NON-CONFIDENTIAL

H1 FY2021 Financial Results
Six-month period ended June 30, 2021
August 12, 2021 | Sosei Group Corporation (TSE:4565)

Disclaimer
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unforeseen safety issues resulting from the administration of our products in patients, uncertainties related to product manufacturing, the lack of market acceptance of our products, our inability to manage growth, thecompetitive 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, ourrelationships with affiliated entities, changes and developments in technology which may render our products obsolete, and other factors. These factors include, without limitation, those discussed in our public reports filedwith the Tokyo Stock Exchange and the Financial Services Agency of Japan. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonably based on
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References to "FY" in this presentation for periods prior to January 1, 2018 are to the 12-month periods commencing in each case on April 1 of the year indicated and ending on March 31 of the following year, and the ninemonth period from April 1, 2017 to December 31, 2017. From January 1, 2018 the Company changed its fiscal year to the 12-month period commencing in each case on January 1. References to "FY" in this presentation should
be construed accordingly.
© Sosei Group Corporation. Sosei Heptares is the corporate brand and trademark of Sosei Group Corporation. Sosei, Heptares, the logo and StaR® are trademarks of Sosei Group companies.

2

Agenda1

Overview of Financial Results

2

Operational Highlights

3

Muscarinic Agonist Programs

4

Q&A

5

Appendix

Note: This material was created to explain the details of our company and is not intended to be used for investment decisions. In addition, the contents reflect the views of our company
at the time of the creation of the material, and the accuracy of the information is not guaranteed. Investments should be made based on the independent views of investors3

1
Overview of Financial Results
Chris Cargill, COO and CFO

4

Continued to execute on objectives and targeted investments
Summary Financial Highlights for the 6 months ended 30 June 2021

1

Revenue of ¥3,123m ($28.9m) vs. ¥2,516m ($23.2m) in H1 2020, driven by achievement of several
progress-related milestone events and larger releases of deferred revenue from existing partners

2

Cash Earnings Loss of ¥800m ($7.4m) vs. loss of ¥181m ($1.7m) in H1 2020, as a result of planned increasein R&D investment (e.g., Muscarinic and prioritized in-house programs) and professional advisory fees

3

Operating Loss of ¥1,849m ($17.1m) vs. loss of ¥1,136m ($10.5m) in H1 2020 as a result of Oravi
impairment and higher SBC1 costs. Financing costs in the period largely offset by CC2 and FX3 gains

4

Robust cash balance of ¥40.6bn, an increase of ¥621m since the beginning of the year as a result ofour balanced approach to investment and diversified partner base

5~¥10bn new growth capital raised after the period ended, adding to our existing ~¥20.9bn funds
earmarked to accelerate our strategic growth initiatives and investments
Our unique and balanced business model continues to support a sustainable financial profile

Notes: USD:JPY FX rates used - 2020 YTD average Rate: 108.25, 2021 YTD average rate; 108.11, 31 Dec 2020 spot rate: 103.52, 30 Jun 2021 spot rate: 110.54
1. SBC = Stock-Based Compensation 2. CC = Contingent Consideration 3. FX = Foreign Exchange

5Encouraging revenue growth offset by planned increase in R&D(muscarinic and priority in-house programs) and non-cash costs
Revenue (JPY million)

Cash Operating Expenses1,2 (JPY million)

3,123
2,516

Operating Loss (JPY million)

3,638
2,425
(1,136)(1,849)6m to 30-Jun-20

6m to 30-Jun-21• Revenue +24% vs. H1 2020 due to progress
milestones from existing partners:• Pfizer (MC4 Ph 1 start)• Biohaven (CGRP Ph 1 start)• Genentech (Delivery of StaRs®)• Deferred revenue releases on AbbVie
and Genentech collaborations• Royalties from Novartis were stable

6m to 30-Jun-20

6m to 30-Jun-21

6m to 30-Jun-21• Increased R&D investment in muscarinic
M4R (HTL ‘878) and other prioritized highvalue creation in-house programs• Oravi impaired in the period – new
distribution deal executed post period end
expected to improve sales• Strong interest from global partners formuscarinic programs• Higher SBC1 costs from continued roll out
of RSU2 plans – aligning with shareholders• H1 2020 spend lower than normal due toonset of pandemic in Mar-20, plus alarge non-recurring supplier credit• Financing costs up from CB3 issued in July
2020. H1 2020 result included realized
RMF14 gain

