Leading-Edge Nanotechnology

Financial Results and Company Situation for the Fiscal Year Ended March 31, 2018

Tokyo Stock Exchange, Mothers 4571

Thursday, May 17th, 2018

NanoCarrier Co., Ltd.

Table of Contents

1. Financial Results for the Fiscal Year Ended March 31, 2018

2. Pipelines3. Business Development4. Cosmetics Business

Appendix4. Company Overview5. Status of Major Shareholders6. Micellar Nanoparticle Technology

Financial Results for the FY Ended March 31, 2018

3

Sales Increase in lump-sum payments under agreements related to joint research and

development, etc. Increase in sales of cosmetics business, etc.

Operating loss The operating loss increased 2,639 million yen from the previous fiscal year, to 5,351

million yen, mainly due to a 15 million dollar lump-sum payment to VBL under licensing agreement and an increase in clinical development expenses.

FY ended March 31, 2017 (A)

FY ended March 31, 2018 (B)

Inc. (Dec.)(B) – (A)

Sales 218 259 40

Cost of sales and SGA expenses 2,930 5,610 2,679

R&D expenses 2,252 4,979 2,727

Operating loss (2,712) (5,351) (2,639)

Other income/expense, net 93 46 (46)

Ordinary loss (2,619) (5,304) (2,685)

Net loss (2,696) (5,416) (2,740)

Balance Sheet as of Mar. 31, 2018

（(Million of Yen）Mar. 31, 2017

(A)Mar. 31, 2018

(B)Inc. (Dec.)

(B)-(A)

Cash, money trust and bonds(Liquidity in Hand) 11,769 6,408 (5,361)

Other current assets 672 433 (239)

Other non-current assets 497 785 288

Total assets 12,939 7,626 (5,312)

Convertible bonds with stock acquisition rights 2,475 2,475 0

Other liabilities 397 490 93

Net assets 10,067 4,661 (5,405)

Capital stock and surplus 22,151 22,184 32

Retained earnings (12,324) (17,741) (5,416)

Valuation difference on available-for-sale securities 7 27 19

Stock acquisition rights 233 191 (41)

Total liabilities and net assets 12,939 7,626 (5,312) 4

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Financial Forecast for the FY Ending March 31, 2019

Sales Forecast sales are projected cosmetics business sales only. The forecast does not currently include any (projected) sales from lump-sum

payments under partnership agreements, etc. R&D expenses

R&D expenses are expected to amount to 1,976 million yen.

FY ended March 31, 2018 (A)

FY ending March 31, 2019 projection (B)

Inc. (Dec.) (B)-(A0

Sales 259 224 (35)

Cost of sales and SGA expenses 5,610 2,673 (2,937)

R&D expenses 4,979 1,976 (3,003)

Operating loss (5,351) (2,449) 2,902

Ordinary loss (5,304) (2,438) 2,866

Net loss (5,416) (2,495) 2,921

6

Fundraising (announce on April 9,2018)

（１） Payment date April 27, 2018（２） Number of shares issued 1,500,000 shares of common stock（３） Issue price 806 yen per share（４） Amount of funds to be raised 1,203,000,000 yen（５） Method of offering or allotment Third-party allotment（６） Prospective allottee Noritsu Koki Bio Holdings L.L.C.

（１） Allotment date April 27, 2018

（２）Number of stock acquisition rights issued 6,481 rights

（３） Issue price 5,555 yen per stock acquisition right（Total amount: 36,001,955 yen）

（４）Number of dilutive shares after the issuance 6,481,000 shares

（５） Amount of funds to be raised 4,659,916,955 yen （Estimated net proceeds）

（６）Exercise price and conditions for revision of exercise price

Initial exercise price: 715 yenThe exercise price will be revised to an amount equivalent to 90% of the closing price of the Company’s common stock for ordinary trading on the Tokyo Stock Exchange on the trading day immediately prior to the date of effectiveness of each request to exercise the stock acquisition rights. However, the minimum exercise price will instead become the revised exercise price if this calculation results in a revised exercise price that is below the minimum exercise price.

（７） Method of offering or allotment Third-party allotment（８） Prospective allottee Merrill Lynch Japan Securities Co.,Ltd.

