Financial Results for FY 2022
(Fiscal Year Ended March 31, 2023)

May 12, 2023

Biotech Striving for Value Creation－For a Comprehensive Healthcare System for Children,Families, and Society －Kidswell Bio Corporation

Business Highlights in FY2022 (1)Cell Therapy (Regenerative Medicine) Business• Established SEHD drug discovery platform based on S-Quatre® with the completion of GMP-compliant SHED MCB.
• Accumulating data of SHED basic research by promoting in-house and collaborative research with academia.
• Making a great progress of initiatives on the start of clinical research/ trials for the first generation SHED.
• Driving initiatives for maximizing the value of SHED drug discovery platform(Research of the second generation SHED, pursuit of synergies with other modalities and preparation for thebusiness activities in the U.S. )First Generation (Naive SHED）

SHED Drug Discovery Platform

Starting the preparation for clinical research/ clinical trial• Clinical research on cerebral palsy, one of the target diseases of the firstgeneration SHED, was confirmed by Certified Regenerative Medicine
Committee of Nagoya University• Clinical research/ clinical trials for other disease are under preparation ofclinical research/ clinical trials

Second Generation (Reinforced SHED）
GMP-compliant
SHED MCB• Identified enhancement methods and target diseases through collaborative
research with academia.
• Driving R&D activities for starting US business development• Preparing a new research organization for accelerating research activities

Other Modalities and Synergies
Preparing a new research system to create new seeds utilizing SHED as a row
material2

Business Highlights in FY 2022 (2)• Promoting the development of new biosimilars while maintaining stablerevenue (supply) from existing BS productsBiosimilar (BS) Business• Prioritizing manufacturing cost reduction
GBS-001

Filgrastim BS（Approved in Nov. 2012）• Biosimilar of G-CSF
preparation filgrastim forneutropenia, etc. Alfa
Biosimilar

GBS-011

GBS-007

Darbepoetin alfa BS（Approved in Sept. 2019）Ranibizumab BS（Approved in Sept. 2021）• Biosimilar of continuous
Erythropoiesis Stimulating
Factor Preparation
Darbepoetin alfa

• Biosimilar of anti-VEGF
antibody drug ranibizumab• Strong sales and moreorders than expected• Approved of additional
indication (diabetic macularoedema)• Promoting to discover antibody drugs with new mechanisms

Fourth BS Product（Under development）

Non-disclosure

New Biologics Business(Antibody drugs)

Preclinical and clinical data

Multiple academic
institutes

A patent grant for anti-RAMP2
antibodies

Collaborative
Research

New mechanism which inhibits theformation of new blood vessels witha new mechanism.
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Financial Results in FY 2022 (PL): Income Statement
Unit：thousands yen

Subject

Gross sales
Cost of goods sold(Cost of sales ratio)
Gross profit
Selling, generaland administrative expenses(Cost of sales ratio)
R&D expenses(Cost of sales ratio)
Other expenses

Results for 4Q
FY2021
Consolidated

FY2022 ended March 31,2023(Non-consolidated)
Year-onResults for 4Q
year ratio

1,569,233

2,776,241

177%

550,357

1,250,553

227%

35%

45%

1,018,875

1,525,688

150%

1,937,994

2,076,617

107%

123%

75%

1,150,210

1,216,349

73%

44%

787,784

860,268

106%

109%

-919,119-550,929--

Net loss-952,640-624,769---535,259-657,434

Forecast• Expanded the biosimilar sales led by sales growth of GBS-007.
• Recorded the sales related to completion of GMP-compliant SHEDMCB.
• Although there was a delay of shipment of some products, thesales were generally in line with the original plan.

Progressrate

2,900,000

96%

1,700,000

74%

59%

Operating loss

Net loss for the year

Highlights--• Gross profit expansion due to strong sales in biosimilar business.

R&D expenses• Less R&D expenses of GBS-007 and JRM-001 due to stock transfer.
• More investment in cell therapy business.
Other selling, general and administrative expenses• Increased payment of royalty due to strong sales in biosimilar business.
• Continuously streamlining expenses.
• Despite increased payment of royalty due to strong sales inbiosimilar business, operating loss decreased through prioritizing
investments and continuous cost reduction.
• Full-year forecast also significantly decreased losses.

• This fiscal year’s net income (loss) increased due to recording theincome from sale of investment securities as extraordinary
income in the FY 2021 but is expected to improve significantly
compared with the full-year forecast.

1,200,000

127%

2,180,000

95%

75%
1,400,000

87%

48%780,000

110%-980,000---999,000---1,000,000--• Well business in the biosimilars and steady progress in the cell therapy business such as preparation for clinical research of SHED pipeline.
• Net sales increased. Profit improved at each profit stage, except for quarterly net income, which was due to special factors in the previous
fiscal year.
• Steadily taking a step forward to achieve the numerical targets of the Medium-Term Strategic Plan (KWB2.0).
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Financial Results in FY 2022: Balance Sheet(Unit：thousand yen)

Subject

4Q FY 2021

Non-Consolidated

4Q FY2022

Highlights

Non-Consolidated

Current assets

3,294,940

3,697,155(Cash and cash equivalents）

1,160,934

1,067,162

 Cash increased due to long-term loan from Mizuho
Bank and the issuance of the 4th series of CBs.

