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Sosei Group CorporationSosei Group Corporation Aiming to become an international biopharmaceutical drug development pg p company originating from Japan R&D Day 24th June 2015 Tokyo 24 June 2015 Agenda Time Topic Presenter 10:00 – 10:10 Sosei Group  Overview Shinichi  Tamura,  Group CEO  10 10 10 30 Ht Oi Ml l Wi Ht CEO10:10 – 10:30 Heptares Overview Malcolm Weir,  Heptares CEO 10:30 – 10:50  3D Demo of  GPCR Structure  Based Drug Design Jonathan Mason, Senior Research  Fellow  10:50 – 11:10 Muscarinic  Agonists for  Alzheimer’s and Schizophrenia Tim Tasker, Heptares CMO 11:10 – 11:20 Adenosine A Antagonists for Tim Tasker Heptares CMO11:10 – 11:20 Adenosine A2A Antagonists for  ADHD and Immuno‐Oncology Tim Tasker, Heptares CMO 11:20 – 11:30 CGRP  antagonists for migraine Tim  Tasker, Heptares CMO 11:30 – 11:35 Heptares synergies  with Jitsubo and Activus Akinori Mochizuki, Chief Technical  Officer 11:35 – 11:40 Future directions Shinichi Tamura, Group CEO R&D Day 2015.6.24 11:35  11:40  Future directions Shinichi Tamura, Group CEO 11:40 – 12:00 Q  and AA L L 2 M&A Adds Powerful Product Engine Drug discovery engine Di i t i b l i l i f Di i t i b l i l i f Nano Technology Driving sustainable pipeline of new product opportunities Continued strategy to partner Driving sustainable pipeline of new product opportunities Continued strategy to partner ✔ ✔ Peptide Technologies Technology Continued strategy to partner around platform and pipeline Wl d l UK R&D t Continued strategy to partner around platform and pipeline Wl d l UK R&D t ✔ ✔ GPCR Technology World-class UK R&D team Synergy with existing Sosei World-class UK R&D team Synergy with existing Sosei ✔ ✔ Technology Synergy with existing Sosei Group platform technologies Synergy with existing Sosei Group platform technologies ✔ R&D Day 2015.6.24 3 Sosei Group – Acquired New Strengths StaR® Te chnology Pe pt ide Na no Tech n o l o g y Innovative drug discovery engine Continuing revenue stream gyyg Sustainable pipeline replenishment through innovative drug discovery Profitable, sustainable revenue structure through innovative drug discovery engine High-profit potential pipeline Global management pp Number of first-in-class/ best-in-class candidates Exceptional leadership team, strong corporate governance system R&D Day 2015.6.24 4 Focused on developing multiple and Business Strategy Focused on developing multiple and sustainable revenue streams beyond COPD product royalties Long-termLong-term Mid-termMid-term ・ Product commercialisation ・ New product royalties ・ Pipeline partnershipsTodayToday ・ Pipeline partnerships ・ COPD product royalties ・ Pipeline partnerships ・ Platform deals TodayToday ・ COPD product royalties ・ Platform deals ・ Platform deals R&D Day 2015.6.24 Platform deals 5 Pipeline R&D Day 2015.6.24 6 COPDCOPD At hAt h Out-licensed product to be developed into a new asthma therapy: QVM149 COPDCOPD AsthmaAsthma LAMALAMA LAMA/LABALAMA/LABA LAMA/LABA/ICSLAMA/LABA/ICS QVM149QVM149QVA149QVA149NVA237NVA237 QQQQ UltibroUltibro®®SeebriSeebri®® Ad d l h d i E U J • New inhaled triple therapy • Approved and launched in EU, Japan etc. • Filed for approval in the US pp y for asthma • Novartis plans to file for approval in 2018 • Development/sales milestones totaling up to JPY 187.5 million • Milestones (upon P3 initiation, filing, and approval) R&D Day 2015.6.24 • Royalties until 2026 • Fixed-rate royalties 7 Ht Th ti LtdHeptares Therapeutics Ltd. GPCR Drug Discovery and Development © Sosei Group Corporation. All rights reserved. 8 The Heptares Presenting Team Jonathan Mason, PhD Senior Research Fellow, Heptares Therapeutics Tim Tasker, MD CMO and VP Development, Heptares Therapeutics Malcolm Weir, PhD Co-founder and CEO of Heptares Therapeutics, and Chief R&D Officer of Sosei Group  Pioneer in computer-aided drug design (CADD)  >20 years at GSK/SB with responsibility for early clinical development of neuroscience Officer of Sosei Group  Former Head of the Biomolecular Structure Department / Molecular Sciences Division, GlaxoWellcome  Former Divisional Director at Lundbeck Research - Early Lead Generation (Chemistry) and Computational Chemistry & Chief development of neuroscience compounds and a key participant in the NDAs of some major neuroscience projects  Former CEO, Inpharmatica  Awarded, with two other Heptares senior scientists 2015 Malcolm Scientist  Formerly held roles of Executive Director at Pfizer UK, Director at Bi t l M S ibb (US) d t  Former Executive VP of Clinical Development at Evotec  Fellow of the UK Royal College of senior scientists, 2015 Malcolm Campbell Memorial Prize by the UK Royal Society of Chemistry in recognition of Outstanding Contribution to GPCR Drug Disco er Bristol-Myers Squibb (US) and at Rhône-Poulenc Rorer (now Sanofi- Aventis) (UK, France and US) Physicians and of the UK Faculty of Pharmaceutical Medicine Discovery R&D Day 2015.6.24 9 Heptares Therapeutics B ildi th ld’ l di GPCR th ti Exceptional pipeline of clinical candidates Building the world’s leading GPCR therapeutics company Exceptional pipeline of clinical candidates  Diversified pipeline across