English translation

Summary of Financial Statements for the Fiscal Year Ended December 31, 2021
[Japanese GAAP] (Non-consolidated)
February 10, 2022
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 andChief Financial Officer

Takaaki Fukushima

TEL +81-3-5472-1125

Ordinary Annual General
Meeting of Shareholders

March 29, 2022

Date of Dividend
Payment (plan)—

Scheduled Date to File
Securities Report

March 29, 2022

Supplementary materials for the financial statements: Yes

No

Holding of earnings performance review:

No (For securities analysts and institutional investors)

Yes(Amounts of less than one million yen are rounded down.)
1. Business Results for FY 2021 (January 1, 2021 to December 31, 2021)(1) Operating Results
Net Sales(Percentages indicate year-on-year changes.)

Operating Profit (Loss)

Ordinary Profit (Loss)

Profit (Loss)

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

8,256
2,987

176.4
5.3

1,016
(4,506)——

1,001(4,615)——

2,032(4,090)——FY 2021
FY 2020

Earnings (Loss) per
Share
FY 2021
FY 2020

Ratio of Ordinary
Diluted Earnings per Ratio of Profit (Loss)
Profit (Loss) to Total
Share
to Equity (ROE)
Assets (ROA)

Ratio of Operating
Profit (Loss) to Net
Sales

Yen

Yen

%

%

%

53.04
(124.13)

52.32
—

39.6
(104.7)

13.6(79.9)

12.3(150.9)(Reference) Equity in earnings of affiliates:

FY 2021— million yen

FY 2020— million yen(2) Financial Position
Total Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen

%

Yen

8,452
6,274

6,745
4,657

73.7
64.3

162.26105.76

FY 2021 (as of December 31, 2021)
FY 2020 (as of December 31, 2020)(Reference) Shareholders’ equity:

Net Assets

FY 2021 (as of December 31, 2021)
FY 2020 (as of December 31, 2020)

6,226 million yen
4,037 million yen(3) Cash Flows
Cash Flows fromOperating Activities
FY 2021
FY 2020

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash
Equivalents at End of
PeriodMillions of yen

Millions of yen

Millions of yen

Millions of yen

140(4,122)

(70)
(160)

(71)
4,222

3,860
3,848

―1―

2. Dividends
Annual Dividend per ShareFY 2020
FY 2021
FY 2022 (Forecast)

1st QuarterYen

2nd Quarter
Yen

—
—
—

0.00
0.00
0.00

Total Dividends

3rd Quarter Fiscal Year End
Yen
Yen

—
—
—

Payout Ratio

Full Year
Yen Millions of yen

0.00
0.00
0.00

%

—
—

0.00
0.00
0.00

—
—
—

Ratio of
Dividends to
Net Assets%——

3. Earnings Forecasts for FY 2022 (January 1, 2022 to December 31, 2022)(Percentages indicate year-on-year changes.)
Operating Profit(Loss)Net Sales
Millions of yen

Full Year

10,992% Millions of yen

33.1

1,770

Ordinary Profit(Loss)% Millions of yen

74.2% Millions of yen

1,750

Earnings (Loss) per
Share

Profit (Loss)

74.8

1,480

%

Yen

(27.2)

38.63

Notes:(1) 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(2) Number of issued shares (common stock)(i) Total number of issued shares at the end of

FY 202138,457,206 shares

FY 2020

38,202,956 shares(ii) Total number of treasury shares at the endof the year

FY 202182,618 shares

FY 2020

30,143 shares(iii) Average number of shares during the year

FY 202138,313,220 shares

FY 2020

32,950,201 sharesthe year (including treasury shares)* Summaries of financial statements are not subject to audit through certified public accountants or auditing corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters(Notes on forward-looking statements)
All forecasts presented in this financial statement, including earnings forecasts, are based on the information currently available tomanagement 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.
Overview of Business Results, etc. (4) Future outlook,” on Page 9 of the attachment.

―2―

Index of the attachment
1. Overview of Business Results, etc. ........................................................................................................................................................ 4(1) Overview of business results for the fiscal year under review ......................................................................................................... 4(2) Overview of financial position for the fiscal year under review ....................................................................................................... 8(3) Overview of cash flows for the fiscal year under review ................................................................................................................. 9(4) Future outlook .................................................................................................................................................................................. 9(5) Basic policies concerning profit distribution and dividends ........................................................................................................... 10(6) Business risks ................................................................................................................................................................................. 11
2. Status of Corporate Group ................................................................................................................................................................... 17
3. Management Policies ........................................................................................................................................................................... 17(1) Basic policy of company management ........................................................................................................................................... 17(2) Key performance index .................................................................................................................................................................. 18(3) Pipeline .......................................................................................................................................................................................... 18(4) Medium- to long-term strategy....................................................................................................................................................... 20(5) Issues to be addressed by the Company ......................................................................................................................................... 21
4. Basic Views on Selection of Accounting Standards ............................................................................................................................. 22
5. Financial Statements and Primary Notes ............................................................................................................................................. 23(1) Balance sheet.................................................................................................................................................................................. 23(2) Statement of income ....................................................................................................................................................................... 25(3) Statement of changes in equity ....................................................................................................................................................... 26(4) Statement of cash flows.................................................................................................................................................................. 28(5) Notes to going concern assumptions .............................................................................................................................................. 29(6) Significant accounting policies ...................................................................................................................................................... 29(7) Notes to financial statements .......................................................................................................................................................... 30(Change in accounting methods)...................................................................................................................................................... 30(Change in presentation) .................................................................................................................................................................. 30(Accounting Standards Not Yet Applied, etc.) ................................................................................................................................. 30(Balance sheet)................................................................................................................................................................................. 32(Statement of income) ...................................................................................................................................................................... 32(Statement of changes in equity) ...................................................................................................................................................... 33(Statement of cash flows)................................................................................................................................................................. 35(Financial instruments) .................................................................................................................................................................... 35(Retirement benefits) ....................................................................................................................................................................... 38(Stock options) ................................................................................................................................................................................. 39(Asset retirement obligations) .......................................................................................................................................................... 50(Segment information) ..................................................................................................................................................................... 51(Affiliated party information) .......................................................................................................................................................... 52(Per share information) .................................................................................................................................................................... 53(Significant subsequent events) ....................................................................................................................................................... 53
6. Other .................................................................................................................................................................................................... 53(1) Change in officers .......................................................................................................................................................................... 53(2) Other .............................................................................................................................................................................................. 54―3―

1. Overview of Business Results, etc.
(1) Overview of business results for the fiscal year under review(Business results for the fiscal year under review)
Progress in the Company’s business for the fiscal year under review is as follows.
(i) Domestic business[Transition to the Company’s own sales infrastructure and business expansion]
With the expiration of the business partnership agreement with Eisai Co., Ltd. in December 2020, the Company began selling
TREAKISYM® (generic name: bendamustine hydrochloride) through its own sales organization. As a result, the Company
attained profitability in FY 2021, which was its top priority for the fiscal year, and solidified the foundation for future businessgrowth. The Company aims to achieve sustainable growth going forward.
With the shift to in-house sales, the Company began providing information tailored to the needs of each target market andworked to cultivate demand. It also offered detailed information on its products and held seminars. Through these efforts, theCompany was able to further improve the productivity of its salesforce. In addition to sales representatives, the Company
assigned hematology experts with more in-depth knowledge of the field to each region of its operation. Moreover, to build anationwide distribution network, we have entered into agreements with Suzuken Co., Ltd. and Toho Pharmaceutical Co., Ltd.,making both companies exclusive wholesalers of our products. We have also begun working with S.D. Collabo Co., Ltd. to build
a nationwide logistics system and set up two logistics centers—one in Eastern Japan and the other in Western Japan.
During the fiscal year under review, the Company commenced sales of the ready-to-dilute (RTD) intravenous formulation of
TREAKISYM® in January 2021, having obtained marketing approval in September 2020, and promoted the shift from theexisting freeze-dried (FD) formulation to the newly approved formulation. In March 2021, the Company obtained approval for apartial change to the marketing authorization of the FD formulation of TREAKISYM ®, allowing the product to be used in thebendamustine-rituximab (BR) therapy as well as in the genetically engineered polatuzumab vedotin plus bendamustine-rituximab(P+BR) therapy to treat recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL). After the approval was granted, the FD
formulation of TREAKISYM® immediately became available for use in the BR therapy, and the Company further promoted theswitch from the conventional multidrug therapy.
In April 2021, the Company obtained approval for a partial change to the marketing approval of the RTD formulation of
TREAKISYM® for its use in the BR and P+BR therapy for the treatment of r/r DLBCL. In May 2021, genetically engineered
polatuzumab vedotin was listed in the NHI drug price list, allowing TREAKISYM® to be used in the P+BR therapy.
[Stable product supply]
The Company commenced sales of the RTD formulation of TREAKISYM ® in January 2021, and has steadily worked topromote the switch from the FD formulation to the RTD formulation.
The Company currently imports the FD formulation of TREAKISYM ® from Astellas Deutschland GmbH, a subsidiary of
Astellas Pharma Inc., and it imports the RTD formulation of TREAKISYM ® from Eagle Pharmaceuticals, Inc. (head office: New
Jersey, U.S.).
The Company conducts secondary packaging and quality screening on imported batches of both the FD and RTD formulationsof TREAKISYM® in Japan and works to maintain stable quality.
In terms of supply, we diligently worked to replace the FD formulation of TREAKISYM® with the RTD formulation. Due toslower than anticipated conversion, the risk of the FD formulation going out of stock arose and controls were implemented on
shipments of the FD product from September 2021. Owing to the understanding and collaboration of healthcare providers, theconversion from the FD to RTD formulation has made rapid progress. The Company has secured sufficient inventory of RTD
formulation to ensure stable supply.
.
[Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB L-1702 (rapid
infusion (“RI”) injection) (generic name: bendamustine hydrochloride or bendamustine hydrochloride hydrate, trade name:TREAKISYM®)]
SymBio obtained marketing approval for TREAKISYM® for the indication as first-line treatment of low-grade non-Hodgkin’s
lymphoma (low-grade NHL) (Note 1) and mantle cell lymphoma (MCL) in December 2016, and for the indications ofrecurrent/refractory low-grade NHL and MCL in October 2010 and chronic lymphocytic leukemia (CLL) in August 2016.
TREAKISYM® is thus being used to treat a wide array of malignant lymphoma. Further, bendamustine-rituximab (BR) therapy―4―was added to the Guidelines for Tumors of Hematopoietic and Lymphoid Tissues published by the Japanese Society of
Hematology in July 2018, and recommended as a standard treatment for all previously approved indications. With thisdevelopment, TREAKISYM® has established its foothold as the standard treatment for malignant lymphoma.
In July 2018, the Company obtained approval for a partial change to the marketing authorization of TREAKISYM ®, allowing
the product to be used in combination with not only rituximab but also other new anti-CD20 antibodies for the treatment of CD20 positive follicular lymphoma (FL), a typical histologic type of low-grade NHL. Having obtained approval for the partialchange, TREAKISYM® is available to patients as a new treatment option in combination with obinutuzumab (Note 2). In March
2019, the Company obtained approval for a partial change to the marketing authorization, allowing the use of TREAKISYM ® asa pretreatment 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. Owing to the spread of its use as a pretreatment agent for regenerative medicine and other pharmaceutical products, thestatus of TREAKISYM® as the standard treatment for malignant lymphoma has further solidified.
In addition to the already-approved indications, SymBio conducted a Phase III clinical trial of BR therapy targeting r/r
DLBCL, and in May 2020 it applied for a partial change to the marketing authorization to include this additional indication. The
approval was granted in March 2021. In April 2021, the Company obtained approval for a partial change to the marketing
approval of the RTD formulation of TREAKISYM® for its use in BR and P+BR therapies for the treatment of r/r DLBCL.
Further, the Company conducted a follow-up study with overall survival as the primary endpoint, since survival data (e.g., overall
survival and progression-free survival) for BR therapy is crucial in establishing TREAKISYM® as a DLBCL treatment. The
Company presented the results of the study at the annual meeting of the Japanese Society of Hematology and other academic
conferences, and is currently preparing to publish the results in academic journals. In June 2020, Chugai Pharmaceutical Co., Ltd.
filed for marketing approval of genetically engineered polatuzumab vedotin (Note 6) used in combination with BR therapy intreating r/r DLBCL. In response, in July 2020 the Company applied for a partial change to the marketing authorization of
TREAKISYM® used in combination with genetically engineered polatuzumab vedotin and rituximab and obtained approval in
March 2021. In May 2021, genetically engineered polatuzumab vedotin was included in the NHI drug price list, allowing
TREAKISYM® to be used in the combination therapy of genetically engineered polatuzumab vedotin and BR therapy (P+BR).
Because there existed no effective treatment for r/r DLBCL, combination therapies comprising multiple anticancer drugs had
been used as rescue chemotherapy, and the development of highly effective and safe drugs was in dire need. BR therapy isalready used to treat patients with r/r DLBCL in Europe and the U.S. In Japan, patient organizations and relevant academic
societies have requested to the Ministry of Health, Labour and Welfare to make BR therapy available as soon as possible. Goingforward, the Company expects TREAKISYM® to be widely available as a treatment option for many patients by promoting theshift from the conventional multidrug therapies.
In September 2017, SymBio concluded an exclusive license agreement with Eagle Pharmaceuticals for the RTD formulation
and rapid infusion (RI; enabling shorter administration time) injection (Note 7) of TREAKISYM® in Japan. The Company obtained
marketing approval for the RTD formulation in September 2020, and launched the product in January 2021. For the RI injection,
the Company concluded clinical trials aimed at confirming the drug’s safety, and in May 2021, submitted a partial change
application. Further, in November 2021, the Company was granted approval for its partial change application to extend the shelf
life of the RTD formulation to 30 months based on the results of long-term stability studies.
Unlike the current FD formulation, RTD formulation of TREAKISYM® does not require the cumbersome manual work of
dissolving the drug (i.e., drug reconstitution), shortening preparation time and reducing burdens on healthcare providers.
Further, the RI injection significantly reduces the infusion time from the one hour required by the conventional FD and RTD
formulations, providing great benefit and value to both patients and healthcare providers.
(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.

―5―

(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 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
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, genetically engineered
polatuzumab vedotin is a first-in-class anti-CD79b ADC (targeting CD79b) built by conjugating humanizedmonoclonal antibody targeting CD79b to a tubulin polymerization inhibitor. CD79b protein is specifically expressedon the surface of many B-cells, and is expected to be a promising target in new drug development. Geneticallyengineered polatuzumab vedotin selectively binds to CD79b while minimally affecting normal cells, and destroys Bcells with the chemotherapeutic agent it contains.

