controlling party without the express written consent of the non-controlling party. All monies recovered upon the
final judgment or settlement of any enforcement action in the Field shall be shared, after reimbursement of expenses, equally by the parties. Notwithstanding the foregoing, IRC and Vyrex shall fully
cooperate with each other in the planning and execution of any action to enforce the Patent Rights in the Field. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 11<BR>
TERM AND TERMINATION  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Expiration.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Unless terminated earlier pursuant to Section&nbsp;11.2 or 11.3 below, the Agreement
shall expire on the expiration of IRC's obligations to pay royalties under the Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Termination Upon Default.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as otherwise provided in Article&nbsp;13, upon or after the
default under any material provision of the Agreement, if the defaulting party has not cured such default within ninety (io) days after written notice thereof from the other party, the other party
may, at its option (a)&nbsp;terminate the Agreement and any licenses granted thereunder and/or (b)&nbsp;retain any licenses granted by the defaulting party to the other party under the Agreement,
and/or (c)&nbsp;seek such other relief as may be provided at law, in equity or otherwise under such circumstances. Any termination of the Agreement under this Section&nbsp;11.2 shall be effective
upon receipt by the defaulting party of notice of termination from the other party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Termination Upon Insolvency.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;A party may terminate the Agreement upon the occurrence of any of the
following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.3.1&nbsp;&nbsp;The
other party shall (a)&nbsp;seek the liquidation, reorganization, dissolution or winding up of itself (other than dissolution or winding up
for the purposes of reconstruction or amalgamation) or the composition or readjustment of all or substantially ll of its debts, (b)&nbsp;apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all or substantially all of its assets, (c)&nbsp;make a general assignment for the benefit of its creditors,
(d)&nbsp;commence a voluntary case under the Bankruptcy Code, (e)&nbsp;file&nbsp;a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or readjustment of debts, or (f)&nbsp;adopt any resolution of its Board of Directors or stockholders for the purpose of effecting any of the foregoing; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.3.2&nbsp;&nbsp;A
proceeding or case shall be commenced without the application or consent of the other party and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the following shall be entered and continue unstayed in effect, for a period of ninety (io) days from and after the date
service of process is effected upon the other party, seeing (a)&nbsp;its liquidation, reorganization, dissolution or winding up, or the composition or readjustment of all or substantially all of its
debts, (b)&nbsp;the appointment of a trustee, receiver, custodian, liquidator or the like of itself or of all or substantially all of its assets, or (c)&nbsp;similar </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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relief under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or readjustment of debts. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Effect of Expiration and Termination.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Expiration or termination of the Agreement shall not relieve
the parties of any obligation accruing prior to such expiration or termination. The provisions of Articles 8, 9, and 12 shall survive the expiration or termination of the Agreement. Upon expiration of
the Agreement under Section&nbsp;11.1 above, the license under the Know-How granted to IRC pursuant to Section&nbsp;6.1 above shall continue and become a perpetual and fully-paid license, and the
license under the Program Patent Rights and Program Know-How granted to Vyrex pursuant to Section&nbsp;6.2 above shall continue as a perpetual and fully-paid license. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 12<BR>
INDEMNITY  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;12.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Direct Indemnity.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each party shall indemnify and hold the other party harmless, and hereby forever
releases and discharges the other party, from and against all losses, liabilities, damages and expenses (including reasonable attorneys' fees and costs) incurred as a result of any claims, demands,
actions or other proceedings arising out of the recklessness, willful misconduct or breach of the Agreement by such party. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;12.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Procedure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;A party (the "Indemnitee") that intends to claim indemnification under this
Article&nbsp;12 shall promptely notify the other party (the "Indemnitor") of any claim, demand, action or other proceeding for which the Indemnitee intends to claim such indemnification, and the
Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so desires, jointly with any other indemnitor similarly noticed, to assume the defense thereof with counsel
selected by the Indemnitor; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitee, if representation of the
Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interest between the Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity obligations under this Article&nbsp;12 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected
without the consent of the Indemnitor, which consent shall not be withheld unreasonably. The failure to deliver notice to the Indemnitor within a reasonable time after the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve the Indemnitor of any liability to the Indemnitee under this Article&nbsp;12, abut the omission so to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to the Indemnitee otherwise than under this Article&nbsp;12. The Indemnitor may not settle the action or otherwise consent to an
adverse judgment in such action that diminishes the rights or interests of the Indemnitee without the express written consent of the Indemnitee. The Indemnitee shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any claim, demand, action or other proceeding covered by this indemnification. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;12.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Insurance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex and IRC each shall maintain insurance with respect to development, manufacture
and sales of Products by Vyrex or IRC, as the case may be, in such amount as Vyrex or IRC, respectively, customarily maintains with respect to the development, manufacture and sale of its other
products. Vyrex and IRC, as applicable, shall maintain such insurance for so long as each continues to manufacture or sell any Products, and thereafter for so long as Vyrex and IRC, as applicable,
each maintains insurance for itself covering the development, manufacture and sale of its other products. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 13<BR>
FORCE MAJEURE  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached the Agreement for failure or delay in
fulfilling or performing any term of the Agreement to the extent, and for so long as, such failure or delay is caused by or results from causes beyond the reasonable control of the affected party
including but not limited to fire, floods, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other party. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 14<BR>
ASSIGNMENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Agreement may not be assigned or otherwise transferred, nor, except as expressly provided hereunder, may any right or obligations hereunder be assigned or
transferred by either party without the consent of the other party; </FONT><FONT SIZE=2><I>provided, however, </I></FONT><FONT SIZE=2>that either IRC or Vyrex may, without such consent, assign the
Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in control
or similar transaction. Any permitted assignee shall assume all obligations of its assignor under the Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 15<BR>
SEVERABILITY  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each party hereby acknowledges that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of the Agreement be or become invalid, the parties shall substitute,
by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed
that the parties would have entered into the Agreement with such provisions. In case such provisions cannot be agreed upon, the invalidity of one or several provisions of the Agreement shall not
affect the validity of the Agreement as a whole, unless the invalid provisions are of such essential importance to the Agreement that it is to be reasonably assumed that the parties would not have
entered into the Agreement without the invalid provisions. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 16<BR>
MISCELLANEOUS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Notices.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Any consent, notice or report required or permitted to be given or made under the
Agreement by one of the parties to the other shall be in writing, delivered by any lawful means and shall be effective upon receipt by the addressee. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="16%"><FONT SIZE=2><BR>
If to IRC:</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="79%"><FONT SIZE=2><BR>
The Immune Response Corporation<BR>
5935 Darwin Court<BR>
Carlsbad, CA 92008<BR>
Attention: Dennis J. Carlo, Ph.D.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%"><FONT SIZE=2><BR>
with a copy to:</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="79%"><FONT SIZE=2><BR>
Pillsbury Madison &amp; Sutro LLP<BR>
235 Montgomery Street, 15<SUP>th</SUP> Floor<BR>
San Francisco, CA 94104<BR>
Attention: Thomas E. Sparks, Jr.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%"><FONT SIZE=2><BR>
If to Vyrex:</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="79%"><FONT SIZE=2><BR>
Vyrex Corporation<BR>
2159 Avenida de la Playa<BR>
La Jolla, CA 92037<BR>
Attention: Carl M. Lewis</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Applicable Law.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Agreement shall be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law principles thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Entire Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Agreement contains the entire understanding of the parties with respect to
the subject matter hereof. All express or implied agreement and understandings, either oral or written, heretofore made are expressly superseded by the Agreement. The Agreement may be amended, or any
term hereof modified, only by a written instrument duly executed by both parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Headings.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The captions to the several Articles and Sections hereof are not a part of the
Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Independent Contractors.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;It is expressly agreed that IRC and Vyrex shall be independent
contractors and that the relationship between the two parties shall not constitute a partnership, joint venture or agency. Neither IRC nor Vyrex shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior consent of the party to do so. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Waiver.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The waiver by either party of any right hereunder or the failure to perform or of a breach
by the other party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other party whether of a similar nature or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Counterparts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<A NAME="page_kf1062_1_14"> </A>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first set forth above. </FONT></P>

