English translation

Summary of Financial Statements
for the First Six Months of Fiscal Year Ending December 31, 2020
[Japanese GAAP] (Non-consolidated)
August 5, 2020
Company Name

SymBio Pharmaceuticals Limited

Listing: Tokyo Stock Exchange

Securities Code4582

URL: https://www.symbiopharma.com/

Representative

Representative Director,
President and Chief Executive Officer

Fuminori Yoshida

Contact Person

Corporate Officer and Chief Financial Officer Takaaki Fukushima

Scheduled Date to File Quarterly August 6, 2020
ReportTEL +81-3-5472-1125

Date of Dividend
Payment (plan)

Supplementary materials for the quarterly financial statements:

Yes ・ No

Holding of quarterly earnings performance review:

Yes ・ No—

(Amounts of less than one million yen are rounded down.)
1. Business Results for the First Six Months of FY 2020 (January 1, 2020 to June 30, 2020)(1) Operating Results (cumulative)(Percentages indicate year-on-year changes.)
Net Sales

Operating Profit (Loss)

Ordinary Profit (Loss)

Profit (Loss)

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,360
2,004

(32.1)
4.0(1,839)(2,015)——(1,883)(2,069)——(1,884)(2,069)——1H FY 2020
1H FY 2019

Earnings (Loss) per Share Diluted Earnings per Share
Yen

Yen

1H FY 2020
(62.47)—
1H FY 2019(95.58)—(Note 1) On July 1, 2019, the Company conducted a 1-for-4 consolidation of common stock. Earnings per share have been
calculated based on the assumption that this consolidation was conducted at the beginning of FY 2018.
(Note 2) Diluted earnings per share is not stated above due to recording of a net loss per share, despite the potential dilution ofshares.
(2) Financial Position
Total Assets
1H FY 2020 (as of June 30, 2020)
FY 2019 (as of December 31, 2019)(Reference) Shareholders’ equity:

Net Assets

Equity Ratio

Millions of yen

Millions of yen

%

6,585
5,273

5,792
4,400

78.9
71.7

1H FY 2020 (as of June 30, 2020)
FY 2019 (as of December 31, 2019)―1―

5,192 million yen
3,779 million yen

2. Dividends
Annual Dividend per Share
1st QuarterYen

2nd Quarter
Yen

3rd Quarter
Yen

Fiscal Year End
Yen

Full Year

FY 2019—
0.00
FY 2020—
0.00
FY 2020 (Forecast)(Note) Revision of dividend forecasts recently announced:

—

0.00

0.00

—
Yes ・ No

0.00

0.00

Yen

3. Earnings Forecasts for FY 2020 (January 1, 2020 to December 31, 2020)(Percentages indicate year-on-year changes.)
Operating Profit(Loss)Net Sales
Millions of yen% Millions of yen

Full Year
3,404
20.0
(5,090)(Note) Revision of earnings forecasts recently announced:

Ordinary Profit(Loss)

Earnings (Loss) per
Share

Profit (Loss)% Millions of yen% Millions of yen

%

Yen

—

—

—

(146.98)(5,134)
Yes ・ No

(4,803)

Notes:(1) Application of special accounting treatment in preparation of quarterly financial reports: Yes ・ No
(2) Changes in accounting policies, changes in accounting estimates and restatements after error corrections(a) Changes in accounting policies due to revision of accounting standards:

Yes ・ No(b) Changes in accounting policies due to other reasons:Yes ・ No(c) Changes in accounting estimates:

Yes ・ No(d) Restatements after error corrections:

Yes ・ No

(3) Number of issued shares (common stock)(i) Total number of issued shares at the end of
the year (including treasury shares)(ii) Total number of treasury shares at the endof the year(iii) Average number of shares during the year
(cumulative)