(Note 7)

Ready-to-dilute (RTD) and rapid infusion (RI) are pre-dissolved liquid formulations that differ from the conventional
freeze-dried (FD) formulation. The RTD formulation significantly reduces the preparation time and labor cost for
healthcare providers, and the RI injection substantially reduces infusion duration from the current one hour, 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.) has conducted global Phase III clinical trials (withtrial sites in more than 20 countries; INSPIRE study) of the intravenous formulation of rigosertib for higher-risk myelodysplastic
syndromes (HR-MDS) which failed to respond to the current standard treatment with hypomethylating agents, relapsed after
treatment under the current standard of care, or were intolerant to hypomethylating agents; the primary endpoint of the study isoverall survival. In August 2020, Onconova announced that the primary endpoint—improved survival compared to physician’s
choice of treatment—was not met. The Company is responsible for clinical development in Japan, and is reviewing ways to use
the findings from the additional analysis of the INSPIRE study in the future development of rigosertib (intravenous formulation).
As for the oral formulation of rigosertib, Onconova completed a Phase I/II clinical trial of the investigational drug (incombination with azacitidine (Note 8)) in the U.S. in first-line HR-MDS patients, and the results suggested that the oral formulationof rigosertib used in combination with azacitidine was safe and effective. In June 2017, the Company initiated a Phase I clinical
trial in Japan to confirm the safety and tolerability of high-dose monotherapy and tolerance in Japanese patients, and completed
patient enrollment in June 2019.
With the aim of maximizing the business value of rigosertib and TREAKISYM®, the Company will conduct joint researchwith the University of Tokyo and Gunma University to investigate the efficacy of the drugs used in combination with each otheras well as in combination with other existing drugs, and to look for new indications.
(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)]
In September 2019, the Company concluded an exclusive global licensing agreement for intravenous and oral formulation ofantiviral drug brincidofovir (Note 9) (SyB V-1901; “BCV IV” and “BCV Oral,” respectively) with Chimerix Inc. (head office:―6―

North Carolina, U.S.). Under this agreement, the Company acquired exclusive rights for the worldwide development, marketing,and manufacture of BCV for all human indications, excluding orthopox viruses.
The Company decided to prioritize the global development of BCV IV, primarily in Japan, the U.S. and Europe, targeting
adenovirus (AdV) infections occurring after hematopoietic stem cell transplantation, an area with high unmet medical needs as
there currently exists no effective treatment. In March 2021, the Company submitted an Investigational New Drug (IND)
application to the U.S. Food and Drug Administration (FDA) to initiate a Phase II clinical trial targeting AdV infections primarily
in pediatric patients (also including adult patients). In April 2021, the FDA granted the development program a fast-track
designation. In August 2021, the investigational drug was administered to the first patient enrolled (first patient in or FPI) in theclinical trial. Further, In January 2022, the Company successfully filed a Clinical Trial Application (CTA) to the Medicines and
Healthcare products Regulatory Agency (MHRA) of the U.K.
Based on the efficacy and safety findings from clinical trials targeting AdV infections, the Company plans to investigate theefficacy of BCV against a range of dsDNA(Note 10) viral infections and expand target indications to include multiple viral
infections occurring after hematopoietic stem cell transplantation. It also intends to pursue the possibility of expanding target
indications to viral infections after kidney or other organ transplantation. Through these efforts, the Company aims to expand themarket for BCV and maximize its business value. BCV Oral demonstrated highly active antiviral effects in earlier clinical trials
conducted in Europe and the U.S. These trials also confirmed that BCV Oral had broad-spectrum antiviral effects. Based on these
extensive antiviral effects of BCV Oral against various dsDNA viruses, the Company expects BCV IV to be also effective andsafe in the treatment and prevention of various viral infections occurring after hematopoietic stem cell transplantation.
In addition to strong antiviral effects, BCV is also expected to have antitumor effects. Through joint research with the National
Cancer Centre Singapore and University of California San Francisco (UCSF) Brain Tumor Center, SymBio is investigating new
indications for BCV in oncology, including rare brain tumors and Epstein-Barr (EB) virus-positive lymphoma.
In December 2020, Chimerix announced that the FDA accepted its New Drug Application (NDA) for BCV Oral as a medical
countermeasure against smallpox; Chimerix obtained FDA approval in June 2021.
(Note 9)

Brincidofovir is a lipid conjugate of cidofovir (CDV). CDV is an antiviral drug already approved and marketed in the
United States and the European Union, but unapproved in Japan. It is quickly absorbed into the lipid bilayer
membrane and efficiently transferred into cells, and the bound lipid chain is metabolized and separated from thestructure by intracellular phospholipases. This process generates an activator (CDV-PP; CDV diphosphate) that is
retained in the cells for a long period of time, significantly raising the compound’s antiviral activity. Furthermore,
BCV avoids nephrotoxicity, a fundamental issue plaguing CDV, as the lipid conjugation prevents the accumulation of
the compound in renal tubular epithelial cells through organic anion transporter 1 (OAT1) and CDV is released at low
levels in the bloodstream.

(Note 10) Double-stranded DNA (dsDNA) viruses include herpesviridae, adenoviridae, polyomaviridae, papillomaviridae,
poxviridae families of viruses, such as cytomegalovirus (CMV), adenovirus (AdV), human herpesvirus 6 (HHV-6),
herpes simplex virus type 1 or 2 (HSV-1/2), BK virus (BKV), varicella zoster virus (VZV), human papillomavirus(HPV), JC virus, and smallpox virus.
(ii) Business outside JapanThe Company’s U.S.-based wholly-owned subsidiary SymBio Pharma USA, Inc. (President: Fuminori Yoshida) appointed
Dr. Carolyn Yanavich as its Vice President and Head of Project Management and Clinical Operations in October 2021, andlaunched full-scale operations aimed at accelerating global development of antiviral drug brincidofovir towardcommercialization.
(iii) Licensing of new drug candidates
SymBio is moving ahead with global development of brincidofovir, an antiviral drug in-licensed in September 2019. At thesame time, the Company continues to evaluate new drug candidates for potential in-licensing. Through these efforts, it aims tocreate medium- to long-term business value as a profitable biopharmaceutical company with growth potential.
(iv) Business results
As a result of the above, sales in FY 2021 grew substantially to 8,256,924 thousand yen (+176.4% year-on-year), driven by thetransition to in-house sales of TREAKISYM®. The contributions from the sales transition more than offset the negative impactsof residual inventories of TREAKISYM® FD formulation in the market sold by Eisai before the transition and the resurgence of―7―

COVID-19 cases, which resulted in postponed medical treatments as well as constrained sales activities due to tighter restrictions
on visits to facilities. From the third quarter of FY 2021 in particular, postponed medical treatments resumed as COVID-19
vaccination of the elderly patients made progress. Sales of TREAKISYM® for r/r DLBCL also began to increase from the third
quarter owing to approval of BR and P-BR therapies for the additional indication of r/r DLBCL granted in March 2021, and theinclusion of Chugai Pharmaceutical’s genetically engineered polatuzumab vedotin in the NHI drug price list in May 2021. As aresult, net sales in the second half of FY 2021 increased substantially year-on-year from 1,626,402 thousand yen a year ago to
5,110,316 thousand yen.
Gross profit rose substantially to 5,800,110 thousand yen (+569.1% year-on-year) on the back of sales growth and improved
gross profit margin resulting from the rapid progress in the switch from the freeze-dried (FD) formulation of TREAKISYM® toready-to-dilute (RTD) formulation. On the other hand, an inventory loss of 331,866 thousand yen of the FD formulation of
TREAKISYM® was recorded primarily as a result of the switch from the FD to RTD formulation.
Selling, general and administrative expenses totaled 4,784,109 thousand yen (-11.0% year-on-year), including research anddevelopment expenses of 1,736,126 thousand yen (-23.4% year-on-year) primarily due to expenses associated with clinical trials
for TREAKISYM®, rigosertib, and brincidofovir, as well as other selling, general and administrative expenses of 3,047,982
thousand yen (-1.8% year-on-year), including higher selling expenses due to the transition to in-house sales.
As a result, the Company recorded operating profit of 1,016,001 thousand yen in FY 2021 (versus an operating loss of
4,506,220 thousand yen in FY 2020). Although the Company recorded non-operating income of 17,462 thousand yen, consisting
mainly of 14,757 thousand yen in commission income, it also recorded non-operating expenses of 32,330 thousand yen, primarily
comprising foreign exchange losses of 20,186 thousand yen and commission expenses of 9,499 thousand yen. As a result,ordinary profit totaled 1,001,133 thousand yen (versus an ordinary loss of 4,615,903 thousand yen in FY 2020). Bottom-line
profit totaled 2,032,203 thousand yen (versus a loss of 4,090,216 thousand yen in FY 2020) due mainly to the recording of
1,275,759 thousand yen in deferred tax assets as a result of a careful assessment of the recoverability of deferred tax assets inlight of business results for FY 2021.
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) Overview of financial position for the fiscal year under review(Assets, liabilities, net assets, and cash flows)
Total assets as of December 31, 2021 stood at 8,452,997 thousand yen, an increase of 2,178,290 thousand yen from the previous
fiscal year-end. This was primarily due to increases of 1,740,521 thousand yen in accounts receivable–trade, 149,081 thousand yen
in advance payments, and 64,366 thousand yen in prepaid expenses, offsetting decreases of 412,950 thousand yen in semi-finishedgoods, 314,761 thousand yen in consumption taxes receivable, and 146,284 thousand yen in merchandise and finished goods.
Total liabilities stood at 1,707,324 thousand yen, an increase of 89,935 thousand yen from the previous fiscal year-end, due
mainly to increases of 516,036 thousand yen in accrued consumption taxes, 301,671 thousand yen in income taxes payable and186,437 thousand yen in provision for product changeover, offsetting decreases of 595,776 thousand yen in accounts payable–
trade and 130,738 thousand yen in accounts payable–other.
Total net assets stood at 6,745,672 thousand yen, an increase of 2,088,354 thousand yen from the previous fiscal year-end. Thiswas mainly owed to increases of 2,032,203 thousand yen in retained earnings due to the recording of bottom-line profit, 113,015
thousand yen in capital surplus, and 112,684 thousand yen in share capital, and a decrease of 101,041 thousand yen in shareacquisition rights.
The equity ratio consequently rose 9.3 percentage points from the previous fiscal year-end to 73.7%.
Cash and cash equivalents (“cash”) as of December 31, 2021 increased 11,480 thousand yen from the previous fiscal year-end to3,860,106 thousand yen.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 140,042 thousand yen, compared with 4,122,483 thousand yen in cashused by these activities in the previous fiscal year. The key drivers were1,001,331 thousand yen in profit before income taxes, adecline of 830,797 thousand yen in consumption taxes receivable, and decrease of 559,235 thousand yen in inventory. Cashoutflows were mainly due to an increase of 1,740,521 thousand yen in accounts receivable–trade, a decrease of 595,776 thousand
yen in notes and accounts payable–trade.
(Cash flows from investing activities)―8―

Net cash used in investing activities amounted to 70,849 thousand yen, compared with 160,309 thousand yen used in these
activities in the previous fiscal year. Principal contributing factors included 38,383 thousand yen in purchase of intangible assets,
25,454 thousand yen in purchase of property, plant and equipment, and 7,011 thousand yen in leasehold and guarantee deposits.
(Cash flows from financing activities)
Net cash used by financing activities was 71,922 thousand yen, compared with 4,222,090 thousand yen provided by these
activities in the previous fiscal year. This mainly reflected cash outflows of 68,825 thousand yen in purchase of treasury sharesand 4,001 thousand yen in payments for issuance of shares, offsetting cash inflows of 649 thousand yen in proceeds from
disposal of treasury shares and 254 thousand yen in proceeds from issuance of shares resulting from the exercise of shareacquisition rights.

(3) Overview of cash flows for the fiscal year under review
13th Term
FY 2017

14th Term
FY 2018

15th Term
FY 2019

16th Term
FY 202017th Term
FY 2021Equity ratio (%)

63.6

70.1

71.7

64.3

73.7

Equity ratio on a fair market value
basis (%)

278.4

250.9

304.0

230.6

520.0

Debt redemption period (years)

―

―

―

―

―

Interest coverage ratio

―

―

―

―

―

Equity ratio: Equity (total shareholders’ equity)/total assets
Equity ratio on a fair market value basis: Total market value of common stock/total assets
Debt redemption period: Interest-bearing debt/cash flows from operating activities
Interest coverage ratio: Cash flows from operating activities/interest payments(Notes) 1. Total market value is calculated based on the number of shares issued, excluding treasury shares.
2. Debt redemption period and interest coverage ratio are not available due to negative cash flows from operating
activities through FY 2020 and the absence of interest payments in FY 2021.

(4) Future outlook
SymBio expects net sales to reach 10,992 million yen in FY 2022, a 33.1% increase from FY 2021, as a result of a full-year
sale of TREAKISYM® for r/r DLBCL with the approval of the drug’s use in BR and P-BR therapies for the additional indicationin March 2021 and the inclusion of Chugai Pharmaceutical’s genetically engineered polatuzumab vedotin in the NHI drug pricelist in May 2021. The Company also expects a positive impact from its efforts to promote the shift from the conventional
multidrug therapy for treating r/r DLBCL to TREAKISYM® and further penetration of TREAKISYM® for the indication of firstline treatment of low-grade non-Hodgkin’s lymphoma (low-grade NHL).
For research and development, the Company intends to accelerate the global development of antiviral drug brincidofovir for
multiple indications. Further, to increase business value for the long term, the Company will explore new indications for its
pipeline drugs in collaboration with academia and increase efforts to search for new in-licensing candidates and consider forming
new alliances. Through these efforts, the Company aims to advance the development of its pipeline as a whole. At the same time,
the Company will strive to maintain profitability it achieved in FY 2021 and aim for sustainable earnings growth going forward.
It will also steadily work to expand its business globally.
As a result, the Company anticipates R&D expenses of 3,056 million yen (1,736 million yen in FY 2021) and selling, generaland administrative expenses of 7,026 million yen (4,784 million yen in FY 2021) including R&D expenses.
Key development milestones for the Company’s current pipeline are as follows.
[TREAKISYM®]
For the indication of r/r DLBCL, the Company submitted a partial change application to the Pharmaceuticals and Medical
Devices Agency (PMDA) in May 2020. The approval was granted in March 2021, and the FD formulation of TREAKISYM®
became available for use in the bendamustine-rituximab (BR) therapy.
In regard to the liquid formulations of TREAKISYM® in-licensed from Eagle Pharmaceuticals, the Company obtained
manufacturing and marketing approval for the RTD formulation in September 2020 and launched the product in January 2021. In
April 2021, the Company obtained approval for a partial change to the marketing approval of the RTD formulation of―9―

TREAKISYM® for its use in the BR and P+BR therapy for the treatment of r/r DLBCL. For the RI injection, the Company
completed clinical studies on safety and filed a partial change application in May 2021.
The Company will actively conduct further research on TREAKISYM®, such as specified clinical research with Saitama
Medical University and joint research with Kyoto University, to explore new possibilities of the drug.
[Intravenous and oral formulation of rigosertib]
Onconova Therapeutics, Inc. announced in August 2020 that in the global Phase III clinical trial of the intravenous formulationof rigosertib (INSPIRE study), the primary endpoint—improved overall survival compared to physician’s choice of treatment—
was not met. The Company is in charge of clinical development in Japan, and is reviewing ways to utilize findings from theadditional analysis of the INSPIRE study in the future development of rigosertib.
For rigosertib and TREAKISYM®, the Company is searching for new indications as well as new applications for the two drugs
used in combination with each other or with other existing drugs, through joint research with the University of Tokyo, andGunma University.
[Antiviral drug brincidofovir]
In the development of antiviral drug brincidofovir, for which the Company envisions a global rollout, SymBio is working withrenowned researchers in each field, and is designing a global study based on the knowledge and insight gained from thesecollaborations.
As a result of the review at the Global Advisory Board held in February 2020, the Company has decided to prioritize the global
development of the intravenous formulation of brincidofovir (BCV IV) primarily in Japan, the U.S., and Europe targeting
disseminated adenovirus (AdV) infections occurring after hematopoietic stem cell transplantation, a niche area with a high unmet
medical need. In March 2021, the Company filed an IND application with the FDA to conduct a Phase II clinical trial primarily
in pediatric patients suffering from AdV infections (also includes adults). This development program was granted a fast-track
designation by the FDA, and the investigational drug was administered to the first patient enrolled (first patient in or FPI) in
August 2021. Further, in January 2022, the Company successfully filed a CTA to the MHRA.
Using the knowledge and insight on the safety and efficacy of BCV gained from clinical trials targeting AdV infections, theCompany intends to investigate the effectiveness of the investigational drug against various other dsDNA virus infections after
hematopoietic stem cell transplantation and expand target indications to include multiviral infections. It will also explore thepossibility of expanding the target indications to viral infections associated with kidney and other organ transplants. The
Company aims to expand the market for BCV and maximize its business value. Clinical trials conducted by Chimerix in Europe
and the US have demonstrated that BCV Oral has strong antiviral activity against a broad range of viruses. BCV Oral’s antiviral
activity against a range of dsDNA viruses suggests that BCV IV may also be safe and effective in the prevention and treatment ofvarious viral infections after hematopoietic stem cell transplantation.
In addition to its potent antiviral activity, BCV is also expected to have antitumor effects. Through joint research with the
National Cancer Centre Singapore and UCSF Brain Tumor Center, the Company is exploring new indications in oncology
including rare brain tumors and EB virus-positive lymphoma.
In June 2021, Chimerix obtained approval for BCV Oral as a medical countermeasure against smallpox from the FDA.
As a result of these planned activities, the Company anticipates net sales of 10,992 million yen, operating profit of 1,770
million yen, ordinary profit of 1,750 million yen, and profit of 1,480 million yen for FY 2022.