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<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" COLSPAN=2><FONT SIZE=2>THE IMMUNE RESPONSE CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="44%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>DENNIS J. CARLO</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>Title</FONT></TD>
<TD WIDTH="44%" ALIGN="CENTER"><FONT SIZE=2><I>Pres/CEO</I></FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%" COLSPAN=2><FONT SIZE=2><BR>
VYREX CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="44%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>SHELDON S. HENDLER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>Title</FONT></TD>
<TD WIDTH="44%" ALIGN="CENTER"><FONT SIZE=2><I>CEO</I></FONT><HR NOSHADE></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>a2037372zex-10_3.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>

<HTML>
<HEAD>
<TITLE> Prepared by MERRILL CORPORATION www.edgaradvantage.com
</TITLE>
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<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT 10.3  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> <A NAME="kg1062_first_amendment_to_collaborati__fir04811"> </A>
<A NAME="toc_kg1062_1"> </A>
<BR>    FIRST AMENDMENT TO COLLABORATION AGREEMENT<BR>  DATED AUGUST 1, 1997, BETWEEN VYREX CORPORATION<BR>  AND THE IMMUNE RESPONSE CORPORATION    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_recitals"> </A>
<A NAME="toc_kg1062_2"> </A></FONT> <FONT SIZE=2><B>RECITALS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Vyrex Corporation (hereinafter "Vyrex") and The Immune Response Corporation (hereinafter "IRC") entered in a Collaboration Agreement effective as of
August&nbsp;1, 1997 (hereinafter "Agreement"), pursuant to which, inter alia, the parties agreed to conduct a collaborative research program and Vyrex, as the exclusive worldwide licensee of patent
rights and know-how relating to CD-Tagging&#153; technology, granted to IRC certain exclusive worldwide rights to develop, make, use, offer for sale, sell and import
Products (as defined in the Agreement), and to conduct the Program (as defined in the Agreement). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Vyrex is the owner and assignee of all right, title and interest in certain antioxidant compounds, methods, processes, procedures and uses specifically set forth in
Appendix&nbsp;I hereto and thereby incorporated by reference herein (hereinafter collectively referred to as "</FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Vyrex and IRC desire to evaluate </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> for potential applications within the Field and Scope of the Program. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Vyrex agrees to grant IRC an exclusive world-wide license to </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> under the terms and conditions
set forth below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;NOW
THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, Vyrex and IRC agree to amend the Agreement, and otherwise agree, as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_1._definitions"> </A>
<A NAME="toc_kg1062_3"> </A>
<BR></FONT><FONT SIZE=2><I>1. DEFINITIONS</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;1
of the Agreement is hereby amended to add the following new definitions, and to amend the definition of "Product" as follows: </FONT></P>

<DL compact>
<DT><FONT SIZE=2>1.1</FONT></DT><DD><FONT SIZE=2>"</FONT><FONT
SIZE=2>VANTOX-N</FONT><FONT SIZE=2>" shall mean the compounds, methods, processes, procedures and uses described in Appendix&nbsp;I hereto,
which, based upon testing conducted by or on behalf of the parties during and in the performance of the Program, have demonstrated, in the reasonable discretion of the Steering Committee (as defined
in the Agreement), potential utility in the Field and within the Scope (as defined in the Agreement).
<BR><BR></FONT></DD><DT><FONT SIZE=2>1.2</FONT></DT><DD><FONT SIZE=2>"</FONT><FONT
SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Improvement" shall mean any compound, process, method, procedure, derivative or use (a)&nbsp;which
constitutes an improvement to </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> conceived by or on behalf of, Vyrex or IRC during the performance of the Program; (b)&nbsp;which
based upon testing conducted by or on behalf of the parties during and in the performance of the Program, has demonstrated, in the reasonable discretion of the Steering Committee (as defined in the
Agreement), potential utility in the Field (as defined in the Agreement); and (c)&nbsp;which, if patentable, claims priority of U.S. Patent Application Serial No.&nbsp;09/075,356 filed
May&nbsp;8, 1998, entitled "Water-Soluble Pro-Drugs of Propofol".
<BR><BR></FONT></DD><DT><FONT SIZE=2>1.3</FONT></DT><DD><FONT SIZE=2>"</FONT><FONT
SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Know-How"shall mean all information and data, which is not generally known including, but not
limited to, syntheses, formulae, procedures, protocols, techniques and results of experimentation and testing, which are necessary or useful to develop, synthesize, manufacture, use, practice or sell </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>
or any </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Improvement.
<BR><BR></FONT></DD><DT><FONT SIZE=2>1.4</FONT></DT><DD><FONT SIZE=2>"First
Amendment Commencement Date" shall mean June&nbsp;24, 1998.
<BR><BR></FONT></DD><DT><FONT SIZE=2>1.5</FONT></DT><DD><FONT SIZE=2>"</FONT><FONT
SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Patent Rights" shall mean, collectively, (a)&nbsp;the patent rights specifically described in
Appendix&nbsp;I; and (b)(i)&nbsp;any and all patent applications heretofore or hereafter filed or having legal force in any country, which claim a </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Improvement and/or </FONT><FONT
SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Know-How; (ii)&nbsp;all
patents that issue therefrom, including utility, model and design patents and certificates of </FONT></DD></DL>
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<UL>

<P><FONT SIZE=2>invention;
and (iii)&nbsp;all divisionals, continuations, continuations-in-part, reissues, renewals, extensions of additions to any such patent applications and patents. </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Patent Rights shall be excluded from
Program Patent Rights as defined in Paragraph&nbsp;1.22 of the Agreement. </FONT></P>

</UL>
<DL compact>
<DT><FONT SIZE=2>1.6</FONT></DT><DD><FONT SIZE=2>"Product"
shall mean, collectively, (a)&nbsp;a product which incorporates or contains a Program Compound (as defined in the Agreement), and/or (b)&nbsp;a product which
incorporates, contains, uses, is based on or results from </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> or a </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>
Improvement. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_2._representations_and_warranties"> </A>
<A NAME="toc_kg1062_4"> </A>
<BR></FONT><FONT SIZE=2><I>2. REPRESENTATIONS AND WARRANTIES</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each
party hereby represents and warrants to the other party as follows: </FONT></P>

<DL compact>
<DT><FONT SIZE=2>2.1</FONT></DT><DD><FONT SIZE=2>Each
party has the corporate power, authority and the legal right to enter into this Amendment and to perform its obligations hereunder, and has taken all necessary corporate action
on its part to authorize the execution and delivery of the Amendment and the performance of its obligations hereunder. The Amendment has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid and binding obligation, enforceable against such party in accordance with its terms
<BR><BR></FONT></DD><DT><FONT SIZE=2>2.2</FONT></DT><DD><FONT SIZE=2>All
necessary consents, approvals and authorizations of all governmental authorities and other Persons (as defined in the Agreement) required to be obtained by such party in
connection with the Amendment have been obtained.
<BR><BR></FONT></DD><DT><FONT SIZE=2>2.3</FONT></DT><DD><FONT SIZE=2>The
execution and delivery of the Amendment, and the performance of such party's obligations hereunder, do not conflict with or violate any requirement of applicable laws or
regulations, and do not conflict with, or constitute a default under, any contractual obligations of such party.
<BR><BR></FONT></DD><DT><FONT SIZE=2>2.4</FONT></DT><DD><FONT SIZE=2><B>Nothing in this Amendment shall be construed as a representation made, or warranty given, by either party that any patent will issue based upon any pending
patent application within the </B></FONT><FONT SIZE=2><B>VANTOX-N</B></FONT><FONT SIZE=2><B>Patent Rights, that any patent issued with respect thereto will be valid, or
that the use of any license granted hereunder, or the use of any </B></FONT><FONT SIZE=2><B>VANTOX-N</B></FONT><FONT SIZE=2><B>Patent Rights or  </B></FONT><FONT SIZE=2><B>VANTOX-N</B></FONT><FONT SIZE=2><B> Know-How will not infringe the patent or
intellectual patent rights of any other Person. Furthermore, neither party
makes any representations or warranties, express or implied, with respect to </B></FONT><FONT SIZE=2><B>VANTOX-N</B></FONT><FONT SIZE=2><B> Patent Rights or  </B></FONT><FONT SIZE=2><B>VANTOX-N</B></FONT><FONT SIZE=2><B> Know-How, including without
limitation, merchantability or fitness for a particularpurpose.</B></FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_3._license_grants"> </A>
<A NAME="toc_kg1062_5"> </A>
<BR></FONT><FONT SIZE=2><I>3. LICENSE GRANTS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;6 of the Agreement is hereby amended to add the following new provision: </FONT></P>

