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WRITTEN COMMUNICATION COMPRISED OF SLIDES SHOWN DURING AN ANALYST PRESENTATION
DATED AUGUST 15, 2000
SLIDE 0
This slide contains the text "Chiron - Science for Life" accompanied by a Chiron
logo, and the date "August, 2000".
SLIDE 1
This slide is entitled "Forward Looking Statement," and contains the
following text: "Today's presentation contains both historical information
and forward-looking comments. Actual events or results may differ materially
from these expectations. For a complete discussion of the factors that may
affect operating and financial results, please see Chiron's documents filed
with the SEC, including its most recent 10-K and 10-Q."
SLIDE 2
This slide is titled, "Important Information," and contains the following
text: "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 Elliott Avenue West, Seattle, Washington,
98119, Telephone: (206) 467-8100. This announcement 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."
SLIDE 3
This slide is titled, "Chiron & PathoGenesis - A Global Player in Infection,"
and contains the logos of each of Chiron and PathoGenesis Corporation.
SLIDE 4
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives." It contains the following text:
- Powerful anti-infectives franchise making a difference in peoples
lives
- Full line of products in therapeutics, vaccines and blood testing
- Fully integrated US & Europe commercial operations
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- Comprehensive anti-infective R&D skills & capabilities
- Complementary skills, compatible culture and values
- Focused on delivering shareholder value
SLIDE 5
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives," and presents a table comparing the two
companies by categories including "Headquarters," "Research & Development,"
"Commercial Operations," "Market Cap," and "Employees." The tabular
information for Chiron reads as follows: "Headquarters Emeryville, CA;
Research & Development Emeryville, Siena; Commercial Operations Amsterdam,
Emeryville, Marburg; Market Cap 8.9 B; Employees 3300." The tabular
information for PathoGenesis reads as follows: "Headquarters Seattle, WA;
Research & Development Seattle, WA; Commercial Operations Skokie, IL,
Annandale, NJ, London; Market Cap 500 M; Employees 300."
SLIDE 6
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives" and presents a timeline depicting a
sequence of events in the histories of both companies. "1981: Chiron
founded;" "1981: HBV antigen for 1st genetically engineered human vaccine;"
"1984: Cloned and sequenced HIV genome;" "1987: Cloned HCV genome;" "1988:
Introduced HBV diagnostic blood test;" "1989: Prokeukin-Registered Trademark-
approved in EU (kidney cancer);" "1990: First blood test for HCV;" "1991:
Pathogenesis founded;" "1993: Betaseron-Registered Trademark- approved;"
"1996: bDNA HIV viral load;" "1997: TOBI-Registered Trademark- approved
(US);" "1999: TOBI-Registered Trademark- approved (UK, Canada, Argentina,
Israel);" "1999: NAT adopted by Australian Red Cross Blood;" "2000:
Menjugate-Trademark- approved UK;" "2000: Fluad-Trademark- approved in EU."
SLIDE 7
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives," and contains the following text:
"Infection: TOBI-Registered Trademark- Cystic Fibrosis; Procleix-Trademark-
eSAS; Menjugate-Trademark; Fluad-Trademark; 30 vaccines;" "Cancer;
Proleukin-Registered Trademark- Metastatic Melanoma; Proleukin-Registered
Trademark- Renal Cell Carcinoma; Depocyt-Registered Trademark-;" "Other
Opportunities: Betaseron-Registered Trademark- / Betaferon-Trademark-;
Regranex-Registered Trademark-."
SLIDE 8
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives." It depicts in graph format the progress
arrows labeled "Anti-Viral Diagnostics (Blood Testing),"
"Anti-Viral/Anti-Bacterial (Vaccines)," "Anti-Bacterial Therapeutics" and
"Anti-Viral Therapeutics" along columns labeled "Research," "Development,"
"Manufacturing" and "Commercial Products." The arrows
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labeled "Anti-Viral Diagnostics (Blood Testing)," "Anti-viral/Anti-Bacterial
(Vaccines)" and "Anti-Bacterial Therapeutics" are shown stretching across all
four columns and the arrow labeled "Anti-Viral Therapeutics" is shown
stretching across the columns labeled "Research" and "Development," but
stopping short of the column labeled "Manufacturing."
