Disclaimer: This translation is prepared and provided for readers’ convenience only. This summary does not constitute any
guarantee, and the Company will not compensate any losses and/or damage stemming from actions taken based on thesestatements. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed
to be correct.

May 13, 2022

Summary of Consolidated Financial Results
for the First Three Months of the Fiscal Year Ending December 31, 2022 (JGAAP)
Listed company’s name: RaQualia Pharma Inc.
Listed on:
Tokyo Stock Exchange (TSE)
Stock code:
4579
URL:
https://www.raqualia.com/
Representative:
Hirobumi Takeuchi, President and CEO
Contact:
Hidefumi Sugiyama, General Manager, Finance & Accounting Dept.
Scheduled date of filing of quarterly securities report: May 13, 2022
Scheduled date of dividend payment:―
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:
Yes(TEL) +81-52-446-6100(Amounts are rounded down to the nearest million yen.)

1.

Consolidated financial results for the first three months of the fiscal year ending December 31, 2022 (January 1, 2022 toMarch 31, 2022)(1) Consolidated operating results (cumulative)(Percentage figures represent changes from the same period of the previous fiscal year.)Net sales

Operating profit

First three months ended
million yen%
million yen%
March 31, 2022
339
(48.3)(119)–
March 31, 2021
655
430.7
149
–
Note: Comprehensive income
Three months ended March 31, 2022:
Three months ended March 31, 2021:
Earnings per share (Basic)
First three months ended
March 31, 2022
March 31, 2021

Profit attributable toowners of parent

Ordinary profit
million yen%

million yen

%

(70)
268
(126) million yen
206 million yen

–
–

(120)
188

–
–

[–%]
[–%]

Earnings per share (Diluted)

yen

yen

(5.77)
9.00

–
9.00

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
As ofmillion yen
million yen%
March 31, 2022
5,188
4,663
89.7
December 31, 2021
5,234
4,788
91.3
Reference: Equity As of March 31, 2022: 4,653 million yen
As of December 31, 2021: 4,777 million yen
2.

Dividends
First quarter-end
yenAnnual dividends per share
Second quarter-end Third quarter-end
Fiscal year-end
yen

Fiscal year ended–––
December 31, 2021
Fiscal year ending–
December 31, 2022
Fiscal year ending––
December 31, 2022
(forecast)
Note: Revisions to the forecasts of dividends most recently announced: None

yen

Total

yen

yen

–

–

–

–

3.

Forecasts of consolidated financial results for the fiscal year ending December 31, 2022 (January 1, 2022 to December 31,
2022)(Percentage figures represent year-on-year changes)

Net sales
million yen

Operating profit%

million yen

Profit attributable to Earnings perowners of parent
share (Basic)

Ordinary profit%

million yen%

million yen%

yen

Fiscal year ending
2,605
(6.2)
420 (40.6)
420 (51.3)
342 (54.7)
16.34
December 31, 2022
Note: Revisions to the forecasts of results most recently announced: None
* As the Company conducts performance management on an annualized basis, forecasts of results over a six-month period areomitted.
* Notes(1) Changes in significant subsidiaries during the first three months ended March 31, 2022 (changes in specified subsidiaries
resulting in the change in scope of consolidation): None
(2) Application of special accounting for preparing quarterly consolidated financial statements: Yes
Note: For more details, please refer to the section of “(4) Notes to quarterly consolidated financial statements (Application of
special accounting for preparing quarterly consolidated financial statements)” of “2. Quarterly consolidated financial
statements and significant notes thereto” on page 8 of the attached material.
(3) Changes in accounting policies, changes in accounting estimates, and restatements of prior financial statements
a. Changes in accounting policies due to the revisions to accounting standards and other regulations: Yes
b. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: None
d. Restatements of prior financial statements: None
Note: For more details, please refer to the section of “(4) Notes to quarterly consolidated financial statements (Changes inaccounting policies)” of “2. Quarterly consolidated financial statements and significant notes thereto” on page 8 of theattached material.
(4) Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2022

