EXHIBIT 10.40 DEVELOPMENT AGREEMENT

EXHIBIT 10.40

DEVELOPMENT AGREEMENT

BETWEEN

NOVARTIS CONSUMER HEALTH, SA

AND

GALAGEN INC.

Dated: December 17, 1999

TABLE OF CONTENTS

PAGE

1. JDC; Project Activity................................................................................. 4

2. Project Funding/Payment............................................................................... 6

3. Intellectual Property Rights.......................................................................... 6

4. Confidentiality....................................................................................... 8

5. Publication and Publicity............................................................................. 9

6. Covenants; Representations and Warranties............................................................. 9

7. Indemnification....................................................................................... 10

8. Dispute Resolution.................................................................................... 10

9. Term and Termination.................................................................................. 11

10. Independent Contractor................................................................................ 11

11. Notices............................................................................................... 12

12. General Provisions.................................................................................... 12

13. Debarment Certification............................................................................... 14

Exhibit A............................................................................................. 15

DEVELOPMENT AGREEMENT

THIS DEVELOPMENT AGREEMENT ("DEVELOPMENT AGREEMENT"), effective as of
the 17th day of December, 1999, made and entered into by and between GalaGen
Inc., a Delaware corporation ("GALAGEN") and Novartis Consumer Health, SA, a
Swiss corporation ("NCH").

WITNESSETH:

WHEREAS, GalaGen has expertise in developing food products;

WHEREAS, Novartis Consumer Health, Inc. and GalaGen have entered into
the License Agreement and the Supply Agreement, that establish all terms and
conditions relating to the license exclusivity and supply of the Licensed
Ingredients (as defined in the License Agreement), and commercialization of the
Products (as defined in the License Agreement);

WHEREAS, NCH desires that GalaGen carry out various product development
and research projects (each, a "PROJECT") on behalf of NCH as described herein.

NOW THEREFORE, in consideration of the payments and the mutual promises
and conditions set forth herein, the sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

DEFINITIONS. The following terms shall have the meanings set forth below, or
where indicated, for purposes of this Development Agreement. Defined terms used,
but not defined, herein shall have the meaning assigned to them in the License
Agreement and/or the Supply Agreement.

"ADDITIONAL PRODUCTS" shall mean additional products developed pursuant to this
Development Agreement exclusively for NCH.

"CONFIDENTIAL INFORMATION" shall have the meaning set out in Section 4.1 of
this Development Agreement.

"COPYRIGHTABLE MATERIAL" shall have the meaning set out in Section 3.1 of this
Development Agreement.

"DEVELOPMENTS" shall have the meaning set out in Section 3.1 of this Development
Agreement.

"IMPROVEMENTS" shall mean any enhancement to an Additional Product and/or
Developments, including process technology and/or formulation improvements made
during the term of this Development Agreement.

"JDC" shall mean the joint development committee described more fully in Section
1.1 hereof.

"LICENSE AGREEMENT" shall mean the License Agreement between Novartis Consumer
Health, Inc. and GalaGen, dated October 25, 1999.

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

"NET SALES" shall mean [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

"PROJECT" shall mean research and development projects agreed upon by the
parties.

"PROJECT PLAN" shall have the meaning set out in Section 1.2 of this Development
Agreement.

"SUPPLY AGREEMENT" shall mean the Supply Agreement between Novartis Consumer
Health, Inc. and GalaGen, dated October 25, 1999.

"TERRITORY" shall mean worldwide.

"THIRD PARTY LICENSE" shall have the meaning set out in Section 3.5 of this
Development Agreement.

1. JDC; PROJECT ACTIVITY

1.1 NCH and GalaGen shall initiate Projects in the area of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] and (b) carry out such other research/development work
as the Parties shall agree. A joint development committee consisting of an equal
number of representatives from NCH and GalaGen (initially two (2)
representatives each) (the "JDC") shall be established within sixty (60) days
after the effective date of this Development Agreement to identify Projects to
be pursued and to oversee the work done on the Projects. A representative of NCH
shall act as chairperson of the JDC. NCH and GalaGen each shall have the right
to replace one or more of its representatives on the JDC upon written notice to
the other party. GalaGen and NCH each agree to use commercially reasonable
efforts to carry out its responsibilities under this Development Agreement in a
timely manner.

