Financial Results for 2Q FY 2022
(Fiscal Year Ending March 31, 2023)
November 8, 2022

Kidswell Bio Corporation

Business and Financial
Highlights in 2Q FY 20222

Overview of Financial and Business Highlights
Financial Highlights in 2Q FY 2022
Expanding the biosimilar sales led by sales growth of GBS-007.
Recorded the sales related to completion of GMP-compliant SHED MCB.
Recorded operating profit due to solid gross profit growth and reduced investment in SHED projects until confirming
the MCB completion.

Business Highlights in 2Q FY 2022
• Transferred all shares of JRM (Japan Regenerative Medicine Co., Ltd.) to Metcela Inc. (Developmentof JRM-001 is led by Metcela, Inc.).

Cell Therapy（Regenerative
Medicine）

New Biologics
Biosimilars
Others• Completed GMP-compliant SHED MCB.
• Executed a master service agreement with Showa Denko Materials Co., Ltd. for the development of
manufacturing process for the regenerative medicine products utilizing SHED and manufacturing
investigational new drugs.
• Filed patent application on cell therapy for cerebral palsy utilizing SHED with Tokai National Higher
Education and Research System.
• Published the research articles in collaboration with Hamamatsu University School of Medicine (Proofof concept of the potential therapeutic application of next generation SHED for brain cancer).
• Executed a research collaboration agreement with Chiome Bioscience Inc. (Chiome) on thedevelopment of antibody drugs.

• Recorded strong sales due to more orders of GBS-007 than expected.

• Sifted to non-consolidated financial result from 1Q FY 2022 due to transfer of the subsidiary (Japan
Regenerative Medicine Co., Ltd.).
• Completed financing for working capital and facility reinforcement due to increased order of GBS-007.

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Financial Results in 2Q FY 2022 (PL): Income Statement
Unit：thousands yen

Subject

Results for 2Q
FY2021

FY 2022 ending March 31,
2023(Non-consolidated)(Consolidated)

Result for 2Q

Forecast

Gross sales

740,635

1,116,111

2,900,000

Cost of goods sold275,700

420,954

1,700,000

695,156

1,200,000

Gross profit

464,935

GAP analysis of forecast in FY 2022
• Expanding the biosimilar sales led by sales growth of GBS-007• Recorded the sales related to completion of GMP-compliant SHED MCB• Gross profit expansion due to biosimilar businessSelling, generaland administrative e
xpenses

915,868

684,018

2,180,000

R&D expenses

532,689

251,787

1,400,000

Other expenses

383,178

432,230

780,000• Continuously streamlining expenses and recorded expenses asscheduled

Operating profit-450,932

11,137-980,000• Recorded operating profit due to reduced R&D investment until
confirming the completion of GMP-compliant SHED MCB

Net loss-463,616-42,082-999,000

Net loss for thequarter

463,221-42,687-1,000,000• Reduced investment in SHED business until confirming the completionof GMP-compliant SHED MCB•

Operating profit in the first half year of FY 2022 due to strong sales and reduced investment in SHED projects.

•

Improved the probability of achieving 3 billion yen of sales and 1 billion yen of operating profit in FY 2025 due to expansion ofbiosimilar business.
Positive investment in SHED projects from the latter half of FY 2022 for aiming at further sales and profit growth by licensing-out etc.

•4Financial Results in 2Q FY 2022: Balance Sheet
Unit：thousands yen

Subject

4Q FY2021
Consolidated

2Q FY 2022
Non-Consolidated

Highlights

Current assets

3,294,940

4,035,227(Cash and cash
equivalents）

1,160,934

1,874,518

 Cash increased due to long-term loan
from Mizuho Bank and the issuance of
convertible bonds (CBs).

