English translation for reference purposes only

FY2022 2Q
Financial Results

In case of any discrepancy,
the Japanese version shall prevail

Modalis therapeutics Corporation（TSE︓4883）

August 5, 2022
Copyrights and proprietary to Modalis

Disclaimer
This document has been prepared by Modalis Therapeutics corporation and Modalis Therapeutics Inc. (the “Companies”)
solely for information purpose only. This document does not constitute or form part of and should not be construed as, anoffer to sell or issue or the solicitation of an offer to buy or acquire securities of the Companies in Japan, the United States
or any other jurisdictions. The information contained herein is based on current economic, regulatory, market trends andother conditions. The Companies make no representation or guarantee with respect to the credibility, accuracy orcompleteness of the information herein. The information contained herein may change without prior notice. You may not
publish or use this document and the contents thereof for any other purpose without a prior written consent of theCompanies. Furthermore, the information on future business results are forward-looking statements. Forward-looking
statements include but not limited to expressions such as "believe", “expect", "plan", "strategic", "expect", "anticipate","predict" and "possibility", as well as other similar expressions to explain future business activities, achievements, events andfuture conditions. Forward-looking statements are predictions about the future that reflect management's judgment
based on currently available information. As such, these forward-looking statements are subject to various risks anduncertainties that could cause actual results to differ materially from those expressed in or suggested by the forwardlooking statements. Therefore, you may not rely entirely on forward-looking statements. The Companies do not assume any
obligation to change or correct any forward-looking statements in light of new information, future events or other findings.
This document and its contents are confidential and are being provided to you solely for your information and may not beretransmitted. This presentation is being furnished to you solely for your information and may not be reproduced or
redistributed to any other person. In giving this presentation, the Companies do not undertake any obligation to provide
the recipient with access to any additional information or to update this presentation or any additional information or tocorrect any inaccuracies in any such information which may become apparent.
Information on companies other than the Companies and information provided from third parties are based on public
information or sources. The Companies have not independently verified the accuracy and appropriateness of such dataand indicators used herein, nor assume any responsibility for the accuracy and appropriateness of such data andindicators presented in this document.

2

Copyrights and proprietary to Modalis

MODALIS•

is pioneering the first CRISPRbased gene modulationtechnology•is the leading company inepigenetic modulation•develops novel precision
medicines for genetic
disorders for which there
have been no cure3

Copyrights and proprietary to ModalisEvery life deserves attention

Corporate Philosophy

Every life deserves attention
The company group, through drug discovery using the core platform
technology “non-cutting CRISPR technology” (CRISPR-GNDM ®
technology) to invent therapeutics targeting rare genetic disorders. True
to our corporate philosophy of “every life deserves attention,” we hope
to contribute to society by giving patients hope to overcome their illness.

4Copyrights and proprietary to Modalis

Provides solution for the long tail of disease

Historical drug targets
are high incidence
diseases (e.g. diabetes)

Long tail ofdiseases

Only~600 § therapeutics

Tx D

Tx C

approved to date

Tx B

Therapeutics A

Patient number

It is believed that of10,000* human diseases, about 7,000#are rare diseases which consist of“long tail” diseases. Of these, 80%† overlap with genetic disorders and 95％ remain untreated.
The company is committed to identifying cures with our powerful novel technology.

No treatment option
for 95%† ¶ of genetic
disorders

400 Mil pts¶
Diseases

Scalable efficient approach is required to tackle the divided populationreference: *21st Century Cure Act, #NIH GARD †innovation.org ¶GlobalGenes.org§Active therapeutics of 491 NME, 106 BLA, 17 cellular and gene therapy products @FDA as of 2019.7.22 Source from KEGG

5

Copyrights and proprietary to Modalis

Table of contents

1. Financial Highlights
2. Key Topics
3. Growth Strategy
4. Q&A

6

Copyrights and proprietary to Modalis1. Financial Highlights

7

Copyrights and proprietary to Modalis１． Financial Highlights ︓ PL & Business Result

PL & Business Result（Million Yen）

FY2021 2Q（A）

FY2022 2Q（B）

（B）
－（A）

Operating revenue

140

39

Operating expenses

478

908

430

R&D

349

778

429

SGA

129

130

1

Operating income

(477)

(868)

(391)

Ordinary income

(464)

(780)

(316)

17(775)(792)

ProfitOperating revenue
・Earning collaborative R&D milestone income
Operating expenses
・R&D increased year on year as business progressed(primarily in personnel expenses,research material expenses, rent fee and expenses for conducting clinical trials of MDL101)
SGA: Selling and Generally Administrative Expenses

8Copyrights and proprietary to Modalis１． Financial Highlights : Pipeline

Pipelinepreclinical

Code

Disease/Indication*1

PartnerStructure

MDL-201

MuscleAstellas
Pharma Inc.

