<PAGE>



                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

                                      FORM 10-Q


(Mark One)
      [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934
      For the quarterly period ended June 29, 1997
                                          OR
      [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934
      For the transition period from ____________ to ____________

      Commission File Number: 0-12798

                                  CHIRON CORPORATION
-------------------------------------------------------------------------------
                (Exact name of registrant as specified in its charter)


           Delaware                                              94-2754624
-------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

4560 Horton Street, Emeryville, California                       94608
-------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip code)

                                   (510) 655-8730
-------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)

                                   Not Applicable
-------------------------------------------------------------------------------
                      (Former name, former address and former
                     fiscal year, if changed since last report)

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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

    CLASS                                         OUTSTANDING AT JULY 31, 1997
    -----                                         ----------------------------

Common Stock, $0.01 par value                            174,062,826



<PAGE>

                                 CHIRON CORPORATION
                                  TABLE OF CONTENTS

                                                                 PAGE NO.
PART I.  FINANCIAL INFORMATION

    ITEM 1.   FINANCIAL STATEMENTS

         Consolidated Balance Sheets as of
         June 30, 1997 and December 31, 1996 . . . . . . . . . . . .3

         Consolidated Statements of Operations for the
         three months and six months ended June 30, 1997 and 1996. .4

         Consolidated Statements of Cash Flows for the
         six months ended June 30, 1997 and 1996 . . . . . . . . . .5

         Notes to Consolidated Financial Statements. . . . . . . . .6

    ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . .9


PART II. OTHER INFORMATION

    ITEM 1.   LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . .  21

    ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 21


    ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . 22


SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35


                                       2
<PAGE>

                                   CHIRON CORPORATION
                              CONSOLIDATED BALANCE SHEETS
                                     (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      June 30,    December 31,
                                                                        1997          1996
                                                                    -----------   ------------
                                                                    (Unaudited)
<S>                                                                 <C>          <C>
                                 ASSETS
Current assets:
    Cash and cash equivalents                                          $111,927        $68,114
    Short-term investments in marketable debt securities                 36,224         38,694
                                                                     ----------     ----------
         Total cash and short-term investments                          148,151        106,808
    Accounts receivable                                                 315,675        351,971
    Inventories                                                         188,249        180,534
    Other current assets                                                 64,358         57,455
                                                                     ----------     ----------
         Total current assets                                           716,433        696,768
Noncurrent investments in marketable debt securities                     12,648         22,027
Property, plant, equipment and leasehold improvements, at cost:
    Land and buildings                                                  234,526        231,998
    Laboratory, production and office equipment                         405,767        381,421
    Leasehold improvements                                              118,209        114,282
    Construction in progress                                             78,010         69,120
                                                                     ----------     ----------
                                                                        836,512        796,821
    Less accumulated depreciation and amortization                     (249,260)      (213,217)
                                                                     ----------     ----------
         Net property, plant, equipment and leasehold improvements      587,252        583,604
Purchased technology, net                                                59,619         65,592
Other intangible assets, net                                             72,445         76,669
Investments in equity securities and affiliated companies               180,136        184,328
Other assets                                                             65,484         59,682
                                                                     ----------     ----------
                                                                     $1,694,017     $1,688,670
                                                                     ----------     ----------
                                                                     ----------     ----------

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                    $79,014        $96,157
    Accrued compensation and related expenses                            49,596         56,695
    Short-term borrowings                                               151,743        137,467
    Current portion of unearned revenue                                  26,157         19,638
    Taxes payable                                                        38,558         33,407
    Other current liabilities                                           118,513        129,805
                                                                     ----------     ----------
         Total current liabilities                                      463,581        473,169
Long-term debt                                                          393,396        419,589
Other noncurrent liabilities                                             28,274         31,057
                                                                     ----------     ----------
         Total liabilities                                              885,251        923,815
                                                                     ----------     ----------
Commitments and contingencies
Stockholders' equity:
    Common stock                                                          1,735          1,707
    Additional paid-in capital                                        1,804,185      1,774,406
    Accumulated deficit                                              (1,001,476)    (1,032,554)
    Cumulative foreign currency translation adjustment                  (17,842)        (6,318)
    Unrealized gain from investments                                     23,124         28,574
    Notes receivable from stock sales                                      (960)          (960)
                                                                     ----------     ----------
         Total stockholders' equity                                     808,766        764,855
                                                                     ----------     ----------
                                                                     $1,694,017     $1,688,670
                                                                     ----------     ----------
                                                                     ----------     ----------
</TABLE>

             THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     ARE AN INTEGRAL PART OF THIS STATEMENT.


                                       3
<PAGE>

                               CHIRON CORPORATION
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                     THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                  ----------------------      ------------------------
                                                                   June 30,      June 30,       June 30,       June 30,
                                                                    1997           1996           1997           1996
                                                                  --------      ---------     ----------      --------
<S>                                                              <C>           <C>           <C>             <C>
Revenues:
    Product sales, net                                            $256,370       $254,156       $507,499       $493,978
    Equity in earnings of unconsolidated joint businesses           28,772         22,008         53,986         45,616
    Collaborative agreement revenues                                29,128         23,147         55,976         54,561
    Other revenues                                                  19,493         16,424         46,585         27,331
                                                                  --------      ---------     ----------      ---------
         Total revenues                                            333,763        315,735        664,046        621,486
                                                                  --------      ---------     ----------      ---------
Expenses:
    Cost of sales                                                  107,114        107,912        215,446        209,891
    Research and development                                        97,431         91,010        189,136        175,058
    Selling, general and administrative                             99,029         98,730        195,635        191,059
    Other operating expenses                                         3,331          2,492          6,610          5,600
                                                                  --------      ---------     ----------      ---------
         Total expenses                                            306,905        300,144        606,827        581,608
                                                                  --------      ---------     ----------      ---------

Income from operations                                              26,858         15,591         57,219         39,878

Gain on sale of interest in affiliated company                           -         12,066              -         12,066
Interest expense                                                    (7,757)        (6,918)       (16,243)       (13,931)
Other income, net                                                    3,733          1,613          4,086          2,807
                                                                  --------      ---------     ----------      ---------

Income before income taxes                                          22,834         22,352         45,062         40,820

Provision for income taxes                                           7,092          6,997         13,984         12,722
                                                                  --------      ---------     ----------      ---------

Net income                                                        $ 15,742      $  15,355     $   31,078      $  28,098
                                                                  --------      ---------     ----------      ---------
                                                                  --------      ---------     ----------      ---------

Net income per share                                              $   0.09      $    0.09     $     0.18      $    0.16
                                                                  --------      ---------     ----------      ---------
                                                                  --------      ---------     ----------      ---------

Weighted average number of shares
    used in computing per share amounts                            176,955        177,870        176,603        178,084
                                                                  --------      ---------     ----------      ---------
                                                                  --------      ---------     ----------      ---------

</TABLE>


             THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     ARE AN INTEGRAL PART OF THIS STATEMENT.


                                       4
<PAGE>

                                       CHIRON CORPORATION
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (UNAUDITED)
                                         (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                  SIX MONTHS ENDED
                                                                                              ------------------------
                                                                                                June 30,       June 30,
                                                                                                  1997           1996
                                                                                              ----------       --------
<S>                                                                                          <C>              <C>
Cash flows from operating activities:
    Net income                                                                                   $31,078        $28,098
    Adjustments to reconcile net income to net cash provided by
         (used in) operating activities:
              Depreciation and amortization                                                       50,634         54,379
              Gain on sale of interest in affiliated company                                           -        (12,066)
              Other, net                                                                           4,944          4,312
              Changes, excluding effect of acquisitions, to:
                   Accounts receivable                                                            25,693        (36,715)
                   Inventories                                                                   (34,119)       (32,153)
                   Other current assets                                                           (1,650)       (14,923)
                   Accounts payable and accrued expenses                                         (21,965)       (11,869)
                   Current portion of unearned revenue                                             6,790            728
                   Taxes payable                                                                   5,308          5,097
                   Other current liabilities                                                      (5,817)         9,096
                   Other noncurrent liabilities                                                      491            444
                                                                                                 -------       --------
                     Net cash provided by (used in) operating activities                          61,387         (5,572)
                                                                                                 -------       --------
Cash flows from investing activities:
    Purchases of investments in marketable debt securities                                       (27,911)       (55,009)
    Proceeds from sale and maturity of investments in marketable debt securities                  39,760         88,589
    Capital expenditures                                                                         (36,383)       (55,350)
    Proceeds from sale of interest in affiliated company                                               -         14,000
    Purchases of investments in equity securities and affiliated companies                        (5,500)        (6,240)
    Increase in other assets                                                                      (2,476)        (6,956)
                                                                                                 -------       --------
         Net cash used in investing activities                                                   (32,510)       (20,966)
                                                                                                 -------       --------
Cash flows from financing activities:
    Net payments under line of credit arrangements                                                     -        (25,345)
    Proceeds from issuance of short-term debt                                                     16,014          7,727
    Repayment of notes payable and capital leases                                                (30,818)        (5,035)
    Proceeds from issuance of common stock                                                        29,740         29,218
                                                                                                 -------       --------
         Net cash provided by financing activities                                                14,936          6,565
                                                                                                 -------       --------
         Net increase (decrease) in cash and cash equivalents                                     43,813        (19,973)
Cash and cash equivalents at beginning of the period                                              68,114         74,318
                                                                                                 -------       --------
Cash and cash equivalents at end of the period                                                  $111,927        $54,345
                                                                                                --------       --------
                                                                                                --------       --------
</TABLE>

             THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THIS STATEMENT.


                                       5
<PAGE>

                              CHIRON CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 JUNE 30, 1997
-------------------------------------------------------------------------------

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

        The information at June 30, 1997, and for the three months ended June 
     30, 1997 and 1996, is unaudited, but includes all normal recurring 
     adjustments which the management of Chiron Corporation (the "Company" or 
     "Chiron") believes to be necessary for fair presentation of the periods 
     presented.  In addition, during the second quarter of 1997, a $6.6 
     million reduction in cost of sales was recognized due to a revised 
     estimate of royalties to be paid on sales of certain products; a $4.7 
     million reduction in selling, general and administrative expenses was 
     recognized due to changes in estimated accruals created in prior 
     periods; and $0.9 million of other revenues was recognized as a result 
     of a reduction in estimated royalty reserves created in the first 
     quarter of 1997.  The consolidated balance sheet amounts at December 31, 
     1996 have been derived from audited financial statements.  Interim 
     results are not necessarily indicative of results for a full year.  This 
     information should be read in conjunction with Chiron's audited 
     consolidated financial statements for the year ended December 29, 1996, 
     which are included in the Annual Report on Form 10-K filed by the 
     Company with the Securities and Exchange Commission.