（Trade receivables）

461,854

650,697 Due to positive sales growth of GBS-007(Products)

200,118

213,888(In-process inventory)

788,696504,388(Advance payments)

495,544755,290(Long-term debts to be repaid within
one year from a subsidiary）

600,000－(Other current assets)

161,537

36,444(Allowance for doubtful accounts)-573,745－

Non-current assets

175,396

224,719

Total assets

3,470,336

4,259,946

Current liabilities

1,111,168

651,641656,260

1,908,555

Total liabilities

1,767,428

2,560,196

Total shareholders’ equity

1,702,908

1,699,749

Total liabilities and shareholders’ equity

3,470,336

4,259,946

Non-current liabilities••

 Due to long-term loan from Mizuho Bankand the issuance of CBs.

Improved cash balance while net assets ratio became lower due to long-term loan from Mizuho Bank and issuance of CBs.
Accelerates investment in SHED projects due to increased cash balance and operating cashflow from biosimilar business.
5Key Updates in Mid-Term Strategic Plan
Progressing asscheduled

Licensing-out

SHED

CSC
JRM-001

R&D

Cell Therapy
SHED CSC

New Biologics

Biosimilar
4th Product

UPDATE！

Completion of SHEDMCBTechnology
Development

SHED Supply
SystemCompletion of MCB

Designer Cell

High-Yield Protein
Producing CellLines

Key infrastructure forcommercialization of celltherapy/ regenerative medicine
products
UPDATE！

ProfitExpansion

GBS-001
Cost Reduction

Stable Profit

GBS-001
Sales

2nd generation SHED

Publication of the research articles
in collaboration with Hamamatsu
University School of Medicine

GBS-007
Cost Reduction

Completed

GBS-011
Royalties

GBS-007
Sales

Strengthen profit structure
led by GBS-007
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Pipeline Updates
Cell therapy (Regenerative Medicine) Business
Development
Product

1stGeneration
SHED

TargetBasic
Research

Non-Clinical and Clinical Trial

Conditional &Time-limited
Authorization

Marketing/ Marketing
Authorization/ Continuous
Production

Cerebral palsy

Nagoya University, Tokyo
Medical and Dental University

Congenital Isolated
Hypoganglionosis

Mochida Pharmaceutical

Spinal cord injury

Nagoya University

Non-union
fractures
2ndgeneration
SHED

Partner

Hokkaido University andSpinal Injuries Center
Hamamatsu Univ. School of
Medicine

Brain Cancer

NanoCarrier and BioMimetics
Sympathies

Under consideration

Biosimilar Business
Development Product

GBS-001
GBS-007
GBS-011

TargetDevelopment ResearchPhaseⅠ

PhaseⅢ

Application

LaunchOncology
Ophthalmic
disease
Renal disease

Partner
Fuji Pharma
Senju Pharmaceutical Sanwa
Kagaku Kenkyusho

4th BS Product5th BS Productthereafter

Clinical Trial（※Non-disclosure）
Under consideration

New Biologics Business
Development
Product

New
Antibody

TargetOncology

Basic
Research

Non-Clinical
Trial

Clinical Trial
PhaseⅠ

PhaseⅡ

PhaseⅢ

Application/
Approval/
LaunchPartners
Sapporo Medical Univ.
Chiome Bioscience Inc.
MabGenesi

7

Key updates in celltherapy (SHED) business

SHED Master Cell Bank

SHED

Frozen SHED MCB in a storage tube*

Microscope image of
SHEDs**Sample9Stable manufacturing & supply system of SHED MCB
From teeth donation to SHED MCB
Check donors’ health condition
Extract deciduous teeth

Manufacture SHED Master Cell
Bank in compliance with GMP

University of Tokyo Hospital
Showa University Dental Hospital

Nikon CeLL innovation(Cell and gene therapy processdevelopment and cell and gene therapy
manufacturing service）• Declaration of Consent• Donor information management• Donor screening (medical examination）• Store and supply extracted
teeth, etc.

