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ANALYST CALL
Good Morning, and welcome to Chiron's announcement regarding our press release
this morning describing our acquisition of PathoGenesis. On behalf of the Chiron
team, let me introduce you to today's speakers. With me are Sean Lance, Chairman
and CEO of Chiron; Jim Sulat, Vice President and CFO; Rusty Williams, CSO and
President of R&D, Paul Hastings, President of our Biopharmaceutical business and
several members of our executive committee. I am Joyce Lonergan, Vice President
of Corporate Development and Investor Relations. I will be available, with the
Investor Relations team, to answer any questions you may have after the call.
Before we begin, let me remind you that the following conference call contains
forward- looking statements that involve risks and uncertainties. A full
discussion of the company'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 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, marketing
effectiveness and acquisitions.
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
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and Exchange Commission's website at WWW.SEC.GOV. In addition, the Schedule TO
will be available from Chiron Corporation, our address 4560 Horton Street,
Emeryville, California, 94608, and our phone: (510) 655-8729. The Schedule 14D-9
will be available from PathoGenesis Corporation, address 201 Elliott Avenue
West, Seattle, Washington, ZIP code 98119, and phone: (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.
Let me also say that we are working out some of the details for the integration
plan. Today we will provide details of this transaction, and answer what we are
able. Now let me turn the call over to Sean Lance.
SEAN LANCE
Thank you Joyce. Good morning to you all. Today, we are very excited to
share with you the details of our acquisition of PathoGenesis. As you know, we
announced last night a completed acquisition agreement for about $700 million
dollars in cash, or $38.50 a share. We are pleased to inform you that we believe
this acquisition will position us as a global player in infectious disease and
cancer, with a fully integrated commercial and R&D infectious disease portfolio
across our biopharmaceutical, vaccines and blood screening businesses.
PathoGenesis' products provide both near term and long term value to Chiron. As
many of you know, PathoGenesis comes with a solid marketed product, TOBI, which
is
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regarded as the gold standard for treating cystic fibrosis patients with
respiratory infections. We are excited about the growth potential for TOBI in
new markets and in new patient populations. Already marketed in six countries -
including the U.S., the UK and Canada - TOBI received European-wide approval
under the Mutual Recognition process earlier this week. Chiron is in a great
position to quickly realize the full global potential of this high-growth
product. We intend to leverage the strength of our combined capabilities to
maximize this product in these new markets.
PathoGenesis also has a state-of-the-art R&D technology platform, including
bacterial genomics, and a novel inhalation antibiotic technology platform. Rusty
Williams will provide you with more specifics about their R&D platform a little
later. We believe the research and development synergies between PathoGenesis
and Chiron is an important component of our long-term growth.
We also believe that the acquisition of PathoGenesis will expand our revenue
base, product portfolio and pipeline at an attractive valuation. For all the
reasons mentioned, we feel this deal was attractively priced.
We've had a research and development collaboration with PathoGenesis and know
the complementary strengths they bring to our operations. For those of you not
familiar with the company, PathoGenesis is a Seattle-based, pharmaceutical
company best known for its successful inhalation drug-delivery technology for
antibiotics. PathoGenesis has approximately 320 employees, more than half in
research and development, and a quarter in sales and marketing.
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Besides allowing us to quickly expand our infectious disease franchise, this
acquisition adds depth to our development capabilities for two infectious
disease candidates now in late-stage clinical trials: TFPI for severe sepsis and
IL-2 in HIV. Reinforcing our own clinical anti-infective work are PathoGenesis'
efforts to expand TOBI into lung transplant infection and other respiratory
infection indications. PathoGenesis also has solid pre- clinical programs with
inhaled macrolides and quinolones. These capabilities add depth to an excellent
anti-infective R&D portfolio that spans across our three business divisions.
All in all, this acquisition substantially reinforces our clinical and
pre-clinical pipeline of promising anti-infective drug candidates. We're very
confident that the combination of product portfolios and research and
development strength will result in sustainable long-term growth and enhance
shareholder value in an increasingly competitive environment.
In short, our vision is simple: to solidify Chiron's position as a global player
in infectious disease while leveraging our already strong oncology sales and
marketing efforts.
I'd now like to let Jim Sulat speak to the financial terms of this transaction.