neuroscience, metabolic, orphan diseases  Multiple Phase 1 & Phase 2 clinical programmes reporting data during 2015-2017 Unique, proprietary GPCR structure-based drug discovery platform  Breakthrough chemistry for validated, yet previously hard-to-drug, biology  Enables small molecule peptide and biologics discovery Enables small molecule, peptide, and biologics discovery Multiple platform deals – potential for sustainable revenues Experienced global leadership team ( /) R&D Day 2015.6.24 (Most with megapharma/biopharma experience) 10 The Heptares pipeline P Id i i Di Pl i i l Ph 1 Ph 2Programme Indication Discovery Preclinical Phase 1 Phase 2 M1 agonist AD/Sz Cognition M agonist Sz/AD Psychosis M4 agonist Sz/AD Psychosis M1M4 dual agonist Sz/AD Psych / Cog A2A antagonist ADHD IND open 2A g CGRP antagonist Migraine Orexin OX1 antagonist Addiction p GLP-1 antagonist Congenital hyperinsulinism Multiple targets Multiple indications  Highly validated targets, relatively low biology risk Partnered programmes Multiple indications Progress confidential AD: Alzheimer’s disease; Sz: schizophrenia; ADHD: attention deficit hyperactivity disorder R&D Day 2015.6.24  All first-in-class or superior next-generation therapeutics; multiple shots on goal  Leading in neuroscience, next wave of orphan (eg GLP-1 antagonist)/other therapeutic areas 11 Value potential from Heptares platform/pipeline Market Projected Rf Candidate Target product profile Patient population US/5EU 1 Market value (est) 1 Projected peak sales (est) 2 Reference product peak sales M1 agonist Well-tolerated pro-cognitive fA D d f i t f AD 5-8.5M S 2 8M (85% f $7bn dt $3-5 bn Aricept $3.9 bn for AD and first-ever for cognitive impairment in Sz, PDD Sz 2.8M (85% of patients) precedent for AD + new Sz, PD M4 agonist Well-tolerated anti-psychotic for Sz and first-ever for AD AD psychosis 1.5-2.3M Sz 35 M $6.5 bn Sz $13bn total $3-5 bn Abilify $5.7 bn in all indicationsfor Sz and first ever for AD Sz 3.5M $13bn total indications Dual M1/M4 agonists Dual anti-psychotic and pro- cognitive for AD, Sz, other AD 2-3.5M Sz 3.3M $20 bn $5-10 bn New paradigm in AZ and Sz A2A antagonist Effective, safe non-stimulant for ADHD 31M pediatric and adult $5-8 bn $0.5-1.5 bn Strattera $0.7 bn Vyvanse $1 4 bnfor ADHD Vyvanse $1.4 bn CGRP antagonist First-in-class SME for Migraine Treatment and Prophylaxis US: 36M, 12.6M eligible for prophylaxis, 30-40% triptan failures, 5EU: 47M $2-3 bn (Rx) $0.5-2 bn Levadex $0.5bn (est) AMG-334 $2.6bn (est) Orexin OX1 antagonist First-in-class new mechanism for craving/addiction Smoking: c70M US: 1.3M on Chantix Opioid: 4.2M $2.7-3.7 bn $1-3 bn Chantix $0.9 bn Suboxone $0.9 bn R&D Day 2015.6.24 1Sources: Decision Resources, Defined Health, LEK, GBI, analyst reports and company financial reports and presentations 2Estimate based on market size and differentiation versus standards of care and competitor pipeline 12 Heptares Corporate Deals  Key strategy to partner around pipeline and platform Key strategy to partner around pipeline and platform  Provides strong validation, cash and sustainable long-term revenue potential • More than $30 million generated in upfront and milestone payments $• Potential to generate more than $1 billion in future milestones and royalties Partner Focus Small molecule & antibody drugs in multiple therapeutic areas StaR® antigens for antibody discovery, multi-target alliance Up to 2 GPCR drug targets for undisclosed indications in acute care StaR® antigens for antibody discovery, multi-target alliance Small molecules targeting single GPCR linked to CNS disorders Small molecules targeting a single GPCR nominated by Novartis R&D Day 2015.6.24 13 G Protein-Coupled Receptors (GPCRs)  Most important family of drug targets in industry • Source of approximately 40% approved drugs*  Clinical validation and compelling biology across wide range of diseases Respiratory diseases Advair® OC t i ® Neuroscience Zyprexa® Abilif ® Cardiovascular diseases Opsumit® Di ® Respiratory  diseases OxyContin® Breo™ Ellipta™ Anoro® Seebri® Abilify® Seroquel® Suboxone® Diovan® Benicar® Tracleer® Zioptan™ bl d GPCR Neuroscience Cardiovascular  diseases Ultibro® Ventolin® HFA  Singulair® Spiriva® Plavix® Cancer Metabolic diseases Belviq® Byetta® Myrbetriq® Metabolic  diseases Other Cancer R&D Day 2015.6.24 Tudorza® Pressair® Erivedge®Signifor® *Product names are trademarks of their respective owners 14 GPCR Stabilization Enables SBDD  But, many high-value GPCRs remain untapped or intractable • Sub-optimal or no drug compounds resulting  SBDD previously not applicable to GPCRs due to protein instability • 7-transmembrane helix structure collapses outside membrane  Stable GPCRs (StaR proteins) and 3D structures are the key to unlocking discovery unlocking discovery • Stable in clinically relevant conformations (agonist/antagonist/partial agonist) • Enables crystallization for X-ray structure determination • Provides antigen for antibody discovery R&D Day 2015.6.24 15 GPCRs Exist in Different Forms  GPCRs can switch between inactive (antagonist) and active (agonist) states  These differ in shape and bind different compounds Antagonist conformation Agonist conformation Cell signal switched onCell signal switched off  Depending on the disease it may be necessary to switch the GPCR on or off  Heptares StaR® Technology locks the protein in the form required to treat the disease, to find gg R&D Day 2015.6.24  Heptares StaR Technology locks the protein in the form required to treat the disease, to find drugs that will have the right effect 16 Structure Solution by X-ray Crystallography GPCR crystal Synchrotron X-ray beam R&D Day 2015.6.24 X-ray diffraction patternProtein structuresDrug Design 17 Revolution in GPCR Drug Discovery Traditional Approach Heptares Approach 1M compounds randomly screened bH T S >10M compounds screened ‘in silico’ to fit protein kt Traditional Approach Heptares Approach by HTS pocket Low hit rate – poor quality High hit rate – precise information on No information on mechanism g p ligand/protein interactions Resource-intensive Structure-based design rapidly Resource-intensive empirical chemistry programme design rapidly generates optimised candidates Sub-optimal drug candidates Optimised drug candidates ‘perfect fit’ R&D Day 2015.6.24 Reduced attrition 18 StaR Technology for Antibody Discovery  Scarcity of GPCR mAbs: only one mAb approved to date  StaR technology solves key problem: • stable, quality antigen in specific conformation Antibody Partners ,q y g p  >100 untapped mAb GPCR targets across range of diseases  Heptares pipeline development via partnerships Unique Structural Insights Activity in Disease modelsBroad Utility in Ab Discovery mAb epitope In vitro eg Phage screening In vivo Immunisation R&D Day 2015.6.24 Immunisation 19 Heptares Holds Key to GPCR Drug Discovery Heptares StaRs® Stable Protein Structural Information SBDD  St R t h l i t f ti f di Antibody Discovery SMEs Peptides  StaR technology is transformative for discovery • Yields drugs with increased selectivity, safety and greatly reduced clinical attrition  Strong scientific validation • Extensive publication record in high impact journals  StaR® proteins for all families of GPCRs • 10+ world-first receptor x-ray structures R&D Day 2015.6.24  8 novel first/best-in-class candidates (preclinical and Phase 1) 20 R&D Day 24th June 2015 Tokyo 3D Demo GPCR Structure Based Drug Design: Adenosine A2A receptor 2A © Sosei Group Corporation. All rights reserved. R&D Day 24th June 2015 Tokyoy y Muscarinic M1 and M4 Agonists for 1 4 g Alzheimer’s Disease and Schizophrenia © Sosei Group Corporation. All rights reserved. 22 The Role of Muscarinic Receptors M1 brain – learning and memory M 4 brain – behaviour M2 heart – heart rate and BPM2/M3 lung - bronchoconstriction M2/3 stomach – gastric emptying  H l il fil f 30+ ti t M d/ M ith t M M M2/3 bladder – contraction M2/3 gut – gut transit  Holy grail profile for 30+ years: activate M1 and/or M4 without M2 or M3  Mechanism validated by xanomeline, a poorly selective M1/M4 agonist • Improved memory in Alzheimer’s disease (AD) and reduced behaviouralImproved memory in Alzheimer s disease (AD) and reduced behavioural symptoms in schizophrenia (SZ) • GI and CV side effects mediated by M2 and M3 receptors - clinical development discontinueddevelopment discontinued  Blockbuster drugs do not adequately address the unmet medical need • AD: Aricept (donepezil) - $3.9bn peak sales, dose-limiting side effects and lf f f t R&D Day 2015.6.24 loss of effect • SZ: Abilify (aripiprazole) - $5.9bn peak sales, dose-limiting side effects 23 Major Markets and Unmet Needs Alzheimer’s Disease SchizophreniaAlzheimer s Disease Symptoms • Decline in memory, thinking and reasoning skills • Behavioural and personality changes 30 -50% with Schizophrenia Severe psychiatric illness • Positive symptoms linked to dopamine (hallucinations delusions)• Behavioural and personality changes, 30-50% with psychosis (suspiciousness, delusions) Most prevalent form of dementia in elderly •> 75M by 2030, driven by ageing population (hallucinations, delusions) • Negative symptoms (loss of affect, immobility) • Cognitive deficits in execut ive function and attention Affects 1% of the world population 75M by 2030, driven by ageing population • 7.7 million new cases of AD per year • Highest growth in Asia • Leading cause of disability, nursing home admissions, death • Symptoms commonly emerge by 16-25 yrs • High risk for suicide (1 in 10) Treatment 50% l di d tt t No cure or prevention • Only 20-50% of people receive a diagnosis • Symptomatic treatment with cholinesterase inhibitors • Moderate and transient clinical benefit with dose • 50% people diagnosed -n o treatment • Positive symptoms: an ti-psychotics – poorly tolerated due to side effects (weight gain, movement disorders, GI effects, sexual problems) • Negative symptoms and cogn itive impairment: no • Moderate and transient clinical benefit, with dose- limiting side effects (nausea, diarrhoea) Burden of Dementia • >$600Bn (World) >$200Bn (USA) effective treatment Burden of Schizophrenia • >$32.5Bn-$65Bn (USA), > ¥2.8 trillion (Japan) R&D Day 2015.6.24 >$600Bn (World), >$200Bn (USA) • 16% of direct medical costs worldwide • 1 in 2 people living with SZ does not receive adequate care 24 Heptares Muscarinic Programmes  