English translation

Summary of Financial Statements
for the First Half of the Fiscal Year Ending December 31, 2019
[Japanese GAAP] (Non-consolidated)
August 7, 2019
Company Name
Securities Code
Representative

SymBio Pharmaceuticals Limited
4582
Representative Director,
President and Chief Executive Officer

Listing: Tokyo Stock Exchange
URL: https://www.symbiopharma.com/
Fuminori Yoshida

Contact Person

Director, Head of Corporate Planning & Admin.
Division and Chief Financial Officer

Kenji Murata

TEL +81-3-5472-1125

Scheduled Date to File
Quarterly ReportAugust 8, 2019

Date of Dividend
Payment (plan)—

Supplementary materials for the quarterly financial statements:

Yes ・ No

Holding of quarterly earnings performance review:

Yes ・ No

(Amounts of less than one million yen are rounded down.)
1. Business Results for the First Half of FY 2019 (January 1, 2019 to June 30, 2019)(1) Operating Results (cumulative)(Percentages indicate year-on-year changes.)
Net Sales
Operating Profit (Loss) Ordinary Profit (Loss)
Profit (Loss)
Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

2,004
1,928

4.0
8.0

(2,015)(1,324)——(2,069)(1,377)——(2,069)(1,388)——1H FY 2019
1H FY 2018

Earnings (Loss)
per Share

Diluted Earnings
per ShareYen

Yen

1H FY 2019(95.58)—1H FY 2018(95.15)—(Note 1) On July 1, 2019, the Company conducted a 1-for-4 consolidation of common stock. Earnings per share have been
calculated based on the assumption that this consolidation was conducted at the beginning of FY 2018.
(Note 2) Diluted earnings per share is not stated above due to loss per share, despite the potential dilution of shares.
(2) Financial Position
Total Assets

Net Assets

Millions of yen

1H FY 2019 (as of June 30, 2019)
FY 2018 (as of December 31, 2018)(Reference) Shareholders’ equity:

Equity Ratio

Millions of yen

6,674
6,239
1H FY 2019 (as of June 30, 2019)
FY 2018 (as of December 31, 2018)

%

5,426
4,901
4,845 million yen
4,371 million yen

72.6
70.1

2. Dividends
Annual Dividend per Share
2nd Quarter
3rd Quarter
Fiscal Year End

1st Quarter
FY 2018
FY 2019
FY 2019 (Forecast)

Full Year

Yen

Yen

Yen

Yen

Yen

—
—

0.00
0.00

—

0.00

0.00

—

0.00

0.00

(Note) Revision of dividend forecasts recently announced:

Yes ・ No

3. Earnings Forecasts for FY 2019 (January 1, 2019 to December 31, 2019)
Operating
Profit (Loss)

Net Sales
Millions of yen

Full Year(Percentages indicate year-on-year changes.)
Earnings (Loss)
Profit (Loss)
per Share

Ordinary
Profit (Loss)%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

3,092 (19.4)(3,780)—(3,856)—(3,859)—(167.66)(Note) Revision of earnings forecasts recently announced:
Yes・ NoOn July 1, 2019, the Company conducted a 1-for-4 consolidation of common stock. The forecast for earnings per share in FY 2019
incorporates the impact of this consolidation. For details, please refer to “Explanation regarding the appropriate use of earnings
forecasts and other matters.”
Regarding the earnings forecasts, please refer to the announcement “Revision to Earnings Forecasts for FY 2019 and Mid-Range
Plan (FY 2019 to FY 2022)” released today (on August 7, 2019)

Notes:(1) Application of special accounting treatment in preparation of quarterly financial reports: Yes ・ No
(2) Changes in accounting policies, changes in accounting estimates and restatements after error corrections(a) Changes in accounting policies due to revision of accounting standards:

Yes ・ No(b) Changes in accounting policies due to other reasons:Yes ・ No(c) Changes in accounting estimates:

Yes ・ No(d) Restatements after error corrections:

