Announcement on the Foundation of Ontorii Inc.

In Japan, cancer is the most cause of death and at least 300,000 people are died a year because of this disease. The development of medicines for the treatment of cancer is the most challenging problem and now in progress all over the world. Under these circumstances, nucleic acid drugs(*1) have raised large expectations as therapeutic agents for cancer because of their ability of selective and strong effect on the gene causing diseases with few side effects.

While nucleic acid drugs have shown strong effects in vitro (= in test tubes), insufficient effects have been shown in vivo (= in living body) because they are easily decomposed in living body and have insufficient cellular membrane permeability. This problem is the most challenging for their practical uses. We are announcing the foundation of a new company, Ontorii Incorporated, which we are establishing in collaboration with Harvard University in the U. S., with the aim of developing the next generation of nucleic acid drug candidates based on the novel technique for the synthesis of nucleic acid analogues.

1.Background and Objective
Recently, nucleic acid drugs have drawn increasing attentions as anti-cancer agents. It is said that small molecule medicines and biopharmaceutical compounds (antibody drugs etc.) show some effects on only approximately 20% of all of the target molecules(*2), though the remaining 80% are "undruggable"(*3). So, nucleic acid drugs is expected to show high effects against the remaining target molecules by utilizing the original properties of nucleic acid analogues, such as antisense nucleic acids(*4), siRNA, miRNA(*5) and aptamer(*6).

However, native nucleic acids have a serious problem that they are hard to reach the target molecules because they are easily decomposed by a variety of nuclease(*7) in cells and serum, and their permeability against cell membranes is not high. To overcome the problem, various drug delivery systems(*8) have been developed, yet developing the effective way for drawing out the potential of nucleic acid drugs in living body have hitherto been the greatest hurdle for making practical use of nucleic acid medicines.

On September 8 this year, our company, which has the corporate philosophy of "freeing patients from suffering by supporting drug development and improving medical technology", established Ontorii Incorporated (hereafter Ontorii Inc.; head office in Massachusetts) as a joint-venture with the internationally renown authority on nucleic acid research, Professor Gregory L. Verdine of the Harvard University Department of Chemistry and Chemical Biology (http://verdinelab.harvard.edu/) to strive to solve the challenge above.

Ontorii Inc., with original nucleic acid design techniques (Prodrug Strategy(*9); application for patent completed) will advance the performance in vivo (improvement of nuclease resistance, cellular membrane permeability, ability of target-specificity, durability of the effect, etc.) of previously developed nucleic acid drugs, develop rational design techniques for the novel drug candidates, and, primarily, advance the development of a fundamental technology which will become the foundation for the creation of nucleic acid drugs targeted on cancer. Together with these researches, it will aim to develop the next generation of nucleic acid drugs based on the premise of cooperation with companies at the forefront of the pharmaceutical industry, which have a deep interest in our technology.

Ontorii Inc. has already secured a laboratory (420m²) on the campus of Harvard University, and will establish a research implementation system before the end of the year. Furthermore, it is planned to foster R&D and business synergy across the companies in the group while coordinating the above-motioned nucleic acid design techniques closely with Chiralgen, Ltd. (an SNBL subsidiary, head office in Chiba prefecture), which develops ground-breaking nucleic acid base syntheses based on the research of Takeshi Wada, Associate Professor of the Graduate School of Tokyo University, Department of Medical Genome Sciences.