NON-CONFIDENTIAL

FY2022 Financial Results
12-month period ended December 31, 2022
14 February 2023 | Sosei Group Corporation (TSE:4565)

Disclaimer
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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

Strategy Updates

3

Operational Highlights

4

R&D Progress

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

2. Strategy

1
FY2022 Financial Results
Hironoshin Nomura, CFO

4

3. Operation

4. R&D

5. Objectives

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Financial Summary for FY2022

Strong revenue & cash generation in 2022 combined with continued investment in R&D

1

2022 Revenue of ¥15,569m ($119m) vs. ¥17,712m ($161m) in the prior year.
2021 revenue included a $100m upfront fee (Neurocrine) whereas 2022 included two significant but
smaller upfront fees of $35m. This decrease in upfront fee revenue was partially offset by an increasein milestone income.

22022 Operating Profit of ¥3,436m ($26m) vs. ¥3,775m ($34m) in the prior year.
2022 Core Operating Profit of ¥5,856m ($45m) vs. ¥8,904m ($81m) in the prior year.
This reflects the decrease in Revenue and an increased Core R&D of ¥1,324m ($2m), in line with ourstrategy.

32022 Net Profit of ¥383m ($3m) vs. ¥1,017m ($9m) in the prior year.
The current year includes a non-cash charge of ¥1,836m ($14m) for impairment of the Group’s
investment in an associated company, MiNA.

4¥67bn cash balance ($507m) as at Dec 31, 2022
The majority of which is earmarked for acquisitions and in-licenses to accelerate our growth.

Note: USD:JPY FX rates used – 131.30 (Average rate YTD 2022) and 110.16 (Average rate YTD 2021)

5

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

Key Financial Indicators
2022 Revenue lower due to inclusion of one substantial upfront fee in 2021
FY22 actual(JPY million)
20,00017,712

15,00010,000
5,000
0

9,726
2,183
3,830

8,842

11,40815,569
4,666

7,397

3,405

Revenue

1,948

3,259

3,713

3,489

3,045

3,506

FY19

FY20

FY21

FY22

Upfront 1
Milestone 2
Royality/Other

Operating Profit(JPY million)
10,000

8,904

8,000

5,856

6,000
4,000
2,000
0

2,846
384
FY19

2,904

3,775

3,436

FY21

FY22

928
FY20

1 Upfront fee revenue recognised at deal inception

2 Milestone revenue recognised at milestone event + deferred revenue releases

6 Revenue can vary significantly year on year depending on the occurrence of milestone
events and the signing of new collaborations agreements with upfront fees.
 Revenue decreased by JPY2,143m / $42m in 2022 vs. 2021 primarily due to inclusionof a substantial upfront fee from Neurocrine (JPY11,408m/$100m) in 2021.
 2022 Revenue includes upfronts from:• a new partnership with Eli Lilly targeting diabetes and metabolic diseases• a new partnership with AbbVie targeting neurological diseases
 5 milestones events were achieved in the 2022 (Takeda, Genentech, AbbVie, Pfizer
and Neurocrine) generating a significant increase in this revenue stream.

OPCore OP Core R&D costs increased by ¥1,143m vs.2021 primarily due to higher activity on inhouse programs, the impact of a stronger GBP vs. JPY and cost inflation.
 Core SG&A costs increased by ¥345m vs.2021 due to a general increase in businessactivity during a period of lighter COVID restrictions (including professional fees,
travel and training) plus the impact of a stronger GBP vs. JPY and cost inflation.
 One-off restructuring charges totaling ¥ 533m (mainly relating to the retirement of 3
Executive Officers) were also incurred in Q1 2022.

