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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                   FORM 10-K
 
/X/           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                                       OR
/ /         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                          COMMISSION FILE NO. 0-12798
                            ------------------------
                               CHIRON CORPORATION
             (Exact name of Registrant as specified in its charter)
 
<TABLE>
<S>                                            <C>
                  DELAWARE                                      94-2754624
          (State of Incorporation)                   (IRS Employer Identification No.)
</TABLE>
 
                               4560 HORTON STREET
                          EMERYVILLE, CALIFORNIA 94608
              (Address of principal executive offices) (Zip Code)
 
       Registrant's telephone number, including area code: (510) 655-8730
        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK, $0.01 PAR VALUE
               WARRANTS TO PURCHASE COMMON STOCK, $0.01 PAR VALUE
 
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12  months (or  for such shorter  period that  the Registrant was
required to  file  such  reports), and  (2)  has  been subject  to  such  filing
requirements for the past 90 days.
 
                            Yes __X__        No ____
 
Indicate  by check mark if disclosure of  delinquent filers pursuant to Item 405
of Regulation S-K is  not contained herein,  and will not  be contained, to  the
best  of Registrant's knowledge,  in definitive proxy  or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
-------
 
The aggregate  market  value  of  voting stock  held  by  nonaffiliates  of  the
Registrant as of March 1, 1996, was $2,391,730,000.
 
The  number of shares outstanding of each  of the Registrant's classes of common
stock as of March 1, 1996:
 
<TABLE>
<CAPTION>
                     TITLE OF CLASS                                           NUMBER OF SHARES
--------------------------------------------------------  --------------------------------------------------------
<S>                                                       <C>
             Common Stock, $0.01 par value                                       42,109,984
</TABLE>
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
The Company's  Consolidated  Financial  Statements for  the  fiscal  year  ended
December  31, 1995, are incorporated  by reference into Parts  II and IV of this
Form 10-K Report and are filed as Exhibit 13 to this Form 10-K Report.
 
Portions of the  Proxy Statement for  the Annual Meeting  of Stockholders to  be
held  on  May 16,  1996, are  incorporated by  reference into  Part III  of this
Report.
 
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                                     PART I
 
ITEM 1.  BUSINESS
 
    THIS  REPORT  CONTAINS  FORWARD-LOOKING STATEMENTS  THAT  INVOLVE  RISKS AND
UNCERTAINTIES RELATING TO THE FUTURE FINANCIAL PERFORMANCE OF CHIRON CORPORATION
(THE "COMPANY" OR "CHIRON"), AND ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY.
IN EVALUATING SUCH  STATEMENTS, STOCKHOLDERS AND  INVESTORS SHOULD  SPECIFICALLY
CONSIDER  THE VARIOUS  FACTORS IDENTIFIED  UNDER THE  CAPTION "FACTORS  THAT MAY
AFFECT FUTURE OPERATING  RESULTS" CONTAINED IN  THE MANAGEMENT'S DISCUSSION  AND
ANALYSIS   OF  FINANCIAL  CONDITION  AND   RESULTS  OF  OPERATIONS  IN  CHIRON'S
CONSOLIDATED FINANCIAL STATEMENTS INCORPORATED BY  REFERENCE IN THIS FORM  10-K,
WHICH  COULD CAUSE ACTUAL  RESULTS TO DIFFER MATERIALLY  FROM THOSE INDICATED BY
SUCH FORWARD-LOOKING STATEMENTS.
 
    Chiron is  a diversified,  science-driven  healthcare company  that  applies
biotechnology  and other techniques of modern  biology and chemistry to develop,
produce and sell products intended to improve the quality of life by diagnosing,
preventing and  treating  human  disease.  Chiron  participates  in  four  human
healthcare  markets:  diagnostics,  including  immunodiagnostics,  critical care
diagnostics and new quantitative probe tests; therapeutics, with an emphasis  on
oncology,  serious infectious diseases and critical care diseases; pediatric and
adult vaccines; and ophthalmic surgical  products for the correction of  vision.
Chiron  also develops or acquires new technologies, employing these technologies
to discover  new products  for the  Company or  for its  partners. For  example,
Chiron  is developing a new generation of chemical therapeutics through advanced
techniques of drug design and discovery  and is conducting an active program  in
gene therapy.
 
    Effective  January 1,  1995, Chiron  began a  biotechnology partnership with
Ciba-Geigy Limited, of Basel, Switzerland ("Ciba") whereby Ciba acquired a  49.9
percent  ownership interest  in Chiron  common stock.  At the  same time, Chiron
acquired Ciba's  Ciba  Corning Diagnostics  Corp.  ("CCD") business  and  Ciba's
interests  in Chiron Biocine Company (formerly  The Biocine Company) and Biocine
S.p.A. (through JV  Vax B.V., a  Netherlands company). In  addition, Chiron  and
Ciba  agreed to cooperate in  research, development, manufacturing and marketing
of biotechnology products on an  arms-length basis, while remaining  independent
to pursue other opportunities. For a further description of the partnership with
Ciba,  see  Part  II,  Item  8.,  Note  2  of  Notes  to  Consolidated Financial
Statements.  Chiron  operates  through  the  following  business  units:  Chiron
Diagnostics,  which includes the  CCD business, quantitative  probe tests and an
interest in  a  joint  immunodiagnostic  business;  Chiron  Biocine,  a  vaccine
business  which includes Biocine S.p.A.; Chiron Therapeutics; and Chiron Vision,
the Company's ophthalmic business. A  fifth business unit, Chiron  Technologies,
manages  the  Company's research  and clinical  development programs  other than
diagnostics and vaccines  and develops new  technologies with potential  utility
throughout Chiron.
 
    Chiron was incorporated in California in 1981 and reincorporated in Delaware
in  1987. A  global organization  with facilities  on four  continents, Chiron's
corporate headquarters is located at 4560 Horton Street, Emeryville,  California
94608-2916, and its telephone number at that address is (510) 655-8730.
 
CHIRON DIAGNOSTICS
 
    Chiron,  through its Chiron  Diagnostics business unit  and its wholly-owned
subsidiary CCD  (collectively  "Chiron  Diagnostics"), is  one  of  the  world's
largest providers of critical blood analyte systems used to measure blood gases,
blood  electrolytes  and metabolites.  These systems  are  used by  hospitals to
diagnose and monitor patients in critical care settings. Chiron Diagnostics also
markets the  ACS:180-Registered  Trademark-  and  ACS:180  Plus-TM-,  which  are
automated,  high-throughput  random access  immunodiagnostic  instrument systems
used by  hospital and  reference  laboratories to  detect and  measure  thyroid,
anemia, fertility, cancer and STAT cardiac indicators.
 
    Chiron  Diagnostics develops branched  DNA ("bDNA") probe  tests to quantify
levels of virus and other indicators of disease. Clinical evidence suggests that
Chiron's bDNA probe tests  may have utility  in predicting disease  progression,
selection    of    patients   for    treatment    based   on    probability   of
 
                                       1
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response and monitoring response to therapy. Chiron is selling bDNA probe  tests
for  human  immunodeficiency  virus  ("HIV"),  hepatitis  C  virus  ("HCV"), and
hepatitis B virus ("HBV") for Research Use Only in the United States and Europe.
The United States Food and Drug  Administration ("FDA") has accepted for  review
Chiron's application to market its bDNA probe test for HIV in the United States.
Chiron  has licensed  rights to  sell bDNA  probe tests  in Japan  and Taiwan to
Daiichi Pure Chemicals Co., Ltd. ("Daiichi"). Daiichi currently markets Chiron's
Quantiplex-TM- bDNA tests for HCV and HBV in Japan.
 
    Chiron has built a joint business  with a significant worldwide presence  in
the  immunodiagnostic market  with Ortho  Diagnostic Systems,  Inc. ("Ortho"), a
Johnson & Johnson company, based largely on sales of tests used to screen  blood
for the potential presence of HCV. The joint business sells a full line of tests
required  to screen blood  for hepatitis viruses  and retroviruses, and provides
confirmatory tests  and microplate-based  instrument  systems to  automate  test
performance  and data collection.  Chiron and Ortho share  equally in the pretax
operating earnings generated by the joint business. The joint business holds the
immunodiagnostic rights  to Chiron's  hepatitis  and retrovirus  technology  and
receives  royalty  payments for  the sale  of HCV  tests by  Abbott Laboratories
("Abbott") and Pasteur  Sanofi Diagnostics. In  1995, Chiron and  Ortho began  a
collaboration  with Genelabs Technologies, Inc. ("Genelabs") regarding hepatitis
G virus. Under  the terms  of the  collaboration agreement,  the joint  business
received certain immunodiagnostic rights to the Genelabs technology. Chiron also
has  an option to  share equally in  the pretax operating  earnings generated by
Johnson & Johnson's home HIV test, currently under review by the FDA.
 
CHIRON BIOCINE
 
    Chiron Biocine, headquartered in Emeryville with operations in Siena, Italy,
is the Company's business to develop  and market new vaccines. Chiron  Biocine's
present business is based primarily on the sale of non-recombinant pediatric and
flu  vaccines in Italy and,  to a lesser extent,  in Southern Europe, the Middle
East, the Far East, Africa, South America, and to international health  services
such  as the World Health Organization. Among  its products is a new genetically
engineered  acellular  pertussis   (whooping  cough)   vaccine,  combined   with
diphtheria  and tetanus ("DTaP"), currently marketed in Italy. Chiron Biocine is
preparing applications  to market  the DTaP  vaccine in  the United  States  and
Europe, based on the results of large-scale government-sponsored trials in Italy
that  showed the Chiron acellular pertussis  vaccine is safer and more effective
than a current whole-cell pertussis vaccine.
 
    Chiron Biocine is developing a new generation of vaccines for serious  adult
infections  such as  herpes simplex virus,  type 2 ("HSV-2")  or genital herpes,
cytomegalovirus ("CMV") and HCV.  These vaccines utilize genetically  engineered
antigens  which are  displayed in  a manner  that mimics  the appearance  of the
actual agent, combined in a formulation  with adjuvants that amplify the  immune
response.  In 1996, Chiron Biocine announced that, based on a preliminary review
of clinical trial  data, a  vaccine formulation designed  to treat  HSV-2 had  a
statistically  significant  benefit on  several disease  indicators but  did not
reach statistical significance on its primary endpoint. A separate Phase 3 trial
of a vaccine designed to prevent HSV-2 is underway and scheduled to be completed
in 1996. Phase 2 trials  of a CMV vaccine are  underway in the United States.  A
Phase  1 trial of an HIV vaccine  is underway in Thailand, in collaboration with
the Royal Army and the United States  Department of the Army. A vaccine for  HCV
is  in preclinical trials. Chiron Biocine is also collaborating with NABI in the
development of a new  family of human immunotherapeutic  products, based on  the
vaccines  of  Chiron  Biocine and  initially  focused  on the  development  of a
hyperimmune globulin product to prevent and treat CMV infections.
 
    In February 1996, Chiron  and Behringwerke AG, a  subsidiary of Hoechst  AG,
entered  into an agreement whereby Chiron will purchase a 49 percent interest in
the human vaccine business of Behringwerke AG for Deutsche mark 171.5 million in
cash. Chiron has an option to purchase  the remaining 51 percent in March  1998,
1999,  2000 or 2001, and  Behringwerke AG has the  option to have Chiron acquire
the remaining 51  percent interest in  March 2001. Behringwerke  AG, one of  the
largest
 
                                       2
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vaccine  suppliers  in  Germany,  manufactures  and  markets  vaccines  for flu,
diphtheria, tetanus, pertussis,  rabies, tick-borne encephalitis,  tuberculosis,
cholera,  an oral  vaccine for polio,  and, under license  from other companies,
distributes vaccines  in  Germany  for measles,  mumps,  rubella,  hepatitis  B,
typhoid  fever, pneumonia, haemophilus influenza as well as an inactivated polio
vaccine.
 
    During the  period of  mutual  ownership, Chiron  and Behringwerke  AG  will
operate  the vaccine business as a joint  venture. The joint venture is designed
to provide an outlet for Chiron Biocine's new vaccines in the German market  and
to  expand its presence in  the European vaccine market.  Chiron will report its
share of the  joint venture's results  as equity in  earnings of  unconsolidated
joint  businesses.  Consummation  of  the  transaction  is  subject  to  certain
conditions, including  regulatory approvals  and customary  conditions prior  to
closing.
 
    In  addition to its  Chiron Biocine activities,  Chiron has received royalty
payments since 1986  from the  sales of Recombivax-Registered  Trademark- HB,  a
vaccine  against HBV developed,  manufactured and marketed by  Merck & Co., Inc.
("Merck"), using technology developed by Chiron.
Recombivax-Registered  Trademark-  HB  was  the  first  vaccine  using   genetic
engineering to be licensed by the FDA for human use.
 
CHIRON THERAPEUTICS
 
    Chiron  Therapeutics, Chiron's  hospital and large  clinic-based business in
the  United  States  and  Europe,  markets  products  for  use  principally   by
oncologists.    Its   leading   product   is   Proleukin-Registered   Trademark-
(aldesleukin), interleukin-2, the first treatment approved for metastatic kidney
cancer. In the United States, Chiron also markets generic chemotherapy drugs  as
part of a joint venture with Ben Venue Laboratories, Inc. In addition, on behalf
of   Ciba   Pharmaceuticals,   Chiron   promotes   Aredia-Registered  Trademark-
(pamidronate  disodium  for  injection),  a  drug  to  treat  hypercalcimia   of
malignancy, Paget's disease and osteolytic bone lesions of multiple myeloma.
 
    Chiron Therapeutics manufactures Betaseron-Registered Trademark- (interferon
beta-1b) for Berlex Laboratories, Inc., a United States affiliate of Schering AG
of  Berlin, Germany ("Schering"), which markets the product in the United States
and Canada. In Europe,  Schering is marketing the  product under the trade  name
Betaferon-TM-,  manufactured  by  Boehringer Ingelheim,  for  which  Chiron will
receive a royalty.
 
CHIRON VISION
 
    Chiron Vision is  the Company's  business in  ophthalmic surgical  products,
with  sales in the United States and 15 other countries. Chiron Vision's line of
products for the surgical correction of  vision includes both hard and  foldable
intraocular  lenses  for  cataract  replacement  surgeries,  phacoemulsification
instruments for  small-incision  cataract  surgeries,  and  refractive  surgical
instruments  including corneal shapers and excimer lasers. In March 1995, Chiron
Vision expanded  its presence  in the  United States  and European  markets  for
cataract  surgery products  through the  acquisition of  the ophthalmic surgical
division of IOLAB,  a Johnson &  Johnson company. Following  the acquisition  of
IOLAB, Chiron Vision initiated a global restructuring of the combined operations
to enhance manufacturing, marketing and management efficiencies.
 