1H FY 2020

35,181,381 shares

FY 2019

26,437,681 shares

1H FY 2020

24,993 shares

FY 2019

22,593 shares

1H FY 2020

30,176,512 shares

1H FY 2019

21,655,982 shares(Note) On July 1, 2019, the Company conducted a 1-for-4 consolidation of common stock. Total number of issued shares at the endof the year, total number of treasury shares at the end of the year, and average number of shares during the year have been
calculated based on the assumption that this consolidation was conducted at the beginning of FY 2018.
* Summary of the quarterly financial statements is not subject to quarterly reviews by certified public accountants or accounting
corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters
All forecasts presented in this document, including earnings forecasts, are based on the information currently available to theCompany and assumptions judged to be reasonable. Actual results may differ substantially from these forecasts due to various
factors. Regarding the assumptions on which the Company’s earnings forecasts are based and their usage, please refer to “1.
Qualitative Information on Quarterly Financial Results (3) Explanation of earnings forecasts and other forward-looking
information” on Page 8 of the attachment.

―2―

Index of the attachment
1. Qualitative Information on Quarterly Financial Results ........................................................................................................................ 4(1) Explanation of business results ........................................................................................................................................................ 4(2) Explanation of financial position...................................................................................................................................................... 8(3) Explanation of earnings forecasts and other forward-looking information ...................................................................................... 8
2. Quarterly Financial Statements and Primary Notes ............................................................................................................................... 9(1) Quarterly balance sheet .................................................................................................................................................................... 9(2) Quarterly statement of income ....................................................................................................................................................... 11(3) Quarterly statement of cash flows .................................................................................................................................................. 12(4) Notes to quarterly financial statements .......................................................................................................................................... 13(Notes to going concern assumptions) ............................................................................................................................................. 13(Relating to the quarterly statement of income) ............................................................................................................................... 13(In case of significant changes to shareholders’ equity) ................................................................................................................... 13(Significant subsequent events) ....................................................................................................................................................... 13―3―