• Receive extracted teeth• Extract SHED from pulp tissue andculture• Manufacture SHED Master Cell Bank

Deciduous
teeth

Cell therapy
products
Development

Master Cell Bank

Demand ofraw materials
Secure sufficient teeth donor candidates

10Business Strategies
For launching the world’s first SHED cell & gene therapy
SHED:

SHED: 1st generation
Strive to establish SHED
business
Target diseases: Diseases
related to nervous, muscularand bone system
Market potential:
Expect to grow 700 to 800
billion yen market size by※1
2040（Global)2nd generation

SHED Supply Business

Designer cells

For other modalities

Target diseases:
Genetic disease,neurodegenerative diseaseand cancer• Products utilizing SHEDderived cell organs andextracellular vesicles(exosome and mitochondria,etc.)• Drug Delivery Systemutilizing SHED

Market potential:
Expect to grow over 1 trillion※2
yen market size by 2028
(e.g. CAR-T cell therapy: over 13.5
billion dollars in the world)Market potential:
Expect hundreds of billions※3
yen market size

SHED MCB※1: KWB’s research※2 & 3: Estimated by KWB based on public information from various related institutions and organizations

11

Manufacturing Investigational New Drugs
Clinical manufacturing and high-quality investigational new drugs
3D bioreactors
Manufacturing cost reduction and quality
improvement applicable to both adherent andsuspension cells
Stable culture expansion
Stable Supply of investigational new
drugs
Accelerating global & domestic
clinical development
USA

EuropeJapan※Permission for use of corporate logs and photos from Showa Denko K.K. and Minaris Regenerative Medicine Co., Ltd.

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Updates of SHED Growth Strategy
Commercialization:
1st generation SHED

Launching regenerative
medicine products• Establishment of SHED Supply system
 Completed GMP-compliant MCB and drive
development of manufacturing method ofinvestigational new drugs and implementation of
the manufacturing• Selection of target diseases through collaborative
researches Cerebral palsy and Spinal cord injury, etc.

NagoyaUniv.

Financing for strategic
execution• Financing from overseas market

For commercialization of the 2nd generation SHED
Hamamatsu• Introduction of next-generation technologies
Univ. Schoolof Medicine
to generate synergies Potential therapeutic application of next generation
SHED such as engineered SHED for brain cancer• Promoting technology adoption through alliances
and acquisitions
 Actively approaching potential partners for
maximizing SHED value

Human resources andorganizational structure• Establishing office in overseas• Equity financing specialized for SHED development
Approaching overseas funds/ VCs with acquired dataand progress of research and development

Fostering networks with international medical
institutions and academiasStrengthening cooperation between Japan andoverseas• Staff recruiting for global expansion
*Progress is shown in red.

Strengthening SHED
development structure• Establishment of a SHED delivery system to overseas• Large-scale financing to realize SHED commercializationInvention in SHED and next
generation technology

 Combination with synergistic devices• Establishment of clinical development system Reinforcing organizational structure andprocedures such as SOPs

Fund-raisingTechnology

Driving establishment of manufacturing system incomplaint with FDA and EMA
Actively recruiting people for implementing andrealizing growth strategies

13

SHED Pipeline
Development
Product

TherapeutictargetPartners

Number of patients(Domestic) ※2

Number of patients(Global) ※2

None

Nerve protection,
activation andregeneration

Nagoya University, Tokyo
Medical and Dental University

2,000 patients per
year,
30,000 patients in
total

100,000 patients per
year, 1.7 millions
patients in total

Enterectomy,
colostomy

Ganglion
regeneration

Mochida Pharmaceutical

100 patientsー

Loss of motor
function andsensation

None

Nerve protection,
activation andregeneration

Nagoya University

5,000 patients per
year,
100,000 patients in
total

25,000 patients per
year, 500,000
patients in total (US,EU and Japan)

