Basel, 10 November 2003

Roche licenses promising new antibiotic from Sankyo

Roche and Sankyo announced today that Roche has acquired exclusive rights to CS-023, Sankyo’s new antibiotic compound entering Phase II clinical development. If successful, CS-023, a parenteral carbapenem, will be used to treat severe infections in intensive care units.

“Injectable antibiotics have been a core focus of Roche’s portfolio strategy for many years,” explained William M. Burns, Head of Roche’s Pharmaceuticals Division. “Pursuing this agreement with Sankyo builds on our existing leadership in the antibiotics field and success in the hospital care market with products like Rocephin. We are pleased to partner with a distinguished Japanese partner, such as Sankyo.”

"This is a beneficial partnership for both companies. We are pleased to enter into this partnership with Roche, a leader in the anti-infective market. Roche's capabilities will accelerate the clinical development and commercial success of CS-023. We look forward to the exciting results from this important collaboration," said Takashi Shoda, Sankyo’s President.

Terms of the Agreement
Under the terms of the agreement, Roche will be responsible for the compound’s development and commercialization in major parts of the world including the US and Europe, while Sankyo will retain commercialization rights for Japan, China, Taiwan, South Korea, and countries in the Middle East. Sankyo will receive an initial payment as well as milestone-based payments. In addition, Roche will pay Sankyo royalties based upon future product sales.

About the Antibiotics Market
The global demand for antibacterials is high. An aging population has led to the rise in incidence and severity of bacterial infections. Nearly 20% of afflicted patients acquire the infection while in the hospital. Every year, two million Americans contract nosocomial, or hospital acquired, pneumonia. This pneumonia is difficult to treat and is most common in people over the age of 65.
An estimated 25-33% of hospitalized patients receive antibiotics. Most of these patients require longer courses of more intensive treatment, usually delivered intravenously in the hospital. The emergence of resistance pathogens has led to infections becoming more virulent and more difficult to treat.
The global antibacterial drugs market was worth $25.2 billion in 2001 and is forecasted to reach $27.6 billion in 2007.

About CS-023 and Carbapenems
CS-023 is a parenteral carbapenem with strong activity against gram-positive and gram-negative bacteria, including resistant Staphylococcus aureus, a potentially pathogenic bacteria found in nasal membranes, skin or hair follicles, and Pseudomonas aeruginosa, a major agent of nosocomial infection. Carbapenems are beta-lactam ring structure antibiotics that act similarly to penicillins and cephalosporins by inhibiting synthesis of the bacterial cell wall. Carbapenems are currently the only antibiotics effective against some newly emerging nosocomial pathogens that are resistant to beta-lactamases. The efficacy of this class of drug, as well as the clinical profile, makes them particularly attractive to hospital physicians. Recent preclinical findings indicate that CS-023 is active against a broad spectrum of infections while maintaining a similar toxicity to other antibiotics of this class, and it is likely to be a valuable addition to treatments of bacterial infection.

Roche Business Development and Alliance Strategy
Roche’s innovation strategy is based on strong in-house research with centres in Japan, Europe and the USA and strategic alliances with Genentech and Chugai. Complementing and strengthening the Group’s dynamic R&D capabilities are over 80 scientific and commercial collaborations with biotech companies and universities in clearly defined focus areas. During the past 18 months, Roche has formed over 50 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 these business transactions into productive relationships.
This partnership with Sankyo marks the third licensing deal Roche has signed with a Japanese company in the last six months, in addition to its innovative strategic partnership with Chugai Pharmaceutical Co., Ltd. Roche recognizes the valuable scientific research and opportunities emerging from Japanese pharmaceutical companies and is actively pursuing further relationships within Japan and across the globe.

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 Sankyo
Sankyo Co. Ltd. is one of Japan's largest pharmaceutical companies, with annual worldwide sales of $4.8 billion. Sankyo has a long history of discovering new classes of drugs, including the statin class of lipid-lowering drugs, with its discovery of the first statin in the world. Sankyo discovered, co-developed and manufactures pravastatin sodium.