Chiron Presents Data on Tobramycin Powder for Inhalation at North American Cystic Fibrosis Conference.

EMERYVILLE, Calif. & SAN CARLOS, Calif. -- Data Support Development Rationale of New Dry Powder Formulation and Portable Delivery System

Chiron Corporation (Nasdaq:CHIR) and Nektar Therapeutics (Nasdaq:NKTR) today announced data from the final study report of a Phase I clinical trial of tobramycin powder for inhalation (TPI) presented by Chiron at the 18th Annual North American Cystic Fibrosis Conference in St. Louis, October 14-17. TPI, an inhaled antibiotic, is being developed for the treatment of cystic fibrosis (CF) patients with infections caused by Pseudomonas aeruginosa. The trial data, presented in four abstracts and an oral presentation at the conference, suggest that TPI, a formulation of tobramycin, a drug with a proven efficacy and safety profile, may significantly reduce the treatment burden for cystic fibrosis (CF) patients by offering a short administration time and full portability.

"Chiron is working to protect the health of CF patients, and TPI has the potential to be a revolutionary approach to treating common lung infections associated with CF," said Stephen Dilly, M.D., chief medical officer, Chiron BioPharmaceuticals. "TPI represents the first dry-powder, high-payload delivery of an antibiotic directly to the airways. Phase I clinical data show that it may be a well-tolerated, more convenient alternative to existing therapies. We believe TPI could potentially improve patient compliance and are committed to demonstrating this through further clinical studies."

"Getting an anti-infective drug like tobramycin quickly, directly and deep into an infected lung is a logical way to improve treatment for CF patients," said John Patton, Ph.D., Nektar co-founder and chief scientific officer. "Our formulation and pulmonary drug delivery technologies enable development of innovative therapeutics like this next generation of inhaled tobramycin."

TPI is used with a capsule-based hand-held inhaler, developed in collaboration with Nektar Therapeutics, that provides a fully portable, quick and convenient system for CF patients. The Phase I trial, which included 90 patients at 15 study centers in the United States, compared the safety, pharmacokinetics and delivery time of TPI administered via the novel hand-held device to Chiron's TOBI(R) tobramycin solution for inhalation administered via nebulizer. Based on positive Phase I data, Chiron plans to initiate two large Phase III clinical trials for further study of TPI.

About Cystic Fibrosis

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.

About TOBI(R) Tobramycin Solution for Inhalation

TOBI(R) tobramycin solution for inhalation 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 ampoule of TOBI contains 300 milligrams of tobramycin in a 5-milliliter solution. TOBI 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 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 than placebo. Patients with known or suspected renal, auditory, vestibular or neuromuscular dysfunction should use caution when taking TOBI. For more on TOBI, visit www.abouttobi.com.

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. For more information about Chiron, please visit www.chiron.com.

About Nektar

Nektar Therapeutics provides industry-leading drug delivery technologies, expertise and manufacturing to enable the development of high-value, differentiated therapeutics. Nektar's advanced drug delivery capabilities are designed to enable the company's biotechnology and pharmaceutical partners to solve drug development challenges and realize the full potential of their therapeutics, from developing new molecular entities to managing the life cycles of established products. Nektar Advanced Pulmonary Technology uses innovative molecular formulations and novel delivery devices to improve or enable administration of medicines to and through the lungs for both lung diseases and systemic conditions.

Chiron Forward-Looking Statement 

This news release contains forward-looking statements, including statements regarding the anticipated benefits of TPI to CF patients, product development initiatives, product marketing, market size, and in- and out-licensing activities that involve risks and uncertainties and are subject to change. No assurances can be given that TPI will have favorable results in further clinical trials, including the proposed Phase III trials, or ultimately receive marketing approval. 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.

Nektar Forward-Looking Statement

This release contains forward-looking statements that reflect management's current views as to Nektar's business strategy, product and technology development plans and funding, collaborative arrangements, clinical trials, and other future events and operations. These forward-looking statements involve uncertainties and other risks that are detailed in Nektar's reports and other filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 2003, as amended, and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. Actual results could differ materially from these forward-looking statements.

Note: TOBI is a trademark of Chiron Corporation.