Sosei Group Corporation
th Annual J.P. Morgan
36
INTRODUCTION TO
Healthcare
Conference
SOSEI GROUP
8 January 2018
July 2017

Disclaimer
The material that follows is a presentation of general background information about Sosei Group Corporation and its subsidiaries (collectively, the “Company”) as of the date of this presentation. This
material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment advice torecipients. It is not targeted to the specific investment objectives, financial situation or particular needs of any recipient. It is not intended to provide the basis for any third party evaluation of any securities or
any offering of them and should not be considered as a recommendation that any recipient should subscribe for or purchase any securities.
The information contained herein is in summary form and does not purport to be complete. Certain information has been obtained from public sources. No representation or warranty, either express or
implied, by the Company is made as to the accuracy, fairness, or completeness of the information presented herein and no reliance should be placed on the accuracy, fairness, or completeness of suchinformation. The Company takes no responsibility or liability to update the contents of this presentation in the light of new information and/or future events. In addition, the Company may alter, modify orotherwise change in any manner the contents of this presentation, in its own discretion without the obligation to notify any person of such revision or changes.
This presentation contains “forward-looking statements,” as that term is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as
amended. The words “believe”, “expect”, “anticipate”, “intend”, “plan”, “seeks”, “estimates”, “will” and “may” and similar expressions identify forward looking statements. All statements other thanstatements of historical facts included in this presentation, including, without limitation, those regarding our financial position, business strategy, plans and objectives of management for future operations(including development plans and objectives relating to our products), are forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.
Such forward looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. The important factorsthat could cause our actual results, performance or achievements to differ materially from those in the forward looking statements include, among others, risks associated with product discovery anddevelopment, uncertainties related to the outcome of clinical trials, slower than expected rates of patient recruitment, unforeseen safety issues resulting from the administration of our products in patients,
uncertainties related to product manufacturing, the lack of market acceptance of our products, our inability to manage growth, the competitive environment in relation to our business area and markets,
our inability to attract and retain suitably qualified personnel, the unenforceability or lack of protection of our patents and proprietary rights, our relationships with affiliated entities, changes anddevelopments in technology which may render our products obsolete, and other factors. These factors include, without limitation, those discussed in our public reports filed with the Tokyo Stock Exchange
and the Financial Services Agency of Japan. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonably based on information
currently available to the Company's management, certain forward looking statements are based upon assumptions of future events which may not prove to be accurate. The forward looking statements inthis document speak only as at the date of this presentation and the company does not assume any obligations to update or revise any of these forward statements, even if new information becomes
available in the future.
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or as a measure of liquidity (in each case, as determined in accordance with IFRS). Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, analysis of the Company's
results reported in accordance with IFRS.
References to "FY" in this presentation are to the Company's fiscal years, namely the 12-month periods commencing in each case on April 1 of the year indicated and ending on March 31 of the following
year, unless specifically otherwise indicated.

2

Listed 2004 in Tokyo (TSE Mothers: 4565)

A Japan-listed biotech with a difference

Global management team
Main scientific campus in the U.K.
Market capitalization: c.$2.0bn➢ World-leader in GPCR-focused drug design based on unique IP protected StaR®1 GPCR technology &enabled SBDD2 platform➢ Partnered clinical-stage pipeline in neurology, immuno-oncology, CNS & other diseases, with up to
c.$6bn in potential economics➢ Proprietary pipeline led by dementia with Lewy Bodies (DLB) Phase 2 program in Japan, plus multiple
novel candidates in development➢ Strategic investment in saRNA therapeutics with lead candidate in Phase 1/2a for liver cancer, an orphan
indication➢ Growing royalties from legacy respiratory products provide source non-dilutive cash flows➢ Strong cash position of c.$300m to drive global growth strategy
Tokyo listed, global operations. We are building Japan’s first biotech champion

33

1 Stabilized receptor technology
2 Structure-based drug designUnique management team for a Japan-listed company
Significant pharma and biotech expertisePeter BAINS
Chief Executive Officer
 Former Senior VP of International Commercial

Development at GSK
 Former CEO of Syngene

Dr. Malcolm WEIR
Chief R&D Officer
 CEO and Co-Founder Heptares
 Former Head of Molecular Science Division at

Glaxo Wellcome

Dr. Fiona MARSHALL
Chief Scientific Officer CSO and Co-Founder at Heptares
 Former Head of Molecular Pharmacology