    In  March 1996, Chiron  Vision received FDA approval  to begin marketing the
Vitrasert-TM- Implant to deliver ganciclovir for the treatment of CMV  retinitis
in  people  with AIDS.  In Phase  3 clinical  trials, the  Vitrasert-TM- Implant
demonstrated a clinically important improvement over intravenously  administered
ganciclovir  in delaying  the progression  of CMV  in these  individuals. Chiron
Vision is co-marketing  the Vitrasert-TM-  Implant worldwide,  including in  the
United  States  and  Europe,  with  Hoffmann-La  Roche,  Inc.  ("Roche"),  which
manufactures and markets ganciclovir.
 
CHIRON TECHNOLOGIES
 
    Chiron  Technologies   applies   enabling  technologies   in   combinatorial
chemistry,  gene therapy and  recombinant proteins to  develop products intended
for use as therapeutics,  and develops new  technologies with potential  utility
throughout   the  Company.  Chiron  Technologies   combines  the  Company's  own
proprietary technologies  in  combinatorial  chemistry,  robotic  screening  and
selection and molecular biology with the knowledge and participation of a select
group  of leading  academic scientists in  the fields of  structural biology and
bio-organic  chemistry.  Chiron  also   engages  in  collaborations  to   create
 
                                       3
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libraries   of  compounds   for  characterization   and  screening   with  other
pharmaceutical companies,  including  Janssen  Pharmaceutica  NV,  a  Johnson  &
Johnson company, and Ciba, as well as with organizations in other fields such as
Dow Elanco, an agricultural company.
 
    Chiron  augmented  its  program  in gene  therapy  with  the  acquisition in
September 1995  of Viagene,  Inc., now  known as  Chiron Viagene.  Through  this
program,  Chiron is developing gene therapy and gene transfer products, and drug
activation technology for the prevention and treatment of a broad range of human
diseases. Chiron's gene  therapy program includes  collaborations with  Ribozyme
Pharmaceuticals, Inc., Progenitor, Inc., and the Virus Research Institute.
 
    Chiron,  in collaboration with Johnson &  Johnson, is developing a series of
growth factors to treat topical wounds. In September 1995, Chiron and Johnson  &
Johnson  announced that  the two  companies have  reviewed favorable preliminary
Phase   3    clinical    trial   data    on    their   wound    healing    agent
Regranex-Registered   Trademark-   (becaplermin),   a   formulation   containing
recombinant human platelet-derived  growth factor (rhPDGF),  and are  proceeding
with  regulatory  applications. Chiron  manufactures  rhPDGF in  bulk  for final
formulation  into   Regranex-Registered  Trademark-.   Johnson  &   Johnson   is
responsible for clinical development, regulatory matters, marketing and sales.
 
    Chiron  is  collaborating with  Cephalon, Inc.  ("Cephalon") to  develop and
market products for the treatment of neurological disorders. During 1995, Chiron
and Cephalon announced that  Myotrophin-TM- (insulin-like growth factor,  IGF-1)
had shown a favorable result in Phase 2/3 trials in the United States and Europe
for the treatment of amytrophic lateral sclerosis (ALS or Lou Gehrig's Disease).
Subsequently,  the FDA asked for further  information about these trials. If the
requested information is  deemed insufficient  by the  FDA, additional  clinical
trials may be required before a marketing application can be submitted by Chiron
and  Cephalon. Following an  analysis of data  from a Phase  2 trial, Chiron has
decided to discontinue  its own clinical  development of IGF-1  for acute  renal
failure. Chiron is considering further clinical development of IGF-1.
 
    In the area of cardiovascular disease, Chiron has begun a collaboration with
G.D.  Searle  &  Co.  ("Searle"), to  develop  tissue  factor  pathway inhibitor
("TFPI"), a coagulation inhibitor with potential applications in thrombotic  and
inflammatory  diseases, trauma and critical care. Chiron and Searle have begun a
Phase 2 clinical trial studying the use of TFPI in microvascular surgery.
 
COMPETITION
 
    Chiron  competes  against  a  large   number  of  other  biotechnology   and
pharmaceutical  companies in the United States and internationally, and although
no single company competes in every area of Chiron's interests, the  competition
is  intense  and  expected to  increase.  Biotechnology and  drug  discovery are
rapidly evolving fields in which  new developments frequently result in  product
obsolescence  and price competition. To compete effectively, Chiron's direct and
joint businesses invest heavily in research, maintain multiple sales forces that
concentrate efforts on  individual classes of  customers, and spend  significant
amounts  on  advertising, promotion  and  selling. Substantial  consolidation is
underway in the global healthcare industry,  and is expected to produce  greater
efficiencies and even more intense competition.
 
    In  the diagnostic  market, the  major competitor  to both  the Chiron-Ortho
joint business and to  the Chiron Diagnostics business  is Abbott. In  addition,
although  initial patents for the Chiron HCV  invention have been issued and are
being upheld through litigation, the joint business faces continued  competition
from  a number of  unlicensed sellers of HCV  tests including Murex Diagnostics,
Ltd., a  subsidiary  of  International  Murex  Technologies  Corp.,  and  United
Biomedical, Inc. (see Part I, Item 3.). Other companies in Japan and Europe have
introduced,  or may be preparing to  introduce, competing HCV tests. In addition
to Abbott, Chiron faces  competition in the  immunoassay market from  Boehringer
Mannheim  and Johnson  & Johnson,  which purchased  the diagnostic  and clinical
chemistry business  of Eastman  Kodak. Chiron's  bDNA probe  tests compete  with
products from affiliates of Roche (which is developing tests based on polymerase
chain reaction), Abbott and Digene
 
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and  may  compete  with Gene-Trak  Systems  and Gen-Probe  Incorporated.  In the
critical  blood  analyte  market,  Chiron  Diagnostics  faces  competition  from
Radiometer Medical A/S and Instrumentation Laboratory Company.
 
    Four  large  companies  hold the  greatest  share of  the  worldwide vaccine
market: Merck  and  SmithKline  Beecham ("SmithKline"),  both  of  which  market
pediatric vaccines and the only widely sold recombinant vaccines for hepatitis B
infection;  Lederle Praxis  Biologics ("Lederle"),  a division  of American Home
Products; and the combination of Connaught Laboratories, Inc. ("Connaught"), and
Pasteur Merieux Serums  et Vaccins  (which separately has  a strategic  alliance
with  Merck), both  of which sell  pediatric vaccines.  SmithKline and Connaught
both have acellular pertussis vaccines that demonstrated superiority compared to
a currently marketed whole-cell pertussis vaccine, and have indicated that their
United  States  regulatory  applications   for  such  vaccines  are   completed.
SmithKline and Lederle are developing vaccines for genital herpes.
 
    In  the therapeutics  market, Proleukin-Registered  Trademark- competes with
alpha interferon sold by Schering Plough Corporation and by Roche as a treatment
for  metastatic  kidney  cancer.  Several  other  biotechnology  companies   are
developing  IL-2  or  other  interferons  as  immune-system-based  therapies for
cancers and infectious diseases, including Roche, Genentech, Inc. ("Genentech"),
and Amgen Inc. Approximately  30 companies compete in  the United States  market
for  anticancer  chemotherapies, including  Bristol-Myers Squibb  Company, which
accounts  for  nearly  half  the   market.  Chiron's  therapeutic  products   in
development  for  cancer, infectious  diseases  and cardiovascular  disease face
competition from  companies such  as  Genetics Institute,  Immunex  Corporation,
Genentech  and many other  biotechnology companies. Aredia-Registered Trademark-
may face competition from other bone growth factors.
 
    Chiron Vision  competes  against  numerous  healthcare,  pharmaceutical  and
biotechnology  companies in the  research, development and  marketing of devices
and therapeutic  products for  the ophthalmic  surgery market.  Chiron  Vision's
competition  in  its largest  product line,  intraocular lenses,  includes Alcon
Laboratories, Inc., a division of Nestle SA; Allergan, Inc.; Pharmacia AB; Storz
Instrument Company, a subsidiary of  American Home Products; and Staar  Surgical
Co. Gilead Sciences, Inc., has a systemically injectable pharmaceutical that may
compete against Chiron Vision's ganciclovir Vitrasert-TM- Implant, and which has
been  recommended for regulatory approval.  Summit Technology, Inc. has received
approval, and has  begun marketing  in the United  States, an  excimer laser  to
correct  vision. VISX, Inc., which has  cross-licensed its patents with those of
Chiron Vision outside the  United States, has an  excimer laser under review  at
the FDA.
 
    Betaseron-Registered  Trademark-, the  only product  licensed in  the United
States to treat relapsing-remitting multiple sclerosis, began usage by  patients
in October 1993. Potential competing products to Betaseron-Registered Trademark-
in  the  United  States and  Europe  include  two products  that  have completed
clinical trials.  Of these  two  products, a  recombinant beta  interferon  from
Biogen,  Inc. ("Biogen")  has been  recommended for  regulatory approval  in the
United States. Other companies have entered, or are preparing to enter, products
into clinical  trials for  multiple sclerosis.  In Europe,  Schering's  product,
Betaferon-TM-,  faces competition  from Ares  Serono. In  Italy and  Spain, Ares
Serono sells an extracted form of beta interferon which is used for, among other
purposes,  treatment  of  multiple  sclerosis,  and  holds  licenses  for  other
indications in several countries, including Germany.
 
    A   significant  amount  of  research   in  biotechnology  is  performed  in
universities and nonprofit research  organizations. These entities are  becoming
more  active  in  seeking patent  protection  and licensing  revenues  for their
discoveries. The competition  among large pharmaceutical  companies and  smaller
biotechnology  companies  to acquire  technologies from  these entities  also is
intensifying. While Chiron actively collaborates with such entities in  research
and has and will continue to license their technologies for further development,
these  institutions also compete with Chiron to recruit scientific personnel and
to establish proprietary technology positions.
 
                                       5
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MANUFACTURING
 
    Chiron  currently  has  licensed  manufacturing  facilities  in  Emeryville,
California,  for the  production of  biologicals. During  1995, construction was
completed on  additional  manufacturing  facilities  in  Vacaville,  California.
Chiron  also  has manufacturing  facilities in  Puerto  Rico and  Amsterdam, The
Netherlands. During  1995, the  Company began  producing certain  quantities  of
rhPDGF  and TFPI  in the  Vacaville facility  and anticipates  utilizing the St.
Louis facility  to  produce clinical  grade  materials for  Phase  1, 2,  and  3
clinical  trials  for HSV,  CMV and  HIV  products. Due  to lower  than expected
domestic commercial  demand for  the Company's  Betaseron-Registered  Trademark-
product,  the Puerto Rico facility was idled and the regulatory approval process
for Betaseron-Registered Trademark- fermentation  in the Amsterdam facility  was
suspended.  The Amsterdam facility is currently being used for the production of
bacterial vaccines and clinical grade materials and as a pilot plant for process
development.
 
    In 1995,  the  Company began  construction  activities for  a  manufacturing
facility  in Italy to be used in the production of bacterial vaccines, including
acellular pertussis. Regulatory approvals for  each of the facilities  described
above  are  necessary before  Chiron can  begin  any new  commercial production.
Failure to  obtain all  necessary  approvals and  permits would  materially  and
adversely affect the continued development and introduction of Chiron products.
 
    Following  the acquisition of IOLAB, Chiron Vision consolidated the majority
of its domestic operations at IOLAB's facilities in Claremont, California.  This
consolidation  resulted  in the  closure of  leased manufacturing  facilities in
Huntington, West Virginia; and  Rapid City, South  Dakota. Chiron Vision  leases
additional  manufacturing facilities  in Irvine,  California; Lyon,  France; and
Munich, Germany.
 
    CCD  owns   manufacturing  facilities   in  Oberlin,   Ohio;  and   Walpole,
Massachusetts.   Other   manufacturing  sites   are  leased   including  Irvine,
California; Alameda, California; Medfield, Massachusetts; and Sudbury,  England.
All CCD facilities were certified ISO 9000 in 1995.
 
MAJOR CUSTOMERS
 
    During  1995, no  single customer contributed  ten percent or  more to total
revenues.  Ciba  and  its  affiliates  are  related  parties  and   collectively
contributed  11  percent and  13 percent  of  total revenues  in 1994  and 1993,
respectively. Johnson  & Johnson  and  its affiliates  are related  parties  and
collectively contributed 22 percent and 32 percent of total revenues during 1994
and  1993, respectively.  Sales of  Betaseron-Registered Trademark-  to Chiron's
marketing partner accounted for less than ten percent of total revenues in  1995
and 1993, and 23 percent in 1994.
 
    For  a discussion of revenues by geographic area, see Part II, Item 8., Note
11 of Notes to Consolidated Financial Statements.
 
RESEARCH AND DEVELOPMENT
 
    The Company's two  primary sources  of new product  candidates are  internal
research  and development and collaboration  and licensing with other healthcare
companies. Research and  development expense  for the years  ended December  31,
1995,  1994 and 1993,  including payments to  collaborative partners, was $343.8
million, $166.2 million and $140.0 million, respectively. Under contracts  where
reimbursement is based upon work performed, the related research and development
expenses  were $51.8 million, $72.4 million and  $61.5 million in 1995, 1994 and
1993, respectively.
 
RAW MATERIALS
 
    Raw materials and laboratory supplies utilized in the Company's research are
generally available from several commercial sources. In certain projects, sample
tissues and cell strains used for the Company's research and development may  be
difficult  to  obtain. The  Company relies  upon its  good relations  with other
researchers and institutions to obtain the majority of such strains and samples.
Sources include blood banks, hospitals, universities and national  laboratories.
Most  raw materials necessary  for process development,  production scale-up and
commercial  manufacturing  are  generally  available  from  multiple  commercial
sources.    However,   certain    processes   require    materials   from   sole
 
                                       6
<PAGE>
sources or materials that are difficult for suppliers to produce and certify  to
the  Company's specifications  or for  which the raw  materials may  be in short
supply. Although  Chiron  maintains  an  awareness of  the  condition  of  these
suppliers, their ability to supply the Company's needs and the market conditions
for  these  materials, there  is  a risk  that  material shortages  could impact
production efforts.  The  Company  believes  that  its  relationships  with  its
commercial suppliers are good.
 
GOVERNMENT REGULATION
 
    Regulation by governmental agencies in the United States and other countries
is  a  significant  and changing  factor  in Chiron's  research  and development
effort, and in the Company's plans to produce and market both approved  products
and  those nearing approval. Intent to market products in Europe brings an added
regulatory burden, as the role of the European Economic Community has  increased
significantly in recent years.
 
    The  Company's products  (both marketed  and investigational)  in the United
States are primarily biologicals, but  also include drugs, diagnostic tests  and
instruments  and ophthalmic devices. All are regulated under the Food, Drug, and
Cosmetic Act ("FDCA")  and supporting regulations.  The biological products  are
additionally  regulated  under  the  Public  Health  Service  Act  ("PHSA")  and
supporting regulations. Licensing of a  biological product in the United  States
is  accompanied  by a  requirement to  simultaneously license  the manufacturing
establishment.
 
    Licensing of the  establishment includes a  requirement that all  facilities
used  to  manufacture,  fill,  test and  distribute  the  product  in interstate
commerce be inspected and approved by the FDA's Center for Biologics  Evaluation
and  Research.  The  review and  inspection  process  includes a  review  of all
labeling, including the vial,  carton, box and packers,  as well as  promotional
and advertising materials.
 
