Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022

November 8, 2022

Summary of Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
(Excerpt from Japanese version)[Japanese GAAP]

Company name:

Kidswell Bio Corporation

Listing: Tokyo Stock Exchange

Stock code:
Representative:

4584
Masaharu Tani, President & CEO

URL: https://www.kidswellbio.com/en/

Contact:

Yasuo Sakae, Corporate Officer, CFO
Tel: +81-3-6222-9547

Scheduled date of filing of Annual Securities Report:
Scheduled date of payment of dividend:

November 11, 2022
-Preparation of supplementary materials for financial results:
Holding of financial result meeting:Yes
Yes (for institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1.

Financial Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 – September. 30, 2022)(1) Results of operations (Cumulative)(Percentages shown for net sales and incomes represent year-on-year changes)
Ordinary income
Net income
Operating income

Net sales
Second quarter of the fiscal year
ending March 31, 2023
Second quarter of the fiscal year

Million yen%Million yen%

Million yen%

Million yen%

1,116-

11--42--42---------

ended March 31, 2022

Net income

Diluted netper shareincome per share

Second quarter of the fiscal year
ending March 31, 2023
Second quarter of the fiscal year

Yen

Yen

-1.36

-

ended March 31, 2022
(Notes)1. Even though there is a calculation of dilutive shares available, there is no reporting on net income per share after an adjustment of
dilutive shares as the company recorded net loss.
2. Since the Company shifted to non-consolidated financial statements from the fiscal year ending March 31, 2023, the result in thesecond quarter of the fiscal year ended March 31, 2022 and percentage for year-on-year changes are not recorded.
(2) Financial position
Total assets
Million yen

Dividends

equity ratio

Million yen

As of September 30, 2022
4,259
As of March 31, 2022
3,470
(Reference) Shareholders’ equity
Second quarter of the fiscal year ending March 31, 2023: 1,500 million yen
2.

Shareholders’

Net assets

%

1,699
1,702

35.2
43.8

Fiscal Year ended March 31, 2022: 1,518 million yen

Dividend per share1Q-end 2Q-end 3Q-end Year-endTotal

Yen

Yen

Yen

YenYenFiscal year ended March 31, 2022

-0.00

-0.00

0.00

Fiscal year ending March 31, 2023

0.00

0.00

Fiscal year ending March 31, 2023
0.00
(forecasts)(Note) Changes to the most recent forecasted dividend amount: None

- 1 -Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022

3.

Business Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentages represent year-on-year changes)

Net sales
Million yen%

Operating incomeOrdinary income

Million yen

Million yen%%

Net income

Net income
Million yen

per share%

Yen--31.80

2,900-980-999-1,000
Full year(Notes)
Changes to the most recent business forecast: None
Since the Company mainly manages annual performance, only full-year performance forecasts are shown.

* Annotations
1. Special accounting treatments used in preparation of financial statements of the quarter: None
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 second quarter of the fiscal year ending March, 2023: 31,471,147 shares
At the end of the fiscal year ended March, 2022: 31,437,547 sharesb. Number of treasury shares at the end of period
At the second quarter of the fiscal year ending March, 2023: 92 shares
At the end of the fiscal year ended March, 2022: 92 sharesc. Average number of shares outstanding during the period
At the second quarter of the fiscal year ending March, 2023: 31,445,380 shares
At the second quarter of the fiscal year ended March, 2022: 30,270,727 shares*This summary report on Kidswell Bio Corporation’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.
(How to obtain supplemental financial information)
Materials for the supplemental financial information are available on the Company’s website (https://www.kidswellbio.com/en/).

- 2 -Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022○Table of Contents
I. Overview of business results for the current fiscal quarter……………………………………………………………………

4II．Financial statements and notes to financial statements……………………………………………………………

5(A) Balance sheet……………………………………………………………………………………………………………

5(B) Income statement…………………………………………………………………………………………………………

6(C) Notes to financial statements………………………………………………………………………………………………

7(Notes on going concern assumption) ………………………………………………………………………………………

8(Notes on material changes of shareholders’ equity) …………………………………………………………………………

