Financial Results for FY 2021
(Fiscal Year Ended March 31, 2022)
May 12, 2022

Kidswell Bio Corporation

Cautionary Statement
This information material is provided for understanding Kidswell Bio
Corporation (“KWB”), not for soliciting investment in KWB shares.
Information provided in this material may contain so-called “forwardlooking statements.”
These statements are based on current
expectations, forecasts and assumptions that are subject to risks anduncertainties, which could cause actual outcomes and results to differ
materially from these statements. Risks and uncertainties include
success rate of R&D projects, new regulations and rules, relations withpartners in the future, etc.
This material includes information on pharmaceutical products andregenerative medicine (or related products), etc., which is being
developed or launched. However, this is not intended to promote our
products or provide medical advices.

22

Business andFinancial Highlights in
FY 20213

Overview of Financial and Business Highlights
Financial Highlights◆ Financial Highlights in FY 2021
 Full-year sales increased by biosimilar due to the addition of GBS-007. Revenues related to MCB
completion shifted to FY 2022
 Gross profit for the full year exceeded the forecast due to the contribution of biosimilar R & D expenses are about 650 million yen less than scheduled due to partnering of JRM andbiosimilar development period shifted to FY 2022, etc.
 No impact on business performance due to the COVID-19 pandemic
Business Highlights
Biosimilar• GBS-007: Received Approval Manufacturing and Sales in Japan and launched in Dec.
2021.

Regenerative
medicine(Cell Therapy ）• Executed a business alliance agreement with Metcela Inc. in the regenerative medicine
field• Executed a development agreement on “designer cell”, the 2nd generation cell therapy,
with BioMimetics Sympathies Inc.(BMS)• Executed a collaborative research agreement with NanoCarrier Co., Ltd.
• Started manufacturing master cell bank (MCB) in compliance with GMP → Completed• Executed a share purchase agreement with Metcela Inc.（Development of JRM-001 is
led by Metcela, Inc.）

Others• Recorded extraordinary income (sales profit of investment securities) in accordancewith about 500 million yen cash proceed.
• Due to the transfer of a subsidiary (JRM), the company will shift to non-consolidated
financial statements from 1Q FY 2022 ending March 2023.

4

Consolidated Financial Results in FY 2021 (PL）Consolidated income statement
Subject

Gross sales

Results for
3Q/FY 2020

996,543

Unit:thousands yen
FY2021Results for
4Q/FY 2021

1,569,232

Forecast

GAP analysis of forecast in FY 2021

1,900,000

 Profits from GBS-001 and GBS-011 exceeded the forecasts
 Included sales of GBS-007
 Sales of APIs related to the API manufacturing process development for
the 4th BS product are partly included in the budget due to a change ofthe development plan (No impact on the development schedule).
 Sales related to the completion of the MCB will be shifted to FY 2022.
 Recorded 96 million yen for MCB completion as cost of development in
1Q FY 2021 (It is a reserve for loss on orders according to theaccounting method.） Full-year forecasts include the temporary cost of about 650 million yen as
the cost of the manufacturing process establishment for the 4th
biosimilar product and related to the completion of the MCB→ Related to the completion of the MCB will be shifted to FY 2022.

Cost of goods
sold119,571

550,357

1,020,000

Gross profit

876,971

1,018,875

880,000

Selling,
general andadministrative
expenses

1,846,659

1,937,994

2,600,000

R&D
expenses

963,868

1,150,209

1,800,000

Other
expenses882,791

787,784

800,000

Operatingprofit-969,687-919,118-1,720,000

 Gross profit recorded higher than expected due to a stable bioshimilar
profit Flexible revision of development costs by reviewing development plans
 Revisions of development expenses related to JRM-001 due to transfer ofsubsidiary (JRM) Costs related to GBS-007 cost reduction measures are partly shifted to FY
2022.
 Continuously streamlining selling, general and administrative expenses

Note: Net loss attributable to owners of parent was -535,000 thousand yen (full-year forecast : 1,323,000 thousand yen) due to extraordinary income(gain on sale of investment securities) in 3Q/FY2021.

5

Consolidated Financial Results for FY 2021 (BS)Consolidated balance sheet
Subject

Unit:thousands yen

FY2020

FY2021Highlight

Current assets

3,346,310

3,325,939(Cash and cash
equivalents)

1,461,158

1,187,189

 Revenue from the sale of investment securities was generated, butinvestment in R&D continues.

