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SymBio Pharmaceutials｜4582｜

Shared Research Report

SymBio Pharmaceuticals | 4582 |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 at http://www.sharedresearch.jp and various professional platforms. Our sponsored research reports provide an in-depth
and informative view of the companies we cover, and contain the latest available information updated in a timely manner.

OnFebruary 9 2017, SymBio Pharmaceuticals announced earnings results for full-year FY12/16.
FY12/15Cumulative

FY12/16

FY12/16(JPYmn)

Q1

Q2

Q3

Q4

Q1Q2

Q3

Q4% of FY

Sales

408

976

1,332

1,933

193

1,211

1,408

2,368

101.2%

YoY

135.0%

0.1%

-1.2%

-1.1%

-52.7%

24.0%

5.6%

22.5%

Gross profit

FY Est.
2,339
21.0%

120283

395

583

57405

478

904

YoY

272.1%

14.3%

11.8%

10.7%

-53.1%

43.2%

21.1%

55.1%

GPM

29.5%

28.9%

29.7%

30.2%

29.2%

33.4%

34.0%

38.2%

453

931

1,383

3,135575

1,225

2,011

3,031

1.1%

4.2%4.7%

71.3%

27.0%

31.6%

45.4%

-3.3%

110.9%

95.3%

103.8%

162.1%

297.6%

101.2%

142.8%

128.0%

-332

-648

-988

-2,552-518-820-1,532-2,127

YoY---------OPM---------

SG&A expenses
YoY
SG&A-to-sales ratio

Operating profit

Recurring profit

--419

-674

-1,056-2,630-655-1,177-1,917-2,317

YoY---------

RPM---------Net income--2,778

-420

-676

-1,059-2,632-653-1,175-1,916-2,313

YoY---------Net margin---------

FY12/15

Quarterly(JPYmn)

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Gross profit

408
135.0%
120

568-29.2%
162

356
-4.5%
113

601
-1.0%
188

193
-52.7%
57

1,018
79.2%
348

197
-44.7%
74

960
59.9%
426

YoY

272.1%-24.5%

5.8%

8.5%-53.1%

114.8%-34.6%

126.6%

GPM

29.5%

28.6%

31.6%

31.3%

29.2%

34.2%

37.4%

44.3%

453

478

452

1,752

575

650

786

1,021

1.1%

7.3%

6.0%

243.7%

27.0%

36.0%

73.8%

-41.7%

110.9%

84.1%

127.0%

291.6%

297.6%

63.9%

399.2%

106.2%

-332
-

-316
-

-340
-

-1,564
-

-518
-

-302
-

-712
-

-595
-

-419
-

-255
-

-382
-

-1,574
-

-655
-

-522
-

-740
-

-400-

-420-

-256
-

-383
-

-1,573
-

-653
-

-523
-

-741
-

-397
-

YoY

SG&A expenses
YoY
SG&A-to-sales ratio

Operating profit
YoY
OPM

Recurring profit
YoY
RPM

Net income
YoY

Net margin-2,815

FY12/16

Q1

Sales--2,811

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

FY12/16 sales totaled JPY2.4bn (+22.5% YoY) thanks to domestic sales of Treakisym. Products sales rose 10.6%. It also
booked a non-recurring revenue resulting from achieving the sales milestone of SyB L-0501 in Taiwan.
SG&A expenses fell 3.3% YoY to JPY3.0bn. R&D expenses fell to JPY1.7bn (-18.1% YoY). There were expenses for clinical
trials for TREAKISYM®, the intravenous and oral formulations of Rigosertib Sodium, and SyB P-1501. SG&A expenses
excluding R&D expenses were up 24.0% at JPY1.4bn.

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SymBio Pharmaceutials｜4582｜

As a result, operating loss totaled JPY2.1bn (loss of JPY2.6bn in FY12/15). The company also reported a recurring loss ofJPY2.3bn (loss of JPY2.6bn last year) partly due to non-operating expenses of JPY196mn (mainly on forex losses ofJPY159mn). Net loss was JPY2.3bn (loss of JPY2.6bn).

Domestic
Treakisym (SyB L-0501; 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 the indications of refractory or relapsed low-grade non-Hodgkin’s lymphoma (NHL) and mantle cell lymphoma (MCL).
Though product sales based on the National Health Insurance (NHI) drug price declined slightly to 99.2% of the previous
year’s result, product sales to Eisai were largely in line with plan.
Regarding chronic lymphocytic leukemia (CLL), the company filed an NDA in December 2015, and obtained approval forthe additional indication in August 2016. The company developed and applied for this indication upon request of theMinistry of Health, Labour and Welfare in Japan as one of the “Unapproved or Off-Labeled Drugs with High MedicalNeeds.” This is the second approval after the approval of an sNDA for the indication of refractory/relapsed low-grade NHL
and mantle cell lymphoma which the company has already received in October 2010.
In Japan, the company submitted a new drug application (NDA) to Japan’s Pharmaceuticals and Medical Devices Agency(PMDA) in December 2015 for a first-line treatment of low-grade NHL and MCL and obtained approval for the additional
indication in December 2016. Meanwhile, in Europe, though the company received notification on January 2016 from
Astellas Pharma that its application had been withdrawn, it continued with the domestic approval process upon
consulting with the PMDA, resulting in the approval of the additional indication.

