Roche has announced that it intends to increase its stake in Chugai from 50.1 per cent to 59.9 per cent. Roche has invited Chugai shareholders to tender their shares at a price of Yen 1,730 per share (so-called 'tender offer bid' under Japanese Financial Instruments and Exchange Law).

The price reflects an 11.7 per cent premium over Chugai's share price of Yen 1,549 as of the close on May 21, 2008. If the tender offer is successful, the transaction will increase Roche's ownership stake in Chugai from currently 50.1 per cent to 59.9 per cent. The transaction is based on Roche's right to increase its stake to 59.9 per cent at any time after the 5th anniversary of the alliance.

Franz B Humer, chairman of the board of Roche commented, "We intend to increase our stake because we believe in both the long-term potential of the Japanese market and in the strategic importance of this successful partnership. Since our partnership started more than five years ago, our relationship has intensified in all areas to the benefit of both companies".

The alliance between Roche and Chugai was formed in October, 2002, and has resulted in a number of significant achievements. Over the last five years Chugai has launched Avastin (in colorectal cancer), Copegus (in combination with Pegasys for hepatitis C) and Tarceva (lung cancer) as well as significant line extensions for Xeloda (adjuvant colon cancer) and Herceptin (adjuvant breast cancer).

Another important milestone was the filing of Actemra (rheumatoid arthritis) in the US and Europe in November 2007. Actemra is the first Chugai medicine that the Roche Group is developing for worldwide commercialization. In Japan, Actemra was launched for the treatment of Castleman's disease in 2005 and recently approved for rheumatoid arthritis.

Furthermore, R7201 (CSG452), one of three early-stage compounds that Roche licensed from Chugai in 2007, started phase I clinical development for type 2 diabetes.