Overview of the current Japanese biotech industry and investment outlook

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1 Overview of the current Japanese biotech industry and investment outlook Daiwa SMBC Capital Co.,Ltd Hiroki Narita Deputy General Manager

2 Biotechnology Market in Japan (\ 100M) bio related products & services bio-products bio-products products 10,381 11,918 12,523 12,407 12,899 17,227 bio related products & services 3,949 4,679 4,947 5,179 5,566 5,765 Biotechnology market 14,330 16,597 17,470 17,586 18,465 22,992

3 Overview of JPN biotech companies Number of JPN biotech companies Num. of Companies Business lines of JPN Biotech Companies Categories number of companies Pharmaceuticals, Diagnostic equipment Research support services Consulting services Personal health care (preventive medicine, health food product) Research equipments and devices 66 78

4 Number of Newly Listed Companies in Japan TSE 1st Sec. TSE 2nd Sec. JASDAQ OSE Hercles Others Total TSE=Tokyo Stock Exchange OSE=Osaka Stock Exchange

5 Number of Newly Listed BioTech Companies in Japan OSE Hercles NSE Centrex JQ NEO *2008 * As of the end of December TSE=Tokyo Stock Exchange OSE=Osaka Stock Exchange NSE=Nagoya Stock Exchange JQ=JASDAQ

6 Market Cap Biotech Em erging Market 8,274 12,362 17,721 30,972 19,806 18,043 ( bil.) ( bil.) Biotech ( bil.) Em erging Market ,000 30, , ,

7 Overview of Listed Biotech Companies in Japan (1) 2369 MediBic Consulting & development of bioinformatics systems 2370 MEDINET Co., Ltd. Cancer immunotherapy services 2385 Soiken Inc. Development of biomarker; clinical research services for specialized health food 2397 DNA Chip Research Inc. Development & production of DNA chip 2929 Pharma Foods International Co., Ltd. Development and sales of functional foods ingredients 4563 AnGes MG, Inc. Biopharmaceutical (Gene-drug for PAD and IHD) 4564 OncoTherapy Science, Inc. Genome-based anticancer drug discovery 4565 Sosei Co. Ltd. Biopharmaceutical company focused on drug development 4566 LTT Bio Pharma Co., Ltd. Research & development of drug delivery system 4567 Effector Cell Institute, Inc. Development of drug discovery technology 4570 Immuno-Biological Laboratories Co., Ltd. Development & production of in-vitro diagnostic products; development of medicines 4572 Carna Biosciences, Inc. Production & sales of kinases for biological research 4573 R-Tech Ueno, Ltd Research & development,manufacture,sales,export&import of pharmaceutical products 4875 MediciNova, Inc Biopharmaceutical (drugs for multiple sclerosis, status asthmaticus, asthma etc.) 4974 TAKARA BIO INC. Production & sales of biological research equipments; health food and develops gene therapies for cancer 7707 Precision System Science Co.,Ltd. Manufacturer of DNA extraction equipment and related scientific products 7774 Japan Tissue Engineering Co., Ltd. Development & production of tissue-engineered medical products 4571 Nano Carrier Co.,Ltd R&D and production of pharmaceuticals using micellar nanoparticles technology 2191 tella.,inc DC Vacine therapy

8 Overview of Listed Biotech Companies in Japan (2) Code Company Name Established Market IPO Date Offering Price( ) Initial Quotation ( ) Initial Quotation/ Offering Price (%) Shares Outstanding (PostIPO) Market Cap. based on Offering Price ( mil.) Market Cap. based on Initial Quotation ( mil.) 2160 GNI Ltd. Nov-01 Aug (11.1) 70,881,831 6,379 5, TRANS GENIC INC. Apr-98 Dec ,647,500 10,197 13, MediBic Feb-00 Sep , , ,072 10,009 19, MEDINET Co., Ltd. Oct-95 Oct ,000 1,260, ,680 14,588 52, Soiken Inc. Jul-94 Dec ,000 1,360, ,998 37,699 78, DNA Chip Research Inc. Apr-99 Mar ,000 1,280, ,600 9,248 17, Pharma Foods International Co., Ltd. Sep-97 Jun , , ,100 11,983 16, AnGes MG, Inc. Dec-99 Sep , , ,009 18,042 32, OncoTherapyScience, Inc. Apr-01 Dec-03 1,000,000 2,400, ,470 59, , Sosei Co. Ltd. Jun-90 Jul , , ,220 48,976 48, LTT Bio Pharma Co., Ltd. Jan-03 Nov , , ,650 10,703 14, Effector Cell Institute, Inc. Jun-99 NSE Centrex Mar , ,000 (36.8) 18,675 7,097 4, Carna Biosciences, Inc. Apr-03 JQ NEO Mar ,000 99,300 (9.7) 53,190 5,851 5, MediciNova, Inc Sep-00 OSE Hercules Feb ,282,856 38,913 39, TAKARA BIO INC. Apr-02 Dec , , ,000 52,400 60, Precision System Science Co.,Ltd. Jul-85 OSE Hercules Feb-01 1,750,000 3,500, ,374 14,655 29, Nano Carrier Co.,Ltd Nune-96 Mar-03 20,000 27, ,013 2,360 2, Tella.Inc June-04 JQ NEO Mar (3.2) 11,082,000 3,435 3, Japan Tissue Engineering Co., Ltd. Feb-99 JQ NEO Dec ,000 96,000 (20.0) 76,045 9,125 7,300

