Sumitomo Pharma Co., Ltd. (Head Office: Osaka, Japan; Representative Director, President and CEO: Hiroshi Nomura; Securities Code: 4506, Prime Market of TSE) announced that it has resolved, at a meeting of the board of directors held on November 30, to transfer all the shares (hereinafter the 'Share Transfer') of its wholly owned subsidiary Sumitomo Pharma Food & Chemical Co., Ltd. (Head office: Osaka, Japan; President and CEO: Nobuyuki Hara, hereinafter 'Sumitomo Pharma Food & Chemical') to MEDIPAL HOLDINGS CORPORATION (Head Office: Chuo-ku, Tokyo, Japan; Representative Director, President and CEO: Shuichi Watanabe; hereinafter 'MEDIPAL').

Sumitomo Pharma has also entered into a Share Purchase agreement with MEDIPAL regarding the Share Transfer as described below.

The execution of the Share Transfer is subject to regulatory approval under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of April 14,1947) and the satisfaction of other closing conditions.

Reasons and Purposes of the Share Transfer

Sumitomo Pharma has been considering various measures to formulate a new Midterm Business Plan, based on its policy to pursue the selection and concentration of its businesses to strengthen its business foundations. As part of this policy, Sumitomo Pharma has decided to transfer all shares of Sumitomo Pharma Food & Chemical, our non-pharmaceutical business subsidiary, to MEDIPAL.

Sumitomo Pharma Food & Chemical, established in 2010 by consolidating the Food & Specialty Products Division of Sumitomo Pharma and the trading company Gokyo Trading Co., Ltd., is a wholly owned subsidiary of Sumitomo Pharma that imports, manufactures, and sells food ingredients, food additives and chemical product materials, etc. Taking advantage of the research and development abilities and commitment to quality of a manufacturer, as well as the strengths of a trading company having both information collection and communication abilities, Sumitomo Pharma Food & Chemical has constantly delivered valuable products and merchandise in keeping with its mission to be a company that is useful to society.

MEDIPAL has stated in its 2027 Medium-Term Vision (April 2022 to March 2027, covering the fiscal years ending March 2023 to March 2027), that it will strengthen and enhance its initiatives to respond to the needs for extending healthy life expectancies and the growing demand for prevention and pre-disease. MEDIPAL believes that the addition of Sumitomo Pharma Food & Chemical, which has contributed to the improvement of people's wellbeing and lifestyle through the provision of food ingredients, will contribute to the success of the MEDIPAL Group's Medium-Term Vision. Sumitomo Pharma believes that the Share Transfer will lead to the further growth of Sumitomo Pharma Food & Chemical, as a company integrating research and development, distribution, and sales. The Share Transfer will create synergies between the competitive products that come from Sumitomo Pharma Food & Chemical's advanced research and development capabilities and MEDIPAL Group's extensive distribution network. In addition, considering MEDIPAL's focus on expanding into overseas markets as one of growth strategies of its Medium-Term Vision, international expansion is expected to play an important role in Sumitomo Pharma Food & Chemical's growth strategy.

Sumitomo Pharma intends to make full use of the consideration received from the Share Transfer to implement measures to strengthen its business foundation and to establish growth engines. It will also strive to secure sustained growth by concentrating its management resources on the pharmaceutical business.

Future Outlook

When the Share Transfer is processed, a gain on the sale of shares of subsidiaries of approximately JPY25 billion (before tax) is scheduled to be recorded. However, the impact on the consolidated financial results for FY2022 has yet to be determined because the amount is to be recorded at the closing. If it becomes necessary to revise the consolidated financial forecasts for FY2022, Sumitomo Pharma will announce such information in a timely manner.

Contact:

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