Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

May 12, 2022

Summary of Consolidated Financial Results for
the Fiscal Year Ended March 31, 2022 (Extracted from Japanese version)[Japanese GAAP]
Company name:
Stock code:

Kidswell Bio Corporation
4584

Listing: Tokyo Stock Exchange
URL: https://www.kidswellbio.com/en/

Representative:
Contact:

Masaharu Tani, President & CEO
Yasuo Sakae, Corporate Officer, CFO

Tel: +81-3-6222-9547
Scheduled date of Annual General Meeting of Shareholders:June 27, 2022

Scheduled date of filing of Annual Securities Report:
Preparation of supplementary materials for financial results:

June 28, 2022
Yes

Holding of financial result meeting:Yes (for institutional investors and anyalysts)(All amounts are rounded down to the nearest million yen)

1.

Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 – March 31, 2022)(1) Results of operations (Cumulative)(Percentages shown for net sales and incomes represent year-on-year changes)
Net income
Ordinary income
attributable to owners
Operating income

Net salesof the parent
Million yen%

Million yen%

Million yen%

Million yen

%

-919
-969

-

-952
-991

-

-535
-1,001-

Fiscal year ended Mar.31, 2022
1,569
57.5
Fiscal year ended Mar. 31, 2021
996
-7.5
(Note) Comprehensive income
Fiscal year ended Mar. 31, 2022: -738 million yen (-%)
Fiscal year ended Mar. 31, 2021: -776 million yen (-%)

Fiscal year ended Mar. 31, 2022

Net income

Diluted net income

per shareper share

Return on Equity

Ordinary income Operating income
on total assets

to net sales

Yen

Yen

%

%

%

-17.35

-

-35.4

-25.6

-58.6

Fiscal year ended Mar. 31, 2021
-34.79
-68.5
-26.3
-97.3
(Reference) Equity in net income of affiliates
Fiscal Year Ended March 31, 2022: - million yen (- %), Fiscal Year Ended March 2021: - million yen (-%)
(Note)
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) Financial position
Total assets

Shareholders’

Net assets

Net assets per shareequity ratio

Million yen

Million yen

%

Yen

3,503

1,718

43.8

48.79

As of Mar. 31, 2021
3,933
1,610
38.0
(Reference) Shareholders’ equity March 31, 2022: 1,533 million yen, March 31, 2020: 1,494 million yen

50.44

As of Mar. 31, 2022

(3) Cash flows

As of Mar. 31, 2022
As of Mar. 31, 2021

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at the endof period

Million yen

Million yen

Million Yen

Million Yen-1,169-1,267

526
-22

369
718

1,187
1,461

-

1

-

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

2. Dividends
Dividend per share
1Q-end 2Q-end 3Q-end Year-end

Total

Dividend
Total dividends payout ratio(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million Yen

Fiscal year ended Mar. 31, 2021
Fiscal year ended Mar. 31, 2022

-

0.00
0.00

-

0.00
0.00

0.00
0.00

-

Fiscal year ending Mar. 31, 2023
(forecasts)

-

0.00

-

0.00

0.00

Dividend on
net assets

%

%

-

-

-

3. Consolidated Business Forecasts for the Fiscal Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)
Since the Company will shift to non-consolidated financial statements from the fiscal year ending March 30, 2023, the Company has
decided not to disclose consolidated business forecasts but to disclose individual ones. As to the individual business forecasts, pleaserefer to “2. Parent Company (KWB only) business forecasts of the Fiscal Year Ending March 31, 2023 (April 1, 2022 – March 31,2023)” in the Summary of Parent Company (KWB only) Performance below.

* Notes
1. Changes in significant subsidiaries during the period (change in specified subsidiaries which accompanies a change in the range ofconsolidation): None
2. 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 the fiscal year ended March, 2022: 31,437,547 shares
At the end of the fiscal year ended March, 2021: 29,622,847 sharesb. Number of treasury shares at the end of period
At the end of the fiscal year ended March, 2022: 92 shares
At the end of the fiscal year ended March, 2021: 92 sharesc. Average number of shares outstanding during the period
At the end of the fiscal year ended March, 2022: 30,851,293 shares
At the end of the fiscal year ended March, 2021: 28,788,906 shares(Reference) Summary of Parent Company (KWB only) Performance

1.