Notes: 1 Non-IFRS measure; 2 Cash Operating Expenses = Cash R&D + Cash G&A
1. SBC = Stock-Based Compensation 2. RSU = Restricted Stock Units 3. CB = Convertible Bond 4. RMF1 = Regenerative Medicine Fund 1

66m to 30-Jun-20

Encouraging revenue growth offset by planned increase in R&D(muscarinic and priority in-house programs) and non-cash costs (cont’d)
JPY million

USD million

6m ended
30 Jun 2020

6m ended
30 Jun 2021

6m ended
30 Jun 2020

6m ended
30 Jun 2021

Revenue

2,516

3,123

23.2

28.9

Cash Cost of Sales

(304)

(366)

(2.8)

(3.4)

Cash R&D(1,500)(2,382)(13.9)(22.0)Cash G&A(925)(1,256)(8.5)(11.6)

Other Cash Income

32

81

0.3

0.7

Cash Earnings Loss

(181)

(800)

(1.7)

(7.4)

Non-Cash Costs(955)(1,049)

(8.8)

(9.7)

Operating Loss

(1,136)(1,849)(10.5)(17.1)

46

(32)

0.4

(0.3)

(180)

488

(1.6)

4.5

(1,270)(1,393)(11.7)(2,117)(2,297)(19.6)Net Finance Costs
Equity Accounted
Investments
Net Profit before
income tax
Net Profit

Notes: USD:JPY FX rates used – 2020 YTD average rate: 108.25, 2021 YTD average rate: 108.11

7

Revenue by Type

13%

22%

30%

6m ended
30 Jun 2020

6m ended
30 Jun 2021

50%

37%
48%

6m ended 30 Jun 2020

6m ended 30 Jun 2021

Milestone

¥753m

$7.0m

¥1,546m$14.3m(12.9)

Royalty¥1,219m$11.2m¥1,167m$10.8m(21.2)

Other

¥544m

$5.0m

¥410m

$3.8m

Sustainability of business model and corporate strategy is reflectedin our robust and well capitalized balance sheet
JPY million

USD million

As of
31 Dec2020

As of
30 Jun2021

As of
31 Dec2020

As of
30 Jun2021

Goodwill & intangibles

25,936

27,412

250.5

248.0

Property, plant & equip.

3,824

3,915

36.9

35.4

Cash at hand

40,00840,629386.5

Equity Acc. investments

3,087

3,666

29.8

Other financial assets

1,593

3,519

15.4

Other assets

2,017

2,207

19.5

20.0

Total Assets

76,465

81,348

738.6

735.9

Convertible Bonds

14,78914,918

142.9

135.0

Other liabilities

9,295

10,674

89.7

96.5

Total Liabilities

24,08425,592

232.6

231.5

Net Assets

52,38155,756

506.0

504.4

1

2

Notes: USD:JPY FX rates used – 31 Dec 2020 spot rate: 103.52, 30 Jun 2021 spot rate: 110.54
1. Includes Investing, financing and FX related movements

8

Commentary

1

367.5
33.2

2

31.8

1

 Small cash inflow when balances are aggregated in JPY,
however weaker JPY in H1 2021 drove a reduction in total
cash balance when aggregated in USD

2

 Increase due to positive revaluation of several investment
securities, including significant increase in value of our
new Centessa Pharma holding following its IPO

Cash Flow Bridge (6m ended 30 Jun 2021)
USD Millions

Cash balance
31 Dec 2020

Operatingcash flows

Othercash flows1

Cash balance
30 Jun 2021

Unchanged FY2021 financial guidance (12m to 31-Dec-21)

Guidance(Dec-21)

Cash R&D expenses

Cash G&A expenses¥4,000 to 5,000m¥1,800 to 2,300m

 Increased investment in HTL’878
selective M4R agonist program –valuable opportunity to secure a
new major partnership Continued global implementation of
Oracle Netsuite Enterprise
Resourcing Planning (ERP) system

