Kyowa Hakko Establishes
U.S. Antibody Business Company
BioWa, Inc.
Will Promote Strategic Commercial Development
of a Next Generation Antibody Technology

 Kyowa Hakko Kogyo Co., Ltd. (TSE: 4151), a leading Japanese biotechnology and pharmaceutical company, announced today that it has established BioWa, Inc. in the U.S. to pursue development and commercialization of its biological technologies and businesses, particularly those relating to monoclonal antibodies. The antibody therapeutic industry is largely centered in the U.S., and has grown rapidly in recent years with antibody based medicine sales expected to well exceed 10 billion dollars market by 2010. BioWa, based in Princeton, NJ, is a wholly-owned subsidiary of Kyowa America, Inc., a U.S. holding company of Kyowa Hakko.

 "The U.S. not only represents the largest market for antibody medicine, but also is the ideal environment for efficiently and quickly commercializing new biotechnology," stated Dr. Nobuo Hanai, President and CEO of BioWa, Inc. "Centering on our proprietary POTELLIGENT™ technology, BioWa will seek strategic alliances with U.S. companies that possess high potential antibody technologies and/or are presently developing antibody medicines."

 Kyowa Hakko's POTELLIGENT™ technology, is the result of breakthrough research into methods for enhancing Antibody-Dependent Cellular Cytotoxicity (ADCC). ADCC activity is a function of the human immune system that uses natural killer cells, monocytes and other white blood cells, to destroy cancer cells and other antigens. Kyowa's researchers have determined that ADCC activity is significantly increased by reducing fucose, a sugar chain naturally present in antibodies. By enabling creation of low fucose antibodies, POTELLIGENT™ technology dramatically increases the potency and efficacy of antibodies.

 The application of POTELLIGENT™ technology to anti-tumor antibodies increases their potency at least 100 times over that of existing antibodies. In addition to increasing therapeutic effectiveness, the heightened potency will enable physicians to effectively treat a larger population of patients using smaller doses, reduced side effects and treatment costs.

 POTELLIGENT™ technology can be applied to many existing pharmaceuticals and antibody agents, broadening the spectrum of applications and potentially slashing production costs to as little as 1% of present costs.

 Another significant characteristic of Kyowa Hakko's POTELLIGENT™ technology is that it can produce high ADCC activity antibodies using conventional production methods and cell lines, such as the use of Chinese hamster ovary cells, which are widely used in biopharmaceutical production processes and adhere to Good Manufacturing Practice (GMP).

 "Our mission is to harness the enormous potential of biotechnology to create innovative cancer and allergy therapies," said Dr. Tadashi Hirata, President and CEO of Kyowa Hakko. "We have already begun phase I and phase II clinical trials in the U.S. for the monoclonal antibody KW-2871 against malignant melanoma, and have several candidate compounds for antibody medicines in the pre-clinical phase. We will strive to become a leading biomedicine company by pursuing the creation and development of antibody medicines and by pursuing strategic partnerships for commercialization of unique new biotechnologies that have competitive advantages. The creation of BioWa in the U.S. is a critical element of our strategy to broaden our international market presence."

Profile of BioWa, Inc.
Established: February 1, 2003
Address: Princeton, New Jersey
Paid-in capital: US $5 million
President: Dr. Nobuo Hanai
Business description: Commercialization of antibody technologies, licensing and developing antibody medicines
Employees: 5

About Kyowa Hakko
Kyowa Hakko, headquartered in Tokyo, is a world leader in developing, manufacturing and marketing pharmaceuticals and biotechnology products. For over half a century, Kyowa has been a pioneer in the development and application of fermentation technology and new forms of biotechnology. Its core pharmaceutical research is focused on drug discovery using antibody-based technologies and developing therapeutic agents for cancer and allergies. Kyowa has achieved world-wide success with two agents:

• Mitomycin, indicated for adenocarcinoma of the stomach and pancreas, and marketed in the U.S. by Bristol-Myers Squibb as Mutamycin^®; and
• Olopatadine, indicated to relieve itching of the eye due to allergic conjunctivitis, and marketed in the U.S. by Alcon as Patanol^®;