Tuesday, Jul 9, 1996

Tanox Biosystems and Genentech Settle Lawsuits

South San Francisco, Calif. -- July 9, 1996 --

July 9, 1996 -- Genentech, Inc. (NYSE: GNE) and Tanox Biosystems, Inc., of Houston, Texas, today announced settlement of lawsuits filed by each company against the other. Specifically, Tanox Biosystems, Inc. had filed a lawsuit against Genentech, Inc. relating to development of anti-lgE monoclonal antibodies, and Genentech, Inc. had filed a patent infringement lawsuit against Tanox and Ciba-Geigy Ltd. Tanox and Ciba are jointly developing an anti-lgE antibody product for treatment of allergies and allergic asthma, and independently Genentech has been developing an anti-lgE antibody.

All three companies also have reached an agreement in principle under which Genentech and Tanox/Ciba will combine their existing anti-lgE antibody programs into a cooperative development effort. The three companies intend to conclude a definitive agreement within the next six months.

Following the combination of their respective programs, Tanox, Ciba and Genentech will jointly select the most promising anti-lgE antibody product for continued development and commercialization after reviewing clinical trial results for the products which each group currently has in development. Under the three-way agreement, Ciba will share marketing opportunities with Genentech in the United States and Europe. F. Hoffmann-La Roche Ltd, which has certain existing agreements with Genentech, also will have an option to participate in marketing the anti-lgE antibody product in Europe and Japan.

Following dismissal of the lawsuit against Genentech, Tanox will receive an initial payment from Genentech and will also receive milestone payments from Genentech resulting from the development progress of the jointly selected product. Under the three-way agreement, Tanox also will receive royalties from sales of the anti-lgE antibody product world-wide, except for the countries of Taiwan, China, Hong Kong, Singapore, and Korea, where Tanox and Ciba will co-develop the product and share the financial benefits.

Tanox also has agreed to a termination of its existing co-promotion rights in the United States in exchange for an increased royalty and profit participation on sales of the anti-lgE product in the U.S. In addition to the three-way agreement, Tanox has entered into certain additional licensing arrangements with Genentech to minimize the possibility of future patent disputes between the two companies.

"We are very pleased to have the lawsuit behind us and to have successfully concluded an agreement with both Genentech and Ciba which truly creates a winning situation for all of us," said Dr. Nancy Chang, chief executive officer of Tanox. "Now we can focus on the much more exciting prospect of coordinating our efforts to accelerate the development and commercialization of what we hope will be an important new therapy for allergies and asthma."

"The settlement not only provides satisfactory closure to the legal issues between our companies, but a gratifying opportunity to synergize our considerable individual resources toward a common public good," said Arthur D. Levinson, Ph.D., president and chief executive officer of Genentech.

Tanox and Ciba have concluded a Phase II study of one of their anti-lgE antibody products in patients which were allergic to mountain cedar pollen and another Phase II study was initiated in patients with mild to moderate asthma. Genentech has conducted Phase II studies of its lead product in both asthma and allergic rhinitis and has initiated additional Phase II studies. The companies anticipate that pivotal clinical studies with a jointly selected product could commence as early as the fall of 1997.

Tanox Biosystems, Inc., incorporated in 1986, is a biotechnology research and development company based in Houston, Texas. Tanox is a leader in the development of novel monoclonal antibody-based treatments for diseases involving or affecting the human immune system.

Ciba-Geigy Limited of Basel, Switzerland, is a leading developer and manufacturer of health-care and agricultural products and specialty chemicals for industry. The Pharma Division of Ciba is dedicated to discovering, developing, manufacturing and marketing innovative pharmaceuticals that meet unmet medical needs and improve patients' quality of life.

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.

Hoffmann-La Roche is an international healthcare company committed to the discovery and development of new drugs to help treat human illness. Represented in more that 70 countries, the company is a worldwide leader in the research and development of innovative pharmaceuticals, vitamins, fine chemicals and diagnostic equipment.

Media Contacts: Kathleen Rinehart (415) 225-8681
Laura Leber (415) 225-5759
Investor Contact: Diane Shrick (415) 225-1599
Tanox Biosystems
Media Contacts: David Anderson: (713) 664-2288

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