Chiron Corp. and N.V. Organon said Tuesday they entered into acombinatorial chemistry collaboration to discover and develop newdrug candidates.

Organon will pay Chiron an annual fee and fund research at Chironfor an undisclosed time period. The companies did not disclosedisease targets nor specific financial terms.

But they said each company will retain specific rights in certainindications and pay the other company milestones and royalties ifachievements are met. Chiron, of Emeryville, Calif., and Organon, ofOss, the Netherlands, also will discuss the possibility of applyingcertain Chiron combinatorial methods to Organon's internal researchand development.

Company officials could not be reached for comment Tuesday.

But in a prepared statement, Chiron Technologies Vice PresidentWalter Moos said, "We are pleased to work with Organon tocombine its special strengths in chemistry and biology with ours inmolecular diversity and biotechnology."

Driek Vergouwen, managing director of research and development atOrganon, said, "This collaboration is a further step in Organon'scommitment to embrace the powerful potential of combinatorialchemistry in our drug discovery programs. Clearly Chiron is one ofthe pioneers in this field and we are pleased to be able to explore thehorizons that this collaboration will open up to both companies."

Chiron's stock (NASDAQ:CHIR) gained 38 cents Tuesday to closeat $17.88. _ Jim Shrine

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