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

                                    FORM 10-Q

(Check One)
     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                                       OR

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

For Quarterly Period Ended October 1, 1995   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 October 1, 1995
     -----                                   ------------------------------

Common Stock, $0.01 par value                          41,556,655

<PAGE>


                               CHIRON CORPORATION
                                TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                        PAGE NO.
                                                                        --------

PART I.   FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS

          Consolidated Balance Sheet as of
          September 30, 1995 and December 31, 1994 . . . . . . . . . . . . . . 3

          Consolidated Statement of Operations for the
          three months and nine months ended September 30, 1995 and 1994 . . . 4

          Consolidated Statement of Cash Flows for the
          nine months ended September 30, 1995 and 1994  . . . . . . . . . . . 5

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

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . . . . . . .14


PART II.  OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . .23

     ITEM 2.  CHANGES IN SECURITIES. . . . . . . . . . . . . . . . . . . . . .23

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . . .23

     ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS . . . . . . .23

     ITEM 5.  OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .23

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . .23


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

                                        2
<PAGE>

                               CHIRON CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                     ASSETS
                                 (IN THOUSANDS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                            September 30,     December 31,
                                                                 1995             1994
                                                            -------------     ------------
                                                             (Unaudited)
<S>                                                         <C>               <C>
Current assets:
  Cash and cash equivalents                                 $     69,046      $     84,876
  Short-term investments in marketable debt securities            79,991           137,619
                                                            ------------      ------------
      Total cash and short-term investments                      149,037           222,495
  Accounts receivable                                            247,948           140,476
  Inventories                                                    161,518            47,592
  Other current assets                                            43,486            23,252
                                                            ------------      ------------
      Total current assets                                       601,989           433,815
Noncurrent investments in marketable debt securities              88,129           171,328
Property, equipment and leasehold improvements, at cost:
  Land and buildings                                             202,425            60,930
  Laboratory, production and office equipment                    271,335           140,438
  Leasehold improvements                                          97,561            82,145
  Construction in progress                                        55,354            78,998
                                                            ------------      ------------
                                                                 626,675           362,511
  Less:  accumulated depreciation and amortization               125,784            76,337
                                                            ------------      ------------
    Net property, equipment and leasehold improvements           500,891           286,174
Intangible assets, net                                           161,143            85,803
Investments in equity securities and affiliated companies         44,449            51,425
Other assets                                                      45,393            21,197
                                                            ------------      ------------
                                                            $  1,441,994      $  1,049,742
                                                            ------------      ------------
                                                            ------------      ------------

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                          $     66,911      $     27,778
  Accrued compensation and related expenses                       50,914            24,010
  Short-term borrowings                                           60,181                --
  Current portion of unearned revenue                             20,604             1,544
  Current portion of long-term debt                                5,843             3,461
  Taxes payable                                                   28,759            10,060
  Other current liabilities                                      127,513            52,788
                                                            ------------      ------------
    Total current liabilities                                    360,725           119,641
Long-term debt                                                   412,322           338,061
Other noncurrent liabilities                                      35,276            19,409
Commitments and contingencies
Stockholders' equity:
  Common stock                                                       407               334
  Common stock to be issued                                            9                --
  Additional paid-in capital                                   1,633,769         1,161,942
  Additional paid-in capital-common stock to be issued            82,850                --
  Accumulated deficit                                         (1,105,292)         (575,236)
  Cumulative foreign currency translation adjustment                 (99)           (1,719)
  Unrealized gain (loss) from investments                         22,027           (12,690)
                                                            ------------      ------------
    Total stockholders' equity                                   633,671           572,631
                                                            ------------      ------------
                                                            $  1,441,994      $  1,049,742
                                                            ------------      ------------
                                                            ------------      ------------
</TABLE>

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

                                       3

<PAGE>

                               CHIRON CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                 Three Months Ended             Nine Months Ended
                                                            ----------------------------  ----------------------------
                                                            September 30,  September 30,  September 30,  September 30,
                                                                 1995           1994           1995           1994
                                                            -------------  -------------  -------------  -------------
<S>                                                         <C>            <C>            <C>            <C>
Revenues:
  Product sales, net                                        $    230,311   $     81,837   $    662,553   $    187,653
  Equity in earnings of unconsolidated
   joint businesses                                               16,898         24,591         56,436         55,699
  Collaborative agreement revenues                                18,346         16,453         28,868         57,288
  Other revenues                                                   9,133          5,326         26,828         19,059
                                                            ------------   ------------   ------------   ------------
     Total revenues                                              274,688        128,207        774,685        319,699

Expenses:
  Research and development                                        88,689         44,055        259,649        119,554
  Cost of sales                                                  102,513         36,361        301,343         86,814
  Selling, general and administrative                             85,280         27,972        258,539         77,547
  Write-off of purchased in-process technologies                 132,535             --        364,951             --
  Costs related to Ciba transaction                                   --             --         49,478             --
  Restructuring and reorganization costs                              --             --         39,055             --
  Other operating expenses                                         3,536          1,183          9,323          3,198
                                                            ------------   ------------   ------------   ------------
     Total expenses                                              412,553        109,571      1,282,338        287,113
                                                            ------------   ------------   ------------   ------------

Income (loss) from operations                                   (137,865)        18,636       (507,653)        32,586

Other income (expense), net                                       (2,781)           248         (6,281)           957
                                                            ------------   ------------   ------------   ------------

Income (loss) before income taxes                               (140,646)        18,884       (513,934)        33,543

Provision for income taxes                                         4,461          6,317         16,122         11,049
                                                            ------------   ------------   ------------   ------------

Net income (loss)                                           $   (145,107)  $     12,567   $   (530,056)  $     22,494
                                                            ------------   ------------   ------------   ------------
                                                            ------------   ------------   ------------   ------------

Net income (loss) per share                                 $     ( 3.59)  $       0.37   $     (13.18)  $       0.66
                                                            ------------   ------------   ------------   ------------
                                                            ------------   ------------   ------------   ------------
Weighted average number of shares
used in computing per share amounts                               40,429         34,110         40,210         34,251
                                                            ------------   ------------   ------------   ------------
                                                            ------------   ------------   ------------   ------------

</TABLE>

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

                                       4
<PAGE>

                               CHIRON CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  Nine Months Ended
                                                            ----------------------------
                                                            September 30,  September 30,
                                                                 1995           1994
                                                            -------------  -------------
<S>                                                         <C>            <C>
Cash flows from operating activities:
  Net income (loss)                                         $   (530,056)  $     22,494
  Adjustments to reconcile net income (loss)
    to net cash provided by (used in) operating
    activities:
      Write-off of purchased in-process technologies             364,951             --
      Reserves and other adjustments                              30,670         12,663
      Depreciation and amortization                               67,761         33,541
      Undistributed earnings of affiliates                        (2,355)        (4,350)
      Changes, excluding effects of acquisitions, to:
        Accounts receivable                                       42,300        (30,629)
        Inventories                                              (36,720)        (7,873)
        Other current assets                                      (4,005)        (9,958)
        Accounts payable                                          (7,151)       (10,340)
        Current portion of unearned revenue                        5,727        (11,050)
        Accrued compensation and related expenses                 (1,021)        (1,152)
        Taxes payable                                             10,961         11,042
        Payable to Biocine                                            --         (2,040)
        Other current liabilities                                 26,352         (3,174)
        Other noncurrent liabilities                             (20,428)         2,517
                                                            ------------   ------------
          Net cash provided by (used in) operating
            activities                                           (53,014)         1,691
Cash flows from investing activities:
  Purchase of investments in marketable debt securities         (122,177)      (150,886)
  Sale of investments in marketable debt securities              278,919        183,920
  Capital expenditures                                           (70,559)       (81,411)
  Acquisition of IOLAB, net of cash acquired                     (96,013)            --
  Cash acquired from the Ciba acquisitions,
    net of cash paid                                              14,225             --
  Acquisition of Viagene, net of cash acquired                   (28,590)            --
  Acquisition of Technolas, net of cash acquired                  (2,255)            --
  Acquisition of Domilens, net of cash acquired                       --        (17,407)
  Investments in equity securities and affiliates                 (5,650)       (18,862)
  Distributions from affiliates                                       --            947
  Increase in other assets                                          (547)       (12,029)
                                                            ------------   ------------
          Net cash used in investing activities                  (32,647)       (95,728)
Cash flows from financing activities:
  Borrowings under line of credit arrangements                    16,769             --
  Repayment of notes payable and capital leases                   (3,017)        (4,004)
  Proceeds from capital contribution from Ciba                    24,845             --
  Proceeds from issuance of common stock                          30,630         15,758
                                                            ------------   ------------
          Net cash provided by financing activities               69,227         11,754
                                                            ------------   ------------
Effect of exchange rate changes on cash and
  cash equivalents                                                   604             --
                                                            ------------   ------------
          Net decrease in cash and cash equivalents              (15,830)       (82,283)
Cash and cash equivalents at beginning of the period              84,876        156,516
                                                            ------------   ------------
Cash and cash equivalents at end of period                  $     69,046   $     74,233
                                                            ------------   ------------
                                                            ------------   ------------

</TABLE>

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

                                       5

<PAGE>


                               CHIRON CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1995
-------------------------------------------------------------------------------

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     The information at September 30, 1995, and for the periods ended September
     30, 1995 and 1994, is unaudited, but includes all normal recurring
     adjustments which Chiron's management believes to be necessary for fair
     presentation of the periods presented.  The consolidated balance sheet
     amounts at December 31, 1994 have been derived from audited financial
     statements.  Certain 1994 balances have been reclassified to conform to the
     1995 presentation.  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 31, 1994, and with Amendment No. 1 to the Company's filing on Form
     8-K dated January 4, 1995.

     The consolidated financial statements include the accounts of the Company
     and its subsidiaries. Investments in joint ventures, partnerships and
     interests in other companies in which Chiron has an equity interest of 50
     percent or less are accounted for by the equity method or cost method, as
     appropriate.  All significant intercompany balances and transactions have
     been eliminated.

     FISCAL YEAR

     Effective for fiscal year 1995, the Company adjusted its fiscal year end
     from December 31 to the 52 or 53-week period that ends on the Sunday
     nearest December 31.  As a result, the third quarter of 1995 represents the
     thirteen-week period ended October 1, 1995.  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 fair value.  Inventories consist of the following:

<TABLE>
<CAPTION>

                                   SEPTEMBER 30,        DECEMBER 31,
                                        1995                1994
                                   -------------       -------------
                                             (IN MILLIONS)
          <S>                      <C>                 <C>
          Finished goods           $      90           $      24
          Work in process                 31                   9
          Raw materials                   41                  15
                                   ---------           ---------
                                   $     162           $      48
                                   ---------           ---------
                                   ---------           ---------

</TABLE>

     INCOME TAXES

     Income tax expense for the quarters ended September 30, 1995 and 1994
     includes a provision for federal, state and foreign taxes based on the
     annual estimated effective rates applicable to certain of the Company's
     subsidiaries.

                                        6

<PAGE>

     PER SHARE DATA

     Per share information is based on the weighted average number of common
     shares and dilutive common share equivalents outstanding.  Shares issuable
     upon the exercise of stock options and certain warrants are included in the
     calculations, utilizing the treasury stock method, to the extent they are
     dilutive.  Shares assumed to be issued upon conversion of the Company's
     convertible debentures and certain warrants are not included since their
     inclusion would be antidilutive.  Fully diluted per share data has not been
     presented as the amount would not differ materially from primary per share
     data.

     REVENUE RECOGNITION

     Revenue from product sales consists of shipments of diagnostic materials
     and instruments, ophthalmic products, therapeutics and other biologicals
     and is generally recognized upon shipment.  Revenue from service contracts
     is recognized ratably over the life of the contract.  Revenue from the sale
     of equipment under sales-type leases is recognized at the inception of the
     lease.  All of the above revenues are included in "Product sales, net" in
     the Consolidated Statement of Operations.

2.   BUSINESS COMBINATIONS

     TRANSACTION WITH CIBA-GEIGY LTD. AND AFFILIATES ("CIBA")

     On January 1, 1995, Chiron entered into a series of agreements with Ciba,
     including an investment agreement, a cooperation and collaboration
     agreement and a governance agreement (collectively "Agreements").  Ciba
     acquired a 49.9 percent ownership interest in Chiron common stock (now
     approximately 48 percent), partially through a tender offer for
     approximately 38 percent of Chiron's outstanding common stock for $117 per
     share.  At the same time, Chiron acquired all of the outstanding common
     stock of Ciba Corning Diagnostics Corp. ("CCD") and Ciba's interests in
     The Biocine Company (subsequently renamed "Chiron Biocene Company,"
     hereinafter referred to as "Chiron Biocene Company") and JV Vax B.V.
     (a Netherlands company which owns Biocine S.p.A.) in exchange for 6.6
     million newly-issued Chiron common shares and a cash payment of $24
     million.  These two acquisitions of Chiron common stock by Ciba, together
     with Ciba's prior holdings of approximately 1.4 million shares, result in
     the aforementioned 49.9 percent ownership of the Company's common stock.