(5) Basic policies concerning profit distribution and dividends
The Company has not distributed dividends to date.
Although the Company has begun sales of its first product, TREAKISYM®, other pipeline products are still at the investment
stage. Therefore, it is our policy to prioritize allocation of funds to strengthen our financial position and continue research anddevelopment activities rather than to distribute dividends. However, we recognize that the return of profit to shareholders is an
important management issue and will continue to consider the distribution of profits based on future business performance andfinancial conditions.
The articles of incorporation state that the Company can pay an interim dividend, based on a resolution by the Board of
Directors, on June 30 every year as the record date. The Company can also distribute surplus by designating a record date inaddition to year-end and interim dividends. The decision-making body for the interim dividend is the Board of Directors, and forthe year-end dividend the shareholders’ meeting.

―10―(6) Business risks
Key business risks are described below. Issues that are not necessarily considered significant by the Company are also
disclosed in view of our commitment to actively provide information to investors and shareholders as these issues may carryweight in making investment decisions or in understanding our business activities. The Company is fully aware of the potential
risks, and will make utmost efforts to prevent such risks from materializing, but should they occur, we intend to take appropriate
action. However, we realize that investment decisions regarding our stock should be made carefully by evaluating the following
matters, as well as other matters mentioned in other sections of this financial statement. The following descriptions do not purport
to cover all possible risks associated with investment in our stock. The future perspectives mentioned below reflect our
understanding of our business circumstances as of the date of publication of this financial statement.
(i) Risks associated with pharmaceutical development in general
The Company’s main business is to in-license new drug candidate compounds created by pharmaceutical and bio venturecompanies, and to develop these into pharmaceutical products. The R&D field of pharmaceuticals is replete with strong
competition, including pharmaceutical giants. In addition, specialty pharmaceutical companies, including the Company,
emulate each other in quality and speed within the sector. The process from development to manufacturing and marketing
involves many regulatory hurdles, necessitating a vast amount of capital input over a long period of time in business
operations. Their future prospects involve uncertainty and these risk factors are associated with the Company’s present andfuture business activities.
a) Uncertainty involved in pharmaceutical development
The development of a pharmaceutical drug to launch generally requires a large amount of expenditure over a prolonged
period. The probability of success is low. At each stage of development, it is not uncommon to discontinue or delay productdevelopment. In pharmaceutical development, the different stages have to be conducted in phases, and at each phase a decision
is made regarding whether or not development should continue. It is not unusual to stop development in mid-process. The
probability is low for development to progress successfully through to product launch. Even after a product is successfully
developed and launched, reevaluation is conducted periodically or as required to confirm efficacy and safety of the product inlight of academic standards in medical and pharmaceutical areas at the time of reevaluation. In cases where efficacy is notconfirmed or serious side effects are identified that could lead to further damage to the health of patients, there remains a riskthat approval for the product may be revoked due to concerns over efficacy and side effects (see (f): “risk associated with side
effects”). To reduce and disperse these risks, the Company aims to have several drug candidates in its development pipeline
and to prioritize insofar as possible the in-licensing of drug candidates with confirmed proof of concept (POC) (Note 11) in humansubjects. For small specialty pharmaceutical business such as the Company, the impact of removing a single drug candidatefrom the development pipeline is material and could have a significant impact on the Company’s financial position, businessperformance, and cash flow.
(Note 11) Proof of concept (POC) means confirming the efficacy and safety of a new drug candidate in clinical trials andverifying its practical potential.
b) Uncertainty of income
In order to generate income from the drugs in development, the Company must succeed at all stages of new drug candidate
development, obtain the requisite approvals from regulatory authorities, and manufacture and market the product either on ourown or in partnership with a third party. There is no guarantee that the Company will succeed in these activities, or even if we
do succeed, we may not be able to ensure the margin of profitability needed to continue the business.
The Company obtained marketing approval for the RTD formulation of TREAKSYM® in September 2020 and began salesin January 2021. For the RI injection of TREAKISYM®, the Company filed a partial change application in May 2021. Partialchanges to marketing authorization approving use of the FD and RTD formulations for use in treating recurrent/refractory
diffuse large B-cell lymphoma (r/r DLBCL) were received in March and April 2021, respectively.
With respect to rigosertib, Onconova announced in August 2020 that in the global Phase III clinical trial (INSPIRE study),
the primary endpoint—improved overall survival compared to physician’s choice of treatment—was not met. The Company isin charge of clinical development in Japan, and is reviewing ways to utilize findings from the additional analysis of the
INSPIRE study to the future development of rigosertib.
The Company has prioritized the global development of antiviral drug brincidofovir as a treatment for adenovirus (AdV)―11―infection in immunocompromised patients, including in patients after hematopoietic stem cell transplantation, an area withhigh unmet needs. It is also considering the development of the drug for viral infections associated with organ transplants andvirus-induced cancers.
We are engaged in the development of these compounds, seeking to successfully launch them as commercial products. In
some cases, we may consider entering into an alliance with other pharmaceutical companies in development and marketing to
expedite the inflow of income. Notwithstanding our efforts, the drug candidates in our pipeline will require a considerable
amount of time in development before they reach the marketplace. There is no guarantee that they will make it onto the market
as viable products, or that an alliance agreement can be signed with other pharmaceutical companies. We are of the opinion
that the selection of indications and the methods of identifying alliance and marketing thus far promise sufficient future
profitability after considering the market size and marketing performance of approved drugs. However, should we prove to be
wrong in our assessment, or should there be any change in the conditions on which the assessment is based on and we fail topromptly adapt to such changes, there could be a significant impact on our financial position, business performance, and cash
flow.
c) Uncertainty in legislation and regulations requiring compliance, and the health insurance system
The pharmaceutical industry, the Company’s core business, is subject to various regulatory restrictions in individual
countries, which are imposed by laws and administrative guidance related to pharmaceutical drugs as well as other relevant
legislation regarding all aspects of business operations (research, development, manufacturing, and marketing). We formulate
our business plans in accordance with the Pharmaceuticals and Medical Devices Act (PMD Act) of Japan and other current
legislative regulations as well as the health insurance system in Japan, together with drug pricing guidelines that derive fromthe PMD Act. There is also a possibility that these regulations, regulatory systems, and pricing will change before the productsthat we are developing reach the marketplace. If any major change does occur, there may be a significant impact on our
financial position, business performance, and cash flow.
d) Risk concerning development and marketing overseas
In addition to Japan, we have identified the U.S., Europe, and Asia among other regions as our strategic business areas. We
are developing global business expansion plans for the future worldwide development, sale, and manufacture of antiviral drug
brincidofovir, including in the U.S., Europe, and Asia. In overseas markets or in Japan, pharmaceutical development andmarketing generally require large expenditure and are associated with various business risks. To reduce investment expenditureand business risk, we out-license the development and marketing rights of some of our drug candidates to other overseas
companies. Before out-licensing the rights we possess, we will select the licensee after careful due diligence; we will monitor
the licensees’ activities when necessary after out-licensing the rights. The development and sales of out-licensed products are
subject to business conditions of the licensee or any changes in the regulatory and competitive environment in respective
countries, and may fall below initial expectations, resulting in lower than anticipated milestone revenue or royalty income. In
such cases, there may be an impact on our financial position, business performance, and cash flow. Similarly, we regularly
consider strategically utilizing partnerships with other pharmaceutical companies through methods such as joint development,
joint marketing, and insourcing or outsourcing agreements. However, the Company acknowledges the possibility that actual
earnings may not reach target levels if development or sales do not progress according to projections due to factors such as
economic conditions at partner companies, regulations in various countries, or competitive environments. Such cases could
potentially affect the Company’s financial position, business performance, and cash flow.
e) Competition in the pharmaceutical industry
The pharmaceutical industry is highly competitive. A large number of both Japanese and foreign pharmaceutical companies
and research institutions, including giant multinational pharmaceuticals, compete in the arena. Technological innovation isprogressing rapidly. Many competitors have a comparative advantage over the Company in terms of technology, marketing,and financial position. Thus, these companies may more efficiently produce and sell competing products, which are more
effective than the Company’s developed products. In addition to the risks posed by competing products and biosimilars, theCompany is aware of potential business risks from the emergence of novel technologies in life sciences, including thedevelopment of treatments that go beyond the scope of conventional medicine. If changes to the external business environmentare beyond what is anticipated, for instance due to the emergence of novel technologies and treatments that could
fundamentally change the way the diseases our products target and development candidates are treated, our financial position,business performance, and cash flows may be significantly affected.

―12―f) Risk associated with side effects
Unexpected side effects may occur from the use of pharmaceutical products, from their clinical trial stage to post-marketingstage. If serious and unexpected side effects occur, compensation claims may be brought against the Company, or dependingon the situation, there is the risk of a delay in clinical trial timelines or even discontinuation of product development. In thecase where such side effects could lead to further damage to the health of patients, there is the risk of cancellation of approvalor discontinuation of sales. Regarding compensation claims, the Company has obtained the liability insurance necessary tominimize the financial damage should such claims arise. However, this does not exclude the possibility that the compensation
awarded exceeds the amount insured. If this should occur, it could have a significant impact on the Company’s financial
position, business performance, and cash flow.
g) Product liability
The development and manufacturing of pharmaceutical products involves product liability risk. If in the future any productsthat we have developed cause damage to health or any adverse events are discovered during clinical trials, manufacturing,sales, or marketing of the drug, the Company will be subject to product liability. This may have a significant impact on the
Company’s financial position, business performance, and cash flow. If a product liability suit is filed against the Company, theCompany’s corporate image could be damaged, leading to a loss of confidence in the Company and its drugs, impacting futurebusiness.
h) Risks related to manufacturing and supply stability
After bringing products under development to market, the Company must ensure a stable supply of those products.
However, technological or legal issues at a business partner to whom the Company has outsourced production could interrupt
or substantially delay the supply of products, as could a fire or other disaster that causes a suspension of operations. Suchsituations could have a significant impact on the Company’s financial position, business performance, and cash flow.
(ii) Risk in business operationsa) Risk concerning the Company’s business model
The Company does not own research and manufacturing facilities. Instead, the Company has adopted a business model toraise income and profit fromin-licensing drug candidates, mainly targeting orphan drugs (Note 12) in the areas of oncology andhematology, from pharmaceutical and bio venture companies with POC established through human subjects, and developing
and marketing pharmaceutical products in Japan, Asia (China, South Korea, Taiwan, Singapore, etc.), and other countries
globally. Furthermore, we have acquired exclusive rights for the worldwide development, sale, and manufacture of antiviraldrug brincidofovir (BCV) for all human indications except orthopox viruses, through an exclusive global licensing agreementwith Chimerix Inc. Utilizing these rights, we will transform into a specialty pharmaceutical company that is capable ofexpanding into global markets and is equipped with an integrated system for supplying high quality pharmaceutical products.
In developing and marketing the pipeline products, the Company plans to engage in alliances with other pharmaceuticalcompanies. However, there is no guarantee that the Company can continuously in-license drug candidate compounds thatsatisfy in-house criteria and secure a partnership with these corporate partners. In addition, as the Company mainly targets
orphan drugs for in-licensing (Note 13), it may not be able to generate expected sales turnover. Furthermore, in the event thatdevelopment by a licensor is delayed or fails, there may be impact on the corresponding development in Japan. The Company
also acknowledges the possibility that global business expansion may not proceed according to initial projections due touncontrollable factors that affect the progress of development, sales, and manufacturing plans of either the Company or its
corporate partners. These factors could impact the Company’s financial position, business performance, and cash flow.
Needless to say, intense competition within the pharmaceutical sector and changes in the Company’s financial position may
force the Company to revise its business model. Should this occur, there may be a significant impact on the Company’sbusiness.
(Note 12) The rare-disease field is one in which the number of patients requiring drugs is small. Drugs for this field are termed“orphan drugs.” The Japanese Ministry of Health, Labour and Welfare has established an orphan drug designation
system for drugs meeting the criteria of (1) a drug to treat a serious disease that affects less than 50,000 people inJapan, and (2) for which there is a great need for medical treatment. Once designation is obtained, the drug will enjoy
various advantages including shortening of the time from regulatory submission for review of the drug to approval andthe extension of the re-examination period for up to 10 years.

―13―

(Note 13) “In-licensed drug candidates” are compounds or products for which obtaining the rights of development andcommercialization from other companies is under consideration.
b) Dependency on specific partners and suppliers
The Company holds exclusive rights to manufacture antiviral drug brincidofovir for all human indications except fororthopox viruses. As a specialty pharmaceutical company without production facilities, the Company currently needs to dependon the supply of products from other companies when conducting clinical trials and marketing approved drugs. Given this fact,
the financial position and production conditions of the product suppliers may have a significant impact on the Company’s
financial position, business performance, and cash flow. Typically, in license agreements with partner companies, revenues
before the drug reaches the market include an upfront payment upon signing the contract, funding for co-development, andmilestone payments. The timing of milestone payments is not always predictable. If development progress is delayed, there
may be a significant impact on the Company’s financial position, business performance, and cash flow.
c) Risk concerning intellectual property rights
During drug development activities, the Company makes use of various intellectual property rights which generally havebeen licensed to the Company by other pharmaceutical and bio venture companies. In relation to in-licensed drug candidates,
there is a risk that patent applications by licensors relating to an out-licensed drug are not approved or are declared invalid.
Moreover, it is difficult to completely avoid the possible creation of an intellectual property right by a third-party thatsupersedes the intellectual property right of the Company’s in-licensed drug candidate. These situations could lead to asignificant impact on the Company’s financial position, business performance, and cash flow. The Company engages in joint
research with research institutions and other organizations. In such cases, the Company must discuss the ownership of researchoutcomes with partnering research institutions in accordance with each institution’s policies, and it may not always obtain thesole ownership of intellectual property rights. As of the submission date of this financial statement, no lawsuit has been filed
by a third-party against the Company concerning intellectual property rights, including patents in connection with productdevelopment. When in-licensing a drug candidate, the Company will seek advice from lawyers and conducts a thorough due
diligence investigation through patent firms in order to prevent such intellectual property risks. Nevertheless, it is difficult torealize full protection from the occurrence of intellectual property right disputes involving the infringement of third-party
rights, and these may have a significant impact on the Company’s financial position, business performance, and cash flow. The
candidate compounds that the Company in-licenses are not necessarily protected by patents. On the other hand, even if a drugcandidate is not protected by a patent, the assignment of the compound for re-examination review by the regulatory authorities
would restrict the entry of generic drugs during the review period, giving rise to a limited period of marketing exclusivity.
d) Information protection
To reduce risks relating to confidential information about the Company’s pipeline development or other business activities
leaking outside the Company, the Company takes appropriate steps to protect its confidential information. The Company
requires directors and employees, Scientific Advisory Board (SAB) members, research institutions, outsourcing partners, andother business partners to sign confidentiality agreements. Even with agreements in place, directors and employees, SAB
members, research institutions, outsourcing partners, and other business partners may not adhere to confidentiality, and should
this occur, confidential information may be divulged elsewhere, which may impact the Company’s business, financial position,business performance, and cash flow.
e) Risk concerning important contracts
If any contracts that may have a significant impact on conducting the Company’s business operations are terminated due toexpiration, cancellation, or for any other reason, there may be a significant impact on the Company’s financial condition,business performance, and cash flow.
(iii) Risk associated with organizationa) Risk of being a young company
SymBio was founded in March 2005. Since inception, the Company has engaged in in-licensing activities of drug candidates
for development. The founding President and CEO built up the pharmaceutical development business from scratch, and theCompany recorded income from product sales in August 2010, for the first time in its history. There is the possibility thatbusiness issues that SymBio has never encountered before arise in the future. At the moment, however, it is difficult to―14―

