Fujinaga Pharm Co. Ltd.

Tokyo, Japan - (May 16, 2023) – The Board of Directors of DAIICHI SANKYO COMPANY, LIMITED (headquartered in Chuo-ku, Tokyo; hereinafter called “the Company”) resolved at a meeting held today to transfer all shares of DAIICHI SANKYO ESPHA CO., LTD. (headquartered in Chuo-ku, Tokyo; hereinafter called “DSEP”), a consolidated subsidiary of the Company, held by the Company to Qol Holdings Co., Ltd. (headquartered in Minato-ku, Tokyo; hereinafter called “Qol”) and entered into a stock transfer agreement with Qol on the same day. With regard to the timeline for the DSEP stock transfer, the Company will transfer to Qol, 51% of the shares by April 2024 and the remaining 49% later. 1. Purpose of stock transfer In the Japanese market, with the government’s measures to increase generics uptake, generics have replaced branded products. The ratio of generics usage has already reached the target of 80%, and drugs of this kind are now seen as essential. However, issues such as ensuring stable supply and quality control still remain. DSEP has taken advantage of its strength in authorized generics (AG) and has rapidly expanded its business. On the other hand, Qol has two business segments, its Pharmacy Business and its Medical Related Business, and the company has been engaged in projects to support medical care and healthcare in these fields. We believe that we can create synergies through the integration of the two companies’ businesses, strengthen corporate capabilities, such as those for drug development and stable supply, to expand DSEP’s generics business focused on AG, and examine ways to launch new businesses. As a result, we have come to the conclusion that the best course of action to meet the increased expectations of patients, healthcare professionals, and stakeholders is to continue to expand DSEP’s business activities and to consider new business initiatives. 2. Overview of subsidiary to be transferred Name DAIICHI SANKYO ESPHA CO., LTD. Location 3-5-1 Nihonbashi Honcho, Chuo-ku, Tokyo Name and title of representative Takeshi Shinseki, Representative Director, President Business description Research, development and sales of pharmaceuticals Capital 450 million yen Date of establishment April 1, 2010 Major shareholders and shareholding ratio DAIICHI SANKYO COMPANY, LIMITED (100%) Relationships between the Company and the company concerned Shareholding relationship The Company owns 100% shares of the company concerned. Personnel relationship Some officers of DSEP concurrently serve as officers of the company, etc. Business relationship The Company purchases products from the company concerned. The Company leases office and other space to the company concerned. Financial positions and operating results for the last three years (Unit: million yen except per share data) Year ended March 31, 2021 March 31, 2022 March 31, 2023 Net assets 17,431 17,554 18,982 Total assets 36,024 37,431 46,466 Net assets per share 968,427.82 yen 975,233.15 yen 1,054,567.82 yen Net sales 60,159 64,382 78,769 Operating income 10,698 10,879 12,865 Ordinary income 10,706 10,880 12,897 Net income 7,398 7,520 8,934 Net income per share 411,037.45 yen 417,805.33 yen 496,334.67 yen Dividend per share 411,000 yen 417,000 yen - yen 3. Overview of counterparty to transfer Name Qol Holdings Co., Ltd. Location 37th Floor Shiroyama Trust Tower, 4-3-1 Toranomon, Minato-ku, Tokyo Name and title of Takashi Nakamura, President and Representative Director representative Business description Pharmacy and medical-related business Capital 5,786.89 million yen Date of establishment October 13, 1992 Net assets and total assets as of the end of the most recent fiscal year Net assets: 48,856 million yen Total assets: 101,905 million yen Major shareholders and shareholding ratio (As of March 31, 2023) MEDIPAL HOLDINGS CORPORATION 20.11% The Master Trust Bank of Japan, Ltd. (trust account) 9.35% BBH FOR FIDELITY LOW-PRICED STOCK FUND (PRINCIPAL ALL SECTOR SUBPORTFOLIO) 6.07% Qol Group employees’ shareholding association 4.85% Takashi Nakamura 4.34% Relationships between the Company and the company concerned Shareholding relationship The Company owns 3.45% of the shares of the company concerned. Personnel relationship There is no personnel relationship. Business relationship APO PLUS STATION Co., Ltd. (APS), a consolidated subsidiary of the company concerned, provides services of dispatching medical representatives (MRs). APS dispatches MRs to the Company. Medical Qol Co., Ltd., a consolidated subsidiary of the company concerned, produces sales materials for the Company. The Company purchases pharmaceuticals from Fujinaga Pharm Co., Ltd., a consolidated subsidiary of the company concerned. Applicability of affiliated party There is no applicable affiliated party. 4. Number of shares transferred, consideration for transfer, and status of shares held before and after transfer Number of shares held by the Company before transfer 18,000 shares (number of voting rights: 18,000; percentage of voting rights held by the Company: 100%) Number of shares transferred 18,000 shares Consideration for transfer 25,000 million yen Number of shares held by the Company after transfer 0 share (number of voting rights: 0; percentage of voting rights held by the Company: 0%) 5. Timeline of transfer Date of resolution by the Board of Directors May 16, 2023 Date of conclusion of stock transfer agreement May 16, 2023 Date of stock transfer execution (planned) October 1, 2023 (30% of the shares held by the Company) April 1, 2024 (21% of the shares held by the Company) The date of execution of the transfer of the remaining 49% of the Company's shares will be determined by separate negotiation. 6. Future outlook The impact of the stock transfer on the forecast of the consolidated financial results for the year ending March 31, 2024 is still being reviewed. We will inform you as soon as the details are finalized.