    The  FDA is  proposing to  amend the  biologics regulation  to eliminate the
establishment   license   application    requirement   for    well-characterized
biotechnology  products licensed under the PHSA.  The proposed rule would exempt
well-characterized biotechnology products, licensed under the PHSA, from certain
biologics  regulations  and  harmonize  the  requirements  applicable  to  these
products with those applicable to similar drug products approved under the FDCA.
 
    Since   every  FDA  decision  requires  submission  of  an  application  and
substantial supporting documentation (such as a New Drug Application,  Premarket
Approval  Application,  Product  License Application,  or  Establishment License
Application), the preparation  of the  documentation, its  submission and  audit
review  determines the speed with which a  research program is translated into a
marketed product.
 
    Licensing procedures  in the  European  Union ("EU")  were revised  in  1995
leading to the estab-
lishment  of  the  following  two  new  registration  procedures:  a Centralized
Procedure for  licensing of  medicinal products  derived from  the use  of  high
technology/biotechnology  processes,  and  a Decentralized  Procedure  whereby a
license granted in one Member  State of the EU  is mutually recognized by  other
Member  States, leading to  the granting of equivalent  licenses in those Member
States recognizing the original license.
 
    The Centralized Procedure is mandatory for those medicinal products  derived
from genetic engineering/monoclonal antibody technologies and optional for other
high  technology-derived medicinal  products and  any drug  with a  new chemical
entity as an active substance, a new delivery system of significant  innovation,
or  an  entirely  new  indication  of  significant  therapeutic  interest.  This
procedure leads to the  granting of a  single license for the  entire EU by  the
newly established European Medicines Evaluation Agency based in London.
 
    For  existing national licensing procedures,  a transition period to January
1, 1998  will exist.  At that  time, the  Decentralized Procedure  will  replace
independent national licensing of products in the EU.
 
    Due  to insufficient experience to date, it  is unclear what impact, if any,
these revised procedures will have for the registration of products in Europe.
 
                                       7
<PAGE>
PATENTS AND PROPRIETARY RIGHTS
 
    Intellectual property  (e.g.,  patents,  trade secrets  and  trademarks)  is
important  to the business  of the Company.  Chiron and its  subsidiaries have a
substantial number of  pending patent  applications and granted  patents in  the
United  States  and in  foreign countries.  It is  not known  how many  of these
pending patent applications will be granted as patents, and at least some of the
pending  applications  will  be  abandoned.  A  number  of  patents  and  patent
applications   owned   by  third   parties   have  been   licensed  exclusively,
semi-exclusively or nonexclusively  to Chiron  and its subsidiaries  for one  or
more  fields of use. Chiron and its subsidiaries also own a number of trademarks
in the United States and foreign countries.
 
    Due to unresolved issues regarding the scope of protection provided by  such
patents,  as well as the  possibility of patents being  granted to others, there
can be  no assurance  that  the patents  owned or  licensed  to Chiron  and  its
subsidiaries  will  provide substantial  protection  or commercial  benefit. The
rapid rate of development and the intense research efforts throughout the  world
in  biotechnology,  the significant  time  lag between  the  filing of  a patent
application  and  its  review  by  appropriate  authorities  and  the  lack   of
significant legal precedent involving biotechnology inventions make it difficult
to  predict accurately  the breadth  or degree  of protection  that patents will
afford Chiron's or its subsidiaries' biotechnology products or their  underlying
technology.  It  is also  difficult  to predict  whether  valid patents  will be
granted based  on biotechnology  patent  applications or,  if such  patents  are
granted,  to predict the nature  and scope of the claims  of such patents or the
extent to which they may be enforceable.
 
    Important legal questions remain to be  resolved as to the extent and  scope
of  available patent  protection in the  United States and  abroad. Under United
States law,  although a  patent has  a statutory  presumption of  validity,  the
issuance  of a patent is not conclusive as  to validity or as to the enforceable
scope of  its claims.  Accordingly,  there can  be  no assurance  that  Chiron's
patents   will  afford   legal  protection  against   competitors  with  similar
inventions, nor  can  there  be any  assurance  that  the patents  will  not  be
infringed  or designed around by  others or that others  will not obtain patents
that Chiron would need to license or design around.
 
    Trade secrets and  confidential information  are likely to  be important  to
Chiron's  commercial  success.  Although  Chiron and  its  subsidiaries  seek to
protect  trade  secrets  and  confidential   information  they  believe  to   be
significant,  there  can be  no assurance  that others  will not  either develop
independently the same or similar  trade secrets or confidential information  or
obtain  access to such  trade secrets or  confidential information. Furthermore,
there can be no  assurance others have  not obtained or  will not obtain  patent
protection  that will preclude Chiron or its subsidiaries from using their trade
secrets or confidential information.
 
    Most countries  limit  the  enforceability  of  patents  against  government
agencies  or government contractors. Generally, the  patent owner may be limited
to monetary relief  and may be  unable to  enjoin infringement. This  can be  of
particular  importance  in countries  where a  major customer  of Chiron  or its
licensees is a governmental  agency. The inability  to enjoin such  infringement
and  the  necessity  of  relying  exclusively  on  monetary  compensation  could
materially  diminish  the  value  of  a  particular  patent.  Furthermore,  many
countries  (including European  countries) have compulsory  licensing laws under
which third parties may compel the grant of non-exclusive licenses under certain
circumstances (for  example, failure  to "work"  the invention  in the  country,
patenting  of  improvements by  a third  party  or failure  to supply  a product
related to health and safety). The  mere existence of such limits on  injunctive
relief and compulsory licensing systems could force Chiron to grant a license it
would not have otherwise granted.
 
    Chiron  is  aware that  others,  including various  competitors, educational
institutions  and   governmental  organizations   have  intellectual   property,
particularly  patents and pending patent applications,  in the United States and
other  countries  potentially   useful  or   necessary  to   Chiron's  and   its
subsidiaries' businesses including vaccines, diagnostics, therapeutics, oncology
and  ophthalmics. Some  of these  patents and  applications claim  only specific
products or methods of making such products, while
 
                                       8
<PAGE>
others claim  more  general  processes  or  techniques.  There  may  be  similar
third-party  intellectual property  important to the  business of  Chiron or its
subsidiaries of which the Company is not  currently aware. It is likely that  in
the  future others will obtain patents  or develop proprietary rights that might
be necessary or  useful for the  manufacture, use  or sale of  some products  by
Chiron  or  its  subsidiaries.  Certain  of  these  patents  or  rights  may  be
sufficiently  broad  to  prevent  or  delay  Chiron  or  its  subsidiaries  from
practicing  necessary technology, including the  manufacture and/or marketing of
products important to Chiron's current and future business. The scope,  validity
and  enforceability of such patents,  if granted, the extent  to which Chiron or
its subsidiaries may wish or need to obtain licenses thereunder and the cost and
availability of such  licenses are  not susceptible to  accurate prediction.  If
Chiron  or  its  subsidiaries  do  not obtain  such  licenses,  products  may be
withdrawn from the market, or delays could be encountered in market introduction
while an attempt is made to design around such patents. Alternatively, Chiron or
its subsidiaries could find  that the development, manufacture  or sale of  such
products is foreclosed. Chiron or its subsidiaries could incur substantial costs
in challenging the validity or scope of such patents.
 
    Chiron  is  currently involved  in legal  proceedings involving  patents and
expects that litigation relating  to the validity and  scope of its patents  and
proprietary  rights and  those of  third parties will  continue to  arise in the
future (see Part I, Item 3.).  Substantial costs could be incurred in  defending
the  validity  or  scope  of patents  owned  by  or licensed  to  Chiron  or its
subsidiaries. If  Chiron  and  its  subsidiaries are  unable  to  obtain  strong
proprietary rights to protect a product after the expenditure of funds to obtain
regulatory  approval,  competitors  may  be able  to  market  competing products
without being required to undertake  the same lengthy and expensive  development
efforts that Chiron and its subsidiaries already have completed. In these cases,
it  is  possible that  price competition  could  become a  principal competitive
factor in the marketing of such products.  If Chiron or any of its  subsidiaries
should lose litigation with respect to third party intellectual property rights,
Chiron  and its subsidiaries could be  precluded from manufacturing or marketing
certain products and incur substantial liability for damages and attorney fees.
 
EMPLOYEES
 
    At December 31, 1995, Chiron and its subsidiaries employed 6,894 people on a
full-time and part-time basis in  eight principal locations on four  continents.
Of  Chiron's  employees,  3,789  were  involved  in  research,  development  and
manufacturing efforts  and 3,105  were involved  in operations,  administration,
sales and marketing and finance.
 
ITEM 2.  PROPERTIES
 
    Chiron's  operations are  conducted in  owned and  leased facilities located
throughout the world. Chiron's principal  facilities are located in  Emeryville,
California,  and  are  used  for  research  and  development,  manufacturing and
administrative activities. Although  the Company  leases the  majority of  these
facilities,  Chiron  owns certain  facilities as  well as  land held  for future
expansion.
 
    The Company owns manufacturing facilities located in Vacaville,  California;
St. Louis, Missouri; and Amsterdam, The Netherlands. Certain of these facilities
have  available  capacity due  to lower  than expected  domestic demand  for the
Company's  Betaseron-Registered   Trademark-  product.   Chiron  also   owns   a
manufacturing facility in Puerto Rico which is currently idled due to lower than
expected  demand  for Betaseron-Registered  Trademark-.  Chiron leases  and owns
manufacturing facilities  in Italy  for the  production of  pediatric and  adult
vaccines.  In 1995, Chiron  commenced construction in  Italy to build additional
manufacturing facilities for the production of bacterial vaccines.
 
    Chiron  owns  manufacturing  facilities  in  Oberlin,  Ohio;  and   Walpole,
Massachusetts,  which are used for the development and manufacture of diagnostic
products. The Company also owns a sales and administrative facility in  Norwood,
Massachusetts,  and a  sales office and  warehouse in  Halstead, England. Chiron
leases manufacturing facilities  relating to its  diagnostic products in  Irvine
and Alameda, California; Medfield, Massachusetts; and Sudbury, England.
 
                                       9
<PAGE>
    The  Company owns administrative and  manufacturing facilities in Claremont,
California, and  leases manufacturing  facilities in  Irvine, California;  Lyon,
France;  and  Munich,  Germany,  which  are  used  in  the  Company's ophthalmic
business.
 
    Chiron leases additional facilities in  14 cities across the United  States.
These  properties  are primarily  sales and  service  offices. The  Company also
leases additional facilities  in Canada, Mexico,  England, Switzerland,  Sweden,
Spain,  Italy,  The Netherlands,  Germany,  France, Belgium,  Austria, Portugal,
Poland, Taiwan, Singapore, Korea, Japan  and Australia, primarily for sales  and
service offices.
 
    The  Company believes  its present facilities  are adequate  for its current
needs. The Company continually evaluates future requirements for its facilities.
 
ITEM 3.  LEGAL PROCEEDINGS
 
    ABBOTT  LABORATORIES.    On  December  13,  1993,  Chiron  filed  a   patent
infringement  action against Abbott in the  United States District Court for the
Northern District  of  California.  The  suit,  which  alleges  infringement  of
Chiron's  U.S. Patent  No. 5,156,949  ("the '949  patent"), claiming  the use of
recombinant envelope antigens in  immunoassays for HIV  antibodies, is based  on
Abbott's  sale of  unlicensed HIV immunoassay  tests which are  believed to fall
within the scope of one or more patent claims. Abbott is defending this suit  on
the  basis of invalidity and  non-infringement. Chiron is requesting unspecified
damages and injunctive relief.  Cross motions for  summary judgment on  Abbott's
defenses  of inequitable conduct and prior invention were filed. After argument,
the Court granted  portions of Chiron's  motion but denied  Abbott's motion  for
summary  judgment.  Subsequently, the  United States  Patent &  Trademark Office
declared an interference  between the '949  patent and an  application owned  by
Centocor  and the U.S. government. Chiron is the junior party. The Court refused
Abbott's request to stay the  litigation pending resolution of the  interference
and has scheduled a trial for April 7, 1996.
 
    On  April 26, 1994,  Abbott filed suit  against Chiron in  the United States
District Court for the Northern District of Illinois, Eastern Division, alleging
that the Company has,  by making, using and  selling nucleic acid  hybridization
assays,  infringed three  U.S. patents  owned by  third parties  and licensed to
Abbott. Abbott  is  seeking injunctive  relief  and damages  in  an  unspecified
amount.  The Company believes that it  has substantial defenses and is defending
this suit vigorously. Trial is currently scheduled for July 15, 1996.
 
    ALLERGAN MEDICAL OPTICS.  On December 8, 1992, Allergan Medical Optics filed
a lawsuit  in the  United States  District  Court for  the Central  District  of
California  against Chiron and Chiron IntraOptics (now Chiron Vision) (together,
"Chiron"). The complaint alleged  that a mechanical inserter  used to place  the
Chiron  foldable intraocular lens in the eye during cataract surgery infringes a
patent licensed exclusively to Allergan.  Allergan sought an injunction  against
sales of the inserter, damages in an unspecified amount, and attorneys' fees. On
November  27,  1995, Chiron  Vision  and Allergan  reached  a settlement  in the
lawsuit. Chiron signed a Final Consent Judgment in exchange for a license to the
subject patent.
 
    ADVANCED CHEMTECH.  On  August 11, 1994, Advanced  ChemTech, Inc. brought  a
lawsuit  against  Chiron in  the United  States District  Court for  the Western
District of Kentucky, Louisville Division, asserting that certain Chiron patents
relating to peptide mixtures are invalid  and unenforceable and that Chiron  has
engaged  in unfair  competition and unfair  business practices  in asserting its
patent rights.  Advanced ChemTech  is asking  the Court  to: (1)  find that  the
patent  at issue is  invalid and unenforceable; (2)  find that Advanced ChemTech
does not infringe the patents; and (3) award damages according to proof.  Chiron
has answered and counterclaimed for infringement of its patents. Chiron believes
that  it  has  substantial  defenses against  the  claims  asserted  by Advanced
ChemTech.
 
    DANIEL W. BRADLEY.  On  December 20, 1994, Dr.  Daniel W. Bradley, a  former
scientist  at the U.S. Centers  for Disease Control (the  "CDC") brought suit in
the United States District Court for the Northern District of California against
Chiron,   Ortho,    certain    employees    of   Chiron,    and    the    United
 
                                       10
<PAGE>
States  government.  Subsequently,  Bradley  dismissed the  United  States  as a
defendant. Bradley, who collaborated with Chiron scientists on research that led
to the discovery of HCV, alleges he had been wrongly excluded as an inventor  of
HCV.  He requests various forms of relief,  including declarations that he is an
inventor of  Chiron's  patents  related  to  HCV  and  that  these  patents  are
unenforceable.  Bradley further seeks monetary  damages and a constructive trust
on all past and  future profits derived from  Chiron's HCV invention, which  are
estimated  by Bradley to be in excess of  $1 billion, as well as penalties under
federal and state Racketeering and Corrupt Organization (RICO) statutes.  Chiron
believes  Bradley's claims  to inventorship and  his suit are  without merit and
that substantial defenses  exist. In 1990,  Bradley and the  CDC entered into  a
settlement  agreement regarding  their respective  claims of  inventorship under
which any rights either might have were assigned to Chiron. Chiron believes that
the settlement agreement is  valid and bars substantially  all of the claims  in
the  subject  litigation. Chiron  and  the other  defendants  filed a  motion to
dismiss  Bradley's  First  Amended  Complaint.  The  Court  dismissed  Bradley's
complaint  for failure to  state a claim  upon which relief  can be granted, but
allowed Bradley  to file  an amended  complaint. Chiron  has filed  a motion  to
dismiss Bradley's Second Amended Complaint.
 