accurately predict changes in the external environment that may affect the Company’s business results. Therefore, theCompany considers business results for the past several years to be an inadequate reference to pass judgment on whether or not
the Company can continue to grow.
b) Risks relating to company size
The Company retains contract research organizations (CROs (Note 14)) in research and development, thereby forming adevelopment framework requiring relatively small staff numbers. With the development of the existing pipeline (including
global expansion) and with newly in-licensed drug candidates to be added to the pipeline, the Company may need to develop
human resources in research and development. However, for whatever reason if an alliance with a CRO terminates, or if theCompany fails to secure the planned number of staff, or existing employees decide to leave, the Company’s business
operations may be hampered, leading to a possible impact on the Company’s financial position, business performance, andcash flow.
(Note 14) A contract research organization (CRO) is an organization that provides research and other services to pharmaceuticalcompanies, supporting pharmaceutical companies in their efforts to conduct development activities without delay. The
details of the commissioned activities may include monitoring to ensure that clinical studies are carried out in fullaccordance with study protocols and clinical data management.
c) Dependency on a specific person
Fuminori Yoshida, the Representative Director, founding President and CEO, has played a key role since the Company’s
foundation in the implementation and execution of all operations in the Company’s business management. Thus, in the eventthat he cannot continue to perform his corporate responsibilities for some unforeseen reason, this could have a significant
impact on the Company’s business operations.
d) Scientific Advisory Board (SAB)The Scientific Advisory Board (“SAB”) is an advisory panel to the Company’ on the potential in-licensing of new drugcandidates. The Company invites members of the panel from clinicians and scientists engaged in basic research who are highly
regarded in the healthcare industry due to their successful track records and wealth of experience. The SAB meets two or threetimes a year to engage in active discussion and debate, sharing each member’s own perspective on an in-licensed drugcandidate in order to build a pipeline portfolio with a balanced risk–return trade-off, while taking into consideration healthcare
needs and profitability of in-licensed drug candidates gathered from all over the world. The Company will continue to retain
outstanding members for the SAB. However, if difficulty arises in retaining members for reasons such as the cancellation,
expiration, or renewal refusal of contracts with existing members, there may be an impact on the Company’s ability to evaluate
and in-license quality drug candidates.
(iv) Business resultsa) Business performance in previous years
The Company's key business indicators are given below:
Term

13th Term

14th Term

15th Term

16th Term

17th Term

Fiscal Year

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021Net sales(thousands of yen)
Operating profit (loss)(thousands of yen)
Ordinary profit (loss)(thousands of yen)

3,444,206

3,835,530

2,837,753

2,987,051

8,256,924(3,947,061)(2,656,072)(4,301,615)(4,506,220)

1,016,001(3,976,784)(2,748,730)(4,376,655)(4,615,903)

1,001,133

Until the 16th Term, with the exception of the 4th Term, the Company’s total R&D expenses and other general andadministrative expenses exceeded the Company’s income, resulting in the posting of an operating loss, an ordinary loss, and abottom-line loss. For this reason, the Company does not consider the financial statements and indicators of previous years inwhich it recorded losses to provide adequate reference data in making comparisons with business performance of the year theCompany posted profit and later, or in forecasting future business performance.

―15―b) Expected increase in R&D expenditures
The Company’s R&D expenses for the past five fiscal years are provided below:
Term

13th Term

14th Term

15th Term

16th Term

17th Term

Fiscal Year

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

R&D expenses(thousands of yen)

3,017,812

1,832,746

2,441,552

2,266,556

1,736,126

The Company intends to continue its development activities. Through the recording of product sales revenue upon early
approval for the intravenous and oral formulations of rigosertib and antiviral drug brincidofovir, and the income from allianceswith pharmaceutical companies, the Company aims to collect early return on its R&D investment and continuously improvebusiness performance as soon as possible; however, there is no guarantee that the Company will be able to achieve these aims
as planned.
c) Negative retained earnings (accumulated deficits) brought forward
Specialty pharmaceutical businesses incur significant upfront R&D expenditure until products under development at theclinical stage reach the marketplace so that they can continuously earn stable income through product sales revenue and royalty
income. As a result, with the exception of the 4th Term, the Company reported losses since its foundation until the 16th Term.
At the end of the 17th Term, FY 2021, the Company recorded a negative balance of 27,977,510 thousand yen as accumulated
deficits brought forward. SymBio aims to become profitable at the earliest possible date by advancing its pipeline development
in a rapid, precise, and efficient manner and shifting toward marketing through its own internal salesforce. However, thepossibility still exists that profits may not be generated in the planned timeline. Should the Company’s business fail to develop
and fail to generate profits as planned, the timing of negative retained earnings brought forward becoming positive may beconsiderably delayed.
d) Fundraising
As a bio venture aiming to transform into a global specialty pharmaceutical company, the Company requires a large amountof funds to cover business expansion, including funds for R&D expenses. If SymBio’s business plan does not proceed asplanned and it suffers a shortfall in funding, the Company will endeavor to procure funds by changing strategic alliances,
securing new alliance contracts, or issuing new shares. However, if the Company fails to generate funds when they are
required, there may be serious doubt over the continuation of its business operations.
e) Tax losses carried forward
The Company currently has tax losses carried forward. For this reason, the Company is not subject to corporate income tax,
local inhabitant tax, or enterprise tax at the standard rates and expects this to continue for several years into the future.
However, if accumulated deficits are written off earlier than expected and can no longer be used as an offset to taxable income
due to such reasons as the revision to current tax treatment of losses carried forward, the Company would become liable for thepayments of corporate income tax, local inhabitant tax, and enterprise tax at standard rates, which may have an impact on abottom-line profit (or loss) and cash flow currently planned.
(v) Other risksa) Profit distribution to shareholders
Since the foundation of the Company, dividends have not been distributed. SymBio is currently at the business stage ofmaking upfront investment for the development and commercialization (including global rollout) of pharmaceutical drugs, aswell as achieving continuous growth through its own internal salesforce. The Company plans to continue to prioritize using
funds to strengthen its financial position, continue its R&D activities, and support in-licensing of new drug candidates. Thus,
the Company currently has no plans for making dividend payouts. However, the Company recognizes that the return of profit
to shareholders is an important management issue and will consider profit distribution based on future business performanceand financial condition.
b) Procurement of funds
The Company may face increases in its capital requirements due to rises in necessary expenses accompanying businessexpansion through in-licensing of new drug candidates or unpredictable changes in external environment. Fluctuations in―16―

estimated earnings may also cause capital requirements to greatly exceed predictions in the Company forecast for theforthcoming fiscal year or in the medium- to long-term strategy. In either of these cases, the Company may obtain additional
financing through means such as issuing new shares. By doing so, the number of issued shares will increase, potentiallydiluting the per share value of the Company’s stock.
c) Dilution of the Company’s shares by the exercise of potential shares
The Company adopted a stock option plan in order to motivate and encourage higher business performance of directors andemployees, and to attract human resources of excellence. In accordance with Articles 236, 238, 239, and 240 of the Companies
Act, share acquisition rights are granted to directors and employees.
.
To attract talent, the Company may continue to offer similar incentives. This means that if these share acquisition rights are
exercised in the future, per share value of the Company’s stock may be diluted.
As of the end of the current fiscal year, the number of dilutive shares due to warrant is 296,850 shares, which is equivalent to
0.7% of the total number of issued shares of 38,457,206.
d) Stock holding by venture capitals
In general, venture capitals and investment partnerships own shares for the purpose of realizing capital gains by sellingshares after IPO. If venture capitals and investment partnerships that own SymBio shares sell all or a portion of such shares, it
could have an impact on the market price of the Company’s shares.
e) Risk of loss on foreign exchange
The Company, which does not currently have a manufacturing facility, receives its supply of products from other companies
and assumes that it will make one-off payments when in-licensing drug candidates to expand its pipeline. Suitable financing
for these payments is obtained in advance through the arrangement of deposits denominated in foreign currency or foreignexchange forward contracts. Where such assets denominated in foreign currency are stated at market value in financial
statements at every year end, there is a risk of loss on valuation due to foreign currency fluctuations in the future and this may
have an impact on the Company’s financial position, business performance, and cash flow.
f) Risk associated with natural disasters
Any disasters (earthquake, typhoon, fire, etc.) and plague that occur in the Company’s geographic business domain could
lead to disruptions in the supply chain of the Company’s products, involving such processes as manufacture, import, inspection
and shipment in Japan, and sales to distributors. In such cases, fall in social credibility and compensation issues may have an
impact on the Company’s financial position, business performance, and cash flow.

2. Status of Corporate Group
SymBio owns one unconsolidated subsidiary. However, its impact on financial results is insignificant, and it has therefore been
omitted.

3. Management Policies(1) Basic policy of company management
SymBio Pharmaceuticals Limited was established in March 2005 by Fuminori Yoshida, who previously served concurrently as
Corporate VP of Amgen Inc. (Note 15) (U.S.) and President of Amgen K.K., a wholly owned subsidiary of Amgen Inc., (now part of
Takeda Pharmaceutical Company Limited) for 12 years since its establishment.
The Company aims to achieve social and management responsibilities by responding to unmet medical needs (Note 16) based on
the guiding principle of mutual harmony, creating an intricate symbiotic relationship between patients, physicians, scientists,
regulators, and investors.
The Company regards underserved therapeutic areas with extremely significant medical needs as a business opportunity andremains focused on the areas of oncology and hematology, where high entry barriers exist due to the high degree of specialization
required. In this sense, SymBio is the first specialty pharmaceutical company in Japan. Rather than exploring opportunities to inlicense and develop new “blockbuster” drugs (drugs with sales exceeding 100 billion yen), the Company channels its resources
into the development of drugs in underserved markets where medical needs are high despite limited patient numbers. Holding
multiple drug approvals and new drug candidates in these key therapeutic areas, the Company aims to build a solid pipeline―17―

portfolio, achieve high profitability with high-value products and services, and operate sustainable businesses.
(Note 15) Applied Molecular Genetics, or Amgen Inc., the world’s largest company in the biopharmaceutical field, was foundedin Thousand Oaks, California, in 1980, and started business in Japan as Amgen K.K. on May 1, 1993. After Takeda
Pharmaceutical Company Limited (“Takeda”) acquired 100% of Amgen K.K.’s stock in February 2008, its operations
were merged into Takeda.
(Note 16) “Unmet medical needs” means requirements for medical treatment that have not yet been fulfilled. It refers to asituation in which no effective drugs or treatments are currently available, despite strong demand by patients and/or
physicians.

(2) Key performance index
As a pharmaceutical company, SymBio believes that launching new drugs on an ongoing basis through its own salesforce is an
important aspect of obtaining higher business value. Accordingly, we have established an integrated sales system that includes an
in-house sales organization, as well as logistics and distribution systems. The Company also intends to continue in-licensing drugcandidates for development and aggressively investing management resources in R&D activities.
Earnings have continued to grow, mainly due to product sales, since SyB L-0501 was approved for manufacture and sale inJapan in 2010. The Company continued collaborating with Eisai to expand sales of TREAKISYM® until our business partnershipagreement expired in December 2020. From 2021, we switched to our own salesforce with the aim of further increasing earnings.
We aim to achieve a stable and high level of profitability as soon as possible by obtaining approval for the intravenous and oral
formulations of rigosertib and putting this product on the market, launching development of and commercializing antiviral drug
brincidofovir in Japan and overseas, and working to in-license, promote the development of, and acquire approval for new
pipeline products. Although we have achieved profitability following the transition to in-house sales in FY 2021, we haverefrained from setting performance index targets such as ROE or ROA because we intend to continue making aggressive R&D
investment.

(3) Pipeline
The Company currently has the following pipeline products under development: SyB L-0501, SyB L-1101, SyB C-1101, SyB
L-1701, SyB L-1702, and SyB V-1901. The Company will continue to in-license candidate drugs to further expand and build its
pipeline portfolio with a balanced risk–return trade-off.
(i) [Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (RTD formulation), SyB L-1702 (RI injection), (generic name:bendamustine hydrochloride or bendamustine hydrochloride hydrate, trade name: TREAKISYM®)]
Bendamustine hydrochloride (the generic name), the active pharmaceutical ingredient of TREAKISYM ®, is an anticancer
agent that has been in use for a number of years in Germany under the trade name of Ribomustin ® for the treatment of nonHodgkin’s lymphoma, multiple myeloma, and chronic lymphocytic leukemia. The Company decided to in-license this productbecause there is currently no effective medication for the indications of recurrent/refractory low-grade non-Hodgkin’s lymphoma
and mantle cell lymphoma. These are underserved therapeutic areas aligned with the Company’s corporate mission and also fallwithin one of SymBio’s targeted therapeutic fields (hematologic cancer). Astellas Deutschland GmbH, a German subsidiary of
Astellas Pharma Inc., is the worldwide licensor of bendamustine hydrochloride. Cephalon, Inc. (Pennsylvania, U.S.), a subsidiaryof Teva Pharmaceutical Industries Ltd. (Israel), in-licensed rights to bendamustine hydrochloride for North America from
Astellas Pharma GmbH and obtained approvals from the U.S. Food and Drug Administration (FDA) to use the drug for thetreatment of chronic lymphocytic leukemia and refractory B-cell non-Hodgkin’s lymphoma in March 2008 and October 2008,
respectively. Mundipharma International Corporation Limited (U.K.) and Janssen-Cilag Limited (U.K.) are also licensed from
Astellas Pharma GmbH and have obtained exclusive rights for the development and commercialization of bendamustinehydrochloride in Europe and other regions, respectively.
The Company licensed from Astellas Deutschland GmbH with exclusive rights for the development and commercialization of
bendamustine hydrochloride in Japan, China, South Korea, Singapore, and Taiwan. In Japan, the drug was approved for theindications of recurrent/refractory low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma in October 2010, and waslaunched under the trade name TREAKISYM® in December 2010. In December 2015, the Company filed a partial change
application to include the additional target indications of first-line treatment of low-grade non-Hodgkin’s lymphoma and mantle
cell lymphoma, and chronic lymphocytic leukemia. The Company obtained approval for the indication of chronic lymphocytic
leukemia in August 2016 and of first-line treatment of low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma in―18―

