News Releases

Jun. 11, 2002

Transfer of Pharmaceutical Business

Japan Energy Corporation ("J Energy") (Head Office: 2-chome, Toranomon, Minato-ku, Tokyo; President, Mitsunori Takahagi) and Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo Pharmaceuticals") (Head Office: 2-chome, Doshomachi, Chuo-ku, Osaka; President, Masaaki Yokotsuka) have reached a basic agreement upon the transfer, by October 1st 2002, of a major part of J Energy's pharmaceutical business to Sumitomo Pharmaceuticals. The contract was signed today.

The transfer will include the results of research and development currently being conducted by J Energy (patent rights, research data and rights to commercialize exclusively such patent rights and research data - see note), and in consideration of this transfer Sumitomo Pharmaceuticals will pay a lump sum as well as running royalties when the products under applicable research are commercialized as pharmaceuticals.

(Note: Items, including anti-AIDS drugs, for which the license of patent rights, etc., have been assigned by J Energy to a third party are excluded from the above transfer.)

J Energy, which is in the process of transition to a holding company structure, scheduled to be completed in the autumn of this year, has been considering the best manner for the development of its pharmaceutical business in order to achieve an optimum allocation of management resources. The company has concluded that the transfer of part of its pharmaceutical business to Sumitomo Pharmaceuticals, with which J Energy has been jointly developing interferon inducers, is the best solution.

Sumitomo Pharmaceuticals, which is reinforcing its research and development in the fields of cardiovascular medicine, neurology and immunology, is of the opinion that the transfer of J Energy's pharmaceutical business, whose main area of research is in immunological diseases, will strengthen its own research resources in the field of its first priority. Sumitomo Pharmaceuticals has judged that it will be able to further develop the transferred research results.

Staff members engaged in pharmaceutical research and development at J Energy may choose to be transferred to Sumitomo Pharmaceuticals.