FY2022
R&D Meeting: Part I
December 15, 2022
NIPPON SHINYAKU CO., LTD.

Current and Future Treatment for
Dravet Syndrome*presentation slides are unavailable

FY2022
R&D Meeting: Part II
December 15, 2022
NIPPON SHINYAKU CO., LTD.

Promoting patient-centric business activity
Three commitments to fulfill our corporate philosophy
Continue to launch at least one unique product each year
Generate at least 50% of consolidated sales from overseas
Target at least more than twice in net sales and operating profit

Corporate philosophy
Helping People Lead Healthier, Happier Lives

Identity
To produce new drugs

Regardless of the size of the market, we will continue to contribute tosociety by creating and delivering innovative new drugs for patients
suffering from diseases.
4

Leveraging our acquired strengths
Leveraging our technical superiority

Nucleicacid
technology

Doing one’s all for individuals
Promote unique R&D in areas
where other companies are not
involved

Intractable
and rarediseases

20 years of R&D activity in the field of
nucleic acid, results to success ofdeveloping the first nucleic acid drug
discovered in Japan
Viltepso

Originality
In-licensing
and PLCM*

Generic name: Viltolarsen
In-house discovered drug by
Nippon Shinyaku.
This treatment for Duchenne
muscular dystrophy is anmorpholino antisense
oligonucleotide.

Uptravi
Generic name: Selexipag
Treatment for pulmonary
arterial hypertension /chronic
thromboembolic pulmonary
hypertension developed in-house by
Nippon Shinyaku.
A global blockbuster productmarketed in more than 70 countries.

Maximizing product value
VidazaEnhanced development pipeline andmarketed an average of 1 or more new
products per year

Generic name: Azacitidine
Introduced through a licensing
agreement with Celgene corporation.
Treatment for myelodysplastic syndrome /acute myeloid leukemia treatment.

*PLCM: Product life cycle management 5

R&D strategy

We aim to become a company with a meaningful
existence in the global healthcare field.
6

Research andDevelopment Activities

R&D approach
As a slogan for our R&D division, we aim for“The creation of new drugs to be used worldwide.“
Therefore, we will continue to create highly unique anddistinctive new drugs.
With a sense of speed and to increase the probability of success in
mind, research will be conducted to expand our product pipeline bycontinuously creating unique research themes through three
approaches, “Strategy for Therapeutic Focus Area” and “Strategy for
Modality,” and “Open Innovation.”
Strategy for Therapeutic Focus Area
Open innovation

Strategy for Modality8

Progress of nucleic acid DMD pipeline
Target% of DMD patients

Exon 538%

NS-089/NCNP-02

Exon 446%

NS-050/NCNP-03

Exon 50

4%NS-051/NCNP-04

Exon 51

13%

Exon 45 Skipping

Exon 45

8%

Exon 55 Skipping

Exon 55

2%

Program
NS-065/NCNP-01(Viltolarsen)

Pre clinical

PI

PI／Ⅱ

PII

PIII

LaunchPIIIin progress

Nippon Shinyaku owned DMD pipeline can cover
approximately 40% of all DMD patients9

Progress of nucleic acid product (NS-065/NCNP-01)
Study no.

Study description

Estimated primary
completion date*Study 202
(Long-term study from
P2 study (Study 201))

P2, open
Week 217, 16 patients

Complete
2021/11

Study 502
(Registry from Study
202).

Long-term follow-up
10 years, ~16 cases

2032/9Study 301-RACER53(Global P3 Study)

P3, double-blind, placebo-controlled
48 weeks, 74 patients, 4-7 years

2024/12Study 302-RACER53-X(Long-term study from
Study 301)

P3, open
2 years2026/6P2, open
48 weeks, 20 patients, 8 years orolder ambulatory (8 patients)/nonambulatory (12 patients).

2023/8Study 211-Galactic53(advanced cases)*Primary Completion Date on ClinicalTrials.gov

10Clinical study updates• NS-065/NCNP-01 phase 2 extension study• NS-089/NCNP-02 investigator-initiated clinical study

11

Clinical study updates• NS-065/NCNP-01 phase 2 extension study• NS-089/NCNP-02 investigator-initiated clinical study12NS-065/NCNP-01 phase 2 extension study【Study Design of Study 201 and 202】

Viltolarsen 40 mg/kg/wk
n=6

Randomization
Randomization

Continue current dose
Placebon=230-day follow-up

Viltolarsen 80 mg/kg/wk
n=6
Placebon=2

MusclebiopsyViltolarsen 40 mg/kg/wk
n=2

Continue current dose

Viltolarsen 80 mg/kg/wk
n=2

4 weeks
Period 1

20 weeks
Period 2

Study 201

Muscle biopsy

192 weeks►► Study 202 ◄◄*wk, week.