1.2 GalaGen shall carry out the work on each Project according to a project plan
agreed upon by the JDC in the form attached hereto as EXHIBIT A (each, a
"PROJECT PLAN"). The JDC may update and/or revise each Project Plan by written
amendment signed by both NCH and GalaGen.

1.3 The JDC shall perform the following functions:

(a) Monitor the progress of and compliance with each Project Plan and
approve any changes to any Project Plan;

(b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***];

(d) Review and evaluate the results of studies performed pursuant to
this Development Agreement; and

(e) Determine the most appropriate regulatory pathway and develop
appropriate strategy to obtain regulatory approval for the Additional Products.

1.4 The chairperson of the JDC shall call meetings when reasonably deemed
appropriate, currently anticipated to be no less frequently than once every
three (3) months. If possible, the meetings shall be held in person, or where
appropriate, by video or telephone conference. When held in person, the location
of such meetings shall alternate between GalaGen's facilities and NCH's
facilities. The parties shall mutually agree upon the form of and agenda for the
meeting. Additional participants may be invited by any member to attend meetings
where appropriate (e.g., representatives of regulatory affairs or outside
consultants). Such additional participants shall have no vote. Minutes of each
meeting of the JDC shall be exchanged for review and comment by the members.
Thereafter, they shall be signed by the chairperson and distributed to each of
the Parties. Each Party shall be responsible for the expenses incurred by its
representatives in attending such meetings.

1.5 The JDC shall make decisions by majority vote, with at least one consenting
vote of each party's JDC members. If the required majority decision cannot be
found and all the members of each party take the same opposing positions in a
matter either party deems to be of major importance, the matter shall be handled
pursuant to Section 8.1 hereof. Voting by proxy is permissible. Urgent matters,
including regulatory and adverse events matters may be decided by unanimous
votes of the chairperson and a representative designated by GalaGen.

1.6 Except as explicitly set forth herein, in no event shall the chairperson of
the JDC have any additional powers or responsibilities beyond those delegated to
such person by virtue of such person's membership on the JDC. Without limiting
the foregoing, it is understood that, except as a voting member of the JDC, the
chairperson shall not have the power to control or dictate decisions or to veto
any decisions reached by the committee under the decision-making processes set
forth in Section 1.5.

1.7 GalaGen shall permit representatives of NCH, at reasonable times, to (a)
visit the facilities in which the Project Plan is being conducted and to observe
the Project activities being conducted; and (b) review GalaGen's relevant books
and records on a confidential basis, including records relating to expenditures
made on behalf of NCH by GalaGen under the Project Plan.

1.8 GalaGen shall advise NCH, by written or oral communications, as and
when requested, of the progress and status of the Project Plan and shall advise
NCH promptly, by written or oral communications, of all significant developments
regarding the Project Plan.

2. PROJECT FUNDING/ PAYMENT

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

3. INTELLECTUAL PROPERTY RIGHTS

3.1 All ideas, designs, methods, prototypes, finished product, data,
product applications, formulas, processes, concepts, techniques, compounds,
inventions, discoveries, Improvements, technology and know-how, whether or not
patentable, that GalaGen conceives, develops or reduces to practice that is
derived directly from the Project Plans (collectively, "DEVELOPMENTS") shall be
the property of NCH. All Copyrightable materials generated or developed in the
course of performing the Project Plan ("COPYRIGHTABLE MATERIALS") shall be
considered works made for hire under United States copyright law. To the extent
that any such materials, under applicable law, may not be considered works made
for hire, GalaGen hereby assigns to NCH the ownership of copyright in such
materials.

(a) GalaGen shall have the right to obtain a license, with rights to
sublicense, for Developments and Copyrightable Materials for applications that
Novartis declines to commercialize. Terms of any such license shall be
negotiated at that time.