     Under the terms of the Agreements, Ciba is entitled to name three new
     members to Chiron's Board of Directors and has limited rights to review and
     approve certain Chiron transactions.  In connection with the Agreements,
     Ciba has agreed to guarantee $425 million of new debt for Chiron and has
     agreed to provide $250 million (which may be increased up to $300 million
     subject to certain reductions in the debt guarantee) over five years in
     support of research at Chiron, and Chiron has the option of issuing up to
     $500 million of new equity to Ciba.

     The acquisitions of CCD and Ciba's interests in Chiron Biocine Company and
     JV Vax B.V. (the "Acquisitions") were accounted for under the purchase
     method of accounting.  The purchase price of approximately $433 million was
     allocated to the acquired assets and assumed liabilities based upon their
     estimated fair value on the acquisition date. The fair value of the net
     assets acquired in the Acquisitions, including in-process technology, was
     estimated based on an independent valuation of the acquired net assets.
     The aggregate purchase price of approximately $433 million was less than
     the fair value of the net assets acquired by approximately $58 million.
     This amount was ratably allocated as a reduction of the noncurrent assets
     of the acquired companies.    In connection with the Acquisitions,
     liabilities were assumed as follows:

                                        7

<PAGE>

<TABLE>
<CAPTION>

                                                       (IN MILLIONS)
          <S>                                          <C>
          Fair value of assets acquired                  $   696
          Common stock issued                               (408)
          Cash paid                                          (24)
          Acquisition costs                                   (1)
                                                         -------
          Liabilities assumed                            $   263
                                                         -------
                                                         -------

</TABLE>

     As required under generally accepted accounting principles, Chiron
     recognized as an expense the amount allocated to in-process technology in
     the first nine months of 1995.  This resulted in a noncash charge against
     earnings of $223 million.  Other transaction-related charges totaling $50
     million related to employee payments and the related taxes, and legal and
     investment advisor fees were also recognized as expenses in the first nine
     months of 1995.  Ciba agreed to reimburse the Company $25 million for a
     portion of the employee payments and such reimbursement has been recorded
     as a capital contribution.  Other purchased intangible assets of
     approximately $34 million consisting of a customer list and base technology
     are being amortized over their estimated useful lives of 10 to 15 years,
     using the straight-line method.

     The results of operations of CCD, JV Vax B.V. and Chiron Biocine Company
     are included in Chiron's consolidated operating results from January 1,
     1995 forward.  Chiron's interest in the operating results of JV Vax B.V.
     and Chiron Biocine Company were included in the Company's 1994 operating
     results under the equity method of accounting.

     During the third quarter, Chiron and Ciba entered into an investment,
     research support and marketing agreement to utilize research funding
     provided by Ciba, as discussed above.  Under the terms of the agreement,
     Ciba will fund from time to time, at Chiron's request, research and
     development efforts for certain adult vaccines currently under
     development.  In return, Ciba will receive an interest in a stream of
     variable royalties in potential worldwide sales and also in promotional
     rights in countries other than those in North America and Europe, for such
     vaccines.  The interests in royalties are to be acquired by Ciba
     through ownership of a newly organized subsidiary of Chiron.  Royalties
     will be paid, on a country by country basis, for the later of ten years or
     to the date of expiration of applicable product patents.  Royalties
     received prior to the year 2000 will be reinvested in funding ongoing
     research and development of the vaccines.

     Under the terms of the agreement, Chiron was granted an option to
     repurchase Ciba's interest, at cost plus an agreed-upon return.  In
     addition, if Chiron chooses to exercise the option, Ciba will be granted
     certain marketing rights in countries other than those in North America
     and Europe with respect to the adult vaccines developed from the funding.
     Pursuant to the agreement, Chiron received $12 million of funding from
     Ciba during the third quarter, which Chiron recorded as collaborative
     agreement revenues. Prior to further funding by Ciba, however, Chiron and
     Ciba have agreed to negotiate a restructuring of the agreement to include
     royalty rights for one or more additional Chiron products.

     ACQUISITION OF IOLAB

     On March 31, 1995, Chiron Vision acquired the surgical division of IOLAB
     from Johnson & Johnson.  The acquisition was accounted for under the
     purchase method of accounting.  The purchase price of approximately $96
     million was allocated to the acquired assets and assumed liabilities based
     upon their estimated fair value on the acquisition date.  The fair value of
     the net assets acquired, including in-process technology, was estimated
     based on independent valuations of the acquired net assets.  In connection
     with the acquisition, liabilities were assumed as follows:

                                        8


<PAGE>

<TABLE>
<CAPTION>

                                                       (IN MILLIONS)
          <S>                                          <C>
          Fair value of assets acquired                   $  109
          Cash paid                                          (95)
          Acquisition costs                                   (1)
                                                         -------
          Liabilities assumed                            $    13
                                                         -------
                                                         -------

</TABLE>

     The amount allocated to in-process technology of $10 million was charged
     against earnings in the first quarter of 1995.  Other purchased intangible
     assets of approximately $46 million consisting of base technology,
     goodwill, trade name and a customer list are being amortized over their
     estimated useful lives of 10 to 15 years using the straight-line method.
     IOLAB's results of operations are included in Chiron's results of
     operations from March 31, 1995, forward.

     Also, the Company recorded additional charges for restructuring and
     integration-related expenses totaling $17 million in the first quarter of
     1995.  Of this amount, approximately $8 million was related to write-downs
     of assets.  The remaining $9 million consists primarily of $6 million in
     employee costs and $3 million for the cost of lease terminations.  The
     majority of the accrued costs are expected to be paid over the next two
     years.

     ACQUISITION OF VIAGENE, INC. ("VIAGENE")

     On September 29, 1995, Chiron acquired all the outstanding common stock of
     Viagene in exchange for approximately $36 million in cash and 916,000
     shares of Chiron common stock.  Additionally, on September 29, 1995,
     unexercised options to purchase Viagene common stock were converted into
     options to purchase approximately 132,000 shares of Chiron common stock.
     Viagene is a biotechnology company involved in the discovery, development
     and commercialization of gene transfer products for the treatment or
     prevention of severe viral infections, cancers and other diseases.  Prior
     to the acquisition, Chiron had an ongoing collaboration with Viagene in the
     area of gene therapy and, pursuant to the collaboration arrangement, held
     an investment in the outstanding voting stock of Viagene with a carrying
     value, net of unrealized gain, of approximately $14 million as of September
     29, 1995.

     The Viagene acquisition has been accounted for under the purchase method of
     accounting. The purchase price of approximately $144 million was allocated
     to the acquired assets and assumed liabilities based upon their estimated
     fair value on the acquisition date.  In connection with the acquisition,
     liabilities were assumed as follows:

<TABLE>
<CAPTION>

                                                       (IN MILLIONS)
<S>                                                    <C>
          Fair value of assets acquired                   $  158
          Carrying value of original
            investment in Viagene                            (14)
          Common stock and options issued                    (91)
          Cash paid                                          (36)
          Acquisition costs                                   (3)
                                                         -------
          Liabilities assumed                            $    14
                                                         -------
                                                         -------

</TABLE>

     As required under generally accepted accounting principles, Chiron
     recognized as an expense the amount allocated to in-process technology in
     the third quarter of 1995.  This resulted in a noncash charge against
     earnings of approximately $130 million.

     The results of operations of Viagene are included in Chiron's consolidated
     operating results from September 29, 1995 forward.  As discussed
     previously, the results of operations of CCD, JV Vax

                                        9

<PAGE>

     B.V. and Chiron Biocine Company are included in Chiron's operating results
     from January 1, 1995 forward.  The following unaudited pro forma
     information presents the results of operations of Chiron, CCD, JV Vax
     B.V., Chiron Biocine Company and Viagene businesses for the three and nine
     months ended September 30, 1995 and 1994, with pro forma adjustments as if
     the acquisitions had been consummated as of the beginning of the periods
     presented.  This pro forma information does not purport to be indicative of
     what would have occurred had the acquisitions been made as of those dates
     or of results which may occur in the future.  The pro forma information
     does not include the write-off of purchased in-process technology of $223
     million or other transaction-related costs totaling $50 million (related to
     employee payments and the related taxes, and investment advisor and legal
     fees) which were recognized as expense in the first nine months of 1995,
     relating to the acquisition of CCD, JV Vax B.V. and Chiron Biocine Company.
     Also, the pro forma information does not include the write-off of purchased
     in-process technology related to the Viagene acquisition of $130 million.

<TABLE>
<CAPTION>

                                  THREE MONTHS                 NINE MONTHS
                               ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                             -----------------------     -----------------------
                                 1995       1994            1995         1994
                             ----------   ----------     ----------   ----------
                                     (IN MILLIONS, EXCEPT PER SHARE DATA)
       <S>                   <C>          <C>            <C>          <C>
       Total revenues        $  276,930   $  251,231     $  781,643   $  680,281
       Income (loss) before
         non-recurring
         charges                (20,263)      18,147       (145,070)      24,226
       Income (loss) before
         non-recurring
         charges per share        (0.49)        0.44          (3.53)        0.58


</TABLE>

3.   RESTRUCTURING AND REORGANIZATION COSTS

     Costs totaling $39 million related to restructuring and reorganization
     plans, including $17 million arising from the acquisition and integration
     of IOLAB (Note 2), represent the expected costs of integrating the acquired
     businesses (Note 2) with Chiron's existing businesses, as well as costs
     related to the idling of the Company's Puerto Rico manufacturing facility
     and the scale-back of manufacturing operations at the Company's Amsterdam
     facility, the write-down of duplicate facilities and the change in plans to
     expand the Company's research and administrative facilities.

     Of the approximately $22 million in charges for actions other than the
     integration of IOLAB, approximately $15 million related to write-downs of
     assets.  The remaining costs of approximately $7 million consist primarily
     of employee costs of $1 million and $6 million related to additional tax
     obligations,  lease termination costs and the costs of the change in plans
     for expansion of the Company's research and administrative facilities.
     The majority of the accrued costs are expected to be paid over the next
     two years.  The current status of the accrued restructuring charges is
     summarized below:

                                       10

<PAGE>

<TABLE>
<CAPTION>

                                                                              AMOUNT           AMOUNT TO
                                                           TOTAL             UTILIZED       BE UTILIZED IN
                                                       RESTRUCTURING         THROUGH            FUTURE
                                                          CHARGE       SEPTEMBER 30, 1995       PERIODS
                                                       -------------   ------------------   --------------
                                                                          (IN MILLIONS)

          <S>                                          <C>             <C>                  <C>
          Chiron Vision restructuring charges:
             Employee-related costs                       $   6           $      (3)           $     3
             Facility and lease termination costs             6                  --                  6
             Duplicate and excess inventory                   3                  --                  3
             Other                                            2                  --                  2
                                                          -----           ---------            -------
                                                             17                  (3)                14

          Puerto Rico manufacturing facility                  8                  (4)                 4
          Postponement of Emeryville facility
             expansion                                        8                  (8)                --
          Amsterdam manufacturing facilities                  1                  (1)                --
          Other facility related                              3                  (3)                --
          Other                                               2                  (1)                 1
                                                          -----           ---------            -------
                                                          $  39           $     (20)           $    19
                                                          -----           ---------            -------
                                                          -----           ---------            -------

</TABLE>


4.   COLLABORATIONS AND JOINT BUSINESS ARRANGEMENTS

     GENERAL

     The Company has entered into a number of collaborative arrangements with
     other pharmaceutical and biotechnology companies for the development and
     marketing of certain technologies and products.  The majority of these
     collaborations are in the development or clinical trial phase.  Chiron and
     its collaborative partners generally contribute certain technologies and
     research efforts to the collaboration.  In addition, Chiron and its
     collaborative partners commit, subject to certain limitations and
     cancellation clauses, to share in the funding of the collaborations'
     ongoing research and clinical trial costs.  Chiron, under certain of the
     arrangements, has purchased equity securities, including common and
     preferred stock and warrants to purchase common and preferred stock, of the
     collaborative partner.  Among the new collaborations entered into by the
     Company during the first nine months of 1995 are the following:

     PROGENITOR, INC. ("PROGENITOR")

     In March 1995, the Company reached an agreement with Progenitor, a
     subsidiary of Interneuron Pharmaceuticals, Inc., to collaborate in the
     development and commercialization of therapeutic and vaccine products
     incorporating Progenitor's proprietary gene therapy technology.  Under the
     agreement, Chiron received a license to Progenitor's nonviral gene
     expression system for use in the development of products for the treatment
     of certain cancers and cardiovascular disorders, development of infectious
     disease vaccines and for development of certain other gene therapy
     products.  Chiron will have the right to manufacture and market any
     resulting products of the collaboration.  In return for the license and
     other rights, Chiron made an initial license payment of $2.5 million to
     Progenitor, which was expensed in the first quarter of 1995, and agreed to
     make an additional funding payment of $0.5 million and make additional
     license payments totaling $1 million to retain certain rights to
     development of infectious disease vaccines.  Also, Chiron has agreed to pay
     to Progenitor various product development milestone payments which could
     total approximately $3 million per product plus certain other milestone
     payments which would be treated as prepaid

                                       11

<PAGE>

     royalties.  In addition, Progenitor will receive a royalty from any
     commercial sales of products resulting from the collaboration.