13

NS-065/NCNP-01 phase 2 extension study【TTSTAND CFB vs Natural History Controls】*P <0.05; †P <0.01; ‡P ≤0.001.
CFB, change from baseline; DNHS, Duchenne Natural History Study（DMD natural history control group）;
s, seconds; SE, standard error; TTSTAND, time to stand from supine; w, weeks.

14NS-065/NCNP-01 phase 2 extension study【TTRW CFB vs Natural History Controls】*P <0.05; †P <0.01; ‡P ≤0.001.
CFB, change from baseline; DNHS, Duchenne Natural History Study（DMD natural history control group）;
s, seconds; SE, standard error; TTRW, time to run/walk 10 meters; w, weeks.

15NS-065/NCNP-01 phase 2 extension study【TTCLIMB CFB vs Natural History Controls】*P <0.05; †P <0.01; ‡P ≤0.001.
CFB, change from baseline; DNHS, Duchenne Natural History Study（DMD natural history control group）;
s, seconds; SE, standard error; TTCLIMB, time to climb 4 stairs; w, weeks.

16NS-065/NCNP-01 phase 2 extension study【 Safety Assessment / Common TEAEs (Preferred Term in ≥25% of Participants)】
Viltolarsen participantsParticipants with:
Any TEAE, n (%)
Any drug-related TEAE, n (%)
Any serious treatment-related AE, n (%)
Study drug discontinuation due to TEAE, n (%)

Death, n (%)

40 mg/kg/wk(n = 8)80 mg/kg/wk(n = 8)Total(N = 16)

8 (100)0000

8 (100)1 (13)00
0

16 (100)
1 (6)
0
0
0

Viltolarsen participants
TEAEs（Preferred Term in ≥25% ofParticipants）
Cough, n (%)
Nasopharyngitis, n (%)
Insect bite, n (%)
Rash, n (%)
Vomiting, n (%)
Fever, n (%)
Fall, n (%)
Headache, n (%)
Nasal congestion, n (%)
Influenza, n (%)

40 mg/kg/wk(n = 8)80 mg/kg/wk(n = 8)80 mg/kg/wk(n = 8)5 (63)
4 (50)
4 (50)
2 (25)
3 (38)
2 (25)
4 (50)
3 (38)
3 (38)
3 (38)

5 (63)
5 (63)
2 (25)
4 (50)
3 (38)
3 (38)
1 (13)
2 (25)
2 (25)
1 (13)

10 (63)9 (56)
6 (38)
6 (38)
6 (38)
5 (31)
5 (31)
5 (31)
5 (31)
4 (25)• The most frequently reported TEAEs (reported by ≥25% of participants) were cough and nasopharyngitis.
17

Conclusion• Participants treated with viltolarsen for an additional 192 weeks (upto 216 weeks or 4 years) showed maintenance of function over the
first 2 years and significantly delayed disease progression over thefollowing 2 years in timed function tests compared with CINRG
DNHS controls, which declined over this same time period.

• Viltolarsen was well tolerated over 192 weeks, with most reported

TEAEs being mild or moderate; with no study drug discontinuations
or deaths reported.

• Viltolarsen should be considered an important part of the treatment
strategy for patients with DMD who are amenable to exon 53
skipping.