Parent Company (KWB only) performance of the Fiscal Year Ended March 31, 2022 (April 1, 2021 – March 31, 2022)(1) Parent Company (KWB only) business performance(Percentages shown for net sales and incomes represent year-on-year changes)

Net sales

Ordinary income

Operating income

Net income

Million yen%

Million yen%

Million yen%

Million yen%

Fiscal year ended Mar. 31, 2022

1,569

62.3

-651

-

-968

-

-550

-

Fiscal year ended Mar. 31, 2021

967

0.3

-780

-

-956

-

-1,001-

Fiscal year ended Mar. 31, 2022
Fiscal year ended Mar. 31, 2021

Net income

Diluted net

per share

income per share
Yen

Yen

-17.86-34.79--2-

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

(2) Parent Company (KWB only) financial position
Total assets

Shareholders’equity ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

As of Mar. 31, 2022

3,470

1,702

43.8

48.30

As of Mar. 31, 2021

3,897

1,610

38.3

50.44

(Reference) Shareholders’ equity March 31, 2021: 1,518 million yen, March 31, 2020: 1,494 million yen
2.

Parent Company (KWB only) business forecasts of the Fiscal Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentages shown for net sales and incomes represent year-on-year changes)

Net sales

Operating income

Net income

Net income per share

Million yen

Yen

Full year
2,900
-999
-1,000Since the Company mainly manages annual performance, only full-year performance forecasts are shown.

-31.82Million yen

Million yen*This summary report on Kidswell Bio’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
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/).

-

3

-

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

○Table of Contents of the Attachment
I. Financial Results in FY 2021…………………………………………………………………………………………………
II. Business update………………………………………………………………………………………………………………
III. Outlook ………………………………………………………………………………………………………………………

5

IV. Fundamental policy on adoption of the accounting standards…………………………………………………………………

6

V. Financial statements and notes to financial statements………………………………………………………………………
(A) Consolidated balance sheet…………………………………………………………………………………………………
(B) Statement of consolidated income and comprehensive income……………………………………………………………

7(C) Statement of consolidated cash flows ………………………………………………………………………………………

-

4

-

5
5

7
9
11

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

I. Financial Results in FY 2021
As a result of FY 2021, the sales amount was 1,569,232 thousand yen (57.5% increase compared to the previous consolidated fiscal
year), operational loss was 919,118 thousand yen (operational loss for the previous consolidated fiscal year was 969,687 thousandyen), ordinary loss was 952,640 thousand yen (ordinary loss for the previous consolidated fiscal year was 991,166 thousand yen) andnet loss attributable to owners of the parent was 535,259 thousand yen (net loss attributable to owners of the parent for the previous
consolidated fiscal year was 1,001,461 thousand yen). There is no impact on business performance due to the COVID-19 pandemic
for the end of the current fiscal year.
II. Business update in FY 2021
1. Biosimilar Business
The Company has been collaborating with Senju Pharmaceutical Co., Ltd. based on the joint development agreement for thebiosimilar in the ophthalmic area (Project name: GBS-007) executed on May 12, 2016, and Senju Pharmaceutical Co., Ltd. hasreceived 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 tocontribute to the Company’s stable business foundation as a revenue source.
4.

New Biologics Businss
In the new biologics business, the Company entered into a joint research agreement with Sapporo Medical University on anticancer drug using antibody with cancer cell invasion ability and with MabGenesis for the acquisition of new antibodies with cancer
cell killing effect in January 2020. The Company is promoting research and development of malignant lymphoma, vasculitis,
pulmonary hypertension and partnering activities as the early- stage new biologics pipeline.

5.

