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[SIGNAL PHARMACEUTICALS, INC. LETTERHEAD]                          EXHIBIT 10.23




March 4, 1994


David W. Anderson, Ph.D.
14446 Trailwind Drive
Poway, CA 92064


Dear David:

Signal Pharmaceuticals, Inc. ("Signal" or the "Company") is pleased to offer you
the position of Vice President, Drug Discovery and Preclinical Development
reporting to Alan J. Lewis (President). Your employment with Signal will
commence on March 24.

Your starting salary will be $165,000 annually, less all required withholding
for taxes and social security. In addition Signal is offering a one time signing
bonus of $25,000 to help you quickly make the transition to join us. You will be
eligible for the standard Company benefits. Signal reserves the right to modify
compensation and benefits from time to time as it deems necessary,

In addition, under Signal's 1993 Long-Term Incentive Plan (the "Plan"), the
Company will offer you an opportunity to purchase outright 200,000 shares of SPI
Common Stock at the current fair market value, subject to approval by the
Compensation Committee of the Board of Directors. Under the Plan, one-fifth
(20%) of the shares will vest on the first day of your thirteenth month of
employment. The remaining shares will vest in equal quarterly installments over
a four year period. The invested shares will be subject to repurchase by the
company at their cost to you, should you leave the company before all shares
have vested. In addition, all shares issued under the Plan are subject to
certain limitations on the sale and use of the stock,

Your employment is for an indefinite term. In other words, the employment
relationship is "at will," and either you or SPI has the right to terminate that
employment relationship at any time.


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David W. Anderson,Ph.D.
March 4, 1994
page 2


You will be required to sign an Employee's Proprietary Information and
Inventions Agreement before your employment begins. In addition, you will be
expected to abide by the Company rules and regulations as described in the
Company handbook.

The employment terms in this letter supersede any other agreements or promises
made to you. As required by law, this offer is subject to satisfactory proof of
your right to work in the United States.

Please indicate your acceptance of this offer by signing one of the originals
and returning it to me by the close of business on Wednesday, March 8, 1994, at
which time this offer will lapse.

We have enjoyed our meetings with you and we look forward to your joining the
Signal team. We feel that your experience and enthusiasm can make a substantial
contribution to the success of Signal.


Sincerely,


/s/ ALAN LEWIS (LJC)


Alan J. Lewis, Ph.D.
President



ACCEPTED BY:



/s/ DAVID W. ANDERSON
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David W. Anderson



3/8/94
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Date: