February 28, 2020
SEIKAGAKU CORPORATION(Securities Code: TSE 4548)

Seikagaku Announces Acquisition (Incorporation as a Subsidiary)of Dalton Chemical Laboratories, Inc. of Canada
Seikagaku Corporation (Tokyo, Japan; “Seikagaku”) announces that it has resolved at aBoard of Directors meeting on February 21, 2020, through use of a special purpose acquisition
company, to make a cash acquisition of all shares outstanding of Dalton Chemicals
Laboratories, Inc., (Toronto, Canada; "Dalton") an unlisted company in Canada. Seikagaku andthe shareholders of Dalton have concluded an agreement for this purpose, as described below.

1. Reason for the share acquisition
Dalton provides high-value-added, one-stop contract manufacturing services (CDMO)1,including the manufacturing of chemosynthesis products and active pharmaceutical ingredients(API) and API process development for pharmaceutical companies .
In its new mid-term management plan (fiscal 2019 to fiscal 2021), Seikagaku endeavors tosolidify its profit foundation by focusing on efforts such as accelerating new drug discovery tobecome the pillar of new profits and productivity improvement reforms for pharmaceuticalcompanies.
By incorporating Dalton as a subsidiary, Seikagaku will obtain the chemosynthesis
technology that Dalton has cultivated until now and its know-how related to the development ofdrug manufacturing processes, in addition to a GMP2 -certified overseas drug manufacturingbase. In the future, by utilizing the technology and know-how held by Dalton in its own drug
discovery, Seikagaku will move to in-house manufacturing by Dalton of chemosynthesis
products used for research and other purposes and which Seikagaku has produced byoutsourced contract manufacturing. It will also proceed with the transfer to Dalton of themanufacturing of investigational drugs and some of Seikagaku's pharmaceutical products.
These actions will enable Seikagaku to accelerate drug discovery and to lower its costs as aresult of production optimization and efficiency improvements. In addition, Dalton will be able toexpand its CDMO business.
Notes:

1. CDMO: Contract Development and Manufacturing Organization.
A business that supplies comprehensive services in drug development andmanufacturing to pharmaceutical companies, including contract drug manufacturing,
pharmaceutical formulation planning at the development stage, manufacturing ofinvestigational drugs, and optimization of manufacturing conditions.
2. GMP: Good Manufacturing Practice.
Production control and quality control standards required by the pharmaceuticalmanufacturing industry and manufacturer-distributors.

2. Overview of Dalton Chemical Laboratories, Inc.
(1)
(2)

Name
Dalton Chemical Laboratories, Inc.
Location
Toronto, Ontario Province, Canada
Name of(3)Peter Pekos, CEO
Representative(4)
Business description
CDMO1 business(5)
CapitalCAD 90(6)
Established1986
Capital relationship None
Relationship between
Personal relationshipNone(7)
listed companies andthe subject company
Trading relationship
None
Business performance and financial position of the subject company for the previous(8)three years (units: CAD 1,000)
Fiscal year
April 2017
April 2018
April 2019
Net assets
6,360
7,657
9,393
Total assets
15,263
16,59818,424
Net sales
11,936
14,556
17,195
Operating income
964
990
1,932
Net income
894
1,297
1,736
＊Dalton Chemical Laboratories, Inc. （URL: https://www.dalton.com/）
3. Outline of the counterparties to the share acquisition
Details of the counterparties to the share acquisition are omitted because they are individuals.
There is no capital relationship, personnel relationship or business relationship that should be
described between the counterparties and our company.
4. Number of shares to be acquired, acquisition price, and status of shares held before and after
the acquisition(1)

Percentage of voting rights of shares
before the change

0%

(2)

Acquisition cost

Up to CAD 41 million(3)

Percentage of voting rights of shares
after the change

100%

5. Schedule(1)(2)

Board of Directors resolution
Conclusion of agreement

February 21, 2020
February 28, 2020(3)

Share transfer dateMid-to-late March, 2020 (planned)

6. Effect on forecasts of consolidated financial results
Financial results forecasts for the fiscal year ending March 31, 2020 remain unchanged as
the impact of this matter on the consolidated results for the fiscal year ending March 31, 2020
is not significant.
<Cautionary Notes>
This press release contains forward-looking statements regarding future management strategies orperformance forecasts. These descriptions are based on judgments derived from information that iscurrently available to Seikagaku and are subject to risk and uncertainty. Actual results anddevelopments may differ significantly from these descriptions due to various factors.

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