Chiron Submits New Drug Application for PULMINIQ; Inhaled Form of Cyclosporine Could Be First Immunosuppressant Indicated for Chronic Lung-Transplant Rejection.

EMERYVILLE, Calif. -- Chiron Corporation (Nasdaq:CHIR) today announced the submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for marketing approval of PULMINIQ(TM) (cyclosporine, USP) inhalation solution. Chiron is seeking an indication for the increase in survival and prevention of chronic rejection in patients receiving allogeneic lung transplants, in combination with standard immunosuppressive therapy. PULMINIQ could be the first immunosuppressant approved for this indication.

"Lung-transplant patients continue to suffer rejection rates substantially higher than those for patients receiving other organ transplants. If approved, PULMINIQ would be a major breakthrough in treatment for lung-transplant patients, fulfilling an unmet medical need," said Craig Wheeler, president, Chiron BioPharmaceuticals. "Chiron's efforts to bring this innovative therapy to market represent our continuing commitment to protecting the health of patients with pulmonary conditions."

"Despite the medical community's best efforts, long-term survival rates for patients receiving lung transplants have not improved over the last 10 years," said Aldo Iacono, M.D., associate professor of medicine and surgery in the division of pulmonary, allergy and critical care medicine, University of Pittsburgh School of Medicine, and principal investigator of the clinical studies used to support the PULMINIQ NDA submission. "The potential for cyclosporine inhalation solution to prevent chronic rejection and increase survival is a very important step forward. Because of the patients who participated in our studies, we may have the opportunity to help many others."

Data from the pivotal randomized double-blinded, placebo-controlled trial of cyclosporine inhalation solution (CyIS) is being presented at the 18th Annual North American Cystic Fibrosis Conference in St. Louis, October 13-17, 2004. The study enrolled patients who underwent single-lung or double-lung transplants and were on standard immunosuppressive therapies. 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.

In April 2003, Chiron acquired from Novartis exclusive worldwide commercial development and marketing rights for PULMINIQ, then referred to as aerosolized cyclosporine. Chiron received orphan drug designation from the FDA for PULMINIQ in November 2003. The NDA for PULMINIQ is supported by more than 12 years of data from clinical studies in lung-transplant patients conducted at the University of Pittsburgh.

About PULMINIQ(TM)

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 that seen after other solid organ transplants. Obliterative bronchiolitis, or chronic rejection, remains a cause of significant numbers of deaths after lung transplantation.

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.

This news release contains forward-looking statements, including statements regarding regulatory approval, clinical trial results, sales growth, product development initiatives, new product indications, new product marketing, 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 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.

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Note: PULMINIQ is a trademark of Chiron Corporation.