3.2 During the term of this Development Agreement or any time after the
termination thereof, NCH shall, at its option, determine whether or not to make
any applications for United States letters patent or foreign letters patent or
for copyright registration on any Developments, Improvements thereon or
Copyrightable Materials. If NCH determines to do so, GalaGen shall, at NCH'
request, cooperate in the making of applications for United States letters
patent and foreign letters patent or for copyright registration on any
Developments or Improvements thereon or Copyrightable Materials, and GalaGen
hereby assigns to NCH or its designee (a) any such applications for copyright
registration or for letters patent and patents issuing thereon, and (b) any
other rights arising directly out of the Developments, Improvements thereon, and
Copyrightable Materials.

3.3 GalaGen acknowledges that the Development Fees and other fees to be
paid to it under Sections 2.1 and 2.2 of this Development Agreement constitute
full and complete consideration for assignment of all its rights in the
Developments, Improvements thereon, and the Copyrightable Materials. NCH
acknowledges that these fees do not cover additional costs associated with any
Third Party Licenses (as defined in Section 3.5 hereof) that must be obtained
in order to commercialize the Additional Products.

3.4 All of the data and results arising directly from the conduct of the
Project Plan shall be communicated by GalaGen to NCH and shall be the exclusive
property of NCH. NCH shall be free to incorporate such data and results in any
regulatory filings and GalaGen shall have no ownership, license or access rights
in, or to, such regulatory filings. NCH shall grant to GalaGen the right to use
the data and results related to Projects conducted pursuant to this Development
Agreement on terms to be mutually agreed for use as supporting documentation in
filings or patents unrelated to the Projects. Prior to submitting any regulatory
filings and/or patent filings incorporating such data and results, GalaGen shall
provide a copy of such filings to NCH for its review. Such regulatory filings
shall be treated as Confidential Information. In the event NCH wishes to comment
on such filings, GalaGen shall consider such comments reasonably, but shall not
be bound to incorporate them unless failure to incorporate such comments would
result in a violation of NCH's trade secrets or ownership rights.

3.5 In the event that one or more third-party licenses or sublicenses
(each, a "THIRD PARTY LICENSE") are required to commercialize Products
developed as part of the Collaboration, it shall be GalaGen's responsibility to
negotiate such licenses/sublicenses, and arrange sublicenses to NCH for the
Field of Use on terms reasonably acceptable to NCH. In the event GalaGen is
unable to obtain such a license/sublicense on terms reasonably acceptable to
NCH, NCH shall have the right to step in and negotiate the license/sublicense.
NCH will be responsible for any fees related to licenses and sublicenses
obtained on its behalf, to the amounts necessary to cover the NCH Field of Use.

(b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.6 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

4. CONFIDENTIALITY

4.1 Both GalaGen and NCH agree that, subject to the limitations set forth
in Section 4.3 hereof, all information disclosed to the other party, whether in
oral, written or graphic form, and identified in writing by the disclosing party
as confidential shall be deemed "CONFIDENTIAL INFORMATION" of the disclosing
party. In particular, Confidential Information shall be deemed to include, but
not be limited to, any patent application or drawing or potential patent claim,
trade secrets, information, ideas, inventions, samples, processes, procedures,
methods, formulations, packaging designs and materials, test data, future
development plans, Products/ Additional Products launch date, Know-How (as
defined in the License Agreement) and engineering, manufacturing, regulatory,
marketing, servicing, sales, financing or human resources matters relating to
the disclosing party and its business.

4.2 Each party will take precautions as it normally takes with its own
confidential and proprietary information to prevent disclosure to third parties.

4.3 Both GalaGen and NCH agree that, notwithstanding the above, the
obligations of confidentiality shall not be deemed to apply to:

(a) Information which at the time of disclosure is or thereafter
becomes generally known or available to the public, through no wrongful act or
failure to act on the part of the receiving party.

(b) Information that was known by or in the possession of the receiving
party at the time of receiving such information from the disclosing party as
evidenced by written records.

(c) Information obtained by the receiving party from a third party
source who is not breaching a commitment of confidentiality to the disclosing
party by revealing such information to the receiving party.

(d) Information that is independently developed by the receiving party
without use of confidential information of the other party as evidenced by
written records.

