Cytel Licenses Carbohydrate Technology to Baxter Healthcare; Deal Worth $4 Million to Cytel.

SAN DIEGO--(BUSINESS WIRE)--Mar. 1, 1999--Cytel Corporation (NASDAQ:CYTL) today announced that it has licensed its proprietary carbohydrate synthesis and manufacturing technology to Baxter Healthcare Corporation's Nextran unit for exclusive use in xenotransplantation.

The $4 million license agreement supersedes Cytel's existing supply agreements with Baxter, according to Virgil Thompson, president and chief executive officer.

"This new agreement is beneficial for both Cytel and Baxter," said Thompson. "Cytel is realizing significant value and Baxter will obtain an exclusive license to Cytel's Sugar Nucleotide Cycling Technology (SNC(tm)) including intellectual property and other assets for the manufacture of carbohydrates to be used in xenotransplantation procedures."

Cytel initially entered into a collaboration with Baxter in September 1996 to manufacture and supply a specific bioactive carbohydrate for use in xenotransplantation. In December 1997, the agreement was expanded to include the supply of additional carbohydrate products.

Cytel's SNC Technology is used for the assembly of complex and specific bioactive carbohydrates on a commercial scale including Cylexin, its lead therapeutic compound. It is also useful for synthetic remodeling of carbohydrates or recombinant glycoproteins. The technology imitates the natural carbohydrate synthesis process requiring a cascade of chemical reactions initiated by specialized enzymes. The method can be used for consumer, nutritional and pharmaceutical product development and is more time and cost effective than other chemical synthesis technologies.

Cytel has developed cell adhesion inhibitors for treatment of acute and chronic inflammation, and manufactures bioactive carbohydrates for use in medical and consumer products. Epimmune Inc., its subsidiary, is focused on the discovery and development of a new generation of safer, more potent vaccines for the prevention and treatment of cancer and infectious diseases.

This press release includes forward-looking statements that reflect management's current views of future events. Actual results may differ materially from the above forward-looking statements due to a number of important factors, including but not limited to the risks associated with the timing and cost of conducting human clinical trials, the regulatory approval process, and the possibility that testing may reveal undesirable and unintended side effects or other characteristics that may prevent or limit the commercial use of proposed products. These factors are more fully discussed in Cytel's most recent Forms 10-K and 10-Q.