TAKARA HOLDINGS INC.

At its meeting today, the Board of Directors of Takara Bio Inc. (President & CEO: Ikunoshin Kato, Ph.D.), a consolidated subsidiary of Takara Holdings Inc., decided on a capital increase through third party allocation and issuance of stock acquisition rights for the implementation of a stock option plan.

At the meeting on the same day, the Board of Directors of Takara Holdings Inc. (President: Hisashi Ohmiya) also decided to subscribe to part of the new shares to be issued by third party allocation.

The background to Takara Bio's decision on a capital increase through third party allocation and issuance of stock acquisition rights is as follows:

1. Reasons for Takara Bio's decision on a capital increase through third party allocation and issuance of stock acquisition rights

Takara Bio, in its new business plan announced on May 20 of this year, made a firm commitment to concentrate its entire resources in three business sectors: biotechnology research, biomedicine, and agricultural biotechnology. In the field of biomedicine especially, Takara Bio is determined to set out on its own for clinical development of gene therapy for cancer and HIV in Asia, in alliance with MOLMED S.P.A., Italy, while it will continue to develop licensing business, with its RetroNectin method as the central pillar. Gene therapy, a promising state-of-the-art medical technology for the future, is still in the clinical development stage, with no successful commercialization attempt yet made either at home or abroad, and is expected to require huge expenditures in R&D investment for clinical development. In other words, business evolution toward commercialization of gene therapy technologies will move Takara Bio and the Takara Group into a type of business with higher risks and returns than in the past. We have also judged that the risks associated with investment in the gene therapy business should be shared through funds raised from specific investors who are ready to take such risks and who have a positive perspective on our business scheme. Thus the company has decided on the issuance of new shares by third party allocation, intended for such investors.

Furthermore, Takara Bio considers the proper realignment of the incentive plans necessary to secure competent personnel for the R&D area and to boost the motivation and incentive of the executive officers and employees for improved performance. Therefore, the company has decided to issue stock acquisition rights for implementation of a stock option plan.

Furthermore, Takara Bio considers the proper realignment of the incentive plans necessary to secure competent personnel for the R&D area and to boost the motivation and incentive of the executive officers and employees for improved performance. Therefore, the company has decided to issue stock acquisition rights for implementation of a stock option plan.

Furthermore, Takara Bio considers the proper realignment of the incentive plans necessary to secure competent personnel for the R&D area and to boost the motivation and incentive of the executive officers and employees for improved performance. Therefore, the company has decided to issue stock acquisition rights for implementation of a stock option plan.

2. Outline of capital increase through third party allocation

Through this capital increase via third party allocation, Takara Bio is planning to collect approximately \4 billion to be used for investments in facilities and R&D. Takara Holdings will subscribe to part of the shares to be issued by third party allocation.

(Note) Items concerning the capital increase through third party allocation not mentioned above and requiring a resolution by the Board of Directors will be decided at a later meeting of the Board. Also, the capital increase through third party allocation is subject to a resolution at the Extraordinary General Meeting of Shareholders of Takara Bio Inc., to be held on September 19, 2003.

3. Outline of issuance of stock acquisition rights

（1） Type and number of shares to be issued for the stock acquisition rights	Common stock of Takara Bio Inc. (Up to 1,300 shares )
（2） Allottees eligible for the stock acquisition rights	Executive officers, employees, and others of Takara Bio Inc. and its subsidiaries

(Note) Items concerning the issuance of stock acquisition rights not mentioned above and requiring a resolution by the Board of Directors will be decided at a later meeting of the Board. Also, the issuance of stock acquisition rights is subject to a resolution at the Extraordinary General Meeting of Shareholders of Takara Bio Inc., to be held on September 19, 2003.

4. Outline of Takara Bio Inc.

（1） Firm Name Takara Bio Inc.

（2） President & CEO Ikunoshin Kato, Ph.D.

（3） Location 3-4-1 Seta, Otsu, Shiga 520-2193, Japan

（4） Founding Date April, 2002

（5） Capital 1 billion yen

（6） Number of issued stock (before capital increase) 20,000 shares

（7） Major shareholders (before capital increase) Takara Holdings Inc. (100%)

Cautionary Statement

This press release by Takara Holdings Inc. is a general publication of Takara Bio's decision on capital increase through third party allocation and the issuance of stock acquisition rights, and is not an offer or a solicitation of an offer to buy or sell securities.

Statements made in this document with respect to Takara's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Takara. These statements are based on the judgment of the management in light of the information currently available to it, and also based on various assumptions and views as a result of that information that contain significant risks and uncertainties. Please note that actual results may differ materially from these projections. Factors that may affect actual results include but are not limited to, changes in economic conditions, especially those in consumption trends, exchange rate fluctuations, regulatory and administrative changes, competitive pressure in pricing and product strategies, decline in our ability to sell existing and new products, production interruption, infringement of our intellectual property rights, radical technological innovations, and adverse judgments in significant lawsuits.