816,737

461,854

 Expecting increase in FY 2022 onward due to the sales of GBS-007(Products)

70,712200,118(In-process
inventory)

380,039788,696(Advance
payments)

431,718

495,544(Other current
assets)

185,943

192,536

587,641

177,396

Total assets

3,933,952

3,503,335

Current liabilities

1,114,319

1,128,562

Non-current liabilities

1,209,246

656,260

Total liabilities

2,323,566

1,784,822

Shareholders’ equity

1,610,385

1,718,513

Total liabilities andshareholders’ equity

3,933,952

3,503,335(Trade receivables)

Non-current assets

 Decrease due to investment securities sold

 Decrease due to conversion of convertible bonds

6

Financial Forecasts for FY 2022
Financial Forecast

Subject

Gross sales

Unit:thousands yen
Results for FY
2021

1,569,232

Forecasts for
FY 2022

Highlight

2,900,000

 The sales of GBS-001 will decrease compared to FY 2021 due to inventory
adjustments of the sales company
 Significant growth due to full-year sales of GBS-007
 Temporary revenue from completion of MCB in compliance with GMP Including sales of the APIs related to development of manufacturing process forthe fourth biosimilar product and development milestone Including sales related to increase in the sales of GBS-007
 Including temporary cost due to the completion of MCB manufacturing incompliance with GMP Including the temporary cost of the manufacturing process establishment for
the 4th biosimilar product

Cost of goods
sold550,357

1,700,000

Gross profit

1,018,875

1,200,000

Selling, generaland administrative
expenses

1,937,994

2,180,000
More growth investment in SHED pipelines (Action plans foracceleration of SHED pipelines and overseas expansion）

R&D expense

Other
expenses
Operating profit

1,150,209

1,400,000

787,784

780,000-919,118-980,000

 For licensing-out, additional investments in establishing a high-volume culture
system of SHED based on positive nonclinical results Development expenses for efficient company-led clinical trials
 Additional investment in manufacturing for the long-term stable supply of GBS007
 Development expenses for cost reduction measures of GBS-007
 Continuously streamlining selling, general and administrative expenses

Continuing growth investment based on a stable profit structure of biosimilar business7

Business Forecasts for FY 2022
Business forecast

Sales increased with the addition of GBS-007
R&D strategy shifts to focusing on growth investment while securing biosimilar-led
structure for expanding and stabilizing profit
R&D Expenses comparison (image chart)

Sales comparison (image chart)(Launched)BS（上市品）(Development)BS（開発関連）

Others
その他

BS

SHED

JRM-001

新薬・その他
New drug, others

TemporaryprofitStableprofitResults for FY 2022

Forecast for FY 2022

Image oforiginal
investment

Results for FY 2022

Growthinvestment in
SHED, etc.
Stable profit&
Development
expenses
Forecast for FY 2022

Though having a profit structure enabling us to achieve break-even by keeping
the scale of original growth investment in SHED, etc., KWB aims to expand
future growth investment and further enhance corporate value.
8Key Updates in Mid-Term Strategic Plan
Key updates in 4Q/FY2021

Progressing as scheduled

UPDATE!

Licensing-out

SHED

CSC
JRM-001

R&D

Regenerative
Medicine
SHED CSC

New Biologics

BS Forth
Product

Technology
Development

SHED Supply
SystemEstablishment of
MCB

Designer Cell

High-Yield
Protein Producing
Cell Lines

Executed a share purchaseagreement with Metcela Inc
on April 4, 2022.
Development of JRM-001 is led
by Metcela, Inc.

UPDATE!

ProfitExpansion

GBS-001
Cost Reduction

Completion of MCB incompliance with GMP after
inspection tests, etc. in FY
2022.

GBS-007
Cost Reduction

Completed

StableProfit

GBS-001
Sales

GBS-011
Royalties

GBS-007
Launched in
the market

Focusing on investment in growth of SHED pipelines from FY 2022 inaccordance with the mid-term strategic plan KWB 2.0

UPDATE!

Contributing to the stablebusiness foundation ofbiosihmilar by sales of
GBS-0079

Mid-Term Strategic Plan KWB 2.0
Part-1All for Kids, Kids for All

Kidswell Bio Corporation*Details for SHED, biosimilar and new biologics pipelines will follow as Part-2.

Our vision
All for Kids, Kids for All

KIDS WELL, ALL WELL
～ For Comprehensive Healthcare System forChildren as well as Families, and Society ～
Focus
areas

Business
direction

Pediatric diseases
including juvenile
diseases,
intractable & rarediseaseTargeting diseases
which has lessaccessibility forsufficient medical
treatment

Families

Educational
Institutions

KIDS WELL

Friends

MedicalInstitutions

Society

Government

All for Kids, Kids for All• Under the declining birthrate and aging population, reducing theburden on children is a major social issue.

For Children• Provide new pharmaceuticals and therapeutics to patients
suffering from diseases and contribute to the realization of asociety where children and adults who support children live
happily and brightly.

