Under the terms of the agreement, Takeda and Baxter will
expand upon their previously announced collaboration to bring Vero cell culture-based
influenza vaccines to the Japanese market. Specifically:

— Baxter will
exclusively license to Takeda its proprietary Vero cell-based influenza vaccine
technology for the Japanese market.

— The companies will jointly pursue development and
licensure of an H5N1 influenza vaccine in Japan.

— With assistance from Baxter, Takeda will pursue funding
from the Japanese government for the construction of a Vero cell-based influenza
manufacturing facility in Japan
in order to fully implement the agreement.

— Baxter and Takeda will undertake a technology transfer to
enable Takeda to manufacture the H5N1 influenza vaccine at full-scale by the end
of Takeda’s 2013 fiscal year (ending March 31, 2014).

The agreement includes payments by Takeda to Baxter
consisting of upfront cash payments, development cost reimbursements, payments
upon the achievement of certain development, technology transfer, regulatory
and commercial milestones, and royalties on the sale by Takeda of Vero
cell-based influenza vaccines. Neither Baxter nor Takeda expects to revise
earnings guidance for their respective 2010 fiscal years in connection with
entering into this agreement.

“The agreement with Takeda is an important milestone in
extending the field of cell culture-based vaccine development and
production,” said Robert L. Parkinson, Jr., chairman and chief executive
officer of Baxter. “We believe our joint efforts will help support Japan’s
public health efforts, particularly in the high-priority area of pandemic preparedness.”
“By collaborating with Baxter, a global leader in cell culture-based vaccine
technology for influenza, we plan to establish an infrastructure for the
production of pandemic vaccines in Japan,” said Yasuchika
Hasegawa, president and CEO of Takeda. “We are committed to fulfilling our
social responsibility as a pharmaceutical company by delivering vaccine to the
Japanese market as soon as possible.” Takeda has previously been selected
as a recipient of a subsidy of up to 3.6 billion yen that the Japanese
government offered publicly under its primary supplementary budget in order to
support the investment associated with the development and production of
pandemic influenza vaccines. As a result of this new agreement with Baxter,
Takeda will apply for the government’s public offering under the secondary supplementary
budget for the establishment of commercial facilities for vaccine production.