JIM SULAT
Thanks, Sean. Let me begin by stating that we have unanimous approval from all
of our board members regarding this deal, and we will now be going through all
the usual regulatory processes associated with such a transaction. Chiron will
commence a tender
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offer to purchase all of the outstanding shares of PathoGenesis common stock for
$38.50 per share. We anticipate commencing this tender offer in the next week,
and we expect closing of the transaction to occur in the third or fourth quarter
this year.
The terms of this deal are straightforward. We will pay about $700 million in
cash for PathoGenesis. The acquisition will be treated as a purchase, and while
the details of the purchase accounting calculations have not been completed, we
do expect the transaction to result in certain costs associated with the closing
and significant goodwill charges for Chiron in the future. Accordingly, we
expect Chiron will augment its financial reporting to include a calculation of
earnings on a cash basis. This will be, we believe, the most meaningful way to
judge the company's operations in the future.
On a cash EPS basis, we expect the acquisition of PathoGenesis to be slightly
dilutive in 2001 (in the range of 10-15%) to Chiron's results, and approximately
break even in 2002, all on a fully taxed basis. However, we also expect the
acquisition to be accretive in the years 2003 and beyond, thereby enhancing our
confidence in achieving our long-term goal of a 25% average annual compounded
growth rate in earnings per share.
It is also important to note that all of these projections are based on
conservative assumptions regarding revenue growth and expense reduction
opportunities. Specifically, we expect to continue a consistent high level of
research and development investment to take advantage of PathoGenesis' strong
position in target discovery and bacterial genomics.
Although this is not a transaction driven by cost synergies, we do expect some
areas of
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cost avoidance to result in a lower overall spending in the future for
the combined companies. But these synergies are expected to be relatively
modest.
As for valuation, we determined the price of the acquisition after very careful
assessment, which included an evaluation of both the potential for growth of
PathoGenesis' current products and the generative capacity of their pipeline and
research and development assets. As you know, Chiron has had a research
collaboration with PathoGenesis for the last year and through this we have
developed a high regard for the capabilities of their scientific team. At a
price of about 6.1 times consensus 2001 revenues, and given our confidence in
the long term growth potential of PathoGenesis, we believe the acquisition
offers Chiron shareholders an excellent opportunity for growth in shareholder
value.
We will move as rapidly as possible to integrate PathoGenesis' R&D operations in
Seattle, their contract-manufacturing operations in New Jersey, their marketing
and sales functions in the Chicago area, and international functions into our
own operations. We are setting up a transition team to ensure that this process
proceeds as smoothly as possible, and we do not expect the acquisition of
PathoGenesis to materially affect the structure of Chiron's existing management
and executive teams, which will remain in place. Now I'd like to let Paul
Hastings address our commercial portfolio and late-stage development pipeline.
PAUL HASTINGS
Certainly, and good morning all. I'd like to brief you on how our commercial
operations and pipeline will shape up with the inclusion of PathoGenesis.
In addition to Chiron's three therapeutics currently on the market - Proleukin,
Betaseron
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and Regranex-the integrated company will have a key antibacterial
product for cystic fibrosis with TOBI, and two more infectious disease products
in late-stage clinical development. PathoGenesis currently markets the first and
only inhaled antibiotic approved for the treatment of lung infections in cystic
fibrosis patients. Additionally, again we are pleased to announce that, last
week, TOBI cleared the mutual recognition process required for marketing in 15
European countries. This adds a significant growth opportunity to the 6
countries in which the drug is already on the market. The European market is a
significant near-term growth opportunity for TOBI, and we intend to leverage the
strength of our combined European biopharmaceutical sales forces to maximize
this product in these new markets.
As you may know, Chiron's commercial platform also includes its lead oncology
therapeutic Proleukin, marketed in more than 50 countries for the treatment of
metastatic kidney cancer and metastatic melanoma. Chiron manufactures and
develops Betaseron, a product marketed in the US by Berlex Laboratories, Inc.
and in Europe by Schering AG, for the treatment of patients with multiple
sclerosis. And, we manufacture the active ingredient (PDGF) in Regranex, a
diabetic foot ulcer treatment sold by Ortho-McNeil.
We are impressed with the commercial development of TOBI by PathoGenesis,
especially its investment in additional product formulations and value-added
line extensions. PathoGenesis is exploring a "next generation" TOBI delivery
system to shorten treatment time. These efforts are in synch with the work we
are doing to add value to our Proleukin and Betaseron franchises.