Department at Glaxo Wellcome

Scientific Advisory Board experience

Andrew OAKLEY
Chief Financial Officer
 Former CFO of Actelion Pharmaceuticals Ltd
 Former CFO of Vectura plc

44

Dr. Tim TASKER
Chief Medical Officer
 GSK and Former Executive VP of ClinicalDevelopment at Evotec

Three corporate events have shaped Sosei
Our world-leading Partners

2005

2015

2017

Acquired
Arakis(UK)

AcquiredHeptares Tx(UK)

Investment in
MiNA Tx(UK)➢ Glycopyrrolate, later
licensed to NVS for
respiratory products(Seebri/Ultibro)➢ Ongoing royalties
provide long termsource of non-dilutive
funds➢ Platform: StaR®
technology forstabilising GPCRs➢ Partnered GPCR
pipeline➢ Proprietary GPCR
pipeline➢ Platform: small
activating RNA(saRNA) technology➢ Proprietary
candidate in Phase
1/2a for liver cancer

Our patent-protected StaR® technology enables Structure-Based Drug Design, consolidating our position as
the world leader in GPCR medicine discovery and design
55

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Financials

Vast opportunity targeting GPCRs, however many high-value targets remain untapped
GPCRs are the backbone of the pharma industryc.400

Neurological disordersc.400 non-olfactory GPCR targets in the human genome

drug targets

Gastrointestinal diseases

Metabolic disorders

BEST-IN-CLASSFIRST OR
BEST-IN-CLASS
Drugged27%

In trials
17%

34%

FDA approvals

Oncology
As yet undrugged
56%
Cardiovascular27%

global sales

Respiratory

GPCRs are active in a wide range of disease areas,
and offer broad therapeutic potential
66

1 Source: “Trends in GPCR in Drug Discovery – new agents, targets and indications”, Nature Reviews, October 2017
2 Source: “Unexplored opportunities in the druggable human genome”, Nature Reviews, 2016

Targeting first-in-class or best-in-class
GPCR medicines

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Financials

StaR® technology enables us to stabilize and “unlock” GPCRs
Revolution for GPCR structure-based discovery
Difficulty drugging native/”wild-type” GPCRs

Our solution: proprietary StaR® technology

GPCRs are receptors
with seventransmembrane
structures, that span
the cell membrane

StaR® proteinsenablecrystallisation forstructural
determination, andthe technology isprotected by arobust IP estateand high levels ofknow-how.

Highly unstable whenremoved – aggregate
and lose function
when purified,preventing structural
determination➢ Structural tools of science cannot beapplied to native GPCRs➢ Results in many sub-optimally drugged
targets➢ Unstable nature also prevents ability togenerate stable antigen to raise antibodies
77➢ Single point mutations stabilize GPCRs tocreate a StaR® that can be purified andretains function➢ StaR® technology is the basis for our
integrated structure/ chemistry/
pharmacology platform (SBDD)

StaR® proteinsenable SME,
peptide or
antibody discovery

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Financials

Risk-balanced strategy to leverage leadership and capitalize on GPCR opportunity
Creates and captures valuePartnered(Traditional out-licensing/collaboration projects)

GPCRs

StaR®
+
SBDD

➢ Leverage strategic capabilities of partners

Partnered(Co-development/
profit share)➢ Complementary capabilities and profit
sharing with partners

Proprietary(go-to-market/
commercialize)➢ Rare/orphan and specialty indications➢ Selected markets

Reserving the right to choose which strategy is most appropriate for each drug candidate,with a goal to commercialize ourselves in selected indications and markets
88

1 Stabilized receptor technology
2 Structure-based drug design

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Advancing a Partnered GPCR pipeline in multiple therapeutic areas
Balanced and diversified
Product/Program

Modality

Indication

M1 AD

SME

Alzheimer’s disease

M4 AD/Sz

SME

NeuroB Sx in AD

M1/M4

SME

AD/NeuroB Sx in AD

A2A
antagonist

SME

Cancer I/O

CGRP

SME

Migraine

SME/
mAb

Multiple indications

SME

Pain

SME

Not disclosed

agonistagonistagonistantagonist

Partner

Discovery

Preclinical

Phase 1

Proprietary
GPCR Pipeline

Strategic
Investment: Current stage: Next 12–15 months progress

Phase 2Phase 3

Partnered GPCR Pipeline (Co-development/profit share)
PEP

Inflammation

mAb

Immuno-oncology

Multiple big pharma partners, across multiple modalities, validate our StaR® and SBDD approach99

1 Note: SME = small molecule; mAb = monoclonal antibody

Financials

MarketGPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Financials

Up to $6bn in potential economics secured from lead Partnered compounds
Provides potential source of non-dilutive financing
Partner

Program /Indication

MR PRGM
Cognition/Psych.