December 2016. In May 2020, the Company submitted a partial change application to include the indication ofrecurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL), and obtained approval in March 2021. In order to maximize thebusiness value of TREAKISYM® by further promoting product life cycle management, the Company concluded an exclusive
license agreement with Eagle Pharmaceuticals in September 2017 to develop, market, and sell Eagle’s ready-to-dilute (“RTD”)
and rapid infusion (“RI”) liquid formulation injection products in Japan. The Company obtained approval for the RTD
formulation in September 2020, and launched the product in January 2021. For the RI injection, the Company completed clinical
trials on safety and filed a partial change application in May 2021.
The license agreement concluded with Astellas Deutschland GmbH concerning the rights in Japan and other Asian countries
for the freeze-dried formulation of anticancer agent bendamustine has expired.
(ii) [Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)]Rigosertib is an anticancer agent with a unique type of multikinase inhibitory activity (Note 17). It is currently being developed in
the U.S., Europe, and elsewhere by a U.S. company, Onconova Therapeutics, Inc. (“Onconova”), for the target indications of
myelodysplastic syndromes (“MDS”). MDS is the pre-pathological state for malignant tumors of blood cells, which has shown
increasing numbers of patients in recent years; it frequently affects elderly people; and it is a refractory disease, with a highprobability of developing into leukemia.
No effective medication is available yet, especially for recurrent/refractory MDS, and it therefore constitutes an underserved
therapeutic area. In July 2011, the Company signed a license agreement with Onconova, obtaining the exclusive right to develop
and commercialize rigosertib in Japan and South Korea. Based on this agreement, the Company had developed the intravenous
rigosertib formulation for the target indication of recurrent/refractory higher-risk MDS and the oral formulation for the target
indication of first-line higher-risk MDS (in combination with azacitidine).
As for the intravenous formulation of rigosertib, Onconova conducted global Phase III clinical trials (INSPIRE study) withclinical trial sites in more than 20 countries worldwide, for higher-risk myelodysplastic syndromes (HR-MDS) which did not
respond to the current standard treatment with hypomethylating agents, which relapsed after treatment under the current standardof care, or which were intolerant to hypomethylating agents. In August 2020, Onconova announced that the primary endpoint of
the trial—improved overall survival compared to physician’s choice of treatment—was not met. The Company is in charge ofclinical development in Japan, and is reviewing ways to utilize findings from the additional analysis of the INSPIRE study in the
future development of rigosertib.
The oral formulation of rigosertib was shown to be effective and safe when administered in combination with azacitidine in a
Phase I/II clinical trial in first-line higher-risk MDS patients conducted by Onconova in the U.S. The Company commenced a
Phase I clinical trial in Japan to confirm the safety of high-dose monotherapy and tolerance in Japanese patients in Japan in June
2017, and completed patient enrollment in June 2019.
With the aim of maximizing the business value of rigosertib and TREAKISYM®, the Company is conducting joint researchwith the University of Tokyo, and Gunma University to investigate the efficacy of the drugs used in combination with each otheras well as with other existing drugs and to look for new indications.
(Note 17) Multikinase inhibitors impede the proliferation, infiltration, and metastasis of cancer cells, thereby eradicating them.
(iii) [Antiviral drug: SyB V-1901 (generic name: brincidofovir)]
On September 30, 2019, the Company concluded an exclusive global licensing agreement for antiviral drug brincidofovir(“BCV”) with Chimerix Inc. Under this agreement, the Company acquired the exclusive rights for the worldwide development,
marketing, and manufacture of BCV for all human indications, excluding orthopox viruses. With the global rights to BCV, theCompany will transition into a global specialty pharmaceutical company with an integrated system for supplying high-quality
pharmaceutical products.
The Company has decided to prioritize the global development of the intravenous formulation of BCV primarily in Japan, theU.S., and Europe, targeting adenovirus (AdV) infections occurring after hematopoietic stem cell transplantation—a niche areawith a high unmet medical need. In March 2021, the Company filed an IND application with the FDA to conduct a Phase II study
primarily in pediatric patients (includes adults) suffering from AdV infections. This development program was granted a fasttrack designation from the FDA in April 2021, and the investigational drug was administered to the first patient enrolled in the
study (first patient in or FPI) in August 2021. Further, in January 2022, the Company successfully filed a CTA to the MHRA.
Based on the knowledge and insight on the safety and efficacy of BCV obtained from the clinical trials targeting AdV―19―

infections, the Company will investigate the effectiveness of BCV in treating various other dsDNA virus infections following
hematopoietic stem cell transplantation and aim to expand target indications to include multiviral infections. The Company will
also explore the possibility of expanding target areas to viral infections associated with kidney and other organ transplants. In
doing so, we aim to expand the market for BCV and maximize the drug’s business value. In clinical studies conducted by
Chimerix in Europe and the U.S., BCV Oral has been shown to have strong antiviral activity against a broad range of viruses.
BCV Oral’s antiviral activity against a range of dsDNA viruses suggests that BCV IV may also be safe and effective in theprevention and treatment of various viral infections following hematopoietic stem cell transplantation.
In addition to potent antiviral activity, BCV is also expected to have antitumor effects. Through joint research with the
National Cancer Centre Singapore and UCSF Brain Cancer Center, the Company is searching for new indications in oncology,
including rare brain tumors and EB virus-positive lymphoma.
In December 2020, Chimerix announced that the FDA had accepted its NDA for BCV Oral as a medical countermeasureagainst smallpox; the NDA was approved in June 2021.

(4) Medium- to long-term strategy
The Company is pursuing primarily the following five strategies in order to achieve its medium-term plan.
(i) De-risking by post-POC strategy
We in-license drug candidates for which proof of concept (POC) is already confirmed in human subjects in principle.
Accordingly, they should be drugs that are in a relatively late stage of clinical development or already on the market overseas.
The advanced development is already conducted overseas for these drug candidates and their efficacy and safety are alreadyconfirmed in human subjects, thereby reducing the development risk. We utilize existing clinical data available overseas tocompress development timelines, reduce the development costs, and increase the likelihood of regulatory approvals in Japan andAsian markets.
(ii) Building a high-quality pipeline with exceptional search and evaluation capabilities
Our new drug search engine is connected to the diverse network of pharmaceutical and bio venture companies, and enables us
to select promising drug candidates from a vast number of chemical compounds after the careful review by internal experts.
Using their wealth of experience at the forefront of research and development, Scientific Advisory Board (SAB) members
carefully evaluate and render final judgment on each drug candidate. The highly established screening process up to the final
selection of drug candidates, coupled with the post-POC strategy (in which we in-license drug candidates whose efficacy andsafety are already confirmed overseas), reduces development risk and development timelines. It also helps to understand how the
drug candidates could meet the healthcare needs and to improve the accuracy of revenue projections after the product launch.
(iii) Containment of fixed costs by labless/fabless strategy
The Company does not own any research or manufacturing facilities, which are often regarded as the main fixed costs. Once
drug candidates are searched and in-licensed, we focus on value-added activities such as the formulation and implementation ofdevelopment strategy and outsource other necessary routine procedures. This enables us to reduce development costs ofpharmaceutical drugs and secure a flexible financial strategy.
(iv) Realization of high business efficiency by “Blue Ocean strategy” (Note 18)
Many standard drugs used overseas cannot be prescribed in Japan or a new drug is launched in Japan five years behind its
initial approval overseas. This problem is called “drug lag” and is becoming aggravated, while the term “cancer patient refugee”
has been created. This drug lag is particularly conspicuous in our strategic drug development areas of refractory cancer andhematological diseases. There is a large market of anticancer agents that continues to grow with the aging population. However,anticancer agents have a wide range of indications and they are fragmented by the type of tumor, and in some therapeutic areas
there are a limited number of patients. As an extremely high degree of specialization is required and developing new agents inthese therapeutic areas is difficult, it is often financially unattractive for larger pharmaceutical companies to pursue due to thesmall size of the potential market. This is part of the cause of the delay in drugs coming to market. On the other hand, obtaining
approval and launching a new drug in one of these less competitive therapeutic areas creates an opportunity to achieve further
growth and profitability by continuous indication expansion and bringing new products to the market.

―20―

(Note 18) “Blue Ocean strategy” means a strategy of redefining the market, avoiding marketplaces with fierce competition inwhich competitors seek to gain limited market shares (termed “red oceans”), and instead creating a “blue ocean,” anunexploited market with reduced competition, enabling profits to be maximized while providing customers with highvalue products and services.
(v) Going global beyond Asia
The Company has thus far been operating its businesses in Asia centered on Japan. However, major development isunachievable if we remained in Asia, as the business environment of the Japanese healthcare industry is changing drastically.
Moving forward, the Company will carry out search and evaluation activities to advance new drug candidates with a view toglobal development. On September 30, 2019, the Company concluded an exclusive global licensing agreement for the antiviraldrug brincidofovir with Chimerix Inc. (head office: North Carolina, U.S.). Under this agreement, the Company acquired theexclusive rights for the worldwide development, marketing, and manufacture of brincidofovir for all human indications, except
orthopox viruses.
In March 2021, the Company filed an IND application to the FDA to conduct a Phase II clinical trial of BCV primarily inpediatric patients (includes adults) with AdV infection. The development program was granted a fast-track designation from the
FDA in April 2021, and the investigational drug was administered to the first patient enrolled in the study (first patient in or FPI)in August 2021. Further, in January 2022, the Company successfully filed a CTA to the MHRA.
Based on the knowledge and insight on the safety and efficacy of BCV gained from clinical trials targeting AdV infections, theCompany intends to investigate the effectiveness of the antiviral drug in treating various other dsDNA virus infections after
hematopoietic stem cell transplantation and expand target indications to include multiviral infections. Further, the Company will
explore the possibility of using the drug to treat viral infections associated with kidney and other organ transplants and cancer.
Through these efforts, the Company aims to expand the market for BCV and maximize the drug’s business value.

(5) Issues to be addressed by the Company
The Company is committed to making improvements in the following areas.

(i) Further expansion of the pipeline
In order to enhance the enterprise value as a specialty pharmaceutical company, we need to expand the pipeline throughongoing in-licensing of new drug candidates for development.
The Company is conducting or planning development of the following anticancer agents: SyB L-0501, SyB L-1101, SyB C1101, SyB L-1701, SyB L-1702, and antiviral drug SyB V-1901. Currently we are in discussion with counterparties regarding thein-licensing of several new drug candidates, and will continue with active efforts to in-license new drug candidates fordevelopment in order to further expand our pipeline.
(ii) Life cycle management of products in the existing pipeline
In order to enhance the business value, both in-licensing new drug candidates and promoting product life cycle management
are important. Therefore, it is critical to maximize returns from each drug under development through indication expansion after
the in-licensed drugs’ initial approval.
TREAKISYM® is approved for manufacturing and marketing in Japan for the indications of recurrent/refractory low-grade
non-Hodgkin’s lymphoma and mantle cell lymphoma, chronic lymphocytic leukemia, and first-line treatment of low-grade nonHodgkin’s lymphoma and mantle cell lymphoma. TREAKISYM® was also granted approval for recurrent/refractory diffuse large
B-cell lymphoma (r/r DLBCL) in March 2021. In addition, the Company in-licensed the RTD formulation and RI injection of
TREAKISYM® from Eagle Pharmaceuticals in order to maximize the business value of TREAKISYM® by promoting the life
cycle management of the product. For the RTD formulation, the Company obtained manufacturing and marketing approval in
September 2020, and launched the product in January 2021. For the RI injection, the Company filed a partial change applicationin May 2021.
With respect to rigosertib, U.S. licenser Onconova had been conducting a global Phase III study (INSPIRE study) of the drugin patients with myelodysplastic syndromes (MDS), but in August 2020, it announced that the primary endpoint of the study—
improved overall survival compared to physician’s choice of treatment—had not been met. The Company is in charge of clinicaldevelopment in Japan and is reviewing ways to utilize findings from the additional analysis of the INSPIRE study in future
development of rigosertib.

―21―

With the aim of maximizing the business value of rigosertib and TREAKISYM®, the Company intends to conduct joint
research with the University of Tokyo and Gunma University, to investigate the efficacy of the drugs used in combination as wellas used in combination with other existing drugs and look for new indications.
The Company has proceeded with the global development of antiviral drug brincidofovir targeting adenovirus infections
occurring after hematopoietic stem cell transplantation, an area with a high unmet medical need, ahead of any other indications. It
has also begun to explore the potential of the drug in treating viral infections associated with organ transplants and virus-induced
cancers. We aim to maximize earnings through managing the lifecycle of our products as we transform into a specialty
pharmaceutical company with the capacity to expand into global markets.
(iii) The establishment of the Company’s own salesforce
With the business partnership agreement with its sales agent Eisai Co., Ltd. (Eisai) expired in December 2020, the Company
began preparing to establish its own sales organization for the domestic sales of TREAKISYM® in October 2018 and completed
the process in FY 2020. Following the expiration of its business partnership agreement with Eisai, the Company transitioned thesale of TREAKISYM® to its own sales system in December 2020. Providing specialized technical information will enable theCompany to more accurately understand the needs of the market and respond more swiftly, allowing it to contribute to the benefitof patients while aiming to maximize the business value of TREAKISYM®.
(iv) Global expansion for further growth
In addition to Japan, the Company identifies China, South Korea, Taiwan, and Singapore as strategic countries in Asia and has
moved forward with business development in Asia. However, with expanding medical expenditures due to the aging populationin Japan, and the advent of the “era of generic drugs comprising 80% of all drugs dispensed” as a governmental policy of Japan,
the business environment for innovative drug developers is expected to remain challenging. Such a policy may also be
implemented by other Asian countries.
Under these circumstances, the Company will promote global expansion aiming for further growth. Utilizing its experience
fostered through its business in Asia, the Company will search, evaluate, and negotiate concerning new drug candidates that canfollow antiviral drug brincidofovir in order to acquire their rights on a global scale.
(v) Securing personnel
The Company places the highest priority on personnel as the Company’s principal management resource. Without talent, wecannot make superior achievements in terms of exploring, developing, and providing information concerning new drugs; nor can
we roll out these new drugs on a global scale. We have been continually recruiting talented people; especially after being listed,
we have recruited the best and brightest people in order to strengthen the management organization. Going forward, we plan tocontinue to further strengthen our human resources by providing on-the-job training and employee development programs.
(vi) Financial issue
It is necessary for the Company to raise funds required for business activities such as R&D expenditures as pipeline
development and global business expansion progress and as drug candidates increase in number.
Therefore, we make every effort to further strengthen the financial base by continually diversifying the method of fund raisingand curtailing costs through tight budget control.

4. Basic Views on Selection of Accounting Standards
Over the near term, the Company will prepare its financial statements based on Japanese generally accepted accounting principles(GAAP), taking into account the inter-period comparability of financial statements and comparability across companies.
In terms of the application of International Financial Reporting Standards (IFRS), the Company will take appropriate measuresin light of the existing circumstances in Japan and overseas.