1. Qualitative Information on Quarterly Financial Results(1) Explanation of business results
Progress in the Company’s business for the first six months of the fiscal year under review is as follows.
(i) Domestic business[Establishment of the Company’s own sales force]
The Company plans to transition the sale of TREAKISYM® in Japan to its own sales organization from January 2021 after its
business partnership agreement with Eisai Co., Ltd. (“Eisai”) expires in December 2020. In doing so, the Company aims to attainprofitability in FY 2021 and achieve sustainable growth thereafter to solidify its future business development.
During the first six months of the fiscal year under review, the Company completed setting up a nationwide sales organization
central to establishing its own sales structure as planned. It also hired additional employees to serve as TREAKISYM® sales
representatives and regional sales managers, who are at the core of its nationwide sales organization, and trained them according
to plan, making steady progress toward building a highly productive, high-performance sales force backed by an advanced levelof expertise and extensive experience. Through these efforts, the Company was able to advance to the final stage of establishing anationwide sales organization by mid-FY 2020. Further, continuing from the previous fiscal year, the Company made steadyprogress toward completing the development of its distribution and logistics functions centered on logistics bases strategicallylocated in eastern and western Japan as well as its internal infrastructure, including enterprise resource planning (ERP) and otherinformation systems.
[Issues concerning product defects]
The Company currently imports lyophilized injectable formulation of TREAKISYM® from Astellas Deutschland GmbH(“Astellas Deutschland”), a subsidiary of Astellas Pharma Inc. Contamination and appearance defects were found in somebatches imported in 2019 for sale in Japan, and the extent of the contamination and defects significantly exceeded limits
permitted by quality standards stipulated in the supply agreement entered between the Company and Astellas Deutschland. To
prevent recurrence of similar quality issues, the Company has filed complaints with and urged Astellas Deutschland to fulfill its
responsibilities as a supplier, including implementing a corrective and preventive action (CAPA). However, there was no sign ofimprovement in the first six months of FY 2020, as defect rates remained high in a number of batches imported from Astellas
Deutschland and delivery dates continued to be unreliable. As a result, the Company continued to face issues with the supply of
TREAKISYM®, which resulted in the product’s inventory level remaining lower year on year; accordingly, sales of
TREAKISYM® in the first six months of FY 2020 lagged behind the level recorded in the same period of the previous fiscal year.
In the third quarter of FY 2020 (July–September 2020), to recover the inventory level of TREAKISYM® as soon as possible, theCompany will continue discussions with Astellas Deutschland and manage its progress in addressing the quality and supply
issues to lower the defect rates and stabilize supply.
[Anticancer agents: SyB L-0501 (lyophilized powder formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB
L-1702 (rapid infusion (“RI”) formulation) (generic name: bendamustine hydrochloride; trade name: TREAKISYM®)]
The Company obtained manufacturing and marketing approval for first-line treatment of low-grade non-Hodgkin’s lymphoma(low-grade NHL) (Note 1) and mantle cell lymphoma (MCL) in December 2016, for recurrent/refractory low-grade NHL and MCL
in October 2010, and for chronic lymphocytic leukemia (CLL) in August 2016. TREAKISYM® is thus widely used in the field ofmalignant lymphoma. Further, the combination treatment of TREAKISYM® and rituximab (BR therapy) was added to the
Guidelines for Tumors of Hematopoietic and Lymphoid Tissues 2018 updated and published by the Japanese Society of
Hematology in July 2018, which recommends BR therapy as a choice for standard treatment for all previously approved
indications. With this achievement, TREAKISYM® has established its foothold as the standard treatment for malignant
lymphoma.
In July 2018, the Company obtained approval to partially revise the manufacturing and marketing authorization, allowing
TREAKISYM® to be used in combination with not only rituximab but also other new anti-CD20 antibodies for the treatment of
CD-20 positive follicular lymphoma (FL), a typical histologic type of low-grade NHL. As a new treatment option,
TREAKISYM® is offered to patients in combination with obinutuzumab (Note 2), which was launched in August 2018. In March
2019, the Company obtained approval for a partial change to its application concerning the use of TREAKISYM® as apretreatment agent for tumor-specific T-cell infusion therapy (Note 3). This allowed TREAKISYM® to be used as a pretreatment
agent for Kymriah® intravenous infusion (Note 4), the first chimeric antigen receptor T-cell (CAR-T) therapy (Note 5) to be approvedin Japan (included in the National Health Insurance price list in May 2019). The expansion of its use as a pretreatment agent for―4―regenerative medicine and other pharmaceutical products has strengthened the position of TREAKISYM® as the standard
treatment for malignant lymphoma.
The Company conducted a Phase III clinical trial of BR therapy targeting recurrent/refractory diffuse large B-cell lymphoma(r/r DLBCL), the fourth indication of TREAKISYM® following three approved indications. After obtaining favorable resultsfrom the trial, with the overall response rate—the primary endpoint of the trial—exceeding expected levels, the Company applied
for approval of a partial change to the manufacturing and marketing authorization of TREAKISYM® in May 2020. In June 2020,
Chugai Pharmaceutical Co., Ltd. (“Chugai”) filed for manufacturing and marketing approval of polatuzumab vedotin (Note 6) usedin combination with BR therapy targeting patients with r/r DLBCL. In response, the Company applied for approval in July 2020
to partially amend the manufacturing and marketing authorization of TREAKISYM® used in combination with polatuzumab
vedotin and rituximab. Once polatuzumab vedotin is included in the NHI price list after applications submitted by the Company
and Chugai are approved, TREAKISYM® can be used in combination with polatuzumab vedotin and BR therapy. Because
currently there exists no effective treatment for r/r DLBCL, combination therapies comprising of multiple anticancer drugs arebeing used as rescue chemotherapy. However, because these therapies often cause serious adverse effects, the development ofhighly effective new drugs with little adverse effects is in dire need. BR therapy is already used to treat patients with r/r DLBCLin Europe and the U.S., and in Japan, patient organizations and relevant academic societies have submitted a request to the
Ministry of Health, Labour and Welfare, asking the authorities to make BR therapy available as soon as possible. Once approvalis granted, the Company expects TREAKISYM® to be widely available as a treatment option for many patients.
In September 2017, the Company concluded an exclusive license agreement with Eagle Pharmaceuticals, Inc. (head office:
New Jersey, U.S., “Eagle”) and obtained exclusive rights to develop and market TREAKISYM® liquid formulation (RTD and RI
liquid formulations) (Note 7) in Japan. For the RTD liquid formation, the Company filed an application for approval in September
2019 and plans to launch in the first three months of FY 2021. For the RI liquid formulation, the Company commenced a clinical
trial in November 2018 with the primary goal of confirming its safety, and completed patient enrollment in March 2020. The
Company expects to obtain approval in the second half of FY 2022 by promptly filing for an application after the trial ends. The
RI liquid formulations of TREAKISYM® will significantly reduce the time required for administration to 10 minutes, down fromthe 60 minutes required by the currently available lyophilized powder and RTD formulations. This will likely greatly lessen theburdens placed on patients and healthcare providers, enabling the Company to provide substantial added value. Furthermore, theprotection of multiple patents through liquid formula manufacturing licenses will make it possible to extend the life of theseproducts until 2031, further strengthening the foundation of the Company’s business growth.
(Note 1)

