NON-CONFIDENTIAL

FY2020 Financial Results
12-month period ended December 31, 2020
12 February 2021 | Sosei Group Corporation (TSE:4565)

Disclaimer
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2

Agenda1

FY2020 Financial Results

2

FY2020 Operational Highlights

3

Key Themes for the Future

4

FY2021 Strategic Outlook

5

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 the creation of the material, and the accuracy of
the information is not guaranteed. Investments should be made based on the independent views of investors

3

1
FY2020 Financial Results
Chris Cargill, CFO

4

Another year of successful execution

Summary Financial Highlights for the 12 months ended 31 December 2020

1

Revenue of ¥8,842m ($83m) vs. ¥9,726m ($89m) in prior corresponding period, driven by progresswith existing collaborations, and effective execution of new partnerships and co-investments

2

Cash Earnings Profit of ¥2,904m ($27m) vs. ¥2,846m ($26m) in prior corresponding period, due torigorous focus on collaborative partnerships, strategic execution and cost control

3

Operating Profit of ¥928m ($9m) vs. ¥384m ($4m) in prior corresponding period, successfully achieving
our corporate goal to target sustainable and/or profitable results for the Full Year

4~$200m new growth capital raised, Japan’s largest biotech financing during COVID-19, to support
aggressive strategic growth plan5

Net cash inflow of ¥24.6bn ($246m), resulting in a robust cash balance of ¥40bn ($387m) at year end
Our unique and balanced business model is driving a sustainable financial profile

Note: USD:JPY FX rates used – 106.77 (FY2020) and 109.03 (FY2019)5

Our focus on cost control and sustainable levels of R&D investment
delivered a second consecutive year of profitable results
Revenue (JPY million)

9,726

12m to 31-Dec-19

Cash Earnings Profit1 (JPY million)

8,842

2,846

2,904

12m to 31-Dec-20

12m to 31-Dec-19

12m to 31-Dec-20

Cash Operating Expenses1,2 (JPY million)

5,406

Operating Profit (JPY million)

928



6,101

384

12m to 31-Dec-19

12m to 31-Dec-20

Note: 1 Non-IFRS measure; 2 Cash Operating Expenses = Cash R&D + Cash G&A

6

12m to 31-Dec-19

12m to 31-Dec-20

Our emphasis on collaborative drug discovery partnerships and coinvestments drove a balanced split of revenues
JPY million

USD million

12m ended
31 Dec 2019

12m ended
31 Dec 2020

12m ended
31 Dec 2019

12m ended
31 Dec 2020

Revenue

9,726

8,842

89.2

82.8

Cash Cost of Sales

(807)

(607)

(7.4)

(5.7)

Cash R&D(3,937)(3,411)(36.1)(31.9)Cash G&A(2,164)(1,995)(19.8)(18.7)

Other Cash Income

28

75

0.3

0.7

Cash Earnings Profit

2,846

2,904

26.1

27.2

Non-Cash Costs(2,462)(1,976)(22.6)(18.5)

Operating Profit

384

928

3.5

8.7

Net Finance Costs

331

1,050

3.0

9.8

(181)

(356)

(1.7)

534

1,622

1,432

1,479

Equity Accounted
Investments
Net Profit before
income tax
Net Profit

Note: USD:JPY FX rates used – 106.77 (FY2020) and 109.03 (FY2019)7

Revenue by Type
3%

25%

11%

10%
12m ended
31 Dec 2019

29%
62%

12m ended
31 Dec 2020

60%

12m ended 31 Dec 2019

12m ended 31 Dec 2020

Milestone¥6,013m$55.1m¥5,353m$50.1m

(3.3)

Royalty¥2,406m$22.1m¥2,544m$23.8m

4.9

15.2

Product Sales

¥276m

$2.5m

–

–

13.1

13.8

Other

¥1,031m

$9.5m

¥945m

$8.9m

Positive operating cash flows and a highly successful capital raisinghave us well positioned to invest in enhancing corporate value
JPY million

Cash Flow Bridge (12m ended 31 Dec 2020)

As of
31 Dec2019

As of
31 Dec2020

As of
31 Dec2019

As of
31 Dec2020

Goodwill & intangibles

27,36425,936

249.8

250.5

Property, plant & equip.

