Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021

November 5, 2021

Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending March 31, 2022

[Japanese GAAP]

Company name:
Stock code:

Kidswell Bio Corporation
4584

Listing: Tokyo Stock Exchange
URL: https://www.kidswellbio.com/en/

Representative:
Contact:

Masaharu Tani, President & CEO
Yasuo Sakae, Corporate Officer, CFO

Tel: +81-3-6222-9547
Scheduled date of filing of Annual Securities Report:

November 10, 2021

Scheduled date of payment of dividend:
Preparation of supplementary materials for financial results:

Yes

Holding of financial results meeting:Yes (for institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1.

Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2022
(April 1, 2021 – September 30, 2021)(1) Results of operations (Cumulative)(Percentages shown for net sales and incomes represent year-on-year changes)

Net income
Net sales

Second quarter of the fiscal year
ending Mar.31, 2022

Operating income

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen

%

740

324.5

-450

-

-463

-

-463

-

-693

-

-696

-

Second quarter of the fiscal year
174
-44.4
-682
ended Mar. 31, 2021
(Note) Comprehensive income
Second quarter of the fiscal year ending Mar. 31, 2022: -414 million yen (-%)
Second quarter of the fiscal year ended Mar. 31, 2021: -605 million yen (-%)
Net income

Diluted net income

per share
Second quarter of the fiscal year
ending Mar.31, 2022
Second quarter of the fiscal year

attributable to ownersof the parent

per share
Yen

Yen-15.30--24.49ended Mar. 31, 2021
(Note)
Even though there is a calculation of dilutive shares available, there is no reporting on quarterly net income per share after anadjustment of dilutive shares as the company recorded net loss.
(2) Financial position
Total assets
As of September 30, 2022

Shareholders’equity ratio

Net assets

Million yen

Million yen

%

3,859

1,9 98

48.0

1,610

38.0

As of March 31, 2021
3,933
(Reference) Shareholders’ equity
Second quarter of the fiscal year ending Mar.31, 2022: 1,853 million yen,
Fiscal year ended Mar. 31, 2021: 1,494million yen-1-

Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021

2. Dividends
Dividend per share
1Q-end 2Q-end 3Q-end Year-end

Total

Yen

Yen

Yen

Yen

Yen

-

0.00
0.00

-

0.00

0.00

0.00
(forecasts)(Note) Changes to the most recent forecasted dividend amount: None

0.00

Fiscal year ended Mar. 31, 2021
Fiscal year ending Mar. 31, 2022
Fiscal year ending Mar. 31, 2022

3. Consolidated Business Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2020 – March 31, 2021)(Percentages represent year-on-year changes)

Net sales

Operating income

Ordinary income

Net income
attributable to

Net income

owners of the parent
Million yen%

Million yen%

Million yen%

Million yen

per share

%

1,900
90.7
-1,720-1,740-1,323Full year(Note) Changes to the most recent forecasted dividend amount: None
Forecast for the fiscal year is only described as the Company controls business performance on an annual basis.

Yen-42.91* Notes
1. Changes in significant subsidiaries during the period (change in specified subsidiaries which accompanies a change in the range ofconsolidation): None
2. Special accounting treatments used in preparation of financial statements of the quarter: None
3. Changes in accounting policies and accounting-based estimates, and restatements
a. Changes in accounting policies due to revisions in accounting standards, others: Yes
b. Changes in accounting policies other than a) above: Nonec. Changes in accounting-based estimates: None
d. Restatements: None
4. Number of outstanding shares (common stock)a. Number of shares outstanding at the end of period (including treasury shares)
At the end of second quarter of the fiscal year ending March, 2022: 31,434,047 shares
At the end of second quarter of the fiscal year ended March, 2021: 29,622,847 sharesb. Number of treasury shares at the end of period
At the end of second quarter of the fiscal year ending March, 2022: 92 shares
At the end of second quarter of the fiscal year ended March, 2021: 92 sharesc. Average number of shares outstanding during the period
At the end of second quarter of the fiscal year ending March, 2022: 30,270,727 shares
At the end of second quarter of the fiscal year ended March, 2021: 28,424,005 shares*This summary report on Kidswell Bio’s financial statements is not subject to audit procedures.
(Notes to information regarding future)
Forecasts regarding future performance in these materials are based on assumptions judged to be valid and the information available
to the Company at the time these materials were made. These materials on future performances are not promises by the Company.
Actual performance may differ significantly from these forecasts for several reasons. Please refer to “I. Overview of business results
for the current fiscal quarter” on page 4 and 5 of the attachments for forecast assumptions and notes of caution for usage.
(How to obtain supplemental financial information)
Materials for the supplemental financial information is available on the Company’s website (https://www.kidswellbio.com/en/).

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Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021○Table of Contents of the Attachment
I.