    CARNEGIE  MELLON UNIVERSITY. On August  20, 1994, Carnegie Mellon University
and Three  Rivers Biologicals,  Inc.  brought a  lawsuit  in the  United  States
District  Court  for the  Western District  of Pennsylvania  against Hoffmann-La
Roche, Inc., Roche Molecular Systems, Inc., the Perkin-Elmer Corporation, Chiron
and its wholly-owned subsidiary, Cetus  Oncology Corporation, claiming that  the
defendants  infringed certain United States patents relating to plasmids for the
expression of DNA Polymerase  I and to  plasmids providing for  nick-translation
activity.  Carnegie Mellon  and Three Rivers  Biologicals are  seeking a finding
that the defendants willfully infringed the patents at issue, injunctive  relief
and  damages according  to proof.  All defendants  have answered  the complaint.
Venue of the case was changed to  the Northern District of California on  motion
by  Chiron. Discovery  is ongoing.  The facts  of the  case, including potential
indemnification rights or obligations among the defendants, are currently  under
review. However, Chiron believes that it and Cetus have significant defenses.
 
    EVANS.   On  November 8,  1995, the Tribunal  of Brescia,  an Italian Court,
dismissed a lawsuit brought by Evans Medical Limited (a division of Medeva  plc)
("Evans") against Chiron's Italian vaccine business, Biocine S.p.A., and against
Nuova  Chimica Medica s.r.1., a distributor.  Evans sought injunctive relief via
an emergency procedure. The  suit alleged that the  p69 antigen used in  Biocine
S.p.A.'s recombinant acellular pertussis vaccines
(Acelluvax-Registered   Trademark-  and   Acelluvax-Registered  Trademark-  DTP)
infringed Evans' Italian counterpart  to its European  patent No. 162,639  ("the
'639  patent").  This  patent is  licensed  by Evans  exclusively  to SmithKline
Beecham Biologicals S.A. Counterpart patents are pending or have been issued  in
other jurisdictions, including the United States. Earlier in the year, Evans had
brought  a similar  proceeding against  Biocine S.p.A.  and its  distributor for
emergency injunctive  relief  in the  same  Court.  Following a  June  26,  1995
hearing, Evans abandoned that proceeding.
 
    Biocine S.p.A. previously had opposed issuance of the '639 patent before the
European  Patent Office ("EPO") and has appealed  the finding reached by the EPO
in that opposition proceeding. Biocine S.p.A.  filed an action against Evans  in
Milan on October 23, 1995 alleging invalidity of the same patent that formed the
basis  for the two Italian  suits discussed above. Biocine  S.p.A. later filed a
claim against Evans for non-infringement  with the Milan Court. Evans'  response
to  the Milan actions was filed in February 1996. Also in February 1996, Biocine
S.p.A. filed an action alleging invalidity and non-infringement of Evans'  Dutch
equivalent  to the '639 patent in The  Netherlands. Chiron believes that it does
not infringe any valid claim in the '639 patent or in its foreign counterparts.
 
    MUREX DIAGNOSTICS, LTD.   In a  series of  actions, the first  of which  was
brought  on  March 2,  1992, Chiron,  together with  Ortho and  Ortho Diagnostic
Systems, Ltd. (collectively, "Ortho"), filed suit in the High Court for  England
and  Wales against Murex  Diagnostics, Ltd. ("Murex"),  alleging infringement of
Chiron's U.K. Patent No.  2,212,511 ("the '511 patent")  as a result of  Murex's
manufacture  and sale of HCV immunoassay kits  in the U.K. Murex is a subsidiary
of International Murex Technologies Corp., a Canadian company. Chiron and  Ortho
sought injunctive relief and unspecified damages.
 
                                       11
<PAGE>
On  May 27, 1994, the High Court  granted judgment for Chiron and Ortho, holding
the '511 patent  valid and infringed,  and ordered  Murex to pay  damages in  an
amount  to  be  determined. Both  Murex  and the  Chiron/Ortho  parties appealed
various aspects of the High Court's  judgment. Chiron's and Ortho's request  for
an  injunction was  granted on November  30, 1994. Following  an interim damages
inquiry which was  held in  February 1996,  the Court  ordered Murex  to pay  L6
million  (approximately $9  million) to  Chiron/Ortho by  February 23,  1996. On
February 22, 1996, Murex, which had changed its name to Specialist  Diagnostics,
Ltd., filed a petition for voluntary liquidation. There can be no assurance when
or whether Chiron and Ortho will be able to collect this damage award. A damages
inquiry is scheduled for July 1996.
 
    In  a series of rulings on November 2  and 7, 1995, the U.K. Court of Appeal
held that, with the exception  of one claim, the '511  patent is valid and  that
Chiron  could amend the patent and proceed with the damages inquiry. The parties
have applied for leave to appeal to the House of Lords.
 
    Chiron is informed that officials within the British Ministry of Health have
in the past raised  the possibility of authorizing  Murex's infringement of  the
'511 patent under the "Crown use" provisions of British law, with respect to the
sale  of HCV immunoassay  kits to the British  National Health Service. Further,
Murex has stated  that it will  apply for  a compulsory license  under the  '511
patent.
 
    Infringement  proceedings  against  Murex  on  German  and  European patents
corresponding to the '511  patent also have  been filed by  Chiron and Ortho  in
Germany,  Italy, The  Netherlands and Belgium.  On January 23,  1995, Chiron and
Ortho were granted an injunction in Germany. On May 8, 1995, Chiron was  granted
a cross-border preliminary injunction by the Dutch Court preventing infringement
by  Murex  and  certain of  its  affiliates covering  The  Netherlands, Belgium,
France, Spain and Luxembourg. Murex has  brought an action in Australia  seeking
revocation  of  the  Australian  counterpart  of  the  '511  patent.  Chiron has
counterclaimed for infringement. That matter is  scheduled for trial in June  of
1996.
 
    ORGANON  TEKNIKA,  LTD.   On May  4, 1994,  Chiron instituted  summary legal
proceedings against Organon  Teknika, B.V., Akzo  Pharma, B.V., subsidiaries  of
Akzo   N.V.  (all  subsidiaries  of  Akzo  N.V.  (collectively  referred  to  as
"Organon")), and United Biomedical, Inc. ("UBI"), the supplier of Organon's  HCV
antigens and kits, in the District Court of the Hague, The Netherlands, alleging
infringement  of European Patent No. 318,216 ("the  '216 patent") as a result of
the defendants' manufacture and sale of HCV immunoassay kits. On July 22,  1994,
Chiron  was  granted  a  cross-border  preliminary  injunction  against  further
infringement, including sale  of the UBI  kit, by Organon  in Austria,  Belgium,
Switzerland,  Germany,  Spain,  France,  Italy,  Liechtenstein,  Luxembourg, The
Netherlands and Sweden. Organon and UBI appealed the injunction. The '216 patent
is a counterpart of the British '511 patent. Infringement proceedings brought by
Chiron and Ortho were also pending  against Organon in Italy and Belgium  (based
on  the '216 patent), and consolidated with the actions against Murex, described
above. Chiron, Ortho, and Organon settled all European HCV litigation on October
9, 1995, and Chiron  and Ortho were compensated  for past infringement. UBI  did
not  participate  in the  settlement, and  has  been ordered  to pay  Ortho Ltd.
damages by the U.K.  Court of Appeal,  along with Murex,  as described above.  A
damages inquiry has not yet been scheduled.
 
    SICOR.    In April  1991, Alco  Chemicals, Ltd.  ("Alco") and  Sicor, S.p.A.
("Sicor"), former suppliers of bulk doxorubicin to Cetus Ben Venue  Therapeutics
("CBVT"),  filed  suit in  the  United States  District  Court for  the Northern
District of California against Cetus  Oncology Corporation ("Cetus"), Ben  Venue
Laboratories,  Inc. ("Ben Venue"), CBVT and  Erbamont, Inc. ("Erbamont") and its
affiliates. Plaintiffs claim  that they had  distribution and supply  agreements
with CBVT relative to a product called doxorubicin hydrochloride. Sicor had been
prevented  from manufacturing  product for CBVT  since September  1990. In March
1991, CBVT entered  into an agreement  with Erbamont which  provided for,  among
other  things, the settlement of several legal proceedings then pending relating
to Erbamont's alleged doxorubicin proprietary  rights, and the exclusive  supply
of  doxorubicin to CBVT by  Erbamont. The Sicor complaint  alleges breach of the
CBVT contract to  purchase bulk  doxorubicin from  Sicor, as  well as  antitrust
violations   and   interference   with  contract   and   prospective  advantage,
 
                                       12
<PAGE>
and sought unspecified damages. Plaintiffs assert in separate counts against all
of the Cetus  parties that their  contracts with CBVT  have been breached,  that
inducement  of  such breaches  has been  tortious, that  plaintiffs' prospective
economic relations have been tortiously  frustrated, that the Cetus parties  are
indebted to plaintiffs on past accounts said to relate to the joint financing of
earlier  litigation, and that plaintiffs' distribution and supply of doxorubicin
has been foreclosed by reason of violations of the federal antitrust laws. Cetus
has denied  any  entitlement  to  recovery  in this  lawsuit  and  has  filed  a
counterclaim  against the plaintiffs  for fraud and breach  of contract based on
Sicor's failure to deliver the bulk product. Sicor's antitrust claims have  been
dismissed  on motion and Sicor has  dismissed its claims against Erbamont. Sicor
filed a summary judgment motion with  respect to the counterclaims of the  Cetus
parties.  On February  2, 1996,  the District  Court granted  that motion  in an
opinion which the  Company is currently  studying. The Company  believes it  has
substantial  defenses  to the  Sicor claims.  A  related arbitration  before the
International Chamber of Commerce in New  York brought by Sicor against  Chiron,
Cetus,  and  Ben Venue  has  been stayed  pending  the resolution  of  the Cetus
parties' counterclaims in the litigation described above.
 
    In February 1995, Sicor and Alco filed a further action in the United States
District Court for the Northern District of California against CBVT for  amounts
allegedly  owed by CBVT  to Sicor and  Alco for the  supply of doxorubicin, plus
interest and attorneys' fees. This case has  been assigned to the same judge  as
the  above-referenced  District Court  case. The  Company  believes that  it has
significant defenses to these claims.
 
    SCRIPPS CLINIC.   The Company is  defending a lawsuit  filed on November  8,
1983,  by the Scripps  Clinic and Research  Foundation and Revlon,  Inc., in the
United States District Court  for the Northern  District of California  alleging
that  Chiron's research  program to synthesize  a protein  associated with human
blood  clotting  ("Factor  VIII:C")   through  genetic  engineering   techniques
infringes plaintiffs' rights under a patent for purified Factor VIII:C. The suit
seeks  an injunction  against further infringement,  an accounting, compensatory
damages of at least $10 million and  punitive damages in the same amount.  After
the  trial court  granted summary  judgment in  favor of  Chiron, the plaintiffs
appealed. Appeal Nos. 89-1541, -1542, -1543,  -1646 and -1647 were filed in  the
United  States Court  of Appeals  for the  Federal Circuit.  The Appellate Court
reversed the trial court, finding that summary judgment was not appropriate  and
directing  that a number of issues be tried, including the issues of inequitable
conduct on the  part of Scripps,  patent validity, and  patent infringement.  No
trial  date has  been set  and it  is unclear  when a  date will  be set. Chiron
intends to vigorously assert its defenses at trial.
 
    SUMMIT.  On September 29, 1994, Summit Technology Ireland B.V., a subsidiary
of Summit Technology, Inc., a manufacturer of ophthalmic lasers, filed a  patent
infringement  action in the  Regional Court of  Dusseldorf, Germany, against two
German subsidiaries of Chiron Vision (Chiron Technolas and Chiron Adatomed), and
their respective managing directors. The  suit alleged that the manufacture  and
sale in Germany of the Technolas-Registered Trademark-
Keracor-Registered   Trademark-   '116  excimer   laser  infringed   the  German
counterpart of a European patent held by Summit. Summit sought injunctive relief
and damages which it estimated  at Deutsche mark 2  million. On August 3,  1995,
the  German Court  granted judgment  in favor  of Summit,  granted an injunction
against  defendants'  further   infringement  and  awarded   damages  for   past
infringement  in  an  amount to  be  determined.  On September  1,  1995, Summit
enforced the judgment and  the injunction by posting  security in the amount  of
Deutsche  mark 2 million. The Company's  appeal of the Regional Court's decision
is pending. Chiron Technolas, Chiron Vision's sole source of ophthalmic  lasers,
continues  to manufacture  ophthalmic excimer  lasers, which  are distributed by
Chiron Vision and its  subsidiaries. The Company  believes these activities  are
outside  the scope of the judgment and  injunction of the German Regional Court.
The Company has also initiated a separate judicial action in Germany seeking  to
invalidate Summit's patent.
 
    AMERICAN  HOME  PRODUCTS.    On  April  27,  1995,  American  Home  Products
Corporation ("AHP")  filed suit  against Chiron  in the  Superior Court  in  New
Castle  County,  Delaware,  claiming  compensatory,  consequential  and punitive
damages based  on an  alleged breach  and repudiation  by Chiron  of a  contract
pursuant  to which Chiron  had agreed to  purchase certain assets  from AHP. The
case has been settled and was ordered dismissed on December 2, 1995.
 
                                       13
<PAGE>
    BRILLIANT TRADING CO., WOLFSON.  Following the announcement by Chiron of the
signing of  a definitive  agreement to  acquire Viagene,  Inc. ("Viagene"),  two
lawsuits  purporting to be class actions were filed on April 24 and May 1, 1995,
respectively, in the Court  of Chancery of the  State of Delaware against  named
directors  and officers of Viagene and against  Viagene and Chiron. In one case,
Chiron is  sued on  a  theory that  it aided  and  abetted alleged  breaches  of
fiduciary  duty by  Viagene's directors and  officers in  approving the proposed
acquisition by Chiron. In the other case, Chiron is sued for alleged breaches of
fiduciary  duty  as  a  controlling  stockholder  of  Viagene.  Plaintiffs  seek
declaratory  and injunctive relief,  an accounting and  costs and disbursements.
Defendants have  received an  open  extension of  time  to answer  or  otherwise
respond. Chiron believes these suits are without merit.
 
