ONO PHARMACEUTICAL CO., LTD.
R&D Meeting
February 22, 2024

[Number of Speakers]

4
Gyo Sagara
Toichi Takino

Tatsuya Okamoto
Ryuta Imura

President, Representative Director, and Chief
Executive Officer
Member of the Board of Directors, Senior
Executive Officer, Executive Director of
Discovery & Research
Corporate Officer, Deputy Executive
Director, Clinical Development
Senior Director, Corporate Communications

Presentation
Imura: First, President Sagara will give an opening speech, and then Mr. Okamoto, Deputy Executive Directorof Clinical Development, will introduce the development status of ONO-4578. Finally, Dr. Takino, Executive
Director of Discovery and Research, will introduce the progress of open innovation and ONO-8250.

1

Sagara: I would like to begin by saying a few words about the changes we have decided to make to our top
management structure from April onward.
As you know, ONO is currently facing the expiration of patents for Opdivo and the diabetes-related Glactiv
and Forxiga in the near future and is currently working to strengthen its pipeline and how to overcome thesepatent expirations. Also, we are working on how to grow further, and I think this will be everything for the
next few years.
As I have mentioned in the past, the first and most important issue is to obtain approval and sell the products
overseas, in the US and Europe by ourselves.
Of course, we are taking this initiative from a place where we have never obtained approval, have never dealt
with production and logistics regulations, and have no experience in marketing or sales, so we are preparedfor difficulties, but we know that we need to accomplish this.
The Japanese market is currently 5% of the global market. Of that 5%, we obtain approval and sell the products
ourselves, but the remaining 95% are licensed out, from which we receive royalties, and that is the model wehave adopted.
I won't say the remaining all 95%, but it will be 50% in the United States and 15% in major European countries,
and plus extra, but it is time for us to try and sell the products by ourselves in those markets. The entire
company is working diligently toward this goal.
In terms of the US, we have been planning to launch Velexbru in 2026. The target year is 2026, which is two
years from now, and when the entire company is working together to achieve this target, I wondered if thecurrent structure is really the best way to achieve this goal. The current system is that I am the president andhave only one representative, and the rest are handled by the departments, department directors, and theperson in charge.

2

We have been moving forward under this structure, but we decided to create this new structure to move
forward with the last two years until 2026 with the entire company united as one. The idea was that two or
three cylinders would be more propulsive, more successful, and more feasible than one cylinder.
Of course, we felt that having only one representative was not a desirable system when considering various
accidents, etc. The background of this change is that we decided on this type of structure to move forward
toward the most important milestone of the next two years with a three-cylinder engine.
So, what role will each of us three play? Naturally, the president will be in charge of internal operations, andDr. Takino will be responsible for day-to-day operations and decisions within the Company. I, Sagara will be
involved in the Company's policies, direction, and decision-making, and will also bear responsibility for suchdecisions.
Dr. Takino oversees the whole thing and has a long and proven track record of BD and licensing experienceoverseas, given his background. As you know, I became president in 2008, and the timing was such that thepercentage of long-term listed products would be about 90% in three or four years. The research institute did
not have anything suitable for the time.
Therefore, we decided to strengthen the license and overcome this problem, and I asked the BD team at thetime to take on a difficult task. At that time, Dr. Takino and I worked in tandem to find partners overseas andin Japan to acquire the compounds.
I think we can say that most of the compounds for which we obtained the rights at that time are now available,
except for Opdivo and Velexbru, the long-term listed products. We obtained more than a dozen compounds
in our hands, and those compounds are now supporting the Company.
In the meantime, our investment in Opdivo paid off, and we launched it for melanoma in 2014 and took theindication for lung cancer in 2016, and so far, that has allowed us to grow steadily. We are determined to go
through these difficult times with a new mindset to deal with the situation as it was 15 years ago, and we will
have the new President Dr. Takino oversees our overseas expansion.
Although he does not have any experience of working in clinical development overseas, I am sure that he will
be able to make good use of his long career working overseas.
This is the background for the new structure that will be in place as of April 1. As for Mr. Tsujinaka, who will
become vice-president, will be responsible for the solid operation of the domestic entities. In addition, I,
Sagara will continue to be responsible for industry activities, business activities, and external relations.
I have not had a chance to talk to the analysts since the announcement on January 11, so I have spoken to
you today.

3

I am showing you the rough operation of the Company until the approval and start of sales of Velexbru in the
United States in FY2026.
What I would like to say with this is that we are entering a difficult period in terms of sales. Royalties will bedecreasing next year, and as you know, unfortunately, we will be taking the Opdivo tailgated price cut on April
1. This is something we have to overcome, though. Period performance will be a bit tougher compared to thesteady growth of the last few years.
However, we will continue to invest in research and development as much as possible. Although I would not
go so far as to say that we will sacrifice profit and loss for the period and performance for the period, we
intend to make solid investments with a certain degree of preparedness.
About 15 years ago, we continued to invest in R&D despite three to four years of slow performance. We havebeen criticized by many of you, but we have accumulated a certain amount of funds over the past several
years, and we intend to make good use of them.
In the current medium-term plan for FY2022 to FY2026, we will invest JPY600 billion in R&D, which will be anaverage of JPY120 billion per year. We invested JPY95 billion in FY2022 and the amount is expected to be
JPY109 billion this fiscal year. We would like to work hard to steadily move forward with R&D investment on
the scale of JPY600 billion.
For details, please refer to the document.

4

Imura: Now, Mr. Okamoto of Clinical Development will continue with an explanation of the development
status of ONO-4578.
Okamoto: I would like to introduce the development status of ONO-4578, including the most recently
published conference report.

