Hitachi Chemical

News Release

January 31, 2019
Hitachi Chemical Co., Ltd.

Notice Regarding the Stock Acquisition of apceth Biopharma GmbH,
a Contract Manufacturer of Regenerative Medicine Products

Hitachi Chemical Co., Ltd. (Head Office: Chiyoda-ku, Tokyo; President and CEO: Hisashi Maruyama; hereinafter “Hitachi Chemical”) announces the decision of the conclusion of a contract with apceth GmbH & Co. KG (Head Office: Bayern, the Federal Republic of Germany; hereinafter “Germany”; CEO: Dr. Christine Günther; hereinafter “apceth”) to acquire all stock of apceth Biopharma GmbH (Head Office: Bayern, Germany; CEO: Dr. Christine Günther; hereinafter “apceth Biopharma”), a contract manufacturer of regenerative medicine products.

1. Reason for the Stock Acquisition

As stated in the 2018 Medium-term Management Plan ending in fiscal year 2018, Hitachi Chemical’s basic policy in the life sciences business is to cultivate the future foundation business and Hitachi Chemical has (1) set the development of a foundation in the diagnostic medicine business, and (2) launched the regenerative medicine business. Hitachi Chemical has thus far worked to expand its regenerative medicine business in the United States and Japan. In May 2017, it acquired PCT, LLC, a Caladrius Company (currently Hitachi Chemical Advanced Therapeutics Solutions, LLC), a US-based contract manufacturer of regenerative medicine products with a 20-year track record of manufacturing regenerative medicine products. In addition, in April 2018, it commenced operation of a new facility in Yokohama, Kanagawa Prefecture, Japan to provide contract development and manufacturing services for the development of regenerative medicine products.
Apceth Biopharma manufactures regenerative medicine products on contract for pharmaceutical manufacturers mainly in Europe and the United States through its manufacturing sites of regenerative medicine products in Germany. The company has a track record of manufacturing various regenerative medicine products for investigation, including cancer immunotherapy cell, iPS cell*1, and mesenchymal stem cell*2.
Hitachi Chemical decided this stock acquisition agreement with apceth with the aim to expanding its business presence footprint in Europe -the world’s second-largest market for regenerative medicine after the United States. This stock acquisition will allow Hitachi Chemical Group to construct a framework of manufacturing regenerative medicine products in the United States, Japan, and Europe. Utilizing apceth Biopharma’s manufacturing sites as well as its wide range of sales network, Hitachi Chemical Group will expand its regenerative medicine business further. The Group will also work to construct a framework that assures timely manufacture and shipment of uniform quality products in each region to our customers of the pharmaceutical manufacturers who sell their products globally, by combining the manufacturing know-how that Hitachi Chemical Group has acquired in line with the United States and Japanese regulations in relation to regenerative medicine products with the know-how that apceth Biopharma has acquired in accordance with European regulations.
Through this stock acquisition, Hitachi Chemical will work to further strengthen its regenerative medicine business, aiming to secure a leading share of the global market for contract manufacturing of regenerative medicine products.

A type of master cell, which can be harvested from skin, etc. and has the ability to proliferate like stem cells and differentiate into various cells.
A type of cell that can be harvested from bone marrow or adipose tissue, having the ability to proliferate and differentiate into various cells like bone, cartilage or muscle.

2. Outline of the Company Subject to the Share Acquisition

(1) Name apceth Biopharma GmbH
(2) Address Max-Lebsche-Platz 30, 81377 Munich, Germany
(3) Name and title of
the representative
CEO: Dr. Christine Günther
(4) Principal lines of
Contracted manufacturing of regenerative medicine products
*The research and development business of regenerative medicine products of apceth Biopharma GmbH was transferred to apceth GmbH & Co. KG prior to the acquisition of shares by Hitachi Chemical.
(5) Capital 25 thousand euros (3.1 million yen*)
*The conversion rate is 1 euro = 124 yen. Figures are rounded to the nearest unit.
(6) Established July 28th, 2015
(7) Major shareholder
and shareholding
apceth GmbH & Co. KG 100%

3. Outline of the Counterparty to the Share Acquisition (Transfer)

(1) Name apceth GmbH & Co. KG
(2) Address Max-Lebsche-Platz 30, 81377 Munich, Germany
(3) Name and title of
the representative
CEO: Dr. Christine Günther
(4) Principal lines of
Operation and management of apceth Biopharma GmbH
(5) Established June 20th, 2007
(6) Major shareholders
and shareholding
Santo Holding GmbH (82.49%)
FCP Biotech Holding GmbH (9.16%)
Other individual shareholder (8.35%)

4. Price of Shares Acquired

Price of shares
Around 75.5 million euros (9.4 billion yen)
*The conversion rate is 1 euro = 124 yen. Figures are rounded to the nearest unit.
Price of shares acquired will be finalized through price adjustments after the share transfer.

5. Schedule

(1) Resolution at the board of directors’ meeting January 31, 2019
(2) Share purchase contract agreement (planned) January 31, 2019
(3) Share transfer (planned) April 2019*
This schedule is as of January 31, 2019 and may be subject to change due to procedures and certain circumstances in the future.

6. Future Outlook

The expected impact of this share acquisition on Hitachi Chemical’s consolidated performance forecast for the fiscal year ending March 2019 is minor.