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.

August 14, 2024

Summary of Consolidated Financial Results
for the First Six Months of the Fiscal Year Ending December 31, 2024 (JGAAP)
Listed company’s name: RaQualia Pharma Inc.
Listed on:
Tokyo Stock Exchange (TSE)
Stock code:
4579
URL:
https://www.raqualia.com/en/ir.html
Representative:
Hirobumi Takeuchi, President and CEO
Contact:
Hidefumi Sugiyama, General Manager, Finance & Accounting Dept.
Scheduled date of filing of semi-annual securities report:
August 14, 2024
Scheduled date of dividend payment:―
Supplementary documents for financial results:
Yes
Financial results briefing:
Yes(TEL) +81-52-446-6100(Amounts are rounded down to the nearest million yen.)

1.

Consolidated financial results for the first six months of the fiscal year ending December 31, 2024 (January 1, 2024 toJune 30, 2024)(1) Consolidated operating results (cumulative)(Percentage figures represent changes from the same period of the previous fiscal year.)Net sales

Operating profit

First six months ended
million yen%
million yen
June 30, 2024
1,411
39.1
(154)
June 30, 2023
1,014
(29.9)(23)
Note: Comprehensive income
Six months ended June 30, 2024:
Six months ended June 30, 2023:
Earnings per share (Basic)
First six months ended
June 30, 2024
June 30, 2023

Profit attributable toowners of parent

Ordinary profit%

million yen

–
–

(277)
–
36
(94.6)(477) million yen[–%]
183 million yen [(59.9)%]%

million yen

(323)
25

%

–
(94.6)

Earnings per share (Diluted)

yen

yen

(14.97)
1.18

–
1.18

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
As ofmillion yen
million yen%
June 30, 2024
10,125
5,648
55.6
December 31, 2023
6,871
6,120
88.7
Reference: Equity As of June 30, 2024: 5,626 million yen As of December 31, 2023: 6,094 million yen
2.

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

Fiscal year ended–
0.00–
December 31, 2023
Fiscal year ending–
0.00
December 31, 2024
Fiscal year ending–
December 31, 2024
(forecast)
Note: Revisions to the forecasts of dividends most recently announced: None

yen

Total

yen

yen

0.00

0.00

0.00

0.00

3.

Forecasts of consolidated financial results for the fiscal year ending December 31, 2024 (January 1, 2024 to December 31,
2024)(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%

Fiscal year ending
4,535 138.5
313–
December 31, 2024
Note: Revisions to the forecasts of results most recently announced: None

million yen%

million yen

%

yen

290

–

236

–

10.91

* Notes(1) Significant changes in the scope of consolidation during the first six months ended June 30, 2024: None
(2) Application of special accounting for preparing semi-annual consolidated financial statements: Yes
Note: For more details, please refer to the section of “(4) Notes to semi-annual consolidated financial statements (Application of
special accounting for preparing semi-annual consolidated financial statements)” of “2. Semi-annual consolidated financial
statements and significant notes thereto” on page 11 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: Noneb. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: None
d. Restatements of prior financial statements: None
(4) Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2024

21,638,281 shares

As of December 31, 2023

21,623,281 sharesb. Total number of treasury shares at the end of the period
As of June 30, 2024

81 shares

As of December 31, 2023

51 sharesc. Average number of outstanding shares during the period (cumulative from the beginning of the fiscal year)
For the first six months ended June 30, 2024

21,628,665 shares

For the first six months ended June 30, 2023

21,594,082 shares* Semi-annual financial results reports are exempt from 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.
For the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof, please refer tothe section of “(3) Qualitative information regarding consolidated earnings forecasts” of “1. Qualitative information regarding
settlement of accounts for the first six months” on page 5 of the attached material.
(Method of accessing supplementary documents for financial results and details of financial results briefing)
The Company plans to hold a financial results briefing for institutional investors and analysts as well as general investors (via
live webcast) on Thursday, August 15, 2024.
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 six months ...................................................... 2(1) Qualitative information regarding consolidated operating results ............................................................................ 2(2) Qualitative information regarding consolidated financial position........................................................................... 4(3) Qualitative information regarding consolidated earnings forecasts .......................................................................... 5

2.

