IPR Pharmaceuticals Invests $100 Million And Acquires Chiron Corporation Plant in Puerto Rico.

HATO REY, Puerto Rico--(BUSINESS WIRE)--August 19, 1998--

IPR Pharmaceuticals, Inc. has acquired the Chiron Corporation plant and adjacent lands in Canovanas, Puerto Rico as part of a plan to invest approximately $100 million in new facilities in Puerto Rico. The announcement was made today by IPR President Ruben Freyre and Jaime Morgan Stubbe, Executive Director of the Puerto Rico Industrial Development Co. (PRIDCO), in a joint news conference.

"This investment by IPR reaffirms Puerto Rico's position as a world class strategic center of manufacturing where the most important and prestigious companies in the world have decided to establish and expand their operations," the PRIDCO director said. "PRIDCO's vision of converting the Puerto Rican government into a facilitator, together with the skills and experience of our labor force, have made it possible for IPR and many other companies to invest and expand in Puerto Rico."

For his part, Freyre said that the acquisition of the Chiron facilities gives IPR its third manufacturing site and the additional space it needs to accommodate its growing operations on the island. The company currently employs approximately 530 persons in its two local plants in Carolina and Guayama, about 200 more than it employed three years ago. Freyre added that the company would make significant improvements in the two plants, including the construction of new facilities.

IPR is a wholly owned subsidiary of Zeneca Group, a British-based life science company that employs more than 33,000 persons worldwide. Chiron is a biotechnology firm headquartered in Emeryville, California that had acquired the Canovanas plant in 1993.

"This expansion project reflects our belief that Puerto Rico continues to be an important investment area for the company," Freyre said. "The $100 million investment will be divided about equally between the new Canovanas plant and the existing site at Guayama."

According to Freyre, the decision to acquire the Canovanas plant was prompted by space limitations at the Carolina plant that hindered future growth. The Carolina plant will continue to operate, he said, but part of the Quality Assurance Laboratory operations and some of the product packaging lines will be shifted to Canovanas. "The Canovanas plant will be an extension of the Carolina plant," he added. Nelson Perez, Director of Manufacturing at the Carolina plant, will also direct operations at the Canovanas plant. The proximity of the Canovanas site to the Carolina operation was also a factor in its selection. "We wanted a nearby site in order to retain all of the employees who have helped this company to grow in recent years," Freyre added.

IPR will be making two new products in its Carolina and Canovanas plants: Casodex, for the treatment of cancer, and Zomig, used in the treatment of migraine headaches. According to Freyre, IPR is projecting that its newly acquired plant will be operational by the end of 1999. Similarly, they expect the new expansion phase in Guayama to begin early next year and be finished by the close of the year 2001.

The Guayama plant is currently undergoing a $15 million expansion that should be completed by the end of this year. IPR's total investment in Puerto Rico will exceed $250 million when all of the expansion projects are completed.

IPR launched its Puerto Rico operations in 1986 when it acquired the Carolina plant from another pharmaceutical firm. At the time, the company was called ICI Pharmaceuticals Puerto Rico, Inc., but in 1991 the name was changed to IPR Pharmaceuticals. The Guayama plant was inaugurated in 1992. Zeneca ranks among the top 25 pharmaceutical companies in the world.

The announcement of the IPR investment in Puerto Rico joins other important announcements that the head of PRIDCO has divulged in recent months. Among those are the following: Pharmacia & Upjohn, with a $100 million investment; Ocular Sciences/American Hydron with an investment of $25 million in the municipality of Juana Diaz and a commitment to employ 234 persons; Smart Modular Technologies in Aguada, with an investment of $15 million as a supplier to Hewlett-Packard, with a commitment to employ 450 persons; Cutler-Hammer with 269 jobs and a $4 million investment in Cabo Rojo, and a projected $200 million investment by the year 2000; Thermometric, which inaugurated its operations in Anasco to supply products to Baxter's Cardiovascular Division, with an investment of $700,000 and a commitment to employ 100 persons; Allergan with a $12 million investment and a commitment to create 150 jobs; Hewlett-Packard of Aguadilla, with a $100 million investment and a projected 1,300 jobs; and Searle & Co., with a $200 million investment and a commitment to employ 800 persons.

In Puerto Rico, there are 79 pharmaceutical plants operating on the island with employment of over 22,000 persons, according to the 1997 Manufacturing Census of the Department of Labor and Human Resources.

The Puerto Rico Industrial Development Company (PRIDCO), a public corporation of the Government of Puerto Rico, is headquartered in San Juan with a main regional office in New York, and other offices in Chicago and Costa Mesa. PRIDCO manages industrial tax and other incentives, and constructs and leases factory shells to house industrial operations.

CONTACT: Elizabeth Tung [phone]

Ketchum Public Relations 

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Vivian C. Vazquez Colon [phone]

PRIDCO