The teddy was given to Sherry by her father shortly before his death.
Sherry clutched onto the teddy as she found her parents bodies shortly after they had been murdered by Iliaster. Her guardian Elsworth then guided her out of the building to safety.
Elsworth constantly took Sherry to different parts of the world in order to hide from Ylister. Sherry brought the teddy with her the whole time. While they were in Japan, Elsworth found the card hidden inside the teddy.