Yes ・ No

(3) Number of shares outstanding (common stock)(i) Number of issued shares at the end of theperiod (including treasury shares)(ii) Number of treasury shares at the end of
the period(iii) Average number of shares during theperiod (cumulative)

1H FY 201924,362,681 shares

FY 2018

20,599,731 shares

1H FY 201918 shares

FY 2018

18 shares

1H FY 2019

21,655,982 shares

1H FY 2018

14,593,392 shares(Note) On July 1, 2019, the Company conducted a 1-for-4 consolidation of common stock. The number of issued shares at the endof the period, number of treasury shares at the end of the period, and average number of shares during the period have been
calculated based on the assumption that this consolidation was conducted at the beginning of FY 2018.
* Summary of the quarterly financial statements is not subject to quarterly reviews by certified public accountants or accounting
corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters
1. All forecasts presented in this document, including earnings forecasts, are based on the information currently available tomanagement and assumptions judged to be reasonable. Actual results may differ substantially from these forecasts due tovarious factors. Regarding the assumptions on which the Company’s earnings forecasts are based and their usage, pleaserefer to “1. Qualitative Information on Quarterly Financial Results, (3) Explanation of earnings forecasts and other forwardlooking information,” on Page 7 of the attachment.
2.

The Company approved a 1-for-4 consolidation of common stock at the 14th Ordinary General Meeting of Shareholders
held on March 28, 2019. This consolidation of shares was carried out with an effective date of July 1, 2019. The earnings
forecast for FY 2019, when calculated based on the number of shares outstanding prior to the reverse stock split is asfollows:
FY 2019 loss per share forecast (full year): 41.92 yenIndex of the attachment

1. Qualitative Information on Quarterly Financial Results .................................................................................................. 1(1) Explanation of business results ................................................................................................................................... 1(2) Explanation of financial position ................................................................................................................................ 4(3) Explanation of earnings forecasts and other forward-looking information ................................................................ 4
2. Quarterly Financial Statements and Primary Notes ......................................................................................................... 5(1) Quarterly balance sheet .............................................................................................................................................. 5(2) Quarterly statement of income .................................................................................................................................... 7(3) Quarterly statement of cash flows .............................................................................................................................. 8(4) Notes to quarterly financial statements ....................................................................................................................... 9(Notes to going concern assumptions) ......................................................................................................................... 9(Notes to significant changes in shareholders’ equity) ................................................................................................. 9(Significant subsequent events) .................................................................................................................................. 10

