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Investor Update

Basel, 23 June 2004

Roche and Kosan announce indication changes for KOS-862 phase II trials

Roche and Kosan Biosciences Incorporated today announced plans to initiate a phase II trial of KOS-862 (R1492) in prostate cancer, while terminating a phase II trial in colorectal cancer. Prostate cancer has been selected for further clinical development because of the high response rates recently reported for the epothilone class of drugs in this indication. The KOS-862 trial in colorectal cancer will be terminated due to unanticipated cumulative drug toxicities in patients who had been previously treated with oxaliplatin. A planned phase Ib combination trial of KOS-862 with Xeloda to support the colorectal trial will not be initiated.

Roche and Kosan entered into an alliance for the co-development of KOS-862 and its back up compounds in September 2002. The partners expect to file an IND application and initiate a phase I clinical trial for a second epothilone compound in 2004. Currently, Roche and Kosan are discussing extending their relationship to generate and develop additional epothilone drug candidates.

“Although we have concluded the colorectal cancer trials, the response rate of patients with prostate cancer towards other epothilones leads us to be optimistic about the potential efficacy of KOS-862 in this type of tumor,” said Daniel V. Santi, M.D., Ph.D, Chairman and Chief Executive Officer of Kosan.

William M. Burns, Head of Roche’s Pharmaceuticals Division, added, “Roche is confident in the potential of epothilones as important anticancer agents. We are pleased that the Roche–Kosan collaboration continues to move KOS-862 through the appropriate efficacy trials, while advancing next-generation epothilone analogs through the pipeline.”

About Kosan
Kosan Biosciences has two lead product candidates: KOS-862 and 17-AAG, including its proprietary formulation designated KOS-953. Both compounds are derived from an important class of natural products known as polyketides. KOS-862 is currently in Phase II trials in non-small cell lung and breast cancers; it is partnered with Roche in a global development and commercialization agreement. 17-AAG is being evaluated in multiple Phase I and Phase Ib clinical trials in collaboration with the National Cancer Institute. By applying its expertise and proprietary technologies to generate polyketide analogs and by increasing the production yields of polyketides, Kosan has created a robust pipeline of potentially significant products for cancer, as well as for infectious disease and other therapeutic areas. For additional information on Kosan Biosciences, please visit the Company’s website at www.kosan.com.

Roche in Oncology
Within the last five years the Roche Group including its partners Genentech in the US and Chugai in Japan has become the world’s leading provider of anti-cancer treatments, supportive care products and diagnostics. Its oncology business includes an unprecedented four marketed products with survival benefit in different major tumour indications: Xeloda and Herceptin in advanced stage breast cancer, MabThera in non-Hodgkin’s Lymphoma, and Avastin in Colorectal Carcinoma. In the United States Herceptin and Avastin are marketed by Genentech alone and MabThera/Rituxan by Genentech together with Biogen Idec Inc. Outside of the United States, Roche and its Japanese partner Chugai are responsible for the marketing of these drugs.

The Roche oncology portfolio also includes NeoRecormon (anaemia in various cancer settings), Bondronat (prevention of skeletal events in breast cancer and bone metastases patients, hypercalcemia of malignancy), Kytril (chemotherapy and radiotherapy-induced nausea and vomiting) and Roferon-A (hairy cell and chronic myeloid leukaemia, Kaposi's sarcoma, malignant melanoma, renal cell carcinoma). CERA is the most recent demonstration of the commitment to anaemia management. The Roche Group’s cancer medicines generated sales of more than 6 billion Swiss francs in 2003.

In a recent phase III study Tarceva met its primary endpoint of improving overall survival in patients with non-small cell lung cancer. Tarceva is being developed by Roche, Genentech and OSI Pharmaceuticals. Chugai is pursuing its development and regulatory approval for the Japanese market.

Roche is developing new tests, which will have a significant impact on disease management for cancer patients in the future. With a broad portfolio of tumour markers for prostate, colorectal, liver, ovarian, breast, stomach, pancreas and lung cancer, as well as a range of molecular oncology tests, we will continue to be the leaders in providing cancer focused treatments and diagnostics.

Roche Oncology has four research sites (two in the US, Germany and Japan) and four Headquarter Development sites (two in the US, UK and Switzerland).

About Roche
Headquartered in Basel, Switzerland, Roche is one of the world’s leading innovation-driven healthcare groups. Its core businesses are pharmaceuticals and diagnostics. Roche is number one in the global diagnostics market and is the leading supplier of pharmaceuticals for cancer and a leader in virology and transplantation. As a supplier of products and services for the prevention, diagnosis and treatment of disease, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche employs roughly 65,000 people in 150 countries. The Group has alliances and research and development agreements with numerous partners, including majority ownership interests in Genentech and Chugai.

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