Monday, Aug 21, 1989

Genentech rCD4 Partnership Raises $72.5 Million

South San Francisco, Calif. -- August 21, 1989 --

Genentech, Inc. today announced it had raised $72.5 million through a private partnership to fund future research, development and clinical trials of rCD4 and rCD4-IgG, potential AIDS therapeutics. Phase II/III trials for rCD4 are set to begin this fall and Phase I trials for the second generation product, rCD4-IgG, are scheduled to begin soon.

The partnership, Genentech Clinical Partners IV, was offered through PaineWebber Development Corporation. Included in the offering were warrants to purchase shares of Genentech common stock. It is the fourth such partnership created to fund Genentech products under development. The others were for human growth hormone and gamma interferon; tissue plasminogen activator (t-PA); and tumor necrosis factor.

In the test tube, it has been shown that recombinant CD4 acts like a decoy, or molecular sponge, entrapping the virus. Recombinant CD4 may be able to stop the progression of AIDS by blocking the HIV virus from infecting healthy cells and binding the potentially detrimental parts of the virus envelope. The second generation product, rCD4-IgG, combines a portion of CD4 and a portion of a human antibody. Animal studies completed indicate that rCD4-IgG may improve rCD4 by increasing its half-life, which could improve its therapeutic effect and allow for a more convenient treatment regimen. Additionally, rCD4-IgG could itself potentially act like a human antibody and stimulate the body's own immune system to attack the AIDS virus directly. Genentech scientists first published the invention of rCD4-IgG last February and the company has filed U.S. and foreign patent applications for rCD4-IgG.

Genentech Clinical Partners IV has exclusive rights to rCD4 products in the United States and rights to a royalty on sales of rCD4 products in Europe. Any rCD4 products which receive FDA approval will be manufactured and marketed by Genentech, and Genentech and the partnership will share in profits from product sales. Genentech has an option, which arises two years after FDA approval, to purchase all rights to rCD4 from the limited partners. If Genentech exercises that option, it will make payments to the limited partners over a multi-year period.

Genentech cautions work involving rCD4 and rCD4-IgG is still in early investigational stages and must be proven in extensive human clinical trials.

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

# # #