1. Qualitative Information on Quarterly Financial Results(1) Explanation of business results
Progress in the Company’s business for the first half of the fiscal year ending December 31, 2019 is as follows.
(i) Domestic[Preparation for the establishment of the Company’s own salesforce]
In October 2018, the Company began preparations to establish its own salesforce for the sale of TREAKISYM ® in Japan aheadof the expiration of a business partnership agreement with Eisai Co., Ltd. (“Eisai”) in December 2020. The Company’s top
management objectives are to attain profitability in the fiscal year ending December 31, 2021 and to achieve sustainable growth
thereafter. By transitioning to its own salesforce, the Company plans to solidify its future business development.
During the first half of the fiscal year under review, the Company made progress on the personnel expansion and training
required to complete the structure of 20 TREAKISYM® managers that it views as the core of its salesforce’s framework. It also
proceeded with preparations to distribute personnel to their areas of responsibility according to plan. The Company is aiming toestablish a high-performance and highly productive sales organization that is based on deep expertise and abundant experience.
Concurrently, preparation for the construction of infrastructure for logistics, distribution, and information systems is currently
underway and progressing according to plan.
[Anticancer agents: SyB L-0501 (lyophilized powder formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB L1702 (rapid infusion (“RI”) formulation), and SyB C-0501 (oral formulation) (generic name: bendamustine hydrochloride; trade
name: TREAKISYM®)]
The Company markets TREAKISYM® in Japan through its business partner, Eisai. The Company obtained manufacturing andmarketing approval for first-line treatment of low-grade non-Hodgkin’s lymphoma (Note 1) (low-grade NHL) and mantle cell
lymphoma (MCL) in December 2016, for recurrent/refractory low-grade NHL and MCL in October 2010, and for chronic
lymphocytic leukemia (CLL) in August 2016. Following this indication expansion, TREAKISYM ® is steadily increasing its
market share in the area of first-line treatment by replacing R-CHOP, the conventional standard treatment, at medical clinics andhospitals. Further, the combination treatment (BR therapy) of TREAKISYM® and rituximab was newly included in the
Guidelines for Tumors of Hematopoietic and Lymphoid Tissues 2018 edited and published by the Japanese Society of
Hematology in July 2018, becoming recommended as a choice for standard treatment for all previously approved indications.
With this development, TREAKISYM® has been effectively establishing its foothold as the standard treatment for malignant
lymphoma, and surveys conducted by the Company indicate that its share of the fist-line treatment has risen to 55%.
In addition to the three already-approved indications, the Company is conducting a Phase III clinical trial for TREAKISYM®
targeting recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL). The trial is in response to serious need at clinics andhospitals as there is currently no reliable standard treatment. Patient groups and relevant academic societies have petitioned to theregulatory authorities for the approval of BR therapy. With a view to providing new therapeutic alternatives and maximizing
product value, the Company began the Phase III clinical trial in August 2017 and, after enrolling its first patient in January 2018,steadily continued to accumulate cases, finally completing the enrollment process in April 2019. After the follow-up period forenrolled patients is complete, the Company will proceed in earnest with preparations to apply for the approval of the additional
indication.
The Company is targeting a transition to TREAKISYM® liquid formulation (RTD and RI liquid formulations) (Note 2), for whichit concluded an exclusive license agreement (in Japan), with Eagle Pharmaceuticals, Inc. (head office: New Jersey, U.S.)(“Eagle”) in September 2017. In accordance with this goal, the Company is already industriously preparing to apply for approval
concerning RTD liquid formulation products through consultations with the Pharmaceutical and Medical Devices Agency. A
clinical trial for RI liquid formulation began in November 2018, with the primary goal of confirming their safety. The Company
has been steadily accumulating cases since the enrollment of the first patient began in April 2019. This drug will provide added
value by greatly reducing the burdens placed on patients and healthcare providers, and liquid formula patent protection will
enable the extension of its product life until 2031. With this drug, the Company is aiming to maximize business value while
focusing on development strategies.
Further, the Company acquired approval for the partial revision to the manufacturing and marketing authorization in July 2018.
As a result, TREAKISYM® can now be used in combination with not only rituximab but also other new anti-CD20 antibodies forthe treatment of CD20 positive follicular lymphoma (FL), a common histologic type of low-grade NHL. As a new treatment
option, it is being offered to patients in combination with obinutuzumab (Note 3), which was launched in August 2018. In March―1―

2019, the Company received approval for changes to a portion of its application concerning the use of TREAKISYM ® as apretreatment agent for tumor-specific T-cell infusion therapy (Note 4). This will allow TREAKISYM® to be used as a pretreatment
for Kymriah® intravenous infusion (Note 5), which was approved as the first chimeric antigen receptor T-cell (CAR-T) therapy (Note6) in Japan and included in the NHI price listings in May 2019. The status of TREAKISYM® as a standard treatment for

malignant lymphoma is becoming stronger as its use as a pretreatment used with regenerative medicine and other products
continues to spread.
In addition to the intravenous formulation currently under development and on sale, the Company is exploring the potential of
TREAKISYM® as the treatment for solid tumors and autoimmune diseases through the development of an oral formulation, withan aim to solidify its business through a platform of TREAKISYM ® products. Amid such initiatives, the Company commenced a
Phase I clinical trial for progressive solid tumors in January 2018, with the aims of examining the recommended dosage andadministration schedule as well as tolerability and safety of the oral formulation of TREAKISYM®, and identifying potential
target tumor types. After completing enrollment of the first patient in May 2018, the Company is currently working toaccumulate cases. Meanwhile, with a view to evaluating the effect of oral administration of TREAKISYM® on the immune
system, the Company concluded a joint research agreement with Keio University in May 2018 to verify the therapeutic effect of
this product in the treatment of systemic lupus erythematosus (SLE), an autoimmune disease that is giving rise to extremely hightreatment demand. The Company later conducted a preclinical trial with Keio University. Currently, the results of this trial arebeing collected and, once they have been evaluated, the Company will consider its plans moving forward, including future
clinical trials.
(Note 1)