First in class selective M and M agonists M1 - Cognition First-in-class selective M1 and M4 agonists  M1 agonists – Cognitive impairment in AD and SZ M1 Cognition • Highly selective M1 agonists with optimised level of activity • Phase 1 complete • Clinical Proof of Concept (PoC) trials in elderly subjects and AD Minimal off target side effects p( ) yj patients 2015/2016  M4 agonists – Psychosis and behavioral disturbance -10 -9 -8 -7 -6 -5 -4 Log [HTL-C] (M) Heptares Muscarinic M1 agonist 4 g y • Potential in SZ and AD • Highly selective for M4, optimised pharmacology Phase 1 end 2016 clinical PoC in Sz psychosis 2018 M1 M2 M3• Phase 1 end 2016, clinical PoC in Sz psychosis 2018  Dual M1/M4 agonists – Cognitive impairment & Psychosis M3 R&D Day 2015.6.24 • Clinical Phase 1 H2 2016, Phase 2a 2017 Unique SBDD approach 25 Role of Muscarinic M1 in Cognition 2. Loss of cholinergic g neurons in AD leads to decline in cognitive functions 1. M1 receptors in cortex and hippocampus are key in mediating 3. Acetyl-cholinesterase cognitive effects of acetylcholine (ACh) 3. Acetyl cholinesterase inhibitors (e.g. donepezil) prevent breakdown of ACh 4. M1 agonist activates receptor independently of ACh levels – Effects limited due to dose-limiting side effects and loss of ACh as disease progresses of ACh levels R&D Day 2015.6.24 26 Non-selective M1 Agonist Enhances Cognition in AD and SZ Xanomeline significantly stopped the decline in memory in AD patients Xanomeline enhanced cognition in SZ fG C f f Discontinued as a result of GI and CV side effects mediated by M2 and M3 receptors R&D Day 2015.6.24 Shekhar et al. Veroff et al. 27 Target Product Profile – M1 Agonists Alzheimer’s Schizophrenia Type of patient Throughout symptomatic disease Chronic between acute episodes Dose Oral, once daily Transdermal Oral, once daily Depot Effect Improved memory & attention Improved attention & exec function Impact Stay independent with less care demand Improved longer term outcome eg employment SafetySafety Tolerability Improved v Aricept High Competition AriceptN o a pproved treatment R&D Day 2015.6.24 C o p e tto p pp 28  Memory loss in natural aged dog Heptares M1 Agonist Demonstrates Improved Cognitive Function  Rat model of memory loss  Memory loss in natural aged dog model  M1 agonist reduces errors in dogs trained to carry out object retrieval  Rat model of memory loss  M1 agonist increases ability of rats to remember aversive environment yj task  Increased activity in animals with more severe symptoms HTL M it R&D Day 2015.6.24 HTL M1 agonist 29 HTL9936 – Selective M1 agonist – Phase 1a completed  First compound designed by Heptares  First compound designed by Heptares technology in humans  84 healthy young & elderly subjects  84 healthy young & elderly subjects dosed to 175mg & 10 days  3-hour half life in elderly subjects - yj penetrates into the brain well  Well tolerated in young subjects with levels up to 240ng/ml - large margin over dog cognition changes  Produces changes in EEG by two different methods at low exposures in man – affects brain in human R&D Day 2015.6.24  No M2 or M3 effects 30 M1 Agonist Clinical Plan – Cognition in AD & SZ HTL9936 HTL9936 Ph1b Healthy Elderly M1 agonist 1-month Ph2a AD Safety/Tolerability/PK HTL9936 PhI1 – Healthy Volunteers Single and Multiple Doses Cognition HTL9936 Ph1b Ph2b AD 3-6 months proof of enhanced cognition versus placebo M Ai t Doses COMPLETE Healthy Elderly fMRI Cognition Imaging p M1 Agonist 1-month Ph2a SZ Cognition 2015 2016 2017 Target Safety and PK in AD Efficacy R&D Day 2015.6.24 Target Engagement Safety and PK in AD Efficacy in SZ Efficacy in AD Role of Muscarinic M4 in Psychosis  M4 activation regulates dopamine and  M4 activation regulates dopamine and glutamate systems involved in psychosis  M4 knockout mice are hyperdopaminergic 4 yp p g • Anti-psychotic effects of xanomeline are absent in M4 knockout mice  In a Sz clinical trial (N=20), xanomeline significantly improved Positive and Negative Symptoms of SZ score (PANSS) and the Brief Psychiatric Rating Scale (BPRS) Brief Psychiatric Rating Scale (BPRS)  Xanomeline reduced behavioural symptoms in behavioural symptoms in AD clinical study R&D Day 2015.6.24 32 Target Product Profile – M4 agonists Alzheimer’s Schizophrenia Type of patient All severity Moderate / Severe Acute psychosis Dose Oral, once daily Oral, once daily Effect Reduced behavioural symptoms Reduced severity of psychosis Impact Less care demand Greater compliance as better tolerated SafetySafety Tolerability Improved v Aricept Improved v antipsychotics Competition No approved treatment Older anti psychotics R&D Day 2015.6.24 C o p e tto pp py 33 M4 Agonist Clinical Plan – Psychosis in SZ & AD Ph2 Anti-psychosis Schizophrenia Ph1b – Healthy Elderly Ph2 Alzheimer’s Ph1 Safety Tol SAD/MAD IND Enabling Preclinical Selection of M4 Compound Behavioural Effects Healthy Volunteers p 2016 2017 2018 2019 M4 Phase 1 start Target Engagement Efficacy in SZ Efficacy in AD R&D Day 2015.6.24 start Engagement Efficacy in AD 34 R&D Day 24th June 2015 Tokyoy y Adenosine A2A Antagonists for ADHD and 2A g Immuno-Oncology © Sosei Group Corporation. All rights