証券ｺｰﾄﾞ:4584

Financial Results for 2Q/FY2021(Fiscal Year Ending March 31, 2022)
November 5, 2021

Kidswell Bio Corporation

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 “forwardlooking statements.”
These statements are based on current
expectations, forecasts and assumptions that are subject to risks anduncertainties, which could cause actual outcomes and results to differ
materially from these statements. Risks and uncertainties includesuccess rate of R&D projects, new regulations and rules, relations withpartners in the future, etc.
This material includes information on pharmaceutical products andregenerative medicine (or related products), etc., which is being
developed or launched. However, this is not intended to promote ourproducts or provide medical advices.

2

Change of Company Name

Kidswell Bio Corporation(KWB)
Kids＋wellness All for KIDS, KIDS for All
Biotech Engineering Company,
Striving for Value Creation
For a comprehensive healthcare systemfor children as well as families and society

Made a new start as Kidswell Bio Corporation, or KWB, from July 1,2021. Under “Kids Well, All Well”, we will make our goal come true.
3From GTS to Kidswell Bio
Create and deliver a new medical care for patients of all ages who is sufferingfrom rare and intractable diseases by leveraging pediatric diseases and newmodality perspective

GTSGTS
Know-how
Succeeding

Kidswell Bio
New
Growth Driver

Project
Management

NetworkExperts

Biosimilar Business
New Biologics
Medicine

Pediatric Diseases

New Regenerative
Medicine

SHED・CSC

Kidswell Bio
Rare and Intractable Diseases
For Patients of All Ages4Business and FinancialHighlights in 2Q/FY2021

5

Overview of Financial and Business Highlights
Financial Highlights◆ Financial Highlights in 2Q/FY2021
 Sales results were in line with the forecast.
 R&D is steadily proceeding.
 No impact on business performance due to the COVID-19
pandemic.
Business Highlights

Biosimilar• GBS-007: Received Manufacturing and Sales Approval for biosimilar in theOphthalmic Area in Japan.

New Biotech（Regenerativemedicine/ CellTherapy）• Collaborative research agreement with NanoCarrier Co., Ltd. fordevelopment of a designer cell as reinforced cell therapy utilizing SHED.
• Started GMP production of Master Cell Bank (MCB).
6

Consolidated Financial Results in 2Q/FY2021
Unit:thousands yen

Subject

Results for
2Q/FY2020

Forecasts for FY2021
Results for
2Q/FY2021

Highlights
Forecasts

Gross sales

174,487

740,635

1,900,000

 Included profits from GBS-001 and GBS-011.
 Recorded drug substance sales related to themanufacturing process for the 4th biosimilar product

Cost ofgoods sold39,964

275,700

1,020,000

 Included 96 million yen for MCB completion in cost ofsales as budgeted (It is a reserve for loss on ordersaccording to the accounting method.）

Gross profit

134,523464,935

880,000

Selling,
general andadministrativ
e expenses

817,249

915,868

2,600,000

R&D
expense403,208

532,689

1,800,000

Other
expenses

414,040

383,178

800,000

Operatingprofit-682,725-450,932-1,720,000

 Although R&D expense increased from the previous term,
it was due to carrying over of R&D expenses into FY2021.
The final stage of commercial manufacturing of GBS-007
is smoothly proceeding.
 Continuously streamlining Selling, General and
Administrative expenses

7

Updates of Mid-Term
Strategic Plan
From FY2021 to FY2025

8Key Updates in 2Q/FY2021

Licensingout

R&DTechnologyDevelopment

SHED
Collaborative
Research

New Biotech
SHED & CSC

Supply Systemof SHED
Establishment ofMCB

CSC
JRM-001

New Biologics

Designer Cell

Biosimilars
Fourth ProductHigh-Yield
Protein Producing
Cell Lines

UPDATE!

Collaborative research
agreement with NanoCarrier

Nanomicelles(A gene deliverytechnology)×SHEDUPDATE!

Progress in MCB establishment

Started GMP production

ProfitExpansion

GBS-001
Cost Reduction

GBS-007
Cost Reduction

UPDATE!