(e) Information that is the subject of a granted written permission to
disclose that is issued by the disclosing party to the other party.

(f) Information that is required to be disclosed pursuant to the law,
but only to the extent required to be disclosed; PROVIDED, HOWEVER, the
disclosing party notifies the other party in writing and gives the other party
reasonable time to comment on the same prior to disclosure.

4.4 During the term of this Development Agreement and for a period of five
(5) years thereafter, each party shall maintain all Confidential Information in
trust and confidence and shall not disclose any Confidential Information to any
third party or use any such information for any unauthorized purpose, other than
as authorized in Section 4.3 hereof or as necessary to accomplish the purpose of
this Development Agreement subject to an appropriate binder of confidentiality
as set forth in Section 4.5 hereof. Each party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Development Agreement. Confidential Information shall not be used for any
purpose or in any manner that is not consistent with this Development Agreement
or that would constitute a violation of any laws or regulations including,
without limitation, the export control laws of the United States. Each party
hereby agrees that it will not in any way attempt to obtain, either directly or
indirectly, any information regarding any Confidential Information from any
third party who has been employed by, provided consulting services to, or
received in confidence information from, the other party.

4.5 Both parties will make diligent efforts to ensure that all employees,
consultants, agents, subcontractors and manufacturing contractors who may have
access to Confidential Information of the other party, and any other third
parties who might have access to Confidential Information, will use such
information in a manner consistent with the terms of this Development Agreement
and will be bound by the terms set forth in this Article 4. No Confidential
Information shall be disclosed to any employees, subcontractors, agents or
consultants who do not have a need to receive such information.

4.6 To the extent either party discloses Confidential Information of the
other party to an employee, consultant, subcontractor or manufacturing
contractor (collectively "AGENTS") or permits an Agent to have access to such
Confidential Information, such party shall indemnify the other party for any
claims, damages, losses, liabilities, costs or expenses, including reasonable
attorneys' fees, incurred by the other party as a result of the indemnifying
party's Agent further disclosing or misusing such Confidential Information.

5. PUBLICATION AND PUBLICITY

5.1 GalaGen and NCH agree not to issue any press release or other public
statement disclosing the existence of or relating to this Development Agreement
without prior written consent of the other party; PROVIDED, HOWEVER, that
neither GalaGen nor NCH shall be prevented from complying with any duty of
disclosure it may have pursuant to law (including SEC regulations) subject to
notifying the other party in writing and giving such other party reasonable time
to comment on the same prior to disclosure.

6. COVENANTS; REPRESENTATIONS AND WARRANTIES

6.1 GalaGen hereby covenants to NCH that:

(a) it will use its best efforts to perform the services required to be
performed by it hereunder in a professional and competent manner and in
accordance with the Project Plan; and

(b) it warrants that all services and goods rendered shall be provided
in compliance with FDA's current Good Laboratory Practices and current Good
Manufacturing Practices and in compliance with any other applicable federal,
state, local, regulations, rules, guidelines and procedures.

6.2 GalaGen hereby represents and warrants that:

(a) each of the individuals who has provided or will provide services
hereunder either (i) has a relationship with it that has accorded it exclusive
ownership of all patent, copyright and other intellectual property rights in all
Developments and Copyrightable Materials, or (ii) has entered into an agreement
with it that provides for assignment to it of all patent, copyright and other
intellectual property rights in all Developments and Copyrightable Materials;

(b) it has the right and authority to convey all patent, copyright and
other intellectual property rights in the Developments and the Copyrightable
Materials to NCH in accordance with the terms of this Development Agreement;

(c) during the term of this Development Agreement it shall be free from
any commitments that would create a conflict of interest impeding the
fulfillment of its obligations under this Development Agreement. NCH and GalaGen
acknowledge and agree that GalaGen may perform services outside of the time
devoted to NCH pursuant to this Development Agreement except where the
performance of such services would impair GalaGen's ability to perform its
obligations

under, or directly conflict with the terms of, this Development Agreement.
GalaGen shall notify NCH of any agreement entered into between GalaGen and third
parties that may create a conflict of interest between the services being
provided to NCH hereunder and those contemplated to be provided to the third
party;

(d) it has the personnel, facilities and materials to conduct the
Project Plan.

