Thursday, Feb 26, 2004

Genentech, Novartis and Tanox Settle Disputes Surrounding Xolair and TNX-901

South San Francisco, Calif. -- February 26, 2004 --

Genentech, Inc. (NYSE: DNA), Novartis Pharma AG and Tanox, Inc. (Nasdaq: TNOX) announced today that they have settled all litigation among them and finalized the detailed terms of their three-party collaboration, begun in 1996, to develop and commercialize certain anti-IgE antibodies including Xolair® (Omalizumab) and TNX-901.

The following details of the settlement were disclosed: Genentech and Novartis will each reimburse Tanox $3.3 million for a portion of its TNX-901 development costs; Tanox will relinquish any rights to manufacture Xolair, and in exchange, will receive payments tied to the quantity of Xolair produced; and Tanox will benefit from an accelerated forgiveness of a loan to finance the construction of its biologics manufacturing plant in the mid-1990s.

As in the original agreement, Genentech and Novartis share U.S. marketing rights for all collaboration products, while Novartis has marketing rights outside the United States. The existing royalty and profit-sharing percentages will remain unchanged. Committees with representatives from all three companies have been established to cooperatively oversee further development and commercialization of Xolair, and possibly other collaboration products.

Peanut allergy
The partners are committed to developing Xolair as the lead molecule for the treatment of peanut allergy. An Investigational New Drug (IND) application for Xolair in this indication was filed with the U.S. Food and Drug Administration (FDA) in November 2003. Patient enrollment in a Phase II proof-of-concept clinical trial is expected to begin early this year.

About Genentech
Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. Seventeen of the currently approved biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes 12 biotechnology products directly in the United States. The company has headquarters in South San Francisco, California and is traded on the New York Stock Exchange under the symbol DNA. For press releases and additional information about the company, please visit http://www.gene.com.

This statement made in this press release relating to the expected timing of patient enrollment in a Phase II proof of concept clinical trial is forward-looking and the actual timing could differ materially. Among other things, the timing for patient enrollment could be affected by discussions with the FDA, recruitment of investigators and study site initiation.