Berna Biotech AG has entered into a strategic alliance with Shire Pharmaceuticals Group plc for commercialization of key products in its influenza and hepatitis B vaccine franchises.

Under the terms of the agreement, Shire Pharmaceuticals receives exclusive rights for the commercialization of Berna Biotech's hepatitis B vaccines, Hepavax Gene and Bio-Hep-B, in Europe. Berna Biotech receives exclusive rights for the commercialization of Shire Pharmaceuticals' influenza vaccine, Fluviral, in territories outside North America and Europe. Profits will be shared equally.

The Shire Pharmaceuticals Group is a rapidly-growing specialty pharmaceutical company, whose capabilities span research, development and marketing. The company's focus is in the area of specialty pharmaceuticals, and there is a growing capability in vaccines and biologics for infectious diseases. Shire's commercial success is achieved through marketing products to defined customer groups, where effective targeting of prescribers allows maximization of sales by a relatively small but high quality sales force.

The alliance with Shire Pharmaceuticals will strengthen Berna Biotech's market position in its core hepatitis B vaccine franchise. Berna Biotech's hepatitis B vaccine, Hepavax-Gene, is the world's leading public market vaccine. Thanks to the competitive pricing of a high quality product, the introduction of the vaccine is anticipated to open up new markets for hepatitis B vaccine within Europe. Shire Pharmaceuticals will be responsible for the registration and commercialization of the vaccine in Europe.

Shire Pharmaceuticals will also be responsible for the European commercialization of Berna Biotech's premium-priced third generation hepatitis B vaccine, Bio-Hep-B. The vaccine is currently in phase III of development with launch anticipated in 2004/5. Berna Biotech and Shire Pharmaceuticals will share equally in the remaining costs of development of the vaccine, with Shire Pharmaceuticals responsible for commercialization.

The strategic alliance with Shire Pharmaceuticals additionally expands Berna Biotech's core influenza vaccine franchise. Berna Biotech's premium-priced influenza vaccine, Inflexal V, is primarily targeted at private markets in Europe. Shire Pharmaceuticals' marketed influenza vaccine, Fluviral, the leading flu vaccine in Canada will complement the existing portfolio, harnessing Berna Biotech's marketing expertise in the International region (territories outside Europe and North America) to expand the market for this vaccine.

Both companies will share profits from the strategic alliance equally. Further financial terms were not disclosed. The companies are discussing further options for partnership in the areas of influenza vaccines and Sales & Marketing in Europe.

This alliance is an important step in strengthening our European market presence, as well as strengthening our key product franchises", said Kuno Sommer, CEO of Berna Biotech. "Shire Pharmaceuticals has a broad sales and marketing network throughout Europe and its strategy and track record in maximization of sales through effective targeting of prescribers is ideally suited to marketing of our vaccine products. Furthermore, their influenza vaccine is highly complementary to our existing product portfolio, allowing us to leverage our International marketing expertise to expand this franchise. Through a close collaboration at all stages, we anticipate that this will be a fruitful alliance for both parties.

Commenting on the agreement, Richard de Souza, Director International of Shire Pharmaceuticals, said, "We are delighted to be linking with Berna Biotech which has over 100 years experience in the development and marketing of vaccines and immunotherapeutics in markets worldwide. Through this alliance, Shire will become a significant player in all segments of the vaccines market, thereby creating a platform through which we will be able to launch our exciting projects that are currently in development including SPD 703 for pneumonia, meningitis, otitis media and SPD 704 for meningitis and septicaemia."