18

Clinical study update• NS-065/NCNP-01 phase 2 extension study• NS-089/NCNP-02 investigator-initiated clinical study19

NS-089/NCNP-02
Study design of Phase 1/2 Study（First-in-human, Open label study)

Key inclusion Criteria• Age : 4-17 years• Ambulant• Amenable to exon
44 skipping

Primary Objectives• Safety andtolerability

MDA, March 2022

Secondary Objectives• Dystrophin protein expression• Motor function assessments*• Exon 44 skipping levels• Pharmacokinetics• Serum CK levels• In vitro assays＊Motor function assessments：NSAA (North Star Ambulatory Assessment), TTSTD (Time to stand from supine), TTRW (10-meter walk), 6MWT (6-minute walk),
2MWT (2-minute walk), TUG (Timed Up and Go), PUL (Performance of Upper Limb), Muscle strength assessment

20

Amount of change in dystrophin in patientmuscleBaseline

Week 25

Baseline

Exon skipping efficiency(mean %)

Dystrophin in patient muscle(mean %)

NS-089/NCNP-02
Study design of Phase 1/2 Study（First-in-human, Open label study)

Week 25

Amount of change in exon skipping
efficiency

Baseline

Week 25

Mean change from baseline in
dystrophin expression % (SD)

Mean change frombaseline in exon skipping
efficiency % (SD)

40mg/kg(n=3)

10.27 (1.88)

29.56 (8.77)

80mg/kg(n=3)

15.79 (6.44)

34.64 (9.56)

Mean(%)

13.03 (5.21)

32.10 (8.71)

Baseline

Week 25

MDA, March 2022

• After 24 weeks of 6 cases tested, a significant increase of dystrophin expression and exon skipping efficiency frombaseline were observed. Also, NS-089/NCNP-02 was safe and well tolerated.

• Function assessment in the dose finding stage show a tendency of recovery and increase in motor function.
• The limitations of this study include the small number of participants and lack of placebo control arm, thus the observed
effectiveness of NS-089/NCNP-02 in inducing endogenous dystrophin expression and stabilization of motor functionneeds further verification.

21

Status of developing DMD pipelines

NS-065/
NCNP-01

Development
stage

Contents

Approved inJapan and US
P3 study inprogressP3 study, Study 502 (long-term follow-up study), and Study 211 (study inambulant and non-ambulant boys with DMD) in progress.



Investigator-initiated clinical trial in Japan has been completed, and an extension
study is ongoing.
Throughout discussion with the FDA to begin P2 study in Japan and the UnitedStates, FDA commented on the result of nonclinical safety study and asked for athird-party expert meeting. During this year, a meeting with a third-party expert
is expected to be completed and by the end of this fiscal year, we will renegotiatewith the FDA.

NS-089/
NCNP-02

Preparation forP2 study inJapan and US



NS-050/
NCNP-03

Preparation forP1/2 study inJapan and USThroughout discussion with the FDA to begin P1/2 study in Japan and the US,
FDA requested an additional genotoxicity study to be conducted, which we are
currently proceeding. We expect genotoxicity study to be completed during thisfiscal year and submit results to the FDA.

NS-051/
NCNP-04

Preparation forP1/2 study inJapan and US

We are currently discussing with PMDA, to initiate clinical study. We are alsoplanning to have pre-IND meeting with the FDA, within this fiscal year.

Exon 45skipping

Preclinical

We have selected candidate sequeces and nonclinical studies are underway.

Exon 55
skipping

Preclinical

We have selected candidate sequeces and nonclinical studies are underway.
22

Next-generation modalities

Development of next-generation
antisense nucleic acids
Novel sequence
design method

Improvement of the activity andspecificity by designing single
sequence in which has two target
sequences

Next-generation
antisense nucleic acids

Improvement of
PMO intracellulartransferability

Membranepermeable
peptide linkage

Synthesis of
Stereoselective stereochemically puresynthesis
and optimized modified
nucleic acid

Next generation antisense nucleic acids can improve distribution,
efficacy (persistence and activity), safety, and physical properties
compared to current antisense nucleic acids. This expands theapplication of nucleic acid drug to other diseases.
24

Peptide-conjugated nucleic acid

We are developing PPMO in which CPP is bound to morpholino nucleic acidas DDS technology to improve the pharmacokinetics of nucleic acid drugs byenhanced cell membrane permeability. As a result, we aim to improve thedrug efficacy and reduce the frequency of administration using PPMO.

25

Stereoselective synthesis
Conventional PMO (a mixture of stereoisomers)

mirrorB(n)＊Stereocontrol (single-stereoisomers)：monomer

＊N

P
N
CH3

CH3

Monomer has chirality and PMO is a
mixture of stereoisomer.

Stereocontrolled synthesis of optimized modified nucleic acids create new
added value (such as improvement of physical properties and activity)

26

Novel sequence design method (NS-089/NCNP-02)
Exon 44
Active sequence A

Active sequence B

Link sequence A andsequence B

Strong skipping activity
is obtained.

