Bayer acquires manufacturing facility from Novartis

Bayer will manufacture Betaseron at the Emeryville site, retain full control of all manufacturing and process technology used in the production of Betaseron (interferon beta-1b) and has retained the employees associated with the manufacture of the product.

As part of the transaction, which was announced in March 2007, Novartis has transferred manufacturing responsibility to Bayer Schering Pharma for Betaseron and has received a total one-time payment of approximately $200 million for the transfer of production equipment, inventory and the leasing of buildings at the site.

Bayer Schering Pharma will continue to pay Novartis royalties equivalent to those being paid currently on net sales of Betaseron manufactured by Bayer at the Emeryville facilities until expiration of the original regulatory filing, development and supply agreement in October 2008. After this date, no more royalties will be due to Novartis on the sales of Betaseron.

Bayer Schering Pharma will support Novartis in the regulatory filing process of a Novartis brand of the 250mcg version of interferon beta-1b as part of the deal. When approved by health authorities, Bayer Schering Pharma will supply the 250mcg version of interferon beta-1b to Novartis from 2009 forward and receive in return a double-digit royalty payment from Novartis.

Betaseron is currently marketed by Bayer Schering, which was created after Bayer acquired Schering in 2006. In 1993, Schering signed an agreement with Chiron covering the regulatory filing, development and supply of Betaseron. Novartis acquired Chiron in 2006. Novartis assumed the rights to this product through the purchase of Chiron.