Research & Development We are maintaining aggressive research & development investment in particular for late-stage development products R&D Sites (including Alliances) Basic Strategy Hub & Spoke, Central & Satellite System Seeking rapid development and approval for our Oncology Area Psychiatry & Neurology Area late-stage pipeline REMIGES Ventures Tolero Johns Hopkins University • Accelerating late-stage clinical development products U.S. Under our ONE TEAM operating structure for the Global Sharp Edge Labs Sumitomo Clinical Development linking our Japan and U.S. units, we are Dainippon Pharma JCR Pharma Afraxis Boston conducting efficient development focused on late-stage Sunovion Biomedical DCI DRD PsychoGenics U.S. U.S. clinical development products to obtain fast approval. BioElectron Exscientia Osaka RACMO RIKEN DSK Boost drug discovery research activity to create Kobe Sumitomo Keio University novel differentiated drug candidates Pharma Kyoto University Kyoto University (China Suzhou) • Allocate research resources to the focus therapeutic CiRA areas (Psychiatry & Neurology, and Oncology) and new DCI: DSP Cancer Institute DSK: Kyoto University and Sumitomo Dainippon Pharma Joint Research Project therapeutic areas DRD: Drug Research Division We are focusing our research activities in areas of significant RACMO: Regenerative & Cellular Medicine Office unmet medical needs, Psychiatry & Neurology and Oncology. We are also dedicating our research effort to new areas such Actively collaborating with external research institutions Engaged in drug discovery research to continuously create as the Regenerative Medicine and Cell Therapy field, and innovative drug candidates based on cutting-edge technologies, we disease fields where no approved drugs exist. are not limiting our research activities to internal technologies and talents but are aggressively promoting external collaborations with • Ensuring “POC* First” to quickly confirm drug concepts academic institutions and biotech companies having innovative in humans technologies. In April 2016, we started the second phase of the Kyoto We are applying translational research to bridge basic University and Sumitomo Dainippon Pharma Joint Research Project research to clinical studies. One such activity is to evaluate (DSK Project), aiming to discover innovative anti-cancer drugs. the same biomarkers in non-clinical and clinical studies, in Additionally, we signed several contracts for joint research order to predict clinically effective dose ranges and collaborations under the “PRISM” framework, our open innovation demonstrate clear POC at earlier clinical phases. Additionally, program, which we ran again in fiscal 2016. we are making efforts in repositioning/repurposing the drugs R&D organizational structure supporting active drug or drug candidates whose safety has been confirmed in discovery research humans, to other therapeutic indications. In order to strengthen our drug discovery activities, we are operating * Proof of Concept (POC): confirmation of expected safety and efficacy in humans early/late research stages with different management philosophies and processes. • Drug discovery leveraging our strengths; Accelerating Early-stage research mimics start-up biotech-style approach, to maximize individual talents and creativity. Late-stage research external collaborations emphasizes organizational and team strengths, and collaboration We are applying leading-edge technologies in drug discovery, across multiple functions such as clinical research, CMC*, and such as using in-silico methods for drug design, using iPS regulatory affairs to proceed toward early approvals. cells to confirm efficacy/safety, and using disease-specific Additionally, from April 2016 we established a PC (Professional Contributor) job title as part of our emphasis on individual specialization iPS derived cells to clarify the mechanisms of disease. We and career paths for employees aspiring to make a difference. are working further to incorporate leading-edge technologies * CMC: An abbreviation of Chemistry (characteristics analysis) of active from external collaborations and strengthen our drug ingredients/formulations, Manufacturing, and Controls (quality control). discovery activities. CMC refers to parts of the company involved with pharmaceutical manufacturing and quality during the process of applications for approval. 