Uses of funds (1)Cost of acquisition of Gene techno Science shares: Approx. 1.2 billion yen(2)Development pipeline R&D expenses: Approx. 4.6 billion yen

NC-6004,NC-6300 and VB-111

Estimated net proceeds: Approx. 5.8 billion yen

Table of Contents

1. Financial Results for the Fiscal Year Ended March 31, 2018

2. Pipelines3. Business Development4. Cosmetics Business

Appendix4. Company Overview5. Status of Major Shareholders6. Micellar Nanoparticle Technology

NC-6004• Phase III ：Pancreatic

Resumed patient enrollment（Aug. 2017）

• Phase II ：Basket design trial (NSCLC, bladder, biliary tract)

Granted orphan drug designation from the US FDA for the indication ofbiliary tract cancer and completed patient enrollment of planned 50 patients.

• Phase I/II ：Head and neck Prepared to start joint multinational clinical trials in the US, Europe and Asia Designed the trial in combination with immune checkpoint inhibitors

NC-6300• Phase I/II ：Soft tissue sarcoma

Granted orphan drug designation from the US FDA. Patient enrollment is ongoing Dose ascending phase escalating to 185 mg/m2 in Phase I part

8

Status of Clinical Pipeline Development

9

Clinical Pipeline

Product Cancer Indication BR PC ph1 ph2 ph3 Develop

Area Alliance Partner

NC-6004Cisplatin micelle

Pancreatic Japan/Asia

Lung (NSCL)Bladder

Biliary tract USA/EU

Head and neckUSA/EU

/Asia

NC-6300Epirubicin micelle

Soft tissue sarcoma USA

NC-4016Dach-platinum micelle Solid USA

NK105（Out-Licensed）Paclitaxel micelle

BreastGastric Japan

VB-111（In-Licensed）Non-replicating Adeno 5 vectors

Ovarian Thyroid

Recurrent Glioblastoma

Japan

（Mainlyin USA)

Co-Development

In-House Development

In-House

In-House

Out-Licensed

ＶＢＬ

Co-Development

ＶＢＬ

ＶＢＬ

In-Licensed

New2018.5.15

10

NC-6004 Head and Neck（１）

Phase I/II trials for head and neck cancerClinical trials for NC-6004 used in combination with immune checkpoint inhibitors will be conducted in US, Europe and Asia (joint multinational trials)

May 15, 2018Concluded a basic agreement with Orient Europharma for additional licensing and joint development of NC-6004 in regions such as Europe and the United States

Development plan for joint multinational clinical trials

Head and neck cancer

Sixth most common solid malignancy * Approximately 650,000 new head and neck cancers are diagnosed annually across the

world, with 200,000 deaths annually* Clinical trials of immune checkpoint inhibitors as first-line treatment are ongoing. Nivolumab and Pembrolizumab have already been approved as second-line

treatments. * Globocan Project. Geneva: World Health Organization; 2010.

11

Antitumor effects

• Disease control rate: 85.0%（SD: 14/20 patients; PR:3/20）• Partial responses (PR) observed in 3, of which 1 failed prior anti-PD1 • 67% of patients who observed tumor shrinkage have received

platinum based regimen in previous.

Reduction

Progression

Results of Phase Ib Clinical Study of NC-6004 in the US

V Subbiah et al. European Society for Medical Oncology congress 2016

Good response also observed in SCCHN patients（ ■ ）

All 3 patients achieving PR were previously exposed to platinum based regimen and 1 failed prior anti-PD1

12

NC-6004 Head and Neck （２）

D Rebecca. American Society of Clinical Oncology annual meeting 2016

Efficacy of cisplatin used in combination with immune checkpoint inhibitors has been widely reported and new development plan was concluded to be valid from the viewpoint of the provability of success, development speed, and marketability, etc.

Reason for changes to clinical trial plan

13

NC-6004 Head and Neck（３）

Pembrolizumab /Nivolumab

block

Cisplatindownregulate

upregulate

Pembrolizumab/ Nivolumab

Cisplatin downregulate block

block

stimulate

World J Immunol 2015 March 27; 5(1): 1-15

Potential synergistic effect of NC- 6004 in combination with immune checkpoint inhibitors

NC-6004 is being expected to have similar effect.

