SAN DIEGO, CA, - GenStar Therapeutics Corp. (GNT) announced on September 13, 2002 that it agreed to merge with privately held Vascular Genetics Inc., in a move to accelerate the development of gene-based drug products for heart disease. The new company, to be called Autus Genetics Corp., plans to focus on the development of a later-stage genetic drug for cardiovascular disease as well as therapies targeting "important, unmet" needs in major drug market sectors, the biotechnology companies said.

The key focus of Autus's development will be Vascular Genetics' VEGF-2, a gene-based therapy for the treatment of severe cardiovascular disease and angina, the companies said. The gene-based therapy also holds promise for the treatment of peripheral vascular disease, they added.

Vascular Genetics was founded in 1997 in partnership with Human Genome Sciences Inc., St. Elizabeth's Medical Center and Cato Holding Co. In November 1997, Humane Genome Sciences granted Vascular Genetics an exclusive license in the field of gene therapy for Human Genome's VEGF-2 gene. As a part of that deal, Human Genome Sciences currently holds a 27% interest in Vascular Genetics.

GenStar's gene therapy for the delivery of Factor VIII in the treatment of hemophilia will also be a primary focus for the company's development plan. The treatment currently is in a Phase I trial.

The deal, which has been structured as a merger of equals, is expected to close as early as the fourth quarter. The boards of both companies have approved the deal, which is subject to shareholder approvals and other closing conditions. Shareholders of each company will own about 50% of the newly combined company.

Duff & Phelps, LLC served as financial advisor to GenStar and rendered a fairness opinion to GenStar's Board of Directors in connection with this transaction. The fairness opinion was prepared in the Los Angeles office of Duff & Phelps under the direction of Sheryl L. Cefali, a managing director of the firm.

Vascular Genetics' largest shareholders, Human Genome Sciences (HGSI) and Cato have agreed to vote in favor of the deal.

Humane Genome Sciences and Baxter International Inc. (BAX) would each hold a 15% stake in the new company. Besides its stake, Human Genome Sciences also would be entitled to receive up to a 10% royalty on net sales of any product brought to market by Autus Genetics that is based on the VEGF-2 gene.

Richard E. Otto, president and chief executive of Vascular Genetics, will lead the new company as chief executive. GenStar's president and CEO, Robert E. Sobol, M.D., will serve as president. Chief financial officer will be Vascular Genetics' Robert T. Atwood.