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Exhibit 99.2
FOR IMMEDIATE RELEASE
CHIRON TO ACQUIRE PATHOGENESIS
Acquisition Expands Chiron's Infectious Disease Franchises in
Biopharmaceuticals, Vaccines and Blood Testing
EMERYVILLE, CA, AUGUST 14, 2000 -- Chiron Corporation (NASDAQ: CHIR) and
PathoGenesis Corporation announced today that they have entered into a
definitive agreement for Chiron to purchase PathoGenesis for $38.50 per share in
cash, or about $700 million. The transaction will be accounted for under the
purchase method and is projected to close in the third or fourth quarter of this
year.
The acquisition positions Chiron as a global player in the treatment and
prevention of infectious disease and cancer. Specifically, Chiron will have:
- A substantially expanded therapeutic focus in infectious disease, augmenting
Chiron's established oncology franchise
- Five major commercial products: TOBI-Registered Trademark-,
Proleukin-Registered Trademark-, Betaseron-Registered Trademark-,
Menjugate-TM- and Procleix-TM-
- More than 40 products on the market worldwide across Chiron's three business
units
- More than 15 programs in clinical development, including several new
applications for TOBI (tobramycin solution for inhalation), candidates in HIV
and severe sepsis, as well as three preclinical candidates for lung infections
- An enhanced R&D capability in bacterial genomics and small molecule
therapeutics to enable development of high-value, next generation
anti-infectives
- Inhalation drug delivery technology used in marketed products and with
preclinical and clinical drug candidates
- Global commercial operations, with an expanded sales and marketing group in
the U.S. and Europe
- Excellent working relationships with key patient groups, such as the Cystic
Fibrosis Foundation, cancer communities and AIDS advocates
"The unified research and commercial focus of the combined company provides
Chiron an opportunity to leverage our infectious disease franchises in
biopharmaceuticals, vaccines and blood testing while augmenting our already
established oncology presence. PathoGenesis brings us a high-growth product in
TOBI, and strengthens our pipeline with novel approaches to anti-infective drug
development," commented Sean Lance, Chiron chairman and chief executive officer.
"The acquisition expands Chiron's revenue base, commercial portfolio and
research and development pipeline. We believe the integrated operations will
enable our shareholders to realize continued long-term growth."
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CHIRON TO ACQUIRE PATHOGENESIS
Acquisition Expands Chiron's Infectious Disease Franchises in
Biopharmaceuticals, Vaccines and Blood Testing
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PATHOGENESIS' TOBI TO ACCELERATE CHIRON'S COMMERCIAL ANTI-INFECTIVE FRANCHISE
TOBI will be the lead infectious disease product of Chiron's biopharmaceutical
business. TOBI is the first and only inhaled antibiotic approved for the
treatment of PSEUDOMONAS AERUGINOSA lung infections in cystic fibrosis patients.
The product has been used to treat more than 9,500 patients in the U.S., is
growing steadily there, and is currently marketed in six countries worldwide.
TOBI EUROPEAN APPROVAL
Last week, TOBI cleared the mutual recognition process required for marketing in
15 additional European countries, recognizing the drug's earlier approval by the
reference member state, the United Kingdom. Each country is expected to issue a
marketing authorization for TOBI during the next few months. As a result, TOBI
is expected to be launched in these European countries starting in the fourth
quarter of 2000. This should result in significant revenue growth in TOBI sales
in the near-term. Chiron will augment PathoGenesis' European sales and marketing
of TOBI with its existing commercial infrastructure. The integrated company will
have a combined worldwide sales and marketing team of about 350 people.
EXPANDED DEVELOPMENT OPPORTUNITIES
PathoGenesis will strengthen Chiron's anti-infective development portfolio by
adding pipeline candidates and substantial development skills. Chiron already
has two infectious disease products in late-stage clinical development:
tifacogin (tissue factor pathway inhibitor, TFPI), in Phase III trials for
severe sepsis, in collaboration with Pharmacia, Inc., and recombinant human
interleukin-2 (rhIL-2, or aldesleukin, marketed as Proleukin), in Phase III
trials for HIV. The expanded pipeline will also include label expansion studies
for TOBI in other indications, as well as a "next generation" TOBI that is
intended to shorten treatment time and improve both dosing convenience.
