A Happy New Year.

I would like to take this opportunity to extend our sincere appreciation to our shareholders and investors for providing us with the continuous invaluable support.

Last year, 2011, our country experienced a catastrophic disaster and unbearable grief. The year was symbolized by the word “絆(kizuna)”, representing the bond and tied relationship between people that encouraged us to overcome this difficult times. There has ever been a year when the need to fully appreciate quality of life (QOL) has been so important since I was engaged in the development of pharmaceutical drugs.

I am participating as a member of the working group that takes steps to review the extension system for the terms of patents. This working group formed part of the Patent System Subcommittee of the Intellectual Property Policy Committee within the Industrial Structure Council organized by the Japan Patent Office. Most pleasant event to us was that a new extension system has finally put into effect on December 28, 2011, which allows us to start a fresh year on a new note.

The patent term of 20 years is too short for the pharmaceutical industry where product development requires an enormous amount of investment and time from invention to commercialization. With this in mind, the patent term has been extended a maximum of five years in order to better protect the rights of a new drug. Although the Company’s core technology of drug delivery system (DDS) is both a significant driving force behind efforts to improve the aforementioned QOL and an epoch-making technology that is indispensable in the development of pharmaceutical drugs, it was determined inappropriate under the extension system on the grounds that the active ingredients therein were the same time as that of conventional drugs. We have been trying, therefore, to work on appealing to the relevant authorities in order to resolve this discrepancy since the establishment of the Company, and finally we achieved an extension up to a maximum of five years.

We at NanoCarrier will do our utmost to deliver micellar nanoparticle drugs that originate from Japan to patients at the earliest possible opportunity and thereby contribute to society. We would very much appreciate your continued support this year.

Ichiro Nakatomi, Ph.D.
President & CEO
January 5, 2012