GENZYME MOLECULAR ONCOLOGY & COMPUGEN COLLABORATE IN EXPANSION.

Genzyme Molecular Oncology (Nasdaq: GZMO) and Compugen Ltd. have entered into a collaboration that will expand global access to Genzyme's proprietary SAGE database. The collaboration will increase revenue opportunities for both companies while enabling customers to increase research productivity and more rapidly clarify the role of genes in disease.

Genzyme Molecular Oncology's patented SAGE technology enables users to identify genes as diagnostic markers and therapeutic targets for potential drug development.

Under the terms of two separate agreements, Genzyme Molecular Oncology and Compugen will share revenue related to the use of SAGE data. Financial details were not disclosed.

Under the first agreement, the two companies will share revenue generated by customer use of SAGE data on Compugen's research website, www.labonweb.com. Genzyme Molecular Oncology will provide over 2 million transcripts from its database to Compugen for use on this site. These transcripts are believed to represent more than half of the genes in the human genome.

LabOnWeb.com is a life-sciences research site that allows academic and commercial scientists to perform advanced analysis on their own data in combination with available genomic and expression data. The site integrates Compugen's proprietary databases, the SAGE database, and public data with access to computational biology programs.

Under the terms of the second agreement, the SAGE database will be integrated into Compugen's LEADS platform. Genzyme Molecular Oncology will receive royalties from future sales of the LEADS platform by Compugen.

LEADS is a computational biology platform that analyzes genomic and expressed sequence data to enable rapid discovery of genes, splice variants and gene function. LEADS customers have in-house access to this platform, gaining the capability to analyze their own databases in conjunction with Compugen's proprietary data and public data. The availability of the SAGE database will provide additional novel data to these customers, particularly in the area of cancer.

"Our collaboration with Compugen further validates the importance of our proprietary SAGE data in the quest to develop drugs that target genes involved in disease. SAGE picks up where the Human Genome Project leaves off by providing insight into the role of genes in disease," said Gail Maderis, president, Genzyme Molecular Oncology. "SAGE continues to be a valuable tool for generating data and revenue for our own cancer drug development efforts."

Martin Gerstel, chairman of Compugen said, "Our LabOnWeb.com site has been enthusiastically received by the life science research community, and we are seeing significant continuing gains in usage since activating the site in mid-December. We believe that the addition of the SAGE technology-which includes one of the largest proprietary databases of cancer and other disease-related gene expression data-will be a very valuable addition to our Internet offerings."

Background On SAGE

SAGE is an integral part of Genzyme Molecular Oncology's therapeutic discovery efforts with particular emphasis on the identification of novel tumor antigens and antiangiogenic factors. It can be used in a wide variety of applications such as identifying disease-related genes, analyzing the effects of drugs on tissues, and providing insight into disease pathways.

In December 1999, Genzyme Molecular Oncology announced that it had provided researchers at the Johns Hopkins University with an extensive database of new SAGE information regarding the patterns of expressed genes in human cancer and normal tissues. A summary of the extensive SAGE data was published in the article "Analysis of Human Transcriptomes" in the December issue of Nature Genetics (vol. 23, pp. 287-288).

As described in the Nature Genetics paper, researchers at the Johns Hopkins University analyzed 3.5 million transcripts from Genzyme Molecular Oncology's proprietary database and from public data that included information from normal and cancer tissue. Of the transcripts identified by SAGE, 46 percent represent new genes not present in existing databases.

SAGE was invented by a group of researchers led by Kenneth Kinzler, Ph.D. of the Johns Hopkins University and Bert Vogelstein, M.D. of the Johns Hopkins University and Howard Hughes Medical Institute. The technology is exclusively licensed to Genzyme Molecular Oncology.

In November 1999, Victor Velculescu, Ph.D., a cancer researcher in the group at the Johns Hopkins Oncology Center, won the International Prize for Young Scientists for his work on developing SAGE. Amersham Pharmacia Biotech and the journal Science created this prestigious award to honor outstanding graduate students in molecular biology.

Background On LabOnWeb

In December 1999, Compugen launched LabOnWeb.com, the first web-based research engine that provides life-science researchers with access to Compugen's unique algorithms and proprietary data, as well as public data. LabOnWeb has already proved to be an invaluable tool for scientists worldwide, and is being developed rapidly to accommodate a growing number of research tools and databases for a wide scope of applications.

Compugen, a life science research company, is a leader in converging advanced computational technologies with molecular biology to model and understand the molecular mechanisms of life. Compugen's computational and biological capabilities are based on a multi-disciplinary research team consisting of mathematicians, computer scientists, and molecular biologists.

Genzyme Molecular Oncology is developing a new generation of cancer products focusing on cancer vaccines and angiogenesis inhibitors. It is shaping these new therapies through the integration of its gene discovery, gene therapy, small-molecule drug discovery, and protein therapeutic efforts.

A division of Genzyme Corporation, Genzyme Molecular Oncology has its own common stock intended to reflect its economic value and track its performance. This press release contains forward-looking statements regarding the ability of the collaboration to increase revenue opportunities and the percentage of human genes contained in the SAGE database. Actual results may differ significantly based on market acceptance of the LabOnWeb site and the LEADS platform, and the results of research on the human genome.

For more information, call(609)655-5105.