<DL compact>
<DT><FONT SIZE=2>3.1</FONT></DT><DD><FONT SIZE=2>Vyrex
hereby grants to IRC an exclusive worldwide license (with the exclusive right to grant sublicenses) under Vyrex' rights in the </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Patent Rights and </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>
Know-How (a)&nbsp;to conduct
the Program, and (b)&nbsp;to develop, make, use, offer for sale, sell and import Products. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_4._program_inventions_and_patent_rights"> </A>
<A NAME="toc_kg1062_6"> </A>
<BR></FONT><FONT SIZE=2><I>4. PROGRAM INVENTIONS AND PATENT RIGHTS</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;10
of the Agreement is hereby amended to add the following new provisions: </FONT></P>

<DL compact>
<DT><FONT SIZE=2>4.1</FONT></DT><DD><FONT SIZE=2>Vyrex
shall solely own the entire right, title and interest in all </FONT><FONT SIZE=2>VANTOX-N, VANTOX-N</FONT><FONT SIZE=2> Improvements, </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Patent Rights and </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>
Know-How.
<BR><BR></FONT></DD><DT><FONT SIZE=2>4.2</FONT></DT><DD><FONT SIZE=2>Vyrex,
at its sole cost, shall be responsible for and shall have the sole right to control the preparation, filing, prosecution and maintenance of </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Patent Rights. The provisions of Section&nbsp;10.3 of the
Agreement additionally shall apply to the </FONT> <FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> Patent Rights.
<BR><BR></FONT></DD><DT><FONT SIZE=2>4.3</FONT></DT><DD><FONT SIZE=2>Upon
expiration of the Agreement under Section&nbsp;11.1 of the Agreement, the license under the </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>
Know-How granted to IRC pursuant to Section&nbsp;3.1 of this Amendment shall continue and become a perpetual and fully-paid license. </FONT></DD></DL>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_5._relation_to_other_documents"> </A>
<A NAME="toc_kg1062_7"> </A>
<BR></FONT><FONT SIZE=2><I>5. RELATION TO OTHER DOCUMENTS</I></FONT></P>

<DL compact>
<DT><FONT SIZE=2>5.1</FONT></DT><DD><FONT SIZE=2>The
Program Workplan (as defined in the Agreement), when drafted, shall include reference to </FONT><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2>.
<BR><BR></FONT></DD><DT><FONT SIZE=2>5.2</FONT></DT><DD><FONT SIZE=2>Vyrex
and IRC agree that, except as specifically provided in this Amendment, all other terms and conditions set forth in the Agreement shall remain in full force and effect and
shall govern the rights and obligations of the parties hereto.
<BR><BR></FONT></DD><DT><FONT SIZE=2>5.3</FONT></DT><DD><FONT SIZE=2>The
parties agree that in the event of any conflict or inconsistency between the Agreement and the specific provisions of this Amendment, the provisions of this Amendment shall
control in all respects. </FONT></DD></DL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties have executed this amendment effective as of the First Amendment Commencement Date at La Jolla, California. </FONT></P>

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<TD WIDTH="52%" COLSPAN=3><FONT SIZE=2>For VYREX CORPORATION:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>SHELDON S. HENDLER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Sheldon S. Hendler, PhD., M.D.<BR>
Chairman and Chief Executive Officer</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="52%" COLSPAN=3 VALIGN="TOP"><FONT SIZE=2><BR>
For THE IMMUNE RESPONSE CORPORATION:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
/s/&nbsp;</FONT><FONT SIZE=2>DENNIS J. CARLO</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Dennis J. Carlo, Ph.D.<BR>
Chief Executive Officer</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg1062_appendix_i"> </A>
<A NAME="toc_kg1062_8"> </A>
<BR></FONT><FONT SIZE=2><B>APPENDIX I    <BR>  </B></FONT></P>

<P><FONT SIZE=2>VANTOX-N</FONT><FONT SIZE=2> shall mean any compound, method, process, procedure or use claimed in U.S. Patent Application Serial No.&nbsp;09/075,356, filed
May&nbsp;8, 1998, entitled "Water-Soluble Pro-Drugs of Propofol"and any United States and foreign patent applications that claim priority thereof; all patents that have issued or in the
future issue therefrom, including utility, model and design patents and certificates of invention; and all divisionals, continuations, continuations-in-part, reissues,
renewals, extensions or additions to any such patent applications and patents. </FONT></P>

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<FONT SIZE=2><A HREF="#toc_kg1062_1">FIRST AMENDMENT TO COLLABORATION AGREEMENT DATED AUGUST 1, 1997, BETWEEN VYREX CORPORATION AND THE IMMUNE RESPONSE CORPORATION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_3">1. DEFINITIONS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_4">2. REPRESENTATIONS AND WARRANTIES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_5">3. LICENSE GRANTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_6">4. PROGRAM INVENTIONS AND PATENT RIGHTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_7">5. RELATION TO OTHER DOCUMENTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg1062_8">APPENDIX I</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>a2037372zex-10_4.htm
<DESCRIPTION>EXHIBIT 10.4
<TEXT>

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<HEAD>
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<P><FONT SIZE=2><A
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<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT 10.4  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ki1062_second_amendment_to_collaborat__sec04830"> </A>
<A NAME="toc_ki1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECOND AMENDMENT TO COLLABORATION AGREEMENT<BR>  DATED AUGUST 1, 1997, BETWEEN VYREX CORPORATION<BR>  AND THE IMMUNE RESPONSE CORPORATION    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>RECITALS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Vyrex Corporation (hereinafter "Vyrex") and The Immune Response Corporation (hereinafter "IRC") entered into a Collaboration Agreement dated
August&nbsp;1, 1997 (hereinafter "Agreement"), wherein Vyrex, as the exclusive worldwide licensee of patent rights and know-how relating to CD-Tagging&#153;
technology, granted to IRC certain exclusive worldwide rights, as limited by Field and Scope (as defined in the Agreement), to use its CD-Tagging technology in furtherance of the Program
(as defined in the Agreement). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Vyrex and IRC executed a First Amendment to the Agreement, effective June&nbsp;24, 1998, wherein Vyrex granted to IRC an exclusive world-wide license to
Vantox-N compounds, limited by Field and Scope, to develop and use Vyrex's Vantox-N compounds in furtherance of the Program. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Vyrex and IRC, pursuant to an agreement reached between the companies on or about April&nbsp;26, 1999, now wish to formalize the termination of the exclusive worldwide
sub-license of patent rights and know-how relating to CD-Tagging technology granted in the Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Vyrex and IRC now desire to further amend the Agreement by incorporating the license grant of specific Vyrex proprietary technology, limited by Field and Scope, as more fully
set forth below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;NOW
THEREFORE, in consideration of the foregoing promises and the mutual covenants set forth below, the parties hereby agree to amend the Agreement as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ki1062_article_1_amendment"> </A>
<A NAME="toc_ki1062_2"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE 1<BR>  AMENDMENT    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;Section&nbsp;1.9
of the Agreement is restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Field</I></FONT><FONT SIZE=2>" shall mean the treatment of diseases, states or conditions associated with central or peripheral nervous systems, including but
not limited to migraine and anesthesia. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;Section&nbsp;1.25
of the Agreement is restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Scope</I></FONT><FONT SIZE=2>" shall mean the discovery, research and development of (a)&nbsp;proteins, small molecules and compounds involved in nerve
growth and repair, and (b)&nbsp;propofol pro-drugs described in U.S. Patent WO 99/58555, owned by Vyrex, as limited by the Field. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;Section&nbsp;3.6
of the Agreement is restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;Term of the Program.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as provided in Article&nbsp;11 below, the term of the Program shall commence on the Commencement Date and
terminate on the sixth anniversary thereof. Termination of the Program pursuant to this paragraph shall not serve to terminate or otherwise affect the rights and obligations of the parties pursuant to
any other Article under this Agreement. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Termination of License Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex and IRC hereby agree that this Second Amendment terminates all
rights of IRC under the sub-license covering CD-Tagging patent rights granted by Vyrex to IRC in the Agreement. IRC acknowledges and represents hereby that it has not, pursuant
to the Agreement, granted any sub-license or conveyed any rights to any affiliate or third party with respect to CD-Tagging. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/IRC Collaboration - Page 1 of 3 </I></FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;1.5&nbsp;Section&nbsp;6.1 of the Agreement is restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;Licenses to IRC.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vyrex hereby grants to IRC an exclusive worldwide license (with the exclusive right to grant sub-licenses) under
Vyrex's rights in the VANTOX-N Patent Rights and VANTOX-N Know-How (including without limitation the propofol pro-drugs described in U.S. Patent WO
99/58555), and as limited by the Field and Scope, to conduct the Program, and to develop, make, use, offer for sale, sell and import Products. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.6&nbsp;Section&nbsp;6.3
of the Agreement is restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;Sublicenses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.3.1.&nbsp;&nbsp;IRC
shall provide to Vyrex a written summary of the general financial terms of any proposed sublicense under the licenses granted to IRC under
the Agreement prior to execution thereof. Such summary shall be Confidential Information of IRC. Vyrex shall have ten (10)&nbsp;days after the date of such written summary to provide IRC with
comments on such proposed sublicense. IRC may enter into an agreement with a sublicensee on terms that are substantially similar to or more favorable to IRC than the proposed terms, provided, if Vyrex
reasonably demonstrates that the proposed terms are not arms length terms, negotiated in good faith, under the circumstances, IRC shall consider in good faith any reasonable comments provided by Vyrex
during such ten (10)&nbsp;day period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.3.2.&nbsp;&nbsp;IRC
and Vyrex shall provide to the other party a copy of any sublicense under the licenses granted under the Agreement promptly upon execution
of the same. Any such sublicense shall be subject to the provisions of the Agreement. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ki1062_article_2_miscellaneous"> </A>
<A NAME="toc_ki1062_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE 2<BR>  MISCELLANEOUS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Defined Terms.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;All terms used, but not defined, in this Second Amendment shall have the respective
meanings set forth in the Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Continuing Effect.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;This Second Amendment shall be effective for all purposes as of the Effective
Date. Except as otherwise expressly modified by this Second Amendment, the Agreement shall remain in full force and effect in accordance with its terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Governing Law.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;This Second Amendment shall by governed by and construed in accordance with the laws
of the State of California without regard to the conflicts of law principles hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Counterparts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;This Amendment may be executed in counterparts, each of which shall be deemed to be
an original and together shall be deemed to be one and the same document. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/IRC Collaboration - Page 2 of 3 </I></FONT></P>