20,959,642 shares

As of December 31, 2021

20,955,142 sharesb. Total number of treasury shares at the end of the period
As of March 31, 2022

50 shares

As of December 31, 2021

50 sharesc. Average number of outstanding shares during the period (cumulative from the beginning of the fiscal year)
For the first three months ended March 31, 2022

20,956,714 shares

For the first three months ended March 31, 2021

20,951,592 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an
audit corporation.
* Appropriate use of financial forecasts and other special remarks(Caution concerning forward-looking statements)
Forward-looking statements provided in this document, including financial forecasts, are based on the information currently
available to the Company and certain assumptions considered reasonable. Such statements are included without any guarantee asto their future achievement. Actual results, etc. may differ materially from the forecasts depending on various factors.
(Method of accessing supplementary documents for quarterly results and details of quarterly results briefing)
The Company plans to hold a briefing for the first three months online on May 18, 2022. The Company plans to post the
documents used at the briefing on its website promptly after the briefing is held.

Contents of attachment
1.

Qualitative information regarding settlement of accounts for the first three months ................................................... 2(1) Qualitative information regarding consolidated operating results ............................................................................ 2(2) Qualitative information regarding consolidated financial position........................................................................... 3(3) Qualitative information regarding consolidated earnings forecasts .......................................................................... 3

2.

Quarterly consolidated financial statements and significant notes thereto ................................................................... 4(1) Consolidated balance sheet ....................................................................................................................................... 4(2) Consolidated statement of income and consolidated statement of comprehensive income ...................................... 6
Consolidated statement of income (cumulative)....................................................................................................... 6
Consolidated statement of comprehensive income (cumulative) ............................................................................. 6(3) Consolidated statement of cash flows ....................................................................................................................... 7(4) Notes to quarterly consolidated financial statements................................................................................................ 8
Notes on premise of going concern .......................................................................................................................... 8
Notes on significant changes in the amount of shareholders’ equity ........................................................................ 8
Application of special accounting for preparing quarterly consolidated financial statements .................................. 8
Changes in accounting policies ................................................................................................................................ 8
Additional information ............................................................................................................................................. 8
Segment information, etc. ......................................................................................................................................... 9
Significant subsequent event .................................................................................................................................... 9

-1-

1.