4,120

3,824

37.6

36.9

Cash at hand

15,37540,008

140.3

386.5

Equity Acc. investments

3,539

3,087

32.3

29.8

Other financial assets

2,053

1,593

18.7

15.4

Other assets

4,229

2,017

38.6

19.5

Total Assets

56,68076,465

517.4

738.6

Corporate Bonds–

14,789–142.9

Other liabilities

11,602

9,295

105.9

89.7

Total Liabilities

11,602

24,084

105.9

232.6

Net Assets

45,07852,381

411.5

506.0

Note: USD:JPY FX rates used – 106.77 (FY2020) and 109.03 (FY2019)8

USD million

USD Millions

Cash balance
31 Dec 2019

Operatingcash flow

Othercash flows

Capitalraise

Cash balance
31 Dec 2020

Our commitment to sustainable and balanced risk and reward
investing enabled us to keep costs under control
Q3 2020
Guidance

Actualresults(Dec-20)

Cash R&D expenses

Cash G&A expenses¥4,200 to 4,700m¥1,800 to 2,300m¥3,411m¥1,995m

 Successful negotiations with suppliers toclaw back prior year overcharges
 Increase in new collaborations shiftedlarge development costs to partners
 Managed slow down in program
expenditure from coronavirus delays)

9 Prudent cost management
 Reduction mainly due to UK National
Insurance related credit driven by
movement in share priceModest increases in investment to fuel programs, add new major
partners, and drive a step-up in our corporate valuation

Guidance(Dec-21)

Cash R&D expenses

Cash G&A expenses¥4,000 to 5,000m¥1,800 to 2,300m

 Increased investment in HTL’878
selective M4 agonist program – anextremely valuable opportunity tosecure a new major partnership Continued build-out of Complianceand Governance capabilities

 Accelerate new first-in-class target
discovery and advance programs Implementation of Oracle Netsuite
ERP system

Investing today to drive growth tomorrow

10

2
FY2020 Operational Highlights
Chris Cargill, CFO

11

Organic growth plan driving our world-leading GPCR drug discovery
OBJECTIVE

ORGANIC GROWTH PLAN

Continue to expand
expertise in GPCRs
Extend technology /platform leadership

Generate high quality
novel candidates

OBJECTIVE

At least 2 new
Preclinical Candidates
on average,
every year

OBJECTIVEOBJECTIVE

Demonstrateprogress of pipeline

2-3 new high-value
collaborations and/or
co-investments,
every year

Advance discovery anddevelopment pipeline

Execute high value
partnerships

Building a broad pipeline to fuel the continued execution of high-value partnerships and co-investments

12Organic growth plan driving our world-leading GPCR drug discovery
OBJECTIVES METORGANIC GROWTH PLAN

 Jan-20 – Orexin agonist
scientific breakthrough,triggering next tranche ofMedicxi funding (Orexia, Inexia)
 Dec-20 – Strategic technology
collaboration with Captor
Therapeutics for Targeted
Protein Degradation
 H1 FY20 – CGRP ant. advanced
to Phase 1 ready H2 FY20 – mGlu5 NAM
advanced through Phase 1
 Jun/Jul-20 – Enerzair®
approved in Japan and EU
 Sep-20 – CCR6 ant. starts Ph 1

Extend technology /platform leadership

Advance discovery anddevelopment pipeline

Generate high quality
novel candidates

Execute high value
partnerships

All organic growth objectives successfully achieved

13

OBJECTIVES MET
 H1 FY20 – Nomination of H4
ant. candidate for Atopic
Dermatitis H1 FY20 – Nomination of EP4
ant. candidate for I/O
 H1 FY20 – Nomination of GPR35
ag. candidate for IBD (which wasthen out-licensed to GSK) Jun-20 – AbbVie collaboration
targeting inflammatory diseases
 Nov-20 – Tempero Biocollaboration for mGlu5 NAM
 Dec-20 – Biohaven collaboration
for CGRP antagonist Dec-20 – GSK collaboration for
GPR35 agonistWe continued to expand our expertise in GPCRs, having solved our300th high-resolution structure from 30th GPCR drug target
Significant untapped GPCRome opportunity for years to come –StaR® technology is enabling us to unlock the potential of GPCRs~400
GPCR targets~75%
Not yet drugged
Antagonist /Agonist bound
Solved 300+ molecular structuresfrom 30+ different receptors / 60+ StaRs