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<A NAME="page_ki1062_1_3"> </A>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Second Amendment effective as of the date of the last signed below. </FONT></P>

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<TR VALIGN="BOTTOM">
<TD WIDTH="60%" COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>THE IMMUNE RESPONSE CORPORATION</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
/s/ Dennis J. Carlo</FONT><HR NOSHADE><FONT SIZE=2> Dennis J. Carlo, Ph.D.<BR>
Chief Executive Officer</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
Date:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="28%" ALIGN="CENTER"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="60%" COLSPAN=3><FONT SIZE=2><BR>
VYREX CORPORATION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="28%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
/s/ G. Dale Garlow</FONT><HR NOSHADE><FONT SIZE=2> G. Dale Garlow<BR>
Chief Executive Officer</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
Date:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="28%" ALIGN="CENTER"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/IRC Collaboration - Page 3 of 3 </I></FONT></P>

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<BR>
<P><br><A NAME="01SAN1062_6">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ki1062_1">SECOND AMENDMENT TO COLLABORATION AGREEMENT DATED AUGUST 1, 1997, BETWEEN VYREX CORPORATION AND THE IMMUNE RESPONSE CORPORATION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ki1062_2">ARTICLE 1 AMENDMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ki1062_3">ARTICLE 2 MISCELLANEOUS</A></FONT><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>7
<FILENAME>a2037372zex-10_5.htm
<DESCRIPTION>EXHIBIT 10.5
<TEXT>

<HTML>
<HEAD>
<TITLE> Prepared by MERRILL CORPORATION www.edgaradvantage.com
</TITLE>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#01SAN1062_7">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>

<P><FONT SIZE=2><A
NAME="page_kk1062_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT 10.5  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_license_agreement"> </A>
<A NAME="toc_kk1062_1"> </A></FONT> <FONT SIZE=2><B>LICENSE AGREEMENT    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This license agreement (the "Agreement") is made and is effective as of the 29<SUP>th</SUP> of August&nbsp;2000 by and between Vyrex Corporation, a
California corporation with principal offices located at 2159 Avenida de la Playa, La Jolla, California 92037-3215 ("Licensor") and VDF Futureceuticals,&nbsp;Inc., and Illinois
corporation with principal offices located at 300 W. 6<SUP>th</SUP> Street, Momence, Illinois 60954 ("Licencee"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_recitals"> </A>
<A NAME="toc_kk1062_2"> </A>
<BR></FONT><FONT SIZE=2><B>RECITALS    <BR>  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, Licensor is the owner and/or exclusive licensee of certain chromium and boron compounds and/or
complexes, including method and know-how, which compounds and/or complexes are covered by United States and/or foreign patents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, Licensee is engaged in the business of manufacturing and marketing raw materials and products to the pharmaceutical,
nutraceutical, and agricultural industries and is desirous of obtaining certain rights from Licensor to further develop, manufacture and commercialize products based on, or derived from, the chromium
and boron compounds and/or complexes. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, both Licensor and Licensee are desirous of entering to a business relationship whereby Licensor would be granted the exclusive
worldwide right to manufacture Licensed Products and both Licensor and License would have the right to commercialize Licensed Products. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>THEREFORE</B></FONT><FONT SIZE=2>, in consideration of the mutual covenants and promises set forth herein, the parties agree as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_1._definitions"> </A>
<A NAME="toc_kk1062_3"> </A>
<BR></FONT><FONT SIZE=2><I>1. DEFINITIONS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;"Licensor's
Patent Rights" means patent rights to any subject matter claimed in or covered by: (1)&nbsp;United States Patent number 6071545; patents issued
thereon; divisions and continuations thereof; continuations-in-part thereof; substitutions or reissues thereof; and foreign patents and patent applications corresponding
thereto, and (2)&nbsp;United States Patent number 5962049; patents issued thereon; divisions and continuations thereof; continuations-in-part thereof; substitutions or
reissues thereof; and foreign patents and patent applications corresponding thereto. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;"License
Method" shall mean any process, method, procedure or use which is covered by the Licensor's Patent Rights or the use or practice of which, but for the
licenses granted hereunder, would constitute an infringement of any claim in Licensor's Patent Rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;"Licensed
Product" means any (a)&nbsp;material or product containing the elements boron and/or chromium and that is covered by Licensor's Patent Rights or whose
manufacture, use, practice or sale would constitute, but for the license granted to Licensee pursuant to this Agreement, an infringement of any claim within Licensee's Patent Rights, and/or
(b)&nbsp;any material or product developed, made, used, sold, registered or practiced with License Method. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.4&nbsp;"Affiliates"
means any legal person which directly or indirectly controls, is controlled by, or is under common control with Licensee. As defined herein "control"
means the power to direct the policies of an entity whether through ownership of voting securities or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.5&nbsp;"Gross
Revenue" means the gross sales of Licensed Products by Licensee, its Affiliates and its sublicensees based on gross invoice prices of Licensed Products less
cash, trade, or quantity discounts actually taken. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.6&nbsp;"Major
Market Countries" means the United States of America, Canada, Japan, Korea, United Kingdom, France, Germany, Italy, Spain, and Australia. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 1 of 10 </I></FONT></P>

