Kyoto, February 12, 2003 - Takara Bio Inc. (President and CEO: Ikunoshin Kato, Ph.D.) and MOLMED (MOLMED S.P.A.), an Italian company that develops and commercializes gene therapy technologies, has signed letter of intents on exclusive alliance with MOLMED in gene-therapy for cancer and HIV in Asia. Takara Bio is to acquire exclusive rights in Asian countries, including Japan, Korea, China, Taiwan and Far East Russia, but except for India, Turkey, to use MOLMED's technologies relating to gene therapy for (1) hematological malignancies such as leukemias, lymphomas and myelomas using HSV-TK gene, (2) solid tumor such as non-small cell lung cancer and other solid tumors using HSV-TK in combination with MAGE-3 gene, and (3) HIV using multiple genes which interfere with HIV replication.
Following 3 projects are included in the collaboration;

1. Gene therapy for hematological malignancies (TK project):
Lymphocytes from donor infused to leukemia patient are able to actively attack leukemia cells, on the other hand, the same lymphocytes occasionally attack patient's organ and tissues, causing severe graft-versus-host disease (GVHD). The core of the MolMed technology is to transduce suicide gene (thymidine kinase: TK) to donor T lymphocytes, and when severe GVHD occurs, ganciclovir is treated to the patient to kill T lymphocytes and diminish GVHD.

2. Gene therapy for solid tumor expressing MAGE-3 (M3TK project):
MAGE-3 is an antigen expressed specifically in cancer cells such as melanoma, head and neck cancer, esophageal cancer, and lung cancer. The M3TK method is a kind of "cancer vaccination strategy" attempting to vaccinate patients affected by such tumors by infusion of T cells transduced with MAGE-3 and TK gene.

3. Gene therapy for HIV (anti-HIV project):
The anti-HIV method is based upon the transfection of multiple genes, which inhibit the growth of HIV, into haematopoietic stem cells that can give rise to progenies of T lymphocytes. Once HIV infects the genetically engineered T lymphocytes, the products of the inserted genes prevent the replication of the virus.

Phase I/II clinical trials are now performed by MolMed in Europe. Commercialization of the TK, M3TK and anti-HIV therapies is scheduled on late 2006, 2008, 2006 respectively.

In Japan, number of target patients is 20,000 for TK, 20,000 for M3TK and 5,000 for the anti-HIV therapy. In China, number of patient with HIV infection is estimated more than 1 million. MolMed estimates the cost of the gene therapy will be about US$ 20 to 30 thousand per patient.

Gene therapy is one of Takara Bio's important strategic area. Collaborating with Indiana University, Takara has developed RetroNectin^TM, a recombinant human fibronectin, that significantly increases the transduction efficiency in retrovirus mediated gene therapy. More than 30 institutes and hospitals are using RetroNectin^TM for clinical trials for gene therapy. Meanwhile, ViroMed, a subsidiary of Takara Bio in Korea, is conducting phase I/II clinical trials of gene therapy for ischemic disease.

In December 2001, Takara Bio already granted to MolMed rights to use its RetroNectin^TM in gene-therapy, and MolMed is conducting clinical trials of gene therapy in Europe. The agreement this time further strengthen the already existing relationship between Takara Bio and MolMed. MolMed extends its gene therapy efforts in Europe and America applying Takara Bio's RetroNectin^TM, while Takara Bio extends its gene therapy in Asian countries using MolMed technology. Takara Bio expects the collaboration with MolMed enables Takara Bio to develop and commercialize competitive gene-therapy technology.

About MOLMED:
MOLMED is an Italian company that manufactures GMP grade vectors for gene therapy, and develops and commercializes gene therapy technologies for leukemia, lung cancer, prostate cancer, and HIV infection. The company holds important technologies and patents related to such gene therapies.

About Takara Bio Inc.
Takara Bio Inc. is an innovative biotechnology company based in Shiga, Japan. As a world leader in biotechnology research and development, Takara Bio was the first company to market PCR technology in Japan and is also the developer of the RetroNectin™ reagent, which is a world-standard in gene therapy protocols. In addition to providing research reagents and equipment to the life science research market, Takara Bio has active research and product development activities in the fields of gene and cell-based therapy, and agricultural biotechnology; and is committed preventing disease and improving the quality of life for all people through the use of biotechnology. Through strategic alliances with other industry leaders, the Company aims to extend its reach around the world. More information is available at http://www.takara-bio.com.

For more information:
Corporate Communications
Takara Bio Inc.
E-mail: bio-ir@takara-bio.co.jp

This article is translated from press release in Japanese for your convenience.

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