NON-CONFIDENTIAL

H1 FY2023 Financial Results
Six-month period ended June 30, 2023
4 August 2023 | Sosei Group Corporation (TSE:4565)

Disclaimer
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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, thecompetitive 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, ourrelationships with affiliated entities, changes and developments in technology which may render our products obsolete, and other factors. These factors include, without limitation, those discussed in our public reports filedwith 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
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© Sosei Group Corporation. Sosei Heptares is the corporate brand and trademark of Sosei Group Corporation. Sosei, Heptares, the logo and StaR® are trademarks of Sosei Group companies.

2

Agenda3

1

Financial Results

2

Operational Highlights

3

R&D Progress

4

Japan/APAC Commercial Business

5

Objectives for FY2023 and beyond

6

Appendix

Note: This material was created to explain the details of our company and is not intended to be used for investment decisions. In addition, the contents reflect the views of our company at the time of thecreation of the material, and the accuracy of the information is not guaranteed. Investments should be made based on the independent views of investors

1. Financial
Results

1
Financial Results
Hironoshin Nomura, CFO

4

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Financial Summary for H1 FY2023

Successful execution of strategy with continuing investment in R&D

1

YTD Revenue of ¥2,146m ($16m) vs. ¥2,457m ($20m) in the prior comparative period.
YTD revenue is lower primarily due to a reduction in royalty income in line with expectations, andlower billable R&D as activity has naturally passed over to our partners.

2

YTD Core Operating Loss of ¥2,719m ($20m) vs. ¥2,378m ($19m) in the prior comparative period.
The decrease in revenue is matched by a decrease in cost of sales. The planned increase ininvestment in Core R&D is partially offset by a higher UK RDEC tax credit.

3

R&D and G&A expense is in line with guidance beginning of this year.
Post-closing of Idorsia APAC transaction announced on July 20, the Group is currently evaluating theimpact on full-year consolidated costs.

4¥66bn cash balance ($453m) as at June 30, 2023.
Post-closing of Idorsia APAC transaction announced on July 20, the Group will have approximately¥42 billion cash on hand.

Note: USD:JPY FX rates used: Average rate YTD 2023 = 134.82 / Average rate YTD 2022: 122.83 / Spot rate Jun 30, 2023: 144.78

5

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Key Financial Indicators

2023 Revenue lower due to a reduction in royalty income in line with expectations
FY23H1 actual(JPY million)
3,500

Revenue

3,123

3,000

2,516

2,500

752

2,000

2,457
1,547

512

667

1,500
1,000

1,764

1,577

FY20 H1

FY21 H1

500
0

2,146

1,945

FY22 H1

1,479

1

Upfront
Milestone 2
Royalty/OtherFY23 H1

Operating Profit(JPY million)
0(1,000)(2,000)(181)(1,136)(802)(1,849)(3,000)(4,000)(5,000)6

 Revenue can vary significantly quarter on quarter depending on the occurrence of
milestone events and the signing of new collaboration agreements with upfront fees.
 Revenue decreased by JPY311m / $4m in H1 2023 vs. H1 2022.
 Revenue from billable R&D services reduced as activity on some of our moreestablished collaborations has naturally passed over to our partners.
 Royalty Revenue decreased in line with expectations.
 Milestone income from existing partnerships in H1 2023 related to deferred revenue
releases on the AbbVie, Genentech and Eli Lilly collaborations, and increased due tothere being more active agreements vs. the prior comparative period.
 There were no milestone events in the current YTD vs. two in the prior comparative
period.

(2,378)(3,804)

FY20 H1

FY21 H1

FY22 H1(2,720)(4,168)
FY23 H1

Notes:
1. Upfront fee revenue recognised at deal inception
2. Milestone revenue recognised at milestone event + deferred revenue releases

OPCore OP Core COS costs decreased by ¥274m vs. H1 2022 reflecting the decrease in FTE
revenue.
 Core R&D costs increased by ¥507m vs. H1 2022 primarily due to increased
investment in discovery activities, as planned.
 UK RDEC tax credits included under Other income increased by ¥328m vs. H1 2022
as a result of an increase in tax credit rates.

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Full year cost guidance

Incremental investment designed to deliver greater returns over the medium to long term

~

8,000

8,000

6,000

R&D

4,000

0

¥8,000 to ¥10,000m

10,00010,0002,000

R&D expenses (IFRS basis)

Guidance(JPY million)

4,292

3,793

FY19

FY20

5,931

FY21

7,454

FY22



Expand platform and grow discovery capacity

Build a program-centric clinical development focus, and invest in new translational
medicine capabilitiesMove priority programs into Phase 1b clinical studies to deliver greater valueThis guidance does not include any impact of the Idorsia APAC acquisition

FY23(JPY million)

G&A expenses (IFRS basis)

5,000

4,750

4,000

4,250

3,000
2,000

3,614

3,435

3,940

G&A

4,377

1,000
0

7

¥4,250 to ¥4,750m

~

FY19

FY20

FY21

FY22

FY23



Invest in functional teams to support great scienceContinue to enhance corporate governance

Costs associated with TSE Prime listing projectThis guidance does not include any impact of the Idorsia APAC acquisition

6. Appendix

1. Financial
Results2
Operational Highlights
Chris Cargill, CEO

8

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

Accelerating Our Mission

Now delivering life-changing medicines to patients

Japan
Korea

INVESTING IN WORLD-LEADING SCIENCE…

GPCR-Targeted Research &Drug Discovery Platforms…TO DELIVER LIFE-CHANGING MEDICINESMISSION

Experienced Clinical Development &Profitable Commercial Operations+ APAC (ex-China)

Combining our leading GPCR drug discovery platform with one ofJapan’s world-class clinical development and profitable commercial operations

Accelerating our transformation into a fully integrated biopharma company
committed to helping patients in Japan and across the APAC region.