LicenseMDL-202

MuscleAstellas
Pharma Inc.

LicenseMDL-205

CNS

Eisai Co .,Ltd

Collaboration

MDL-101

CMD1A*2

Fully controlled
by Modalis

Wholly-owned

MDL-102

CNS

Fully controlled
by Modalis

Wholly-owned

MDL-104

Tauopathy*3

Fully controlled
by Modalis

Wholly-owned

MDL-105

DCM*4

Fully controlled
by ModalisWholly-owned

MDL-206

Angelman
Syndrome

Fully controlled
by Modalis

Wholly-owned

discovery

INDenabling

Clinical
IND

PhI

PhII

PhIII

Collaboration

In-house

Pipeline Expansion*1: We have adopted a strategy of withholding specific indications until the patent application is published for competitive reasons.
*2: CMD1A=Merosin-deficient congenital muscular dystrophy type 1A*3: Tauopathy belongs to a class of neurodegenerative diseases involving the aggregation of tau protein. Correlation with Alzheimer’s diseasehas been suggested.
*4: DCM=Dilated cardiomyopathy

9Copyrights and proprietary to Modalis１． Financial Highlights ︓ BS & Financial Position

BS & Financial Position（ Million Yen ）FY2021（A）
5,067

FY2022 2Q
（B）
4,255

（B）－（A）

Cash & deposits

4,936

4,158

(778)

Non-current assets
Property, plant andequipment
Right to use patent

1,002

1,08886)223

342119)

704

673

(31)

6,069

5,343

(726)

Current liabilities

18120524)

Non-current liabilities

339

325

(14)

Total liabilities

52053010)

Total net assets

5,549

4,813(736)

Total liabilities and net assets

6,069

5,343(726)

Capital adequacy ratio

91.4％

90.0％

Current assets

Total assets(812)• Stable financial base, High Equity ratio• Increased property, plant and equipment such as research equipment due to theexpansion of the laboratory of the US subsidiary10

Copyrights and proprietary to Modalis１． Financial Highlights ︓ Cash Flow Status

Cash Flow Status
4,936

△713

△118

350

Balance of Cashand cashequivalents（FY2021）

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing
activitiesEffect of exchange
rate change on cash
and cash equivalents

ＡＢＣ

4,158

Balance of Cashand cashequivalents（FY2022 2Q）

Ａ Cash flows from• Loss before income taxes （△780）

Ｂ Cash flows from investing• Purchase of property, plant and equipment （△129）

Ｃ Cash flows from financing

・Proceeds from issuance of stock acquisition rights （7）operating activities• Depreciation （58）

activities

activities

1111（ Million Yen ）Copyrights and proprietary to Modalis2. Key Topics

12

Copyrights and proprietary to Modalis２. Key Topics : About MDL-101

Summary of MDL-101
Ø Reported by 1Q/2022
n Mouse model data in two disease strains (dy2j and dyW) and wildtype• Upregulation of LAMA–1 gene and protein along with GNDM expression• Improvement in biochemical and physiological readouts as well as prolonged survival• Sustained expression of GNDM in WT mice for 2 years

n pilot NHP study to explorer dose and to assess immune reaction against GNDM
n Kicked off GMP targeting process development in collaboration with a CDMO.

Ø Progress thereaftern INTERACT meeting with FDA (Mid Jul) -> summarized in the next pagen In-life* part of 2nd NHP study completed. Sample analysis ongoing.
n Design and execution of the studies toward pre-/IND
n Process development ongoing for GMP manufacturingn Engage with clinical advisors

Ø Next steps:
n Filing pre-IND meeting (by end 2022)
n Continue IND enabling GLP tox and PK/PDn Continue process development and pilot productions for GMP campaign
in-life*: Phase of a study following treatment in which the test system is ongoing
13

Copyrights and proprietary to Modalis２. Key Topics : About MDL-101

INTERACT* Meeting summary•

Held in Mid July••Non-binding
Modalis provided development summary and questions toFDA and FDA answered to them in writing and follow them up
in a web meeting.

•Primary agenda includes– Manufacturing process and method to assess clearance of theresulted product– Compatibility among samples used in animal studies and clinical trials– Species selection for the GLP studies– Using surrogate products for animal studies•

FDA responses were found to be within Modalis' expectations
and under control. They did not result in significant changes tothe planned studies and development strategies.

INTERACT : INitial Targeted Engagement for Regulatory Advice on CBER Products
14

Copyrights and proprietary to Modalis２. Key Topics : About MDL-101

Mice study demonstrated significant improvement in muscle function
Grip
Strength
Forepaws
Grip
Strength
Forepaws
AveragePeak Force(gf)force (gf)
Peak401e14• dyW (severe MDC1a model)
mice injected with GNDM
1e14 control(control gRNA, or active
UNT gRNA at low and high dose)compared with untouched.
5e13302010• Grip strength assay on 34day post injection.

