R SymBio Pharmaceuticals / 4582
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Update Notes

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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.

On February 7, 2018, SymBio Pharmaceuticals Ltd. announced earnings results for Full-year FY12/17.
FY12/16

Cumulative

FY12/17

FY12/17(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

% of FY

Sales

193

1,211

1,408

2,368

870

1,786

2,417

3,444

96.1%

YoY

-52.7%

24.0%

5.6%

22.5%

350.2%

47.5%

71.7%

45.4%

Gross profit

FY Est.
3,583
51.3%

57

405

478

904

239

510

675

1,031

YoY

-53.1%

43.2%

21.1%

55.1%

323.0%

26.0%

41.0%

14.1%

GPM

29.2%

33.4%

34.0%

38.2%

27.5%

28.5%

27.9%

29.9%

575

1,225

2,011

3,031

764

1,746

4,183

4,978

YoY

27.0%

31.6%

45.4%

-3.3%

32.9%

42.5%

108.0%

64.2%

SG&A ratio

297.6%

101.2%

142.8%

128.0%

87.9%

97.7%

173.1%

144.5%-518-820-1,532-2,127-525-1,236-3,508-3,947

YoY

-

-

-

-

-

-

-

-

-

OPM

-

-

-

-

-

-

-

-

-

SG&A expenses

Operating profit

-

-655

-1,177-1,917-2,317-583-1,268-3,547-3,977

YoY

-

-

-

-

-

-

-

-

RPM

-

-

-

-

-

-

-

-

-653

-1,175-1,916-2,313-583-1,266-3,546-3,978

YoY

-

-

-

-

-

-

-

-

-

Net margin

-

-

-

-

-

-

-

-

-

Recurring profit

Net income

FY12/16

Quarterly(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Gross profit

1,018
79.2%
348

197
-44.7%
74

960
59.9%
426

870
350.2%
239

916
-9.9%
271

631
220.3%
165

1,028
7.0%
357

YoY

-53.1%

114.8%-34.6%

126.6%

323.0%-22.2%

123.8%-16.2%

GPM

29.2%

34.2%

37.4%

44.3%

27.5%

29.6%

26.1%

34.7%

575

650

786

1,021

764

982

2,437

795

YoY

27.0%

36.0%

73.8%

-41.7%

32.9%

51.1%

210.1%-22.1%

SG&A ratio

297.6%

63.9%

399.2%

106.2%

87.9%

107.1%

386.5%

77.4%

-518
-

-302
-

-712
-

-595
-

-525
-

-711
-

-2,272
-

-439
-

-655
-

-522
-

-740
-

-400
-

-583
-

-685
-

-2,279
-

-430
-

-653
-

-523
-

-741
-

-397
-

-583
-

-684
-

-2,280
-

-432
-

YoY

SG&A expenses

Operating profit
YoY
OPM

Recurring profit
YoY
RPM

Net income
YoY-4,009---4,009FY12/17193-52.7%
57

Sales

-

-3,932

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

FY12/17 sales totaled JPY3.4bn (+45.4% YoY) thanks to domestic sales of Treakisym®.
Due to the sales increase, gross profit came to JPY1.0bn (+14.1% YoY). Gross profit margin was 29.9% (-8.2pp).
SG&A expenses rose 64.2% YoY to JPY5.0bn. R&D expenses increased 81.0% to JPY3.0bn. There were expenses for clinical trials
for Treakisym®, the intravenous and oral formulations of Rigosertib Sodium and SyB P-1501, and the cost of in-licensing liquid
formulation products of Treakisym® (RTD and RI formulations). SG&A expenses excluding R&D expenses were up 43.7% at
JPY2.0bn.
As a result, operating loss totaled JPY4.0bn (loss of JPY2.1bn in FY12/16). The company also reported a recurring loss of JPY4.0bn(loss of JPY2.3bn in FY12/16) partly due to non-operating expenses of JPY34mn (mainly on share issue expenses of JPY14mn, forex
losses of JPY10mn, and fees and commissions paid of JPY9mn). Net loss was JPY4.0bn (loss of JPY2.3bn in FY12/16).

