The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)

NEWS RELEASE<http://www.takara-bio.co.jp>

Announcement on revision of Takara Bio Medium-TermManagement Plan FY2020
Kusatsu/Shiga, Japan-May 11, 2018 – Takara Bio Inc. (Takara Bio), today announced the revision of target infinal fiscal year stated on Takara Bio Medium-Term Management Plan FY2020 (“Medium-Term ManagementPlan”) disclosed on May 9, 2017, considering recent business progress and change in management environment
as described below.
1.

Revision reason and description
Medium-Term Management Plan aims to strengthen the three business segments, namely, the Bioindustry,
Gene Therapy, and AgriBio businesses and the business base that supports these efforts, to enhance thestanding as a global and industrial company for regenerative medical products. Under this overall policy, thenet sales and the operating income as the targets for fiscal 2020, the final year of the medium-term
management plan has been set 38.5 billion yen and 4.0 billion yen, respectively*1.
As announced already, Gene Therapy business is expected to increase the net sales and profit due to theexecution of the agreement for co-development/exclusive sales with external institute unplanned originally*2.
Bioindustry business is expected to expand the reagents/instruments-related products overseas, increase thesales growth by broad range of fields including industry and medical applications and the sales profits ofcontracted service focused on the development/manufacturing supporting business relating to regenerative
medical products (CDMO business). In response to this situation, Takara Bio made a decision on theinvestment in newly-establishing for the R&D and manufacturing facility dedicated to regenerative medical
products in head office site of Kusatsu/Shiga*3.
In R&D, Takara Bio will accelerate the development against research reagents/instruments/contracted
service menu and gene therapy products by spending R&D funding exceeding the original plan. Also, moreinvestments will be spent on the fundamental technologies development based on the next generation Gene
Therapy, leading to strengthen a cross-organizational R&D activity.
The possible risk factors surrounding our management environment holds the slow growth of R&D funding
accompanying changes in trends of each country’s governmental policy and the intensified competition witha number of companies entering new market in CDMO business. Nevertheless, Takara Bio will make theutmost effort and will take countermeasures against such risks by launching continuously new products/new
service via the strengthened R&D activities.
Under these circumstances, the net sales for fiscal 2020, the final year of the medium-term management plan
has been unchanged from original plan, while the operating income for the same period of the fiscal year has
been upwardly revised as described below.

1Targets for fiscal 2020, the final year ending March 2020 of the medium-term management plan
(Hundred millions of yen)
Original plan

Revised plan

Increase (decrease)

Net sales

3853850

R&D expenses

4856+8Operating income

4060+20

Fiscal year ended Mar

Fiscal year ending Mar

Fiscal year ending Mar

31, 2018

31, 2019

31, 2020(Actual)(Budget)(Plan)

R&D expenses by reportable segment(Hundred millions of yen)

Bioindustry

27

27

Gene therapy

18

21

Others/Common

2

4

Total

475256Note 1: Formulation of Medium-Term Management Plan FY2020 (Released on May 9, 2017)
Note 2: Takara Bio entered into an agreement for co-development/exclusive sales of NY-ESO-1・siTCRTM and CD19・CAR gene therapywith Otsuka (Released on April 9, 2018)
Note 3: Takara Bio to Establish a New Facility for the Research and Manufacturing of Regenerative Medical Products (Released on January30, 2018)

2.

Future plan for each business segment
Bioindustry business
The business aims to apply prodigious growth by simultaneously expanding business overseas ofreagents/instruments along with synergistic maximization through businesses with two U.S. companies(WaferGen Bio-systems Inc. and Rubicon Genomics Inc.) acquired and strengthening domestic businessfocusing on CDMO business enhanced by manufacturing capabilities of regenerative medical products inJapan. Also, further attempt is to establish the system in order to accelerate the development of research
reagents based on the Bioindustry business and strengthen the fundamental technologies in order to create
next generation gene therapy project continuously.

<Key point>
The overview is presented in the following table.
Policies for each fieldResearch reagents

Rapid commercialization of cutting-edge technologies that leverage theopen innovation approach

Contracted services

Develop structure based on GMP/GCTP* 4 , CAP-LAP*5 , and other quality
assurance and accuracy control systems in order to expand contracted
services involving regenerative medical products and the clinical field

Scientific instruments

Combine devices and reagents to perform systematized single-cell analysis
methods and develop PCR-related products2

Priority R&D Areas for the Bioindustry Business1.

