San Diego, CA -e February 1, 2005— Applied Molecular Evolution (AME) today announced that it has recently received positive rulings in several patent litigation cases relatd to the Kauffman family of patents.

On Wednesday, October 8, 2004, the district judge presiding over AME’s pending legal action against MorphoSys for infringement of the Kauffman family of patents issued an order denying all summary judgment motions filed by MorphoSys and AME. A magistrate judge had recommended on January 6, 2003, that the district court judge grant the MorphoSys motion for non-infringement and deny all other motions. The district court judge declined to accept the magistrate judge’s recommendation.

Background: on June 25, 2001, Applied Molecular Evolution (AME) filed a complaint against MorphoSys AG, a company focused on the discovery and development of human antibodies, in the United States District Court of Massachusetts seeking injunctive relief and damages for infringement of five United States Patents originally issued to Dr. Stuart Kauffman.

Further, on November 8, 2004, AME successfully defended oppositions filed by MorphoSys, Archemix, and SomaLogic against specific claims in corresponding Kauffman patent issued in Europe.

“These legal decisions and the recent successful defense of the Kauffman patents in Europe remove the uncertainty regarding this patent estate caused by ongoing litigation. We continue to believe this technology is fundamental to the directed evolution approach for bioproduct development. AME is therefore committed to making the technology accessible and believes the judge’s denial of summary judgment in the MorphoSys case and the recent ruling by the European Patent Office may have a positive influence on our licensing program,” commented William D. Huse, M.D., Ph.D., President of AME.

Inquiries regarding licensing can be directed to AME.

About AME
AME is a wholly owned subsidiary of Eli Lilly and Company and a leader in applying directed molecular evolution to improve healthcare by optimizing and developing human biotherapeutics. Directed molecular evolution is a process for optimizing genes and proteins for specific commercial purposes. Since its inception, AME's principal focus has been on applying its proprietary AMEsystem(TM) technology platform to human biotherapeutics, the largest market for directed molecular evolution. Biotherapeutics, or biopharmaceuticals, are protein pharmaceuticals such as antibodies, cytokines, hormones and enzymes. AME uses its proprietary technology to develop improved versions of currently marketed, FDA-approved biopharmaceuticals as well as novel human biotherapeutics.