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R SymBio Pharmaceuticals / 4582
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Domestic
Treakisym® (SyB L-0501/SyB L-1701 (RTD) /SyB L-1702 (RI) /SyB C-0501 (oral); anticancer agent; generic name: bendamustinehydrochloride)The company markets the anticancer agent Treakisym® in Japan through its business partner, Eisai Co., Ltd. (TSE1: 4523) for theindications of refractory or relapsed low-grade non-Hodgkin’s lymphoma (NHL) and mantle cell lymphoma (MCL), untreatedlow-grade NHL and MCL, and chronic lymphocytic leukemia (CLL).
As a result of additional indications, sales of Treakisym® based on the National Health Insurance (NHI) drug price grew 60.9% YoY,
and accordingly product sales to Eisai increased 62.7%.
In addition to the above three approved indications, the company has filed an NDA for a fourth indication to help patients whoneed new treatments and maximize the value of the product. The company has completed phase III clinical trials for relapsed or
refractory diffuse large B-cell lymphoma (DLBCL, or aggressive NHL). In response to strong medical needs, the company finishedconsultation with the Pharmaceuticals and Medical Devices Agency and began phase III clinical trials toward the addition of an
indication in August 2017, enrolling the first patient in January 2018.
In addition to ongoing efforts to add new indications, in September 2017, the company concluded an exclusive licensing
agreement with Eagle Pharmaceuticals (based in New Jersey, US) to develop, market, and sell liquid formulations of Treakisym®
(RTD and RI formulations) in Japan for Treakisym®’s product life cycle management. The RTD and RI products offer significant
value added to patients and healthcare professionals, and extends Treakisym®’s product life cycle until 2031.
SymBio is exploring further expansion of the Treakisym® business by developing an oral formulation in addition to the injection
currently under development or on sale to treat solid tumors and autoimmune diseases. In this context, the company
commenced a phase I clinical trial for progressive solid tumors in January 2018, with the aim of examining the recommended
dosage and schedule as well as tolerability and safety of the oral formulation of Treakisym®, and narrowing down the types ofpotential target tumors.

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 (30 patients enrolled so far). The global Phase III trial addresses higher risk myelodysplastic
syndrome (MDS) patients who do not respond to treatment or relapsed after treatment with hypomethylating agents (HMAs),
the current standard of care (“Primary HMA Failure”) and is under way at clinical trial sites in more than 20 countries worldwide.
The company completed the first patient enrollment in July 2016 and enrollments are smoothly accumulating. Based on the
results of an interim analysis performed in January 2018, SymBio decided to continue the trial, increasing the number of patient
enrollment in accordance with a pre-determined statistical criteria.
SymBio planned to start domestic Phase I clinical trials for the oral form of Rigosertib (used in combination with azacitidine) for
higher-risk myelodysplastic syndrome (MDS), however, due to delays in the supply of drugs by Onconova for the trials, patient
enrollment did not make progress. Since Onconova resumed the supply of clinical trial materials, SymBio initiated a phase I
clinical trial in Japan in June 2017 and enrolled the first patient in October. The purpose of the Japanese phase I study is to confirm
the safety of high-dose oral rigosertib, which was added to the ongoing US phase II study by Onconova in untreated orrelapsed/refractory patients with higher-risk MDS. After demonstrating the safety of high-dose oral rigosertib, SymBio intends to
immediately recommence an oral rigosertib/azacitidine combination trial in Japan, and participate in the global phase III study inuntreated higher-risk MDS patients that Onconova is planning.

