August 5, 2022

SEIKAGAKU CORPORATION
Consolidated Financial Results (Japan GAAP) (Summary)for the First Three Months of Fiscal 2022
(Three-Month Period Ended June 30, 2022)
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 2022
(from April 1, 2022 to June 30, 2022)(1) Consolidated Financial Results(Percentages indicate changes from the same period in the previous fiscal year)
Net sales
Millions ofYen

Operating income
Millions ofYen%

Ordinary income
Millions ofYen%%First three months of fiscal 2022

8,307(29.5)

1,126(74.7)

1,714(62.8)

First three months of fiscal 2021

11,78471.6

4,446-

4,613

655.8

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 2022

1,493(59.1)

26.62

-

First three months of fiscal 2021

3,652

589.3

64.73

-

(Note) Comprehensive income:First three months of fiscal 2022:First three months of fiscal 2021:

2,162 million yen [(54.7)%]
4,772 million yen [398.2%](2) Consolidated Financial Position
Total assets

Total equity

Equity ratio

Millions of Yen

Millions of Yen%

As of June 30, 2022

74,97967,30389.8

As of March 31, 2022

75,244

66,34088.2(Reference) Shareholders’ equity:
As of June 30, 2022: 67,303 million yen
As of March 31, 2022: 66,340 million yen

2. Dividends

Fiscal 2021
Fiscal 2022
Fiscal 2022
(Forecast)

1st QuarterYen-2nd Quarter
Yen
15.00

Dividends per share3rd Quarter
Yen-

11.00

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

AnnualYen
15.00

Yen
30.00

11.00

22.00

* 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: Yes(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,
2022

56,814,093 shares

As of March 31,
2022

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

As of June 30,
2022

1,015,222 shares

As of March 31,
2022

567,822 shares(c) Average number of shares issued during
the period (three months)

First three monthsof fiscal 2022

56,105,055 sharesFirst three monthsof fiscal 2021

56,429,665 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, 2023.