9

5. FY2023
Objectives

6. Appendix

1. Financial
Results

Four strategic pillars to increase corporate value

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives(The graph is illustrative only)

4
JAPAN PHARMA
BUSINESS UNIT
EVOLVING
IN-HOUSE R&D

3

CLINICAL DEVELOPMENT& COMMERCIAL
MAJOR CASH FLOW
GENERATING PARTNERSHIPS

2WORLD-LEADINGSBDD FOR GPCRs

1

TRANSLATIONALMEDICINE
DRUG
DISCOVERYPLATFORMS

2023
10

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

On track to meet our key FY2023 objectives by year’s end
FY2023 OBJECTIVES

1

2

3

4

11

4. Japan/APAC
Business

5. FY2023
Objectives

ACHIEVEMENT

1

Invest to enhance GPCR SBDD platform
capability✓

Expected H2 2023

MAJOR CASH
FLOW GENERATINGPARTNERSHIPS

2

Execute at least one new high value
collaboration, and progress existing
partnerships✓

Expected H2 2023

EVOLVE
IN-HOUSE R&D

3Advance at least two new in-houseprograms into first-in-human clinical trials✓

GPR52 Ph1 start
EP4 Ant expected H2 2023

JAPAN
COMMERCIAL
PHARMA UNIT

4

Take clear steps to build a Japan
Commercial Pharma Unit

✓

Japan
Korea

WORLD-LEADINGDRUG DISCOVERY

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Japan Pharma Business Unit

Acquired two companies and up to nine product/pipeline rights
TRANSACTION FUNDINGACQUIRED LEGAL ENTITIES2PORTFOLIO OF CATALYST RICH PRODUCTS| Cerebral vasospasm associated with aSAH3Idorsia Pharmaceuticals Japan (IPJ)
New Long-Term
Corporate Loan
(Mizuho Bank)
Purchase Price~JPY 65

JPY 40 BN

BN1

Established: 26 March 2018
Number of Employees: 130
Office Locations: Tokyo, Osaka
Acquired Shareholding: 100%

Established: 7 July 2022
JPY 25 BN

Commercially available in Japan; launched (Apr-22)
NHI Sales: JPY 7.5 BN (FY22A); JPY 13.3 BN (FY23E)
Included in stroke treatment guidelines (Q3 23)~6,500 patients treated to date and growing| Insomnia

Idorsia Pharmaceuticals Korea (IPK)
Existing Cash

•
•
•
•

Number of Employees: 5
Office Location: Seoul
Acquired Shareholding: 100%

•
•
•
•

FDA & EMA approved; Positive Ph 3 Japan data (Oct-22)
J-NDA filing (Q4 23) and NHI Pricing/Launch (Q4 24)
Co-promotion with Mochida
Right to receive all future milestones from Mochida

Plus, up to 7 other clinical programs from Idorsia’s global
development pipeline via exclusive opt-ins4 & ROFN/ROFR5

Cash Flow positive transaction brings a portfolio of life-changing medicines and late-stage clinical programs.
Synergistic development and profitable commercial operations in Japan to serve as platform for APAC expansion.
1 Based on FX rate 1 CHF = 163 JPY as at 19 July 2023. 2 As of 1 July 2023. 3 Aneurysmal Subarachnoid Hemorrhage 4 Exclusive opt-in rights for Cenerimod (Ph 3) and Lucerastat (Ph 3); 5 Right of First Negotiation / Rightof First Refusal for Selatogrel, ACT-1004-1239, ACT-1014-6470, IDOR-1117-2520, ACT-777991

12

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

6. Appendix

Broad, Diversified and Balanced Pipeline

Pioneering novel and differentiated therapies across multiple therapeutic areas
Pre-Discovery / Discovery

Preclinical

Phase 1
GPR52 ag.

EP4 ant. HTL’732


APAC*

Inflammatory Bowel Disease

ROFR/ROFN for up to five additional programsfrom Idorsia’s global portfolio1

M1 ag.

Neurology

15+ PROGRAMSPARTNEREDMultiple

GI

Multiple

Inflammatory/Neurology

Diabetes/Metabolic

Ongoing technology collabs.
AI-driven

AI-driven

AI-driven

TPD

Gut-brain axis

APAC*

Cerebral vasospasm

 Oravi®

Systemic lupus erythematosus

Lucerastat

APAC*

APAC*



Mouth candidiasis

CCR6 ant. PF’894

M4 ag. NBI’568

Ultibro® Breezhaler®

M1 ag.