―22―

5. Financial Statements and Primary Notes(1) Balance sheet(Unit: thousands of yen)
FY 2020(as of December 31, 2020)

FY 2021(as of December 31, 2021)

3,848,626
406,988271,550
672,891482
43,49480,645
314,761
175,852
5,815,292

3,860,106
2,147,510
125,265259,940
479
192,576
145,011—
16,946
6,747,838

59,123(16,388)
42,73590,043(56,076)
33,96676,70164,620(19,959)
44,66072,734(33,760)
38,974
83,634

296,005
5,836
301,841

254,774
4,330
259,104

0—80,87180,871
459,415
6,274,707

01,275,759
86,6601,362,419
1,705,159
8,452,997

665,460
192,705
645,81381,928——29,431
1,615,339

69,683—515,075
383,599
516,036
4,342
29,373
1, 518,111

—
2,050
2,050
1,617,389

186,437
2,776
189,213
1,707,324

AssetsCurrent assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Semi-finished goods
Supplies
Advance payments
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Total property, plant and equipment
Intangible assets
Software
Software in progress
Total intangible assets
Investments and other assets
Shares of subsidiaries and associates
Deferred tax assets
Lease and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Unearned revenue
Accounts payable–other
Income taxes payable
Consumption taxes payable
Provision for sales returns
Other
Total current liabilities
Non-current liabilities
Provision for product changeover
Provision for retirement benefits
Total non-current liabilities
Total liabilities―23―

(Unit: thousands of yen)
FY 2020(as of December 31, 2020)

FY 2021(as of December 31, 2021)

17,044,943

17,157,628

17,014,943
4,541
17,019,485

17,127,628
4,873
17,132,501(30,009,713)(30,009,713)(17,538)
4,037,177
620,140
4,657,318
6,274,707(27,977,510)(27,977,510)(86,045)
6,226,573
519,099
6,745,672
8,452,997

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Share acquisition rights
Total net assets
Total liabilities and net assets―24―

(2) Statement of income
FY 2020(from January 1, 2020
to December 31, 2020)
Net sales
Net sales of goods
Rights income
Total net sales
Cost of sales
Beginning merchandise inventory
Cost of purchased goods
Purchase allowance and returns
Total
Ending merchandise inventory
Cost of goods sold
Gross profit
Provision for sales returns
Net gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on tax refund
Dividend income of insuranceCommission 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)
Extraordinary income
Gain on reversal of share acquisition rights
Settlement received
Total extraordinary income
Profit (loss) before income taxes
Income taxes–current
Income taxes–deferred
Total income taxes
Profit (loss)―25―(Unit: thousands of yen)
FY 2021(from January 1, 2021
to December 31, 2021)

2,977,051
10,0002,987,051

8,256,924—
8,256,924—
3,163,251
98,611
3,064,640*1,
944,442
2,120,198
866,853—
866,853*2, *3
5,373,073(4,506,220)

944,442
2,145,244—
3,089,686*1,
637,2142,452,471
5,804,452
4,342
5,800,110*2, *3
4,784,109
1,016,001

137
120
2,324
—
2
2,585

57
68
2,579
14,7570
17,462

43,95827,021
41,287—112,268(4,615,903)

9,499
1,950
20,186693
32,3301,001,133

4,341
525,145
529,486(4,086,416)
3,800
—
3,800
(4,090,216)

198
—
198
1,001,331
244,887(1,275,759)(1,030,871)
2,032,203

(3) Statement of changes in equity
FY 2020 (from January 1, 2020 to December 31, 2020)(Unit: thousands of yen)
Shareholders’ equity
Capital surplus
Retained earnings
Other retained
earnings
Treasury
Capital stock Legal capital Other capital Total capital
Total retained
sharesRetained
surplussurplussurplusearnings
earnings brought
forwardBalance at beginningof current period
Changes of items
during period
Issuance of newshares (exercise ofshare acquisitionrights)Profit (loss)
Purchase oftreasury shares
Disposal of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

14,870,639

14,840,639

2,174,304

2,174,304

14,843,137(25,919,496)(25,919,496)(4,090,216)(4,090,216)(15,077)

2,174,304(6,387)
2,043

2,043

3,926

2,174,304

2,174,304

2,043

2,176,347(4,090,216)(4,090,216)(2,461)

17,044,943

17,014,943

4,541

17,019,485(30,009,713)(30,009,713)(17,538)

Shareholders’equityShareacquisition
Total
rightsshareholders’equityBalance at beginningof current period
Changes of items
during period
Issuance of newshares (exercise ofshare acquisitionrights)Profit (loss)
Purchase oftreasury shares
Disposal of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

2,498

3,779,202

620,913

Total net
assets4,400,116

4,348,608

4,348,608(4,090,216)(4,090,216)(6,387)(6,387)

5,969

5,969
(772)

(772)

257,974(772)

257,201

4,037,177

620,140

4,657,318―26―

FY 2021 (from January 1, 2021 to December 31, 2021)(Unit: thousands of yen)
Shareholders’ equity
Retained earnings
Other retained
earnings
Capital stock Legal capital Other capital Total capital
Total retained
Retained
surplussurplussurplusearnings
earnings brought
forwardCapital surplus

Balance at beginningof current period
Changes of items
during period
Issuance of newshares (exercise ofshare acquisitionrights)Profit (loss)
Purchase oftreasury shares
Disposal of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

17,044,943

17,014,943

112,684

112,684

17,019,485(30,009,713)(30,009,713)

2,032,203

2,032,203(17,538)

112,684(68,825)
331

331

318

112,684

112,684331

113,015

2,032,203

2,032,203(68,507)

17,157,628

17,127,628

4,873

17,132,501(27,977,510)(27,977,510)(86,045)

Shareholders’equityShareacquisition
Total
rightsshareholders’equityBalance at beginningof current period
Changes of items
during period
Issuance of newshares (exercise ofshare acquisitionrights)Profit (loss)
Purchase oftreasury shares
Disposal of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

4,541

Treasuryshares

4,037,177

620,140

Total net
assets

4,657,318

225,368

225,368

2,032,203

2,032,203(68,825)(68,825)649

649(101,041)(101,041)

2,189,396(101,041)

2,088,354

6,226,573

519,099

6,745,672―27―

(4) Statement of cash flows
FY 2020(from January 1, 2020
to December 31, 2020)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of guarantee deposits
Share-based remuneration expenses
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for sales returns
Increase (decrease) in provision for product changeover

Interest income
Settlement received
Foreign exchange losses (gains)
Commission expenses
Share issuance cost
Gain on reversal of share acquisition rights
Loss on retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses
Decrease (increase) in advances paid
Increase/decrease in consumption taxes
payable/consumption taxes refund receivable
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable–trade

Increase (decrease) in accounts payable–other
Increase (decrease) in other current liabilities
OthersSubtotalInterest and dividends received
Settlement package received
Commitment fee paid
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 acquisition rights
Payments 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―28―(Unit: yen in thousands)
FY 2021(from January 1, 2021
to December 31, 2021)(4,086,416)
63,835952
102,378
431
—
—
(137)
(525,145)
1,501
43,95827,021(4,341)
37
142,286(944,442)
10,39841,7911,001,331
93,9591,223
124,270
726
4,342
186,437(57)—(14,209)
9,499
1,950
(198)
693
(1,740,521)
559,235(64,366)—(39,436)

830,797(203,578)
544,546
29,132
190,341—(4,604,882)
153
525,145(41,000)(1,900)(4,122,483)

9,825(595,776)(125,188)(132,180)
1,489
153,28557—(9,499)(3,800)140,042(15,667)(133,264)(11,377)(160,309)(25,454)(38,383)(7,011)(70,849)

4,244,690

254

10,540(27,290)(6,387)538
4,222,090(1,501)(62,203)3,910,830*1 3,848,626—(4,001)(68,825)649(71,922)
14,20911,4803,848,626*1 3,860,106

(5) Notes to going concern assumptions

None to be reported.

(6) Significant accounting policies
1. Valuation basis and method of marketable and investment securities(1) Shares of subsidiaries and associates
Shares of subsidiaries and associates are stated at cost determined by the moving-average method.
(2) Other marketable and investment securities
Available-for-sale securities with determinable market value
Available-for-sale securities with a determinable market value are stated at fair value based onmarketable value on the closing date and other premises. Any valuation differences are included directly
in shareholders’ equity. Cost of securities sold is calculated by the moving-average method.
Available-for-sale securities without determinable market value
Available-for-sale securities without determinable market value are stated at cost determined by themoving-average method.
2. Valuation basis and method of derivative transactions
Derivative financial instruments are stated at fair value.
3. Valuation basis and method of inventories
Merchandise and finished goods are stated at cost determined by the first-in, first-out method, while semifinished goods are stated at cost determined by the weighted-average method. The amount on the balance sheet
is calculated by reducing book value when the contribution of inventories to profitability declines.
4. Depreciation and amortization of non-current assets(1) Property, plant and equipment (excluding lease assets)
Depreciation of property, plant and equipment is computed by the straight-line method.
The useful lives of major property, plant and equipment are summarized as follows:
Buildings
3 to 18 years
Tools, furniture and fixtures
4 to 20 years(2) Intangible assets (excluding lease assets)
Amortization of intangible assets is computed by the straight-line method.
Capitalized software costs are being amortized over the period of the internal use of five years.
(3) Lease assets
Depreciation of lease assets is computed by the straight-line method over the lease term with no residual
value.
5. Deferred assets
Share issuance costs and bond issuance costs are recorded as expenses in full at the time of expenditure.
6. Basis for translating assets and liabilities denominated in foreign currencies into Japanese yen
Monetary assets and liabilities denominated in foreign currencies are translated into yen at the spot
exchange rates prevailing on the closing date, and resulting gains or losses are credited or charged to income.
7. Basis for reserves and provisions
Provision for retirement benefits
The provision for retirement benefits is provided based on an estimated amount for retirement benefit
obligations as of the end of the fiscal year under review.
The Company applies the simplified method to calculate amounts of provision for retirement benefits andretirement benefit expenses. That is, the amount of retirement benefit obligations are the payments requiredfor voluntary retirement as of each fiscal year end.

―29―

Provision for sales returns
The provision for sales return is provided to prepare for losses from returned products sold, an amountequivalent to losses based on the estimated amount of future returns is recorded.
Provision for product changeover
The provision for product changeover is provided to prepare for expenses to be incurred in connection
with the changeover from FD to RTD formulation, the estimated amount of such expenses is recorded.
8. Cash and cash equivalents in the statement of cash flows
Cash and cash equivalents consist of cash on hand, cash in banks which can be withdrawn at any time, andshort-term investments with a maturity of three months or less that can easily be converted to cash and are
subject to little risk of change in value.
9. Other significant basis for the preparation of financial statements
Accounting for consumption tax
Transactions are recorded at amounts exclusive of consumption tax.

(7) Notes to financial statements(Change in accounting methods)(Change in inventory valuation methods)
The Company previously valued its inventory using the weighted-average method, but from the first quarter of
FY 2021, it has adopted the first-in, first-out method for merchandise and finished goods and the weightedaverage method for semi-finished goods. The transition to in-house sales has enabled the Company to better
monitor and understand the flow of inventory, prompting it to reexamine its definition of and valuation methods
for inventory to allow for more appropriate inventory valuation and profit/loss calculation.
As a result, the Company adopted the first-in, first-out method for merchandise and finished goods and theweighted-average method for semi-finished goods to better reflect the flow of its inventory. The Company
determined that these methods were rational from the perspective of ensuring appropriate inventory valuation andprofit/loss calculation, and that these methods better reflected the Company’s business conditions.
The Company has not retrospectively applied the revised valuation methods to previous results as the impact of
the change was negligible.
(Change in presentation)(Balance sheet)
The transition to in-house sales has enabled the Company to better understand and monitor the flow of its
inventory, prompting it to revise its definition of merchandise and finished goods, as well as of semi-finishedgoods, to allow for more appropriate inventory valuation and profit/loss calculation.
As a result, the Company replaced merchandise and finished goods of 944,442 thousand yen at the previous
fiscal year-end recorded under the current assets section of the balance sheet with semi-finished goods of 672,891
thousand yen and merchandise and finished goods of 271,550 thousand yen.
(Accounting Standards Not Yet Applied, etc.)• “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020, AccountingStandards Board of Japan)• “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March
26, 2021, Accounting Standards Board of Japan)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in―30―

the United States jointly developed comprehensive accounting standards for revenue recognition, and in May 2014
published “Revenue from Contracts with Customers” (IFRS 15 at IASB, Topic 606 at FASB). Given that IFRS 15
will be applied to fiscal years with dates on or after January 1, 2018 and Topic 606 will be applied to fiscal years
with dates after December 15, 2017, the Accounting Standards Board of Japan (ASBJ) has developed
comprehensive accounting standards for revenue recognition and published them along with the Implementation
Guidance.
The basic policy of the ASBJ in developing accounting standards for revenue recognition is thought to be setting
accounting standards, with the incorporation of the basic principles of IFRS 15 as a starting point, from a standpointof comparability between financial statements, which is one of the benefits of ensuring consistency with IFRS 15,
and to add alternative accounting treatments without losing comparability if there is an item that should be taken
into account in practices, etc. that have been conducted in Japan.

(2) Planned date of application
To be applied at the beginning of the fiscal year ending December 31, 2022.

(3) Effect of application of the accounting standards, etc.
Application of the “Accounting Standard for Fair Value Measurement,” etc. will have a negligible impact onfinancial statements• “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019, AccountingStandards Board of Japan)• “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31,
July 4, 2019, Accounting Standards Board of Japan)• “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, July 4, 2019, AccountingStandards Board of Japan)• “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019, Accounting Standards
Board of Japan)• “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19,
March 31, 2020, Accounting Standards Board of Japan)(1) Overview
In light of virtually identical and detailed guidance issued by the International Accounting Standards Board(IASB) and the U.S. Financial Accounting Standards Board (FASB), specifically “Fair Value Measurement” (IFRS
13) under international financial reporting standards and Accounting Standards Codification – “Fair Value
Measurement (Topic 820)” under U.S. accounting standards, the Accounting Standards Board of Japan (ASBJ) has
taken steps to bringing Japan standards into conformity with international accounting standards, particularly withrespect to guidance and disclosure regarding the fair value of financial instruments. This decision resulted inannouncement of the Accounting Standard for Fair Value Measurement.
As a basic policy in development of the accounting standard regarding measurement of fair value, ASBJ opted
essentially to adopt IFRS 13 in its entirety, with a view to improving the comparability of financial statements
between Japanese and foreign companies by utilizing a unified measurement approach. Additionally, in
consideration of actual practice in Japan to date, ASBJ has defined other procedures with respect to individual item
―31―

categories within a scope that will not significantly harm comparability between financial statements.

(2) Planned date of application
To be applied at the beginning of the fiscal year ending December 31, 2022.

(3) Effect of application of the accounting standards, etc.
Application of the “Accounting Standard for Fair Value Measurement,” etc. will have a negligible impact onfinancial statements.

(Balance sheet)
The Company has overdraft and commitment line contracts with three banks in a business relationship to
efficiently procure working capital. The status of the bank overdraft and loan commitments based on these contracts
at the end of each fiscal year is as follows:(Unit: thousands of yen)
FY 2020
FY 2021(as of December 31, 2020)(as of December 31, 2021)
Total amounts of bank overdraft limit
3,150,000
3,150,000
and loan commitment line
Balance of borrowing outstanding——
Unused balance
3,150,000
3,150,000(Statement of income)* 1 The amount of inventories at the end of each fiscal year is book value after the write-down due to decreased
profitability, and the following valuation loss is included in the cost of sales.
(Unit: thousands of yen)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
187,840
275,633* 2 The selling expenses ratio is roughly 24.2% and 34.4% for FY 2020 and FY 2021, respectively, and the general andadministrative expenses ratio is roughly 75.8% and 65.6% for FY 2020 and FY 2021, respectively.
Major expense items and amounts are as follows:(Unit: thousands of yen)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
Remuneration for directors (and other
119,105
119,643
officers)
Salaries and allowance
410,547
453,632
Retirement benefit expenses
753
853
Research and development expenses
2,266,556
1,736,126
Depreciation
40,17168,737
Fee expenses
405,325
38,318Promotion expenses
1,301,048
1,642,559*3

Total amounts of research and development expenses included in general and administrative expenses(Unit: thousands of yen)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
2,266,556
1,736,126―32―

(Statement of changes in equity)
FY 2020 (from January 1, 2020 to December 31, 2020)
1. Type and number of shares issued and treasury shares(Unit: number of shares)
At beginning ofcurrent period

Increase

At end of current
periodDecrease

Shares issued
Common stock
26,437,681
11,765,275—
38,202,956
Total
26,437,681
11,765,275—
38,202,956
Treasury shares
Common stock
22,593
13,9006,350
30,143
Total
22,593
13,9006,350
30,143(Notes)
1. Increase of 11,765,275 issued shares of common stock is due to the exercise of share acquisition rights.
2. Increase of 13,900 issued shares of common stock is due to the purchase of fractional shares.
3. Of the decrease of 6,350 common treasury shares, 5,200 were due to exercise of share acquisition rights,
and 1,150 were sold to owners of fractional shares.
2. Share acquisition rights
Number of shares to be issued
Company

Description

The 47th warrant
The 50th warrant
SymBioPharmaceuticals
The 51th warrant
LimitedType ofshares to beissuedCommonstock
Commonstock
Commonstock

Balance
as ofDecember31, 2018(thousandsof yen)At
beginningof current
periodIncrease

Decrease

At end ofcurrent
period

1,675,000―

1,675,000———

7,000,000

7,000,000———

3,000,000

3,000,000——

Share acquisitionrights as stock
—
—
—
—
—
620,140
options
Total
1,675,000 10,000,000 11,675,000—
620,140(Note) The information about the type and number of shares to be issued pertaining to share acquisition rights as
stock options is described in “Stock options.”(Main reasons for increase/decrease)
Decrease due to exercise of the 47th warrant: 1,675,000 shares
Increase due to issuance of the 50th warrant: 7,000,000 shares
Decrease due to exercise of the 50th warrant: 7,000,000 shares
Increase due to issuance of the 51st warrant: 3,000,000 shares
Decrease due to exercise of the 51st warrant: 3,000,000 shares
3. Dividends
None to be reported.