(Trade receivables）

461,854

1,088,766 Due to strong sales growth of GBS-007(Products)

200,118

213,007(In-process inventory)

788,696422,308(Advance payments)

495,544821,536(Long-term debts to be repaid within
one year from a subsidiary）

600,000－(Other current assets)

161,537

84,373(Allowance for doubtful accounts)-573,745－

Non-current assets

175,396

197,609

Total assets

3,470,336

3,894,765

Current liabilities

1,111,168

1,055,839

656,260

1,605,420

Total liabilities

1,767,428

2,661,259

Total shareholders’ equity

1,702,908

1,233,505

Total liabilities and shareholders’ equity

3,470,336

3,894,765

Non-current liabilities

 Due to long-term loan from Mizuho Bank and theissuance of the 4th series of CBs, etc.

• The net asset ratio has been reduced due to long term loan and issuance of CBs, but the level of liquidity has been kept.
• Accelerating investment in cell therapy business with increased liquidity and operating cash flow from biosimilars.

5Forecast of FY 2023
• Expecting to achieve sales target of KWB 2.0 two years ahead of schedule due to strong
sales of GBS-007 and revenue from the fourth BS product.
• Continuing to invest in SHED cell therapy businesses infrastructure as well as pipelines.
• In addition to the increase of R&D expenses, the COGS ratio will temporarily increase
due to changes in the product mix.
• Expecting to achieve the KWB 2.0 by contributing to profits by further expansion ofsales of the biosimilar business in FY2025, while continuing to invest in the cell therapybusiness.
(Unit: thousand yen)

Subject

Results in FY 2022

Forecast for FY2023

Increase/ decrease ratio

Gross sales

2,776,241

3,500,000+26.1%

R&D expenses

1,216,349

1,600,000+31.7%

Operating loss

-550,929-1,500,000--

Net loss-624,769-1,550,000--

Net loss for the year

-657,434-1,550,000-6

KWB2.0 Roadmap

Accelerating our R&D activities to realize our vision forpatients who are waiting for new medical treatments

Steadily proceeding with the preparation

KIDS WELL, ALL WELL

for clinical research / clinical trial
Launching cellular medicine / celltherapy products

SHED MCB Completed
Accelerating cell therapy products
development
Focusing on SHED development

Establishment of revenue base
Establishment of biosimilar
development technology• Acquisition of biopharmaceuticaldevelopment know-how• Strong sales of GBS-007• Started development of the fourth BSproduct• New BS pipeline development

Founding (2001) to FY2021• Accelerating development overseas inaddition to domestic development• Active investment in human resources
and capital• Accelerating R&D by fund-raising fromoverseas investors and public researchfunds such as AMED

Aiming to launch the world‘s first
SHED medicine / therapy by FY2030• Steady development progress in Japanand overseas• Strengthening SHED business activities• Diverse personnel structure, including
experts in cell medicine development andhuman resources with knowledge of newmodalities

SHED + Human Resource Development
Maintaining stable revenue of biosimilar business
FY2022

FY2025（3 billion yen of sales and 1 billion
yen of operating profit ）FY2030 onward
7Financing measures appropriate for each business development stages

To improve pipeline value, a variety of financing methods has been/willbe taken at the right time, and our financing policy continues.
FY2019–Acquisition of Advanced Cell Technology and Engineering Ltd.
= Financing after starting a full-scale regenerative medicine business
Financing measures

FY2023–

FY2025–

PurposeCash: about 1 billion yen/year

Fixed expenses, R&D expenses (Basic research of antibody drugs and SHED)

Long-term debt: 1.6 billion yen

Working capital for Biosimilar (BS) business and a part of development capital

CB and warrants: 2.2 billion yen• Development of manufacturing process for GBS-007 and fourth BS product• Completion of SHED MCB and development of cell culture process

Financing measures（Scheduled）

PurposeCash: about 1 billion yen/year

Fixed expenses and basic research of SHED

Unexercised warrants (issued):
about 600 million yen

Responding to BS production expansion

Long-term debt

Order expiation of GBS-007 and working capital after launching the fourth BSproduct

Stock issue and subsidy (AMED,etc.)