Non-Hodgkin’s lymphoma (NHL) refers to malignant lymphoma other than Hodgkin’s lymphoma. Malignant
lymphoma is a cancer of the lymphatic system in which lymphocytes develop malignant growths. The majority ofJapanese malignant lymphoma patients are suffering from NHL.

(Note 2)

Obinutuzumab (Gazyva®, marketed by Chugai Pharmaceutical Co., Ltd.): Like rituximab recommended by treatment
guidelines for non-Hodgkin’s lymphoma in Japan and overseas, obinutuzumab is a glycoengineered type II anti-20
monoclonal antibody that directly binds to CD20 (a protein expressed on B-cells other than stem cells or plasma cells)
on target B-cells to attack and destroy them along with the body’s immune system.

(Note 3)Tumor-specific T-cell infusion therapy is a treatment method in which tumor-specific T-cells (T-cells that specificallyrecognize cancer cells) taken from cancer patients are artificially bestowed with cancer specificity extracorporeally,
amplified and then administered to the patient.

(Note 4)

Kymriah® intravenous infusion (generic name: tisagenlecleucel; marketed by Novartis Pharma K.K.): Kymriah®
intravenous infusion is the first chimeric antigen receptor T-cell (CAR-T) therapy approved within Japan. Novartis
Pharma received manufacturing and marketing approval for Kymriah® for use in the treatment of CD19 positive
recurrent/refractory B-cell acute lymphoblastic leukemia (B-ALL) and CD19 positive recurrent/refractory diffuse
large B-cell lymphoma (DLBCL) in March 2019. Kymriah® intravenous infusion was included in NHI price listings in
May 2019.

(Note 5)Chimeric antigen receptor T-cell (CAR-T) therapy is a type of tumor-specific T-cell infusion therapy that introduces
genes that code chimeric antigen receptors (CARs) into T-cells, amplifies these cells and then infuses them. These
chimeric antigen receptors are produced by combining the intracellular domains of T-cell receptors with the antigen
binding sites of antibodies capable of recognizing membrane antigens attached to tumor cells. In clinical trials using―5―

CARs to target CD19 that expresses on B-cells, CD19-targeting CARs were introduced into T-cells that were later
administered to patients with B-cell tumors. These modified cells produced clear clinical effects.
(Note 6)Developed by Roche using Seattle Genetics’ antibody-drug conjugate (ADC) technology, polatuzumab vedotin is a
first-in-class anti-CD79b ADC (targeting CD79b) built by conjugating humanized monoclonal antibody targeting
CD79b to a tubulin polymerization inhibitor. CD79b protein is specifically expressed on the surface of many B-cells,
and is expected to be a promising target in new drug development. Polatuzumab vedotin selectively binds to CD79b
while minimally affecting normal cells, and destroys B-cells with the chemotherapeutic agent it contains.

(Note 7)

RTD and RI are pre-dissolved liquid formulations that differ from currently available lyophilized (freeze-dried)
powder injection. RTD (ready-to-dilute) will significantly reduce the preparation time and labor cost for healthcare
providers, and RI (rapid infusion) will reduce infusion duration to 10 minutes from the current 60 minutes, providing
significant benefit and value to both patients and healthcare providers.

[Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)]U.S. licensor Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S., “Onconova”) is conducting a global Phase III
clinical trial (also known as INSPIRE trial, with trial sites in more than 20 countries) of the intravenous formulation of rigosertib
for higher-risk myelodysplastic syndromes (HR-MDS) which do not respond to the current standard treatment withhypomethylating agents, relapse after treatment under the current standard of care, or are intolerant to hypomethylating agents.
The Company is responsible for clinical development in Japan. Onconova announced in March 2020 that global patient
enrollment (final target of 360 patients) was completed and further announced in July 2020 that it reached the required number ofsurvival events. Onconova in the July 2020 announcement also stated that it expected to obtain the top-line results (primary
endpoints) of the trial in the third quarter of 2020 and that scheduled to present the results at an academic conference within thesame year. Based on the results of the trial, the Company plans to apply for approval in Japan at the same time as in the U.S. andEurope.
As for the oral formulation of rigosertib, Onconova has completed Phase I/II clinical trials in the U.S. for the target indicationof first-line HR-MDS (in combination with azacitidine (Note 8)), and results suggested that the oral formulation of rigosertib andazacitidine were safe and effective when combined. The Company started a domestic Phase I clinical trial in June 2017 toconfirm the tolerability and safety of the oral formulation of rigosertib for Japanese patients. We began patient enrollment since
the first patient was enrolled in October 2017 and completed the enrollment process in June 2019. After completion of this trial,
the Company plans to take part in a global trial for combination therapy with azacitidine as the first-line treatment of patientswith HR-MDS, which Onconova is currently considering conducting. Data from this global trial was announced at the 61st
American Society of Hematology (ASH) Annual Meeting and Exposition in December 2019. Based on this data, Onconova
announced in the same month that it is discussing the design of a Phase II/III adaptive clinical trial testing this combination
therapy as a first-line treatment for HR-MDS.
(Note 8)

Azacitidine (Vidaza®, marketed by Nippon Shinyaku Co., Ltd.): This hypomethylating agent (for injection) wasapproved in 2011 upon successful confirmation of extended overall survival for the first time in the Phase III clinical
trial for the indication of MDS, and is currently used as a first-line drug for MDS patients who have difficulties inhematopoietic stem cell transplantation. MDS is a preleukemic state, and decrease in tumor suppressor gene due toexcessive methylation of DNA is thought to be related to the disease. Hypomethylating agents such as azacitidine arethought to suppress progress to leukemia by restoring tumor suppressor gene with a deterrent effect against
methylation of DNA.

[Antiviral drug: SyB V-1901 (generic name: brincidofovir)]
On September 30, 2019, the Company concluded an exclusive global licensing agreement for intravenous and oral formulationof antiviral drug brincidofovir (Note 9) (SyB V-1901; “BCV IV” and “BCV Oral,” respectively) with Chimerix Inc. (head office:North Carolina, U.S., “Chimerix”). Under this agreement, the Company acquired the exclusive rights for the worldwide
development, marketing, and manufacture of BCV for all human indications, excluding smallpox.
Since the Company acquired exclusive rights to BCV, it has continuously exchanged ideas with experts in infectious diseases
in and outside Japan in formulating a global development plan. Taking into consideration multiple perspectives and upon
carefully reviewing scientific and medical validity as well as the business feasibility of BCV, the Company has decided toprioritize global development of BCV IV targeting adenovirus (AdV) infections occurring after hematopoietic stem cell―6―

transplantation, an area with high unmet medical needs as there currently exists no effective treatment. The global development
will focus on Japan, the U.S., and Europe. Leveraging its knowledge of the efficacy and safety of BCV obtained from conducting
clinical trials of the drug, the Company intends to expand target indications of BCV to include multiple viral infections occurring
after hematopoietic stem cell transplantation, and further investigate whether it can be indicated for viral infections after kidney
or other organ transplantation. Through these efforts, the Company aims to expand the target market of BCV and maximize its
business value and strives to transform itself into a global specialty pharmaceutical company equipped with a comprehensive
system for supplying quality pharmaceutical products.
BCV Oral has demonstrated highly active antiviral effects in clinical trials conducted by Chimerix in Europe and the U.S..
These trials have also confirmed that BCV Oral has broad-spectrum antiviral effects. The extensive antiviral effects of BCV Oralagainst various dsDNA viruses (Note 10) have led the Company to expect BCV IV to demonstrate efficacy and safety in thetreatment and prevention of various viral infections occurring after hematopoietic stem cell transplantation.
(Note 9)