reserved. Attention Deficit Hyperactivity Disorder (ADHD)  Symptoms Symptoms • Most common childhood psychiatric disorder • Complex disorder characterized by inattention, hyperactivity and impulsivity. yp y p y  Treatment • Stimulant drugs while effective have poor safety and ADHD deficits in frontal cortex & b l li i ( tt ti• Stimulant drugs, while effective, have poor safety and tolerability • Schedule II controlled substances with abuse potential Sid ff t i l d tit it h basal ganglia regions (attention, reasoning, impulsivity) • Side effects include appetite suppression; growth retardation; insomnia; irritability/aggression • Current non-stimulants offer improved safety, but if i ffi One of the largest pharma markets inferior efficacy  Key opportunity • Affects 6 to 9% of children • Prevalence of 30M+ in major markets • Market predicted to grow to $10b b 2020 i j R&D Day 2015.6.24  Key opportunity • New non-stimulant with best-in-class efficacy and safety >$10bn by 2020 in major markets 36  Highly concentrated expression in key brain areas Role of Adenosine A2A Receptors in ADHD  Highly concentrated expression in key brain areas involved in ADHD  A2A mechanism enhances dopamine and glutamate transmission  A2A antagonists are active in animal models of ADHD including attention and impulsivity  Reported beneficial ‘calming’ effects of caffeine (a weak A2A antagonist) in ADHD  Clinical proof of concept with Vernalis V81444 in adult ADHD showed significant improvement in A2A Antagonists di t ib ti i b l R&D Day 2015.6.24 PERMP-P measure (p=0.019) of attention distribution in basal ganglia, link to ADHD 37  First ever GPCR candidate wholly derived Heptares Novel Adenosine A2A Antagonist HTL1071 ‐ complementary fit to receptor site First-ever GPCR candidate wholly derived from SBDD • Highly optimised receptor interactions HTL1071 ‐ complementary fit  to receptor site Preladenant – suboptimal interactions  Candidate features – reduce toxicity risk • Very low molecular weight, relatively polar • Non-furan and non-xanthine  Cd i d t b f i t HTL Lead –d e s i g n e d to fit  pocket  Candidate benefits • Improved oral bioavailability and PK • Potent in vivo efficacy in impulsivity and attention models of ADHD cAMP accumulation 40 • Reduced safety risk in clinical development • No evidence for abuse liability  Successfully completed pre-clinical 10 20 30 Control + 300 pM + 1 nM + 3 nM + 10 nM + 30 nM ed cAMP responseyp p development and plan to progress to Phase 1 studies during 2015 -10 -9 -8 -7 -6 -5 -4 -3 0 + 100 nM + 300 nM Normalis R&D Day 2015.6.24 Log [NECA] (M) Potent competitive antagonist 38 HTL1071 Development Plan to POC in ADHD Ph2 Ad l ADHD Ph1 single dose safety/tolerability/PK Ph2 Adult ADHD • 4-week parallel group study • ADHD rating scales & cognitive domains • Two dose levels & placebo 55 per group Two dose levels & placebo, 55 per group •n = 1 6 5 Ph2b ti ti iti Multiple dose Ph1 Safety and PK Ph1 PET Imaging dose receptor occupancy Ph2b supporting activities: API manufacture, 3-month tox, formulation development 2015 2016 2017 Target PoC R&D Day 2015.6.24 Target Engagement PoC Efficacy in ADHD 39  Immunotherapy is a revolutionary way to treat cancer A2A Antagonist for Cancer Immunotherapy py y y • Dramatic efficacy seen with antibodies to CTLA4 (Yervoy) and PD1 (Optivo, Keytruda) • Agents act on the immune cells’ response to the tumour and not the tumour itself • Tumours have many mechanisms to evade immune system – including production of adenosine  A antagonists have potential to increase efficacy of T cell killing a cancer cell. Blocking A2A receptors on T cells prevents tumours evading the immune system  A2A antagonists have potential to increase efficacy of immunotherapies by blocking action of adenosine on T cells • Potential to combine with multiple immunotherapy approaches Control mAb CTLA4 A2A ant A t+ Ab gy Potential to combine with multiple immunotherapy approaches e.g. checkpoint inhibitors, cancer vaccines, CAR-T  Opportunity in a wide range of tumour types  Ability to select patients based on biomarkers of elevated A2A ant+ mAb  Ability to select patients based on biomarkers of elevated adenosine e.g. CD73  Heptares uniquely positioned with X-ray structures of multiple adenosine receptors A t i t h th ffi R&D Day 2015.6.24 • Discovery of first A2A antagonists specifically optimised for cancer indications A2A antagonists enhance the efficacy of other immunotherapies, e.g. CTLA4 and PD1 mAbs 40 HTL1071 – Combination in Immuno-oncology  Tumours release adenosine to block T cell immune response  Tumours release adenosine to block T cell immune response Adenosine A2A receptors Cellular Breakdown – Chemotherapy Adenosine A2A receptors – ATP release – TAA release Hypoxia HIF1a ↑CD39 ↑CD73 Adapted from RD Leone et al. Comp Struct Biol J 13 (2015) 265 272 R&D Day 2015.6.24 – HIF1a → ↑CD39 ↑CD73 Comp. Struct. Biol. J. 13 (2015) 265-272 41 HTL1071 – Combination in Immuno-oncology  Tumours release adenosine to block T cell immune response  Tumours release adenosine to block T cell immune response  A2A antagonists block adenosine and enhance: 1. Activation of T cells – CTLA-4 blockade – Vaccines