First, we present ONO-4578, an overview of the compound.
This is a small molecule compound created in-house for oral use. The mechanism of action is antagonism
against EP4, one of the four receptors for prostaglandin, PGE2. I will explain the development status in detaillater.

5

Here is the mechanism of action of ONO-4578.
As I just mentioned, ONO-4578 is an antagonist of EP4, one of the receptors for the bioactive substance PGE2.
This bioactive substance, PGE2, has various functions.
In the cancer microenvironment, cancers utilize PGE2 produced by themselves to induce a group of cells thatnegatively regulate tumor immunity, such as MDSCs or M2 macrophages, to escape from tumor immunity. It
is thought that they create a tumor microenvironment that is comfortable for them to live in.
On the other hand, Opdivo, acts on CD8-positive T cells, which are the main players in the anti-tumor immunity,
the side that attacks cancer, and suppresses the inactivation of T cells. However, we believe that ONO-4578
activates tumor immunity by suppressing the activation of other tumor immunity suppressing factors such as
MDSCs and M2 macrophages, which cannot be inhibited by Opdivo.

6Here is some non-clinical and basic data.
As I mentioned earlier, Opdivo and ONO-4578 have different points of action. Therefore, we believe that the
combination of both drugs will enhance anti-tumor immunity and provide stronger anti-tumor effects.
Figure 1 shows the results of the combined administration of ONO-4578 in a syngeneic mouse tumor-bearing
model and PD-1 antibody to mice. As you can see, the combination of both drugs has shown a strong antitumor effect as expected.
I would like you to take a look at the diagram below to see if the movement in line with the concept, in linewith the mechanism of action I mentioned earlier, is actually occurring. It has been confirmed that the numberof CD8 T cells on the right-side increases by reducing the number of bad cells, such as M2 macrophages and
MDSCs, which negatively induce tumor immunity.
Based on these preclinical results, we believe that the combination of Opdivo and ONO-4578 has the potential
to show high efficacy not only in cancers where the efficacy of PD-1 antibodies has already been established,
but also in some cancers where the efficacy of PD-1 antibodies alone or in combination with chemotherapy
has not been easily observed, for example, pancreatic cancer, colorectal cancer.

7Here is the status of clinical development.
As shown here, we are currently developing the drug in combination with Opdivo for multiple solid tumors.
Today, I will present the results in detail later of the Phase I trial shown at the top of this list, Part C, whichtargets advanced and recurrent gastric cancer, and Part D, which targets colorectal cancer after third-line
treatment.
On the other hand, as I mentioned earlier, we believe that combination therapy can be expected to enhancethe efficacy for colorectal cancer. We are conducting the ONO-4578-02 trial, which is a trial in which Opdivo
and ONO-4578 are used in combination with chemotherapy, which is the standard treatment, for first-line
colorectal cancer. Also, we are conducting the ONO-4578-04 trial, which is a trial in which Opdivo and ONO4578 are used in combination with chemotherapy, which is the standard treatment, for first-line pancreaticcancer.
As for ONO-4578-05 trial, this is a trial for non-small cell lung cancer. As you all know, PD-1 or PD-L1 antibodycontaining regimens are currently the standard of care for first-line treatment of non-small cell lung cancer,
but for those who experienced exacerbations after receiving this standard regimen, we are now conducting a
trial in which we will administer Opdivo and ONO-4578 again in combination with the standard regimens.
Regarding gastric cancer, it is indicated by a blue bar at the bottom. Based on the results of Part C, which I willtalk about later, we have already announced that we have started a Phase II study in Japan, South Korea andTaiwan, in which ONO-4578 is added to the standard treatment of gastric cancer, the combination of Opdivo
and chemotherapy.

8

I would like to present the results of Part C, the ONO-4578-01 study in gastric cancer.
The results of this study were presented at ESMO last year.

9This is a brief overview of the study design. This is different from the slide presented at the conference but isavailable as supplementary materials. I will use this to explain the study design.
In Part C of the ONO-4578-01 study, Opdivo was not yet approved for first-line gastric cancer treatment at
the time of the study's initiation. At that time in Japan, Opdivo monotherapy, was approved for gastric cancer
patients after the third-line treatment and it was the standard treatment.
In Part C of the study, patients who had received the standard of care, Opdivo, for the third-line treatment
and had a certain level of clinical benefit but subsequently developed disease progression or PD, in otherwords, patients who were considered to have developed resistance to Opdivo, were divided into two cohorts:
Part C1, in which patients were re-treated with Opdivo in combination with ONO-4578, and Part C2, in which
patients were treated with the standard of care, Opdivo plus ONO-4578.
Since this was a phase I study, the primary endpoints were to confirm tolerability and safety. Today I will talkincluding effectiveness.

10Efficacy Results.
Part C1, which I mentioned earlier, is on the left side, and Part C2, on the right side, is the addition of ONO4578 to the standard of care, Opdivo monotherapy.
The response rate for Part C1 was 10.0%, and the disease control rate was 73.3%. On the other hand, theresponse rate in Part C2, in which naïve patients with no prior experience with PD-1 antibody drugs weretreated with Opdivo and ONO-4578, was 16.7%, and the disease control rate was 40.0%.
For your information, the ATTRACTION-2 trial, or ONO-4538-12 trial, a Phase III study in gastric cancer patients
after the third-line treatment who had not received PD-1 antibody drugs, showed a response rate of 11.2%
and a disease control rate of 40.3%.

11This is a waterfall plot.
The left side is C1, and the right side is C2. Now I would like you to focus on this C1. As I have mentioned
repeatedly, patients eligible for C1 are those who were once treated with Opdivo as the standard of care andhad a certain level of benefit, but whose tumors subsequently grew.
In Part C1, more than half of the patients again showed tumor shrinkage after re-administration of Opdivo in
combination with ONO-4578.

