News Release

Yamanouchi Pharmaceutical Co., Ltd.

Yamanouchi Gives Up Acquisition of Approval of YM 175 for Osteoporosis

August 22 ,2002

Tokyo, Japan -August 22, 2002- Yamanouchi Pharmaceutical Co., Ltd. (president: Toichi Takenaka) has decided to give up the acquisition of approval of its drug YM175 (generic name: incadronate disodium) for osteoporosis and to withdraw its corresponding NDA. Yamanouchi was asked to conduct an additional clinical trial to prove its effects on bone fractures after submission of the NDA. The decision follows the trial result that non-inferiority of YM175 to a control drug was not proven.

 YM175 is a bisphosphonate compound discovered by Yamanouchi. The NDA was filed in 1998 as an oral drug for osteoporosis based on the results of clinical trials in which efficacy of YM175 for increasing bone mass was shown. Thereafter, the company conducted a clinical trial designed to show its effects on bone fractures and submitted the data from that study in 2002. In that study, non-inferiority of YM175 to a control drug was not proven with regard to the main analysis of the primary endpoint, but non-inferiority was demonstrated with regard to its sub-analysis. Yamanouchi has been discussing the findings with the regulatory authority but has finally decided to abandon its development.

 Yamanouchi has another bisphosphonate YM529 and is conducting clinical trials for indications including multiple myeloma and bone metastasis of breast cancer. It concluded a license agreement on this compound with Ono Pharmaceutical in 1999 for indications such as osteoporosis and hypercalcemia.

 Yamanouchi is committed to continuing its growth by further increasing sales of Harnal (tamsulosin), a drug for the treatment for functional symptoms of benign prostatic hyperplasia, in Japan and abroad, as well as Lipitor (atorvastatin), a drug for hypercholesterolemia, and Advaferon (interferon alfacon-1), a drug for hepatitis C, in Japan and by successively launching major new products such as telmisartan, a long-lasting angiotensin II receptor antagonist scheduled to reach the market within this year, and YM177 (celecoxib), a COX-2 inhibitor.