SLIDE 9
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives." It is titled "Combining Research &
Development Strengths" and depicts the respective strengths of each company
in a product development cycle. It contains a graphic titled
"Anti-Bacterial/Anti-Infective Product Development Cycle" which depicts a
band labeled with the logos of each of Chiron and PathoGenesis and containing
9 colored rectangles stretching under the text "Target Discovery [arrow] Drug
Discovery [arrow] Pre-Clinical Development [arrow] Clinical Development,"
with an arrow at the end of the band pointing to a box with the title "New
Antibiotic Drugs." In the box is the text, "Respiratory Tract," "Hospital
Use," "Broad Spectrum" and "Community Use." A key identifies the color purple
with the text "Chiron Strengths" and rectangles labeled "HTS," "Small
Molecule Libraries," "Combichem," and "Medicinal Chemistry" within the band
are purple. A key identifies the color blue with the text "PathoGenesis
Strengths" and rectangles labeled "Molecular Genetics," "Bacterial Genomics,"
"Animal Pharmacology Models," and "Anti-Bacterial Development Experience"
within the band are blue. One rectangle, labeled "Microbiology," is a mixture
of both blue and purple.
SLIDE 10
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives," and depicts graphically the respective
strengths of each company in research, development, and commercial products.
It contains a graphic which depicts a band labeled with the logos of each of
Chiron and PathoGenesis and containing 14 colored rectangles stretching under
the text, "Reseach [arrow] Development [arrow] Commercial Products," with an
arrow at the end of the band pointing to an area in which a picture of two
vials of Menjugate-Trademark- and a picture of a package of TOBI-Registered
Trademark- are located. A key identifies the color blue with the text "Chiron
Strengths" and rectangles labeled "Functional Genomics; Small Molecule Drug
Discovery; Prophylactic Vaccines; Therapeutic Vaccines; HIV Therapy; Immuno
Stimulator; Sepsis Therapy; Prophylactic Vaccines" within the band are blue.
A key identifies the color purple with the text "PathoGenesis Strengths" and
rectangles labeled "Bacterial Genomics; Microbiology Pharmacology; New Broad
Spectrum Antibiotics; Chemistry Mfg.; Inhalation Technology; TOBI-Registered
Trademark-" within the band are purple.
SLIDE 11
This slide, titled "Global Employees," contains the logos of each of Chiron
and PathoGenesis and the text "A Global Player in Anti-Infectives." It
presents two pie graphs under the respective logos of Chiron and
PathoGenesis. The pie graph under the
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Chiron logo has percentages of 53% labeled "US" and 46% labeled "Europe." The
pie graph under the Chiron logo has percentages of 84% labeled "US" and 16%
labeled "Europe."
SLIDE 12
This slide contains the logos of each of Chiron and PathoGenesis and the text
"A Global Player in Anti-Infectives," and contains a map of the land masses
of the world excluding certain polar regions, with color-coded icons
resembling beakers situated over certain countries or regions. Beakers
labeled "BioPharmaceuticals" are positioned on the United States, Canada, the
United Kingdom and Ireland, France, Eastern Europe and the Middle East.
Beakers labeled "Vaccines" are positioned on the United States, Argentina,
Scandinavia, India and Japan. Beakers labeled "Blood Testing" are positioned
on the United States, South Africa, Southeast Asia and Australia.
SLIDE 13
This slide, titled "BioPharma," depicts four arrows stretching eastward over
a maps of the United States and Europe. Above the respective maps are the
labels "U.S." and "Europe." The first arrow from the top is labeled
"Proleukin-Registered Trademark-" and shows a picture of the product, a
graphic of an office building or factory, which stands for "Manufacturing,"
above the U.S. map and a picture of a globe with a graphic representation of
a handshake taking place in front the globe, which stands for "Marketing."
The second arrow from the top is labeled "TOBI-Registered Trademark-" and
shows a picture of the product, a graphic of an office building or factory,
which stands for "Manufacturing," above the U.S. map and a picture of a globe
with a graphic representation of a handshake taking place in front the globe,
which stands for "Marketing." The first and second arrow each point to the
words "Chiron" and a Chiron logo featuring a centaur bearing a medical
symbol. The second arrow from the bottom is labeled "Betaseron-Registered
Trademark-" and shows a picture of the product, a graphic of an office
building or factory, which stands for "Manufacturing," above the U.S. map and
a graphic of a small pile of paper currency, which stands for "Royalties,"
over the map of Europe. This arrow points to the logos of Schering and
Berlex. The arrow at the bottom is labeled "Regranex-Registered Trademark-"
and shows a picture of the product, a graphic of an office building or
factory, which stands for "Manufacturing," above the U.S. map. This arrow
points to the logos of Johnson & Johnson and Ortho-McNeil.
SLIDE 14
This slide, titled "Proleukin-Registered Trademark-," shows the Proleukin
logo and a picture of the product. It is followed by the text "Approved for
Metastatic Melanoma and Metastatic Renal Cell Carcinoma; Growth
opportunities: Increase market penetration; Potential use in HIV; Leverage
immunomodulatory action; Develop franchise improvements."
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SLIDE 15
This slide, titled "TOBI-Registered Trademark-," shows the TOBI logo and a
picture of the product. It is followed by the text "Only inhaled antibiotic
approved for pseudomonal lung infections in CF patients; approved in North
America; mutual recognition in Europe; Growth opportunities: NextGen,
Bronchietasis, Ventilator-associated pneumonia & lung transplant infections."
