February 14, 2024

SEIKAGAKU CORPORATION
Consolidated Financial Results (Japan GAAP) (Summary)for the First Nine Months of Fiscal 2023
(Nine-Month Period Ended December 31, 2023)
Listed exchanges: Tokyo Stock Exchange (Prime Market)
Stock code number: 4548
URL: https://www.seikagaku.co.jp/en/(All amounts have been rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Nine Months of Fiscal 2023
(from April 1, 2023 to December 31, 2023)(1) Consolidated Financial Results(Percentages indicate changes from the same period in the previous fiscal year)
Net sales
Millions ofYen

Operating income
Millions ofYen%

Ordinary income
Millions ofYen%%First nine months of fiscal 2023

27,3844.7

2,328(31.6)

3,049(27.7)

First nine months of fiscal 2022

26,162(7.0)

3,407(45.4)

4,218(38.9)

Net income attributable toowners of parent
Millions of%
Yen

Net income per share

Diluted net income
per share

Yen

Yen

First nine months of fiscal 2023

2,701(25.6)

49.51

-

First nine months of fiscal 2022

3,628(32.4)

65.42-(Note) Comprehensive income:First nine months of fiscal 2023:
First nine months of fiscal 2022:

5,905
6,471

million yen [(8.8)%]
million yen [5.0%](2) Consolidated Financial Position
Total assets

Total equity

Equity ratio

Millions of Yen

Millions of Yen%

As of December 31, 2023

79,886

71,71889.8

As of March 31, 2023

75,62567,216

88.9(Reference) Shareholders’ equity:
As of December 31, 2023:
As of March 31, 2023:

71,718 million yen
67,216 million yen

2. Dividends

Fiscal 2022
Fiscal 2023
Fiscal 2023
(Forecast)

1st QuarterYen-

2nd QuarterYen
13.00
13.00

Dividends per share
3rd Quarter
Yen-(Note) Revision of the forecasts most recently announced: No1Year-end

AnnualYen
13.00

Yen
26.00

13.00

26.00

3. Forecast of Consolidated Financial Results for Fiscal 2023 (from April 1, 2023 to March 31, 2024)
Net sales

Fiscal 2023

Operating income

Millionsof Yen%36,100(7.9)

Millionsof Yen1,300(Percentages indicate changes from the previous fiscal year)
Net income
Net income
Ordinary income
attributable toper shareowners of parent
Millionsof Yen%(38.5)

2,250%(26.7)

Millionsof Yen2,600%(16.2)

Yen47.66(Note) Revision of the forecasts most recently announced: No* Notes(1) Changes in the status of material subsidiaries during the period: No(2) Application of specific accounting methods for preparing the quarterly consolidated financial
statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and retrospective restatements(a) Changes in accounting policies accompanying revisions in accounting standards: No(b) Changes other than those in (a) above: No(c) Changes in accounting estimates: No(d) Retrospective restatements: No(4) Number of shares issued (common stock):(a)Number of shares at the end of the period(including treasury stock)

As of December
31, 2023

56,814,093 shares

As of March 31,2023

56,814,093 shares(b) Number of treasury stock at the end ofthe period

As of December
31, 2023

2,253,719 shares

As of March 31,
2023

2,273,029 shares(c) Average number of shares issued during
the period (six months)

First nine monthsof fiscal 2023

54,552,936 sharesFirst nine monthsof fiscal 2022

55,468,720 shares*This financial reports are not subject to the quarterly review procedures of the certified public accountant and audit
firm.
* Disclaimer regarding forward-looking information including appropriate use of forecasted financial results
The forecast shown in these materials are based on information currently available and certain assumptions that the Company
regards as reasonable. Actual performance and other results may differ materially from these forecasted figures due to variousfactors.