―33―

FY 2021 (from January 1, 2021 to December 31, 2021)
1. Type and number of shares issued and treasury shares(Unit: number of shares)
At beginning ofcurrent period

Increase

At end of current
periodDecrease

Shares issued
Common stock

38,202,956

254,250―

38,457,206

Total

38,202,956

254,250―

38,457,206

Treasury shares
30,14382,618
Common stock
53,025550
30,14382,618
Total
53,025550(Notes)
1. Increase of 254,250 issued shares of common stock is due to the exercise of share acquisition rights.
2. Increase of 53,025 issued shares of common stock is due to the purchase of fractional shares.
3. The decrease of 550 common treasury shares is due to sales to owners of fractional shares.
2. Share acquisition rights
Number of shares to be issued
Company

Description

SymBioShare acquisition
Pharmaceuticals rights as stock
Limitedoptions(Note)

Type ofshares to beissued—At
beginningof current
period—Increase

Decrease

At end ofcurrent
period———Balance
as ofDecember31, 2018(thousandsof yen)519,099

Total
—
—
—
—
519,099
The information about the type and number of shares to be issued pertaining to share acquisition rights as
stock options is described in “Stock options.”

3. Dividends
None to be reported.

―34―

(Statement of cash flows)*1. Cash and cash equivalents as of the fiscal year end are reconciled to the accounts reported in the balance sheet as
follows:(Unit: thousands of yen)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
Cash and deposits
3,848,626
3,860,106
Cash and cash equivalents
3,848,626
3,860,106(Financial instruments)
1. Financial instruments(1) Policies for financial instruments
The Company procures the funds necessary in light of the pipeline development plan (primarily by third-party
allotment and offering by new share issuance). A temporary surplus fund is invested in financial instruments which
are highly safe and liquid.
As a principle, the Company does not enter into derivative transactions for speculative trading purposes but uses
them within the scope prescribed in the Company’s internal rules.
(2) Types of financial instruments and related risks
Operating receivables such as accounts receivable–trade and advances paid in connection with joint development
are exposed to the credit risk of customers and joint development partners. Operating receivables denominated inforeign currencies are exposed to foreign exchange fluctuation risk.
The Company intends to invest in marketable and investment securities which have a relatively low risk of falling
below initial investments, however, it might entail a finite risk.
Operating payables such as accounts payable–trade and accounts payable–other are mostly due within 60 days.
Operating payables denominated in foreign currencies are exposed to foreign exchange fluctuation risk.
The Company uses derivative transactions to avoid foreign exchange fluctuation risks and enters into forward
exchange contracts within the scope prescribed in the internal rules based on balances of receivables and payables
denominated in foreign currencies as well as the actual volume of export and import transactions denominated inforeign currencies.
Lease and guarantee deposits are mostly security deposits related to leased office premises and their refunds are
subject to the credit risk of the lessor.
(3) Risk management for financial instruments(i) Monitoring of credit risks (the risk that customers or counterparties may default on obligations)
In accordance with the Company’s internal credit policies for managing credit risk arising from operatingreceivables, the Company’s department in charge of these matters periodically monitors the creditworthiness ofmajor customers and monitors due dates and outstanding balances by individual customers. In addition, theCompany is making efforts to promptly identify and mitigate risks of bad debts from customers who are having
financial difficulties.
The Company enters into derivative transactions only with financial institutions which have a sound credit
profile in order to mitigate the counterparty risk.
(ii) Monitoring of market risk (the risk arising from fluctuations in foreign exchange rates, interest rates, and others)
The Company deposits cash primarily with financial institutions with high credit ratings.
For marketable and investment securities, the Company intends to avoid risks of falling below initialinvestments by investing in securities with a satisfactory credit rating and investment period in accordance with
the Company’s internal investment policies.
The Company enters into forward exchange contracts in order to avoid foreign exchange fluctuation risks inconnection with receivables and payables denominated in foreign currencies.
Followed by appropriate authorization procedures prescribed in the Company’s internal rules, the Finance &Accounting department executes and monitors derivative transactions. Monthly transaction performances are―35―

reported to the executive management committee.
(iii) Monitoring of liquidity risks (the risk that the Company may not be able to meet its obligations on the scheduled
due date)
Based on the report from each department, the responsible department of the Company prepares and updates its
cash flow plans on a timely basis and ensures to maintain the liquidity on hand to manage liquidity risk.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted
market price available, fair value is reasonably estimated. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result in different fair value.
(5) Concentration of credit risk
As of the end of the fiscal year under review, 100% of operating receivables are from one particular major
customer.
2. Fair value of financial instruments
The carrying value on the balance sheet, fair values, and their differences are as follows. The financial instruments
whose fair value is extremely difficult to determine are not included. (See Note 2.)
FY 2020 (as of December 31, 2020)(Unit: thousands of yen)
Carrying value on the
Fair value
Differencesbalance sheet(1) Cash and deposits
3,848,626
3,848,626―(2) Accounts receivable–trade406,988406,988―(3) Consumption taxes receivable
314,761
314,761―
Assets, total
4,570,376
4,570,376―(1) Accounts payable–trade665,460
665,460―(2) Accounts payable–other
645,813645,813―(3) Income taxes payable
81,92881,928―(4) Accrued consumption taxes―――
Liabilities, total
1,393,202
1,393,202―
Derivative transactions, total (*)―――(*) Receivables and liabilities arising from derivative transactions are presented on a net basis and net liabilities areshown in parentheses.
FY 2021 (as of December 31, 2021)(Unit: thousands of yen)
Carrying value on the
Fair value
Differencesbalance sheet(1) Cash and deposits
3,860,106
3,860,106―(2) Accounts receivable–trade2,147,510
2,147,510―(3) Consumption taxes receivable―――
Assets, total
6,007,617
6,007,617―(1) Accounts payable–trade
69,683
69,683―(2) Accounts payable–other
515,075
515,075―(3) Income taxes payable
383,599
383,599―(4) Accrued consumption taxes
516,036
516,036―
Liabilities, total
1,484,394
1,484,394―(*)
Derivative transactions, total―――(*) Receivables and liabilities arising from derivative transactions are presented on a net basis and net liabilities are―36―

shown in parentheses.
(Notes)1. Fair value measurement of financial instruments and other matters related to securities and derivative transactions
Assets(1) Cash and deposits, (2) Accounts receivable–trade, and (3) Consumption taxes receivable
The carrying value is deemed as the fair value since these are scheduled to be settled in a short period of time.
Liabilities(1) Accounts payable–trade, (2) Accounts payable–other, (3) Income taxes payable, and (4) Accrued consumption taxes
The carrying value is deemed as the fair value since these are scheduled to be settled in a short period of time.
Derivative transactions
None to be reported.
2. Financial instruments whose fair value is extremely difficult to determine
FY 2020(as of December 31, 2020)
80,871

Lease and guarantee deposits(Unit: thousands of yen)
FY 2021(as of December 31, 2021)
86,660.
3. The redemption schedule for monetary assets and securities with maturities after the closing date
FY 2020 (as of December 31, 2020)(Unit: thousands of yen)Due in one year or
less

Due after one year Due after five years
through five years through ten years Due after ten years

3,848,535―――

Accounts receivable–trade406,988―――

Consumption taxes
receivable
Total

314,761―――

4,570,285―――

Deposits

FY 2021 (as of December 31, 2021)(Unit: thousands of yen)Due in one year or
less

Due after one year Due after five years
through five years through ten years Due after ten years

Deposits

3,860,106―――

Accounts receivable–trade
Consumption taxes
receivable
Total

2,147,510

―

―

―

―

―

―

―

6,007,617

―

―

―

―37―

(Retirement benefits)
1. Outline of retirement benefit plans
The Company has adopted a defined contribution pension plan. A lump-sum payment plan (non-contributory plan) is
applied for certain employees based on the Company’s internal rules for retirement benefits.
The simplified method is applied to calculate amounts of provision for retirement benefits and retirement benefit
expenses.
2. Retirement benefit plan under the simplified method(1) The reconciliation of provision for retirement benefits at the beginning and the end of the fiscal year under thesimplified method is as follows:(Unit: thousands of yen)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
Provision for retirement benefits at beginning of period
1,619
2,050
Retirement benefit expenses
530
726
―
Paid amount of retirement benefits(99)
Provision for retirement benefits at end of period
2,050
2,776
(2) The reconciliation of retirement benefit obligations or pension assets at the end of the fiscal year and provision for
retirement benefits and the prepaid pension cost on the balance sheet is as follows:(Unit: thousands of yen)
FY 2020
FY 2021(as of December 31, 2020) (as of December 31, 2021)
Retirement benefit obligations under non-contributory
2,050
2,776
plan
Net defined benefit liability or asset on the balance sheet
2,050
2,776
Provision for retirement benefits
Net defined benefit liability or asset on the balance
sheet(3) Retirement benefit expenses
Retirement benefit expenses calculated under the simplified method

2,050

2,776

2,050

2,776

FY 2020: 530 thousand yen
FY 2021: 726 thousand yen

3. Defined contribution pension plan
The amount of the Company’s contribution to the defined contribution pension plan for FY 2020 and FY 2021 were2,518 thousand yen and 2,546 thousand yen, respectively.

―38―

(Stock options)
1. The account title and the amount of stock options charged as expenses

Selling, general and administrative expenses

FY 2020(from January 1, 2020
to December 31, 2020)
102,378(Unit: thousands of yen)
FY 2021(from January 1, 2021
to December 31, 2021)
124,270

2. The account title and the amount of income recognized for vested shares that expired unexercised(Unit: thousands of yen)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
Gain on reversal of share acquisition rights
4,341
198
3. Description of stock options and changes in the size of stock options
The following information is based on stock options that were available in the fiscal year ended December 31, 2021.
The number of stock options is converted into the number of shares.
On July 1, 2019, we conducted a 1-for-4 consolidation of common stock, and figures below reflect its impact.

―39―

(1) Description of stock options
The 24th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

The 25th Warrant
5

48,000 shares

March 31, 2011
1. The Person Granted must havethe status as the Company’s
director, Audit & Supervisory
Board member, advisor, or
employee at the time of
exercise. However, this is notnecessarily the case if the Person
Granted retires due to the expiryof her/his term or compulsory
retirement; or if otherwise theBoard of Directors approves orif the Person Granted is anexternal collaborator.
2. The Company’s stock must be
listed on a stock exchange.
The vesting period is not fixed.
From March 31, 2013 to March 30,
2021

The 26th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

Common stock59

48,750 shares

March 31, 2011

Same as on the left

Same as on the left
From March 31, 2013 to March 30,
2021

The 27th Warrant
4

90,625 shares

May 2, 2012
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1) to (6).
The period that fulfills therequirement of the exercise
conditions *(2) and (5).
From April 18, 2014 to April 17,
2022

―40―

Employees of the Company

Employees of the Company

Common stock70

107,675 shares

May 2, 2012Same as on the left

Same as on the left
From April 18, 2014 to April 17,
2022

The 30th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

The 31st Warrant
5

29,000 shares

May 29, 2013
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1) to (6).
The period that fulfills therequirement of the exercise
conditions *(2) and (5).
From May 15, 2015 to May 14,
2023
The 32nd Warrant

Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

Common stock

68

31,000 shares

May 29, 2013Same as on the left

Same as on the left
From May 15, 2015 to May 14,
2023
The 33rd Warrant

5

63,000 shares

April 30, 2014
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From April 16, 2017 to April 15,
2024

―41―

Employees of the Company

Employees of the Company

Common stock68

82,500 shares

April 30, 2014

Same as on the left

Same as on the left
From April 16, 2017 to April 15,
2024

The 35th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

The 36th Warrant
6

51,050 shares

April 10, 2015
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 27, 2018 to March 26,
2025

The 37th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

Common stock61

78,000 shares

April 10, 2015

Same as on the left

Same as on the left
From March 27, 2018 to March 26,
2025

The 38th Warrant
659,125 shares

April 14, 2016
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 31, 2019 to March 30,
2026

―42―

Employees of the Company

Employees of the Company

Common stock73

98,750 shares

April 14, 2016

Same as on the left

Same as on the left
From March 31, 2019 to March 30,
2026

The 40th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

The 41st Warrant
6

70,000 shares

April 24, 2017
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 30, 2020 to March 29,
2027

The 43rd Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

Common stock71

112,800 shares

April 24, 2017Same as on the left

Same as on the left
From March 30, 2020 to March 29,
2027

The 44th Warrant
6

76,250 shares

April 26, 2018
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 30, 2021 to March 29,
2028

―43―

Employees of the Company

Employees of the Company

Common stock74

116,200 shares

April 26, 2018

Same as on the left

Same as on the left
From March 30, 2021 to March 29,
2028

The 48th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

The 49th Warrant
6

78,750 shares

April 22, 2019No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 30, 2022 to March 29,2029
The 52th Warrant

Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

Common stock

92

179,125 shares

April 22, 2019

Same as on the left

Same as on the left
From March 30, 2022 to March 29,2029
The 53rd Warrant

4

115,000 shares

April 24, 2020
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 27, 2023 to March 26,
2030

―44―

Employees of the Company

Employees of the Company

Common stock

119

375,000 shares

April 24, 2020

Same as on the left

Same as on the left
From March 27, 2023 to March 26,
2030

The 54th Warrant
Individuals covered by the plan andnumber of persons granted stock
options
Class and number of shares to beissued upon the exercise of thestock options
Grant date

Vesting conditions

Vesting period
Exercise period

Directors of the Company

Common stock

The 55th Warrant
5

40,750 shares

April 23, 2021
No specific conditions areprescribed in the allotment
agreement for share acquisitionrights entered into between the
Company and the Person Granted,
except for certain vesting
conditions stipulated in the exercise
conditions. The exercise conditions
are described in *(1), (3), (4), (7),and (8).
The period that fulfills therequirement of the exercise
condition *(7).
From March 25, 2024 to March 24,
2031

Employees of the Company

Common stock

134

114,125 shares

April 23, 2021

Same as on the left

Same as on the left
From March 25, 2024 to March 24,2031*(1) Fractions less than one unit of a share acquisition right shall be unexercisable.
(2) The Person Granted may exercise all or part of the rights in accordance with the following classifications:
The 26th and the 27th warrants(a) Those who were granted the share acquisition rights may exercise the rights within the limit of one-fourth (1/4) from April
18, 2014 to April 17, 2015.
(b) Those who were granted the share acquisition rights may exercise the rights within the limit of one-half (1/2) from April 18,
2015 to April 17, 2016.
(c) Those who were granted the share acquisition rights may exercise the rights within the limit of three-fourths (3/4) from
April 18, 2016 to April 17, 2017.
(d) Those who were granted the share acquisition rights may exercise all the rights from April 18, 2017 to April 17, 2022.
The 30th and the 31st warrants(a) Those who were granted the share acquisition rights may exercise the rights within the limit of one-fourth (1/4) from May
15, 2015 to May 14, 2016.
(b) Those who were granted the share acquisition rights may exercise the rights within the limit of one-half (1/2) from May 15,
2016 to May 14, 2017.
(c) Those who were granted the share acquisition rights may exercise the rights within the limit of three-fourths (3/4) from May
15, 2017 to May 14, 2018.
(d) Those who were granted the share acquisition rights may exercise all the rights from May 15, 2018 to May 14, 2023.
(3) The Person Granted shall exercise the rights starting from the date of resolution by the below-mentioned shareholders’ meetingor the Board of Directors’ meeting until one day before the effective date of the Organizational Restructuring as followed,
regardless of the conditions of the exercise period originally stipulated, when the Organizational Restructuring is approved by
the resolution of the Company’s shareholders’ meeting (including the case where resolution of a shareholders’ meeting isdeemed to exist pursuant to the provision of Article 319 of the Companies Act) or the Board of Directors’ meeting (limited tothe case where no shareholders’ meeting is required for the said Organizational Restructuring) before the exercise period of theshare acquisition rights comes into effect: an absorption-type merger or an incorporation-type merger where the Company
becomes a dissolving company and an absorption-type split or an incorporation-type company split where the Company
becomes a split company, or a share exchange or a share transfer where the Company becomes a wholly-owned subsidiary(collectively, “Organizational Restructuring” as mentioned above).
(4) The share acquisition rights shall not be offered for pledge or disposed of in any other way.
(5) A person to whom these stock options are granted (“Person Granted”) must have the status as the Company’s director, Audit &Supervisory Board member, or employee of the Company or its affiliates at the time of exercise. However, this is notnecessarily the case where:(a) The Person Granted is a director or Audit & Supervisory Board member of the Company or its affiliates and retires due tothe expiry of her/his term.
(b) The Person Granted is an employee of the Company or its affiliates and retires due to compulsory retirement.