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<A NAME="page_kk1062_1_2"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_2._exclusive_grant"> </A>
<A NAME="toc_kk1062_4"> </A>
<BR></FONT><FONT SIZE=2><I>2. EXCLUSIVE GRANT    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;Subject
to the limitations set forth in this Agreement, Licensor hereby grants to Licensee an exclusive worldwide license under Licensor's Patent Rights to
manufacture Licensed Products and to practice Licensed Method. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;Subject
to the limitations set forth in this Agreement, Licensor further grants to Licensee a non-exclusive worldwide license under Licensor's Patent
Rights to commercialize Licensed Products with Licensor retaining co-marketing rights to commercialize Licensed Products manufactured by Licensee pursuant to paragraph&nbsp;2.1 above.. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;Except
as otherwise provided herein, the license granted in section&nbsp;2.1 shall be exclusive for the term of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;Licensor
expressly reserves the right to use the Invention, Licensor's Patent Rights and associated technology for education and research purposes and to publish
the results thereof. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_3._sublicenses"> </A>
<A NAME="toc_kk1062_5"> </A>
<BR></FONT><FONT SIZE=2><I>3. SUBLICENSES    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;Licensor
grants to the Licensee the right to issue sublicenses to third parties under the licenses herein granted, provided the Licensee has current exclusive
rights thereto under this Agreement. To the extent applicable, such sublicenses shall include all of the rights of, and obligations due to, the Licensor that are contained in this Agreement. Licensor
and Licensee agree that revenues derived from sub-license fees, sublicense maintenance fees and or sublicense royalties shall be split (50%/50%) between Licensor and Licensee. If Licensee
is unable to sublicense Licensor's Patent Rights under conditions providing it a fair return, Licensor agrees to enter negotiations with Licensee to arrive at sublicensing terms which are reasonable
and fair to both parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;Within
thirty (30)&nbsp;days after execution thereof, Licensee shall provide the Licensor with a copy of each sublicense issued hereunder. Licensee shall also
promptly collect and guarantee payment of all
royalties due Licensor from sublicensees; and summarize and deliver all reports due Licensee from sublicensees. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;Upon
termination of this Agreement for any reason, Licensor, at its sole discretion, shall determine whether any or all sublicenses shall have been canceled or
assigned to the Licensor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_4._license-issue_fee,_license___4._02535"> </A>
<A NAME="toc_kk1062_6"> </A>
<BR></FONT><FONT SIZE=2><I>4. LICENSE-ISSUE FEE, LICENSE MAINTENANCE FEES AND MILESTONE PAYMENTS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;The
Licensee shall pay to Licensor an Initial License-Issue Fee of twenty-five thousand dollars ($25,000.00) upon execution of this Agreement. Said fee
is non-refundable and not an advance against royalties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.2&nbsp;The
Licensee shall pay to Licensor a Supplemental License-Issue Fee of seventy-five thousand dollars ($75,000.00) payable upon attaining $75,000.00 in
initial sales of Licensed Products. Said fee is non-refundable and not an advance against royalties. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_5._royalties"> </A>
<A NAME="toc_kk1062_7"> </A>
<BR></FONT><FONT SIZE=2><I>5. ROYALTIES    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;The
Licensee shall pay to Licensor a total gross royalty of thirty percent (30%) of Gross Revenue. Of the thirty percent (30%) gross royalty, Licensee shall credit
and allocate five percent (5%) to research and development and the distribution/publication of the results of that research and development of Licensed Product and pay the remaining twenty-fiver
percent (25%) to Licensor in accordance with paragraphs 5.2, 5.3, 5.4 and 5.5 below, and sections 7.3 and 7.4. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 2 of 10 </I></FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;Paragraphs 1.1, 1.2 and 1.3 define Licensor's Patent Rights, Licensed Product and Licensed Method so that royalties shall be payable on products and methods covered
by both pending patent applications and issued patents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;Royalties
accruing to the Licensor shall be paid to the Licensor monthly commencing on the date of first commercial sale by Licensee, or its affiliates, pursuant to
the licenses granted herein. Each such payment will be for royalties which accrued within the Licensee's most recently completed calendar month. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;Licensee
shall pay to the Licensor a minimum monthly royalty, commencing on the effective date of this agreement, equal to the amounts in schedule set forth below.
The minimum royalty for any given month shall be credited against the actual paid Licensor for the same month. Month one commences upon both GRAS affirmation and FDA Pre-market
Notification approval, (21 CFR Part&nbsp;190). If the Chromium patent does not prove to be a superior form of Chromium, Minimum Monthly Royalties will not be due. This will be decided by both
parties at commencement of month thirteen. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="71%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="66%" ALIGN="LEFT"><FONT SIZE=1><B>Time Period from Effective Date Hereof<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="32%" COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>Minimum<BR>
Monthly Royalty</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="66%" ALIGN="CENTER"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Boron<BR> </B></FONT><BR></TH>
<TH WIDTH="4%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Chromium<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="66%"><FONT SIZE=2>Months 1-12</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>None</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>None</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="66%"><FONT SIZE=2>Months 13-24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,500</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,500</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="66%"><FONT SIZE=2>Months 25-36</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>7,500</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>7,500</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="66%"><FONT SIZE=2>Months 37-life of agreement</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>15,000</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;All
monies due the Licensor shall be payable in United States funds collectible at par in La Jolla, California or at such other location as Licensor may from time
to time designate. When Licensed Products are sold for monies other than United States dollars, the earned royalties will first be determined in the foreign currency of the country in which such
Licensed Products were sold and then converted into equivalent United States funds. The exchange rate will be that quoted in the Wall Street Journal on the last business day of the reporting period. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_6._due_diligence"> </A>
<A NAME="toc_kk1062_8"> </A>
<BR></FONT><FONT SIZE=2><I>6. DUE DILIGENCE    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.1&nbsp;The
Licensee, upon execution of this Agreement, shall use best efforts and shall diligently proceed with the development, testing, regulatory approval, manufacture
and sale of Licensed Products in all countries of the world and shall earnestly and diligently endeavor to market the same in all countries of the world within a reasonable time after execution of
this Agreement and in quantities sufficient to meet the market demands therefore. Licensor does not guaranty that approvals will be obtained in all countries where applications are filed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.2&nbsp;The
Licensee shall be entitled to exercise prudent and reasonable business judgment in meeting its due diligence obligations hereunder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.3&nbsp;The
Licensor and Licensee shall cooperate and use reasonable efforts to obtain all necessary governmental approvals for the manufacture, use and sale of Licensed
Products in all Major Market Countries. The costs of such necessary government approvals shall be borne by Licensee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_7._progress_and_royalty_payments"> </A>
<A NAME="toc_kk1062_9"> </A>
<BR></FONT><FONT SIZE=2><I>7. PROGRESS AND ROYALTY PAYMENTS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.1&nbsp;Beginning
on the first six (6)&nbsp;month anniversary of the effective date of this agreement, and semi-annually thereafter, the Licensee shall submit
to the Licensor a progress report covering the activities of Licensee, its affiliates and sublicensees related to the development, testing, and marketing of each Licensed Product until the first
commercial sale of each such product. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 3 of 10 </I></FONT></P>

<HR NOSHADE>
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<A NAME="page_kk1062_1_4"> </A>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;7.2&nbsp;The progress reports submitted under section&nbsp;7.1 shall include, but not be limited to, the following topics: </FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>summary
of work complete
<BR><BR></FONT></DD><DT><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>key
scientific discoveries
<BR><BR></FONT></DD><DT><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>summary
of work in progress
<BR><BR></FONT></DD><DT><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>current
schedule of anticipated events or milestones
<BR><BR></FONT></DD><DT><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>market
plans for introduction of Licensed Products, and
<BR><BR></FONT></DD><DT><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
summary of resources (dollar value) spent in the reporting period. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.3&nbsp;After
the first commercial sale of a Licensed Product anywhere in the world, the Licensee will make monthly royalty reports to the Licensor within thirty
(30)&nbsp;days after the end of each calendar month. Each such royalty report will cover the most recently completed calendar month and will show (a)&nbsp;the gross sales of Licensed Products,
(b)&nbsp;the number of each type of Licensed Product sold; (c)&nbsp;the royalties, in U.S. dollars, payable hereunder with respect to such sales, (d)&nbsp;the method used to calculate the
royalty; and (e)&nbsp;the exchange rates used, if any. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.4&nbsp;If
no sales of Licensed Products have been made during any reporting period, a statement to this effect shall be provided. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_8._books_and_records"> </A>
<A NAME="toc_kk1062_10"> </A>
<BR></FONT><FONT SIZE=2><I>8. BOOKS AND RECORDS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.1&nbsp;The
Licensee shall keep and shall cause its sublicensees to keep books and records in accordance with generally accepted accounting principles accurately reflecting
all transactions and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;information
relating to this Agreement. Such books and records shall be open to inspection by representatives or agents of Licensor at reasonable times upon reasonable notice. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.2&nbsp;The
fees and expenses of the Licensor's representatives performing such an examinations shall be borne by Licensor. However, if an error in royalties of more than
five percent (5%) of the total royalties due for any royalty period is discovered, then the fees and expenses of these representatives shall be borne by Licensee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_9._research_and_development"> </A>
<A NAME="toc_kk1062_11"> </A>
<BR></FONT><FONT SIZE=2><I>9. RESEARCH AND DEVELOPMENT    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;9.1&nbsp;Licensor
and Licensee agree to cooperate in research and development to facilitate and enhance commcerciability of Licensed Products. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;9.2&nbsp;Licensee
may negotiate grants including research contracts for research with various public or private institutions. The patent rights owned by the Licensor to
inventions arising from such research, for which Licensee pays all direct and indirect costs of the research project, and which enhance the safety, utility, manufacturability or commercial value of
the Licensed Products may be added to patent rights included in the license. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;9.3&nbsp;All
intellectual property inventions arising or derived from Licensors Patent Rights, Licensed Method, Licensed Products, and know-how shall be owned
exclusively by Licensor limited only by the licenses granted herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;9.4&nbsp;To
the extent that inventions are discovered, falling outside the scope of paragraph&nbsp;9.3 above, during the course of research and development conducted
jointly by Licensor and Licensee, said inventions shall be jointly owned, fifty percent (50%) each by Licensor and Licensee. To the extent that Licensor and Licensee are not "inventors" of the
invention pursuant to the definitions of inventorship </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 4 of 10 </I></FONT></P>

