August 4, 2023

SEIKAGAKU CORPORATION
Consolidated Financial Results (Japan GAAP) (Summary)for the First Three Months of Fiscal 2023
(Three-Month Period Ended June 30, 2023)
Listed exchanges: Tokyo Stock Exchange (Prime Market)
Stock code number: 4548
URL: https://www.seikagaku.co.jp/en/(All amounts have been rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Three Months of Fiscal 2023
(from April 1, 2023 to June 30, 2023)(1) Consolidated Financial Results(Percentages indicate changes from the same period in the previous fiscal year)
Net sales

Operating income

Millions ofYen

Millions ofYen%

Ordinary income
Millions ofYen%%First three months of fiscal 2023

9,661

16.3

1,298

15.3

1,959

14.3

First three months of fiscal 2022

8,307(29.5)

1,126(74.7)

1,714(62.8)

Net income attributable toowners of parent
Millions of%
Yen

Net income per share

Diluted net income
per share

Yen

Yen

First three months of fiscal 2023

1,887

26.4

34.62

-

First three months of fiscal 2022

1,493(59.1)

26.62-(Note) Comprehensive income:First three months of fiscal 2023:First three months of fiscal 2022:

3,048 million yen [41.0%]
2,162 million yen [(54.7)%](2) Consolidated Financial Position
Total assets

Total equity

Equity ratio

Millions of Yen

Millions of Yen%

As of June 30, 2023

77,06769,555

90.3

As of March 31, 2023

75,62567,216

88.9(Reference) Shareholders’ equity:
As of June 30, 2023: 69,555 million yen
As of March 31, 2023: 67,216 million yen

2. Dividends

Fiscal 2022
Fiscal 2023
Fiscal 2023
(Forecast)

1st QuarterYen-2nd Quarter
Yen
13.00

Dividends per share3rd Quarter
Yen-

13.00

-(Note) Revision of the forecasts most recently announced: No1Year-end

AnnualYen
13.00

Yen
26.00

13.00

26.00

* Notes(1) Changes in the status of material subsidiaries during the period: No(2) Application of specific accounting methods for preparing the quarterly consolidated financial
statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and retrospective restatements(a) Changes in accounting policies accompanying revisions in accounting standards: No(b) Changes other than those in (a) above: No(c) Changes in accounting estimates: No(d) Retrospective restatements: No(4) Number of shares issued (common stock):(a)Number of shares at the end of the period(including treasury stock)

As of June 30,
2023

56,814,093 shares

As of March 31,
2023

56,814,093 shares(b) Number of treasury stock at the end ofthe period

As of June 30,2023

2,273,029 shares

As of March 31,
2023

2,273,029 shares(c) Average number of shares issued during
the period (three months)

First three monthsof fiscal 2023

54,541,064 sharesFirst three monthsof fiscal 2022

56,105055 shares* This financial reports are not subject to the quarterly review procedures of the certified public accountant and audit
firm.
* Disclaimer regarding forward-looking information including appropriate use of forecasted financial results
At this time it would be difficult to reasonably assess a forecast of consolidated financial results for the fiscal year ending
March 31, 2024.

2

1. Results of Operations for the First Quarter of Fiscal 2023 (Three-Month Period Ended June 30, 2023)(1) Qualitative explanation on quarterly financial results
In the first three months (April 1 to June 30, 2023) of the fiscal year ending March 31, 2024 (fiscal 2023), netsales were ¥9,661 million, up 16.3% year on year. The increase is attributable to an increase in royalty income
coupled with year-on-year sales volume growth for ARTZ in China and domestic pharmaceuticals, which offset adecline in overseas sales in the LAL business and lower sales volume of Gel-One, an intra-articular singleinjection viscosupplement for the treatment of knee osteoarthritis.
Operating income rose 15.3% year on year to ¥1,298 million. Operating income growth lagged behind revenue
growth because of higher SGA expenses at overseas subsidiaries. Ordinary income and net income attributable toowners of parent rose 14.3% to ¥1,959 million and 26.4% to ¥1887 million, respectively.
1) Net sales by segment
Pharmaceutical Business- Domestic Pharmaceuticals (¥3,312 million, up 11.7% year on year)
Deliveries to medical institutions of ARTZ, a joint function improvement agent for knee osteoarthritis, increased
year on year thanks to successful measures to promote switching from competing products. The Company’s salesrose due to an increase in shipment volume, despite the impact of NHI drug price reductions.
The Company’s sales of the joint function improvement agent JOYCLU declined year on year because of ashipping schedule adjustment. The Company issued a Dear Healthcare Professionals Letter of Rapid SafetyCommunication (Blue Letter) concerning JOYCLU on June 1, 2021 and is continuing cooperative efforts withsales partner Ono Pharmaceutical Co., Ltd. to proactively gather side effects reports and other information andprovide safety-related information. The Company also conducted clinical research to identify the cause of side
effects with the cooperation of specialists and medical institutions and will continue to analyze data obtained
through this research and consider proposals that will lead to correct use.
Deliveries to medical institutions of the OPEGAN series of ophthalmic viscoelastic devices increased year on
year due to a market growth trend accompanying population aging as well as the impact of limited shipments ofcompeting products. The Company’s sales rose sharply on higher shipment volume, despite the impact of NHI
drug price reductions.
The Company’s sales of MucoUp, a submucosal injection agent for endoscopic surgery, decreased, reflecting asales partner inventory adjustment.
Deliveries to medical institutions and the Company’s sales of HERNICORE, a treatment for lumbar discherniation, remained at the prior-year level.
- Overseas Pharmaceuticals (¥2,324 million, up 30.0% year on year)
Local sales volume in the U.S. and the Company’s sales of Gel-One, an intra-articular single-injection
viscosupplement for the treatment of knee osteoarthritis, decreased year on year, reflecting the impact of a healthinsurance system change relating to price disclosure implemented in July 2022.
Local sales volume in the U.S. of SUPARTZ FX, an intra-articular 5-injection viscosupplement for the treatmentof knee osteoarthritis, increased, due to a changing market environment associated with a health insurance
system change. The Company’s sales rose due to a shipping schedule adjustment and yen depreciation.
Local sales volume in China of ARTZ rose, reflecting a rebound in the patient consultation rate following adecline in the first quarter of the previous fiscal year due to lockdowns in major cities accompanying therenewed spread of COVID-19. The Company’s sales rose sharply year on year because there were no shipmentsin the prior-year first quarter due to a packaging material change.
- Bulk Products and Contract Development and Manufacturing Organization (¥835 million, up 14.0%
year on year)
Sales increased due to growth from bulk products and the positive impact of yen depreciation on contract3