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Full year cost guidance

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

~

8,000

8,000

6,000



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

R&D

4,000

0

¥8,000 to ¥10,000m

10,00010,0002,000

R&D expenses (IFRS basis)

Latest Guidance(JPY million)

4,292

3,793

FY19

FY20

5,931

FY21

7,454

FY22

FY23

(JPY million)

G&A expenses (IFRS basis)

5,000

4,750

4,000

4,250

3,000
2,000

3,614

3,435

FY19

FY20

3,940

G&A

4,377

1,000
0

7

¥4,250 to ¥4,750m

~

FY21

FY22

FY23



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

Costs associated with TSE Prime listing project

6. Appendix

1. Financial

2
Strategy Updates
Chris Cargill, CEO

8

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

The vision for Sosei GroupWorld Leading Science, Life Changing Medicines

Development, medical affairs
and commercial capabilities todeliver medicines to patientsWORLD-LEADING SCIENCE
LIFE-CHANGING MEDICINESWorld-class scientific platform,
to discover life-changing
medicines

9

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Clear strategy to drive the business forward
Four pillars of strategic focus
DRUG DISCOVERY

UK

1WORLD-LEADING DRUGDISCOVERY

TRANSLATIONAL MED.

DEVELOPMENTCOMMERCIAL

3
TRANSFORMING
IN-HOUSE R&D
4





Japan

JAPAN PHARMA BUSINESS UNIT
2

GlobalPartners

10



MAJOR CASH FLOW GENERATING PARTNERSHIPS

6. Appendix

1

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

World‐Leading GPCR Drug Discovery

Why GPCRs? ‘Second golden age’ of GPCR discovery is here and we have a 15-year head start~400

GPCR targets
active indiseases2~34%

of FDAapprovals
target GPCRs1

27%
of global
sales
are GPCR
drugs1NEUROLOGICAL DISORDERS
GASTROINTESTINAL DISEASESIMMUNOLOGY/ONCOLOGYMETABOLIC DISORDERS
CARDIOVASCULARRESPIRATORYGPCRs are active in a wide range of disease areas,
and offer broad therapeutic potential

GPCR research has led to more than 700 approved drugs
over previous decades and is still ripe for development3

Sources: 1 “Unexplored opportunities in the druggable human genome”, Nature Reviews, 2016 ; 2 “Trends in GPCR in Drug Discovery – new agents, targets and indications”, Nature Reviews, 2017; 3 “Septerna
emerges with $100m to spark second golden age of prolific drug target GPCR with pioneer as co-founder” by Kyle LaHucik via Fierce Biotech, Jan 27 2022;

11

6. Appendix

2

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

Major Cash Flow Generating Partnerships

Income from strategic licensing provides non-dilutive finance to support investment and growthBalance of potential milestone income from existing license agreements1(USD million)

Top 15 pharmaceutical/biotech companies by license value2(cumulative total since 2015)(USD million)(USD million)

1,200

12,0000
1,000

10,0005,000

10,00015,00020,00025,00030,000AstraZeneca
Ionis Pharmaceuticals

8,000

5,000+

800

Sosei Group
Daiichi Sankyo
PeptiDream

600

6,000

Eisai
Precision Biosciences

400

4,000

Galapagos
CytomX Therapeutics

5,000+

2,000

200

Hanmi Pharmaceutical
Skyhawk Therapeutics
Arrowhead Pharmaceuticals

0FY15/3

FY16/3

FY17/3

FY18/3

FY18/12FY19/12

FY20/12

FY21/12

FY22/120

Sangamo Therapeutics
Dicerna Pharmaceuticals

Commercial milestone(left axis)
Development milestone(left axis)
Received upfront and milestone(right axis/cumulative)

12

Genmab

1 Balance as of the end of the fiscal year of only those currently under contract. TEVA and Abbvie (formerly Allergan), for which compounds were returned, are excluded from the balances from FY2018 andFY2021, respectively. 2 The figures are based on ‘Licensing’ category on third party's (EvaluatePharma's) proprietary database and therefore do not completely match the amounts shown in the LHS chart.
Source: Company’s data (LHS) and EvaluatePharma (as of 2023/2/6) (RHS)

