NATIONAL INSTITUTES OF HEALTH AWARDS DIVERGENCE
SMALL BUSINESS INNOVATION RESEARCH PHASE II GRANT

ST. LOUIS (Sept. 19, 2002) - Divergence, Inc., the nematode genomics company, announced today that it has received a 24-month, $637,000 Phase II Small Business Innovation Research (SBIR) Grant from the National Institutes of Health's (NIH) National Institute of Allergy and Infectious Diseases.

The grant is the company's third from the federal government and will help fund Divergence's continuing research in novel parasite control technology. Divergence received Phase I funding from the NIH for target-validation in 2001. This summer, Divergence received a Phase I SBIR Grant from the National Science Foundation for research in the development of vaccines and transgenic plants.

Divergence's phase II proposal was titled "Target Validation Methods for Nematode Control Agents." Senior Director of Molecular Research Andrew Kloek, Ph.D., will lead the funded research which applies new technologies, such as bioinformatics and RNA interference (RNAi), to overcome a major bottleneck in parasite control discovery-the lack of functionally validated high quality candidate target genes. Products resulting from the company's work could include antiparasitic drugs and vaccines for humans, livestock, and pets, environmentally safe pesticides, and infection resistant plants.
"Beginning in 1999, Divergence was one of the first companies to apply RNA interference to anthelmintic and nematicide discovery on a large scale," said James McCarter, M.D., Ph.D., president and chief scientific officer of Divergence. "By increasing our Caenorhabditis elegans RNAi knockout capability significantly and implementing RNAi in other nematode species, we created an excellent portfolio of target genes in parasites of humans, other animals, and plants. As a result of these efforts, Divergence already has identified multiple families of chemistry showing excellent nematicidal activity.

"This Phase II grant will allow our team to investigate the promise of specific target genes in more detail," he added. "We believe Divergence's target-based approach will allow us to discover more compounds, vaccines, and plant genes that not only are effective against parasites, but also safe for the host organism and for the environment."
Divergence's Phase I SBIR Grant from the National Science Foundation announced in August 2002 is funding a $93,000, six-month project titled "Nematode Intestinal Proteins as Anthelmintic Targets." The project is led by Director of Molecular Research Michelle Hresko, Ph.D.

Divergence is a venture capital backed research and development company dedicated to the discovery of effective and ecologically sound strategies for the control of parasites and other pests. The company's initial focus is on parasitic nematodes, one of the world's major pest groups. Nematodes are roundworms that cause billions of dollars in damage annually to numerous crops, including soybeans, cotton, strawberries, and bananas. Nematodes also cause widespread disease in animals, including infections such as heartworm in dogs and cats and intestinal worms in livestock. Nematode-induced human diseases include hookworm, elephantiasis, and African river blindness.

For more information on Divergence, visit www.divergence.com.