Regenerative Medicine (Cell Therapy) 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 as important research source.
Regarding the development of Master Cell Bank (MCB), which is the basis for commercializing SHED as a product for regenerative
medicine, the Company started manufacturing master cell bank (MCB) in compliance with GMP and it has been completed. 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 directivityof SHED to specific diseases on December 6, 2021.
As to CSC (project name: JRM-001), the Company executed a business 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. In addition, the Company executed a share purchase agreementwith Metcela, Inc. to lead the development of JRM-001 on April 4, 2022.

6.

OthersThe Company recorded the extraordinary income (sales profit of investment securities) in accordance with about 500 million yen
cash proceed on October 21, 2021.

III. Outlook
Since the Company will shift to non-consolidated financial statements from the fiscal year ending March 30, 2023, the Company has
decided not to disclose consolidated business forecasts but to disclose individual ones. The business forecasts for the following year
include sales of 2,900,000 thousand yen, operational loss of 980,000 thousand yen, ordinary loss of 999,000 thousand yen and net lossof 1,000,000 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 (stemcells from human exfoliated deciduous teeth) as regenerative medicine was carried forward from the current consolidated fiscal year.
Therefore, the sales in the next fiscal year estimate at 2,900,000 thousand yen. In addition, (3) is temporary items required in the-5-

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

development process for accounting purposes, as sales, which are equivalent to the manufacturing costs. The basis of our mid-to-longterm profit structure is the profit related to biosimilars in (1). The sales of GBS-001 will decrease compared to the previous fiscal year
due to inventory adjustments of the sales company, while GBS-007 launched in FY 2021 will be a new source of revenue and raiseoverall revenue. In addition, as a profit perspective, GBS-001 is expected to maintain the same profit ratio as in the previous fiscal
year, and GBS-007 is expected to improve further profit ratio by investing in cost reduction measures over the medium term.
Establishing a stable profit base in the biosimilar business, the Company has been pursuing a stable profit and business growth withnew biologics business and regenerative medicine (cell therapy) business as future growth drivers. In particular, the SHED business isthe most important pipeline that supports our growth. While the Company has been working to strengthen the Company’s
manufacturing and clinical trial infrastructure for SHED products to launch in Japan, the Company is planning to expand its SHED
business not only domestically but also overseas.
Accordingly, forecasts for the following year include R&D expenses of 1,400,000 thousand yen (the actual R&D expense for thecurrent fiscal year was 1,150,209 thousand yen). The main breakdown is additional investments related to strengthening
manufacturing capabilities for a longer-term stable supply of GBS-007, which is more steadily introduced into the market than
expected after the launch, and continued investment in manufacturing cost reduction measures, including carried over from the current
consolidated fiscal year. Furthermore, based on the positive results of nonclinical research of SHED, the SHED-related R&D expenses
will also be maintained at a high level due to additional investments in the establishment of a manufacturing system for mass cultureof SHED and an organizational structure including human resources to effectively conduct SHED clinical trials on a company-led
basis for enhancing future licensing-out probability. On the other hand, as JRM-001 has been transferred to Metcela Inc., the businessalliance partner, development cost will not be incurred any more, while the profit contribution from JRM-001 has been changed toroyalty revenue only.
In summary, the Company decided to make a more R&D investment in the growth driver, especially the SHED pipelines. Based on
the results of basic and nonclinical research results of SHED after the acquisition of Advanced Cell Technology and Engineering Ltd.
in 2019, the Company has confidence in the effectiveness of SHED for our target diseases. In addition, with research, manufacturing,clinical trial know-how related to the regenerative medicine business through the development of JRM-001 and partnering activities
such as a business alliance with Metcela Inc., the Company will supplement human resources and technology resources for theregenerative medicine business with such partners and invest in establishment of the infrastructure to facilitate effective and efficient
R&D activities and prepare for implementing clinical trials in a timely manner.
As it should take several years to recover return from these investments, the Company decided to announce the mid-term strategic plan
KWB 2.0. The Company recognizes the importance of this investment strategy based on accumulated R&D experience related to
SHED after the announcement of the mid-term strategic plan in February 2021 and believes that it is appropriate and essential to
implement the change of strategy at this timing in order to survive the competition in the regenerative medicine business in the future.
Profitability will be carried forward to FY 2025 in the mid-term strategic plan KWB 2.0. However, our profit structure is being
strengthened by the steady progress of the biosimilar business as expected, and the sales and profits target for the mid-term period has
been secured. We believe that it is most important to pursue results that should exceed the profits target from FY 2025 and beyond set
in the original mid-term strategic plan, and increase the corporate value by steadily delivering new medical treatments to patients. The
Company will continue to strive to optimize and facilitate R&D activities.
The financial forecasts are derived utilizing the currently available information obtained by the Company and are based onassumptions 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 dueto the COVID-19 pandemic, we have not included this impact in our business forecast.
The Company transitioned to Growth Market from April 4, 2022, as per the selection results of the new market segments by the Tokyo
Stock Exchange.
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.
-