        Certain previously reported amounts have been reclassified to conform 
     with the current period presentation.

     FISCAL YEAR

        The fiscal year of the Company is a 52 or 53-week year ending on the 
     Sunday nearest the last day in December of each year.  As a result, the 
     second quarters of 1997 and 1996 represent the thirteen-week periods 
     ended June 29, 1997 and June 30, 1996, respectively.  For presentation 
     purposes, dates used in the consolidated financial statements and notes 
     refer to the calendar month end.

     INVENTORIES

        Pharmaceutical inventories are stated at the lower of cost or market 
     using the average cost method or, in the case of vaccine products, using 
     the last-in, first-out ("LIFO") method. Diagnostic and ophthalmic 
     products are valued at cost, using the first-in, first-out ("FIFO") 
     method which is less than market value.  Inventories consist of the 
     following:

                                          JUNE 30,     DECEMBER 31,
                                           1997            1996
                                         --------      ------------
                                              (IN THOUSANDS)
     Finished goods                       $94,509        $94,875
     Work in process                       49,913         45,874
     Raw materials                         43,827         39,785
                                         --------       --------
                                         $188,249       $180,534
                                         --------       --------
                                         --------       --------
     INCOME TAXES

        Income tax expense for the three and six months ended June 30, 1997
     and 1996 is based on an estimated annual effective income tax rate.


                                       6
<PAGE>

     PER SHARE DATA

         Per share data is based on the weighted average number of
     common and dilutive common equivalent shares outstanding.  Common
     equivalent shares result from the assumed exercise of outstanding
     stock options and warrants that have a dilutive effect when applying
     the treasury stock method.  Shares assumed to be issued upon
     conversion of the Company's convertible debentures are not included
     for any of the periods presented since their inclusion would be
     anti-dilutive.  Fully diluted per share data has not been presented,
     as the amounts would not differ materially from primary per share
     data.

     NEW ACCOUNTING STANDARDS

        In February 1997, the Financial Accounting Standards Board issued 
     Statement of Financial Accounting Standards No. 128, "Earnings per 
     Share" ("SFAS 128"), which will be effective for financial statements 
     for periods ending after December 15, 1997, including interim periods, 
     and establishes standards for computing and presenting earnings per 
     share. Earlier application is not permitted.  In its consolidated 
     financial statements for the year ending December 31, 1997, the Company 
     will make the required disclosures of basic and diluted earnings per 
     share and provide a reconciliation of the numerator and denominator of 
     its basic and diluted earnings per share computations.  All prior period 
     earnings per share data will be restated by the Company upon adoption of 
     SFAS 128. Basic earnings per share excludes dilution and is computed by 
     dividing income available to common stockholders by the weighted-average 
     number of common shares outstanding for the period.  Basic earnings per 
     share under SFAS 128 for the three months ended June 30, 1997 and 1996 
     would have been $0.09 in both periods. For the six months ended June 30, 
     1997 and 1996, basic earnings per share would have been $0.18 and $0.17, 
     respectively. The application of SFAS 128 to the calculation of diluted 
     earnings per share would not have a material effect on the Company's per 
     share data presented for those periods.

        In June 1997, the Financial Accounting Standards Board issued 
     Statement of Financial Accounting Standards Nos. 130 and 131, "Reporting 
     Comprehensive Income" ("SFAS 130") and "Disclosures about Segments of an 
     Enterprise and Related Information" ("SFAS 131"), respectively 
     (collectively, the "Statements").  The Statements are effective for 
     fiscal years beginning after December 15, 1997.  SFAS 130 establishes 
     standards for reporting of comprehensive income and its components in 
     annual financial statements.  SFAS 131 establishes standards for 
     reporting financial and descriptive information about an enterprise's 
     operating segments in its annual financial statements and selected 
     segment information in interim financial reports.  Reclassification or 
     restatement of comparative financial statements or financial information 
     for earlier periods is required upon adoption of SFAS 130 and SFAS 131, 
     respectively.  Application of the Statements' disclosure requirements 
     will have no impact on the Company's consolidated financial position, 
     results of operations or earnings per share data as currently reported.  

2.   LONG-LIVED ASSETS

        As circumstances dictate, Chiron's management reviews the carrying 
     value of all facilities, including the Company's idle pharmaceutical 
     fill and finishing facility in Puerto Rico, to determine whether an 
     impairment of the carrying value has occurred in accordance with 
     Statement of Financial Accounting Standards No. 121, "Accounting for the 
     Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed 
     of."  The cumulative impact on the Company's manufacturing needs of 
     recent product developments including, among others, the genital herpes 
     vaccine which failed to show efficacy in clinical trials and the finding 
     of a U.S. Food and Drug Administration ("FDA") advisory committee in May 
     1997 that there was not substantial evidence that Myotrophin-TM- 
     (rhIGF-1 or mecasermin [recombinant DNA origin]) Injection is effective 
     in the treatment of amyotrophic lateral sclerosis (ALS or Lou Gehrig's 
     disease), prompted management to conclude during the second quarter of 
     1997 that the Company currently has excess manufacturing capacity 
     relative to its projected needs.  As a result of this change in 
     circumstances, the Company reviewed the carrying amount of its idle 
     manufacturing facility in Puerto Rico for impairment.  


                                       7
<PAGE>

     In connection with the Company's ongoing study of the capacity 
     and efficiency of its global manufacturing operations, management is 
     considering alternative options concerning the Puerto Rico facility, 
     including divestiture, lease, contract manufacturing and other 
     internal uses for the facility's idle capacity.  Based on certain 
     assumptions which consider currently available information, the sum of 
     expected future cash flows that will be generated by the Puerto Rico 
     facility, undiscounted and without interest charges in accordance with 
     SFAS 121, will be sufficient to recover the $44.6 million carrying amount
     of the facility at June 30, 1997.  If the Company is unable, however, to
     find a suitable use for the Puerto Rico facility consistent with its
     current expectations, an adjustment in a future period of the carrying
     value of that facility to its fair value will have a material adverse
     impact on the Company's results of operations.

3.   COLLABORATION ARRANGEMENT

        In May 1997, the Company entered into an agreement to collaborate in 
     the development and commercialization of diagnostic, therapeutic and 
     vaccine products.  Subject to the collaboration and in return for a 
     license and other rights, Chiron made an initial payment of $1.0 
     million, which was recorded as research and development expense during 
     the three months ended June 30, 1997.  In addition, the Company is 
     obligated to fund allowable research costs, in amounts not less than 
     $8.5 million in the first year and $5.5 million in each of the second 
     and third years of the collaboration term, incurred by the collaborative 
     partner (the "Partner") in performing research requested by the Company. 
     Under the agreement, Chiron is required to make certain additional 
     payments upon achievement of specified milestones.  In addition, the 
     Partner will receive a royalty from any commercial sales of products 
     resulting from the collaboration. 

        Concurrent with this collaboration agreement, the Partner and Chiron 
     entered into a stock purchase agreement whereby Chiron invested $5 million
     in the convertible preferred stock of the Partner, representing a 3.6%
     interest in the Partner's outstanding equity.  This investment is
     accounted for under the cost method and is reflected in the accompanying
     consolidated balance sheets as investments in equity securities and
     affiliated companies as of June 30, 1997.  Pursuant to the stock purchase
     agreement, Chiron is obligated to invest an additional $2.5 million in the
     common stock of the Partner upon the closing of the Partner's initial
     public offering ("IPO") occurring on or before December 2, 1997, or such
     later date as is determined by mutual agreement of the parties.  If the
     Partner does not consummate its IPO on or prior to December 2, 1997, no
     additional investment will be required by Chiron.  The Partner has
     indicated to Chiron, however, that it expects to complete its IPO in
     August 1997.

4.   LONG-TERM DEBT

        In January 1997, the Company entered into an agreement to purchase for
     $29.8 million a manufacturing facility and related buildings that had 
     previously been leased under a long-term capital lease obligation.  As a 
     result, the Company eliminated the related obligation which totaled 
     $29.4 million.


                                       8
<PAGE>

5.   CONTINGENCIES

        The Company is party to various claims, investigations and legal 
     proceedings arising out of the normal course of its business. These 
     claims, investigations and legal proceedings relate to intellectual 
     property rights, including claims brought separately by two competitors 
     that the Company's acellular pertussis vaccine infringes claims under 
     three distinct patents. Pending claims also relate to contractual rights
     and obligations, employment matters, shareholder derivative claims, 
     claims of product liability, and other issues.  While there can be no 
     assurance that an adverse determination of any such matters could not 
     have a material adverse impact in any future period, management does not 
     believe, based upon information known to it, that the final resolution 
     of these matters will have a material adverse effect upon the Company's 
     consolidated financial position and annual results of operations and 
     cash flows.

                                       9
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------------------------------------

OVERVIEW

    THE DISCUSSION BELOW 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" WHICH COULD 
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH 
FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY 
RELEASE THE RESULTS OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS 
WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR 
TO REFLECT THE OCCURRENCES OF UNANTICIPATED EVENTS.

    THE DISCUSSION BELOW SHOULD BE READ IN CONJUNCTION WITH PART I, ITEM 1, 
"FINANCIAL STATEMENTS," OF THIS QUARTERLY REPORT ON FORM 10-Q AND PART II, 
ITEMS 7 AND 8, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS" AND "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA," 
RESPECTIVELY, OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED 
DECEMBER 29, 1996.

    Chiron is a diversified, science-driven, market-directed 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: (i) diagnostics, including 
blood screening tests, automated immunodiagnostic systems, critical blood 
analyte systems and new quantitative probe tests; (ii) therapeutics, with an 
emphasis on oncology, serious infectious diseases and critical care diseases; 
(iii) adult and pediatric vaccines; and (iv) ophthalmic surgical products, 
including instruments and devices used for the surgical correction of vision 
and intraocular implants to deliver drugs to the eye.  Chiron also develops 
or acquires new technologies, employing these technologies to discover new 
products for the Company or for its partners.