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<P><FONT SIZE=2>
as applied by the United States Patent and Trademark Office, Licensor and Licensee shall be ensure that they are joint assignees, fifty percent (50%) interest each, in said patents. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_10._term_of_the_agreement"> </A>
<A NAME="toc_kk1062_12"> </A>
<BR></FONT><FONT SIZE=2><I>10. TERM OF THE AGREEMENT    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.1&nbsp;Unless
otherwise terminated by operation of law or by acts of the parties in accordance with the terms of this Agreement, this Agreement shall be in force from
the effective date recited on page one and shall remain in effect until the latter of expirations of the last to expire of any Patent Rights licensed under this Agreement or until the last Patent
Application licensed under this Agreement is finally abandoned. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;10.2&nbsp;Any
expiration or termination of this Agreement shall not affect the rights and obligations set forth in the following Articles: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="71%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2>Article&nbsp;5</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2>Royalties</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;7</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Progress and Royalty Reports</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;8</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Books and Records</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;11</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Termination by Licensor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;12</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Termination by Licensee</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;19</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Indemnification</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;24</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Failure to Perform</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
Article&nbsp;29</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="83%"><FONT SIZE=2><BR>
Secrecy</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_11._termination_by_the_licensor"> </A>
<A NAME="toc_kk1062_13"> </A>
<BR></FONT><FONT SIZE=2><I>11. TERMINATION BY THE LICENSOR    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.1&nbsp;If
the Licensee should violate or fail to perform any term or covenant of this Agreement, then the Licensor may give written notice of such default (Notice of
Default) to the Licensee. If the Licensee should fail to cure such default within thirty-five (35)&nbsp;days of the effective date of such notice, the Licensor shall have the right to
terminate this Agreement and the licenses herein by a second written notice (Notice of Termination) to the Licensee. If a Notice of Termination is sent to the Licensee this Agreement shall
automatically terminate upon the date such notice is sent. Such termination shall not relieve the Licensee of its obligations to pay any royalties or license fees owing at the time of such
termination, shall not terminate Licensee's right to report and pay royalties on Licensed Products in inventory at the time of termination, and shall not impair any accrued right of the Licensor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.2&nbsp;In
addition to the provisions of paragraph&nbsp;11.1 above, Licensee shall be deemed in default, and Licensor shall have the right terminate the Agreement, if
Licensee: </FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>becomes
insolvent, as that term is defined pursuant to the bankruptcy provisions of the United States Code;
<BR><BR></FONT></DD><DT><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>fails
to pay its debts as they generally become due;
<BR><BR></FONT></DD><DT><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>voluntarily
seeks, consents or acquiesces in the benefits of any United States bankruptcy or similar debtor relief laws of any jurisdiction;
<BR><BR></FONT></DD><DT><FONT SIZE=2>(d)</FONT></DT><DD><FONT SIZE=2>becomes
a party to or is made the subject of any proceeding provided for by any debtor-relief law that could suspend or otherwise effect Licensee's rights under this Agreement; or
<BR><BR></FONT></DD><DT><FONT SIZE=2>(e)</FONT></DT><DD><FONT SIZE=2>fails
or ceases to actively pursue prosecution, development and/or commercialization of Licensed Products. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 5 of 10 </I></FONT></P>

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<UL>
<UL>
</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;11.3&nbsp;Upon
termination, all rights granted pursuant the this Agreement shall revert in full to Licensor effective as of the date of termination. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_12._termination_by_licensee"> </A>
<A NAME="toc_kk1062_14"> </A>
<BR></FONT><FONT SIZE=2><I>12. TERMINATION BY LICENSEE    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;12.1&nbsp;The
Licensee shall have the right at any time to terminate this Agreement by giving notice in writing to the Licensor. Such notice of terminations shall be
subject to Article&nbsp;20 (Notices) and termination of this Agreement shall be effective one hundred twenty (120)&nbsp;days from the effective date of such notice. If such termination is without
cause within the first two (2)&nbsp;years of this Agreement, Licensee shall pay to the Licensor the sum of seventy-five thousand dollars ($ 75,000.00) with the Notice of Termination
before such notice is effective. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;12.2&nbsp;Any
termination pursuant to Paragraph&nbsp;12.1 of this Agreement shall not relieve the Licensee of any obligations or liability accrued hereunder prior to such
termination or rescind anything done by the Licensee or any payments made to, or accrued to the benefit of, Licensor hereunder prior to the time such termination becomes effective, and such
termination shall not affect in any manner any rights of the Licensor arising under this Agreement prior to such termination. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_13._disposition_of_prod__kk102315"> </A>
<A NAME="toc_kk1062_15"> </A>
<BR></FONT><FONT SIZE=2><I>13. DISPOSITION OF PRODUCTS AND PROPERTY UPON TERMINATION    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;13.1&nbsp;Upon
termination of this Agreement by either party (i)&nbsp;the Licensee shall have the privilege of disposing of all previously made or partially made Licensed
Products but no more, within a period of one hundred twenty (120)&nbsp;days, provided, however, that the sale of such Licensed Products shall be subject to the terms of this Agreement including, but
not limited to, the payment of royalties at the rate and at the time provided herein and the rendering of reports thereon, and (ii)&nbsp;the Licensee shall promptly return and shall cause its
sublicensees to return, to the Licensor all property belonging to the Licensor and all copies and facsimiles thereof and derivatives therefrom. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_14._use_of_trademarks_and_names"> </A>
<A NAME="toc_kk1062_16"> </A>
<BR></FONT><FONT SIZE=2><I>14. USE OF TRADEMARKS AND NAMES    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;14.1&nbsp;Nothing
contained in this Agreement shall be construed as conferring any right to use in advertising, publicity, or other promotional activities any name, trade
name, trademark, or other designation of either party hereto by the other (including contraction, abbreviations or simulations of any of the foregoing) in the absence of specific written consent of
the owner of such name, trade name, trademark, or other designation. Unless required by law, the use by Licensee, its Affiliates or sublicensees of the name of Licensor is expressly prohibited in the
absence of written consent by Licensor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_15._limited_warranty"> </A>
<A NAME="toc_kk1062_17"> </A>
<BR></FONT><FONT SIZE=2><I>15. LIMITED WARRANTY    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;15.1&nbsp;The
Licensor warrants to the Licensee that it has the lawful right to grant these licenses. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;15.2&nbsp;These
licenses and associated inventions are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR
IMPLIED. THE LICENSOR MAKES NO REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;15.3&nbsp;IN
NO EVENT WILL THE LICENSOR BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION
OR LICENSED PRODUCTS. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 6 of 10 </I></FONT></P>