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The integrated company will also explore additional indications for TOBI,
including bronchiectasis, an abnormal and permanent dilation of the bronchi, in
Phase II development. Ventilator-associated pneumonia and lung transplant
indications are also in the clinical pipeline.
Also, the addition of the Annandale, New Jersey facility enables Chiron to build
its supply-chain management capability and further leverage our existing full
line of manufacturing skills to include small molecule production.
The combination of our two companies will strengthen Chiron's product portfolio
and marketing capabilities, allowing us to quickly become an integrated,
competitive player in the rapidly growing, infectious diseases markets globally.
We intend to leverage the strength of our combined sales forces to maximize this
product in these new markets. Rusty will now address research and development
operations.
RUSTY WILLIAMS
Thank you Paul. I am quite excited about the research and development engine
that will be formed by the integration of Chiron and PathoGenesis. The R&D
efforts of the two companies are surprisingly complementary. In addition, we
believe that our expertise in combinatorial chemistry and in high throughput
screening, combined with PathoGenesis' expertise in bacterial target discovery
and antibiotic development, will result in a fully integrated infectious disease
R&D engine.
PathoGenesis brings us a substantial knowledge base in molecular genetics,
bacterial genomics, microbiology, and animal pharmacology models - as well as an
exciting
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technology platform in inhalable antibiotics. The company has well-proven
expertise in conducting clinical trials to support infectious disease
indications. In fact, PathoGenesis already has a number of line extension
programs for TOBI in clinical trials. Our newly broadened infectious disease
pipeline will also be driven by PathoGenesis' Compound PA-1806, expected to
enter Phase I clinical trials later this year for gram-negative bacterial
infections, and also by several follow-on broad spectrum antibiotics in late
stages of pre-clinical research.
As you know, Chiron's late-stage infectious disease pipeline includes tifacogin
(otherwise known as tissue factor pathway inhibitor, or TFPI) for the treatment
of severe sepsis, which is one of the most serious complications of late-stage
infections. We also have recombinant interleukin-2 (IL-2) for use in combination
with anti-retrovirals in the treatment of HIV infections. Both of these products
are currently in Phase III trials.
Chiron's clinical development pipeline also includes a Phase II study for its
hepatitis B immunotherapy and Phase I clinical studies with MIV-150, a drug for
HIV. In addition, we're developing therapeutic vaccines, for HIV and hepatitis C
infections as well as new prophylactic vaccines for the prevention of
meningococcal meningitis, HIV and hepatitis C viral infections.
One of the most exciting components of this deal is the two companies' expertise
in genomics creates new opportunities for development of next-generation
therapeutic and prophylactic anti-infective products. The combined program has
exciting generative potential for the creation of novel anti-infectives for
serious diseases that currently are not adequately treated. The integrated R&D
engine will also target novel drugs to address
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the worldwide issues of emerging drug resistance.
As I mentioned earlier, one of our main goals in this transaction was to create
a formidable infectious disease focused R&D engine that will generate
significant long-term value for the company. Sean, let me turn the call back
over to you.
SEAN LANCE
Thanks Rusty. Thank you Paul and thank you Jim. Now, let me now open the
floor for any questions.
Q & A
Good Morning
John, we can't hear you.
I HAVE A CALL.
Q: Oh Hi Okay. Two questions, regarding TOBI what were the international sales
of TOBI in Year 2000?
A: To date, I think they're in the 4 to 5 million dollar range. They're up ____
Q: In total sales in the first six months of the year?
A: About 40, a little over 40 million.
Q: Okay and which countries is it approved in right now?
A: Actually it's approved through the mutual recognition process for all 15.
Q : No, but which countries is it selling at right now and how soon do you think
you can get pricing approval in the countries in Europe where it's not selling
right now?
A: Right now it's selling the United Kingdom, the U.S. and in Canada. What was
the
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second part of your question Merrill?
Q: When do you think you will get the pricing in Europe, because obviously you
know getting the approval in Europe is the first step then you need to get the
pricing to actually get reimbursed for sales.
A: To answer your question Murav the first and most significant part of this was
getting mutual recognition, the next step is getting the process involving
reimbursement in Europe and we can't comment on what the timing of that might be
but the process is definitely in place.
Q: Okay, the other question that I have is regarding the impact of the
transaction on earnings. You mentioned dilutive in 2001, break even for 2002 and
accretive in 2003. Is this on a cash basis or a amortized basis?