Brincidofovir (BCV) has a structure in which cidofovir (an antiviral drug already approved and marketed in the U.S.
and Europe, but unapproved in Japan; “CDV”) is bound to a lipid chain (hexadecyloxypropyl; “HDP”). It is quickly
absorbed into the lipid bilayer membrane and efficiently transfers into cells, and then the bound lipid chain ismetabolized and separated from the structure by intracellular phospholipases. This process generates an activator(CDV-PP; CDV diphosphate) that is retained in the cells for a long period of time, dramatically raising thecompound’s antiviral activity. Furthermore, BCV avoids nephrotoxicity, a fundamental issue plaguing CDV, since
HDP conjugation prevents the accumulation of the compound in renal tubular epithelial cells through organic aniontransporter 1 (OAT1) and CDV is released at low levels in the bloodstream.

(Note 10) Double-stranded DNA (dsDNA) viruses includes herpesviridae, adenoviridae, polyomaviridae, papillomaviridae,
poxviridae families of viruses, such as CMV, AdV, HHV-6, BK virus, HSV1/2, VZV, HPV, JCV, and small pox
virus.
[Patient-controlled analgesia SyB P-1501]
The Company initiated an arbitration against The Medicines Company (head office: New Jersey, U.S., “MDCO”) on October
11, 2017 under the rules of the International Chamber of Commerce, seeking damages of 82 million US dollars arising from
MDCO’s repudiation of the license agreement entered between the Company and MDCO for exclusive rights to SyB P-1501(IONSYS in the U.S.). The Company announced on August 5, 2020 that the arbitral tribunal, while denying the Company’s claim
for damages, has awarded 50% of the legal fees and expenses that the Company sought to recover in the arbitration. In addition,
the arbitral tribunal denied MDCO’s counterclaim in full and awarded no recovery to MDCO. Any material impact of the award
on the Company’s earnings forecast for the fiscal year ending December 31, 2020 will be evaluated and disclosed by theCompany in a timely manner.
(ii) Business outside Japan
SyB L-0501 is also marketed in South Korea, Taiwan, and Singapore, and product sales of SyB L-0501 in these countries werein line with the Company’s forecasts.
(iii) Licensing of new drug candidates
The Company plans to focus on formulating and executing plans for the global development of the antiviral drug brincidofovir
in-licensed in September 2019 for the time being. However, we will continue working on and reviewing multiple existing
licensing projects while searching for and evaluating new drug candidates for potential in-licensing. Through these efforts, we
aim to create long-term business value as a profitable biopharmaceutical company with growth potential.
(iv) Business results
As a result of the above, net sales totaled 1,360,648 thousand yen for the first six months of the FY 2020, primarily reflecting
product sales of TREAKISYM®, and overall net sales fell 32.1% year on year.
Selling, general and administrative expenses totaled 2,169,841 thousand yen (-14.7% year on year), including research anddevelopment (“R&D”) expenses of 833,697 thousand yen (-13.4% year on year) primarily due to expenses associated withclinical trials for the intravenous formulation of TREAKISYM® and the intravenous and oral formulations of rigosertib, as wellas other selling, general and administrative expenses of 1,336,143 thousand yen (-15.5% year on year), including upfront
spending to establish an internal sales structure.

