FOR IMMEDIATE RELEASE

December 8, 2003.

Novartis enters into research collaboration with Morphochem for use of its MOREsystem™ in lead discovery.

Munich, Germany, 8 December 2003…Morphochem AG, a leader in the evolutionary discovery of small molecule drugs, has entered into a research collaboration with Novartis wherein Morphochem will apply MOREsystem™, its evolutionary drug discovery engine, to the discovery and optimisation of novel compounds with activity against a number of undisclosed biological targets for a range of health disorders or diseases. Under the terms of the agreement, which were not disclosed, Novartis will fund the research at Morphochem and Morphochem is entitled to receive research and development milestone payments. Additionally Morphochem will retain the rights to develop compounds synthesised during the programme for which Novartis does not exercise a licence.

Dr Peter Seufer-Wasserthal, VP Business Development at Morphochem, commented: “This collaboration nicely fits our vision of working with partners to apply our integrated discovery technologies in parallel on a number of targets to identify compounds active against these targets. These compounds will then be further refined applying genetic algorithms in an evolutionary way in which multi parametric optimisation is used to identify compounds suited as potential drug candidates.”

Morphochem AG discovers and develops highly selective small molecule compounds for the medicines of tomorrow. The company integrates novel chemistries with biological screening on the basis of its proprietary MolMind™ technology. Its unique and highly integrated chemical genomics platform provides a continuous flow of novel drug candidates for unmet medical needs in major areas of indications such as cancer and anti-infectives

Morphochem was founded in Munich in 1996 and is an integrated, transnational drug discovery and development company, currently employing some 100 staff. To date the Company has raised  78 million in four financing rounds. For further information please consult www.morphochem.com.