Rigel, Novartis to Collaborate on Five Drug Discovery Projects

Rigel Inc. (South San Francisco) and Novartis Pharma AG (Basel, Switzerland) will work together on five different five-year research projects to identify targets for products that can treat, prevent, or diagnose the effects of disease using Rigel's advanced functional genomics technology. While the exact research plan has been established only for the first collaboration, Novartis has secured access to Rigel's technology for an additional four projects to be defined over the next two years.

Under the terms of the agreement, Novartis will provide Rigel with upfront cash and equity investment, research funding, and milestone and certain royalty payments to identify targets for drugs, including small molecule (orally-active) agents, vaccines, and/or diagnostic products. The equity investment consists of significant immediate funding, but the majority is callable by Rigel up through an initial public offering.

The first collaboration is focused on identifying targets that regulate T cells, which play a central role in the body's immune response and have an important affect on the body's acceptance of newly-transplanted organs. Novartis will select two of the remaining four projects in the next year, with the final two projects to be identified within two years. The work will be done both at Rigel and at Novartis. Novartis will retain exclusive worldwide rights to develop and market products in those areas relating to targets discovered under the collaboration.

Novartis is a life sciences company with core businesses in healthcare, agribusiness, and consumer health.

Rigel Inc. is a privately held company focused on the discovery of novel therapeutic agents.

For more information: James M. Gower, President and CEO, Rigel Inc., 240 East Grand Ave., South San Francisco, CA 94080. Tel: 650-624-1100. Fax: 650-624-1101.