19 Sumitomo Dainippon Pharma Co., Ltd. Annual Report 2017 Product Launch Plan (as of July 28, 2017) Candidates for delivering sustainable growth —Striving for a quick recovery from the “LATUDA cliff”— Area FY2017 FY2018 FY2019 FY2020 - FY2022 TRERIEF® LONASEN® lurasidone obeticholic acid (Parkinsonism in Dementia (Schizophrenia / (Schizophrenia / Bipolar l (NASH) with Lewy Bodies) Transdermal patch) depression / Bipolar maintenance) thiotepa napabucasin DSP-6952 (Conditioning treatment (Colorectal cancer, (IBS with constipation, prior to HPCT) Pancreatic cancer) Chronic idiopathic constipation) Japan amcasertib iPS cell-derived RPE cells (Solid tumors) (Age-related macular degeneration) DSP-7888 (Solid tumors / Hematologic malignancies) napabucasin glycopyrronium dasotraline dasotraline SB623 (Colorectal cancer, (COPD) (ADHD) (BED) (Chronic stroke) Pancreatic cancer) UTIBRONTM, SEEBRITM apomorphine alvocidib DSP-2230 amcasertib (COPD) U.S. (Parkinson’s disease) (Acute myeloid leukemia) (Neuropathic pain) (Solid tumors) (In-licensed) DSP-7888 SEP-363856 (Solid tumors / (Schizophrenia) Hematologic malignancies) LONASEN® lurasidone China (Schizophrenia) (Schizophrenia) (Approved in Feb.2017) Psychiatry & Neurology Oncology Liver / Digestive Respiratory New Chemical Entities New Indication, etc. ® LATUDA (lurasidone hydrochloride) cancer stemness, it may provide a new therapeutic option against the Atypical antipsychotic Developed in-house challenges in cancer treatment such as treatment resistance, LATUDA® (lurasidone hydrochloride) is an atypical antipsychotic agent recurrence and metastasis. that is believed to have an affinity for dopamine D2, serotonin 5-HT2A Amcasertib (BBI503) and serotonin 5-HT7 receptors where it has antagonist effects. In addition, Cancer Developed in-house (Boston Biomedical, Inc.) LATUDA® is a partial agonist at the serotonin 5-HT1A receptor and has no appreciable affinity for histamine H1 or muscarinic M1 receptors. BBI503 is an orally administered small molecule agent with a novel mechanism of action designed to inhibit cancer stemness pathways, Dasotraline (SEP-225289) including Nanog, by targeting stemness kinases. By inhibiting pathways Attention-deficit hyperactivity disorder (ADHD), Binge eating involved in the maintenance of cancer stemness, it may provide a new disorder (BED) Developed in-house (Sunovion Pharmaceuticals Inc.) therapeutic option against the challenges in cancer treatment such as SEP-225289 is a dopamine and norepinephrine reuptake inhibitor treatment resistance, recurrence and metastasis. (DNRI). SEP-225289 has an extended half-life (47-77 hours) that supports the potential for a continuous therapeutic effect by dosing at DSP-7888 24-hour intervals. Cancer Developed in-house DSP-7888 is a therapeutic cancer peptide vaccine derived from Wilms’ Apomorphine hydrochloride (APL-130277) tumor gene 1 (WT1) protein. DSP-7888 is a vaccine containing Parkinson’s disease Developed in-house (Sunovion Pharmaceuticals peptides that induces WT1-specific cytotoxic T lymphocytes (CTLs) and Inc., from former Cynapsus Therapeutics) helper T cells. DSP-7888 is expected to become a treatment option for APL-130277 is a sublingual film formulation of apomorphine, a patients with various types of hematologic malignancies and solid dopamine agonist, which is the only molecule approved in the U.S. for tumors that express WT1, by inducing WT1-specific CTLs that attack acute intermittent treatment of OFF episodes associated with WT1-expressing cancer cells. By adding a helper T cell-inducing Parkinson’s disease. It is designed to rapidly, safely and reliably convert peptide, improved efficacy over that observed with a killer peptide a Parkinson’s disease patient from the OFF to the ON state while alone may be achieved. avoiding many of the issues associated with subcutaneous delivery of apomorphine. Alvocidib Cancer In-licensed from Sanofi S.A. Napabucasin (BBI608) Alvocidib targets cyclin-dependent kinase (CDK) 9, a member of Cancer Developed in-house (Boston Biomedical, Inc.) cyclin-dependent kinase family, which activates transcription of BBI608 is an orally administered small molecule agent with a novel cancer-related genes. The subsequent down-regulation of MCL-1, an mechanism of action designed to inhibit cancer stemness pathways by anti-apoptotic gene, may be responsible for the potential clinical targeting STAT3. By inhibiting pathways involved in the maintenance of anti-cancer activity observed with alvocidib. Sumitomo Dainippon Pharma Co., Ltd. Annual Report 2017 20 Research & Development Oncology Area Drug Discovery In the Oncology area, we are committed to contribute to treatments for patients with cancer, and are driving research Psychiatry & Neurology Area and development forward under the four core strategies below. Taking on the challenge to discover new, fundamental Our aim is to deliver unique products that have not been treatments for neurodegenerative disorders, at the available to date. intersection of psychiatric and neurologic research The Psychiatry & Neurology area is one in which Sumitomo • Cancer Stemness Inhibitor Dainippon Pharma