Non-Hodgkin’s lymphoma (NHL) is a generic term of all types of malignant lymphoma other than Hodgkin’s
lymphoma. Malignant lymphoma refers to malignant growths that form when the lymphatic corpuscles inside of whiteblood cells become cancerous. The majority of malignant lymphoma identified in Japanese patients is non-Hodgkin’s
lymphoma.

(Note 2)

RTD and RI are predissolved liquid formulations that differ from the currently available freeze-dried (“FD”) powder
formulation. RTD (ready-to-dilute) will significantly reduce the preparation time and labor cost for healthcare
providers, and RI (rapid infusion) will reduce infusion duration to 10 minutes from the current 60 minutes, greatly
reducing the burdens placed on patients and providing significant added value to healthcare providers.

(Note 3)Obinutuzumab (Gazyva®, marketed by Chugai Pharmaceutical Co., Ltd.): Like rituximab recommended by treatment
guidelines for non-Hodgkin’s lymphoma in Japan and overseas, obinutuzumab is a glycoengineered type II anti-20
monoclonal antibody that directly binds to CD20 (a protein expressed on B-cells other than stem cells or plasma cells)
on target B-cells, and attacks and destroys them along with the body’s immune system.

(Note 4)

Tumor-specific T-cell infusion therapy is a treatment method in which tumor-specific T-cells (T-cells that specificallyrecognize cancer cells) taken from cancer patients are artificially bestowed with cancer specificity extracorporeally,
amplified and then administered to the patient.

(Note 5)Kymriah® intravenous infusion (generic name: tisagenlecleucel; marketed by Novartis Pharma K.K.): Kymriah®
intravenous infusion is the first chimeric antigen receptor T-cell (CAR-T) therapy approved within Japan. The
Company received manufacturing and marketing approval for Kymriah® for use in the treatment of CD19 positive
recurrent/refractory B-cell acute lymphoblastic leukemia (B-ALL) and CD19 positive recurrent/refractory diffuse
large B-cell lymphoma (DLBCL) in March 2019. Kymriah® intravenous infusion was included in NHI price listingsin May 2019.

(Note 6)

Chimeric antigen receptor T-cell (CAR-T) therapy is a type of tumor-specific T-cell infusion therapy that introduces
genes that code chimeric antigen receptors (CARs) into T-cells, amplifies these cells and then infuses them. These
chimeric antigen receptors are produced by combining the intracellular domains of T-cell receptors with the antigenbinding sites of antibodies capable of recognizing membrane antigens attached to tumor cells. In clinical trials using
CARs to target CD19 that expresses on B-cells, CD19-targeting CARs were introduced into T-cells that were later
administered to patients with B-cell tumors. These modified cells produced clear clinical effects.

[Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)]U.S. Licensor Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S.) (“Onconova”) is conducting a global Phase III
clinical trial (with trial sites in more than 20 countries) of the intravenous formulation of rigosertib for higher-risk―2―myelodysplastic syndromes (HR-MDS) which do not respond to the current standard treatment with hypomethylating agents,
which relapse after treatment under the current standard of care, or which are intolerant to hypomethylating agents. The
Company is responsible for clinical development in Japan and in December 2015 began the trial. Forty-four patients wereenrolled as of July 31, 2019. According to Onconova, out of the target of 360 total patients worldwide, 75% had been enrolled asof March 2019. Based on the results of the trial, the Company is planning to apply for approval in Japan at the same time as in
the U.S. and Europe.
As for the oral formulation of rigosertib, Onconova completed Phase I/II clinical trials in the U.S. for the target indication of
first-line HR-MDS (in combination with azacitidine (Note 7)) and is conducting a Phase II clinical trial for the target indication oftransfusion-dependent lower-risk MDS. The Company started a domestic Phase I clinical trial in June 2017 to confirm thetolerability and safety of the oral formulation of rigosertib for Japanese patients. The Company continued to steadily accumulate
cases since the first patient was enrolled in October 2017 and completed patient enrollment in June 2019. After completion of thistrial, the Company plans to promptly conduct a Phase I clinical trial for combination therapy with azacitidine. Further, to apply
for approval of the oral formulation of rigosertib in Japan no later than in the U.S. and Europe, it plans to take part in a global
Phase III clinical trial for combination therapy with azacitidine for the first-line treatment of patients with higher-risk MDS,
which Onconova currently plans to conduct. In order to accelerate this global clinical trial’s examination process, Onconova
applied for a Special Protocol Assessment (SPA) (Note 8) with the US Food and Drug Administration (FDA) in December 2018. A
Phase III clinical trial is expected to begin once approval from the FDA is received. With respect to the development for thetarget indication of transfusion-dependent lower-risk MDS, the Company will continue to consider participating from Japan inview of the status of the development by Onconova.
(Note 7)

Azacitidine (Vidaza®: marketed by Nippon Shinyaku Co., Ltd.): This hypomethylating agent (for injection) wasapproved in 2011 upon successful confirmation of extended overall survival for the first time in the Phase III clinical
trial for the indication of MDS. It is currently used as a first-line drug for MDS patients who have difficulties inhematopoietic stem cell transplantation. MDS is a preleukemic state, and decrease in tumor suppressor gene due toexcessive methylation of DNA is thought to be related to the disease. Hypomethylating agents such as azacitidine arethought to suppress progress to leukemia by restoring tumor suppressor gene with a deterrent effect against
methylation of DNA.

(Note 8)Special Protocol Assessment (SPA): A system under which after completion of a phase II trial and prior to the launchof phase III trial, sponsors can reach an agreement with the FDA regarding the phase III trial protocol such as target
illness, purpose, trial design, primary and secondary endpoints, and method of data analysis. The agreement indicatesthat the FDA concurs with the adequacy of the overall protocol design and the design can be used (without changing
the terms) in the approval filing process when the phase III trial is completed. The SPA is intended to shorten FDA’s
review period of new drug application, as it boosts the possibility of drug approval provided the trial endpoints areachieved.

[Patient-controlled pain management drug: SyB P-1501]
In October 2015, the Company entered into an agreement with Incline Therapeutics, Inc., a wholly owned subsidiary of The
Medicines Company (head office: New Jersey, U.S.) for an exclusive license to develop and commercialize SyB P-1501 in
Japan. The Company, acting in the best interest of patients, determined to temporarily suspend new patient enrollment for SyB P1501 from April 21, 2017 due to its recently arising concern as to the continuity of The Medicines Company’s business regarding
the product.
The Company later initiated arbitration against The Medicines Company on October 11, 2017 under the rules of theInternational Chamber of Commerce, seeking damages of 82 million U.S. dollar (approximately 9.0 billion yen) arising from The
Medicines Company’s repudiation of the license agreement. The Company claims that The Medicines Company was not able toprovide the Company with adequate assurance of performance of its contractual obligations under the license agreement in lightof its decision to discontinue commercialization activities regarding the product and withdraw from markets in the U.S. andEurope, and that such failure by The Medicines Company is a material breach of the license agreement. Furthermore, theCompany terminated the license agreement on November 30, 2017, based on the fact that breach of the license agreement by The
Medicines Company was not remedied within the stipulated time, and terminated the development of SyB P-1501 on February 9,
2018.
Arbitration proceedings against The Medicines Company are still ongoing.
[New drug candidates]―3―