 Accelerate new and prioritized inhouse programs with strong value
creation potential

 Continued build-out of Complianceand Governance capabilities

Investing today to drive growth tomorrow9Successful international offering and buyback of existing bonds
completed after the period ended
Net proceeds of ¥29.8bn from Euro-Yen denominated convertible bonds due 2026
Use of proceeds:

Largest mid-cap convertible bond raise in Asia Pacificregion since 2015Highly successful liability management exercise, withstrong 98% investor take-up• New ¥10bn net proceeds to be
added to existing ¥20.9bn capital andallocated to strategic growth
initiatives (acquisitions and/or
investments)



Lowered Group’s funding cost, extended maturity ofdebt and potentially reduced dilution upon conversion• Approximately ¥0.9bn to be allocatedtowards R&D of new pipeline
programs and working capital• Approximately ¥18.9bn to beallocated towards the repurchase ofexisting convertible bonds –completed

We continue to evaluate strategic growth ideas and are well capitalized to execute
when a potential opportunity presents itself
102
Operational Highlights

Shinichi Tamura, Chairman and CEO

11

Excellent progress expanding our drug discovery business
Summary Operational Highlights for the 6 months ended 30 June 2021

New strategic technology collaborations with PharmEnable and InveniAI* for AI-driven drug discovery,
and Metrion Biosciences to explore SBDD approaches for ion channels

Excellent progress across partnered programs including MC4 antagonist (partnered with Pfizer) and
CGRP antagonist (partnered with Biohaven) both entered Phase 1 clinical trials, and StaR® proteinsdelivery to Genentech, all triggering development milestone payments

Spin-off company Orexia Therapeutics merged into Centessa Pharmaceuticals, a new asset-centriccompany, which completed its $380m raise / $1.7bn market cap. NASDAQ IPO in June 2021

Potential clinical candidate for SARS-CoV-2 MPro program have now been identified and suitable forfurther development as an oral treatment of COVID-19
World-leading platform for identifying and exploiting new druggable targets,and a corporate strategy designed to deliver value creation for all stakeholders* Executed in July 2021 (event occurred post period close)12

10 drug candidates generated from our SBDD platform have beensuccessfully advanced into clinical trials
LAST 12 YEARS (StaR® / SBDD GENERATED)DRUG DISCOVERYDEVELOPMENT
New

TODAY
LEAD OPMEDIUM TERM OUTLOOKTECHNOLOGYDRUG DISCOVERY

Deliver at least

Generate on
average

5 compounds

Identified

Generated

Produced

36

24

10

11 candidates

optimized
leads

preclinicalcandidates

clinicalcandidates

CLINICALPRECLINICAL

10 candidates

4

new programs tolead optimization
stage every 2 years

new preclinicalcandidates
every year

One of THE most productive drug discovery teams in the world over the past 12 years

132

We saw excellent progress across our deep pipeline and added multiple
new technology collaborations
Pre-Disc. / Discovery

Preclinical studies

Multi-target

GPR35 ag.

Multiple

Outlicensed

Phase 1IBD

mCRPC

Multi-target

MC4 ant.

Single target

CGRP ant.

PAR2 peptide

AI-driven

IBD

Oravi®

Mouth candidiasis

1

Immuno-oncology

NewmGlu5 NAM

Narcolepsy

EP4 ag.

Enerzair® Breezhaler®

CXCR4 mAb

New

OX1/OX2 ag.

Coronaviruses

COPD

AsthmaNeurology

Ion channel

Ultibro® Breezhaler®

COPD

Anorexia

TPD

Marketed

Seebri® Breezhaler®

IBD

SARS-CoV-2 MPro
In-house /Not yetpartnered*A2a ant. combo(s)T2DM/Obesity

CCR6 ant.

Multiple

Inflammatory

Co-owned
companies

GLP-1 ag.

Multi-target

GI and otherCo-dev /Profitshare

Phase 2

Substance Use GPR52 ag.
Neurology

EP4 ant.

