Chiron and Ciba to Collaborate on Combinatorial Chemistry-Based Research and Development.

EMERYVILLE, Calif.--(BUSINESS WIRE)--Nov. 28, 1995--Chiron Corp. (NASDAQ:CHIR) and Ciba-Geigy Limited of Basel, Switzerland, announced today that the two companies will collaborate on drug discovery research and development using Chiron's combinatorial chemistry technology.

The collaboration has two parts, one of which focuses on the identification of new drug candidates for specific disease targets, and the other of which grants Ciba a non-exclusive, perpetual license to apply Chiron's combinatorial chemistry technologies broadly in Ciba's corporate research.

Under the target-based collaboration agreement, Chiron and Ciba will use proprietary molecular diversity approaches to identify new classes of compounds with potential as pharmaceuticals that are active against receptor or enzyme targets associated with certain diseases. Ciba will make initial payments to Chiron in exchange for access to Chiron's technology and chemical libraries and exclusive rights to two drug discovery targets, with an option to add two additional targets.

Ciba will have the right to develop and market products for indications of its choice, and Chiron will receive milestone payments and a royalty on net sales. Chiron will have commercialization rights to products for non-competing indications, subject to payment of royalties to Ciba. In addition, Ciba will fund activities at Chiron related to the collaboration for three years, extendable to five years at Ciba's option.

The technology transfer portion of the agreement calls for Ciba to pay fees to Chiron, spread over several years, in exchange for a non-exclusive, perpetual license to utilize Chiron's combinatorial chemistry techniques. During the five-year term, each party will have access to improvements made by the other. The parties may collaborate to jointly improve specific aspects of the technologies.

The technology transfer arrangement includes surface chemistries of solid phase supports and solid phase synthetic organic chemistry methods, techniques for automating the synthesis of compounds including robotics and customized software, analytical capabilities to monitor automated synthesis, computational approaches to library and compound design and related data management, and assay screening methods including methods for toxicology and pharmacokinetic testing of individual drug candidates and compound mixtures.

It does not include Chiron's combinatorial libraries nor Chiron's participation in the application of such technologies to the design of specific libraries or compounds, except for use in the target collaboration.

"The technology transfer collaboration provides the opportunity for Chiron and Ciba to work together to advance our combinatorial chemistries and to explore new molecular diversity techniques," said Walter H. Moos, Ph.D., vice president, Chiron Technologies.

"Additionally, the target agreement enables Ciba and Chiron together to apply these state-of-the-art technologies for immediate drug discovery use focused on two or more specific targets. Both Chiron and Ciba will benefit from the interaction, joint technological advancement and any potential financial returns that result from the overall program. We look forward to additional opportunities to transfer our basic combinatorial chemistry knowledge and techniques to other companies through agreements that will allow the independent utilization of this powerful technology."

Romeo Paioni, Ph.D., head of Pharma Research at Ciba in Basel, reiterated the sentiments expressed by Dr. Moos, and added, "Clearly, Chiron is a leader in this field, and Ciba scientists look forward to joining forces with Chiron for a productive and mutually beneficial collaboration in the field of combinatorial technologies."

"Combinatorial chemistry is an area of technological strength at Chiron," said William J. Rutter, Ph.D., chairman of Chiron. "This collaboration is an example of how the `preferred partnership' between Ciba and Chiron will result in new opportunities for both companies to advance important technologies of mutual interest."

"I am excited by the working atmosphere between Ciba and Chiron," said Pierre E. Douaze, head of the Ciba Pharma Division. "Our collaboration in the field of combinatorial chemistry technology will surely have a profound effect on Ciba's pharma drug discovery programs and additionally will benefit Ciba in other areas."

In January 1995, Chiron and Ciba commenced a strategic alliance designed to capitalize on the two companies' unique and complementary strengths to discover, develop, manufacture and market biotechnology and other healthcare products on a global scale.

At that time, Chiron and Ciba identified their interest in a specific collaboration in the field of combinatorial chemistry. This is an example of a collaboration in which these two parties share technology to their mutual benefit. Earlier in 1995, Chiron and Ciba began a shared collaboration with New York University to apply an advanced genetic optical mapping technology to pharmaceutical and diagnostic development.

Ciba Geigy Limited, based in Switzerland, is one of the world's leading biological and chemical companies. The Pharma Division is dedicated to discovering, developing, manufacturing and marketing innovative pharmaceuticals to meet unmet medical needs and improve quality of life. In 1994, the division had sales of SFr. 6,105 million and has branches, joint ventures, scientific offices and agencies in more than 150 countries.

The company maintains pharmaceutical research centers in Switzerland, the United States and the United Kingdom. The Ciba group, with total 1994 sales of SFr. 22,049 million, is dedicated to satisfying needs in healthcare, agriculture and industry with innovative, value-adding products and services.

Chiron Corp. is a biotechnology company headquartered in Emeryville, near San Francisco. Chiron is building a healthcare business that addresses needs in several markets: diagnostics, including immunodiagnostics and bDNA probe assays; vaccines, emphasizing adult and pediatric infectious diseases; therapeutics, with an emphasis on oncology, neurology, endocrinology and serious infectious and other diseases requiring critical care; and ophthalmic products for the surgical correction of vision.

Additional research programs are underway in gene therapy and gene transfer, and cardiovascular disease.

CONTACT: Chiron Corp., Emeryville

Larry Kurtz, 510/601-2476

Kimberly Kraemer, 510/601-2412