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 during hospitalization inJune 2016. The company enrolled the first patient in November 2016 and was making progress with case accumulation. However,
SymBio later found a fact that raises concerns about the continuity of The Medicines Company’s SyB P-1501 business. In the

2/6R SymBio Pharmaceuticals / 4582
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interests of patient welfare, SymBio has suspended further patient enrollment since April 2017 and is in talks with The Medicines
Company regarding how the SyB P-1501 clinical trial and commercialization in Japan would be affected. The license agreementwith Incline Therapeutics, Inc. was terminated in November 2017.
The Company initiated an arbitration against The Medicines Company in October 2017, under the rules of the International
Chamber of Commerce, seeking damages of USD82mn (approximately JPY9.0bn) arising from The Medicines Company’s
repudiation of the license agreement.
In conjunction with the termination of the license agreement, the Company will terminate the development of SyB P-1501, a
process that the Company expects to complete by March 2018.

New drug candidates
From a long-term perspective, SymBio continues to search for and evaluate promising drug candidates, in a bid to acquire global
licensing rights for these drugs and grow into a sustainable and profitable biopharmaceutical company with growth potential andprofitability. At present, the company is considering licensing rights for several drug candidates. Further, in May 2016, thecompany established SymBio Pharma USA, Inc., a wholly owned US-based subsidiary, as a strategic base for overseas businessdevelopment. The company looks to leverage this subsidiary to actively acquire rights over new drug development candidates
globally, and engage in development and commercialization in major markets including the US, Japan, and Europe to transition
to a global specialty pharmaceutical company.

Overseas
The company marketed Treakisym® in Korea, Taiwan, and Singapore, and overseas sales were ahead of target.

Full-year company forecasts(JPYmn)Sales
SG&A expensees
SG&A ratio

FY12/17FY Act.
3,444
4,978

FY12/18
FY Est.
4,201
4,350

144.5%

103.5%

Recurring profit-3,977-3,044

Net income-3,978-3,056R&D expenses
SG&A excluding R&D
Operating profit
OPM
RPM

3,017
1,961
-3,9472,311
2,039-2,981

Net margin

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

Earnings outlook
The company forecasts sales of JPY4.2bn (+22.0% YoY) on sales growth of Treakisym®.
The company forecasts R&D expenses of JPY2.3bn (JPY3.0bn in FY12/17) and total SG&A expenses including R&D expenses of
JPY4.4bn (JPY5.0bn).
The company’s R&D program comprises development of Treakisym® for the additional indication of relapsed or refractory DLBCL(aggressive NHL), oral and liquid formulations of Treakisym® (RTD and RI formulations), and oral and intravenous Rigosertib
products.
The company forecasts an operating loss of JPY3.0bn (operating loss of JPY4.0bn in FY12/17), recurring loss of JPY3.0bn (JPY4.0bnloss), and net loss of JPY3.0bn (JPY4.0bn loss).

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R SymBio Pharmaceuticals / 4582
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Pipeline
Treakisym®
Enrolments are currently accumulating for the phase III trial for relapsed or refractory DLBCL (aggressive NHL) that is under way.
The company will progress development of liquid formulations (RTD and RI formulations) of Treakisym® in-licensed from Eagle
Pharmaceuticals after finalizing development plans for the two products. The company aims to enroll the first patient for its phase
I clinical trial of oral Treakisym®, which has already started, as soon as possible.

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 ofrigosertib. Clinical trials of the oral version of rigosertib for use in combination with azacitidine are to begin after safety ofazacitidine monotherapy is confirmed in a domestic phase I study for which the company is still enrolling patients.

Long-term outlook
Medium-term plan (FY12/18–FY12/21)
When it released its FY12/17 results, SymBio also announced a four year medium-term plan for FY12/18 through FY12/21.
Medium-term plan
FY12/17

FY12/18

FY12/19

FY12/20(JPYmn)

Act.

Est.