Mid-term strategic plan KWB 2.0 to survive in the competitiveenvironment and promptly realize our vision11

Reasons for launching KWB 2.0- Changes in the biosimilar market•-

Launched GBS-007,our third biosimilar product, as the first biosimilar in the ophthalmology fieldin Dec. 2021.
 Sales continue to be better than expected and expecting further growth•

The entry of biosame (authorized biosimilar (AGS)) into the market is getting impacts
to the biosimilar market
Competitive Biosame
Name of productIndications

Medicinal effects

Development
Company

Approval
date

Impact on KWB’s
products

Eylea(Aflibercept)

Age-related
maculardegeneration

Anti-VEGF
antibody drugs

Bayer Yakuhin,
Ltd.

Feb. 2022

Competitive
product of GBS007

Nesp(Darbepoetin Alfa)

Renal anemia

Erythropoietin
Receptor
Activator

Kyowa Kirin Co.,
Ltd.

Aug. 2018

Competitive
product of GBS011

 As the number of biosame entering the market will increase, the competition formarket share with biosimilars will intensify (profitability will decline). As a result,potential partners of pharmaceutical companies will hesitate to launch new
biosimilar projects.
 Biosimilar projects that secure enough profitability will become less.
• Continue to maximize value for existing biosimilar pipelines• Need to change KWB’s profit structure that relies solely on biosimilar businesses.

Accelerating the creation of new medicines to increase corporate value by SHED
(cell therapy) development

12

Reasons for launching KWB 2.0–Strategies for an increase in stock prices -The stock market didn’t evaluate KWB’s business expansion by launching biosimilars.

(Yen)

2800
2600
2400
2200

Bio-brand
bubble

GBS-001(Filgrastim BS)

GBS-011(Darbepoetin alfa BS)

GBS-007(Ranibizumab BS)

Launched in Nov.
2012

Launched in Sept.
2019

Launched in Dec.
2021

2000
1800
1600
1400

Launched three biosimilar products with investment

1200
1000
800
600
400
200
0
(Period)

Stock price transition• The launch of biosimilars alone didn’t lead to stock price increase.
• Sticking to achieving target profitability with the biosimilar business alone won’t be reflected in ”big”
stock price increase.
13

KWB 2.0– Investment for breakthrough in SHED development -Active investment in the SHED (Cell Therapy) pipelines to promptly realize ourvision• Promote global business expansion and R&D of SHED(cell therapy)• Accelerate development in overseas while continuing business in Japan• Aiming to launch the world‘s first SHED medicine/ therapy products by FY 2030
Enhancing corporate• Continue biosimilar business and new biologics business
value

Aiming to be a one-of-a-kind company thatcreates cell and gene therapy products
utilizing SHED(Million yen)
1500

Revenue from SHED

1000

Revenue from BS
500

0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

（FY）

-500

-1000

-1500

Investment
in BS

Investment in
SHED
R&D

研究開発費
expenses

Sales
売上高
revenueGross

粗利revenue
14

Business foundation for KWB 2.0
Step-ahead strengths among other bio ventures• Profit structure achieving sales of 3 billion yen and operating income of 1 billion
yen in FY 2025
• Well-knowledge and experienced human resources in biologics development• Well-accumulated know-how in the development of biosimilar products

Biosimilars Business Foundation
GBS-001(Filgrastim BS)

GBS-011(Darbepoetin alfa BS)

GBS-007(Ranibizumab BS)

Fourth
Product
Fifth Product...

Medium- to long-term cash flow + Experts for proceeding biosimilar
pipeline + Well-accumulated know-how

Expand and strengthen profits through biosimilar
products

15

Growth strategies for breakthrough in SHED
Commercialization

Launching regenerative
medicine products of the
1st generation of SHED

Technology

For Launching regenerative medicine products of the
1st generation of SHED

Invention in SHED and next
generation technology

For commercialization of the 2nd generation of SHED• Establishment of SHED Supply system• Introduction of next-generation technologies togenerate synergies• Selection of target diseases throughcollaborative researches• Combination with synergistic devices• Promoting technology adoption through alliances
and acquisitions• Establishment of clinical development
systemFocusing on R&D of SHED pipelines andaccelerating R&D in Japan and overseas
Fund-raising

Human resources andorganizational structure

Financing for strategic
execution

Strengthening SHED
development
structure• Financing from overseas market• Establishment of a SHED delivery system tooverseas• Large-scale financing to realize SHED
commercialization•• Equity financing specialized for SHED
development

Establishing office in overseas
 Fostering networks with international medical
institutions and academia Strengthening cooperation between Japanand overseas• Staff recruiting for global expansion

16

Breakthrough in SHED

- Prompt commercialization of the first generation of SHED -Selecting target diseases throughjoint research with academia

Accelerating clinical development inJapan and overseas

Based on the evidence through our R&D,
further joint research will be promoted
and maximize SHED potential.

