Tokyo, Japan – 11 December 2014: Sosei Group Corporation (“The Group”; TSE Mothers Index: 4565) is pleased to announce that at the meeting of the Board of Directors held today, it resolved to acquire existing shares and underwrite a third party allocation of new shares of Jitsubo Co., Ltd. (“Jitsubo”). Upon completion of these transactions, Jitsubo will become a consolidated subsidiary of the Group.
1. Reasons for the acquisition
The Group has successfully secured a steady revenue stream from milestones and royalty payments from COPD products licensed to Novartis (Seebri® Breezhaler® and Ultibro® Breezhaler®)*. However, in order to further enhance its corporate value, the Group has been looking for new pipeline candidates that could augment the revenue inflow from the two marketed Novartis products.
As a result, the Group has identified and resolved to acquire Jitsubo, a company with a cutting-edge peptide technology. Together with APNT (the nanoparticle technology of the Group’s subsidiary, Activus Pharma), Jitsubo’s technology is expected to play an important role in achieving the mid-long term strategic goals of the Group.
Jitsubo was established in April 2005 by Professor Kazuhiro Chiba of the United Graduate School of Agricultural Science, Tokyo University of Agriculture and Technology, with the aim of bringing a commercial focus to his scientific findings. The company is focused on development of peptide generic products and identification of new drug candidates based on the novel peptide synthesis technology, Molecular HivingTM 1, and the molecule modification technology, PeptuneTM 2. Together, these technologies enable efficient synthesis and isolation of peptide analogue compounds.
Expected benefits of the acquisition:
2. Share transaction
Based on the Investment agreement signed with Jitsubo, the Group will underwrite a third-party allocation for 68,871 new “Class D” shares that are to be issued by Jitsubo on 26 December. In addition, The Group will acquire 69,490 of the issued outstanding shares from the existing shareholders. As a result, the Group will own 52.4% of Jitsubo issued shares, making Jitsubo a consolidated subsidiary.
As 1 outstanding share holds 1 voting right, and 1 “Class D” share holds 3 voting rights, Sosei will hold 276, 103 voting rights of the total of 401,632. This equals to 68.7% of voting rights holding ratio.
3. Overview of Jitsubo
4. Existing shareholders from whom the shares will be acquired
The Group has reached agreement with 8 individual shareholders whose names and addresses were being withheld, as per their request for privacy. There are no conflicts of interest in terms of capital, personnel and business transactions that require disclosure.
5. Number of shares to be acquired, acquisition price and state of share ownership before and after acquisition
7. Future prospects
The potential impact of the acquisition on future earnings is difficult to estimate at present. The Group will inform investors of any important matter arising from the transaction, in a timely and appropriate manner.
* Seebri®, Ultibro® and Breezhaler® are registered trademarks of Novartis AG.
1. Molecular Hiving™：
Molecular HivingTM technology is Jitsubo’s patented technology for a novel peptide synthesis. Currently, two types of peptide synthesis technologies are widely used: solid-phase peptide synthesis (SPPS) and liquid-phase peptide synthesis (LPPS). SPPS is a high cost technology often applied for the small scale manufacturing, whereas LPPS is often applied for larger scale manufacturing, but cannot be used for long-chain peptide synthesis. Molecular HivingTM technology combines the benefits of both SPPS and LPPS, and provides the solution for efficient peptide synthesis at low costs. Moreover, since the monitoring of peptide synthesis process that was not possible with SPPS was enabled with this technology, high-quality peptide can be manufactured more easily than with the currently existing methods. For more details please visit www.jitsubo.com.
PeptuneTM is a novel technology that enables arbitrary alteration of molecular configuration, without changing the amino acid sequence within the peptide. Compared to the existing similar technologies, it has a high structural diversity, which makes possible for pharmacological function and stability to be improved based on the molecular configuration of peptide. In addition, introducing a new functional molecule to a cross-linkage is also possible, and this new scientific approach enables the production of novel functional peptide. For more details please visit www.jitsubo.com.