1. Develop fundamental technologies for regenerative medical products and establish quality
control methods

2.

2. Develop an ultra-low-input nucleic acid analysis method

3.

3. Develop new technologies necessary for clinical sequencing

4.

4. Utilize PCR in industrial applications and deploy it in the clinical field
5. Develop new technologies connected to genome editing
Note 4: GMP is an abbreviation for Good Manufacturing Practice and ref ers to the Standards for Manufacturing Control andQuality Control for Pharmaceuticals and Quasi -drugs that must be observed in the manufacture of pharmaceuticals. GCTP is anabbreviation for Good Gene, Cellular, and Tissue-based Products Manufacturing Practices and refers to the Standards for
Manufacturing Control and Quality Control for Regenerative Medical Products Manufacturers.
Note 5: CAP (College of American Pathologists) is U.S. -based organization whose primary functions include providing quality
management system tools, accrediting laboratories, and providing education. LAP (Laboratory Accreditation Program) is run by
CAP and is the world’s largest international clinical trial laboratory accreditation program. Inspections of laboratories are carriedout once a year, targeting both tangible assets (e.g., clinical testing labs’ hardware) and the intangible assets for running such labs
(e.g., software).

Gene therapy businessIn fiscal 2018, the business aims to acquire the manufacture and sales approval of HF10, with a first gene therapy
product for cancer on the Japanese market. Also, further attempt is to conduct joint development with partners inJapan and cooperate with partners in overseas.
<Key point>
The status of each clinical development project is presented in the following table.
Disorders

Projects

Targeted

Country

StatusPartners

Phase II in progress
Japan
HF10

Virus(Canerpaturev)

NYsiTCR

TM

ESO-1

T-cellTherapy

MAGE-A4CAR

CD19CARapplication

infiscal 2018 plannedMelanomaOncolytic

Engineered

Approval

UnitedStates

Preparations underway

Investigator initiated Phase

Otsuka Pharma

II in progress

Co-development/exclusive sales

Japan

Synovial sarcoma

Japan

Phase I in progress

Solid cancer

Japan

Phase I/II in progress

Solid cancer

CanadaEsophageal, etc.

Japan

Phase I in progress

Adult ALL*6

Japan

Phase I/II in progress3

Co-development/exclusive sales

Phase II completed

Pancreatic cancer

Note 6: ALL: Acute lymphocytic leukemia

Otsuka Pharma

Investigator initiated Phase
Ib in progress

Otsuka Pharma
Co-development/exclusive sales
Investigator initiatedPreparations underway

Investigator initiatedOtsuka Pharma
Co-development/exclusive sales

AgriBio business
The business aims at building a stable platform by continuing the profitable business for functional foods andmushrooms.
<Key point>・

Build a platform for the stable supply of products suited to the sales plan from Takara Healthcare Inc.
(Functional foods business)

・

Expand business efficiently through the unification of manufacture and sales systems (Integration into
Mizuho Norin Co., Ltd. and KINOKO CENTER KIN Inc.) (Mushroom business)・

Build the brand strategy approaching to the market for each mushroom product (Mushroom business)

For more information:PR・IR Department, Takara Bio Inc.
E-mail: bio-ir@takara-bio.co.jp

This article is translated from press release in Japanese for your convenience.
Forward-Looking Statements
Statements in this news release, other than those based on historical fact, concerning the current plans,
prospects, strategies and expectations of the Company and its Group represent forecasts of future
results. While such statements are based on the conclusions of management according to information
available at the time of writing, they reflect many assumptions and opinions derived from information thatincludes major risks and uncertainties. Actual results may vary significantly from these forecasts due tovarious factors. Factors that could influence actual results include, but are not limited to, economicconditions, especially trends in consumer spending, as well as exchange rate fluctuations, changes inlaws and government systems, pressure from competitors’ prices and product strategies, decline inselling power of the Company’s existing and new products, disruptions to production, violations of ourintellectual property rights, rapid advances in technology and unfavorable verdicts in major litigation.

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