R SymBio Pharmaceuticals / 4582
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Update Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

This PDF document is an updated note on the company. A comprehensive version of the report on the company, including this latest update, isavailable on our website and various professional platforms.

On February 6, 2020, SymBio Pharmaceuticals Ltd. announced earnings results for full-year FY12/19.
FY12/18

Cumulative

FY12/19

FY12/19(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

% of FY

Sales

888

1,928

3,032

3,836

1,611

2,005

2,008

2,838

91.8%

YoY

2.1%

8.0%

25.5%

11.4%

81.4%

4.0%

-33.8%-26.0%

Gross profit
YoY
GPM

SG&A expenses

250

573

924

1,173

609

529

563

865

4.4%
28.1%

12.4%
29.7%

37.0%
30.5%

13.7%
30.6%

144.0%
37.8%

-7.7%
26.4%

-39.1%
28.0%-26.3%
30.5%

964

1,898

2,832

3,829

1,205

2,545

4,099

5,166

26.1%
108.5%

8.7%
98.4%-32.3%
93.4%-23.1%
99.8%

25.0%
74.8%

34.1%
126.9%

44.8%
204.1%

34.9%
182.1%-715-1,325-1,908-2,656-596-2,015-3,536-4,302

-

-

-

-

-

-

-

-

-749

-1,378-1,938-2,749-616-2,069-3,642-4,377

-

-

-

-

-

-

-

-

Net income-760-1,389-1,941-2,753-617-2,070-3,641-4,376

YoY
Net margin

-

-

-

-

-

-

-

-

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

888
2.1%
250

1,040
13.5%
324

1,104
75.1%
351

803
-21.8%
249

1,611
81.4%
609

394
-62.2%-793-99.7%
33

830
3.3%
302

4.4%
28.1%

19.5%
31.1%

113.0%
31.8%-30.3%
31.0%

144.0%
37.8%--90.5%
-

21.4%
36.4%

YoY
SG&A ratio

Operating profit
YoY
OPM

Recurring profit
YoY
RPM

Quarterly(JPYmn)Sales
YoY

Gross profit
YoY
GPM

SG&A expenses
YoY
SG&A ratio

Operating profit
YoY
OPM
YoY
RPM

964

934

934

997

1,205

1,340

1,555

1,067

-4.9%
89.8%

-61.7%
84.6%

25.4%
124.2%

25.0%
74.8%

43.4%
340.4%

66.5%
-

7.0%
128.6%

-715
-

-610
-

-583
-

-749
-

-596
-

-1,419--1,521
-

-765
-

-749
-

-629
-

-560
-

-811
-

-616
-

-1,453--1,573
-

-735
-

-760
-

-629
-

-552
-

-812
-

-617
-

-1,453--1,571
-

-736
-

-

Net income
YoY
Net margin

FY12/1926.1%
108.5%-

Recurring profit

FY12/18

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

FY Est.
3,092-19.4%--3,780---3,856---3,859----Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Breakdown of SG&A expenses
FY12/18

Cumulative

FY12/19(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

SG&A expenses

964

1,898

2,832

3,829

1,205

2,545

4,099

5,166
34.9%

YoY

26.1%

8.7%

-32.3%-23.1%

25.0%

34.1%

44.8%

R&D expenses

416

839

1,293

1,833

472

963

1,972

2,442

YoY

5.3%

-0.1%

-52.3%-39.3%

13.4%

14.8%

52.5%

33.2%

548

1,059

1,539

1,996

733

1,582

2,127

2,725

48.5%

16.9%

4.6%

1.8%

33.8%

49.3%

38.3%

36.5%

SG&A expenses excl. R&D
YoY

FY12/18

Quarterly

FY12/19(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

SG&A expenses

964

934

934

997

1,205

1,340

1,555

1,067
7.0%

YoY

26.1%

-4.9%

-61.7%

25.4%

25.0%

43.4%

66.5%

R&D expenses

416

423

454

540

472

491

1,009

470

YoY

5.3%

-4.9%

-75.7%

76.0%

13.4%

16.2%

122.1%-13.0%

SG&A expenses excl. R&D
YoY

548

511

479

458

733

849

546

597

48.5%

-4.8%

-15.2%

-6.4%

33.8%

66.0%

13.8%

30.6%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

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R SymBio Pharmaceuticals / 4582
Coverage