12

In Part C, tumor biopsies were performed before and after administration of the investigational treatment.
With the cooperation of the patient, we collected and evaluated tumors before and after administration. We
studied the impact of the combination of ONO-4578 and Opdivo at the molecular level.
This is the biomarker evaluation item.
I am very sorry, but what was measured it is not disclosed. Regarding the results obtained, we conducted apooled analysis of clinical data such as efficacy and safety, and as shown on the right, for example, efficacy
predictors, or to examine which items are most effective for patients with high scores, as well as to examine
the mechanism of action in the first place.

13

In fact, here is the data presented at the conference.
These are some of the results of biomarker analysis. The figure shows the changes in gene expression in tumor
tissue before and after administration.
As I mentioned at the beginning, ONO-4578 suppresses the so-called "bad" macrophage cell group, but theright side shows that the number of bad cells has decreased, and the number of good cells has increased.
On the other hand, when combined with ONO-4578 and Opdivo, the concept is to increase T cell activation
with Opdivo while suppressing suppressive cells with ONO-4578, and as a result, activation of T cells has also
been observed.
We believe that the preclinical results of activation of CD8-positive T cells while suppressing the bad cells havebeen reproducibly confirmed in the clinical setting.
In other words, our concept of combining Opdivo and ONO-4578 is supported at least by the results of Part
C1.

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Here are the results of the quantitative measurement of PGE2 metabolites in urine.
As shown in C1 and C2, it can be seen that the amount of PGE2 metabolites in urine was higher in the groupof patients who had an anti-tumor effect of SD or higher compared to the group of patients who had a PD.
Although this is only a backward-looking observation, we believe that the combination therapy of ONO-4578
and Opdivo may be particularly effective in patients with relatively high PGE2 levels.

15

This shows safety results.
The study is for patients with advanced recurrent gastric cancer. We believe that this combination therapy
has demonstrated a manageable safety profile.
So far, I have presented the results of the Part C clinical trial itself. I am afraid that this is a projection-only
document.
As you know, we have conducted a large number of clinical trials with Opdivo, and naturally we have a hugeamount of data from those clinical trials, including data on individual patients. We believe that our strengthlies in our ability to utilize this data for future development, and today we are presenting an example of this.
Here is a comparison of the results of Part C and Part C1 with the results of our previous clinical trials in gastriccancer.
I hope you will forgive me for the blurriness of the slide. First, the basic premise is that this is a comparison
between different tests, so the data is only for internal review. Therefore, we need to be careful in interpreting
the results, so we have added this blurring.
We can extract patients from previous clinical trials who have almost the same background information as
our Part C1 patients. Therefore, by comparing the results of these trials, and taking into consideration not
only the clinical data from Part C1 but also the changes in biomarkers and other factors, we came to theconclusion that the combination of ONO-4578 and Opdivo could be an effective treatment for gastric cancer,
and as I mentioned earlier, we have started a phase II trial for the first-line treatment.

16

These are the results of Part D of the Phase I trial of the combination of Opdivo and ONO-4578, which waspresented at ASCO-GI in January this year for the treatment of colorectal cancer after the third line oftreatment.

I am afraid we do not have a figure here, but 51 patients with colorectal cancer after the third line of treatment
were enrolled in the study.

17

This slide shows efficacy results. The response rate, or ORR, was 3.9%, and the disease control rate, DCR, was39.2%.

The spider plot is shown on the left and the waterfall plot on the right.
At the cutoff, two patients were still on investigational treatment.

18

This list summarizes the results of Part D introduced so far, as well as the results of other clinical trials thathave already been reported in previous reports and papers.
Looking at the 3.9% response rate for Part D that I mentioned earlier, some of you here may have theimpression that it may not be working very well.
However, we believe that it is very difficult to obtain tumor shrinkage in colorectal cancer after the third lineof treatment. In fact, the response rates for the above treatments, Regorafenib, which is one of the standard
treatments, and TAS102, are all in the 1% range. While it is difficult to see tumor shrinkage in the third-line
treatment of colorectal cancer, we believe that a response rate of 3.9% is not bad.

19

Here are the results of the subgroup analysis.
We believe that ONO-4578 is unique in that it enhances the efficacy of PD-1 antibodies through a different
mechanism of action. It is generally known that PD-1 antibodies, including PD-L1 antibodies, are more
effective when the number of PD-L1-positive cells in the target cancer cells is high.
This slide shows the results of stratified analysis in the CPS, in which PD-L1 expression was evaluated in tumor
cells and immune cells.
The PD-L1-positive group had a 4% response rate and a 48% disease control rate. On the other hand, theresponse rate for PD-L1 negative was 4.5%, but the disease control rate was 36.4%, indicating that the disease
control rate was better in the PD-L1 positive group.

20This is a swimmer plot, a plot that shows the duration of the administration.
This is a visualization of the duration of time that the combination of Opdivo and ONO-4578 could becontinued. As you can see, the duration of treatment is clearly longer in the CPS-positive group on the right.

21

Here is the Kaplan-Meier curve of OS by PD-L1 expression status.
Purple, the top one, is positive. As you can see, the PD-L1-positive group had better survival than the negative
group.
The overall survival rate at 12 months was 59.5% in the PD-L1-positive group and 36.4% in the PD-L1-negative
group. Additionally, the OS of the PD-L1 positive group had not reached the median at this cutoff point.
Given that this is a small, single-arm study, we naturally need to be cautious in interpreting the results.
However, the OS results of the PD-L1-positive group are numerically better than those of other trials including
similar drugs, as I have just shown you a list. We are now in the process of positively considering the next
development for colorectal cancer as well as gastric cancer.

