Announcement of Agreement on Company Split (Simplified Absorption-Type Split) of Japan Tobacco Inc.'s Pharmaceutical Business and Acquisition of Shares of Akros Pharma Inc. by Shionogi Inc. (Making it a Subsidiary)

OSAKA, Japan, May 7, 2025 - Shionogi & Co., Ltd.  (Head Office: Osaka, Japan; Chief Executive Officer: Isao Teshirogi, Ph.D.; hereafter "Shionogi" or the “Company”) today announced that at the Board of Directors meeting held on May 7, 2025, it resolved to succeed to the pharmaceutical business of Japan Tobacco Inc. (Headquarters: Minato-ku, Tokyo; President: Masamichi Terabatake; hereinafter referred to as "Japan Tobacco") (hereinafter referred to as "JT Pharmaceutical Business" or the "Business to be Split") through a company split (simplified absorption-type split) (hereinafter referred to as the "Absorption-Type Split") and to acquire all issued shares of Akros Pharma Inc. (a 100% sub-subsidiary of Japan Tobacco, headquartered in New Jersey, USA; hereinafter referred to as "Akros") by Shionogi Inc., a group company of Shionogi in the USA (hereinafter referred to as the "Share Acquisition"), and has entered into an agreement (hereinafter referred to as the "Agreement") regarding the same.

 

In connection with the Agreement, the Company also resolved at the Board of Directors meeting held today to conduct a tender offer (hereinafter referred to as the "Tender Offer") for the common shares of Torii Pharmaceutical Co., Ltd. (hereinafter referred to as "Torii Pharmaceutical"), a consolidated subsidiary of Japan Tobacco, to make Torii Pharmaceutical a wholly-owned subsidiary of the Company (hereinafter referred to as the "Full Ownership"). For details on the Tender Offer, please refer to the "Notice of Commencement of Tender Offer for Shares of Torii Pharmaceutical Co., Ltd. (Securities Code: 4551)" released today.

 

I.      Purpose of the Absorption-Type Split and Share Acquisition (hereinafter referred to as the "Transaction")
Shionogi's basic policy (SHIONOGI Group Heritage) is to always provide the best medicine (healthcare solutions) necessary to protect people's health. The Company engages in research and development, manufacturing, and sales activities of prescription drugs, over-the-counter drugs, and diagnostic agents. In 2020, the Company set forth the Vision (SHIONOGI Group Vision) that aims to achieve by 2030, "Creating the Future of Healthcare with a New Platform," and formulated the medium-term management plan Shionogi Transformation Strategy 2030 (STS2030) to realize this Vision. The Company is transforming into a Healthcare as a Service (HaaS) company that provides various healthcare services tailored to customer needs, not limited to the provision of prescription drugs, to comprehensively address the problems faced by patients and society worldwide.

From fiscal 2020 to fiscal 2022, the Company aimed to contribute to the early end of the COVID-19 pandemic by providing not only therapeutic drugs but also total care solutions for COVID-19, including detection (epidemic prediction), prevention, diagnosis, and mitigation of severe cases. As a result, the Company obtained domestic approval for the COVID-19 therapeutic drug Xocova at an unprecedented speed, advancing its drug discovery capabilities. Additionally, the Company expanded its product and service offerings beyond prescription drugs, including its first vaccine and wastewater epidemiology survey service. Based on the achievements and lessons learned from these efforts, the path to realizing the SHIONOGI Group Vision became clearer, leading to the revision of STS2030 in 2023 and the start of STS2030 Revision.

In STS2030 Revision, the three years from fiscal 2023 to fiscal 2025 are positioned as STS Phase 2, with the basic policy of global top-line growth centered on the infectious disease area and fostering growth drivers through aggressive investment, accelerating growth through transformation. In research and development, the Company focuses on high-impact infectious diseases and high-impact QOL diseases as priority areas. In infectious diseases, the Company has developed many innovative new drugs, such as the anti-HIV drugs (dolutegravir and cabotegravir), the  for multidrug-resistant Gram-negative bacterial infections (cefiderocol), and the anti-influenza virus drug Xofluza, based on its strong foundation in small molecule drug discovery (creating drugs with molecular weights ranging from tens to hundreds). The Company aims to solve the problems faced by patients and society worldwide by further strengthening and expanding its strong foundation in small molecule drug discovery.

On the other hand, JT Pharmaceutical Business has been engaged in research and development of prescription drugs since entering the business in 1987, aiming to create first-in-class small molecule drugs through stable research and development investment. Currently, under the business purpose of "valuing science, technology, and human resources and contributing to patients' health," Japan Tobacco conducts research and development, while Torii Pharmaceutical handles manufacturing, sales, and promotion activities, building an integrated value chain and maximizing synergies within the group. JT Pharmaceutical Business focuses on three priority research and development areas: cardiovascular, renal, and muscle, "immunology and inflammation, and central nervous system, with strengths in rapid clinical development through specialization on research and development in the small molecule drug discovery and collaboration between domestic and international research and development bases. To deliver new drugs created in-house to patients as early as possible,  JT Pharmaceutical Business actively engages in out-licensing and partnerships with global mega-pharma companies, in addition to promoting in-house development.

