atugen extends agreement with Schering AG, includes RNA interference technology

Berlin. 17th June, 2003 - atugen AG today announced that Schering AG, Germany (FSE: SCH, NYSE: SHR) has committed to a further two year extension of their collaboration. atugen has worked with Schering on the validation on a number of novel drug targets associated with cancer, using its KnockDown™ technology. Under the terms of the new agreement atugen will also employ its improved RNA interference technology. atugen will be working with Schering's research scientists in Germany and its Berlex Biosciences subsidiary in California.

Under the terms of the new agreement, atugen will receive annual licensing fees, research funding and milestone payments. atugen will develop GeneBloc^® and/or siRNA molecules, designed to inhibit expression of specific drug target candidates selected by Schering. The effects of the knock-down will be analysed in a variety of pharmacological assays by atugen, thus validating gene function and disease association.

Klaus Giese, CSO and VP of Research at atugen, commented, "This starts our seventh year of working with Schering, one of our longest standing pharma customers. This new collaboration agreement demonstrates atugen's KnockDown™ technology and proprietary lipids which enable delivery of the oligonucleotide molecules efficiently into the cells. This underlines atugen's expertise and superior tools, whether GeneBloc^® (improved antisense molecules), siRNA or lipids to validate disease-associated genes."

"Schering builds on an international research network with a variety of partners to constantly offer patients and physicians new treatment options. In this process it is our goal to shorten time to market of our candidate genes. atugen helps us in this by early identification of the most promising targets for successful new drugs," said Prof. Dr. Martin Schneider, Head of Enabling Technologies, Research Center Europe of Schering AG.

atugen AG, located in Berlin, Germany, is a technology leader in disease pathway elucidation. Its drug discovery research tools are made available to the biopharma industry through a variety of research collaborations including alliances to develop its own in-house pipeline. atugen has proved its technology by establishing a portfolio of functionally validated targets and compounds inhibiting the PI 3-kinase pathway. This disease pathway plays an important role in most cancer types, diabetes, wound healing and other indications. The company offers proprietary KnockDown™ technologies (antisense molecules i.e. GeneBlocs, improved synthetic siRNA, vector expression systems for siRNA and ribozymes) and superior transfection reagents.

GeneBloc^® and KnockDown™ are trademarks of atugen AG www.atugen.com

atugen AG Dr. Zisi Fotev, Vice President Business Development Tel: +49 30 9489 2804 Fax: +49-30 9489 2801 fotev@atugen.com

Media Contact Fiona Brown, Northbank Communications Tel: +44 (0)207 886 8155 Fax: +44 (0)207 886 8151 f.brown@northbankcommunications.com