    STOCKHOLDER  LITIGATION.    In  November 1994,  Chiron,  its  directors, and
certain of its officers were sued  in three essentially identical actions  filed
as  class actions on behalf of  Chiron stockholders, alleging that the directors
had violated their fiduciary  duty by failing to  maximize stockholder value  in
connection  with  the  series  of transactions  affected  with  Ciba  which were
announced on November 20, 1994, by, among other things, not taking all  possible
steps  to seek out and encourage the best offer for the Company once the Company
had been put in play. Two of the actions filed respectively on November 14, 1994
and November 22, 1994 (HANNA V. CHIRON CORP., ET AL., C.A. No. 13874, and DEZUBE
V. CHIRON CORPORATION ET AL., C.A. 13896) were filed in the Court of Chancery of
the State of Delaware in and for New Castle County. The complaints in both cases
ask for  injunctive relief,  rescission and  attorneys' fees.  Plaintiff in  the
HANNA  action additionally seeks damages in  an unspecified amount. Plaintiff in
the DEZUBE action  additionally seeks  an accounting. The  complaints have  been
answered by all defendants, who deny the material allegations of the complaints.
The  third action was filed in the Superior Court of California, Alameda County,
Northern Division, on December 1, 1994 (PERERA ET AL., V. CHIRON CORPORATION  ET
AL., C.A. No. 744522-2). Plaintiff sought injunctive and declaratory relief, and
an  accounting, costs and disbursements, including attorneys' and experts' fees,
and other relief.
 
    On October  17, 1995,  the PERERA  plaintiffs commenced  a new  action  (the
"Federal  Action") in the United States District Court for the Northern District
of California, against  the same defendants  and Ciba-Geigy, Ltd.,  Ciba-Geigy's
Chairman Alex Krauer, Ciba-Geigy Corporation, and Ciba Biotech Partnership, Inc.
(collectively, the "Ciba Defendants"). The Federal Action asserts both state and
federal  claims, including a claim under Sections  10(b), 14(d) and 14(e) of the
Securities Exchange Act  of 1934, and  seeks damages and  injunctive relief.  On
October  23, 1995,  in light  of the  filing of  the Federal  Action, the PERERA
action was dismissed by stipulation of the parties.
 
    Plaintiffs and all  of the defendants  other than the  Ciba Defendants  have
entered  into an agreement to  settle the Federal Action  on a class-wide basis,
subject to approval by the Court. Under the terms of that settlement  agreement,
Chiron  will  pay  plaintiffs' counsel  up  to  $300,000 in  attorneys  fees and
expenses, as  may be  awarded by  the Court,  and will  pay the  costs of  class
notice.   Chiron  has  no  other  financial  obligations  under  the  settlement
agreement, which also  contemplates that the  HANNA and DEZUBE  actions will  be
dismissed  as moot  following approval  of the  settlement and  dismissal of the
Federal Action. It is presently expected  that the settlement will be  presented
to  the District Court for preliminary approval  at a status conference in March
1996, and that  a final  approval hearing will  be scheduled  within two  months
thereafter, following notice to the plaintiff class.
 
                                       14
<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    No  matters were brought to  a vote of Chiron's  stockholders in the quarter
ended December 31, 1995.
 
                      EXECUTIVE OFFICERS OF THE REGISTRANT
 
    The executive officers of  the Company, who serve  at the discretion of  the
Board of Directors, are as follows:
 
<TABLE>
<CAPTION>
              NAME                AGE                    TITLE
--------------------------------  ---  -----------------------------------------
<S>                               <C>  <C>
William J. Rutter, Ph.D.          67   Chairman of the Board
Edward E. Penhoet, Ph.D.          55   President and Chief Executive Officer
Renato Fuchs, Ph.D.               53   Senior Vice President, Manufacturing and
                                        Development Operations
William G. Green, Esq.            51   Senior Vice President, General Counsel
                                        and Secretary
Pablo D.T. Valenzuela, Ph.D.      54   Senior Vice President, Biologicals
                                        Research and Development; Office of the
                                        President, Chiron Diagnostics
Lewis T. Williams, M.D., Ph.D.    47   Senior Vice President; President, Chiron
                                        Technologies
Dennis L. Winger                  48   Senior Vice President, Finance and
                                        Administration, and Chief Financial
                                        Officer
Robert P. Blackburn, Esq.         39   Vice President and Chief Patent Counsel
Kenneth J. Conway                 47   Senior Vice President, Ciba Corning
                                        Diagnostics; Office of the President,
                                        Chiron Diagnostics
Keith A. Costa                    58   Executive Vice President, Ciba Corning
                                        Diagnostics; Office of the President,
                                        Chiron Diagnostics
Rajen K. Dalal                    42   Vice President, Corporate Planning and
                                        Business Development
Dino Dina, M.D.                   49   Vice President, Virology and Vaccine
                                        Development; President, Chiron Biocine
                                        Company
Alain Herrera, M.D.               45   Vice President; President, Chiron
                                        Therapeutics Europe
Edward Kenney                     51   Division Vice President, Chiron
                                        Therapeutics
William J. Link, Ph.D.            49   Vice President; Chairman and Chief
                                        Executive Officer, Chiron Vision
Mario Lorenzoni                   54   Vice President; Chief Executive Officer,
                                        Biocine S.p.A.
Bernardita Mendez, Ph.D.          43   Vice President, Regulatory and Quality
                                        Affairs
Walter H. Moos, Ph.D.             41   Vice President, Research and Development,
                                        Chiron Technologies
Frances L. Tuttle                 48   Senior Vice President, Ciba Corning
                                        Diagnostics; Office of the President,
                                        Chiron Diagnostics
Mickey S. Urdea, Ph.D.            43   Vice President, Nucleic Acid Systems
                                        Research and Development
</TABLE>
 
                                       15
<PAGE>
    DR.  RUTTER, a co-founder of the Company,  has served as its Chairman of the
Board since the  Company's inception  in 1981. He  was Director  of the  Hormone
Research  Institute  at  the  University of  California,  San  Francisco Medical
Center, from 1983 to May 1989 and has  been on the faculty at the University  of
California,  San Francisco, since 1969, becoming  Professor Emeritus in 1991. He
has served as Director of Ciba-Geigy Ltd. since 1995.
 
    DR. PENHOET, a co-founder of the  Company, has been Chief Executive  Officer
and  a Director since  the Company's inception  in 1981, and  was President from
1981 to 1989 and Vice Chairman from  1989 until 1993. Dr. Penhoet reassumed  the
title of President, effective April 1, 1993. He has been a faculty member at the
University of California, Berkeley, for 24 years.
 
    DR.  FUCHS joined  the Company as  Senior Vice  President, Manufacturing and
Development Operations, in  1993. From 1988  until joining Chiron,  he was  with
Centocor,  Inc.,  most  recently  as  Senior  Vice  President  of Pharmaceutical
Development, responsible for process development of antibody products.
 
    MR. GREEN  joined the  Company  as Vice  President  and General  Counsel  in
October  1990,  having  served as  Secretary  or Assistant  Secretary  since the
Company's inception in 1981. In February 1992, he became Senior Vice  President,
Secretary  and General Counsel. From  1981 to 1990, he was  a partner in the San
Francisco law firm of Brobeck, Phleger & Harrison.
 
    DR. VALENZUELA, a co-founder of the Company, became Senior Vice President in
March 1989, and a member of the Office of the President, Chiron Diagnostics,  in
October 1995, having served as Vice President and Director of Research since the
Company's   inception  in  1981.  He  was  associated  with  the  University  of
California, San  Francisco,  and also  has  held adjunct  faculty  positions  at
Catholic University in Santiago, Chile.
 
    DR.  WILLIAMS joined the Company in August 1994 as Senior Vice President and
President of Chiron Technologies. From 1988 until joining the Company, he was  a
professor  of medicine at the University  of California, San Francisco. Prior to
joining UCSF, he was on the faculty  of Harvard Medical School. In addition,  he
was  a co-founder and director of COR Therapeutics, Inc. from 1988 until joining
the Company.
 
    MR. WINGER joined the Company in August 1989 as Vice President, Finance  and
Administration,  and Chief Financial  Officer. He became  Senior Vice President,
Finance and Administration, and  Chief Financial Officer,  in February 1992.  He
was Vice President and Chief Financial Officer of The Cooper Companies from 1987
to 1989.
 
    MR.  BLACKBURN joined the Company in  April 1989 as Director of Intellectual
Property. He became Vice  President and Chief Patent  Counsel in February  1992.
Prior  to joining  the Company, he  was a  partner in the  law firm  of Ciotti &
Murashige, Irell & Manella.
 
    MR. CONWAY joined the  Company in January 1995  as Senior Vice President  of
CCD,  as a result of the Company's acquisition of CCD. He has held that position
since 1991. In October 1995, he was appointed  as a member of the Office of  the
President for Chiron Diagnostics.
 
    MR.  COSTA joined the Company in January 1995 as Executive Vice President of
CCD, a  position he  has  held since  December 1988.  In  October 1995,  he  was
appointed as a member of the Office of the President for Chiron Diagnostics.
 
    MR.  DALAL  joined  Chiron in  December  1991 as  Vice  President, Corporate
Planning. From 1983 until joining Chiron,  he was employed by the  international
consulting  firm of  McKinsey & Company,  where he  performed general management
consulting in  the  firm's  pharmaceuticals,  medical  devices  and  diagnostics
industries practice.
 
    DR.  DINA joined the  Company as Director  of Virology in  1982. In November
1990, he  became  Vice  President,  Virology and  Vaccine  Development,  and  in
February  1993, Vice President, Virology and Vaccine Development, and President,
Chiron Biocine.
 
                                       16
<PAGE>
    DR.  HERRERA  was  promoted  to  Vice  President  and  President  of  Chiron
Therapeutics  Europe in 1993. From 1991 until  1993, he was Managing Director of
the Company's EuroCetus office in France. From 1987 until joining Chiron, he was
Managing Director of Pierre Fabre Oncologie Laboratories.
 
    MR. KENNEY joined  the Company in  1991 as  a result of  the acquisition  of
Cetus Corporation as Vice President, Marketing and Sales. Prior to that date, he
held   the  position  of   Senior  Director,  Marketing   Group,  at  Cetus  for
approximately four years.
 
    DR. LINK joined the  Company as President of  Chiron Ophthalmics, Inc.  (now
"Chiron  Vision") in February 1986  and held that title  until 1995. In November
1990 he became Vice President  of the Company, in  January 1992 he became  Chief
Executive  Officer, Chiron Vision, and in  April 1995 he became Chairman, Chiron
Vision.
 
    MR. LORENZONI joined the Company in January 1995 as Vice President and Chief
Executive Officer of Biocine  S.p.A. Prior to joining  the Company, he had  been
Chief  Executive Officer of Biocine S.p.A.  since 1994, and Managing Director of
Biocine S.p.A. since 1992. Prior to 1992, he was Vice Director of Ciba Italy.
 
    DR. MENDEZ  joined the  Company  in 1984  in Scientific  Affairs,  following
post-doctoral  studies  at the  University of  California, Berkeley.  She became
Director of Regulatory and  Patent Affairs in  1987, Vice President,  Regulatory
Affairs,  in  February  1992  and,  in  February  1993,  became  Vice President,
Regulatory and Quality Affairs.
 
    DR. MOOS joined Chiron in October 1991  as a Vice President of Research  and
Development  and Director  of Chemical  Therapeutics. He  became Vice President,
Chemical Therapeutics  Research  and  Development, in  February  1992  and  Vice
President,  Research and  Development, Chiron  Technologies, in  1994. From 1982
until joining  Chiron,  he  was with  the  Parke-Davis  Pharmaceutical  Research
Division  of the Warner-Lambert Company, where he last held the position of Vice
President, Neuro-
science and Biological  Chemistry. Dr.  Moos has  been an  Adjunct Professor  of
Pharmaceutical  Chemistry at the University  of California, San Francisco, since
1992.
 
    MS. TUTTLE joined the  Company in January 1995  as Senior Vice President  of
CCD in charge of Worldwide Marketing and Strategic Planning, a position she held
from  1994 to February 1996.  In October 1995, she was  appointed as a member of
the Office of the President for Chiron  Diagnostics. From 1990 to 1994, she  was
Executive Director of Manufacturing Operations for CCD.
 
    DR. URDEA joined the Company in 1981 after a post-doctoral fellowship at the
University   of  California,  San  Francisco,  and  has  directed  nucleic  acid
diagnostic research and development efforts at Chiron since that time. He became
Vice President, Nucleic Acid Systems Research and Development, in February 1992.
 
                                       17
<PAGE>
                                    PART II
 
ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS
 
    The information under the caption "Market Price of Common Stock" on page  49
of  the 1995 Consolidated Financial Statements,  which is included as Exhibit 13
to this Form 10-K Report, is incorporated herein by reference.
 
ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                           -----------------------------------------------------------------------
                                                1995           1994           1993          1992          1991
                                           --------------  -------------  ------------  ------------  ------------
<S>                                        <C>             <C>            <C>           <C>           <C>
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)
Consolidated Statement of Operations
 Data:
  Total revenues.........................  $    1,100,582  $     453,979  $    317,535  $    246,260  $    141,498
  Income (loss) from operations..........        (482,428)        42,400        15,138       (95,544)     (455,765)
  Other income (expense), net............          (8,346)       (10,403)        7,949         6,973        12,997
  Income (loss) before extraordinary
   item..................................        (512,463)        18,325        18,384       (92,595)     (444,650)
  Net income (loss)......................        (512,463)        18,325        18,384       (99,252)     (444,650)
  Income (loss) per share before
   extraordinary item....................          (12.62)          0.53          0.55         (3.07)       (22.54)
  Net income (loss) per share............          (12.62)          0.53          0.55         (3.29)       (22.54)
  Weighted average shares outstanding....          40,610         34,293        33,681        30,200        19,724
 
<CAPTION>
 
                                                                        DECEMBER 31,
                                           -----------------------------------------------------------------------
                                                1995           1994           1993          1992          1991
                                           --------------  -------------  ------------  ------------  ------------
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                        <C>             <C>            <C>           <C>           <C>
Consolidated Balance Sheet Data:
  Working capital........................  $      268,408  $     314,174  $    256,419  $    250,874  $    486,826
  Total assets...........................       1,490,198      1,049,742       968,597       701,115       907,162
  Long-term debt, excluding current
   portion...............................         413,248        338,061       332,991       110,681       247,466
  Accumulated deficit....................      (1,087,699)      (575,236)     (593,561)     (611,945)     (511,783)
  Stockholders' equity...................         672,412        572,631       522,289       478,681       505,617
 
Number of employees......................           6,894          2,668         2,179         1,867         1,706
</TABLE>
 
    On January 8, 1992, Chiron combined with IntraOptics, Inc. in a  transaction
accounted  for as a pooling-of-interests. All periods have been restated for the
effects of  this  combination.  On  December 12,  1991,  Chiron  acquired  Cetus
Corporation  ("Cetus")  in  a  merger  accounted  for  by  the  purchase method;
therefore, the operating  results of  Cetus are included  from the  date of  the
acquisition.
 