Overview of business results for the current fiscal quarter ……………………………………………………………………

4

II. Financial statements and notes to financial statements………………………………………………………………………
(A) Consolidated balance sheet…………………………………………………………………………………………………
(B) Statement of consolidated income and comprehensive income……………………………………………………………

6(C) Statement of consolidated cash flows ………………………………………………………………………………………

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6
8
9

Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021

I. Overview of business results for the current fiscal quarter
A. Explanation of business results
The Company made a new start as Kidswell Bio Corporation from July 1, 2021. As Gene Techno Science Co., Ltd. the Company
successfully established a basis of our solid and stable growth in the biosimilar business. With such success, the Company are
striving for further growth by exploring the new biologics and regenerative medicine business. The Company will challenge
pediatric disease as a new field, in addition to intractable and rare diseases on which the Company has also been focusing for R&D.
With the Company’s biotech expertise and children’s potential vital force such as SHED ((stem cell human exfoliated deciduous
teeth) and CSC (cardiac stem cells), the Company envision creating new pharmaceuticals and therapeutics for all people. Under“Kids Well, All Well” we will make our goal come true.
1.

Biosimilar Business

Following the sales of the neutropenia medicine "Filgrastim BS" by Fuji Pharmaceutical Co., Ltd. and Mochida Pharmaceutical Co.,
Ltd., the biosimilar of darbepoetin alfa jointly developed with Sanwa Kagaku Kenkyusho Co., Ltd., has been on sale sinceNovember 27, 2019. The Company continues stable sales by receiving royalties according to the sales of this products. The
Company has been collaborating with Senju Pharmaceutical Co., Ltd. based on the joint development agreement for the biosimilarin the ophthalmic area (Project name: GBS-007) executed on May 12, 2016, and Senju Pharmaceutical Co., Ltd. has received
approval of manufacturing and sales in Japan from the Ministry of Health, Labour and Welfare on September 27, 2021.
2.

New Biologics BusinessIn the new biologics business, the Company entered into a joint research agreement with Sapporo Medical University on anti-cancer
drug using antibody with cancer cell invasion ability and with MabGenesis for the acquisition of new antibodies with cancer cellkilling effect in January 2020. As the Company mentioned in the mid-term strategic plan From FY2021 to FY2025, the Company ispromoting research and development of Malignant lymphoma, Vasculitis, Pulmonary Hypertension and partnering activities as theCompany’s target pipelines.
3.

New Biotech BusinessTo succeed in the regenerative medicine business, the Company has been aggressively promoting multiple projects collaborative
research and business partnering with academias as well as companies by utilizing SHED and CSC as important research sources.
Regarding SHED, multiple academia and companies have evaluated the possibility of providing new treatment methods in such asbone and neurologic disease. Especially, effectiveness of SHED in non-clinical studies has been shown in multiple SHED pipelines,
and alliances and licensing-out with pharmaceutical companies will be accelerating.
Regarding CSC, the Company is accelerating the development activity of regenerative medicine (project name JRM-001), mainly
targeting single ventricle physiology, which is a serious heart disease of children. After Japan Tissue Engineering Co., Ltd. (J-TEC)
joined as a manufacturing partner, development of JRM-001 significantly accelerates with plenty of J-TEC’s achievements incommercializing products of regenerative medicine from the patient's tissue. Furthermore, JRM-001 was designated as the orphan
regenerative medicine products by the Ministry of Health, Labor and Welfare.
As progress of a designer cell as reinforced cell therapy utilizing SHED for the Company’s future growth strategy, the Company
executed a collaborative research agreement with NanoCarrier Co., Ltd. (NanoCarrier) for the development of a gene transfer
method with effective mRNA for SHED and verification of the effectiveness of gene transfer designer SHED by combining SHED
with a gene delivery technology Nanomicelles owned by Nanocarrier. Regarding the development of Master Cell Bank (MCB),
which is the basis for commercializing SHED as a product for regenerative medicine, the Company has been collaborating with
"ChiVo Net, Child Volunteer Network for Future Medical", Tokyo University of Tokyo Hospital and Showa University Dental
Hospital. With the completion of SHED source supply system with the above collaboration, the Company started manufacturing themaster cell bank at the GMP / GCTP manufacturing facility of Nikon CeLL innovation Co., Ltd. The Company continues topromote research and development of regenerative medicine in collaboration with academias and companies.

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Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021

As a result, the sales amount was 740,635 thousand yen (324.5% decrease from the same quarter of the previous year), operationalloss was 450,932 thousand yen (682,725 thousand yen in the same quarter of the previous year), ordinary loss was 463,616 thousandyen (693.599 thousand yen in the same quarter of the previous year) and net loss attributable to owners of the parents for the current
fiscal quarter was 463,221 thousand yen (696,079 thousand yen in the same quarter of the previous year). There is no impact on
business performance due to the COVID-19 pandemic for the current quarterly consolidated cumulative period.

