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Investor Update

Basel, 16 September 2004

Roche and Protein Design Labs to jointly develop Zenapax for Asthma

Roche and Protein Design Labs (PDL) today announced a worldwide agreement to co-develop and commercialize Zenapax (daclizumab) for asthma and related respiratory diseases, based on recent positive phase II data in patients with moderate to severe asthma.

“This new agreement will strengthen our pipeline in asthma, where we are currently in phase II development of a novel oral treatment,” said William Burns, Head of Roche’s Pharmaceuticals Division. “We believe that daclizumab will offer patients a significant improvement over today’s current therapy. Our long-standing relationship with PDL continues to grow as we develop daclizumab further.”

Mark McDade, Chief Executive Officer, PDL, said, “The continued development of daclizumab in asthma is among PDL’s highest clinical development priorities. With Roche as our ongoing partner in this indication, we believe daclizumab will obtain the resources needed to develop the full potential of this humanized antibody in asthma.”

Under terms of the agreement, PDL will receive a $17.5 million upfront payment as well as up to $187.5 million in development and commercialization milestones for successful further development of daclizumab. Roche and PDL will globally co-develop daclizumab in asthma, share development expenses and co-promote the product in the US. Outside the US, PDL will receive royalties on net sales of the product in asthma.

About the Roche - PDL partnership
In 1989, Roche acquired the worldwide rights to daclizumab, a product that has since gained an important position within Roche’s transplantation portfolio. In September 2003, Roche resold to PDL all rights to daclizumab, except in transplantation, until 2007 when PDL will have the option to re-acquire the transplantation rights as well. In 2004, PDL approached Roche with compelling phase II data for daclizumab in asthma, leading to today’s announcement for the continued co-development of daclizumab in respiratory disorders by Roche and PDL.

Zenapax in Asthma
In March 2004, PDL reported positive results from the initial clinical study of daclizumab in patients with chronic, persistent asthma whose disease is not well controlled with high doses of inhaled corticosteroid therapy. The primary endpoint, percent change in FEV1 from baseline to 12 weeks (day 84), met statistical significance (p=0.05). FEV1, or forced expiratory volume at one second, is a measure of pulmonary function. Secondary clinical endpoints also supported these findings.

The Phase II randomized, double-blind, placebo-controlled clinical trial was conducted at 24 centers in the United States and treated a total of 114 patients. In the assessment of the primary endpoint, patients receiving daclizumab experienced a mean increase in FEV1 of 4.4% of baseline, compared to placebo patients who experienced a mean decrease of 1.5% (p=0.05). Other spirometric measures (FEV1/FVC, FEF25-75%) were consistent with these results. Patients receiving daclizumab also demonstrated a statistically significant increase in the time to asthma exacerbation requiring oral corticosteroid rescue (p=0.024). Peripheral eosinophil levels were significantly reduced in the daclizumab treatment group compared to the placebo group (p=0.04). Statistically significant (p≤0.007) within-group changes in the daclizumab group revealed improvements from baseline in diary symptom scores, as well as morning and night time peak expiratory flow rates. There were no significant within-group changes seen in the placebo group.

Treatment with Zenapax was generally well tolerated. The overall frequency of adverse events was comparable between daclizumab and placebo groups.

About Asthma
Asthma is among the most common chronic medical conditions in the United States and worldwide, affecting more than 20 million people in the United States, according to the American Lung Association (ALA) and the American Academy of Allergy, Asthma & Immunology (AAAAI). According to a recent report on the global burden of asthma published by the NIH, WHO and the Global Initiative for Asthma, asthma is one of the most common chronic diseases in the world and it is estimated that around 300 million people in the world currently have asthma. The rate of asthma continues to increase and it is estimated that there may be an additional 100 million persons suffering from asthma by 2025. Asthma accounts for 1 in every 250 deaths worldwide.

About Protein Design Labs
In September 2003, PDL acquired all rights to Zenapax, excluding transplantation indications but with the option to gain such indication rights by 2007. PDL retains this right in accordance with the terms of the September 2003 agreement.
Protein Design Labs is a leader in the development of humanized antibodies to prevent or treat various disease conditions. PDL currently has antibodies under development for autoimmune and inflammatory conditions, asthma and cancer. PDL holds fundamental patents for its antibody humanization technology.
Further information on PDL is available at www.pdl.com.

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. 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 is number one in the global diagnostics market, a leading supplier of pharmaceuticals for cancer and transplantation and a market leader in virology. In 2003 prescription drug sales by the Pharmaceuticals Division totalled 19.8 billion Swiss francs, while the Diagnostics Division posted sales of 7.4 billion Swiss francs. Roche employs roughly 65,000 people in 150 countries and has alliances and R&D agreements with numerous partners, including majority ownership interests in Genentech and Chugai.

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