Tuesday, Mar 21, 1989

Cross-Licensing Agreement Reached on Factor VIII Genetically Engineered Clotting Agent for Hemopheliacs

Cambridge, Mass. -- March 21, 1989 --

Genetics Institute, Inc. (GENI,NASDAQ), Baxter Healthcare Corp. (BAX, NYSE), Genentech, Inc. (GENE,NYSE) and Miles Inc., the healthcare company of Bayer USA Inc., today announced a world-wide cross-licensing agreement concerning genetically engineered Factor VIII, the clotting agent missing from the blood of most hemophiliacs.

The cross-licensing arrangement will allow Genetics Institute and its licensee, Baxter, and Genentech and its licensee, Miles through its Cutter Biological business unit, to proceed with independent development of recombinant Factor VIII products, while avoiding potential disputes over competing patent positions.

Genetics Institute received a United States patent in July 1988 covering recombinant DNA methods for production of Factor VIII. In addition, Genentech has pending in Europe and Japan.

A decision issued February 24, 1989 in the U.S. District Court for the Northern District of California further clarified the patent situation on Factor VIII for the parties involved. Ruling on a patent held by the Scripps Clinic and Research Foundation and licensed to Rorer Group Inc., Judge William W. Schwarzer invalidated and held unenforceable all claims that would cover the Factor VIII product. Rorer has indicated it will appeal the decision.

Factor VIII

Currently, hemophiliacs are treated with Factor VIII concentrates, which are purified from human blood plasma. Recombinant Factor VIII is expected to eventually replace these concentrates.

The Companies

Genetics Institute is a leading biotechnology firm engaged in the discovery and development of human pharmaceuticals through recombinant DNA technology.

Baxter Healthcare is the principal U.S. operating subsidiary of Baxter International Inc., which through its domestic and international subsidiaries develops, manufactures, and markets a diversified line of medical health care products, systems and services.

Genentech, Inc. is a leading biotechnology company focusing on the development, manufacture and marketing of pharmaceuticals produced by recombinant DNA technology.

Miles Inc. is the healthcare company of Bayer USA Inc., the U.S. Management holding company of Bayer AG, West Germany. Through its pharmaceutical division, Miles develops, manufactures and markets antibiotic, cardiovascular, antifungal, and cerebrovascular drugs in the U.S. and Canada biologicals worldwide.

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