MC4 ant. PF’669

GLP-1 ag. PF’532

Seebri® Breezhaler®

GPR35 ag.

mGlu5 NAM TMP-301 

IBD

Neurology

Anorexia

IBD

Schizophrenia

T2DM/Obesity

Substance abuse

COPD

COPD

Enerzair® Breezhaler®
AsthmaCXCR4 mAb KY1051
Immuno-oncology

Narcolepsy

Note: Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG.
1 ROFR = Right of First Refusal / ROFN = Right of First Negotiation in the APAC (ex-China) territory for Selatogrel, ACT-1004-1239, ACT-1014-6470, IDOR-1117-2520, ACT-777991

13

 Cenerimod

 PIVLAZ®

M1M4 ag. NBI’570

OX2 ag. ORX750
PAR2 peptide

APAC*

Fabry disease

Neurology

Previous and ongoing discovery collabs.

Commercial

Insomnia (Q4 23 Filing)EP4 ag.

15+ PROGRAMS

Phase 3
Daridorexant

Schizophrenia

Advanced solid tumours

IN-HOUSE

Phase 2✓ Updates since the beginning of FY23



1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

3
R&D Progress
Dr. Matt Barnes, President of Heptaresand Head of UK R&D

14

5. FY2023
Objectives

6. Appendix

1

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

Technology collaboration landscape

Adding complementary approaches to increase discovery opportunities
Pre-Disc. / Discovery

Preclinical studies

Clinical studies

Commercialization

Target ID

Structure

Hit ID

Lead Optimization

Choosing the right target

Our Core Technologies
StaR®

SBDD

CryoEM

DEL Screening

Protein Binder Toolkit

Chemogenomic Library Screening

Discovering a therapeutic agent

15

5. FY2023
Objectives

6. Appendix

2

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

6. Appendix

Clinical stage partnerships (Muscarinic Programs)

Developing novel muscarinic receptor agonists for schizophrenia and other neuropsychiatric disorders
NBI’568: Phase II initiated ‘22
NBI’570: Phase I to be initiated Q3 ‘23
Sosei Heptares received$100m upfront, +$30m @ Ph 2
Sosei Heptares to receive ongoing
R&D funding and up to $2.6bn
in potential development, regulatory
and commercial milestones,
plus tiered double digit percentage
royalties on net sales
Sosei Heptares retains rights todevelop all M1 agonists in Japan in
all indications, with NBIX receiving codevelopment and profit share options

Source: Neurocrine Biosciences Announces Conference Call and Webcast of Second Quarter 2023 Financial Results
https://www.neurocrine.com//assets/2023/08/Final-NBIX-Q2-2023-Earnings-Presentation_08.01.23.pdf

16

3

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Clinical Trial Starting for in-house programs
GPR52 Ag and EP4 Ant is now starting clinical trials
Pre-Disc. / Discovery

Preclinical studies

GPR52 Ag (HTL0048149)

17

Commercialization

Clinical studies

EP4 Ant (HTL0039732)

Indication

Schizophrenia

Indication

Advanced solid tumours

MoA

GPR52 receptor agonist

MoA

EP4 receptor antagonist

Stage

Phase1 (FSFD completed at the end of June)

Stage

Phase1/2a (FSFD is expected very shortly)

Target number of participants

104

Target number of participants

150

Participant type

Healthy volunteer

Participant typePatient

Start date

06/2023

Start date

07/2023

End date (ESTIMATED)

11/2024

End date (ESTIMATED)

09/2026

Link

https://www.isrctn.com/ISRCTN17231793?q=&filters=&sort=&offset=58&totalResults=23
608&page=6&pageSize=10

Partner
Link

https://clinicaltrials.gov/study/NCT05944237?term=Heptares&viewType=Table&page=2&
rank=15

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

4
Japan/APAC Commercial Business
Dr. Satoshi Tanaka, President of IPJ/IPK

18

5. FY2023
Objectives

6. Appendix

4

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

PIVLAZ® – Commercially Available (Launched Japan in 2022)
Strong uptake since launch and growing number of patients treated

Cumulative Patients Treated Since Launch

PIVLAZ® (clazosentan) is a fast-acting, selective
endothelin A (ETA) receptor antagonist for theprevention of cerebral vasospasm (CV) after
aneurysmal subarachnoid hemorrhage (aSAH)•••

aSAH is a condition involving sudden life-threatening
bleeding in the brain, and requires rapid medical
treatment
Japan and South Korea have two of the highest
incidence rates of aSAH in the world, at least twice ashigh as in many countries in the world
Market exclusivity until 2030 (Japan) and 2029 (South
Korea)~300%(2Q YoY )

~500
2Q22
(JPY million)

~1600
3Q22

4Q22

1Q23

+76%

5,000
0

Inclusion of PIVLAZ® in Japanese treatment guidelines was confirmed in Q3 2023.
Further increases in uptake are expected to strengthen the already successful launch.

