Chiron Breaks Ground for Phase 1 of Life Sciences Center in Emeryville.

EMERYVILLE, Calif.--(BUSINESS WIRE)--Sept. 9, 1996--Chiron Corp. officially broke ground here today for construction of the first phase of its Life Sciences Center (LSC).

Phase 1 includes a new five-story, 268,000 gross square-foot research and development building along Hollis Street to be completed in 1998, which is scheduled to house 500 researchers.

In August 1995, the Emeryville City Council unanimously approved Chiron's LSC proposal to build a 2.2 million square-foot premier research and development center over a 30-year period. Buildout of the LSC on a 25-acre site bounded by Hollis Street on the east, Stanford Avenue on the north, Horton Street on the west and 45th Street on the south, would be completed in several stages.

Chiron currently employs about 1,800 people in Emeryville in approximately one million gross square feet in facilities at various sites in the city, where the company has been headquartered since its founding in May 1981.

"This new research building will enable Chiron to continue its tradition for developing and introducing innovative products that control serious diseases through prevention, diagnosis and treatment," said William J. Rutter, Ph.D., chairman.

"Our new facilities, starting with this one, are being designed to foster scientific creativity through an interactive and productive physical environment that integrates aesthetically and functionally into our urban community. The laboratories in this building will incorporate the most advanced equipment in a layout adopted to the modern scientific workstyle."

LSC design architect Ricardo Legorreta of Mexico has conceived a distinctive master plan which features a series of interconnected mid-rise research and development buildings. Legorreta's colorful design also incorporates several aspects that diminish the feeling of separation between the LSC, sidewalk, street and city, including:

-- Setbacks in the facades along Hollis Street between Stanford Avenue and 53rd Street that create pedestrian arcades connecting a series of urban parks and gardens, -- A public park at the corner of Hollis and 53rd streets that contains a waterway to recall Temescal Creek, and -- Internal plazas that will create gathering points for both employees and the public.

"The process that led us to this first step toward realizing our goal for a unique urban research headquarters was a model of local participatory democracy at work," noted Edward E. Penhoet, Ph.D., president and chief executive officer. "Concerns about design, parking and community access were resolved through a candid exchange that made the project better.

"We have been happy with our Emeryville location and now intend to have it serve as the research headquarters for what has become a global biotechnology enterprise. The Life Sciences Center will be an economic engine for the East Bay and creates a strong anchor for the expanding axis of biotechnology activities in the Bay Area."

Buildout of the entire LSC project will accommodate about 3,000 new employees at Chiron, will create thousands of construction jobs during the phased buildout, and will stimulate local and regional business activity, including the creation of an additional 3,000 new jobs in Alameda County, in retail or small businesses.

According to a recent study by the California Healthcare Institute and KPMG Peat Marwick, the 20 year-old biomedical/biotechnology industry has become a major driver of the California economy. The state is the global leader for this industry, with some 32 percent of all biotech companies headquartered here, representing more than 40 percent of all U.S. biotech jobs.

Comprised of biotechnology and medical device companies, academic and research institutions, the biomedical industry is the state's third-largest industrial sector, accounting in 1995 for about 165,000 jobs with a total payroll of $8.2 billion.

Biomedical investment in new research and development by California companies amounted to $2.8 billion in 1995, with operating budgets of more than $7.2 billion, which delivered to the state corporate taxes of $59 million and sales taxes of $402 million.

The list of commercialized human healthcare products that came from the research and development of California biomedical companies includes: recombinant human insulin, recombinant human growth hormone, the first clot-dissolver for heart attacks, the first genetically engineered vaccine, for hepatitis B, the first new drug for multiple sclerosis, new genetically engineered red and white blood cell growth promoters, the first drug to treat metastatic kidney cancer, and tests to screen out hepatitis C virus from blood and plasma.

Much of the enabling technology as well as many of the basic discoveries for these and other products occurred in Bay Area universities such as the University of California, San Francisco; the University of California, Berkeley; and Stanford University. As a result, the Bay Area has the largest concentration of biotechnology activity in the United States, and thus the world.

"Clearly, the productive relationship between the centers of academic research and the many commercial enterprises in the Bay Area has played a major role in establishing the state's global leadership in the biotechnology industry, with a substantial proportion of this activity located in the East Bay," concluded Penhoet. "Chiron looks forward to remaining a focal point in the further expansion of the biomedical industry in the region."

The full buildout of the LSC project could generate up to $290 million cumulatively over a 30-year period in additional property taxes for Emeryville, 20 percent of which is mandated for the construction of affordable housing. Chiron will advance about $6 million for local traffic improvements, which may be shared by other future development, and will pay about $6.6 million in fees and cash contributions for planning and building permits, sewer connection, small business incentives, public art, capital programs and public safety.

Under separate agreements with Oakland, Emeryville and Berkeley, Chiron also will provide funding for certain community projects and improvements. It already offers summer jobs and internships for students in all these cities, and plans to extend this activity. Chiron also will develop and fund specific educational initiatives designed to improve the science and particularly biotechnology programs in public schools.

In an agreement between Chiron and Oakland, the city and the company will undertake jointly a series of initiatives to attract other biotechnology companies to Oakland. As a first step, Chiron and the city will sponsor jointly applications for siting biotechnology incubator facilities in Oakland. Together, they will seek to obtain and provide incentives for biotechnology and other life sciences business to locate within an expanded Oakland Enterprise Zone. They will establish a joint Economic Development Committee whose mandate will be to seek out other opportunities for mutually beneficial initiatives in Oakland to support biotechnology business.

Legorreta Arquitectos of Mexico City is the LSC design architect. (Note: Founder and principal Ricardo Legorreta also has been commissioned as architect for the proposed new Mexican Museum of Art in San Francisco.) Flad & Associates is the architect of record. Peter Walker William Johnson & Partners of Berkeley is the LSC landscape architect. Rudolf and Sletten of Foster City is the contractor. Brayton & Hughes Design Studio is the interior designer. Banque Nationale de Paris led the financing; Credit Suisse and Union Bank of Switzerland also participated.

Chiron Corporation, headquartered in Emeryville, Calif., is a science-driven healthcare company that combines diagnostic, vaccine and therapeutic strategies for controlling disease. In 1995, Chiron had total revenues of $1.1 billion. Chiron has approximately 7,300 employees around the world, including 2,780 in California, in sites at the following locations in addition to Emeryville: Alameda, Vacaville, Irvine, Claremont and San Diego.

Chiron participates in four global healthcare markets: diagnostics, including immunodiagnostics, critical care diagnostics and new quantitative probe tests; therapeutics, with an emphasis on oncology and infectious disease; pediatric and adult vaccines; and ophthalmic surgical products for the correction of vision. Chiron also has research programs underway in gene therapy and gene transfer, combinatorial chemistry, cardiovascular disease and critical care. Chiron developed the first genetically engineered vaccine, for hepatitis B, discovered hepatitis C virus (formerly non-A, non-B hepatitis) and introduced blood screening tests that have improved the safety of the worldwide blood supply, developed new treatments for metastatic kidney cancer and multiple sclerosis, and pioneered the use of new bDNA tests that measure the amount of virus (viral load) in people with HIV infections, which allow physicians to individualize patient therapies and monitor their response to treatments.

CONTACT: Chiron Corp., Emeryville

Larry Kurtz, 510/601-2476