7. INDEMNIFICATION

7.1 GalaGen shall defend, indemnify and hold harmless NCH (including its
officers, agents, employees and affiliates), from any loss, claim, action damage
expense or liability (including defense costs and attorneys' fees) arising out
of or related to the breach of any covenant, warranty or representation of
GalaGen or the negligence or willful misconduct of GalaGen or its agents.

7.2 NCH shall defend, indemnify and hold harmless GalaGen (including its
officers, agents, employees and affiliates), from any loss, claim, action damage
expense or liability (including defense costs and attorneys' fees) arising out
of or related to the breach of any covenant, warranty or representation of NCH
or the negligence or willful misconduct of NCH or its licensees or agents.

8. DISPUTE RESOLUTION

8.1 If the JDC is unable to resolve, after thirty (30) days, a dispute
regarding any issue presented to it or arising in it, such dispute will be
referred to the Chief Executive Officer of GalaGen and the Chief Executive
Officer of NCH or his designee for good faith resolution, for a period of ninety
(90) days.

8.2 If a claim of breach, nonperformance, nonpayment or repudiation should
arise related to or connection with this License Agreement (a "DISPUTE"), the
parties shall attempt to resolve the matter (a) within sixty (60) days from the
date that the party raising the Dispute notifies the other party in writing of
the Dispute, or (b) if this License Agreement specifies a cure period for the
subject of the Dispute, (b) within such cure period.

8.3 If the parties do not resolve the JDC Dispute days pursuant to Section
8.1 within ninety (90), or any Dispute pursuant to Section 8.2 within the sixty
(60) day period or relevant cure period, as appropriate, then the parties agree
to submit the matter to binding arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules by a panel of
three mutually agreeable qualified arbitrators. GalaGen and NCH agree to make
available to the arbitrators on a confidential basis any information, test
results, or research in either party's possession related to the subject of the
Dispute in addition to supplying any other information requested or necessary to
allow the arbitrators to deliver an opinion, which shall be rendered within
forty-five (45) days of selection of the full panel or such additional time as
the arbitrators reasonably need. The arbitrators shall be required to provide to
the parties a written summary of their findings and the facts and law on which
their decision is based.

9. TERM AND TERMINATION

9.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

9.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

9.3 In the event of termination of this Development Agreement, GalaGen will
disclose in writing to NCH such data and results as shall have resulted from the
conduct of the then current Project Plans prior to the effective date of
termination and will deliver to NCH a copy of the complete records (including,
without limitation, laboratory records) regarding the Project Plans.

9.4 Any claim that arises prior to the effective date of termination of
this Development Agreement shall survive such termination.

9.5 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

10. INDEPENDENT CONTRACTOR

10.1 The parties acknowledge and agree that: (a) GalaGen shall conduct the
Project Plans as an independent contractor; (b) this Development Agreement does
not create and shall not be construed as creating an employee, representative,
joint venture, partnership or agency relationship between them; and, (c) they
shall each take actions consistent with the provisions of this Section.

11. NOTICES

11.1 All notices required or permitted hereunder shall be given in writing
and sent by facsimile transmission, or mailed postage prepaid by first class
certified or registered mail, or sent by a nationally recognized express courier
service, or hand delivered or sent by facsimile at the following addresses:

Novartis Consumer Health, SA.
Route de l' Etraz
XX-0000 Xxxx 0, Xxxxxxxxxxx
Attention: Global Head of Research and Development, Nutrition

GalaGen Inc.
0000 Xxx Xxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxx

Any notice, if mailed properly addressed, postage prepaid, shall be deemed made
three (3) days after the date of mailing as indicated on the certified or
registered mail receipt, or on the next

business day if sent by express courier service or on the date of delivery or
transmission if hand delivered or sent by facsimile transmission.