8- 3 -Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022

I. Overview of business results for the current fiscal quarter
1. Biosimilar Business
The Company recorded stable profits from the sales of the neutropenia medicine "Filgrastim BS" by Fuji Pharmaceutical Co., Ltd.
and Mochida Pharmaceutical Co., Ltd., and the royalties from biosimilar of darbepoetin alfa jointly developed with Sanwa Kagaku
Kenkyusho Co., Ltd. The Company has been collaborating with Senju Pharmaceutical Co., Ltd. based on the joint development
agreement for the biosimilar in the ophthalmic area (Project name: GBS-007) executed on May 12, 2016, and Senju PharmaceuticalCo., Ltd. has received an approval of manufacturing and sales in Japan from the Ministry of Health, Labour and Welfare on
September 27, 2021 and had it launched in the market on December 9, 2021. While the sales have been performing steady since thelaunch, further sales are expected to increase due to strong demand. The Company expects to contribute to the Company’s stablebusiness foundation as a revenue source.
2. New Biologics BusinessIn the new biologics business, the Company entered into the research collaboration agreement with Sapporo Medical University onanti-cancer drug using antibody with cancer cell invasion ability and with MabGenesis for the acquisition of new antibodies withcancer cell killing effect in January 2020. The Company executed the research collaboration agreement with Chiome Bioscience
Inc. (Chiome) in May, 2022 for accelerating the antibody-drug research in the oncology field by the combining knowledge andtechnologies of the Company and Chiome.
3. Cell Therapy (Regenerative Medicine) BusinessTo succeed in the regenerative medicine business, the Company has been aggressively promoting multiple collaborative research
projects with academias as well as business partnering with companies by utilizing SHED (Stem cells from Human ExfoliatedDeciduous teeth) as important research source. While conducting research and development with academias and companies, theCompany has been steadily progressing the development of cell therapy with SHED, and the Company accelerates to create theworld's first cell therapy and regenerative medicine product with SHED as the Company’s growth driver.
Furthermore, regarding the progress of a designer cell (reinforced cell therapy with SHED) as the Company’s future growthdriver, the Company executed the collaborative research agreement with NanoCarrier Co., Ltd. (NanoCarrier) on September 8,2021, and the contracted development agreement with BioMimetics Sympathies Inc. (BMS) on the development of new cell
culture method for directivity of SHED to specific diseases on December 6, 2021.
Regarding the development of a master cell bank (MCB), which is an essential step in commercializing SHED as a regenerative
medicine product, SHED MCB passed final verification tests and SHED MCB in compliance with GMP was completed inAugust 2022. Therefore, the Company released S-Quatre®, a one-stop service from sourcing of deciduous teeth throughcollaboration with "ChiVo Net Future Medical Children's Volunteer Network", University of Tokyo Hospital and Showa
University Dental Hospital to supply of highly reliable and GMP-compliant SHED MCB as an intermediate product for celltherapy.
As to CSC (cardiac stem cells, project name: JRM-001), the Company transferred all shares of Japan Regenerative Medicine Co.,
Ltd. (JRM) to Metcela, which would lead the development of JRM-001 by combining experience, knowledge, and technologies
in heart disease field, and continues support to JRM.
As a result, the sales amount was 1,116,111 thousand yen, operational profit was 11,137 thousand yen, ordinary loss was 42,082
thousand yen and net loss for the second quarter of the current fiscal year was 42,687 thousand yen.

- 4 -Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022

II．Financial statements and notes to financial statements(A) Balance sheet

AssetsCurrent assets
Cash and cash equivalents
Trade receivables
Products
In-process inventory
Advance payments
Long-term debts to be repaid within one year froma subsidiary
Other current assets
Allowance for doubtful accounts
Total current assets
Non-current assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade payables
Long-term debts to be repaid within one year
Accrued expenses
Income taxes payable
Contract liabilities
Reserve for loss on orders
Other current liabilities
Total current liabilities
Non-current liabilities
Convertible bonds
Long-term debts
Reserve for retirement allowance
Total non-current liabilities
Total liabilities
Shareholders’ equity
Shareholders capital
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders capital
Equity warrants
Total shareholders’ equity
Total liabilities and shareholders’ equity

As of the end of the previous
fiscal year
(March 31, 2022)- 5 -（in thousand yen）
As of the second quarter of thecurrent fiscal quarter(Sept. 30, 2022)

1,160,934
461,854
200,118
788,696495,544

1,874,518
650,697
213,888504,388755,290

600,000－

161,537-573,745
3,294,940

36,444－
4,035,227

1,641
3,064
170,690
175,3963,470,336

1,558
2,680
220,479
224,719
4,259,946

45,47975,000252,760
37,832
216,000
475,2438,851
1,111,168

117,344
300,000
192,250
32,558－－9,487
651,641

100,000
525,000
31,260656,260
1,767,428

600,000
1,275,000
33,555
1,908,555
2,560,196

1,421,212
10,726,813-10,629,570-73
1,518,382
184,525
1,702,908
3,470,336

1,433,566
10,739,166-10,672,257-73
1,500,401
199,348
1,699,749
4,259,946

Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022(B) Income statement(Quarterly cumulative period)（in thousand yen）
This quarterly cumulative period(April 1, 2022 to Sept. 30, 2022)
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 profit
Non-operating income
Interest income
Materials sales income
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Bond interest
Stock issuance expenses
Loan arrangement fee paid
Foreign exchange loss
Miscellaneous loss
Total non-operating expensesOrdinary loss
Net loss for the quarter before taxes adjustments
Corporate, residential and enterprise taxes
Total corporate and other taxes
Net loss for the quarter

1,116,111
420,954695,156
251,787
432,230
684,018
11,137
5
2,250
360
2,615
13,664676
389
30,00010,553551
55,835-42,082-42,082605
605-42,687- 6 -Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022(C) Quarterly Statement of consolidated cash flows(in thousand yen)
As of the end of 2Q FY2022(April 1 to September 30, 2022)
Cash flows from operating activities
Net loss for the year before taxes adjustments (-)
Depreciation expenses
Increase/decrease in reserve for loss on orders (- meansdecrease)
Interest or dividends received
Interest expense
Bond interest
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)
Changes in contract liabilities (- means increase)
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 investment securities
Proceeds from loan collection from affiliated company
Other payments
Cash flows from investing activities
Cash flows from financing activities
Proceeds from long-term loan
Repayment of long-term loan
Proceeds from issuance of convertible bonds
Other changes
Cash flows from financing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase/decrease in cash and cash equivalents (- meansdecrease)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the quarter-42,082466-475,243-5
13,664676
30,000-188,842
270,537-259,746
71,865-60,810-216,000
167,330-688,189
5-19,607-1,210-709,001-50,000
26,254
0-23,745970,000-25,000
499,7201,610
1,446,330－
713,584
1,160,943
1,874,518- 7 -Kidswell Bio Corporation (4584) Financial Results for 2Q FY2022(D) (Notes on going concern assumption)
There is no reporting item applicable to this matter.
(Notes on material changes of shareholders’ equity)There is no reporting item applicable to this matter.

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