Adenosine A2A receptors Cellular Breakdown – Chemotherapy Adenosine A2A receptors – ATP release – TAA release Hypoxia HIF1a ↑CD39 ↑CD73 Adapted from RD Leone et al. Comp Struct Biol J 13 (2015) 265 272 R&D Day 2015.6.24 – HIF1a → ↑CD39 ↑CD73 Comp. Struct. Biol. J. 13 (2015) 265-272 42 HTL1071 – Combination in Immuno-oncology  Tumours release adenosine to block T cell immune response 2. Expansion of T cells  Tumours release adenosine to block T cell immune response  A2A antagonists block adenosine and enhance: p 1. Activation of T cells – CTLA-4 blockade – Vaccines Cellular Breakdown Adenosine A2A receptors – Chemotherapy – ATP release – TAA release Hypoxia R&D Day 2015.6.24 Hypoxia – HIF1a → ↑CD39 ↑CD73 Adapted from RD Leone et al. Comp. Struct. Biol. J. 13 (2015) 265-272 43 HTL1071 – Combination in Immuno-oncology  Tumours release adenosine to block T cell immune response 2. Expansion of T cells  Tumours release adenosine to block T cell immune response  A2A antagonists block adenosine and enhance: 3E f f fT l l 1. Activation of T cells – CTLA-4 blockade Vaccines 3. Effects of T cells on tumour – PD-1 blockade – PD-L1 blockade – Vaccines – Adoptive T-cell therapy Cellular Breakdown Adenosine A2A receptors Cellular Breakdown – Chemotherapy – ATP release – TAA release R&D Day 2015.6.24 Hypoxia – HIF1a → ↑CD39 ↑CD73 Adapted from RD Leone et al. Comp. Struct. Biol. J. 13 (2015) 265-272 44 HTL1071 – Combination in Immuno-oncology Synergy with other immunotherapies Clinical trials of combinations • HTL1071 + PD 1 blockers HTL1071 +t h i t h • HTL1071 + other immunotherapy • HTL1071 + chemotherapy Measure tissue T cell response biomarkers Show effects on survival R&D Day 2015.6.24 Adapted from RD Leone et al. Comp. Struct. Biol. J. 13 (2015) 265-272 45 R&D Day 24th June 2015 Tokyoy y CGRP Antagonists for Migraine gg © Sosei Group Corporation. All rights reserved. 46 Severe and Chronic Migraine Migraine Prevalence  Symptoms • Debilitating head pain, often with nausea and/or aura Migraine Prevalence • Various rare and/or genetic subtypes, including basilar & hemiplegic  Treatment • Traditional OTC analgesics for mild migraine • Triptans +/- NSAID for moderate • Inferior options for refractory patients and for prophylaxis Market  Opportunity to address significant unmet medical needs • Chronic lifelong illness • Highest prevalence 30-39 yrs • 12% prevalence; 30M+ sufferers (USA); 65M+ (G7) • No good options for triptan-refractory or those with cardiovascular risk • Current prophylaxis – only 50% response rates, poorly tolerated • 25-33% patients have very frequent migraine (~weekly) • 30-40% patients require prophylaxis R&D Day 2015.6.24 47 Role of CGRP in Migraine  CGRP is a potent vasodilator released from CGRP is a potent vasodilator released from trigeminovascular nerve endings • Causes pain and plasma protein extravasation  CGRP levels elevated in migraineurs • CGRP induces migraine-like headache in susceptible individuals  Small molecule CGRP antagonists have progressed to Ph3 trials and shown efficacy equivalent to ti t triptans • Failure due to liver toxicity associated with high dose and compound properties • Need for higher potency safe small molecules gp y  Antibodies to CGRP or the CGRP receptor in Phase 2 clinical trials R&D Day 2015.6.24 • Efficacy demonstrated in chronic migraine prophylaxis with TEV-48125 and ALD403 48 Heptares CGRP Antagonist Project  Heptares developing small molecule CGRP antagonists for multiple market segments • Highly potent small molecules optimised by structure and fragment based methods fragment based methods • Low dose sub-cut and IN delivery very unlikely to cause liver injury seen with previous high dose oral agents  Intranasal (non-invasive) product for both  Intranasal (non invasive) product for both prophylaxis and rescue use • Prophylaxis: Once-daily agent; potentially superior efficacy vs biologics Fragment-linking structure-based drug • Rescue: Rapid onset; ideal for patients with vomiting; efficacy in triptan refractory patients • Phase 1 start 2016, Phase 2 PoC acute 2017 and prophylaxis 2018 design strategy generated multiple lead compounds 2018  Auto-injector for patients with more severe disease • Fastest acting, highest efficacy format for emergency rescue R&D Day 2015.6.24 49 1. Initial Ph1 safet y and tolerability by s/c route + PoMechanism b y inhibition of capsaicin flare CGRP Antagonist Clinical Plan yy y yp 2. Provides biomarker predictive of therapeutic dose 3. Transition to intranasal device for Ph2 – PoC in prophylaxis by mid 2018 4. Additional Opportunity for acute efficacy Ph2 with s/c or intranasal IND Eb l i St di 4Q15 Candidate Nomination Ph1 bi i l (IN) 2015 2016 2017 2018 IND Enabling Studies  Ph1 SAD/MAD/PK/PD  (SC) Ph2 POC Migraine Prophylaxis Ph1 bioequivalence (IN)  (SC)  Migraine Prophylaxis  Ph2 acute efficacy SC or IN Additional Toxicology for  3‐month clinical study Target Engagement R&D Day 2015.6.24 Target Engagement Skin flare inhibition 50 Heptares Newsflow Programme Indication 2015 2016 2017 M1 agonist AD (Cognition) Ph1a Safety (Completed) Ph1b – Target engagement Ph2 Efficacy in AD pts (POC) Ph2a safety, tolerability, PK in