Genentech Licenses IGF-I to Tercica Medica, Inc.; Tercica Closes $21.5 million Series A Financing.

Business Editors/Health & Medical Writers

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SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--May 23, 2002

Tercica Medica, Inc. announced today that Genentech, Inc. (NYSE:DNA) has granted Tercica certain exclusive licenses and options to its rights to Insulin-Like Growth Factor-I (IGF-I), a hormone central to human growth and metabolism. Tercica said that it initially plans to develop IGF-I for Growth Hormone Insensitivity Syndrome. Genentech has also granted Tercica an exclusive option to acquire its rights to the combination of IGF-I and insulin-like growth factor binding protein-3 (BP3). Genentech received an undisclosed ownership position in Tercica and will also receive downstream payments based on milestones and eventual sales.

Tercica also announced today the closing of a $21.5 million Series A round of financing, led by MPM Capital with co-investor Prospect Venture Partners. Dr. Dennis J. Henner, a General Partner of MPM Capital, Dr. Ashley Ledbetter, a Principal at MPM Capital and Dr. Alex Barkas, a Managing Partner of Prospect Venture Partners have joined the Company's Board of Directors. Prior to joining MPM, Dr. Henner was at Genentech from 1981 to 2001, where he served as Senior Vice President of Research and as a member of the Executive Committee, Product OD Review Committee and Research Review Committee. Dr. Barkas was previously the lead investor and founding CEO of Connetics, Inc. (Nasdaq:CNCT), which was founded on programs in-licensed from Genentech. The Tercica management team is led by Dr. John A. Scarlett, President and Chief Executive Officer, and Dr. Ross G. Clark, Chief Technical Officer.

"Tercica is well-positioned to develop and commercialize IGF-I," Dr. Scarlett noted. "Our license and collaboration agreement with Genentech provides the company with extensive preclinical and clinical data, a well-developed, efficient manufacturing process, and very significant intellectual property and know how in the IGF-I field. In addition, our access to Genentech's rights to the combination IGF-I/BP3 product should put Tercica in a good position to take advantage of expanding knowledge in the growth biology field."

"Tercica plans to pursue development of IGF-I for growth hormone insensitivity syndrome (GHIS)," said Dr. Clark. "Despite adequate or even elevated levels of growth hormone, patients with GHIS have low serum IGF-I levels due to cellular resistance to the effects of growth hormone. IGF-I deficiency results in short stature, and is also associated with decreased muscle mass, increased fat, poor exercise tolerance, and other significant metabolic consequences. IGF-I is the scientifically logical treatment for this condition. In previous studies of patients with GHIS, IGF-I stimulated significant skeletal growth and improved many of the metabolic abnormalities observed in these patients."

Tercica was founded by a group of leading scientists in the field of growth hormone and IGF-I, including Dr. Bengt-Ake Bengtsson, Professor of Endocrinology, Sahlgrenska Hospital, University of Goteborg, Sweden, Dr. Iain C. A. F. Robinson, Head of Molecular Neuroendocrinology at the National Institute for Medical Research, Mill Hill, England, Dr. Olle G.P. Isaksson and Dr. Clark. Dr. Isaksson is Chairman of the Department of Internal Medicine, Sahlgrenska Hospital, University of Goteborg, Sweden, and joins Dr. Scarlett and Dr. Clark on the Tercica Board of Directors.

Dr. Scarlett previously was the Chief Executive Officer of Sensus Drug Development Corporation, which licensed a growth hormone-related endocrine product from Genentech. Sensus was sold to Pharmacia, Inc. in 2001. Dr. Scarlett trained in Internal Medicine at the University of Pennsylvania and in Endocrinology and Metabolism at the University of Colorado. He previously held clinical development positions at Johnson & Johnson and Novo Nordisk, and was also a founder of Covance Biotechnology Services, Inc., a leading contract manufacturer of biopharmaceuticals that was sold to Diosynth in 2001. Dr. Clark was a Senior Scientist in Endocrinology at Genentech for 9 years, and authored 26 issued US patents, including many in the area of growth hormone, IGF-I and BP3. Dr. Clark was previously a founder and the Chief Technical Officer at NeuronZ Ltd, a privately held biotechnology company developing central nervous system applications of IGF-I, a founding Board member of ViaLactia Biosciences Ltd, a New Zealand biotechnology company, and a Senior Research Officer at the National Institute for Medical Research, Mill Hill, London. Dr. Clark holds a part-time Professorship at the University of Auckland in New Zealand. Mr. Howard Moore, formerly Business Establishment Manager at ViaLactia Biosciences Ltd and also a founder of Tercica, joins the Company as Executive Vice President.

Tercica's offices will be located in South San Francisco, CA.