On February 10, 2023, Torii Pharmaceuticals Co., Ltd stated in its press release that it had decided to oppose the shareholder proposals submitted by LIM Advisors Limited. The proposals submitted are as follows: (i) Appropriation of Surplus: The amount after deducting surplus dividends per share of common stock from 153 Yen with the date of this General Meeting of Shareholders being the date of effect; (ii) Acquisition of Treasury Shares: In accordance with the provisions of Companies Act Article 156, Paragraph 1, a total of 2.8 million shares of the company at the acquisition price of 8.3 billion Yen will be acquired through delivery of cash within one year from the conclusion of this General Meeting of Shareholders; (iii) Partial Amendment of the Articles of Incorporation: Individual remuneration amount, content and calculation method of remuneration of directors with representative rights should be disclosed in business and security reports every year; (iv) Partial Amendment of the Articles of Incorporation: The company shall review the need for fund management through a Cash Management System (CMS) in the Board meeting and disclose the results in the report on Corporate Governance submitted to Tokyo Stock Exchange. Torii Pharmaceuticals has opposed the proposals for the following reasons: (i) The company states it is necessary to have cash on hand to acquire in-licensed products and in situations where there is a risk of failure in development or a long period to monetization.

The company will continue to use cash on hand for business investments and growth in profits to provide appropriate returns to shareholders; (ii) The proposal submitted by the shareholder is based on a short-term perspective and does not consider the importance of business investment. The Company believes that following through with the proposal could pose a serious risk and will not lead to an increase in corporate value over the medium-long term; (iii) Individual remuneration of directors is decided by the Board of Directors and is determined within the scope of remuneration approved at the Annual General Meeting of Shareholders. In addition to this, the company publishes the outlines of decision policy in its business and security reports in accordance with laws and ordinances.

The Company believes it is disclosing adequate information to shareholders for a sufficient evaluation of roles and of the system of Corporate governance; (iv) Over the recent debate on strengthening governance on parent-subsidiary transactions, the company has decided to reduce the amount of funds through CMS to the amount necessary for using as a fund settlement account. In addition, the Board of Directors has always confirmed the status of Company’s funds from time to time and the company appropriately discloses transactions with parent company including CMS in its business and security reports.