22This is a safety result.
As in Part C for gastric cancer, the combination therapy, Opdivo and ONO-4578, showed a manageable safety
profile in patients with colorectal cancer in this treatment line.

23

Here is a summary.
The results of Part C and Part D of the ONO-4578-01 study, a Japanese Phase I trial of ONO-4578 in
combination with nivolumab for gastric cancer and colorectal cancer that has failed or not tolerated standard
therapy, were presented in excerpts from the conference report.
We believe that the results of the efficacy and biomarker analyses obtained in Part C are encouraging andsuggest that the concept of combination therapy with ONO-4578 and nivolumab is sound.
In colorectal cancer, where PD-1/PD-L1 antibody alone is not effective or has poor efficacy, ONO-4578 has
been seen as an effective expression of PD-1 antibody drug, where PD-1 antibody was originally supposed towork, but the inhibitory cell population was disturbed by ONO-4578 acts and suggested that it may contributeto the expression of its effect.
Based on the results of Part C and other clinical trials, we have initiated a global Phase II trial, ONO-4578-08,
for first-line gastric cancer.
Imura: Next, Dr. Takino, Executive Director of Discovery & Research, will introduce the progress of Open
Innovation and ONO-8250.

24

Takino: I would like to update on research.
In the first half, I would like to outline the direction of the research as I update Open Innovation again. In thelatter half, I would like to introduce the ONO-8250, which has emerged from such an open innovation.

But first, I would like to introduce our drug discovery policy and areas of focus.
Our drug discovery is all about open innovation. This is an initiative to create new drugs with original medical
impact by combining unique seeds with optimal modalities using the latest technology.

25

We have four main areas of focus: oncology, immunology, neurology, and specialties. As I don't have to tellyou, the unmet needs of these areas are still high, and patients are still waiting for the next step. Specialty is
an area that we will work on if unmet needs are high in addition to these three.

Here is a recent update on Open Innovation.
It is summarized in a chronological table, but from last year's R&D meeting session, we have summarized theentire year in NEW.

26

As you can see, we are working very hard on the light blue section, biologics. We are also actively working on
the use of digital AI, as indicated by the orange circle, on a trial basis.

27

This just changed that sequence we just reviewed.
The left side shows the disease areas vertically, and the upper right side shows from seeds to modality. The
squares indicate the initiatives that have been undertaken over the past year.
One of the first initiatives this year is a commitment to antibodies. As for AI, of course, we are using AI tosearch for seeds and drug targets. Especially for generating small molecule drugs, AI is being used in order toimprove the efficiency of drug discovery. In addition to that, we are working to make a strong use of AI in our
biologic’s efforts
Also, the white letters in the blue boxes show initiatives of ONO-7018 from Chordia, ONO-4685 from Merus,
and ONO-8250 from Fate, which I will mention later. Open innovation, of course, takes time, but I feel that
this type of open innovation is leading to the strengthening of the clinical pipeline.

28

Next, I would like to provide a small summary of our biologic’s initiatives.
As you already know, the main focus has been on small molecules from PG, but considering the current trends
in the world, we are also making efforts to achieve a good balance between success probability and portfolio
by engaging in biologics centering on antibodies.
In doing so, we will first utilize antibody libraries, digital and AI, and also work on the technological evolutionof multi-specific antibodies. We are not only working on drug discovery from the “seed” stage, but also
introducing research themes even from the “seedling” stage.
We are also working with Fate on cells and modified cytokines amidst the diversity of modalities.

29

First, this is one of the research themes introduced in the field of oncology from a British venture called
Macomics. As we explained in the clinical development session, Macomics is a company that deals with tumorassociated macrophages TAMs, and it was created by Professor Pollard of the University of Edinburgh, who
was a leading researcher in this field. In the tumor microenvironment, the presence of TAMs is not negligible,
as shown in the upper left figure. After identifying and verifying their new drug discovery, we set out todiscover new drug discovery targets for macrophages.
In cancers where PD-1 is not effective and T-cell infiltration is not sufficient, we are trying to make better use
of macrophages.

30

Another macrophage initiative, which we announced last week, is Numab, a Swiss company that is quiteadvanced in the engineering of antibodies.
We have already experienced this in our drug discovery partnerships since 2017. The company is working ona macrophage engager using a multi-specific antibody called NM49, an approach that forces macrophages toattach to cancer cells, although it is still in its early stages. This is one of the themes we have introduced, andwe are working to make it one of our future pipelines.

31

In addition to introducing themes, we are also working on more basic targets that we would like to work on,
partnering with well-established or highly skilled companies in the field of antibodies. One is Twist. They also
have an extensive library of antibodies, so we are working together with them to generate antibodies that weare unable to generate alone.

Another company is Adimab.
The company has a rich format and experience and track record in the field of multi-specific antibodies, andwe are working to increase our pipeline of bispecific antibodies.

32

We also decided to partner with EME, a domestic venture company. This is a VHH with a small molecularweight. For targets that are difficult to obtain antibodies for, there are targets that can be obtained with VHH
due to its characteristics, so we decided the collaboration to make the most of the characteristics of VHH.

33

In terms of areas other than antibodies, we collaborated with Shattuck to incorporate recent technologicaladvances in engineered cytokines.
We would like to work on a project in the area of autoimmunity, because the company has a technology thatenables the creation of proteins that have two actions with a single molecule.
These are the biologics-related updates.

34

Next, let me touch on the initiative in the AI/digital area.
First, I would like to talk about the application to biologics.
This is a drug discovery partnership with EVQLV. This is entirely in silico, using a protein language model andnatural language processing, to activate antibody sequences from antigens from scratch. This is cutting edge
technology. We are now in the process of trying to see the possibility of dramatically accelerating the speedof antibody design.