14

Results of Phase I Clinical Study of NC-6300 in Japan

Reduction of adverse events of epirubicin such as vomiting and myelotoxicity was observed, and the recommended dose of NC-6300 was determined to be 170 mg/m2.The standard dosage of epirubicin is 60 or 100 mg/m2 （for treatment of breast cancer）

No decrease in cardiac function was observed even in cases to whom NC-6300 was administered for more than 12 months, indicating the possibility of extension of continuous treatment.

The maximum accumulated does of epirubicin in life is limited as 900 mg/m2, and at higher doses the risk of cardiac failure increases. However, according to data from PI trial in Japan, in 4 patients the dose exceeded 900 mg/m2 without any incidence of cardiotoxicity, and the safety profile was good.

H Mukai et al Invest New Drugs. 2017 Jun;35(3):307-314.

Development of NC-6300 in the US

Standard treatment Number of newly diagnosed patients（2014）

Number of deaths（2014）

5-year relative survival

Soft tissuesarcoma

Anthracycline (Doxorubicin)

12,020（Rare cancer）

4,740 Approx. 70%*

Source: CA CANCER J CLIN 2014;64:9-29、 * Cancer Information Service, National Cancer Center, Japan

1. Epirubicin is approved anthracycline anticancer agent2. Not many drug candidates and relatively less competition

（Efficacy of immune checkpoint inhibitors is limited）3. Possibility of application of the FDA Accelerated Approval Program

What is soft tissue sarcoma? Malignant tumor that develops in the soft tissue such as the subcutaneous

tissue or muscle Development of new drugs is expected, as treatment options are limited.

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Aims of development

Granted orphan drug designation in July 2017 Dose ascending phase escalating to 185 mg/m2, higher than recommended dose

in Japan of 170 mg/m2

Current status of development

Table of Contents

1. Financial Results for the Fiscal Year Ended March 31, 2018

2. Pipelines3. Business Development4. Cosmetics Business

Appendix4. Company Overview5. Status of Major Shareholders6. Micellar Nanoparticle Technology

ＡＤＣＭ (Antibody/Drug-conjugated micelle) Low molecular weight drug Nucleic acid drug (NanoFect®)

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Business Development: Status of Joint Research

Joint research & investment with bioventures with antibody technology Optimization of ADCM through fusion of new antibodies

with micelles

Joint research on brain delivery Fusion of brain sensor “J-Brain Cargo®“ and micellar

nanoparticles

Advantages of ADCM

Antibody-DrugConjugated Micelle

Antibody-DrugConjugates

ADCM ADC

1. ADCM can carry 100-300 molecules of payload per Mab.

2. ADCM is equal or more active for sensitive tumors.

3. ADCM is significantly active for resistant tumors.

4. ADCM is more effectively internalized in the tumors.

5. ADCM shows a continuous drug release in the tumors.

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Conclusion of license agreement with VBL Therapeutics for development and commercialization of gene-therapy “VB-111” in Japan Phase III clinical trial of VB-111 for treatment of ovarian

cancer currently underway in US Systemic therapy with potential additional indications

Start of examination of business alliance Began examination of business alliance aimed at enhancing

corporate value of both companies, with eye to establishment of sales structure

Business alliance and capital increase by way of third-party allotment Began joint research aimed at creation of biodrugs

in areas where no treatment exists Exploring possibilities in regenerative medicine field

19

Business Development: New Pipeline and Business Alliance

20

New Pipeline（VB-111）

Platinum-resistant ovarian cancer Start of Phase III trial （Dec. 2017）

Status of VBL Therapeutics’ Ongoing Development in US

Detailed analysis data of trial for rGBM will be studied and possibility of development in Japan will be examined, taking the above diseases into consideration.

Suriv

al

Days

Median overall survival of 810 days in the VB-111 therapeutic dose arm, versus 172 days in the low dose arm

POCPhase I/II

Mar. 8, 2018 – Report of top-line results（VBL） No difference in primary endpoint of overall survival (OS) was observed. Detailed data analysis underway

Recurrent glioblastoma (GBM)

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Business Alliances

Announced April 9, 2018＜Exploration of possibilities in regenerative medicine field＞The three companies will combine their respective R&D technologies and expertise to develop drugs for diseases for which no treatment exists or for which existing medical treatment does not work well.

