Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

May 13, 2021

Summary of Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021
Company name:
Stock code:
Representative:
Contact:

Gene Techno Science Co., Ltd.
4584
Masaharu Tani, President & CEO
Yasuo Sakae, Corporate Officer, CFO
Tel: +81-3-6222-9547
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of filing of Annual Securities Report:
Scheduled date of payment of dividend:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:[Japanese GAAP]

Listing: Tokyo Stock Exchange
URL: http://www.g-gts.com/en/

June 29, 2021
June 30, 2021
Yes
Yes (for institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1. Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 – March 31, 2021)(1) Results of operations(Percentages shown for net sales and incomes represent year-on-year changes)

Net sales

Operating income

Million yen

Net income
attributable to ownersof the parent

Ordinary income%

Million yen%

Million yen%

Million yen%

Fiscal year ended Mar. 31, 2021
996
-7.5
Fiscal year ended Mar. 31, 2020
1,077
(Note) Comprehensive income
Fiscal Year Ended March 31, 2021: -776 million yen (- %),-969-1,161--991-1,187--1,001-7,316-

Net income
per share

Fiscal Year Ended March 31, 2020: -7,339 million yen (-%)

Diluted net income
Return on Equity
per share

Yen

Yen

Ordinary income Operating income
on total assets
to net sales

%

%

%

-68.5
-26.3
-97.3
Fiscal year ended Mar. 31, 2021
-34.79-511.6-33.1-107.8
Fiscal year ended Mar. 31, 2020
-264.65(Reference) Equity in net income of affiliates
Fiscal Year Ended March 31, 2021: - million yen (- %), Fiscal Year Ended March 2020: - million yen (-%)
(Note)
1. The percentage for year-on-year changes in the fiscal year ended March 31, 2020 is not recorded due to the change toconsolidated financial statement from the fiscal year ended March 31, 2020. Since the return equity and the ratio of ordinary
income to total assets are the first year of consolidation, they are calculated based on the year-end equity and total assets.
2. Even though there is a calculation of dilutive shares available, there is no reporting on net income per share after anadjustment of dilutive shares as the company recorded net loss.
(2) Financial position
Total assets
Million yen

As of Mar. 31, 2021
As of Mar. 31, 2020
(Reference) Shareholders’ equity

Shareholders’equity ratio

Net assets

%

Yen

1,610
38.0
1,487
39.8
March 31, 2020: 1,430 million yen

50.44
51.73

Million yen

3,933
3,592
March 31, 2021: 1,494 million yen,

Net assets per share(3) Cash flows

As of Mar. 31, 2021
As of Mar. 31, 2020

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodMillion yen

Million yen

Million Yen

Million Yen-1,267-1,325

-22
-137

718
1,221

1,461
2,032

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Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

2. Dividends
Dividend per share
1Q-end 2Q-end 3Q-end Year-end
Fiscal year ended Mar. 31, 2020
Fiscal year ended Mar. 31, 2021
Fiscal year ending Mar. 31, 2022
(forecasts)

Total dividends

Total

Dividend
Dividend on
payout ratio
net assets(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million Yen

%

%

-

0.00
0.00

-

0.00
0.00

0.00
0.00

-

-

-

-

0.00

-

0.00

0.00

-

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

Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%

Net income
attributable toowners of the parent%

Million yen

Net income
per share

%

Yen

1,900
90.7
-1,720-1,740-1,741
Full year(Note) Forecast for the fiscal year is only described as the Company controls business performance on an annual basis.

-58.18* Notes
1. Changes in significant subsidiaries during the period (change in specified subsidiaries which accompanies a change in the range ofconsolidation): Yes
New: None
Excluded: Advanced Cell Technology and Engineering Ltd.
2, Changes in accounting policies and accounting-based estimates, and restatements
a. Changes in accounting policies due to revisions in accounting standards, others: Noneb. Changes in accounting policies other than a) above: Nonec. Changes in accounting-based estimates: None
d. Restatements: None
3. Number of outstanding shares (common stock)a. Number of shares outstanding at the end of period (including treasury shares)
At the end of the fiscal year ended March 31, 2021: 29,622,847 shares
At the end of the fiscal year ended March 31, 2020: 27,646,986 sharesb. Number of treasury shares at the end of period
At the end of the fiscal year ended March 31, 2021: 92 shares
At the end of the fiscal year ended March 31, 2020: 92 sharesc. Average number of shares outstanding during the period
At the end of the fiscal year ended March 31, 2021: 28,788,906 shares
At the end of the fiscal year ended March 31, 2020: 27,645,408 shares(Reference) Summary of Parent Company (GTS only) Performance
Parent Company (GTS only) performance of the Fiscal Year Ended March 31, 2021 (April 1, 2020 – March 31, 2021)(1) Parent Company (GTS only) business performance(Percentages shown for net sales and incomes represent year-on-year changes)