19

13,260

7,540

2022

Source: Company data

2Q23

PIVLAZ® Sales (NHI basis)

15,00010,000

~3100

~6500

~4700

2023 (F)5. FY2023
Objectives

6. Appendix

4

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Daridorexant – Best-In-Class Drug With 2H 2023 J-NDA Filing
Expected to launch 2H 2024

Daridorexant is a dual orexin receptor antagonist(DORA) that selectively blocks the binding of
the wake-promoting neuropeptides for thetreatment of chronic insomnia•••

Approved in the US, Europe, Canada (2022) – marketed as
QUVIVIQ®; Positive results in Japan Phase 3 trial reported in Oct
2022, and NDA filing expected 2H 2023
Insomnia is highly prevalent in Japan and South Korea and mostdiagnosed patients are receiving pharmacological treatment
DORA class is growing rapidly as safer alternatives tobenzodiazepines and the “Z-drugs” (e.g., zolpidem) are highly
sought•Market exclusivity until 2038 (Japan and South Korea)•

Co-Promotion with Mochida; all milestones after transaction from
Mochida are payable to Sosei Heptares(JPY BN)80

60

DORA class sales in Japan (NHI basis)
17%

DORA market share
Belsomra
Dayvigo

14%
45
35

6%

1%
0

2

9

14

21

28

33

28
11

1
1
2014 2015 2016 2017 2018 2019 2020 2021 2022

Daridorexant is a best-in-class medicine for insomnia, and well positioned to meet the unmet needs of patientswith sleep disorders in Japan and APAC (ex-China).
Source: Encise, IQVIA

20

29

33

4%

20

57

12%
9%

40

19%

6. Appendix

4

1. Financial
Results

Cenerimod and Lucerastat

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Exclusive opt-in rights for two potentially exciting product opportunities
Cenerimod

Lucerastat

Indication

Systemic Lupus Erythematosus (SLE)

Indication

Fabry Disease

MoA

Selective S1P1 receptor modulator

MoA

Glucosylceramide synthase inhibitor

Stage

Global Ph3 studies ongoingStage

Number of Patients~120,000 in Japan

Major therapies*(Japan)Total Market Size : c.300 Oku JPY• Benlysta (GSK, 50~100 Oku JPY est. peak sales)• Saphnelo (AZ, 50~100 Oku JPY est. peak sales)• Plaquenil (Sanofi, ~50 Oku JPY)

• Phase 3 (MODIFY) study primary endpoint(neuropathic pain) not met, however, renal
function and echocardiography secondary
endpoints were positive• Open Label Extension (OLE) study ongoing

Number of Patients~1,000 in Japan

Major therapies*(Japan)Total Market Size : c.300 Oku JPY• Replagal (ERT, Takeda, ~140 Oku JPY)
• Fabrazyme (ERT, Sanofi, ~100 Oku JPY)
• Galafold (PCT, Amicus, ~46 Oku JPY)

Value proposition• Potential to provide a broadly-applicable oral
monotherapy option as an alternative to IV
enzyme replacement therapy (Galafold iscurrently the only available oral therapy, andapplicable to patients with certain rare
mutations)

Value proposition• Potential to be the first oral, disease-modifying
SLE therapy that acts by reducing circulating T
and B cells early in the immune cascade• S1P1 modulation is a well-establishedmechanism in other diseases, such as MS(Gilenya, Zeposia)• Broadly-applicable mechanism means potential
to expand to other autoimmune diseases

Small opt-in fee to license each program, with Sosei responsible for all development plans and future costs in the territory.
If successfully commercialized, Sosei is obligated to pay tiered single digit royalties to Idorsia for each product.
Source: *Estimate from Evaluate Pharma; JMDC; Datamonitor
ERT: Enzyme replacement therapy; PCT: Pharmacological chaperone therapy

21

6. Appendix

4

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

Japan Is A Leading Market for Clinical Innovation And Quality

5. FY2023
Objectives

APAC countries respect Japan for its high data quality

Quality Clinical Development

Deep
understandingof disease andtreatment by
Doctors/HCPs

High quality
data fromclinical studies
through to Post
Marketing
SurveillanceHighpenetration inof patient
population
duringcommercial
phase

Quality Regulatory Environment

Quality excellent access toDoctors/HCPs who
evaluate novel drugs
Achieve strong patient
uptakeContribute to reduce drug
loss/lag for Japan patients

22

Reasonable NHI Prolongation ofprice forpatents via
reimbursement
extendedsupported byclinicalhigh quality
development
clinical trial and
PMS data

Regional
optimization
makes clinical
trials cheaperand faster to
execute6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. . Japan/APAC
Business

5
Objectives for FY2023 and beyond
Chris Cargill, CEO

23

5. FY2023
Objectives

6. Appendix

1. Financial
Results

Expected News Flow

2. Operational
Highlights

3. R&D
Progress

4. . Japan/APAC
Business

5. FY2023
Objectives

Several catalysts on-track to be achieved over the next 18 months
Japan

✓

2H 2023Japan
Sth Korea

Approval

LaunchFilingApproval

Opt-in decision

Lucerastat

Opt-in decision
EP4 Ant
Ph 1 start

New EP4 Ag
Out-license Ph 1 start

1 Milestone payment expected to be received from Mochida Pharmaceutical upon achievement of development progression24

1H 2025

LaunchPhase 3 start

Cenerimod

Existing Pipeline Catalysts

2H 2024

Included in treatment guidelines (July)

Sth Korea
1

1H 2024

GPR52
Ph 1b completion

6. Appendix

Our 2030 vision

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. . Japan/APAC
Business

5. FY2023
Objectives

Novel medicines on the market globally, through our collaborations with partners
Commercial business in Japan, based on in-licensed and in time, own products
Broad, deep and sustainable pipeline of programs with significant potential
Rapidly growing sales, cash flow and profits
Leading biopharma company in Japan driving innovative medicines to patients25

