NEW YORK, Sept. 7 /PRNewswire/ -- Cadus Pharmaceutical Corporation
(OTC bulletin Board: KDUS) today announced that the United States Court of
Appeals for the Federal Circuit ruled in favor of Cadus and overturned the
1998 judgment entered by the U.S. District Court for the Southern District of
California in the patent infringement suit filed by SIBIA Neurosciences, Inc.
("SIBIA") (which was acquired by Merck & Co. in 1999).  The Court of Appeals
ruled that the claims of SIBIA's U.S. Patent No. 5,401,629 asserted against
Cadus were invalid, and that the District Court erred in denying Cadus' motion
for judgment as a matter of law on the issue of invalidity.
    SIBIA filed suit against Cadus in 1996 and claimed that Cadus infringed
the '629 patent, which covers the use of cells, engineered to express any type
of cell surface receptor and a reporter gene, used to report results in the
screening of compounds against target assays.  After trial, in December 1998,
the jury issued a verdict in favor of SIBIA and awarded SIBIA $18.0 million in
damages.  Cadus appealed the jury verdict to the Court of Appeals for the
Federal Circuit, which heard oral argument in the case in March 2000.  In
order to stay execution pending appeal of the $18.0 million judgment obtained
by SIBIA, in March 1999, Cadus deposited $18.5 million in escrow to secure
payment of the judgment in the event Cadus were to lose the appeal.
    "This decision by the Court of Appeals, reversing the erroneous jury
verdict, is a welcome vindication.  Cadus always believed the jury was wrong,
and is glad that justice has now prevailed," said Russell Glass, President and
Chief Executive Officer of Cadus.
    This press release may contain forward-looking statements that involve a
number of risks and uncertainties.  Important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are set forth in the company's prospectus dated July 17, 1996 or
detailed from time to time in filings that the company makes with the
Securities and Exchange Commission.  These include risks and uncertainties
relating to the company's ongoing litigation with SIBIA, including
uncertainties regarding the final outcome of the litigation and the
re-examination of SIBIA's patent at issue in the litigation, risks and
uncertainties relating to the company's ability to realize value from its
assets, technological uncertainties regarding the company's technology, rapid
technological change, an intensely competitive market, intellectual property
rights and general economic conditions.
 
SOURCE  Cadus Pharmaceutical Corporation
    -0-                             09/07/2000
    /CONTACT:  Russell D. Glass, President and Chief Executive Officer of
Cadus Pharmaceutical Corporation, 212-702-4315 or rglass@sfire.com/
    (KDUS)
 
CO:  Cadus Pharmaceutical Corporation; SIBIA Neurosciences