―45―

(c) The Person Granted is a director, Audit & Supervisory Board member, or employee of the Company or its affiliates and theBoard of Directors resolves that he/she has resigned or retired with honorable recognition.
(6) In the event that:(a) The Person Granted dies before the exercise period comes into effect, the beneficiary/ies shall exercise the rights of up to
one-half (1/2) within six (6) months from the date of inheritance, or(b) The Person Granted dies during the exercise period, the beneficiary/ies shall exercise all the rights within six (6) months
from the date of inheritance. However, in the event that the beneficiary/ies dies, the rights shall be discarded and shall not
be exercised by his/her beneficiary/ies.
(7) The Person Granted must have the status as a director or employee of the Company or its affiliates at the time of exercise.
However, this is not necessarily the case where:(a) The Person Granted is a director of the Company or its affiliates and retires due to the expiry of her/his term.
(b) The Person Granted is an employee of the Company or its affiliates and retires due to compulsory retirement.
(c) The Person Granted is a director or employee of the Company or its affiliates and the Board of Directors resolves thathe/she has resigned or retired with honorable recognition.
(8) In the event that the Person Granted dies, the beneficiary/ies shall be able to succeed and exercise the share acquisition rights asprescribed in the allotment agreement for share acquisition rights entered into between the Company and the Person Granted.
However, in the event that the beneficiary/ies dies, the rights shall be discarded and shall not be exercised by his/her
beneficiary/ies.

―46―

(2) Changes in the size of stock options(a) Number of stock options

Grant dateNon-vested shares:
At the beginning of the year
GrantedExpired
VestedAt the end of the year
Vested shares:
At the beginning of the year
VestedExercised
ExpiredAt the end of the year

Grant dateNon-vested shares:
At the beginning of the year
GrantedExpired
VestedAt the end of the year
Vested shares:
At the beginning of the year
VestedExercised
ExpiredAt the end of the year

Grant dateNon-vested shares:
At the beginning of the year
GrantedExpired
VestedAt the end of the year
Vested shares:
At the beginning of the year
VestedExercised
ExpiredAt the end of the year

(Unit: number of shares)
The 26th Warrant The 27th Warrant
May 2, 2012
May 2, 2012

The 24th Warrant
March 31, 2011

The 25th Warrant
March 31, 2011

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—

48,000——48,000—19,125——
19,125—90,625———90,62543,375———43,375

The 30th Warrant
May 29, 2013

The 31st Warrant
May 29, 2013

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

29,000———29,00011,925———
11,925

17,250—17,250——15,175
—
5,550
—
9,625

The 35th Warrant
April 10, 2015

The 36th Warrant
April 10, 2015

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

14,050—11,475—
2,575

20,500—8,125—
12,37517,750—17,750——31,325—18,875—
12,450―47―(Unit: number of shares)
The 32nd Warrant The 33rd Warrant
April 30, 2014
April 30, 2014

(Unit: number of shares)
The 37th Warrant The 38th Warrant
April 14, 2016
April 14, 2016

Grant dateNon-vested shares:
At the beginning of the year
GrantedExpired
VestedAt the end of the year
Vested shares:
At the beginning of the year
VestedExercised
ExpiredAt the end of the year

(Unit: number of shares)
The 43rd Warrant The 44th Warrant
April 26, 2018
April 26, 2018

The 40th Warrant
April 24, 2017

The 41st Warrant
April 24, 2017

—
—
—
—
—

—
—
—
—
—

42,500——42,500—62,325——62,325—65,000—60,00042,800—20,65033,75042,50057,50014,00062,32537,075

―

―

—

250

5,000

22,15018,75039,000(Unit: number of shares)
The 52nd Warrant The 53rd Warrant
April 24, 2020
April 24, 2020

The 48th Warrant
April 22, 2019

The 49th Warrant
April 22, 201947,500—122,375—

115,000—

297,750——

16,500―27,250——25,000―47,500105,875

90,000270,500

6,250

2,250

―

―

Vested——25,000―Exercised
ExpiredAt the end of the year

—
—

—
—

—
—

—
—

6,250

2,250

25,000―Grant dateNon-vested shares:
At the beginning of the year
GrantedExpired
VestedAt the end of the year
Vested shares:
At the beginning of the year

Grant dateNon-vested shares:
At the beginning of the year
GrantedExpired
VestedAt the end of the year
Vested shares:
At the beginning of the year
VestedExercised
ExpiredAt the end of the year

(Unit: number of shares)
The 54th Warrant The 55th Warrant
April 23, 2021
April 23, 2021—
40,7504,500—
36,250—114,125
4,750—
109,375

—
—
—
—
—

—
—
—
—
—

―48―

(b) Per share prices
The 24th Warrant
March 31, 2011

The 25th Warrant
March 31, 2011

The 26th Warrant
May 2, 2012

The 27th Warrant
May 2, 2012

2,728

2,728

2,220

2,220

—

—

—

—

0

0

(a) 716(b) 748(c) 780(d) 808(a) 716(b) 748(c) 780(d) 808

The 30th Warrant
May 29, 2013

The 31st Warrant
May 29, 2013

The 32nd Warrant
April 30, 2014

The 33rd Warrant
April 30, 2014

3,196

3,196

1

1

Average stock price atthe time of exercise
(yen)

—

—

1,129

1,177

Fair value price at
grant date (yen) (Note 2)(a) 2,344(b) 2,408(c) 2,468(d) 2,524(a) 2,344(b) 2,408(c) 2,468(d) 2,524

916

916

The 35th Warrant
April 10, 20151

The 36th Warrant
April 10, 20151

The 37th Warrant
April 14, 20161

The 38th Warrant
April 14, 2016
1

1,126

1,157

1,127

1,162

1,224

1,224

1,088

1,088

The 40th Warrant
April 24, 20171

The 41st Warrant
April 24, 20171

The 43rd Warrant
April 26, 20181

The 44th Warrant
April 26, 2018
1

1,119

1,187

1,135

1,393

812

812

792

792

Grant date
Exercise price (yen)(Note 1)

Average stock price atthe time of exercise(yen)
Fair value price at
grant date (yen) (Note 2)

Grant date
Exercise price (yen)(Note 1)

Grant date
Exercise price (yen)Average stock price atthe time of exercise(yen)
Fair value price at
grant date (yen)Grant date
Exercise price (yen)Average stock price atthe time of exercise(yen)
Fair value price at
grant date (yen)―49―Grant date
Exercise price (yen)Average stock price atthe time of exercise(yen)
Fair value price at
grant date (yen)Grant date
Exercise price (yen)Average stock price atthe time of exercise(yen)
Fair value price at
grant date (yen)The 48th Warrant
April 22, 20191

The 49th Warrant
April 22, 20191

The 52nd Warrant
April 24, 2020
1

The 53rd Warrant
April 24, 2020
1

—

—

—

—

776

776

324

324

The 54th Warrant
April 23, 2021
1

The 55th Warrant
April 23, 2021
1

—

—

1,169

1,169

(Notes) 1. The Company increased its capital through the public offering on December 4, 2013 and through the third-party allotment on
December 25, 2013, at the per share amount less than the exercise price of options. Thus, the exercise amounts above arestated after applying the price adjustments clause.
2. (a), (b), (c), and (d) above correspond to each of (a), (b), (c), and (d) of the exercise periods as previously described in 3. (1)*(2).

4. Method for estimating the fair value of the stock options
The fair value of the stock options that were granted during this fiscal year is estimated based on the following method:(1) Estimate technique used: Black-Scholes Option Pricing Model(2) Major assumptions and estimate method
The 54th Warrant

The 55th Warrant

71.90%

71.90%

2.92 years

2.92 years

Estimated dividend (Note 3)

0 yen per share

0 yen per share

Risk-free interest rate (Note 4)(0.14)%(0.14)%

Volatility of stock price (Note 1)
Estimated remaining period (Note 2)(Notes) 1. The volatility was calculated based on the actual stock prices from May 22, 2018 to April 23, 2021.
2. The period from the allotment date to the start date of the exercise period is used.
3. The Company estimates dividends to be zero since no dividends have been paid in the past.
4. This represents yields of Japanese government bonds corresponding to the estimated remaining outstanding period.

5. Estimate of the number of stock options vested
The number of expired shares is estimated based on the historical turnover ratio.
(Asset retirement obligations)
The Company has future restoration obligations related to leasehold contracts for office premises. Carrying the balanceof lease and guarantee deposits as an asset, the Company reasonably estimates non-recoverable amounts of lease andguarantee deposits under lease contracts and records the amount attributable to the respective fiscal year as expenses,
instead of accounting for asset retirement obligations by recognizing a liability and an associated asset.

―50―

(Segment information)[Segment information]
FY 2020 (from January 1, 2020 to December 31, 2020) and FY 2021 (from January 1, 2021 to December 31, 2021)
Segment information is omitted since the Company operates within a single segment, which includes the researchand development, manufacturing, and marketing of pharmaceutical drugs and other related activities.
[Related information]
FY 2020 (from January 1, 2020 to December 31, 2020)
1. Information by product and service
Information by product and service is omitted since external sales of a single service category account for morethan 90% of net sales stated in the statement of income.
2. Information about geographical areas(1) Net sales
Net sales information about geographical areas is omitted since external sales to Japanese customers accountfor more than 90% of net sales stated in the statement of income.
(2) Property, plant and equipment
None to be reported as all property, plant and equipment are located in Japan.
3. Information by the major customer(Unit: thousands of yen)
Name of customer

Net sales

Eisai Co., Ltd.

Name of related segment
2,545,650

Suzuken Co., Ltd.

125,526

Toho Pharmaceutical Co., Ltd.

119,510

Pharmaceutical businesses including
research and development, manufacturing,and marketing of pharmaceutical drugs andother related activities
Pharmaceutical businesses including
research and development, manufacturing,and marketing of pharmaceutical drugs andother related activities
Pharmaceutical businesses including
research and development, manufacturing,and marketing of pharmaceutical drugs andother related activities

FY 2021 (from January 1, 2021 to December 31, 2021)
1. Information by product and service
Information by product and service is omitted since external sales of a single service category account for morethan 90% of net sales stated in the statement of income.
2. Information about geographical areas(1) Net sales
Net sales information about geographical areas is omitted since external sales to Japanese customers accountfor more than 90% of net sales stated in the statement of income.
(2) Property, plant and equipment
None to be reported as all property, plant and equipment are located in Japan.
3. Information by the major customer(Unit: thousands of yen)
Name of customer

Net sales

Suzuken Co., Ltd.

5,042,274

Toho Pharmaceutical Co., Ltd.

3,426,221―51―

Name of related segment
Pharmaceutical businesses including
research and development, manufacturing,and marketing of pharmaceutical drugs andother related activities
Pharmaceutical businesses including
research and development, manufacturing,and marketing of pharmaceutical drugs andother related activities[Information about impairment loss on non-current assets by reportable segment]
FY 2020 (from January 1, 2020 to December 31, 2020) and FY 2021 (from January 1, 2021 to December 31, 2021)
None to be reported.
[Information about the amortization and unamortized balance of goodwill by reportable segment]
FY 2020 (from January 1, 2020 to December 31, 2020) and FY 2021 (from January 1, 2021 to December 31, 2021)
None to be reported.
[Information about the gain on bargain purchase by reportable segment]
FY 2020 (from January 1, 2020 to December 31, 2020) and FY 2021 (from January 1, 2021 to December 31, 2021)
None to be reported.
(Affiliated party information)
Transactions with affiliated parties
Officer(s) and major individual shareholder(s) of the Company
FY 2020 (from January 1, 2020 to December 31, 2020)
Category

Name ofcompany or
personExecutive

Fuminori
YoshidaRatio of voting
Capital or
rights and other Relationships
investment Business details orforms ofwith affiliated
Location(thousands
profession
ownershippartiesof yen)(ownership) (%)——

Representative
Director, President
and Chief
Executive Officerof the Company(Ownership)
Direct: 2.36—

Transaction
details

Transaction
amount(thousandsof yen)Exercise ofshareacquisitionrights40,565(37,250
shares)Year-end
Accountbalance(thousands
title
of yen)——(Note) This information describes the exercise during the fiscal year under review of share acquisition rights
granted based on resolutions at Board of Directors meetings on March 30, 2016.
FY 2021 (from January 1, 2021 to December 31, 2021)
Category

Name ofcompany or
personExecutive

Fuminori
YoshidaRatio of voting
Capital or
rights and other Relationships
investment Business details orforms ofwith affiliated
Location(thousands
profession
ownershippartiesof yen)(ownership) (%)——

Representative
Director, President
and Chief
Executive Officerof the Company(Ownership)
Direct: 2.83—

Transaction
details

Transaction
amount(thousandsof yen)Exercise ofshareacquisitionrights

58,217(72,500
shares)Year-end
Accountbalance(thousands
title
of yen)—(Note) This information describes the exercise during the fiscal year under review of share acquisition rights
granted based on resolutions at Board of Directors meetings on March 29, 2017 and March 29, 2018.

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(Per share information)
FY 2020
FY 2021(from January 1, 2020
(from January 1, 2021
to December 31, 2020)
to December 31, 2021)
Net assets per share
105.76 yen Net assets per share162.26 yen
Loss per share(124.13) yen Net income per share
53.04 yen
Dilutive net income per share― Dilutive net income per share
52.32 yen
(Notes) 1. While having potential dilutive shares, diluted earnings per share is not provided since the Company
reported loss per share.
2. The basis for calculating loss per share is as follows:
FY 2020(from January 1, 2020
to December 31, 2020)

FY 2021(from January 1, 2021
to December 31, 2021)(4,090,216)

2,032,203――(4,090,216)

2,032,203

32,950,201

38,313,220

―
―
―

―
526,804(526,804)

Net income (Loss) per share
Net income (Loss) (thousands of yen)Amount not attributable to the shareholders of common
stock (thousands of yen)
Net income (Loss) attributable to the shareholders ofcommon stock (thousands of yen)
Average number of shares outstanding during the year
(shares)
Dilutive net income per share
Net income adjustment (thousands of yen)
Increase in number of common stock(Warrant)

3 types of share
Description of potential dilutive shares not included inacquisition rights
the earning-per-share calculation due to anti-dilution,(1,209,600 units) inwith significant changes from the end of the previous
accordance with thefiscal year
Companies Act Article
236, 238, and 239.

―

3. The basis for calculating net assets per share is as follows:

Net assets (thousands of yen)Amount to be deducted from net assets (thousands ofyen)(Of which, share acquisition rights herein [thousandsof yen])Net assets attributable to the shareholders of common
stock (thousands of yen)
Number of shares used in the calculation of net assets
per share (shares)

FY 2020
FY 2021(as of December 31, 2020) (as of December 31, 2021)
4,657,318
6,745,672(Significant subsequent events)
None to be reported.

6. Other(1) Change in officers―53―

620,140

519,099(620,140)(519,099)

4,037,177

6,226,573

38,172,813

38,374,588

For information regarding change in officers, see the “Notice of Appointment of Corporate Officer” released on
December 20, 2021 and “Notice of Appointment of Vice President and COO” released on December 24, 2021.

(2) Other
None to be reported.

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