EXHIBIT 10.1

REPORT OF INDEPENDENT AUDITORS



To the Shareholders of CeNeS Pharmaceuticals plc:

      We have audited the accompanying consolidated balance sheets of CeNeS
Pharmaceuticals plc (a Company incorporated in Scotland) as of December 31, 2000
and 2001, and the related consolidated statements of operations and
comprehensive losses, statements of changes in shareholders' equity and cash
flows for the year ended August 31, 1999, and the four months ended December 31,
1999 and the years ended December 31, 2000 and 2001. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits. As
explained in note 2, the financial statements have not been prepared for the
purposes of Section 226 of the Companies Act 1985.

      We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CeNeS Pharmaceuticals plc as
of December 31, 2000 and 2001, and the results of its operations and its cash
flows for the year ended August 31, 1999, the four months ended December 31,
1999 and the years ended December 31, 2000 and 2001 in conformity with
accounting principles generally accepted in the United States.




/s/ Arthur Andersen



Arthur Andersen
Cambridge, England

Date:  July 10, 2002



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