A2A
Immuno-oncology

CGRP
Migraine

Upfront
received(US$m)

125

665

Total Sales
Milestones(US$m)

2,575

Total UF +Milestones(US$m)

3,365

Milestones
Received(US$m)

Royalty(US$m)
➢

15

➢

10

500

510

22

10

400

410

5

Tiered,doubledigit

145+

~189
per target

N.D.

Tiered(singledigit)

1,890

6,175

Additional Details

Tiered,doubledigit
Tiered,doubledigit

Nil

TOTAL

Total
Development
Milestones (US$m)➢➢

Exclusive global rights
Allergan committed $50m to a joint R&D program
through Ph 2a
Exclusive global rights to AZD4635
Collaboration to discover further A2A receptor blocking
compounds for development➢

Exclusive global rights to novel CGPR antagonists➢

Received research funding➢➢

Discovery of potential novel GPCR agents selected by
Pfizer (up to 10 targets)
Pfizer will be responsible for developing andcommercializing any agents discovered

42

c.$6bn in potential development, regulatory and commercial milestones to come,in addition to royalties on sales
10
10

GPCRs/StaR®

Muscarinic M1 receptor agonist program for AD
A novel approach for symptomatic treatment of AD

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Partnered with:

Strategic
Investment

Financials

M1 AD
Phase 1b

➢ Donepezil inhibits cholinesterase, preventing the
breakdown of ACh
Presynaptic
NeuroneAricept®/
Donepezil(AChEI)P

M1
receptors(standard of care)

M1
M1

M1

Postsynaptic
Receptor➢ Enhancement of ACh by AChEIs such as Donepezil
provides clinical benefits➢ Benefits limited due to low/declining levels of ACh as
disease progresses, plus adverse side-effects➢ Blockbuster drug (c.$4bn sales pre U.S. patent expiry)

Cholinesterase(AChE)

Acetylcholine (ACh)HTL0018318(NOVEL)

Aricept®/
Donepezil

HTL0018318
Novel muscarinic
M1 receptor
agonist➢ Acts directly on M1 receptor post synapse,
independent of endogenous levels of ACh➢ Circumvents the underlying neurochemical deficit inAD➢ Offers potential first-in-class therapy

Selective muscarinic M1 receptor agonism offers a potential first-in-class therapy for AD patients
11
11

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Partnered with:Financials

M1 AD

HTL0018318 is a potential first-in-class therapy for AD
Highly selective M1 receptor agonist derived from StaR® and SBDD

Phase 1b

Overview of the HTL0018318 muscarinic M1 agonist➢ Cognitive benefits of M1 agonism supported by Lilly’s
clinical studies of xanomeline1➢ Xanomeline’s development stopped due tounacceptable CV and GI side effects linked tostimulation of M2 & M3

➢ StaR® & SBDD “designed out” unwanted selectivity
over the M2 & M3 receptors➢ M4 agonist also in clinical development for NeuroB Sx
in AD – designed using same principle as HTL0018318

M1% activation➢ HTL0018318 is a potent muscarinic M1 agonist withnegligible M2/M3 agonism

HTL0018318

Xanomeline1
Cognition

PO
M GI side-effects
O
Behavioural P
M
M2 CV side-effects
3

4-11 -10 -9 -8 -7 -6 -5

Log [Xanomeline] (M)M1

CognitionP

HTL0018318 is aselective M1 receptor
agonist for cognition
with negligible agonist
activity at M2 or M3
receptors

Selectivity is crucial. HTL0018318 has a differentiated mechanism of action with the potential to optimise
symptomatic benefits in AD patients
12
12

Source: Internal analysis
1 Bodick et. al. “Effects of Xanomeline, a Selective Muscarinic Receptor Agonist, on Cognitive Function and Behavioural Symptoms in Alzheimer’s Disease” Arch Neurol. 1997;54@465-473