     GENELABS TECHNOLOGIES, INC. ("GENELABS")

     In March 1995, the Company reached an agreement with Genelabs, whereby
     Chiron and Genelabs cross-licensed certain rights to hepatitis C virus
     ("HCV"); hepatitis G virus ("HGV"), a hepatitis virus discovered by
     Genelabs; human T-cell leukemia virus - I ("HTLV-I") and human T-cell
     leukemia virus - II ("HTLV-II") diagnostic tests.  Under the agreement,
     Chiron acquired certain rights to develop and market diagnostic products
     for the detection of HGV, HTLV-I and HTLV-II.  In return, Genelabs acquired
     development and marketing rights in Asia, except Japan, for certain
     products incorporating Chiron's HCV technology.  Ortho, Chiron's joint
     diagnostic business partner, has agreed to participate as Chiron's equal
     partner in the collaboration with Genelabs and therefore will share equally
     in all payments under the agreement, including equity investments. Chiron
     and Ortho agreed to pay $5 million in up front license fees and up to $9
     million in HGV development milestones.  Chiron and Ortho also agreed to
     invest a total of $10 million in equity securities of Genelabs at the
     closing.  Also, under the terms of the Agreement, Chiron and Ortho have the
     option to acquire substantially all of the diagnostics business of Genelabs
     in the year 2000 through the conversion of the $10 million equity
     investment for approximately one-half the business and an additional
     payment equal to the then fair market value of the remaining half. Of an
     initial payment of $5 million made in the first quarter of 1995,
     approximately $4.2 million was expensed while the remainder was recorded as
     an investment in securities of Genelabs.   In the second quarter of 1995,
     an additional payment of $2.5 million was made of which $1.2 million was
     expensed and the remainder was recorded as an investment in securities of
     Genelabs.  Under a separate agreement, Chiron agreed to pay Genelabs $1
     million in cash in exchange for a right of first refusal to obtain an
     exclusive license to Genelabs' HGV technology for use in vaccines.  This
     payment was expensed in the second quarter of 1995.

     NEW YORK UNIVERSITY ("NYU")

     In March 1995, the Company reached an agreement with NYU for the license of
     optical mapping technology for use by Chiron and its sublicensee, Ciba, in
     development of diagnostics, therapeutics and vaccines, and Chiron also
     acquired the right to commercialize a potential optical mapping instrument.
     Under the terms of the agreement, Chiron made a $5 million initial payment
     to NYU, which was expensed in the first quarter of 1995, for the license
     and for funding certain research facilities at NYU.  If Chiron decides to
     continue development of the instrument, Chiron will be obligated to make a
     $4 million milestone payment to NYU and will make royalty payments to NYU
     based upon any future product sales of the instrument, subject to certain
     minimum royalties.  In addition, Ciba has agreed to make certain further
     research payments to NYU in connection with development of the instrument
     in exchange for the sublicense and in exchange for royalty payments by
     Chiron to Ciba based upon sales of the instrument.

5.   DEBT OBLIGATIONS

     ACQUIRED DEBT OF CCD

     As part of the Acquisitions, the Company assumed approximately $96 million
     in debt of CCD.  This debt consists primarily of short-term borrowings
     under revolving foreign line of credit arrangements totaling $39 million at
     September 30, 1995, and a note payable to Ciba in the amount of $53 million
     which is due in the year 2000.  The foreign line of credit arrangements
     bear interest at local interest

                                       12

<PAGE>

     rates ranging from approximately 2 percent to 16 percent.  The note payable
     to Ciba bears interest at a variable rate (approximately 6 percent at
     September 30, 1995).

     LINE OF CREDIT ARRANGEMENT

     On March 24, 1995, the Company entered into a revolving, unsecured line of
     credit arrangement with an international bank under which the Company may
     borrow up to $50 million.  This credit facility is guaranteed by Ciba and
     bears interest at a rate based on LIBOR (approximately 6 percent on the $10
     million outstanding at September 30, 1995).

     6.   CONTINGENCIES

     SICOR.  In April 1991, Alco Chemicals, Ltd. ("Alco") and Sicor,
     SpA ("Sicor"), Cetus Ben Venue Therapeutics' ("CBVT") former suppliers
     of bulk doxorubicin, filed suit in the United States District Court
     for the Northern District of California against Cetus Corporation
     ("Cetus"), Ben Venue Laboratories, Inc. ("Ben Venue"), CBVT and
     Erbamont, Inc. ("Erbamont") and its affiliates.  Sicor had been
     prevented from manufacturing product for CBVT since September 1990,
     when Sicor's facilities in Italy were ordered closed by the government
     in connection with trade secret litigation in Italy.  In March 1991,
     CBVT entered into an agreement with Erbamont which provided for, among
     other things, the settlement of several legal proceedings then pending
     relating to Erbamont's alleged doxorubicin proprietary rights, and the
     exclusive supply of doxorubicin to CBVT by Erbamont. The Sicor
     complaint alleges breach of the CBVT contract to purchase bulk
     doxorubicin from Sicor, as well as antitrust violations and
     interference with contract and prospective advantage, and seeks
     unspecified damages.  Cetus has denied any entitlement to recovery in
     this lawsuit and has filed a counterclaim against the plaintiffs for
     fraud and breach of contract based on Sicor's failure to deliver the
     bulk product.  In an order filed on January 11, 1993, the judge
     granted summary judgment motions in favor of the Cetus parties and
     Erbamont with respect to the Sicor and Alco claims.  Sicor appealed
     the summary judgment and, in August 1993, dismissed its claims against
     Erbamont.  In an opinion issued April 3, 1995, the Ninth Circuit Court
     of Appeals affirmed the summary judgment on the antitrust claims, but
     reversed and remanded to the District Court for further proceedings
     the claims of breach of contract and interference with prospective
     advantage.  The Cetus parties filed a motion for rehearing by the
     Ninth Circuit Court of Appeals, which was denied on July 10, 1995.
     Sicor's petition for writ of certiorari to the United States Supreme
     Court was also denied.  The Company believes it has substantial
     defenses to the remanded claims.  A related arbitration before the
     International Chamber of Commerce brought by Sicor against Chiron,
     Cetus and Ben Venue has been stayed pending the resolution of the
     Cetus parties' counterclaims in the above described litigation.

     In February 1995, Sicor and Alco filed a further action in the
     United States District Court for the Northern District of California
     against CBVT for amounts allegedly owed by CBVT to Sicor and Alco for
     the supply of doxorubicin, plus interest and attorneys' fees.  This
     case has been assigned to the same judge as the above referenced
     District Court case.  Internal investigation of the claim is under
     way.

     SUMMIT.  On September 29, 1994, Summit Technology Ireland B.V., a
     subsidiary of Summit Technology, Inc., a manufacturer of ophthalmic
     lasers, filed a patent infringement action in the Regional Court of
     Dusseldorf, Germany, against two German subsidiaries of Chiron Vision,
     Chiron Technolas and Chiron Adatomed, and their respective managing
     directors.  The suit alleged that the manufacture and sale in Germany
     of the Technolas-Trademark- Keracor-Trademark- 116 excimer laser infringe
     the class of a patent held by Summit. Summit sought injunctive relief and
     damages which it estimated at DM 2 million.  On August 3, 1995, the German
     court granted judgment in favor of Summit, granted an injunction
     against defendants' further infringement and awarded damages for past
     infringement in an amount to be determined.  On September 1, 1995,
     Summit enforced the judgment and the injunction by posting security in
     the amount of DM 2 million.  The Company has appealed the Regional
     Court's decision.  Chiron Technolas, Chiron Vision's sole source of
     ophthalmic lasers, continues to manufacture ophthalmic excimer lasers
     which are distributed by Chiron Vision and its subsidiaries.  The
     Company believes these activities are outside the scope of the
     judgment and injunction of the German Regional Court.  The Company has
     also initiated a separate judicial action in Germany seeking to
     invalidate Summit's patent.

     CARNEGIE-MELLON UNIVERSITY.  On August 20, 1994, Carnegie Mellon
     University and  Three Rivers Biologicals, Inc. brought a lawsuit in
     the United States District Court for the Western District of
     Pennsylvania against Hoffmann-La Roche, Inc., Roche Molecular Systems,
     Inc., the Perkin-Elmer Corporation, Chiron and Cetus Oncology
     Corporation, claiming that the defendants infringed certain United
     States patents relating to plasmids for the expression of an enzyme
     which may be useful in connection with polymerase chain reaction
     ("PCR") processes and products.  Cetus sold its PCR business to F.
     Hoffmann-La Roche Ltd. and Hoffmann-La Roche, Inc. ("Roche") in 1991.
     Carnegie Mellon and Three Rivers Biologicals are seeking a finding
     that the defendants willfully infringed the patents at issue,
     injunctive relief and damages according to proof.  All defendants have
     answered the complaint.  Discovery recently began.  Venue of the case
     was recently changed to the Northern District of California on motion
     by Chiron.  The facts of the case, including any indemnification
     rights or obligations among the defendants, are currently under
     review.  However, Chiron believes that it, and its wholly owned
     subsidiary, Cetus Oncology, have significant defenses.

     MUREX DIAGNOSTICS, LTD.  In a series of actions, the first of
     which was brought on March 2, 1992, Chiron together with Ortho
     Diagnostic Systems, Inc.  ("Ortho") and Ortho Diagnostic Systems,
     Ltd. ("Ortho Ltd."), filed suit in the High Court for England and Wales
     against Murex Diagnostics, Ltd. ("Murex"), alleging infringement of
     Chiron's U.K. Patent No. 2,212,511 ("the '511 patent") as a result of
     Murex's manufacture and sale of HCV immunoassay kits in the U.K.
     Murex is a subsidiary of International Murex Technologies Corp., a
     Canadian company.  Chiron and Ortho sought injunctive relief and
     unspecified damages.  On May 27, 1994, the court granted judgment for
     Chiron and Ortho, holding the '511 patent valid and infringed, and
     ordered Murex to pay damages in an amount to be determined.  Chiron's
     and Ortho's request for an injunction was granted on November 30,
     1994.  A damages inquiry is scheduled for July 1996.  Both Murex and
     the Chiron/Ortho parties appealed various aspects of the High Court's
     judgment.  In a series of rulings on November 2 and 7, 1995, the U.K.
     Court of Appeal held that, with the exception of one claim, the '511
     patent is valid, that Chiron could amend the patent and proceed with
     the damages inquiry, and that, contrary to the High Court's ruling,
     Murex did not have a defense with respect to Ortho Ltd. for damages
     prior to October 13, 1993.  The parties may apply for leave to appeal
     to the House of Lords.  Chiron is informed that officials within the
     British Ministry of Health have in the past raised the possibility of
     authorizing Murex's infringement of the `511 patent under the "Crown
     use" provisions of British law, with respect to the sale of HCV
     immunoassay kits to the British National Health Service.  Further,
     Murex has stated that it will apply for a compulsory license under the
     '511 patent.  Infringement proceedings against Murex on German and
     European patents corresponding to the '511 patent have also been filed
     by Chiron and Ortho in Germany, Italy, The Netherlands and Belgium.
     On January 23, 1995, Chiron and Ortho were granted an injunction in
     Germany.  On May 8, 1995, Chiron was granted a cross-border
     preliminary injunction by the Dutch court preventing infringement by
     Murex and certain of its affiliates covering The Netherlands, Belgium,
     France, Spain and Luxembourg.  Murex has brought an action in
     Australia seeking the revocation of the Australian counterpart of the
     '511 patent.  Chiron has counterclaimed for infringement.

     ORGANON TEKNIKA, LTD.  On May 4, 1994, Chiron instituted summary
     legal proceedings against Organon Teknika, B.V., Akzo Pharma, B.V.,
     Akzo Pharma International, B.V., Organon Teknika, N.V. [all
     subsidiaries of Akzo N.V. (collectively referred to as "Organon")],
     and United Biomedical, Inc. ("UBI"), the supplier of Organon's HCV
     antigens and kits, in the District Court of the Hague, The
     Netherlands, alleging infringement of European Patent No. 318,216
     ("the '216 patent") as a result of the defendants' manufacture and
     sale of HCV immunoassay kits.  On July 22, 1994, Chiron was granted a
     cross-border preliminary injunction against further infringement,
     including sale of the UBI kit, by Organon in Austria, Belgium,
     Switzerland, Germany, Spain, France, Italy, Liechtenstein, Luxembourg,
     The Netherlands and Sweden.  Organon and UBI appealed the injunction.
     The '216 patent is a counterpart of the British '511 patent.
     Infringement proceedings brought by Chiron and Ortho were also pending
     against Organon in Italy and Belgium (based on the '216 patent), and
     in the U.K. (based on the British '511 patent), in proceedings
     consolidated with the actions against Murex, described above.  Chiron,
     Ortho and Organon settled all European HCV litigation on October 9,
     1995, and Chiron and Ortho were compensated for past infringement.
     UBI did not participate in the settlement, and has been ordered to pay
     Ortho Ltd. damages by the U.K. Court of Appeal, along with Murex, as
     described above.