3rd out of 2,914

3

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Transforming In-House R&D

Enhancing efficiency and success rates to drive returns and value creation
TARGET
BIOLOGY• Entrench target biology to understanddisease processes• Define robust and testable hypothesis

PROGRAMCENTRIC• Empowered and aligned program teams• Accountable for planning, budget, risk
• Functions exist to support programs

TRANSLATIONALMEDICINE• Fully integrated preclinical and earlyclinical capabilities• Lean, fit-for-purpose, and best practice

QUICK WIN /FAST FAIL• Shift attrition to earlier, cheaper
development phase• Faster attrition enables reinvestment in
R&D “sweet spot”

High quality candidates, faster,and generated cost-effectively
Larger, late-stage partnering deals
in attractive areas of clear unmet need
Deeper in-house pipeline, and a pathway forJapan clinical development

Complementing our world-leading science with operational best practices to increase efficiency, PoS, & ROI

13

6. Appendix

4

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Japan Pharma Business Unit

Huge opportunity to create a disruptive pharma business in Japan

Secondlargestpharmamarket(excl.
China)

Large,
ageingpopulation

Universal
health caresystem

FOCUS: underserved,
specialty TA/DAs
ADOPT: lean, rational
development andcommercial model
BUILD: Japan aslynchpin market,
APAC for expansion

14

Stable, proinnovation
marketRelatively
weak
incumbents

Attractive
market for
disruptors

6. Appendix

1. Financial

2. Strategy

3
Operational Highlights
Chris Cargill, CEO

15

3. Operation

4. R&D

5. Objectives

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

Partners and active pipeline overview
Pre-Start / Discovery

Preclinical

Phase 1PARTNEREDPrevious and ongoing discovery collabs.
Multiple

MultipleGI

Phase 3Marketed

SELECTED ACTIVE PIPELINE PROGRAMS

15+ PROGRAMS✓

Phase 2✓✓

Inflammatory Diabetes
Neurology Metabolic

Ongoing technology collabs.

✓

M1M4 ag. NBI’570

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

Neurology

IBD

Neurology

Anorexia

IBD✓

Substance abuse

CXCR4 mAb KY1051

Immuno-oncology✓

T2DM/Obesity

COPD

COPD

Enerzair® Breezhaler®
AsthmaOravi®

Immuno-oncology

EP4 ant. HTL’732

Schizophrenia

Mouth candidiasis✓

IN-HOUSE

GPR52 ag.

10+ PROGRAMS

Neurology

EP4 ag.
IBD

M1 ag. Japan
Neurology

16

Note: Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG✓✓ Updates since the beginning of FY22

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Major updates since the beginning of FY22

Further enhanced the platform’s value, via multiple new collaborations
Pre-Start / Discovery Updates✓

1✓
WORLD-LEADINGDRUG DISCOVERY

✓
✓
✓

17

New GPCR targets already identified with AI dataset
New platform to identify novel targets
5 milestones achieved across multiple programs
New US$1.2bn multi-target neurology collaboration
Received US$10m milestone from Inflammatory collaboration
New US$700m multi-target Diabetes and Metabolic collaboration

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Major updates since the beginning of FY22 (cont’d)

Great progress by our partners, including two new late-stage clinical trial starts
Translational Medicine / Clinical Development Updates
2
MAJOR CASH
FLOW
GENERATINGPARTNERSHIPS✓

M4 IND accepted by FDA and Ph. 2 started H2 2022, received
US$30m milestone✓mGlu5 NAM received FDA clearance for Ph. 1 and US$5.3M grantfrom NIDA✓

3

TRANSFORMING
IN-HOUSE R&D

18✓

Strong GLP-1 Ph. 1 data, Ph. 2b started H2 2022,received US$10m
milestone✓✓

New EP4 partnership to maximize cancer trials
M1 ag. Japan
Neurology

One new preclinical candidate – compound selected
Strategic collaboration to drive R&D transformation and growth andto build Translational Medicine