The Company continues to actively seek new drug candidates and in-licensing opportunities, aiming to expand bothprofitability and growth potential over the long term in a manner that is aligned with management objectives and strategies.
Discussions with multiple potential licensors are ongoing.
In May 2016, the Company established a wholly owned subsidiary, SymBio Pharma USA, Inc. (head office: Menlo Park,
California, U.S., “SymBio Pharma USA”), as the Company’s planned strategic base for overseas business development.
Acquiring licenses to new drug candidates through SymBio Pharma USA as the base of global business will be part of theCompany’s continued transformation into a global specialty pharmaceutical company with capability to develop andcommercialize new drugs in the U.S., Japan, Europe, and other major global markets.
(ii) Markets outside Japan
SyB L-0501 is also marketed in South Korea, Taiwan, and Singapore and the product sales of SyB L-0501 in these countries
progressed in line with the Company’s forecasts.
(iii) Business results
As a result of the above, net sales totaled 2,004,976 thousand yen for the first half of the fiscal year ending December 31,
2019, primarily reflecting product sales of TREAKISYM®. Overall net sales rose 4.0% year on year.
Selling, general and administrative expenses totaled 2,544,503 thousand yen (+34.1% year on year), including research anddevelopment (“R&D”) expenses of 962,598 thousand yen (+14.8% year on year) primarily due to expenses associated with theclinical trial for the intravenous and oral formulations of TREAKISYM® as well as the intravenous and oral formulations ofrigosertib, and other selling, general and administrative expenses of 1,581,904 thousand yen (+49.3% year on year).
As a result, an operating loss of 2,015,102 thousand yen was recognized for the first half of the fiscal year ending December
31, 2019 (compared to an operating loss of 1,324,638 thousand yen for the first half of the previous fiscal year). In addition,
including non-operating expenses totaling 57,178 thousand yen primarily comprised of foreign exchange losses, ordinary loss
totaled 2,069,366 thousand yen (compared to an ordinary loss of 1,377,648 thousand yen for the first half of the previous fiscal
year) and a bottom-line loss totaled 2,069,929 thousand yen (compared to a loss of 1,388,502 thousand yen for the first half ofthe previous fiscal year).
Segment information has been omitted as the Company operates within a single segment, which includes the research anddevelopment, manufacturing, and marketing of pharmaceutical drugs and other related activities.

(2) Explanation of financial position
Total assets as of June 30, 2019 stood at 6,674,140 thousand yen, up 434,717 thousand yen from December 31, 2018. This
primarily reflected increases of 1,244,810 thousand yen in cash and deposits, 103,788 thousand yen in software in progress, and51,586 thousand yen in prepaid expenses, offsetting decreases of 533,824 thousand yen in merchandise and finished goods,
400,630 thousand yen in accounts receivable–trade, and 32,008 thousand yen in consumption taxes receivable.
Total liabilities came to 1,247,768 thousand yen, down 89,855 thousand yen from December 31, 2018. This was mainly due to adecrease of 717,627 thousand yen in accounts payable–trade, offsetting an increase of 605,485 thousand yen in accounts payable–
other.
Net assets totaled 5,426,372 thousand yen, up 524,572 thousand yen from December 31, 2018. This was mainly attributable toincreases of 1,271,770 thousand yen in share capital, 1,271,770 thousand yen in capital surplus, and 50,962 thousand yen in shareacquisition rights, offsetting a decrease of 2,069,929 thousand yen in retained earnings that was due to the recording of a loss forthe quarter.
As a result, the equity ratio rose by 2.5 percentage points from December 31, 2018 to 72.6%.

(3) Note of earnings forecasts and other forward-looking information
Regarding the earnings forecasts, please refer to the announcement “Revision to Earnings Forecasts for FY 2019 and MidRange Plan (FY 2019 to FY 2022)” released today (on August 7, 2019).

