GENE LOGIC Enters Genomics Alliance with Japan Tobacco for Drug Discovery in Renal Disease and Other Indications.

COLUMBIA, MD--(BUSINESS WIRE)--September 9, 1997--GENE LOGIC INC. and Japan Tobacco Inc. ("JT") today announced that the companies will collaborate in the discovery of novel drug targets and drug leads for the development of new therapeutic agents in renal disease. Under the agreement, GENE LOGIC will initially use its proprietary Accelerated Drug Discovery platform to analyze gene expression and gene regulation in both human tissues and animal disease models to identify genes related to the onset and progression of glomerulonephritis. JT will also be the first subscriber to GENE LOGIC'S GENE EXPRESS(TM) Normal database, a comprehensive reference set of quantitative gene expression profiles in a wide variety of normal tissues of human, rat and mouse origins, and will have the option to access GENE LOGIC's proprietary Flow-thru Gene Chip(TM) technology for high-throughput screening of the effects of its compound libraries on gene expression in cellular assay systems. At any time during the first two years of the alliance, JT has the right to expand the collaboration to include drug target and lead discovery programs in two other disease areas.

Under terms of the agreement, JT will have worldwide rights to all small molecule drugs and therapeutic antibodies and proteins developed pursuant to the alliance research programs, and GENE LOGIC will receive royalties on sales of all such products. GENE LOGIC retains all rights to gene therapy, antisense and diagnostic products.

JT will pay GENE LOGIC a minimum $3 million in the first year of the alliance to initiate the research program in renal disease. JT will make further minimum annual payments of $3 million to GENE LOGIC during the term of the alliance in respect of the renal disease program and for each indication to which JT has exercised its expansion option. GENE LOGIC will be eligible for further payments upon the achievement of certain research milestones and upon the clinical development and commercialization of therapeutic products discovered through the alliance programs. Such milestone payments amount to a minimum of $12.7 million for each product. JT will make an investment of $3 million in GENE LOGIC Common Stock at the time of an initial public offering by the Company, provided that such an offering closes within the first two years of alliance. The collaboration is projected to continue for 5 years, subject to extension or early termination by JT.

"Through this alliance, JT gains access to a comprehensive, genomics-based target and drug lead discovery system. The components of this system include exclusive databases of gene expression in the disease areas of specific interest, non-exclusive access to the GENE EXPRESS(TM) Normal database and the GENE LOGIC suite of bioinformatics tools, and optional, proprietary screening technology, the Flow-thru Gene Chip(TM), which enables the rapid discovery of drug leads based on gene expression as an assay readout. JT will therefore be able to select among multiple strategies to fill its drug discovery pipeline and further leverage its substantial investments in combinatorial chemistry and traditional high-throughput screening methodologies," said Keith O. Elliston, Ph.D., the Chief Scientific Officer of GENE LOGIC.

GENE LOGIC is a high-throughput, functional genomics company using a new system based analysis of gene expression and gene regulation to accelerate the discovery of novel drug targets and drug leads. The core of GENE LOGIC's Accelerated Drug Discovery platform is a unique technology for monitoring the expression level of every gene in a given tissue or cell type with a high degree of sensitivity, reliability and accuracy. Analyzing these data using its Molecular Topography(TM) tool, GENE LOGIC is able to produce a complete quantitative picture of all the genes used in a human cell. In its accelerated discovery process, GENE LOGIC creates "molecular movies," a series of molecular topographies, which show the changes in gene expression patterns as a disease develops and progresses in a specific cell or tissue type, across different cell types, and in cells treated with various drugs or experimental compounds. By analyzing these changes using proprietary bioinformatics software, GENE LOGIC believes that it will be able to identify rapidly which expressed genes are implicated in a disease and provide more novel targets for drug discovery in a shorter time and at a lower cost than competing technologies. In addition to its exclusive programs in specific disease areas, GENE LOGIC has developed a comprehensive suite of functional genomics tools, the GENE EXPRESS(TM) Normal database, rEST(TM) (rare EST) database, and TAG(TM) (The Annotated Genome) database, to accelerate drug target and drug lead discovery and development. These components may be used independently or in conjunction with the Company's proprietary Flow-thru Gene Chip(TM) to identify drug leads.

Japan Tobacco Inc., a diversified company with annual revenues in excess of $23 billion and assets exceeding $15 billion, entered the pharmaceutical business in 1987. In the field of ethical pharmaceuticals, JT is currently engaged in clinical development of various drugs, including those for the treatment of dementia, asthma, angina pectoris, diabetes and inflammation, and has launched 5HT3 antagonist as an anti-emetic in Japan in 1994. JT presently conducts drug discovery research at its Central Pharmaceutical Research Institute in Osaka, Japan.

GENE LOGIC is a privately-held company with major discovery programs in cancer, central nervous system disorders, osteoporosis, inflammation and infectious disease. GENE LOGIC's principal investors include Oxford Bioscience Partners, Hambro Health International, Inc. and BIOTECHVEST.

CONTACT: GENE LOGIC INC.

Mark D. Gessler

Senior Vice President &

Chief Financial Officer

[phone] ext. 109

mgessler@ genelogic.com

[e-mail]

or

JAPAN TOBACCO INC.

Susumu Motojima

Vice President

Corporate Communications Div.

[phone]

or

Burns McClellan

Karen L. Bergman (media)

Reagan Codner (investors)

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