April 4, 2022
Kidswell Bio Corporation
Code: 4584 (TSE Mothers)
Masaharu Tani, President & CEO

Announcement of execution of share transfer agreement of the consolidated subsidiaryand share purchase agreement with Metcela Inc., and change in the purpose of the 10th
share acquisition rights due to this transaction(Extracted from Japanese version)
Tokyo, April 4, 2022 – Kidswell Bio Corporation (KWB) executed a share transfer agreement of theCompany’s consolidated subsidiary, Japan Regenerative Medicine Co., Ltd. (JRM), and sharepurchase agreement with Metcela Inc. (Metcela) based on the business alliance started on January
19, 2022, for accelerating the regenerative medicine business of KWB and Metcela and improving
future corporate value. Under this agreement, all share of JRM will be transferred to Metcela.
Therefore, KWB will change the purpose of the 10th share acquisition rights (with exercise priceadjustment clause) through third-party allotment issued on April 8, 2020.
Consequently, we will shift to non-consolidated financial statements from the first quarter of the fiscal
year ending March 2023 because KWB's consolidated subsidiary no longer exists from April 4, 2022.
I.

Execution of share transfer agreement
1. Purpose of share transfer
To further accelerate the R&D activities of regenerative medicine products, KWB executed abusiness alliance agreement with Metcela on January 19, 2022, and has been exchanging
management resources, knowledge, and technology in the regenerative field. As a result, the twoparties have reached an agreement that the best path forward for JRM’s future business growthis for Metcela to take the lead in the development of JRM’s regenerative medicine products
utilizing cardiac stem cells (CSC, project name: JRM-001), as Metcela has accumulated
experience and know-how in the development of autologous cell products and has established awell-developed research and development system.
Both CSCs and Metcela’s VCAM-1-positive Cardiac Fibroblast (VCF) have many commonalities
as they are both autologous cells and delivered via catheter. This is consistent with Metcela’s
belief that for highly immunoresponsive organ, like the heart, minimally invasive autologous
therapy not requiring immunosuppression is the most ideal. By developing these pipelines in an
integrated manner, it is possible to bring seamless pipeline development for a wide range ofcardiac diseases and, in the future, relish a wide range of synergistic effects in terms of sharing

manufacturing know-how and sales systems.
As part of the transfer of shares of JRM, Metcela has agreed to pay KWB a certain royalty basedon the sales of JRM-001, and KWB’s support of JRM will continue.
To further deepen the business alliance between KWB and Metcela, KWB will purchase theshares of Metcela. KWB expects starting clinical trials of SHED (Stem cell from Human
Exfoliated Deciduous teeth) and expansion of SHED indications with Metcela’s research anddevelopment knowledge. KWB will provide SHEDs for launching new pipelines with Metcela andcontinue further discussions on supporting the expansion of Metcela’s VCF business with KWB’s
know-how of establishment of SHED master cell bank.

The impact on the business results for the fiscal year ending March 2023 is expected to beminimal.

2. Details of share transfer
All shares of JRM owned by KWB have been transferred to Metcela on April 4, 2022. KWB will
receive royalties based on sales of JRM-001, if Metcela launches JRM-001 product in Japan andoverseas
3. Schedule(1)

Date of resolution

April 4, 2022

(2)

Date of signing share transfer agreement

April 4, 2022

(3)

Date of share transfer

April 4, 2022

4. Outlook
As a result of the transfer of the shares, KWB no longer has a consolidated subsidiary, it will
shift to non-consolidated financial statements from the first quarter of the fiscal year ending
March 2023. The earnings forecast for the fiscal year ending March 2023 is scheduled to beannounced in May 2022. Matters to be announced will be notified in a timely manner.
II. Execution of share purchase agreement
１． Reasons for share purchase
As mentioned in 1. Purpose of share transfer, KWB will purchase the shares of Metcela to build
a stronger partnership with Metcela and accelerate the regenerative medicine business of KWBand Metcela.
The impact on the business results for the fiscal year ending March 2023 is expected to beminimal.

2２． Details of share purchase（１） Purchase priceNot open to the public（２） Shareholding ratio of KWB

Less than the standard for becoming an equity
method affiliated companies（３） Purchase date

April 4, 2022

Note: Some disclosures are omitted because it falls under the minor standards of timely
disclosure.
III. Change in the purpose of the 10th share acquisition rights
1. Change in the purpose of the funds to be raised
The purpose of the 10th share acquisition rights issued by KWB on April 8, 2020, will change
due to the share transfer to Metcela.
2. Contents of the changes
The changes in the use of funds are as follows (changes are underlined).
（Before transfer of JRM shares）
Name financing

Unit：million yenPurpose of use

Payment

Amount

3rd series ofConducting domestic phase III

convertible bond withclinical trials of JRM-001

schedule
From April

590

stock acquisition2020 to March
2022

rights10th share acquisitionrightsResearch and development for

From January772

allogenic cell and overseas clinical2021 to Marchtrials of JRM-001

2025(After transfer of JRM shares)

Unit：million yen
AmountName financing

Purpose of use（allottedamount）

3rd series ofConducting

domestic

convertible bond withclinical trials of JRM-001

phaseIII

stock acquisition

590
（590）

rightsPayment
schedule
From April
2020 to March
2022

Manufacturing, clinical10th share acquisitionrightsdevelopment, expansion ofindications, and introduction of newtechnologies for regenerative

475（0）

From April
2022 to March2025

medicine using SHED
Note: The amount of funds to be raised through the execution of the 10th share acquisitionrights has been changed based on the current planned funding of 475 million yen due to3

the revised exercise price based on the execution price adjustment scheme.

About Kidswell Bio Corporation (KWB)
Kidswell Bio Corporation will challenge pediatric disease as a new field, in addition to intractable
and rare diseases on which GTS has also been focusing for R&D. We would like to contribute tochildren who have hopes and dreams for their bright future. Furthermore, with our biotech expertiseand children’s potential vital force such as SHED and CSC, we envision creating new pharmaceuticals
and therapeutics for all people under “Kids Well, All Well.”Contact:
Kidswell Bio Corporation
Tel: +81-3-6222-9547 Mail: info@kidswellbio.com

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