Roche Diagnostics and Epigenomics sign broad Cancer Diagnostics alliance

Companies to collaborate on diagnostic products for early cancer detection, classification and treatment response

BASEL, Switz. - March 18, 2003 - Roche and Epigenomics announced today a broad three-year collaboration to develop a range of molecular diagnostic and pharmacogenomic cancer products based on Epigenomics’ DNA-methylation technologies. DNA Methylation is a natural "switch" that controls gene expression giving rise to distinct patterns in cells including cancer and other diseased cells. Based on these methylation patterns, cancer can be detected and classified from tissue and bodily fluids, such as blood serum or urine samples.

Under the terms of the agreement, Roche will make an upfront payment of € 4 million and in addition provide R&D funding, milestone payments and royalties on product sales. Both partners estimate that if all products are successfully launched, the total value of the agreement could exceed € 100 million.

The collaboration comprises the development of diagnostics products for use in early detection of cancers from major sites (e.g. colon, breast, prostate), their characterization (e.g. aggressive versus non-aggressive tumors) and prediction of treatment response to particular anti-cancer drugs. Epigenomics will be responsible for marker discovery, identification and pre-validation. Epigenomics’ DNA methylation technologies will be incorporated into Roche’s existing and future PCR platforms (PCR: polymerase chain reaction) and into the recently licensed Microarray Technology. Diagnostic test development, clinical trials, product manufacturing, regulatory submissions and all sales and marketing worldwide are to be conducted by Roche.

"We are very enthusiastic about this collaboration. Roche is already the world leader in cancer therapies and with this alliance we will complement our position in the diagnostics field. The products that are being developed as part of this collaboration address the urgent need for earlier detection of cancer in bodily fluids by more accurate screening tests, as well as identifying those patients who need chemotherapy and most likely respond to particular cancer therapies," says Heino von Prondzynski, Head of Roche Diagnostics and member of Roche’s Corporate Executive Committee. "As the worldwide leader in in vitro Diagnostics we are committed to identify diseases early in order to improve treatment and enhance patients’ quality of life. The alliance with Epigenomics will help us to remain at the forefront of the molecular diagnostics market and support our activities to pursue a market that could be greater than 3 billion Swiss francs ten years from now for our divisional cancer care program."

Alexander Olek, CEO of Epigenomics, adds: "This collaboration validates Epigenomics' DNA methylation technology and product development approach. By underlining the synergy between our in-house units, Diagnostics and Pharma Technology businesses, it allows us to pursue our vision of personalizing medicine. With the emerging trend of the pharmaceutical industry moving towards administering therapy only with a specific diagnostic test, we feel that the partnership with Roche Diagnostics solidifies Epigenomics’ position as a leader in this field."DNA Methylation and Diagnostic Applications

DNA methylation is a natural phenomenon whereby a methyl chemical group is attached to the cytosine base of DNA. The pattern of DNA methylation is one of the primary biological mechanisms that controls gene expression or activity. As the methyl group is either present or not, the pattern on any strand of DNA can be digitized and easily interpreted. Measuring the differences in DNA methylation patterns of diseased and healthy conditions provides a reliable, sensitive and convenient way of identifying disease. For example, bodily fluid samples (e.g. blood serum or urine) can be used to reveal whether that person has cancer. Using a tissue sample from this individual, the DNA methylation patterns can be interpreted to show what type of cancer it is and most importantly guide physicians on the most appropriate way to treating it. Roche is the world leader in oncology treatment

Roche Diagnostics offers a broad portfolio of tumor markers for prostate, colorectal, liver, ovarian, breast, stomach, pancreas and lung cancer, as well as a range of molecular oncology tests running on the LightCycler. Within its Integrated Cancer Care Unit the company develops new tests which will have a significant impact on disease management of cancer patients in the future.

The franchise of its pharmaceuticals Division includes MabThera (non-Hodgkin’s lymphoma), Xeloda (colorectal cancer, breast cancer), Herceptin (breast cancer), NeoRecormon (anaemia in various cancer settings), Roferon-A (leukaemia, Kaposi’s sarcoma, malignant melanoma, renal cell carcinoma) and Kytril (chemotherapy and radiotherapy-induced nausea). The franchise accounted in 2002 for sales of more than 5 billion Swiss francs (+33%).

About Roche

Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-oriented healthcare groups in the fields of pharmaceuticals and diagnostics. Roche’s products and services address prevention, diagnosis and treatment of diseases, thus enhancing well-being and quality of life. In 2002 Roche’s core businesses recorded sales of 26.5 billion Swiss francs and employed some 61,900 people worldwide. Roche’s Diagnostics Division, the world leader in in vitro diagnostics with a uniquely broad product portfolio, supplies a wide array of innovative testing products and services to researchers, physicians, patients, hospitals and laboratories world-wide. For further information, please visit the website at www.roche.com.

About Epigenomics

Epigenomics is committed to significantly improving the treatment of cancer and other complex diseases by developing novel diagnostic and pharmacogenomic products based on DNA methylation. By detecting and interpreting DNA methylation patterns, the "on" and "off" signs for genes, Epigenomics can create a digitized readout (Digital Phenotype®) for each cell. The comparison of a patient’s cells against healthy and abnormal reference samples enables an exact diagnosis of disease at a very early stage and provides physicians with essential information to help guide an appropriate therapy. The combination of diagnosis and therapy, based on this information and robust proprietary technology, is "personalizing" medicine. Epigenomics is supported by a network of renowned academic researchers and clinicians, with expertise in the fields of cancer and DNA methylation. The company has its headquarters in Berlin, Germany, and a wholly owned subsidiary in Seattle, USA. For further information, please visit the website at www.epigenomics.com.