Semi-annual consolidated financial statements and significant notes thereto .............................................................. 6(1) Consolidated balance sheet ....................................................................................................................................... 6(2) Consolidated statement of income and consolidated statement of comprehensive income ...................................... 8
Consolidated statement of income (cumulative)....................................................................................................... 8
Consolidated statement of comprehensive income (cumulative) ............................................................................. 8(3) Consolidated statement of cash flows ....................................................................................................................... 9(4) Notes to semi-annual consolidated financial statements......................................................................................... 11
Notes on premise of going concern ........................................................................................................................ 11
Notes on significant changes in the amount of shareholders’ equity ...................................................................... 11
Application of special accounting for preparing semi-annual consolidated financial statements........................... 11
Notes on segment information, etc. ........................................................................................................................ 11
Significant subsequent event .................................................................................................................................. 11

-1-

1.

Qualitative information regarding settlement of accounts for the first six months(1) Qualitative information regarding consolidated operating results
1) Financial results
Regarding the first six months of the fiscal year ending December 31, 2024, the Japanese economy shifted into a moderate
recovery trend in the second quarter after the standstill experienced in the first quarter. According to the Bank of Japan’s quarterly
short-term economic survey (June 2024 survey), business sentiment was positive overall, with sentiment maintaining a high level
among large enterprises in the non-manufacturing sector despite a slight decline, and sentiment among large enterprises in the
manufacturing sector rising for the first time in two quarters.
In the pharmaceutical industry, the rules for the “premium to promote the development of new drugs and eliminate off-label use”
have been changed as a measure to “eliminate drug lag/drug loss” in the NHI drug price revision for FY2024. Industry associations
are continuing to request drug price measures that will appropriately recognize pharmaceutical innovation. Amid voices ofconcern being heard about a decline in international competitiveness of Japan’s pharmaceutical industry, the government has
positioned it as a growth sector. The interim report published following the 5th meeting of the Council of the Concept for Early
Prevalence of the Novel Drugs to Patients by Improving Drug Discovery Capabilities, held in May 2024, included strategic targets
for strengthening drug discovery capabilities in Japan, promptly delivering the novel drugs to the people, and the creation of asocial system that sustains an environment facilitating investment and innovation. This interim report also included statements
about the creation by startups of the seeds of and new modalities for pharmaceuticals, indicating that the role played by drug
discovery-oriented venture companies including the Group is becoming increasingly important.
Under such conditions, the Group achieved the following financial results during the first six months.