Immuno-oncology

H4 ant.

Atopic Dermatitis

PAR2 mAb

Atopic Dermatitis

M1M4 ag.
Neurology

Targeting partnershipby end-2021

M4 ag. HTL’878
Neurology

M1 ag. HTL’936/’318
Neurology

10+ other programs
Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG. New distribution deal executed with new distribution partner to commence on 1 November 2021. Fujifilm responsible for distribution until 31 October 2021.
14 *Note:
The in-house pipeline displayed above includes fully funded programs only and excludes back-up programs and similar indication programs for one target. For example – A2a ant, SSTR5 ag, GLP-1 ant, GLP-2 ant, M1 and M4 backup programs (list not exhaustive).
1

Partnered Program
In-house Program Program Progression

Next wave of COVID-19 therapies – SARS-CoV-2 protease inhibitors– are starting to show promise

15

Overview

PF-07321332 – small molecule oral
antiviral treatment; twice a day
dosing at first sign of infection / firstawareness of an exposure

S-217622 – small molecule oral
antiviral treatment; once a day
dosing.

SH-879 – small molecule oral antiviraltreatment; once or twice daily dosing
immediately after a positive test resultand for up to 2 weeks after

Phase

Phase 2/3 trial initiated in July 2021
for PF-07321332/ritonavir combo

Japanese Phase 1 trial initiated inJuly 2021

Potential clinical candidate identified
suitable for further development• Animal studies showed ability todecrease the viral load quickly andsignificantly• No safety concerns reported so far

Key data findings• Exhibits potent in vitro antiviral
activity against SARS-CoV-2• Robust preclinical antiviral effectand good preclinical safety profile,• Good tolerability, no safety
findings up to 500mg dose 2x daily
with ritonavir/10 days in healthy
volunteers• Requirement for ritonavir
combination boost exposure• Comparable antiviral activity
to Pfizer’s PF-07321332 against
SARS-CoV-2 in cell based assays• Low in vitro clearance, superior invivo clearance and high plasma
exposure from oral dosing• Does not likely require co-dosingwith ritonavir for PK boosting inhuman clinical trials, unlike Pfizer’s
PF-07321332

Source: Company announcements; Company websites

Our MPro inhibitor SH-879 represents an excellent opportunity forfurther development as an oral drug for the treatment of COVID-19
M Pro enzyme inhibition

TARGET PRODUCT PROFILEPROGRAM STAGE
Excellent progress has been made in >1 chemical
series of inhibitors since project initiation Apr-20% Inhibition

80

16

boceprevir

20
0
-10

NEXT STEPS

PF-07321332

40

-8

-6

Compound (Log M)-4-2

Proactively seeking funding via charitableorganizations and trusts / other philanthropic
sources of funding, to rapidly progress ourmolecules

Coronavirus inhibition by SH-879
150

EC50: 540 nM
EC50: 110 nM

125

OC43
229E

100

Cytotox

75
50
25
0
-25

-9

-8

-7

-6

Compound (Log M)-5-4

SARS-CoV-2 inhibition% Live Infected Cells

150

EC50: 82 nM
EC50: 93 nM

125SH-879
PF-07321332

100
75
50
25
0
-25

* Regardless of pandemic/endemic status. List of LDCs as defined by the United Nations.

SH-879

60

-20
-12

Potential clinical candidates have now been
identified, suitable for further development
Promising PK results from SH-879, our mostadvanced asset (see adjacent charts for cell-based
antiviral assay data)

IC50: 14 nM
IC50: 18 nM
IC50: 4.9 μM

100% Live Infected Cells

Once or twice daily oral agent for treatment of
SARS-CoV-2 viral infection dosed immediately
after a positive test result and for up to 2 weeks
thereafter, with potential for broader application
for intervention of associated human coronavirus
infections

120

-9

-8

-7

-6

Compound (Log M)-5-4Program is available for global partnering toaccelerate progress to human clinical trials
Significant inbound interest received
and under assessment
Program remains a core ESG project –We will not profit/receive economics fromsales to Least Developed Countries*. For allother countries, we will reinvest a portion of
any profits received towards ourGroup’s ESG initiatives