0sedoN

Ucontrol13

1e14

5e

14

1eTMedNDhclGw
ghourot
Lot
Hi
Unon
CMouse surrogate of MDL-101
seodIn addition to the survival benefit, the functional improvement is confirmed
average of 3 trials
15

Copyrights and proprietary to Modalis２. Key Topics : Summary in R&D

Summary of other R&D activity
Ø Other pipelinesn MDL-104 (Tau)• Robust Tau suppression confirmed in humanized MAPT micen MDL-105 (TTN)• Engaged and discussed with Scientific and Clinical advisorsØ Othern Presented 6 articles including MDL-101, 104, 105, and 205 at 26th
American Society of Gene and Cell Therapy (ASGCT) annualmeeting (May 16-19 @Washington DC)
n Presented LAMA-1 and Titin programs at CureCMD(curecmd.org)conference (Jun 29-Jul1 @Nashville TN)• https://www.scifam.info

16Copyrights and proprietary to Modalis２. Key Topics : Other updates on business

Other updates on businessØ Progress on intellectual propertyn Received notice of allowance (NOA) from USPTO on a patent cofiled with Astellas titled ‘Method for treating muscular dystrophyby targeting utrophin gene (Jun)Ø Progress on partneringn MDL-101: Partnering discussion ongoing with pharma/biotech
companies
n Research collaboration: In discussion with pharma/biotech
companies on new targets

17Copyrights and proprietary to Modalis２. Key Topics : Collaboration pipeline

Steady progress in IND enabling of 201 and 202
MDL-205 has achieved MS and collaboration is extended
Collaboration pipeline
CodeCodeIndication

2022/122023〜

MDL-201
muscleNonclinical and IND-enabling studies, CMC activities#MDL-202
muscleNonclinical and IND-enabling studies, CMC activities#

MDL-205
CNS

Research collaboration*Scheduled milestone events are informational in the future and subject to change#The partner is taking a policy of not disclosing status of projects in preclinical or earlier
18

Copyrights and proprietary to Modalis２. Key Topics : In-house pipeline

Several pipelines are coming out in this year
In-house pipeline
Code
Codeindication

2022/122023/122024/12

適応疾患
MDL-101

CMD1A

INTERACT

Pre-IND
filingINDfilingPoC

MDL-102
CNS

MDL-104
Tauopathy

Pre-IND
filing

MDL-105
DCM

Pre-IND
filing

MDL-206
Angelmansyndrome

MDL-XXXCV

To be announced*Scheduled milestone events are informational in the future and subject to change

19

Copyrights and proprietary to Modalis

3. Growth Strategy

20

Copyrights and proprietary to Modalis

３. Growth Strategy : Expansion of pipeline

Growth Strategy

opportunity expands two dimensionallyPotential Growth for GNDM technology

Expansion~2,200 target opportunity
MDL-XXX

pipelines

MDL-105>100 core target indications

MDL-104
MDL-102

License opportunity

MDL-101
MDL-206
MDL-205
MDL-202
MDL-201

M/S payment as progress
Stage of development

21

Copyrights and proprietary to Modalis

３. Growth Strategy : Expansion of pipeline

Large indication programs follow MDL-101 which paves the clinicalpath
Modalis’ pipelines and market size

MDL-205
CNS
MDL-105
DCM

MDL-201
Muscle disease

MDL-202
Muscle disease

MDL-205
Angelmansyndrome

MDL-104
Tauopathy

Stage of development
Size of circles represents an image of market size or patient number of each indication
22Copyrights and proprietary to Modalis

MDL-101
CMD1a３. Growth Strategy : GNDM

GNDM is efficient approach both for LoF and GoF mutation
In GoF disorders

In LoF disorders
singlePoint of Mutation(s)Base editing

Limited onlyto ex vivo
application

DNARNA

Protein

Gene editing• GNDM(CRISPR)• ZFP-TF(ZFN)

Gene Therapy

small

1 mutant allele

Multiple copies

variedGNDM

Si RNA
ASO

Protein(Ab)peptideSmall molecule

Editing(K/D)

diversified
Gene Size

Large

LoF: Loss of function
GoF: Gain of (mal)function
23

Targets for suppression

K/D: Knock-down

Copyrights and proprietary to Modalis

３. Growth Strategy : GNDM

Modalis is uniquely positioned within the CRISPR field

Gene

CRISPR

Other(e.g. ZFN)

24

Editing

EditasCRISPR Tx
Intelliabase

Modulation(epigenetic editing)

BEAM

Sangamo

Copyrights and proprietary to ModalisTune
ChromaEpicBio

Encoded３. Growth Strategy : Composition of Modalis’ value and measures for advance