AD pts SZ (Cognition) Ph2a efficacy in SZ pts (POC) M4 agonist AD (Psychosis) Start of Ph1 studies (Psychosis) SZ (Psychosis) Start of Ph1 studies A2A antagonist ADHD Start of Ph1 studies Ph1 safety, tolerability Ph2b in ADHD ptsA2A antagonist ADHD Start of Ph1 studies Ph1 safety, tolerability and PK – Target engagement Ph2b in ADHD pts CGRP Migraine Start of Ph1 studies Ph1 safety Intranasal and S/C R&D Day 2015.6.24 Intranasal and S/C Target engagement 51 Heptares vision for the next five years Clinical Rare Oral All membraneNew  Clinical Proof of Concept on first wave of neuroscience products 2015-2017 Clinical pipeline Rare diseases Oncology Oral agonists All membrane proteinsBiologics New GPCRs*  Transformative partnerships • Additional discovery alliances and clinical-stage product deals  N t f d t did t i t li i i l di h / di Next wave of product candidates into clinic, including orphan/rare diseases, oncology, metabolic • Potential to take to market independently in selected cases • Leverage capabilities of Sosei Group to advance/differentiate product opportunities  Science and technology leadership R&D Day 2015.6.24 • New GPCRs, transporters, ion channels, biased agonists * Source: Lagerström & Schiöth Nature Reviews Drug Discovery 7, 339-357 (2008). 52 R&D Day 24th June 2015 Tokyoy y Jitsubo Peptide Pharmaceutical R&D © Sosei Group Corporation. All rights reserved. 53 Jitsubo Snapshot Vision  To contribute to human development through technology innovation  To contribute to welfare of society through development Vision  To contribute to welfare of society through development of peptide products Established: April 2005 Representative: Yusuke Kohno, CEO Business overview: 1. Development of peptide generics 2. Licensing of intellectual t property 3. Development of improved peptide products R&D Day 2015.6.24 Tokyo University of Agriculture and Technology, Venture Port 54 Jitsubo’s Strengths  Molecular HivingTM • Development of high purity peptide API at low costs Development of high-quality peptide at low costs 1 • Development of high-purity peptide API at low costs • Technology enables supervision during the manufacturing process • Highly reactive, enables synthesis of specialized peptides that was difficult using pre-existing technologies. High-value adding novel peptide modification technology 2  PeptuneTM • Improves functions of peptides without changing their original pharmacological features High-value adding novel peptide modification technology 2 features • By optimizing existing peptides, new IP and product candidates can be developed • Enables peptide binding to small-molecule compounds R&D Day 2015.6.24 55 Peptide therapeutics market potential Sales 2012 2020 GrowthSales 2012 2020 Growth Japan USD 1.4 bn USD 2.4 bn 71% W-W USD 16 bn USD 23 bn 44% Generic market USD 1.2 bn USD 3.8 bn 217%market Source: Seed Planning, Inc. Market Research & Consulting, 「2014年版 世界のペプチド医薬品開発の現状と将来展望」 Novel peptide  Peptide therapeutics market is expected to growNovel peptide compounds  Peptide therapeutics market is expected to grow • Discovery of novel peptide compounds in collaboration with Heptares (StaR® technology) Generic peptide  Generic peptide market to grow subsequent to theGeneric peptide market  Generic peptide market to grow subsequent to the patent expiration of blockbuster peptides • Alliances expected in generic field based on high- effeciency synthesis R&D Day 2015.6.24 effeciency synthesis 56 APNTAPNT (Activus Pure Nano-particle hl )Technology ) © Sosei Group Corporation. All rights reserved. APNT (Activus Pure Nano-particle Technology )  APNT does not use metal orceramic beadsand therefore avoids APNT does not use metal or ceramic beads and therefore avoids contamination derived from beadsʼ chip. APNT utilizes salt for milling, which is completely washed away from the final product APNT Salt Active Pharmaceutical Ingredient (Elan) Beads mill liquid dispersion mediumActive Pharmaceutical Ingredient R&D Day 2015.6.24 Beads g 58 Contributing to drug development with unique technology  T echnology with high usability in drug development • Over 90% of pharmaceutical products and candidate compounds with promising efficacy and safety profiles have poor solubility, which causes low b lb l dd d d hb d dl  Technology with high usability in drug development bio-availability and increased doses, and inhibits drug development. • Pharmaceutical companies have been investigating the potential of life- cycle management  Activus offers a solution by using its own unique nanotechnology  Development of novel but poorly soluble candidate compounds from Heptares StaR® technology discovery platform R&D Day 2015.6.24 from Heptares StaR® technology discovery platform 59 R&D Day 24th June 2015 Tokyoy y Future Directions of Sosei Groupp © Sosei Group Corporation. All rights reserved. 