SAN DIEGO, Calif. Jan. 8 /PRNewswire/ -- Houghten Pharmaceuticals, Inc.
(HPI) (Nasdaq: HPIP) and Chugai Biopharmaceuticals, Inc. (CBI), a subsidiary
of Chugai Pharmaceutical Co., Ltd., today announced that they have established
a drug discovery collaboration and license agreement.  Under the terms of the
agreement, HPI will receive upfront payments and potential milestones and
royalties.  HPI also gains access to biological targets relating to diabetes
and central nervous system diseases for use in HPI's internal discovery
program.  CBI will receive worldwide, nonexclusive rights to use HPI's
combinatorial chemistry libraries for selected targets in the areas of bone,
cardiovascular and infectious diseases, hematological growth factors and
oncology.
    Any products discovered which address these diverse disease targets may be
commercialized in a variety of ways.  For targets in CBI's areas of interest,
CBI will develop and commercialize any discoveries, compensating HPI with
milestones and royalties.  In the area of inflammation, CBI and HPI plan to
jointly develop and commercialize discoveries.  For targets in HPI's areas of
interest, HPI will develop and commercialize any discoveries, compensating CBI
with royalties on sales from commercialized inventions.
    "This is a creative and valuable relationship which affords both companies
a great deal of flexibility," said Robert S. Whitehead, HPI's president and
chief executive officer.  "The agreement provides both short- and long-term
funding opportunities, as well as scientific expertise in strategic areas of
interest to HPI.  We see this as an opportunity to accelerate the research
programs at CBI while assisting HPI in taking a significant step toward
becoming a fully integrated drug discovery company."
    "This is indeed an agreement that should prove to be beneficial for both
parties," said Henry L. Nordhoff, CBI's chairman, president and chief
executive officer.  "CBI is able to provide HPI limited access to our
proprietary screening technology and, in combination with traditional cash
payments and royalties, strike a novel agreement that grants CBI access to
combinatorial libraries in Chugai's key areas of therapeutic focus."
    HPI is a drug discovery company, which utilizes combinatorial chemistry
and combinatorial biology technologies to create novel small-molecule drug
candidates.  The company leverages its technology platform by entering into
pharmaceutical alliances, enabling partners to access HPI's technologies in
exchange for licensing fees, potential milestone payments and royalties; or by
establishing joint-discovery alliances with biotechnology companies.  HPI also
uses its drug discovery technologies in its internal development programs.
HP 228, the company's lead compound, is in Phase 11 trials for the treatment
of inflammatory and metabolic diseases.
    CBI began as the therapeutics division of Gen-Probe Incorporated and was
spun out into an independently operated, wholly owned subsidiary of Chugai
Pharmaceutical Co. Ltd. (Chugai) of Tokyo, Japan on July 1, 1995.  CBI is
Chugai's therapeutic presence in North America and, in addition to conducting
discovery research, will undertake clinical development and commercialization
of pharmaceutical products that are transferred from Japan as well as
initiated through internal discovery and in-licensing programs.  CBI's
technology platforms include high-throughput screening,
genomics/bioinformatics and medicinal chemistry.  Chugai is a leading Japanese
pharmaceutical manufacturer focusing on diseases of bone, blood and the
cardiovascular system, as well as cancer and infectious diseases.  Two
biotechnology products, EPO and G-CSF, have already been major contributors to
the company's success.  Chugai established a commercial presence in the United
States with its acquisition of Gen-Probe Incorporated, a biotechnology
diagnostics company, in 1989.
    Except for the historical information contained herein, the matters
discussed in the news release are forward-looking statements that involve
risks and uncertainties, including whether any potential products will be
discovered, whether any discoveries can or will be successfully formulated,
scaled-up, developed and commercialized, whether combinatorial libraries of
HPI will have utility or value to potential partners or internally, whether
HPI's access to biological targets of CBI will have utility or value to HPI,
whether regulatory approvals can be obtained, the impact of competitive
products and pricing, whether any corporate collaboration with CBI will be
successful, and other risks detailed from time to time in HPI's Securities and
Exchange Commission (SEC) filings.  These forward-looking statements represent
HPI's judgment as of the date of this release.  Actual results may differ
materially from those predicted.  HPI disclaims, however, any intent or
obligation to update these forward-looking statements.

    HPI's releases are on the World Wide Web at http://www.houghten.com and PR
Newswire's fax-on-demand service at 1-800-758-5804, extension 374050.

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