Kemia Raises $33.5 Million in Series B Financing Led by JPMorgan Partners.

Business Editors/Health/Medical Writers

BIOWIRE2K

SAN DIEGO--(BUSINESS WIRE)--March 29, 2004

Kemia, Inc. today announced that it closed a $33.5 million Series B Financing led by JPMorgan Partners. Additional new investors in the B round included Novo A/S and HamiltonApex Technology Ventures. All of Kemia's previous "A" round investors -- Alta Partners, Forward Ventures, Texas Pacific Group Biotechnology, TPG Ventures, and Novartis BioVentures -- also participated in the Series B round. This closing brings Kemia's cumulative financing to $53 million. Rod Ferguson, J.D., Ph.D., partner at JPMorgan Partners, joined Kemia's board following the financing.

"The combination of world class medicinal chemistry, strong management and great venture investors made this a particularly attractive investment opportunity for JPMorgan Partners," said Ferguson. "Kemia today has both a very promising new drug entering the clinic early in 2005 and the potential to build a pipeline of novel, oral medicines for additional high value targets."

"We are delighted to have JPMorgan Partners lead this round, and we welcome Rod Ferguson to Kemia's board," said Lew Shuster, Kemia's CEO. "With JPMorgan Partners, Novo A/S, and HamiltonApex joining Kemia's previous investors, Kemia benefits from the resources and leadership of an expanded team of venture capitalists, each with significant pharmaceutical industry experience."

Kemia discovers and develops new, oral small molecule medicines for well-validated, clinically significant targets. Kemia applies proprietary chemistries and medicinal chemistry experience to two large and as yet underdeveloped classes of small molecule drug opportunities -- alpha helix interactions and allosteric kinase inhibitors. These target classes include numerous potential drug discovery targets across major disease areas including inflammation, cancer, HIV, diabetes and bone diseases.

Kemia's first drug candidate, an allosteric kinase inhibitor for inflammation, is projected to begin human clinical trials early in 2005. Kemia's development candidates are highly potent, selective, orally bioavailable, and demonstrate excellent in vitro absorption and metabolic properties. The compounds have shown efficacy in initial animal models of inflammation. Significantly, their mechanism of kinase inhibition is allosteric rather than acting at the ATP binding site. The allosteric binding approach allows Kemia's compounds to be more selective and thus have fewer side effects.

Kemia, based in San Diego, California, is led by Lew Shuster, CEO. Shustser joined Kemia in 2003, bringing 20 years of life science industry CFO, COO, and CEO experience, including leading successful IPO's for Human Genome Sciences and Pharmacopeia. The company's scientific team is led by Chief Scientific Officer Ed Roberts, Ph.D. Roberts joined Kemia in 2002 from F. Hoffmann La Roche in Basel, Switzerland, where he was senior vice president and head of discovery chemistry. Roberts is joined on the scientific management team by Jan Lundstrom, Ph.D., vice president of biology. Lundstrom joined Kemia in 2002 after completing a 28-year career at AstraZeneca including extensive experience in pharmacokinetics, pharmacodynamics, and preclinical development.

JPMorgan Partners (JPMP) is a global partnership with approximately $19 billion in capital under management (as of December 31, 2003). It is a leading provider of private equity and has closed over 1,300 individual transactions since its inception on 1984. JPMP has more than 140 investment professionals in nine principal offices throughout the world. JPMorgan Partners is the private equity arm of JPMorgan Chase & Co. (NYSE:JPM), one of the largest financial institutions in the United States. For additional information, please visit their website at www.jpmorganpartners.com. HamiltonApex is a $100 million venture fund headquartered in San Diego. Novo A/S is a private investment company, fully owned by the Novo Nordisk Foundation. Novo A/S is the holding company of the Novo Group and has significant holdings in the independent and publicly listed companies Novo Nordisk A/S and Novozymes A/S. Novo A/S currently has 20+ companies in its portfolio, about half in Europe and the other half in North America. Investments in the Novo A/S portfolio are managed by eight partners in Copenhagen and one partner in London. For more information please visit www.novodk.com.

NOTE TO EDITORS: In the company name Kemia, Inc. noted in this news release, there is an accent over the "e" in "Kemia."

Also, in the name Jan Lundstrom, there is an umlaut over the "o" in "Lundstrom."