Received Manufacturing andSales Approval

StableProfit

GBS-001
SalesGBS-011
Loyalties

GBS-007
To launch in themarket shortly

After listing the drug price,sales are expected to start by
the end of this year.

9GBS-007: Expansion of BS portfolio for profitability
Highlights Launching the third product of biosimilars to the market.
 After listing the drug price, sales are expected to start by the end of this year.
Partially contributed to our sales this fiscal year.
 Providing new options for patients as the first BS in the field of ophthalmology.

■Outline

Biosimilar of Anti-VEGF antibody drug Ranibizumab as a medicine forage-related macular degeneration■Target disease

A disease in which waste products accumulate in the macula, which
controls eyesight in the eyeball, or new blood vessels form in themacula with aging, making it difficult to see■Development Partner

One of the leading domestic companies in the field of ophthalmology,
which handles a wide range of medical drugs for ophthalmology andotolaryngology.

■Market of Anti-VEGF
antibody drug

Targeting the domestic market for existing treatments for age-related
macular degeneration
Lucentis About 27 billion yen (Domestic, FY2020)
Eylea
About 65 billion yen (Domestic, FY2020)■Outlook

Sales will start from this fiscal year with approval.
The indications for this drug are only a part of the preceding products.
Additional indications will be added accordingly.
Actively promoting not only domestic but also overseas expansion, which has alarger market.

Age-related maculardegeneration
Senju PharmaceuticalCo., Ltd.

10

SHED: Boosting licensing-out activities
UPDATE

Showed positive effectiveness of non-clinical studies in SHED pipelines
Accelerating licensing-out activities to pharmaceutical companies
Partners

Number ofpatients(Domestic)

ORTHOREBIRTH

2,000 patients
per year

15 out of 10,000
newborns

Ganglion
regeneration

Mochida Pharmaceutical

100 patients

ー

None

Nerve protection,activation andregeneration

Tokyo Metropolitan
Institute of Medical
Science, Nagoya
University, Tokyo
Medical and Dental
University

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

100,000 patients
per year, 1.7
millions patientsin total

Nagoya University

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

25,000 patients
per year,
500,000 patientsin total (US, EUand Japan)

Target disease

symptom

Existing
Treatment

TherapeutictargetPediatricdisease

Cleft lip and palate

Eating andspeechdisorderLip arthroplasty+ iliac bonegraft

Maxilla boneregeneration

Pediatric
diseaseCongenital Isolated
Hypoganglionosis

Intestinalobstruction

Enterectomy,
colostomy

Pediatric
diseaseIncluding
Pediatric
disease※Non-disclosureof details

Number ofpatients (Global)

Cerebral palsy

Quadriplegiaand PosturedisorderSpinal cord injury

Loss of motor
function andsensation

None

Nerve protection,
activation andregeneration

Non-union fractures

Chronic pain,
gait
disturbance

Surgery

Boneregeneration

Hokkaido University andSpinal Injuries Center

100,000 patients
per yearー

Peripheral nerve
palsyMotor function
and sensation
disorderNerve
reconstruction(Autologousnerve
transplantation)

Peripheral nerve
regeneration

Oita University

8,000 surgeries
per yearー

Bone-relateddiseases

※

※

※

Showa University Schoolof Medicine※※

Ophthalmologic
disease※※※

Gifu PharmaceuticalUniversity※※

11Designer Cell, Next Generation Cell Therapy
Aiming at Global Expansion
2 nd Generation Cell Therapy : Designer Cell can Change Patients’ Future

ｘCell Therapy

Enhanced therapeutic efficacy
and cell directionality fordisease sites＝Designer Cell

1st generation
2nd Generation Cell Therapy R&D
FY2021

Clinical Trial

FY2025

FY2030
2nd Generation “Designer Cell”

PermanentCureTreatment

SymptomaticTreatment

Vaccine（Prevention・Treatment）

DTx

1st Generation
Cell Therapy
Non-Recombinant
Type of Stem Cell etc

Small, Mid
Molecule Drug

Recombinant Cell Therapy (StemCell-Based)
Add/Enhance Functions
by Genetic Engineering

Nucleic
AcidMedicine

Antibody Drug

Pediatric diseases
Infection

Life style
relatedDegenerative（Nerve, Organ）

Autoimmunity* Created by Kidswell Bio Corporation referring from Strategic Proposal of Designer Cell by Japan Science and Technology Agency.