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

4
R&D Progress
Dr. Matt Barnes, President of Heptaresand Head of UK R&D

19

6. Appendix

1

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Platform evolution and new targeted collaborations
World-leaders choose our platform to prosecute complex GPCRs
Pre-Disc. / Discovery

Target ID

Preclinical studies

Structure

Clinical studies

Hit ID

Commercialization

Multi-target Discovery Collaborations
Total Potential
Milestones1

Lead Optimization$1.8bnCore
Technologies
Latest additions
to our platform

StaR®
(Stabilized Receptor)

SBDD(Structure-Based
Drug Design)

CryoEM

DEL Screening(DNA Encoded Library)+Protein Binder Toolkit“for difficult targets faster”+

Chemogenomic Library
Screening“for better compounds faster”

1Potential option fees, development, regulatory and commercial milestone payments at time of signing. Sosei Heptares is also eligible to receive tiered royalties ranging from high single digit to mid-teen
percentage on future net sales of any products developed under the partnerships

20$1.0bn$1.2bn✓✓$1.6bn$730m

6. Appendix

1

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

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
from beginning✓ Updatesof FY22 to date21

2

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Clinical stage partnerships (Muscarinic Programs)

6. Appendix

Developing novel muscarinic receptor agonists for schizophrenia and other neuropsychiatric disorders
Phase II initiated ‘22
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 Fourth Quarter and Year-End 2022 Financial Results
https://www.neurocrine.com//assets/2023/02/NBIX-Q4-and-FY-2022-Earnings-Presentation_Final-1.pdf

22

2

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Clinical stage partnerships (Pfizer GLP-1 agonist for T2D/Obesity)

Well-positioned to compete on efficacy, tolerability and administration vs. other oral therapies
Phase IIb initiated ‘22

Orals projected to capture ~30% of GLP-1 market by 2032 due
to strong patient preference >60% of patients prefer BID oral
vs. QW injections
Source: Pfizer Quarterly Corporate Performance – Second Quarter 2022 presentation
https://s28.q4cdn.com/781576035/files/doc_financials/2022/q2/Q2-2022-Earnings-Charts-FINAL.pdf

23$25B GLP-1 market currently growing at +30% per year,
projected to reach ~$90B by 2030

6. Appendix

3

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Wholly-owned programs to begin clinical studies next 12 months
Advancing priority programs into early clinical studies, including our collaboration with CRUKIndicationand target

TargetProduct
ProfileClinical starttarget24

Immunosuppression
in solid tumors

Schizophrenia
and Psychosis

Inflammatory
Bowel Disease

EP4 antagonist

GPR52 agonist

EP4 agonist• Once daily oral small molecule• To be used in combo withcheckpoint inhibitors• Collaboration with Cancer
Research UK

H1 2023• Once daily oral
small molecule• 24hr target engagement

H1 2023• Oral GI restricted• Good potency and selectivity• Minimal GI systemic exposure

H2 2023

6. Appendix

3

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

EP4 antagonist (HTL0039732)

New collaboration with CRUK to advance clinical trials for this promising cancer therapeutic
Best access - unrivalled network of world-leading
scientists and cliniciansWorld-class infrastructure - multi-center trials
delivered across 20 clinical centers in the UK
Shared costs and risks - co-development project,
coordinated and managed by CRUK, with joint
funding and shared risk reward
Win-win for cancer drug development - Sosei
Heptares retains the license to clinical trial results
and collaboration IP, CRUK receives a modest shareof future revenue if the drug successfully developed
Cancer is an extremely complex area for development. We partnered with CRUK who have delivered six agentsas registered medicines alongside world-leading corporate partners

Source: Cancer Research UK, Center for Drug Development

25

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

5
Objectives for FY2023 and beyond
Chris Cargill, CEO

26

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

Achievements in FY2022

Organic and strategic initiatives position us well for long-term growth
FY2022 OBJECTIVES