6. Appendix

1. Financial
Results

6
Appendix26

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

6. Appendix

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

TSE Prime Listing

A significant milestone achieved to truly become a global biotech company✓

TSE Market Segments

FIRST SECTION

✓

PRIME

Business Performance and Financial Status• Revenue > JPY 10bn and Market Cap > JPY 100bn
Liquidity thresholds – sufficient number of tradable
shares and shareholders, and trading value✓ Governance – tradable share ratio maintained

SECOND SECTIONSTANDARD
JASDAQ

8-MAR-23 TSE approved change of market listing segmentfrom Growth Market to the Prime Market
15-MAR-23 Effective date of move to Prime Market

MOTHERSOLD STRUCTURE

27

GROWTHNEW STRUCTURE

APR-23 > Included in TOPIX index✓✓✓✓ Updates since the beginning of FY23

6. Appendix

Introduction of ‘Core Operating Profit’

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Core Operating Profit – the financial indicator closer to the reality of our business
Operating Profit

Operating Profit“IFRS”



Financial results recorded and prepared inaccordance with International Financial
Reporting Standards (IFRS)“Core”+ Material Non-cash Costs(Depreciation, Amortization, Share based payments, Impairment...etc.)+ Material Non-recurring Costs(Restructuring costs and Other material one-off items...etc.)

Cash
Recurring
Non-recurring(Material)

28

Non-cash(Material)

Costs under“Core”

Costs under “IFRS”

Core Operating Profit is a new key
financial indicator that highlights theunderlying recurring cash generating
capability of the business.
 Core Operating Profit is defined as IFRS
Operating Profit + material Non-cash costs+ material non-recurring costs
 Material Non-cash Costs include
depreciation, amortization, share based
payments and impairment.
 Material Non-recurring Costs include
restructuring costs and other material
one-off items.
 Core Operating Profit = Cash Earnings +material Non-recurring Costs


6. Appendix

Financial Impact of IPJ/IPK transaction

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Transaction expected to be cash flow positive in the first full calendar year
Purchase Price

Key Dates

Impact on
Consolidated
Financial Results

Closing Date
20 July 2023 (JST)Purchase Price Payment Date
within a week post-closing

Impact on
FY23 Financials

Long-term corporate loan:
 JPY40 Bn
 7 year, low-rate loan from Mizuho Bank

From existingcash:
 JPY25 Bn

Post-closing, financial results of the acquired entities will
be reflected in the Group’s consolidated financial results

 The amounts of intangible assets and goodwill arising in the consolidated balance sheet are currently under review by Management / Auditors.
 Goodwill will not be amortized in accordance with IFRS standards, whilst intangible assets will be amortized over the expected sales period.
 SGC's carried forward tax losses will be utilized against future taxable profits.
 Post-closing, the Group will have approximately JPY42 billion cash on balance sheet.

Peak Sales (E)Mid- toLong-Term
Impact(Guidance)

JPY 35 Bn+
Peak EBITDA (E)JPY 10 Bn+
1 Based on FX rate 1 CHF = 163 JPY as at 19 July 2023

29

Transaction
Funding~JPY65 Bn1 (CHF400 Mn)

 Peak forecasts based on PIVLAZ® and Daridorexant performance in Japan, Korea and Taiwan only
 Potential upsides to forecasts include: Launch of PIVLAZ® and Daridorexant in additional APAC (ex-China) regions
 Exercise of opt-in right and launch of Cenerimod and Lucerastat
 Exercise of ROFR/ROFN rights and launch of up to additional five products Launch of existing in-house programs, incl. GPR52 agonist and M1 agonist Launch of potential other in-licensed products in the future

6. Appendix

1. Financial
Results

Estimation of potential market size

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Multi-billion USD annual peak sales potential for our post-pre-clinical pipeline
Category

Neurologicaldisorders

Indication2

Individual Products~55 million$7.3 billion (2010)$3.9 billion (2009/Aricept)

M1 agonist, M1/M4 agonist

Schizophrenia~20 million$20.7 billion (2011)$5.7 billion (2013/Abilify)

M4 agonist, M1/M4 agonist

Substance use disorders

Other~10.4 million1~3 million-

Cancer

--$2.3 billion (2022)
-

-

-

-

$1.7 billion (2020/Xyrem)--mGlu5 NAM
OX2 agonist
CGRP antagonist, GPR52 agonist~42 million$178.9 billion (2022)$21.0 billion (2022/Keytruda)

A2a antagonist, EP4 antagonist, CXCR4 mAb~10 million$23.5 billion (2022)$7.5 billion (2022/Humira)

CCR6 antagonist, GPR35 agonist, EP4 agonist

Atopic Dermatitis~13.3 million$8.1 billion3 (2022)$7.0 billion (2022/Dupixent)

H4 antagonist, PAR2 mAb

T2DM/Obesity~420 million$58.3 billion (2022)$8.8 billion (2022/Ozempic)

GLP1 agonist

Anorexia~10 million

ImmunologicalIBD
disorders

Total

30

Market Size

Our Candidates

Dementia

Narcolepsy

Other

Peak Sales(USD million)