A: It's on a cash EPS basis.
Q: Okay and if you amort___ what amortization schedule are you going to follow?
A: Well I think it's still too early for us to have an answer to that question
because all the purchase accounting calculations have not been completed, but we
do expect on an amortized basis this will be a dilutive transaction for the
foreseeable future as a result of the goodwill charges.
Q: Well if you amortize it for 20 years goodwill charges are going to be around
slightly less than $20 million per year.
A: You may have better information than I do, I can't confirm that
calculation ...
Q: That's just my guess.
A: Yeah, I haven't done the in process R&D write-off calculations there are a
variety of things yet to come so I'm afraid I can't give you much more guidance
than that.
Q: Okay, um, I guess, that's my questions. Ultimately what's gonna be the effect
of this year, since you mentioned the effect of '01?
A: Well, we'll have a substantial set of charges associated with this
transaction when it closes, whether it's the third quarter or the fourth
quarter, so on any basis I suspect it'll probably be dilutive but . . .
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Q: Yeah, but, you know when you take out the charges....
A: We expect the Company to about break even, so I don't think it will have
a major impact one way or the other, on that basis.
Q: PathoGenesis to be break even.
A: Correct.
Q: Okay, Okay, well thank you.
A: Thank you Madam.
THE NEXT QUESTION.
Hello.
Q: Hi can you hear me?
A: Yes, yes we can
Q: I just want to ask about your statement that you expect next year will be
10-15% dilution. What was the assumption behind that in terms of the revenue
from TOBI and also with reduction in expenses. Because if you look at the
reduction in interests, um, I think that would give you more dilution then that
obviously.
A: Um, we think that there will be, we do think that there will be some cost
digging as I mentioned in my portion of the call which will offset a portion of
the lost interest charges, we also believe there will be some integration
related costs as well which, you know, go the other direction. Based on our
calculations, which are a little more conservative than street expectations, we
come up with the 10-15% range net.
Q: What is the street expectation for 2001 sales of TOBI?
A: The consensus for total revenues is about 113-115 million, something in that
range.
Q: How confident are you in the size of the sales force that would be required
to fully launch in Europe at this point that it's actually setup by
PathoGenesis?
A: Yes, the PathoGenesis folks have fully integrated groups, particularly in the
United Kingdom at this time. They have a number of agreements with local
companies in
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specific countries like Italy, and Belgium and Germany as well and
we're very confident that the combination of these two commercial operations
will be able to launch TOBI effectively this year and next year.
Q: Can you tell me what kind of sales force do you have in Europe?
A: We have a sales force in Europe that almost is identical to our sales force
in the United States it's relatively about 55 to 60 people selling in all the
major European Countries, plus country operations as well.
Q: Yeah, thank you.
A: Okay. Thank you Macon.
Operator we'll take the next question.
THE NEXT QUESTION IS FROM MIKE KING.
Q: Good morning guys.
A: Hi Mike.
Q: Ah, just a couple of quick questions. First, what's the TOBI patent
expiration date?
A: 2014, Mike.
Q: 2014, okay, and I assume that there are going to be other formulations
that will allow you to extend that?
There are a number of new formulations under development.
Q: And uh, help me out in understanding how you get near term leverage in the
marketing, because you've got TFPI if successful will be a hospital based
product, HIV docs are going to be completely different then you know the CF docs
so I guess I'm a little bit at a loss to understand how there's significant near
term leverage on the marketing side.
A: Actually TFPI is in partnership with Pharmacia, so that's a joint venture.Um,
hm, and we actually don't anticipate that we would need to augment the
PathoGenesis sales force, particularly in the U.S. They have to call on roughly
1,000 pulmonologists who treat cystic fibrosis in the United States. They have
30 people who are doing that, they
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recently finished a sales force sizing plan with CF associates and discovered
that they might need people to cover that audience. So remember that this is
a very specific audience that is pulmonologists who treat cystic fibrosis and
cystic fibrosis centers so initial market with very specific promotional
needs, so we're quite happy with their organization. We see some synergies at
a management level with a sales organization both in the U.S. and in Europe,
we're essentially very excited to have acquired this Company and the sales
and marketing organization that is already effectively marketing TOBI.
Q: Thanks.
A: Thanks Mike.
Next question please.
THE NEXT QUESTION IS FROM ERIC SMITH.