Skipping efficiency (%)

When activity is enhanced by combining
sequence A and sequence B

NS-089/NCNPNS-089/ NCNP-

Sequence
Sequence A

02 (single(single02+sequenceBB(2＋sequence

stranded)stranded)Sequence
A
Sequence A

Sequence
B
Sequence B(2 vials)oligos)27

Several types of approach for DMD

Nucleic acid drug (exon skipping)
Dystrophin mRNA
Full
length

51

52

53

54

Full-length mRNA

Reading frame
does not fit.

Exon 52
Deletion

51

52

53

54

Deletion of exon 52
mRNA

Reading frame fits.

Exon 52
Deletion

51

Exon 53
Skip

Full-length
Protein production

No protein
production

54

mRNA lacking
exons 52 and 53

Slightly short but
functional protein
production

29

Cell therapy CAP-1002
Cardiosphere-derived cell therapeutic.
Exosomes (extracellular vesicles) released from this drug are expected
to reduce oxidative stress, inflammation, fibrosis, and increase cell
energy and myocyte generation, resulting in reducing deterioration of
motor and cardiac functions.

WMS, October 2022

30

Cell therapy CAP-1002:HOPE-2 study + OLE study
DB Phase

Gap Phase

The Lancet, March 2022

HOPE-2 DB: PUL scoring
Key inclusion criteria• Age: 10 years or older• Non-ambulant or lateambulant (10MWT>10S)• PUL entry item score 2-5(loss of full overhead reachbut retained hand-to-mouth
function)

OLE Phase

WMS, October 2022

HOPE-2 DB+OLE: PUL scoring
Duration of treatment
・DB Phase: CAP-1002 or placebo
was given once every 3 months
for 4 doses
・Gap Phase: Off treatment due to
COVID-19 pandemic
・OLE Phase: CAP-1002 was given
once every 3 months for 2 years

As a result,
CAP-1002
slowed declineof upper limb
function for long
period of time.

31

Gene therapy (our activity)
Challenges of microdystrophin products: Serious adverse events
associated with high-dose and systemic administration※ enhancer and promoter work
together to increase transcription(DNA to mRNA)

Concept: Microdystrophin gene therapy with equivalent or higher
efficacy and higher safety profile than developing drug.
32

Position within the three treatments
Advantage

Disadvantage

Nucleic acid drug
(Exon skipping)・Multiple doses are possible
・Long-term safety and efficacy data are
available

・Target patients are limited
・Therapeutic effects only towards
skeletal muscle

Cell (exosome)therapy・Potentially effective not only for skeletal
muscle, but also for the heart・Can improve upper limb function in patients
who are non-ambulant

・Effect towards ambulant patients have notbeen examined.
・Difficulty in cell specification anddistribution

Gene therapy(microdystrophin)・Potentially effective not only for skeletal
muscle but also for the heart・May be available to DMD patient who is not
amenable to exon skipping.

・High and systemic dose resulting toimmunotoxicity
・Currently difficult to administer multiple
doses.
・Not clear whether short-chain dystrophin
adequately improves motor function

We believe that there is an optimal combination of treatments depending on thepatient's genetic background, medical (health) condition and timing.
33

Safe Harbor Statement• Materials and information provided during this presentation may contain so-called “forward-looking
statements.” These statements are based on current expectations, forecasts and assumptions thatare subject to risks and uncertainties which could cause actual outcomes and results to differ materiallyfrom these statements.
• Risks and uncertainties include general industry and market conditions, and general domestic andinternational economic conditions such as interest rate and currency exchange fluctuations. Risks anduncertainties particularly apply with respect to product-related forward-looking statements. Product risks
and uncertainties include, but are not limited to, technological advances and patents attained bycompetitors; challenges inherent in new product development, including completion or failure of clinical
trials; claims and concerns about product safety and efficacy; regulatory agency’s examination, obtaining
regulatory approvals; domestic and foreign social security reforms; trends toward healthcare cost
containment; and governmental laws and regulations affecting domestic and foreign operations.
• Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, which
include, but are not limited to, inability to build production capacity to meet demand, unavailability of raw
materials, and competition with others.
• The Company disclaims any intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
• This English presentation was translated from the original Japanese version.
In the event of any inconsistency between the statements in the two versions, the statements in theJapanese version shall prevail.