Update Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Full-year FY12/19 results▷

Sales:▷

Recurring loss:

JPY4.4bn (loss of JPY2.7bn in FY12/18)

Net loss:

JPY4.4bn (loss of JPY2.8bn in FY12/18)▷▷

JPY2.8bn (-26.0% YoY)

Operating loss: JPY4.3bn (loss of JPY2.7bn in FY12/18)

As the company explained as its reason for earnings forecast revisions announced in August 2019, foreign matter contamination
and appearance defects were discovered in lyophilized injection agents imported from Astellas Deutschland GmbH, a subsidiaryof Astellas Pharma Inc. The extent of contamination and defects significantly exceeded limits permitted by quality standards
stipulated in the supply agreement, and as a result, the shipments of Treakisym® 100mg vials to its domestic distributor Eisai wasdelayed. Accordingly, sales declined YoY.
SG&A expenses rose 34.9% YoY to JPY5.2bn and R&D expenses increased 33.2% YoY to JPY2.4bn. This included upfront
payments for new drug brincidofovir (an antiviral drug for the treatment of infections), and expenses for conducting clinical trials
of intravenous and oral formulations of Treakisym® and rigosertib. Excluding R&D expenses, SG&A expenses increased by 36.5%
YoY to JPY2.7bn.
As a result, operating loss, recurring loss, and net loss widened YoY.

Domestic
Preparations for in-house sales organization begin
The business alliance agreement between SymBio and Eisai Co., Ltd. under which Eisai acts as a sales agent expires in December
2020. SymBio started to build an in-house sales organization for Treakisym® in the domestic market in October 2018. Key
management priority is to move into the black in FY12/21 and ongoing profit growth thereafter. The company is therefore laying
the groundwork for a shift to an internal sales organization to drive future business development.
The company increased Treakisym® sales representatives and conducted training to form the core of its in-house marketing
network. Information provision activities were started from July 2019 by the Treakisym® sales representatives dispatched to eachregion to promote the shift to a nationwide operation with close local ties. The company made progress toward completing theformation of its nationwide sales structure (planned in 1H FY12/20). In Q4 FY12/19 (October to December 2019) it hired
additional regional sales managers and Treakisym® managers necessary to complete the sales structure, as well as moving ahead
with business alliances with pharmaceutical wholesalers and establishing logistics centers in East and West Japan to provide a
distribution and logistics function. It also prepared a new IT system that includes ERP to upgrade its IT infrastructure.

Treakisym® (SyB L-0501[lyophilized injection]/SyB L-1701 [RTD]/SyB L-1702 [RI]/SyB C-0501 [oral]; anticancer agent; generic name:bendamustine hydrochloride)The company markets the anticancer agent Treakisym® in Japan through its business partner, Eisai Co., Ltd. (TSE1: 4523) for theindications of untreated low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma (marketing approval obtained in
December 2016), refractory or relapsed low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma (October 2010), andchronic lymphocytic leukemia (August 2016).
The combination therapy of Treakisym® and rituximab (BR therapy) was newly included in the Practical Guidelines for
Hematological Malignancies 2018 edited and published by Japanese Society of Hematology as a standard treatment option,
which applies to all of the approved indications. This has seen Treakisym® establish its position as a standard treatment for
lymphatic cancer. By switching to its own sales structure in 1H FY12/20, the company plans to attain a large market share as inmarkets in Europe and the US.
In addition to the above three approved indications, the company is conducting a phase III clinical trial for the fourth indication of
relapsed or refractory diffuse large B-cell lymphoma (r/r DLBCL). The response rate (primary endpoint) in the test results released

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R SymBio Pharmaceuticals / 4582
Coverage