GPCRs/StaR®

Adenosine A2A antagonist program for cancer treatment
Exciting I/O treatment approachI/O drugs – forecast sales for marketed products ($bn)1

26.1
23.2

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Partnered with:

Strategic
Investment

Financials

A2A
Phase 1b

Potential role of Adenosine A2A antagonists in cancer➢ Blocks tumor cells’ ability to use Adenosine to evade theimmune system➢ Opportunity in a wide range of tumor types – in particular,
link to tumors with hypoxia

19.4
15.4

➢ Ability to select patients based on biomarkers of elevatedadenosine, e.g. CD73

11.2

➢ Potential role both as I/O monotherapy, and incombination with other immunotherapy approaches

2017F

2018F

2019F

2020F

2021F

Immunotherapies are at the forefront of cancer treatment with strong forecast growth for I/O drugs.
A2A antagonists represent an exciting I/O treatment approach
13
13

Source: Management estimates
1 Includes sales forecasts for Keytruda (pembrolizumab), Opdivo (nivolumab), Yervoy (ipilimumab), Tecentriq (atezolizumab), Imfinzi (durvalumab), and Bavencio (avelumab) only

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Partnered with:

AZD4635 is a highly potent and selective A2A antagonist
The first A2A antagonist structurally derived from StaR® and SBDD
Preclinical summary of AZD4635

Financials

A2A
Phase 1bPhase 1b trials ongoing➢ Ph. 1b trials in patients with solid malignancies(mono/combination therapy) progressing well
➢ MTD for monotherapy complete, dose escalation toestablish the MTD in combination with IMFINZI™ nearcompletionP➢ Progressing with signal seeking Ph. 1b expansion cohorts
in a number of tumor types with monotherapy and/or in
combination with IMFINZI™

AZD4635 enhances the anti-tumor activity of anti-PD-L1 checkpoint inhibitorsin established MC38 syngenic tumors1
14
14

1 As demonstrated preclinically. Preclinical pharmacodynamics and antitumor activity of AZD4635, a novel adenosine 2A receptor inhibitor that reverses adenosine mediated T cell suppression

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Modality

Indication

Discovery

Preclinical

Phase 1

: Next 12–15 months progress

Phase 2Phase 3

Proprietary GPCR Pipeline (Go-to-market/commercialize) - formerly known as “Wave 2”
1 DLB
M1 M
agonistSME

Dementia with Lewy Bodies (Japan)

mGlu
5
mGlu
5 NAM

SME

CNS

MOL 1

SME

Undisclosed

MOL 2

SME

Undisclosed

MOL 3

SME

Undisclosed

MOL 4

SME

Undisclosed

MOL 5

SME

Undisclosed

agonistNAM

Investment in StaR® technology driving Proprietary GPCR pipeline progress– up to 3 novel drug candidates to enter Phase 1 every year commencing CY2018
15
15

1 Note: SME = small molecule

Financials: Current stage

Proprietary pipeline now led by M1 DLB opportunity in Japan
Focus on selected rare/orphan and specialty indications or markets
Product/Program

Strategic
Investment

MarketGPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Sosei is advancing HTL0018318 for DLB in Japan
Highly selective M1 receptor agonist designed by StaR® and SBDD

Financials

M1 DLB
Phase 2 ready

Dementia with Lewy Bodies (DLB)

Overview of our M1 program for DLB in Japan➢ Progressive neurodegenerative dementia, second mostprevalent behind AD (c.1m patients in Japan)➢ HTL0018318 – same compound being advanced byAllergan for AD in our Partnered pipeline➢ Advances in diagnosis have increased DLB awareness➢ Phase 2 POC monotherapy study, expected to begin in
Japan in 2018

➢ Social and ‘political’ priority in Japan to evaluate newtreatments

Potential
Muscarinic
M1 agonist
for DLB➢ Strong go-to-market opportunity for Sosei in Japan➢ Greater cholinergic deficit in DLB than inAD• Leverages our clinical capabilities, and broader trackrecord of successful product development in Japan➢ Loss of presynaptic cholinergic system
reduces effect of donepezil whilst intact
post synaptic receptors allows response toM1 agonists• Satisfies key element of growth strategy – manageable
indication treated in specialist centres, sizeable market
opportunity to build and retain value