RESULTS OF OPERATIONS

REVENUES

    The Company's revenues are derived from a variety of sources, including 
product sales, joint business arrangements, collaborative agreements and 
product royalty agreements.  Product sales, Chiron's largest revenue 
category, consists of the following product lines for each of the three-month 
and six-month periods ended June 30:

<TABLE>
<CAPTION>
                                               THREE MONTHS                 SIX MONTHS
                                               ENDED JUNE 30,              ENDED JUNE 30,
                                            1997          1996           1997           1996
                                         --------      --------        -------       ---------
                                                             (IN THOUSANDS)
<S>                                    <C>            <C>             <C>          <C>
    Diagnostic products                  $154,929       $146,200       $303,951       $282,115
    Ophthalmic products                    52,725         59,513        103,063        104,454
    Vaccine products                       17,191         19,472         35,710         40,306
    Betaseron-R- sales                     14,305         12,251         28,093         33,142
    Oncology products                      16,527         15,671         35,203         31,820
    Other products                            693          1,049          1,479          2,141
                                         --------        -------        -------        -------
                                         $256,370       $254,156       $507,499       $493,978
                                         --------       --------       --------       --------
                                         --------       --------       --------       --------
</TABLE>


    As Chiron continues to increase the sales of certain seasonal products 
and expand its presence in international markets, particularly European 
markets, seasonal fluctuations in product sales and the related gross profit 
amounts have become more significant. For this reason, revenues and 


                                       10
<PAGE>


gross profit amounts from certain product lines are generally higher in the 
first half and fourth quarter of the year.  As a result, Chiron's results in 
any one quarter are not necessarily indicative of results to be expected for 
a full year.

    Diagnostic product sales include sales-type leases of fully-automated, 
random-access immunodiagnostic testing systems (ACS:180-R-, automated 
chemiluminescence system) and reagents for these systems; direct sales of 
ACS:180-R- instruments and related operating leases;  and sales of critical 
care systems (CBA-TM-), clinical chemistry products, manual 
immunodiagnostic systems and branched DNA ("bDNA") probe kits for human 
immunodeficiency virus ("HIV").  Sales of diagnostic products increased in 
both the second quarter and first half of 1997 as compared to the same 
periods in 1996, primarily due to increased research sales of bDNA probe 
kits, reflecting the continued overall growth in viral load testing for HIV, 
and of ACS immunodiagnostic products.  Sales of bDNA probe kits increased 
$7.0 million and $14.4 million in the second quarter and first half of 1997, 
respectively, as compared to the same periods of 1996.  The growth in ACS 
immunodiagnostic product sales of $6.5 million and $12.1 million during the 
second quarter and first half of 1997, respectively, resulted from a 10% 
increase during both periods in sales volume of reagents resulting from the 
compounding effect of increased ACS:180-R- system placements as compared to 
the prior year.  The overall increases in diagnostic product sales in the 
second quarter and first half of 1997 were partially offset by reduced sales 
of manual immunodiagnostic systems and critical care products, as well as the 
impact of unfavorable foreign currency exchange rates, primarily in Japan, 
Germany and France.  When compared to rates in effect for the second quarter 
and first half of 1996, the increases in diagnostic products sales were 
reduced by $6.8 million and $13.5 million, respectively, in the comparable 
periods of 1997.

    In June 1997, Chiron Diagnostics Corporation ("Chiron Diagnostics") 
reached a three-year agreement with Premier Purchasing Partners, L.P., the 
nation's largest healthcare alliance enterprise, to supply immunochemistry 
analyzers and supplies to Premier's owners and affiliates.  As a result of 
the agreement, Chiron Diagnostics became one of two select suppliers to 
Premier for immunodiagnostic systems, assays and reagents.  Diagnostic 
product sales in the second quarter of 1997 do not include any sales of 
immunodiagnostic products made in connection with the Premier agreement. 


    Sales of ophthalmic products decreased in the second quarter and first 
half of 1997 by $6.8 million and $1.4 million, respectively, as compared to 
the same periods of 1996.  Sales of PMMA intraocular lenses in the second 
quarter and first half of 1997 decreased $4.6 million and $7.6 million, 
respectively, from the same periods of 1996 due to a continuing shift towards 
foldable technologies and the impact of competing products.  A $2.1 million 
decrease in sales of the Vitrasert-TM- Implant product (Cytovene-TM-; Roche 
Laboratories) also contributed to the overall decrease in ophthalmic product 
sales during the second quarter of 1997, reflecting a reduction in the 
incidence of cytomegalovirus ("CMV") retinitis due to the impact of protease 
inhibitors in the treatment of HIV.   Vitrasert-TM- Implant sales in the 
first half of 1997 remained relatively constant with the first half of 1996 
as the Vitrasert-TM- product was approved by the U.S. Food and Drug 
Administration ("FDA") in March 1996. Unfavorable changes in foreign currency 
exchange rates in the second quarter and first half of 1997 also contributed 
to the overall decrease in ophthalmic product sales between years.  Partially 
offsetting the overall decrease in ophthalmic product sales during the second 
quarter and first half of 1997 as compared to the same periods of 1996 were 
increased sales of refractive products, including keratomes and excimer 
lasers, of $1.1 million and $6.5 million, respectively.

    Vaccine product sales consist primarily of sales by Chiron's Italian 
subsidiary of pediatric and flu vaccines in international markets and to 
certain international health services.  The overall decrease in vaccine 
product sales in both the second quarter and first half of 1997 as compared 
to the same periods of 1996 is primarily due to a $3.2 million and $3.4 
million decrease, respectively, in sales of Polioral-TM-, a pediatric oral 
polio vaccine.  Supply constraints, particularly during the second quarter of 
1997, resulted in the decreases in sales of Polioral-TM- during these 
periods. Decreased sales of TriAcelluvax-TM- (formerly Acelluvax DTP-TM-), a 
recombinant acellular pertussis vaccine, also contributed to the overall 
decrease in vaccine product sales during the first half of 1997 due to higher 
sales volume in the prior year resulting from introduction of the acellular 
pertussis vaccine in late 1995.  Unfavorable changes in foreign currency 
exchange rates in the second quarter and first half of 1997 also contributed 
to the overall decrease in vaccine product sales between years. 

                                       11
<PAGE>

    Under the terms of a development and supply agreement with Schering AG, 
Germany ("Schering"), and its U.S. affiliate, Berlex Laboratories, Inc. 
("Berlex"), Chiron manufactures Betaseron-R- (interferon beta-1b) for Berlex. 
Under the terms of the agreement, Chiron earns an initial partial payment 
for Betaseron-R- upon  shipment to Berlex and a subsequent secondary payment 
for Betaseron-R- upon Berlex's net sales of the product to patients. 
Beginning July 1997, a larger portion of the overall payment for Betaseron-R- 
will be included in the secondary payment. Betaseron-R- product sales revenue 
in the second quarter increased from $12.2 million in 1996 to $14.3 million 
in 1997, primarily as the result of a voluntary reduction during the second 
quarter of 1996 in shipments to Berlex pending FDA approval of certain 
labeling changes.  Partially offsetting the overall increase in Betaseron-R- 
product sales during the second quarter of 1997 was a $3.6 million decrease 
in secondary revenues as a result of the introduction of a competing product 
in the second quarter of 1996.  In the first half of 1997, Betaseron-R- 
product sales decreased $5.0 million as compared to the first half of 1996 
due to a decrease in commercial vials shipped to Berlex during the first 
quarter of 1997 and a decrease in secondary revenues.

    Future levels of Chiron's Betaseron-R- shipments will depend upon the 
rate at which new patients are enrolled from existing and future markets, the 
extent to which patients, once enrolled, remain compliant with the prescribed 
treatment regimen and continue to regularly receive Betaseron-R-, and the 
impact of competing products, including other beta interferon products that 
were approved for sale in the U.S. during 1996. In addition, based upon the 
level of inventories carried by Berlex, the timing of future shipments to 
Berlex and the related revenue may vary.


    Sales of oncology products, principally Proleukin-TM- (aldesleukin, 
interleukin-2), increased slightly in the second quarter of 1997 over the 
comparable period of 1996, primarily due to an overall 6% increase in 
Proleukin-TM- units sold. This overall increase in unit sales in the second 
quarter of 1997 reflects a 13% increase in vials sold in European markets and 
a 4% decrease in vials sold in the U.S., due primarily to a domestic sales 
price increase in April 1997.  In the first half of 1997, sales of 
Proleukin-TM- increased $2.8 million as compared to the same period of 1996, 
reflecting an increase in unit sales of 13% and 11% in domestic and European 
markets, respectively.  Worldwide average selling price, which decreased 
slightly during the second quarter and first half of 1997 as compared to the 
same periods of the prior year, generally fluctuates between periods due to 
the geographic mix of units sold.

    The Company markets many of its commercial products internationally. As a 
result, product revenues in almost all product lines are affected by 
fluctuating foreign currency exchange rates. Foreign product sales were 
approximately $142.9 million and $284.3 million for the second quarter and 
first half of 1997, respectively, as compared to $141.2 million and $274.8 
million for the second quarter and first half of 1996, respectively. 
International sales of diagnostic products accounted for substantially all of 
the increase in foreign product sales between periods. For both the second 
quarter and first half of 1997, approximately 56 percent of Chiron's product 
sales were denominated in foreign currencies. Product sales would have been 
$10.9 million and $20.9 million higher in the second quarter and first half 
of 1997, respectively, if currency exchange rates had remained constant with 
the same periods of 1996.  Changing currency exchange rates have had, and 
will continue to have, an impact on Chiron's results.  The Company's other 
revenues, discussed below, are largely denominated in U.S. dollars but are 
impacted by the Company's joint partners' and collaborators' non-U.S. 
operations.

    Equity in earnings of unconsolidated joint businesses consists 
substantially of Chiron's one-half interest in the pretax operating earnings 
of its joint diagnostics business with Ortho Diagnostic Systems, Inc. 
("Ortho"), a Johnson & Johnson ("J&J") company. The joint business sells 
tests used to screen blood for the potential presence of hepatitis C virus 
("HCV") and HIV.  The joint business also holds the immunodiagnostic rights 
to Chiron's hepatitis and retrovirus technology and receives royalties from 
several companies, including Abbott Laboratories, Pasteur Sanofi Diagnostics 
and International Murex Technologies, Inc., for their sales of certain tests. 
Chiron and Ortho separately are developing new instrument systems expected to 
contain broad menus of immunodiagnostic tests to serve the clinical 
diagnostic segment of the market.  Chiron must obtain Ortho's agreement in 
order to market hepatitis and retrovirus tests that are being developed for 
use on Chiron Diagnostics' new systems.  There can be no assurance that 
Chiron can obtain such agreement on acceptable terms or at all.

                                       12
<PAGE>

    In the second quarter of 1997, Chiron's share of the pretax operating 
earnings of the joint business, which is recorded by Chiron on a one-month 
lag based upon estimates supplied by Ortho, increased to $23.3 million from 
$20.7 million for the comparable period of 1996, primarily due to increased 
royalties.  In the first half of 1997, Chiron's share of the pretax operating 
earnings of the joint business, including the impact during the first 
quarters of 1997 and 1996 of the final annual accounting, increased to $48.5 
million from $43.2 million for the first half of 1996.  The increase in the 
first half of 1997 was primarily due to increased royalties and increased 
sales by the joint business of HCV and HIV tests, partially offset by a 
reduction in the revenue derived from the final annual accounting.  In the 
first quarter of 1997, Chiron recognized joint business revenue of $0.8 
million from the final accounting for 1996, as compared to $3.8 million 
recognized in the first quarter of 1996 from the final accounting for 1995.