Number ofPatients--~$299 billion/year--

MC4 antagonist~$56 billion/year

Source (Number of patients)：World Health Organization, Evaluate Pharma, The European Federation of Crohn‘s & Ulcerative Colitis Associations (EFCCA), Narcolepsy Network, Inc., GBD 2015 Disease andInjury Incidence and Prevalence Collaborators (October 2016). “Global, regional, and national incidence, prevalence, and years lived with disability for 310 diseases and injuries, 1990-2015: a systematic
analysis for the Global Burden of Disease Study 2015”. Lancet. 388 (10053): 1545–1602 1 The number of patients with drug addiction
Source (Peak Sales):Sales of each indications are extracted form Evaluate Pharma’s data of sales by disease and sales by individual products (as of 30 June. 2022). 2 Sosei Heptares may target one segment in
the market for specific diseases. 3 Since there is no applicable indication category, the market size of “Eczema” is stated. Current market size for Atopic Dermatitis may be larger than stated above.

6. Appendix

Potential revenues from existing partnerships

1. Financial
Results

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

Securing stable revenues in the short to medium term from existing partnerships
Potential milestones from existing partners

Potential royalties from existing partners~$299bn/year

In addition to $5.0bn+ below

Total market size ofour target diseases(maximum)~$56bn/year$5.0bn +1(potentially receive after commercialized)

Commercial milestones(from existing partners)$5.0bn+ 1(Sum up for peak sales of product)

Product Market potential(maximum)Product Market potential (maximum)×~mid-teen percentage1(potentially receive after commercialized)(potentially receive in next c.10 years)
Development
milestones(from existing
partners)

Short to medium term revenue
potentially received in next 10 years(Total drug market for target indication)

Potential royalty(maximum)Mid to long term revenue potentially
received after commercialization

Expand by executing
new collaborations

1 All of these are the maximum values if all existing programs are successful. Note that the probability of success in drug discovery is not relatively high, and realistically not all programs will be successful.
Source: Total market size of our target diseases and Product Market potential is stated in the previous page31

5. FY2023
Objectives

6. Appendix

1. Financial
Results

Partnered pipeline
CompoundTarget / Mechanism of Action

Modality

Indication

Seebri® Breezhaler®

LAMA

SME

COPD

Ultibro® Breezhaler®

LAMA+LABA

SME

COPD

Enerzair® Breezhaler®

LAMA+LABA+ICS

SME

AsthmaORAVI®

Antifungal agent miconazole

SME

Oropharyngeal candidiasis

Imaradenant1

Adenosine A2a ant. combo

SME

mCRPC

NBI-1117568

Muscarinic M4 agonist

SME

Schizophrenia(Not disclosed)

Muscarinic M1 agonist

SME

Neurology diseases

NBI-1117570

Muscarinic M1/M4 agonist

SME

Neurology diseases

PF-07081532

GLP-1 agonist

SME

T2DM/ObesityPF-07054894

CCR6 antagonist

SME

Inflammatory bowel disease

PF-07258669

MC4 antagonist

SME

Anorexia(Not disclosed)

CGRP antagonist

SME

Neurology diseases(Not disclosed)

GPR35 agonist

SME

Inflammatory bowel disease(Not disclosed)

Multi target

SME/LME

Multiple indications(Not disclosed)

Multi target

SME/LME

Gastrointestinal and other(Not disclosed)

Multi target

SME

Inflammatory/Neurology(Not disclosed)

Multi target

SME

Diabetes/MetabolicPartnerDisc.

2. Operational
Highlights

PCC

3. R&D
Progress

Ph1

Partnered32

Note: SME = small molecule. LME = large molecule. Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG. 1 AstraZenenca have removed the A2a program from their clinicalpipeline as at Q3 2021

Ph2

4. Japan/APAC
Business

Ph3

5. FY2023
Objectives

App

6. Appendix

Mkt

1. Financial
Results

Partnered pipeline (cont’d)CompoundTarget / Mechanism of Action

Modality

Indication

KY1051CXCR4 mAb

mAb

Immuno-oncology(Not disclosed)

PAR-2

PeptideInflammatory diseases(Not disclosed)

Targeted Protein Degradation

SME

Gastrointestinal disorders(Not disclosed)

AI-Augmented Drug Discovery

SME

Neurology diseases(Not disclosed)

Multi target AI-powered

SME/LME

Immune diseases(Not disclosed)

Multi target AI-powered

SME/LME

Immune diseases(Not disclosed)

Gut-brain axis drug discovery

SME

Gastrointestinal disorders

TMP301mGlu5 NAM

SME

Substance use disorders(Not disclosed)

OX2 agonist (Oral)

SME

Narcolepsy

Co-development

Co-owned companies

33

Note: SME = small molecule. LME = large moleculePartnerDisc.

