NON – CONFIDENTIAL

Drug Discovery and Early Development
targeting GPCRs
38th Annual J.P. Morgan Healthcare Conference, San Francisco, 15 January 2020
January 2020 | Sosei Group Corporation

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© Sosei Group Corporation. Sosei Heptares is the corporate brand of Sosei Group Corporation. Sosei, Heptares, the logo and StaR® are Trade Marks of Sosei Group companies.

1Agenda2

1Introduction

2

GPCR Drug Discovery & Early Development

32019 Achievements, Financials & 2020 Outlook

1Introduction3

30 years of company history
Acquired Arakis, aUK biotech, adding
COPD assets to ourportfolio

Sosei Group
founded by
CEO Shinichi
Tamura

1990

2004

2005

Listed on Tokyo Stock
Exchange Mothers (TSE:4565)

4

Corporate rebranding toSosei Heptares

2015

Acquired Heptares
Therapeutics, a UK
biotech focusedon GPCR drugdiscovery

2018

TODAYLeading drug discovery & early development targeting GPCRsSCIENCE & TECHNOLOGY – LEDSolved

260+Molecular structures

RECOGNIZEDGLOBALLY FORWORLD-CLASS,PIONEERINGSCIENCEPARTNERSHIP FOCUSEDOUR TECHNOLOGY HAS ATTRACTEDWORLD LEADING PHARMA AND
BIOTECHS AS KEY PARTNERS

4PRODUCTS
ON MARKETGLOBALLY29

R&D PROGRAMSDISCLOSED WITH
BROAD AND DEEPPIPELINE BEHIND

From25+Different GPCRs
Solved>30%
Structures of GPCR targets

OUR CO-FOUNDERRICHARD HENDERSONWAS AWARDED THE
2017 NOBEL PRIZE
IN CHEMISTRY

5BURGEONING PIPELINECOLLABORATIONS WITH LEADINGACADEMIC GROUPS KEEP US AT THECUTTING EDGE OF SCIENTIFIC RESEARCHFORMED 2 SPIN-OUT COMPANIESWhy GPCRs?

Well known targets; significant untapped opportunity; “high hanging fruit”
P
LAST 50 YEARSNEXT 50 YEARS?

~400GPCRPROTEINS

25%

75%

NEUROLOGICALGASTROINTESTINAL
Blockbuster drugs targeting GPCRs

Blockbuster first-in-class drugs

IMMUNO-ONCOLOGYRARE / SPECIALTY

Forward focus on first-in-class novel medicines for patients
Sources: “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

6?

Strategy leverages proprietary technology and core competencies

Extend technology/platform leadership
EXECUTE NEW
PARTNERSHIPS AND
PROGRESS EXISTINGPARTNERSHIPS

Generate high quality novel candidates

Enhance focus on high value programs orLT ventures

Executing new partnered projects and progressing existing projects is at the heart of what we do7

Our StaR® technology enables smarter GPCR drug development
Unique structural insights into GPCRs enable better and smarter drug design

GPCRs are active in multiple
disease areas, and offer broad
therapeutic potential

8However, GPCRs are challenging
to drug optimally due to theirnatural unstable state

Stabilizing GPCR proteins on anindustrial scale for Discovery
and Early Development

Core competencies are drug discovery & early development
Drug discovery and early development are exposed to favorable industry trends
DRUG DISCOVERYEARLY DEVELOPMENTTECHNOLOGYDISCOVERYPRECLINICAL

PH 1A

PH 1BPPPPP

LATE STAGE DEVELOPMENT
PH 2PH 3

APPROVALBIG BIOTECH / PHARMA PARTNER

2 – 3 YEARS

1 –2 YEARS

2 YEARSLow cost, low risk, faster progression & favorable growth95+ YEARSMARKETBuilding a pipeline of high value partnered projects/LT ventures
Unique focus on lower cost, high value add projects
Approaches to drug discovery and development

New partnerships completed in 2019

OCOST

Potential deal value

Wholly-owned

JVs to besold or IPO’dHigh cost /High value

OFee-for-service

Partnered/ co-owned

Low cost /Low value

Low cost /high value

PTARGET>$1.0bn>$1.2bn
VALUE

Exclusively focused on high value partnerships >$500m; or LT ventures with upside
10Uniquely positioned to drive global biotech innovation in our field
R&D CENTRE OF EXCELLENCECAMBRIDGE, UK

HEADQUARTERS
TOKYO, JAPAN~150 EMPLOYEES~30 EMPLOYEES

Proprietary StaR®1 protein
GPCR technology

Japanese Development/
PMDA Expertise

Drug Discovery (SBDD2)
Platform

Access to Capital

Preclinical/Translational andPhase I Expertise

Long-term Investments /Corporate Venture Capital

R&D centre of excellence in Cambridge, UK, driving enhanced science, productivity, andnew collaboration and partnership opportunities
1 Stabilized receptor technology
2 Structure-based drug design

11

2GPCR Drug Discovery andEarly Development

12Track record of attracting world-leading partners$375m Inhalation pharma
products dev out-licensing(April 2005)$200m Single targetoption agreement(Oct 2009)