35This is a domestic venture company MOLCURE.
We are also working on using AI to learn more about the various characteristics of biopharmaceuticals throughmachine learning, which we believe will make it possible to create antibodies that have been difficult to createin the past.

36

Let me also mention a few examples of AI outside of biology.
This is Turbine, a British company. The company owns simulation technology using cancer cells on a computer.
This is a method to collect information on cancer-specific biology, and to find new therapeutic targets basedon the information by calculation. This is one of the partnerships that we are looking forward to, as it will
hopefully lead to groundbreaking breakthroughs.

37This was also in the press release this week, but we will use their proprietary natural language processing andAI drug discovery platform technologies, including the latest technologies such as generative AI, and we will
work interactively with them to discover possibilities for data-driven drug discovery.

This is the last of the digital. This is not a venture, but a Tokyo-1 project, which is supercomputer for drug
discovery being developed by the NVIDIA. We are currently starting to explore the possibility of dramaticallychanging value judgments and design predictions by processing extremely large amounts of data at highspeeds that have not been possible before.

38That's all for open innovation, but I will update you a little bit about other forms of open innovation.
The first will be OVI, which is our CVC. Based in the West Coast in the US, we started with USD100 million, buthave now scaled up to USD200 million and are making investments with the strategic return of acquiring
information on innovation.

I won't mention one of each, but you can see listed here, we are investing in technologies and innovations
that will contribute to building our pipeline in the future. We are planning to expand this investment more
and more.

39

On the other hand, this is a way of giving back to academia, we have established a foundation that provides
research grants to researchers in academia, both in Japan and overseas.
The top left corner is the foundation for research, which is independently operate. It is called Ono Medical
Research Foundation. Since 2022, the foundation is for cancer, immunology, and neurology. We want tosupport researchers who are working on research in areas where there is still a lot of unmet needs.
The ONO Pharma Foundation, shown on the right, is a foundation that is working to fund for cutting-edge
research in the US West Coast, Cambridge, and Boston, which are at the forefront of science.

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Next, I would like to introduce ONO-8250 in a few pages.
As you know, this is also a drug discovery collaboration with Fate, which itself is working to create CAR-T using
IPS-derived cells. Their iPS gene editing technology is top of the line in the world, and they have the technology
to differentiate it into immune cells. This is a CAR-T that is coming out of the Fete drug discovery alliance, and
it is ONO-8250, which is a highly armed HER2-directed iPS-derived CAR-T, with seven gene edits.
iPS-derived cells are different from the autologous process, in which blood samples are obtained from patientsand prepared on site. A large amount can be prepared and quality can be made uniform. Although
refrigeration will be necessary, it is expected to have the potential to become a product in the form of an offthe-shelf, truly product-like product.
In the case of the autologous CAR-T, medical institutions and patients are burdened with time, cost, and effort,
but with this iPS-derived CAR-T, we can expect great benefits.
We issued a press release that P1 of ONO-8250, targeting patients with HER2-positive solid tumors, hasstarted in the United States.

41

The first of these seven gene editing is a HER2 antibody used for CAR-T. It uses a CAR based on H2CasMab, aHER2 antibody superior in cancer selectivity, acquired by Dr. Kato of Tohoku University.

42Here is the data that shows the actual extent of its cancer selectivity. This red marker is trastuzumab, whichis commonly used HER2 antibody. In contrast, the one shown in blue is ONO-8250, which uses H2CasMab as
the CAR.
On the far left is a HER2-expressing cancer cell line, although this one will show cell-killing effects with either
CAR. In terms of normal cells expressing HER2, CAR with trastuzumab CAR has a cell-killing effect, but basic
data suggest that our ONO-8250 has a low injury potential to normal cells, due to its superior cancer selectivity.
We will not know the magnitude of this until we see a clinical trial, but we are taking this as a signal to lookforward to.

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Let me explain a few other features of ONO-8250.
First, we intend to target solid tumors among cancers. In such cases, there are various barriers, first, themigration of tumor tissue is an issue. The CXCR2 gene has been gene-edited, and since the production of IL8
is increased in cancer tissues, the IL8 makes it easier for 8250 to migrate toward the cancer cells.
And then there is the middle one. As Mr. Okamoto explained earlier, this cancer microenvironment is anenvironment that makes it difficult for the immune system to function properly and TGFβ controls theimmunosuppressive environment. As shown in red, if TGFβ is introduced, cytotoxicity is greatly suppressed.
On the other hand, by inserting the fusion gene of TGFβ receptor and IL18 receptor, as shown in the green
curve on the right, it clearly shows cytotoxicity.
We have added one more thing to arm, CD16 gene is included as shown in the far right. It has also beenreported in oncology that the expression of the target can become heterogeneous due to the cancer's escapebehavior, in which the cancer eventually loses the expression of HER2.
Therefore, by inserting CD16 gene, ONO-8250 shows cytotoxic activity even in cancer cells that have lost HER2
expression, when used in combination with other cancer antigens.

44

We believe that this may be due to the CAR, which is highly selective for cancer, but it has been confirmed
the cell-killing effect of ONO-8250 on cancer cells with low HER2 expression.
his is only a signal at the basic stage and will be confirmed in clinical trials.

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This is the last data regarding 8250.
In HER2-positive cancer cells and tumor-bearing models, basic data have emerged suggesting that ONO-8250,
when used in combination with other antibodies, may enhance the anti-tumor effect.
As described above, the possibilities of iPS derived CAR-T, at least at this point, are very promising throughvarious kinds of armed gene editing that cannot be conceived of in the conventional drug generating process.
We look forward to future clinical signals.

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This is a reposted content. We will continue to increase the number of partnerships in our priority areas, fromseed discovery to small molecules and biotechnology, and we consider that we would like to apply AI anddigital technology to various areas.
We would also like to speed up drug discovery, improve the probability of drug discovery, and strengthen ourinnovative pipeline by working in these areas.