Small molecule /Antibody / Peptide
discovery

Highest resolution GPCR structure to date.
Average resolution of 2.5Å – higher than
the average resolution reported globally.
Source: “Unexplored opportunities in the druggable human genome”, Nature Reviews,
2016 ; “Trends in GPCR in Drug Discovery – new agents, targets and indications”, Nature
Reviews, 2017; Management analyses, Protein Data Bank

14

Multiple
indications
Receptors for which a structure has beenreleased in Protein Data Bank (public domain)

Receptors for which Sosei
Heptares has developed a StaR®

Our StaR® technology and SBDD platform enables productive drug
discovery and generates multiple high quality candidates
LAST 10 YEARS (StaR® / SBDD GENERATED)TODAY

DRUG DISCOVERY

LEAD OPEARLY DEVELOPMENTMEDIUM TERM OUTLOOKTECHNOLOGYDRUG DISCOVERY

Deliver at least

Generate on average

new programs to lead
optimization stage
every 2 years

new preclinicalcandidates
every year

4 compounds

Generated

Producedhigh quality novel
preclinicalcandidates

IND1 clinicalcandidates that haveentered human trials

24

8

PRECLINICAL
13 candidates
CLINICAL

4

8 candidates

One of the most productive GPCR drug discovery teams in the world over the past 10 years
Note: 1 IND = Investigational New Drug15

2

We leveraged our SBDD platform to support COVID-19 research in2020, discovering a potent series of broad spectrum anti-virals
Program focused on inhibitors of SARS-CoV-2 main protease,a highly conserved protein essential for viral replication
ACE2

TMPRSS2

Endosomal entry
Exocytosis

Structure-based design approach has identified potent
compounds for further development as oral treatments for
SARS-CoV-2 infection and future coronavirus variants

Translation
Replication
Proteolysis

Virion assembly
ERGIC

Transcription
RTC

pp1a/ab

Program has advanced rapidly under an international
collaboration of companies led by Sosei Heptares as part of its
commitment to socially responsible investing

genomic RNA

MPro

Structural proteins

Translation
ER

nsps

Now seeking partners with expertise in antiviral development for rapid progression of identified molecules
for this important global fight against SARS-COV-2 and future coronavirus variants

16

We added multiple new partnered and in-house programs to our deep
pipeline, which will drive more collaborations and value creation
Pre-Disc. /Discovery

Multi-target

Single target

Multiple

Outlicensed

Preclinical development

20+

Metabolic

GPR35 ag.
IBD

Phase 1

13

CGRP ant.
Neurology

Phase 27

A2A ant.

Solid tumors

A2a ant. combo(s)mCRPCMulti-target

CCR6 ant.

Enerzair® Breezhaler®

COPD

IBD

AsthmaOravi®

Mouth candidiasis

CXCR4 mAb
TPD

Ion channel

PAR2 peptide

AI

Immuno-oncology

OX1/OX2 ag.

mGlu5 NAM

Narcolepsy

SARS-CoV-2 MPro
Coronaviruses

17

COPD

Seebri® Breezhaler®

T2DM/Obesity

Inflammatory

In-house /Not yetpartnered

Ultibro® Breezhaler®

GLP-1 ag.

Multiple

Single target

Co-owned
companies

4

Multi-target

GI and otherCo-dev /Profitshare

Marketed2

10+ programs
Neurology
GI / Inflammation
Immunology

Substance Use

GLP-2 ag. peptide
Intestinal failure

H4 ant.

Atopic Dermatitis

PAR2 mAb

Atopic Dermatitis

SSTR5 ag. peptide
Endocrine

GLP1 ant. peptide2

EP4 ant.

M4 ag. Backup

M4 ag. HTL’878

GPR52 ag.

M1M4 ag.

M1 ag. Backup

M1 ag. HTL’936/’318

Endocrine

Neurology

Immuno-oncology

Neurology

Neurology

Neurology

Partnered ProgramM1 ag1 HTL’318
DLB

Neurology

Neurology

Note: Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG. 1 Phase 2 trial of HTL0018318 for DLB in Japan has been withdrawn. The Group may resubmit a new clinical trial notification for HTL0018318 (oranother novel M1 agonist) to the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) in the future. 2The option to license GLP1 antagonist peptide was not exercised before 31 December 2020 and therefore the program is currently
wholly in-house.

