Cambridge, massachusset and Heidelberg, Germany
November 6, 2002

LION bioscience AG (Neuer Markt: LIO, WKN 504 350, Nasdaq: LEON), a leading provider of integrated IT solutions for the life sciences industry, announced its financial results for the second quarter of the 2002/2003 fiscal year. The key points are:

• A sustained decline in industry spending as well as the company's transition from a product-based to a solutions-based business contributed to a revenue decrease to 12.6 million euros for the first half of fiscal year 2002/2003 compared with 19.2 million euros for the year-earlier period.
• The company's previously announced cost reduction program and the development of its new solutions are on track.
• Aggregate non-cash amortization expenses and losses related to goodwill, intangible assets and financial investments amounted to 70.6 million euros, as previously indicated.
• The company is actively managing its cash position of 88.1 million euros as of September 30, 2002.

For the three months ended September 30, 2002, total revenue reached 5.2 million euros, compared with 10.2 million euros for the same period in 2001. For the six months ended September 30, 2002, revenue was 12.6 million euros, compared with 19.2 million euros in the year-earlier period. The revenue decline was due mainly to a continued downturn in spending in the life sciences industry, longer-than-expected sales cycles and a deferred milestone payment for a complex customer project. In addition, discontinuing LION's drug discovery business led to a further decrease in revenue in the second quarter.

Operating costs increased to an aggregate of 23.8 million euros in the second quarter from 19.3 million euros in the year-earlier period and included one-time charges of 2.3 million euros for costs associated with discontinuing LION's drug discovery business and the termination of an external IT service provider agreement. The increase in general and administrative expenses is mainly attributable to the expansion of LION's operations and sites in the United States as a result of the company's acquisition
of NetGenics.

Operating results before depreciation and amortization (EBITDA) doubled to -18.6 million euros in the second quarter from -9.1 million in the same period of the previous fiscal year. The net loss for the period widened to 92.7 million euros from 10.3 million euros from the previous year. Loss per share increased to 4.67 euros for the second quarter from 0.55 euros in the same period of the previous fiscal year. The widened losses resulted mainly from non-cash amortization expenses related to goodwill
and intangible assets and losses from financial investments (for an aggregate amount of 70.6 million euros). As previously indicated, LION wrote off the impaired goodwill and intangible assets resulting from the acquisitions of Trega Biosciences and NetGenics as required by U.S. GAAP accounting rules, in the amount of 62.1 million euros. In addition, of its 10.6 million euros in strategic investments, LION realized losses of 8.5 million euros, reflecting a complete write-off of one investment.

"Despite a difficult economy, we remain confident that LION is laying the groundwork for sustainable growth and shareholder value by building and developing the right kind of comprehensive integration solutions to satisfy life science R&D's most critical needs," said Dr. Friedrich von Bohlen, chief executive officer of LION bioscience. "We are not managing the company on a quarterly basis but for the long term, based on a validated assessment of the industry's needs. LION's proven reputation in the industry, strong customer base, cutting-edge technologies, and solid cash position will allow us to succeed in the current industry consolidation."

Financial Outlook

As of September 30, 2002, LION had 88.1 million euros in cash and marketable securities. Together with cost management measures underway, most notably the discontinuation of the company's drug discovery business, the company continues to aim for break even in the fourth quarter of fiscal year 2003/2004. LION has identified cost savings potential of up to 20 million euros for the next full business year as a result of discontinuing its drug discovery business. LION also expects increased revenue growth in fiscal year 2003/2004, as a result of new and expanded customer collaborations based on  the company's new comprehensive integration solutions: the LION DiscoveryCenter(TM) integration platform, the LION Target Engine(TM) for biology, the LION Lead Engine(TM) for chemistry and the LION DiscoverySolution(TM) for the whole discovery process.

Second-Quarter Highlights

• successful first demonstration of the capabilities of LION's new flagship integration platform, LION DiscoveryCenter(TM), at the Drug Discovery Technology 2002 conference in Boston in
  August. LION DiscoveryCenter(TM) provides an integrated access to chemical and biological information from both internal and external sources, creating a powerful collaborative decision
  platform from which all discovery activities can be managed.
• election of pharmaceutical industry leader Jurgen Dormann as chairman of the supervisory board.
• announcement of LION's discontinuation of its iD3(TM) drug discovery business by the end of the calendar year in order to focus on the company's core competence of providing comprehensive integration and decision support solutions for the life science industry. The move is expected to result in savings of up to 20 million euros in FY 2003/2004.
• announcement of LION's entry into the large French crop science market with licensing deals with Rhobio and Biogemma, underlining the versatility of LION's technology for pharmaceutical, agricultural and food science research.
• extension of the company's market presence in Asia through distribution agreements in India and Taiwan, complementing the company's existing distribution agreement with CTC in Japan.

For a complete report of LION's results for the second quarter and the six months ended September 30, 2002, please visit http://www.lionbioscience.com/financials. 

LION bioscience provides proven information and knowledge management solutions to significantly improve life science R&D performance and productivity. LION's performance software solutions developed by its scientific and IT experts enable researchers to simultaneously compile and analyze data across various phases of the R&D process. Research time and costs are reduced, as scientists are able to identify and focus on the most promising drug candidates earlier.

LION sets the standard for integration solutions with more than 200 corporate and academic customers globally including Aventis, Bayer, Boehringer Ingelheim, Celera, DuPont, GlaxoSmithKline, IBM, Janssen, Merck Inc., Nestle, Novartis, Paradigm Genetics, Pharmacia & Upjohn, Roche, Schering AG and Sumitomo Pharmaceuticals.