Net sales
Fiscal year ended Mar. 31, 2021
Fiscal year ended Mar. 31, 2020

Operating income

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen

%

967
964

0.3
-5.6

-780
-969

-

-956
-1,007--1,001-7,316-－ 2－

Net income

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

Net income
per share
Fiscal year ended Mar. 31, 2021
Fiscal year ended Mar. 31, 2020

Diluted net income
per share

Yen

Yen

-34.79-264.65-(2) Parent Company (GTS only) Financial position
Total assets

Net assets

Million yen

As of Mar. 31, 2021
As of Mar. 31, 2020
(Reference) Shareholders’ equity

Shareholders’equity ratio
%

Yen

1,610
38.3
1,487
40.6
March 31, 2020: 1,430 million yen

50.44
51.73

Million yen

3,897
3,524
March 31, 2021: 1,494 million yen,

Net assets per share*This summary report on the Company’s financial statements is not subject to audit procedures.
*Cautionary statement with respect to forward-looking statements, and other special items(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 “II. Outlook” on page 5 and 6 of theattachments 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 (http://www.g-gts.com/en/).

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Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

○Table of Contents of the Attachment
I.

Financial Results in FY 2020…………………………………………………………………………………………………

II. Outlook………………………………………………………………………………………………………………………
III. Fundamental policy on adoption of the accounting standards…………………………………………………………………

5
5
6

IV. Financial statements and notes to financial statements………………………………………………………………………

7(A) Consolidated balance sheet…………………………………………………………………………………………………

7
9(B) Statement of consolidated income and comprehensive income……………………………………………………………
(C) Statement of consolidated cash flows ………………………………………………………………………………………

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11

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

I. Financial Results in FY 2020
As a result of FY 2020, the sales amount was 996,543 thousand yen (7.5% decrease compared to the previous consolidated fiscal year),
operational loss was 969,687 thousand yen (operational loss for the previous consolidated fiscal year was 1,161,396 thousand yen),ordinary loss was 991,166 thousand yen (ordinary loss for the previous consolidated fiscal year was 1,187,254 thousand yen) and net
loss attributable to owners of the parent was 1,001,461 thousand yen (net loss attributable to owners of the parent for the previous
consolidated fiscal year was 7,316,396 thousand yen). There is no impact on business performance due to the COVID-19 pandemic forthe end of the current fiscal year.