Qualitative information regarding settlement of accounts for the first three months(1) Qualitative information regarding consolidated operating results
1) Financial results
During the first three months of the fiscal year ending December 31, 2022, the outlook for the Japanese economy remained
uncertain due to the impact of the outbreak of the Omicron strain of the novel coronavirus on service consumption and production
activities in the manufacturing sector, as well as rising resource prices and market turmoil following the Russian invasion of
Ukraine. In the pharmaceutical industry, the Ministry of Health, Labour and Welfare announced the NHI drug price revision for
FY2022, with a revision rate of -1.35% on a medical cost basis and a revision equivalent to -6.69% on a drug cost basis for market
prices. Such industry trends as these had no small impact on the business development activities of drug discovery startups, likethe Group, that operate a drug discovery business.
Under such conditions, the Group achieved the following financial results during the first three months.
Regarding human drug products, sales of K-CAB® (generic name: tegoprazan)—a drug for gastro-esophageal reflux disease
marketed by HK inno.N Corporation (South Korea, “HK inno.N (South Korea)”)—in South Korea performed well overall fromlast year through this year, with sales from external prescriptions recording an increase of 23% compared with the same periodof the previous fiscal year. Furthermore, HK inno.N (South Korea) received manufacturing and marketing approval in South
Korea for a new orally disintegrating tablet dosage form of tegoprazan.
Regarding the global development of tegoprazan, in China, review proceeded smoothly in its manufacturing and marketing
approval for the indication for erosive gastro-esophageal reflux disease, and HK inno.N (South Korea)’s Chinese licensee
Shandong Luoxin Pharmaceutical Group Stock Co., Ltd. (China) received manufacturing and marketing approval from the
Chinese authority in April 2022. In Malaysia, a drug product supply agreement was concluded between HK inno.N (South Korea)
and Pharmaniaga Logistics Sdn Bhd (Malaysia). Furthermore, in Japan, where the Company is the rights holder, the Company
decided to conduct a clinical pharmacology study (Phase I clinical trial) aimed at evaluating ethnic differences between Japaneseand South Korean people for the purpose of utilizing data from South Korea for rapid and efficient development and approval.
With regard to the schizophrenia drug ziprasidone, the Company and Meiji Seika Pharma Co., Ltd. have, by mutual consent in
February 2022, terminated the license agreement concluded in March 2011 granting exclusive rights to develop and market the
drug in Japan.
With regard to pet drugs, sales trended upward for GALLIPRANT® (generic name: grapiprant), which is a drug for osteoarthritis
in dogs, and ENTYCE® (generic name: capromorelin), which has an indication for anorexia management for dogs, both of whichwere licensed to Elanco Animal Health Inc. (U.S., “Elanco (U.S.)”). Furthermore, Elanco (U.S.) applied for manufacturing andmarketing approval for capromorelin in Europe, following approval in the U.S., where it currently markets the drug under thebrand name ELURA® as a drug for the management of weight loss in cats with chronic kidney disease. As a result, the Company
received a lump-sum payment for achievement of this milestone.
Other licensed programs are in the pre-clinical development stage or later at licensee companies. For programs in preparation forlicensing, opportunities for face-to-face meetings continue to be limited due to COVID-19, but business development activities
have steadily progressed while utilizing online conferencing and other tools. Also, pre-clinical trials for the ghrelin receptor
agonist, developed in-house by the Company, are progressing smoothly.
Accordingly, financial results for the first three months, the reporting period, were as follows. Business revenue for the period
was 339 million yen (down 48.3% year on year), operating loss totaled 119 million yen (compared with operating profit of 149
million yen a year earlier), ordinary loss totaled 70 million yen (compared with ordinary profit of 268 million yen a year earlier),
and loss attributable to owners of parent was 120 million yen (compared with profit attributable to owners of parent of 188 million
yen a year earlier).
Business revenue mainly consists of milestone income of 115 million yen (down 77.7% year on year) and sales royalty incomeof 184 million yen (up 36.4% year on year). On the other hand, total business expenses were 459 million yen (down 9.4% year
on year). This total mainly consists of cost of business revenue (53 million yen, a 28.1% increase from the same period of theprevious fiscal year), research and development expenses (263 million yen, a 3.0% increase from the same period of the previous
fiscal year) and other selling, general and administrative expenses (142 million yen, a 32.0% decrease from the same period of
the previous fiscal year).
2)

Research and development

Research and development expenses of the entire Group during the first three months were 263 million yen. For the first threemonths, there were no material changes to the research and development activities.

-2-(2) Qualitative information regarding consolidated financial position
1) Analysis of assets, liabilities and net assets
AssetsTotal assets as of March 31, 2022 were 5,188 million yen, a decrease of 46 million yen (down 0.9%) from the end of theprevious fiscal year. This is mainly attributable to an increase in cash and deposits of 168 million yen, a decrease in accounts
receivable - trade and contract assets of 857 million yen, an increase in prepaid expenses of 191 million yen, an increase inlease assets of 189 million yen, and an increase in investment securities of 292 million yen.
Liabilities
Total liabilities as of March 31, 2022 were 524 million yen, an increase of 78 million yen (up 17.6%) from the end of theprevious fiscal year. This is mainly attributable to an increase in lease obligations of 210 million yen, a decrease in accounts
payable - other of 24 million yen, a decrease in income taxes payable of 73 million yen, and a decrease in accrued
consumption taxes of 37 million yen.
Net assets
Net assets as of March 31, 2022 were 4,663 million yen, a decrease of 124 million yen (down 2.6%) from the end of theprevious fiscal year. This is mainly attributable to the recording of loss attributable to owners of parent of 120 million yen
and a decrease in valuation difference on available-for-sale securities of 5 million yen.
Consequently, the equity ratio was 89.7% (down 1.6 percentage points from the end of the previous fiscal year).
2)

