Chiron and XOMA Announce Initiation of Phase I Clinical Trial for CHIR-12.12 in Multiple Myeloma -- Second Clinical Trial Evaluating Oncology Drug Candidate Begins

Chiron Corporation (Nasdaq:CHIR) and XOMA Ltd.(Nasdaq:XOMA) today announced the initiation of a second clinicaltrial of CHIR-12.12, a novel, fully human, antagonist antibody thattargets the CD40 antigen. The Phase I trial is for patients withmultiple myeloma, a type of cancer that is associated with expressionof the CD40 antigen on the cancer cell surface. Chiron and XOMAannounced the initiation of a Phase I clinical trial of CHIR-12.12 inpatients with chronic lymphocytic leukemia in April 2005. CHIR-12.12is the first drug candidate to enter clinical testing under thecollaborative agreement between Chiron and XOMA for the developmentand commercialization of antibody products for the treatment ofcancer.

"The expansion of our Phase I program is an indication of ourexcitement for this compound," said Stephen Dilly, M.D., Ph.D., chiefmedical officer, Chiron BioPharmaceuticals. "Chiron'stranslational-medicine approach to drug development has helpedidentify diseases against which CHIR-12.12 may be effective, providingus with data that supports our decision to move forward with studiesin multiple areas."

"We're pleased to move CHIR-12.12 into clinical studies in asecond B-cell oncology indication," said John C. Castello, XOMA'schairman, president and chief executive officer. "Our collaborationwith Chiron enables both companies to advance promising antibodiesmore quickly than either could alone. This benefits our employees andshareholders, as well as potentially offering a new treatment formultiple myeloma patients."

The single-agent, open-label Phase I study of CHIR-12.12 isdesigned to evaluate the safety, dose tolerability and pharmacokineticprofile of CHIR-12.12 in patients with multiple myeloma. Translationalmedicine will be used to monitor biomarkers and allow correlation ofthese markers with response to CHIR-12.12 therapy, guiding the dosingregimen and the selection of responsive patient populations. The studyis expected to enroll up to 40 patients at four leading cancer centersin the United States.

About CHIR-12.12

CHIR-12.12 is a fully human, antagonist antibody that targets theCD40 antigen. As shown in vitro in cell lines, in vivo in animalmodels and ex vivo in patient cells, CHIR-12.12 binds to tumor cellsthat express CD40 and antagonizes (prevents) CD40 ligand-mediatedgrowth and survival of malignant B cells. Based on preclinical data,CHIR-12.12 also induces antibody-dependent cellular cytotoxicity(ADCC), killing CD40 expressing tumor cells by immune effector cells.This dual mechanism of action makes CHIR-12.12 a drug candidate withpotential for the treatment of B-cell malignancies. CHIR-12.12 is aninvestigational drug candidate and has not been approved by the U.S.Food and Drug Administration.

About Multiple Myeloma

Multiple myeloma, also known as myeloma or plasma cell myeloma, isa progressive hematologic (blood) cancer of the plasma cell (a type ofB lymphocyte), an important part of the immune system that producesimmunoglobulins (antibodies) to help fight infection and disease.Clinical manifestations of multiple myeloma include hypercalcemia,anemia, renal damage, increased susceptibility to bacterial infection,and impaired production of normal immunoglobulin. The disease also ischaracterized by diffuse osteoporosis (bone destruction), usually inthe pelvis, spine, ribs and skull. Multiple myeloma is the second mostprevalent blood cancer after non-Hodgkin's lymphoma, representingapproximately 1 percent of all cancers and 2 percent of all cancerdeaths. The median age at diagnosis is about 71 years, and only 2percent of cases are diagnosed in individuals under the age of 45.Statistics indicate both increasing incidence and earlier age of onsetof multiple myeloma. Approximately 50,000 Americans currently havemultiple myeloma, and the American Cancer Society estimates thatapproximately 15,980 new cases of multiple myeloma will be diagnosedin 2005.

About Chiron

Chiron delivers innovative and valuable products to protect humanhealth by advancing pioneering science across the landscape ofbiotechnology. The company works to deliver on the limitless promiseof science and make a positive difference in people's lives. For moreinformation, please visit www.chiron.com.

About XOMA

XOMA develops and commercializes antibody and other protein-basedbiopharmaceuticals for cancer, immune disorders and infectiousdiseases. The company pipeline includes products from collaborativeproduct development programs with Chiron Corporation, MillenniumPharmaceuticals, Inc., and Aphton Corporation, and also includesRAPTIVA(R), a product marketed worldwide that came from acollaboration with Genentech, Inc. For more information about XOMA'sproduct pipeline and antibody product development capabilities andtechnologies, please visit XOMA's website at www.xoma.com.

Chiron Forward-Looking Statements

This news release contains forward-looking statements, includingstatements regarding development of CHIR-12.12, regulatory review andmarketing, that involve risks and uncertainties and are subject tochange. A full discussion of the company's operations and financialcondition, including factors that may affect its business and futureprospects, is contained in documents the company has filed with theSEC, including the Form 10-Q for the quarter ended June 30, 2005, andthe Form 10-K for the year ended December 31, 2004, and will becontained in all subsequent periodic filings made with the SEC. Thesedocuments identify important factors that could cause the company'sactual performance to differ from current expectations, including theoutcome of clinical trials, regulatory review and approvals,competition, manufacturing capabilities, intellectual propertyprotections and defenses, and marketing effectiveness. In particular,there can be no assurance that Chiron will successfully develop andreceive approval to market new products, including CHIR-12.12, orachieve market acceptance for such new products. There can be noassurance that Chiron's out-licensing activities will generatesignificant revenue, nor that its in-licensing activities will fullyprotect it from claims of infringement by third parties. In addition,the company may engage in business opportunities, the successfulcompletion of which are subject to certain risks, including approvalby Novartis AG, regulatory approvals, and the integration ofoperations.

We do not undertake an obligation to update the forward-lookinginformation we are giving today.

XOMA Forward-Looking Statements

Statements made in this press release related to progress ortiming of product development or collaborative arrangements, or thatotherwise relate to future periods, are forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933 andSection 21E of the Securities Exchange Act of 1934. These statementsare based on assumptions that may not prove accurate. Actual resultscould differ materially from those anticipated due to certain risksinherent in the biotechnology industry and for companies engaged inthe development of new products in a regulated market. These risks,including those related to the results of pre-clinical testing, thetiming or results of pending and future clinical trials (including thedesign and progress of clinical trials; safety and efficacy of theproducts being tested; action, inaction or delay by the FDA, Europeanor other regulators, their advisory bodies; and analysis orinterpretation by, or submission to, these entities or others ofscientific data), changes in the status of existing collaborativerelationships, the ability of collaborators and other partners to meettheir obligations, market demand for products, scale up and marketingcapabilities, competition, availability of additional licensing orcollaboration opportunities, international operations, share pricevolatility, XOMA's financing needs and opportunities, uncertaintiesregarding the status of biotechnology patents, uncertainties as to thecost of protecting intellectual property and risks associated withXOMA's status as a Bermuda company, are discussed in the Company'smost recent annual report on Form 10-K and in other SEC filings.Consider such risks carefully in evaluating XOMA's prospects.