Chiron Reports First Quarter 1996 Results.

EMERYVILLE, Calif.--(BUSINESS WIRE)--April 30, 1996--Chiron Corporation (NASDAQ:CHIR) reported today that for the first quarter ended March 31, 1996, the company had net income of $12,744,000 or 29 cents per share on revenues of $305,751,000 versus a net loss of $385,778,000 or $9.64 per share on revenues of $218,246,000 for the first quarter of 1995.

Chiron's 1995 first-quarter results included charges totaling $349 million of additional operating expenses, of which $297 million resulted from a strategic partnership transaction with Ciba-Geigy Limited whereby Chiron acquired Ciba Corning Diagnostics Corp. and interests in The Biocine Company and Biocine S.p.A., and from Chiron's acquisition of the IOLAB Surgical Division from Johnson & Johnson and its integration into the operations of Chiron Vision.

Chiron's 40 percent increase in total revenues resulted principally from a 30 percent increase in product sales, to $238.3 million in the first quarter of 1996 from $183.9 million in the first quarter of 1995, and an increase in collaborative agreement revenues to $31.4 million in the first quarter of 1996 from $5.6 million in the first quarter a year ago.

The quarterly increase in Chiron's net product sales is attributable to the IOLAB acquisition, revenues from which were not included in product sales in the first quarter of 1995, and increased sales of Betaseron (interferon beta-1b) by Chiron to its partner, the Berlex Laboratories U.S. affiliate of Schering AG of Germany.

The quarterly increase in collaborative research agreement revenues results from research funding of $16.0 million received from Ciba primarily for certain vaccine research and development programs, and from a $7.5 million initial payment from a new collaborative partner for access to certain of Chiron's combinatorial chemistry techniques.

Diagnostic product sales increased to $134.3 million in the first quarter of 1996 from $127.4 million in the first quarter of 1995. The increase was driven primarily by increased immunodiagnostic product sales, including ACS immunoassay systems, for which penetration expanded in developing markets and an expanded menu generated greater assay volume compared to a year ago.

Sales by Chiron Vision increased to $44.9 million in the first quarter of 1996 from $24.3 million in the first quarter of 1995 primarily due to the acquisition of IOLAB, which led to increases in sales of intraocular lenses, phacoemulsification instruments and viscoelastic products. Sales of the Vitrasert Implant, cleared for Marketing by the U.S. Food and Drug Administration as the first drug delivery system to provide local, sustained therapy for CMV retinitis, totaled $1.0 million following its launch in early March.

Vaccine product sales were $20.8 million for the first quarter of 1996 compared to $15.8 million for the first quarter of 1995. The increase was driven by Biocine S.p.A.'s expansion into new export markets for its polio vaccine, and by increased sales in Italy of its combined diphtheria, tetanus and acellular pertussis vaccine.

Chiron Therapeutics' sales of oncology products in the United States and Europe increased to $16.1 million in the first quarter of 1996 from $12.8 million in the first quarter of 1995. In the first quarter of 1996, combined sales volumes of Proleukin (aldesleukin) in both markets increased by 22 percent, and average net selling prices increased six percent, compared to the prior year. Sales of Aredia (pamidronate disodium) by Chiron Therapeutics in the United States on behalf of Ciba Pharmaceuticals, which are accounted for in "Other Revenues," also increased in the first quarter of 1996 compared to a year ago.

Betaseron sales increased to $20.9 million in the first quarter of 1996 from $1.8 million in the first quarter of 1995, a quarter in which Chiron made minimal shipments to Berlex because Berlex had sufficient inventory to satisfy patient demand. In addition, Betaseron revenues in the first quarter of 1996 included $2.8 million for product manufactured and sold to Berlex for use in the United States but distributed by Schering in an early access program for patients in Europe prior to commercial approval there.

On March 31, 1996, Chiron held cash, cash equivalents and investments in marketable debt securities totaling $219.3 million. During the first quarter of 1996, Chiron consumed $4.9 million of cash and investment assets, largely for capital expenditures.

