Axys Advanced Technologies Announces Agreement With Bristol-Myers Squibb Company.

Business Editors, Health/Medical Writers

SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--Feb. 1, 2000

Axys Pharmaceuticals And Bristol-Myers Squibb Company Conclude

Hepatitis C Partnership

Axys Pharmaceuticals, Inc. (Nasdaq: AXPH) today announced that Axys Advanced Technologies, Inc. (AAT), its combinatorial chemistry subsidiary, entered into an agreement with Bristol-Myers Squibb Company (BMS) to provide them with diverse compounds for pharmaceutical screening.

Axys will also provide BMS with enabling technologies for reproducing and expanding the library chemistries. This agreement provides for payments to AAT for product delivery and technology transfer. At the same time, Axys announced the termination of its collaboration with BMS in which the parties were attempting to develop inhibitors to the Hepatitis C Virus protease.

&uot;We are excited to have BMS as our fourteenth combinatorial chemistry partner. BMS is a recognized leader in the use and application of combinatorial chemistry within the pharmaceutical industry,&uot; commented Robert A. Reed, Ph.D., President of Axys Advanced Technologies, Inc. &uot;Their selection of Axys Advanced Technologies to provide screening compounds and related technology underscores the value AAT brings to pharmaceutical companies looking for a chemistry provider who inherently understands the drug discovery process, and can interact efficiently and productively with a pharmaceutical organization.&uot;

In December 1997, Axys entered into a collaborative agreement with BMS to develop potent and selective inhibitors of the hepatitis C virus protease NS-3 as drugs to prevent the growth and spread of HCV, a leading cause of liver disease. Axys earned a milestone under the agreement in September 1998 in connection with the attainment of certain drug discovery goals making use of Axys' chemistries. The parties have determined that further collaborative pursuit of the HCV protease target would not likely result in a potential therapeutic for HCV.

&uot;While our collaboration on Hepatitis C did not lead to a clinical candidate, Axys and BMS worked extremely well together in prosecuting the target to a definitive decision, which allowed BMS to understand our world-class chemistry capabilities,&uot; commented Michael C. Venuti, Ph.D., senior vice president of research and chief technical officer at Axys. &uot;We are very pleased to continue to work with BMS through our AAT subsidiary providing diversity libraries and technologies for pharmaceutical screening. We'll now re-deploy our medicinal chemistry resources on our proprietary oncology portfolio and our partnered programs with Merck and Aventis.&uot;

Axys is focused on developing and expanding its proprietary oncology pipeline with internal programs as well as new collaborations. Axys has three oncology programs in preclinical research. These include a program to inhibit urokinase, a key component of angiogenesis and metastasis in many human tumors, a novel tumor suppressor protein, ASP-05, and the recently announced acquisition of exclusive worldwide development and marketing rights to Signal Pharmaceuticals' selective estrogen receptor-beta modulators (SERM-(beta)) for the treatment of cancer. Additionally, there are several other cancer targets to which Axys is applying its high throughput screening and medicinal chemistry expertise.

Axys Advanced Technologies, Inc. (AAT), a subsidiary of Axys Pharmaceuticals, Inc., is a world leader in the design and production of innovative combinatorial chemistry. AAT expertise focuses on creating high quality, diverse compound libraries for HTS that yield novel chemotypes as hits. AAT offers fully validated chemistries that allow partners to rapidly progress their hits to lead compounds through a synergistic combination of combinatorial and medicinal chemistry techniques and strategies. AAT products include Enabled Compounds, Technology Transfer programs, and Custom Chemistry Services. AAT partners include Pharmacia and Upjohn, Parke-Davis, Aventis, Daiichi Pharmaceuticals, Genomics Institute of the Novartis Research Foundation, Signal Pharmaceuticals, Protein Design Labs, Novalon Pharmaceuticals, Allergan, Elitra Pharmaceuticals, Cephalon, Inc., Searle, and Bristol-Myers Squibb.

Axys Pharmaceuticals is a drug discovery and development company with a proprietary focus in oncology. Axys is building shareholder value through (1) a broad and diversified pipeline of research and development programs partnered with world-class pharmaceutical companies; (2) expansion of a non-partnered research and development franchise in oncology; and (3) the spin out of affiliated businesses that leverage the company's technologies in order to provide capital for Axys' drug discovery and development programs. Axys' technology-leveraging businesses are: Axys Advanced Technologies, a combinatorial chemistry oriented business; PPGx, a majority owned pharmacogenomics company, and Akkadix, an agricultural biotechnology company.

Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties which could cause Axys' actual results to differ materially from those discussed here, including Axys' reliance on the efforts of its collaborative partners, the risk that Axys' collaborations will not be successful, the risk that clinical trials will not proceed as anticipated or may not be successful, the risk of Axys' early stage of development, the risk that Axys will not be successful in entering into new collaborations, competition and marketing risk, the risk of unexpected difficulties and delays in the development of new technologies and in expanding its manufacturing capabilities, and general economic conditions that may affect Axys' 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 &uot;What Factors Could Cause Our Results to Differ Significantly from Those You Might Expect?&uot; and &uot;Additional Risk Factors&uot; in the company's SEC Reports, including the company's report on Form 10-K for the fiscal year ended December 31, 1998.

For more information on Axys Pharmaceuticals, Inc., please visit the company's website at http://www.axyspharm.com.

For more information on Axys Advanced Technologies, Inc., please visit the company's website at http://www.axystech.com.