Single target discovery collab
focused on CNS disorders(April 2011)

Exclusive option agreement
for A2a ant. in CNS disorders(May 2011)

4yr multi-target researchand discovery collab(May 2011)

Two targets research anddev collaboration(Jan 2013)

Multi-target alliance todevelop mAbs
(Feb 2013)Marketing authorization (JP)transfer for NorLevo®
(Jan 2014)

Distribution agreement forSO-1105 (antifungal agent)(Feb 2014)

Multi-target antibody
discovery alliance(July 2015)$510m Development outlicensing for A2a ant. in I/O(Aug 2015)$410m CGRP development
out-licensing for migraine(Nov 2015)$2.0bn Multi-target
discovery alliance(Nov 2015)$3.2bn+ Muscarinic R&D
partnership for CNS disorders(April 2016)

Multi-target co-dev collab.
focused on mAbs for I/O(April 2016)

Single target discovery collab
for pain treatment(Mar 2017)

Single target co-dev collab.
in inflammatory disease(June 2017)€40m collab. to createcompanies Orexia / Inexia(Feb 2019)$1.0bn+ Multi-target
R&D alliance(July 2019)$1.2bn+ Multi-target
R&D alliance(August 2019)

Active Partnerships

Completed / Inactive Partnerships

13 Note: Deal values represent potential total milestone and upfront payments to Sosei Heptares that could be earned under the agreement (excluding royalties)

Partners are attracted to our technology-led discovery engine
Game-changing approach revolutionized GPCR-targeted discovery

NEW TECHNIQUE TO
IMAGE BIOMOLECULESEXPANDSCAPACITY TO
EXPLORE MORE
GPCRs

CHESS

CryoEM

AI /MACHINELEARNINGSTAR®
TECHNOLOGY

SaBRESMARTER DRUG DESIGN

14ACCELERATES AND
IMPROVESDRUGDISCOVERYDNA
EncodedLibraries

ALTERNATIVE MODES
OF ACTION

Industry-leading rates of productivity
Time to identify Preclinical Candidate (from Discovery)

4 YEARSBig
Pharma25+
CANDIDATESGENERATEDIN THE LAST
10 YEARSP
Sosei
Heptares2.0-2.5 YEARS

Aiming forcontinuous
improvement

7

PROGRESSED INTO
CLINICAL STUDIESCOMPOUNDS
IN 7 YEARSWe produce 2 to 3 Preclinical Candidates per year vs. industry standard of 1 for a company our size
Source: Management estimates

15Our steady state model can create multiple value inflection points
Aiming to execute 2 to 3 new high-value partnerships and/or novel ventures in 2020

4Projects
Projects

New Projects every 2 years(to Lead Optimization stage)
$$

$

$

$

$

$

$

PARTNERPARTNERPARTNERPARTNERPROGRESSFURTHER2x
PCC1p.a.

Projects$

Projects

Pool of projects thatcan be partnered
immediately
PCC = Preclinical Drug Candidate ready for testing per year

1615+
TODAY

$2 YEARS

PH 1AVolunteers
2 YEARSPH 1B
Patients

Today we have 15+ partnered projects…
Modality1Indication

Seebri®/Ultibro®

SME

COPD

QVM149SME

AsthmaNorLevo®

SME

Emergency contraception

ORAVI®

SME

Oropharyngeal candidiasis

Product/Program

Partner

Discovery

Preclinical

Phase 1

Phase 2Phase 3MarketedMarketed Products✓

Partnered Pipeline (Traditional out-licensing/collaboration projects)
A2a antagonist

SME

Multiple solid tumors

A2a antagonist

SME

EGFRm NSCLC

M1 agonist

SME

Alzheimer’s diseaseM4 agonist

SME

Alzheimer’s disease

M1/M4 dual agonist

SME

Alzheimer’s diseaseSingle target

SMEPainSingle target

SME

Undisclosed

Single target

SME

Undisclosed

Single target

SME

Metabolic and otherMultiple targets

mAb

Inflammation

Multiple targets

SME/LME

Multiple indications

Multiple targets

SME/LME

Multiple indications✓✓✓

Partnered Pipeline (Co-development/profit share)
CXCR4 mAb

mAb

Immuno-oncology

Single targetmAb

Immuno-oncology

Single target

PeptideInflammation

Orexin agonists

SME

Narcolepsy

Orexin agonists

SME

Narcolepsy

Asset-centric Companies

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

17✓: Current stage: Next 12–18 months progress…and are advancing the next wave of 15+ projects to be partnered
Product/Program

Modality1

Indication

Originator

Discovery

PreclinicalPhase 1

Phase 2Phase 3Marketed

In-house GPCR projects (pre-partnering)mGlu5 NAM

SME

Neurology

SSTR agonist

PeptideEndocrine disorders

CGRP antagonist

SME

Migraine

GLP-1 antagonist

PeptideMetabolic diseases

GLP-2 agonist

PeptideIntestinal failure

Orexin-1 antagonist

SME

Cocaine-use disorders

Apelin agonist

PeptidePAH

GPR35 agonist

SMEInflammatory bowel disorders

H4 antagonist

SME

Atopic dermatitis

PAR2 mAbmAb

Atopic dermatitis

Multiple programs
targeting a broad rangeof GPCRs

SME/LME/mAb/
PeptideMultiple indications across
Neurology, GI / Inflammation,
Immuno-oncology and rare /specialty diseases

