AXYS Pharmaceuticals Expands Collaboration With Boehringer Mannheim to Identify Genes Associated With Osteoporosis.

SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--March 30, 1998--

AXYS Also Provides Update on Corporate Progress Pursuant to Merger

of Arris and Sequana

AXYS Pharmaceuticals, Inc. (Nasdaq: AXPH) today announced the expansion of its collaborative research program with Boehringer Mannheim to identify genes associated with osteoporosis. The original agreement, signed in May 1995, resulted in the successful identification of discrete genetic regions linked to bone metabolism in primates, for which the former Sequana Therapeutics, Inc. (now merged with AXYS) received a milestone payment from Boehringer Mannheim in August 1997. Under the terms of the expanded agreement, the researchers will seek to accelerate the research, with the goal of identifying corresponding regions within the human genome.

"Expansion of the Boehringer Mannheim partnership is the result of our ongoing review of both partnered and proprietary research programs," commented John Walker, AXYS' chairman and chief executive officer. "As part of this review, the company may decide to terminate a particular research project, seek to amend current agreements, or seek to reacquire certain programs where the research fits neatly with our gene-to-drug approach and where partners may not be able to commit the resources to move ahead at an accelerated pace. In this instance, Boehringer Mannheim was clearly pleased with our progress and wished to accelerate the program through this expansion."

Corporate Update

AXYS provided additional updates on corporate progress pursuant to the merger of Arris and Sequana:

-- Company management has identified areas where efficiencies can be

achieved from the Arris-Sequana integration and are expected to

result in annual savings of $3-5 million in administrative and

operational expenditures from planned levels.

-- AXYS has decided to move its functional genomics subsidiary,

NemaPharm, Inc., from Cambridge, Massachusetts to the company's

South San Francisco-based high-throughput screening facility. This

will allow for the acceleration of chemical annotation studies

needed to identify targets in a given pathway, as well as the

compounds that modulate their activity.

-- The company has liquidated its equity holdings in Aurora

Biosciences (Nasdaq: ABSC) in order to comply with the company's

investment policies. The net proceeds of approximately $6.6

million will be reflected as an increase in cash and investments

on the company's balance sheet.

-- The company is continuing to explore various options to take

advantage of new business opportunities presented in

pharmacogenomics and agriculture. This is part of AXYS' strategy

to drive economic benefit from its technology platform in order to

maximize shareholder value.

"Since the effective date of the merger in early January, we have continued to focus our efforts on implementing our business plan to both leverage our platform through our efforts in pharmacogenomics and agriculture, as well as to coordinate and integrate our discovery programs in three key disease areas, inflammation, metabolic and oncology," continued Walker. "We have a research pipeline in each of these three programs which covers the spectrum from gene identification to drug development. We believe this consolidation of our non-partnered research efforts will lead to both new collaborations and the creation of value in a proprietary market area. Given the speed and success of our early efforts, we believe that the strength of AXYS will be evident in the new business and new collaborations we expect to have in place as early as the end of 1998."

AXYS Pharmaceuticals is a leader in the integration of drug discovery technologies from gene identification through clinical development and is focused on the discovery of small molecule therapeutics. The company has research collaborations with world-class pharmaceutical companies, covering a broad range of therapeutic areas including respiratory, cardiovascular, metabolic, and infectious disease as well as oncology and central nervous system disorders. -0- Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties which could cause the Company's actual results to differ materially from those discussed here, including the risk that the Company will not be successful in entering into new collaborations, the risk of the Company's early stage of development, the Company's reliance on the efforts of its collaborative partners, competition, and general economic conditions that may affect the Company's actual results and developments. Additional factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled "Business Risks" in the Company's SEC Reports, including the report on Form 10-K for the fiscal year ended December 31, 1996 and the Company's Report on Form 10-Q for the quarter ended September 30, 1997, as well as those discussed in the section entitled "Risk Factors" in the Company's Registration Statement on Form S-4 filed with the SEC on November 26, 1997. -0- For more information on AXYS Pharmaceuticals Inc., please visit the company's website on the World Wide Web at http://www.axyspharm.com.

CONTACT: AXYS Pharmaceuticals, Inc. Burns McClellan, Inc.

John Walker Justin Jackson (media)

Chairman and CEO  John Nugent (investors)

[phone] [phone]

or

Shari Annes

VP, Investor Relations 

[phone]