New Chemical Entities, Inc. and Thetagen, Inc. Merge

-- Joins Complementary Genomics, Informatics Technologies and Chemical

Diversity From Natural Products to Accelerate Discovery

Of Validated Drug Leads--

Sep 15, 1999, 01:00 ET from New Chemical Entities, Inc.

    FRAMINGHAM, Mass., and BOTHELL, Wash., Sept. 15 /PRNewswire/ --
 New Chemical Entities, Inc. (NCE), a  drug discovery and information company,
 and Thetagen, Inc., a provider of drug discovery and pharmacogenomic services,
 announced today that the companies have merged.  The combined Company, which
 retains the name NCE, integrates three complementary technologies, all focused
 on enhancing the discovery of validated pharmaceutical leads: (1) chemical
 diversity and drug leads derived from natural products, (2) pharmaco- and
 toxicogenomics, and (3) drug discovery informatics.  The Company has an
 established  revenue base from over a dozen worldwide research contracts and
 an emerging pipeline of high value information products and validated leads.
 Financial terms of the merger were not disclosed.
     NCE was founded in 1997 by a group of leading research and drug discovery
 professionals, headed by Dr. Barry A. Berkowitz, to advance a novel approach
 to pharmaceutical discovery that integrates informatics and molecular
 diversity from natural products.  Dr. Berkowitz, who is Chairman and CEO of
 NCE, is an experienced pharmaceutical executive and entrepreneur.  He most
 recently was co-founder and CEO of ChemGenics Pharmaceuticals (formerly Myco
 Pharmaceuticals) until successfully merging the company with Millennium
 Pharmaceuticals in 1997.
     Thetagen was established in 1997 by Sam Deliganis, MBA, and by Curtis
 Omiecinski, Ph.D., a leader in pharmaco- and toxicogenomics.  In January 1999,
 Thetagen acquired the assets and hired the staff of MDS Panlabs' integrated
 drug discovery division.  Thetagen provides a range of drug discovery services
 from a substantial technology base and five laboratories that includes:
 pharmaco- and toxicogenomics and gene profiling; natural products sourcing and
 bioengineering; separations technologies and analytical chemistry; synthetic
 organic and combinatorial chemistry; and chemoinformatics and drug design.
     "NCE is building a unique position in the industry based on applying and
 integrating a series of key technologies to increase the quality and quantity
 of molecular diversity relevant for drug discovery.  For example, the Company
 is creating new databases and information tools to better integrate actionable
 biomolecular information into the drug discovery process," said Dr. Berkowitz.
 "We call this approach Drug Discovery Informatics.  Our approach can
 dramatically increase the efficiency of the drug discovery process at a time
 when genomics is providing a wealth of potentially important new targets, the
 validation of which requires the type of chemical diversity and information
 particularly available from natural sources."
     He continued, "We are excited about the potential of NCE and, as a result
 of the merger, we have a powerful drug discovery platform.  The integration of
 our genomics technologies allows us to expand diversity further and more
 rapidly identify novel structures with improved safety profiles.  We also
 improve the capabilities in combinatorial chemistry, chemoinformatics and drug
 design."  Dr. Berkowitz noted "that although chemical diversity from natural
 products has provided the structures for 30 percent of today's top
 pharmaceuticals and 60 percent of antibiotics and anti-cancer drugs, discovery
 from natural products has been considered slow and inefficient.  Our new
 integrated company removes key bottlenecks that have slowed progress in the
     Sam Deliganis, NCE's Chief Operating Officer, commented, "the merged
 company provides a range of opportunities to generate multiple near- and
 longer-term revenue streams.  The new company has a dual and balanced business
 model that in the near-term provides revenues derived from the sale or
 licensing of high-value natural product libraries, biomolecular data mining
 technologies and drug discovery services.  Longer-term, we will discover and
 develop validated lead drugs to fuel a pipeline of strategic alliances with
 the products to be commercialized by our partners."  He added that Thetagen
 also brings to the merger a current revenue base from  over a dozen
 international service and drug discovery research contracts and
     NCE has three sets of new high-value products in development that combine
 access to chemical diversity with chemical and biological information.  These
 products include:
     * Proprietary informatics and databases:  NCE is building one of the most
       knowledge intensive databases in the industry of bio- and
       chemoinformatics related to diversity from natural products.  NCE is
       expanding this database to increase its ability to be mined and to be
       interactive with proteomics, genomics and medicinal chemistry databases
       that are important for drug discovery.  The NCE-LIMS (Lab Information
       Management System) is proprietary, powerful and provides synergy and
       added value for data handling, mining and display.
     * Large and target-focused libraries:  NCE is developing information-rich
       libraries, based principally on natural products, that are pre-screened
       against disease targets, highly amenable to high throughput screening,
       chemically and biologically diverse, and searchable for biomolecular
       information to enable greater efficiency in drug discovery. A second set
       of libraries combines for the first time the quality of natural product
       diversity with the quantity and power potential of combinatorial
     * Validated drug leads.  NCE is building a pipeline of validated drug
       leads, which the company expects will result in major corporate
     The Company's current drug discovery services include, pharmaco- and
 toxicogenomics testing and drug sourcing based on one of the most extensive
 collections, in a commercially available format, of natural product diversity
 and related enabling technologies.
     The new Company is led by a strong management and research team with an
 excellent record of success.  In addition to Dr. Berkowitz and Mr. Deliganis,
 NCE's senior management team includes Christopher Ball, Ph.D., Chief Business
 Officer and an experienced group of drug discovery directors.  NCE has an
 established and participatory  Scientific Advisory Board of world leaders in
 informatics, biocombinatorial biology, chemistry, natural products and drug
 discovery including:
     -- Anthony G.M. Barrett, Ph.D., Head of  Synthesis, Dept. of Chemistry,
        Imperial College of Science Technology and Medicine, London (U.K);
     -- Jeffrey M. Becker, Ph.D., Professor of Microbiology, University of
        Tennessee, Knoxville;
     -- A. Jamie Cuticchia, Ph.D., Senior Scientist, Bioinformatics, Hospital
        for Sick Children, and Assistant Professor of Medicine and Biomedical
        Information Services, Johns Hopkins University;
     -- Arnold L. Demain, Ph.D., Professor of Industrial Microbiology, MIT;
     -- David L. Eaton, Ph.D., Director, Center for Ecogenetics and
        Environmental Health and Professor in the Department of Environmental
        Health, University of Washington;
     -- Paul Matsudaira, Ph.D., Professor of Biology, MIT;
     -- Koji Nakanishi, Ph.D., Centennial Professor of Chemistry, Columbia
     -- Curtis Omiecinski, Ph.D., Professor, Department of Environmental
        Health, University of Washington;
     -- Gregory Petsko, Ph.D., Professor and Director, Rosenstiel Basic Medical
        Sciences Res. Cntr., Brandeis University;
     -- Gregory Stephanopoulous, Ph.D., Professor, Department of Chemical
        Engineering, MIT;
     -- Jerry Weisbach, Ph.D., former President of Warner-Lambert's
        pharmaceutical research division.
     NCE has operations outside of Seattle, in Bothell, Washington, and outside
 of Boston, in Framingham, Massachusetts.  The Washington facility includes a
 fully equipped 24,000-square-foot research laboratory customized for drug
 discovery.  The company has a full-time staff of 25.

SOURCE New Chemical Entities, Inc.