Chiron Grants Nonexclusive HCV License to InterMune; Agreement Further Enables Development of HCV Therapeutics to Address Disease.

EMERYVILLE, Calif. -- Chiron Corporation (Nasdaq:CHIR) today announced that Chiron had granted a nonexclusive license to InterMune, Inc. for the research, development and commercialization of therapeutics against hepatitis C virus (HCV) drug targets. Financial terms of the agreement were not disclosed.

"We are pleased to have worked with InterMune to reach this agreement," said Ursula Bartels, Chiron's general counsel. "Making our HCV technology available to develop small-molecule therapeutics will help to address the toll from this terrible disease. Chiron is committed to meeting this major medical need, both through its broad licensing policy and through its own small-molecule therapeutic program."

In June, Chiron granted a nonexclusive license to its HCV technology to Prosetta Corporation, the first agreement providing a "no entry cost" option for use of the company's HCV technology. The licensing terms are intended to provide flexibility to licensees by confirming the availability of no up-front or annual payments. In 2003, Chiron granted nonexclusive licenses to its HCV technology to Boehringer-Ingelheim International GmbH, Gilead Sciences, Pfizer, Rigel Pharmaceuticals, and Vertex Pharmaceuticals. The company has also granted a license to F. Hoffmann-LaRoche for use in nucleic acid testing to screen whole blood donations for HCV. Chiron's efforts to combat HCV include the Procleix(R) System, which screens whole blood donations for HCV, HIV-1, and hepatitis B, and which Chiron markets and develops in collaboration with Gen-Probe Incorporated. In addition, Chiron is currently conducting two Phase I trials for HCV vaccine candidates and has a small-molecule therapeutic in pre-clinical testing.

About Hepatitis C 

In 1987, Chiron scientists Michael Houghton, Ph.D.; Qui-Lim Choo, Ph.D.; and George Kuo, Ph.D., cloned and first identified HCV as the cause of transfusion-related non-A, non-B hepatitis. This breakthrough marked the first time a virus was cloned before it had been grown in tissue culture or otherwise isolated. The Chiron scientists received the prestigious Lasker Award in recognition of this discovery. Since the initial work, Chiron has been granted more than 100 HCV-related patents in over 20 countries, including patents directed to hepatitis C polypeptides encoded throughout the genomes of HCV. Such polypeptides can be used in a variety of medical applications, including blood screening, clinical diagnosis, vaccines and as therapeutic targets for drug screening. More than fifteen companies have been granted nonexclusive licenses to Chiron's HCV technology for drug screening and diagnostic purposes, including Bristol-Myers Squibb, GlaxoSmithKline, Japan Tobacco Inc. and Gilead.

About Chiron

Through its global Blood Testing, Vaccines and BioPharmaceuticals businesses, Chiron Corporation addresses human suffering with more than 50 diverse products to detect, prevent and treat disease worldwide. The company's consistent success has come from its pioneering science, skill in delivering innovations in biotechnology and disciplined business approach. Chiron believes that science has the power to improve people's lives and harnesses that power to transform human health.

This year, Chiron Vaccines celebrates 100 years of advancing medicine with the anniversary of two founding companies. In 1904, Emil von Behring and Achille Sclavo independently started companies in Germany and Italy, respectively, dedicated to the research, development and manufacture of vaccines to protect humanity from infectious disease. As the fifth-largest vaccine manufacturer in the world, Chiron remains dedicated to the legacies of von Behring and Sclavo to prevent disease and develop new vaccines to improve human health globally.

This news release contains forward-looking statements, including statements regarding sales growth, product development initiatives, new product indications, new product marketing, acquisitions, strategies, policies, 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 June 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.

Consistent with SEC Regulation FD, we do not undertake an obligation to update the forward-looking information we are giving today.

NOTE: Procleix is a registered trademark of Chiron Corporation.