Chiron Corp. negotiated a second non-exclusive license for itscombinatorial chemistry with Japan Tobacco Inc., giving the Tokyo-based pharmaceutical company access to technology for synthesizingsmall molecule compounds for potential drug candidates.

Chiron, of Emeryville, Calif., will receive annual payments for thetechnology transfer for two years, but financial terms were notdisclosed. The agreement also includes an option for up to twoadditional years. Chiron officials said Wednesday they will receivetheir first payment this quarter.

The Japan Tobacco alliance does not include a drug developmentcollaboration.

Chiron's first non-exclusive license agreement for its combinatorialchemistry was made with its strategic partner, Ciba-Geigy Ltd., ofBasel, Switzerland. The contract with Ciba, which owns about 50percent of Chiron, includes provisions for co-developing drugs basedon the technology.

Chiron's stock (NASDAQ:CHIR) closed Wednesday at $98.50, ajump of $5.25.

Earlier this month, Ciba and Sandoz Ltd., also of Basel, proposed amerger of the two drug makers in an exchange of stock valued atnearly $30 billion. _ Charles Craig

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