M1 agonist2SME

DLB (Japan)

Multiple candidates are the focus of new partnership discussions
1 Note: SME = small molecule; LME = large molecule; mAb = monoclonal antibody
2 Phase 2 trial of HTL0018318 for DLB in Japan has been withdrawn. The Group plans to resubmit a new clinical trial notification for HTL0018318 (or another novel M1 agonist) to theJapanese Pharmaceuticals and Medical Devices Agency (PMDA) in the future18✓: Current stage: Next 12–18 months progress3
2019 Achievements, Financials, and2020 Outlook

19

What we achieved in 2019$15m milestone
Initiation of Phase 2
trials of I/O program
in solid tumors€40m collaboration
Creation of two assetcentric companies withMedicxi

SSTR5 agonist
First subject dosed inPhase 1 study ofHTL0030310$2.5m milestone
Submission of QVM149
MAA to the EuropeanMedicines Agency$6m milestones (total)
Nomination of first twocandidates for clinicaladvancement

January 2019

February 2019

February 2019

May 2019

May / June 2019$26m UF/Near term
Multi-target researchand license agreement,
worth potential $1bn+$26m UF/Near term
Multi-target researchand dev. partnership,
worthpotential$1.2bn+$3m milestone
Nomination of new
GPCR disease target$5m milestone
Initiation of Phase 1
trails for first
nominated candidate$3m milestone
Nomination of third
candidate for clinicaladvancement

July 2019

August 2019

October 2019December 2019

December 2019

Existing Partnership

In-house Program (to be partnered)

New Partnership20

Our strategy is driving more sustainable financial metrics
Revenue (USDm)

Operating Profit (USDm)

107126(53)9m to 31-Dec-18

9m to 30-Sep-19

9m to 31-Dec-18

Cash Operating Expenses1 (USDm)

9m to 30-Sep-19

Net Profit (USDm)

136241(55)9m to 31-Dec-18
Note: Converted into USD at FX rate USD:JPY of 109.
1 Non-IFRS measure

21

9m to 30-Sep-19

9m to 31-Dec-18

9m to 30-Sep-19

Strong executive team, advisory board and supportive key shareholders
Executive Management
Mr. Shinichi Tamura
Chairman, President, CEODr. David Roblin Chair of Scientific Advisory Board

Mr. Chris Cargill
EVP, Chief Financial Officer

Dr. Peter Bernstein

Shareholder Structure

Dr. Caetano Reis e Sousa

Dr. Malcolm Weir
EVP, Research & Early Development

Prof. Ed Bullmore

Dr. Darryle Schoepp

Dr. Tim Tasker
EVP, Chief Medical Officer

Prof. Richard Henderson

Dr. Roberto Solari

Mr. Kazuhiko Yoshizumi
EVP, Chief Compliance Officer

Dr. Paul Leeson

Dr. Chris Tate

Mr. Tadoyashi Yasui
EVP, President of Sosei Co.

Prof. Sir Keith PetersMr. Anders Tullgren

Source: FactSet as of 8 January 2020

22

Scientific Advisory BoardTokyo
Stock Exchange(TSE:4565)

Taiyo Pacific Partners 6.7%
Capital International 5.8%
Norges Bank Investment Management 1.3%
Capital Research & Management 1.0%
BlackRock Fund Advisors 0.9%
Matthews International Capital Management 0.9%
Other 83.4%

Robust FY2020 outlook
Expected events in 2020

23

1

Seed next wave of pre-discovery projects

2

Continued delivery of candidates in-house and for partners

3

Progress existing partnered programs

4

New collaborations and partnerships with world leadersThank you!

~42M
affectedglobally~3.1M
affected
globally~1.1B
affected
globally~50M
affected
globally~1.6M
affected inUS (mod-sev~50K
affected
globally~450K
affected
globally~300K
affected
globally

ALS

Cushing’s

uncontrolled)

Cancer

IBD

Migraine

Dementia

AtopicDermatitis

PAH• A2a antagonist• CXCR4 mAb• GPR35 agonist• CGRP antagonist• M1 agonist• M4 agonist• M1/M4 agonist• H4 antagonist• PAR2 mAb• Apelin agonist• mGlu5 NAM

Our mission is to make a significant contribution to improving the quality of lifeand health of people around the world
Sources: World Health Organization, EvaluatePharma, Management Estimates. Notes: Sosei Heptares may choose to only target a segment of the specific market.

24• SSTR agonist

Your contact:
Chris Cargill
Chief Financial Officer
IR@soseiheptares.com

SOSEI HEPTARESPMO Hanzomon 11F

The Steinmetz Building

North West House

2-1 Kojimachi, Chiyoda-ku

Granta Park, Cambridge

119 Marylebone RoadTokyo 102-0083

CB21 6DG

London NW1 5PUJapan

United Kingdom

United Kingdom