9 Overview of Listed Biotech Companies in Japan (3) Code Company Name Listing Date Market Founded Fiscal Year Revenue (\mil) Operating Profit (\mil) 2160 GNI Ltd. Aug-07 Mar-00 Mar (949) 2342 TRANS GENIC INC. Feb-02 Apr-98 Mar (624) 2369 MediBic Sep-03 Feb-00 Dec (377) 2370 MEDINET Co., Ltd. Oct-03 Oct-95 Sep-08 1,838 (667) 2385 Soiken Inc. Dec-03 Jul-94 Jun-08 2,547 (20) 2397 DNA Chip Research Inc. Mar-04 Apr-99 Mar (288) 2929 Pharma Foods International Co., Ltd. Jun-06 Sep-97 Jul (452) 4563 AnGes MG, Inc. Sep-02 Dec-99 Dec (2,684) 4564 OncoTherapy Science, Inc. Dec-03 Apr-01 Mar-09 3, Sosei Co. Ltd. Jul-04 Jun-90 Mar (3,667) 4566 LTT Bio Pharma Co., Ltd. Nov-04 Jan-03 Mar-09 1,261 (907) 4567 Effector Cell Institute, Inc. Mar-05 NSE Centrex Jun-99 May (1,279) 4570 Immuno-Biological Laboratories Co., Ltd. Mar-07 OSE Hercules Sep-82 Mar-09 1,036 (382) 4572 Carna Biosciences, Inc. Mar-08 JASDAQ Apr-03 Dec (296) 4875 MediciNova, Inc Feb-05 OSE Hercules Sep-00 Dec-08 0 (2,260) 7707 Precision System Science Co.,Ltd. Feb-01 OSE Hercles Jul-85 Jun-08 3,397 (141) 4571 Nano Carrier Co.,Ltd Mar-08 Jun-96 Mar (531) 2191 Tella.Inc Mar-09 JQ NEO Jun-04 Dec Japan Tissue Engineering Co., Ltd. Dec-07 JQ NEO Feb-99 Mar (1,102)

10 Overview of Listed Biotech Companies in Japan (4) Code Company Name Current Share Price* (\) Current Shares Outstanding* (Shares mil.) Current Market Cap.* (\ mil.) Market Cap.based on Current Share Price//Market Cap. based on Offering Price ( %) Market Cap. based on Current Share Price//Market Cap. based on Initial Quotation (%) 2160 GNI Ltd ,068 2, TRANS GENIC INC. 19, , MediBic 9, , MEDINET Co., Ltd. 19, , Soiken Inc. 31, , DNA Chip Research Inc. 57, , Pharma Foods International Co., Ltd. 28, , AnGes MG, Inc. 183, , OncoTherapy Science, Inc. 205, , Sosei Co. Ltd. 154, , LTT Bio Pharma Co., Ltd. 34, , Effector Cell Institute, Inc. 36, , Immuno-Biological Laboratories Co., Ltd. 1, , Carna Biosciences, Inc. 76, , MediciNova, Inc ,072 6, TAKARA BIO INC. 234, , Precision System Science Co.,Ltd. 114, , Nano Carrier Co.,Ltd 19, , Tella.,Inc 1,760 11,732 19, Japan Tissue Engineering Co., Ltd. 82, , * share price, shares outstanding and market Cap.: closing price of 2009/8/6

11 Partnering with Pharmaceutical &Biotech Companies Comany Partner Compound Stage Takeda CBP501 (treatment for cancer, selectively abrogating the G2 checkpoint ) Phase Ⅰ/Ⅱ Astellas New vaccine Technology Research Shionogi Peptide vaccine (treatment for cancer) Pre-clinical ZERIA TM411(treatment for cancer) Phase Ⅰ/Ⅱ Kaken α9 integrin antibody (treatment for autoimmune, cancer etc) Pre-clinical Boehringer (German) Fully-human therapeutic antibody programs (platform technology) Research 15

12 Partnering with Pharmaceutical &Biotech Companies Company Partner Compound Stage Chugai Antibody programs with its own diversified chicken cell libraries (platform technology) Research Maruho Taiho HGF (treatment for cutaneous ulcer, growth factor) ARH-1029 (treatment for gastric ulcer, PPI inhibitor) Phase Ⅰ/Ⅱ Pre-clinical Eisai SA4503 (treatment for stroke and depression, targeting sigma-1 receptors) PhaseⅡ Why only with Japanese big pharma? 16

13 Topics in Lifescience Sector DS Capital and Kyoto University set up a new firm to manage patents for ips cells with Daiwa Securities Group and Sumitomo Mitsui Banking Corporation. Press release on the 16 th of May

14 Topics in Lifescience Sector DS Capital and Coller Capital Invested in RaQualia Pharma, carved out by Pfizer in DS Capital and U.K.-based Coller Capital have taken a combined majority position in RaQualia Pharma Inc., a former research laboratory of Pfizer Inc. 32 % Daiwa SMBC Capital 24% Coller Capital Press release on the 7th of July % Pfizer 19

15 Topics in Lifescience Sector METI(Ministry of Economy,Trade&Industry) Minister Nikai attended the opening ceremony of Innovative Network Corporation of Japan on 28 July, 2009 The Innovation Network Corporation of Japan(INCJ) will invest in innovative business in areas such as advanced materials, electronics, energy,environment, life sciences, and machinery. This July, INCJ launched with a capital of 90.5 bil JPY(82bil JPY by Japanese govermment+ 8.5bil JPY by 16 private companies). INCJ obtains Japanese government s guarantee support of 800bil JPY,which gives INCJ an investment capability of 900bil JPY in total. They will be investing JPN innovative tech-oriented start-ups for a period of 15 years. 20

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