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<A NAME="page_kk1062_1_7"> </A>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;15.4&nbsp;Nothing in this Agreement shall be construed as: </FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>a
warranty or representation by the Licensor as to the validity or scope of any Licensor's Patent Rights; or
<BR><BR></FONT></DD><DT><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>a
warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of patents of
third parties; or
<BR><BR></FONT></DD><DT><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>an
obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Article&nbsp;18; or
<BR><BR></FONT></DD><DT><FONT SIZE=2>(d)</FONT></DT><DD><FONT SIZE=2>conferring
by implications, estoppel or otherwise any license or rights under any patents of the Licensor other then the Licensor's Patent Rights as defined herein, regardless of
whether such patents are dominant or subordinate to Licensor's Patent Rights; or
<BR><BR></FONT></DD><DT><FONT SIZE=2>(e)</FONT></DT><DD><FONT SIZE=2>an
obligation that the Licensor furnish and license know-how to Licensee other than as defined herein. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_16._patent_costs_and_maintenance"> </A>
<A NAME="toc_kk1062_18"> </A>
<BR></FONT><FONT SIZE=2><I>16. PATENT COSTS AND MAINTENANCE    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;16.1&nbsp;Licensor
assumes all responsibility to prosecute and maintain, at its own expense, patents, and patent applications, relating to Licensor's Patent Rights and all
right, title and interest in said patents or patent applications shall belong to Licensor subject only to the licenses granted hereunder. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_17._patent_marking"> </A>
<A NAME="toc_kk1062_19"> </A>
<BR></FONT><FONT SIZE=2><I>17. PATENT MARKING    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;17.1&nbsp;The
Licensee agrees to mark all Licensed Products, or their containers, made, used or sold under the terms of this Agreement in accordance with applicable patent
marking laws and include such other marks, including logos or trademarks as Licensor and Licensee shall agree upon. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_18._patent_infringement"> </A>
<A NAME="toc_kk1062_20"> </A>
<BR></FONT><FONT SIZE=2><I>18. PATENT INFRINGEMENT    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;18.1&nbsp;In
the event that either Licensor or Licensee shall learn of an infringement of any patent licensed under this Agreement, the discovering party shall inform the
other in writing within thirty (30)&nbsp;days of learning of the infringement and include in such notice the available evidence of infringement. Both parties to this Agreement agree that during the
period, and in a jurisdiction where the Licensee has exclusive rights under this Agreement, neither will notify a third party of the infringement of any of Licensor's Patent Rights without first
obtaining consent of the other party, which consent shall not be unreasonably denied. Both parties shall use their best efforts in cooperation with each other to terminate such infringement without
litigation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;18.2&nbsp;The
Licensor may request that Licensee take legal action against the infringement of the Licensor's Patent Rights. Such request shall be made in writing. Licensee
shall have six (6)&nbsp;months within which to resolve the alleged infringement in a manner and on such terms and conditions as are acceptable to Licensor and Licensee. Licensee may bring suit for
patent infringement within the six (6)&nbsp;period in a jurisdiction where the Licensee had exclusive rights under this Agreement. However, in the event the Licensee elects to bring suit in
accordance with this paragraph, the Licensor may thereafter join such suit at its own expense. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;18.3&nbsp;If
legal action is decided upon, it shall be at the expense of the party on account of whom suit is brought and all recoveries shall be distributed as follows:
(1)&nbsp;if Licensee brings legal action on its own account, to the extent there is a recovery of compensation for lost royalty or license revenue, Licensor shall be entitled to a share of said
recovery in the same proportion as it would otherwise be entitled to in accordance with the royalty and license revenue provisions set forth in the Agreement; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 7 of 10 </I></FONT></P>

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<P><FONT SIZE=2>
and (2)&nbsp;should legal action brought jointly by the Licensor and the Licensee and participated in by both parties any and all recoveries shall be shared jointly. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;18.4&nbsp;Each
party agrees to cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party on account of whom suit is brought.
Such litigation shall be controlled by the party bringing the suit, except that either party may be represented by counsel of its choice pursuant to such party's determination in any suit brought by
the other party. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_19._indemnification"> </A>
<A NAME="toc_kk1062_21"> </A>
<BR></FONT><FONT SIZE=2><I>19. INDEMNIFICATION    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;19.1&nbsp;The
Licensee shall, and shall cause its sublicensees to, indemnify, hold harmless and defend the Licensor, its officers, employees and agents; the sponsors of the
research that the led to the Invention, and the inventors of the patents and patent applications in Licensor's Patent Rights and their employers from and against any and all liabilities, claims,
suits, losses, damage, costs, fees and expenses resulting from or arising out of the exercise of this license or any sublicense. This indemnification will include, but will not be limited to, any
product liability. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;19.2&nbsp;The
Licensee, at its sole cost and expense, shall insure its activities in connection with the work under this Agreement and obtain, keep in force and maintain
insurance in an amount adequate to insure for any and all potential third party claims provided for in paragraph&nbsp;19.1 above. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;19.3&nbsp;The
Licensor shall promptly notify Licensee in writing of any claim or suit brought against the Licensor for which Licensor intends to invoke the provisions of
this Article. Licensee shall keep the Licensor informed on a current basis of its defense of any claims pursuant to this Article&nbsp;19. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_20._notices"> </A>
<A NAME="toc_kk1062_22"> </A>
<BR></FONT><FONT SIZE=2><I>20. NOTICES    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;20.1&nbsp;Any
notice or payment required to be given to either party shall be deemed to have been properly given and to be effective (a)&nbsp;on the date of delivery if
delivered in person, or (b)&nbsp;five (5)&nbsp;days after mailing if mailed by first-class certified mail, postage paid, to the respective addresses given below, or to such other address as either
party shall designate by written notice given to the other party. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="63%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>In the case of Licensee:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>VDF Futureceuticals,&nbsp;Inc.<BR>
300 W. 6<SUP>th</SUP> Street<BR>
Momence, Illinois 60954</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
In the case of Licensor:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Vyrex Corporation<BR>
2159 Avenida de la Playa<BR>
La Jolla, California 92037-3215<BR></FONT>
</TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_21._assignability"> </A>
<A NAME="toc_kk1062_23"> </A>
<BR></FONT><FONT SIZE=2><I>21. ASSIGNABILITY    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;21.1&nbsp;This
Agreement is binding upon and shall inure to the benefit of the Licensor, its successors and assigns, but shall assignable by the Licensee only with the
written consent of the Licensor, which consent shall not be unreasonably withheld. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_22._late_payments"> </A>
<A NAME="toc_kk1062_24"> </A>
<BR></FONT><FONT SIZE=2><I>22. LATE PAYMENTS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;22.1&nbsp;In
the event royalty payments or fees are not received by the Licensor when due, the Licensee shall pay to the Licensor interest charges at a rate of ten percent
(10%) simple interest per annum. Such interest shall be calculated from the date payment was due until actually received by the Licensor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 8 of 10 </I></FONT></P>

<HR NOSHADE>
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<A NAME="page_kk1062_1_9"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_23._waiver"> </A>
<A NAME="toc_kk1062_25"> </A>
<BR></FONT><FONT SIZE=2><I>23. WAIVER    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;23.1&nbsp;It
is agreed that no waiver of any party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any
subsequent and/or similar breach or default. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_24._failure_to_perform"> </A>
<A NAME="toc_kk1062_26"> </A>
<BR></FONT><FONT SIZE=2><I>24. FAILURE TO PERFORM    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;24.1&nbsp;In
the event of a failure of performance due under the terms of this Agreement and if it becomes necessary for either party to undertake legal action against the
other on account thereof, then the
prevailing party shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_25._governing_laws"> </A>
<A NAME="toc_kk1062_27"> </A>
<BR></FONT><FONT SIZE=2><I>25. GOVERNING LAWS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;25.1&nbsp;This
Agreement shall be interpreted and construed in accordance with the laws of the State of California, but the scope and validity of any patent or patent
application shall be governed by the applicable laws of the country of such patent or patent application. Th exclusive jurisdiction and venue for any dispute between the parties arising out of this
Agreement, or any term or condition thereof, shall be the Superior Court of California, County of San Diego, or the United States District Court, Southern District of California. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_26._preference_for_united_states_industry"> </A>
<A NAME="toc_kk1062_28"> </A>
<BR></FONT><FONT SIZE=2><I>26. PREFERENCE FOR UNITED STATES INDUSTRY    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;26.1&nbsp;Because
this Agreement grants the exclusive right to use or sell the Invention in the United States, the Licensee agrees that any products embodying this
Invention or product through the use thereof will be manufactured substantially in the United States. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_27._foreign_government_approval_or_registration"> </A>
<A NAME="toc_kk1062_29"> </A>
<BR></FONT><FONT SIZE=2><I>27. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;27.1&nbsp;If
this Agreement or any associated transaction is required by the law of any nation to either approved or registered with any governmental agency, the Licensee
shall assume all legal obligations to do so and all costs and expenses related thereto. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_28._export_control_laws"> </A>
<A NAME="toc_kk1062_30"> </A>
<BR></FONT><FONT SIZE=2><I>28. EXPORT CONTROL LAWS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;28.1&nbsp;The
Licensee shall observe all applicable United States and foreign laws relating to this Agreement, including those with respect to the transfer of Licensed
Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_29._secrecy"> </A>
<A NAME="toc_kk1062_31"> </A>
<BR></FONT><FONT SIZE=2><I>29. SECRECY    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;29.1&nbsp;With
regard to confidential information ("Data"), which can be oral or written or both, received from the Licensor regarding this Invention, during their term of
this Agreement and for five (5)&nbsp;years thereafter the Licensee shall, and shall cause its Affiliates and sublicensees: </FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>not
to use Data except for the sole purpose of performing under the terms of this Agreement;
<BR><BR></FONT></DD><DT><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>safeguard
the Data against disclosure to others with the same degree of care as it exercises with its own data of a similar nature;
<BR><BR></FONT></DD><DT><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>not
to disclose Data to others (except to its employees, agents, or consultants, Affiliates or sublicensees who are bound to Licensee by a like obligations of confidentiality)
without the </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 9 of 10 </I></FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>express
written consent of the Licensor, except that Licensee shall not be prevented from using or disclosing any of the Data: </FONT></P>