Update Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

in November 2019 was better than expected. As of February 2020, the company is preparing to apply for approval in 1H
FY12/20.
SymBio is targeting a transition to Treakisym® liquid formulation (RTD and RI formulations), for which it concluded an exclusive
licensing agreement in Japan with Eagle Pharmaceuticals (based in New Jersey, US) in September 2017. The company has alreadyconsulted with PMDA and filed for approval of the RTD formulation in September 2019 with an eye towards commercialization by
Q1 FY12/21. SymBio launched clinical trials for the RI formulation in November 2018 primarily to confirm safety, and has madesteady progress with patient enrollments since enrolling the first patient in April 2019, having enrolled 31 patients as of end
January 2020. The company will apply for approval without delay after the end of the clinical trials of the RI formulation and aims
to begin sales in 1H FY12/22. Liquid formulations of Treakisym® will offer significant value added (reduced burden) to patientsand healthcare professionals, and patent protection in the form of a liquid product license makes it possible to extend the
product life of Treakisym® until 2031.
In July 2018, SymBio obtained approval for the partial revision to the marketing authorization of Treakisym®. As a result,
Treakisym® can now be used in combination with not only rituximab but new anti-CD20 antibodies as well. This will allow
combination therapy with obinutuzumab (launched in August 2018) for the treatment of CD 20-positive follicular lymphoma (FL),the most common histological type of low-grade NHL, enabling the company to provide patients with a new treatment therapy.
In March 2019, the company obtained approval for the partial revision to its application concerning the use of Treakisym® as apretreatment agent in tumor-specific T cell infusion therapy. This will allow Treakisym® to be used as a pretreatment agent for
Kymriah® intravenous infusion, which was approved as the first chimeric antigen receptor T-cell (CAR-T) therapy in Japan andlisted on the NHI drug price list in May 2019.
The Phase I clinical trial of Treakisym® as a treatment for progressive solid tumors and preclinical study to verify the efficacy ofTreakisym® in the treatment of systemic lupus erythematosus (SLE), which were conducted to explore further potential
indications of the drug, have been completed. However, the company decided to suspend development despite the initial
objectives of the studies being met. Its policy is to prioritize development in Japan and overseas of antiviral drug candidate
brincidofovir (for which it has obtained a license) to utilize its management resources most effectively.

Rigosertib Sodium (SyB L-1101 [IV]/SyB C-1101 [oral]; anticancer agent; generic name: Rigosertib Sodium)
Onconova Therapeutics, Inc., the licensor, is currently conducting a global phase III trial and SymBio Pharmaceuticals started theJapan trial in December 2015 (48 patients enrolled as of December 2019). The global phase III trial addresses higher-risk
myelodysplastic syndromes (higher-risk 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, andis under way at clinical trial sites in more than 20 countries worldwide. In December 2019, Onconova announced that it hadreached over 90% of its target of enrolling 360 patients worldwide as of November 2019. The company plans to report top-line(primary endpoint) results in 1H 2020. Based on these trial results, the company plans to apply for approval in Japan at the sametime as in the US and Europe.
Regarding the oral formulation of rigosertib, Onconova completed phase I/II clinical trials for the drug used in combination withazacytidine, whose results suggested the efficacy and safety of the combination therapy.. To verify the tolerability and safety ofthe oral formulation of rigosertib among Japanese patients, SymBio began phase I clinical trials in Japan in June 2017, enrolled thefirst patients in October 2017, and completed patient enrollment in June 2019. After completing the phase I trials, the company
will consider phase I clinical trials for rigosertib used in combination with azacitidine, participate in global phase III clinical trials of
the drug used in combination with azacitidine as first-line treatment for higher-risk MDS currently planned by Onconova, andapply for approval of the oral formulation of the drug in Japan at the same time as in the US and Europe. In December 2019,
Onconova announced that it was considering the design of a Phase II/III adaptive trial with untreated higher risk MDS patients
based on the data presented at the 61st American Society of Hematology (ASH) Annual Meeting in December 2019.