     DANIEL W. BRADLEY.  On December 20, 1994, Dr. Daniel W. Bradley,
     a former scientist at the U.S. Centers for Disease Control (the "CDC")
     brought suit in the United States District Court for the Northern
     District of California against Chiron, Ortho, certain employees of
     Chiron, and the United States government.  Subsequently, Bradley
     dismissed the United States as a defendant.  Bradley, who collaborated
     with Chiron scientists on the research that led to the discovery of
     HCV, alleges he has been wrongly excluded as an inventor of HCV.  He
     requests various forms of relief, including declarations that he is an
     inventor of Chiron's patents related to HCV and that these patents are
     unenforceable.  Bradley further seeks monetary damages and a
     constructive trust on all past and future profits derived from
     Chiron's HCV invention, which are estimated by Bradley to be in excess
     of $1 billion, as well as penalties under federal and state
     Racketeering and Corrupt Organization (RICO) statutes.  Chiron
     believes Bradley's claims to inventorship and his suit are without
     merit, and that substantial defenses exist. In 1990, Bradley and the
     CDC entered into a settlement agreement regarding his claims of
     inventorship in which any rights either might have were assigned to
     Chiron.  Chiron believes that the settlement agreement is valid and
     bars nearly all of the claims in the subject litigation.  Chiron and
     the other defendants have filed a motion to dismiss.  In a hearing on
     November 3, 1995, the court stated that it will grant the motion to
     dismiss Bradley's suit, but that Bradley will be given a limited leave
     to file an amended complaint.

     ABBOTT LABORATORIES.  On December 13, 1993, Chiron filed a patent
     infringement action against Abbott Laboratories ("Abbott") in the
     United States District Court for the Northern District of California.
     The suit, which alleges infringement of Chiron's U.S. Patent No.
     5,156,949 ("the '949 patent"), claiming the use of recombinant
     envelope antigens in immunoassays for HIV antibodies, is based on
     Abbott's sale of unlicensed HIV immunoassay tests which are believed
     to fall within the scope of one or more patent claims.  Abbott is
     defending this suit on the basis of invalidity and non-infringement.
     Chiron is requesting unspecified damages and injunctive relief.  Cross
     motions for summary judgment on Abbott's defenses of inequitable
     conduct and prior invention are currently pending.  The court had
     issued a tentative decision granting Abbott's motion for summary
     judgment on invalidity due to prior invention.  Subsequently, the
     court heard further arguments on this issue and reversed itself,
     denying Abbott's motion for summary judgment.  Subsequently, the
     United States Patent & Trademark Office declared an interference
     between the '949 patent and an application owned by Centocor and the
     U.S. government.  Chiron is the junior party.

     On April 26, 1994, Abbott filed suit against Chiron in the United
     States District Court for the Northern District of Illinois, Eastern
     Division, alleging that the Company has, by making, using and selling
     nucleic acid hybridization assays, infringed three U.S. patents owned
     by third parties and licensed to Abbott.  Abbott is seeking injunctive
     relief and damages in an unspecified amount.  The Company believes
     that it has substantial defenses and is defending this suit
     vigorously.

     STOCKHOLDER LITIGATION.  In November 1994, Chiron, its directors,
     and certain of its officers were sued in three essentially identical
     actions filed as class actions on behalf of Chiron stockholders,
     alleging that the directors had violated their fiduciary duty by
     failing to maximize stockholder value in connection with the series of
     transactions affected with Ciba-Geigy which were announced on November
     20, 1994, by, among other things, not taking all possible steps to
     seek out and encourage the best offer for the Company once the Company
     had been put in play.  Two of the actions filed respectively on
     November 14, 1994 and November 22, 1994 (HANNA V. CHIRON CORP. ET AL.,
     C.A. No. 13874, and DEZUBE V. CHIRON CORPORATION ET AL., C.A. No.
     13896) were filed in the Court of Chancery of the State of Delaware in
     and for New Castle County.  The complaints in both cases ask for
     injunctive relief, rescission and attorneys' fees.  Plaintiff in the
     HANNA action additionally seeks damages in an unspecified amount.
     Plaintiff in the DEZUBE action additionally seeks an accounting.  The
     complaints have been answered by all defendants, who deny the material
     allegations of the complaints.  The third action was filed in the
     Superior Court of California, Alameda County, Northern Division, on
     December 1, 1994 (PERERA ET AL. V. CHIRON CORPORATION ET AL., Case
     Action No. 744522-2).  Plaintiff sought injunctive and declaratory
     relief, and accounting, costs and disbursements, including attorneys'
     and experts' fees, and other relief.  The PERERA action has been
     dismissed by stipulation and the plaintiffs have filed, on October 17,
     1995, a new action against the same defendants and Ciba-Geigy, Ltd. in
     the U.S. District Court for the Northern District of California.  The
     defendants intend to defend vigorously these matters.

     The Company is party to certain other lawsuits, each of which is
     described in Item 3, Legal Proceedings, on page 9 of the Company's
     report on Form 10-K for the period ended December 31, 1994, in Item 1,
     Legal Proceedings, on page 24 of the Company's report on Form 10-Q for
     the period ended April 2, 1995, and in Item 1, Legal Proceedings on
     page 24 of the Company's report on Form 10-Q for the period ended July
     2, 1995, and as to which lawsuits there have been no material
     developments since such Form 10-K and Forms 10-Q were filed.


                                       13

<PAGE>

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

GENERAL

Chiron Corporation (the "Company" or "Chiron") is a diversified, science-driven
healthcare company that applies biotechnology and other techniques of modern
biology and chemistry to develop, produce and sell products intended to improve
the quality of life by diagnosing, preventing and treating human disease. Chiron
participates in four global healthcare markets:  diagnostics, including
immunodiagnostics, critical care diagnostics and new quantitative probe tests;
therapeutics, with an emphasis on oncology and infectious disease; pediatric and
adult vaccines; and ophthalmic surgical products for the correction of vision.

ACQUISITIONS

As discussed further in Note 2 of Notes to Consolidated Financial Statements,
on January 1, 1995, Chiron entered into a series of agreements with
Ciba-Geigy Limited of Basel, Switzerland ("Ciba"), including an investment
agreement, a cooperation and collaboration agreement and a governance
agreement (collectively the "Agreements").  Ciba acquired a 49.9 percent
ownership interest in Chiron common stock (now approximately 48 percent). At
the same time, Chiron acquired all of the outstanding common stock of Ciba
Corning Diagnostics Corp. ("CCD") and Ciba's interests in The Biocine Company
(subsequently renamed "Chiron Biocine Company," hereinafter referred to as
"Chiron Biocine Company") and JV Vax B.V. (a Netherlands company which owns
Biocine S.p.A.) in exchange for 6.6 million newly-issued Chiron common shares
and a cash payment of $24 million.  The acquisitions of CCD and Ciba's
interests in Chiron Biocine Company and JV Vax B.V. (the "Acquisitions") were
accounted for under the purchase method of accounting and resulted in a $223
million charge to earnings in the first nine months of 1995 to expense
purchased in-process technology.  The results of operations of CCD, Biocine
S.p.A. and Chiron Biocine Company are included in Chiron's consolidated
operating results from January 1, 1995, forward.  Chiron's share of the
operating results of Biocine S.p.A. and Chiron Biocine Company were included
in the Company's 1994 operating results under the equity method of accounting.

In connection with the Agreements, Ciba has agreed to guarantee $425 million
of new debt for Chiron and has agreed to provide $250 million (which may be
increased up to $300 million subject to certain reductions in the debt
guarantee) over five years in support of research at Chiron, and Chiron has the
option of issuing up to $500 million of new equity to Ciba.

During the third quarter of 1995, Chiron and Ciba entered into an investment,
research support and marketing agreement to utilize research funding provided
by Ciba, as discussed above.  Under the terms of the agreement, Ciba will
fund from time to time, at Chiron's request, research and development efforts
for certain adult vaccines currently under development.  In return, Ciba will
receive an interest in a stream of variable royalties in potential worldwide
sales and also in promotional rights in countries other than those in North
America and Europe, for such vaccines.  The interests in royalties are to be
acquired by Ciba through ownership of a newly organized subsidiary of Chiron.
Royalties will be paid, on a country by country basis, for the later of ten
years or to the date of expiration of applicable product patents. Royalties
generated from product sales prior to the year 2000 will be reinvested in
funding ongoing research and development of the vaccines.

Under the terms of the agreement, Chiron was granted an option to repurchase
Ciba's interest, at cost plus an agreed-upon return.  In addition, if Chiron
chooses to exercise the option, Ciba will be granted certain marketing rights
in countries other than those in North America and Europe with respect to the
adult vaccines developed from the funding.  Pursuant to the agreement, Chiron
received $12 million of funding from Ciba during the third quarter, which Chiron
recorded as


                                       14


<PAGE>

collaborative agreement revenues. Prior to further funding by Ciba, however,
Chiron and Ciba have agreed to negotiate a restructuring of the agreement to
include royalty rights for one or more additional Chiron products. Chiron
anticipates receiving additional funding from Ciba in future periods, pursuant
to the terms of the restructured agreement.

As discussed further in Note 2 of Notes to Consolidated Financial Statements, on
March 31, 1995, Chiron Vision acquired the surgical division of IOLAB from
Johnson & Johnson for approximately $96 million.  The acquisition was accounted
for under the purchase method of accounting, and resulted in a $10 million
charge to earnings in the first quarter of 1995 to expense purchased in-process
technology.  The Company recorded additional charges for restructuring and
integration-related expenses totaling $17 million.  IOLAB's results of
operations are included in Chiron's consolidated operating results from March
31, 1995, forward.

As discussed further in Note 2 of Notes to Consolidated Financial Statements, on
September 29, 1995, Chiron acquired all the outstanding common stock of Viagene
in exchange for approximately $36 million in cash and 916,000 shares of Chiron
common stock.  Additionally, on September 29, 1995, unexercised options to
purchase Viagene common stock were converted into options to purchase
approximately 132,000 shares of Chiron common stock. The acquisition was
accounted for under the purchase method of accounting and resulted in an
approximately $130 million charge to earnings in the third quarter of 1995 to
expense purchased in-process technology.  Viagene's results of operations are
included in Chiron's consolidated operating results from September 29, 1995,
forward.

RESULTS OF OPERATIONS

REVENUES

PRODUCT SALES

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 the three-month and nine-month periods ended
September 30:

<TABLE>
<CAPTION>

                                  THREE MONTHS                 NINE MONTHS
                               ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                1995         1994           1995         1994
                             ----------   ----------     ----------   ----------
                                                (IN MILLIONS)
     <S>                     <C>          <C>            <C>          <C>
     Diagnostic products     $    131.2   $      6.3     $    396.5   $     15.6
     Ophthalmic products           45.9         28.0          122.6         74.7
     Betaseron-Registered
       Trademark- sales            18.5         33.2           42.7         61.4
     Vaccine products              18.2           --           53.7           --
     Oncology products             15.8         12.4           43.8         31.9
     Other products                 0.7          1.9            3.3          4.1
                             ----------   ----------     ----------   ----------
                             $    230.3   $     81.8     $    662.6   $    187.7
                             ----------   ----------     ----------   ----------
                             ----------   ----------     ----------   ----------

</TABLE>

As a result of the January 1995 acquisition of CCD, diagnostic product sales now
represent the largest component of product sales.  CCD had sales of $125.3
million and $374.6 million for the three and nine months ended September 30,
1995, respectively.  CCD's product sales for the three and nine months ended
September 30, 1994, which are not included in Chiron's 1994 results, were $110.9
million and $317.4 million, respectively.  CCD product sales include direct
sales and sales-type leases of CCD's fully-automated random-access
immunodiagnostic (ACS) testing systems and reagents for these systems, as well
as sales of critical blood analyte systems, clinical chemistry products and
manual immunodiagnostic systems. Both of CCD's major product lines (ACS
diagnostic systems and critical blood analyte systems)

                                       15

<PAGE>

experienced increased sales when compared to the prior year, particularly as
favorable foreign currency rates added to reported revenues.  Sales of
diagnostic systems often include the sale of service and maintenance contracts.
Revenue from these contracts is included in product sales revenue and is
recognized ratably over the life of the contracts.

Diagnostic product sales also include sales of nucleic acid probe products and
instrumentation and sales of antigens and RIBA-Registered Trademark- tests.
Nucleic acid probe products are sold at cost to Daiichi Pure Chemical Co., Ltd.
("Daiichi"), which markets the product in Japan and pays Chiron a royalty based
upon its sales of the product.  Nucleic acid probe products are also sold by
Chiron on a research-use only basis in the United States and Europe.  Antigens
and RIBA-Registered Trademark- test kits are sold at cost to Ortho Diagnostic
Systems, Inc. ("Ortho"), Chiron's partner in a joint diagnostic business.

