Serono and Genentech Announce International Marketing Agreement for Psoriasis Treatment Raptiva

Business Wire, August 8, 2002

Business Editors/Health & Medical Writers

GENEVA & SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--Aug. 7, 2002

Serono S.A. (virt-x: SEO)(NYSE: SRA) and Genentech, Inc. (NYSE:DNA) today announced that the two companies have entered into an agreement under which Serono will receive an exclusive license to market the psoriasis treatment Raptiva(TM) (efalizumab, formerly Xanelim(TM)) internationally outside of the United States, Japan, and certain other Asian countries. Development and marketing rights in the United States remain with Genentech and its U.S. partner XOMA (US) LLC (Nasdaq:XOMA) and Genentech retains exclusive marketing rights in Japan and certain other Asian countries. Under the agreement, Genentech, Serono and XOMA may collaborate on co-developing additional indications for Raptiva and will share certain global development costs. Financial terms of the agreement were not disclosed.

"We are delighted to partner with Genentech and accelerate our entry into a new therapeutic area with the licensing of a significant Phase III product," said Ernesto Bertarelli, Chief Executive Officer of Serono. "As an autoimmune disease with unmet medical needs, psoriasis is one of our targeted strategic areas."

"This strategic partnership provides Genentech with a strong global partner that will spearhead international marketing efforts for Raptiva," said Joseph S. McCracken, vice president of Business and Commercial Development of Genentech. "We believe Serono's proven success in international markets will allow Raptiva to compete effectively on a global basis, and continue our efforts to bring to market a potential new therapy for patients with moderate-to-severe psoriasis."

About Raptiva

A humanized monoclonal antibody, Raptiva is a targeted T-cell modulator designed to inhibit three key inflammatory processes in the cascade of events that are associated with psoriasis. These processes are: (1) binding of T-cells through interactions with adhesion molecules on the endothelial cell surface; (2) trafficking of T-cells into the skin; and (3) activation of T-cells, all of which may be linked to the abnormal growth of skin cells and the painful, elevated scaly patches of skin (lesions) typical among psoriasis sufferers. Raptiva is administered subcutaneously (under the skin) once per week.

Raptiva is being developed in the U.S. through a partnership between Genentech and XOMA and is currently in Phase III clinical testing for the treatment of moderate-to-severe plaque psoriasis. Pending data from an additional efficacy study and discussions with the Food and Drug Administration (FDA), Genentech anticipates filing a Biologics License Application (BLA) for Raptiva in psoriasis by the end of 2002. Serono plans to file Raptiva with European regulatory authorities during the first quarter of 2003.

Raptiva is also in Phase II clinical testing in rheumatoid arthritis as a potential therapy for moderate-to-severe disease, and Genentech, Serono and XOMA may collaborate on co-developing this additional indication for Raptiva.

Psoriasis Background

Psoriasis is a chronic autoimmune disease that affects approximately 5.7 million patients in Europe and approximately 4.5 million people in the U.S. Psoriasis is characterized by the abnormal growth of new skin cells, resulting in thick, red, scaly, inflamed patches. Psoriasis is not a contagious disease.

Psoriasis may be one of several types: plaque psoriasis, pustular psoriasis, erythrodermic psoriasis, guttate psoriasis, or inverse psoriasis. Plaque psoriasis, the most common form of the disease, is characterized by inflamed patches of skin ("lesions") topped with silvery white scales. Psoriasis can be limited to a few spots or involve extensive areas of the body, appearing most commonly on the scalp, knees, elbows and trunk. Psoriasis is categorized as mild, moderate or severe, depending on the percentage of body surface area involved and the impact of the patient's quality of life.

Existing treatments for psoriasis are topical (applied to the skin), systemic (taken internally), or phototherapeutic (ultraviolet light applied to the skin). While some current treatments may help control the symptoms of psoriasis, their benefits are not long-lasting and may be associated with serious side-effects. There currently is no known cure.

About Serono

Serono is a global biotechnology leader. The Company has six recombinant products on the market, Gonal-F(R), Luveris(R), Ovidrel(R)/Ovitrelle(R), Rebif(R), Serostim(R) and Saizen(R) (somatropin. (Luveris(R) is not approved in the USA.)) In addition to being the world leader in reproductive health, Serono has strong market positions in neurology, metabolism and growth. The Company's research programs are focused on growing these businesses and on establishing new therapeutic areas. Currently, there are seventeen new molecules in development.

In 2001, Serono achieved worldwide revenues of U.S. $1.38 billion, and a net income of U.S. $317 million, making it the third largest biotech company in the world based on revenues. The Company operates in 45 countries, and its products are sold in over 100 countries. Bearer shares of Serono S.A., the holding company, are traded on the virt-x (SEO) and its American Depository Shares are traded on the New York Stock Exchange (SRA).