―4―2. Quarterly Financial Statements and Primary Notes(1) Quarterly balance sheet(Thousands of yen)
FY 2018(as of December 31, 2018)
AssetsCurrent assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Prepaid expenses
Advances paid
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Software in progress
Total intangible assets
Investments and other assets
Shares of subsidiaries
Long-term prepaid expenses
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Accounts payable–other
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Provision for retirement benefits
Total non-current liabilities
Total liabilities―5―

1H FY 2019(as of June 30, 2019)

4,821,355
411,720533,824
83,372
31,147
124,855
32,214
6,038,490

6,066,166
11,090—134,959
27,83592,846
41,9106,374,808

36,771
20,180—56,95135,141
22,8791,288
59,30850,946
20,43071,37644,866124,218
169,085

01,225
71,37872,604200,932
6,239,423

0—70,93770,937299,3316,674,140

726,100
503,637
71,24935,354
1,336,342

8,473
1,109,122
69,13359,5501,246,281

1,281
1,281
1,337,623

1,487
1,487
1,247,768

FY 2018(as of December 31, 2018)(Thousands of yen)
1H FY 2019(as of June 30, 2019)

12,972,579
12,942,579(21,543,238)(17)
4,371,902
529,897
4,901,799
6,239,423

14,244,349
14,214,349(23,613,168)(17)
4,845,513
580,859
5,426,113
6,674,140

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Share acquisition rights
Total net assets
Total liabilities and net assets―6―

(2) Quarterly statement of income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on tax refund
Insurance claim income
Other
Total non-operating income
Non-operating expenses
Commission expenses
Share issuance cost
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on reversal of share acquisition rights
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit (loss) before income taxes
Income taxes–current
Total income taxes
Profit (loss)

1H FY 2018(from January 1, 2018
to June 30, 2018)
1,928,378
1,355,079
573,299
1,897,937(1,324,638)(Thousands of yen)
1H FY 2019(from January 1, 2019
to June 30, 2019)2,004,976
1,475,575
529,400
2,544,503(2,015,102)

439
116
—
54
609

101
76
2,736
—
2,914

5,504
19,11429,002—53,620(1,377,648)

5,257
9,282
42,411
227
57,178(2,069,366)

876
876

1,336
1,336

9,829
9,829
(1,386,602)
1,900
1,900
(1,388,502)——(2,068,029)
1,900
1,900
(2,069,929)―7―

(3) Quarterly statement of cash flows

1H FY 2018(from January 1, 2018
to June 30, 2018)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Share-based remuneration expenses
Increase (decrease) in provision for retirement
benefits
Interest income
Foreign exchange losses (gains)
Commission expenses
Share issuance cost
Gain on reversal of share acquisition rights
Loss on retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses
Decrease (increase) in advances paid
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in other current assets
Decrease (increase) in long-term prepaid
expenses
Increase (decrease) in trade payables
Increase (decrease) in accounts payable–other
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividends received
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from refund of leasehold and guarantee
deposits
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Proceeds from issuance of shares resulting fromexercise of share acquisition rights
Proceeds from issuance of share acquisitionrightsPayments for issuance of shares
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period―8―(Thousands of yen)
1H FY 2019(from January 1, 2019
to June 30, 2019)(1,386,602)
16,91564,636(2,068,029)
17,91173,787

128

206

(439)
29,8705,504
19,114(876)
9,829(321,062)(199,242)(22,238)(20,533)(101)
55,734
5,257
9,282(1,336)—400,630
533,824(56,844)
3,311

31,99432,00831,614

360

5,123

1,225

278,270
61,233241745(1,395,772)
439(1,900)(717,627)
603,144
12,023440(1,094,789)
101(1,900)(1,397,232)(1,096,587)(27,834)(3,530)(6,596)(109,039)

13,747—(17,617)(115,636)

1,541,756

2,522,051

23,100—(17,582)(9,282)

1,547,274

2,512,769(29,870)(55,734)