―7―

As a result, an operating loss of 1,839,942 thousand yen was recognized in the first six months of FY 2020 (versus an
operating loss of 2,015,102 thousand yen in the same period of FY 2019). Due to non-operating expenses of 43,377 thousand
yen, primarily comprising of foreign exchange losses of 18,985 thousand yen and share issuance cost of 22,896 thousand yen,ordinary loss totaled 1,883,076 thousand yen (versus an ordinary loss of 2,069,366 thousand yen in the same period of FY 2019)and bottom-line loss in the first three months of the FY 2020 totaled 1,884,976 thousand yen (versus a loss of 2,069,929 thousand
yen in the same period of FY 2019).
Segment information has been omitted since the Company operates within a single segment, which includes the research anddevelopment, manufacturing, and marketing of pharmaceutical drugs and other related activities.

(2) Explanation of financial position
Total assets as of June 30, 2020 stood at 6,585,397 thousand yen, an increase of 1,311,441 thousand yen from the previous
fiscal year end. This was primarily due to increases of 1,498,876 thousand yen in cash and deposits, 151,893 thousand yen inmerchandise and finished goods, 43,753 thousand yen in prepaid expenses, 31,522 thousand yen in software in progress, 23,555
thousand yen in software, 19,902 thousand yen in tools, furniture and fixture, and 10,936 thousand yen in lease and guarantee
deposits, offsetting decrease of 314,728 thousand yen in accounts receivable–trade, 139,809 thousand yen in consumption taxes
receivable, 27,066 thousand yen in advances paid, and 17,713 thousand yen in construction in progress .
Total liabilities stood at 792,949 thousand yen, a decrease of 80,888 thousand yen from the previous fiscal year end, owing
mainly to a decrease of 155,592 thousand yen in accounts payable–other, which offset an increase of 72,990 in accounts payable–
trade.
Under net assets, decreases of 21,251 thousand yen in share acquisition rights and 1,884,976 thousand yen in retained earnings
due to the recording of a bottom-line loss were offset by increases of 1,650,573 thousand yen in capital surplus and 1,648,467
thousand yen in share capital. As a result, total net assets increased by 1,392,330 thousand yen from the previous fiscal year end
to 5,792,447 thousand yen.
The equity ratio consequently rose 7.2 percentage points from the previous fiscal year end to 78.9%.

(3) Explanation of earnings forecasts and other forward-looking information
No revision was made to the earnings forecasts for FY 2020 as of the date of this document.

―8―

2. Quarterly Financial Statements and Primary Notes(1) Quarterly balance sheet(Unit: thousands of yen)
FY 2019(as of December 31, 2019)
AssetsCurrent assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Prepaid expenses
Advances paid
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Software in progress
Total intangible assets
Investments and other assets
Shares of subsidiaries
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Accounts payable–other
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Provision for retirement benefits
Total non-current liabilities
Total liabilities―9―

1H FY 2020(as of June 30, 2020)

3,910,830
549,275—
94,002
41,791
275,324
16,267
4,887,491

5,409,697
234,546
151,893
137,755
14,725
135,515
48,2896,132,424

34,734
19,242
21,51375,491

33,04039,1443,800
75,985

94,974
145,551
240,525

118,529
177,073295,603070,44670,446
386,463
5,273,955

081,38381,383452,972
6,585,397

120,913639,482
87,75624,066872,219

193,903
483,890
88,49924,860791,153

1,619
1,619
873,838

1,796
1,796
792,949

(Unit: thousands of yen)
FY 2019(as of December 31, 2019)
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Share acquisition rights
Total net assets
Total liabilities and net assets

14,870,639
14,843,137(25,919,496)(15,077)3,779,202
620,9134,400,116
5,273,955―10―

1H FY 2020(as of June 30, 2020)

16,519,107
16,493,711(27,804,473)(15,559)
5,192,785
599,661
5,792,447
6,585,397

(2) Quarterly statement of income(For the first six months of FY 2020)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on tax refund
Insurance claim income
Other
Total non-operating income
Non-operating expenses
Commission expenses
Share issuance costs
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit (loss)
Gain on reversal of share acquisition rights
Total extraordinary income
Profit (loss) before income taxes
Income taxes–current
Total income taxes
Profit (loss)

