Tokyo, Japan – 22 June 2006: Sosei Co. Ltd (“Sosei”; TSE Mothers Index: 4565), the biopharmaceutical company, today releases the Chairman's statement to be made at Sosei’s General Meeting of Shareholders on 23 June 2006.
“The year has been marked by significant change for Sosei. The strategic acquisition of Arakis last year enhanced Sosei’s pipeline, spread development risk and added a sustainable product discovery engine. More recently, the withdrawal of SOU-001 from our development pipeline and the withdrawal of the application for approval of Eligard as a generic, along with continuing uncertainty surrounding the Eligard regulatory approval process, have been disappointments.
The Board has conducted a strategic review of our pipeline and initiated a review of our capabilities and cost base worldwide. We have implemented initial reductions in headcount and by focusing expenditure on a smaller number of core products in our pipeline and reviewing our capabilities and costs we intend to bring the overall cost base of the Company down so that we currently have 2 years planned cash requirements.
Product development pipeline
The discussions with the Japanese PMDA concerning any future path towards registration for Eligard have been continued, but after a review of the Eligard programme the Board has confirmed that there is no short or medium term prospect of developing Eligard (SOT-375) for the Japanese market within costs and timescales compatible with creating value for shareholders.
Following the strategic review of the pipeline we have concluded that in addition to our lead product NVA237 and its combination products (for chronic obstructive pulmonary disease) that are funded by our partner Novartis, the prioritised pipeline will focus expenditure on AD 923 (for cancer breakthrough pain), SOU-003 (for nocturia), AD 452 (for rheumatoid arthritis), SOT-075 (for emergency contraception) and AD 337 (for fibromyalgia). In addition, we will continue to fund development work led by the operations in the UK to ensure we continue to have a rich resource to enhance and broaden the pipeline in the future. Product candidates SOT-375, SOT-107, AD 529 and SD 726 are no longer in the prioritised pipeline. The financial impact of the completed portfolio review is minimal in FY2006 although cost reductions will occur in the next financial year.
Revised Development Pipeline
Despite the recent setbacks we strongly believe that Sosei’s pipeline has the necessary quality and breadth to drive real value for shareholders as it matures and we will focus our investment to develop the core portfolio though major value enhancing stages. A number of these stages are expected during the current financial year, including the completion of Phase IIb trials for NVA 237 and AD 452 and the initiation of a Phase I trial for NorLevo (SOH-075) in Japan.
We are confident that the long term future of Sosei as a global biopharmaceutical company is very attractive for the shareholders. This future will be built upon the strong pharmaceutical development pipeline of the Company and our professional and dedicated staff.”