In-house Program
Recently regained
programWe continued to make excellent progress in collaborative drug
discovery, adding three new pharma partnerships in 2020
Partner

Active Partnered Program

Therapeutic Area

UF / Near Term Payments

Potential deal value1

2020 Collaboration and Licensing
Agreement for GPR35 agonist

Gastrointestinal,
immunology$44m$480m+

2020 Collaboration and Licensing
Agreement for CGRP antagonist

Neurology$10m$380m+

2020 Discovery Collaboration andOption to License2

Inflammatory andAutoimmune$32m$400m+

2019 Multi-target Collaboration

Multiple; Initial focus on
Gastrointestinal$26m$1.2bn+2019 Multi-target Collaboration

Multiple$26m$1.0bn+2015 Multi-target Collaboration

MultipleNil$1.8bn+2015 Collaboration and Licensing
Agreement for A2a antagonist

Immuno-oncology$10m$500m+$148m$5.9bn+TOTAL
1 Potential option fees, development, regulatory and commercial milestone payments, plus royalties on global commercial sales;
2 AbbVie has the option to expand the collaboration by an additional three targets

18

We created Tempero Bio, an exciting co-owned investment withthe global pharma industry leaders at Aditum Bio
Tempero Bio to advance the clinical development ofmGlu5 NAM program in neurological diseases
Tempero Bio – a new company created to develop the mGlu5 NAM
program, including candidate HTL14242 (TMP-301), to develop
therapies targeting substance use disorders and anxiety.

Co-founded by industry veterans:

Aim of co-investment to combine high quality mGlu5 NAM
pharmacotherapy with digital devices to support patient treatment,
improve adherence and ultimately create better patient outcomes.
Tempero Bio plans to bring TMP-301 into a Phase 2 clinical trial
within 12 months, utilizing TrialSpark – a tech-enabled platform – as
the innovative clinical research engine.
Sosei Heptares received $5 million upfront payment and strategic
equity stake in Tempero Bio, and is eligible to receive development
and commercial milestone payments plus tiered royalties.
Nov 2020

19

Joe Jimenez

Mark Fishman

Paul Sekhri

Former CEO

Founding President

Former CEO“We created Aditum Bio to select and develop clinical assets
using a novel approach combining data, software and technology
to speed development.” – Joe Jimenez

Strategic growth plan driving corporate value expansion
STRATEGIC GROWTH PLANOBJECTIVE

Capital raisecompleted to pursue
revenue focuseddeals in 2021

Seek out revenuegenerating opportunities

Invest / collaborate innovel technologies

OBJECTIVE METOBJECTIVE MET

Add new technology
capabilities to our
SBDD platform

OBJECTIVE

Take steps to expand
beyond core GPCR
specialty

Expand drug target
classes beyond GPCRs



In-license late-stage
programs for Japan

Bring international
medicines toJapanese patients inareas of unmet need

Adding new revenues, and accessing new technologies, to expand our future-proof our capabilities


20

Collaborations in FY20



Collaborations in FY21 (See Appendix)

We have taken our first step into the exciting area of Targeted
Protein Degradation via a strategic collaboration with Captor
Strategic technology collaboration with Captor
Therapeutics focused on targeted GPCR degradation
Explores the potential of our unique combination of technologies todevelop a novel GPCR degraders platform, opening up so far
intractable drug targets for us to address.
Targeted protein degradation – novel approach to drug discovery
where the body’s natural process for degrading proteins is diverted
using small molecule drugs to eliminate disease-causing proteins.
Expected to have multiple advantages over classical drugs such as
inhibitors and antibodies for the development of novel therapeutics
against a broad range of diseases.
Initial focus to identify small molecules targeting a GPCR with a keyrole in a strongly validated signalling pathway implicated in
gastrointestinal disorders.
Dec 2020

21

 The Captor platform includes Molecular Glues, Bi-SpecificDegraders and Obterons
 Each approach has different characteristics and may be better
suited to different targets or diseases

We are covering ~50% of the drug discovery landscape through thetactical expansion of our strategic collaborations
Established Modality

GPCR

Future potential Modality

Small Molecule

Antibody/Protein

68%

25%

Ion channel

18%

Cell
therapy7%

Nuclearreceptors

16%

Kinase3%

Others30%: Proportion of new drugs approved by FDA (2015-2019) by modality

PartnerPartnerPartnerPartner: Proportion of small–molecule drugs that target major families (Nature Reviews Drug Discovery volume 16, pages19–34(2017))

22

Gene
therapy

TPD

33%Partner(Specific AI area)

Drug
TargetPeptideLegendExpand drug target
classes beyond
GPCRs

Invest / collaborate
in noveltechnologies…

3
Key themes for the future- Addressing challenges in drug discovery- Being an ESG leader

Shinichi Tamura, Chairman and CEO
23

Three big challenges in drug discovery and development
KEY OPPORTUNITY

Choosing
the right target

Discoveringa therapeutic agent

Conducting
the right patient studies•

Will modulating the target
affect disease?