Noritsu Koki Group companies (drug-discovery-related) Gene Techno Science：Develops biopharmaceuticals to meet healthcare needs JRM ：Developed the world’s first regenerative medicine for congenital heart

disease, designated under fast-track review system and started clinical trials

Gene Techno Science Co., Ltd. and Noritsu Koki Co., Ltd.

Announced January 17, 2018The details of the business alliance will be further defined and a business alliance within the next 6 months and will include the possibility for cooperation in marketing and R&D for pharmaceuticals as well as capital alliance at a later stage. NanoCarrier will engage in negotiations, aiming to conclude a business alliance agreement.

Ceolia Pharma Co., Ltd.

Table of Contents

1. Financial Results for the Fiscal Year Ended March 31, 2018

2. Pipelines3. Business Development4. Cosmetics Business

Appendix4. Company Overview5. Status of Major Shareholders6. Micellar Nanoparticle Technology

Cosmetics Business

23

2010e‘clafutur-W Lotion:Developed and marketed by NanoCarrier

2013New eclafutur :Jointly developed with AlbionMarketed by Albion

2014Marketing overseas in AsiaLaunch of refill productLaunch of large size product

Micellar nanoparticle technology has also become established as a cosmetics technology through joint development with a luxury cosmetics manufacturer

2016Hair growth products for menExpanded applicationto healthcare field

Jointly developed with AlbionMarketed by NanoCarrier

2016EXCIA AL:Jointly developed with AlbionMarketed by Albion

Sep. 2017Expanded into products for women

https://depth.technology/“Depth” online shop

Depth

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Jointly developed with AlbionMarketed by Nanocarrier

Next-generation scalp-care items that reconsider the obvious fact that the scalp is also skin and combine the basics of skin care with a hair growth DDS

CLEANING MOISTURE BOOSTER ADVANCE

PART 01 PART 02 PART 03 PART 04

Conditions the scalp , improving hair growthDelivering hair growth ingredients

to the target place

Expanding number of physical stores that offer products in addition to Internet sales

Hokkaido, Miyagi, Saitama, Tokyo, Kanagawa, Nagano,Osaka, Fukuoka, Nagasaki, Kumamoto, Kagoshima

https://depth.technology/shop/list.phpFor a list of stores that offer depth products, click here:

Thank you very much

ContactNanoCarrier Co.,Ltd. CEO Office

TEL: 03-3241-0553

This presentation may include forward-looking statements pertaining to thebusiness and prospects of NanoCarrier Co.,Ltd. (the “Company”). Thesestatements reflect the Company’s current analysis of existing information andtrends. Actual results may differ from expectations based on risks anduncertainties that may affect the Company’s businesses.

Although this presentation includes information regarding pharmaceuticals andcosmetics (including products under development), the information is notintended as any advertisement and/or medical advice.

Table of Contents

1. Financial Results for the Fiscal Year Ended March 31, 2018

2. Pipelines3. Business Development4. Cosmetics Business

Appendix4. Company Overview5. Status of Major Shareholders6. Micellar Nanoparticle Technology

Founded June 14, 1996

Listed market Listed on the Mothers Section of the Tokyo Stock Exchange on March 5, 2005

Location Head Office and Lab Wakashiba, Kashiwa, Chiba PrefectureTokyo Office Kyobashi, Chuo-ku, TokyoiCONM Lab Tonomachi, Kawasaki, Kanagawa Prefecture

Subsidiaries NanoCarrier UＳ Medford, MA

Capital 11,101 million yen (as of March 31, 2018)

Total issued stocks 43,236,584 shares （as of March 31, 2018)

Employees and Management

58（as of March 31, 2018)

Directors President and CEO Ichiro Nakatomi, Ph.D.