    Also included in equity in earnings of unconsolidated joint businesses is 
Chiron's 49 percent share of the after-tax operating results of a joint 
venture with Behringwerke AG of Germany, which was acquired in July 1996.  
Results from the joint venture are recorded by Chiron on a one-month lag.  
Chiron's share of earnings in the second quarter and first half of 1997 was 
$6.1 million and $6.3 million, respectively.  The operating results of the 
joint venture in the second quarter of 1997, relative to its results for the 
first half of the year, reflect strong seasonal sales of certain adult 
vaccines.  Chiron's share of earnings in the first half of 1997 also includes 
amortization of intangibles and Chiron's share of a $2.0 million up-front 
license fee that was expensed by the joint venture during the first quarter 
of 1997.

    Equity in earnings of unconsolidated joint businesses for the second 
quarter and first half of 1996 also includes $1.4 million and $2.5 million, 
respectively, related to Chiron's 50 percent interest in a generic cancer 
chemotherapeutics business with Ben Venue Laboratories, Inc. ("Ben Venue").  
Effective May 1, 1996, Chiron sold its interest to Ben Venue for $14.0 
million in cash, resulting in a $12.1 million gain in the second quarter of 
1996.
 
    Collaborative agreement revenues consist of fees received for research 
services as they are performed, fees received for completed research or 
technology, fees received upon attainment of benchmarks specified in the 
related research agreements, and proceeds from sales of biological materials 
to research partners for clinical and preclinical testing.  Collaborative 
agreement revenues for the second quarter of 1997 increased to $29.1 million 
from $23.1 million in the second quarter of 1996, primarily as the result of 
license fees and increased research funding, discussed below.  Collaborative 
agreement revenues for the first half of 1997 increased to $56.0 million from 
$54.6 million in the first half of 1996.  Collaborative agreement revenues in 
the first half of 1996 include revenues of $7.5 million recognized by Chiron 
in the first quarter of that year pursuant to the terms of a technology 
transfer and development agreement with Japan Tobacco Inc. ("JT").  Pursuant 
to this agreement, the pharmaceutical division of JT acquired a 
non-exclusive, perpetual license to apply certain of Chiron's combinatorial 
chemistry technologies in JT's research and product development programs.  
Under this agreement, Chiron will earn another $7.5 million during the third 
quarter of 1997.

    Included in collaborative agreement revenues are amounts from Novartis AG 
("Novartis"), the successor to Ciba-Geigy Ltd. ("Ciba"). Pursuant to the 
terms of a December 1995 research funding agreement, Novartis agreed to 
provide $250 million (which may be increased to $300 million subject to 
certain conditions) over five years in support of research at Chiron, subject 
to aggregate annual funding limitations.  As a result, Chiron recognized 
revenues of $18.0 million and $15.0 million under this agreement during the 
second quarters of 1997 and 1996, respectively.  In the first half of 1997 
and 1996, Chiron recognized revenues of $33.8 million and $31.0 million, 
respectively, from Novartis' research funding.  Through June 30, 1997, Chiron 
has cumulatively recognized revenues of $132.8 million pursuant to this 
agreement. Chiron's aggregate annual funding limitation for 1997 is $50.0 
million, of which $33.8 million has been drawn by Chiron during the first 
half of the year.  Chiron is currently seeking to increase its annual funding 
limitation to include the utilization of unused funding from prior periods.  
If Chiron is unsuccessful in its negotiations to increase its annual funding 
limitation, research funding in the second half of 1997 will be limited to 
$16.2 million in aggregate.  Subject to current and future aggregate annual 
funding limitations, Chiron anticipates continued utilization of the research 
funding provided by Novartis.


                                       13
<PAGE>

    Additionally, during the second quarter and first half of 1997, Chiron 
recognized $3.8 million and $7.5 million, respectively, of collaborative 
agreement revenues pursuant to a November 1996 agreement with Novartis, which 
was primarily executed in conjunction with a consent and agreement that 
resolved the Federal Trade Commission's review of the merger between Ciba and 
Sandoz Ltd. which created Novartis.  In partial consideration for Chiron 
agreeing to grant royalty-bearing licenses for certain patent rights on the 
herpes simplex virus thymidine kinase gene in the field of gene therapy, 
Novartis agreed to pay Chiron up to $60.0 million over the next five years, 
$15.0 million of which relates to 1997 and will be recognized ratably 
throughout the year.

    Other revenues consist principally of product royalties, including 
royalty revenues resulting from Schering's European sales of Betaferon-R-, 
and revenues generated from Aredia-TM- (pamidronate disodium for injection).  
Other revenues increased $3.1 million and $19.3 million in the second quarter 
and first half of 1997, respectively, over the comparable periods of 1996.  
In the second quarter and first half of 1996, Chiron recognized $7.6 million 
and $11.2 million, respectively, of sales fees earned by the Company for 
Aredia-TM- sales and marketing services provided on behalf of Novartis.  
Chiron provided these services pursuant to an agreement with Novartis which 
provided Chiron exclusive promotional rights to Aredia-TM- in the U.S.  This 
agreement expired in March 1997.  Pursuant to a November 1996 agreement with 
Novartis, Chiron began to co-promote Aredia-TM- in the U.S. for a 2-1/2 year 
period beginning April 1997.  During the first half of 1997, Chiron 
recognized $6.9 million of revenues related to Aredia-TM- co-promotion 
services provided to Novartis during the second quarter and $12.5 million of 
sales fees under the exclusive agreement which expired in March.  A 
definitive agreement covering the terms of the co-promotion arrangement is 
expected to be finalized during the second half of 1997.  Chiron anticipates 
that co-promotion services and transitional sales effort provided in future 
periods under the new co-promotion agreement will decrease, along with the 
related revenues, as Chiron takes a less active role in promoting Aredia-TM-. 
Royalty revenues resulting from Schering's European sales of Betaferon-R-, 
which started during the second quarter of 1996, contributed $4.8 million and 
$9.0 million to the overall increase in other revenues during the second 
quarter and first half of 1997, respectively, as compared to the same periods 
of 1996.  Included within royalties from Schering in the second quarter of 
1997 is a $0.9 million reduction in estimated royalty reserves created in the 
first quarter of 1997.  The sale of certain oncology-related marketing rights 
for $2.0 million during the second quarter of 1997 and increased royalties 
related to hepatitis B, partially offset by decreased royalties related to 
insulin, also contributed to the overall increase in other revenues during 
the second quarter and first half of 1997 as compared to the same periods of 
1996.

COSTS AND EXPENSES

    Cost of sales increased consistently with the increase in product sales 
between years.  The gross profit margin remained constant at 58% for each of 
the second quarter and first half of 1997 and 1996.  During the second 
quarter of 1997, a $6.6 million reduction in cost of sales was recognized 
within Chiron Diagnostics due to a revised estimate of royalties to be paid 
on sales of certain products.  Excluding the impact of this reduction in cost 
of sales, gross profit margin in the second quarter and first half of 1997 
decreased approximately 2 percentage points in both periods, to 56%, as 
compared to the same periods of 1996. In the second quarter of 1997, this 
decrease in gross profit margin resulted primarily from supplier price 
increases for viscoelastic products, as well as an adverse sales mix of 
clinical chemistry products in certain lower margin international markets.  
In the first half of 1997, this decrease also resulted from certain charges 
related to vaccine products and an adverse sales mix occasioned from sales of 
lower margin critical blood analyte systems to foreign distributors in the 
first quarter of 1997.  Partially offsetting these decreases in gross profit 
margin in the second quarter and first half of 1997 as compared to the same 
periods of 1996 were improvements in gross profit margins resulting from 
increased sales of bDNA probe kits and immunodiagnostic reagents. Gross 
profit margin percentages may fluctuate significantly in future periods as 
the Company's product mix continues to evolve.

    Research and development expenses increased in the second quarter from 
$91.0 million in 1996 to $97.4 million in 1997.  In the first half of the 
year, research and development expenses increased from $175.1 million in 1996 
to $189.1 million in 1997.  Chiron's research and development expenses 
fluctuate from period to period depending upon the extent of clinical


                                       14
<PAGE>

trial-related activities, including the manufacturing of material; the number 
of products under development and their progress; and the acquisition of 
companies and new technology and licensing rights. These increases in 
research and development expenses were due to the continued development of 
bDNA probes; the ACS:Centaur-TM-, a more powerful immunoassay system designed 
to increase laboratory productivity and provide a platform for proprietary 
analytes that will help clinicians manage disease progression; 
Regranex-R-(becaplermin), a wound healing agent; as well as additional 
amounts related to research involving gene therapies, and hepatitis and other 
vaccines.  Additionally, during the second quarter of 1997, Chiron made $1.0 
million upfront payments to both Biomira, Inc., under a May 1997 agreement to 
co-develop Biomira's Theratope-TM- immunotherapeutic vaccine, and to another 
collaborative partner, under a May 1997 collaboration agreement for the 
development and commercialization of diagnostic, therapeutic and vaccine 
products.  Chiron also made a $1.0 million milestone payment to DepoTech 
Corporation in the second quarter of 1997 upon submission to the FDA of the 
first new drug application ("NDA") in the U.S. for DepoCyt-TM- (injectable 
sustained-release cytarabine), an anticancer agent.  During the first quarter 
of 1997, Chiron made a $1.5 million payment to Novartis resulting from the 
February 1997 filing of a NDA with the FDA for Myotrophin-TM- (rhIGF-1 or 
mecasermin [recombinant DNA origin]) Injection.  On May 8, 1997, an FDA 
advisory committee found that there was not substantial evidence that 
Myotrophin-TM- Injection is effective in the treatment of amyotrophic lateral 
sclerosis (ALS or Lou Gehrig's disease).  Chiron and its collaborative 
partner, Cephalon, Inc., will be reviewing with the FDA the advisory 
committee's recommendation in the second half of 1997.

    During 1995 and 1996, Chiron, together with J&J, co-funded the 
development and introduction of a home HIV testing service business, Direct 
Access Diagnostics.  Chiron elected not to exercise its option, which expired 
in May 1997, to participate in this venture with J&J. During the second 
quarter and first half of 1996, Chiron recognized research and development 
expense of $2.5 million and $5.0 million, respectively, related to its option 
to participate in this venture.

