Chiron Receives FDA Priority Review Designation for New Drug Application for PULMINIQ --Cyclosporine, USP-- Inhalation Solution.

EMERYVILLE, Calif. -- Agency Sets Six-Month Review Period for New Treatment for Lung-Transplant Patients

Chiron Corporation (Nasdaq:CHIR) today announced that the U.S. Food and Drug Administration (FDA) has accepted the company's New Drug Application (NDA) for marketing approval of PULMINIQ(TM) (cyclosporine, USP) inhalation solution. The NDA also has been granted priority review designation, which sets an agency action letter due date of six months from the time of filing. Chiron announced the NDA submission for PULMINIQ on October 14, 2004.

"Because the potential value of this therapy to improve the survival of and prevent chronic rejection in lung-transplant patients is significant, we are very pleased that the FDA has decided to grant PULMINIQ a priority review," said Craig Wheeler, president, Chiron BioPharmaceuticals. "Approximately 4,000 patients in the United States are currently awaiting lung transplants, and PULMINIQ could significantly benefit those fortunate enough to receive transplants."

Priority review designation is granted to products that would be a significant improvement compared to marketed products in the treatment, diagnosis or prevention of a disease. Chiron is seeking an indication for PULIMINIQ for the increase in survival and prevention of chronic rejection in patients receiving allogeneic lung transplants, in combination with standard immunosuppressive therapy. PULMINIQ would be the first immunosuppressant approved for this indication.

The NDA for PULMINIQ is supported by clinical data from subjects exposed to the drug for at least 2 years. A pivotal randomized double-blinded, placebo-controlled trial of cyclosporine inhalation solution (CyIS) conducted at the University of Pittsburgh enrolled patients who underwent single-lung or double-lung transplants and were on standard immunosuppressive therapies. Data from the pivotal trial demonstrates a 79 percent decrease in the risk of death for patients receiving PULMINIQ compared to patients receiving placebo during the study period. Fourteen (46.7 percent) of the placebo-treated patients died prior to study closure, as compared to three (11.5 percent) of the CyIS-treated patients. The estimated survival duration hazard ratio was 0.213, which equates to a 79 percent decrease in the risk of death for patients receiving CyIS compared to patients receiving placebo during the study period. Overall there were 18 (60 percent) patients with histologically proven bronchiolitis obliterans or death in the placebo arm versus five (19 percent) in the CyIS arm (P=0.003), and fewer CyIS-treated subjects died or developed bronchiolitis obliterans syndrome grade 1 or higher (39 percent of the CyIS-treated subjects versus 70 percent of the placebo-treated subjects; P=0.020). However, the rate of grade 2 or higher acute rejections was 7.9 percent higher in the placebo arm than in the CyIS arm (P=0.73) and did not appear to have an effect on the development or prevention of acute rejection. Side effects included probable treatment-related bronchospasm manifested by exacerbated dyspnea and airway irritation.

About PULMINIQ(TM) (Cyclosporine, USP) Inhalation Solution

PULMINIQ(TM) contains 300mg/4.8mL cyclosporine, USP for administration by inhalation. PULMINIQ delivers cyclosporine directly to the lungs, achieving greater drug concentration at the rejection site than intravenous or oral cyclosporine. Cyclosporine, an immunosuppressant, has previously been approved in other products as a standard treatment for chronic rejection of kidney, liver and heart allogeneic transplants.

About Lung-Transplant Rejection

Rejection is the process by which an organ transplant recipient's immune system recognizes, becomes sensitized against and attempts to eliminate the foreign antigens of the donor organ. The lung is one of the most vulnerable organs to rejection. Despite the use of immunosuppression therapy, acute rejection can and often does occur. Later, post-transplantation, chronic rejection may also occur. Currently available immunosuppressant regimens have not been effective in reducing the incidence of chronic rejection or prolonging survival. Compared to other types of organ transplants, survival for lung transplantation has not improved appreciably in the last 10 to 15 years. According to the International Society for Heart and Lung Transplantation 2004 registry data of lung transplants performed between January 1988 and June 2002, one-year survival remains about 75 percent in the current era (transplants performed between January 1998 and June 2002). At five years, survival continues to be around 50 percent, no better than it was in the late 1980s and early 1990s, and is now significantly less than seen after other solid organ transplants. Obliterative bronchiolitis, or chronic rejection, remains a cause of significant numbers of deaths after lung transplantation.

About Chiron

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 about Chiron, please visit www.chiron.com.

This news release contains forward-looking statements, including statements regarding regulatory review and approval and new product indications, 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 generally, 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 materially from current expectations, including those expressed or implied by the forward-looking statements contained in this press release. In particular, there can be no assurance that the company's NDA relating to this product will be approved in a timely fashion or at all, or if approved, that the company will successfully commercialize or achieve market acceptance for this product. Other factors include 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. 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.

We do not undertake an obligation to update the forward-looking information we are giving today.

Note: PULMINIQ is a trademark of Chiron Corporation.