Nippon Shinyaku Co., Ltd.
R&D Meeting
December 15, 2022

Presentation
Moderator: I will now introduce today's speakers. From the left, Toru Nakai, President.
Nakai: Hello. Thank you.
Moderator: Kazuchika Takagaki, Director, Research and Development.
Takagaki: Hello. Thank you.
Moderator: Takanori Edamitsu, Director, Business Management and Sustainability.
Edamitsu: Hello. Thank you.
Moderator: I will now hand over to the president to begin the presentation.
Nakai: My name is Toru Nakai, President of Nippon Shinyaku.

First, let me explain Nippon Shinyaku's R&D strategy.

1

Since our company was established, our identity has been to create new medicines. To us, that means we are
pursuing our corporate philosophy, which is Helping People Lead Healthier, Happier Lives through theprovision of high quality and distinctive products.
To this end, all of our employees have the desire to put patients and their families first and foremost. We will
promote research and development to create as many products as possible and as soon as possible. Our goal
is to help each and every patient who is suffering from a disease to get the appropriate treatment, regardlessof the size of the market. As a result, we hope to achieve to continue to launch an average of at least one
unique product each year.

For more than 100 years, we have been engaged in the creation of distinctive drugs as a research-based
pharmaceutical company.
We believe that we have a number of strengths, which we have built up over the years. One is ourtechnological superiority in nucleic acid technology, which we have been working on for more than 20 years.
Another is our spirit of challenge in actively tackling therapeutic areas and diseases that other companies are
not working on. Another strength is our efforts in in-licensing activities and product life cycle management tomaximize the value of our products.
We will continue to engage in research and development in pursuit of originality by making the most of thestrengths we have built up.

2

Our R&D strategy is to promote research and development with a sense of urgency in our four focus
therapeutic areas of urology, hematology, intractable and rare diseases, and gynecology. Our approach isbased on the three pillars of in-house drug discovery, in-licensing, and product lifecycle management.
In addition, we will continue to develop and promote our business in the US, Europe, China, and other regions
in order to develop globally needed drugs and provide them to patients, aiming to become a company with ameaningful existence in the global healthcare field.
Today, Mr. Takagaki will explain our specific R&D activities centered on nucleic acid technology, which isindispensable for us to become a meaningful existence in the global healthcare field.

3

Takagaki: Hello, I am Takagaki, Director, Research and Development.
Our approach to research and development is to continuously create highly unique and distinctive new drugs
to be used worldwide.
With an eye to speeding up the development process and increasing the probability of success, we areconducting research to expand our pipeline through continuously creating distinctive research themes. We
will proceed using three approaches: Strategy for Therapeutic Focus Area, Strategy for Modality, and Open
Innovation.

4Here is our DMD pipeline.
We have viltolarsen, NS-065, targeting exon 53, NS-089 targeting exon 44, NS-050 targeting exon 50, NS-051
targeting exon 51 and exon 45 and exon 55 skipping agents.
The percentage of DMD patients covered by viltolarsen is 8%, by exon 44 is 6%, by exon 50 is 4%, by exon 51
is 13%, by exon 45 is 8%, and by exon 55 is 2%. We will be able to cover about 40% of all DMD patients with
our DMD pipeline.
Later on, we will explain the progress of each compound.

5First, I would like to explain the current progress of NS-065, viltolarsen.
At the top is Study 202, an extension study of Phase II study. This was completed in November 2021. The
results will be presented later on.
We also have Study 502, an extension study from Study 202. This is a long-term follow-up study for 10 years.
The next is Study 301, which is a Phase III randomized, double-blind, placebo-controlled study. The duration
is 48 weeks, with 74 patients aged four to seven years. All patients have registered, and the trial is currently
progressing well.
Next is Study 302, an extension Study of Study 301.
At the bottom of the list is Study 211, which is a study in advanced cases. In addition to ambulatory patients,
the study includes a certain number of non-ambulatory patients.

6

Now, I would like to continue with clinical study updates.
First, I would like to explain the results of the Phase II extension study of NS-065, viltolarsen.
Here is a description of the design of Study 201 and Study 202.
In Study 201, viltolarsen at 40 mg/kg and 80 mg/kg was administered. Initially, some patients received placebo
for 4 weeks. After confirming safety, patients on placebo also received 40 mg/kg or 80 mg/kg of viltolarsen.
This is Study 201.
I will like to introduce the results of Study 202, the extension study of Study 201, which was conducted for
192 weeks, little past four years.