Non-union fractures

Chronic pain, gait
disturbance

SurgeryBoneregeneration

Hokkaido University and Spinal
Injuries Center

100,000 patients per
year

ーOphthalmologic
disease

※1

※1

※1

Gifu Pharmaceutical University※1※1

Motor function andsensation disorder

Nerve
reconstruction(Autologous
nervetransplantation)

Peripheral nerve
regeneration

Oita University

8,000 surgeries per
yearーEating and speechdisorderLip arthroplasty+ iliac bone graft

Maxilla boneregeneration

ORTHOREBIRTH

2,000 patients per
year

15 out of 10,000
newborns

Brain cancer

Poor life prognosis

Surgery,
radiation therapy,
chemotherapy

Anticancer,
prevention ofrecurrence

Hamamatsu University School of
Medicine

20,000 patients per
year

830,000 patients in
total

※1

※1

※1

※1

NanoCarrier, BioMimetics
Sympathies※1※1

Target disease
Pediatric disease

Cerebral palsy

Pediatric disease

Congenital Isolated
Hypoganglionosis
Including PediatricdiseaseSpinal cord injury
1st generation
SHED

Peripheral nerve palsy

Pediatric disease

Cleft lip and palate

Symptom
Quadriplegia andPosture disorder
Intestinal
obstruction

2nd generation
SHED

Existing
Treatment※1 Details not disclosed, ※2 KWB research based on public and relevant information

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For realization of the MidTerm Strategic Plan –KWB 2.0-

New Development Stage in SHED• Steady progress in the creation of cell therapy and gene therapy productswith SHED• Timely and appropriate financing for the improvement of corporate value
Future events with businessprogress

Current progress
2nd generation

Collaborate with academias that have nextgeneration technologies to generate synergies

Exploration of next-generation technologies
to generate synergies

Drive the acquisition of innovative technologies throughbusiness collaboration
Continue basic research and collaborative research withacademias to create engineered SHED

Collaborative research with Hamamatsu
Univ. School of Medicine（Brain cancer）

1st generation

Preparation for clinical research and development
Patent application with Tokai National Higher
Education and Research System (Nagoya Univ.)

Selection and Consideration oftarget diseases

Manufactur
ing

Business collaboration for
manufacturing investigational new drugs

Clinical research（First-in-human clinical trials）
Drive intellectual property strategies

Continue basic research and collaborative research with academias
Promote the development manufacturing method for stable manufacturingof investigational drugs

Completion of SHEDMCB
The fist half of FY 2022
(from April to September 2022)

The latter half of FY 2022
(from October 2022 to March 2023)

The first half of FY 2023 (from April 2023)
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KWB2.0: Our Commitments
Toward further growth and global expansion with thecommercialization of SHED products
Clinical Development &Product strategies

Basic Clinical Research& ExplorationCEO

Academias
Academias

Patients
患者さん

Masaharu
Tani

COO

CBO

ShinyaKurebayashi

Masayuki
Kawakami

CFO

Yasuo
Sakae
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KWB2.0: Our Commitments
More focus on new products launch
COO’s responsibilities (Chief Operating Officer)• Translate from basic reseach to clinical development
aiming at commercialization of SHED products（Celltherapy）

NOW!

• Explore seed and promote basic research (Biosimilar andnew biologics business)

Next stage for externalizing clinical development andproduct strategies for commercializationof cell therapy with SHED

SHED products

CTO’s responsibilities (Chief Technology
Officer)• Promoted development of manufacturingmethods by combining existing technologies(Bioshimilar business)

Cell therapy(Regenerative
Medicine)• Explored seeds exploration and promoting
basic research (New biologics & cell therapy
business)

Biosimilar
Business
New Biologics
Business

GTS1.0(From 2001)

GTS2.0(From 2012)

GTS3.0(From 2018)

KWB1.0(From 2019)

