Basel, 18 September 2003

Roche and Memory Expand Strategic Alliance in CNS

Roche and Memory Pharmaceuticals Corporation today announced an expansion of their strategic alliance to develop drug candidates targeting a novel mechanism of action to treat Alzheimer’s disease (AD) and schizophrenia. These drug candidates may also be developed for additional central nervous system (CNS) indications. This agreement is focused on a new target, builds on the first Roche-Memory alliance signed in 2002, and further strengthens Roche’s CNS portfolio for the future.

“Roche is committed to finding novel, more effective medicines to treat and manage diseases such as Alzheimer’s, where few treatment options are available,” stated William M. Burns, Head of Roche’s Pharmaceuticals Division. “Expanding our partnership with such a promising CNS discovery organization as Memory Pharmaceuticals, could lead to new and more effective therapies for psychiatric and neurological disorders. This is an excellent example of the direction Roche is taking in its innovation strategy and in creating value with its alliance partners.”

Under the terms of the agreement, Roche will purchase a minority equity stake in Memory, at an undisclosed premium over the last financing round, and will provide up-front and milestone payments as well as support for ongoing research and development. Memory will be responsible for advancing drug candidates through early stage clinical development. Roche may then opt to license worldwide rights for the further development and commercialization of products resulting from this collaboration. Roche will pay Memory royalties on product sales and has granted Memory an option to co-promote products in the U.S. Assuming all potential milestones through product launch are achieved, Memory could receive up to $150 million (U.S.) in payments plus royalties.

“We are pleased to have the opportunity to expand a very successful partnership, which has already resulted in one product entering clinical development within 12 months of our first transaction,” said Tony Scullion, CEO of Memory Pharmaceuticals. “Expanding this alliance to a second target enables us to leverage our strong CNS discovery base while maintaining our culture as an independent entrepreneurial company, pursuing multiple corporate partnerships. The fact that we will be responsible for development through Phase 2a confirms the confidence that Roche has in our capabilities. Our decision to further partner with Roche reflects their strong R&D and alliance management competencies,” Scullion added.

About Alzheimer’s Disease and Schizophrenia
AD is a debilitating disease that affects not only an individual, but entire families. It remains an area for which few treatments are available. AD is a degenerative disease of unknown origin. The disease typically strikes between the ages of 50 and 60 and is characterized by the gradual death and disappearance of nerve cells in the cerebral cortex. Early clinical signs include marked forgetfulness and episodes of mental confusion. In advanced stages, memory is almost completely obliterated and the disabling effects of the disease are so severe that patients require institutional care.

Schizophrenia is a chronic and severe brain disorder affecting approximately one percent of the world’s population. It is more acutely described as a psychosis, a type of illness that causes severe mental disturbances, which disrupts normal thoughts, speech, and behavior. Treatment is aimed at reducing symptoms and preventing psychotic relapses and is believed to be most effective when begun early in the course of the illness.

CNS Research at Roche
AD is a major focus of CNS research at Roche, where different approaches are being taken to discover new classes of medicines. Considerable advances have been made in understanding the causes of AD, primarily as the result of studies on the function of genes, which are linked with various hereditary forms of the disease. In this regard, scientists at Roche have played a leading role.

The worldwide population with CNS disorders is steadily rising.This is being driven by an aging population, improving diagnostic techniques, increasing physician awareness and a gradual shift away from the social stigma traditionally attached to many psychiatric conditions such as schizophrenia. AD is estimated to cost the U.S. economy $100 billion annually and affects up to four million patients in the U.S. alone.

Roche Business Development and Alliance Strategy
Roche is a distinctive alliance partner with expertise in identifying cutting-edge innovation that can lead to new and improved medicines. Over the past 18 months alone, Roche has formed 38 new partnerships, which span a wide range of therapeutic areas and technologies, making it an industry leader. Through its alliance strategy, Roche creates value with its partners by transforming those business transactions into productive relationships. A key element of this strategy is to enable its partners to achieve their vision while maintaining their cultural identity and entrepreneurial spirit.

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, 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 R&D agreements with numerous partners, including majority ownership interests in Genentech and Chugai.

About Memory Pharmaceuticals
Memory Pharmaceuticals is a neuropharmaceutical company developing drugs for the treatment of cognitive disorders in neurological and psychiatric diseases and aging. Based on intellectual property developed by Nobel Laureate, Eric Kandel, M.D., the Company applies its COGNOSTICS™ technology to target validation, chemical hit and lead identification, lead optimization and nomination of clinical development candidates. Memory Pharmaceuticals has developed a diverse pipeline of novel drug candidates for different disease indications at various stages of research and development, based on in-house discovery efforts. For more information, access the website.