    On  May 10, 1994, Chiron  acquired Laboratoires Domilens, S.A. ("Domilens"),
in a transaction accounted for by the purchase method; therefore, the  operating
results of Domilens are included from the date of the acquisition.
 
    Effective  January 1, 1995, under a  series of agreements between Chiron and
Ciba, Chiron acquired  CCD and  Ciba's interest  in Chiron  Biocine Company  and
Biocine  S.p.A.  The acquisition  of  those entities  was  accounted for  by the
purchase method;  therefore,  the  operating  results  for  those  entities  are
included  for the  entire year.  On March 31,  1995, Chiron  Vision acquired the
surgical division of IOLAB from Johnson & Johnson in a transaction accounted for
by the purchase method; therefore, the  operating results of IOLAB are  included
from  the  date  of the  acquisition.  On  September 29,  1995,  Chiron acquired
Viagene, Inc. in a transaction accounted for by the purchase method;  therefore,
the  operating  results of  Viagene,  Inc. are  included  from the  date  of the
acquisition.
 
                                       18
<PAGE>
    The Company has paid no cash dividends and does not expect to pay  dividends
in the foreseeable future.
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
 
    The  information under the caption  "Management's Discussion and Analysis of
Financial Condition  and  Results of  Operations"  on  pages 1-12  of  the  1995
Consolidated  Financial Statements which is included  as Exhibit 13 to this Form
10-K Report is incorporated herein by reference.
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
    The financial statements and supplementary data  on pages 13-47 of the  1995
Consolidated  Financial Statements which is included  as Exhibit 13 to this Form
10-K Report are incorporated herein by reference.
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
    The Company's current reports on Form 8-K dated March 7, 1994, and March 25,
1994, are incorporated herein by reference.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    The information under the captions  "Election of Directors" and  "Compliance
with  Section 16(a) of the Securities Exchange  Act of 1934" in the Registrant's
Proxy Statement for the  Annual Meeting of  Stockholders to be  held on May  16,
1996, is incorporated herein by reference.
 
    Information  as to Chiron's executive officers appears  at the end of Part I
of this Report.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
    The  information  under   the  caption  "Executive   Compensation"  in   the
Registrant's  Proxy Statement for the Annual  Meeting of Stockholders to be held
on May 16, 1996, is incorporated herein by reference.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The information under  the captions "Principal  Stockholders" and  "Security
Ownership  of Management"  in the  Registrant's Proxy  Statement for  the Annual
Meeting of Stockholders to be  held on May 16,  1996, is incorporated herein  by
reference.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    The  information under the captions "Related Transactions" and "Compensation
Committee Interlocks  and  Insider  Participation"  in  the  Registrant's  Proxy
Statement  for the Annual Meeting of Stockholders to be held on May 16, 1996, is
incorporated herein by reference.
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
a)  1. FINANCIAL STATEMENTS
 
    The Consolidated Financial  Statements and Notes  to Consolidated  Financial
Statements   appearing  on  pages  13-47  of  the  1995  Consolidated  Financial
Statements, which is included  as Exhibit 13  to this Form  10-K Report and  the
Reports  of Independent Auditors appearing on pages 30 and 31 of this Form 10-K,
are incorporated herein by reference.
 
                                       19
<PAGE>
    2. FINANCIAL STATEMENT SCHEDULES
 
    Schedule II -- Valuation and Qualifying Accounts
 
    All other  schedules are  omitted,  since the  required information  is  not
present  or is not  present in amounts  sufficient to require  submission of the
schedule, or because the  information required is  included in the  consolidated
financial statements and notes hereto.
 
b)  REPORTS ON FORM 8-K
 
    On  November 13, 1995, Chiron filed Amendment No. 1 to its current report on
Form 8-K,  dated  September  29, 1995,  to  include  under Item  7  the  audited
financial  statements of Viagene, Inc. and proforma combined condensed financial
information.
 
c)  EXHIBITS
 
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
-----------  ------------------------------------------------------------------------------------
<S>          <C>
      2.01   Agreement and Plan of Merger, made as of February 6, 1987, incorporated by reference
             to Exhibit 2.01 of the Registrant's Form 10-Q report for the period ended  September
             30, 1994.
      3.01   Restated  Certificate of  Incorporation of  the Registrant,  dated August  18, 1987,
             incorporated by reference to Exhibit 3.01  of the Registrant's Form 10-K report  for
             fiscal year 1991.
      3.02   Certificate of Amendment of Restated Certificate of Incorporation of the Registrant,
             dated  December  12,  1991,  incorporated  by  reference  to  Exhibit  3.01  of  the
             Registrant's Form 10-K report for fiscal year 1991.
      3.03   Bylaws of the Registrant, as amended,  incorporated by reference to Exhibit 3.03  of
             the Registrant's Form 10-K report for fiscal year 1994.
      4.01   Indenture,  dated as of  May 21, 1987,  between Cetus Corporation  and Bankers Trust
             Company, Trustee, incorporated by reference to Exhibit 4.01 of the Registrant's Form
             10-Q report for the period ended September 30, 1994.
      4.02   First  Supplemental  Indenture,  dated  as  of  December  12,  1991,  by  and  among
             Registrant,  Cetus Corporation, and Bankers Trust Company, incorporated by reference
             to Exhibit 4.02 of the Registrant's Form 10-K report for fiscal year 1992.
      4.03   Indenture, dated as of November 15, 1993, between Registrant and The First  National
             Bank  of  Boston, as  Trustee,  incorporated by  reference  to Exhibit  4.03  of the
             Registrant's Form 10-K report for fiscal year 1993.
      4.04   Rights Agreement, dated as of August  25, 1994, between the Company and  Continental
             Stock  Transfer & Trust Company, which  includes the Certificate of Designations for
             the Series A Junior Participating  Preferred Stock as Exhibit  A, the form of  Right
             Certificate  as Exhibit B and the Summary  of Rights to Purchase Preferred Shares as
             Exhibit C, incorporated  by reference to  Exhibit 4.04 of  the Registrant's  current
             report on Form 8-K dated August 25, 1994.
      4.05   Amendment  No. 1 to Rights  Agreement dated as of  November 20, 1994, between Chiron
             Corporation  and  Continental  Stock  Transfer  &  Trust  Company,  incorporated  by
             reference  to Exhibit  4.05 of  the Registrant's current  report on  Form 8-K, dated
             November 20, 1994.
      4.06   $1,000,000 County of Lorain, Ohio Variable Rate Industrial Revenue Bonds dated as of
             July 1, 1984, due  July 1, 2014,  incorporated by reference to  Exhibit 4.06 of  the
             Registrant's  Form 10-Q report  for the period  ended April 2,  1995. The Registrant
             agrees to furnish to the Commission upon  request a copy of such agreement which  it
             has elected not to file under the provisions of Regulation 601(b)(4)(iii).
</TABLE>
 
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  NUMBER                                           EXHIBIT
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<S>          <C>
      4.07   $1,000,000  Walpole Industrial Development Authority  6.75% Industrial Revenue Bonds
             dated as of July  1, 1979, due  July 1, 2004, incorporated  by reference to  Exhibit
             4.07  of the Registrant's Form  10-Q report for the period  ended April 2, 1995. The
             Registrant agrees to furnish to the Commission upon request a copy of such agreement
             which it has elected not to file under the provisions of Regulation 601(b)(4)(iii).
     10.01   Lease between Registrant and BGR Associates, a California limited partnership, dated
             May 26, 1989, incorporated  by reference to Exhibit  10.01 of the Registrant's  Form
             10-Q report for the period ended September 30, 1994.
     10.02   First Amendment to Lease between Registrant and BGR Associates, a California limited
             partnership.
     10.03   Lease  between Registrant and  BGR Associates II,  a California limited partnership,
             dated May 26, 1989, incorporated by  reference to Exhibit 10.02 of the  Registrant's
             Form 10-Q report for the period ended September 30, 1994.
     10.04   First  Amendment to  Lease between  Registrant and  BGR Associates  II, a California
             limited partnership, dated as of March 15, 1995.
     10.05   Agreement and Plan of  Merger dated as  of April 23, 1995  between Viagene, Inc.,  a
             Delaware  corporation, and Chiron Corporation,  incorporated by reference to Exhibit
             10.67 of the Registrant's current report on Form 8-K dated April 24, 1995.
     10.06   Stockholders' Agreement dated  as of April  23, 1995 among  certain stockholders  of
             Viagene,  Inc.,  a Delaware  corporation,  and Chiron  Corporation,  incorporated by
             reference to Exhibit  10.68 of  the Registrant's current  report on  Form 8-K  dated
             April 24, 1995.
     10.07   Stock and Asset Purchase Agreement dated as of March 6, 1995, by and among Johnson &
             Johnson,  a New Jersey corporation, Site Microsurgical Systems, Inc., a Pennsylvania
             corporation, and Chiron Corporation and Amendment No. 1 to Stock and Asset  Purchase
             Agreement,  entered  into  March 31,  1995  by  and among  Johnson  &  Johnson, Site
             Microsurgical Systems, Inc.  and Chiron  Corporation, incorporated  by reference  to
             Exhibit  10.05 of the  Registrant's Form 10-Q  report for the  period ended April 2,
             1995.
     10.08   Revolving Credit Facility dated as of March 24, 1995, between Chiron Corporation and
             Swiss Bank Corporation, San Francisco  Branch, incorporated by reference to  Exhibit
             10.06 of the Registrant's Form 10-Q report for the period ended April 2, 1995.
     10.09   Joint  Venture Agreement  by and  between Chiron  Biocine Corporation,  a California
             corporation, and CIBA-GEIGY Biocine Corporation, a Delaware corporation, dated April
             15, 1987 (with certain confidential information deleted), incorporated by  reference
             to  Exhibit 10.23 of the  Registrant's Form 8 filed  with the Commission on February
             14, 1992.
     10.10   Amendment  to  Biocine  Joint  Venture  Agreement  by  and  between  Chiron  Biocine
             Corporation,  a  California  corporation,  and  CIBA-GEIGY  Biocine  Corporation,  a
             Delaware corporation, effective as of January 1, 1992, incorporated by reference  to
             Exhibit 10.63 to Registrant's Form 10-Q report for the period ended June 30, 1992.
     10.11   Research  and License Agreement by and between Registrant and The Biocine Company, a
             Delaware partnership, dated  April 15, 1987  (with certain confidential  information
             deleted),  incorporated by  reference to  Exhibit 10.24  of the  Registrant's Form 8
             filed with the Commission on February 14, 1992.
     10.12   License  Agreement  by  and  between  CIBA-GEIGY  Biocine  Corporation,  a  Delaware
             corporation,  and The Biocine Company, a  Delaware partnership, dated April 15, 1987
             (with certain  confidential  information  deleted),  incorporated  by  reference  to
             Exhibit  10.25 of the Registrant's Form 8  filed with the Commission on February 14,
             1992.
</TABLE>
 
                                       21
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<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
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<S>          <C>
     10.13   License  Agreement  by  and  between   Chiron  Biocine  Corporation,  a   California
             corporation,  and The Biocine Company, a  Delaware partnership, dated April 15, 1987
             (with certain  confidential  information  deleted),  incorporated  by  reference  to
             Exhibit  10.26 of the Registrant's Form 8  filed with the Commission on February 14,
             1992.
     10.14   Letter  Agreement  signed   by  CIBA-GEIGY  Corporation,   dated  April  15,   1987,
             incorporated  by reference to Exhibit 10.13 of the Registrant's Form 10-Q report for
             the period ended September 30, 1994.
     10.15   Agreement between the Registrant  and Ortho Diagnostic Systems,  Inc., a New  Jersey
             corporation, dated August 17, 1989, and Amendment to Collaboration Agreement between
             Ortho Diagnostic Systems, Inc. and Registrant, dated December 22, 1989 (with certain
             confidential information deleted), incorporated by reference to Exhibit 10.14 of the
             Registrant's Form 10-Q report for the period ended September 30, 1994.
     10.16   License  and Supply Agreement  between Ortho Diagnostic Systems,  Inc., a New Jersey
             corporation, the Registrant and Abbott Laboratories, an Illinois corporation,  dated
             August  17, 1989  (with certain  confidential information  deleted), incorporated by
             reference to Exhibit  10.15 of  the Registrant's Form  10-Q report  for the  quarter
             ended June 30, 1994.
     10.17   Chiron  1991 Stock Option Plan, as amended,  incorporated by reference to Annex 1 of
             the Registrant's Proxy Statement dated April 18, 1995.*
     10.18   Forms of Option Agreements, Chiron 1991 Stock Option Plan, as amended,  incorporated
             by  reference to Exhibit 10.17 of the  Registrant's Form 10-K report for fiscal year
             1993.*
     10.19   Forms of  Option Agreements,  Cetus Corporation  Amended and  Restated Common  Stock
             Option  Plan, incorporated by  reference to Exhibit 10.33  of Registrant's Form 10-K
             report for fiscal year 1991.*
     10.20   Forms of Supplemental Letter concerning the assumption of Cetus Corporation  options
             by  Chiron, incorporated  by reference  to Exhibit  10.34 of  Registrant's Form 10-K
             report for fiscal year 1991.*
     10.21   Agreement and Plan of Reorganization dated as  of October 11, 1991 by and among  the
             Registrant,  Chiron Ophthalmics, Inc., COI  Acquisition Corp., IntraOptics, Inc. and
             James R.  Cook, M.D.,  incorporated by  reference to  Exhibit 28.2  of  Registrant's
             current report on Form 8-K dated October 14, 1991.
     10.22   Indemnification Agreement between the Registrant and Dr. William J. Rutter, dated as
             of  February  12,  1987  (which  form  of  agreement  is  used  for  each  member of
             Registrant's Board of Directors), incorporated by reference to Exhibit 10.21 of  the
             Registrant's Form 10-Q report for the period ended September 30, 1994.
     10.23   Stock  Purchase  Agreement  by and  between  the  Registrant and  Johnson  & Johnson
             Development Corporation, a corporation organized and existing under the laws of  the
             State  of New  Jersey, dated  as of  October 3,  1986, incorporated  by reference to
             Exhibit 10.22 of the  Registrant's Form 10-Q report  for the period ended  September
             30, 1994.
     10.24   Ciba  Corning  Diagnostics  Corp.  Policies,  Guidelines  and  Procedures  regarding
             Severance Pay.*
     10.25   Form of Debenture Purchase Agreement between the Registrant and CIBA-GEIGY, Limited,
             a corporation organized and existing under  the laws of Switzerland, dated June  22,
             1990,  incorporated  by reference  to Exhibit  10.25 of  the Registrant's  Form 10-K
             report for fiscal year 1994.
     10.26   Chiron  Corporation  1.90%  Convertible  Subordinated  Note  due  2000,  Series   B,
             incorporated  by reference to Exhibit 10.25 of the Registrant's Form 10-K report for
             fiscal year 1993.
</TABLE>
 
