Axys Advanced Technologies Enters Combinatorial Chemistry Agreement With Daiichi Pharmaceutical Co., Ltd.

SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--July 7, 1999--

Axys Pharmaceuticals, Inc. (Nasdaq:AXPH) today announced that Axys Advanced Technologies, Inc., its combinatorial chemistry business subsidiary, entered into a three year agreement with Daiichi Pharmaceutical Co. Ltd., of Tokyo, Japan, to provide Daiichi with a diverse compound screening library consisting of small molecule compounds created using Axys' combinatorial chemistry technologies.

Axys will also provide Daiichi with enabling technologies and the synthetic protocols for reproducing and expanding the library chemistries. This agreement provides for payments to Axys in excess of $10 million related to product delivery and technology transfer.

"We are enthusiastic about the opportunity of working closely with a leader in the Japanese pharmaceutical market and we look forward to building a long lasting relationship with Daiichi," commented Robert A. Reed, Ph.D., vice president of Axys Pharmaceuticals and general manager of Axys Advanced Technologies. "We are continuing to build on our reputation as a leader in the combinatorial chemistry market. This marks the fifth agreement we have signed over the past year and the third with a major pharmaceutical company."

Dr. Haruo Tachizawa, Board Director, Basic Technology Research Laboratory and New Product Research Laboratories, at Daiichi Pharmaceutical Co., Ltd. said, "We are very pleased to enter into this collaboration with one of the pioneers and leaders in combinatorial chemistry library development. We are looking forward to a long term partnership between our companies that will enhance Daiichi's drug discovery efforts through the transfer to Daiichi of combinatorial chemistry technology as well as high quality compound libraries and detailed synthetic protocols."

"We are coming off of a very successful first year in 1998 in which we had revenues of $11.7 million as we signed new agreements with Parke-Davis, Signal Pharmaceuticals, Rhone-Poulenc Rorer and Protein Design Labs," said John Walker, chairman and chief executive officer of Axys Pharmaceuticals. "We are offering combinatorial chemistry with the perspective of diversity and drug-like properties that appeal to our pharmaceutical partners. Compound libraries that can accelerate the search for new leads and novel chemistries. We have quickly established ourselves as the lead player in this market and the collaboration with Daiichi, one of the top Japanese pharmaceutical companies, is ample and further evidence of this fact."

Axys Pharmaceuticals is a leader in the integration of life science technologies with a focus on transforming gene discoveries into drugs. 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 Xyris, a majority owned 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 "What Factors Could Cause Our Results to Differ Significantly from Those You Might Expect?" and "Additional Risk Factors" 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.