7This slide shows the motor function results over the four-year period.
The blue line is for the group that received viltolarsen, and the yellow line represents natural history data of
DMD patients. This is a test of time to stand from supine, with seconds on the left side and speed on the rightside, showing the same data in seconds and speed.
As you can see, there was a slight improvement for about two years, and then coming up to the four-year
point, a maintenance trend or a slight decline was observed, but, patients treated with viltolarsen showed atrend of maintenance compared to the natural history data.

8

Next is a study for time to run/walk 10 meters.
The left side shows seconds, and the right side shows speed, which is still the same data described in adifferent way. The upper blue line is the viltolarsen group and the lower yellow line is the natural history dataof DMD patients.

9

The next slide is data from a study of time to climb four stairs.
The left side shows seconds, and the right side shows velocity, both of which also showed improvement
followed by maintenance in the viltolarsen group.

10These are adverse events of phase II extension study.
There have been eight cases reporting adverse events receiving the 40 mg/kg dose and eight cases on the 80
mg/kg dose. However, there was only one case reporting adverse events related to the drug receiving the 80
mg/kg dose.
In this one case, the adverse event was blood leakage from the blood vessel when the drug was administered.
The most common adverse events in this study were cough and nasopharyngitis.

11

This is a summary of Phase II extension study.
When comparing patients receiving viltolarsen and natural history data of DMD patients, patients treatedwith viltolarsen showed maintenance of motor function over the first two years and showed a trend ofdelaying disease progression during the following two years.
Viltolarsen was well tolerated over 192 weeks, with most reported adverse events being mild or moderate;with no study drug discontinuations or death reported.
This study shows that viltolarsen should be considered as an important treatment for DMD patients amenable
to exon 53 skipping.

12

Next, I would like to talk about the results of the investigator-initiated clinical study for NS-089/NCNP-02.
This is an investigator-initiated clinical study conducted by the National Center of Neurology and Psychiatry,
NCNP.
First, here is a design of the clinical study.
The left side is part one, the dose escalation part. The dose gradually increased from 1.62 mg/kg to 40 mg/kg
or even 80 mg/kg.
In part two, the same dose, 40 mg/kg, or 80 mg/kg was administered.
After part two, we are currently conducting an extension study.

13

These are the results of muscle biopsy after part two.
As for the mean change from baseline in dystrophin expression, a 10.27% increase of protein expression in
the 40 mg/kg group and a 15.79% increase in the 80 mg/kg group were observed.
Patients amenable to exon 44 skipping had a rather high baseline, but even from there, we saw a large
increase in protein expression. Since the average protein expression of viltolarsen was about 5%, NS-089
induces a considerably greater protein expression.
Next, the right side shows the mean change from baseline in exon skipping efficiency. An increase in exonskipping efficiency of 29.56% in the 40 mg/kg group and 34.64% in the 80 mg/kg group were observed.
This investigator-initiated clinical trial indicated a significant increase of dystrophin expression and exonskipping efficiency in six patients during the 24-week treatment period. In addition, NS-089/NCNP-02 was safe
and well tolerated.
In part two, we have seen a trend of maintenance and improvement in motor function, albeit for a shortperiod of time.
Since the number of cases in this study was only six, it was not a placebo-controlled study, and the duration
for testing motor function was short, we believe that further investigation of efficacy of the drug is necessary.

14

Next, is the status of developing DMD pipelines.
NS-065 or viltolarsen is approved in Japan and the US and are now undergoing Phase III trials.
Regarding NS-089, investigator-initiated clinical trial in Japan have been completed and we are now
conducting an extension study. Furthermore, we are now in discussion with the FDA to start Phase II trials inJapan and the US. The FDA has commented on the results of the non-clinical safety study and requested ameeting of third-party experts to be held. During this year, a meeting with a third-party expert is expected tobe completed, and by the end of this fiscal year, we will renegotiate to reach agreement with the FDA to start
clinical trials in beginning of the next fiscal year.
Next, regarding NS-050, we are now in discussion with the FDA with the intention of starting a phase I/II study
in Japan and the US. Here, an additional genotoxicity study was requested to be conducted although we think
there was no risk of genotoxicity according to the ICH guideline. However, the FDA requested that we conduct
an additional study. The request was not in accordance with the ICH guideline. We are currently conducting
this study and expect to have an agreement with the FDA by the end of this fiscal year and start clinical trials
next fiscal year.
Regarding NS-051, negotiations are underway with the PMDA and the FDA for the initiation of clinical study.
We plan to have pre-IND by the end of this fiscal year.
For exons 45 and 55 skipping, we have selected candidate sequences, and we are currently conducting nonclinical studies.

