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Rigel and Novartis Initiate Second Drug Discovery Collaboration

South San Francisco, CA - October 28, 1999

Rigel, Inc. today announced that it has entered into its second, five-year drug discovery collaboration with Novartis Pharma AG. Researchers from both companies will use Rigel's advanced functional genomics technology to identify and validate small molecule (orally-active) drug targets that can mediate specific functions of B cells -- white blood cells that are involved in autoimmune diseases such as rheumatoid arthritis, lupus and organ transplantation.

This is the second of five research projects on which the companies have agreed to collaborate; the remaining three will be defined over the next two years. The initiation of this research project triggers an undisclosed cash payment to Rigel, which will also receive milestone and certain royalty payments relating to the development of any vaccines, diagnostics or therapeutics resulting from the collaboration. In exchange, Novartis will retain exclusive worldwide rights to develop and market products in those areas relating to targets discovered under the collaboration.

"We are pleased to be initiating our second research project with Novartis just months after announcing our first collaboration in the area of T cell regulation," said James M. Gower, President and Chief Executive Officer of Rigel, Inc. "We are confident that together, these two collaborations will produce important discoveries in the area of immunology and autoimmune disease and will help Novartis rapidly identify drug candidates with the highest potential for success in addressing these diseases."

Rigel, Inc., a privately held company founded in 1996, is focused on the discovery of novel therapeutic agents. The Company's rapid drug target identification and validation technology represents a new, advanced approach to functional genomics, integrating proprietary advances in gene transfer techniques with combinatorial biology, genomics and ultra high-throughput functional screening.

The technology allows scientists to quickly probe the inner circuitry of diseased cells to find the targets that control cell function and can be specifically and safely modulated by orally-administered drugs to treat disease. In addition to its collaborations with Novartis, Rigel is currently working with Janssen Pharmaceutica, N. V. to discover oncology therapeutics and diagnostics based on cell cycle regulation and with Pfizer Inc. to discover human and veterinary drugs for asthma and allergy based on IgE regulation in B cells. Rigel also has immunology research programs exploring the regulation of mast cell activation in allergy/asthma, the TNF pathway in inflammation, and oncology programs aimed at blocking angiogenesis and the elimination of early drug resistance in tumor cells.