Regarding human drug products that are already on the market, sales of K-CAB® (generic name: tegoprazan)—gastric acidsecretion inhibitor marketed by HK inno.N Corporation (headquarters: Osong, South Korea, “HK inno.N”)—in South Korea
continued to perform well. Sales from external prescriptions in the first six months ended June 30, 2024 amounted to 91.9 billion
won, an increase of 24.1% year on year, and equivalent to approximately 10.1 billion yen at 0.11 yen to the won. Tegoprazan’s
share in the South Korean peptic ulcer drug market was 14%, continuing to maintain the No. 1 share. Moreover, although requests
for a trial to confirm the passive scope of a patent were made in relation to the substance patent for tegoprazan in South Korea(South Korea patent number: 1088247), these requests were dismissed in their entirety in June 2024. The Company believes that
this will lead to even more robust protection of exclusive sales rights for K-CAB®.
Global expansion of tegoprazan is also progressing steadily. The Company has executed exclusive license agreements with HK
inno.N for the development, marketing, and manufacturing of tegoprazan with sublicensing rights. During the first six months
ended June 30, 2024, sublicensee Laboratorios Carnot (headquarters: Mexico City, Mexico) received marketing approvals fromlocal authorities in six countries: Chile, Dominican Republic, Honduras, Nicaragua, Guatemala, and El Salvador. Furthermore,in April 2024, HK inno.N concluded a licensing agreement with Tabuk Pharmaceutical Manufacturing Company (headquarters:
Riyadh, Saudi Arabia) covering the Middle East and North Africa. As a result of this progress, the Company received a lumpsum payment from HK inno.N.
As of the end of the first six months ended June 30, 2024, tegoprazan is being developed, reviewed for marketing approvals,
prepared for launch, or marketed in 46 countries around the world, and the 8 countries where tegoprazan products are being
marketed are South Korea, China, the Philippines, Mongolia, Mexico, Indonesia, Singapore, and Peru. HK inno.N’s sublicensees
continue to make progress with filings for approval in Thailand, Vietnam, Argentina, and other countries in Southeast Asia andSouth-Central America, and they are proceeding with clinical development in a number of countries, including the United States
and Canada. HK inno.N is aiming to expand sales to 100 countries around the world by 2028.
With regard to pet drugs, sales were strong for GALLIPRANT® (generic name: grapiprant), which is a drug for osteoarthritis indogs, and ENTYCE® (generic name: capromorelin), which has an indication for anorexia management for dogs, and ELURA®
(generic name: capromorelin), which has an indication for weight loss management in cats with chronic kidney disease, all ofwhich were licensed to Elanco Animal Health Inc. (headquarters: Indiana, U.S., “Elanco”). With regard to ELURA®, in February
2024, Elanco received approval from the Ministry of Agriculture, Forestry and Fisheries to manufacture and market it in Japan.
Preparations are currently underway by Elanco for the product launch, as in Europe, where it received manufacturing andmarketing approval in 2023.
Other licensed programs are also in the pre-clinical or later development stage at licensee and sublicensee companies. During thefirst six months ended June 30, 2024, Xgene Pharmaceutical Pty Ltd., a subsidiary of Xgene Pharmaceutical Co., Ltd.
(headquarters: Hong Kong, “Xgene”) initiated a Phase I clinical trial in Australia for the TRPM8 blocker (RQ-00434739/XG2002)(the “Phase I trial”). As a result, the Company received a lump-sum payment from Xgene. In the Phase I trial, dose-escalation
studies on healthy volunteers to evaluate the tolerability and pharmacokinetics of the TRPM8 blocker are expected to yieldvaluable information for subsequent clinical trials.
Also in the six months ended June 30, 2024, the Company entered into a new agreement as a result of ongoing businessdevelopment activities. In April 2024, the Company entered into an option and licensing agreement (“the agreement”) for-2-