KWB2.0（From 2022）

KWB3.0（From 20XX）
18

Roadmap
Accelerating our R&D activities to realize our vision

KIDS WELL, ALL WELL

SHED MCB:
Stable culture expansion
and supply

Launching cellular medicine /celltherapy products

SHED Master Cell Bank Competed

SHED MCB Competed

Accelerating cell therapy products
development
Focusing on SHED development

Establishment of revenue base
Establishment of biosimilar
development technology• Establishment of SHED platform• Active investment in human resources andcapital• Diverse personnel structure, including
experts of cell medicine development andhuman resources with knowledge of newmodalities• Stable revenue from three BS products• Started development of the 4th BS product• New BS pipeline development

Founded (2001) to FY 2021

• Steady development progress in Japan andoverseas• Accelerating development in overseas inaddition to domestic development• Accelerating R&D by fund-raising fromoverseas investors• Acquisition of biopharmaceuticaldevelopment know-how

Aiming to launch the world's
first SHED medicine/ therapy by
FY2030• Strengthening SHED business activities

SHED + Human Resource Development
Maintaining stable revenue of biosimilar business

FY 2022

FY 2025 （Turning profitable）（3 billion yen of sales and 1 billion yen ofoperating profit ）FY 2030 onward
19All for Kids, Kids for All

Technical Terminology
TermExplanation

Cell therapy (Regenerative
Medicine)

Cell therapy is the transplantation of human or animal cells to replace or repair damaged tissue. It
includes utilizing immune cells in the blood, adipose-derived and born-derived mesenchymal stem cells.

Designer cells

Designer cells can enhance therapeutic efficacy and cell directionality for disease sites. They are ofinterest in the field of diseases without radical cure as a medical treatment of next generation.

ExosomeEMA

A tiny vesicle created and released from the plasma membrane of various types of cells,
especially immune cells, and capable of inducing antigen-specific immune responses. Exosomes are of
special interest in the field of medicine with their special ability.
European Medicines Agency
The European Medicines Agency (EMA) is a decentralized agency of the European Union (EU)responsible for the scientific evaluation, supervision and safety monitoring of medicines in the EU.

FDA

Food and Drug Administration
The Food and Drug Administration (FDA) is responsible for protecting the public health by assuring thesafety, efficacy, and security of human and veterinary drugs, biological products, medical devices, ournation's food supply, cosmetics, and products that emit radiation. The FDA also provides accurate,science-based health information to the public.

GMP

Good Manufacturing Practice (GMP) is minimum required guidelines that a manufacturer must meet toassure that their products are consistently high in quality and work for their intended use. GMP is a partof a quality system covering the manufacture and testing of pharmaceutical ingredients, foods,
pharmaceutical products, diagnostics, and medical devices.

21

Technical Terminology
TermExplanation

Master Cell Bank (MCB)

Master Cell Bank (MCB) is cells for medical treatments that are expanded under the constant culture
condition and divided into several vials for long frozen storage. Frozen MCB can be expanded again
after thawing and utilized for regenerative medicine products as a raw material.

SHED

SHED：Stem cells from Human Exfoliated Deciduous teeth
SHED is a mesenchymal stem cell (MSC) extracted from a dental pulp cavity inside exfoliated deciduous
teeth and is easy to differentiate into bone and nerve cells. Especially SHEDs from young donors haveshown higher proliferative activity and secretory capacity of various growth factors (particularly
neurotrophic factors) compared to stem cells from other tissues.

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Cautionary Statement
This information material is provided for understanding Kidswell Bio
Corporation (“KWB”), not for soliciting investment in KWB shares.
Information provided in this material may contain so-called “forward-looking
statements.” These statements are based on current expectations, forecasts
and assumptions that are subject to risks and uncertainties, which could cause
actual outcomes and results to differ materially from these statements. Risks
and uncertainties include success rate of R&D projects, new regulations andrules, relations with partners in the future, etc.
This material includes information on pharmaceutical products andregenerative medicine (or related products), etc., which is being developed orlaunched. However, this is not intended to promote our products or provide
medical advices.
23