Japan Tobacco Inc. Announces Sale of Xenotech Interest

Business Wire, Dec 21, 1999

Business Editors

TOKYO--(BUSINESS WIRE)--Dec. 21, 1999

Japan Tobacco Inc. (JT) (TSE: 2914) today announced that Abgenix, Inc. (Abgenix) has agreed to buy the interest held by JT America in Xenotech Inc. and Xenotech, L.P. (together, Xenotech) for US $47 million. JT has accepted the offer with completion set for the end of December 1999.

In addition, Abgenix and JT have concluded a separate license agreement which allows JT to use Xenotech's technology and continue to commercialize human-type monoclonal antibodies obtained from the technology.

As a result of the proposed sale, JT America, JT's US subsidiary, expects to realize a capital gain of approximately US $47 million.

The agreements thus allow JT to maximize effective use of capital by selling the interest while maintaining access to this innovative technology and its commercial prospects.

Since 1991, JT and Cell Genesys, Inc., the parent company of Abgenix, have collaborated in research and development in mice (XenoMouse(TM)) which produce fully human-type monoclonal antibodies. To date, JT has invested over US $40 million in this collaboration. Since completion of the XenoMouse(TM) technology, Abgenix and JT have pursued their own research and development in antibody-based pharmaceuticals.

Japan Tobacco Inc., with sales in the year ended March 31, 1999 of US $32 billion (translated from yen at the rate of US $1 = (Y)120), is one of the world's largest manufacturers of tobacco products and has three of the world's top five brands in its product portfolio. Since its privatization in 1985, it has actively diversified its operations into pharmaceuticals and foods.

Note: Shareholder structure chart available upon request from Gavin Anderson & Company.