Sales of ophthalmic surgical products increased between years largely due to the
impact of the May 1994 acquisition of Laboratoires Domilens S.A. ("Domilens")
and the March 1995 acquisition of the surgical division of IOLAB.  As a result
of these acquisitions, total intraocular lens sales have increased by 36 percent
and 59 percent in 1995 over the respective three-month and nine-month periods of
1994, while phacoemulsification and new viscoelastic products have added
significant incremental revenues in those product lines.

Betaseron-Registered Trademark- sales decreased between years for the third
quarters of 1994 and 1995, and  on a year-to-date basis.  These fluctuations
occurred primarily due to a change in the supply agreement between Chiron and
its marketing partner, Berlex Laboratories, Inc. ("Berlex").  During 1994,
Chiron operated under an amended supply agreement whereby Chiron recognized
substantially all of its Betaseron-Registered Trademark- revenue at the time of
shipment to Berlex.  Chiron exercised its option to revert to the terms of an
original supply agreement effective January 1, 1995.  Under those original
terms, Chiron earns a partial payment for Betaseron-Registered Trademark- upon
shipment to Berlex and a subsequent final payment based upon Berlex's net sales
of the product.  Additionally, total vials sold to Berlex during the third
quarter of 1995 are 15 percent lower than the third quarter of 1994.  On a year-
to-date basis, total vials sold to Berlex in 1995 increased slightly over the
prior year; however, reported revenues declined due to the change in the supply
agreement with Berlex. Chiron anticipates that total 1995 vials sold to Berlex
will be slightly below 1994 levels, but reported Betaseron-Registered Trademark-
revenues will be approximately $30 million lower than in 1994 due to the change
in the supply agreement.

Vaccine product sales consist of sales of pediatric and adult vaccines primarily
in Italy and to public health organizations by the Company's Biocine S.p.A.
subsidiary.  Biocine S.p.A.'s vaccine products include Acelluvax-Registered
Trademark-, a recombinant acellular pertussis vaccine; Agrippal-Registered
Trademark-, a flu vaccine; and Polioral-Registered Trademark-, an oral polio
vaccine.  Sales of Biocine S.p.A.'s flu vaccine are seasonal, with strong sales
generally occurring during the pre-flu season in the fourth quarter of the year.
Biocine S.p.A.'s product sales for the three and nine months ended September 30,
1994, which are not included in Chiron's 1994 results, were $12 million and $37
million, respectively.

Sales of oncology products, principally Proleukin-Registered Trademark-,
increased between 1994 and 1995 for both the three-month and nine-month periods
due to an increase in vials sold in both the European and domestic markets as
well as a change in the European market mix resulting in increased sales in
markets with higher unit selling prices.

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
$125.6 million and $373.0 million for the three-month and nine-month periods
ended September 30, 1995, versus $20.4 million and $46.6 million for the three-
month and nine-month periods ended September 30, 1994.  International sales of
diagnostic products by CCD and vaccine sales by

                                       16

<PAGE>

Biocine S.p.A. accounted for substantially all of the increase in foreign
product sales. Product sales would have been approximately four percent lower in
1995 for each of the respective three-month and nine-month periods if currency
exchange rates had remained the same as the comparable periods of 1994. For the
three-month and nine-month periods ended September 30, 1995, 55 percent and 56
percent, respectively, of Chiron's total product sales are denominated in
foreign currencies as opposed to 25 percent for each of the same periods of
1994.  The Company's other revenues, discussed below, are largely denominated in
U.S. dollars.

EQUITY IN EARNINGS OF JOINT BUSINESSES

As of September 30, 1995, Chiron holds a 50 percent interest in two joint
businesses: a joint diagnostic business with Ortho and a generic cancer
chemotherapeutics business with Ben Venue Laboratories, Inc.  Chiron's interest
in the pretax operating earnings of its joint diagnostic business with Ortho
represents the largest component of joint business revenues.  Approximately
80 percent of the sales of the Chiron-Ortho joint business arise from sales of
HCV blood screening tests.  The joint business also receives a royalty from
Abbott Laboratories ("Abbott") for Abbott's sales of HCV tests which use Chiron
technology and which compete directly with tests marketed by Ortho.  Chiron's
share of the profits of the joint business on a year-to-date basis in 1995 was
slightly above that of 1994.  On a quarterly basis, profits from the joint
business decreased in 1995 compared to 1994 due to reduced sales to foreign
affiliates.

COLLABORATIVE AGREEMENT REVENUES

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 of sales of biological materials to research partners
for clinical and preclinical testing.  Collaborative agreement revenues
decreased from the prior year periods due to the January 1995 acquisition of
Ciba's interest in Chiron Biocine Company, Chiron's joint vaccine venture with
Ciba.  Prior to the acquisition, Chiron received reimbursement for its vaccine
research expenses from Chiron Biocine Company and recorded such reimbursement as
collaborative agreement revenue.  After the acquisition, Chiron Biocine Company
became a wholly-owned subsidiary of Chiron and thus no longer provides research
revenues to Chiron.  In the three-month and nine-month periods ended September
30, 1994, Chiron recognized revenues of $8.5 million and $32.5 million,
respectively, from Chiron Biocine Company. Further contributing to the decrease
in collaborative agreement revenues was the completion of a nucleic acid probe
development program with Daiichi and a payment received as reimbursement from a
collaborative research partner, each of which provided first quarter 1994
revenues of $3 million.

As discussed previously, during the third quarter of 1995, Chiron and Ciba
entered into an investment, research and marketing agreement to utilize the
research funding provided by Ciba.  Under the terms of this agreement,
Chiron received $12 million of funding from Ciba which was recorded as
collaborative agreement revenues.  Chiron anticipates that this funding
source will be utilized for research programs in future periods as well,
pursuant to the terms of the restructured agreement discussed previously.

OTHER REVENUES

Other revenues consist principally of product royalties, service fees,
government grants and sales fees earned by the Company for sales and marketing
services rendered on behalf of its generic chemotherapeutics joint venture and
on behalf of Ciba. Increased royalty revenues for the sale of recombinant human
insulin and Japanese sales of nucleic probe products accounted for most of the
increase in other revenues for the third quarter of 1995.  For the nine-month
period of 1995, in addition to the items

                                       17

<PAGE>


noted previously, the increase was also due to sales fees received from Ciba for
sales of Aredia-Registered Trademark-, for which Chiron began earning sales fee
revenue in late 1994.

COST AND EXPENSES

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses increased significantly between 1994 and 1995,
largely due to the acquisitions of CCD and Biocine S.p.A.  CCD and Biocine
S.p.A. together added $22.8 million and $65.1 million in incremental research
and development expenses for the three-month and nine-month periods ended
September 30, 1995, respectively.  Also included in the third quarter of 1995 is
a payment of $16.4 million related to the funding of certain collaboration
expenses and the purchase of additional program rights from Cephalon Inc., an
existing collaboration partner.  During the first nine months of 1995, the
Company entered into several new collaboration arrangements and funded
development expenses in a number of its existing collaborative arrangements with
other pharmaceutical and biotechnology companies for the research, development
and marketing of certain technologies and products. As part of these
collaborative arrangements, Chiron has made various investments in the equity
securities of the collaborative partners and, in some cases, agreed to provide
specified levels of funding to the collaboration. As discussed further in Note 4
of Notes to Consolidated Financial Statements, new collaborative arrangements
entered into by Chiron during the first nine months of 1995 include the
following:

-    In March 1995, the Company reached an agreement with Progenitor, Inc.
     ("Progenitor"), a subsidiary of Interneuron Pharmaceuticals, Inc., to
     collaborate in the development and commercialization of therapeutic and
     vaccine products incorporating Progenitor's proprietary gene therapy
     technology.  Under the agreement, Chiron received a license to Progenitor's
     nonviral gene expression system for use in the development of products for
     the treatment of certain cancers, cardiovascular disorders, development of
     infectious disease vaccines and for development of certain other gene
     therapy products. Chiron will have the right to manufacture and market any
     resulting products of the collaboration.  In return for the license and
     other rights, Chiron made certain financial commitments to Progenitor.  In
     addition, Progenitor will receive a royalty from any commercial sales of
     products resulting from the collaboration.

-    In March 1995, the Company reached an agreement with Genelabs Technologies,
     Inc. ("Genelabs"), whereby Chiron and Genelabs cross-licensed certain
     rights to hepatitis C virus ("HCV"), hepatitis G virus ("HGV"), human T-
     cell leukemia virus - I ("HTLV-I") and human T-cell leukemia virus - II
     ("HTLV-II") diagnostic tests.  Under the agreement, Chiron acquired certain
     rights to develop and market diagnostic products for the detection of HGV,
     HTLV-I and HTLV-II.  In return, Genelabs acquired development and marketing
     rights in Asia, except Japan, for certain products incorporating Chiron's
     HCV technology.  Ortho, Chiron's joint diagnostic business partner, has
     agreed to participate as Chiron's equal partner in the collaboration with
     Genelabs and therefore will share equally in all payments under the
     agreement, including equity investments.

-    In March 1995, the Company reached an agreement with New York University
     ("NYU") under which Chiron acquired rights to optical mapping technology
     for use by Chiron and its sublicensee, Ciba, in development of diagnostics,
     therapeutics and vaccines.  Chiron also acquired the right to commercialize
     a potential optical mapping instrument.  In exchange for these rights,
     Chiron and Ciba made certain financial commitments to NYU.

Incremental research and development expense recognized as a result of the
Company's funding of its third party collaborations, including the new
agreements with Genelabs, Progenitor and NYU, during the third quarter and first
nine months of 1995 totaled $16 million and $53 million, respectively.

                                       18

<PAGE>

With respect to Chiron's in-house research and development programs, Chiron
continued to devote substantial resources to its vaccine programs, growth factor
and nucleic acid therapeutics programs and internal biological and chemical
therapeutics programs.  During the remainder of 1995, the Company expects that
research and development expense will remain significantly higher than prior
years due to the impact of the acquisitions and continued expenses in all of its
collaborations.  Product development, manufacturing start-up, and regulatory
expenses may also increase in future periods as Chiron's products in development
advance towards commercialization.

COST OF SALES

Cost of sales increased consistent with the increase in product sales between
years.  The gross profit margin of 55 percent for both the third quarter and the
first nine months of 1995 was comparable to the gross profit margins for the
same periods in 1994.  The gross profit margin was affected negatively
throughout 1995 as a result of a reversion to the original Betaseron-Registered
Trademark- supply agreement discussed previously and operating expenses
associated with the idled Puerto Rico facility.  Offsetting this downward
pressure was the addition of CCD's and Biocine S.p.A.'s product sales in 1995.
Gross profit margin percentages may fluctuate significantly in future periods as
the Company's product mix continues to evolve.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses ("SG&A expenses") increased between
1994 and 1995 for both the three-month and nine-month periods ended September
30, 1995, largely due to the impact of the acquisitions of CCD and Biocine
S.p.A., which together added $50 million and $146 million of primarily selling
and marketing expenses for the three-month and nine-month periods, respectively.
SG&A expenses in the ophthalmic business were also significantly higher on a
year-to-date basis in 1995 due to the acquisitions of Domilens and IOLAB and
increased costs related to the ophthalmic sales force arising from the
integration of Chiron Vision's operations with IOLAB.

OTHER EXPENSES

In the third quarter of 1995, the write-off of purchased in-process technology
consists primarily of $130 million related to the acquisition of Viagene.  In
the first nine months of 1995, the write-off of purchased in-process technology
also includes $223 million for the acquisitions of CCD, Biocine S.p.A. and
Chiron Biocine Company, $10 million for the acquisition of IOLAB and $2 million
for the acquisition of Technolas GmbH.


Costs related to the Ciba transaction consist primarily of employee payments and
related tax liabilities and legal and investment advisor fees.  Under the
agreements reached with Ciba, Ciba has reimbursed the Company $25 million for a
portion of the employee payments and such reimbursement has been recorded as a
capital contribution.

Restructuring and reorganization costs in the first nine months of 1995
represent certain accrued costs of integrating the acquired businesses with
Chiron's existing businesses, costs related to the idling of the Company's
Puerto Rico manufacturing facility and the scaling-back of manufacturing
operations at the Company's Amsterdam facility, and costs related to the write-
down of duplicate facilities at the Company's Emeryville, California,
headquarters.  Also included is a charge related to the change in plans to
expand the Company's Emeryville research and administrative facilities.  Of the
$39 million in total charges in the first nine months of 1995, approximately $23
million related to write-downs of assets.  The remaining charges of $16 million
consist of employee costs of $7 million and other accrued costs of $9 million
primarily for

                                       19

<PAGE>

lease termination costs, additional tax obligations and the costs of the
change in plans for expansion of the Company's research and administrative
facilities.  The majority of the accrued costs are expected to be paid through
1996.

