Nanogen and Epoch Biosciences Agree to Merge

Nanogen to Incorporate Epoch's Operations and
Complementary Products for Genomic Analysis

The companies serve many of the same customers and both market in vitro diagnostic products that provide physicians information to predict, diagnose and treat disease. Epoch has developed advanced technologies that it incorporates in its MGB Eclipse(TM) Probe System, which consists of reagents and software for improving all types of molecular analyses, including gene expression, SNP (single nucleotide polymorphism) and mutation detection, and identification of infectious organisms. Nanogen has begun incorporating Epoch's technology into its own assays. Epoch has several product offerings for molecular research and diagnostic applications, including research reagents and services for real-time PCR (polymerase chain reaction) that offer a high degree of accuracy and ease of use. In July, Epoch launched 21 MGB Eclipse(TM) Detection Reagents, real-time Analyte Specific Reagents (ASRs) for the molecular diagnosis of infectious and genetic diseases and cancer. The real-time ASRs are complementary to the NanoChip(R) Molecular Biology Workstation, which accomplishes more complex analysis of multiple markers.

"The merger with Epoch will broaden Nanogen's product offerings to research institutions and clinical reference labs and allow us to further leverage our existing sales and marketing infrastructure. By adding Epoch's high-quality products, we expect to increase our productivity, expand our customer reach and significantly grow revenue," said Howard Birndorf, Nanogen chairman and chief executive officer. "Operating synergies between the two companies are clear and we expect that Epoch will generate a positive cash flow contribution to our business."

"Merging Epoch into Nanogen creates a diversified line of research and diagnostic products that should see faster adoption given Nanogen's established infrastructure and capital resources," said William G. Gerber, M.D., Epoch Biosciences chief executive officer. "As part of its evolution to a product company, Epoch has been more aggressively pursuing a direct sales strategy in research and, more recently, diagnostics. The merger is a decisive way to accelerate this objective, giving us immediate access to a knowledgeable and well-integrated marketing and sales organization with an established customer base."

Under terms of the merger, Nanogen has agreed to an offer price of $2.00 per Epoch share, representing a 30% premium over the average closing price of Epoch's shares for the 20 trading days ending on September 1, 2004. Epoch shareholders will receive a number of Nanogen shares based on an exchange ratio determined by dividing the offer price of $2.00 per share by Nanogen's issue price as calculated at closing. Nanogen's issue price will be calculated based on the average closing price of Nanogen's shares for the 20 trading days ending on and including the third trading day prior to the closing. The companies have agreed that the exchange ratio will not be less than 0.4673 nor exceed 0.6329 of one Nanogen share. There are approximately 29 million Epoch shares and share equivalents outstanding. The directors of both companies and certain other stockholders of Epoch have signed an agreement to vote in favor of the transaction, which is expected to be tax-free to Epoch stockholders. The transaction is subject to approval by Nanogen and Epoch stockholders and other customary closing conditions. The merger is expected to close by the end of 2004.

Epoch markets its products worldwide directly to end-users and through distributors in the research, clinical diagnostic, and industrial markets. It licenses its technologies to leading companies such as Applied Biosystems, Celera Diagnostics and QIAGEN for incorporation into their products. Epoch collaborates with ARUP Laboratories to develop MGB Eclipse(TM) Detection Reagents for the diagnosis of infectious diseases. Specialty Laboratories applies Epoch's technology to determine whether abnormal cells remain in an individual's bloodstream following therapy to eradicate leukemia. The National Cancer Institute's Cancer Genome Anatomy Project selected the MGB Eclipse(TM) by Design service to provide researchers validated genotyping assays to identify the SNPs listed in the SNP500 Cancer database.

Epoch recorded revenues for the six months ended June 30, 2004 of $3.9 million and an operating loss of $1.4 million. The company recorded total revenues of $8.9 million in 2003. At June 30, 2004, Epoch had unrestricted cash and cash equivalents of $9.2 million.

Upon closing the transaction, Nanogen intends to retain Epoch's research and development capabilities and reagent manufacturing operations in Bothell, Washington. Administration, marketing and sales will be merged into Nanogen's existing operations in San Diego, California.

Seven Hills Partners LLC acted as financial advisor to Nanogen in this transaction. Molecular Securities Inc. acted as financial advisor to Epoch Biosciences.

A document addressing "Frequently Asked Questions" regarding this agreement can be found on Nanogen's website at www.nanogen.com and on Epoch's website at www.epochbio.com under "Press Releases."

About Nanogen, Inc. (Pre-Merger)

Nanogen develops advanced in vitro diagnostics to provide physicians and patients worldwide with sophisticated information to predict, diagnose and treat disease. Research and clinical reference labs use the highly accurate and reliable NanoChip(R) Molecular Biology Workstation and NanoChip(R) Electronic Microarray to develop tests to detect genetic mutations associated with a variety of diseases, such as cystic fibrosis, Alzheimer's and cardiovascular disease. Nanogen's subsidiary SynX offers a line of point-of- care antibody-based diagnostic tests and is building expertise in cardiac related health conditions. Nanogen's ten years of pioneering research involving nanotechnology may also have future applications in medical diagnostics, biowarfare and other industries. For additional information please visit Nanogen's website at www.nanogen.com.

About Epoch Biosciences, Inc. (Pre-Merger)

Epoch Biosciences, Inc. develops and sells proprietary products with commercial applications in the genomics and molecular diagnostics fields. Epoch's technology has numerous applications including the detection of inherited diseases, single nucleotide polymorphisms (SNPs) to identify individuals at risk for disease or adverse drug reactions, and gene expression measurement. The company's chemical reagents enhance the performance of genetic analysis procedures, and are compatible with the majority of DNA analysis systems currently employed or under development for research and diagnostic use. The company has an established presence in the research market through licenses to leading genomics companies, global distribution agreements and direct sales to end-users. Epoch also participates in the industrial/bioterrorism sectors and has entered the diagnostics market. Information about Epoch is available at www.epochbio.com.