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Gen-Probe and Novartis Agree to Extend and Expand Blood Screening Collaboration

Posted on: Tuesday, 27 January 2009, 15:00 CST

- Companies Will Work Together to Protect World's Supply of Donated Blood from Infectious Diseases Until 2025

- Partners Anticipate Continued Expansion into New Global Markets and Development of Innovative New Products, Including Next-Generation PANTHER Instrument

- Companies Also Plan Exploratory Collaboration in Pharmacogenomics

- Gen-Probe Provides Preliminary 2009 Financial Guidance Including Additional Revenue and Profit from Agreement

SAN DIEGO, Jan. 27 /PRNewswire-FirstCall/ -- Gen-Probe (Nasdaq: GPRO) announced today that it has agreed to extend and expand its blood screening collaboration with Chiron, a Novartis (NYSE: NVS) business, ensuring the companies will work together to develop and commercialize molecular technologies that safeguard the world's donated blood supply until the year 2025.

"Extending and expanding our agreement with Novartis enables us to continue providing innovative nucleic acid tests that protect the world's blood supply from dangerous pathogens, while benefiting from our partner's extensive global commercial presence," said Hank Nordhoff, Gen-Probe's chairman and chief executive officer. "At the same time, it enables us to deliver significant additional economic value to our shareholders while minimizing financial and operational risk and potential disruption to an outstanding business."

Since 1998, Gen-Probe and Novartis have developed, manufactured and commercialized nucleic acid tests and instrumentation that have been used by blood banks to screen more than 125 million blood donations in the United States alone. These tests have intercepted thousands of units of blood that were infected with HIV-1, hepatitis C and B, and West Nile virus, thereby preventing life-threatening diseases from being passed along to transfusion recipients.

"Together these two companies have discovered and developed innovative solutions for the screening and prevention of infectious diseases to help protect the nation's blood supply," said William F. Moore, senior vice president, biomedical services operations, American Red Cross. "We are pleased to see this successful collaboration continue to focus on innovations and reinvestment in technology that will help keep the blood supply as safe as possible."

Unlike standard serological testing, nucleic acid testing (NAT) detects viral RNA and DNA during earlier stages of infection, shortening the window period from infection to detection. Scientific models estimate that NAT reduces the infectious window period of HIV-1, HCV and HBV from 35% to 91%, compared with standard serological methods.

About the Revised Agreement

The collaboration between Gen-Probe and Novartis was established in 1998, and was scheduled to expire in 2013. Under the original terms of the agreement, the companies shared revenue from the sale of blood screening assays. Gen-Probe was responsible for manufacturing costs, while Novartis was responsible for commercial expenses. The companies shared research and development (R&D) costs.

Under the revised agreement, Gen-Probe will continue to be primarily responsible for R&D and manufacturing. Novartis will remain responsible for sales and marketing of the products, but will collaborate more closely with Gen-Probe on sales, marketing and distribution strategies. In addition to sharing R&D costs, the companies will share manufacturing expenses. Gen-Probe also will receive a percentage of end-user revenue that escalates gradually from 2009 until 2015, and remains constant thereafter.

As part of the expanded agreement, Novartis has agreed to help fund development of Gen-Probe's PANTHER instrument, a fully automated molecular testing platform, for the blood screening market. The companies also have agreed to evaluate, using Gen-Probe's technologies, the development of companion diagnostics for current or future Novartis medicines.

Gen-Probe Preliminary 2009 Financial Guidance

Gen-Probe expects the new agreement to add to the Company's revenue and profits in 2009 and future years. Accordingly, Gen-Probe's preliminary expectation is that its total revenues in 2009 will range from $460 to $490 million, and that its earnings per share will range from $1.80 to $2.05. These preliminary ranges incorporate foreign exchange rate fluctuations approximately 10% higher or lower than recent levels, and do not yet include potential revenue from the new PROCLEIX ULTRIO assay in the United States.

About Gen-Probe

Gen-Probe Incorporated is a global leader in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid tests (NATs) that are used primarily to diagnose human diseases and screen donated human blood. Gen-Probe has more than 25 years of NAT expertise, and received the 2004 National Medal of Technology, America's highest honor for technological innovation, for developing NAT assays for blood screening. Gen-Probe is headquartered in San Diego and employs approximately 1,000 people. For more information, go to http://www.gen-probe.com.

Caution Regarding Forward-Looking Statements

Any statements in this press release about Gen-Probe's expectations, beliefs, plans, objectives, assumptions or future events or performance, including those under the heading "Gen-Probe Preliminary 2009 Financial Guidance," are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as believe, will, expect, anticipate, estimate, intend, plan and would. For example, statements concerning the future financial effects of the new agreement, new products, future sales or profits, potential regulatory approvals, and customer adoption are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by any forward-looking statement. Some of these risks, uncertainties and assumptions include but are not limited to: (i) the risk that the revised collaboration will not be maintained, (ii) the risk that new blood screening products will not be cleared for marketing in the timeframes we expect, if at all, (iii) the possibility that new markets for the sale of our blood screening products may not develop as expected, (iv) we may not be able to compete effectively with other companies currently selling blood screening products or which launch such products in the future, (v) we depend on a small number of contract manufacturers and single source suppliers of raw materials, (vi) changes in third-party reimbursement policies regarding our products could adversely affect their sales, (vii) changes in government regulation affecting our products could harm our sales and increase our development costs, and (viii) litigation involving the assertion of third party patent rights could be expensive and divert management's attention, and/or result in damages or injunctive relief. The foregoing describes some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements. For additional information about risks and uncertainties we face and a discussion of our financial statements and footnotes, see documents we file with the SEC, including our most recent annual reports on Form 10-K and all subsequent periodic reports. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this news release or to reflect the occurrence of subsequent events.

Contact: Michael Watts Sr. director, investor relations and corporate communications 858-410-8673

SOURCE Gen-Probe Incorporated

Source: PR Newswire

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