Organic growth plan driving our world-leading GPCR drug discovery
OBJECTIVE

ORGANIC GROWTH PLAN

Continue to expand
expertise in GPCRs
Extend technology /platform leadership

Generate high quality
novel candidates

OBJECTIVE

At least 2 new
Preclinical Candidates
on average,
every year

OBJECTIVEOBJECTIVE

Demonstrateprogress of pipeline

2-3 new high-value
collaborations and/or
co-investments,
every year

Advance discovery anddevelopment pipeline

Execute high value
partnerships

Continuing to build a broad pipeline of high-value creating programs, partnerships and co-investments

17Strategic growth plan driving corporate value expansion
OBJECTIVE

Capital raisecompleted to pursue
revenue focuseddeals in 2021

STRATEGIC GROWTH PLAN

Seek out revenuegenerating opportunities

Invest / collaborate innovel technologies

OBJECTIVE

Take steps to expand
beyond core GPCR
specialty


OBJECTIVE

Add new technology
capabilities to our
SBDD platform

OBJECTIVE

Expand drug target
classes beyond GPCRs

In-license late-stage
programs for Japan

Bring international
medicines toJapanese patients inareas of unmet need

Seeking to add new revenues, access new technologies, and expand and future-proof our capabilities

18

3
Muscarinic Agonist Programs –A neuroscience pipeline with amulti-blockbuster profile
Dr. Tim Tasker, CMO
19

Recapping the status and progress of our Muscarinic programs

Patented StaR® technology enabled SBDD approach to identify novel highly selective muscarinic M4R,
M1R and dual M1R/M4R orthosteric agonists

Muscarinic M4R and M1R represent clinically validated targets for the treatment of psychosis andcognition, precedented by non-selective muscarinic agonists (e.g. xanomeline) in short term clinicalstudies (5 weeks) in schizophrenia (“SZ”) and mild-moderate Alzheimer’s disease (“AD”) (6 months)

Multi-blockbuster commercial opportunity for orally dosed novel mechanisms targeting control ofpositive symptoms and with an improved safety profile over current Standard of Care. Further
improvement in efficacy an upsideIncreased investment in M4R agonist program this year (following reversion in early 2021), with
program nearing Phase 2 readiness for SZ with a back-up compound which is Phase 1 ready

New M1R agonist and a dual M1R/ M4R agonist IND ready in 2022, utilizing Proof of Mechanism data in
AD from pathfinder compound to accelerate early development
Lead M4R orthosteric agonist (HTL’878) Ph 2 ready in the near term, and a first-in-class M1R orthosteric agonist
compound IND ready in 2022 whilst maintaining a broad muscarinic portfolio

20Our Muscarinic programs represent a ready-made neurosciencepipeline with multiple blockbuster opportunities
Program

Indication

HTL’878

Schizophrenia

Phase 2 readyortho
orthoagonist
agonistNot disclosed

Schizophrenia

Completion of
Phase 1 SAD

M1R/M4R dual
ortho agonist

Not disclosed

Schizophrenia &Alzheimer’s
cognition & psychosis

IND readyHTL’318

Alzheimer’s
Dementia Lewy Bodies

Regulatory
consultation

HTL’936

Alzheimer’s
Dementia Lewy Bodies

Clinical PK

Not disclosed

Alzheimer’s
Dementia Lewy Bodies

IND readyM4R
ortho agonist

M1R
ortho agonist
pathfinders
M1R
ortho agonist

Discovery

Preclinical

Phase 1

Phase 2

Next Milestone
12-18 months

CompoundNegotiations progressing well with multiple potential global development/co-development partners.
Current intention remains to partner all programs in order to aggressively accelerate their development
Key: Full box = completed phase. Striped box = next milestone21

4th-gen candidates aim to be effective treatments for SZ withfewer side effects
Efficacy

SafetyPositive
symptoms

Negative
symptom

Cognitive
impairment

Extrapyramidal
symptoms**

Weight gain

MoA

Typical medicine

Peak sales
exampleGeneration

Number of patients
20M*

Number of patients
11.5M*

Number of patients
16M*

-

-

Typicalantipsychotic

D2 AntHaldol(Historic data
unavailable)

