Celgene Corporation to Acquire Signal Pharmaceuticals, Inc.; Celgene Drug Discovery Expands Into Gene Regulation.

Business Editors

WARREN, N.J.--(BUSINESS WIRE)--June 30, 2000

Celgene Corporation (NASDAQ: CELG) announced that it has entered into an agreement to acquire Signal Pharmaceuticals, Inc., a privately held San Diego-based biopharmaceutical company focused on the discovery and development of new classes of drugs that regulate genes associated with disease. Signal's technology is centered in the key areas of intracellular signaling and gene and protein regulation.

Signal's drug discovery engine, which integrates advanced target and drug discovery technologies into a complete target-to-drug platform, accelerates the application of genomics to the development of new classes of gene regulating drugs. This discovery engine enables the company to identify and pursue numerous gene regulating drug targets and drug leads across multiple diseases.

Signal researchers have identified 27 drug targets in 10 major gene regulating pathways and 24 novel series of drug leads. Many of the company's discovery programs target the underlying causes of disease, rather than treating disease symptoms.

Signal's target and drug discovery team includes over 70 researchers with world class expertise in cellular, molecular and genomic biology, drug discovery, drug optimization and preclinical drug development. These capabilities are used to map complex gene regulating pathways in cells and select key gene switches within these pathways as targets for drug discovery. These targets are then used to identify and optimize drug leads which selectively regulate biological pathways that control disease. The company's strategic assets include a large intellectual property portfolio; comprising 38 issued U.S. and foreign patents and more than 80 pending U.S. and foreign patents.

"We are delighted with this transaction," said John W. Jackson, Chairman and CEO of Celgene Corp. "Signal provides an excellent strategic fit with Celgene. Although this transaction has little financial impact on Celgene, the strategic impact is significant. This merger places Celgene at the forefront of the application of the genomics revolution. Signal provides us the capability to discover and develop proprietary drug targets and significant lead optimization capabilities."

"The timing of this merger is ideal for us. Signal has made remarkable progress in the past two years, producing a deep and sustainable pipeline of new drug targets and drug leads. We now have the financial and developmental resources to advance our programs to the clinic. The breadth and completeness of the combined company's pipeline will be competitive with the major pharmaceutical companies," said Alan Lewis Ph.D., President and Chief Executive of Signal Pharmaceuticals.

Under the terms of the agreement which both Celgene and Signal Boards of Directors have unanimously approved, Celgene will acquire all Signal outstanding shares in a tax-free stock-for-stock merger that is intended to be accounted for under pooling-of-interests treatment. Upon completion of the transaction, Celgene will issue 3,674,800 shares of its common stock or 4.4% of its post transaction fully diluted share count, as currently calculated, in exchange for all of the outstanding capital stock of Signal. The exchange ratio is .1257 Celgene shares for each share of Signal. The transaction is expected to be slightly dilutive in fiscal 2001 and neutral to earnings in fiscal 2002. Completion of the acquisition is subject to a vote of Signal's shareholders and is subject to review under the Hart-Scott-Rodino Antitrust Improvements Act.

Shareholders holding approximately 56% of the common shares and 78% of Signal's preferred shares have signed irrevocable shareholder agreements in favor of the transaction. If the transaction is not concluded, the merger agreement requires that Signal grant Celgene options to purchase addition Signal shares and pay a termination fee of up to $10 million.

Celgene CORPORATION

Celgene Corporation, headquartered in Warren, NJ, is an independent biopharmaceutical company engaged in the discovery, development and commercialization of small molecule drugs for the treatment of cancer and immunological diseases. Celgene's lead drug THALOMID(R) received approval from the FDA in 1998 for the treatment of ENL. Sales of THALOMID have been rising rapidly and were $11.7 million in the first quarter of this year. Over 140 clinical trials are being conducted to determine the drug's potential efficacy in a variety of cancer and inflammatory conditions.

Celgene's chiral program has developed a chirally pure version of Ritalin, the market standard treatment for the symptoms of Attention Deficit Disorder and Attention Deficit Hyperactivity Disorder. This drug is the subject of a major strategic alliance with Novartis and has completed all regulatory trials. A New Drug Application will be submitted later this year.

Celgene's oncology and immunology pipeline is highlighted by two classes of novel, proprietary small molecule compounds. Selective Cytokine Inhibitory Drugs or SelCIDs are potent inhibitors of Tumor Necrosis Factor (alpha) (TNF-(alpha)). They act through the selective inhibition of the enzyme Phosphodiesterase 4 (PDE 4). Preclinical and animal studies have shown this class of compounds to be significantly more active immunomodulators than THALOMID. The lead SelCID was found to be well tolerated in Phase I trials. A pilot double blind, placebo-controlled Phase II trial in Crohn's disease has recently been expanded based on blinded positive responses. Additional trials in a wide range of disease states will be initiated over the next twelve months for Celgene's lead SelCID and the follow-on compounds.

The IMiDs(R) or Immunomodulatory Drugs are a class of novel structural analogues of thalidomide which have been demonstrated in preclinical tests to be substantially more potent than thalidomide. Two lead IMiDs have completed initial Phase I trials and were found to be well tolerated and non-sedating. Phase I/II trials in multiple myeloma patients are scheduled to begin in the next sixty days. It was recently announced that Celgene and the National Cancer Institute have entered into a letter of intent regarding a major research collaboration for the preclinical and clinical study of this class of compounds.

The U.S. Patent and Trademark Office has issued Celgene numerous composition of matter and use patents relating to the company's SelCIDs and IMiDs.

SIGNAL PHARMACEUTICALS

Signal Pharmaceuticals, headquartered in San Diego, California, is a biopharmaceutical company focused on discovering, developing and commercializing new classes of small molecule drugs that regulate disease-associated genes.

The company has developed and integrated a platform of target and drug discovery technologies to accelerate the application of genomics to the discovery of important new classes of gene regulating drugs. Signal's target and drug discovery engine has enabled the company to successfully identify gene regulating targets and drug leads across six major classes of disease. The company's drug pipeline includes eight major drug discovery and development programs in the fields of cancer, inflammation, bone metabolism, neurological and cardiovascular disease and virology. The company's SERM program has identified drug leads with potential for preventing and treating breast, prostate and other cancers, in addition to preventing and treating osteoporosis.

Signal's JNK program has generated drug leads that have demonstrated significant disease-modifying activity in a preclinical arthritis model. Because these compounds are potent and selective regulators of the TNF, IL-2 and gamma interferon gene pathways, they are expected to have broad clinical utility in treating arthritis, stroke, cancer and other diseases. The company also has identified potent and selective inhibitors of the NF-k(beta) pathway that regulates cytokine genes (e.g., IL-1, IL-2, IL-6, IL-8 and TNF), and play a pivotal role in immune-inflammatory diseases, cardiovascular diseases and cancer.

Signal researchers also are identifying new gene regulating molecules within cells that provide a sustainable pipeline of drug targets for future drug discovery programs. The company conducts these discovery programs both independently and in collaboration with leading academic researchers and pharmaceutical partners.

Please feel free to visit our website at www.celgene.com.

This release contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties and other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include actions by the FDA and other regulatory authorities, and those factors detailed in the Company's filings with the Securities and Exchange Commission such as 10K, 10Q, and 8K reports.