 

Shionogi has been considering collaboration with JT Pharmaceutical Business and Torii Pharmaceutical to realize the Vision of "Creating the Future of Healthcare with a New Platform" in STS2030 Revision. As a result of these considerations, the Company concluded that by adding the capabilities of JT Pharmaceutical Business, which has strengths in small molecule drug discovery and development , it would be possible to accelerate the  advancement of promising pipeline projects and  increase the responsiveness and efficiency of business operations through collaboration with the Company's pharmaceutical manufacturing functions. The Company proposed to Japan Tobacco the acquisition of JT Pharmaceutical Business and the full ownership of Torii Pharmaceutical, and after subsequent discussions, reached the Agreement. The Company believes that the Transaction will create a leading company that delivers innovative pharmaceuticals from Japan to the world, contributing to the health of patients and people worldwide, and contributing to the realization of a sustainable and healthy society. The Company also believes that the Transaction will provide opportunities for the employees of JT Pharmaceutical Business (including group companies) to continue to thrive with peace of mind.

 

II.     Overview of the Absorption-Type Split

        i.    Summary of the Absorption-Type Split

(1)   Date

(1)	Date of Board Resolution for Agreement	May 7, 2025
(2)	Date of Agreement	May 7, 2025
(3)	Date of Board Resolution for Absorption-Type Split Agreement	September, 2025 (planned)
(4)	Date of Absorption-Type Split Agreement	September, 2025 (planned)
(5)	Effective Date of Absorption-Type Split	December, 2025 (planned)

 

(Note 1): The Absorption-Type Split falls under the simplified absorption-type split stipulated in Article 796,

Paragraph 2 of the Companies Act for the Company, and Article 784, Paragraph 2 of the Companies Act for

Japan Tobacco. Therefore, it will be carried out without the approval resolution of the shareholders'

meeting.

(Note 2): The schedule may be changed as necessary, considering the need for responses to approvals,

registrations, notifications, etc., from relevant authorities, circumstances, and other various factors.

 

(2) Method of Absorption-Type Split
     The Company will be the succeeding company, and Japan Tobacco will be the splitting company.

 

(3) Allocation of Consideration
     The Company will pay 5,397 million yen to Japan Tobacco as consideration for the Absorption-Type

Split.

 

(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights
     Not applicable.

 

(5) Increase or Decrease in Capital Due to Absorption-Type Split
     Not applicable.

 

(6) Rights and Obligations to be Succeeded
     The Company will succeed to the assets, liabilities, and contractual rights and obligations related to the

Absorption-Type Split, except for those separately specified in the Absorption-Type Split Agreement.

 

(7) Prospects for Debt Performance
     The Company believes that there are no issues with performance of the debts that will become due after the effective date of the Absorption-Type Split.

 

       ii.    Allocation of Consideration and Basis for the Absorption-Type Split

(1) Basis and Reason for Allocation of Consideration
   The allocation of consideration was agreed upon after comprehensive discussions between both

   companies, taking into account the performance status and future prospects of the business to be

   split.

 

(2) Matters Related to Calculation
   The Company has not obtained a valuation report from a valuation institution in connection with the

Absorption-Type Split.

 

(3) Prospect of Delisting and Its Reason
   Since the consideration involves the exchange of money, there is no prospect of delisting.

 

(4) Measures to Ensure Fairness
   Not applicable.

However, the Company has appointed Nishimura & Asahi Law Office as the legal advisor for the

Absorption-Type Split and has received legal advice on various procedures, decision-making methods,

and processes related to the Absorption-Type Split. Nishimura & Asahi Law Office does not have any

significant interests that should be disclosed in relation to the Absorption-Type Split and is not a

related party to the Company or Japan Tobacco.

 

(5)Measures to Avoid Conflicts of Interest
   Not applicable.

(Unit: million yen, unless otherwise specified.)

        i.    Overview of JT Pharmaceutical Business

(1) Content of JT Pharmaceutical Business

   Research and development of prescription drugs

 

(2) Business Performance of JT Pharmaceutical Business

	Fiscal year ended December 2024
Net sales	¥44,942 million

 

(3) Items and Amounts of Assets and Liabilities of the JT Pharmaceutical Business to be Succeeded (as of December 31, 2024)

   The assets (excluding shares of Torii Pharmaceutical and Akros) and

liabilities, as well as other rights and obligations belonging to the JT pharmaceutical business, As

stipulated in the absorption-type split agreement will be succeeded by our company.

Assets		Liabilities
field	book value	field	book value
Current Assets	¥8,588 million	Current Assets	¥5,448 million
Fixed Liabilities	¥37,832 million	Fixed Liabilities	¥9,875 million
Total	¥46,420 million	Total	¥15,323 million

Note: The above amounts are calculated based on the balance sheet as of December 31, 2024, and the actual amounts to be succeeded will be adjusted for any increases or decreases up to the effective date.

