Hayward, CA - September 18, 2000 ---Biolog, Inc., a biotechnology company pioneering powerful new tools for cell-based analysis, announced today that it has signed its first major licensing agreement with Paradigm Genetics (Nasdaq: PDGM). Under this collaborative license, Biolog's new Phenotype MicroArray™ (PM) technology will be used to help Paradigm determine gene function in agriculturally important fungal species.

Under the terms of the multi-year agreement, Paradigm will have nonexclusive rights to use the PM products. In support of the agreement, Biolog has delivered to Paradigm both Phenotype MicroArrays and its new high-throughput automated system, the OmniLog® PM System. This agreement represents Biolog's first research partnership based on the use of its PM technology in the emerging field of phenomics - the study of cell properties (phenotypes) as a means of understanding how a gene or drug affects living cells.

Biolog's proprietary Phenotype MicroArray technology provides researchers with a powerful, efficient and cost-effective tool for determining gene function by directly measuring the consequence of a genetic change on cellular phenotypes. The technology, which allows researchers to test hundreds to thousands of cell properties all at once, also has application in the validation and optimization of drug targets, determination of a drug's mode of action, assessment of cell toxicology and basic cellular research.

The patented method involves the use of PMs to conduct a very detailed comparison of two cell lines, one of which has been modified by a gene mutation or tested with a drug lead. Data generated from the MicroArrays are captured and interpreted by Biolog's OmniLog® PM System, which uses bioinformatic software to report how the cells have changed. An advantage of the PM technology is its ability to detect many unexpected changes in cell function as easily as a singular phenotypic change.

"We are pleased with our collaboration with Biolog scientists and the results we've obtained together using Biolog's Phenotype MicroArray technology customized to meet Paradigm's needs. It is one in a series of assays that we use to do phenotypic profiling. It should accelerate progress in our microbial research program," said John Hamer, Ph.D., vice president of research and development at Paradigm Genetics. According to Tim Mullane, president of Biolog, "We welcome the opportunity to work with Paradigm as our first partner for our PM technology. Their results demonstrate the basic utility of the technology, which may be used in agricultural research, and drug discovery and development.

"We believe our PM technology is a major new platform for biological analysis. Just as DNA microarray technology allows for the simultaneous measurement of expression levels of thousands of genes, Biolog's Phenotype MicroArray technology allows for the simultaneous quantitative measurement of thousands of cell phenotypes. By providing a vast amount of information about gene function in a short time, we expect that PMs will play a major role in the current race to determine gene function in model cell lines."

According to Barry Bochner, Ph.D., inventor of PM technology, "Gene sequencing technology has fueled explosive growth in the number of identified genes. The need now is to understand those genes and their function in much greater detail. A knowledge of gene function not only is important to discover new drugs and drug targets, but is essential to establish a strong intellectual property position on a newly discovered gene."

In addition to functional genomics, the phenotypic analysis provided by Biolog's PM technology can be invaluable in determining a drug candidate's effect on a model cell line and in conducting a number of comparative studies, including: pathogenic versus non-pathogenic microorganisms in target development; bacterial, fungal, or insect pathogens versus their hosts; virus-infected versus virus-free cells; and diseased versus healthy cells.

Paradigm Genetics is industrializing the process of gene function discovery for four major sectors of the global economy: human health, nutrition, crop production, and industrial The Company has designed the GeneFunction Factory™ -- an integrated, rapid, industrial-scale laboratory through which it discovers gene function. Paradigm and its strategic partners intend to develop novel products using information developed with the GeneFunction Factory. Paradigm's GeneFunction Factory is based on a state-of-the-art phenomics platform integrated with metabolic profiling and gene expression profiling technologies. The backbone of the GeneFunction Factory is the Company's FunctionFinder™ bioinformatics system, used to collect, store, analyze, and retrieve information. For more information visit www.paragen.com.

Biolog is a pioneer in the development of powerful new cellular analysis tools for solving critical problems in pharmaceutical and biotechnology research and development. The company has recently launched its Phenotype MicroArray technology and OmniLog® PM System for such applications as determining gene function, validating and optimizing drug targets, and assessing cellular toxicology. Further information can be obtained at the company's website, www.biolog.com.