1st

+++

-

-

++++

+

Atypical
antipsychotics

D2 Ant+5-HT Regulator

Zyprexa
Risperdal
LatudaZyprexa$5,000M+(2010)

2nd

+++

+

+

++

++++

D2 partial Ag+
5-HT Regulator

Abilify
REXULTI
VraylarAbilify$6,100M+(2013)

3rd

+++

+

+

+

+

M4R Agonist***KarXT
CVL-231
HTL’878

-

4th

+++

++

++

-

-

Following reversion in early 2021, HTL’878 was rapidly positioned for success in SZ

22

HTL’878*As 1 patient can have several symptoms, number of patients in 3 symptoms is overlapping**Drug-induced movement disorders including involuntary or uncontrollable movements. tremors. muscle contractions. It is said to be related with D2 receptor occupancy balance.
***Expected efficacy and expected safety derived from ongoing clinical trials of KarXT and CVL-231.
Source：P T. 2014 Sep; 39(9): 638–645, J Clin Psychiatry. 2010;71(3):280–286, Schizophr Bull. 2010 Jan; 36(1): 36–42 and EvaluatePharmaModulation of the muscarinic M4R now an increasingly
de-risked and validated target for treating multiple types of SZ
Lead Program

KarXT

CVL-231

HTL’878

MoA

M1R/M4R Agonist,
M2R/M3R Antagonist

M4R PAM1

M4R Direct Agonist

Current Phase(mostadvanced)

Phase 3Phase 1bPhase 2 ready(near term)

Target SZ (Psychosis) - Ph3
 SZ (Negative and cognitive symptom) - Ph1
 Dementia-related Psychosis - Ph1

 SZ (negative, positive and general
psychopathology) – Ph1b-

Ph. 2 met primary endpoint (Nov 18, 2019)Ph. 1b Positive Topline (June 29, 2021)$17.68 → $85.10($1.7Bn+ Market cap increase)$12.57 → $23.20($1.6Bn+ Market cap increase)

Impact ofrecent Clinical
data*

-

Recent positive trial results with KarXT and CVL-231 are fueling broad investor and pharma industry interest in themuscarinic class - including our highly selective M4R direct agonist approach for SZ*Share price change is 5 business days after announcement. 1 PAM = Positive Allosteric Modulator
Source: Company Announcements, FactSet23

HTL’878

HTL’878
HTL’878 is differentiated and is the only highly selective
orthosteric agonist of the muscarinic M4 receptor in development
Direct agonism of
M4R is a clinicallyvalidated target forpsychoses

HTL’878 is anorthosteric partial
direct M4R agonist
with a potentially
improved sideeffect profile• Direct agonism of the muscarinic M4 mechanism is a clinically validated target for the treatment of psychoses(Xanomeline, KarXT), underpinned by strong non-clinical science from around the world• HTL’878 has been shown to act via selective direct agonism of the M4R in non-clinical species and also in humans• HTL’878 is an orthosteric partial direct M4R agonist with a potentially improved side effect profile in comparison withthe front-runner (KarXT) and likely CVL-231• HTL’878 has much better selectivity and a potentially improved side-effect profile than KarXT• CVL-231 is a Positive Allosteric Modulator ( PAM )which therefore requires ACh tone in the CNS making it difficult
to achieve a margin over CV side effects• Efficacy of an orthosteric agonist does not depend on cholinergic tone, unlike a PAM – we expect also stronger efficacy
in Dementia Related Psychosis than a PAM which is unlikely to be effective

Of the fourth-generation treatments in development, HTL’878 stands out as a potentially superior approach

24

4
Q&A
Shinichi Tamura, Chairman and CEO

25

Thank you for your attention

Summary Financial and Operational Highlights for the 6 months ended 30 June 2021



Revenue of ¥3,123m



New strategic technology collaborations



Robust cash balance of ¥40.6bn

Excellent progress across partnered programswith multiple Phase 1 starts~¥10bn new growth capital raised