Analysis of cash flows

The balance of cash and cash equivalents (“net cash”) as of March 31, 2022 amounted to 2,404 million yen (compared with 2,041
million yen a year earlier), an increase of 163 million yen (up 7.3%) from the end of the previous fiscal year.
The respective cash flows in the first three months and the factors thereof are as follows.
Cash flows from operating activities
Net cash provided by operating activities was 372 million yen (up 609.7% year on year). This is mainly attributable to therecording of loss before income taxes of 85 million yen, a cash inflow from a decrease in trade receivables of 857 million
yen, a cash outflow from an increase in prepaid expenses of 184 million yen, and income taxes paid of 90 million yen.
Cash flows from investing activities
Net cash used in investing activities was 244 million yen (up 58.2% year on year). This is mainly attributable to purchase ofinvestment securities of 301 million yen and proceeds from redemption of investment securities of 56 million yen.
Cash flows from financing activities
Net cash used in financing activities was 4 million yen (compared with net cash of 6 million yen provided a year earlier).
This is mainly attributable to proceeds from issuance of shares as a result of exercise of share acquisition rights of 2 million
yen and repayments of lease obligations of 6 million yen.
(3) Qualitative information regarding consolidated earnings forecasts
At the present time, there are no changes to the full-year consolidated earnings forecasts for the fiscal year ending December 31,
2022 presented in “Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 (JGAAP)”
published on February 14, 2022.

-3-

2.

Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Thousands of yen)
As of December 31, 2021

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Accounts receivable - trade, and contract assets
Securities
Supplies
Advance payments to suppliers
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Leased assets, net
Total property, plant and equipment
Intangible assets
Trademark right
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Total investments and other assets
Total non-current assets
Total assets-4-

As of March 31, 2022

2,345,306
1,205,401–
313,807
10,547
15,93990,382
22,3904,003,775

2,513,536–
347,738
260,807
9,578
19,911
281,690
60,286
3,493,549

70,479180,500
48,409299,389

68,520166,737
238,355
473,613

3,839
29,227731
33,7993,648
26,916731
31,296887,932
9,300
897,233
1,230,422
5,234,197

1,180,539
9,083
1,189,622
1,694,533
5,188,082

(Thousands of yen)
As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Deposits received
Other
Total current liabilities
Non-current liabilities
Lease obligations
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets-5-

As of March 31, 2022

45,996
21,547112,768
63,00480,40537,47528,884
10,442400,524

58,36649,95587,83948,688
6,538
–
6,260
23,880281,531

17,52012,12916,018–45,668446,193

199,594
12,153
14,231
17,053
243,032
524,564

2,256,920
2,446,703
49,631(21)
4,753,234

2,258,745
2,448,528(71,272)(21)
4,635,980

23,91923,91910,8504,788,004
5,234,197

17,985
17,985
9,552
4,663,518
5,188,082

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income (cumulative)(Thousands of yen)First three months ended
March 31, 2021

First three months ended
March 31, 2022

655,610339,273

41,529255,977
209,059
506,566
149,043

53,218
263,751
142,153
459,122(119,849)

359
5,319
111,683
1,972
2,404
121,738

209
5,117
62,148–
6
67,482

398
2,040
–
–
–
2,438
268,343

704
3,000
76
13,438583
17,803(70,170)

3,382
–
3,382

–
2,739
2,739

–
–
271,726
83,148
188,578–
188,578

17,80017,800(85,231)35,671(120,902)–(120,902)