•

Identifying a modulator withthe appropriate profile•

Demonstrating the value ofthe agent in treating disease•

Can a good modulator of thetarget be found?

•

Differentiating fromcompetitors (if any)•

Utilizing biomarkers to
support patient stratification

Our greatest opportunity is to leverage technology to choose the right drug targets
that will become the transformational therapies of the future

24

Aim

How

Why

To support the identification andvalidation of new drug GPCR targets
across our core therapeutic areas (GI,immunology, immuno-oncology andneuroscience)
By leveraging top-end external company
omics platforms/databases andvalidation capabilities
To add exciting novel GPCR targets toour pipeline which have evidence of adirect involvement in a disease /mechanism process to fuel partnering
activity and higher value creation

AI / Machine Learning

We have created the new target ID and validation (TIV) frameworkto accelerate our quest to choose the right targets
Bioinformatics

Proteomics

SBDD
platform

Transcriptomics

Small Molecule
Discovery

Genomics

Clinical Trials

Clinical/Patient Data

Continuously expanding our know-how and SBDD platform to maintain our leadership position in GPCR drug discovery

25

New TIV Framework - mid-term plan to pursue investments andexternal collaborations to hunt novel first-in-class drug targets
2021

2022

2023

INTERNAL THERAPEUTIC AREA INITIATIVES

2024
PRE-DISCOVERY

Therapeutic
Area

PE

MAXIMIZE EXISTING COLLABORATIONSNEW EXTERNAL COLLABORATIONS / ALLIANCES

TargetID• To support our Therapeutic Areas of Interest(GI/Immunology/Neuroscience)TV

TargetValidation

BMS

HID

DISCOVERY
H2L

Target validation

Systems
Biology

Investing in the next wave of future targets
mAb PLATFORM BUILD• Identify strategic partner to maximise
platform capability

Commencing 2021 we will aggressively expand our external technology collaborations and alliances
Note: PE = Protein Engineering; BMS = Biomolecular Structure; TV = Target Validation; HID = Hit Identification; H2L = Hit-to-Lead; LO = Lead Optimization

26

LO

Our commitment to ensure a sustainable future for all
Sustainable Development Goals adopted by theUnited Nations (Sep-15)

E
•
•
•

SUSTAINABILITY COMMITTEE
Promoting efficient energy use
and renewable energy sources
Reducing waste and water usage
Promoting efficiency in drug
discovery

Source: United Nations
LINK: https://soseiheptares.com/uploads/Sustainability/Sustainability_20201214_JP.pdf

27

S
•
•

Sosei Heptares is undertaking initiatives focused on
10 of the 17 Sustainable Development Goals

E

Environment

S

SocialG

Governance

CHARITY COMMITTEE
Hosting events to raise monetary
donations for multiple dementiarelated charities
Equipment donations to local
educational institutions

G••

GOVERNANCE STRUCTURE
Board of Directors –6 members(incl. 5 external independent)
Investment Committee andScientific Advisory Board provide
recommendations to the Board

4
FY2021 Strategic Outlook

Shinichi Tamura, Chairman and CEO

28

Priority objectives for FY2021

Progress the organic
growth plan

Being an ESG leader

•
•

29

Promote sustainable ESG
practices and policies acrossglobal business
Establish collaborations withindustry partners to further
develop candidates as oral
treatments for humancoronaviruses

Execute on the strategic
growth plan•

Extend technology / platform
leadership••

Generate high quality
Preclinical-stage candidates•••

Advance discovery anddevelopment pipeline
Execute 2-3 new high value
collaborations and/or coinvestments•

Seek out revenue-generating
opportunities
Invest / collaborate in novel
technologies and expand
drug target classes beyond
GPCRs
In-license late-stage assets
for Japan market

Thank you for continued investment and interest!
1

Maintain technology
and platform
leadership in ourchosen field

2Enter new high value
drug discovery anddevelopment
partnerships withpharma /biotech3Achieve importantmilestones on
existing partnered
programs