    In July 1997, Chiron and Pharmacia & Upjohn Inc. ("Pharmacia & Upjohn") 
entered into license and assignment agreements whereby Pharmacia & Upjohn 
granted to Chiron a semi-exclusive, royalty-bearing worldwide license related 
to the Myotrophin-TM-  manufacturing process and a non-exclusive, 
royalty-bearing worldwide license to a cardiovascular indication.  In 
exchange for the assignment to Chiron of certain intellectual property 
rights, Chiron granted to Pharmacia & Upjohn a worldwide, non-exclusive, 
non-transferable royalty-free license to such intellectual property for any 
use. Upon execution of the agreements, Chiron recorded research and 
development expense of $4.6 million, and made an initial payment of $3.3 
million, in July 1997.  The remainder, or $1.3 million, is payable by Chiron 
on January 1, 1998.

    Selling, general and administrative ("SG&A") expenses as a percentage of 
net product sales were 39% for each of the second quarter and first half of 
1997 and 1996.  Selling and marketing expenses continue to represent the 
largest portion of total SG&A expenses, as Chiron devoted significant 
resources to support sales volumes in its existing product lines as well as 
new products, such as Chiron's new bDNA probes and Rapidpoint-TM- 400, a 
critical care system designed specifically for critical care settings in 
hospitals.  The Rapidpoint-TM- 400 was announced in Europe during the first 
quarter of 1997.  Additionally, increases over the prior year in SG&A 
expenses, resulting from various consulting and information systems projects, 
were offset by $4.7 million of changes to estimated accruals created in prior 
periods during the second quarter of 1997.

OTHER ITEMS

    Effective May 1, 1996, Chiron sold its 50% interest in a generic cancer 
chemotherapeutics business to Ben Venue, Chiron's joint venture partner, for 
$14.0 million in cash, resulting in a $12.1 million gain reported as gain 
on sale of interest in affiliated company in the second quarter and first 
half of 1996.

    Interest expense increased in the second quarter and first half of
1997 over the comparable periods of 1996 as a result of increased debt
borrowings.


                                       15
<PAGE>

    Other income, net, consists primarily of investment income on the 
Company's cash and investment balances and other non-operating gains and 
losses. Other income, net, increased in the second quarter of 1997 over the 
comparable period of 1996, primarily as the result of foreign exchange 
hedging gains.  The overall increase in other income, net, in the first half 
of 1997 as compared to the same period in 1996 also reflects a $1.5 million 
loss on an investment recorded by Chiron in the first quarter of 1996.  
Partially offsetting these increases in other income, net, in the second 
quarter and first half of 1997 was reduced investment income arising from 
lower balances in the Company's investment portfolio.

    The provision for income taxes in 1997 and 1996 is based on an estimated 
annual effective income tax rate. The estimated effective rate is determined 
based on management's estimate of taxable income and is subject to change in 
future periods, due to the mix of domestic and foreign income and changes in 
tax rates.  The 1997 rate is less than the U.S. Federal statutory rate 
primarily due to the utilization of foreign and U.S. net operating losses.

LIQUIDITY AND CAPITAL RESOURCES

    Chiron's capital requirements have been generally funded from cash and 
investments on hand, debt borrowings and sales of equity.  In addition to 
these sources of capital, future capital requirements may be financed through 
a combination of research funding provided by Novartis, possible 
off-balance-sheet financing and cash generated from operations. Chiron's cash 
and investments, which totaled $160.8 million at June 30, 1997, are invested 
in a diversified portfolio of investment grade financial instruments, 
including money market instruments, corporate notes and bonds, government or 
government agency securities, and other debt securities.  By policy, the 
amount of credit exposure to any one institution is limited.  These 
investments are generally not collateralized and primarily mature within 
three years.  Investments with maturities in excess of one year are presented 
on the balance sheet as noncurrent investments.  

    Chiron attempts to reduce its exposure to fluctuations in foreign 
currency exchange rates by entering into forward currency contracts 
("forwards") and options.  The Company is primarily exposed to fluctuations 
in currencies in western European countries and Japan. Forwards are used to 
hedge balance sheet exposure resulting from completed transactions 
denominated in a foreign currency, and options are used to hedge certain 
anticipated transactions.  Forward contracts are settled quarterly, and 
option contracts expire quarterly through December 1997. As of June 30, 1997, 
the Company held forward and option contracts totaling $75.9 million and 
$58.7 million, respectively.

    As circumstances dictate, Chiron's management reviews the carrying value 
of all facilities, including the Company's idle pharmaceutical fill and 
finishing facility in Puerto Rico, to determine whether an impairment of the 
carrying value has occurred in accordance with Statement of Financial 
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived 
Assets and for Long-Lived Assets to be Disposed of."  The cumulative impact 
on the Company's manufacturing needs of recent product developments 
including, among others, the genital herpes vaccine which failed to show 
efficacy in clinical trials and the finding of an FDA advisory committee in 
May 1997 that there was not substantial evidence that Myotrophin-TM- (rhIGF-1 
or mecasermin [recombinant DNA origin]) Injection is effective in the 
treatment of amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease), 
prompted management to conclude during the second quarter of 1997 that the 
Company currently has excess manufacturing capacity relative to its projected 
needs.  As a result of this change in circumstances, the Company reviewed the 
carrying amount of its idle manufacturing facility in Puerto Rico for 
impairment.  In connection with the Company's ongoing study of the capacity 
and efficiency of its global manufacturing operations, management is 
considering alternative options concerning the Puerto Rico facility, 
including divestiture, lease, contract manufacturing and other internal uses 
for the facility's idle capacity.  Based on certain assumptions which 
consider currently available information, the sum of expected future cash 
flows that will be generated by the Puerto Rico facility, undiscounted and 
without interest charges in accordance with SFAS 121, will be sufficient to 
recover the $44.6 million carrying amount of the facility at June 30, 1997.  
If the Company is unable, however, to find a suitable use for the Puerto Rico 
facility consistent with its current expectations, an adjustment in a future 
period of the carrying value of that facility to its fair value will have a 
material adverse impact on the Company's results of operations.

                                       16
<PAGE>

    To date, management has concluded that no impairment of the carrying 
value of any of its facilities has occurred.  There, however, can be no 
assurance that global manufacturing needs for existing products will continue 
unchanged and product development programs will be successful. Accordingly, 
changes in assumptions and manufacturing plans, needs and capacity may occur 
in the future which may require a reduction of the carrying value of certain 
facilities to their fair value.

    At June 30, 1997, the Company had borrowed $100.0 million in the U.S. 
under an aggregate $200.0 million in revolving, committed, unsecured credit 
lines with three separate financial institutions.  One of the agreements, 
providing for borrowings up to $100.0 million, expired in July 1997 and was 
simultaneously amended to extend the availability through August 11, 1997 
under the same terms and conditions as those in the original credit 
agreement.  The Company intends to execute a replacement multi-year revolving 
credit agreement providing for borrowings up to $100.0 million, under similar 
terms and conditions, with the same financial institution.

    Chiron selectively enters into cross currency interest rate swaps 
("swaps") to modify the interest and currency characteristics of specific 
outstanding debt obligations.  In June 1997, Chiron entered into a five-year 
swap agreement with a notional amount of $26.4 million, effectively 
converting debt denominated in U.S. Dollars to Japanese Yen and modifying the 
interest rate from a variable rate to a fixed Japanese Yen rate of 2.1%.

    In future periods, Chiron expects to incur substantial capital spending.  
Chiron's liquidity may be further impacted in future periods by its decision 
to fund its share of expenses in certain of its joint ventures and 
collaboration arrangements.  Over the next several years, Chiron anticipates 
funding collaborations with a number of its research partners, and may make 
additional equity investments in collaborative partners.

    During the six months ended June 30, 1997, cash and investments in 
marketable debt securities increased by $32.0 million. The increase was 
primarily due to $61.4 million of cash provided by operations, $29.7 million 
of proceeds related to the issuance of common stock under the Company's stock 
option and employee stock purchase plans and $16.0 million of incremental 
short-term debt borrowings.  These increases were partially offset by $36.4 
million of capital expenditures, the repayment of a long-term capital lease 
obligation totaling $29.4 million, and $5.5 million of investments in equity 
securities and affiliated companies.  In January 1997, Chiron purchased a 
manufacturing facility and related buildings in Emeryville, California that 
had been previously leased under the long-term capital lease obligation.  

    During the six months ended June 30, 1996, cash and investments in 
marketable debt securities decreased by $54.2 million.  The decrease was 
primarily due to $55.4 million of capital expenditures, $25.3 million of net 
payments under line of credit arrangements, $6.2 million of investments in 
equity securities and affiliated companies, $5.6 million of cash used in 
operations, and the repayment of notes payable and capital leases totaling 
$5.0 million.  These decreases were partially offset by $29.2 million of 
proceeds related to the issuance of common stock under the Company's stock 
option and employee stock purchase plans and $14.0 million of proceeds from 
the sale of Chiron's interest in Ben Venue.

    Cash provided by operations of $61.4 million in the first half of 1997, 
as compared to cash used in operations of $5.6 million in the first half of 
1996, primarily reflects the decrease in accounts receivable at June 30, 1997 
and increase in accounts receivable at June 30, 1996 over respective prior 
year end amounts.  The decrease in accounts receivable in 1997 results 
primarily from the timing of payments from the Chiron-Ortho joint business 
and from Novartis, and from a greater receivable balance at December 31, 1996 
than at December 31, 1995 due to revenue growth in the fourth quarter of 
1996. The increase in accounts receivable in 1996 results from research 
funding from Novartis which began in the first quarter of 1996 and from 
amounts receivable from Ben Venue.

                                       17
<PAGE>

    Chiron believes that its cash and investments, funds provided by 
operations and capital market transactions will be sufficient to meet its 
cash requirements during the upcoming twelve months and through the 
foreseeable future.

NEW ACCOUNTING STANDARDS

    In February 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. 128, "Earnings per Share" 
("SFAS 128"), which will be effective for financial statements for periods 
ending after December 15, 1997, including interim periods, and establishes 
standards for computing and presenting earnings per share. Earlier 
application is not permitted.  In its consolidated financial statements for 
the year ending December 31, 1997, the Company will make the required 
disclosures of basic and diluted earnings per share and provide a 
reconciliation of the numerator and denominator of its basic and diluted 
earnings per share computations.  All prior period earnings per share data 
will be restated by the Company upon adoption of SFAS 128. Basic earnings per 
share excludes dilution and is computed by dividing income available to 
common stockholders by the weighted-average number of common shares 
outstanding for the period.  Basic earnings per share under SFAS 128 for the 
three months ended June 30, 1997 and 1996 would have been $0.09 in both 
periods. For the six months ended June 30, 1997 and 1996, basic earnings per 
share would have been $0.18 and $0.17, respectively. The application of SFAS 
128 to the calculation of diluted earnings per share would not have a 
material effect on the Company's per share data presented for those periods.

