Chiron Announces Settlement with Roche in HIV Patent Dispute

Chiron Announces Settlement with Roche in HIV Patent Dispute
Agreement Highlights Strength of Company's Intellectual Property Estate 


EMERYVILLE, Calif., Sept. 10  /PRNewswire-FirstCall/ -- Chiron Corporation
(NASDAQ:CHIR) today announced that it has reached a settlement with F.
Hoffmann-La Roche (Roche) in a dispute over licensing fees and royalties that
Chiron had asserted was owed to the company under a licensing agreement related
to its U.S. Patent No. 6,531,276 (the "276 Patent"). The patent, which was
issued in the United States in March 2003, is directed to nucleic acid testing
(NAT) methods for HIV.

"This settlement attests to the strength of Chiron's intellectual property
position," said Ursula Bartels, Chiron's general counsel. "Because of Chiron's
pioneering science, many people around the world are more protected from
infection by HIV and other life-threatening viruses. The terms of this
agreement recognize the value of our HIV technology and the validity of our
U.S. patent."

Under the terms of the settlement agreement, which covers clinical diagnostics
and blood screening, Roche irrevocably stipulates to the validity and
enforceability of the patent. In addition, Chiron will retain all funds paid by
Roche while the matter was in dispute. Chiron will also receive a lump-sum
payment of $78 million in lieu of royalties beyond January 1, 2005. Roche may
elect under the terms of the agreement to obtain a partial refund and revert to
paying royalties on the sales of its products in North America. The amount of
such potential refund (initially $64 million) and the royalty rate that would
be applicable (between 19 percent and 11 percent) depend on when any such
election is made.  The refund available and the applicable royalty rate each
decrease in equal quarterly increments over the eight quarters of 2005 and
2006.  As such, Chiron expects to recognize $64 million of the payment as
revenue over those eight quarters.  The remaining $14 million is nonrefundable
and will be recognized as revenue in the third quarter of 2004.

This settlement agreement leaves unaffected royalties that Chiron already
receives for its HIV technology from Roche and other licensees under Chiron's
ex-U.S. patents.  In November 2003, Chiron initiated an arbitration against
Roche pursuant to the rules of the CPR Institute for Dispute Resolution. The
arbitration was held in June 2004. The agreement between the companies
concludes the arbitration process.

About Chiron

Through its global Blood Testing, Vaccines and BioPharmaceuticals businesses,
Chiron Corporation addresses human suffering with more than 50 diverse products
to detect, prevent and treat disease worldwide.  The company's consistent
success has come from its pioneering science, skill in delivering innovations
in biotechnology and disciplined business approach. Chiron believes that
science has the power to improve people's lives and harnesses that power to
transform human health. For more information about Chiron, please visit
http://www.chiron.com/.

This year, Chiron Vaccines celebrates 100 years of advancing medicine with the
anniversary of two founding companies.  In 1904, Emil von Behring and Achille
Sclavo independently started companies in Germany and Italy, respectively,
dedicated to the research, development and manufacture of vaccines to protect
humanity from infectious disease.  As the fifth-largest vaccine manufacturer in
the world, Chiron remains dedicated to the legacies of von Behring and Sclavo
to prevent disease and develop new vaccines to improve human health globally.

This news release contains forward-looking statements, including statements
regarding intellectual property protections, patent validity and enforcement,
product development initiatives, new product indications, new product
marketing, and in- and out-licensing activities that involve risks and
uncertainties and are subject to change.  A full discussion of the company's
operations and financial condition, including factors that may affect its
business and future prospects, is contained in documents the company has filed
with the SEC, including the form 10-Q for the quarter ended June 30, 2004 and
the form 10-K for the year ended December 31, 2003, and will be contained in
all subsequent periodic filings made with the SEC.  These documents identify
important factors that could cause the company's actual performance to differ
from current expectations, including the outcome of clinical trials, regulatory
review and approvals, manufacturing capabilities, intellectual property
protections and defenses, stock-price and interest-rate volatility, and
marketing effectiveness.  In particular, there can be no assurance that Chiron
will increase sales of existing products, successfully develop and receive
approval to market new products, or achieve market acceptance for such new
products.  There can be no assurance that Chiron's out-licensing activities
will generate significant revenue, nor that its in-licensing activities will
fully protect it from claims of infringement by third parties. In addition, the
company may engage in business opportunities, the successful completion of
which are subject to certain risks, including shareholder and regulatory
approvals and the integration of operations.

Consistent with SEC Regulation FD, we do not undertake an obligation to update
the forward-looking information we are giving today. 

DATASOURCE: Chiron Corporation



CONTACT:  Chiron Corporate Communications & Investor Relations, Media,

[phone], or Investors, [phone]



Web site:  http://www.chiron.com/ 

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