2. Operational
Highlights

PCC

Ph1

3. R&D
Progress

Ph2

4. Japan/APAC
Business

Ph3

5. FY2023
Objectives

App

6. Appendix

Mkt

1. Financial
Results

In-house pipeline
CompoundTarget / Mechanism

Modality

Indication

PIVLAZ®

ETA antagonist

SME

Cerebral vasospasm

Daridorexant

Dual Orexin antagonist

SME

Insomnia

HTL’149

GPR52 agonist

SME

Neurology diseases

HTL’732

EP4 antagonist

SME

Immuno-oncology(Not disclosed)

EP4 agonist

SME

Inflammatory bowel disease(Not disclosed)

Muscarinic M1 agonist (JP)SME

Neurology diseases(Not disclosed)1

H4 antagonist

SME

Atopic Dermatitis(Not disclosed)

SARS CoV-2 Mpro

SME

Coronaviruses

Multiple programs

Not disclosed

SME/LME

Neurology diseases

Multiple programs

Not disclosed

SME/LMEGI and Inflammatory diseases

Multiple programs

Not disclosed

SME/LME

Immunology diseases

Originator

In-house Programs

In-house Programs (No longer internally funded. Targeting academic / industrial partnership)34

HTL’310

SSTR5 agonist

PeptideHypoglycaemic disorders

HTL’097

GLP-1 antagonist

PeptideHypoglycaemic disorders

HTL’023

Dual GLP-2/GLP-1 agonist

PeptideIntestinal failure/NASH(Not disclosed)

Apelin agonist

PeptidePulmonary Arterial Hypertension

HTL’641

Dual orexin antagonist

SME

Insomnia and sleep disorders(Not disclosed)

PAR-2 mAb

mAb

Atopic Dermatitis/Pain

Note: SME = small molecule. LME = large molecule. 1 Due to changes of strategy, we deprioritized until we will find another indication opportunity

Disc.

2. Operational
Highlights

PCC

Ph1

3. R&D
Progress

Ph2

4. Japan/APAC
Business

Ph3

5. FY2023
Objectives

App

6. Appendix

Mkt

1. Financial
Results

Glossary

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Basic Terminology/Technology
GPCR

G Protein-Coupled Receptor

There are about 800 types of GPCRs in the human body. While 400 of them are known to be potential drug targets, about 300 of them are not yet drugged

StaR

Stabilized Receptor

Sosei Heptares’ proprietary technology to stabilize a GPCR by engineering a small number of single point mutations outside of the ligand-binding site. It enables to identify the structureof GPCRs to be used for SBDD drug discovery as well as antibody drug discovery as antigens
A method to design drugs on a computer base based on the analysis of the three-dimensional structure of the drug target (e.g., protein receptor)

SBDD

Structure-Based Drug Design

TPD

Targeted Protein Degradation

Drugs that promote the degradation of target proteins (e.g., receptors) in cells and aim for therapeutic effects by reducing disease-causing proteins

PAM

Positive Allosteric Modulator

A regulator that binds to unusual active sites (allosteric sites) on the receptor to increase the affinity and effect of the agonist

NAM

Negative Allosteric Modulator

A regulator that binds to an unusual active site on the receptor (allosteric site) and reduces the affinity and effectiveness of the agonist

Ag

AgonistA therapeutic drug that binds to a receptor and activates an intracellular signaling system similar to biological substances

Ant

Antagonist

A therapeutic drug that suppresses biological reactions by binding to receptors and preventing them from binding to biological substances

PK

Pharmacokinetics

Research and testing on the relationship between drug dosage and blood concentration. Mainly describes the rate process of ADME
Research and testing on the relationship between drug concentration and pharmacological effects

PD

Pharmacodynamics

ADME

Absorption, Distribution, Metabolism and Excretion A series of process in the absorption of drugs into the body, distribution within the body, metabolism in the liver and other organs, and excretion in the kidneys and other organs

POM

Proof of Mechanism

Proof of mechanism of action, mainly through biomarkers. It can suggest the possibility of efficacy in fewer cases than POC

POC

Proof of Concept

Proof of a therapeutic concept, primarily through clinical efficacy and safety

AchAcetylcholine

A neurotransmitter released from the peripheral parasympathetic and motor nerves to transmit nerve stimuli

IND

Investigational New Drug

Information packages for development candidates to be submitted to the U.S. Food and Drug Administration (FDA) at the time of initiation of clinical trials

Ph1

Phase1

A study in humans. The main purpose is to confirm the safety of the drug candidate mainly by healthy volunteers.

Ph2

Phase2A study in humans. The main purpose is to confirm the efficacy of the drug candidates on a small scale (however, the number of patients varies greatly depending on the disease)

Ph3

Phase3A study in humans. The main purpose is to determine the efficacy of the drug candidates on a large scale (however, the number of patients varies greatly depending on the disease)

NDA

New Drug Application

An application to the U.S. Food and Drug Administration (FDA) for approval to market a new drug
Disease/Drug

35

LAMA

Long Acting Muscarinic Antagonist

An inhalant that dilates bronchial tubes and improves respiratory function by inhibiting the action of acetylcholine receptors (M3), which increase parasympathetic nerves.

LABA

Long Acting Beta2-Agonist

An inhalant that improves respiratory function by stimulating sympathetic beta2 receptors to dilate the bronchi.

ICS

Inhaled Corticosteroid

An inhalant that suppresses airway inflammation to prevent coughing attacks and other symptoms caused by asthma, also promotes the action of beta 2 stimulants and improve airway
hyperresponsiveness.

mCRPC

Metastatic Castration–Resistant Prostate Cancer

Cancer that has spread (metastasized) beyond your prostate gland and for which hormone therapy is no longer effective in stopping or slowing the disease.

