Sosei to Acquire Activus Pharma

TOKYO, June 21, 2010 /PRNewswire-FirstCall/ -- Sosei Group Corporation ("Sosei"; TSE Mothers Index: 4565), announced today that it has reached an agreement to acquire 100% of Activus Pharma Ltd. ("Activus"), a privately-held biopharmaceutical company based in Chiba, Japan.

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

Strategic Rationale

Activus' core technologies in drug formulation using proprietary nano-particle processing will form the basis of Sosei's new platform technology.

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

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

Structure of the transaction

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

1) Preference shareholders

Cash consideration of 500,250,000 yen will be provided. However, in case the net cash balance of the day preceding the day of share exchange is below the 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 cash balance of the day preceding the day of share exchange and the cash considerations provided to preference shareholders.

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

    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

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

Forward-Looking Statements

This press release contains "forward-looking statements", including statements about the discovery, development and commercialisation of products. Various risks may cause Sosei's actual results to differ materially from those expressed or implied by the forward-looking statements, including adverse results in clinical development programmes; failure to obtain patent protection for inventions; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from development efforts; the requirement for substantial funding to conduct research and development and to expand commercialisation activities; and product initiatives by competitors. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Sosei Group Corporation