We hereby announce that Nissha Co., Ltd. (hereafter “Nissha”) has made Sparsha Pharma USA, Inc. (hereafter “Sparsha Pharma USA”) as an equity-method affiliate by acquiring on April 21, 2020 additional shares of the company into which Nissha had already made a small investment in April 2019.

Nissha has focused on the Drug Delivery System (*1) (hereafter “DDS”) in the “medical” market that is one of our target markets, and proceeded with development of film type of pharmaceuticals (Oral Thin Films and Transdermal Patches) for which Nissha can make the most of its core technologies. Oral thin film is a thin-film dosage form that can be orally taken without water, and is suitable for elderly patients with swallowing difficulties and bedridden patients. On the other hand, transdermal patch is a medical patch that is associated with less side effects mediated by hepatic metabolism, and is easy for patients to self-administer. Both formulations are expected to expand the market owing to the change of dosage forms from tablets and injections, etc.

Sparsha Pharma USA is a venture enterprise that has a strength in the formulation development and manufacturing of transdermal patches. It owns a GMP-compliant manufacturing plant. Since the plant is also licensed by the DEA (*2), Sparsha Pharma USA can handle narcotics for medical use that are used to relieve pain including cancer pain. Sparsha Pharma USA has launched a lidocaine patch (pain-relief drug) as its own-developed OTC drug (*3) that can be used for continuous 24-hour application, and also has multiple development pipelines for ethical (prescription-only) drugs.

Nissha is planning to promote the technology transfer of oral thin film formulation from Nissha to Sparsha Pharma USA in near future. Together with Zonnebode Pharmaceutical Co., Ltd. acquired in November 2019, Nissha will expand its pharmaceutical businesses in the Japanese domestic market and the world’s largest U.S. market. By means of the core technologies it has cultivated since it was founded, as well as other innovations, Nissha aims to make a corporate social contribution to the pharmaceutical market, as it has in other markets, in such a way as to enrich people’s lives.

*1: A dosing system designed to optimize operation so that the required volume of drugs is administered to the required part of the body for only the required length of time
*2 Drug Enforcement Administration
*3 Over The Counter

The impact of this transaction on the Company’s consolidated results for the current fiscal year is expected to be negligible. Going forward, if revisions to business forecasts or the announcement of other matters become necessary, we will make prompt disclosure of the same.