Coelacanth Acquired by Lexicon Genetics for $32 Million, MPM Was Largest Shareholder.

Business/Technology Editors & Medical/Biotechnology Writers

CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 26, 2001

On July 12, 2001, Coelacanth Corporation, an MPM BioVentures I portfolio company, was acquired by Lexicon Genetics Inc. (NASDAQ: LEXG) in exchange for 2,918,991 shares of Lexicon common stock. Based on a share price of $10.9625, the transaction was valued at $32 million. MPM Capital made its initial investment in April of 1999 with a follow-on investment in August of 2000 and was the largest shareholder in Coelacanth.

Coelacanth, which uses proprietary chemistry technologies to rapidly discover new chemical entities for drug development, will form the core for a new division called Lexicon Pharmaceuticals, based in Princeton, N.J. Lexicon Pharmaceuticals will combine Lexicon's novel, functionally defined targets from the human genome with Coelacanth Corporation's high performance chemistry technologies to discover new drugs.

"We are very pleased to have closed our merger with Coelacanth since we already have several in vivo validated drug targets in our assay development pipeline," said Arthur T. Sands, M.D., Ph.D., President and Chief Executive Officer of Lexicon.

"We are excited to join the Lexicon team, and we firmly believe that our combined technologies will allow us to accelerate the drug discovery and development process and rapidly build a leading post-genomics pharmaceutical company," said Alan J. Main, Ph.D., who previously served as Coelacanth's President and Chief Executive Officer and now joins Lexicon's management team as Senior Vice President of Lexicon Pharmaceuticals.

Lexicon Genetics Incorporated is a drug discovery company of the post-genome era, using gene knockout technology to define the functions of genes for the discovery of pharmaceutical products. Lexicon is using this technology to fuel drug discovery programs in cancer, cardiovascular disease, immune disorders, neurological disease, diabetes and obesity. Lexicon has established drug discovery alliances and functional genomics collaborations with leading pharmaceutical and biotechnology companies, research institutes and academic institutions throughout the world to commercialize its technology and further develop its discoveries.

Michael Steinmetz, PhD., a General Partner of MPM Capital served as Chairman of the Board of Coelacanth. "Coelacanth's shareholders are pleased with the merger of the two companies. We are convinced that the novel chemistries developed by the founders, the management, and the employees of Coelacanth will be of great value for the discovery of new drugs."

"Bringing together Coelacanth and Lexicon, leaders in chemistry and in vivo target validation respectively, creates a powerful engine for drug discovery. We look forward to the future of the combined company," said Todd Foley, an Associate with MPM Capital who served on Coelacanth's Board of Directors.

MPM Capital L.P. is a global asset management firm focused on healthcare investing from early stage start-ups to large capitalization public companies. Headquartered in Cambridge, Massachusetts, MPM Capital has offices in South San Francisco, California and Munich, Germany. MPM's current portfolio consists of biopharmaceutical and medical device companies and encompasses platform technology as well as product plays. The firm manages over $1 billion in assets through $830 million in venture capital funds and $250 million in MPM BioEquities, a fund raised this past March to invest in public healthcare companies. These combined funds make MPM Capital one of the largest asset management firms dedicated to the healthcare industry.