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R SymBio Pharmaceuticals / 4582
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Update Notes

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Antiviral drug for the treatment of infections SyB V-1901 (generic name: Brincidofovir）
In September 2019, SymBio concluded an exclusive global license agreement with Chimerix Inc. (hereafter Chimerix) for
brincidofovir (SyB V-1901, hereafter BCV IV and BCV Oral), an antiviral drug for the treatment of infections in intravenous and oral
forms). The company acquired exclusive global rights to develop, manufacture, and market BCV for all diseases except smallpox.
The company will initially develop BCV-IV for treatment of viral hemorrhagic cystitis (vHC) occurring after hematopoietic stem
cell transplantation, which have high unmet medical demand. It also plans to market BCV IV globally after conducting
international joint clinical trials in countries including the US and Europe. As well, the company plans clinical development of BCV
IV as an antiviral treatment of infections after kidney transplants, because it is likely to be effective for transplants other thanhematopoietic stem cell transplants, including organ transplants. The company looks to expand its business in Europe, the US
and Asia (including China), where organ transplant markets are large. It will also consider forming partnerships that takeadvantage of regional characteristics of these target diseases. The company will explore all options for maximizing business value,
including the strategic utilization of wholly-owned subsidiary SymBio Pharma USA, Inc. established in May 2016. The company isworking on a development plan (including improvement of the formulation) for BCV Oral. BCV Oral has demonstrated a strong,
broad-spectrum antiviral effect in clinical trials in Europe and the US by Chimerix. The company will design a global clinical trialbased on these findings.

SyB P-1501, a post-operative patient-controlled analgesia
Regarding SyB P-1501 licensed by The Medicines Company (through its wholly owned subsidiary Incline Therapeutics, Inc.) in
October 2015, SymBio learned of an event that raised concerns about the continuity of its business, and in the interests of patient
welfare, it suspended further patient enrollment in April 2017.
The company initiated an arbitration against The Medicines Company, under the rules of the International Chamber ofCommerce, seeking damages of USD82mn (approximately JPY9.0bn) arising from The Medicines Company’s repudiation of thelicense agreement. SymBio argued that The Medicine Company’s failure to provide sufficient assurance to the company
regarding the performance of obligations under on the license agreement in light of its decision to suspend and withdraw frombusiness activities relating to SyB P-1501in the European and US markets was a material breach of the license agreement.
Arbitration proceedings against The Medicines Company are still ongoing. On January 6, 2020, Swiss company Novartis AG
announced that it had acquired The Medicines Company.

Overseas
The company marketed SyB L-0501 in South Korea, Taiwan, and Singapore, and product sales were in line with the company’splans.

Full-year company forecasts
FY12/19

FY12/20(JPYmn)Sales
Gross profit

1H Act.
2,005
529

2H Est.
833
335

FY Est.
2,838
865

FY Est.
3,404
1,146

GPM

33.7%

26.4%

40.3%

30.5%

SG&A expenses

2,545

2,622

5,166

6,236

SG&A ratio

126.9%

314.8%

182.1%

183.2%

Operating profit-2,015-2,287-4,302-5,090Recurring profit-2,069-2,307-4,377-5,134

Net income-2,070-2,306-4,376-4,803

-

-

-

-

OPM
RPM

-

Net margin

-

-

-

Source: Shared Research based on company data.
Note: Figures may differ from company materials due to differences in rounding methods.

Earnings outlook▷ Sales:

JPY3.4bn (+20.0% YoY)

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R SymBio Pharmaceuticals / 4582
Coverage

Update Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp▷ Operating loss:

JPY5.1bn (loss of JPY4.3bn in FY12/19)▷ Net loss:

JPY4.8bn (loss of JPY4.4bn in FY12/19)▷ Recurring loss:

JPY5.1bn (loss of JPY4.4bn in FY12/19)

SymBio expects sales growth primarily on rising domestic product sales for Treakisym®.

It forecasts SG&A expenses of JPY6.2bn (+20.7% YoY) and R&D expenses of JPY2.7bn (+9.7% YoY). SymBio plans to continue
developing Treakisym® for relapsed or refractory diffuse large B-cell lymphoma (r/r DLBCL) and liquid formulations of Treakisym®
(RTD and RI formulations), oral and intravenous rigosertib products, and new drug brincidofovir, an antiviral drug to treat infections.
The company forecasts SG&A expenses excluding R&D at JPY3.6bn (+30.5% YoY).