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This will be the last one. This is the current pipeline under development. We would like to produce clinicalsignals, and we need to further enrich this pipeline itself and make it stronger, which is what we are currently
doing. We are fully aware that this is an issue that must be addressed and are doing our best to address it.

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Question & Answer
Imura: First, Mr. Yamaguchi from Citigroup Global Markets Japan Inc., please go ahead.
Yamaguchi: I will ask you two questions briefly regarding the first ONO-4578.
There was a blurry diagram, but if we look at it, we can't see it clearly, but the green one is the combo one,and if you compare them properly, did you suggest that the OS is going to show quite well?
Okamoto: You are right, and as I mentioned earlier in my explanation, the blue one is Part C1, and the red
one is the matched data.
In the Opdivo trial, the drug was allowed to continue to be administered if patients re-consent even after PD
in many of the clinical trials because of the phenomenon of pseudo-progression, and apparently PD despite
being effective, which is common in tumor immunotherapy drugs and is called "Beyond PD".
Therefore, although it may be hypothetical, we have extracted data from patients who were continuously
treated with Opdivo after PD, which we believe can be compared with Part C1, and compared them with eachother in terms of inter-trial comparison.
Yamaguchi: Is it correct that you are aiming for Phase II because the green area might start up at the top, so
this can go, including that?
Okamoto: Yes. The range indicates the width of the confidence interval. Although the judgment here will varydepending on the viewer, we feel a certain degree of certainty from the fact that at least the confidence
intervals do not overlap much.
Yamaguchi: On the other hand, you have shown us various charts and graphs on the CRC. It's true that theabsolute ORR at first glance is very low, and I think the PFS is probably quite low as well, but I've been looking
at the OS for a little longer now.
II understand that it's not bad, but there are quite a few drugs out there, so unless they're really good, I think
it would be difficult to get in later and push others out. If you have a strategy to increase the odds of winning,or something like that, please let me know. It looks pretty tough if you go into as is, but what are your thoughtson that?
Okamoto: Thank you very much. Can we show the slide for colorectal cancer? Part D Results.
Yamaguchi: Are you talking about the CRC data for reference?
Okamoto: Thank you. As you pointed out, we are not necessarily thinking of continuing the development ofPart C1 for gastric cancer and Part D for colorectal cancer in the same therapeutic line.
Since Part C and Part D are both from the early stages of Phase I, it was more of a test to see if the drug was
working as intended, including at the molecular level. So, you are right in pointing out that it would be a bit
tough to use the combination of Opdivo and ONO-4578 alone as a drug after the third-line treatment, forexample, with this result. On the other hand, as I indicated in the list of trials, ONO-4578 is also being tested
in combination with chemotherapy for the first-line treatment of colorectal cancer, so I am sorry to go into
too many details, but we are considering the future development of this compound in a combined manner.
Yamaguchi: In the first place, Opdivo doesn't work very well, so I'm not sure how it would work even if you
added something on that.

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Okamoto: You are right. In addition, as I have said earlier, obtaining tumor shrinkage in the later line ofcolorectal cancer is quite challenging. On the other hand, it is generally true that the earlier the treatment
line, the higher the response rate for any type of cancer. We are considering that as well.
Yamaguchi: So, there is a way to put them on TAS, for example.
Okamoto: I’m sorry, but I will refrain from giving details.
Yamaguchi: I understand. Lastly, I understand that you have introduced a lot of technology, but I am not sure
how many of your people understand and can use it properly internally.
What about an allowance for such personnel? I hate to say this, but I bet there are a lot of technologies that
old-timer researchers have no idea what those technologies are about. I think it will be difficult to lead to drug
discovery even with the new technologies unless deals with a considerable amount of human resource issues,
such as bringing in people from outside who can understand them. So, I would like to know your thoughts interms of the allowance for those people?
Takino: As you point out, it is true that nowadays people who understand those technologies are really thedrivers in determining how this should be incorporated.
Therefore, it is not that we force to incorporate those technologies into our projects. In this sense, we
introduce technologies as we need them, and I do not think there is any need to worry about the technology
being left in limbo.
Yamaguchi: Do you use a lot of young people who do not do wet work anymore, or do you deploy a lot of
people who specialize in digital work?
Takino: We are aware of the possibility that people who only use dry may not fully understand biology. We
believe that we need someone who is half-wet and half-dry, but we have input into acquiring such a person
and are working on drug discovery that takes advantage of advances in dry technology.
Imura: Now, Mr. Sakai from UBS Securities Japan Co., Ltd., please go ahead.
Sakai: Regarding the table on page 12. Both C1 and C2, studied only 30 patients each, so I don't think you
have solid statistics yet. This means that C1 is the one with PD-L1 and C2 is the naive one. So, which is more
effective in this case? I think this is Opdivo, but I am not sure whether Opdivo or ONO-4578 works. Has any
verification been done in this regard?
Okamoto: Thank you. Although we have not disclosed it, regarding the acquisition of the biomarkers that I
mentioned earlier, besides comparing the clinical data with past data, we are also internally studying thedifference in biomarker movements between the biomarkers obtained when Opdivo is used as a single-agent
and when it is combined with ONO-4578. Therefore, including all the results, we interpret that there is acertain degree of contribution of ONO-4578.
Sakai: Then that will have to be verified in Phase III. Does this mean that the trials that are being conducted
now will be validated in Phase II?
Okamoto: Yes. In Phase II, we are going to confirm whether or not this will be a real PoC establishment in thetrue sense.
Sakai: I understand. I have a question regarding ONO-8250. How will this be delivered? I believe it will be an
intravenous injection. For example, you may not yet know the number of doses or the dosage, but please let
us know if you have any information regarding that.