                                       22
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<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
-----------  ------------------------------------------------------------------------------------
<S>          <C>
     10.27   Investment Agreement dated as of November  20, 1994 among Ciba-Geigy Limited,  Ciba-
             Geigy   Corporation,  Ciba   Biotech  Partnership,  Inc.   and  Chiron  Corporation,
             incorporated by reference  to Exhibit 10.54  of the Registrant's  current report  on
             Form 8-K dated November 20, 1994.
     10.28   Governance  Agreement dated as of November  20, 1994 among Ciba-Geigy Limited, Ciba-
             Geigy Corporation and Chiron Corporation, incorporated by reference to Exhibit 10.55
             of the Registrant's current report on Form 8-K dated November 20, 1994.
     10.29   Subscription Agreement dated as of November 20, 1994 among Ciba-Geigy Limited, Ciba-
             Geigy  Corporation,  Ciba   Biotech  Partnership,  Inc.   and  Chiron   Corporation,
             incorporated  by reference  to Exhibit 10.56  of the Registrant's  current report on
             Form 8-K dated November 20, 1994.
     10.30   Cooperation and Collaboration Agreement dated as of November 20, 1994, between Ciba-
             Geigy Limited and Chiron Corporation, incorporated by reference to Exhibit 10.57  of
             the Registrant's current report on Form 8-K dated November 20, 1994.
     10.31   Registration  Rights Agreement  dated as of  November 20, 1994  between Ciba Biotech
             Partnership, Inc. and Chiron Corporation, incorporated by reference to Exhibit 10.58
             of the Registrant's current report on Form 8-K dated November 20, 1994.
     10.32   Market Price  Option  Agreement dated  as  of  November 20,  1994  among  Ciba-Geigy
             Limited,   Ciba-Geigy  Corporation,  Ciba  Biotech   Partnership,  Inc.  and  Chiron
             Corporation, incorporated by reference to Exhibit 10.59 of the Registrant's  current
             report on Form 8-K dated November 20, 1994.
     10.33   Amendment  dated  as  of  January  3,  1995  among  Ciba-Geigy  Limited,  Ciba-Geigy
             Corporation, Ciba Biotech Partnership, Inc. and Chiron Corporation, incorporated  by
             reference  to Exhibit  10.60 of  the Registrant's current  report on  Form 8-K dated
             January 4, 1995.
     10.34   Supplemental Agreement  dated  as  of  January 3,  1995  among  Ciba-Geigy  Limited,
             Ciba-Geigy  Corporation,  Ciba  Biotech Partnership,  Inc.  and  Chiron Corporation,
             incorporated by reference  to Exhibit 10.61  of the Registrant's  current report  on
             Form 8-K dated January 4, 1995.
     10.35   Amendment  with Respect to Employee Stock Option Arrangements dated as of January 3,
             1995 among  Ciba-Geigy Limited,  Ciba-Geigy Corporation,  Ciba Biotech  Partnership,
             Inc.  and  Chiron Corporation,  incorporated by  reference to  Exhibit 10.62  of the
             Registrant's current report on Form 8-K dated January 4, 1995.*
     10.36   Supplemental Benefits Agreement, dated July 21, 1989, between the Registrant and Dr.
             William J. Rutter, incorporated  by reference to Exhibit  10.27 of the  Registrant's
             Form 10-Q report for the period ended September 30, 1994.*
     10.37   Lease  dated as  of July 1,  1983 between  Cetus Corporation and  H.B. Chapman, Jr.,
             incorporated by reference to Exhibit 10.28 of the Registrant's Form 10-Q report  for
             the period ended September 30, 1994.
     10.38   Amendment  to Lease, made as  of March 20, 1990, amending  Lease dated July 1, 1983,
             between Harold B. Chapman, Jr. and  Cetus Corporation, incorporated by reference  to
             Exhibit  10.37 of the  Registrant's Form 10-Q  report for the  period ended April 2,
             1995.
     10.39   Second Amendment to Lease made as of January 1, 1995 between Harold B. Chapman,  Jr.
             and the Registrant.
     10.40   Lease  commencing  March 1,  1987,  between EuroCetus  B.V.  and the  Municipal Land
             Company of the City of Amsterdam (Translation).
</TABLE>
 
                                       23
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
-----------  ------------------------------------------------------------------------------------
<S>          <C>
     10.41   Form of Option Agreement (with  Purchase Agreements attached thereto) between  Cetus
             Corporation and each former limited partner of Cetus Healthcare Limited Partnership,
             a  California limited partnership, incorporated by reference to Exhibit 10.31 of the
             Registrant's Form 10-Q report for the period ended September 30, 1994.
     10.42   Form of Option Agreement (with forms of Purchase Agreements attached thereto), dated
             December 30, 1986,  between Cetus  Corporation and  each former  limited partner  of
             Cetus   Healthcare  Limited  Partnership  II,   a  California  limited  partnership,
             incorporated by reference to Exhibit 10.32 of the Registrant's Form 10-Q report  for
             the period ended September 30, 1994.
     10.43   Big-O  Property  Purchase and  Leaseback Agreement,  dated as  of October  31, 1988,
             between Cetus  Corporation and  Richard  K. Robbins,  incorporated by  reference  to
             Exhibit  10.33 of the Registrant's  Form 10-Q report for  the period ended September
             30, 1994.
     10.44   Triple Net Lease dated  as of January  20, 1989, between  Cetus Corporation and  BGR
             Associates  III,  a  California  limited  partnership,  and  Marin  County  Exchange
             Corporation, incorporated by  reference to  Exhibit 10.34 of  the Registrant's  Form
             10-Q report for the period ended September 30, 1994.
     10.45   License  Agreement between the  Registrant and the  Board of Trustees  of the Leland
             Stanford Junior University, dated  December 15, 1981,  incorporated by reference  to
             Exhibit  10.07 of the Registrant's  Form 10-Q report for  the period ended September
             30, 1994.
     10.46   Stock Purchase and Warrant  Agreement dated May 9,  1989, between Cetus  Corporation
             and  Hoffmann-La  Roche Inc.,  incorporated  by reference  to  Exhibit 10.36  of the
             Registrant's Form 10-Q report for the period ended September 30, 1994.
     10.47   Letter Agreement, dated  as of  December 12, 1991,  relating to  Stock Purchase  and
             Warrant  Agreement between  Registrant and  Hoffmann-La Roche  Inc., incorporated by
             reference to Exhibit 10.59 of Registrant's Form 10-K report for fiscal year 1991.
     10.48   Agreement and Plan of  Merger dated as  of July 21, 1991,  by and among  Registrant,
             Chiron Acquisition Subsidiary, Inc. and Cetus Corporation, incorporated by reference
             to Exhibit 28.2 of Registrant's Form 8-K report dated July 22, 1991.
     10.49   Letter  Agreement dated  September 26,  1990 between  the Registrant  and William G.
             Green, incorporated by  reference to  Exhibit 10.41  of the  Registrant's Form  10-K
             report for fiscal year 1992.*
     10.50   Letter  Agreement  dated  December 18,  1991  between Registrant  and  Jack Schuler,
             incorporated by reference to Exhibit 10.42 of the Registrant's Form 10-K report  for
             fiscal year 1992.*
     10.51   Lease  between  Sclavo S.p.A.  and  Biocine Sclavo  S.p.A.,  dated January  7, 1992,
             incorporated by reference to Exhibit 10.49 of the Registrant's Form 10-Q report  for
             the period ended April 2, 1995.
     10.52   Agreement  made as of  November 11, 1993  by and between  Kodak Clinical Diagnostics
             Limited, a company  registered in  England, and  Ciba Corning  Diagnostics Corp.,  a
             Delaware  corporation,  and  Letter  dated  October  7,  1994  from  Kodak  Clinical
             Diagnostics Limited to Ciba Corning Diagnostics Corp., incorporated by reference  to
             Exhibit 10.50 of Amendment No. 1 to the Registrant's Form 10-Q report for the period
             ended  April  2, 1995.  [Certain  information has  been  omitted from  the Agreement
             pursuant to a  request by  Registrant for  confidential treatment  pursuant to  Rule
             24b-2.]
     10.53   Letter  Agreement dated  September 9, 1991  between the Registrant  and Walter Moos,
             incorporated by reference to Exhibit 10.47 of the Registrant's Form 10-K report  for
             fiscal year 1992.*
</TABLE>
 
                                       24
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<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
-----------  ------------------------------------------------------------------------------------
<S>          <C>
     10.54   Letter  Agreement between  the Registrant and  Walter Moos, dated  February 1, 1993,
             incorporated by reference to Exhibit 10.48 of the Registrant's Form 10-K report  for
             fiscal year 1992.*
     10.55   Letter   Agreement  between  Registrant  and  Renato  Fuchs,  dated  May  13,  1993,
             incorporated by reference to Exhibit 10.47 of the Registrant's Form 10-K report  for
             fiscal year 1993.*
     10.56   Agreement  made as of  December 6, 1984, by  and between Corning  Glass Works, a New
             York corporation, and  Bioanalysis Limited,  a company incorporated  in England  and
             Wales,  and Letter  dated July  26, 1985 from  Bioanalysis Limited  to Corning Glass
             Works, incorporated by  reference to  Exhibit 10.54  of the  Registrant's Form  10-Q
             report  for the period  ended April 2,  1995. [Certain information  has been omitted
             from the Agreement pursuant  to a request by  Registrant for confidential  treatment
             pursuant to Rule 24b-2.]
     10.57   Description of Executive Officer Variable Compensation Program.
     10.58   Chiron   Corporation  1995  Executive  Officer   Variable  Cash  Compensation  Plan,
             incorporated by reference to Annex 2 of the Registrant's Proxy Statement dated April
             18, 1995.*
     10.59   Regulatory Filing, Development  and Supply Agreement  between the Registrant,  Cetus
             Oncology  Corporation, a wholly-owned subsidiary of the Registrant, and Schering AG,
             a German company, dated  as of May 10,  1993 (with certain confidential  information
             deleted),  incorporated by  reference to Exhibit  10.50 of  the Registrant's current
             report on Form 8-K dated February 9, 1994.
     10.60   Letter Agreement dated December 30, 1993 by and between Registrant and Schering  AG,
             a  German company (with  certain confidential information  deleted), incorporated by
             reference to Exhibit  10.51 of  the Registrant's Form  10-K report  for fiscal  year
             1993.
     10.61   Guaranty,  dated as of September  29, 1994, made by  Registrant, in favor of Bankers
             Trust Company,  as  trustee, incorporated  by  reference  to Exhibit  10.52  of  the
             Registrant's Form 10-Q report for the period ended September 30, 1994.
     10.62   Guaranty, dated as of September 29, 1994, made by Cetus Corporation, in favor of The
             First  National Bank  of Boston,  as trustee,  incorporated by  reference to Exhibit
             10.53 of the Registrant's Form 10-Q report for the period ended September 30, 1994.
     10.63   Letter Agreements dated  September 11, 1992,  July 15, 1994  and September 14,  1994
             between  the Registrant and Lewis T.  Williams, incorporated by reference to Exhibit
             10.54 of the Registrant's Form 10-Q report for the period ended September 30, 1994.*
     10.64   Letter dated  January 4,  1995 to  C. William  Zadel, incorporated  by reference  to
             Exhibit 10.65 of the Registrant's Form 10-K report for fiscal year 1994.*
     10.65   Letter dated June 28, 1995 to C. William Zadel.
     10.66   Letter to Dino Dina dated April 24, 1984, incorporated by reference to Exhibit 10.66
             of the Registrant's Form 10-K report for fiscal year 1994.*
     10.67   Research  Agreement, dated as of July 15,  1985, between Ciba-Geigy Limited, a Swiss
             corporation,  and   Ciba  Corning   Diagnostics  Corp.,   a  Delaware   corporation,
             incorporated  by reference to Exhibit 10.64 of the Registrant's Form 10-Q report for
             the period ended April 2, 1995.
     10.68   Licensing Agreement, effective December 18, 1986, by and between Miles Laboratories,
             Inc., a  Delaware  corporation,  and  Ciba Corning  Diagnostics  Corp.,  a  Delaware
             corporation,  and Letter dated December 18, 1992 from Ciba Corning Diagnostics Corp.
             to Miles Laboratories, Inc., incorporated by reference to Exhibit 10.65 of Amendment
             No. 1 to  the Registrant's  Form 10-Q  report for the  period ended  April 2,  1995.
             [Certain  information has been omitted  from the Agreement pursuant  to a request by
             Registrant for confidential treatment pursuant to Rule 24b-2.]
</TABLE>
 
                                       25
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<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
-----------  ------------------------------------------------------------------------------------
<S>          <C>
     10.69   Magnetocluster Binding Assay Technology Agreement, dated as of January 21, 1983,  by
             and  between  Bioclinical Group,  Inc., a  Delaware  corporation, and  Corning Glass
             Works, a  New  York corporation,  incorporated  by  reference to  Exhibit  10.66  of
             Amendment  No. 1 to the Registrant's Form 10-Q  report for the period ended April 2,
             1995. [Certain information has been omitted from the Agreement pursuant to a request
             by Registrant for confidential treatment pursuant to Rule 24b-2.]
     10.70   Turn-back License Agreement, dated as of May  30, 1986, by and between Ciba  Corning
             Diagnostics  Corp., a Delaware corporation, and Advanced Magnetics, Inc., a Delaware
             corporation, incorporated by  reference to  Exhibit 10.67 of  the Registrant's  Form
             10-Q  report  for the  period ended  April  2, 1995.  [Certain information  has been
             omitted from the  Agreement pursuant  to a  request by  Registrant for  confidential
             treatment pursuant to Rule 24b-2.]
     10.71   Settlement  Agreement, dated August 30, 1989, between Ciba Corning Diagnostics Corp.
             and Advanced Magnetics,  Inc., incorporated  by reference  to Exhibit  10.68 of  the
             Registrant's  Form  10-Q  report  for  the  period  ended  April  2,  1995. [Certain
             information has been omitted from the Agreement pursuant to a request by  Registrant
             for confidential treatment pursuant to Rule 24b-2.]
     10.72   Lease  made and entered into December 17,  1984 between BGR Associates, a California
             limited partnership, and Cetus Corporation and Amendment to Lease dated December 17,
             1984 entered into effective February 1,  1986, incorporated by reference to  Exhibit
             10.69 of the Registrant's Form 10-Q report for the period ended April 2, 1995.
     10.73   Second  Amendment to  Lease dated  as of  March 15,  1995 between  BGR Associates, a
             California limited partnership, and Registrant.
     10.74   Agreement, effective as of December 21, 1988, by and between Hoffmann-La Roche Inc.,
             a New  Jersey  corporation, and  Cetus  Corporation, incorporated  by  reference  to
             Exhibit  10.70 of the  Registrant's Form 10-Q  report for the  period ended April 2,
             1995. [Certain information has been omitted from the Agreement pursuant to a request
             by Registrant for confidential treatment pursuant to Rule 24b-2.]
     10.75   Agreement, effective as  of December  21, 1988, by  and among  F. Hoffmann-La  Roche
             Ltd.,  a Swiss corporation, Cetus Corporation,  and EuroCetus International, B.V., a
             Netherlands Antilles corporation, incorporated by reference to Exhibit 10.71 of  the
             Registrant's  Form  10-Q  report  for  the  period  ended  April  2,  1995. [Certain
             information has been omitted from the Agreement pursuant to a request by  Registrant
             for confidential treatment pursuant to Rule 24b-2.]
     10.76   Agreement, by and between Cetus Oncology Corporation, EuroCetus International, N.V.,
             and  F. Hoffmann-La Roche  Ltd., incorporated by  reference to Exhibit  10.72 of the
             Registrant's Form  10-Q  report  for  the  period  ended  April  2,  1995.  [Certain
             information  has been omitted from the Agreement pursuant to a request by Registrant
             for confidential treatment pursuant to Rule 24b-2.]
     10.77   Agreement commencing  January 1,  1991,  between EuroCetus  B.V. and  the  Municipal
             Development Corporation (Translation), incorporated by reference to Exhibit 10.41 of
             the Registrant's Form 10-K report for fiscal year 1994.
     10.78   Settlement  Agreement on Purified  IL-2, made as  of April 14,  1995, by and between
             Cetus Oncology Corporation,  dba Chiron  Therapeutics, a  Delaware corporation,  and
             Takeda  Chemical Industries, Ltd., a Japanese corporation, incorporated by reference
             to Exhibit 10.74 of the Registrant's Form  10-Q report for the period ended July  2,
             1995. [Certain information has been omitted from the Agreement pursuant to a request
             by Registrant for confidential treatment pursuant to Rule 24b-2.]
</TABLE>
 