Potential clinical candidate for SARS-CoV-2
MPro program identified

World-leading platform for identifying and exploiting new druggable targets,and a corporate strategy designed to deliver value creation for all stakeholders
26

5
Appendix27

Progression of Partnered Pipeline
CompoundTarget / Mechanism of Action
Modality
Traditional Out-licensing Collaborations
Seebri® Breezhaler® LAMA
SME
Ultibro® Breezhaler® LAMA+LABA
SME
Enerzair® Breezhaler® LAMA+LABA+ICSSME
ORAVI®
Antifungal agent miconazole
SME
Imaradenant
Adenosine A2a ant. combo
SME
PF-07081532
GLP-1 agonist
SME
PF-07054894
CCR6 antagonist
SME
PF-07258669
MC4 antagonist
SME
BHV3100
CGRP antagonist
SME
Not disclosed
GPR35 agonist
SME
Not disclosed
Multi target
SME
Not disclosed
Multi target
SME/LMENot disclosed
Multi target
SME/LMENot disclosed
Single target
SME
Co-development / Profit-share Collaborations
KY1051CXCR4 mAb
mAb
Not disclosed
PAR-2
PeptideNot disclosed
Targeted Protein Degradation
SME
Not disclosed
AI-Augmented Drug Discovery
SME
Not disclosed
Ion Channel Drug Discovery
SME
Not disclosed
Multi target AI-powered
SME
Co-owned investments
TMP301mGlu5 NAM
SME
Not disclosed
OX1/OX2 agonist(oral and intranasal) SME

28

Indication
COPD
COPD
AsthmaOropharyngeal candidiasis
mCRPC
T2DM / Obesity
Inflammatory bowel disease
Anorexia
Neurology diseases
Inflammatory bowel disease
Multiple indications
Multiple indications
Gastrointestinal and other
Inflammatory diseases
Immuno-oncology
Inflammatory diseases
Gastrointestinal disorders
Neurology diseases
Neurology diseases
Immune diseases
Substance use disorders
Narcolepsy

Note: SME = small molecule. LME = large molecule. Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG.

FY2020 stage
FY2021-Now progress
Partner

Disc.

PCC

Ph1

Ph2

Ph3

App

Mkt

Progression of In-house Pipeline
CompoundTarget / Mechanism of Action Modality
Indication
In-house Programs (Not yet partnered)
HTL’878
Muscarinic M4 agonist
SME
Neurology diseases
1
HTL’318
Muscarinic M1 agonist
SME
Neurology diseases
HTL’936
Muscarinic M1 agonist
SME
Neurology diseases
Not disclosed
Muscarinic M1 agonist (B/U)
SME
Neurology diseases
Not disclosed
Muscarinic M4 agonist (B/U)
SME
Neurology diseases
Not disclosed
Muscarinic M1/M4 agonist
SME
Neurology diseases
Not disclosed
H4 antagonist
SME
Atopic Dermatitis
Not disclosed
EP4 antagonist
SME
Immuno-oncology
Not disclosed
GPR52 agonist
SME
Neurology diseases
Not disclosed
PAR-2 mAb
mAb
Atopic Dermatitis
SH-879SARS CoV-2 Mpro
SME
Coronaviruses
Not disclosed
EP4 agonist
SME
Inflammatory bowel disease
Multiple programs
Not disclosed
SME/LME
Neurology diseases
Multiple programs
Not disclosed
SME/LMEGI and Inflammatory diseases
Multiple programs
Not disclosed
SME/LME
Immunology diseases
In-house Programs (No longer internally funded. Targeting academic / industrial partnership)
HTL’310
SSTR5 agonist
PeptideHypoglycaemic disorders
HTL’097
GLP-1 antagonist
PeptideHypoglycaemic disorders
HTL’023
Dual GLP-2/GLP-1 agonist
PeptideIntestinal failure / NASH
Not disclosed

Apelin agonist

PeptidePulmonary Arterial Hypertension

HTL’641

Dual orexin antagonist

SME

Insomnia and sleep disorders

Note: SME = small molecule. LME = large molecule. 1 Voluntarily suspended

29

FY2020 stage
FY2021-Now progress
Originator

Dis

PCC

Ph1

Ph2

Ph3

App

Mkt.

