Tuesday, Dec 3, 1996

Genentech and Baxter to Collaborate

South San Francisco, Calif. and Deerfield, Ill. -- December 3, 1996 --

Genentech, Inc. and the Biotech Group of Baxter Healthcare Corporation announced today the signing of a collaborative agreement to jointly develop a cellular therapy for hemophilia A. The collaboration would combine Genentech's scientific skills and intellectual property relating to Factor VIII production in cells and Baxter's proprietary TheraCyte immunoisolation technology.

Under terms of the agreement, Genentech will develop an engineered cell line for use in Baxter's TheraCyte system, and Baxter will perform all other preclinical and clinical studies. In addition, Genentech will grant Baxter a worldwide exclusive license to its relevant intellectual property for products developed under the collaboration. At the demonstration of clinical viability in a Phase I trial, which is to be conducted in the next several years, Genentech will have the option to equally share in the profits and expenses of the program with Baxter or accept royalties.

The TheraCyte system is comprised of an implantable device and human allogeneic cells that have been genetically modified to produce a desired protein, in this case Factor VIII. The device consists of membranes that protect the cells from the patient's immune system while allowing the protein to enter the patient's circulatory system. If successful, this therapy would provide the patient with continuous levels of Factor VIII. This could eliminate both the need for injections to stop severe bleeding episodes in the event of trauma and the long-term morbidity associated with hemophilia. Moreover, if patients are free from concerns regarding bleeding episodes, they will be able to pursue a more active lifestyle.

The agreement to develop a cellular therapy for hemophilia A builds upon Genentech's substantial expertise in the field of recombinant DNA technology and Baxter's proprietary immunoisolation technology. In addition, Baxter has a successful history in development of hemophilia therapies.

"For more than 30 years Baxter has been a leader in bringing life-saving therapies to the hemophilia community. This agreement with Genentech will enable us to continue to bring state-of-the-art therapies to people with hemophilia," said Timothy B. Anderson, group vice president and president of Baxter's Biotech Group.

"Genentech's expertise in recombinant Factor VIII, in combination with Baxter's TheraCyte system, will give us the opportunity to develop an innovative therapy that has the potential to markedly improve the quality of life for people with hemophilia," said Arthur Levinson, Ph.D., Genentech's president and chief executive officer.

Hemophilia A is a blood coagulation disorder caused by a genetic deficiency in the body's ability to produce Factor VIII. The condition affects approximately 40,000 people in North America, Europe and Japan and can result in severe, uncontrollable bleeding and crippling joint destruction.

Currently, people with hemophilia A are treated with either plasma-derived or recombinant clotting factor products by injections into the blood stream. In December 1992, Baxter launched Recombinate, the first recombinant Factor VIII for the treatment of hemophilia A.

Genentech, Inc. is a leading 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 and Pacific Stock Exchanges under the symbol GNE.

Baxter is a global medical-products and services company that is a leader in technologies related to the blood and circulatory system. Through its subsidiaries, Baxter has market-leading positions in four global businesses: biotechnology, which develops therapies and products for transfusion medicine; cardiovascular medicine, which develops products and expands services to treat late-stage cardiovascular disease; renal, which develops products and services to improve therapies to fight kidney disease; and intravenous systems and medical products, which develop technologies and systems to improve intravenous medication delivery and distributes medical products overseas.

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