Other income (expense), net, consists primarily of investment income on the
Company's cash and investment balances, interest expense related to debt and
capital leases, and a gain of $3 million on the sale of property.  Other income
(expense) decreased between 1994 and 1995 on both a quarterly and year-to-date
basis due to increased interest expense resulting from the acquired debt of CCD
and Biocine S.p.A. and a reduction of interest capitalization on the Company's
capital projects.

The provision for income taxes in the third quarter and the first nine months of
1995 consists primarily of foreign taxes on certain foreign operations of the
Company.  Substantially all of the write-off of purchased in-process
technologies is not deductible for income tax purposes and thus does not create
a tax benefit in 1995.  The provision for income taxes in 1994 was based on the
estimated annual effective income tax rate. The income tax provision changed
between periods primarily due to the acquisition of foreign operations which
were not included in 1994 results.


OUTLOOK

Profitability of the Company depends upon a number of factors. These factors
include: successful integration of newly acquired businesses with Chiron;
continued profit contribution from CCD and the newly integrated ophthalmic
business; continuation of substantial profit contribution from the
Chiron-Ortho joint business; continued product sales of Betaseron-Registered
Trademark- in the United States and Proleukin-Registered Trademark-
worldwide; and the successful completion of clinical trials and subsequent
FDA approval for commercialization of additional vaccines, diagnostics and
pharmaceuticals under development. There can be no assurance whether any
combination of these factors can be achieved, or that any such combination
will result in profitability of the Company. The integration of CCD, Chiron
Biocine Company, Biocine S.p.A., IOLAB and Viagene will have a material
impact on the results of operations of the Company going forward. Although
the Company has recorded the majority of the expected cost of these
integrations in the first quarter of 1995, the Company expects to incur
additional charges in subsequent quarters as these integrations are
completed. Profitability of the Company is also dependent on the continued
utilization of research funding available from Ciba.

Achievement and maintenance of profitability are substantially dependent upon
the success of Chiron's collaborations with others. Under the joint business
agreement with Ortho, Chiron and Ortho together determine strategy and
budgets for their joint diagnostics business, but Ortho conducts all
commercial activities, except research and antigen manufacturing, and
exercises broad control over the conduct of day-to-day operations. The
Company is also dependent upon Schering AG, Germany, and its U.S. affiliate,
Berlex, for development, marketing and distribution of Betaseron-Registered
Trademark-. There can be no assurance that the corporate interests of Berlex
and Ortho, or any other corporate partners, are or will remain consistent
with those of Chiron or that any collaborator will succeed in developing new
markets or retaining and expanding the markets served by the commercial
collaborations.

In addition, Chiron's 50 percent share of the operating earnings of the
Chiron-Ortho joint business has been a significant source of Chiron's
revenues. The market for immunodiagnostic viral screening tests has evolved
rapidly since the introduction of HCV tests by the Chiron-Ortho joint
business and by Abbott. The joint business may be adversely affected in
future periods by increasing margin pressures, the overall demand for current
tests and new diagnostic products, and by the introduction of competing tests
by unlicensed third parties.

Furthermore, other Chiron programs will require substantial additional
investment including the cost of funding collaborative research arrangements
with third parties, the cost of clinical trials, the completion of commercial
scale manufacturing facilities, and marketing and sales expenses associated
with product introductions. Chiron is required to fund 50 percent of the
joint expenses of its collaboration with Cephalon and expects these expenses
to increase as the parties accelerate efforts to gain regulatory approval and
prepare to commercialize Myotrophin-Trademark- in the United
States. Also, the acquisition and integration of Viagene will result in
increased research and development expenses in future periods. Chiron has
significantly expanded its manufacturing capability to support both approved
products and products in development which has resulted in higher levels of
operating expenses and depreciation, and may result in even higher levels of
operating expenses in future periods. The research, development and market
introduction of new products will require the application of considerable
technical and financial resources by Chiron, while revenues generated from
such products, assuming they are successfully developed, may not be realized
for several years. Other material and unpredictable factors which could
affect operating results include the uncertainty, timing and costs associated
with product approvals and commercialization; the issuance and use of patents
and proprietary technology by Chiron or its competitors; the effect of
technology and other business acquisitions or transactions; the increasing
emphasis on controlling healthcare costs and potential legislation or
regulation of healthcare pricing; and actions by collaborators, customers and
competitors.

Chiron exercised its option to revert to the terms of the original
Betaseron-Registered Trademark- supply agreement effective January 1,
1995. Under those original terms, Chiron earns a partial payment for
Betaseron-Registered Trademark- upon shipment to Berlex and a subsequent
final payment based upon Berlex's net sales of the product. Total 1995
shipments of Betaseron-Registered Trademark- are expected to be slightly
below 1994 levels. Total 1995 revenues from Betaseron-Registered Trademark-
shipments are expected to be lower than 1994 revenues by approximately
$30 million as a result of the reversion to the original supply agreement.
Due to issues of inventory management, it is anticipated that vials shipped by
Chiron to Berlex may decrease between 1995 and 1996. There may also be royalties
from European sales during 1996.

In March 1995, the Company decided to idle its Puerto Rico facility and
scale-back the manufacturing operations at the Company's Amsterdam facility.
This decision was based on the belief that current demand for
Betaseron-Registered Trademark- can be adequately supplied with the expanded
manufacturing capacity at the Company's Emeryville, California, facility.
Utilization of this idled manufacturing capacity will require a significant
increase in Betaseron-Registered Trademark- demand and/or the introduction of
new products which would require significant similar manufacturing capacity.

The market price of the Company's common stock is subject to significant
volatility, particularly on a quarterly basis. Any shortfall in revenue or
earnings from levels expected by securities analysts could have an immediate
and significant adverse effect on the trading price of the Company's stock in
any given period. Additionally, announcements of technological innovations by
the Company or its competitors, developments concerning proprietary rights,
public concern as to the safety of biotechnology and economic or other
external factors may have a significant impact on the market price of the
Company's common stock. The Company does not currently believe that inflation
has a significant impact upon its business.

                                       20

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Chiron's capital requirements are funded from public and private sales of equity
and convertible debt and cash provided by operations.  In addition to these
sources of capital, future capital requirements will be financed through a
combination of debt, utilization of funding from Ciba, possible
off-balance-sheet financing (such as R&D limited partnerships), cash generated
from operations and the use of existing cash and investment balances.  Until
required for operations, Chiron's policy is to keep its cash and investments in
a diversified portfolio of investment grade financial instruments, including
money market instruments, corporate notes and bonds, government or government
agency securities, or 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.  To the extent that Chiron has balance sheet exposure
resulting from completed transactions denominated in foreign currency, the
Company's policy is to mitigate exposure to exchange rate changes by entering
into forward currency contracts.  These contracts are settled quarterly.  At
September 30, 1995, the Company had outstanding forward currency contracts
totaling approximately $56 million.

Over the next several years, Chiron anticipates funding collaborations with a
number of its research partners.  During the first nine months of 1995, the
Company funded $53 million related to third party collaborations structured in
the form of additional equity investments and/or development expenses.

In future periods, Chiron expects to incur substantial capital spending as the
Company begins expansion of its administrative, research and development
facilities in Emeryville.  This expansion is projected to occur in stages over
the next thirty years. Additionally, capital expenditures for manufacturing
facilities outside of Emeryville will continue, consistent with the Company's
commitment to expand manufacturing capacity.

During the nine months ended September 30, 1995, cash and cash equivalents
decreased by approximately $16 million.  Approximately $53 million was used in
the Company's operating activities, compared to $2 million provided by operating
activities in the first nine months of 1994.

Investing activities consumed cash of $33 million during the first nine months
of 1995, versus $96 million in 1994.  The first nine months of 1995 included the
acquisition of IOLAB and Viagene for $125 million in cash (net of cash acquired
of $7 million) and net sales of marketable debt securities of $157 million,
compared to net sales of marketable debt securities of $33 million in the first
nine months of 1994.  Capital expenditures on plant and equipment were
$71 million during 1995 versus $81 million in 1994.  The Company also made
investments in the equity securities of collaborative partners totaling $6
million in the first nine months of 1995 and $19 million in the corresponding
period of 1994.


Cash provided by financing activities in the first nine months of 1995 of $69
million includes a $25 million capital contribution by Ciba to fund certain
payments to employees which resulted from the agreements with Ciba and $31
million from the issuance of common stock under the Company's employee benefit
plans.  In March 1995, the Company borrowed $40 million under a line of credit
arrangement, representing the first utilization of the debt guarantee provided
by Ciba.  During September 1995, Chiron repaid $30 million of borrowings under
the line of credit.  In addition, as part of the acquisitions, Chiron assumed
approximately $96 million in debt of CCD.  This debt consists primarily of
short-term borrowings under foreign line of credit arrangements and a long-term
loan with Ciba.

                                       21

<PAGE>

Chiron believes that its cash and cash equivalents and short and long-term
investments, together with funds provided by operations and funding arrangements
with Ciba will be sufficient to meet its cash requirements during the upcoming
twelve months.






                                       22

<PAGE>

ITEM 1.   LEGAL PROCEEDINGS


          SICOR.  In April 1991, Alco Chemicals, Ltd. ("Alco") and Sicor,
          SpA ("Sicor"), Cetus Ben Venue Therapeutics' ("CBVT") former suppliers
          of bulk doxorubicin, filed suit in the United States District Court
          for the Northern District of California against Cetus Corporation
          ("Cetus"), Ben Venue Laboratories, Inc. ("Ben Venue"), CBVT and
          Erbamont, Inc. ("Erbamont") and its affiliates.  Sicor had been
          prevented from manufacturing product for CBVT since September 1990,
          when Sicor's facilities in Italy were ordered closed by the government
          in connection with trade secret litigation in Italy.  In March 1991,
          CBVT entered into an agreement with Erbamont which provided for, among
          other things, the settlement of several legal proceedings then pending
          relating to Erbamont's alleged doxorubicin proprietary rights, and the
          exclusive supply of doxorubicin to CBVT by Erbamont. The Sicor
          complaint alleges breach of the CBVT contract to purchase bulk
          doxorubicin from Sicor, as well as antitrust violations and
          interference with contract and prospective advantage, and seeks
          unspecified damages.  Cetus has denied any entitlement to recovery in
          this lawsuit and has filed a counterclaim against the plaintiffs for
          fraud and breach of contract based on Sicor's failure to deliver the
          bulk product.  In an order filed on January 11, 1993, the judge
          granted summary judgment motions in favor of the Cetus parties and
          Erbamont with respect to the Sicor and Alco claims.  Sicor appealed
          the summary judgment and, in August 1993, dismissed its claims against
          Erbamont.  In an opinion issued April 3, 1995, the Ninth Circuit Court
          of Appeals affirmed the summary judgment on the antitrust claims, but
          reversed and remanded to the District Court for further proceedings
          the claims of breach of contract and interference with prospective
          advantage.  The Cetus parties filed a motion for rehearing by the
          Ninth Circuit Court of Appeals, which was denied on July 10, 1995.
          Sicor's petition for writ of certiorari to the United States Supreme
          Court was also denied.  The Company believes it has substantial
          defenses to the remanded claims.  A related arbitration before the
          International Chamber of Commerce brought by Sicor against Chiron,
          Cetus and Ben Venue has been stayed pending the resolution of the
          Cetus parties' counterclaims in the above described litigation.

          In February 1995, Sicor and Alco filed a further action in the
          United States District Court for the Northern District of California
          against CBVT for amounts allegedly owed by CBVT to Sicor and Alco for
          the supply of doxorubicin, plus interest and attorneys' fees.  This
          case has been assigned to the same judge as the above referenced
          District Court case.  Internal investigation of the claim is under
          way.

          SUMMIT.  On September 29, 1994, Summit Technology Ireland B.V., a
          subsidiary of Summit Technology, Inc., a manufacturer of ophthalmic
          lasers, filed a patent infringement action in the Regional Court of
          Dusseldorf, Germany, against two German subsidiaries of Chiron Vision,
          Chiron Technolas and Chiron Adatomed, and their respective managing
          directors.  The suit alleged that the manufacture and sale in Germany
          of the Technolas-Trademark- Keracor-Trademark- 116 excimer laser
          infringe the class of a patent held by Summit. Summit sought
          injunctive relief and damages which it estimated at DM 2 million.  On
          August 3, 1995, the German court granted judgment in favor of Summit,
          granted an injunction against defendants' further infringement and
          awarded damages for past infringement in an amount to be determined.
          On September 1, 1995, Summit enforced the judgment and the injunction
          by posting security in the amount of DM 2 million.  The Company has
          appealed the Regional Court's decision.  Chiron Technolas, Chiron
          Vision's sole source of ophthalmic lasers, continues to manufacture
          ophthalmic excimer lasers which are distributed by Chiron Vision and
          its subsidiaries.  The Company believes these activities are outside
          the scope of the judgment and injunction of the German Regional Court.
          The Company has also initiated a separate judicial action in Germany
          seeking to invalidate Summit's patent.