Strong go-to-market opportunity for our lead M1 program in Japan. Significant unmet medical and social
need for a new therapeutic approach to tackle DLB in Japan
16
16

GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Strategic investment in saRNA technology
CEBPA1 is an attractive, previously ‘undruggable’ target in liver disease

Financials

CEBPA
Phase 1/2a

In May 2017, we acquired a strategic 25.6% stake in MiNA, with an exclusive option to move to 100% ownership at
pre-determined economics

CEBPA regulates multiple pathways in the liver

saRNA is a unique modality for targeting CEBPA➢ Master regulator of liver function➢ Extremely low drugability score of 0.01 (c.f. PPARg 3.52) forsmall molecule therapeutics➢ Increases energy generation, energy utilisation, aminoacid metabolism, glucose uptake➢ Inhibitor of oncogenic signaling pathways: mTOR, MAPKand YAP1➢ Knock-out mice have impaired liver function➢ Knock-in mice have reduced susceptibility to HCC andcirrhosis without observable toxicity➢ Reversible mode of action eliminates long term risks ofgene therapy / CRISPR➢ Liposomal formulation minimises non-liver toxicity➢ Lead candidate CEBPA currently in a Phase 1/2a clinical
trial in patients for liver cancer, an orphan indication

We are excited about the potential of saRNA therapeutics.
MiNA’s recent deal with Boehringer Ingelheim further supports MiNA/saRNA’s potential
17
17

1 CEBPA (CCAAT/Enhancer Binding Protein Alpha)GPCRs/StaR®

Business
Model

Partnered
GPCR Pipeline

Proprietary
GPCR Pipeline

Strategic
Investment

Financials

Continuing to invest and scale the business
Allergan upfront milestone in FY2016 drives P&L variance% change
FY2016 (FY15 vs FY16)

H1 FY 2016

% change
H1 FY 2017 (H116 vs H117)(JPY m)1

FY2015

Revenue

8,151

18,9013132%

15,8393

5,314

(66%)

Opex

7,209

6,790

(6%)

3,726

4,299

15%

Cash & cash equivalents

10,06813,899na

15,68012,413naInterest-bearing debt

8,837

6,900

na

7,870

10,635na(USD m)2

FY2016H1 FY 2017

Revenue

168.53

47.4

Opex

60.5

38.3

Cash & cash equivalents

123.9

110.6

Interest-bearing debt

61.5

94.8

PLUS c.$200m raised in November 2017 via a Global Offering of shares to international investors.
Pro forma cash balance of c.$300m provides runway of approx. 2-3 years based on organic business plan
1 reporting currency in JPY

1818

2 Converted at USD:JPY FX rate 112.9 (JPY:USD FX rate 0.0089) as at 31 March 2017
3 Includes USD 125m upfront payment from Allergan to Heptares

Listed 2004 in Tokyo (TSE Mothers: 4565)
Global management teamThank you!

Main scientific campus in the U.K.
Market capitalization: c.$2.0bn➢ World-leader in GPCR-focused drug design based on unique IP protected StaR®1 GPCR technology &enabled SBDD2 platform➢ Partnered clinical-stage pipeline in neurology, immuno-oncology, CNS & other diseases, with up to
c.$6bn in potential economics➢ Proprietary pipeline led by dementia with Lewy Bodies (DLB) Phase 2 program in Japan, plus multiple
novel candidates in development➢ Strategic investment in saRNA therapeutics with lead candidate in Phase 1/2a for liver cancer, an orphan
indication➢ Growing royalties from legacy respiratory products provide source non-dilutive cash flows➢ Strong cash position of c.$300m to drive global growth strategy
Sosei is a Japan-listed biotech with a difference

19
19

1 Stabilized receptor technology
2 Structure-based drug designLocations

20

SOSEI GROUPHEPTARES THERAPEUTICSPMO Hanzomon 11F
2-1 Kojimachi, Chiyoda-ku
Tokyo 102-0083 Japan

BioPark, Broadwater Road
Welwyn Garden City
Hertfordshire AL7 3AX United Kingdom

2nd Floor, London BioScience Innovation Centre
2 Royal College Street
London NW1 0NH United Kingdom

Grabenstrasse 11a,
CH-8952 Schlieren Zürich,
Switzerland

www.sosei.com

www.heptares.com

CEBPA - C Enhancing beta Protein Alpha