Organic
GrowthStrategic
Growth27

ACHIEVEMENT

1

Execute at least one new high value collaboration
and/or co-investment✓

2

Generate at least one new preclinical candidate✓

3

Further enhance R&D productivity✓

1

Continue to search for opportunities to acquirecompanies that will bring new sources of revenue✓

2

Collaborate/invest in new technologies with synergies✓

3

In-license late-stage products for clinical development
and commercialization in Japan✘M1 ag. Japan - compound selected

Search ongoing. Continued premium asset
values, combined with weak JPY, provide
reasons to maintain discipline

Not yet completed, actively ongoing1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

Priority objectives for FY2023

Continue to promote future growth by focusing on four strategic pillars
FY2023 OBJECTIVES

1

2

3

4

28

WORLD-LEADINGDRUG DISCOVERY

1

Invest to enhance GPCR SBDD platform capability

MAJOR CASH
FLOW GENERATINGPARTNERSHIPS

2

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

TRANSFORM
IN-HOUSE R&D

3Advance at least two new in-house programs into first-in-human clinical trials

JAPAN
BUSINESS

4

Take clear steps to build a Japan Pharma Unit (in-licensed or in-house products)

1. Financial

2. Strategy

3. Operation

4. R&D

Strategy to enhance our success

Key pillars aimed at increasing corporate value over the medium term
Japan PharmaBusiness Unit

Transform
In‐House R&D
Major Cash flow
Generating
Partnerships
World‐Leading
Drug Discovery

29

5. Objectives

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Our 2030 vision

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 biotech in Japan driving innovative medicines to patients30

6. Appendix

1. Financial

7
Appendix31

2. Strategy

3. Operation

4. R&D

5. Objectives

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Major updates since the beginning of FY22

Selected programs re-positioned or deprioritized to optimize strategy and investment
Position Updates / Deprioritized
CGRP ant.

Strategic decision of partner to revert program to its discovery portfolio

OX2 ag.

Strategic decision of partner to prioritize and invest in oral program instead of intranasal

H4 ant.

Deprioritized and on hold following review. Opportunity to reposition indication being considered

A2a ant.

Assessing reversion opportunity. No active clinical development

Neurology

Narcolepsy (Intranasal)

Atopic Dermatitis

mCRPC

32

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Introduction of ‘Core Operating Profit’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)

33

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

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Estimation of potential market size

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

34

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

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Potential revenues from existing partnerships

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 page35

6. Appendix

1. Financial

2. Strategy

3. Operation

4. R&D

PCC

Ph2

5. Objectives

6. Appendix

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/MetabolicPartner

Disc.

Ph1

Partnered36

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

Ph3

App

Mkt

1. Financial

2. Strategy

3. Operation

4. R&D

PCC

Ph2

5. Objectives

6. Appendix

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)

Ion Channel 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

37

Note: SME = small molecule. LME = large moleculePartner

Disc.

Ph1

Ph3

App

Mkt

1. Financial

2. Strategy

3. Operation

4. R&D

PCC

Ph2

5. Objectives

6. Appendix

In-house pipeline
CompoundTarget / Mechanism

Modality

Indication

HTL’732

EP4 antagonist

SME

Immuno-oncology(Not disclosed)

GPR52 agonist

SME

Neurology diseases(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)38

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.

Ph1

Ph3

App

Mkt

1. Financial

2. Strategy

3. Operation

4. R&D

5. Objectives

Glossary
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

39

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

2. Strategy

3. Operation

4. R&D

5. Objectives

Glossary (cont’d)Drug discovery target

40

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 HEPTARESPMO Hanzomon 11F

Steinmetz Building

North West House

2-1 Kojimachi, Chiyoda-ku

Granta Park, Cambridge

119 Marylebone RoadTokyo 102-0083

CB21 6DG

London NW1 5PU

Japan

United Kingdom

United Kingdom