          CARNEGIE-MELLON UNIVERSITY.  On August 20, 1994, Carnegie Mellon
          University and  Three Rivers Biologicals, Inc. brought a lawsuit in
          the United States District Court for the Western District of
          Pennsylvania against Hoffmann-La Roche, Inc., Roche Molecular Systems,
          Inc., the Perkin-Elmer Corporation, Chiron and Cetus Oncology
          Corporation, claiming that the defendants infringed certain United
          States patents relating to plasmids for the expression of an enzyme
          which may be useful in connection with polymerase chain reaction
          ("PCR") processes and products.  Cetus sold its PCR business to F.
          Hoffmann-La Roche Ltd. and Hoffmann-La Roche, Inc. ("Roche") in 1991.
          Carnegie Mellon and Three Rivers Biologicals are seeking a finding
          that the defendants willfully infringed the patents at issue,
          injunctive relief and damages according to proof.  All defendants have
          answered the complaint.  Discovery recently began.  Venue of the case
          was recently changed to the Northern District of California on motion
          by Chiron.  The facts of the case, including any indemnification
          rights or obligations among the defendants, are currently under
          review.  However, Chiron believes that it, and its wholly owned
          subsidiary, Cetus Oncology, have significant defenses.

          MUREX DIAGNOSTICS, LTD.  In a series of actions, the first of
          which was brought on March 2, 1992, Chiron together with Ortho
          Diagnostic Systems, Inc.  ("Ortho") and Ortho Diagnostic
          Systems, Ltd. ("Ortho Ltd."), filed suit in the High Court for
          England and Wales against Murex Diagnostics, Ltd. ("Murex"),
          alleging infringement of Chiron's U.K. Patent No. 2,212,511
          ("the '511 patent") as a result of Murex's manufacture and
          sale of HCV immunoassay kits in the U.K. Murex is a subsidiary
          of International Murex Technologies Corp., a Canadian company.
          Chiron and Ortho sought injunctive relief and unspecified
          damages.  On May 27, 1994, the court granted judgment for
          Chiron and Ortho, holding the '511 patent valid and infringed,
          and ordered Murex to pay damages in an amount to be
          determined.  Chiron's and Ortho's request for an injunction
          was granted on November 30, 1994.  A damages inquiry is
          scheduled for July 1996.  Both Murex and the Chiron/Ortho
          parties appealed various aspects of the High Court's judgment.
          In a series of rulings on November 2 and 7, 1995, the U.K.
          Court of Appeal held that, with the exception of one claim,
          the '511 patent is valid, that Chiron could amend the patent
          and proceed with the damages inquiry, and that, contrary to
          the High Court's ruling, Murex did not have a defense with
          respect to Ortho Ltd. for damages prior to October 13, 1993.
          The parties may apply for leave to appeal to the House of
          Lords.  Chiron is informed that officials within the British
          Ministry of Health have in the past raised the possibility of
          authorizing Murex's infringement of the `511 patent under the
          "Crown use" provisions of British law, with respect to the
          sale of HCV immunoassay kits to the British National Health
          Service.  Further, Murex has stated that it will apply for a
          compulsory license under the '511 patent.  Infringement
          proceedings against Murex on German and European patents
          corresponding to the '511 patent have also been filed by
          Chiron and Ortho in Germany, Italy, The Netherlands and
          Belgium. On January 23, 1995, Chiron and Ortho were granted an
          injunction in Germany.  On May 8, 1995, Chiron was granted a
          cross-border preliminary injunction by the Dutch court
          preventing infringement by Murex and certain of its affiliates
          covering The Netherlands, Belgium, France, Spain and
          Luxembourg.  Murex has brought an action in Australia seeking
          the revocation of the Australian counterpart of the '511
          patent.  Chiron has counterclaimed for infringement.

          ORGANON TEKNIKA, LTD.  On May 4, 1994, Chiron instituted summary
          legal proceedings against Organon Teknika, B.V., Akzo Pharma, B.V.,
          Akzo Pharma International, B.V., Organon Teknika, N.V. [all
          subsidiaries of Akzo N.V. (collectively referred to as "Organon")],
          and United Biomedical, Inc. ("UBI"), the supplier of Organon's HCV
          antigens and kits, in the District Court of the Hague, The
          Netherlands, alleging infringement of European Patent No. 318,216
          ("the '216 patent") as a result of the defendants' manufacture and
          sale of HCV immunoassay kits.  On July 22, 1994, Chiron was granted a
          cross-border preliminary injunction against further infringement,
          including sale of the UBI kit, by Organon in Austria, Belgium,
          Switzerland, Germany, Spain, France, Italy, Liechtenstein, Luxembourg,
          The Netherlands and Sweden.  Organon and UBI appealed the injunction.
          The '216 patent is a counterpart of the British '511 patent.
          Infringement proceedings brought by Chiron and Ortho were also pending
          against Organon in Italy and Belgium (based on the '216 patent), and
          in the U.K. (based on the British '511 patent), in proceedings
          consolidated with the actions against Murex, described above.  Chiron,
          Ortho and Organon settled all European HCV litigation on October 9,
          1995, and Chiron and Ortho were compensated for past infringement.
          UBI did not participate in the settlement, and has been ordered to pay
          Ortho Ltd. damages by the U.K. Court of Appeal, along with Murex, as
          described above.

          DANIEL W. BRADLEY.  On December 20, 1994, Dr. Daniel W. Bradley,
          a former scientist at the U.S. Centers for Disease Control (the "CDC")
          brought suit in the United States District Court for the Northern
          District of California against Chiron, Ortho, certain employees of
          Chiron, and the United States government.  Subsequently, Bradley
          dismissed the United States as a defendant.  Bradley, who collaborated
          with Chiron scientists on the research that led to the discovery of
          HCV, alleges he has been wrongly excluded as an inventor of HCV.  He
          requests various forms of relief, including declarations that he is an
          inventor of Chiron's patents related to HCV and that these patents are
          unenforceable.  Bradley further seeks monetary damages and a
          constructive trust on all past and future profits derived from
          Chiron's HCV invention, which are estimated by Bradley to be in excess
          of $1 billion, as well as penalties under federal and state
          Racketeering and Corrupt Organization (RICO) statutes.  Chiron
          believes Bradley's claims to inventorship and his suit are without
          merit, and that substantial defenses exist. In 1990, Bradley and the
          CDC entered into a settlement agreement regarding his claims of
          inventorship in which any rights either might have were assigned to
          Chiron.  Chiron believes that the settlement agreement is valid and
          bars nearly all of the claims in the subject litigation.  Chiron and
          the other defendants have filed a motion to dismiss.  In a hearing on
          November 3, 1995, the court stated that it will grant the motion to
          dismiss Bradley's suit, but that Bradley will be given a limited leave
          to file an amended complaint.

          ABBOTT LABORATORIES.  On December 13, 1993, Chiron filed a patent
          infringement action against Abbott Laboratories ("Abbott") in the
          United States District Court for the Northern District of California.
          The suit, which alleges infringement of Chiron's U.S. Patent No.
          5,156,949 ("the '949 patent"), claiming the use of recombinant
          envelope antigens in immunoassays for HIV antibodies, is based on
          Abbott's sale of unlicensed HIV immunoassay tests which are believed
          to fall within the scope of one or more patent claims.  Abbott is
          defending this suit on the basis of invalidity and non-infringement.
          Chiron is requesting unspecified damages and injunctive relief.  Cross
          motions for summary judgment on Abbott's defenses of inequitable
          conduct and prior invention are currently pending.  The court had
          issued a tentative decision granting Abbott's motion for summary
          judgment on invalidity due to prior invention.  Subsequently, the
          court heard further arguments on this issue and reversed itself,
          denying Abbott's motion for summary judgment.  Subsequently, the
          United States Patent & Trademark Office declared an interference
          between the '949 patent and an application owned by Centocor and the
          U.S. government.  Chiron is the junior party.

          On April 26, 1994, Abbott filed suit against Chiron in the United
          States District Court for the Northern District of Illinois, Eastern
          Division, alleging that the Company has, by making, using and selling
          nucleic acid hybridization assays, infringed three U.S. patents owned
          by third parties and licensed to Abbott.  Abbott is seeking injunctive
          relief and damages in an unspecified amount.  The Company believes
          that it has substantial defenses and is defending this suit
          vigorously.

          STOCKHOLDER LITIGATION.  In November 1994, Chiron, its directors,
          and certain of its officers were sued in three essentially identical
          actions filed as class actions on behalf of Chiron stockholders,
          alleging that the directors had violated their fiduciary duty by
          failing to maximize stockholder value in connection with the series of
          transactions affected with Ciba-Geigy which were announced on November
          20, 1994, by, among other things, not taking all possible steps to
          seek out and encourage the best offer for the Company once the Company
          had been put in play.  Two of the actions filed respectively on
          November 14, 1994 and November 22, 1994 (HANNA V. CHIRON CORP. ET AL.,
          C.A. No. 13874, and DEZUBE V. CHIRON CORPORATION ET AL., C.A. No.
          13896) were filed in the Court of Chancery of the State of Delaware in
          and for New Castle County.  The complaints in both cases ask for
          injunctive relief, rescission and attorneys' fees.  Plaintiff in the
          HANNA action additionally seeks damages in an unspecified amount.
          Plaintiff in the DEZUBE action additionally seeks an accounting.  The
          complaints have been answered by all defendants, who deny the material
          allegations of the complaints.  The third action was filed in the
          Superior Court of California, Alameda County, Northern Division, on
          December 1, 1994 (PERERA ET AL. V. CHIRON CORPORATION ET AL., Case
          Action No. 744522-2).  Plaintiff sought injunctive and declaratory
          relief, and accounting, costs and disbursements, including attorneys'
          and experts' fees, and other relief.  The PERERA action has been
          dismissed by stipulation and the plaintiffs have filed, on October 17,
          1995, a new action against the same defendants and Ciba-Geigy, Ltd. in
          the U.S. District Court for the Northern District of California.  The
          defendants intend to defend vigorously these matters.

          The Company is party to certain other lawsuits, each of which is
          described in Item 3, Legal Proceedings, on page 9 of the Company's
          report on Form 10-K for the period ended December 31, 1994, in Item 1,
          Legal Proceedings, on page 24 of the Company's report on Form 10-Q for
          the period ended April 2, 1995, and in Item 1, Legal Proceedings on
          page 24 of the Company's report on Form 10-Q for the period ended July
          2, 1995, and as to which lawsuits there have been no material
          developments since such Form 10-K and Forms 10-Q were filed.


ITEM 2.   CHANGES IN SECURITIES.  None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.  None.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  None.

ITEM 5.   OTHER INFORMATION.  None.

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


          (a)     EXHIBITS.

                  2.01     Agreement and Plan of Merger, made as of
                           February 6, 1987, incorporated by reference to
                           Exhibit 2.01 of the Registrant's Form 10-Q
                           report for the period ended September 30, 1994.


                  3.01     Restated Certificate of Incorporation of the
                           Registrant, dated August 18, 1987, incorporated
                           by reference to Exhibit 3.01 of the Registrant's
                           Form 10-K report for fiscal year 1991.

                  3.02     Certificate of Amendment of Restated Certificate
                           of Incorporation of the Registrant, dated
                           December 12, 1991, incorporated by reference to
                           Exhibit 3.01 of the Registrant's Form 10-K
                           report for fiscal year 1991.

                  3.03     Bylaws of the Registrant, as amended,
                           incorporated by reference to Exhibit 3.03 of the
                           Registrant's Form 10-K report for fiscal year
                           1994.

                  4.01     Indenture, dated as of May 21, 1987, between
                           Cetus Corporation and Bankers Trust Company,
                           Trustee, incorporated by reference to Exhibit
                           4.01 of the Registrant's Form 10-Q report for
                           the period ended September 30, 1994.

                  4.02     First Supplemental Indenture, dated as of
                           December 12, 1991, by and among Registrant,
                           Cetus Corporation, and Bankers Trust Company,
                           incorporated by reference to Exhibit 4.02 of the
                           Registrant's Form 10-K report for fiscal year
                           1992.

                                       23

<PAGE>

                  4.03     Indenture, dated as of November 15, 1993,
                           between Registrant and The First National Bank
                           of Boston, as Trustee, incorporated by reference
                           to Exhibit 4.03 of the Registrant's Form 10-K
                           report for fiscal year 1993.

                  4.04     Rights Agreement, dated as of August 25, 1994,
                           between the Company and Continental Stock
                           Transfer & Trust Company, which includes the
                           Certificate of Designations for the Series A
                           Junior Participating Preferred Stock as Exhibit
                           A, the form of Right Certificate as Exhibit B
                           and the Summary of Rights to Purchase Preferred
                           Shares as Exhibit C, incorporated by reference
                           to Exhibit 4.04 of the Registrant's current
                           report on Form 8-K dated August 25, 1994.