INTEGRATION ENHANCES R&D CAPABILITIES AND PRODUCTIVITY
The acquisition will create a solid research and development engine for the
treatment and prevention of serious infections including hepatitis C, hepatitis
B, P. AERUGINOSA and other respiratory infections, H. PYLORI, meningococcal B
disease, HIV, tuberculosis and other bacterial pathogens.
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CHIRON TO ACQUIRE PATHOGENESIS
Acquisition Expands Chiron's Infectious Disease Franchises in
Biopharmaceuticals, Vaccines and Blood Testing
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An existing PathoGenesis-Chiron research and development collaboration, begun
in December 1999 to discover novel antibiotics, has shown the power of
coupling Chiron's expertise in small molecule drug discovery and vaccines
with PathoGenesis' skills in bacterial genomics and microbiology. The two
companies' expertise in genomics creates new opportunities for development of
next-generation therapeutic and prophylactic anti-infective products. Chiron
has sequenced the meningococcal B genome and PathoGenesis the P. AERUGINOSA
genome. The combined program has exciting generative potential for the
creation of novel anti-infectives for diseases that currently are not
adequately treated. The integrated research and development engine also will
address the emerging worldwide issue of drug resistance.
COMMITMENT TO EFFECTIVE INTEGRATION
PathoGenesis and Chiron are committed to the smooth and rapid integration of
the two companies' commercial and research and development operations.
PathoGenesis' operations will be integrated into Chiron's Biopharmaceutical
and research and development operations, with joint products leveraged in
Europe by both companies' existing sales and marketing teams.
EXISTING COMMERCIAL BUSINESS
Chiron has commercialized more than 40 infectious disease focused products and
testing systems through its vaccine and blood testing businesses. Menjugate is
the lead product of Chiron's vaccine business, which also includes a portfolio
of traditional and emerging vaccines targeting infectious diseases. Procleix, a
nucleic acid testing system for screening the blood supply for hepatitis C and
HIV, is the basis for an emerging business in blood testing. Chiron participates
in a joint business with Ortho Clinical Diagnostics, Inc., which markets a range
of infection screening tests and diagnostics.
Chiron's commercial portfolio already includes Chiron's lead oncology
therapeutic, Proleukin (recombinant interleukin-2, rhIL-2, or aldesleukin),
for the treatment of renal cell cancer and metastatic melanoma. Chiron, in
collaboration with Berlex Laboratories, Inc., and Schering AG, also develops
and manufactures Betaseron (interferon beta-1b) for the treatment of patients
with multiple sclerosis. Chiron also developed and is manufacturing
platelet-derived growth factor (PDGF), the active ingredient in the diabetic
foot ulcer treatment Regranex-Registered Trademark- (becaplermin), which is
marketed by Ortho-McNeil Pharmaceutical, Inc., a Johnson & Johnson company.
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CHIRON TO ACQUIRE PATHOGENESIS
Acquisition Expands Chiron's Infectious Disease Franchises in
Biopharmaceuticals, Vaccines and Blood Testing
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EXPECTED CLOSING IN THIRD OR FOURTH QUARTER
Chiron will commence a tender offer to purchase all of the outstanding shares
of PathoGenesis common stock at a price of $38.50 per share. Chiron does not
expect the transaction to be dilutive beyond 2001. The transaction is
expected to close in the third or fourth quarter of this year. The Boards of
Directors of both companies have unanimously approved the proposed
transaction, which is subject to regulatory filings and customary closing
conditions.
CONFERENCE CALL TO BE HELD ON MONDAY MORNING AT 9:00 A.M. EDT
Sean Lance, Chairman and Chief Executive Officer of Chiron, will host a
conference call at 9:00 am EDT August 14, 2000, to discuss the proposed
business combination. The domestic dial-in number is 1.888.306.2701 and the
international dial-in number is 1.706.634.2118. A replay of the call will be
available through midnight, Wednesday, August 16, 2000.