CancerGene12

Master Cell Bank (MCB) accelerates
SHED regenerative medicine business■ SHED: Research & Development
Basic researchNon-clinical study

Selected oftarget diseases
Major target diseases
Spinal cord injury
Cerebral palsy
Non-Union Fractures

Effectiveness in
multiple pipelines

Licensing-out
alliance

Clinicaltrial

Manufacturingand marketing
approval

Launchto themarket

Establishment of manufacturing processof SHED MCB as raw materials for
final product manufacturing↓Alliances and licensing-out withpharmaceutical companies■ SHED MCB Manufacturing（ GCTP/GMP-compliant MCB manufacturing system）
Deciduous
teeth donation
ChiVo Net

Toothextraction

Cultivation（MCB）

University of Tokyo
Hospital, Showa University
Dental Hospital

Nikon CeLL
innovation(SHED Source Supply Service)

Establishment of SHED intermediate
product supply service from deciduous teeth
donation to MCB

Intermediate product from Japan with various
applicability, including overseas market※ Providing not only as a cell medicine but
also as a raw material for manufacturing
clinical exosomes

Completion of MCB
accelerates R & D andbusiness development
13

S-Quatre Tooth to Life-Changing Medicines
SM

SHED Source Supply ServiceDeciduous teeth donation

SHED intermediate
product supply service

Doctors and dentists check donors’
health condition and deciduous teeth
condition

University of Tokyo Hospital, Showa
University Dental Hospital
Manufacture intermediate
product (Master Cell Bank"MCB") by culturing SHED

Nikon CeLL innovation Co., Ltd.

Check the quality and characteristics ofintermediate products

Deciduous teeth
donated with incidental
information

University of Tokyo Hospital, Showa
University Dental Hospital

Development of regenerative
medicine using SHED as a raw
material1414

Our Role in Society
Promote Two Virtuous Cycles
through “Kids Centricity”Create high quality and low-cost biosimilars andcontribute to reduced medical expenses

High MedicalExpenses

Reallocation of medicalresources

Image of our medical resource
allocation
Elderly

AdultsAdults support childrenChildrenPatients

Cells

Patients
AdultsElderlyMore medical resources

More healthy people, more support
for long-life society↑ Sustainable Economic Development ↑↑ New Treatment Methods ↑Children supporting economic
activities in society

Creating regenerative medicine
with SHED & CSC

MedicalTreatments

R&D15

Toward profitability inthe fiscal year ending
March 202316

Roadmap
The key to further growth isto expand partnering for regenerative medicine and new biologics pipelineA) Turning profitable in FY2022
B) 3 billion yen of sales and 1 billion yen of operating profit in FY2025 and huge profit expansion after 2025
C) Sufficient R&D investment for future business growth

B Profit Expansion

3 billion yen of sales
1 billion yen of operating profit
OperatingProfit

High Return

Further expansion of profits bypartnering of new regenerative &new biologics medicines

Unit:million

A Turning profitable

More stable profitability by reducing
manufacturing costs of existingbiosimilars and launching newbiosimilars
Stable Profit

0

C Sufficient R&D investment for futurebusiness growth-1,000

Initially
expectedbreak-evenpoint-2,000
FY2020

FY2022

FY202517

Financial Forecast for FY2021-Consolidated（Year-on-year comparison）
Subject

Results for
FY2020

Forecast for
FY2021

Unit:thousands yen
Key points✓ Sales of drug substance of BS products and revenue related to royalties
are steadily expanding.
✓ Expecting sales of new BS product, etc.

Gross sales

996,543

1,900,000

Cost of goods
sold119,571

1,020,000

Gross profit

876,971880,000

Selling,
general andadministrative
expenses

1,846,659

2,600,000

882,791

800,000

Other
expenses

R&D
expenses

963,868

1,800,000

Operatingprofit-969,687-1,720,000✓ Temporary fluctuation factors
・Drug substance sales related to the manufacturing process for the 4th
biosimilar product・Revenue from the completion of the MCB✓ Maintaining high profit ratio of revenues related to sales of drug
substance of BS products✓ Regarding sales of the 4th BS product and MCB , the same amount is recorded
as cost in order to collect the manufacturing cost as income for accountingpurposes.
✓ Apparently, the gross profit ratio will drop due to temporary
fluctuation factors except for the revenue from BS products.