CFO Tetsuhito Matsuyama

Teruo Okano, Ph.D. (Professor, Tokyo Women’s Medical University)

Akira Ohashi, MD, Ph.D. (Clinical Doctor)

Auditors Kanshiro Noguchi

Tadashi Morishima （Representative, Morishima CPA Office ）Mieko Nakayama （Partner, Haruka Sogo Law Firm）

Scientific Advisor Kazunori Kataoka, Ph.D. (Director General, iCONM/ Project Professor, The University of Tokyo)

Yukio Nagasaki, Ph.D. (Professor, University of Tsukuba)

Nobuhiro Nishiyama, Ph.D. (Professor, Tokyo Institute of Technology)

Company Profile

27

Status of Major Shareholders

28

Name of shareholder Number of shares held

Shareholding ratio（％）

Japan Trustee Services Bank, Ltd. (Trust Account) 2,675,500 6.19

Shin-Etsu Chemical Co., Ltd. 2,660,000 6.15

THE BANK OF NEW YORK 133524 1,227,600 2.84

Ichiro Nakatomi 1,029,000 2.38

The Master Trust Bank of Japan, Ltd. (Trust Account) 924,600 2.14

THE BANK OF NEW YORK 133652 890,300 2.06

CYNTEC CO., LTD. 623,200 1.44

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC) 598,200 1.38

STATE STREET LONDON CARE OF STATE STREET BANK AND TRUST , BOSTON SSBTC A/C UK LONDON BRANCH CLIENTS- UNITED KINGDOM 500,000 1.16

Matsui Securities Co., Ltd. 490,400 1.13

Total 11,618,800 26.87

Total number of issued shares: 43,236,584 sharesNumber of shareholders: 27,638 As of March 31, 2018

（Note） The shareholding ratio is calculated after subtraction of treasury stock (26 shares).

Nanomicelle system design

Medicelle™

Improves drug’sretention inbloodstream

Improves drug’ssolubility andretention in

blood stream

NanoCap™

Characteristics Structure

30-100nm

ADCM (Antibody/Drug-Conjugated Micelle)Enhances amountof drugs effectively

targeted tospecific locus

Physical entrapmentNK105(Paclitaxel）cosmetics

Electrostatic bondingProtein,siRNA

Chemical conjugationNC-6004 (Cisplatin)NC-4016 (DACH-Platinum)NC-6300 (Epirubicin)

Sensor drug-conjugated micelle（Active Targeting）Sensor:antibody, peptide etc.

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Averageparticle

diameterPolyethylene Glycol

(Hydrophilic, outside of micelle)Polyamino acid

(Hydrophobic, inside micelle)

NanoCarrier - All in One Delivery Technology

Efficacy level

Time

No‐efficacy level

Conventionaldrugs

Nanomicelle

Superior controlled release (improved stability and safety)and improved retention inbloodstream

Controlled release

Enhanced TargetingNanomicelle accumulate in canceroustissue by taking advantage of characteristics of cancer cells

・・

・・・

・

・ ・

・・

・

・

・

・

・

vs.Blood vessel

・

・・ ・・・

・・

・・

・・

・・

・・・・

・・

：Nanomicelle・：Conventional drugs

Normal tissue Cancerous tissue

Blood vessel

Enhanced solubilityDissolve the hydrophobic drug in water

Drug (mg/mL) Itraconazole Paclitaxel

water <0.001 <0.1

Micelle >2 >50

Solubility（Micelle/water）

2000 timesor more

500 timesor more

30

Pla

sma

leve

l

Toxic level

Advantages of Micellar Nanoparticle Anti-cancer Agents

31

Controlled releasedDrug release is controlled

TargetingDrug is delivered to site of lesions

Improved bioavailability1

Solubility of poorly soluble drugs is enhanced

Greater therapeutic effect Drug is delivered to target cells

Reduction of adverse reactionsToxicity is reduced through controlled drug release

Greater convenienceNo need for hospitalization, fewer adverse drug reactions and lower medical costs

Development of high added value drugs

Improvement ofpatient QOL

Note: 1Bioavailability: Index that shows fraction of drug that enters systemic circulation and its efficacy

Unique Drug Discovery Technologies Opening Up New Drug Discovery Possibilities

32

Discovery of new drugs tomeet medical care needsOther companies/Research organizations, etc.

• Existing drugs• Compounds abandoned at

development stage

• New drug candidates

• ADCs

Seeking to enhance performance through unique formulation technologies

Targeting Safety Solubility Pharmacokinetics Efficacy