About Chiron
Chiron Corporation, headquartered in Emeryville, California, is a leading
biotechnology company that participates in three global healthcare markets:
biopharmaceuticals, vaccines and blood testing. The company is applying a
broad and integrated scientific approach to the development of innovative
products for preventing and treating cancer, infection and cardiovascular
disease. This approach is supported by research strengths in recombinant
proteins, genomics, small molecules, gene therapy and vaccines.
Proleukin is a registered trademark of Chiron Corporation. Procleix and
Menjugate are trademarks of Chiron Corporation. TOBI is a registered
trademark of PathoGenesis Corporation. Betaseron and Betaferon are registered
trademarks of Schering AG. Regranex is a registered trademark of Johnson &
Johnson.
THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. A FULL DISCUSSION OF CHIRON'S OPERATIONS AND FINANCIAL
CONDITION, INCLUDING FACTORS THAT MAY AFFECT ITS BUSINESS AND FUTURE
PROSPECTS, IS CONTAINED IN DOCUMENTS THE COMPANY FILES WITH THE SEC, SUCH AS
FORM 10-Q AND FORM 10-K. THESE DOCUMENTS IDENTIFY IMPORTANT FACTORS THAT
COULD CAUSE THE COMPANY'S ACTUAL PERFORMANCE TO DIFFER FROM CURRENT
EXPECTATIONS, INCLUDING THE OUTCOME OF CLINICAL TRIALS, REGULATORY REVIEW,
MANUFACTURING CAPABILITIES AND MARKETING EFFECTIVENESS.
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CHIRON TO ACQUIRE PATHOGENESIS
Acquisition Expands Chiron's Infectious Disease Franchises in
Biopharmaceuticals, Vaccines and Blood Testing
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PATHOGENESIS SHAREHOLDERS SHOULD READ CHIRON'S TENDER OFFER STATEMENT ON
SCHEDULE TO AND PATHOGENESIS' SOLICITATION/RECOMMENDATION STATEMENT ON
SCHEDULE 14D-9 WHEN THEY ARE AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. THE SCHEDULE TO, THE SCHEDULE 14D-9 AND OTHER FILED DOCUMENTS
WILL BE AVAILABLE FOR FREE AT THE SECURITIES AND EXCHANGE COMMISSION'S
WEBSITE AT WWW.SEC.GOV. IN ADDITION, THE SCHEDULE TO WILL BE AVAILABLE FROM
CHIRON CORPORATION, 4560 HORTON STREET, EMERYVILLE, CALIFORNIA 94608,
TELEPHONE: (510) 655-8729, AND THE SCHEDULE 14D-9 WILL BE AVAILABLE FROM
PATHOGENESIS CORPORATION, 201 ELLIOT AVENUE WEST, SEATTLE, WASHINGTON, 98119,
TELEPHONE: (206) 467-8100. THIS PRESS RELEASE IS NEITHER AN OFFER TO PURCHASE
NOR A SOLICITATION OF AN OFFER TO SELL SECURITIES OF PATHOGENESIS. THE TENDER
OFFER WILL BE MADE SOLELY BY AN OFFER TO PURCHASE AND RELATED LETTER OF
TRANSMITTAL TO BE DISSEMINATED UPON THE COMMENCEMENT OF THE TENDER OFFER.
CONTACTS:
INVESTOR CONTACTS: MEDIA CONTACTS:
Joyce A. Lonergan Shelley Schneiderman
Vice President, Corporate Development Associate Manager, Investor Relations &
& Investor Relations Corporate Communications
(510) 923-3030 (510) 923-6905
Vincent Barella Jennifer Wyckoff
Manager, Corporate Communications & Associate Manager, Investor Relations &
Investor Relations Corporate Communications
(510) 923-2138 (510) 923-3103