    In June 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards Nos. 130 and 131, "Reporting Comprehensive 
Income" ("SFAS 130") and "Disclosures about Segments of an Enterprise and 
Related Information" ("SFAS 131"), respectively (collectively, the 
"Statements").  The Statements are effective for fiscal years beginning after 
December 15, 1997.  SFAS 130 establishes standards for reporting of 
comprehensive income and its components in annual financial statements.  SFAS 
131 establishes standards for reporting financial and descriptive information 
about an enterprise's operating segments in its annual financial statements 
and selected segment information in interim financial reports.  
Reclassification or restatement of comparative financial statements or 
financial information for earlier periods is required upon adoption of SFAS 
130 and SFAS 131, respectively.  Application of the Statements' disclosure 
requirements will have no impact on the Company's consolidated financial 
position, results of operations or earnings per share data as currently 
reported.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

    Chiron wishes to caution stockholders and investors that the following 
important factors, among others, in some cases have affected, and in the 
future could affect, Chiron's actual results and could cause Chiron's actual 
consolidated results for the third quarter of 1997, and beyond, to differ 
materially from those expressed in any forward-looking statements made by, or 
on behalf of, Chiron.  The statements under this caption are intended to 
serve as cautionary statements within the meaning of the Private Securities 
Litigation Reform Act of 1995.  The following information is not intended to 
limit in any way the characterization of other statements or information 
under other captions as cautionary statements for such purpose:

    -    Delays, difficulties or failure in obtaining regulatory approval 
         (including approval of its systems, procedures and facilities for 
         production) for the Company's products.  These may include, for 
         example, approval of the Company's Italian manufacturing facilities 
         and processes as satisfying regulatory requirements for production 
         of the Company's diphtheria, tetanus and genetically engineered 
         acellular pertussis and adjuvanted flu vaccines, approval for 
         Myotrophin-TM- for which additional clinical trials may be required 
         by the FDA, and approval for Quantiplex-TM- for HIV and follow-on 
         bDNA probe products, for which the FDA may require substantial 
         additional process and systems validation.

    -    Charges that may be incurred and accrued resulting from implementation
         of restructuring plans currently under consideration, including 
         possible disposal of excess manufacturing and other general facilities.

    -    Inability to maintain or initiate third party arrangements which 
         generate revenues, in the form of license fees, research and 
         development support, royalties, sales fees and other payments, in 
         return for rights in technology or products under development or 
         promotional or other services provided by the Company.

                                       18
<PAGE>

    -    The issuance and use of patents and proprietary technology by Chiron 
         and its competitors, including the possible negative effect on the 
         Company's ability to develop, manufacture and sell its products if 
         it is unable to obtain licenses to patents which may be required for 
         such products.

    -    Failure of corporate partners to commercialize successfully the 
         Company's products or to retain and expand the markets served by the 
         commercial collaborations; conflicts of interest, priorities and 
         commercial strategies which may arise between the Company and such 
         corporate partners, including conflicts as to the strategy for 
         realizing value arising from evolving opportunities.

    -    Delay, difficulty or inability on acceptable terms to resolve 
         conflicts with partners, including resolution with Ortho of Chiron's 
         ability to market hepatitis and retrovirus immunodiagnostic tests 
         that are under development for use on its ACS:Centaur-TM- immunoassay 
         system and resolution of the terms under which Chiron is continuing 
         to co-promote Aredia-TM- for Novartis.

    -    Delays or difficulties in developing and acquiring technology and 
         technical and managerial personnel to manufacture and/or deliver the 
         Company's products in commercial quantities at reasonable costs and 
         in compliance with applicable quality assurance and environmental 
         regulations and governmental permitting requirements.

    -    Possible changes in laws, regulations and guidelines of regulatory 
         agencies, which may affect the development and sales of certain of 
         the Company's products including, for example, off-label sales of 
         pharmaceuticals and research use only sales of diagnostic tests and 
         systems.

    -    The ability and willingness of customers to substitute competitive 
         products for the Company's products once other products for similar 
         indications are approved for marketing.

    -    Difficulties in obtaining key raw materials and supplies of 
         acceptable quality used in the manufacture of the Company's products.

    -    Increased costs of development, regulatory approval, manufacture, 
         sales, and marketing associated with the introduction of novel 
         products and fluctuation of such costs between periods.

    -    Difficulties in launching or marketing the Company's products, many 
         of which are novel products based on biotechnology, and 
         unpredictability of customer acceptance of such products.

    -    Further decline in the Betaseron-R- customer base in the U.S.; the 
         extent to which patients, once enrolled, remain compliant with the 
         prescribed treatment regimen and continue to regularly receive 
         Betaseron-R-; the impact of competing products, including other 
         beta interferon products; pricing, promotional and marketing 
         decisions by the Company's partner, Schering.

    -    Changes in the product mix of the Chiron-Ortho joint business, 
         whereby the proportion of higher margin HCV tests sold relative to 
         other lower margin products decreases; continued margin erosion of 
         HCV tests. 

    -    Continued increases in research and development spending in order to 
         develop new products and increase market share.

    -    Continued or increased pressure to reduce selling prices of the 
         Company's products.

    -    Underutilization of the Company's existing or new manufacturing 
         facilities or of any facility expansions, resulting in production 
         inefficiencies and higher costs; start-up costs and inefficiencies 
         and delays and increased depreciation costs in connection with the 
         start of production in new plants and expansions.

                                       19
<PAGE>

    -    The cost of acquiring in-process technology, either by license, 
         collaboration or purchase of another entity.

    -    Changes in the Company's plans involving the utilization of its 
         long-lived assets, including the Company's ability to find a 
         suitable use for its idle fill and finishing facility in Puerto Rico, 
         in response to changes in the projected level of demand for the 
         Company's products, product pricing, success of clinical trials, 
         timing of regulatory approval, introduction of competing products, 
         available information regarding contract manufacturing alternatives 
         and excess manufacturing capacity which currently exists.

    -    Increased financing costs resulting from the expanded use of debt 
         for operating and acquisition-related activities.

    -    Amount and rate of growth in Chiron's selling, general and 
         administrative expenses; and the impact of unusual or infrequent 
         charges resulting from Chiron's ongoing evaluation of its business 
         strategies and organizational structures, including the continued 
         costs of integration of newly acquired businesses.

    -    The acquisition of fixed assets and other assets, including 
         inventories and receivables; and the making or incurring of any 
         expenditures and expenses, including, among others, depreciation and 
         research and development expenses; any revaluation of assets, 
         including, among others, the Company's investments in the equity 
         securities of other companies with whom it collaborates, or related 
         expenses, and the amount of, and any changes to, tax rates.

    -    The ability or inability of Chiron to obtain, or hedge against, 
         foreign currency, foreign exchange rates and fluctuations in those 
         rates.

    -    The costs and other effects of legal and administrative cases and 
         proceedings (whether civil, such as product-related or 
         environmental, or criminal); settlements and investigations; 
         developments or assertions by or against Chiron relating to 
         intellectual property rights and licenses.

    -    Seasonal fluctuations in product sales and resulting gross margin 
         amounts.


                                       20
<PAGE>

ITEM 1.  LEGAL PROCEEDINGS.

            The Company is party to certain lawsuits, which are described
         in Part I, Item 3, "Legal Proceedings," on page 10 of the Company's
         Annual Report on Form 10-K for the year ended December 29, 1996. No
         material developments in the area of legal proceedings have occurred
         since such Form 10-K was filed, except as follows:

            BRADLEY.  On May 6, 1997, Bradley filed an appeal of the United 
         States District Court's dismissal of his Seconded Amended Complaint 
         with the United States Court of Appeals for the Federal Circuit.  
         Oral argument occurred on July 8, 1997 and a decision may be handed 
         down before year-end.

            BRILLIANT TRADING AND WOLFSON.  These shareholder actions relating 
         to the Viagene acquisition were dismissed on May 7, 1997 by the Court 
         of Chancery of the State of Delaware.

            CONNAUGHT.  On June 7, 1997, Connaught Laboratories, Limited 
         ("Connaught") filed an emergency proceeding with the Tribunale di 
         Siena, Italy, against Chiron S.p.A. seeking to enjoin production, 
         manufacture, and sale of TriAcelluvax-TM- (formerly Acelluvax DTP-TM-) 
         which Connaught alleges infringes its European Patent 527 753 (the 
         "'753 patent".)  The '753 patent claims allegedly relate to the 
         pertactin protein of BORDETELLA PERTUSSIS.  On June 24, 1997, the 
         Siena Court heard oral argument on Connaught's application and ordered
         further briefing.  Additional oral argument is expected to take place 
         in September 1997.  On June 17, 1997, Chiron S.p.A. filed a proceeding
         on the merits in the Tribunale di Milano, Italy, against Connaught.  
         Chiron's action challenges the validity of the '753 patent.  A 
         preliminary hearing on this nullity suit is expected to take place in 
         December 1997.  Connaught also is the owner of EP 322 115 (the 
         "'115 patent") relating to mutant pertussis toxins. On July 17, 1997, 
         Connaught filed suit in the Landgericht Dusseldorf, Germany, against 
         Chiron Behring GmbH, Chiron S.p.A., and Behringwerke AG asserting 
         infringement of the '115 patent.  Connaught seeks to prevent 
         introduction of TriAcelluvax-TM- in Germany.  Also, Connaught seeks 
         damages and an order enjoining Chiron S.p.A. from manufacturing and 
         selling TriAcelluvax-TM- in Italy.

            EVANS.  The action pending in the United States District Court 
         for the Eastern District of Texas was transferred to United States 
         District Court for the District of Delaware in April 1997, by 
         stipulation of the parties. Chiron has answered and filed a 
         counterclaim alleging the invalidity of two U.S. patents in suit 
         owned by Evans and which allegedly relate to the p69 protein of 
         BORDETELLA PERTUSSIS. Chiron seeks judgment declaring that its 
         products do not infringe any claims of these patents.  Chiron 
         further seeks a judgment declaring that the Evans' patents are 
         invalid and unenforceable.  No material events have occurred in the 
         litigation pending in the U.K., where trial is set to begin in 
         November 1997. Technical briefing has been completed in the Italian 
         litigation and a technical expert's report is expected in October 
         1997. In the '639 case, the District Court of The Hague issued a 
         decision on May 14, declaring, INTER ALIA, itself to have 
         jurisdiction to hear Chiron's claim for a declaratory judgment of 
         non-infringement on a pan-European basis. In the '726 case, Chiron 
         filed a Statement of Defense with the District Court of The Hague on 
         April 10.  The case was heard on July 15, 1997, and the Court issued 
         a declaration on July 22 wherein it refused Evans' request for a 
         pan-European injunction, found Evans' '726 patent unenforceable, and 
         declared that Evans had not established infringement of the patent by
         Chiron.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

           The Annual Meeting of Stockholders of Chiron Corporation was held 
         on May 15, 1997.  The following items were voted upon by the 
         stockholders:

    (a)  A proposal to elect directors of the Company for the term of office
         specified below.