Q: Good morning, I just have one remaining question. Maybe you can talk about
the use of cash in the transaction rather than stock.
A: Well, I think it's partially reflective of Chiron's situation, which as you
know has a substantial cash balance over the course of the last number of years
as we talked to you and a couple of others in the past we've been looking for
good ways to invest that money. We believe this is one of those opportunities
change that asset and convert it into another asset and that is PathoGenesis
which has, what we believe to be very excellent long-term growth potential. So I
think that was, has been an objective of ours, but to be honest with you I think
our focus is primarily on that which we were investing in and the form of the
transaction was in some way secondary, we were much more interested in acquiring
and the way we got here was determined along the way.
Q: Thanks.
THE NEXT QUESTION IS FROM DENNIS HARP.
Q: Thank you, my question is regarding the recent approval for the 15 European
countries in terms of the size of the market, is that as large or larger than
the current six countries that TOBI is selling in?
A: The European market is relatively equivalent to the United States market, so
you wouldn't say that the new countries are equivalent to the six markets today,
but Europe and U.S. are relatively equivalent in terms of size of the market.
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Q: And, can you go through the pipeline extensions for TOBI, the additional
formulations and possible new indication and when we might see those enter
clinical trials and move into new marketing opportunities.
A: Yes, there are several approaches to the TOBI that are more convenient and
more user friendly so to speak. One of those is a new sort of inhaler, a new
inhalation device, and the point of that is not only make it convenient to
carry, but also to shorten the time of treatment. Right treatments take about
twenty minutes and the goal is to shorten this down considerably, make it more
convenient, especially for young people who frequently have this disease. In
terms of new indications, this drug is now being developed for a larger
indication than cystic fibrosis. Dilation of the airwaves in which you get
infections, it's currently in the second stage two trial for bronchiectasis and
that trial started recently. There are also new indications in ventilator
assisted pneumonia and in lung transplantation and those are follow ons to the
ones I just mentioned. In addition in their pipeline they have other agents that
they're developing. One I mentioned briefly to compound 1806 that is a compound
inhaled antibiotic that is potent, highly potent, and has a broad spectrum and
should be an additional drug in the (INAUDIBLE). It's scheduled to go phase I
this year, within the next year. Then they have two other drugs that look
promising i9n late pre-clinical studies that have broad spectrum and again
should result in new kinds of therapy for pulmonary infections and those would
extend, of course, beyond cystic fibrosis and are being developed for broader
indications to pulmonary disease like chronic bronchitis.
Q: And the guidance for this being accretive in '03 does that assume success for
any of these clinical or pre-clinical programs that we just described?
A: No it does not, Dennis.
Q: Great, thanks I have no further questions.
A: Thank you.
Operator, we'll take some more questions.
I'm sorry, ma'am.
We'll take some more questions, thank you.
One moment please.
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Are there still questions?
YES SIR, THE NEXT QUESTION IS FROM RON PHILLIP.
A: Thank you
A: Hello.
Q: Yes, I don't, I don't have a question. Thank you.
A: Okay. Thank you.
Operator, why don't we call for a couple more and then we'll be all set.
OKAY. THE NEXT QUESTION IS FROM KINGSTON CHU.
Q: Hi, good morning. I'm hoping you could give us a little more detail on the
conditions of the transaction, particularly, is there any product development
type milestone conditions and also if there is a material adverse effect
condition in the merger?
(DIAL TONE)
Q: Hello.
A: Sure, we're still on are you?
Q: Yeah, um
A: Good. Um, There are no product development milestones...
A: Hello, could you mute your line, we're getting back draft.
Q: Yeah, that's not me.
A: Okay, sorry. There are no products available milestones associated with the
completion of the transaction, there is customary material adverse change
language in the acquisition document, we do expect the transaction to close
relatively expeditiously given that it's in our belief a relatively
straightforward process. But there are no substantive, no product developed
milestones that are part of the deal.
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Q: Okay, and also just to clarify on the timing, your guiding towards third and
fourth quarter for formal closing of the merger correct, but as far as tender
expiration that's kind of customary in terms of time-line your expecting?
A: That's correct.
Q: Okay, great. Thanks
THE NEXT QUESTION IS FROM MATT SCOTLAND.
Q: Thanks. Congratulations on the merger.
A: Thank-you.
Q: Um, do you guys need any European regulatory approval, any foreign country's
regulatory in terms of antitrust approvals to allow the deal to close?