                  4.05     Amendment No. 1 to Rights Agreement dated as of
                           November 20, 1994, between Chiron Corporation
                           and Continental Stock Transfer & Trust Company,
                           incorporated by reference to Exhibit 4.05 of the
                           Registrant's current report on Form 8-K, dated
                           November 20, 1994.

                  4.06     $1,000,000 County of Lorain, Ohio Variable Rate
                           Industrial Revenue Bonds dated as of July 1,
                           1984, due July 1, 2014, incorporated by
                           reference to Exhibit 4.06 of the Registrant's
                           Form 10-Q report for the period ended April 2,
                           1995. The Registrant agrees to furnish to the
                           Commission upon request a copy of such agreement
                           which it has elected not to file under the
                           provisions of Regulation 601(b)(4)(iii).


                  4.07     $1,000,000 Walpole Industrial Development
                           Authority 6.75% Industrial Revenue Bonds dated
                           as of July 1, 1979, due July 1, 2004,
                           incorporated by reference to Exhibit 4.07 of the
                           Registrant's Form 10-Q report for the period
                           ended April 2, 1995. The Registrant agrees to
                           furnish to the Commission upon request a copy of
                           such agreement which it has elected not to file
                           under the provisions of Regulation
                           601(b)(4)(iii).

                  10.01    Lease between Registrant and BGR Associates, a
                           California limited partnership, dated May 26,
                           1989, incorporated by reference to Exhibit 10.01
                           of the Registrant's Form 10-Q report for the
                           period ended September 30, 1994.

                  10.02    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.

                  10.03    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.

                                       24

<PAGE>

                  10.04    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.

                  10.05    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.

                  10.06    Revolving Credit Facility dated as of March 24,
                           1995, between Chiron Corporation and Swiss Bank
                           Corporation, San Francisco Branch, incorporated
                           by reference to Exhibit 10.06 of the
                           Registrant's Form 10-Q report for the period
                           ended April 2, 1995.

                  10.07    Lease between Acorn Development, Inc., a West
                           Virginia corporation, and IntraOptics, Inc., a
                           Delaware corporation, dated September 12, 1991,
                           incorporated by reference to Exhibit 10.06 of
                           the Registrant's Form 10-K report for fiscal
                           year 1992.

                  10.08    Joint Venture Agreement by and between Chiron
                           Biocine Corporation, a California corporation,
                           and CIBA-GEIGY Biocine Corporation, a Delaware
                           corporation, dated April 15, 1987 (with certain
                           confidential information deleted), incorporated
                           by reference to Exhibit 10.23 of the
                           Registrant's Form 8 filed with the Commission on
                           February 14, 1992.

                  10.09    Amendment to Biocine Joint Venture Agreement by
                           and between Chiron Biocine Corporation, a
                           California corporation, and CIBA-GEIGY Biocine
                           Corporation, a Delaware corporation, effective
                           as of January 1, 1992, incorporated by reference
                           to Exhibit 10.63 to Registrant's Form 10-Q
                           report for the period ended June 30, 1992.

                  10.10    Research and License Agreement by and between
                           Registrant and The Biocine Company, a Delaware
                           partnership, dated April 15, 1987 (with certain
                           confidential information deleted), incorporated
                           by reference to Exhibit 10.24 of the
                           Registrant's Form 8 filed with the Commission on
                           February 14, 1992.

                                       25

<PAGE>

                  10.11    License Agreement by and between CIBA-GEIGY
                           Biocine Corporation, a Delaware corporation, and
                           The Biocine Company, a Delaware partnership,
                           dated April 15, 1987 (with certain confidential
                           information deleted), incorporated by reference
                           to Exhibit 10.25 of the Registrant's Form 8
                           filed with the Commission on February 14, 1992.

                  10.12    License Agreement by and between Chiron Biocine
                           Corporation, a California corporation, and The
                           Biocine Company, a Delaware partnership, dated
                           April 15, 1987 (with certain confidential
                           information deleted), incorporated by reference
                           to Exhibit 10.26 of the Registrant's Form 8
                           filed with the Commission on February 14, 1992.

                  10.13    Letter Agreement signed by CIBA-GEIGY
                           Corporation, dated April 15, 1987, incorporated
                           by reference to Exhibit 10.13 of the
                           Registrant's Form 10-Q report for the period
                           ended September 30, 1994.

                  10.14    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.

                  10.15    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.

                  10.16    Chiron Corporation 1991 Stock Option Plan, as
                           amended, incorporated by reference to Annex 1 of
                           the Registrant's Proxy Statement dated April 18,
                           1995.*

                  10.17    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.*

                  10.18    Forms of Option Agreements, Cetus Corporation
                           Amended and Restated Common Stock Option Plan,
                           incorporated by reference to Exhibit 10.33 of
                           Registrant's Form 10-K report for fiscal year
                           1991.*

                                       26

<PAGE>

                  10.19    Forms of Supplemental Letter concerning the
                           assumption of Cetus Corporation options by
                           Chiron, incorporated by reference to Exhibit
                           10.34 of Registrant's Form 10-K report for
                           fiscal year 1991.*

                  10.20    Agreement and Plan of Reorganization dated as of
                           October 11, 1991 by and among the Registrant,
                           Chiron Ophthalmics, Inc., COI Acquisition Corp.,
                           IntraOptics, Inc. and James R. Cook, M.D.,
                           incorporated by reference to Exhibit 28.2 of
                           Registrant's current report on Form 8-K dated
                           October 14, 1991.

                  10.21    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.

                  10.22    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.

                  10.23    Stock Purchase Agreement between the Registrant
                           and CIBA-GEIGY, Limited, a corporation organized
                           and existing under the laws of Switzerland,
                           dated November 14, 1988, incorporated by
                           reference to Exhibit 10.23 of the Registrant's
                           Form 10-Q report for the period ended September
                           30, 1994.

                  10.24    Form of Debenture Purchase Agreement between the
                           Registrant and CIBA-GEIGY, Limited, a
                           corporation organized and existing under the
                           laws of Switzerland, dated June 22, 1990,
                           incorporated by reference to Exhibit 10.25 of
                           the Registrant's Form 10-K report for fiscal
                           year 1994.

                  10.25    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.

                  10.26    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.

                                       27

<PAGE>

                  10.27    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.

                  10.28    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.

                  10.29    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.

                  10.30    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.

                  10.31    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.

                  10.32    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.

                  10.33    Supplemental Agreement dated as of January 3,
                           1995 among Ciba-Geigy Limited, Ciba-Geigy
                           Corporation, Ciba Biotech Partnership, Inc. and
                           Chiron Corporation, incorporated by reference to
                           Exhibit 10.61 of the Registrant's current report
                           on Form 8-K dated January 4, 1995.

                  10.34    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.*

                                       28

<PAGE>

                  10.35    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.*

                  10.36    Lease dated as of July 1, 1983 between Cetus
                           Corporation and H.B. Chapman, Jr., incorporated
                           by reference to Exhibit 10.28 of the
                           Registrant's Form 10-Q report for the period
                           ended September 30, 1994.

                  10.37    Amendment to Lease, made as of March 20, 1990,
                           amending Lease dated July 1, 1983, between
                           Harold B. Chapman, Jr. and Cetus Corporation,
                           incorporated by reference to Exhibit 10.37 of
                           the Registrant's Form 10-Q report for the period
                           ended April 2, 1995.

                  10.38    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(k) of
                           Cetus Corporation's Form 10-K report for its
                           fiscal year 1987 (Commission File No. 0-10003).

                  10.39    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.

                  10.40    Form of Option Agreement (with forms of Purchase
                           Agreements attached thereto), dated December 30,
                           1986, between Cetus Corporation and each former
                           limited partner of Cetus Healthcare Limited
                           Partnership II, a California limited
                           partnership, incorporated by reference to
                           Exhibit 10.32 of the Registrant's Form 10-Q
                           report for the period ended September 30, 1994.

                  10.41    Big-O Property Purchase and Leaseback Agreement,
                           dated as of October 31, 1988, between Cetus
                           Corporation and Richard K. Robbins, incorporated
                           by reference to Exhibit 10.33 of the
                           Registrant's Form 10-Q report for the period
                           ended September 30, 1994.

                  10.42    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.

                                       29

<PAGE>

                  10.43    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.

                  10.44    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.

                  10.45    Letter Agreement, dated as of December 12, 1991,
                           relating to Stock Purchase and Warrant Agreement
                           between Registrant and Hoffmann-La Roche Inc.,
                           incorporated by reference to Exhibit 10.59 of
                           Registrant's Form 10-K report for fiscal year
                           1991.

                  10.46    Agreement and Plan of Merger dated as of July
                           21, 1991, by and among Registrant, Chiron
                           Acquisition Subsidiary, Inc. and Cetus
                           Corporation, incorporated by reference to
                           Exhibit 28.2 of Registrant's Form 8-K report
                           dated July 22, 1991.

                  10.47    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.*

                  10.48    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.*

                  10.49    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.

                  10.50    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.]

                  10.51    Letter Agreement dated September 9, 1991 between
                           the Registrant and Walter Moos, incorporated by
                           reference to Exhibit 10.47 of the Registrant's
                           Form 10-K report for fiscal year 1992.*

                                       30

<PAGE>

                  10.52    Letter Agreement between the Registrant and
                           Walter Moos, dated February 1, 1993,
                           incorporated by reference to Exhibit 10.48 of
                           the Registrant's Form 10-K report for fiscal
                           year 1992.*

                  10.53    Letter Agreement between Registrant and Renato
                           Fuchs, dated May 13, 1993, incorporated by
                           reference to Exhibit 10.47 of the Registrant's
                           Form 10-K report for fiscal year 1993.*

                  10.54    Agreement made as of December 6, 1984, by and
                           between Corning Glass Works, a New York
                           corporation, and Bioanalysis Limited, a company
                           incorporated in England and Wales, and Letter
                           dated July 26, 1985 from Bioanalysis Limited to
                           Corning Glass Works, incorporated by reference
                           to Exhibit 10.54 of the Registrant's Form 10-Q
                           report for the period ended April 2, 1995.
                           [Certain information has been omitted from the
                           Agreement pursuant to a request by Registrant
                           for confidential treatment pursuant to
                           Rule 24b-2.]

                  10.55    Description of Executive Variable Compensation
                           Program, incorporated by reference to Exhibit
                           10.58 of the Registrant's Form 10-K report for
                           fiscal year 1994.*

                  10.56    Chiron Corporation Executive Bonus Plan,
                           incorporated by reference to Annex 2 of the
                           Registrant's Proxy Statement dated April 18,
                           1995.*

                  10.57    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.

                  10.58    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.

                  10.59    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.

                  10.60    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.

                                       31


<PAGE>

                  10.61    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.*

                  10.62    Letter dated January 4, 1995 to C. William
                           Zadel, incorporated by reference to Exhibit
                           10.65 of the Registrant's Form 10-K report for
                           fiscal year 1994.*

                  10.63    Letter to Dino Dina dated April 24, 1984,
                           incorporated by reference to Exhibit 10.66 of
                           the Registrant's Form 10-K report for fiscal
                           year 1994.*

                  10.64    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.

                  10.65    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].

                  10.66    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].

                  10.67    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].

                                       32

<PAGE>


                  10.68    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].

                  10.69    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.

                  10.70    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].

                  10.71    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].

                  10.72    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].

                  10.73    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.


                                       33

<PAGE>

                  10.74    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.]

                  10.75    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.]

                  10.76    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.

                  10.77    Promissory Note dated January 1, 1995 by Ciba
                           Corning Diagnostics Corp, incorporated by
                           reference to Exhibit 10.77 of the Registrant's
                           Form 10-Q report for the period ended July 2,
                           1995.

                  10.78    Investment, Research Support and Marketing Agree-
                           ment made as of September 29, 1995 by and between the
                           Registrant and Ciba-Geigy Limited, a Swiss
                           Corporation. [Certain information has been omitted
                           from the Agreement pursuant to a request by Regis-
                           trant for confidential treatment pursuant to
                           Rule 24b-2.]

                  10.79    Letter Agreement between Ciba-Geigy Limited and the
                           Registrant dated September 29, 1995. [Certain
                           information has been omitted from the Agreement
                           pursuant to a request by Registrant for confidential
                           treatment pursuant to Rule 24b-2.]

                  11       Statement of Computation of Earnings per Share.

                  27       Financial Data Schedule.

         ---------------------------
         *Management contract, compensatory plan or arrangement.

          (b)     Reports on Form 8-K

                  Chiron filed a current report on Form 8-K, dated September 29,
                  1995, reporting under Item 2 the acquisition of Viagene, Inc.

                                       34
<PAGE>

                               CHIRON CORPORATION

                               September 30, 1995





                                   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



                                        BY:  /s/Edward E. Penhoet
                                             ------------------------------
DATE:      November 15, 1995                 Edward E. Penhoet
      ---------------------------            President and Chief
                                             Executive Officer



                                        BY:  /s/Dennis L. Winger
                                             ------------------------------
DATE:      November 15, 1995                 Dennis L. Winger
      ---------------------------            Senior Vice President, Finance
                                             and Administration


                                       35