February 8, 2022

SEIKAGAKU CORPORATION
Consolidated Financial Results (Japan GAAP) (Summary)for the First Nine Months of Fiscal 2021
(Nine-Month Period Ended December 31, 2021)
Listed exchanges: Tokyo Stock Exchange (First Section)
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 2021
(from April 1, 2021 to December 31, 2021)(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 2021

28,145

37.0

6,234

283.7

6,905

231.5

First nine months of fiscal 2020

20,550(6.9)

1,624(50.2)

2,083(46.1)

Net income attributable toowners of parent
Millions of%
Yen

Net income per share

Diluted net income pershare

Yen

Yen

First nine months of fiscal 2021

5,364

188.6

95.25

-

First nine months of fiscal 2020

1,858-

32.94-(Note) Comprehensive income:First nine months of fiscal 2021:
First nine months of fiscal 2020:

6,164 million yen [ 235.6 % ]1,836 million yen [ - % ](2) Consolidated Financial Position
Total assets

Total equity

Equity ratio

Millions of Yen

Millions of Yen%

As of December 31, 2021

76,34467,93389.0

As of March 31, 2021

69,91563,604

91.0(Reference) Shareholders’ equity:
As of December 31, 2021:
As of March 31, 2021:

67,933million yen
63,604million yen

2. Dividends

Fiscal 2020
Fiscal 2021
Fiscal 2021
(Forecast)

1st QuarterYen-2nd Quarter
Yen
10.00
15.00

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

AnnualYen
14.00

Yen
24.00

15.00

30.00

3. Forecast of Consolidated Financial Results for Fiscal 2021 (from April 1, 2021 to March 31, 2022)(Percentages indicate changes from the previous fiscal year)
Net income
Net income
Operating income
Ordinary income
attributable toper shareowners of parent

Net sales

Fiscal 2021

Millionsof Yen%32,200

16.1

Millionsof Yen4,550Millionsof Yen%102.3%

4,650

53.7

Millionsof Yen3,650%(14.4)

Yen64.83(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 financialstatements: Yes(3) Changes in accounting policies, changes in accounting estimates, and retrospective restatements(a) Changes in accounting policies accompanying revisions in accounting standards: Yes(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)(b) Number of treasury stock at the end ofthe period(c) Average number of shares issued during
the period (nine months)

As of December
31, 2021

56,814,093 shares

As of March 31,
2021

56,814,093 shares

As of December
31, 2021

567,822 shares

As of March 31,
2021

384,421 sharesFirst nine monthsof fiscal 2021

56,317,323 sharesFirst nine monthsof fiscal 2020

56,424,531 shares* This financial reports are not subject to the quarterly review procedures.
* 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 theCompany regards as reasonable. Actual performance and other results may differ materially from these forecasted figures due
to various factors.

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1. Results of Operations for the First Nine Months of Fiscal 2021
(Nine-Month Period Ended December 31, 2021)(1) Qualitative explanation on quarterly financial results
In the first nine months (April 1 to December 31, 2021) of the fiscal year ending March 31, 2022 (fiscal 2021),
net sales were ¥28,145 million, up 37.0% year on year. The result is attributable to a rebound from the impact of
the spread of COVID-19 infection in Japan and abroad in the first nine months of the previous fiscal year as well
as a substantial increase in royalty income (reclassified from non-operating income to net sales beginning infiscal 2021) and solid growth from overseas products, which offset the impact of National Health Insurance(NHI) drug price reductions in Japan.
Operating income rose 283.7% year on year to ¥6,234 million, with the sales increase more than offsetting
higher SGA expenses—mainly R&D expenses accompanying progress with an additional clinical study
underway in the U.S. for SI-6603, a treatment for lumbar disc herniation. Ordinary income rose 231.5% year on
year to ¥6,905 million, and net income attributable to owners of parent rose 188.6% to ¥5,364 million.
Net sales by segment
Pharmaceuticals Business- Domestic Pharmaceuticals (¥9,173 million, down 0.2% year on year)
Deliveries to medical institutions of ARTZ, a joint function improving agent for knee osteoarthritis, increased
year on year as a result of successful measures to promote switching from competing products coupled with amarket rebound following contraction in the first nine months of the previous fiscal year caused by the spread ofCOVID-19 infection. The Company’s sales were at the prior-year level, with volume growth offsetting theimpact of NHI drug price reductions.
With regard to the joint function improving agent JOYCLU, launched on May 19, 2021, although theCompany called attention to the risk of shock or anaphylaxis in the Important Side Effects section of theJOYCLU package insert, in response to multiple reports of shock or anaphylaxis occurring in patients following
administration of JOYCLU, the Company issued a Dear Healthcare Professionals Letter of Rapid Safety
Communication (Blue Letter) on June 1 to increase awareness of these side effects among healthcare
professionals. The Company will continue cooperative efforts with sales partner Ono Pharmaceutical Co., Ltd. toproactively gather side effects reports and other information and provide safety-related information and will
strive for early identification of the cause of the side effects with the cooperation of medical professionals andinstitutions.
Deliveries to medical institutions of the OPEGAN series of ophthalmic viscoelastic devices increased year
on year, reflecting a rebound following market contraction in the first nine months of the previous fiscal year
amid a decrease in the number of cataract surgeries accompanying the spread of COVID-19 infection. The
Company’s sales fell as a result of NHI drug price reductions and a decline in shipments from a high level in thefirst nine months of fiscal 2020.
The Company’s sales of MucoUp, a submucosal injection agent for endoscopic surgery, rose as a result ofbringing forward shipments to the sales partner.
Deliveries to medical institutions and the Company’s sales of HERNICORE, a treatment for lumbar discherniation, increased thanks to steady progress with market penetration attributable to active information
provision activities directed at medical institutions carried out together with the sales partner.
- Overseas Pharmaceuticals (¥6,743 million, up 44.6% year on year)
Local sales volume in the U.S. and the Company’s sales of Gel-One, an intra-articular single-injection
viscosupplement for the treatment of knee osteoarthritis, increased year on year, reflecting successful measuresby the sales partner to promote switching from competing products coupled with continuation of the trend
toward preference for single-injection products.
Local sales volume in the U.S. of SUPARTZ FX, an intra-articular 5-injection viscosupplement for thetreatment of knee osteoarthritis, increased due to a rebound from the powerful impact on the spread of COVID3

