ChondroGene Provides Update on Pfizer Collaboration

TORONTO, CANADA (January 27, 2004): ChondroGene™ Limited (TSX Venture: CDG) reported today that it has received a CDN$1.31 million (US$1.0 million) payment from Pfizer Inc (NYSE:PFE) in conjunction with achieving the second research milestone in the joint Pfizer/ChondroGene drug target identification program for osteoarthritis (OA). The first milestone payment was received in April 2003. This payment is in addition to the initial equity investment, and the regular quarterly payments being made by Pfizer to support and accelerate ChondroGene’s OA Biomarker Program. ChondroGene entered into this research collaboration with Pfizer Inc to identify novel therapeutic targets and biomarkers for OA in October of 2002.

"Our research program with Pfizer is proceeding exceedingly well, as evidenced by the achievement of this second milestone," stated Dr. K. Wayne Marshall, President and CEO of ChondroGene. "OA places a huge burden on society, both in terms of cost and in loss of quality of life. Thus, there is a critical need for new biomarkers and therapeutic targets that can result in timely diagnosis and effective management of OA. We are very pleased that Pfizer chose ChondroGene as one of its partners in this important disease area."

Forward-Looking Statements