6-

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

IV. 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
Building
Accumulated depreciation
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
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
Deferred tax liabilities
Allowance for retirement benefits
Total non-current liabilities
Total liabilities-7-

As of the end of the current fiscal
year(March 31, 2022)

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

1,187,189
461,854
200,118
788,696495,544
192,536
3,325,939

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

2,396
-828
1,568
11,500-7,190-4,236
73
1,641
3,064

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

154,672
18,017
172,690
177,396
3,503,335

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

45,47975,000259,853
38,122
216,000
475,243
18,863
1,128,562

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

100,000
525,000－
31,260656,260
1,784,822

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

（in thousand yen)
As of the end of the previous
fiscal year
(March 31, 2021)
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-8-

As of the end of the current fiscal
year(March 31, 2022)

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

1,421,212
10,726,813-10,613,965-73
1,533,987

202,965－

202,965
116,240
1,610,385
3,933,952－
184,525
1,718,513
3,503,335

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

(B) Statement of consolidated income and comprehensive income(Statement of consolidated income)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
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（in thousand yen)
As of the end of the current
Previous fiscal year
fiscal(April 1, 2020 to March 31,
year (April 1, 2021 to March 31,
2021)
2022)
996,543
1,569,232
119,571
550,357
876,971
1,018,875

- 9 -

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

15,5851,150,209
267,420504,778
1,937,994-919,118

52
1,000
1,499
2,552

11
2,775
48
2,834

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

15,460
4,286
6,998
9,366
244
36,356-952,640－－－

417,736
1,144
418,881

0
7,064
1,449
8,513
-999,680
1,781
1,781
-1,001,461-1,001,461－－－－-533,759
1,500
1,500
-535,259-535,259

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

(Statement of consolidated comprehensive income）

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（in thousand yen)
As of the end of the current
Previous fiscal year
fiscal(April 1, 2020 to March 31,
year (April 1, 2021 to March 31,
2021)
2022)
-1,001,461-535,259- 10 -

224,505
224,505-776,955-202,965-202,965-738,224-776,955-738,224－－

Kidswell Bio Corporation (4584) Consolidated Financial Results for the Year Ended March 2022

(C) Statement of consolidated cash flows
Previous fiscal year
(April 1, 2020 to March 31,
2021)
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 (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 profit)
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 Intangible fixed assets
Income due to sale of investment securities
Payment for sale of shares of subsidiary due to change inscope of consolidation
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings (- means
decrease)
Proceeds from issuance of convertible bonds
Proceeds from issuance of stocks through exercising equity
warrants
Proceeds from issuance of equity warrants
Cash 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
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, 2021 to March 31,
2022)-999,680
992
1,449-533,759
2,300
－

7,064

－

24,00096,000-52
15,688－－-174,617-196,491-156,763
107,399
158,630-37,080-1,249,462
52-15,630-2,430-1,267,471-11
15,460-417,736
6,998
354,882-538,062-63,825-64,259-107,026
96,511-1,152,527
11-15,545-1,500-1,169,561-3,254－-160
526,669-14,291－-22,290

526,509-25,000－

599,710－

138,860

369,083

4,774
718,345－-571,417
2,032,575
1,461,158－
369,083－-273,968
1,461,158
1,187,189