II. Outlook
The consolidated business forecasts for the following year include sales of 1,900,000 thousand yen (the actual sales amount for thecurrent fiscal year was 996,543 thousand yen), operating loss of 1,720,000 thousand yen (the actual operating loss amount for the current
fiscal year was 969,687 thousand yen), ordinary loss of 1,740,000 thousand yen (the actual ordinary loss amount for the current fiscal
year was 991,166 thousand yen) and net loss attributable to owners of the parent of 1,741,000 thousand yen (the actual net loss amountfor the current fiscal year was 1,001,461 thousand yen). The Company will pursue to have better results than the forecasts by working
on the opportunities mentioned below.
The sales in the next fiscal year comprise (1) sales of biosimilar products (marketed products) and expansion of profits related toroyalties, (2) sales of the product for development of manufacturing process of the fourth biosimilar product aiming to be launched by
2025, and (3) revenue related to the completion of the master cell bank (MCB), which is the basis for commercializing SHED (stemcell human exfoliated deciduous teeth) as regenerative medicine. Therefore, the sales in the next fiscal year estimate at 1,900,000
thousand yen. In addition, (2) and (3) are temporary items required in the development process, and both are classified, for accounting
purposes, as sales , which are equivalent to the manufacturing costs. The basis of our mid-to-long term profit structure is the profit
related to biosimilars in (1), which maintains the same profit margin of the previous year and will be further improved by investment
in cost reduction measures.
As for biosimilar business, Senju Pharmaceutical Co., Ltd. applied for manufacturing and sales in Japan of the biosimilar product in
the field of ophthalmic treatment to the Ministry of Health, Labour and Welfare on September 18, 2020, which was jointly developedwith the Company (project name: GBS-007), and by continuous investment in future cost reductions, we have been establishing astable profit base in the biosimilar business. For the increase of the value of the Company, the Company has been pursuing a stableprofit and business growth with new biologics business and new biotech business in the cell therapy field of regenerative medicine as
future growth drivers.
Accordingly, forecasts for the following year include R&D expenses of 1,800,000 thousand yen (the actual R&D expense for the current
fiscal year was 963,868 thousand yen). The main breakdown of these R & D expenses is the development cost for commercial productionof GBS-007, clinical trial and final product manufacturing of JRM-001 and this occurs at the final stage of development process
temporarily. For JRM-001 and GBS-007, the amount of R&D expenses carried over into FY2021 is included, but this does not affectthe original development schedule. Furthermore, to maximize GBS-007 profits in the future, the Company estimates development costs
related to cost reduction measures.
As to the investment policy for R&D expenses in the medium term in the future, as mentioned above, it is expected that large-scale
investment in major development products will peak out. More Specifically, excluding the temporary and final costs of GBS-007 andJRM-001, mid-to-long term investment in R&D estimates to be between 500 million and 1 billion yen. Based on our project management
strategy, the Company will collaborate with partners and effectively control R&D expenses.
As shown in the mid-term strategic plan, the Company will turn profitable in the fiscal year ending March 2023, and after that, theCompany continues its research and development activities under the policy of pursuing business growth without making large-scale
investments.

The financial forecasts are derived utilizing the currently available information obtained by the Company and are based on assumptions
the Company deemed reasonable. The forecasts are by no means guarantees of the Company’s performance. The actual results may
differ significantly due to various factors. Since it is difficult to properly forecast the impact on business performance due to the COVID－ 5－

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

19 pandemic, we have not included this impact in our business forecast.
III. Fundamental policy on adoption of the accounting standards
The Group adopts the Japanese Accounting Standards s by considering various burdens to prepare financial statements based on theInternational Financial Reporting Standards.

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Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

IV. Financial statements and notes to financial statements(A) Consolidated balance sheet
As of the end of the previous
fiscal year
(March 31, 2020)
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
Building
Accumulated depreciation
Accumulated impairment loss
Building (net)
Tools, equipment and fixtures
Accumulated depreciation
Accumulated impairment loss
Tools, equipment and fixtures (net)Total 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
Short-term debts
Accrued expenses
Income taxes payable
Deposit payable
Reserve for loss on orders
Other current liabilities
Total current liabilities
Non-current liabilities
Convertible bonds
Long-term debts
Deferred tax liabilities
Allowance for retirement benefits
Other non-current liabilities
Total liabilities
Total liabilities－ 7－(in thousand yen)
As of the end of the current fiscal
year (March 31, 2021)

2,032,575
651,686－
254,260
274,954
108,856
3,322,333

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

56,488-11,636-43,130
1,720
66,343-23,966-42,120
256
1,977
57

2,396
-698
－
1,697
11,500-5,737-4,236
1,526
3,223
2,622

249,161
18,608
267,770
269,805
3,592,139

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

8,763
25,000208,370
46,935
222,978355,243
13,688880,979

109,739－
367,81728,461
216,000
379,243
13,058
1,114,319

600,000
600,000－
19,3204,448
1,223,768
2,104,748

500,000
600,000
89,491
19,755－
1,209,246
2,323,566

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

As of the end of the previous
fiscal year
(March 31, 2020)
Shareholders’ equity
Shareholders' capital
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders capital
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Equity warrants
Total shareholders’ equity
Total liabilities and shareholders’ equity－ 8－(in thousand yen)
As of the end of the current fiscal
year (March 31, 2021)

