News Release

Jul. 15, 2008

Transfer of Shares in Tsumura Lifescience Co., Ltd.

Tsumura & Co. (Headquarters: Tokyo, President: Junichi Yoshii) is pleased to announce that an extraordinary meeting of the Board of Directors held on July 15, 2008 adopted a resolution to transfer all shares in a subsidiary, Tsumura Lifescience Co., Ltd. (hereinafter referred to as "TLS"), to Plumeria Co., Ltd., a share transferee company wholly owned by a fund operated by WISE PARTNERS, INC. Details are as follows:

1. Reasons for the transfer of shares
Tsumura has focused on and specialized in the businesses of Kampo medicine and crude drug, contributing to health and healthcare under its management principle of seeking the "best of nature and science." To respond to steady demands for Kampo formulation for prescription, Tsumura has aggressively invested in establishing tracing systems to stabilize the supply of safe and reliable raw materials for crude drug, and in developing production systems to stabilize the supply of Kampo products.
Created through a company split in October 2006, TLS is manufacturing and selling products, focusing on bath additives and including hair-growth formulas and cleaning agents, in Japan under its basic philosophy of "offering healthy and fulfilling lifestyles by working to harmonize the body, the mind and the environment, with symbiosis with nature as the starting point."
To develop these businesses, Tsumura has decided to transfer TLS shares to Plumeria Co., Ltd. for the following reasons:

1) The businesses of TLS have little synergy with Kampo businesses, which are the core business for Tsumura. Under this situation, an aggressive investment in TLS operations is impossible.

2) The WISE PARTNERS, INC. proposal is based on a management buyout. This scheme can be expected to maintain the current management organization and organizational structure of TLS, and to sustain aggressive support for TLS as it seeks to increase the value of its operations.

3) An improvement in funding and creditworthiness can be expected from WISE PARTNERS, INC., which aims to transform TLS into a public company in the future.

2. Share transfer schedule
Share transfer agreement conclusion date: July 15, 2008
Share transfer execution date: August 29, 2008 (plan)

3. Value of shares to be transferred
¥4,550 million

Tsumura received dividends totaling ¥765 million from TLS prior to the share transfer. The value of shares to be transferred and dividends received total ¥5,315 million.

4. Overview of the subsidiary whose shares will be transferred

Business name Tsumura Lifescience Co., Ltd.
Representative Kazunori Koga
Head office Tamachi Kiyota Bldg. 4F, 4-3-4 Shibaura, Minato-ku, Tokyo
Establishment June 22, 2006
Capital stock ¥200 million
Business description Manufacture and sales of quasi drugs (bath additives, hair-growth agents and etc.), sundry articles and like

5. Overview of the transferee

Business name Plumeria Co., Ltd.
Representative Hiroyuki Kurihara
Head office Parkside House 7F, 2 Ichibancho, Chiyoda-ku, Tokyo
Establishment July 1, 2008
Business description Share transferee company established for the purpose of taking over TLS operations

*Plumeria Co., Ltd. is a company wholly owned by a fund operated by WISE PARTNERS, INC. (WP1 Investment Limited Partnership).

[Reference] Overview of WISE PARTNERS

Business name WISE PARTNERS, INC.
Representatives Tomohiro Nakano and Hiroyuki Kurihara
Head office Parkside House 7F, 2 Ichibancho, Chiyoda-ku, Tokyo
Establishment July 4, 2006
Business description Operation of private equity funds

6. Effects on business results, etc.
Extraordinary income of ¥1,300 million is likely to result from the share transfer announced above in consolidated statements for the fiscal year ending March 2009. With regard to the revision of results forecasts for the fiscal year, Tsumura plans to announce the revision together with results for the first quarter.
Tsumura will acquire 10% of the outstanding shares of Plumeria Co., Ltd. from WP1 Investment Limited Partnership after the TLS share transfer to support the transferee for a fixed period and for other purposes. TLS and Plumeria Co., Ltd. plan to merge by the end of the current fiscal year.