Chiron Corporation is a science-driven healthcare company that combines diagnostic, vaccine and therapeutic strategies for controlling disease. Headquartered in Emeryville, California, near San Francisco, and with operations on four continents, Chiron had revenues in 1995 of more than $1 billion. 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, combinatorial chemistry, cancer, infectious and cardiovascular disease, and critical care. -0-

                           Chiron Corp.
               Consolidated Statement of Operations
                          (Unaudited)
              (In thousands, except per share data)

                                      Three Months Ended
                                Mar. 31,              Mar. 31,
                                  1996                   1995
Revenues:
 Product sales, net            $ 238,259              $ 183,909
 Equity in earnings of
  unconsolidated joint
   businesses                     23,608                 18,178
Collaborative agreement
  revenues                        31,414                  5,567
 Other revenues                   12,470                 10,592
  Total revenues                 305,751                218,246

Expenses:
 Cost of sales                   101,979                 90,282
 Research and development         84,048                 99,055
 Selling, general and
  administrative                  92,330                 84,894
 Write-off of purchased
  in-process technologies           --                  230,657
 Costs related to Ciba
  transaction                       --                   49,520
 Restructuring and
  reorganization charges            --                   37,641
 Other operating expenses         3,107                   2,280
  Total expenses                281,464                 594,329

Income (loss) from
 operations                      24,287                (376,083)
Other expense, net               (5,818)                 (1,389)
Income (loss) before income
 taxes                           18,469                (377,472)

Provision for income taxes        5,725                   8,306

Net income (loss)             $  12,744               $(385,778)

Net income (loss) per
 share                        $    0.29              $   (9.64)

Weighted average number of
 shares used in computing
  per share amounts              44,621                40,013

                           Chiron Corp.
                    Consolidated Balance Sheet
                          (In thousands)

                              ASSETS

                                          March 31,        Dec. 31,
                                             1996            1995
                                          (Unaudited)

Current assets:
 Cash and cash equivalents               $    84,809     $    74,318
 Short-term investments in marketable
  debt securities                             65,318          61,066
  Total cash and short-term investments
   in marketable debt securities             150,127         135,384
 Accounts receivable                         295,577         285,779
 Inventories                                 170,139         165,941
 Other current assets                         54,591          49,899
  Total current assets                       670,434         637,003
Noncurrent investments in marketable
 debt securities                              69,209          88,833
Property, plant, equipment and leasehold
 improvements, at cost:
 Land and buildings                          209,708         208,233
 Laboratory, production and office
  equipment                                  298,126         292,828
 Leasehold improvements                      102,196          95,472
 Construction in progress                     82,197          62,046
                                             -------         -------
                                             692,227         658,579
 Less accumulated depreciation and
  amortization                               157,120         140,761
  Net property, plant, equipment and
   leasehold improvements                    535,107         517,818
Purchased technology, net                     78,649          80,600
Other intangible assets, net                  73,425          71,571
Investments in equity securities and
 affiliated companies                         45,056          54,359
Other assets                                  39,495          40,014
                                           ---------       ---------
                                         $ 1,511,375     $ 1,490,198

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                        $    80,870     $    81,081
 Accrued compensation and related
  expenses                                    41,854          56,994
 Short-term borrowings                        55,179          50,036
 Current portion of unearned revenue          20,025          20,838
 Taxes payable                                31,353          27,551
 Other current liabilities                   135,000         132,095
  Total current liabilities                  364,281         368,595

Long-term debt                               416,924         413,248
Other noncurrent liabilities                  36,102          35,943

Stockholders' equity:
 Common stock                                    422             417
 Additional paid-in capital                1,749,699       1,727,711
 Accumulated deficit                      (1,074,955)    (1,084,699)
 Cumulative foreign currency translation
  adjustment                                  (2,545)            721
 Unrealized gain from investments             21,447          31,262
  Total stockholders' equity                 694,068         672,412
                                           ---------       ---------
                                         $ 1,511,375     $ 1,490,198

CONTACT: Chiron Corp.

Larry Kurtz, 510/601-2476