KALYPSYS RAISES $43 MILLION IN SERIES A FINANCING

4/3/2002

Kalypsys Inc., a San Diego-based biopharmaceutical company, announced today that it had secured $43 million in one of the largest first-round financings ever in the biotech sector. The financing was led by the Sprout Group and co-led by Tavistock Life Sciences, and included CMEA Ventures, Lombard Odier & Cie, Novartis BioVenture Fund, Aravis Ventures, Alejandro Zaffaroni, and the Singapore Economic Development Board, among others. "We are pleased to have such a strong group of global investors recognize the value of starting with a fully integrated drug discovery platform," commented Pratik Shah, PhD, Kalypsys' Chief Business Officer, "This financing round will allow us to aggressively expand our discovery programs and develop a product portfolio."

Spun-out of the Genomics Institute of the Novartis Research Foundation (GNF) in 2001, Kalypsys was formed with a suite of biological, chemical and information technologies that enabled it to commence operations as an integrated drug discovery company. These technologies have been under development for the past two and one-half years by Peter Schultz, PhD, GNF's Institute Director, and his interdisciplinary team of over two hundred biologists, chemists and engineers at GNF. "The power of the Kalypsys platform is that it enables an unbiased, pathway-based approach to discovery," commented Dr. Schultz, "GNF has spent more than two years developing the technology platform underlying Kalypsys, and has already demonstrated the discovery of pathways, targets and novel molecules at an unprecedented rate. GNF and Kalypsys will continue to intensely collaborate to expand the capabilities of the platform." Kevin Lustig, PhD, Kalypsys' Director of Lead Discovery, stated "The pathway-based approach to drug discovery, in which drug candidates are tested in cellular models of disease rather than against isolated targets, is how many current best-selling drugs were discovered. Our automated biological and chemical technologies have now made it possible to pursue this approach on a truly industrial scale."

"Kalypsys is a unique opportunity to invest in technology that is simultaneously leading edge and proven in its ability to carry out pathway-based discovery. Pathway and phenotypic screening combined with state-of-the-art lead optimization systems and advanced informatics creates major efficiencies in the pre-clinical process and confers an advantage in the development of new therapeutics", commented Vijay Lathi of the Sprout Group.

Kalypsys Board members include Peter Schultz, PhD, Institute Director at GNF and Scripps Professor of Chemistry at the Scripps Research Institute, Isy Goldwasser, President of Symyx, John Diekman, PhD, Managing Director at Bay City Capital and Investment Advisor at Aravis, Vijay Lathi of the Sprout Group and Rasesh Thakkar of Tavistock Life Sciences. Other founders include Pratik Shah, PhD, Kalypsys' Chief Business Officer, Kevin Lustig, PhD, Kalypsys' Director of Lead Discovery, Randy King, PhD, MD, Asst. Professor of Cell Biology at Harvard Medical School, Jeremy Caldwell, PhD, GNF's Director of Molecular and Cell Biology, and Bob Downs, GNF's Director of Engineering.

About Sprout Group

The Sprout Group is one of the oldest and largest venture capital firms in the US. Since 1969, Sprout has helped finance more than 300 companies with combined sales exceeding $40 billion. With offices in Menlo Park, New York and Chicago, Sprout focuses on helping to grow companies in datacom and telecom, technology-related services, enterprise software, and healthcare technology. Active investments in healthcare technology include Adeza Biomedical, Adolor, Allos Therapeutics, Deltagen, ePocrates, IntraBiotics Pharmaceuticals, Focus Technologies , Gryphon Sciences, NxStage Medical, Pharsight, PhaseForward, Phylos, Prometheus, Spotfire, Structural GenomiX, Tripath, Variagenics, VascA and VNUS Medical Technologies. Sprout Group is a venture capital affiliate of Credit Suisse First Boston. For further information on the Sprout Group, please visit our web site at www.sproutgroup.com.

About Tavistock Life Sciences

Tavistock Life Sciences Inc. is a division of the Tavistock Group. The Tavistock Group is a privately held organization, whose holdings serve the needs of businesses and consumers worldwide in life sciences, financial services, real estate, oil and gas, leisure services, retailing and manufacturing. Tavistock Life Sciences invests in a select number of biotech opportunities with exceptional technology profiles. In each biotech investment, Tavistock Life Sciences assumes an active partnership role providing appropriate financing, strategic and operational planning, business development, and recruiting assistance. For further information on Tavistock Life Sciences, please contact Rasesh Thakkar at (407) 876 8800.

About Kalypsys

Kalypsys is a biopharmaceutical company pioneering an industrialized approach to pathway-based drug discovery. By using advanced automation technologies to first evaluate drug candidates in cellular models of disease, and then to optimize the safety and efficacy of select candidates, Kalypsys is able to make better decisions earlier in the discovery process, improving the probability of success, quality, and productivity of drug discovery. Kalypsys is using this approach to identify drug leads in multiple therapeutic areas including cancer, inflammation, metabolic diseases, cardiovascular disorders and infectious diseases. For more information on Kalypsys, please visit www.kalypsys.org or call Pratik Shah at (858) 754 3300.