News Release

Oct. 31, 2006

Announcement on the Development of TU-025 (Keishibukuryogan) in the U.S.

Tsumura & Co. (Headquarters: Tokyo, President: Junichi Yoshii) announced that a meeting of its Board of Directors held on October 31, 2006 adopted a resolution on the policy for future development of TU-025 (Keishibukuryogan), currently being studied in the United States for the treatment of menopausal hot flashes. The details of the development policy are as follows.

1. Development Policy
In consideration of the results of the ongoing Phase II clinical study, Tsumura will commence preparations to acquire a commercial IND* with the objective of undertaking an additional Phase II clinical study.

2. Reason
The interim analysis of the Phase II clinical study at the University of Minnesota has suggested a tendency for symptoms to improve with TU-025 compared with the placebo. On the basis of these clinical results, Tsumura has concluded that an additional Phase II clinical study with a modified study design is necessary before conducting a Phase III clinical study.

3. Outlook
We had expected to obtain approval for New Drug Application for TU-025 in FY2010 from the U.S. Food and Drug Administration (FDA), but this decision will cause a delay in the schedule .

4. Remarks
Please note that, for contractual reasons, Tsumura cannot disclose detailed results of the Phase II clinical study prior to the announcement by the University of Minnesota, which is the investigating institute.

*A Commercial IND is a permit granted by the FDA in response to a company's application for the use of a new investigational drug.