We hereby inform you that TRANS GENIC INC. (HO: Mashiki-machi, Kamimashiki-gun, Kumamoto, CEO: Masahiro Koreishi) (hereinafter referred to as q‡TRANS GENICqˆ) filed a joint patent application with Sumitomo Chemical Co., Ltd.(HO: Chuo-ku, Osaka, President: Hiromasa Yonekura) (hereinafter referred to as q‡Sumitomo Chemicalqˆ) and Sumitomo Pharmaceuticals Co., Ltd. (HO: Chuo-ku, Osaka, President: Yasuo Okamoto) (hereinafter referred to as q‡Sumitomo Pharmaceuticalsqˆ) on August 10, 2004 on the new target gene for drug screening.

In December 2001, TRANS GENIC entered into agreements with Sumitomo Chemical Co., Ltd. and Yamanouchi Pharmaceutical Co., Ltd. on 3-step preferentical information disclosure regarding Knockout (KO) mice, as the main pillar of its KO Mouse Business. In accordance with the agreement, TRANS GENIC discloses gene structure information (first step), provides phenotype analysis information on the KO mouse strain that the given company has chosen (second step), and grants a license for consecutive right to use that particular strain KO mouse strain (third step). To date, our business has seen steady improvement, some strains having already reached the third step.

TRANS GENIC, Sumitomo Chemical and Sumitomo Pharmaceuticals have considered the particular KO mouse, one of the strains chosen mice for the third step, as patentable information for its usability as a target gene for drug screening and today agreed to file a joint patent application. In the event that Sumitomo Chemical or Sumitomo Pharmaceuticals brings the patented invention to drug development, TRANS GENIC will gain milestone fees and running royalties at the threshold of each development step. This joint application is our first joint application with Sumitomo Chemical and it is our second time to have filed a joint application as we filed one with Yamanouchi Pharmaceutical Co., Ltd. on June 24, 2004.
The joint application with Sumitomo Chemical and Sumitomo Pharmaceuticals affirms that the gene trap method, a TRANS GENIC technology, is of definite utility in discovering novel drug targets. TRANS GENIC is expanding its business incrementally by pursuing better research results with its partner companies, and by acquiring more partners for drug discovery.