Diversa Corporation and Novartis Agribusiness Biotechnology Research Inc., today announced that they have entered into a multi-year, multi-project collaborative research and product development alliance to develop products for crop enhancement and improved agronomic performance.

As part of the agreement, Novartis will make a $12.5 million upfront payment to Diversa. Diversa will employ its proprietary technologies in combination with Novartis' proprietary technologies to generate new seed products containing novel performance and quality traits, according to Terrance Bruggeman, Diversa's chief executive officer.

"We are pleased to offer Novartis Diversa's advanced research capabilities to provide new
solutions for crop protection and enhancement,'' said Bruggeman. "Through a series of projects
under this alliance, we hope to help Novartis build a pipeline of new seed germplasm products
aimed at increasing crop quality and yields.''

Under terms of the agreement, Diversa will utilize its unique discovery and screening
technologies to identify and optimize genes and gene pathways in transgenic crops. The first
projects will focus on the discovery of new transgenic approaches to enhance production and
provide crops with improved performance and quality traits.

Novartis will fund research support, make milestone payments, and pay licensing fees and
royalties to Diversa. Additional financial terms of the agreement were not disclosed.

Transgenic crops are those that have been genetically engineered to protect them against certain
pests, enhance specific growth characteristics and add nutritional value. Such plants have
already had a profound impact on the agricultural marketplace.

Diversa's proprietary technology involves the direct isolation, expression and sequencing of
microbial and plant genomes derived from raw environmental samples. Using proprietary
assays, ultra high throughput screening techniques and a unique robotic automated system,
Diversa can screen and develop target enzymes or bioactive molecules at a rate close to one
billion per day.

Diversa scientists then employ its "directed evolution'' and "gene reassembly'' approaches to
optimize lead compounds for use in specific applications.

Novartis Agribusiness Biotechnology Research Inc. is an affiliate of Novartis, a world leader in
life sciences with core businesses in Healthcare, Agribusiness and Nutrition. With headquarters
in Basel, Switzerland, Novartis employs approximately 87,000 people and operates in over 100
countries around the world.

Diversa is accessing nature's biodiversity for the rapid development of novel bioactive compounds and enzymes for use by pharmaceutical, agricultural and specialty chemical/industrial markets. Since 1994, it has discovered in excess of 700 proprietary enzymes, significantly exceeding the total number available from all other suppliers.

It currently has customers worldwide and has entered into six prior strategic alliances: Dow Chemical Co. [NYSE:DOW - news], Finnfeeds, Roche BioScience (a Roche Holdings Company), Sigma-Aldrich Co., Halliburton Energy Services (a business unit of Halliburton Co [NYSE:HAL - news].), and ZymeQuest Inc. Diversa has signed bioprospecting agreements with Indonesia, Yellowstone National Park, Costa Rica and Mexico to explore and discover novel enzymes and bioactive molecules from microorganisms living in these diverse areas.

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