Business revenue
Business expenses
Cost of business revenue
Research and development expenses
Other selling, general and administrative expenses
Total business expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on securities
Foreign exchange gains
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on valuation of compound financial instruments
Share issuance costs
Loss on valuation of derivatives
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of investment securities
Gain on redemption of investment securities
Total extraordinary income
Extraordinary losses
Retirement benefits for directors (and other officers)
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent
Consolidated statement of comprehensive income (cumulative)(Thousands of yen)First three months ended
March 31, 2021
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-6-

First three months ended
March 31, 2022

188,578(120,902)

18,38818,388206,967(5,934)(5,934)(126,836)

206,967(126,836)––

(3) Consolidated statement of cash flows(Thousands of yen)First three months ended
March 31, 2021
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Interest income
Interest income on securities
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on valuation of compound financial
instruments
Subsidy income
Loss (gain) on valuation of derivatives
Share issuance costs
Loss (gain) on sale of investment securities
Loss (gain) on redemption of investment securities
Retirement benefits for directors (and other officers)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in advance payments to suppliers
Decrease (increase) in prepaid expenses
Decrease (increase) in consumption taxes refund
receivable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued expenses
Increase (decrease) in income taxes payable - factor
based tax
Increase (decrease) in deposits received
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Subsidies received
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from redemption of investment securities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Proceeds from issuance of shares resulting from exerciseof share acquisition rights
Repayments of lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-7-First three months ended
March 31, 2022

271,726
32,324(359)(5,319)398(89,487)(85,231)
31,835(209)(5,117)704(47,193)

2,040

3,000

(1,972)––(3,382)––(99,434)(9,415)
3,116(6,488)(199,431)–
13,43876–(2,739)17,800857,662969
12,370(3,972)(184,891)

74,146(15,802)

21,387
94,680748(37,475)(49,563)(14,315)(5,787)(19,628)

5,068
10,42894,987
4,653(398)(48,698)
1,972–
52,516(22,623)
17,756
466,850
3,988(704)(90,444)–(7,000)372,689(207,380)(53,557)(4,757)–110,923–(154,771)–––(301,856)–
56,940(244,916)

10,000

–

–

2,275

(3,068)6,931
75,425(19,898)
2,061,316
2,041,418(6,385)(4,110)39,802
163,465
2,240,661
2,404,126

