NON-CONFIDENTIAL

Regains Worldwide Rights to Muscarinic
Agonist Programs
StaR® / SBDD precision-designed selective muscarinic M4, M1 and dual M1/M4 agonists
January 2021 | Sosei Group Corporation (TSE:4565)

Disclaimer
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Executive summary
1

Sosei Heptares regains worldwide rights to muscarinic agonist programs• Decision a result of AbbVie’s pipeline strategy, not based on any efficacy, safety or other data
• Sosei Heptares receives all programs under development, together with the associated IP and
preclinical and clinical data generated from the partnership with Allergan• Includes a pipeline of next-generation selective muscarinic agonists with newly developedchemistry (benefitting from insights from clinical trials and our precision SBDD technologies)

2

Executing our own review and will start activities to re-partner selected programs
immediately• Plan is to focus on rapidly developing these programs towards inflection points in order tore-partner them in the near term in-line with our strategy to execute 2 to 3 high value deals
every year
• Strong track record of executing new business development deals from regained assets (A2afrom Shire to AstraZeneca, CGRP from Teva to Biohaven)3

Executive summary (cont’d)3

Muscarinic programs highly attractive – selective M4 agonist and selective M1 agonist
safe and well tolerated at active doses in Phase 1 studies• Muscarinic M4 and M1 receptors are validated targets for the treatment of psychosis andcognition• M4 has completed (HTL’878) Phase 1a studies and was found to be safe and well tolerated inyounger and older subjects, with the potential to be a first-in-class opportunity to revolutionize
treatment options for SZ, AD and other neurological diseases• Prior to out-licensing to Allergan in 2016, SZ was Heptares’ preferred lead indication andtractable clinical pathway for HTL’878, and we will now once again focus on this strategy• M1 has completed (HTL’318) Phase 1b studies in patients, is safe and well tolerated in humans,and demonstrated evidence of target engagement and effects on cognition in AD patients• We will now take full control of toxicology studies which will be concluded in early 2021
• A next-generation selective M1 agonist with new chemistry is progressing to preclinicalstudies

4

Sosei Heptares regains worldwide rights to muscarinic agonist programs

1

Decision is based on AbbVie’s pipeline strategy, not as a result of safety or efficacy data

Decision is based on AbbVie’s pipeline strategy

Muscarinic programs offer potential symptomatic
treatment options, as opposed to diseasemodifying approaches

Very common for big pharma to re-organize
pipelines following a major acquisition

Jan 27, 2020

AstraZeneca (NYSE: AZN) will acquire brazikumab
Nestle (Swiss: NESN) will acquire and take full operational ownership of Zenpep

Muscarinic programs regained by Sosei Heptares as a result of AbbVie’s pipeline strategy focus
5

Sosei Heptares regains worldwide rights to muscarinic agonist programs1

Now a greatly advanced and enriched portfolio of selective muscarinic agonists
Sosei Heptares receives all programs underdevelopment, together with the associated IP and
preclinical and clinical data generated from thepartnership with Allergan
Includes a pipeline of next-generation
selective muscarinic agonists
with newly developed chemistry
StaR® and SBDD precision-design platform
has delivered a patent estate of chemically diverse
M4, M1 and M1/M4 muscarinic agonist back-ups
in preclinical development

Program
M4 agonist

M1 agonist

M1 / M4 dual agonist

CompoundStage

HTL’878

Ph 1

Undisclosed

Preclinical

HTL’318

Ph 1

HTL’936

Ph 1

Undisclosed

Candidate Selection

Undisclosed

Discovery

Undisclosed

Discovery

Undisclosed

Candidate Selection

We regain a larger and strengthened IP portfolio following over $55m of investment from Allergan,
including a pipeline of next-generation selective muscarinic agonists with novel and diverse chemistry
Note: Blue denotes currently in preclinical stage or about to enter preclinical stage

6

Back in control and executing our own review and planning

2

Aiming to advance development of the muscarinic programs for future re-partnering
Expert consultant appointed to support our rapid
review of all regained muscarinic preclinical andclinical data
Following the outcome of this review, we will focus
on rapidly advancing selected muscarinic programs
towards new value inflection points

A2a
antagonists

CGRP
antagonists

Muscarinic
agonists

2012

2015

2016

Aiming to re-partner selected muscarinic programsin the near term in-line with our strategy to
execute 2 to 3 high value deals every year
Strong track record of extracting value fromregained programs (A2a, CGRP)

Regains

Regains

Regains

Re-partneredRe-partnered

Plan tore-partner



2015



2020

Track record of executing new business development deals from regained programs.
We will immediately commence discussions with potential future out-licensing partners.
7???