4

Seed multiple new
in-house drugcandidates instrategic areas for
future high value
partnering



5



6

Advance selectedin-house programsin early-stage clinicalstudies for higher
value partnering

Create new assetcentric spin-out
companies backed
by venture capitaland retain equity
holding

CGRP ant. advanced toPhase 1 ready and outlicensed to Biohaven

Created Tempero Bio
with Aditum Bio toadvance mGlu5 NAM
program targeting
substance use disorders
and anxiety

FY2020 Achievements
Orexin agonist
scientific breakthroughTech collaboration for
Targeted Protein
Degradation (TPD)

Inflammatory andAutoimmune Collab
CGRP ant. Out-licensing
and Collaboration

Phase 1 start of CCR6
ant. for inflammatory
GPR35 ag. Out-licensing bowel disease
and Collaboration

Note: Enerzair® and Breezhaler® are registered trademarks of Novartis AG

30

Launch of Enerzair®
Nomination of H4 ant.
Breezhaler® for Asthma candidate for Atopic
in EU and Japan
Dermatitis

Nomination of EP4 ant.
candidate for ImmunomGlu5 NAM advanced
oncology
through Phase 1 andNomination of GPR35
out-licensed toant. candidate andTempero Bio
out-licensed

5A
AppendixSignificant events post FY2020 close

31

Bolstered drug discovery capabilities with technology collaborations
Collaborate in novel technologies

32

Expand drug target classes beyond GPCRs

Collaboration with PharmEnable to leverage its proprietary artificial
intelligence-enabled and medicinal chemistry technologies to
identify novel, highly specific drug leads for future development.

Collaboration with Metrion Biosciences to explore the potential of
Sosei Heptares’ SBDD technologies to address disease-associatedion channels in a similar way it has succeeded with GPCRs.

PharmEnable’s approach identifies 3D drug candidate hits withimproved specificity compared with traditional screening methods,
enabling the company to tackle challenging biological targets.

Ion channels – regulate the flow of ions across the cell membraneand represent a large and established but under-exploited class ofdrug targets beyond GPCRs.

Initial focus to apply these technologies on a peptidergic GPCR
target associated with neurological diseases that has proved
particularly difficult to drug.

Initial focus to identify novel, highly specific drug leads for further
development against a single ion channel that is well-validated inneurological diseases.

Sosei Heptares and PharmEnable will jointly conduct and share thecosts of the discovery and development program and will co-own
any resulting products.

Sosei Heptares will have exclusive, full global rights to all molecules
identified and directed to the targets for development by Sosei
Heptares.

Jan 2021

Feb 2021

We regained a larger and strengthened selective muscarinic agonist
portfolio following over $55m of investment from Allergan
Sosei Heptares receives all programs underdevelopment, together with the associated IP and
preclinical and clinical data generated from thepartnership with Allergan
Includes a pipeline of next-generation
selective muscarinic agonists
with newly developed chemistry
StaR® and SBDD precision-design platform
has delivered a patent estate of chemically diverse
M4, M1 and M1/M4 muscarinic agonist back-ups
in preclinical development

Program
M4 agonist

M1 agonist

M1 / M4
dual agonist

CompoundStage

HTL’878

Ph 1

Undisclosed

Preclinical

HTL’318

Ph 1

HTL’936

Ph 1

Undisclosed

Candidate Selection

Undisclosed

Discovery

Undisclosed

Discovery

Undisclosed

Candidate Selection

We have completed our internal review of the Muscarinic programs and will now increase our investmentof the M4 agonist program while maintaining investment in the other portfolio programs
33

Potential to deliver transformative new treatments for patients
Muscarinic M4 and M1 receptors are validated targets for psychosis and cognition
Muscarinic M4 and M1 receptors represent
validated targets for the treatment of psychosis
and cognition, respectively

Xanomeline, the M4/M1 preferring agonist, achieved
human Proof of Concept in double-blind, placebocontrolled trials in SZ and AD patients

Selective orthosteric agonists have been very
challenging despite over 25 years of effort bymajor global pharma~20M
SCHIZOPHRENIA~50M
GLOBAL SUFFERERS$818BNSOCIETAL COST

DEMENTIA

1.1%
COST OF DEMENTIAGLOBAL GDP

Muscarinic M4 and/or M1 receptor agonists with selectivity over peripheral muscarinic M2 and M3 receptor
subtypes have the potential to be transformative treatments
Source: World Health Organization