60 Mid-term projections（after Heptares acquisition） (Million yen) 31 850 Revenue 25,878 Revenue (COPD) Revenue (Heptares etc.) 31,850 • Milestones and royalties from Seebri and Ultibro • Initial payments and milestones related to out-licensing product candidates from Operating profit 22,132 out licensing product candidates from Heptares pipeline • Initial payments from new partnerships based on Heptares screening technology Operating profit 15,183 Operating profit • R&D expenses: c. 4 billion yen annually • SG&A: c.2 billion yen annually 11 732 • Heptares milestones payments from outlicensing product candidates are expected to increase • US launch of Seebri and Ultibro as well as 5,899 11,732 11,279 9,932 • US launch of Seebri and Ultibro, as well as increased awareness of COPD is expected to stimulate market expansion from FY2017 4,565 2,942 R&D Day 2015.6.24 2016/ 3 2017/ 3 2018/ 3 2019/ 3 2020/ 3 • From FY2016, COPD milestones will cease and revenue will consist solely of royalties. 61 Japanese pharma/biopharma companies: ROE (FY2014) 28.2% Average: 8.6% 10.5% 7.7% 9.2% 51 % 5.1% 1.7% 2.6% 3.9% R&D Day 2015.6.24 Source: disclosure material from respective companies 62 Worldwide big pharma companies: ROE (FY2014) 90.4% Average: 30 9% 30.9% 44.6% 31 5% 12.7% 14.4% 80 % 22.2% 23.2% 31.5% 8.0% Pfizer Novartis Roche Sanofi Merck Gilead Amgen Biogen- IDEC R&D Day 2015.6.24 IDEC Source：Yahoo Finance 63 ROE – Global Standard Average, FY2014 Goal, FY2019 Sosei Group JapanJapan OtherOther Top (bio)pharma companiesTop (bio)pharma companies JapanJapan OtherOther O 8.6% 30.9% Over 30% R&D Day 2015.6.24 64 Comparison of indicators (Japan biopharma companies) Market FY201 （f ） Company Market capitalization （million yen） (2015/6/11) FY2015（forecast） PER（multiple） ROE（％） Sosei Group 104,958 17.34 29.44 Takara Bio 173,158 115.41 2.52 R-tech Ueno 26,613 16.50 13.43 PeptiDream 176 130 203 64 14 671PeptiDream 176,130 203.64 14.671 Euglena 147,516 615.20 2.23 2 R&D Day 2015.6.24 g , 12015/6 22015/9 Source: disclosure material from respective companies 65 Comparison of indicators (Japan big pharma companies) Market FY2015（forecast） Company Market capitalization (million yen） (2015/6/11) FY2015（forecast） PER (multiple) ROE(%) Astellas 3,911,520 23.6 12.0 Daiichi Sankyo 1 625 054 22 2 55Daiichi Sankyo 1,625,054 22.2 5.5 Eisai 2,346,438 76.5 6.1 Otsuka Holdings 2,151,851 27.1 4.7 Mit bi hiMitsubishi Tanabe 1,061,080 26.9 4.9 Sosei Group 104 958 17 34 29 44 R&D Day 2015.6.24 Sosei Group 104,958 17.34 29.44 Source: disclosure material from respective companies 66 Corporate value from a variety of revenue sources  Stable revenue platform from COPD therapy Stable revenue platform from COPD therapy  Enhancing corporate value is possible by advancing our pipeline in- house  Constructing new partnerships and securing fresh revenue is possible by leveraging our four platform technologies In-licensing by Jitsubo and Activus Heptares’ pipeline Heptares’ platform technology COPD therapy: Seebri, Ultibro Heptares’ pipeline R&D Day 2015.6.24 py 67 Q&A © Sosei Group Corporation. All rights reserved. Disclaimer This presentation contains forward looking stateme nts. The words “believe”, “expect”, “anticipate”, “intend”, “plan”, “seeks”, “estimates”, “will” and “may” and similar expressions identify forward looking statements. All statements other t han statements of historical fact s included in this presentation, including, without limitation, those regarding our financial posit ion, business strategy, plans and objectives of management for future operations (including development plans and objectives relatingj g p (g p p j g to our products), are forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors w hich may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking sta tements. Such forward looking statements are based on numerous assum ptions re garding our present and future business strate gies and thep gg p g environment in which we wil l operate in the future. The important fa ctors that could cause our actua l results, performance or achievements to differ materially from those in the forward looking statements include, among others, risks associated with prod uct discovery and develo pment, uncertainties related to the outcome of clinical trials, slower t han expected rates of patient recruitment, unforeseen safety issues resultin g from the administration of our products in patients, uncertainties related toy g p p, product manufacturing, the lac k of market acceptance of our products, our inabilit y to manage growth, the competitive environment in relation to our business area and markets, our inability to attract and retain suitably qualified personnel, the unenforceability or lack of protection of our patents and proprietary rights, our relationships wit h affiliated entities, changes and developments in technology which may render our products obsolete, and other factors. These factors include, withoutgy y p , , limitation, those discussed in our public reports filed with the Tokyo Stock Exchange. Further, certain forward looking statements are based upon assu mptions of future events w hich may not prove to be accurate. The forward looking statements in t his document speak only as at the date of this presentation and the company does not assume any obligations to update or revise any of these forward statements, even if new information becomes available in the future. R&D Day 2015.6.24 69

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