19 infection experienced in the first three months of the previous fiscal year, despite continuation of unfavorable
market conditions for multiple-injection products. The Company’s sales increased as a result of bringing forward
shipments to avoid distribution risk.
In an increasingly difficult market environment due to factors including the Chinese government’s pricecurbing policy, local sales volume in China of ARTZ increased because of active sales promotion and thepositive effects of marketing structure enhancement. The Company’s sales rose sharply, reflecting concentrationof shipments in the first nine months in addition to the local sales volume increase.
- Bulk Products and Contract Development and Manufacturing Organization *1 (¥1,952 million, up 27.2%
year on year)
Although sales of bulk products declined, overall sales increased because of growth in sales of contractdevelopment and manufacturing services at overseas subsidiary Dalton Chemical Laboratories, Inc. and otherservices.
As a result of these developments and a substantial increase in royalty income*2 (¥3,550 million, up
1,714.0% year on year), sales from the Pharmaceuticals business segment rose 37.4% year on year to ¥21,420
million.
*1 Starting from the consolidated financial results for the second quarter of fiscal 2020, the sales of Dalton
Chemical Laboratories, Inc., which became a subsidiary in March 2020, are included in the Pharmaceuticalsbusiness.
*2 Beginning in fiscal 2021, royalty income has been reclassified from non-operating income to net sales.
LAL Business
Sales from the LAL business segment increased 35.6% year on year to ¥6,725 million due to an increase in salesof Bacterial Endotoxin Testing (BET) reagents, Clinical Diagnostic (Fungitell) reagents and to higher orders forBET contract services thanks to reinforcement of sales activities at overseas subsidiary Associates of Cape Cod,Inc. and steady sales in Japan.
(2) Explanation of forward-looking statements, including the forecast of consolidated financial results
Although in the third quarter the Company achieved the full-year income forecasts in the forecast ofconsolidated financial results announced on May 13, 2021, the result is attributable to concentration in the firstnine months of sales drivers such as royalty income and bringing forward of shipments of overseas
pharmaceuticals. In light of anticipated higher R&D expenses in the fourth quarter to result from costs related tomeasures to promote subject enrollment for an additional clinical study for SI-6603 and the impact on the sale ofJOYCLU of issuance of the Blue Letter, there is no change in the forecast of full-year consolidated financialresults.
Note: The above forecast has been prepared on the basis of economic circumstances, market trends, and otherassumptions made at the time of release of this document. Actual results may differ from the forecast due to avariety of factors.
(3) Research and Development Activities
To contribute to healthy and fulfilling lives for people around the world, the Company focuses its research anddevelopment on glycoscience as its area of specialization and aims to create original pharmaceuticals andmedical devices.
To achieve early and continuous launching of new drugs, which hold the key to future business growth, theCompany will engage in efficient R&D activities focused on target compounds and high-priority target diseases
and make 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 2021 were ¥5,855 million, or 20.8% of net sales4

(23.8% excluding royalties).
The status of progress of principal R&D activities is described below.
SI-449（adhesion barrier: developed in Japan）
A pilot study in the field of gynecology was initiated in November 2021 for the purpose of expanding the scopeof application of SI-449 by confirming usability and safety in gynecology.
Although a pivotal study of SI-449 in the field of gastroenterological surgery was initiated in May 2020, adelay has occurred in the clinical trial schedule due to the spread of COVID-19 infection. The Company iscontinuing to take measures to make up for the delay, such as expanding the trial site network and implementing
a remote response for facilities where visiting is restricted.
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 or mitigate post-operative adhesion formation 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 substantial change on the other R&D activities.
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