34

Potential to deliver transformative new treatments for patients

Karuna Therapeutics and Cerevel Therapeutics are advancing supportive muscarinic stories

KarXT (M1/M4 agonist, M2/M3 antagonist)

CVL-231 (M4 PAM)

Karuna Therapeutics’ KarXT1 and Cerevel Therapeutics CVL-2312 have reawakened investors and the pharma
industry to the potential of muscarinic programs for the treatment of psychosis and cognition
1. KarXT is combination of xanomeline (muscarinic M1/M4 preferring agonist) and trospium chloride (muscarinic M2/M3 antagonist). Source: Karuna Therapeutics Company Presentation (December 2020) LINK
2. CVL-231 is a selective muscarinic M4 positive allosteric modulator (PAM). Source: Cerevel Therapeutics Company Presentation (November 2020) LINK

35

Potential to deliver transformative treatments for patients
M4 agonist program a potential next-generation, first-in-class treatment for SZ
HTL’878
Using our proprietary StaR®
technology, we have developed
crystallography systems forMuscarinic receptors stabilized
in agonist forms
Details obtained from structuresof a compound series enabletuning of interactions andaffinities across receptor
sub-types

Highly selective M4 receptor agonist for the treatmentof psychosis in schizophrenia and dementias• Potent orthosteric agonist of the M4 receptor• Highly selective vs other muscarinic receptor
subtypes• Highly selective vs other GPCRs and other drug
targets• Excellent CNS penetration and good druglike
properties to ensure access to the target (target
engagement)

Our StaR® / SBDD precision designed M4 agonist program is highly selective for the muscarinic M4 receptor
subtype, offering a differentiated approach versus the competitors in development
36

Potential to deliver transformative treatments for patients
SZ remains a huge unmet medical need
Large market withblockbuster sales profiles…

~20M

SZ patients worldwide

Blockbusters sales profiles despite
limited efficacy and severe side effects$10BN+(2020)$13BN+(2026)…Despite no innovationin 70 years
Current treatments use the same
MOA from the 1950s

1st GenD2 modulating

Atypicals

Dual D2/5HT
modulating

2nd Gen
Atypicals

Dual D2/5HT
modulating

Huge opportunity for HTL’878


Selective M4 agonist

Potential First in Class therapywith a novel MOA
Improved tolerability

Significant need for new
treatment options in SZ

The severe side effect profile of Atypicals continues to drive high relapse rates, disease progression anddiscontinuation of treatment – there is a significant need for new treatment options
Source: World Health Organization; EvaluatePharma

37

5B
Appendix
Revenue and Pipeline
progression38

Revenue breakdown by type (IFRS)USD (M)
89.2
9.5
2.5
22.1

55.1

12m to 31-Dec-19
Other
Product Sales
RoyaltyUpfront (UF)/Milestone (MS) revenue recognized in the full Financial Year1
Revenue(USDm)Date

FY20 UF/MS Event

AZD4635 Phase 2 start

15.0

Feb-20Daiichi Sankyo lead identified

1.5

Feb-19Inexia collab upfront

0.3

Jun-20

AbbVie collab upfront

2.5

Feb-19Fair value of shares in Orexia
and Inexia

2.3

Jun-20Feb-19Daiichi Sankyo structure solved

0.5

Jul-20Feb-19Fujifilm Oravi payments

1.8

Date

FY19 UF/MS Event

82.8

Jan-19

8.9
23.8

50.1

12m to 31-Dec-20

1.3
5.0

Aug-20

Takeda structure solved

0.3

May-19 Pfizer candidate nomination

3.0

Novartis Enerzair® Breezhaler®
May-19EMA filingSep-20Pfizer Phase 1 start

5.0

2.5

Nov-20 Tempero Bio collab upfront

5.0

May-19 Pfizer candidate nomination

3.0

Nov-20Jul-19

Genentech collab upfront

7.6

Nov-20 Biohaven collab upfront

5.0

Aug-19Takeda collab upfront

10.0

Nov-20 Biohaven share consideration

4.7

Sep-19

Genentech target nomination

0.8

Dec-20

AbbVie StaR® structure solved

0.7

Dec-19Pfizer Phase 1 start

5.0

Dec-20

Takeda StaR® structure solved

0.3

Dec-19Pfizer candidate nomination

3.0

Dec-20

GSK collab upfront

12.5

Selected revenue

0.8

Selected revenue

4.3

UF/MS
39

Novartis Enerzair® Breezhaler®
Japan approval
Novartis Enerzair® Breezhaler®
EU approval

Revenue(USDm)

Note: 1 Values relate to revenue recognized in the full financial year per accounting measures, as opposed to cash received in the full financial year.

