Investment and Strategic Partnership Agreement with Sound Wave Innovation, a company leading the R&D of therapeutic devices for early-stage Alzheimer's disease

Sumitomo Heavy Industries, Ltd. (Head Office: Shinagawa-ku, Tokyo; Representative Director, President and CEO: Shinji Shimomura; hereinafter "SHI") has invested in Sound Wave Innovation Co., Ltd. (Head Office: Chuo-ku, Tokyo; Representative Director and President: Hiroaki Shimokawa, hereinafter "SWI"), a university-launched deep-tech startup aiming for social implementation of a therapeutic device for early-stage Alzheimer's disease, by underwriting a capital increase through a third-party share allocation. SHI has also concluded an agreement with SWI on a strategic business partnership regarding the manufacture and sales of the "Transcranial Low-Intensity Pulsed Ultrasound Therapeutic Device (LIPUS-Brain)," a medical device for the treatment of early-stage Alzheimer's disease. [1. Background and purpose of the investment and business partnership] Along with the worldwide increase of aging populations, Alzheimer's disease and other forms of dementia have become societal challenges in the fields of healthcare and welfare. Dementia is known to have a significant impact on the lifestyles of not only the patients themselves, but also their families and caregivers, and there is a strong demand for new treatment alternatives that can contribute to the improvement of QOL (quality of life). In our Medium-Term Management Plan 2026, we have set the "development of a robust entity" as our basic policy, and proposed "strengthening of new business exploration functions" as one of the important tasks for promoting this basic policy. The present agreement contributes to new business exploration in "advanced medical devices," one of the four key investment areas (*1) in which our management resources are to be concentrated. We will combine our technological capability, long cultivated through manufacture of medical devices such as cancer diagnosis and treatment devices, with the deep-tech startup's innovative technology to speed-up the development and supply of products. As with this agreement, SHI will continue to explore new businesses in areas around our core business, and enter into new areas through investments in and partnerships with startup companies, thereby providing solutions for societal challenges and reinforcing our profit-making structure. The present investment in and business partnership with SWI involve our participation in minimally invasive (*3) treatment of dementia using the Low-Intensity Pulsed Ultrasound (hereinafter "LIPUS" (*2)). In the future, we intend to participate in SWI's research and development of innovative medical devices for treating diseases such as severe angina pectoris and cardiac arrhythmia (*Figure 1). The present partnership involves the "Transcranial Low-Intensity Pulsed Ultrasound Therapeutic Device (LIPUS-Brain)," a treatment device intended for use in patients with early-stage Alzheimer's disease. The safety of the device has been confirmed in an exploratory trial (completed in 2022) conducted by a group led by Dr. Hiroaki Shimokawa (Emeritus Professor, Tohoku University), which also strongly suggested the efficacy of the device. Based on these outcomes, in September 2022, the device was designated by the Ministry of Health, Labour and Welfare as the first eligible product under the "Breakthrough Medical Device Designation Program"(*4). In October 2023, a confirmatory trial started and proceeded as planned, achieving the target enrollment number in November 2024. Through this partnership, SHI and SWI will work together towards the social implementation of the SWI's LIPUS technology. The two companies will take advantage of their own strengths and jointly promote manufacture and sales, to offer the society a new medical alternative for Alzheimer's disease treatment, thus contributing to the improvement of QOL of the patients and their families. [2. Overview and future prospects of the investment and business partnership] SWI will promote the confirmatory trial of the relevant therapy and grant a license of the intellectual properties regarding the relevant device, while SHI will conduct manufacture and sales of the relevant device. The confirmatory trial is planned to be completed at the end of FY2026, and as soon as the trial is completed, we will apply for the manufacture and sales approval of the medical device. After the approval, we will gradually proceed with the preparation for launching the device and starting its therapeutic use at medical institutions nationwide. (*1) As business fields driving the company's growth, we have positioned "robotics/automation", "semiconductor", "advanced medical devices" and "environment/energy" as our key investment areas for creating new value and improving corporate value. (*2) LIPUS is an advanced medical technology involving external application of special low-intensity pulsed ultrasound optimized for the affected site. The ultrasonic waves physically stimulate the vascular endothelial cells, which leads to up-regulation of eNOS (endothelial nitric oxide synthase, an enzyme which promotes vasodilation) and VEGF (vascular endothelial growth factor, promoting angiogenesis) and improvement of microangiopathy. Further details are available in the following paper. Shindo T, and Shimokawa Ann Vasc Dis. 2020;13(2):116-125. https://http://www.cardio.med.tohoku.ac.jp/pdf/13_ra.20-00010.pdf/ (*3) For receiving the treatment, the patient only needs to wear a low-intensity pulsed ultrasound generator (a headset in case of dementia treatment) and lie on a bed until the treatment ends. The intensity level of the ultrasonic waves used in LIPUS therapy is similar to those used in diagnostic devices such as an echocardiograph, causing no irritation or pain and requiring no anesthesia. The therapy can thus be performed with minimum physical stress for the patient. The device is small enough to be installed in any medical institution, regardless of the size of the institution. This therapy has been tested in an exploratory trial and confirmed to be safe and strongly suggested to be effective for dementia (early-stage Alzheimer's disease and MCI (mild cognitive impairment)). A confirmatory trial (Clinical Trial Protocol Number: LB1101, Clinical Research Protocol Number: jRCT2032230125) is currently underway and has already achieved its target enrollment number (220 cases). Moreover, there is some strong non-clinical evidence demonstrating its efficacy in the treatment of cardiac diseases (e.g. HFpEF, myocardial infarction, severe angina pectoris), indicating potential expansion of its application to a wide range of diseases. (*4) Further details about the designation are available in: "LIPUS-Brain, a Medical Device for the Treatment of Early Alzheimer's Disease, was designated as an Eligible Product under the Breakthrough Medical Device Designation Program of the Ministry of Health, Labour and Welfare," SWI, October 14, 2022. https://sw-innovation.com/news/info/1175/ (*Figure 1)