TargetTargetFY12/21
Target

Sales

3,444

4,201

4,238

4,413

11,624–10,325

Operating profit (losses)-3,947-2,981-3,786-3,7091,777–878

Recurring profit (losses)-3,977-3,044-3,849-3,772

1,724–825

Net income (losses)-3,978-3,056-3,853-3,776

1,467–702

FY12/18

FY12/19

FY12/20

FY12/21

Complete phase
III clinical trials

Apply forapproval

Obtain approval

Apply forapproval

Obtain approval

Source: Shared Research based on company data.

Main pipeline schedule
FY12/17
Treakisym®
(relapsed or refractory low-grade NHL
and MCL)

Obtained
approval(Oct-10)Treakisym®
(first-line treatment of low-grade NHL
and MCL)

Obtained
approval(Dec-16)

Treakisym®
(CLL)

Obtained
approval(Aug-16)

Treakisym®
(relapsed or refractory moderate- andhigh-grade NHL)

Phase III clinical
trials underway

Treakisym®RTD(all indications)
Treakisym®RI(all indications)

Initiate phase Complete phase
III clinical trials III clinical trials

Treakisym® (oral)(progressive solid tumors)

Phase I clinical
trialsRigosertib (IV)(relapsed and refractory high-risk MDS)
Rigosertib (oral)(high-risk MDS [in combination withazacitidine])

Apply forapproval

Global phase III clinical trials underway

Apply forapproval

Phase I clinical Complete phasetrials underway I clinical trials

Rigosertib (oral)(high-risk MDS [in combination withazacitidine])

Initiate phase I Complete phaseclinical trials
I clinical trials

Source: Shared Research based on company data

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R SymBio Pharmaceuticals / 4582
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Earnings targets of medium-term plan (FY12/18–FY12/21)
Sales
Sales of Treakisym® accounts for the bulk of overall sales. The company set the performance targets for drug sales after analysis
and discussions on market size projections (derived from estimated number of patients), competitive positioning and advantages
compared with existing therapies, and sales performance after commencement of sales. The company’s forecast for FY12/21 isbased on sales of Treakisym® through its own sales force.
The company forecasts sales growth of Treakisym® in FY12/21 onward following approval of an additional indication of relapsed
or refractory diffuse large-B-cell lymphoma (DLBCL), which is expected in 1H FY12/21. Its sales target is calculated using an
estimated market penetration rate range for the indication.

CoGS
CoGS is based on the terms and conditions of licensing and supply agreements with Astellas Deutschland GmbH (German
subsidiary of Astellas Pharma Inc.) and Eagle Pharmaceuticals, Inc.

SG&A expenses
SG&A expenses are broken down into R&D expenses and other SG&A expenses. In the new medium-term plan, R&D expenses
are broken down as follows:▷ Expenses associated with phase III clinical trials of Treakisym®, targeting indication for refractory or relapsed DLBCL (trials started
in August 2017)▷ Expenses associated with the filing and development of Treakisym® liquid formulations (RTD and RI), in-licensed from Eagle
Pharmaceuticals after signing an exclusive licensing agreement in September 2017

▷ Expenses associated with phase I clinical trials of oral Treakisym®, targeting indication for progressive solid tumors (trials
commenced in January 2018)

In regard to SyB L-1101 (Rigosertib IV), based on the results of an interim analysis performed in January 2018 the company plans
to continue its clinical trial, increasing patient enrollment in Japan. Milestone payments that arise at the time of obtaining
approval have not been factored into the forecasts.
In-licensing or development costs on new drug candidates other than those listed in the current pipeline are not accounted for,although the company plans to continue evaluation and discussion of these agents.
Other SG&A expenses are mainly associated with the marketing, production and distribution, business development, andadministrative operations for Treakisym®. The company expects to begin sales of Treakisym® through its own sales force from2021 onward, because the business alliance agreement with Eisai comes to an end in December 2020. As such, expenses forestablishing and running its own sales force are accounted for from 2019 onward.

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

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