15

Next, I would like to talk about the next-generation technology.
As for next-generation antisense nucleic acids, we are promoting the three approaches shown here.
One is a novel sequence design method, in which a single sequence recognizes two target sequences toimprove activity and specificity.
Next is stereoselective synthesis, which synthesizes stereochemically pure and optimized modified nucleic
acids.
The third is a linkage of membrane-permeable peptides, called PPMO, which improves the intracellulartranslocation of PMO.
This approach can improve distribution, efficacy, persistence and activity, safety, and physical properties
compared to current antisense nucleic acids. We believe that this will improve the current PMO characteristics,
make the current application more effective, and not only that but also expand the application of nucleic acidmedicine to other diseases.

16

Firstly, I would like to start off with an explanation of peptide-conjugated nucleic acid.
This is a membrane-permeable peptide, linked with a morpholino nucleic acid.
We are now realizing that the stability of PPMO is considerably influenced by not only the peptide andmorpholino nucleic acid but also the linker written in the middle.
We have selected the optimal peptide, optimized the linker, and selected a highly active nucleic acid sequence.
In this way, we have identified the PPMO candidate. We are currently conducting non-clinical studies andexpect to be able to report back in due course.
As I mentioned earlier, we believe that the addition of membrane-permeable peptides will improve thepermeability and pharmacokinetics of the drug, thereby increasing its efficacy and reducing the frequency ofadministration.

17

The next step is stereoselective synthesis.
In this figure, “P”, the phosphorus with the red dot has a chiral center. It is just like a right-handed and lefthanded relationship. However, the two molecules are different sterically.
In PMO, there are 20 linkages of the phosphate moiety for 21 monomers: it is an N-1 relationship. In the caseof 21 monomers, there are 2 to the 20th power variations in the steric structure.
We believe that by separating these nucleic acids, it will be possible to create a single, chemically optimized
nucleic acid that is a pure product, rather than a mixture of nucleic acids with disparate steric structures thathave been produced in the past.
We believe that this will enable us to achieve new added value, improved physical properties, and increased
activity.
The current progress, as noted below, is that we are now able to synthesize these stereoselective PMOs. We
have conducted several studies and have confirmed improvement in physical properties and activity. Now
that we have done this with one sequence, we are changing the sequence to another to check the
reproducibility and regularity of the sequence. After this, we would like to decide a candidate forstereocontrolled PMO and proceed to non-clinical studies.

18NS-089 is an example of our new sequence design method.
A single antisense oligo binding to a single target sequence in exon 44 is usually selected. In the case of NS089, there were two target sequences or regions in exon 44 that caused activity, so we designed two antisense
oligos for these target sequences and linked these oligos together.
As you all know, nucleic acids must be of a certain length to bind to each other, so if we design and combine
sequences that bind to each of these target sites, as a result, the combined sequence becomes very long. We
found that even if the active sequences A and B are shortened to the point that they are not active on theirown, by combining these short sequences, we can obtain a strong activity that cannot be obtained with asingle sequence.
This principle was used in NS-089. We have applied this design method to other compounds targeting exon
51.
The graph on the right side shows that sequences A and B are not active by themselves. Even a mixture of thetwo sequences has almost no activity. Though when bound together, they have strong activity.

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I will continue with a description of various approaches in DMD.
The first is exon skipping with nucleic acid medicine.
I am sure you all know this already, but the picture at the top shows production of full-length proteins. The
second is an example of deletion of exon 52, in which the protein reading frame no longer fits, so protein
production is no longer possible. The reading frame will be in-frame if it is a multiple of 3. If 53 is also deleted,
it will be a multiple of 3, so the reading frames will be in-frame again, and a slightly shorter but still functional
protein can be produced.
Treatment by exon 53 skipping is to skip exon 53 by introducing antisense nucleic acid.

