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Sosei to Acquire Activus Pharma

Monday, June 21, 2010 Corporate News J E 4
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TOKYO, June 21, 2010 Sosei Group Corporation("Sosei"; TSE Mothers Index: 4565), announced today that it has reached anagreement to acquire 100% of Activus Pharma Ltd. ("Activus"), aprivately-held biopharmaceutical company based in Chiba, Japan.

Activus Pharma Ltd. was established in 2006 as a spin-off from DICCorporation (TSE Section 1 Index: 4631).

Strategic Rationale

Activus' core technologies in drug formulation using proprietarynano-particle processing will form the basis of Sosei's new platformtechnology.

Activus Pure Nano-particle Technology (APNT), unlike other nano-particleprocessing technologies, keeps compounds virtually free from contamination.At the same time, it can yield pharmaceutical ingredients with particle sizesranging from 50 to 300nm levels. Thus, APNT enables the development ofinjections, ophthalmic solutions and inhalations with poorly solublecompounds where high purity is required.

The needs for nano-particle technology within the pharmaceutical industryare still largely unmet. Therefore, the technology can be expected togenerate new development candidates for Sosei, and partnership with otherpharmaceutical companies will allow Sosei to realize revenue from thistechnology in a relatively short period of time.

Structure of the transaction

The deal contemplates the acquisition of 100% of the issued share capitalof Activus through a stock exchange, but there will be no issuance of the newstocks to the current shareholders of Activus. In exchange for the acquiredshares Sosei will offer a cash consideration to:

1) Preference shareholders

Cash consideration of 500,250,000 yen will be provided. However, in casethe net cash balance of the day preceding the day of share exchange is belowthe above sum, the net cash balance will be paid to preference shareholders,while common shareholders will be paid 1 yen per share.

2) Common shareholders

Common shareholders will be paid the difference between the net cashbalance of the day preceding the day of share exchange and the cashconsiderations provided to preference shareholders.

Additionally, a part of the gross profit generated from the acquiredActivus assets will be split among common shareholders up to 5 yearseffective from the day of the enforcement of the deal or until the grossprofit amounts to 1 billion yen, whichever comes sooner.

Sosei is an international biopharmaceutical company anchored in Japanwith a global reach. It practises a reduced risk business model by acquiringcompounds from, and bringing compounds into, Japan through exploitation ofits unique position within global markets. For further information aboutSosei, please visit http://www.sosei.com.

Forward-Looking Statements

This press release contains "forward-looking statements", includingstatements about the discovery, development and commercialisation ofproducts. Various risks may cause Sosei's actual results to differ materiallyfrom those expressed or implied by the forward-looking statements, includingadverse results in clinical development programmes; failure to obtain patentprotection for inventions; commercial limitations imposed by patents owned orcontrolled by third parties; dependence upon strategic alliance partners todevelop and commercialise products and services; difficulties or delays inobtaining regulatory approvals to market products and services resulting fromdevelopment efforts; the requirement for substantial funding to conductresearch and development and to expand commercialisation activities; andproduct initiatives by competitors. As a result of these factors, prospectiveinvestors are cautioned not to rely on any forward-looking statements. Wedisclaim any intention or obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events orotherwise.Activus company profile and recent financial results: 1) Company name Activus Pharma Ltd. 2) Business Research and development of pharmaceuticals and Description nano-particle technology. 3) Founded 24 October 2006 4) Address Venture Plaza Funabashi 218, 1-17-25, Kita-honcho, Funabashi-shi Chiba 273-0864, Japan 5) President and Yasuo Aoki, Ph.D. CEO 6) Paid in capital JPY 880,875,000 7) Outstanding 1,956 shares 8) Total assets JPY 984,457,687 9) Fiscal term March 10) Number of 7 employees (JPY thousands) 31 March 2009 31 March 2010 Sales 103 1,939 Gross operating 103 1,939 profit Operating loss 623,723 291,945 Net loss 661,498 301,225 Total assets 984,457 548,555 Shareholders' 843,112 541,002 equity Notes for Editors: About Sosei

SOURCE Sosei Group Corporation
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