Potential to deliver transformative new treatments for patients3

Muscarinic M4 and M1 receptors are validated targets for psychosis and cognition
Muscarinic M4 and M1 receptors represent
validated targets for the treatment of psychosis
and cognition, respectively

Xanomeline, the M4/M1 preferring agonist, achieved
human Proof of Concept in double-blind, placebocontrolled trials in SZ and AD patients

Selective orthosteric agonists have been very
challenging despite over 25 years of effort bymajor global pharma~20M
SCHIZOPHRENIA~50M
GLOBAL SUFFERERS$818BNSOCIETAL COST

DEMENTIA

1.1%
COST OF DEMENTIAGLOBAL GDP

Muscarinic M4 and/or M1 receptor agonists with selectivity over peripheral muscarinic M2 and M3 receptor
subtypes have the potential to be transformative treatments
Source: World Health Organization

8

Potential to deliver transformative new treatments for patients

3

Karuna Therapeutics and Cerevel Therapeutics are advancing supportive muscarinic stories

KarXT (M1/M4 agonist, M2/M3 antagonist)

CVL-231 (M4 PAM)

Karuna Therapeutics’ KarXT1 and Cerevel Therapeutics CVL-2312 have reawakened investors and the pharma
industry to the potential of muscarinic programs for the treatment of psychosis and cognition
1. KarXT is combination of xanomeline (muscarinic M1/M4 preferring agonist) and trospium chloride (muscarinic M2/M3 antagonist). Source: Karuna Therapeutics Company Presentation (December 2020) LINK
2. CVL-231 is a selective muscarinic M4 positive allosteric modulator (PAM). Source: Cerevel Therapeutics Company Presentation (November 2020) LINK

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Potential to deliver transformative treatments for patients3

M4 agonist program a potential next-generation, first-in-class treatment for SZ
HTL’878
Using our proprietary StaR®
technology, we have developed
crystallography systems forMuscarinic receptors stabilized
in agonist forms

Details obtained from structuresof a compound series enabletuning of interactions andaffinities across receptor
sub-types

Highly selective M4 receptor agonist for the treatmentof psychosis in schizophrenia and dementias• Potent orthosteric agonist of the M4 receptor• Highly selective vs other muscarinic receptor
subtypes• Highly selective vs other GPCRs and other drug
targets• Excellent CNS penetration and good druglike
properties to ensure access to the target (target
engagement)

Our StaR® / SBDD precision designed M4 agonist program is highly selective for the muscarinic M4 receptor
subtype, offering a differentiated approach versus the competitors in development
10Potential to deliver transformative treatments for patients

3

SZ remains a huge unmet medical need
Large market withblockbuster sales profiles…

~20M

SZ patients worldwide

Blockbusters sales profiles despite
limited efficacy and severe side effects$10BN+(2020)$13BN+(2026)…Despite no innovationin 70 years
Current treatments use the same
MOA from the 1950s

1st GenD2 modulating

Atypicals

Dual D2/5HT
modulating

2nd Gen
Atypicals

Dual D2/5HT
modulating

Huge opportunity for HTL’878


Selective M4 agonist

Potential First in Class therapywith a novel MOA
Improved tolerability

Significant need for new
treatment options in SZ

The severe side effect profile of Atypicals continues to drive high relapse rates, disease progression anddiscontinuation of treatment – there is a significant need for new treatment options
Source: World Health Organization; EvaluatePharma

11Potential to deliver transformative new treatments for patients

3

Both KarXT and CVL-231 are advancing through clinical patient studies for SZ

KarXT (M1/M4 agonist, M2/M3 antagonist)

CVL-231 (M4 PAM)

KarXT is a promising drug candidate, however GI side effects havebeen observed1

CVL-231 is a promising drug candidate, however potential CV effects
have been observed2
Cerevel’s product candidates may cause undesirable side effects or have otherproperties that could delay or prevent their regulatory approval, limit thecommercial profile of an approved label, or result in significant negative
consequences following regulatory approval, if obtained.
Undesirable side effects have been observed in Cerevel’s product candidates todate. For example, in clinical trials of tavapadon, a dose-dependent increase in
the frequency of nausea and headache was observed, with nausea, vomiting,dyskinesia, fall, fatigue, sleep disorder and tremors being the most common
adverse events leading to discontinuation of tavapadon. In clinical trials of
CVL-231, some moderate treatment-emergent increases in heart rate andblood pressure were observed following single doses of CVL-231 (>10 mg),which may be due to CVL-231’s activity on the M4 receptor subtype andits subsequent reduction of striatal dopamine levels.