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1. Results of Operations for the First Nine Months of Fiscal 2023 (Nine-Month Period Ended December 31,2023)(1) Qualitative explanation on quarterly financial results
In the first nine months (April 1 to December 31, 2023) of the fiscal year ending March 31, 2024 (fiscal 2023),
net sales were ¥27,384 million, up 4.7% year on year. The increase is attributable to year-on-year sales volume
growth from domestic pharmaceuticals and overseas pharmaceuticals, such as China of ARTZ, coupled with anincrease in royalty income, which offset a decline in overseas sales in the LAL business and lower sales volumeof Gel-One, an intra-articular single-injection viscosupplement for the treatment of knee osteoarthritis.
Operating income fell 31.6% year on year to ¥2,328 million due to an increase in the cost of sales ratio andhigher SGA expenses at overseas subsidiaries. Ordinary income and net income attributable to owners of parent
fell 27.7% to ¥3,049 million and 25.6% to ¥2,701 million, respectively.
1) Net sales by segment
Pharmaceuticals Business-Domestic Pharmaceuticals (¥9,020 million, up 1.9% year on year)
Deliveries to medical institutions of ARTZ, a joint function improvement agent for knee osteoarthritis, increasedyear on year thanks to successful measures to promote switching from competing products. The Company’ssales rose due to an increase in shipment volume, despite the impact of National Health Insurance (NHI) drugprice reductions.
The Company’s sales of the joint function improvement agent JOYCLU declined year on year because of ashipping schedule adjustment. The Company issued a Dear Healthcare Professionals Letter of Rapid Safety
Communication (Blue Letter) concerning JOYCLU on June 1, 2021 and is continuing cooperative efforts withsales partner Ono Pharmaceutical Co., Ltd. to proactively gather side effects reports and other information andprovide safety-related information. The Company also conducted clinical research to identify the cause of side
effects with the cooperation of specialists and medical institutions and will analyze data obtained through thisresearch and continuously consider proposals that will lead to correct use.
Deliveries to medical institutions of the OPEGAN series of ophthalmic viscoelastic devices increased year onyear due to a market growth trend accompanying population aging as well as the impact of limited shipments ofcompeting products. The Company’s sales rose on higher shipment volume, despite the impact of NHI drug
price reductions.
The Company’s sales of MucoUp, a submucosal injection agent for endoscopic surgery, increased, reflecting asales partner inventory adjustment.
Deliveries to medical institutions and the Company’s sales of HERNICORE, a treatment for lumbar discherniation, decreased year on year.
-Overseas Pharmaceuticals (¥7,533 million, up 8.8% year on year)
Although Gel-One, an intra-articular single-injection viscosupplement for the treatment of knee osteoarthritis, isshowing a gradual trend toward recovery from the impact of an insurance reimbursement system change
implemented in July 2022, local sales volume in the U.S. and the Company’s sales of this product decreased yearon year.
Local sales volume in the U.S. of SUPARTZ FX, an intra-articular 5-injection viscosupplement for the treatmentof knee osteoarthritis, increased due to a changing market environment associated with an insurance
reimbursement system change. The Company’s sales rose due to a shipping schedule adjustment and yen
depreciation.
Local sales volume in China of ARTZ rose, reflecting a rebound in the patient consultation rate following adecline in the first nine months of the previous fiscal year due to lockdowns in major cities accompanying therenewed spread of COVID-19. The Company’s sales rose sharply year on year because there were no shipmentsin the prior-year first quarter due to a packaging material change and because of local sales volume growth.
-Bulk Products and Contract Development and Manufacturing Organization (¥2,474 million, up 13.6%
year on year)
Sales increased due to growth from bulk products, higher sales of contract development and manufacturing andother services of overseas subsidiary Dalton Chemical Laboratories, Inc., and yen depreciation.
As a result of these developments and an increase in royalty income (¥699 million, -), sales from thePharmaceuticals business segment rose 9.9% year on year to ¥19,727 million.

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LAL Business
Sales from the LAL business segment decreased 6.7% year on year to ¥7,657 million. Although sales in Japan
were at the prior-year level, sales at overseas subsidiary Associates of Cape Cod, Inc. declined as special demand
accompanying the spread of COVID-19 infection subsided.
(2) Explanation of forward-looking statements, including the forecast of consolidated financial results
Although in the third quarter earnings exceeded the full-year forecast of consolidated financial results announced
on November 8, 2023, in light of expected concentration in the fourth quarter of expenses in preparation for an
NDA submission for SI-6603, a treatment for lumbar disc herniation, there is no change in the forecast ofconsolidated financial results.
(3) Research and Development Activities
To contribute to healthy and fulfilling lives for people around the world, the Seikagaku Group focuses its
research and development on glycoscience as its area of specialization and aims to create original
pharmaceuticals and medical devices.
To achieve early and continuous launching of new products, which hold the key to future business growth, theGroup will engage in efficient R&D activities focused on target compounds and high-priority target diseases andmake efforts to increase the number of projects through reinforcement of unique drug-discovery technologies
and utilization of open innovation.
Total R&D expenses in the first nine months of fiscal 2023 were ¥5,098 million, or 19.1% of net sales(excluding royalties).
The status of progress of principal R&D activities is described below.
SI-6603 (treatment for lumbar disc herniation: developed in the U.S.)
Follow-up observation in an additional Phase III clinical study was completed in March 2023, and topline results
indicating statistically significant improvement in the primary endpoint were obtained in May. Preparations are
currently underway for a Biologics License Application (BLA) to US FDA at an early date.
SI-6603, which contains condoliase as its active pharmaceutical ingredient, is a therapeutic agent directlyinjected into the lumbar disc. It does not require general anesthesia and is less invasive to the patient thansurgical treatment. Since a single-injection treatment is expected to improve the symptoms of lumbar discherniation, the Company aims to provide SI-6603 as a new treatment option.
SI-614 (treatment for dry eye: developed in the U.S.)
Statistically significant improvement in the primary endpoint of a Phase III clinical study being conducted since
May 2022 was not observed.
Seikagaku is considering the policy on future development based on the data obtained.
SI-449 (adhesion barrier: developed in Japan)
In a pivotal study in the field of gastroenterological surgery being conducted since May 2020, results showing
statistically significant adhesion prevention performance in both the primary effectiveness endpoint of thepresence or absence of post-operative adhesions and the secondary effectiveness endpoints of severity and extent
of adhesions were obtained in July 2023. No safety issues were observed.
Also, no major problems were found with safety and operability of SI-449 in laparoscopic surgery in a pilot
study in the field of gynecology conducted for the purpose of expanding the scope of indications for the product.
The Company is now proceeding with selection of a sales partner and preparations for a new drug application(NDA) at an early date.
SI-449 is a powdered medical device whose main ingredient is cross-linked chondroitin sulfate developed using
Seikagaku’s own proprietary glycosaminoglycan cross-linking technology. It has the property of absorbing
moisture and swelling, and is expected to prevent post-operative adhesion formation in surgery by forming abarrier between the surgical wound site and surrounding tissues after application. The Company will proceedwith development of SI-449 with a view to introducing it globally, not only in Japan.There is no substantialchange in the other R&D activities.
There is no substantial change on the other R&D activities.
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