Rigosertib Sodium (SyB L-1101 [IV]/SyB C-1101 [oral]; anticancer agent; generic name: Rigosertib Sodium)
Regarding these agents, for which a licensing agreement was entered into in July 2011, the company changed theirgeneric name from “Rigosertib” to “Rigosertib Sodium” in accordance with the notice of decision on its JapaneseAccepted Names for Pharmaceuticals (JAN) received in October 2016. Onconova Therapeutics, Inc., the licensor, iscurrently conducting a global Phase III trial and SymBio Pharmaceuticals started the Japan trial in December 2015. Theglobal Phase III trial addresses higher risk myelodysplastic syndrome (MDS) patients who do not respond to treatment orrelapsed after treatment with hypomethylating agents (HMAs), the current standard of care (“Primary HMA Failure”) andis under way at clinical trial sites in more than ten countries worldwide. The company has taken steps to register patients,
and completed the first patient enrollment in July 2016. Enrollments are currently accumulating.
SymBio started domestic Phase I clinical trials for the oral (IV) form of Rigosertib Sodium (used in combination withazacitidine) for higher-risk myelodysplastic syndrome (MDS) in December 2015. Due to delays in the supply of drugs forthe joint trials, patient enrollment has not started as of November 11, 2016. The company is looking to start patientregistration upon resolution of this issue, and complete joint trials in line with its plans. SymBio is considering
participating in the global clinical trial to be conducted by Onconova.

SyB P-1501, a post-operative patient-controlled analgesia
The company started a domestic phase III clinical trial for SyB P-1501—licensed by the Medicines Company (through its
wholly owned subsidiary Incline Therapeutics)—for the short-term management of acute post-operative pain duringhospitalization in June 2016. The company is looking to complete the phase III clinical trial quickly, and obtain regulatory
approval in 2019.

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New drug candidates
From a long-term perspective, SymBio will continue to search for and evaluate promising drug candidates, and acquire
global rights for these drugs to become a sustainable and profitable pharmaceutical company with growth potential andprofitability. Further, in May 2016, the company established SymBio Pharma USA, Inc., a wholly owned US-based
subsidiary, as a strategic base for overseas business development. The company looks to leverage this subsidiary toactively acquire rights over new drug development candidates globally, and engage in development andcommercialization in major markets including the US, Japan, and Europe to accelerate the process of turning into a global
specialty pharmaceutical company.

Overseas
The company marketed Treakisym in Korea, Taiwan, and Singapore, and overseas sales were steady.

Full-year company forecasts
FY12/16 Forecasts(JPYmn)Sales
CoGS
Gross profit
GPM
SG&A expenses
SG&A-to-sales ratio
R&D expenses
Operating profit
OPM
Recurring profit
RPMNet IncomeNet margin

FY12/16FY Act.
2,368
1,464904
38.2%
3,031
128.0%
1,667-2,127-2,317-2,313-

FY12/17FY Est.
2,903-3,238-3,303-3,306-

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

Earnings outlook
Sales are expected to reach JPY2.9bn (+22.6% YoY), attributable to higher sales from Treakisym.
R&D expense is expected to total JPY2.3bn (up from JPY1.7bn in FY12/16), while total SG&A expense–including R&D–isprojected to reach JPY4.1bn (up from JPY3.0bn).
R&D spending is slated to increase with the development for approvals of the manufacture and sale of 1) intravenous andoral rigosertib and 2) SyB P-1501. The company will consider expanding indications of Treakisym. In a bid to boost its
enterprise value for the long term, SymBio plans to consider introducing candidates for newly developed drug products
and enhancing the overall value of its pipeline.
As a result, SymBio forecasts an operating loss of JPY3.2bn (operating loss of JPY2.1bn in FY12/16), a recurring loss ofJPY3.3bn (recurring loss of JPY2.3bn in FY12/16), and a net loss of JPY3.3bn (net loss of JPY2.3bn in FY12/16).

Pipeline
Treakisym
The company has finished the phase II trial for relapsed or refractory moderate to high-grade non-Hodgkin lymphoma(NHL) and continues considering expansion of indications.

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Intravenous and oral rigosertib
The company is moving ahead with the accumulation of cases in Japan in the global phase III trial for the intravenous
version of rigosertib Similarly, SymBio aims to quickly start initial patient enrollment by resuming the domestic phase I trialof the oral version of rigosertib for use in combination with azacitidine. Regarding development with low-risk MDS as thetarget efficacy, SymBio will consider it while watching development progress at Onconova Therapeutics.

SyB P-1501, a post-operative patient-controlled analgesia
SymBio reached an in-licensing agreement for SyB P-1501 in FY12/15. The company plans to register as many cases as
possible to finish its domestic phase III clinical trial.

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

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