Hayward, California and Worcester, Massachusset
January 30,  2001

Lynx Therapeutics, Inc. (Nasdaq: LYNX) and Phytera, Inc. announced today a strategic corporate collaboration to identify genes from plants involved in the biosynthesis of anti-oxidant polyphenols, naturally occurring compounds with nutraceutical and pharmaceutical activity. Lynx and Phytera intend to validate gene targets and jointly commercialize the genes with other partners in the nutraceutical and pharmaceutical sectors. Financial terms of the partnership were not disclosed. 

The collaboration will combine Phytera's unique natural product libraries and screening systems with Lynx's ability to produce high-resolution gene expression analysis. Phytera will select plant species from its culture libraries and apply its proprietary ExPAND(R) manipulation technology to regulate the expression of the metabolic pathways and genes responsible for the production of specific anti-oxidant polyphenolic compounds. Lynx will then use its proprietary Megasort(TM) technology to identify genes activated after target compounds are induced. 

"We expect the combination of Lynx's Megasort and Phytera's ExPAND technologies will greatly expedite identification of genes involved in the biosynthesis of plant polyphenols. We believe that Megasort technology is ideally suited for identification of novel differentially expressed genes in diverse plant species where little or no prior gene sequence information is available," said Norrie J. W. Russell, Ph.D., President and Chief Executive Officer of Lynx. "This is another part of our unfolding strategy to capture the broad scientific and commercial opportunities available to Lynx." 

"This collaboration combines Phytera's unique ability to systematically regulate gene expression and provide functional validation in its plant cell culture platform, with Lynx's ability to efficiently mine the relevant genes," said Malcolm Morville, Ph.D., President and Chief Executive Officer of Phytera. "We are delighted to be partnering with Lynx in this genomic alliance that seeks to capitalize on the genetic content of our libraries in order to produce nutraceutical and pharmaceutical products." 

The plant kingdom is one of the primary sources of natural products that are beneficial for human health. A study from the U.S. National Institutes of Health reported natural product-derived drugs accounted for 39% of all approvals by the U.S. Food and Drug Administration from 1983 through 1994 across all therapeutic categories. In addition, a large fraction of the $10 to $15 billion dietary supplements industry is accounted for by the sale of plant extracts. There is a growing body of evidence that dietary polyphenolic compounds found in plant foods, such as soy, grapes and green tea, have a positive impact on health. Two significant areas in which the anti-oxidant activities of these compounds have been implicated include cancer and stroke chemoprevention. 

Phytera is a world leader in applying the chemical and genetic diversity of natural species to discover and develop new pharmaceutical products for the treatment of cancer and infectious diseases. Phytera has a number of novel products in its development pipeline, including one potential cancer drug in Phase I/II human clinical trials in the United States and several anti- infective agents undergoing pre-clinical study. Phytera has also built a highly productive and unique drug discovery engine based upon the application of its proprietary technology platform to the mining of natural chemical and genetic diversity found in plants and marine microorganisms.
Phytera has leveraged its technology platform to build the company through the use of corporate collaborations targeting a range of pharmaceutical indications as well as agricultural, nutraceutical and cosmetic applications. Phytera has partnered with Eli Lilly and Company, Chiron Corporation, Tsumura & Co., Unilever Research U.S., Nycomed Amersham plc, NeuroSearch A/S, Galileo Laboratories, Inc. and Novelos Therapeutics, Inc. 

Lynx is a leader in the development and application of novel technologies for the discovery of gene expression patterns and genomic variations important to the pharmaceutical, biotechnology and agricultural industries. These technologies are based on the Megaclone(TM) technology, Lynx's unique and proprietary cloning procedure, which transforms a sample containing millions of DNA
molecules into one made up of millions of micro-beads, each of which carries approximately 100,000 copies of one of the DNA molecules in the sample. Megaclone(TM) technology is the foundation for Lynx's analytical applications, including: Massively Parallel Signature Sequencing, or MPSS(TM), technology, which provides gene sequence information and high-resolution gene expression data; Megasort(TM) technology, which provides differentially expressed gene sets; and Megatype(TM) technology, which is expected to provide single nucleotide polymorphism, or SNP, disease- or trait-association information. For more information, visit Lynx's web site at
www.lynxgen.com. 

Company news release
N3296