Release Details

Novartis to withdraw from Collaboration in January 2000

SAN DIEGO, July 9 /PRNewswire/ -- Neurocrine Biosciences, Inc. (Nasdaq: NBIX) today announced that it has reacquired the worldwide rights to its multiple sclerosis compound, MSP771, which were previously held by Ciba-Geigy, Limited, which subsequently became part of Novartis Pharma A.G. While Novartis has elected not to participate further in the development of the product because of prioritization of internal resources, they will fulfill their obligation to fund development costs related to the existing Phase II clinical trials through January 2000. Two ongoing Phase II studies are continuing as planned and there has been no interim analysis of data. Patient enrollment has been completed with MSP771 in approximately 150 patients with multiple sclerosis in a randomized, placebo-controlled multinational Phase II trial. Additionally, a Phase II trial, being conducted in collaboration with the National Institutes of Health, is continuing to enroll patients. All patients will complete treatment by the end of 1999.

"The decision was taken in the context of managing our resources and prioritization of projects in our portfolio and should not influence perception of the potential of MSP771. Earlier trials have demonstrated a positive effect with MSP771 as a potential therapy for multiple sclerosis," said Lynn Kramer, M.D., Vice President for Nervous System Clinical Development.

Under the terms of the agreement, Neurocrine will now fully own the technology including preclinical and clinical results and regulatory filings for MSP771, as well as assume GMP manufacturing supply and worldwide marketing and product rights.

"Novartis has provided Neurocrine with a valuable development program and we appreciate their support with the ongoing Phase II program. We are well positioned to take this compound over and plan to move MSP771 through this phase of clinical development on an accelerated basis. Neurocrine's clinical team is headed by Stephen G. Marcus, M.D., who along with several of our clinical investigators, was involved in the development of Betaseron, the first proven effective treatment of multiple sclerosis," said Gary A. Lyons, President and Chief Executive Officer of Neurocrine Biosciences.

"We expect to complete the Phase II trials by year end 1999 and will announce the results in the first quarter of 2000. If these results are positive, we will make the decision to move forward with a pivotal Phase III clinical program and at that time we will also consider strategic partners and alternative funding sources," added Lyons.

"The altered peptide ligand approach represents the next generation of therapy to treat MS. The ongoing Phase II clinical studies are progressing well, and we are encouraged by the immunological data generated from earlier clinical trials which support the continued clinical evaluation of MSP771," said Lawrence Steinman, M.D. Professor, Department of Neurology and Neurological Sciences, Stanford University who was also involved with Neurocrine in the development of the altered ligand peptide technology.

Background Summary

The collaboration was formed in 1996 to develop altered peptide ligands for the treatment of multiple sclerosis (MS) and has resulted in the drug candidate, MSP771, currently in clinical development. As previously disclosed, Novartis has provided upfront licensing fees, milestone payments and funding for preclinical and clinical studies.

Two Phase II trials are underway in patients with relapsing-remitting MS. One trial is being conducted in collaboration with the National Institutes of Health. The second trial is a double-blind placebo-controlled multinational Phase II trial being conducted in the United States, Canada and Europe. The primary endpoint in these trials is the progression or regression of lesions in the brain of these patients as measured by Magnetic Resonance Imaging (MRI). As a secondary endpoint, clinical investigators will look for the generation of a protective immune response as shown in the Phase I trials.

Neurocrine's therapeutic strategy termed altered peptide ligands (APL) directly targets the autoreactive and destructive immune cells. Neurocrine scientists have taken a portion of myelin-basic protein and modified it so that the antigen is no longer capable of activating pathogenic immune cells, but more importantly, the APL induces an immune response which may be capable of regulating the pathogenic cells. Preclinical studies demonstrated the APL was capable of reducing disease severity and progression for extended periods. This is an important advantage over existing drugs, since the immunologic effect appears to be long lasting and may provide a therapeutic effect in progressive type as well as in relapsing-remitting MS. Currently, Novartis and Neurocrine are evaluating MSP771 in two ongoing Phase II studies in relapsing-remitting patients.

Multiple Sclerosis is an inflammatory disease of the central nervous system which destroys the myelin sheath insulating nerve cells in the brain and spinal cord. The resulting damage causes abnormal functioning of nerve fibers leading to the symptoms associated with multiple sclerosis which range from fatigue, spasticity, tremor, decreased mobility, depression, pain and paralysis. According to the National Multiple Sclerosis Society, approximately 350,000 people in the United States and an equal number in Europe are afflicted with MS. Approximately 20,000 new cases of multiple sclerosis are diagnosed each year in the United States alone.

Neurocrine Biosciences is a leading neuroscience company focused on the discovery and development of novel therapeutics for neuropsychiatric, neuroinflammatory and neurodegenerative diseases and disorders. The Company's neuroscience, endocrine and immunology disciplines provide a unique biological understanding of the molecular interaction between central nervous, immune and endocrine systems for the development of therapeutic interventions for anxiety, depression, Alzheimer's disease, insomnia, stroke, malignant brain tumors, multiple sclerosis, obesity and diabetes.

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In addition to historical facts, this press release contains forward looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from those indicated in the forward looking statements are risks and uncertainties associated with Neurocrine's research and development programs and business and finances including, but not limited to, risks and uncertainties associated with, or arising out of, drug discovery, pre-clinical and clinical development of products including risk that research may not generate development candidates, development candidates will not successfully proceed through early clinical trials or that in later stage clinical trials will not show that they are effective in treating humans; determinations by regulatory and governmental authorities; changes in relationships with strategic partners and dependence upon strategic partners for performance of clinical and commercialization activities under collaborative agreements including potential for any collaboration agreement to be terminated without any product success; uncertainties relating to patent protection and intellectual property rights of third parties; impact of competitive products and technological changes; availability of capital and cost of capital; and other material risks. A more complete description of these risks can be found in the Company's Form 10K for the year ended December 31, 1998 and the current form 10Q each of which should be read before making any investment in Neurocrine common stock. Neurocrine undertakes no obligation to update the statements contained in this press release after the date hereof.
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