M4R PAM less likely to be successful in DRP than an M4R Agonist- CVL-231 probability of success in dementia remain uncertain as cholinergic system significantly altered- Xanomeline did show efficacy in psychotic symptoms in Alzheimer’s Disease, providing validation for an agonist•••

Is there sufficient ACh tone in AD or will the patient population be too heterogeneous for a PAM to work?
DRP is most prominent in moderate to severe AD where ACh deficiency greatest – a PAM is unlikely to work in this setting?
Merck M1R PAM had positive data in Phase 1 in volunteers but failed in AD

Lead Program

KarXT
Fixed dose combination of
xanomeline + trospium

HTL’878

Pharmacologicalapproach totolerability

Mixed muscarinic agonist
and peripheral antagonist (combination Pure M4R Positive Allosteric Modulator
product)

Pure M4R orthosteric partial agonist

Rationale

Peripheral antagonist masks some ofthe poorly tolerated muscarinic side
effects of mixed agonists.
Brings kinetics and tolerability probs.

Avoids non-M4R muscarinic side
effects.
Cannot reduce peripheral M4R
cardiovascular effects.

Avoids non-M4R muscarinic side
effects.
Might reduce peripheral M4R
cardiovascular effects.

Status

Lilly data on Xanomeline showed
positive POC in a small AD trial
Strong, positive efficacy data 
Significant, GI Adverse Events 

PAM cannot produce M4R system
stimulation in this patient group dueto the lack of cholinergic tone?
Will CV effects be tolerable in a frail
elderly population?


Ready for phase 2;
Well-tolerated dose and regimen forPhase 2 established by thorough
Phase 1

Source: Bymaster et al, DRUG DEVELOPMENT RESEARCH 40:158–170 (1997)

30

CVL-231

Sosei Heptares M4R Receptor Orthosteric Partial Agonist HTL’878- Potentially superior clinical profile compared to a PAM such as CVL-231- Superior selectivity profile to KarXTHTL’878 binds to a partial agonist receptor

PAM binding to allostericsite, traps ACh slowing
its off-rate, potentiating
the full agonist response• A PAM such as CVL-231 requires
ACh to be present to have efficacy• ACh release in DRP is reduced
and a PAM will have less effect• PAM unlikely effective in DRP• Central and peripheral receptors
affected identically, will also drive
effects in the periphery• Peripheral AEs are unavoidable
31

878
ACh

M4
Receptor

Intracellular“coupling”
driveseffects

conformation acting as a replacement for Ach‘ 878 distributes well to brain (Ph I data)

HTL’878 is a highly selective partial agonist :• Specific activation of the M4R without the needfor Ach – More effective in DRP• Better control of ACh release to modulate DA• No unwanted effects from M1, M2, M3 or M5
receptors due to high selectivity• Partial agonist drives well coupled central effects
with reduced effects on peripheral less-wellcoupled systems• Separation of central and peripheral effects
focussing M4R effects in the brain

Potential Market of M1 Ag

Adding on to Donepezil (standard therapy, peak sales was $3,9BN+), potential to be best in class
Alzheimer's disease
Mild

Moderate

SevereNumber of patients (2030 forecast)

Number of patients (2030 forecast)

Number of patients (2030 forecast)

18.5M

M1R Agonist(Adding on to donepezil)

11.5M

5.2M

DLB
Number of patients (2030 forecast)

6.5M

Ph2 of HTL’318 planned
in Japan and suspended

Target of HTL’318 (Ph1)

Symptomaticdrug
Ex. Aricept(Donepezil)
Peak sales：c. $3,900M+(2009)

Disease-modifying
drug

Source：EvaluatePharma

32

Ex. Aduhelm(Aducanumab)

Expanded
indication

Expanded indication(Japan only)Locations
SOSEI HEPTARESPMO Hanzomon 11F

Steinmetz Building

North West House

2-1 Kojimachi, Chiyoda-ku

Granta Park, Cambridge

119 Marylebone RoadTokyo 102-0083

CB21 6DG

London NW1 5PU

Japan

United Kingdom

United Kingdom