NIH SELECTS KALYPSYS TO PROVIDE ENABLING TECHNOLOGY FOR THE MAJOR INITIATIVE TO FOLLOW THE HUMAN GENOME PROJECT

6/9/2004

San Diego, California, June 9, 2004 — Kalypsys, Inc. and the National Institutes of Health (NIH) entered into an agreement in which the NIH will access Kalypsys' proprietary technologies as a key enablement for the newly created NIH Chemical Genomics Center. The agreement is valued at up to $30 million.

The NIH Chemical Genomics Center will produce innovative chemical tools that will be used to understand the function of the genes that comprise the human genome. Established through the Molecular Libraries and Imaging Initiative of the recently announced NIH Roadmap for Medical Research, the NIH Chemical Genomics Center is based in the National Human Genome Research Institute's (NHGRI's) Division of Intramural Research. This program stems from the Human Genome Project and is one of 28 initiatives in the NIH Roadmap.

"Mapping the human genome was the first step. Now it is essential that the NIH continues its role by determining the function of the approximately 25,000 genes that comprise the human genome. If we want to make medical progress, we need to increase our overall understanding of the roles that genes play in complex diseases, such as cancer, heart disease and diabetes," said NHGRI Director Francis Collins, M.D., Ph.D. "To do this, we need a set of technologies that allows us to screen efficiently a multitude of biochemical pathways simultaneously. We believe that Kalypsys' ultra-high throughput screening technology is an excellent platform to undertake this challenge."

The Kalypsys platform of highly automated lead discovery solutions is comprised of a variety of distinctive off-line and on-line capabilities, including workstations, hit-picking, essential consumables, compound libraries, compound acquisition and screening services, and an ultra-high throughput screening system capable of screening in excess of one million compounds per day in a variety of biochemical and cellular assays. The power and robustness of the Kalypsys technologies make them uniquely suited to probe the massive number and diversity of targets likely to be encountered in this endeavor. The deal, if all options are exercised, is valued at $30 million.

The NIH Chemical Genomics Center is the first in a consortium of chemical genomics screening centers being established by the Molecular Libraries and Imaging Initiative with leadership from the National Institute of Mental Health (NIMH). Up to 10 pilot centers will be funded at academic institutions and other locations across the country in Fiscal Year (FY) 2005. To support the network, NIH plans to establish a repository to acquire, maintain and distribute a collection of up to 1 million chemical compounds. As was the case for the Human Genome Project, data generated by the chemical genomics network will be deposited in a central database, called PubChem, which will be managed by the National Center for Biotechnology Information at the National Library of Medicine and will be freely available to the entire scientific community.

"We are pleased that the Kalypsys technology platform has been selected to enable this national initiative and are proud to participate in the functional mapping of the human genome. The Road Map initiative validates the power and utility of our technologies and Kalypsys as a preferred partner," commented Pratik Shah, Ph.D., Kalypsys' Chief Business Officer. "We have seen these technologies exceed our expectations in drug discovery for Kalypsys and our partners, but this will take the capabilities of our technologies to another level."

About Kalypsys

Kalypsys is a drug discovery company that uses next-generation automated hardware, integrated software, informatics technologies and its sizeable lead-like compound collection to build and advance its own sustainable drug candidate pipeline and those of its partners. The company's mission is to build a sustainable drug pipeline, taking candidates from concept to clinical proof of concept with unmatched speed, efficiency, and success rates. Kalypsys currently has a strong pre-clinical pipeline of small molecule candidates, which it is advancing rapidly to clinical development.

For more information on Kalypsys, please visit www.kalypsys.org. For further information about strategic partnerships, please contact:

John Delyani, Ph.D., +1-858-754-3434