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Letter of Intent Signed on Domestic Marketing and Joint Development of Quinolone Antibiotic T-3811

January 26, 2006

Japan, January 26, 2006 - Toyama Chemical Co., Ltd. (“Toyama”; headquarters: Tokyo; president: Katsuhiko Nakano) and Astellas Pharma Inc. (“Astellas”; headquarters: Tokyo; President and CEO: Toichi Takenaka) today announced that they have signed a letter of intent for the marketing and joint development in Japan of oral formulations of the new-type quinolone antibiotic T-3811 (generic name: garenoxacin) discovered by Toyama. The two companies will sign a definitive license agreement by March 31, 2006.

Key agreements

1)	Toyama manufactures products. Taisho Toyama Pharmaceutical Co., Ltd. (“Taisho Toyama”; headquarters: Tokyo; President: Akira Uehara) and Astellas will co-promote the products under the same brand name.
2)	Toyama will receive an upfront payment upon the definitive agreement being concluded and filing, approval and sales milestone payments from Astellas.
3)	Astellas will join development programs to obtain additional indications for oral formulations of T-3811 in Japan.

Profile of T-3811

・	Different from conventional quinolone antibiotics, T-3811 (garenoxacin) is a new type of quinolone with no fluorine atom at position 6 of the quinolone skeleton.
・	It has a wide antibacterial spectrum and is also effective against PRSP (penicillin-resistant Streptococcus pneumoniae) and MRSA (methicillin-resistant Staphylococcus aureus), which have been reported to present major medical problems in recent years due to their resistance to conventional drugs.
・	It shows good oral absorption and tissues distribution, which make administered orally once a day.

Development status of T-3811

・

In Japan, Toyama and Taisho Pharmaceutical Co., Ltd. (“Taisho”; headquarters: Tokyo; President: Akira Uehara) has co-developed T-3811 for the treatment for respiratory infections and otolaryngologic infections. An application is being prepared for these indications in Japan.

・

Toyama has granted to Schering-Plough Corporation exclusive rights to develop, use and sell T-3811 worldwide, excluding Japan, Korea and China. All clinical trials conducted to date to obtain a wide range of indications from respiratory infections to surgical infections proved non-inferiority of T-3811 compared to control drugs.
Toyama and Taisho have agreed that Taisho Toyama markets T-3811 in Japan. Signing the letter of intent between Toyama and Astellas, Toyama, Astellas, Taisho and Taisho Toyama will cooperate to maximize product value of T-3811 in Japan.

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