         The persons listed below were the only nominees, and each of such 
         persons was elected, as indicated below: (i) three Class I directors 
         were elected to hold office for three years until 2000, and  (ii) one 
         Class III director was elected to hold office for two years until 1999.
         Each of such persons received the following number of votes:

                                       21
<PAGE>

                                           FOR             WITHHELD
                                           ---             --------
         CLASS I DIRECTORS
         -----------------

         Donald A. Glaser                  149,219,808     1,944,074
         Alex Krauer                       149,215,769     1,948,113
         Pieter J. Strijkert               149,236,466     1,927,416


         CLASS III DIRECTOR
         ------------------
         Paul L. Herrling                  149,226,008      1,937,874

         The terms of office of Lewis W. Coleman, Pierre E. Douaze, Edward E. 
         Penhoet, William J. Rutter, Henri Schramek and  Jack W. Schuler 
         continued after the meeting.  Effective June 30, 1997, Vaughn D. 
         Bryson, age 59, was appointed to fill the vacant position of a Class 
         II Independent Director for a term expiring at the annual meeting of 
         stockholders in 1998.  On July 16, 1997, Mr. Schramek passed away, 
         leaving a vacancy in the position of a Class II Independent Director.
         On August 5, 1997, the Company announced the resignation of Dennis L.
         Winger, senior vice president of finance and administration and 
         chief financial officer, effective August 31, 1997.

    (b)  A proposal to approve and adopt the Company's 1997 Employee Stock 
         Purchase Plan as set forth in the Chiron Corporation Proxy Statement 
         dated April 11, 1997, was approved by the stockholders.  The 
         following votes were cast as to such proposal:  For:  117,138,133; 
         Against: 6,892,964; Abstain:  456,624 and Broker Non-Votes:  
         26,676,161.

    (c)  A proposal to approve the amended Chiron 1991 Stock Option Plan to: 
         (i) increase the maximum number of shares that may be issued under 
         the Plan by 13 million shares to 50,262,347 shares; (b) increase by 
         28,673,531 shares the number of shares to be issued under incentive 
         stock options in order to permit all shares authorized to be issued 
         under the Plan (50,262,347) to be so issued; (c) authorize 
         discretionary grants of options and other awards to non-employee 
         directors; and (d) eliminate certain regulatory restrictions, 
         including restrictions on Plan amendments, as permitted by recent 
         amendments to Rule 16b-3 issued by the Securities and Exchange 
         Commission under Section 16(b) of the Securities Exchange Act of 
         1934, as set forth in the Chiron Corporation Proxy Statement dated 
         April 11, 1997, was approved by the stockholders. The following 
         votes were cast as to such proposal: For: 112,331,936; Against: 
         11,570,911;  Abstain:  584,874; Broker Non-Votes: 26,676,161.

    (d)  A proposal to ratify the selection of KPMG Peat Marwick LLP as 
         independent auditors for the Company for the fiscal year ending 
         December 31, 1997, was approved by the stockholders. The following 
         votes were cast as to such proposal: For: 150,662,310; Against: 
         250,437; Abstain: 251,135; Broker Non-Votes: 0.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K. 

    (a)  EXHIBITS. 

           EXHIBIT
           NUMBER                      EXHIBIT
           -------

           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, 
                     as filed with the Office of the Secretary of State of 
                     Delaware on August 17, 1987, incorporated by reference 
                     to Exhibit 3.01 of the Registrant's Form 10-K report for 
                     fiscal year 1996.


                                       22
<PAGE>

                     report for fiscal 1996.

           3.02      Certificate of Amendment of Restated Certificate of 
                     Incorporation of the Registrant, as filed with the 
                     Office of the Secretary of State of Delaware on December 
                     12, 1991, incorporated by reference to Exhibit 3.02 of 
                     the Registrant's Form 10-K report for fiscal year 1996.

           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.

           3.04      Certificate of Amendment of Restated Certificate of 
                     Incorporation of the Registrant, as filed with the 
                     Office of the Secretary of State of Delaware on May 22, 
                     1996, incorporated by reference to Exhibit 3.04 of the 
                     Registrant's Form 10-Q report for the period ended June 
                     30, 1996.

           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       Second Supplemental Indenture, dated as of March 25, 
                     1996, by and among the Registrant, Cetus Oncology 
                     Corporation (formerly Cetus Corporation), and Bankers 
                     Trust Company, incorporated by reference to Exhibit 4.03 
                     of the Registrant's Form 10-Q report for the period 
                     ended June 30, 1996.

          4.04       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.

          4.05       $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).

          4.06       $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.


                                       23
<PAGE>

         10.02       First Amendment to Lease between Registrant and BGR
                     Associates, a California limited partnership, incorporated
                     by reference to Exhibit 10.02 of the Registrant's Form 10-K
                     report for fiscal year 1995.

         10.03       Second Amendment to Lease, dated as of May 9, 1996, between
                     BGR Associates, a California limited partnership, as lessor
                     and Registrant, as lessee [BGR I Property Building NQ
                     Lease], incorporated by reference to Exhibit 10.03 of the
                     Registrant's Form 10-K report for fiscal year 1996.

         10.04       Third Amendment to Triple Net Lease, dated as of January 
                     31, 1997, between BGR Associates, a California limited 
                     partnership, as lessor and Registrant, as lessee 
                     [BGR I Property Building NQ Lease], incorporated by 
                     reference to Exhibit 10.04 of the Registrant's Form 10-K 
                     report for fiscal year 1996.

         10.05       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.

         10.06       First Amendment to Lease between Registrant and BGR 
                     Associates II, a California limited partnership, dated 
                     as of March 15, 1995, incorporated by reference to 
                     Exhibit 10.04 of the Registrant's Form 10-K report for 
                     fiscal year 1995.

         10.07       Second Amendment to Lease, dated as of May 9, 1996, between
                     BGR Associates II, a California limited partnership, as 
                     lessor and Registrant, as lessee, incorporated by 
                     reference to Exhibit 10.07 of the Registrant's Form 10-K 
                     report for fiscal year 1996.

         10.08       Third Amendment to Triple Net Lease, dated as of January
                     31, 1997, between BGR Associates II, a California limited 
                     partnership, as lessor and Registrant, as lessee 
                     [BGR II Property Lease], incorporated by reference to 
                     Exhibit 10.08 of the Registrant's Form 10-K report for 
                     fiscal year 1996.

         10.09       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.

         10.10       Second Amendment to Lease dated as of March 15, 1995, 
                     between BGR Associates, a California limited 
                     partnership, and Registrant, incorporated by reference 
                     to Exhibit 10.73 of the Registrant's Form 10-K report 
                     for fiscal year 1995.

         10.11       Third Amendment to Lease, dated as of May 9, 1996, 
                     between BGR Associates, a California limited 
                     partnership, as lessor and Registrant, as


                                       24
<PAGE>

                     lessee [BGR I Property Building R Lease], incorporated by
                     reference to Exhibit 10.11 of the Registrant's Form 10-K
                     report for fiscal year 1996.

         10.12       Fourth Amendment to Triple Net Lease, dated as of January
                     31, 1997, between BGR Associates, a California limited
                     partnership, as lessor and Registrant, as lessee [BGR I
                     Property Building R Lease], incorporated by reference to
                     Exhibit 10.12 of the Registrant's Form 10-K report for
                     fiscal year 1996.

         10.13       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.

         10.14       First Amendment to Triple Net Lease, dated as of September 
                     10, 1996, between BGR Associates III, a California 
                     limited partnership, as lessor and Registrant, as 
                     lessee, incorporated by reference to Exhibit 10.14 of 
                     the Registrant's Form 10-K report for fiscal year 1996.

         10.15       Second Amendment to Triple Net Lease, dated as of 
                     January 31, 1997, between BGR Associates III, a 
                     California limited partnership, as lessor and 
                     Registrant, as lessee [BGR III Lease], incorporated by 
                     reference to Exhibit 10.15 of the Registrant's Form 10-K 
                     report for fiscal year 1996.

         10.16       Assignment of Lessor Claims, dated as of January 31, 
                     1997, between BGR Associates III, a California limited 
                     partnership, as assignor and Registrant, as assignee, 
                     incorporated by reference to Exhibit 10.16 of the 
                     Registrant's Form 10-K report for fiscal year 1996.

         10.17       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.

         10.18       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.

         10.19       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.

         10.20       Amended and Restated Revolving Credit Agreement dated as 
                     of March 20, 1997, between Chiron Corporation and Swiss 
                     Bank Corporation, New York and Cayman Island Branches.


                                       25
<PAGE>

         10.21       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.

         10.22       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.

         10.23       Chiron 1991 Stock Option Plan, as amended, incorporated 
                     by reference to Annex 2 of the Registrant's Proxy 
                     Statement dated April 11, 1997.*

         10.24       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.*

         10.25       Form of Automatic Share Right Agreement, Chiron 1991 Stock
                     Option Plan, as amended, incorporated by reference to 
                     Exhibit 10.19 of Registrant's Form 10-Q report for the 
                     period ended September 29, 1996.*

         10.26       Forms of Option Agreements, Cetus Corporation Amended 
                     and Restated Common Stock Option Plan, incorporated by 
                     reference to Exhibit 10.27 of Registrant's Form 10-Q 
                     report for the period ended March 30, 1997.*

         10.27       Forms of Supplemental Letter concerning the assumption of
                     Cetus Corporation options by the Registrant, 
                     incorporated by reference to Exhibit 10.27 of 
                     Registrant's Form 10-K report for fiscal year 1996.*

         10.28       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.

         10.29       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.

         10.30       Revolving Credit Agreement, dated as of July 12, 1996, 
                     between Registrant and Bank of America National Trust 
                     and Savings Association, incorporated by reference to 
                     Exhibit 10.24 of the Registrant's Form 10-Q report for 
                     the period ended June 30, 1996.


                                       26
<PAGE>

         10.31       First Amendment to Revolving Credit Agreement, dated as 
                     of July 11, 1997, between Registrant and Bank of America 
                     National Trust and Savings Association.

         10.32       Form of Debenture Purchase Agreement between the 
                     Registrant and Ciba-Geigy, Limited, a Swiss corporation, 
                     dated June 22, 1990, incorporated by reference to 
                     Exhibit 10.25 of the Registrant's Form 10-K report for 
                     fiscal year 1994.

         10.33       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.

         10.34       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.

         10.35       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.

         10.36       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.

         10.37       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.

         10.38       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.

