Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021

February 4, 2022

Summary of Consolidated Financial Results for the Third Quarter of
the Fiscal Year Ending March 31, 2022 (Extracted 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:

February 14, 2022-

Preparation of supplementary materials for financial results:
Holding of financial results meeting:Yes
None (for institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1.

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

Net sales

Net income
attributable to owners

Ordinary income

Operating incomeof the parent
Third quarter of the fiscal year
ending Mar.31, 2022

Million yen%

Million yen%

Million yen%

Million yen

%

1,383

91.9

-432

-

-460

-

-94

-

-660

-

-670

-

Third quarter of the fiscal year
720
-1.7
-647
ended Mar. 31, 2021
(Note) Comprehensive income
Third quarter of the fiscal year ending Mar. 31, 2022: -297 million yen (-%)
Third quarter of the fiscal year ended Mar. 31, 2021: -617 million yen (-%)
Net income
per share
Third quarter of the fiscal year
ending Mar.31, 2022
Third quarter of the fiscal year

Diluted net income
per share
Yen

Yen

-3.08

-

-23.43
ended 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

Shareholders’equity ratio

Net assets

Million yen

As of December 31, 2021
3,900
As of March 31, 2021
3,933
(Reference) Shareholders’ equity
Third quarter of the fiscal year ending Mar.31, 2022: 1,972 million yen,
Fiscal year ended Mar. 31, 2021: 1,494million yen- 1 -Million yen

%

2,137
1,610

50.6
38.0

Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021

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

Total

Yen

Yen

Yen

Yen

Yen

-

0.00
0.00

-

0.00

0.00

Fiscal year ending Mar. 31, 2022
0.00
(forecasts)(Note) Changes to the most recent forecasted dividend amount: None

0.00

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

Net sales

Operating income

Ordinary income

Million yen

Million yen

Net income
attributable toowners of the parent

Million yen

%

%

%

Million yen

Net income
per share

%

1,900
90.7
-1,720-1,740-1,323Full year(Note) Changes to the most recent forecasts: 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 third quarter of the fiscal year ending March, 2022: 31,435,047 shares
At the end of third 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 third quarter of the fiscal year ending March, 2022: 92 shares
At the end of third quarter of the fiscal year ended March, 2021: 92 sharesc. Average number of shares outstanding during the period
At the end of third quarter of the fiscal year ending March, 2022: 30,660,203 shares
At the end of third quarter of the fiscal year ended March, 2021: 28,632,218 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 are available on the Company’s website (https://www.kidswellbio.com/en/).

- 2 -Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021○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…………………………………………………………………………………………………

6(B) Statement of consolidated income and comprehensive income……………………………………………………………

- 3 -

6
7

Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021

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 isstriving 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 envisions creating new pharmaceuticals and therapeutics for all people. Under“Kids Well, All Well” we will make our goal come true.
In addition, regarding the transition to the new market segments of Tokyo Stock Exchange from April 2022, the Company resolved
to apply for the Growth Market at the Board of Directors Meeting held on December 10, 2021, and disclosed the Company’sbusiness plans for realizing further growth. The Company will proceed with the procedures for the application of the GrowthMarket according to the schedule of the Tokyo Stock Exchange, Inc.
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 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. This is the third biosimilar product of the Company and is expected to contribute to
the Company’s stable business foundation as a revenue source.
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 theearly- stage new biologics pipeline.
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 academias and companies have evaluated the possibility of providing new treatment methods in such asbone and neurologic disease. Especially, effectiveness of SHED has been shown in non-clinical studies of the multiple SHED
pipelines, and activities of alliances and licensing-out with pharmaceutical companies have been moving forward steadily.
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.
For the Company’s future growth strategy, as the progress of a designer cell (reinforced cell therapy utilizing SHED), the Company
executed a collaborative research agreement with NanoCarrier Co., Ltd. (NanoCarrier) on September 8, 2021, and a contracted
development agreement with BioMimetics Sympathies Inc. (BMS) on the development of new cell culture method for directivity of- 4 -Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021

SHED to specific diseases on December 6, 2021. Regarding the development of Master Cell Bank (MCB), which is the basis forcommercializing 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 thecompletion of SHED source supply system with the above collaboration, the Company started manufacturing the master cell bank at
the GMP / GCTP manufacturing facility of Nikon CeLL innovation Co., Ltd. The Company continues to promote research anddevelopment of regenerative medicine in collaboration with academias and companies. In addition, the Company executed abusiness alliance agreement with Metcela Inc. (Metcela) on January 19, 2022 for accelerating the regenerative medicine business of
KWB and Metcela by combining management resources, knowledge and technologies in the regenerative medicine field.
As a result, the sales amount was 1,383,239 thousand yen (91.9% increase from the same quarter of the previous year), operationalloss was 432,958 thousand yen (647,405 thousand yen in the same quarter of the previous year), ordinary loss was 460,046 thousandyen (660,897 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 94,401 thousand yen (670,897 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.

- 5 -Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021

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 3Q FY2021(December 31, 2021)

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

1,253,307
909,765
119,056
693,857
545,749
200,7433,722,479

3,223
2,622

2,025
3,255

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

154,672
18,123
172,795
178,077
3,900,557

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

32,00878,034475,243
459,292
1,044,579

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

100,000
600,000
18,105－718,105
1,762,684

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

1,420,030
10,725,630-10,173,107-73
1,972,479

202,965－

202,965
116,240
1,610,385
3,933,952－
165,393
2,137,872
3,900,557

Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021(B) Statement of consolidated income and comprehensive income(Statement of consolidated income)(Quarterly Consolidated Cumulative Period）(in thousand yen)
As of the end of 3Q FY2020(April 1 to December 31, 2020)

As of the end of 3Q FY2021(April 1 to December 31, 2021)

720,859
86,186634,673

1,383,239
458,501
924,737

600,660
681,417
1,282,078-647,405

770,421587,275
1,357,696-432,958

42
1,424
－
779
2,245

6
－
1,650
47
1,704

11,868
3,203
－
－
746
15,818-660,977

11,653
4,205
6,998
5,696
237
28,792-460,046－－－

417,736
1,144
418,881

0
7,064
1,449
8,513
-669,491
1,406
1,406
-670,897－－－－-41,165
53,23653,236-94,401-670,897-94,401

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
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 affiliate
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 -Kidswell Bio Corporation (4584) Consolidated Financial Results for 3QFY2021(Statement of consolidated comprehensive income）(Quarterly consolidated cumulative period）(in thousand yen)
As of the end of 3Q FY2020(April 1 to December 31, 2020)

As of the end of 3Q FY2021(April 1 to December 31, 2021)-670,897-94,401

53,54153,541-617,356-202,965-202,965-297,367-617,356-297,367－－

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 -