Composition of Modalis’ value and measures for advancemeasures for advancement• Aspiration of good talents• Completion of value chainØ Partnering for futurecommercialization
Ø Establishing development
capabilities(pre/clinical,CMC, regulatory)• Expanding access to capital,partner, talent• strengthen financial condition• M&A

Corporate Value• Acquisition ofadditional businesscapability• Increased financial
stabilityBusiness
ValuePipelineValue• Progress of development• Explorer new targets• Life-cycle management• Progress ofdevelopment• Expansion ofpipeline• Validation of technology• Access tonew/complementarytechnology• Strengthening IP portfolio

Platform Value• Obsolescence• Alternative technologies• Shrinking patent life
• Exhausting of low
hanging fruits

25

Time

Copyrights and proprietary to Modalis

4．Q & A

26

Copyrights and proprietary to Modalis

Q1

You had planned to license out MDL101 in the first half of 2022,
how is the progress going?

A) Although we continue to have dialogues with potential partners, we areproceeding with our business with the belief that advancing development
toward clinical trials as planned will ultimately add value to the program andtechnology and lead to the realization of an alliance on better terms.
Since the decision to enter into an alliance depends on the timing and intent of
the other party as well as our own, it is not something that can be achieved
solely through our efforts. On the other hand, as we recognized again atCureCMD conference, where we participated, MDC1A is a life-threatening
disease, and given the current situation where the drug we are developing is ahope of the patients, the best thing we can do and manageable to us is toproceed with the development as fast as possible while we are waiting for aright partner who has strong commitment to develop the molecule together will
make a decision at an appropriate time and under the appropriate conditions.

27

Copyrights and proprietary to Modalis

Q2

Change in Policy on Non-Disclosure of Partnering Goals

A）We had been disclosing our intention and target timing of partnering goals forour own pipelines because we believed it would contribute to investment
information.
However, since partnering depends not only on the progress of the development
and our intentions, but also on the intentions and strategies of the other party, we
have determined that disclosing information that is not within our control is not
appropriate for investment information.
In addition, disclosing our partnering intentions and deadlines would not have apositive impact on negotiations, and in fact there have been cases where suchan impact has occurred. Therefore, we have decided not to disclose ourpartnering goals.

28

Copyrights and proprietary to Modalis

Q3

Any outcomes from the presentation at ASGCT?

A） This year‘s ASGCT was our first opportunity to present our technology anddevelopments at a scientific conference, and we believe our presentations
attracted a great deal of attention. This is consistent with the fact that ourapproach is quite new and unique even in the the rapidly developing field ofgene therapy and genome editing, as well as with the emergence of newcompanies advocating epigenome editing and gene regulation.
As a result, we have received several inquiries about partnerships, which webelieve has been very positive for our future business.

29

Copyrights and proprietary to Modalis

Q4

How does the USPTO’s Notice of Allowance to UTRN patentimpacted on Modalis’ business

A）The fact that the patent will be granted in the U.S. following Japan means thatthe product will be protected by the patent when the pharmaceutical productbased on the patent is launched in that country. Therefore, we believe that thegranting of the patent in the U.S., which is believed to account for about half ofthe pharmaceutical market, is of great significance.
We will continue to work with our partners to obtain patents in the remaining
target countries.

30

Copyrights and proprietary to Modalis

Q5

How did the INTERACT meeting go?

A）This meeting was the first opportunity for MDL-101 and CRISPR-GNDM technology
to make a contact with the regulatory authorities.
While we do not have a policy for disclosing details, the meeting resulted in abetter understanding on our part of1.

The position of the product and technology in gene therapy and applicable guidelines

2.

Issues related to bridging the investigational drug with the product to be used in the GLP studies

3.

Data to be demonstrated in the IND package

4.

The rationale for the study design that we should present in the Pre-IND

As a result, the FDA's opinion is generally consistent with our original study design,
and we do not believe that we need to make any significant changes to ourstudy plan or strategy.

Refer to following for INTERACT meetinghttps://www.fda.gov/vaccines-blood-biologics/industry-biologics/interact-meetings

31

Copyrights and proprietary to Modalis

Q6“ Gene therapy" is noted in the Kishida Cabinet's policy
published on 6/7. What impact does this have?

A）We understand that budgetary and legal measures will be taken based on thisdecision, and the impact of this decision is still unknown at this time.
However, the fact that the areas in which we operate are related to the nationalinterest and have been identified as priority areas in which to provide incentives
is a tailwind, but not a headwind, for our business. Hopefully, appropriate
selection will be made and budget allocations will be made among these areas.
Reference: Basic Policy on Economic and Fiscal Management and Reform 2022h"ps://www5.cao.go.jp/keizai-shimon/kaigi/cabinet/2022/summary_en.pdf

32

Copyrights and proprietary to Modalis