development and manufacturing and other services of overseas subsidiary Dalton Chemical Laboratories, Inc.
As a result of these developments and an increase in royalty income (¥699 million, -), sales from thePharmaceuticals business segment rose 30.7% year on year to ¥7,172 million.
LAL BusinessAlthough sales in Japan were at the prior-year level, sales from the LAL business segment decreased 11.7% year
on year to ¥2,488 million as special demand accompanying the spread of COVID-19 infection subsided, despite
the positive impact of yen depreciation on the results of overseas subsidiary Associates of Cape Cod, Inc.
(2) Explanation of forward-looking information, including the forecast of consolidated financial results
Although the Company has already achieved the full-year income forecasts announced on May 12, 2023, in lightof expected lower revenue from overseas pharmaceuticals and the LAL business and anticipated expenses in
preparation for an application for approval of SI-6603, there is no change in the forecast of consolidated
financial results.
Note: The exchange rate assumption to be used in the forecast of consolidated financial results for the second
quarter onward is ¥130 to the U.S. dollar.

(3) Research and Development Activities
To contribute to healthy and fulfilling lives for people around the world, the Seikagaku Group focuses its
research and development on glycoscience as its area of specialization and aims to create original
pharmaceuticals and medical devices.
To achieve early and continuous launching of new products, which hold the key to future business growth, theGroup will engage in efficient R&D activities focused on target compounds and high-priority target diseases andmake efforts to increase the number of projects through reinforcement of unique drug-discovery technologies
and utilization of open innovation.
Total R&D expenses in the first three months of fiscal 2023 were ¥1,738 million, or 19.4% of net sales(excluding royalties).
The status of progress of principal R&D activities is described below.
SI-6603 (treatment for lumbar disc herniation: developed in the U.S.)
Follow-up observation in an additional Phase III clinical study was completed in March 2023, and topline results
indicating statistically significant improvement in the primary endpoint were obtained in May.
SI-6603, which contains condoliase as its active pharmaceutical ingredient, is a therapeutic agent directly
injected into the lumbar disc. It does not require general anesthesia and is less invasive to the patient thansurgical treatment. Since a single-injection treatment is expected to improve the symptoms of lumbar discherniation, the Company aims to provide SI-6603 as a new treatment option.
SI-614 (treatment for dry eye: developed in the U.S.)
Follow-up observation in a Phase III clinical study conducted for the purpose of evaluating efficacy and safety
was completed in June 2023, and the Company is currently analyzing the data obtained from the study.
SI-614 is a substance produced by introducing a hydrophobic group into hyaluronic acid using Seikagaku’s own
proprietary technology. Ocular instillation of SI-614 in patients is expected to improve symptoms of dry eye bystabilizing the tear film and promoting corneal epithelial wound healing. Through development of SI-614, theCompany aims to provide a new option for the treatment of dry eye.

SI-449 (adhesion barrier: developed in Japan)
In a pivotal study in the field of gastroenterological surgery being conducted since May 2020, results showing
statistically significant adhesion prevention performance in both the primary effectiveness endpoint of thepresence or absence of post-operative adhesions and the secondary effectiveness endpoints of severity and extent
of adhesions were obtained in July 2023. No safety issues were observed.
4Also, no major problems were found with safety and operability of SI-449 in laparoscopic surgery in a pilot
study in the field of gynecology conducted for the purpose of expanding the scope of indications for the product.
Seikagaku plans to proceed with an application for approval of SI-449 following detailed analysis of dataobtained in the two studies and sales partner selection.
SI-449 is a powdered medical device whose main ingredient is cross-linked chondroitin sulfate developed using
Seikagaku’s own proprietary glycosaminoglycan cross-linking technology. It has the property of absorbing
moisture and swelling, and is expected to prevent post-operative adhesion formation in surgery by forming abarrier between the surgical wound site and surrounding tissues after application. The Company will proceedwith development of SI-449 with a view to introducing it globally, not only in Japan.
There is no substantial change on the other R&D activities.
#######

5