Sumitomo Pharma Co., Ltd. and its subsidiary Sumitomo Pharma America, Inc. announced that they have agreed to amend the collaboration and license agreement for the worldwide joint development and commercialization of the four investigational candidate compounds, including ulotaront, under development in the psychiatry and neurology area, initially concluded between Sumitomo Pharma, SMPA, and Otsuka Pharmaceutical Co., Ltd. on September 30, 2021 Main Content of this Amendment Agreement: SEP-4199 and SEP-378614, two of the four compounds covered by the collaboration and license agreement, will not be included in this Amendment Agreement, and SMPA grants Otsuka the exclusive worldwide rights to develop, manufacture, and commercialize ulotaront and SEP-380135 for all indications. SMPA may receive up to USD 30 million (approximately JPY 4.5 billion) in development milestone payments associated with the progress of development for ulotaront and SEP-380135 and royalties based on revenue from Otsuka. There is no upfront payment for this Amendment Agreement.

With the exception of certain studies, Otsuka will fully cover expenses of ongoing studies conducted by the Sumitomo Pharma Group and Otsuka after January 2024. The Sumitomo Pharma Group is currently evaluating the further development strategy for SEP-4199 and SEP-378614. Purposes of this Amendment Agreement: Sumitomo Pharma and SMPA have been collaborating with Otsuka to develop novel candidate compounds, including ulotaront, in psychiatry and neurology as priority disease area.

However, with the current status it will be challenging to generate revenue from these compounds in the Mid-term Business Plan 2027 (FY2023-FY2027). Taking this into consideration, the Sumitomo Pharma Group has reviewed its priority products for development and decided to focus on development programs in the oncology area and regenerative medicine/cell therapy business that are expected to be launched during the Mid-term Business Plan 2027. Therefore, the Sumitomo Pharma Group has handed over the development of ulotaront and SEP-380135 described above to Otsuka.