COPD

Chronic Obstructive Pulmonary Disease

A group of diseases that causes damage to the bronchi and lung due to smoking or inhalation of toxic substances, resulting in breathing problems.

AD

Alzheimer’s Disease

Alzheimer's disease is a progressive neurologic disorder that causes the brain to shrink (atrophy) and brain cells to die, the most common cause of dementia .

DLB

Dementia with Lewy Bodies

Protein deposits, called Lewy bodies, develop in nerve cells in the brain regions involved in thinking, memory and movement (motor control), the second most common type of dementia.

6. Appendix

1. Financial
Results

Glossary (cont’d)

2. Operational
Highlights

3. R&D
Progress

4. Japan/APAC
Business

5. FY2023
Objectives

Drug discovery target

36

M1

Muscarinic M1 Receptor

M4

Muscarinic M4 Receptor

One of the five subtypes M1 to M5 of muscarinic acetylcholine receptors, known to be involved in behavior and dopamine release.

CGRP

Calcitonin Gene-Related Peptide

CGRP is thought to be involved in vasodilation, decreased heart rate, and increased myocardial contractility via receptors.

A2A

Adenosine A2A receptor

One of the four subtypes of adenosine receptors, A1, A2A, A2B, and A3. It is expressed in many tissues and has multiple functions such as neural activity, vasodilation, and immune
regulation.

GLP-1

Glucagon-like Peptide 1

GLP-1 is secreted by gastrointestinal cells when we eat, and is involved in insulin secretion from the pancreas and appetite regulation in the central nervous system.

CCR6

Chemokine Receptors 6

A type of Β chemokine receptor that responds to chemokines generated during inflammation. It is believed to be involved in inflammation and immunity mainly by it's regulating the
migration activity of leukocytes into inflamed tissues.

MC4

Melanocortin 4 Receptor

MC4 is expressed in the central nervous system and is the main receptor that mediates the appetite suppressing effect of alpha-melanocyte stimulating hormone.

GPR35

G Protein-Coupled Receptor 35

Orphan receptors - expressed mainly in immune and gastrointestinal tissues and is thought to be involved in areas of gastrointestinal tract, cardiovascular, inflammation, and central
nervous system.

CXCR4

CXC Motif Chemokine Receptor 4

CXR4 induces migration of cancer cells and is known to be important in metastasis process.

mGlu5

Metabotropic Glutamate Receptor 5

One of the metabolic glutamate receptors expressed in the central nervous system. Glutamate is known to be the most abundant excitatory neurotransmitter in the human nervous
system.

OX1、OX2

Orexin 1 Receptor、Orexin 2 Receptor

Orexins are a class of neuropeptides that are known to play a role in stabilizing wakefulness and inhibiting sleep.

GPR52

G Protein-Coupled Receptor 52

An orphan receptor that is highly expressed in the striatum- may play a role in the regulation of frontal lobe-striatal and limbic dopamine in psychiatric and neurological disorders.

H4

Histamine H4 Receptor

H4 is particularly expressed in immune system cells and is known to be involved in inflammation and allergy.

EP4

Prostaglandin EP4 Receptor

EP4 suppresses innate and acquired immunity and is known to induce tumor progression
PAR2 is known to be associated with many physiological and pathophysiological processes such as inflammation, tumor metastasis, gastrointestinal motility, pain, and itching

One of the five subtypes M1 to M5 of muscarinic acetylcholine receptors, known to be involved in learning and memory.

PAR2

Protease-Activated Receptor 2

SSTR5

Somatostatin Receptor 5

SSTR is expressed mainly on small intestinal endocrine cells and pancreatic beta cells, inhibits the secretion of gastrointestinal hormones such as GLP-1 and PYY by binding somatostatin.

GLP-2

Glucagon-like Peptide 2

Intestinal GLP-2 is secreted together with GLP-1 during nutrient intake, and repairs and protects the intestinal tract.

Mpro

SARS-CoV-2 Main Protease

An enzyme essential for the replication of Sars-CoV-2(COVID-19 cause virus). One of the target proteins for the development of antiviral drugs.

D2

Dopamine Receptor D2

Dopamine is a neurotransmitter in the brain involved in motor control, motivation, and learning - known to be associated with Parkinson's disease and schizophrenia.

5-HT

5-Hydroxytryptamine Receptor

5-hydroxytryptamine (serotonin), as a transmitter in the central nervous system, is thought to play an important role in the regulation of brain function.

Orphan receptor

A receptor whose existence is known based on genetic analysis, but for whom no ligand has been identified.

LigandA ligand is a molecule that binds to a specific receptor in vivo, such as hormones, neurotransmitters. For example, the ligand for muscarinic receptors is acetylcholine.

6. Appendix

Locations
SOSEI GROUPPMO Hanzomon 11F

Midtown East,

F17, 410 Teheran-Ro

Steinmetz Building

North West House

2-1 Kojimachi, Chiyoda-ku

9-7-2 Akasaka Minato-ku

GangHam-Gu

Granta Park,

119 Marylebone RoadTokyo 102-0083

Tokyo 107-0052

Seoul 06192

Cambridge CB21 6DG

London NW1 5PU

Japan

Japan

South Korea

United Kingdom

United Kingdom