News Release

Yamanouchi Pharmaceutical Co., Ltd.

Yamanouchi Pharmaceutical Co., Ltd.,
Yamanouchi Forming Research Alliance with Searle

January 20, 1998

Yamanouchi Pharmaceutical (President: Masayoshi Onoda) has formed a comprehensive research alliance with G.D. Searle & Co., of the United States. Yamanouchi has acquired development and marketing rights in Japan for all of Searle's compounds in the clinical development phases in Europe and the United States for four years after the contract signing. Compounds that Yamanouchi obtains development rights for already amount to more than 10 items at the current stage, including novel hematopoietic growth factors and both anti-inflammatory agents and anti-cancer drugs with novel mechanisms. The Japanese company will pay a fixed sum to Searle in exchange for these rights using milestone payment method. For future product launch, Searle's Japanese branch company and Yamanouchi will co-promote products under the Yamanouchi brand name or the two companies will co-market products under their respective brands.

Amid expectations that the operating environment will become increasingly difficult for pharmaceuticals companies, it is essential that global enterprises maintain R&D capabilities yielding a continuous stream of new drugs through international channels for their continued existence and development. Strengthening the product lineup both domestically and abroad is absolutely imperative. Yamanouchi Pharmaceutical is actively pursuing new drug research in wide-ranging areas, including endocrinology, urogenital organs, bone-related locomortorium, the central nervous system, and malignant neoplasm. While Searle's research areas mesh with Yamanouchi's product strategy, the two firms rarely compete directly at present in their pursuit of research themes. Searle's research projects move forward faster than those of competitors in many cases. Accordingly, in the competition for rapid drug development, the firm boasts many compounds that are first or second to market. Compared with agreements for single compound offerings, comprehensive alliances centered on the entire drug product pipeline are considered far more effective investments for creating excellent drugs products. Yamanouchi concluded the current agreement based on these strong merits. At the same time, Searle will receive partial research funding while also benefiting from the almost simultaneous development in Japan of its products for Europe and the United States.

Illinois-based Searle boasts a long history and a distinguished track record as a research-oriented pharmaceutical enterprise. The company currently carries out pharmaceuticals operations as a subsidiary of the Monsanto Company. Searle's main research areas are circulatory organs, arthritis, insomnia, cancer, and gynecology. Yamanouchi and Searle have already been working together to develop and market in Japan the U.S. company's novel oral anti-inflammatory agent, celecoxib that is expected to greatly reduce side effects compared with available anti-inflammatory agents. Through the alliance, Yamanouchi should again be able to utilize the fruits of Searle's unique research to commercialize pharmaceutical products.

Yamanouchi Pharmaceutical conducts forward-looking research using leading international technologies. Taking advantage of its global operating bases, the company has established a network for rapid clinical development in the most appropriate locations within three cornerstone geographical region-Japan, the United States, and Europe-of lead compounds springing from research. At the same time, Yamanouchi has constructed a drug delivery technology research network within its Group companies that extends across these three cornerstone regions and pursues the development of high-value-added drug products on an international level. In tandem with these global activities to create new drugs, the company aims to further substantiate its product lineup through active strategic alliance such as this one with Searle with the aim of enhancing its underlying corporate strengths.

< Reference>
Outline of Monsanto Company
Established: 1901
Head Office: St. Louis, Missouri, U.S.A.
Sales: US$6.3 billion (Consolidated net sales at fiscal year ended December 31, 1996, and restated to eliminate chemical business sales, spun off September 1, 1997)
Chairman and CEO: Robert B. Shapiro
Business Line: The development, manufacture, and sale of pharmaceuticals, agricultural-related products, and food additives
Outline of G.D. Searle & Co.(a wholly-owned subsidiary of Monsanto Company)
Established: 1888
Head Office: Chicago, Illinois, U.S.A.
Sales: US$1.9 billion(Net sales at fiscal year ended December 31, 1996)
Chairman and CEO, Searle, Vice Chairman, Monsanto:
Richard U. De Schutter
Principal Businesses: R&D, manufacture, and sale of pharmaceuticals
Research centers: Hayward, CA; Palo Alto, CA
Production facility: Norman, OK
Outline of Yamanouchi Pharmaceutical Co., Ltd.
Established: 1923
Head Office: 3-11, Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo 103, Japan
Sales: ¥ 454.7 billion(Consolidated net sales at fiscal year ended March 31, 1997)
President and CEO: Masayoshi Onoda
Principle Businesses: The manufacture, sale, import, and export of pharmaceuticals, quasi-drugs, foods, medical equipment, and devices