611,711
9,917,311-9,077,244-73
1,451,704

1,032,179
10,337,779-10,078,706-73
1,291,179-21,540-21,540
57,226
1,487,390
3,592,139

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

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

(B) Statement of consolidated income and comprehensive income(Statement of consolidated income)Previous fiscal year
(April 1, 2019 to March 31,
2020)
Gross sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Retirement benefits cost
Research and development expenses
Salaries and allowances
Other expenses
Total selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Income from sale of materials
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Stock issuance expenses
Commission paid
Foreign exchange loss
Miscellaneous loss
Total non-operating expenses
Ordinary loss
Extraordinary gain
Profits on Investment securities soldReversal of equity warrant
Total extraordinary gain
Extraordinary loss
Loss on retirement of fixed assets
Loss on sales of stocks of subsidiaries and affiliates
Impairment loss
Loss in relation to the acquisition phase
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 year
Net loss attributable to owners of the parents－ 9－(in thousand yen)
As of the end of the current fiscal
year (April 1, 2020 to March 31,
2021)

1,077,737
653,158
424,579

996,543
119,571876,971

4,800
898,158
187,716495,301
1,585,975-1,161,396

5,040
963,868
246,723
631,027
1,846,659-969,687

117
－
1,380
1,498

52
1,000
1,499
2,552

5,207
1,847
18,0001,524
776
27,355-1,187,254

15,688
4,534
－
3,028
780
24,031-991,166

4,419
1,173
5,592

－
－
－

854
－
5,982,139
149,600
6,132,594-7,314,255
2,140
2,140
-7,316,396-7,316,396

0
7,064
1,449
－
8,513
-999,680
1,781
1,781
-1,001,461-1,001,461

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

(Statement of consolidated comprehensive income）(in thousand yen)
As of the end of the current
fiscal year (April 1, 2020 toMarch 31, 2021)

Previous fiscal year
(April 1, 2019 to March 31,
2020)
Net loss for the year
Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income for the year
(breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests－ 10－-7,316,396-1,001,461-23,151-23,151-7,339,548

224,505
224,505-776,955-7,339,548-776,955－－

Gene Techno Science Co., Ltd. (4584) Consolidated Financial Results for the Year Ended March 2021

(C) Statement of consolidated cash flows
Previous fiscal year
(April 1, 2019 to March 31,
2020)
Cash flows from operating activities
Net loss for the year before taxes adjustments
Depreciation expenses
Impairment loss
Profits or loss on sales of stocks of subsidiaries and affiliates
Balance in relation to the acquisition phase (- means profit)
Increase/decrease in reserve for loss on orders (- means
decrease)
Interest or dividends received
Interest expense
Profits or loss on Investment securities sold (- means decrease)
Commission paid
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 tangible fixed assets
Purchase of Intangible fixed assets
Purchase for investment securities
Income due to sale of investment securities
Income for acquisition of shares of subsidiary due to change inscope of consolidation
Payment for sale of shares of subsidiary due to change in scopeof consolidation
Loan advances to subsidiaries and associates
Other payments
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings (- means
decrease)
Proceeds from long-term debts
Proceeds from issuance of convertible bonds
Proceeds from issuance of stocks through exercising equity
warrants
Proceeds from issuance of equity warrants
OthersCash 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
Increase/decrease in cash and cash equivalents due to stock
exchange
Cash and cash equivalents at the end of the year

－ 11

－

(in thousand yen)
As of the end of the current
fiscal year (April 1, 2020 toMarch 31, 2021)-7,314,255
382
5,982,139－
149,600-999,680
992
1,449
7,064
－

355,243

24,000-117
5,207-4,41918,000-89,711-101,099-55,861-82,311-125,236-54,291-1,316,732-52
15,688－－-174,617-196,491-156,763
107,399
158,630-37,080-1,249,462

117-5,922-2,521-1,325,059

52-15,630-2,430-1,267,471-1,935－-100,349
4,720－-3,254－－

12,934－－-14,291-50,000-2,576-137,206－-4,745-22,290－-25,000

582,000
599,708－
599,71040,325

138,860

3,272-3,534
1,221,771－-240,494

4,774－
718,345－-571,417

2,009,373

2,032,575

263,696－

2,032,575

1,461,158