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Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021

II. Financial statements and notes to financial statements(A) Consolidated balance sheet(in thousand yen)
As of the end of the previous
fiscal year
(March 31, 2021)
AssetsCurrent assets
Cash and cash equivalents
Trade receivables
Products
In-process inventory
Advance payments
Other current assets
Total current assets
Non-current assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Investment securities
Other assets
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade payables
Income taxes payable
Reserve for loss on orders
Other current liabilities
Total current liabilities
Non-current liabilities
Convertible bonds
Long-term debts
Allowance for retirement benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities
Shareholders’ equity
Shareholders' capital
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders capital
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Total accumulated other comprehensive income
Equity warrants
Total shareholders’ equity
Total liabilities and shareholders’ equity- 6 -As of the end of 2Q FY2021(September 30, 2021)

1,461,158
816,737
70,712
380,039431,718
185,943
3,346,310

974,242752,902
98,719617,437
575,136
185,0023,203,440

3,223
2,622

2,425
2,277

563,159
18,636
581,795
587,641
3,933,952

632,690
18,228650,919
655,6223,859,062

109,739
28,461
379,243596,875
1,114,319

114,534
32,629475,243
411,672
1,034,080

500,000
600,000
19,75589,491
1,209,246
2,323,566

100,000
600,000
15,495
110,768
826,263
1,860,343

1,032,179
10,337,779-10,078,706-73
1,291,179

1,419,557
10,725,157-10,541,928-73
1,602,713

202,965

251,220

202,965
116,240
1,610,385
3,933,952

251,220
144,785
1,998,718
3,859,062

Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021(B) Statement of consolidated income and comprehensive income(Statement of consolidated income)(Quarterly Consolidated Cumulative Period）(in thousand yen)
As of the end of 2Q FY2020(April 1 to September 30, 2020)
Gross sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Other expenses
Total selling, general and administrative expenses
Operating loss (-)
Non-operating income
Interest income
Foreign exchange loss
Income from sale of materials
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Stock issuance expenses
Foreign exchange loss
Miscellaneous loss
Total non-operating expenses
Ordinary loss (-)
Extraordinary gain
Reversal of equity warrant
Total extraordinary gain
Extraordinary loss
Loss on retirement of fixed assets
Impairment loss
Total extraordinary loss
Net loss for the year before taxes adjustments (-)
Corporate, residential and enterprise taxes
Total corporate and other taxes
Net loss for the quarter (-)
Net loss attributable to owners of the parents for thequarter (-)- 7 -As of the end of 2Q FY2021(April 1 to September 30, 2021)

174,487
39,964
134,523

740,635
275,700
464,935

403,208
414,040
817,249-682,725

532,689
383,178
915,868-450,932

36
103
－
669
809

6
－
1,650
47
1,704

7,985
2,959
－
737
11,682-693,599

7,761
4,127
2,264
235
14,387-463,616

－
－

1,144
1,144

0
1,449
1,449
-695,048
1,031
1,031
-696,079－－－-462,471
750
750-463,221-696,079-463,221

Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021(Statement of consolidated comprehensive income）(Quarterly consolidated cumulative period）(in thousand yen)
As of the end of t2Q FY2020(April 1 to September 30, 2020)

As of the end of 2Q FY2021(April 1 to September 30, 2021)-696,079-463,221

90,61590,615-605,464

48,25548,255-414,966-605,464-414,966－－

Net loss for the quarter (-)
Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income for the quarter(breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests- 8 -Kidswell Bio Corporation (4584) Consolidated Financial Results for 2QFY2021(C) Quarterly Statement of consolidated cash flows(in thousand yen)
As of the end of 2Q FY2020(April 1 to September 30, 2020)

As of the end of 2Q FY2021(April 1 to September 30, 2021)-695,048
561
1,449-462,471
1,143－

24,00096,000-36
7,985
576,630-48,508
34,673
11,442-22,547
15,082-94,31736-7,927-2,430-104,638-6
7,761
63,834-265,404-143,418
4,795-187,418
36,715-848,468
6-7,846-1,500-857,808-3,254-2,600-5,854－－－-25,000－

599,710－－

370,892

4,774
579,484－
370,892－－

468,991-486,916

2,032,575
2,501,566

1,461,158
974,242

Cash flows from operating activities
Net loss for the year before taxes adjustments (-)
Depreciation expenses
Impairment loss
Increase/decrease in reserve for loss on orders (- means
decrease)
Interest or dividends received
Interest expense
Changes in trade receivables (- means increase)
Changes in inventory (- means increase)
Changes in advance payments (- means increase)
Changes in trade payables (- means decrease)
Changes in accrued expenses (- means decrease)
Other changes
Sub-totalInterest and dividends received
Interest payment
Payment of corporate and other taxes
Cash flows from operating activities
Cash flows from investing activities
Purchase of Intangible fixed assets
Other payments
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings (means decrease)
Proceeds from issuance of convertible bonds
Proceeds from issuance of stocks through exercising
equity warrants
Proceeds from issuance of equity warrants
Cash flows from investing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase/decrease in cash and cash equivalents (- means
decrease)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the quarter- 9 -