SLIDE 16
This slide, titled "Betaseron-Registered Trademark-," shows logos of Berlex
and Schering and a picture of the product. It is followed by the text
"Relapsing Remitting: Approved U.S./Europe; Secondary Progressive Multiple
Sclerosis: Approved Europe/filed U.S.; Growth opportunities: Additional
global approvals in SPMS, Develop franchise improvements."
SLIDE 17
This slide, titled "Regranex-Registered Trademark- (Platelet Derived Growth
Factor)," shows the logo of Regranex and a picture of the product. It is
followed by the text "Approved in diabetic foot ulcers; Growth opportunities:
Approval in additional geographies, Additional indications."
SLIDE 18
This slide, titled "Vaccines," contains a map of the land masses of the world
excluding Antarctica, with countries or regions labeled "Rest of EU,"
"Germany" and "Italy" projected our from the map in bold color, and the
United States and India projected out from the map in grey. Color-coded icons
resembling beakers are situated over those countries or regions. A beaker
over each of the United States and India represents "Rabies." Beakers over
Germany represent "Diphtheria, Tetanus, Acellular Pertussis;" "Mumps,
Measles, Rubella;" "Hepatitis A, Hepatitis B;" "Rabies;" "Haemophilus
influenza;" "Tick-borne Encephalitis;" and "Flu." Beakers over the rest of EU
represent "Diphtheria, Tetanus, Acellular Pertussis;" "Mumps, Measles,
Rubella;" "Haemophilus influenza;" "Tick-borne Encephalitis;" "Flu;"
"Menjugate." Beakers over Italy represent "Diphtheria, Tetanus, Acellular
Pertussis;" "Mumps, Measles, Rubella;" "Hepatitis A, Hepatitis B;" "Rabies;"
"Haemophilus influenza;" "Tick-borne Encephalitis;" and "Flu." In the
north-east corner of the map is situated the logo for Aventis; in the
south-west corner of the map is situated the logo for Riivm; and in the
south-east corner of the map is situated the logo for SmithKline Beecham.
SLIDE 19
This slide, titled "Menjugate-Trademark-," shows the logo of Menjugate and a
picture of the product. It is followed by the text "Approved in the UK March
1, 2000; Chiron awarded UK tender for $100M+; Chiron awarded Ireland tender;
Other upsides possible."
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SLIDE 20
This slide, titled "Blood Testing," shows two pictures of blood testing
apparatuses or equipment and the logo for Johnson & Johnson and a logo
containing the text "GEN-PROBE, Pioneering Advances in Healthcare Through DNA
Probes."
SLIDE 21
This slide, titled "Leveraging Technology -- Intellectual Property," shows
the following headings labeled upon arrows, which are pointing to the text
which follows them in bullet point format: "Patents: Alphavirus, HCV,
Herceptin;" "Licensing Technology: Non-exclusive HCV license to Glaxo
Wellcome, Semi-exclusive HCV license to Abbott & Bayer, PCR to Roche;" and
"Product Licenses: HBV vaccine to Merck, Insulin to Novo Nordisk."
SLIDE 22
This slide, titled "Research & Development," shows pictures of various
products, beakers, petri dishes and scientific equipment.
SLIDE 23
This slide, titled "Research & Development Pipeline," contains a graph on
which the column headings are "Preclinical," "Phase I," "Phase II" and "Phase
III/IV." The first row is labeled "Infection," and has under "Preclinical"
the text "HBV NAT assay, Vaccines: HIV, HCV, Men B, H.pylori, Small
molecules: HCCV, PA 1806, 824;" has under "Phase I" the text "MIV-150 (HIV);
TIGRIS-Trademark-; TOBI-Registered Trademark- for ventilator associated
pneumonia; TOBI-Registered Trademark- NextGen;" has under "Phase II" the text
"TOBI-Registered Trademark- for severe bronchiectasis, TOBI-Registered
Trademark- for lung transplant, HBV Immunotherapy;" and has under "Phase
III/IV" the text "TOBI-Registered Trademark- (CF), Menjugate-Trademark-
Infant (UK), Proleukin (HIV), TFPI (Sepsis), HAV (Europe), eSAS
Procleix-Trademark-." The second row is labeled "Cancer," and has under
"Preclinical" the text "VEGFr Inhhibitor, Antibodies, Immuno Regulator,
Anti-CD40;" has under "Phase I" the text "Angiozyme-Trademark-, Proleukin
--NHL;" and has under "Phase II" and under "Phase III/IV" no text. The bottom
row is labeled "Other Opportunities," and has under "Preclinical" the text
"Anti angiogenesis compound, Diabetes small molecules;" has under "Phase I"
the text "Factor VIII (Hemophilia);" has under "Phase II" the text "FGF
(CAD), FGF (PAD);" and has under "Phase III/IV" the text
"Betaseron-Registered Trademark- (US-Secondary Prog.)."