Fair value of shares in
Tempero Bio

2.0Progression of Partnered Pipeline
CompoundTarget / Mechanism of Action
Traditional Out-licensing Collaborations
Seebri® Breezhaler® LAMA
Ultibro® Breezhaler® LAMA+LABA
Enerzair® Breezhaler® LAMA+LABA+ICS
ORAVI®
Antifungal agent miconazole
Imaradenant
Adenosine A2a ant. combo
Imaradenant
Adenosine A2a antagonist
PF-07081532
GLP-1 agonist
PF-07054894
CCR6 antagonist
Not disclosed
Single target
BHV3100
CGRP antagonist
Not disclosed
GPR35 agonist
Not disclosed
Multi target
Not disclosed
Multi target
Not disclosed
Multi target
Not disclosed
Single target
Co-development / Profit-share Collaborations
KY1051CXCR4 mAb
Not disclosed
PAR-2
Not disclosed
Targeted Protein Degradation
Not disclosed
AI-Augmented Drug Discovery
Not disclosed
Ion Channel Drug Discovery
Co-owned investments
TMP301mGlu5 NAM
Not disclosed
OX1/OX2 agonist
Not disclosed
OX1/OX2 agonist

40

Modality

Indication

SME
SME
SME
SME
SME
SME
SME
SME
SME
SME
SME
SME
SME/LME
SME/LME
SME

COPD
COPD
AsthmaOropharyngeal candidiasis
mCRPC
Solid tumors
T2DM / Obesity
Inflammatory bowel disease
Metabolic and other
Neurology diseases
Inflammatory bowel disease
Multiple indications
Multiple indications
Gastrointestinal and other
Inflammatory diseases

mAb
Peptide
SME
SME
SME

Immuno-oncology
Inflammatory diseases
Gastrointestinal disorders
Neurology diseases
Neurology diseases

SME
SME (Oral)
SME (Intranasal)

Substance use disorders
Narcolepsy
Narcolepsy

Note: Seebri®, Ultibro®, Enerzair® and Breezhaler® are registered trademarks of Novartis AG.

FY2019 stage
FY2020-Now progress
Partner

Disc.

PCC

Ph1

Ph2

Ph3

App

Mkt

Progression of In-house Pipeline
CompoundTarget / Mechanism of Action
In-house Programs (Not yet partnered)

Indication

HTL0016878

Muscarinic M4 agonist

SME

Neurology diseases

HLT0018318

Muscarinic M1 agonist

SME

Neurology diseases

HLT009936

Muscarinic M1 agonist

SME

Neurology diseases

Not disclosed

Muscarinic M1 agonist (B/U)

SME

Neurology diseases

Not disclosed

Muscarinic M4 agonist (B/U)

SME

Neurology diseases

Not disclosed

Muscarinic M1/M4 agonist

SME

Neurology diseases

HTL0030310

SSTR5 agonist

PeptideEndocrine disorders

Not disclosed1

GLP-1 antagonist

PeptideEndocrine disorders

Not disclosed

GLP-2 agonist

PeptideIntestinal failure

Not disclosed

H4 antagonist

SME

Atopic Dermatitis

Not disclosed

EP4 antagonist

SME

Immuno-oncology

Not disclosed

GPR52 agonist

SME

Neurology diseases

Not disclosed

PAR-2 mAb

mAb

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

SME/LME

Immunology diseases

SME

DLB

Multiple programs
Not disclosed
In-house Programs (Suspended)
Muscarinic M1 agonist
HTL00183182

41

Modality

FY2019 stage
FY2020-Now progress
Originator

Dis

PCC

Ph1

Note: 1 The option to license GLP1 antagonist peptide was not exercised before 31 December 2020 and therefore the program is currently wholly in-house. 2 Phase 2 trial of HTL0018318 for DLB in Japan has been withdrawn. The Group may
resubmit a new clinical trial notification for HTL0018318 (or another novel M1 agonist) to the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) in the future.

Ph2

Ph3

App

Mkt.

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