         10.39       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.

         10.40       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.

         10.41       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.


                                       27
<PAGE>


         10.42       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.*

         10.43       Agreement, dated November 27, 1996, between Ciba-Geigy 
                     Limited and the Registrant, incorporated by reference to 
                     Exhibit 10.92 of the Registrant's Form 8-K report filed 
                     with the Commission on December 17, 1996.

         10.44       Amendment dated March 26, 1997, to Agreement dated 
                     November 27, 1996, between Novartis Pharma AG and the 
                     Registrant, incorporated by reference to Exhibit 10.44 
                     of the Registrant's Form 10-Q report for the period 
                     ended March 30, 1997.

         10.45       Letter Agreement, dated May 6, 1996, as to consent to 
                     assignment of contracts to Novartis Limited, among the 
                     Registrant, Ciba-Geigy Limited, Ciba-Geigy Corporation 
                     and Ciba Biotech Partnership, Inc., incorporated by 
                     reference to Exhibit 10.43 of the Registrant's Form 10-K 
                     report for fiscal year 1996. 

         10.46       Letter Agreement, dated December 19, 1996, regarding 
                     compensation paid by the Registrant for director 
                     services performed by employees of Ciba-Geigy Limited, 
                     incorporated by reference to Exhibit 10.44 of the 
                     Registrant's Form 10-K report for fiscal year 1996.*

         10.47       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.*

         10.48       Lease commencing March 1, 1987, between EuroCetus B.V. 
                     and the Municipal Land Company of the City of Amsterdam 
                     (Translation), incorporated by reference to Exhibit 
                     10.40 of the Registrant's Form 10-K report for fiscal 
                     year 1995.

         10.49       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.

         10.50       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.


                                       28
<PAGE>

         10.51       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.

         10.52       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.

         10.53       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 10.51 of Registrant's Form 10-K 
                     report for fiscal year 1996.

         10.54       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.*

         10.55       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.*

         10.56       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.

         10.57       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.]

         10.58       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.

         10.59       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.

         10.60       Description of Executive Officer Variable Compensation 
                     Program, incorporated by reference to Exhibit 10.58 of 
                     the Registrant's Form 10-K report for fiscal year 1996.*


                                       29
<PAGE>

         10.61       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.*

         10.62       Amended and Restated License Agreement effective April 1,
                     1996, between Ciba Corning Diagnostics Corp., a Delaware
                     corporation, and Bioanalysis Limited, a corporation
                     organized under the laws of the United Kingdom of Great
                     Britain and Northern Ireland, incorporated by reference to
                     Exhibit 10.56 of the Registrant's Form 10-Q report for the
                     period ended September 29, 1996. [Certain confidential
                     information has been omitted from the Agreement and filed
                     separately with the Securities and Exchange Commission
                     pursuant to a request by Registrant for confidential
                     treatment pursuant to Rule 24b-2.]

         10.63       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.

         10.64       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.

         10.65       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.*

         10.66       Letters dated May 6, 1996 and May 25, 1996 to Magnus 
                     Lundberg, incorporated by reference to Exhibit 10.61 of 
                     the Registrant's Form 10-Q report for the period ended 
                     September 29, 1996.*

         10.67       Letter dated January 8, 1997 to Magnus Lundberg, 
                     incorporated by reference to Exhibit 10.65 of the 
                     Registrant's Form 10-K report for fiscal year 1996.*

         10.68       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.

         10.69       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.]


                                       30
<PAGE>

          10.70      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.]

         10.71       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.]

          10.72      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.]

          10.73      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.]

         10.74       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.]

         10.75       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.]

         10.76       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.


                                       31
<PAGE>

         10.77       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.]

         10.78       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.]

         10.79       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, incorporated by reference to
                     Exhibit 10.80 of the Registrant's Form 10-K report for
                     fiscal year 1995. [Certain information has been omitted
                     from the Agreement and filed separately with the
                     Securities and Exchange Commission pursuant to a request
                     by Registrant for confidential treatment pursuant to Rule
                     24b-2.  The omitted confidential information has been
                     identified by the following statement: "Confidential
                     Treatment Requested".]

         10.80       Agreement between Ciba-Geigy Limited and the Registrant 
                     made November 15, 1995, incorporated by reference to 
                     Exhibit 10.81 of the Registrant's Form 10-K report for 
                     fiscal year 1995. [Certain information has been omitted
                     from the Agreement and filed separately with the
                     Securities and Exchange Commission pursuant to a request
                     by Registrant for confidential treatment pursuant to Rule
                     24b-2.  The omitted confidential information has been
                     identified by the following statement: "Confidential
                     Treatment Requested".]

         10.81       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.

         10.82       Promissory Note, as amended and restated, dated January 1, 
                     1995 by Ciba Corning Diagnostics Corp., incorporated by 
                     reference to Exhibit 10.83 of the Registrant's Form 10-K 
                     report for fiscal year 1995.

         10.83       Commercial lease between Domilyon Corporation and 
                     Domilens Laboratories and Amendment No. 1 to Commercial 
                     Lease dated May 9, 1994, incorporated by reference to 
                     Exhibit 10.84 of the Registrant's Form 10-K report for 
                     fiscal year 1995.


                                       32
<PAGE>

         10.84       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, incorporated by reference to 
                     Exhibit 10.85 of the Registrant's Form 10-K report for 
                     fiscal year 1995. [Certain information has been omitted
                     from the Agreements and filed separately with the
                     Securities and Exchange Commission pursuant to a request
                     by Registrant for confidential treatment pursuant to Rule
                     24b-2.  The omitted confidential information has been
                     identified by the following statement: "Confidential
                     Treatment Requested".]

         10.85       Reimbursement Agreement, dated as of June 28, 1996, 
                     between Ciba-Geigy Limited, a Swiss corporation, and the 
                     Registrant, incorporated by reference to Exhibit 10.94 
                     of the Registrant's Form 10-Q report for the period 
                     ended June 30, 1996.

         10.86       Reimbursement Agreement, dated as of May 20, 1996, 
                     between Ciba-Geigy Limited, a Swiss corporation, and the 
                     Registrant, incorporated by reference to Exhibit 10.95 
                     of the Registrant's Form 10-Q report for the period 
                     ended June 30, 1996.

         10.87       Letter Agreement between the Registrant and Dr. Richard 
                     W. Barker, dated May 1, 1996, incorporated by reference 
                     to Exhibit 10.88 of the Registrant's Form 10-Q report 
                     for the period ended June 30, 1996.*

        10.88        Revolving Credit Agreement, dated as of March 23, 1996, 
                     between the Registrant and Morgan Guaranty Trust Company 
                     of New York, incorporated by reference to Exhibit 10.89 
                     of the Registrant's Form 10-Q report for the period 
                     ended June 30, 1996.

        10.89        Amendment No. 1 to Revolving Credit Agreement, dated as 
                     of March 18, 1997, between the Registrant and Morgan 
                     Guaranty Trust Company of New York.

        10.90        Purchase and Assignment Agreement between Behringwerke 
                     Aktiengesellschaft, on the one side, and 31.CORSA 
                     Verwaltungsgesellschaft mbH and the Registrant, on the 
                     other side, dated February 17, 1996, Closing Agreement, 
                     by and among Behringwerke Aktiengesellschaft, on the one 
                     side, and the Registrant and 31.CORSA 
                     Verwaltungsgesellschaft mbH, on the other side, dated 
                     June 29, 1996 and Letter Agreement dated June 29, 1996 
                     between the Registrant, 31.CORSA Verwaltungsgesellschaft 
                     mbH and Behringwerke Aktiengesellschaft, incorporated by 
                     reference to Exhibit 10.86 of the Registrant's Form 10-Q 
                     report for the period ended September 29, 1996. [Certain
                     confidential information has been omitted from the
                     Agreements and filed separately with the Securities and
                     Exchange Commission pursuant to a request by Registrant
                     for confidential treatment pursuant to Rule 24b-2.]

         10.91       Royalty Projects Agreement by and between Ciba Corning 
                     Diagnostics Corp., a Delaware corporation, and 
                     Ciba-Geigy Limited, a Swiss corporation, incorporated by 
                     reference to Exhibit 10.87 of the Registrant's Form 10-Q 


                                       33
<PAGE>

                     report for the period ended September 29, 1996. [Certain 
                     confidential information has been omitted from the 
                     Agreement and filed separately with the Securities 
                     and Exchange Commission pursuant to a request by 
                     Registrant for confidential treatment pursuant to 
                     Rule 24b-2.]

         10.92       Purchase Agreement between BNP Leasing Corporation and 
                     the Registrant, dated June 28, 1996, incorporated by 
                     reference to Exhibit 10.90 of the Registrant's Form 10-Q 
                     report for the period ended June 30, 1996.

         10.93       Lease Agreement between BNP Leasing Corporation and the 
                     Registrant, dated June 28, 1996, incorporated by 
                     reference to Exhibit 10.91 of the Registrant's Form 10-Q 
                     report for the period ended June 30, 1996.

         10.94       Ground Lease between BNP Leasing Corporation and the 
                     Registrant, dated June 28, 1996, incorporated by 
                     reference to Exhibit 10.92 of the Registrant's Form 10-Q 
                     report for the period ended June 30, 1996.

         10.95       Reimbursement Agreement, dated as of July 12, 1996, 
                     between Ciba-Geigy Limited, a Swiss corporation, and the 
                     Registrant, incorporated by reference to Exhibit 10.93 
                     of the Registrant's Form 10-Q report for the period 
                     ended June 30, 1996.

         10.96       Form of Performance Unit Agreement, Chiron 1991 Stock 
                     Option Plan, as amended, incorporated by reference to 
                     Exhibit 10.94 of the Registrant's Form 10-K report for 
                     fiscal year 1996.*

         11          Statement of Computation of Earnings per Share.

         27          Financial Data Schedule.
         ________________________ 
         * Management contract, compensatory plan or arrangement.

(b) Reports on Form 8-K

    There were no reports on Form 8-K filed during the quarter ended
June 29, 1997.


                                       34
<PAGE>

                              CHIRON CORPORATION

                                 June 29, 1997




                                  SIGNATURES


    Pursuant to the requirements 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.



                                       CHIRON CORPORATION



DATE:  AUGUST 6, 1997                  BY: /S/ EDWARD E. PENHOET
       --------------                      ------------------------
                                           Edward E. Penhoet, Ph.D.
                                           President and Chief
                                           Executive Officer



DATE:  AUGUST 6, 1997                  BY:  /S/ DENNIS L. WINGER    
       --------------                      -------------------------
                                           Dennis L. Winger
                                           Senior Vice President, Finance
                                           and Administration, Chief Financial
                                           Officer, and Principal Accounting
                                           Officer


                                       35