A: We think that the antitrust approvals on the transaction will be relatively
straight forward given the mix of products between the two companies, and so we
don't foresee any substantive hurdles as a result of that process.
Q: Okay, so you don't anticipate once the initial tender is out there, extending
it at all, you think you'll be able to close it in the standard 20 business day
time frame.
A: I mean, you know, all of this is subject to us learning as we go along, but
that's our current expectation.
Q: Okay, thanks and congratulations.
A: Thank-you very much.
YOUR NEXT QUESTION IS FROM ELISE WANG.
Q: Thank you. Actually I was wondering if you could clarify for us how you
intend to manage this new operation, and in fact who among the senior managers
on PathoGenesis will be remaining. And also, better understanding of where you
attend to achieve the near term cost savings with the combination.
A: As we've moved into the acquisition phase now, we knew we'd be working
extremely close with the Executive Management of PathoGenesis to find out what
these
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areas are that you've just mentioned. We've not put great store on too
much sort of short term savings because that's not in our interest as we go
forward. In fact, we will be working in all of the geographic centers, and now
to understand what the full impact will be of integration within our
organization and as I said that we have so far understood that we'll be working
very closely with the executive management of PathoGenesis.
We'll say this, that we have an advantage in this particular transaction in that
we've been working with this group on R&D programs for the last year, so we know
that we know them well.
Q: Would you remind us, how many employees are in the company and how does it
split up among the different groups, such as R&D, sales and marketing and so
forth.
A: It's just between the 320 employees and the organization, half of that are in
research & development and then half again are in sales and marketing, and the
rest are in manufacturing and the supportive services for the organization
located in the centers that we've mentioned.
Q: Thank you.
A: Thank you.
YOUR NEXT QUESTION IS FROM MICHAEL EMERALD.
Q: Couple of questions, one is when you look at your combined portfolio are
there any particular products where combined you'll have an enormous market
share, including in the R&D department?
A: Not really, you know the product that is on the market, from PathoGenesis is
for cystic fibrosis, currently Chiron does not have a product in that for that
indication and that would be true for most of the products that are in the
research pipeline as well. PathoGenesis focuses on respiratory infection as Sean
made reference to before and we've got limited participation in that part of the
business.
Q: Okay.
A: But when you look in the research pipeline it is true that if you consider
the products that we're developing with them already add to those the products
that they have in their research pipeline and the products that we already had
previously in our pipeline that could cover a broad segment of the infectious
disease market in the future, in particular for organisms in which there is
antibiotic resistance. So that combination of opportunities should have quite a
large market.
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Q: Okay, well then isn't it possible that the Federal Trade Commission will at
least take a second look at it. I'm not saying that they would block the deal.
That would surprise me but ...
A: No, No, because each of these is for a different organism.
Q: Okay.
A: So you know, you could take the same approach for multiple organisms, a
similar approach, but each of these improves different organisms and so each
product is different so there is certainly room for competition there, but this
is a state of the art approach.
Q: Okay. Another question is where are you getting the cash from to pay for the
shares?
A: We have current cash balance of about 1.5 billion so we're simply taking it
off the balance sheet.
Q: Okay. And it wasn't clear to me whether your need European approvals I know
the question was asked but I didn't hear the answer clearly.
A: The honest answer on that one is that we think that those approvals, any
approvals we need will be quite straight forward.
Q: Okay. Thank you very much.
A: Thank you. Can we take one more question.
Okay Sir. Your last question is from Oscar Wu.
OSCAR WU: My question has been answered, thank you.
A: Thank you.
SEAN LANCE - CONCLUDING COMMENTS
All right, well let me conclude. Thank you for your questions.
As you have heard, we firmly believe in the value, the potential and the
deliverables of this unique acquisition. Chiron has positioned itself to be a
leader in the global infectious
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disease market. We've acquired a wonderful product in TOBI with great upside
potential. We've given our commercial operations immediate growth opportunities
in the US and in Europe through the addition of TOBI to our biopharmaceutical
business. And, the acquisition of PathoGenesis expands Chiron's pipeline. Now
the additional R&D skills and capabilities of PathoGenesis will create a
fully-integrated infectious disease product development engine. Once you've had
a chance to review this acquisition, we know you'll agree with its potential.
Thank you all for joining us today. Good-bye.
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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.
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