FOR IMMEDIATE RELEASE

May 20, 2005.

Morphochem provides novel lead compounds for further development from successful collaboration.

Munich, Germany, 20th May 2005…Morphochem AG, a leader in the evolutionary discovery of small molecule drugs today announced the successful completion of their first research agreement with Novartis, with the licensing of certain compounds discovered by Morphochem for further development at Novartis.
Under the terms of the agreement, Morphochem has applied the MOREsystem®, its proprietary design, synthesis and screening technology, to identify novel small molecules outside of existing Intellectual Property, against three non disclosed targets provided by Novartis.

For the duration of the agreement, Morphochem received research funding and is eligible for future milestone payments on the licensed compounds. “We are very pleased that we could demonstrate the speed and efficiency of Morphochem’s discovery engine to identify novel, “drug-able” molecules outside existing intellectual property, so as to provide Novartis with alternative options for their development programs” Sijmen de Vries, MD, MBA, Chief Executive Officer of Morphochem, stated.

Notes
Morphochem AG (www.morphochem.com) a privately owned company based in Munich and Basel has developed a unique and highly integrated fast chemical genomics Drug Discovery Engine that it is applying in several 3th party research programs and for building its own fully owned pipeline. The current lead products in this pipeline; MCM 17 a novel oral anti-thrombotic (Factor Xa inhibitor) and MCB3837 a unique Oxaquin® Dual Action IV Hospital Antibiotic are planned to enter Clinical Trials towards the end of 2005. In addition, as the fast Discovery Engine enables “Fast Follower” development projects on “hot targets”, in addition, the Morphochem pipeline also contains a number of original lead- stage projects against various proven targets.

For further information please contact: