Xenogen and Cubist Pharmaceuticals Enter Into Evaluation Licensing Agreement

–Agreement Focuses on Xenogen's Unique in vivo Imaging Technology in Antiinfective Modeling–

Alameda, CA (August 24, 2000) – Xenogen Corporation today announced it has entered into an evaluation licensing agreement with Cubist Pharmaceuticals, Inc. (Nasdaq: CBST). This agreement provides Cubist access to Xenogen's proprietary real-time, in vivo imaging technologies and gives Cubist the opportunity to assess the technology's application in pre-clinical evaluation of new antimicrobial agents.

Xenogen's technology represents a unique and novel approach to the biological assessment of new chemical entities (NCEs) by enabling the detection of fluorescent or bioluminescent cells (e.g. tumor cells, bacteria) in living animals. This not only allows for non-invasive visualization and tracking of cells to monitor NCE efficacy in real time, but also provides researchers with methods to localize and follow the activation of selected genes in vivo via Xenogen's LPTA™ transgenic animals. The key advantage to Xenogen's methods is the provision of high-quality data at earlier time points, thus accelerating the discovery of NCE's, while providing real savings in the time and cost of drug development.

"We believe strongly that our real-time in vivo imaging technology is a crucial tool for companies at the leading edge of new compound development," said Pamela Reilly Contag, Ph.D., president and co-CEO of Xenogen Corporation. "Cubist Pharmaceuticals, a scientifically sophisticated, technology-driven company, with a novel antiinfective currently in Phase III trials, clearly places a high priority on innovation. We are optimistic that Xenogen's technology will be a key asset as they pursue this goal. In addition," Dr. Reilly Contag continued, "Xenogen scientists recently developed a breakthrough technology that greatly facilitates the in vivo monitoring of Gram-positive bacteria, a focus of Cubist's drug discovery and development efforts."

"We are very pleased to be entering into this agreement with Xenogen," said George "Skip" Shimer, Ph.D., Vice President of Research at Cubist. "We believe Xenogen's technology is a great complement to our focus on the discovery, development and commercialization of antiinfectives. We are hopeful that Xenogen's in vivo modeling capabilities will add significant value to Cubist's efforts and help accelerate our pipeline building activities."

This license is the latest in a series of new agreements and alliances between Xenogen and leading pharmaceutical and biotechnology companies. Recent Xenogen milestones include the granting of a full commercial license to Novartis and the granting of an evaluation license to DuPont Pharmaceuticals.

Xenogen Corporation

Xenogen Corporation is a leader in the field of real-time in vivo imaging, providing the pharmaceutical industry with proprietary technologies, products and services that enable real-time in vivo monitoring to rapidly identify drug leads for successful clinical development. These technologies, unique to Xenogen, enable researchers to overcome barriers that have complicated biological assessment for many years. Xenogen's technology has attracted strong interest from a wide range of pharmaceutical companies worldwide. In addition to pharmaceutical development, the technology has broad applications in other fields, including toxicology and the chemical industry. The May/June issue of Fortune Small Business placed Xenogen among the top 25 young companies whose products, services and technologies "promise to make an explosive impact."