Sosei Subsidiary Heptares Announces Positive Results from Phase 1b Clinical Trial with HTL9936, a First-in-Class Selective Muscarinic M1 Receptor Agonist for Improving Cognition in Dementia and Schizophrenia

Demonstrates changes in brain activity, therapeutic window and M1
receptor selectivity

TOKYO–(BUSINESS WIRE)–Sosei Group Corporation (“Sosei”; TOKYO Mothers Index: 4565) today
reports that Heptares Therapeutics (“Heptares”), the wholly-owned
subsidiary of Sosei Group Corporation, announces positive findings from
its Phase 1b clinical study with HTL9936. HTL9936 is the first selective
muscarinic M1 receptor agonist, designed using Heptares StaR®
technology, which has entered clinical development as a new treatment
for cognitive impairment in patients with dementia and schizophrenia.

These positive results provide strong evidence of a therapeutic window
for the selective M1 agonist mechanism in general, and for
progression of HTL9936 and similar molecules as medicines to treat
cognitive disorders.

The Phase 1b precision medicine study involved 28 healthy elderly
subjects who received different doses of HTL9936 and was designed to
test the effect of drug on measures of brain activity while
simultaneously monitoring side effects.

In the study, HTL9936 exhibited robust and statistically significant
changes in brain electrical activity measured using multiple
electroencephalography (EEG) biomarkers relevant to cognition, including
effects on the P300 evoked response potential (p=0.0052). These
pro-cognitive effects were seen at low doses and low blood
concentrations that were safe and well tolerated.

M1 receptor selectivity was also confirmed across the dose
range studied through the absence of gastrointestinal side-effects (such
as diarrhoea and vomiting) typically attributed to the stimulation of M2
and M3 receptors. Such side effects are dose-limiting in
standard-of-care acetylcholinesterase inhibitors, which likely work
through non-selective muscarinic receptor stimulation.

Heptares is also developing a second patentably distinct M1
agonist, HTL18318, which is in Phase 1 and for which results are
expected later this year. Phase 2 studies in dementia and schizophrenia
patients are expected to commence in late 2016.

“The results from this Phase 1b study reinforce our earlier findings
from clinical and preclinical studies, providing compelling evidence to
support the therapeutic potential of Heptares’ selective M1 agonists
for improving cognitive function in patients with dementia and
schizophrenia,” commented Tim Tasker, Chief Medical Officer of Heptares.
“We are excited by these findings and look forward to progressing the M1
programme into patient studies later this year.”

Malcolm Weir, Heptares CEO, added: “We are greatly encouraged by these
findings from our lead M1 agonist programme. We have
generated a diverse portfolio of selective agonists that includes not
only M1 but M4 agonists for treating psychosis in
schizophrenia and Alzheimer’s disease patients, and dual M1/M4
agonists for both psychosis and cognitive impairment in these patients;
we expect these to reach the clinic from early 2017 onwards. We believe
this is a programme with the potential to deliver medicines of immense
clinical and commercial significance.”

About M1 Receptor Agonism

Direct M1 receptor agonism is a highly validated mechanism of action for
improving cognitive function (memory and thinking) in patients with
progressive dementia. By stimulating directly the pro-cognitive M1
receptors on nerve cells in the brain, M1 agonists substitute
for the diminishing levels of the neurotransmitter (acetylcholine) in
patients that normally act on these receptors. Previous attempts lacked
selectivity and were discontinued due to M2 and M3
mediated side effects.

By contrast, HTL9936 and HTL18318 are small molecules designed using the
Company’s proprietary structure-based platform (StaR® technology) and
are highly selective for M1 over M2 and M3,
therefore offering the prospect of a therapeutic window between enhanced
cognitive activity and side-effects.

About Cognitive Impairment in Alzheimer’s Disease and other CNS
Diseases*

Today there is significant unmet medical need and heavy economic burden
across multiple diseases characterized by cognitive impairment and
dementia. In Alzheimer’s disease (AD), currently available drugs provide
limited and transient effects on cognition. Healthcare costs associated
with AD and dementia (estimated at over $640 billion for North America,
Western Europe and Asia-Pacific) including nursing home care, continue
to grow dramatically and new therapies with better and more durable
efficacy are urgently needed. It is estimated that over 45 million
people worldwide have dementia (4.8 million in North America, 7.5
million in Western Europe, 3.6 million in Asia-Pacific) and this is
expected to increase to over 130 million in 2050. Alzheimer’s disease is
the most common cause of dementia and may contribute to 60–70% of cases.
In addition, an estimated 85% of the 3.2 million schizophrenia patients
in the US suffer from cognitive impairment, as well as 1.4 million
patients in the US suffering from Lewy body dementia. Currently there
are no approved therapies for treating cognitive impairment in
schizophrenia.

About Psychosis in Schizophrenia and other CNS Diseases*

Schizophrenia is a severe psychiatric illness leading to disturbances of
thought. ‘Positive symptoms’ include hallucinations and delusions are
linked to changes in dopamine levels and are treated with current
antipsychotics. However, these are poorly tolerated due to side effects
such as weight gain. There are estimated to be over 21 million people
with schizophrenia worldwide. In addition, 30-50% of AD patients can
suffer from severe behavioral symptoms including psychosis, agitation
and hallucinations as the disease progresses. Therapies including
cholinesterase inhibitors are most commonly used but these have only
moderate and transient benefit and the dose is limited by side effects.
There is currently no cure.

*Sources: World Health Organization, Alzheimer’s Disease International,
National Institute of Mental Health, Lewy Body Dementia Association.

About Heptares Therapeutics

Heptares is a clinical-stage company creating transformative medicines
targeting G protein-coupled receptors (GPCRs), a superfamily of 375
receptors linked to a wide range of human diseases. Heptares proprietary
structure-based drug design technology enables us to engineer drugs for
highly validated, yet historically undruggable or challenging, GPCRs.
Using this approach, we have built an exciting pipeline of new medicines
with the potential to transform the treatment of Alzheimer’s disease,
schizophrenia, migraine, addiction, metabolic disease, and other
indications.

We have advanced our lead assets – the first-in-class selective
muscarinic M1 receptor agonists – from the earliest stages of
discovery into clinical development for treating cognitive
impairment/dementia in Alzheimer’s disease and schizophrenia.
Preliminary clinical results confirm the exquisite selectivity of these
compounds for the M1 receptor over other subtypes in human
subjects, reinforcing preclinical findings. Other proprietary and
partnered candidates across multiple indications are progressing towards
the clinic.

We have also entered partnerships for our novel candidates and
technologies with leading pharmaceutical and biotechnology companies,
including Pfizer, AstraZeneca, MedImmune, MorphoSys and Teva.

Heptares is a wholly owned subsidiary of Sosei Group Corporation. For
more information, please visit www.heptares.com
and www.sosei.com/en.

HEPTARES is a registered trademark in the EU, Switzerland, US and Japan;
StaR®
is a registered trademark in the EU and Japan.

About Sosei

Sosei is a biopharmaceutical company originating from Japan but with
global presence. Sosei’s primary business model is based on identifying
novel and/or differentiated product assets or technology platforms and,
through supporting these in preclinical and clinical development and
establishing commercial partnerships, advancing new medicines to
patients worldwide.
For further information about Sosei, please
visit www.sosei.com/en.

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
.

Contacts

Enquiries:
Sosei Group Corporation
Tokyo Office
Harumi
BANSE, +81-(0)3-5210-3399
Investor Relations
hbanse@sosei.com
or
London
Office
Kathryn LYDON, +44-(0)20-7691-0983
Corporate
Communications
klydon@sosei.com