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Okamoto: Thank you. First, the method of administration is intravenous. As for the frequency ofadministration and dosage, the first-in-human study has just started in the US, and the dosage escalation
process is the same as for small molecules or antibodies, so the currently it is not yet determined. However,in general, there are CAR-T therapies that have already been approved in the field of blood cancers, and I
believe that they will be administered in a pattern similar to that of increasing doses.
Sakai: So, you are saying that this is effective against solid tumors because of the characteristics of thesubstance itself or the antibody itself?
Okamoto: As you just pointed out, I think one of the reasons why CAR-T therapy and cell therapy are noteffective against solid tumors is whether they migrate to the local tumor. As Dr. Takino explained earlier, themechanism is that it is induced by cytokines released by tumors, so I think it will work in theory, but I think it
is necessary to confirm in clinical practice whether it actually works.
Sakai: I see. Thank you.
Imura: Now, Mr. Hashiguchi from Daiwa Securities, please go ahead.
Hashiguchi: I too have a question about ONO-4578 and ONO-8250, one each.
Regarding ONO-4578, why is the Phase II trial a first line development? The C1 cohort is practically the firstline and C2 is practically the third line. Considering that the patient backgrounds are different in that sense,
C1 seems to work somewhat better.
Then, it seems to me that the change in the tumor microenvironment after the previous treatment with
Opdivo seems to have elicited the effect of ONO-4578. How should we understand Phase II is for the first line?
Okamoto: First of all, we are currently conducting P2 and randomized P2. The control group is combination
therapy with Opdivo and chemotherapy. In other words, it is the current global standard of care.
Therefore, the study design that can most clearly clarify the feasibility of the study and whether ONO-4578 isreally contributing is to put ONO-4578 on top of Opdivo and ONO-4578 as the standard of care. This design ispossible for the first-line treatment.
Another is that we are conducting exploratory studies in combination with chemotherapy for first-line
treatment of colorectal and pancreatic cancer, for example, and we believe that chemotherapy for first-line
treatment of gastric cancer is relatively compatible with immunotherapy. We think this is mainly due to theinclusion of oxaliplatin.
Therefore, it is true that there is a point to be made that the results obtained now may work well if only agroup that has acquired resistance is selected, but in terms of how much anti-tumor immunity can bestrengthened in total, we believe that there is a good chance for first-line treatment. Therefore, we would liketo take on the challenge of treating gastric cancer as a first-line treatment, considering its marketability.
Hashiguchi: Regarding ONO-8250, there seems to be a lot of views on the issue of secondary tumors, which
has recently become a hot topic in CAR-T therapy. There seems to be an opinion that Off the Shelf CAR-T may
be have higher risk than autologous CAR-T, but what are your thoughts on this?
Takino: At present, this is just a speculation, but there is a concept that unnecessary gene editing is includedin Off the Shelf CAR-T, leading to a risk. In this context, in the case of iPS gene editing, the uniformity of quality
can be fully assumed, so we assume that the risk may be quite different and lower.

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Hashiguchi: Does that mean that the gene editing mistakes that would cause secondary tumors to have been
identified and can be checked in advance before shipment?
Takino: That’s right. Since iPS cells with gene editing will be differentiated and produced, we expect that thiswill be an advantage of iPS.
Hashiguchi: I understand very well. Thank you.
Imura: Mr. Muraoka of Morgan Stanley MUFG Securities. Please go ahead.
Muraoka: Regarding ONO-4578, I think it's fine for Japan when a patient with gastric cancer is successfully
treated for the first line using ONO-4578 and can see a path forward, but will the rest of the world be able tocontinue as is?
Okamoto: Thank you very much. When you say, “as is”, what do you mean?
Muraoka: In other words, the data from these studies could be used, for example, for an application in the
US.
Okamoto: Thank you. Since this is a Phase II trial, the ultimate goal would be to conduct an international
Phase III trial including the US after the results of this trial are obtained. Therefore, we are not currently
considering applying for approval based on this study.
Muraoka: I think there is a general background that gastric cancer is very different between Asia and the US.
If you do well there, you should be able to go after Phase II in one test without too many problems, I guess?
Okamoto: As you mentioned, there are certainly epidemiological differences between Western and Asian
regions, but at least the combination of Opdivo and chemotherapy is one of the first-line treatments for gastriccancer worldwide, so I do not see any particular difficulty in conducting the study.
Muraoka: I see. Thank you. On page four, where you talk about growth strategies, you also mentioned at the
beginning that you will launch Velexbru in FY2026. I have a feeling that the results of the clinical trials will
begin to appear later this year or so if we look at ClinicalTrials.gov. The point is, I'm asking, is there any way
to get the application approved one year earlier? Is that a rather unreasonable story?
Okamoto: Thank you. I am sorry, but we have been refraining from giving you an answer on the progress ofthe clinical trials that we have been conducting. As President Sagara mentioned at the beginning of thispresentation, the test itself is going well. The clinical trial is now in a state where we can apply according to
the timeline we have always communicated.
Muraoka: The range of application periods is very wide in the chart, but which side is it?
Okamoto: I hope you will excuse me from answering that today. I’m sorry. Since we have received a high levelof interest in Velexbru from everyone, it is natural that we will be updating the progress of the clinical trial,
specifically through public databases, etc., in the not-too-distant future. That's all I can say today.
Muraoka: I understand. Thank you.
Imura: The next question is from Mr. Akahane of Tokai Tokyo Research Center.
Akahane: I understand what you are saying about ONO-4578 and ONO-8250. This ONO-4578, in the material
you gave us, is a prostaglandin receptor, and it is already in Phase II for gastric cancer, colorectal cancer. WhenI first started covering your company, we were told that your company was a compound- oriented company,

