Healios K.K. ("Healios") has entered into an exclusive license agreement with Athersys, Inc. for the development, manufacture and sale of the cell therapy drug HLCM051 for acute respiratory distress syndrome (ARDS) in Japan (the "License Agreement"). Today, Healios agreed to expand the License Agreement for ARDS to cover global territories, dramatically increasing the number of ARDS patients Healios has the opportunity to treat with this therapy. In addition, as announced on March 2, 2023, Healios plans to conduct a new clinical trial for ARDS in Japan, and the company have obtained from Athersys the necessary investigational product for this study manufactured by the 3D bioreactor-based method.

Outline of the Agreement. The scope of the license agreement for the development, manufacture and sales of ARDS will be expanded from Japan to the entire world. Athersys will provide company with investigational product for use in future clinical trials conducted by company.

As a result of the foregoing, Healios will pay Athersys up to $4.5 million subject to the terms of the agreement. In the future, Healios will pay development milestones and sales milestones and royalties as development and sales progress around the world. Acute Respiratory Distress Syndrome (ARDS) ARDS is a general term for respiratory failure that occurs suddenly in a variety of critically ill patients.

Although there are many causes of ARDS, approximately one-third of ARDS cases are caused by pneumonia, and it has been confirmed that ARDS also occurs in critically ill patients with COVID-19. There is no approved drug therapy that can directly improve the prognosis of patients with ARDS, and respiratory failure is treated with mechanical ventilation. The mortality rate after the onset of ARDS is 30~58%, and there is a need for new therapies that can improve the prognosis of patients With ARDS.

Currently, the number of patients in Japan is estimated to be approximately 28,000 per year, and ARDS is designated as a rare disease. However, it is estimated that between 213,000 and 262,000 patients in the United States and 133,000 patients in Europe are affected annually.