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Next, here is an example of cell therapy CAP-1002.
This is a cardiosphere-derived cell therapy. Exosomes or extracellular vesicles released from CAP-1002 are
expected to reduce oxidative stress, inflammation, fibrosis, and increase cell energy and myocyte generation,
resulting in reducing deterioration of motor and cardiac function.
As you can see in the picture, we believe that exosomes are released and act on endothelial cells, fibroblasts,
cardiomyocytes, leukocytes, and other cells to achieve an overall effect.

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This is some of the data from the HOPE-2 Phase II trial. Patients in this study were non-ambulant, so upper
limb motor function are evaluated.
The left side bar is a result of placebo group, and the right side bar is a result of CAP-1002 group. A staticallysignificant improvement in upper limb motor function compared to placebo group was observed.
In the chart on the right, the upper blue line shows the CAP-1002 group, and the lower red line shows theplacebo group. In the first DB period the dosing is started and a significant difference between CAP-1002
group and placebo group in slowing of disease progression was observed.
The gap period, was a time when the administration was not possible due to the COVID-19 pandemic. Even
during this period, the difference between the two groups has not only been maintained but rather wideneda bit. Then at the OLE period, the drug was administered to both groups, and in this case, the slope was almost
the same, but the initial difference was maintained.
The results show that CAP-1002 delays the decline in upper limb function for a long period of time. A Phase
III trial is currently underway.

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Next is gene therapy. I would like to introduce our company's approach.
We believe that the major issue with the current developing drug of microdystrophin for the treatment of
DMD is that it is administered in very high doses and systemically. We consider this very problematic becauseof the potential for serious adverse safety events.
To remedy this, we will improve enhancer and promoter to increase the dystrophin expression level per vector
to achieve a lower dose. Although microdystrophin needs to be shortend less than one-third of its full lengthof dystrophin, we will also optimize the design of the microdystrophin itself to create a protein with higher
functionality, which will also contribute to lower dose. We are now working on a gene therapy that expresses
microdystrophin with equivalent or higher efficacy and higher safety profile than the developing drug using
both of these approaches.

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Lastly, we have discussed the position of these three treatments.
Nucleic acid drug, cell (exosome) therapy, and gene therapy (microdystrophin) each have their own
advantages and disadvantages, and we believe that the best treatment can be achieved by combining them.
In nucleic acid drug, multiple dosing is possible and required. Availability of long-term safety and efficacy data
is an advantage, but one drug targeting a certain exon can only be administered to a certain type of patients.
Furthermore, current nucleic acids are only effective toward skeletal muscle and are unlikely to go to cardiac
muscle.
In the case of exosome therapy, it goes not only to skeletal muscle, but also to the heart and other organs,leading to unintentional affects in those areas. Data are emerging that upper limb muscle strength can be
improved in patients who are non-ambulant. On the other hand, it remains to be seen if it will be effective forambulatory patients. In addition, since we need to distribute cells, we consider setting specification anddistribution of cells to be challenging.
Regarding gene therapy, it may be effective, not only for skeletal muscle but also for cardiac muscle. It is also
not exon type-specific, so it has the potential for use in patients other than those amenable to exon skipping.
Downsides include immunotoxicity due to high systemic doses and the difficulty in administering multiple
doses. Since microdystrophin protein is shortened by less than one-third of dystrophin, we believe that it isunclear whether this type of treatment will adequately restore motor function.
The figure shown at the bottom is a diagram of what an expert in the US thought when we discussed this with
him in September.

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What he said was that for those who are not eligible for exon skipping, gene therapy is the only way to go fornow. However, for patients who are eligible for exon-skipping therapy, initially, the patient has a lot of stem
cells or satellite cells, so in that case, it would be a good idea to prevent the patient's muscle cells from being
destroyed as much as possible using exon skipping. When those stem cells become scarce, gene therapy may
be one option, and it may be a good idea to put microdystrophins in from the outside.
However, in the case of gene therapy, it is theoretically difficult to sustain the effect for a long period of time,
so patients may return to exon skipping, or to move to exosome or cell therapy if the patient is no longer
ambulatory when the effect of gene therapy wanes.
We believe that after each treatment method is approved, and clinical evidence is accumulated, the optimaltreatment will be established based on the patient's genetic background, medical condition, and timing.
That is all.
Thank you very much.

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