1H FY 2019(from January 1, 2019
to June 30, 2019)2,004,976*1,475,575
529,400
2,544,503(2,015,102)(Unit: thousands of yen)
1H FY 2020
(from January 1, 2020
to June 30, 2020)
1,360,648*1,030,749
329,898
2,169,841(1,839,942)

101
76
2,736
—
2,914

120
120
—
2
244

5,257
9,282
42,411
227
57,178(2,069,366)
1,336
1,336
(2,068,029)
1,900
1,900
(2,069,929)

1,495
22,89618,985―43,377(1,883,076)——(1,883,076)
1,900
1,900
(1,884,976)―11―

(3) Quarterly statement of cash flows(Unit: thousands of yen)
1H FY 2020
(from January 1, 2020
to June 30, 2020)

1H FY 2019(from January 1, 2019
to June 30, 2019)
Cash flows from operating activities
Loss before income taxes
Depreciation
Share-based remuneration expenses
Increase (decrease) in provision for retirement
benefits
Interest income
Foreign exchange losses (gains)
Commission expenses
Share issuance costs
Gain on reversal of share acquisition rights
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses
Decrease (increase) in advances paid
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in other current assets
Decrease (increase) in long-term prepaid
expenses
Increase (decrease) in trade payables
Increase (decrease) in accounts payable–other
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividends received
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments of leasehold and guarantee deposits
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Proceeds from issuance of shares resulting fromexercise of share acquisition rights
Proceeds from issuance of share acquisitionrightsPayments for issuance of shares
Purchase of treasury shares
Proceeds from disposal of treasury shares
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period―12―(2,068,029)
17,91173,787(1,883,076)
20,405
55,106

206

177

(101)
55,734
5,257
9,282(1,336)400,630
533,824(56,844)
3,311

(120)
20,272
1,495
22,896―
314,728(151,893)(45,249)
27,06632,008139,809360(32,022)1,225—(717,627)
603,144
12,023440(1,094,789)
101(1,900)72,990(155,565)
1,536
440(1,591,002)
121(1,900)(1,096,587)(1,592,780)(6,596)(109,039)－(9,955)(68,451)(11,377)(115,636)(89,785)

2,522,051

3,215,468－

10,540(9,282)——(20,494)(4,129)321

2,512,769

3,201,706(55,734)(20,272)

1,244,810
4,821,355
6,066,166

1,498,867
3,910,830
5,409,697

(4) Notes to quarterly financial statements(Notes to going concern assumptions)None to be reported.
(Relating to the quarterly statement of income)*The value of ending inventory is the amount after inventory write-downs in connection with a decline in profitability, and thefollowing loss on valuation of inventories is included in the cost of sales.
(Unit: thousands of yen)

1H FY 2019(from January 1, 2019
to June 30, 2019)
187,840

1H FY 2020
(from January 1, 2020
to June 30, 2020)
68,838The above figures reflect the booking of a loss on valuation of inventories, as the Company determined that some batches of
TREAKISYM® 100mg vials were unfit for sales due to quality defects.

(In case of significant changes to shareholders’ equity)
In the first six months of FY 2020, the Company issued new shares due to the exercise of some of share acquisition rights
pertaining to the 33rd, 36th, 37th, 38th, 40th, 41st, 47th, and 50th warrants. As a result, share capital and capital surplus each increased
by 1,648,467 thousand yen. The total value of treasury shares increased 4,129 thousand yen as a result of a share repurchase.
Further, the Company disposed of treasury shares due to the exercise of some of share acquisition rights issued in the 33rd, 36th,and 38th warrants. As a result, the total value of treasury shares fell 3,259 thousand yen and other capital surplus increased 2,176
thousand yen.
The disposal of treasury shares in response to the request to sell shares by shareholders of less-than-one unit of shares led to
declines of 387 thousand yen in the total value of treasury shares and 71 thousand yen in other capital surplus.
As a result, as of June 30, 2020 share capital was 16,519,107 thousand yen, capital surplus 16,493,711 thousand yen, and thetotal value of treasury shares 15,559 thousand yen.
(Significant subsequent events)
None to be reported.

―13―