Through Real World Data (RWD), Virtual
Clinical Trials (DCT), aiming for shortened
clinical trial period and earlycommercialization

Academia

Nonclinical

Clinical

Europ
e

U.S
Japan

SHED

Manufacturing（SHED Source Supply Service）

A one-stop service to providing highly reliable and domestically
produced SHED as an intermediate product for regenerative medicine
products through business collaboration17

Breakthrough in SHED - Investment schedule Focusing on SHED development and accelerating investment forincrease in corporate value
Estimation
Non-clinical study to ～ Corporate clinical trial(Expansion of indications）

Launching
2 to 5 billion yen

Japan

Recruiting, development of human resource andorganizational framework
2022

Over
seas

Some hundreds
million yen

2030

Feasibility study ・ Collaborative research ～ Corporate clinicaltrial• Office in overseas, recruiting & fostering global staff, the developmentof organizational structure• Introduction of next-generation technologies with synergies(Corporate alliances, M&A)
• Promoting the development of the next generation of SHED

Required investment in SHED development(year)

2 to 5 billion yen

Over 5 billion yen

Over 10 billion
yen

Making investments for launching SHED regenerative medicine/ cell therapy
products with equity financing
18Strategic Investment in human resources andorganizational structure• Contributing to society by the development of human resources andorganizational structure that leads to an increase in KWB’s corporate value• Pursuing contributions to society (S in sustainable development goals) throughthe creation of new medical treatments
Experts• Recruiting human resources with knowledge and experience in theregenerative medicine (cell therapy) field• Recruiting human resources with knowledge of next-generation modality• Recruiting global human resources for overseas business activities

Challenging work environment• Talent management to realize human resources strategy• Fostering a corporate culture with diversity (gender, age,nationality, values)• Flexible and appropriate personnel allocation

Organizational culture

with plenty of creativity
and innovation• Execution of career development plan (human resources
development plan)

Respect for each employees' work style• Flexible work system under emergency and pandemic• Establishing work infrastructure for flexible work styles• Fostering a corporate culture for understanding eachworking style
19

Roadmap
Accelerating our R&D activities to realize our vision• Accelerate SHED R&D activities to realize ourvision and increase corporate value.

KIDS WELL, ALL WELL

• Continue stable revenue from biosimilarbusiness and reduce manufacturing costs• Determine when to achieve profitability byprioritizing accelerated investment

Launching cellular medicine/cell therapy products

Accelerating cell therapy
products development
Focusing on SHED development

Establishment of revenue base
Establishment of biosimilar
development technology• Establishment of SHED platform• Active investment in human resources
and capital• Diverse personnel structure, including
experts of cell medicine development
and human resources with knowledge of
new modalities• Stable revenue from three BS products• Started development of the 4th BS
product• New BS pipeline development

Founded (2001)
to FY 2021

• Steady development progress in Japanand overseas• Accelerating development in overseas.
in addition to domestic development• Accelerating R&D by fund-raising fromoverseas investors• Acquisition of biopharmaceuticaldevelopment know-how

Aiming to launch the world's
first SHED medicine/ therapy
by FY2030• Strengthening SHED business activities

SHED + Human Resource Development
Maintaining stable revenue of biosimilar business

FY 2022

FY 2025 （Turning profitable）（3 billion yen of sales and 1 billion yenof operating profit ）FY 2030 onward
20

Our Role in Society
Two Virtuous Cycles through “KidsCentricity”“

MedicalExpenses Reduction &improvement ofmedial access

New Medical
Treatment

Creating regenerative medicine
with SHED for all generations

More people will overcome diseases andthey will play an active role in our society.

Drugdiscovery

Patentapplication

Combining individual technologies andknow-how for building up
efficient development
systemProduct
manufacturing

Clinicaldevelopment

Integrating technologies and know-how in Japan andoverseas and building up efficient R&D system

21

Cautionary Statement

This information material is provided for understanding Kidswell Bio
Corporation (“KWB”), not for soliciting investment in KWB shares.
Information provided in this material may contain so-called “forwardlooking statements.”
These statements are based on current
expectations, forecasts and assumptions that are subject to risks anduncertainties, which could cause actual outcomes and results to differ
materially from these statements. Risks and uncertainties include
success rate of R&D projects, new regulations and rules, relations withpartners in the future, etc.
This material includes information on pharmaceutical products andregenerative medicine (or related products), etc., which is being
developed or launched. However, this is not intended to promote our
products or provide medical advices.

22

All for Kids, Kids for All

KIDS WELL, ALL WELL