Chiron Announces Settlement Agreement With the Respiratory Disease Network.

EMERYVILLE, Calif. -- Resolution of Lawsuit Over Marketing of Compounded Tobramycin Acknowledges Value of Chiron's TOBI(R) Tobramycin Inhalation Solution, USP 

E[acute accent]Chiron Corporation (Nasdaq:CHIR) today announced that the company had reached a settlement agreement with the Respiratory Disease Network (RDN), a group of three compounding pharmacies established by SourceCF in September 2004. Chiron named the RDN as a defendant in litigation concerning the marketing of a compounded formulation of the antibiotic tobramycin for use in a drug delivery device. Chiron makes and markets TOBI(R) tobramycin inhalation solution, USP, a product approved by the U.S. Food and Drug Administration (FDA) for use in combination with the PARI LC PLUS(TM) Reusable Nebulizer and a DeVilbiss Pulmo-Aide(R) air compressor to treat pseudomonal lung infections in cystic fibrosis (CF) patients. The drug-device combination marketed by RDN and other parties named in the lawsuit has not been clinically tested for safety or efficacy and is not approved by the FDA. E[acute accent]"This settlement acknowledges the value of TOBI therapy and ultimately benefits the CF community by helping to ensure that available treatments are marketed responsibly," said Ursula Bartels, Chiron's general counsel. "TOBI is the only FDA-approved tobramycin inhalation solution for the treatment of CF patients and continues to be the gold standard inhaled antibiotic therapy for this patient population. Chiron is dedicated to ensuring the quality and safety of its products, and we continue to invest in developing innovative new treatments to further protect the health of CF patients." E[acute accent]Under the terms of the agreement, which covers the compounding of tobramycin and the marketing of the drug delivery device, the RDN pharmacies are required to attach a disclaimer to any promotional materials related to the drug-device combination. The disclaimer must warn that compounded prescriptions are not evaluated by the FDA for safety or efficacy. The disclaimer also must warn that the device in question has not undergone human clinical studies to determine its safety or efficacy and has not been approved by the FDA for use with tobramycin in the treatment of CF patients.

E[acute accent]About Cystic Fibrosis

E[acute accent]Cystic fibrosis (CF) is a genetic disease that primarily affects people of Caucasian origin. About 30,000 people in the United States and about 70,000 people worldwide have CF. Patients with CF have abnormal movement of salt in and out of the cells lining their lungs, which leads to secretion of thick, sticky mucus that supports bacteria growth. Pseudomonas aeruginosa (Pa) is the most common bacterium causing lung infections in people with CF. By the age of 17, nearly 70 percent of people with CF have Pa in their lungs. Pa infections cause lung inflammation and -- through cycles of inflammation, obstruction and infection -- deterioration of lung function, at an estimated average rate of 1.4 percent to 4 percent per year. Treatment of CF lung disease is aimed at controlling infection, reducing lung obstruction and decreasing inflammation.

E[acute accent]About TOBI(R) Tobramycin Inhalation Solution, USP

E[acute accent]TOBI(R) tobramycin inhalation solution, USP, is an antibiotic approved in the United States and Europe for the treatment of cystic fibrosis (CF) patients with Pseudomonas aeruginosa, a bacterium frequently found in the lungs of these patients. Each ready-to-use TOBI ampoule contains 300 milligrams of tobramycin in a 5 milliliter solution. The TOBI solution is inhaled twice daily, for about 15 minutes per session, in repeated cycles of 28 days on-drug, 28 days off-drug. The dose is the same for all patients regardless of weight, age or other factors. Safety and efficacy have not been demonstrated in patients under the age of 6 years, patients with forced expiratory volume in one second (FEV1) less than 25 percent or greater than 75 percent of predicted, or in patients colonized with Burkholderia cepacia. In controlled clinical trials, TOBI therapy was well-tolerated, with voice alteration (13 percent versus 7 percent) and tinnitus (3 percent versus 0 percent) being the only adverse events reported by significantly more patients treated with TOBI therapy than placebo. Patients with known or suspected renal, auditory, vestibular or neuromuscular dysfunction should use caution when taking TOBI therapy. For more on TOBI therapy, visit www.abouttobi.com.

E[acute accent]About Chiron

E[acute accent]Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology. The company works to deliver on the limitless promise of science and make a positive difference in people's lives. For more information, please visit www.chiron.com.

E[acute accent]This news release contains forward-looking statements, including statements regarding sales growth, product development initiatives, new product indications, new product marketing, acquisitions, and in- and out-licensing activities that involve risks and uncertainties and are subject to change. A full discussion of the company's operations and financial condition, including factors that may affect its business and future prospects, is contained in documents the company has filed with the SEC, including the form 10-Q for the quarter ended September 30, 2004, and the form 10-K for the year ended December 31, 2003, and will be contained in all subsequent periodic filings made with the SEC. These documents identify important factors that could cause the company's actual performance to differ from current expectations, including the outcome of clinical trials, regulatory review and approvals, manufacturing capabilities, intellectual property protections and defenses, stock-price and interest-rate volatility, and marketing effectiveness. In particular, there can be no assurance that Chiron will increase sales of existing products, successfully develop and receive approval to market new products, or achieve market acceptance for such new products. There can be no assurance that Chiron's out-licensing activities will generate significant revenue, nor that its in-licensing activities will fully protect it from claims of infringement by third parties. In addition, the company may engage in business opportunities, the successful completion of which are subject to certain risks, including shareholder and regulatory approvals and the integration of operations. E[acute accent]We do not undertake an obligation to update the forward-looking information we are giving today.

E[acute accent]Note: TOBI is a trademark of Chiron Corporation.