                                       26
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                           EXHIBIT
-----------  ------------------------------------------------------------------------------------
<S>          <C>
     10.79   License  Agreement made  and entered  into December  1, 1987,  by and  between Sloan
             Kettering Institute for Cancer Research, a not-for-profit New York corporation,  and
             Cetus  Corporation, incorporated by  reference to Exhibit  10.75 of the Registrant's
             Form 10-Q report for the  period ended July 2,  1995. [Certain information has  been
             omitted  from the  Agreement pursuant  to a  request by  Registrant for confidential
             treatment pursuant to Rule 24b-2.]
     10.80   Chiron  Funding  L.L.C.  Limited  Liability  Company  Agreement,  entered  into  and
             effective  as of December 28, 1995, among the Registrant, Chiron Biocine Company and
             Biocine S.p.A. and  Ciba-Geigy Corporation.  [Certain information  has been  omitted
             from  the Agreement pursuant  to a request by  Registrant for confidential treatment
             pursuant to Rule 24b-2.]
     10.81   Agreement between  Ciba-Geigy Limited  and the  Registrant made  November 15,  1995.
             [Certain  information has been omitted  from the Agreement pursuant  to a request by
             Registrant for confidential treatment pursuant to Rule 24b-2.]
     10.82   Reimbursement Agreement dated as  of March 24, 1995,  between Ciba-Geigy Limited,  a
             Swiss corporation, and the Registrant, incorporated by reference to Exhibit 10.76 of
             the Registrant's Form 10-Q report for the period ended July 2, 1995.
     10.83   Promissory  Note, as  amended and  restated, dated January  1, 1995  by Ciba Corning
             Diagnostics Corp.
     10.84   Commercial  lease  between  Domilyon  Corporation  and  Domilens  Laboratories   and
             Amendment No. 1 to Commercial Lease dated May 9, 1994.
     10.85   Agreement between the Registrant and Cephalon, Inc. dated as of January 7, 1994, and
             Letter Agreements between the Registrant and Cephalon dated January 13, 1995 and May
             23,  1995. [Certain information has  been omitted from the  Agreements pursuant to a
             request by Registrant for confidential treatment pursuant to Rule 24b-2.]
        11   Statement of Computation of Earnings per Share.
        13   Consolidated Financial Statements.
        21   List of Subsidiaries of the Registrant.
      23.1   Consent of KPMG  Peat Marwick LLP,  Independent Auditors. The  consent set forth  on
             page 32 is incorporated herein by reference.
      23.2   Consent of Ernst & Young LLP, Independent Auditors. The consent set forth on page 33
             is incorporated herein by reference.
        24   Power  of  Attorney.  The  Power  of  Attorney set  forth  on  pages  28  and  29 is
             incorporated herein by reference.
        27   Financial Data Schedule.
</TABLE>
 
------------------------
* Management contract, compensatory plan or arrangement.
 
                                       27
<PAGE>
                                   SIGNATURES
 
    Pursuant  to  the requirements  of  Section 13  or  15(d) of  the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
    Date: March 28, 1996
 
                                          CHIRON CORPORATION
 
                                          By        /s/ EDWARD E. PENHOET
 
                                             -----------------------------------
                                                  Edward E. Penhoet, Ph.D.
                                                PRESIDENT AND CHIEF EXECUTIVE
                                                           OFFICER
 
                               POWER OF ATTORNEY
 
KNOW ALL PERSONS BY THESE PRESENTS:
 
    That the undersigned officers and directors of Chiron Corporation do  hereby
constitute  and appoint Edward E. Penhoet,  Ph.D., and William J. Rutter, Ph.D.,
and each of them,  the lawful attorney  and agent or  attorneys and agents  with
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, determine may be
necessary  or advisable or required to  enable Chiron Corporation to comply with
the Securities Exchange Act of 1934, as amended, and any rules or regulations or
requirements of the Securities and  Exchange Commission in connection with  this
Form  10- K Report. Without  limiting the generality of  the foregoing power and
authority, the powers granted include the power and authority to sign the  names
of  the undersigned officers and directors  in the capacities indicated below to
this Form 10-K  report or  amendments or supplements  thereto, and  each of  the
undersigned  hereby ratifies and confirms all  that said attorneys and agents or
either of them, shall  do or cause to  be done by virtue  hereof. This Power  of
Attorney may be signed in several counterparts.
 
                                       28
<PAGE>
    IN  WITNESS  WHEREOF, each  of the  undersigned has  executed this  Power of
Attorney as of the date indicated opposite his name.
 
    Pursuant to the  requirements of the  Securities Exchange Act  of 1934,  the
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
             SIGNATURE                         TITLE                  DATE
-----------------------------------  -------------------------  ----------------
<C>                                  <S>                        <C>
 
       /s/ EDWARD E. PENHOET
-----------------------------------  President and Chief         March 28, 1996
     Edward E. Penhoet, Ph.D.         Executive Officer
 
                                     Senior Vice President,
                                      Finance and
       /s/ DENNIS L. WINGER           Administration, Chief
-----------------------------------   Financial Officer, and     March 28, 1996
         Dennis L. Winger             Principal Accounting
                                      Officer
 
       /s/ WILLIAM J. RUTTER
-----------------------------------  Chairman of the Board of    March 28, 1996
     William J. Rutter, Ph.D.         Directors
 
       /s/ LEWIS W. COLEMAN
-----------------------------------  Director                    March 28, 1996
         Lewis W. Coleman
 
       /s/ PIERRE E. DOUAZE
-----------------------------------  Director                    March 28, 1996
         Pierre E. Douaze
 
         /s/ DONALD GLASER
-----------------------------------  Director                    March 28, 1996
       Donald Glaser, Ph.D.
 
          /s/ ALEX KRAUER
-----------------------------------  Director                    March 28, 1996
        Alex Krauer, Ph.D.
 
    /s/ FRANCOIS L'EPLATTENIER
-----------------------------------  Director                    March 28, 1996
   Francois L'Eplattenier, Ph.D.
 
        /s/ HENRI SCHRAMEK
-----------------------------------  Director                    March 28, 1996
       Henri Schramek, Ph.D.
 
         /s/ JACK SCHULER
-----------------------------------  Director                    March 28, 1996
           Jack Schuler
 
      /s/ PIETER J. STRIJKERT
-----------------------------------  Director                    March 28, 1996
    Pieter J. Strijkert, Ph.D.
</TABLE>
 
                                       29
<PAGE>
             REPORT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
 
The Board of Directors and Stockholders
Chiron Corporation:
 
    We  have  audited the  accompanying  consolidated balance  sheets  of Chiron
Corporation and subsidiaries as  of December 31, 1995  and 1994 and the  related
consolidated  statements of operations, stockholders'  equity and cash flows for
the years  then  ended.  In  connection with  our  audits  of  the  consolidated
financial  statements, we also have audited  the financial statement schedule as
listed in the  accompanying index. These  consolidated financial statements  and
the  financial  statement  schedule  are  the  responsibility  of  the Company's
management. Our responsibility is  to express an  opinion on these  consolidated
financial statements and the financial statement schedule based on our audits.
 
    We  conducted  our audits  in  accordance with  generally  accepted auditing
standards. Those standards require that we plan and perform the audit to  obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also  includes
assessing  the  accounting principles  used  and significant  estimates  made by
management, as well as evaluating the overall financial statement  presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In  our  opinion, the  consolidated financial  statements referred  to above
present fairly,  in all  material  respects, the  financial position  of  Chiron
Corporation  and subsidiaries as of December 31,  1995 and 1994, and the results
of their operations and their cash flows for the years then ended, in conformity
with generally accepted accounting principles. Also in our opinion, the  related
financial   statement  schedule,  when  considered  in  relation  to  the  basic
consolidated financial  statements taken  as a  whole, presents  fairly, in  all
material respects, the information set forth therein.
 
                                          KPMG Peat Marwick LLP
 
San Francisco, California
February 20, 1996
 
                                       30
<PAGE>
               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
 
The Board of Directors and Stockholders
Chiron Corporation
 
    We  have audited  the consolidated  statements of  operations, stockholders'
equity and cash  flows of  Chiron Corporation for  the year  ended December  31,
1993,   included  in  the  1995  Consolidated  Financial  Statements  of  Chiron
Corporation included  as  Exhibit 13.  Our  audit also  included  the  financial
statement  schedule of Chiron Corporation for  the year ended December 31, 1993,
listed in the Index at Item  14(a). These financial statements and schedule  are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audit.
 
    We  conducted  our  audit  in accordance  with  generally  accepted auditing
standards. Those standards require that we plan and perform the audit to  obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also  includes
assessing  the  accounting principles  used  and significant  estimates  made by
management, as well as evaluating the overall financial statement  presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
    In  our  opinion, the  consolidated financial  statements referred  to above
present  fairly,  in  all  material   respects,  the  consolidated  results   of
operations, changes in stockholders' equity and cash flows of Chiron Corporation
for  the year  ended December  31, 1993,  in conformity  with generally accepted
accounting principles. Also,  in our  opinion, the  related financial  statement
schedule,  when  considered  in  relation to  the  basic  consolidated financial
statements taken  as a  whole,  presents fairly  in  all material  respects  the
information set forth therein.
 
                                          ERNST & YOUNG LLP
 
San Francisco, California
February 25, 1994
 
                                       31
<PAGE>
             CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
 
    We  consent to the incorporation by reference in the Registration Statements
(File  Numbers  33-20181,  33-35182,  2-90595,  33-23899,  33-58305,   33-44477,
33-65024,  33-65177, 33-45822, 33-63297 and 33-65175 on Form S-8 and File Number
33-43574 on Form  S-3) pertaining to  the Chiron Corporation  1982 Stock  Option
Plan,  the 1988 Employee  Stock Purchase Plan,  the 1991 Stock  Option Plan, the
IntraOptics, Inc. 1986 Incentive Stock Option  Plan, as amended, the 1989  Stock
Option  Plan of Viagene, Inc., the Viagene  Employee Stock Purchase Plan and the
shares issuable to certain  warrant holders and in  the related prospectuses  of
our  report dated February 20, 1996, relating to the consolidated balance sheets
of Chiron Corporation and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements  of operations, stockholders'  equity, and  cash
flows for the years then ended and the related schedule, which report appears in
the December 31, 1995 annual report on Form 10-K of Chiron Corporation.
 
                                          KPMG Peat Marwick LLP
 
San Francisco, California
March 26, 1996
 
                                       32
<PAGE>
               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
 
    We  consent to the incorporation by reference in the Registration Statements
of Chiron Corporation  (Forms S-8, Nos.  33-20181, 33-35182, 2-90595,  33-23899,
33-44477,  33-45822, 33-65024,  33-58305, 33-63297, 33-65175  and 33-65177, Form
S-3 No. 33-43574 and Form S-4 No. 33-60503) pertaining to the 1982 Stock  Option
Plan,  the 1988 Employee Stock Purchase Plan,  and the 1991 Stock Option Plan of
Chiron Corporation,  the IntraOptics,  Inc. 1986  Incentive Stock  Option  Plan,
certain  warrants (the "Cetus  Warrants"), the 1989 Stock  Option Plan, the 1993
Incentive Stock Option Plan,  and the Employee Stock  Purchase Plan of  Viagene,
Inc.  and certain shares related to the  acquisition of Viagene, Inc. and in the
related prospectuses of our report dated February 25, 1994, with respect to  the
consolidated  statements of operations, stockholders'  equity and cash flows and
schedule of Chiron Corporation for the year ended December 31, 1993 included and
incorporated herein by reference in this Annual Report (Form 10-K) for the  year
ended December 31, 1995.
 
                                          ERNST & YOUNG LLP
 
San Francisco, California
March 26, 1996
 
                                       33
<PAGE>
                               CHIRON CORPORATION
                       INDEX TO FINANCIAL STATEMENTS AND
                         FINANCIAL STATEMENT SCHEDULES
 
<TABLE>
<CAPTION>
                                                                                PAGES OF 1995
                                                                                CONSOLIDATED
                                                                                  FINANCIAL
                                                                                 STATEMENTS
                                                                                INCORPORATED       FORM 10-K
                                                                                BY REFERENCE         PAGE
                                                                               ---------------  ---------------
<S>                                                                            <C>              <C>
Financial Statements and Notes...............................................          1-47               --
Report of KPMG Peat Marwick LLP..............................................            --               30
Report of Ernst & Young LLP..................................................            --               31
Schedule II -- Valuation and Qualifying Accounts.............................            --               35
</TABLE>
 
                                       34
<PAGE>
                               CHIRON CORPORATION
                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                         ADDITIONS
                                                 -------------------------
                                    BALANCE AT   CHARGED TO    CHARGED TO                                  BALANCE
                                     BEGINNING    COSTS AND      OTHER                                     AT END
DESCRIPTION                           OF YEAR     EXPENSES      ACCOUNTS    DEDUCTIONS   RECLASSIFICATIONS  OF YEAR
----------------------------------  -----------  -----------  ------------  -----------  ---------------  ---------
<S>                                 <C>          <C>          <C>           <C>          <C>              <C>
1995:
  Accounts receivable.............   $   7,210    $   8,815   $   6,680(1)   $  (4,181)     $      --     $  18,524
1994:
  Accounts receivable.............       5,194        5,880       2,424(1)      (4,880)        (1,408)(2)     7,210
1993:
  Accounts receivable.............       2,525        4,012          --         (1,343)            --         5,194
</TABLE>
 
------------------------
(1) Represents accounts receivable allowances as of the acquisition date related
    to acquired businesses.
 
(2) Represents amounts reclassified to other current liabilities.
 
                                       35