KarXT and CVL-231 have attracted significant funding and investor interest for their respective muscarinic
programs despite obvious GI and CV side effect profiles
1 Source: Karuna Therapeutics Company Presentation (December 2020) LINK

2 Source: Cerevel Therapeutics Form S-1 Registration Statement (November 2020) LINK

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Potential to deliver transformative treatments for patients

3

Highly selective muscarinic M4 agonist with potential to be best-in-class treatment
M4 Selectivity Impacts Brain Functions
M4 Muscarinic
Receptor

Potential Effect

Other
Muscarinic
Receptors

Antipsychosis‒?

Cognition‒

GI Side Effects

?

CV Side EffectsHTL’878

Highly Selective
Muscarinic M4 agonist

Receptor Subtype Selectivity Offers Potential Improvement
Xanomeline (M1/M4) data from SZ and AD patients show targeting
muscarinic receptor impacts brain function
Development limited by GI and CV side effects
Karuna’s KarXT addresses this by adding trospium (M2/M3
antagonist) to offset the GI and CV side effects
Non-selective approach
Cerevel’s CVL-231 is a Positive Allosteric Modulator (PAM) withselectivity for M4 over M1, M3 and M5 (>800x) and over M2 (>390x)
However, has demonstrated moderate treatment-emergent
increases in heart rate

HTL’878 much more selective for M4(over M1, M2 and M3) compared with xanomeline andorthosteric agonists have quite different profile to PAMs

Source: Sosei Heptares Internal Data; Cerevel Therapeutics Company Presentation (November 2020) LINK; Shekhar et al. Am J Psychiatry, Vol 165, Aug 2008. N=20. 2 active and 3 placebo-arm patients
discontinued the study, none due to adverse events; Bodick et al. Arch Neurol, Vol 54, Apr 1997. N = 343. 52% of patients in high-dose arm discontinued treatment due to adverse events.

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Potential to deliver transformative treatments for patients3

HTL’878 is safe and well tolerated following evaluation in 120 healthy volunteers

Phase 1a study (NCT03244228)• HTL’878 promising Phase 1 data in healthy
volunteers

Up to 7 days of oral single and twice-daily dosing.
Safe and well tolerated in the young at dose that is
expected to be efficacious• Lower dose level of selective M4 agonist may besufficient in patients• Observed from pharmacodynamic effects
including cerebrospinal fluid (CSF) levels of
free drug (> pEC50), electrophysiology (EEG)and mismatched negativity (MMN) in ERP,
and episodic memory cognitive testing• Potential for better tolerability and improved
therapeutic index versus other muscarinic
modulators in development

•
•
•
•
•

89 young subjects (Male)
31 elderly subjects (Male and Female)No serious adverse events
No typical muscarinic side effects
Minor CV effects observed but deemed acceptable
when dosed for up to 7 days to a dose level
demonstrating SZ-relevant pharmacodynamic
effects (as seen with KarXT)

HTL’878 has demonstrated clear validation of a selective M4 orthosteric agonist on cognitive measures.
More details regarding our development plans for this program will be disclosed later this year
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Potential to deliver transformative treatments for patients3

Progress update regarding HTL’318 and next-generation selective M1 agonist backups
HTL’318 – safe and well tolerated in humans, evidence of target engagement and effects on cognition•

Safe and well tolerated in humans with very few side effects at likely active doses•

Evidence of target engagement and effects on cognition in AD patients from our Phase 1b study in AD patients (NCT03456349)• HTL’318 well tolerated at 28 days using a titration regimen in AD patients on top of donepezil - indications of both pro-cognitive effects
and potential effects on neuropsychiatric symptoms (study not powered for statistical significance)•

HTL’318 remains on voluntary clinical hold due to findings of rare tumour in Non-Human Primates (NHPs) in a separate long-term preclinical
toxicology study•

No clinical findings of concern have been identified in any human subjects that received HTL’318• Extensive testing including imaging has been conducted•

Investigations are ongoing• We will conduct our own further toxicology studies before making any decisions regarding HTL’318••

Next-generation selective M1 agonist programs are now also part of our focus
In parallel we are advancing development of next-generation selective M1 agonists with new chemistryNext-generation compounds are advancing towards preclinical development in 2021

Next-generation M1 agonists with novel chemistry are advancing.
We will decide by the end of 2021 at the latest which selective M1 agonist program to prioritize after further analysis.

15

Summary

16

1

Sosei Heptares regains worldwide rights to muscarinic agonist programs

2

Executing our own review and will start activities to re-partner selected programs
immediately

3

Muscarinic programs highly attractive – selective M4 agonist and selective M1 agonist
safe and well tolerated at active doses in Phase 1 studies

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