Press release
Aug 4, 2017

Notification of Change to Use of Funds


Tokyo, Japan –4 August 2017: Sosei Group Corporation (‘Sosei’; TSE Mothers Index 4565), further to today’s announcement that it has divested its wholly owned subsidiary Activus Pharma (hereafter ‘Activus’), also announced today changes to the use of funds disclosed in the “Notice of Issue Price and Sales Price” released on 4 March 2014.

Reason for the Change In February 2014, Sosei issued 1,781,100 shares and raised JPY4,786 million (Amount to be paid in: 2638.95 JPY per share) which was disclosed in the “Notice of Issue Price and Sales Price” released on 4 March 2014. The amount raised was originally intended for the Initial Use of Funds outlined below. To date Sosei used only JPY700 million on research and development expenses at Activus. We note that no funds were used for laboratory equipment at Activus due to unforeseen delays to research and development activities utilizing Activus’ Nano-Particle Technology (‘ANPT’). Furthermore, only JPY140 million was used for investment in tissue engineering at Sosei Corporate Venture Capital Ltd., given the Sosei RMF1 Limited Partnership for Investment* venture outlined in the note below.

In line with Sosei’s evolving growth strategy, one of our priorities is to develop a proprietary pipeline of novel drug candidates using Heptares’ world-leading StaR® Technology and structure-based drug design capabilities targeting G protein-coupled receptors. As such, Activus is no longer core to Sosei’s strategy and we have today announced the divestment of this business.

Changed Objectives for the Use of Funds

Initial Use of Funds

1. JPY3,786 million for research and development utilizing ANPT at Activus from April 2014 to March 2017

2. JPY500 million for investment in tissue engineering at Sosei Corporate Venture Capital Ltd. from April 2014 to March 2015

3. JPY500 million for investment in Activus’ laboratory equipment from April 2014 to March 2016

Use of Funds after Change

1. JPY700 million was utilized for research and development expenses at Activus prior to today’s announcement regarding its divestment

2. JPY350 million for investment in tissue engineering at Sosei Corporate Venture Capital Ltd.*, up to June 2020, of which JPY140 million has been utilized

3. The balance of funds remaining (approximately JPY3,736 million) will be used to for research and development activities at Heptares from August 2017

*Note: JPY2 billion was raised in total from Sosei and other multiple external organizations to establish Sosei RMF1 Limited Partnership for Investment in regenerative medicine biotechnology venture companies with a view to developing new businesses in the field (announced 23 June 2016). Therefore Sosei has no plan to allocate remaining funds beyond the amount above.

Financial Impact There is no impact on our business results for FY2017. 


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