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specializing in prostaglandins and enzyme inhibitors, and you didn't know what you were going to get. Does
that mean that the research team is now focusing on drug efficacy, such as cancer and immunity, as you
mentioned on the last page, after Opdivo?
ONO-4578 is for solid tumors, stomach cancer, etc., but is it correct to think that there are still many
prostaglandin-related seeds that can be developed in this way for cancer?
Takino: In the first half for your question, we are certainly shifting to a policy of understanding the biology of
diseases in the area, but this does not necessarily create a barrier between cancer and immunology, or
between immunology and the central nervous system.
In fact, I believe that the conventional trend of maximizing the value of the specialty, including the back pocketof the specialty, remains. Regarding the latter half of your question, I interpreted your question as asking
whether more PG or PG-related projects will be applied to cancer, but I am not sure that we can expect to seethat many projects at this time.
Akahane: I understand very well. Thank you.
Imura: Thank you for your patience. Mr. Sawada of JP Morgan, please go ahead.
Sawada: I would like to ask four questions about ONO-8250.
One is gene editing. If you were to use CRISPR-Cas9, I think it would cost a certain amount of money. The
question is whether the burden of that cost is particularly problematic.
Secondly, I think that TCR is deleted to prevent so-called GVHD, but is this TCR deletion alone enough toprevent it? I think that CD52, or something like that, is deleted together with some of the other existingproducts, and I'm not sure if this TCR deletion will be sufficient.
The third point is ensuring the quality of iPS cells. I haven't heard from the industry that quality control of Fate
iPS is necessarily high. In that respect, I think it is said in this industry that the effects are completely different
depending on the quality of Fate's iPS cells, especially the quality. Therefore, I wonder, in that respect, how is
the quality?
Finally, Phase I. Now, I think it is a combination regimen with chemotherapy, why are you putting
chemotherapy in the course together? If you are looking at the effectiveness of this product itself, I think it
would be clearer to look at it as a purely administered course. That's all from me.
Takino: Thank you for asking all the questions.
As to the cost of gene editing, Fate has not separately disclosed or commented here, and we do not believe
we are in a position to do so. However, I will only respond with the comment that over-all, we are at least
hopeful about the possibility of an economic effect considering the current situation in autologous CAR-T
products.
As for whether the measures for GVHD is sufficient, I do not know the answer. However, it is not realistic tosay that we will continue to include dozens more edits of everything. If we are going to explore with reality
somewhere, we interpret the specifications we are working with now as being at least a sufficient profile toconduct a clinical trial first.
As for ensuring the quality of iPS, of course, we are at the stage of entering clinical trials, and we have secured
the quality. However, Fate is not conducting a trial of iPS-derived cells as a first-in-human, so in that sense, it

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is not a pessimistic idea. This is the answer to the first three questions. Mr. Okamoto will answer the fourthquestion.
Okamoto: Thank you. I am aware that the dose is not being titrated in combination with chemotherapy.
Generally, in all cell therapies of this type, lymphocyte depletion is done first for the administered cells to takeroot, and we do conduct that.
Since it is a first-in-human treatment that is combined with chemotherapy, it is necessary to confirm thetolerability of cell therapy alone, so we are currently at that stage, and we are not currently considering using
it in conjunction with chemotherapy.
Imura: Now, Mr. Wada of SMBC Nikko Securities Inc., please ask your questions.
Wada: I would like to ask one question each on ONO-4578 and ONO-8250.
The first is ONO-4578. I believe that the reason why these cancer immunotherapy drugs, after Opdivo, havebeen slow to emerge is because, as your company is doing, they are biomarkers, so it is difficult to select theright patients.
I would like to ask one question here, since you have just shown us this biomarker on page 16. Are you sayingthat this can be done predicatively, or by measuring PGE2 in urine prior to administration, so that it is possible
to select patients who will benefit from the drug?
Okamoto: Thank you. As I mentioned earlier during the presentation, retrospectively, when we separated
patients with SD or higher from patients with PD, the fact that PGE metabolites were high in urine suggeststhat this is one of the proofs that ONO-4578 contributed.
On the contrary, this does not mean that we will continue to develop these biomarkers as predictors ofefficacy and effectiveness.
In addition to us, other companies have also developed compounds that target EP4, and I recall that there
have been reports in the past that the metabolites in urine may play some role in the efficacy of thesecompounds.
Wada: I understand. Thank you. Regarding ONO-8250, it is said that there are two reasons why CAR-T cannot
be used or applied to solid tumors. Regarding tumor metastasis, CX and CR2 have been included, so I think
this is what we are trying to deal with.
The other thing is that cancers that are heterogeneous and express antigens other than HER2 are unavoidably
expressed heterogeneously with solid cancers, so if they remain, it is difficult to be effective. I think these two
are reasons.
In the latter part of the article, on page 61, you use HER2 antibodies in combination with the HER2 antibody.
Can you explain the reasoning for this again?
Takino: Thank you for your question. I am sure this can be interpreted in many ways.
The HER2 antibody trastuzumab may have a different epitope from the HER2 antibody that we use for CAR,
and in such a case, the ability to bind to it in multiple points may be increased.
To be honest, we do not yet have enough insight to comment clearly on how this generalized or synergetic
effect is occurring.

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Wada: Does Fate's CAR-T alone have an added function of killing tumors that do not express HER2, or
attracting such T cells?
Takino: Are you asking about tumor cells that do not express HER2? We do not expect to go that far at thistime.
Wada: So, will you target that with another antibody?
Takino: That’s right. I hope I answered your question.
Wada: Yes. I understand very well. Thank you.
Imura: I would like to conclude the R&D meeting.
Thank you very much for your participation.

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