Clinical research, preparation for starting clinical trial and enhancing
manufacturing system

Financing strategies• SHED Clinical Development: In addition to stock procurement and collaboration with partners (companies andinvestment funds), subsidies from AMED, etc. will be applied according to the progress of the pipeline development.
• Apply debts such as long-term debt from banks considering business profits
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KWB2.0 For the development of SHED treatment methods

Steady progress in delivering SHED products (treatment methods) to patients
KWB2.0KWB3.0• Accumulating data of SHED basicresearch• Identifying indications• Completion of SHED MCB• Established a drug discovery
platform based on S-Quatre®

• Clinical research led byacademia• Manufacturing SHED MCB
compliant with the U.S. FDA
requirements• Development of mass culture
methods• Corporate trials (Ph1/2a, Cerebral palsy, etc.)• Alliances withdevelopment partners• Establishment of
manufacturing methodsof final products

LaunchSHED
products

Under preparation for clinicalresearch (first-in-human)

Completion ofSHED MCB in Aug.
2022（S-Quatre®）

Publication of thethird research article
in collaboration withHamamatsu
University School ofMedicine in Nov.
2022(Secondgeneration of SHED)

Patent application on celltherapy for cerebral palsy
utilizing SHED with Tokai
National Higher Education andResearch System in Oct. 2022
(First generation of SHED)FY2022

Approved theclinical researchplan of Nagoya Univ.
in Feb. 2023 (Firstgeneration SHED)FY2023

FY2025

FY2030

Onward9Outlook for FY2023
New Facility
Tokyo Laboratory

Opening of a new laboratory in Tokyo to accelerate research on the second generation SHED
(reinforced SHED)Management Structure

Strengthen management structure for overseas business expansion

Cell Therapy (Regenerative Medicine) BusinessFirst generation SHED(Naïve SHED)

Cerebral palsy

Starting a clinical research led by Nagoya Univ.
Preparing for industry-sponsored trials in Japan

Congenital Isolated
Hypoganglionosis

Starting a clinical research led by academia or Investigatorinitiated trials

Optic nerve disease

Promoting collaborative research with new partners
Preparing for corporate clinical trail in the U.S.

Brain cancer

Collaborative research (Hamamatsu Univ. School of Medicine）

Spinal cord injury

Collaborative research（Nagoya Univ.）

Second generation SHED(Reinforced SHED)

Other modalities andsynergies

Discussion with several potential partners for alliances

SHED manufacturing

Manufacturing SHED master cell bank (MCB) compliant with the U.S. FDA requirements

Biosimilar Business
Fourth BS product

Under development

Fifth BS productand etc.

Identifying development candidates and starting selecting partner companies

10Establishment of R&D system for maximizing the value of SHED

Accelerating R&D activities aiming at launch of SHED products in Japanand the U.S. with agile research activities by Sapporo and Tokyo laboratory

JapanTokyo
Headquarter

USMaking New Innovations byImplementing SHED R&D Strategies

Under preparation for starting
clinical trials in the U.S.

NEWSapporo
Laboratory

Tokyo Laboratory
Advanced research of the secondgeneration SHED

SHED Basic Research/ functional elucidation• Continuing SHED basic research anddevelopment research including
manufacturing process development• Continuing collaborative research withexisting academia and partners• Continuing existing research of thesecond generation SHED

Sharing andaccumulating researchknow-how andconnection• Pursuing new and unique science withadvanced technologies.
• New generation of SHED andcollaborative research with newpartners/ academia• Creating new modalities/ technologies
utilizing SHED (maximizing the valueof S-Quatre®)
11Pipeline Highlight of Cell Therapy (Regenerative Medicine)
Development
ProductFirst
Generation
SHED

SecondGeneration
SHED

1

Development Stage*
Target disease

ResearchTarget

Research

Preclinical

ClinicalNumber of※2
Patients

Partners

Domestic

Global

Cerebral palsy

Nagoya University,
Tokyo Medical andDental University

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

125,000
participants (under
10 years old)

Congenital Isolated
Hypoganglionosis

MochidaPharmaceutical

100 participants―Spinal cord injury

Nagoya University

5,000 patients peryear, (100,000patients in total)

13,000 cases peryear

Ophthalmologic
disease, etc.

Gifu PharmaceuticalUniversity*3*3

Non-union
fractures

Hokkaido University

100,000 patients
per year―

Cleft lip and palate

ORTHOREBIRTH

2,000 patients peryear

15 out of 10,000
newborns

Brain cancer

Hamamatsu University
School of Medicine

20,000 patients
per year

27,000 parents
per year

Spinal cord injury

Nagoya University

5,000 patients peryear, (100,000patients in total)

13,000 cases peryear

Neurodegenerative
disease, etc.

OtherModalities

Autoallergic
disease, etc.
Exosomes andmitochondria, etc.

*1【Our development stage definitions: Preclinical indicates pharmaceutical development and preliminary toxicity studies for clinical trials, Research indicates acquired animal POC, Research Target indicates before
12acquisition of animal POC, *2 Internal research based on Global Data, Global Cancer Observatory, *3 Details not disclosed

Delivering SHED products (treatment methods) to patients

Delivering SHED regenerative medicine products for diseases for which
effective treatment methods have not yet been established
Congenital Isolated
Hypoganglionosis(DOI:10.1302/0301-620X.85B2.14066)(DOI: 10.7759/cureus.33680)

Ophthalmologic disease(doi:10.1136/jmg.2007.054270)

Brain Cancer

Cerebral palsy(FOUNDATION PARALYSIE CEREBRALE“White Paper on cerebral palsy”)(DOI: 10.3390/cancers11010111)

Spinal cord injury(DOI:https://doi.org/10.1016/S1474-4422(09)70162-0)

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All for Kids, Kids for All

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-lookingstatements.” 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 advice.