102,554
2,947,059
3,049,613

1,244,810
4,821,355
6,066,166

(4) Notes to quarterly financial statements(Notes to going concern assumptions)None to be reported.
(Quarterly statement of income)* 1 Inventories at quarter-end are stated after writing down based on the decrease in profitability.
The following amount is included within cost of sales as loss on valuation of inventories.
1H FY 2018(from January 1, 2018
to June 30, 2018)—(Unit: thousands of yen)
1H FY 2019(from January 1, 2019
to June 30, 2019)
187,840

A certain batch of TREAKISYM® 100mg was determined to be unsalable due to quality issues, which resulted in an inventory
valuation loss. Inventory at quarter-end reflects their book value, taking this inventory valuation loss into account.
(Notes to significant changes in shareholders’ equity)
During the first half of the fiscal year ending December 31, 2019, new shares were issued upon the exercise of parts of the 36th,
37th, 38th, and 46th warrants. As a result, during the first half of the fiscal year under review, share capital and legal capital surplus
increased by 1,271,770 thousand yen and 1,271,770 thousand yen, respectively, amounting to 14,244,349 thousand yen and
14,214,349 thousand yen as of June 30, 2019.

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(Significant subsequent events)
During a meeting held on February 28, 2019, the Board of Directors passed a resolution to submit a proposal concerning reverse
stock split and a partial amendment to the Company’s Articles of Incorporation at the 14th Ordinary General Meeting of Shareholders
that was scheduled to take place on March 28, 2019. This proposal was approved at the same Ordinary General Meeting of
Shareholders and took effect on July 1, 2019.
(1) Purpose of reverse stock split
Since its establishment, the Company has aimed to increase its capital in order to procure funds for the in-licensing of new drugcandidates for development and to support its activities, including R&D necessary for advancing its pipeline development andincreasing its number of drug candidates, staffing for the establishment of its own salesforce, system configuration, anddevelopment of a logistics and distribution infrastructure. As a result, the Company’s total number of outstanding shares as of June30, 2019 was 97,450,724. The Company believes that this share total is very large when considering its business scale. Our shareprice level also fell greatly beneath the desired investment unit level range of between 50,000 yen and 500,000 yen specified inRule 445 of the Tokyo Stock Exchange’s Securities Listing Regulations. In addition, the Company’s share price volatility per yen
was relatively high, amounting to a situation in which large fluctuations in the price of its shares, targets for speculative
investment, were likely to occur. We were aware of the significant impact this had on all general investors.
Based on these circumstances, we conducted a 1-for-4 stock consolidation of common stock with the goals of bringing ournumber of outstanding shares in line with our business scale and adjusting our share price level to desirable investment unit levels.
(2) Percentage and timing of reverse stock split
On July 1, 2019, the Company conducted a 1-for-4 consolidation of common shares recorded in the final shareholders registryon June 30 ,2019.
(3) Share reduction due to reverse stock split
Number of shares outstanding prior to stock consolidation (as of June 30, 2019)97,450,724 shares

Number of shares eliminated by stock consolidation

73,088,043 shares

Number of shares outstanding following stock consolidation

24,362,681 shares(4) Handling of fractions of shares resulting from reverse stock split
Fractions of shares resulting from the stock consolidation will be sold collectively, and the proceeds distributed to their former
shareholders based on the percentages of the share fractions that they had previously held, in accordance with Article 235 of theCompanies Act.
(5) Partial amendment to the Articles of Incorporation associated with the reverse stock split
1) Reason for amendment
In accordance with the recent stock consolidation, the Company revised the total number of authorized shares under Article 6of the Articles of Incorporation on July 1, 2019.
2) Amendments made to the Articles of Incorporation(Underlined text indicates amendments.)
Articles of Incorporation following change

Articles of Incorporation prior to change(Total number of authorized shares)
Article 6
The total number of authorized shares for the Company shallbe 167,000,000.

(Total number of authorized shares)
Article 6
The total number of authorized shares for the Company shallbe 41,750,000.

(6) Impact on per-share information
The impacts of the reverse stock split on per-share information have been included where they are pertinent.

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