<DL compact>
<DT><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>which
Licensee can demonstrate by written records previously known to it;
<BR><BR></FONT></DD><DT><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>which
is now, or becomes in the future, public knowledge other than through acts or omissions of Licensee; or
<BR><BR></FONT></DD><DT><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>which
is lawfully obtained by Licensee from sources independent of the Licensor; and
<BR><BR></FONT></DD><DT><FONT SIZE=2>(d)</FONT></DT><DD><FONT SIZE=2>which
is required to be disclosed under the California Public Records Act or other applicable laws. </FONT></DD></DL>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1062_30._miscellaneous"> </A>
<A NAME="toc_kk1062_32"> </A>
<BR></FONT><FONT SIZE=2><I>30. MISCELLANEOUS    <BR>  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;30.1&nbsp;The
headings of the several sections are inserted for convenience of reference only and are not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;30.2&nbsp;This
Agreement shall not be binding upon the parties until it has been signed below on behalf of each party, in which event, it shall be effective as of the date
recited on page one. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;30.3&nbsp;No
amendment or modification of this Agreement shall be valid or binding upon the parties unless made in writing and signed on behalf of each party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;30.4&nbsp;This
Agreement embodies the entire understanding of the parties and shall supersede all previous communications, representations, or understandings, either oral
or written, between the parties relating to the subject matter hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;30.5&nbsp;In
the event that any of the provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other provision hereof but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been
contained herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, both the Licensor and the Licensee have executed this Agreement, in duplicate originals, by their respective duly authorized officers and/or agents on the day and
year hereinafter written. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="7%"><FONT SIZE=2>For:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>VYREX CORPORATION</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>For:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>VDF FUTURECEUTICALS,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="7%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>G. Dale Garlow</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Jeff Van Drunen</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>President and Chief Executive Officer</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Vice President</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
&nbsp;/s/&nbsp;</FONT><FONT SIZE=2>G. DALE GARLOW</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
&nbsp;/s/&nbsp;</FONT><FONT SIZE=2>JEFF VAN DRUNEN</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="7%"><FONT SIZE=2><BR>
Date:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
<U>&nbsp;September&nbsp;11, 2000</U></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
Date:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
<U>&nbsp;September&nbsp;15, 2000</U></FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><I>Vyrex/VDF Agreement - Page 10 of 10 </I></FONT></P>

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<BR>
<P><br><A NAME="01SAN1062_7">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kk1062_1">LICENSE AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_3">1. DEFINITIONS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_4">2. EXCLUSIVE GRANT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_5">3. SUBLICENSES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_6">4. LICENSE-ISSUE FEE, LICENSE MAINTENANCE FEES AND MILESTONE PAYMENTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_7">5. ROYALTIES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_8">6. DUE DILIGENCE</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_9">7. PROGRESS AND ROYALTY PAYMENTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_10">8. BOOKS AND RECORDS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_11">9. RESEARCH AND DEVELOPMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_12">10. TERM OF THE AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_13">11. TERMINATION BY THE LICENSOR</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_14">12. TERMINATION BY LICENSEE</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_15">13. DISPOSITION OF PRODUCTS AND PROPERTY UPON TERMINATION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_16">14. USE OF TRADEMARKS AND NAMES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_17">15. LIMITED WARRANTY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_18">16. PATENT COSTS AND MAINTENANCE</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_19">17. PATENT MARKING</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_20">18. PATENT INFRINGEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_21">19. INDEMNIFICATION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_22">20. NOTICES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_23">21. ASSIGNABILITY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_24">22. LATE PAYMENTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_25">23. WAIVER</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_26">24. FAILURE TO PERFORM</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_27">25. GOVERNING LAWS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_28">26. PREFERENCE FOR UNITED STATES INDUSTRY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_29">27. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_30">28. EXPORT CONTROL LAWS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_31">29. SECRECY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1062_32">30. MISCELLANEOUS</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>8
<FILENAME>a2037372zex-23_1.htm
<DESCRIPTION>EXHIBIT 23.1
<TEXT>

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<HEAD>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT&nbsp;23.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="km1062_consent_of_independent_public_accountants"> </A>
<A NAME="toc_km1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We consent to the incorporation by reference in this Registration Statement on Form&nbsp;S-2, to be filed with the Securities and Exchange
Commission on or about February&nbsp;5, 2001, by Vyrex Corporation (the "Company") of our report (which contains an explanatory paragraph related to the Company's ability to continue as a going
concern) dated March&nbsp;22, 2000, appearing in the Company's Annual Report on Form&nbsp;10-KSB for the fiscal year ended December&nbsp;31, 1999, (the
"Form&nbsp;10-KSB"), on our audit of the financial statements of the Company as of December&nbsp;31, 1999 and for the year then ended, also appearing in the
Form&nbsp;10-KSB. </FONT></P>

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<TD WIDTH="53%" ALIGN="CENTER"><FONT SIZE=2>/s/&nbsp;</FONT><FONT SIZE=2>J.H. COHN LLP</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> J.H. COHN LLP</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>San
Diego, California<BR>
February&nbsp;2, 2001 </FONT></P>

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<P><br><A NAME="01SAN1062_8">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_km1062_1">CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS</A></FONT><BR>
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<TYPE>EX-23.2
<SEQUENCE>9
<FILENAME>a2037372zex-23_2.htm
<DESCRIPTION>EXHIBIT 23.2
<TEXT>

<HTML>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>EXHIBIT&nbsp;23.2  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ko1062_consent_of_ernst___young_llp,_independent_auditors"> </A>
<A NAME="toc_ko1062_1"> </A>
<BR></FONT><FONT SIZE=2><B>CONSENT OF ERNST&nbsp;&amp; YOUNG LLP, INDEPENDENT AUDITORS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form&nbsp;S-2) and related Prospectus of Vyrex
Corporation for the registration of 1,949,167 shares of its common stock and to the incorporation by reference therein of our report dated March&nbsp;15, 1999, except for Note&nbsp;10 as to which
the date is March&nbsp;29, 1999, with respect to the financial statements included in its Annual Report (Form&nbsp;10-KSB) for the year ended December&nbsp;31, 1998, filed with the
Securities and Exchange Commission. </FONT></P>

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<TD WIDTH="53%" ALIGN="CENTER"><FONT SIZE=2>/s/&nbsp;</FONT><FONT SIZE=2>ERNST&nbsp;&amp; YOUNG LLP</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> ERNST&nbsp;&amp; YOUNG LLP</FONT></TD>
</TR>
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<P><FONT SIZE=2>San
Diego, California<BR>
January&nbsp;31, 2001 </FONT></P>

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<FONT SIZE=2><A HREF="#toc_ko1062_1">CONSENT OF ERNST &amp; YOUNG LLP, INDEPENDENT AUDITORS</A></FONT><BR>
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