Chiron and Progenitor, an Interneuron subsidiary, to collaborate in gene therapy.

COLUMBUS, Ohio--(BUSINESS WIRE)--April 4, 1995--Chiron Corp. (NASDAQ: CHIR) and Progenitor Inc., a subsidiary of Interneuron Pharmaceuticals Inc. (NASDAQ: IPIC) announced today that they have signed a letter of agreement to collaborate in the development and commercialization of Progenitor's proprietary gene therapy technology.

Progenitor has developed a unique nonviral delivery and expression system with potentially broad application in the rapidly emerging field of gene therapy.

The agreement establishes a research and development collaboration between Progenitor and Chiron in selected cancer fields, and licenses to Chiron proprietary vector technology applicable to a number of therapeutic and vaccine products for certain cancers, cardiovascular disorders and infectious diseases, for which Chiron gains certain exclusive manufacturing and marketing rights. Chiron's development activities will be performed in its Chiron Technologies and Chiron Biocine business units. All rights to product applications of the technology that are not specifically included in the agreement are retained by Progenitor.

The two companies will jointly continue development of Progenitor's lead gene therapy product for the treatment of solid-tumor cancers. Progenitor retains rights to co-invest and to participate in product revenues based on its contributions. Chiron will supply clinical and commercial manufacturing for the collaboration's products and would be a preferred manufacturer for the product fields retained by Progenitor.

Upon execution of the letter agreement, Progenitor received an initial payment of $2.5 million, up to $750,000 of which is committed to share in certain start-up nonviral gene therapy manufacturing costs at Chiron. Progenitor will receive an additional $500,000 payment in January 1996. The agreement encompasses a minimum of 11 potential products subject to the research and development collaboration that Chiron may take forward for clinical development. Progenitor will receive additional payments for each product based upon the achievement of defined mostly late-stage clinical development and regulatory filing milestones. While there is no assurance that these milestones will be reached, these additional payments could total in excess of $50 million if all such products were approved for commercial sale. In addition, Progenitor would receive royalties from commercial sales of products resulting from the collaboration.

"Progenitor's agreement with Chiron validates the fundamental attributes of our gene therapy technology, which has exciting potential as a highly efficient delivery system for a broad spectrum of genes," said Douglass B. Given, M.D., Ph.D., president and chief executive officer of Progenitor. "The combination of our respective technology platforms and proprietary positions arising out of pioneering work in gene therapy performed by Doros Platika, M.D., senior vice president for research and development at Progenitor, and by scientists affiliated with Chiron, will help ensure leadership in several important product areas. The collaboration also provides Progenitor with the momentum and resources to accelerate clinical and commercial development of its broadly enabling technologies."

"The agreement with Chiron underscores Interneuron's subsidiary company strategy, which includes the negotiation of strategic partnerships leading to product commercialization and corporate independence for the subsidiaries," said Glenn L. Cooper, M.D., president and CEO of Interneuron and chairman of Progenitor. "We are pleased that Progenitor is working with Chiron, which has proven capabilities in product development, clinical testing, manufacturing and marketing."

"Chiron is applying a range of potentially useful gene therapy approaches to diseases in which we have a strategic interest, including cancer, infectious disease and cardiovascular disorders," said Rusty Williams, M.D., Ph.D., senior vice president and president of Chiron Technologies. "Progenitor's nonviral delivery and expression system will be an important component in our program because of its broad applicability, and because it is proprietary, would have great value if successful."

The collaboration provides Chiron with access to Progenitor's novel nonviral gene therapy vector system, designed to enable the targeted delivery of therapeutic gene sequences by direct injection. This vector technology may provide significant advantages in the treatment and prevention of diseases by allowing for the administration of gene therapy on an as-needed basis until the disorder is corrected.

Progenitor's nonviral vectors carry therapeutic gene sequences into the cell's cytoplasm, the area surrounding the nucleus, where the genes produce high levels of the required therapeutic proteins on a controlled, temporary basis. The vectors' activity in nondividing as well as dividing cells represents a significant advance over retrovirus-based approaches. Progenitor's nonviral vectors do not require integration into the cell's own genome, reducing the potential for interference with the proper function of the cell's genes.

The first application of the technology under Progenitor's agreement with Chiron will be the collaborative preclinical and clinical development of a highly selective treatment for solid-tumor cancers that sensitizes tumors to destruction. The two companies anticipate filing an IND in 1996 to begin clinical testing with this initial product.

Key components of Progenitor's vector technologies were developed by the company's scientific founder, Thomas E. Wagner, Ph.D., of the Edison Biotechnology Institute of Ohio University. Exclusive worldwide rights to the patent application for this technology were licensed by Progenitor from Ohio University in May 1993.

Chiron Corp., headquartered in Emeryville, Calif., applies biotechnology and other techniques of modern biology and chemistry to develop products intended to improve the quality of life by diagnosing, preventing and treating human disease. Chiron participates in four markets: diagnostics, including immunodiagnostics, critical care diagnostics and quantitative bDNA probe tests, therapeutics for cancer and infectious disease, adult and pediatric vaccines, and ophthalmic instruments and devices used for the surgical correction of vision. A fifth business, Chiron Technologies, manages development of new technologies from the company's research including a new generation of chemical therapeutics being developed through advanced techniques of drug design and discovery, and a program in gene therapy.

Progenitor Inc. is a medical biotechnology company developing proprietary gene and cell-based therapies, including novel growth factor products and stem cells, for the treatment of cancers, blood and immune system disorders, and cardiovascular diseases. A majority-owned subsidiary of Interneuron Pharmaceuticals Inc., Progenitor is located in Columbus and Athens, Ohio.

Interneuron Pharmaceuticals Inc., is engaged in the development and commercialization of innovative pharmaceutical products for neurological and behavioral disorders. Through two other subsidiaries, Intercardia Inc. and Transcell Technologies Inc., Interneuron is developing products and technologies related to cardiovascular disease, carbohydrate synthesis and drug transport.

CONTACT: Chiron Corp.

Larry Kurtz, 510/601-2476

or

Progenitor Inc.

Douglass B. Given, M.D., Ph.D., 614/488-6688

or

Interneuron Pharmaceuticals

Glenn L. Cooper, M.D. or William B. Boni, 617/861-8444