SLIDE 24
This slide, titled "Chiron's Preclinical Development Engine," contains a
graph on which the column headings are "Genomics," "Small Molecules" and
"Recombinant Proteins." The first row is labeled "Infection," and has under
"Genomics" the text "Pseudomonas aeruginosa, Men B, Men B/C combo;" has under
"Small Molecules" the text "HCV, PA 1806, PA 824;" and has under "Recombinant
Proteins" the text "HIV, HCV, H. pylori, HBV Immunotherapy." The second row
is labeled "Cancer," and has under "Genomics" the text "Prostate cancer,
Colorectal;" has under "Small Molecules" the text "VEGFr
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inhibitor;" and has under "Recombinant Proteins" the text "Anti-angiogenesis
compound, Immuno-regulator, Antibodies." The third row is labeled "Other
Opportunities," and has under "Genomics" no text; has under "Small Molecules"
the text "GSK 3 -- diabetes, Obesity;" and has under "Recombinant Proteins"
the text "Anti CD-40."
SLIDE 25
This slide, titled "Chiron Financial Performance," shows a graph on which the
left-hand side of the graph (y-axis) is labeled "Revenue $ in Millions" and
shows the following tick marks: "$800, $600, $400, $200, $-;" the right-hand
side of the graph (y-axis) is labeled "EPS" and shows the following tick
marks: "$0.70; $0.60; $0.50; $0.40; $0.30; $0.20; $0.10; $-;" and the bottom
of the graph (x-axis) is labeled "1997; 1998; 1999; and 2Q00." The graph
shows a 1997 revenue approaching $600 million, a 1998 revenue of
approximately $750 million, a 1999 revenue approaching $800 million and a
second quarter of 2000 revenue topping $400 million. The graph shows yearly
1997 EPS of under $0.30, yearly 1998 EPS between $0.50 and $0.40, and yearly
1999 EPS of approximately $0.60. The graph shows quarterly 1998 EPS between
$0.10 and $-, quarterly 1999 EPS of approximately $0.10 and quarterly 2000
EPS approaching $0.30.
SLIDE 26
This slide, titled "Milestones 2000," shows a number of headings with text
underneath them. Under the heading "Biopharmaceuticals," there appears the
text "[arrow] 20% Proleukin-Registered Trademark- growth; [arrow]
Betaseron-Registered Trademark- SP approval; [arrow]TOBI-Registered
Trademark- launch in Europe; [arrow] Resume PDGF sales." Under the heading
"Blood Testing," there appears the text "[arrow] File for eSAS
Procleix-Trademark- approval; [arrow] HBV assay; [arrow] Triple TMA sites;
[arrow] File IND on TIGRIS." Under the heading "R&D," there appears the text
"[arrow] 50% enrollment SILCAAT; [arrow] Publish PA genome; [arrow] TFPI
Phase III initiated; [arrow] HBV Phase II initiated; Go/no-go: [arrow]
FGF-CAD; [arrow] IGF-OA;[arrow] FGF-PAD; Early Stage Programs: [arrow] FVIII,
Angiozyme-Trademark- Phase I/II; [arrow] Two new clinical programs; [arrow]
File IND for PA - 1806." Under the heading "Vaccines," there appears the text
"[arrow] Men C approval/launch; [arrow]Fluad-Trademark- approval; [arrow] Men
B publication." Printed in the lower right hand portion of the slide are the
numbers "$0.78 [arrow] $0.80 - $0.85 EPS."
SLIDE 27
This slide contains the text "Chiron - Science for Life" accompanied by a
Chiron logo, and the text "Chiron: Science, Productions, People,"
"www.chiron.com" and "NASDAQ: CHIR."
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PATHOGENESIS SHAREHOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENT
REGARDING THE ACQUISITION OF PATHOGENESIS REFERENCED IN THIS PRESENTATION,
WHICH WILL BE FILED BY CHIRON AND PICARD ACQUISITION CORP. WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION, AND THE RELATED
SOLICITATION/RECOMMENDATION STATEMENT WHICH WILL BE FILED BY PATHOGENESIS
WITH THE COMMISSION. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO
PURCHASE, LETTER OF TRANSMITTAL AND RELATED TENDER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION
WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO
THIS OFFER. THESE DOCUMENTS WILL BE MADE AVAILABLE TO ALL SHAREHOLDERS OF
PATHOGENESIS AT NO EXPENSE TO THEM. THESE DOCUMENTS ALSO WILL BE AVAILABLE AT
NO CHARGE AT THE SEC's WEB SITE, WWW.SEC.GOV. THIS PRESENTATION 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.
