Chiron Viagene and Virus Research Institute Collaborate on Intracellular Gene Therapy.

SAN DIEGO and CAMBRIDGE, Mass.--(BUSINESS WIRE)--Feb. 6, 1996-- Chiron Viagene, a business of Chiron Corporation (NASDAQ: CHIR), and the Virus Research Institute (VRI) announced today that they have agreed to collaborate on the research and development of intracellular immunizing agents for human immunodeficiency virus (HIV) and other infectious diseases.

Intracellular immunization is a therapeutic approach, developed in the laboratory of Dr. Wayne Marasco of the Dana-Farber Cancer Institute, that uses gene therapy in combination with a new class of genetically modified molecules, intracellular antibodies or "intrabodies." Intrabodies, engineered to be expressed within a cell, are designed to inhibit viral functions, including disruption of the viral assembly process. If successful, this could protect healthy "T" cells and suppress infectious virus release from infected cells.

Under the agreement, Chiron obtains an option to an exclusive license to VRI's proprietary intracellular immunization technology for use in the field of HIV and infectious disease. In exchange, Chiron will support research at VRI and make milestone and royalty payments, covering the development, manufacturing and marketing of intracellular immunization products for HIV and other infectious diseases.

"Intracellular immunization using gene therapy may prove to be an important approach to developing products to treat infectious disease," said Lewis T. "Rusty" Williams, M.D., Ph.D., president of Chiron Technologies. "We believe that the combined strengths of Chiron Viagene's broad gene therapy program and VRI's proprietary intrabody expression technology, position us to explore the potential of this technological approach for HIV and other infectious diseases."

"VRI has demonstrated in vitro that intrabodies not only may inhibit infectious virus production, but also may affect the cytopathic effects of the virus," said Jaime Escobedo, Ph.D., senior director, gene therapy and discovery research at Chiron Technologies. "This indicates that an HIV-specific intracellular immunization agent may be able to inhibit the replication and spread of HIV, thus preventing the onset of AIDS."

"We hope to validate this novel approach in preclinical studies and then initiate human clinical trials," said Steve Mento, Ph.D., president, Chiron Viagene. "Furthermore, VRI's technology complements our overall portfolio of gene therapy technologies, and may be of strategic use in Chiron Viagene's existing gene therapy programs."

"This approach in which antibodies are expressed inside the cell rather than in their normal extracellular location has, we believe, great potental for use in the treatment of HIV and other viral infections," said Barrie Ward, chairman and chief executive officer of VRI. "We are pleased to be working with Chiron Viagene, a major company in the field of gene therapy, to develop this technology for these important indications."

Virus Research Institute, based in Cambridge, Mass., is a development stage biopharmaceutical company specializing in the discovery and development of novel products for the prevention and treatment of infectious diseases. Founded in 1991, the company is pursuing programs directed towards vaccine delivery systems, novel viral and bacterial vaccines and intracellular antibody therapy. The company's major strategies are developing delivery systems for both injected and mucosal vaccines and proprietary vaccine antigens.

Chiron Viagene, based in San Diego, is part of Chiron Technologies, a business unit of Chiron. Viagene was founded in 1987 and is among the first companies to enter the field of gene therapy. Its strategies include proprietary gene transfer technology for the development of drugs that allow therapeutic proteins to be produced directly inside cells. This new class of drugs provides the opportunity to augment normal cellular functions that help prevent or mediate diseases, as well as the opportunity to replace or inactivate disease-causing genes.

Chiron Viagene's products are focused on the treatment of severe viral infections, cancers and other serious diseases. Chiron Viagene has initiated several human clinical trials and in late 1994 began the first Phase 2 clinical trial studying gene transfer products. The indications in which Viagene's gene therapy products are currently being studied include various cancers and a series of trials to treat HIV infection. In the clinical trials, Viagene's gene therapy products have been tested in more than 300 individuals, the largest collective clinical experience of any gene therapy company.

Chiron Technologies directs Chiron's therapeutic research and clinical development activities. In addition to gene therapy, Chiron Technologies conducts research and development programs in combinatorial chemistry and biological agents.

Chiron Corporation, headquartered in Emeryville, Calif., is a diversified, science-driven healthcare company that combines diagnostic, vaccine and therapeutic strategies for managing disease. 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.

CONTACT: Chiron Corp.

Larry Kurtz, 510/601-2476

Kimberly Kraemer, 510/601-2412

or

Virus Research Institute Inc.

J. Barrie Ward, 617/864-6232