12. GENERAL PROVISIONS

12.1 ASSIGNMENT. This Development Agreement shall be assignable (a) by
NCH to one or more of its affiliates and (b) by GalaGen to one or more of its
affiliates so long as such assignment by GalaGen does impair the ability of
GalaGen and its affiliates to perform their obligations under this
Development Agreement. Other than as stated in the previous sentence, this
Development Agreement shall not be assignable by either party without the
prior express written consent of the other party. Any assignment or attempt
at same in the absence of such prior written consent shall be void and
without effect. For purposes of the provisions of this Section, a transfer by
either party of all or substantially all of its stock or assets shall be
deemed an assignment.

12.2 AFFILIATES. As used in this Development Agreement, the term
"affiliates" means corporations, partnerships or other business entities, and
the employees and agents thereof, which, directly or indirectly, are
controlled by, control, or are under common control with NCH or GalaGen.

12.3 SUCCESSORS. This Development Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.

12.4 NO WAIVERS. No delay or omission by either party to exercise any right
under this Development Agreement shall impair any such right or power or be
construed to be a waiver thereof. A waiver by either of the parties hereto of
any of the covenants, conditions or agreements to be performed by the other
shall not be construed to be a waiver of any succeeding breach thereof or of any
covenant, condition or agreement herein contained. No waiver or discharge of any
provisions of this Development Agreement shall be valid unless it is in writing
and is executed by the party against whom such change or discharge is sought to
be enforced.

12.5 SEVERABILITY. If a judicial determination is made that any of the
provisions contained in this Development Agreement constitute an unreasonable
restriction against either party or are otherwise unenforceable, such provision
or provisions shall be rendered void or invalid only to the extent that such
judicial determination finds such provisions to be unreasonable or otherwise
unenforceable, and the remainder of this Development Agreement shall remain
operative and in full force and effect.

12.6 GOVERNING LAW. This Development Agreement shall be governed by, and
construed in accordance with, the laws of the State of New Jersey as though made
and to be fully performed in said State.

12.7 HEADINGS. The headings contained in this Development Agreement do
not form a substantive part of this Development Agreement and shall not be
construed to limit or otherwise modify its provisions.

12.8 ENTIRE AGREEMENT; AMENDMENTS. This Development Agreement and the
Exhibits attached hereto constitute the entire agreement between the parties
with respect to the subject matter hereof, and there are no related
understandings or agreements other than those that are expressed herein, and
no change of any provision of this Development Agreement shall be valid
unless it is in writing and is executed by the party against whom such change
is sought to be enforced. The parties recognize that, during the term of this
Development Agreement, a purchase order, acknowledgement form or similar
routine document (collectively "FORMS") may be used to implement or
administer provisions of this Development Agreement. Therefore, the parties
agree that the terms of this Development Agreement prevail in the event of
any conflict between this Development Agreement and the printed provisions of
such Forms, or typed provisions of Forms that add to, vary, modify or are at
conflict with the provisions of this Development Agreement with respect to
the Project Plan performed during the term of this Development Agreement.

12.9 INSURANCE. GalaGen shall obtain and maintain comprehensive insurance
coverage of at least One Million Dollars ($1,000,000) in aggregate which covers
any and all potential claims, suits, losses expenses or damages arising out of
GalaGen's obligations under this Development Agreement.

13. DEBARMENT CERTIFICATION

13.1 Neither GalaGen nor any person employed thereby directly in the
performance of the Services has been debarred under section 306(a) or (b) of
the Federal Food, Drug and Cosmetic Act and no debarred person will in the
future be employed by the GalaGen in connection with any work to be performed
for or on behalf of NCH which may later become part of any application for
approval of a drug or biologic by the FDA. If at any time after execution of
this contract, the GalaGen becomes aware that the GalaGen or any person
employed thereby is, or is in the process of being, debarred, the GalaGen
hereby certifies that the GalaGen will so notify NCH at once.

IN WITNESS WHEREOF, each of the parties hereto has caused this
Development Agreement to be executed by its duly authorized representatives,
effective as of the date first above written.

NOVARTIS CONSUMER HEALTH, SA

By: /s/ [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
--------------------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

GALAGEN, INC.

By: /s/ X. X. Xxxxxxxx
------------------------------
X. X. Xxxxxxxx
President

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EXHIBIT 10.40 DEVELOPMENT AGREEMENT

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