(4) Notes to quarterly consolidated financial statements
Notes on premise of going concern
No items to report.
Notes on significant changes in the amount of shareholders’ equity
No items to report.
Application of special accounting for preparing quarterly consolidated financial statements(Calculation of tax expenses)
Tax expenses are calculated by multiplying the profit before income taxes by the reasonably estimated effective tax rates after
the application of tax effect accounting to the profit before income taxes for the fiscal year including the quarter under review.
However, in cases where calculations using said estimated effective tax rate yield a result that is notably lacking rationality,
tax expenses are calculated by multiplying profit (loss) before income taxes by the statutory effective tax rate, taking into
consideration the recoverability of deferred tax assets.
Income taxes is the amount inclusive of income taxes - deferred.
Changes in accounting policies(Application of accounting standard for revenue recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020)
and relevant ASBJ regulations from the beginning of the first quarter of the current fiscal year, and it has recognized revenue
at the time the control of promised goods or services is transferred to the customer at the amount expected to be received uponexchange of said goods or services.
The Group earns revenues (upfront payments, milestone-related revenues, royalty income, etc.) from licensing agreementsthat allow third parties to research, develop, manufacture and sell pharmaceuticals and other products and to use theirtechnologies.
With regard to upfront payments and milestone-related revenues, when performance obligations are satisfied at a point in time,
contractual performance obligations are deemed to be satisfied at the time when development, marketing, and other rights are
granted, or at the time when the contractually stipulated milestone is achieved. These revenues are recognized as businessrevenue at the point when contractual performance obligations are deemed to be satisfied.
Royalty income is consideration based on license agreements, etc., calculated based on the sales revenue of the contract partner,
etc. This income is recognized as business revenue with consideration to the point in time at which it is incurred.
The application of the Accounting Standard for Revenue Recognition and its guidance is subject to the transitional treatment
provided in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of theretrospective application assuming the new accounting policy had been applied to periods prior to the start of the first quarter
ended March 31, 2022, was added to or subtracted from the opening balance of retained earnings of the first quarter ended
March 31, 2022, and thus the new accounting policy is applied from such opening balance; provided, however, that the new
accounting policy is not retrospectively applied to contracts where recognitions of nearly all the revenue amounts for periods
prior to the start of the first quarter ended March 31, 2022, are subject to the previous treatment by applying the method
provided for in paragraph 86 of the Accounting Standard for Revenue Recognition. Furthermore, by applying the method set
forth in item (1) of the supplementary provisions of paragraph 86 of the Accounting Standard for Revenue Recognition,
modifications to contracts carried out prior to the beginning of the first quarter of the current fiscal year were accounted forbased on the contractual terms after all contract modifications were reflected. Consequently, this cumulative effect was added
to or deducted from the opening balance of retained earnings of the first quarter of the current fiscal year.
As a result, there was no effect on the quarterly consolidated financial statements for the first quarter of the current fiscal year.
In addition, there was no effect on the opening balance of retained earnings.
In accordance with the transitional treatment provided for in paragraph 89-2 of the Accounting Standard for Revenue
Recognition, figures for the previous fiscal year have not been restated in accordance with the new approach to presentation.
Furthermore, the information on disaggregation of revenue from contracts with customers during the first three months of theprevious fiscal year has not been disclosed as allowed by the transitional treatment provided for in paragraph 28-15 of the
Accounting Standard for Quarterly Financial Reporting (ASBJ Statement No. 12, March 31, 2020).
(Application of accounting standard for fair value measurement, etc.)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019)and relevant ASBJ regulations from the beginning of the first quarter of the fiscal year under review, and it has applied the
new accounting policy provided for by the Accounting Standard for Fair Value Measurement, etc. prospectively in accordancewith the transitional measures provided for in paragraph 19 of the Accounting Standard For Fair Value Measurement, andparagraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019).
Note that there was no effect on the quarterly consolidated financial statements.
Additional information(Application of tax effect accounting for transition from consolidated taxation system to group tax sharing system)
As for items regarding the transition to the group tax sharing system introduced in the “Act Partially Amending the Income
Tax Act” (Act No. 8 of 2020) and items revised on non-consolidated taxation system in connection with the transition to thegroup tax sharing system, the Company and its consolidated subsidiaries have not applied the provisions of paragraph 44 of
the “Guidance on Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Guidance
No. 28, February 16, 2018) as allowed by the provisions of paragraph 3 of the “Tax Effect Accounting for the Transition fromthe Consolidated Taxation System to the Group Tax Sharing System” (ASBJ PITF No. 39, March 31, 2020). Accordingly,-8-amounts of deferred tax assets and deferred tax liabilities are determined in accordance with the provisions of the tax law
before revision.
(Accounting estimates amid the spread of COVID-19)
The Group has determined the accounting estimates for impairment accounting of non-current assets, etc. based on information
available when preparing the consolidated financial statements. The effects of the spread of COVID-19 on the Group arelimited at the present time and the Group has determined that there will not be a significant impact on the estimates for the
fiscal year under review.
Segment information, etc.
[Segment information]
I. For the first three months ended March 31, 2021 (January 1, 2021 to March 31, 2021)
This information is omitted because the Group consists of a single business segment dealing with research and developmentof pharmaceutical and related businesses.
II.

For the first three months ended March 31, 2022 (January 1, 2022 to March 31, 2022)
This information is omitted because the Group consists of a single business segment dealing with research and developmentof pharmaceutical and related businesses.

Significant subsequent event
No items to report.

-9-