 

       ii.    Status After the Absorption-Type Split

(1)	Name of Company	Shionogi & Co., Ltd.	Japan Tobacco Inc.
(2)	Location	1-8, Doshomachi 3-chome, Chuo-ku, Osaka 541-0045, Japan	1-1, Toranomon 4-chome, Minato-ku, Tokyo
(3)	Representative	Isao Teshirogi, Ph.D., Representative Director, President and CEO	Masamichi Terabatake, President, Chief Executive Officer and Representative Director
(4)	Business Description	Research, development, manufacturing and distribution of pharmaceuticals, diagnostic reagents and medical devices, etc.	Manufacture, sale, import, etc., of manufactured tobacco
(5)	Paid-in Capital	¥21,279 million	¥100,000 million
(6)	Fiscal Year-End	March 31	December 31
(7)	Net Assets	It is not confirmed at this time	It is not confirmed at this time
(8)	Total Assets	It is not confirmed at this time	It is not confirmed at this time

 

      iii.    Overview of Accounting Treatment
For the accounting treatment related to the Absorption-Type Split, we plan to apply IFRS 3 'Business Combinations' and use the purchase method, with our Company as the acquiring entity. The amount of goodwill generated from this Absorption-Type Split is currently undecided, and we will inform you as soon as it is determined.

 

      iv.    Future Outlook
We are currently assessing the impact of this Absorption-Type Split on our consolidated performance, and will inform you as soon as it is determined.

 

       v.    Other Noteworthy Matters
The Agreement is contingent upon the absence of any factors hindering the execution of the stock acquisition, such as the issuance of a cease and desist order, based on the results of the Japan Fair Trade Commission's review of the notification under Article 10, Paragraph 2 of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.

 

 

II.     Overview of this Stock Acquisition

        i.    Overview of Our U.S. Subsidiary (Shionogi Inc.) Acquiring the Shares

(1)	Name of Company	Shionogi Inc.
(2)	Location	400 Campus Drive, Florham Park, NJ 07932, USA
(3)	Representative	President and Chief Executive Officer Nathan McCutcheon
(4)	Business Description	Development, manufacturing, and sales of pharmaceuticals
(5)	Paid-in Capital	12 USD (as of March 31, 2024)
(6)	Date of Founding	August 2008
(7)	Major Shareholders and Shareholding Ratios	Shionogi (100%)

       ii.    Overview of the Subsidiary to be Acquired

(1)	Name of Company	Akros Pharma Inc.
(2)	Location	302 Carnegie Center, Suite 300, Princeton, NJ 08540
(3)	Job Title and Name of Representative	President＆CEO Teppei Higuchi
(4)	Business Description	Clinical development, joint research, and exploration of new technology projects overseas
(5)	Paid-in Capital	1,000 USD (as of December 31, 2024)
(6)	Date of Founding	January 1999
(7)	Net Assets	23,776 thousand USD (as of December 31, 2024)
(8)	Total Assets	32,986 thousand USD (as of December 31, 2024)
(9)	Major Shareholders and Shareholding Ratios	JT AMERICA INC. (100%) ※ JT AMERICA INC. is a wholly owned subsidiary of Japan Tobacco Inc.
(10)	Relationship between Shionogi and said company	Capital Relationship	None.
		Personal Relationship	None.
		Transactional Relationship	None.
		Status as Related Party	None.

      iii.    Overview of the Counterparty in the Stock Acquisition

(1)	Name of Company	JT AMERICA INC.
(2)	Location	112 W. 34th Street, 18th Floors, New York, NY 10120
(3)	Job Title and Name of Representative	President & CEO Toshimitsu Eguchi
(4)	Business Description	Holding company functions in the U.S. for non-tobacco and non-food businesses
(5)	Paid-in Capital	51 thousand USD (as of December 31, 2024)
(6)	Date of Founding	May 1988
(7)	Net Assets	141,447 thousand USD (as of December 31, 2024)
(8)	Total Assets	142,125 thousand USD (as of December 31, 2024)
(9)	Major Shareholders and Ownership Ratios	Japan Tobacco Inc.(100％)
(10)	Relationship between Shionogi and said company	Capital Relationship	None.
		Personal Relationship	None.
		Business Relationship	None.
		Related Party Relationship	None.

 

      iv.    Number of Shares to be Acquired, Acquisition Price, and the Status of Shareholding Before and After the Acquisition

 

* The acquisition price has been converted at an exchange rate of 1 USD = 151.55 JPY (based on the average rate over the past six months).

        v.    Date

        vi.    Future Outlook
We are currently assessing the impact of this stock acquisition on Shionogi’s consolidated financial results for the fiscal year ending March 2026. If it becomes necessary to revise the performance forecast, Shionogi will promptly disclose the information.

 

For Further Information, Contact:

SHIONOGI Website Inquiry Form: https://www.shionogi.com/global/en/contact.html