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1. Results of Operations for the First Quarter of Fiscal 2022 (Three-Month Period Ended June 30, 2022)(1) Qualitative explanation on quarterly financial results
In the first three months (April 1 to June 30, 2022) of the fiscal year ending March 31, 2023 (fiscal 2022), netsales were ¥8,307 million, down 29.5% year on year. While the expansion of the LAL business and the effect of
the yen depreciation on overseas products, the result is attributable to a substantial decrease in royalty income, ayear-on-year decline in shipments of JOYCLU, which in fiscal 2021 were concentrated in the first quarter due tothe product launch, and the impact of National Health Insurance (NHI) drug price reductions in Japan.
Operating income fell 74.7% year on year to ¥1,126 million as a result of the sales decrease,notwithstanding a decrease in R&D expenses accompanying completion of subject enrollment in an additional
clinical study underway in the U.S. for SI-6603, a treatment for lumbar disc herniation. Ordinary income and net
income attributable to owners of parent fell 62.8% to ¥1,714 million and 59.1% to ¥1,493 million, respectively,
declining less steeply than operating income because of factors including the recording of foreign exchange
gains due to yen depreciation.
1) Net sales by segment
Pharmaceutical Business- Domestic Pharmaceuticals (¥2,965 million, down 22.9% year on year)
Deliveries to medical institutions of ARTZ, a joint function improvement agent for knee osteoarthritis, increased
year on year amid signs that the market is recovering from the impact of COVID-19, thanks to successful
measures to promote switching from competing products. The Company’s sales fell due to the impact of NHI
drug price reductions, despite an increase in shipment volume resulting from a shipment schedule adjustment.
The Company’s sales of the joint function improvement agent JOYCLU, launched on May 19, 2021,
declined substantially year on year, reflecting concentration of shipments in the first quarter of fiscal 2021 inconnection with the launch. Although the Company called attention to the risk of shock or anaphylaxis in theImportant Side Effects section of the JOYCLU package insert, in response to multiple reports of shock or
anaphylaxis occurring in patients following administration of JOYCLU, the Company issued a Dear Healthcare
Professionals Letter of Rapid Safety Communication (Blue Letter) on June 1, 2021 to increase awareness ofthese side effects among healthcare professionals. The Company is continuing cooperative efforts with sales
partner Ono Pharmaceutical Co., Ltd. to proactively gather side effects reports and other information and provide
safety-related information. Also, in April 2022, the Company initiated a clinical study to identify the cause of theside effects with the cooperation of specialists and medical institutions.
Deliveries to medical institutions of the OPEGAN series of ophthalmic viscoelastic devices increased year
on year, with the impact of COVID-19 running its course and the market gradually returning to the pre-COVID
growth trend. The Company’s sales fell as a result of NHI drug price reductions coupled with an inventory
adjustment by the sales partner.
The Company’s sales of MucoUp, a submucosal injection agent for endoscopic surgery, increased,reflecting a rebound in shipments from a low level in the first quarter of the previous fiscal year.
Although deliveries to medical institutions of HERNICORE, a treatment for lumbar disc herniation,
remained at the prior-year level, the Company’s sales rose due to a shipment schedule adjustment.
- Overseas Pharmaceuticals (¥1,788 million, up 12.5% year on year)
Local sales volume in the U.S. of Gel-One, an intra-articular single-injection viscosupplement for the treatmentof knee osteoarthritis, decreased year on year, reflecting the market trend looking ahead to a July 2022 healthinsurance system change relating to price disclosure and non-recurrence of a volume increase in the first quarterof fiscal 2021 accompanying recovery from the impact of COVID-19. The Company’s sales increased
substantially, fueled by the impact of yen depreciation and a volume increase resulting from shipment timing.
Local sales volume in the U.S. of SUPARTZ FX, an intra-articular 5-injection viscosupplement for thetreatment of knee osteoarthritis, was at the prior-year level, reflecting continuation of unfavorable market
3conditions for multiple-injection products due to the trend toward preference for products that require fewer
injections. However, the Company’s sales rose thanks to the impact of yen depreciation.
Local sales volume in China of ARTZ fell sharply because of a decline in the patient consultation rate dueto lockdowns in major cities accompanying the renewed spread of COVID-19. There were no shipments in thefirst quarter, in accordance with the annual shipping plan, because the sales partner built up inventory in theprevious fiscal year due to a packaging material change. Shipments are scheduled to restart in August 2022.
- Bulk Products and Contract Development and Manufacturing Organization (¥732 million, up 1.7% yearon year)
Overall sales were at the prior-year level. Although sales of contract development and manufacturing and otherservices of overseas subsidiary Dalton Chemical Laboratories, Inc. fell, sales of bulk products rose.
As a result of these developments and a steep decline in royalty income (¥1 million, down 100.0% year on year),sales from the Pharmaceuticals business segment fell 43.5% year on year to ¥5,488 million.
LAL Business
Sales from the LAL business segment increased 35.7% year on year to ¥2,819 million, reflecting steady sales inJapan and the contribution from higher sales of Bacterial Endotoxin Testing (BET) reagents and Clinical
Diagnostic (Fungitell) reagents and higher orders for contract testing services attributable to reinforcement ofsales activities at overseas subsidiary Associates of Cape Cod, Inc.
(2) Explanation of forward-looking information, including the forecast of consolidated financial results
It is difficult at present to prepare reasonable forecasts of consolidated financial results for fiscal 2022, ending
March 31, 2023, because it is necessary to assess the progress of efforts underway to identify the cause of shockor anaphylaxis occurring in patients following administration of the joint function improvement agent JOYCLU.
Accordingly, the Company will continue to refrain from announcing earnings forecasts at this time. Once it
becomes possible to prepare reasonable forecasts, the Company will promptly announce them.

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,
the Group will engage in efficient R&D activities focused on target compounds and high-priority target diseases
and make 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 2022 were ¥1,687 million, or 20.3% of net sales(excluding royalties).
The status of progress of principal R&D activities is described below.

SI-449 (adhesion barrier: developed in Japan)
Subject enrollment in a pilot study in the field of gynecology was completed in May 2022. The study is being
conducted for the purpose of expanding the scope of application of SI-449 by confirming usability and safety ingynecology.
Although a delay has occurred in the clinical trial schedule of a pivotal study of SI-449 in the field ofgastroenterological surgery, conducted since May 2020, due to the spread of COVID-19 infection, subject
enrollment is steadily proceeding thanks to the effectiveness of measures such as expanding the trial site network
and implementation of a remote response for facilities where visiting is restricted.
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
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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.
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