✓ Continuously streamlining Selling, General and Administrative expenses✓ Investment in final development costs for commercial production of GBS-007✓ Development costs for clinical trials and final product manufacturing of JRM-001✓ Full-scale start of cost reduction measures for GBS-007 from this fiscal year andinvesting related cost
✓ Carrying over of R&D expenses into FY2021

18

Strategy for achieving FY2022 Target(turning profitable)
Financial Results in FY2020 and Forecast for FY2021
Subject

Gross sales

Results for
FY2020996,543

Forecast for FY2021
Forecast

1,900,000

Basic figures for business forecast in the next
fiscal year
1,350,000

Sales of new biosimilar
Product is expected.

Cost of goods
soldGross profit
Selling, general
andadministrative
expenses
SG&A expenses
excl. R&D
expenses

119,571876,971

1,020,000

880,000

Excluding temporary sales related
to development of manufacturing
process of 4th biosimilar products
and establishment of MCB

350,000

Excluding temporary sales related
to development of manufacturing
process of 4th biosimilar products
and establishment of MCB

1,000,000

Achieving the first billion yen

Gross profit ofBS only
1,846,659

882,791

2,600,000

800,000

1,520,000

800,000

R&D expense

963,868

1,800,000

720,000

Operatingprofit△969,687△1,720,000△520,000

Final development costs for GBS007 before the launch and R&D
expense related to JRM-001※ areexcluded

Unit:thousands yen

Strategy for achieving
FY2022 target

Increasing sales based on
three BS products andincome from development
milestone （＋licensingout）

Achieving 1 billion yen＋α

Maintaining 800 million
yen
Accelerating R&D
efficiency with around
700 million yen to
promote licensing-out

Turning profitable※ Cost of JRM-001 is excluded from the analysis because the impact on the profit and loss statement varies depending on the partnering situation.

19

Putting our FY2022 “turn profitable” strategy
into numbers
FY 2021

Analytical value

Gross sales

1.35 billion yen

Gross profit

Gross profit from BS
only

R&D expense

SG&A expenses
excl. R&D
expenses

1 billion yen

700 million yen

800 million yen

FY2022Increase / decrease factor

Adding Full-year sales ofGBS-007

Same as above Further reduction ofmanufacturing costs
 Efficient R & D
investment to increase
licensing-out probability

Planning goal
1.35 billion yen or more

Steady increase in sales of BS products
and development milestones, etc. +Further upside with income fromlicensing-out

1 billion yen or more
500 to 800 million yen- Peaking out manufacturing anddevelopment costs of GBS-007- Reducing the development costs of
JRM-001 due to alliance- R&D investment of 500 million yen
is essential to achieve the target ofour mid-term strategic plan

700 to 800 million yen

Maintain the status quo- Continuously streamlining Selling,
General and Administrative expenses- The actual fixed cost that is not linked to sales is 650 million yen.

The lowest gross profit line for profitability is 1.2 billion yen- “200 million yen” additional gross profit is enough based on the FY2021 analytical value→ To be achieved by full year sales of GBS-007 (only partial in FY2021) and development milestones, etc.
- R&D expenses for future growth can be increased while looking at maximizing profitability depending on
licensing-out-related income (More income, more spending accordingly)

20Summary
Progress of SHED regenerative medicine business
contributes to the enhancement of KWB's corporate value
 Establishment of S-QuatreSM Started GMP production of Master Cell Bank (MCB) Progress of non-clinical studies in multiple SHED pipelines (Positiveeffectiveness is shown.)
 Development of a designer cell as reinforced cell therapy utilizing SHED

Positive path to profitability Launching GBS-007 (biosimilar of ranibizumab) to the market and partiallycontributed to our sales this fiscal year Development of our fourth biosimilar product With our unique business Model, even with R & D investment of 500 million yen,future growth can be fully realized.
21

KIDS WELL, ALL WELL