The main pipeline development plans are as follows.

Treakisym®
▷ For r/r DLBCL, the company plans to continue preparations to apply for drug approval▷ SymBio is preparing to begin sales of the RTD formulation (which has been approved) in Q1 FY12/21 and progressing withclinical trials of the RI formulation mainly to confirm safety for Treakisym® in-licensed from Eagle Pharmaceuticals

Oral and intravenous rigosertib products▷ SymBio is continuing to develop intravenous rigosertib formulation, and is enrolling patients in Japan as part of global phase III
clinical trials▷ For oral rigosertib, SymBio is preparing for participation in global phase III trials of rigosertib azacitidine combination therapy that
Onconova Therapeutics is planning

On the same day ,the company announced a medium-term plan covering FY12/20–FY12/22.
Medium-term plan targets
FY12/19

FY12/20

FY12/21(JPYmn)

Act.

Est.

MTP

FY12/22
MTP

Sales

2,811

3,404

9,008

10,816

Operating profit (loss)-4,302-5,090

1,031

1,482

Recurring profit (loss)-4,377-5,134987

1,438

Net income (loss)-4,376-4,803

1,356

1,717

Source: Shared Research based on company data

Targets in medium-term plan (FY12/20–FY12/22)
Sales
SymBio expects product sales of Treakisym® to account for the bulk of sales. Product sales targets reflect the recent pace of market
penetration and sales trends, which feed into the company’s revised sales growth rates calculated over the medium-term plan
period. Currently sales are booked based on product shipment sales to the sales distributor, Eisai. From FY12/21 onward, sales
will be booked on product shipment sales to pharmaceutical wholesalers from the company’s own in-house sales organization.
In estimating sales in FY12/21 and FY12/22, SymBio disclosed targets assuming increased product sales of Treakisym® as it expects
to gain approval of the drug as a treatment for relapsed or refractory diffuse large B-cell lymphoma (DLBCL) in Q2 FY12/21.

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R SymBio Pharmaceuticals / 4582
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SG&A expenses
The company has broken down SG&A expenses into primarily R&D spending and other SG&A expenses.

▷ The company calculated R&D expenses based on the latest development plans for its existing pipeline comprising Treakisym®,
rigosertib IV and oral formulations, and brincidofovir, an antiviral drug for the treatment of infections.

▷ The company has not factored in upfront payments for in-licensing drug candidates outside its existing pipeline after

brincidofovir, an antiviral drug for the treatment of infections, although it will continue to evaluate and investigate them.

▷ Other SG&A expenses comprise primarily Treakisym® sales and marketing, production and distribution, business development,
and management related costs. SymBio is factoring in costs associated with building and operating its own sales organizationfrom FY12/20 onward ahead of the move to sell Treakisym® in-house from FY12/21. It forecasts an increase primarily in personnel
costs due to a higher medical representative headcount and higher costs due to more activities.

Net income
The company forecasts net income exceeding recurring profit in FY12/21 and FY20/22 to reflect the reduction of loss carried overfrom the previous fiscal year from FY12/21 (when it is expected to turn profitable) onward on tax effect accounting.

Personnel plans
SymBio assumes it will complete the formation of its 62-member nationwide sales structure by Q2 FY12/20 and transition tooperating its own sales force in FY12/21. It plans to allocate the bare minimum of necessary personnel in other parts of theorganization and is budgeting for personnel expenses accordingly. Regarding plans to increase personnel expenses for global
expansion of brincidofovir, an antiviral drug to treat infections, the company noted that as of February 2020, it was considering aclinical trial plan and would not need extra personnel during the plan period. Accordingly, it has not booked related personnel
expenses.

Funding plans
In April 2018, the company decided to issue its 45th through 47th stock acquisition rights to secure funds needed to operate.

This note is the most recent addition to the full report.

6/7

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