Tuesday, Jan 3, 1995

Genentech and Scios Nova Enter Into Agreement for Development of Acute Kidney Failure Treatment

Mountain View and South San Francisco, Calif. -- January 3, 1995 --

Scios Nova Inc. (NASDAQ: SCIO) and Genentech, Inc. (NYSE: GNE) today announced that they have entered into a collaboration agreement for the development of Scios Nova's Auriculin® anaritide for the treatment of acute renal (kidney) failure (ARF), which is currently in Phase III clinical trials.

"We are very pleased with this partnership for late stage clinical development and subsequent commercialization of a promising new therapy for patients with acute renal failure," said G. Kirk Raab, Genentech's president and chief executive officer. "Auriculin complements our own rich pipeline of new products, and we have many strengths, including expertise with natriuretic peptides, that when added to Scios Nova's will create a very powerful team that can move a new treatment for ARF to the market and capture a significant marketshare."

Under the terms of the agreement, Genentech and Scios Nova will collaborate in the development of Auriculin for ARF in the United States and Canada. The two companies will co-promote Auriculin for this indication in the United States and Canada, and equally share profits from its commercialization. Scios Nova granted Genentech exclusive marketing rights to all other markets outside North America and will receive a royalty on sales.

"Genentech has extensive experience in the clinical development, regulatory approval and marketing of acute-care products," said Richard L. Casey, Scios Nova chairman and chief executive officer. "In the rapidly changing healthcare environment, we believe that a partnership with Genentech will help ensure the successful launch of Auriculin and accelerate the market penetration in North America. In addition, Genentech will provide the resources and expertise necessary for commercialization outside North America."

Genentech has made a $20 million equity investment in Scios Nova by purchasing a new class of nonvoting preferred stock convertible into approximately 2.1 million shares of common stock at a price equivalent to $9.50 per common share. Under the agreement, Scios Nova, at Genentech's request, will file resale registration statements for the common shares. In addition, Genentech has provided $30 million that Scios Nova may draw down as a loan at its discretion through 2002. The loan is repayable in the form of cash or Scios Nova common stock (at the prevailing market price) at Scios Nova's option any time over the next eight years. Genentech will also pay Scios Nova $50 million in milestone payments upon achievement of key development events and commercial targets, including $30 million upon Food and Drug Administration (FDA) marketing approval of Auriculin. The total of all investments and payments could reach more than $100 million, excluding royalties and profit sharing.

"The partnership with Genentech is consistent with Scios Nova's strategy to develop an acute-care marketing presence in North America and to form an alliance for commercialization outside North America," added Mr. Casey. "The agreement will ensure that Scios Nova has the financial resources to support the development and commercialization of products in our pipeline and will provide the flexibility to take advantage of other product opportunities in our acute-care focus area."

ARF is a life-threatening condition characterized by an acute, severe and sustained decrease in renal function. This condition, for which there is no available treatment, but for which patients normally undergo dialysis, is caused primarily by a temporary decrease in blood flow to the kidneys, such as during complicated surgery or after a traumatic injury. It is estimated that more than 160,000 people in the United States are afflicted with ARF each year. Auriculin has been designated an orphan drug for the treatment of ARF.

Auriculin is Scios Nova's proprietary product for the treatment of ARF. Scios Nova is currently conducting a 500-patient Phase III clinical study to provide safety and efficacy data needed to support an application to the FDA for marketing approval in the United States. The Phase III study will also determine what portion of ARF patients may be eligible for treatment with Auriculin if it receives marketing approval for the treatment of ARF. Scios Nova expects to complete enrollment in the study in February 1995.

Genentech, Inc. is a leading international biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant unmet medical needs. The company has headquarters in South San Francisco, California and is traded on the New York Stock Exchange under the symbol GNE.

Scios Nova is a biopharmaceutical company engaged in the discovery, development and commercialization of novel human therapeutics. Scios Nova focuses its research and development efforts on the treatment of acute illnesses, primarily in the areas of cardio-renal disease and inflammation. The Company is also collaborating with corporate partners in the development of basic fibroblast growth factor, insulinotropin and therapies for Alzheimer's disease.

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