development of veterinary drugs with Velovia Pharma, LLC (headquarters: Tennessee, U.S.; “Velovia Pharma”). This agreement
concerns four compounds in the Company’s development pipeline (“the compounds”), which are expected to have applications
in gastroenterological, metabolic, and fibrotic diseases. Based on the agreement, the Company grants Velovia Pharma an option
for an exclusive license to evaluate, develop, manufacture, and market veterinary drugs containing the compounds. In the eventof Velovia Pharma exercising options for one or more of the compounds, the Company will receive an option exercise fee from
Velovia Pharma, and will also be entitled to receive milestone payments in accordance with subsequent progress in development.
Furthermore, in the event that pet drugs containing the compounds reach the market, the Company will be entitled to receive
royalty payments, based on net sales of the product, and sales milestone payments from Velovia Pharma.
As for other pre-licensing programs, pre-clinical studies progressed in-house for the ghrelin receptor agonist from the previous
fiscal year during the fiscal year under review. For tegoprazan, the Company retains the rights to develop, manufacture, andmarket the product in Japan, and has been in discussions with candidate partner companies continuously in the second quarter.
For other pre-licensing programs, the Company conducted business development activities aimed at finding business partners
through a flexible combination of face-to-face and online meetings.
In the discovery research stage, in addition to engaging in discovery research to generate development compounds, the Company
is aiming to establish a next-generation in-house drug discovery value chain through synergistic effects from existing and newtechnologies, which it is approaching from the four angles of “modality,” “drug target,” “disease area,” and “platform technology.”
With regard to bolstering the small molecule drug discovery that has been one of the Company’s strengths, in addition to utilizing
new technologies such as compound design AI and nerve cells derived from iPS cells, in terms of new initiatives the Company ismoving forward with joint development with Veritas In Silico (headquarters: Shinagawa-ku, Tokyo) of small molecule drugs thattarget mRNA with the objective of creating drugs to treat cancer. During the first six months under review, the Company madesatisfactory progress in compound discovery, identifying multiple small molecule compounds that show the desired characteristics
at the cellular level. In addition, the new research base established at Shonan Health Innovation Park (Fujisawa City, Kanagawa
Prefecture) in 2023 is working on drugs that use new modalities. These include joint research being undertaken with STAND
Therapeutics Co., Ltd. (headquarters: Minato-ku, Tokyo), which seeks to apply drug discovery to the area of intracellular antibody
technology with the aim of creating therapeutic agents for intractable and rare diseases.
Clinical trials for the treatment of myelodysplastic syndrome (MDS) and acute myeloid leukemia (AML) are underway in the
U.S. for a retinoic acid receptor alpha agonist (tamibarotene, AM80/TM-411/SY-1425), licensed by TMRC Co., Ltd.
(headquarters: Shinjuku-ku, Tokyo), one of the Company’s consolidated subsidiaries, to Syros Pharmaceuticals Inc.
(headquarters: Massachusetts, U.S., “Syros”). For MDS, the enrollment of patients necessary for the analysis of the primary
endpoint of Phase III clinical trials related to combined treatments using tamibarotene and azacitidine (SELECT-MDS-1) wascompleted in the first quarter, and data on the complete remission rate is expected by the middle of the fourth quarter.
For AML, Syros is currently operating Phase II clinical trials for patients with RARA gene overexpression for whom traditional
chemotherapy treatment is not suitable and who have not been treated (SELECT-AML-1), and plans to report updated data on
the clinical trial in September. In addition, Syros announced that it received Fast Track designation for AML from the U.S. Foodand Drug Administration (FDA) in April 2024. Drug candidates with Fast Track Approvals enable more frequent communication
with the FDA regarding development plans and, if supported by clinical data, priority review and expedited approval.
In addition, during the first six months ended June 30, 2024, the Company made FIMECS, Inc. (headquarters: Fujisawa City,
Kanagawa Prefecture, “FIMECS”) a wholly owned subsidiary by acquiring all of its outstanding shares and stock acquisitionrights (the “Shares, etc.”). The consideration for this conversion consists of (i) an upfront payment upon acquisition of the Shares,
etc. (the “Closing Consideration”) and (ii) a payment based on FIMECS’ future earnings. The Closing Consideration was 4,500
million yen, and paid upon the acquisition of the Shares, etc. on March 26, 2024. In connection with this conversion, the Company
raised 3,500 million yen through a loan from a syndicate with Mizuho Bank, Ltd. as arranger and The Shoko Chukin Bank, Ltd.
as co-arranger.
FIMECS is a start-up company that aims to create innovative medicines for targets for which the creation of treatments has been
considered extremely difficult (undruggable) using targeted protein degraders, a new modality of drug discovery. With
RaPPIDS™ (Rapid Protein Proteolysis Inducer Discovery System), a proprietary platform technology specialized for targeted
protein degraders, at the core of its business, the company has a hybrid business model that combines a pipeline business modelthat generates revenue through the licensing of its own pipeline with a platform business model that generates revenue throughcollaborations with pharmaceutical companies. With the conversion of FIMECS into a subsidiary, the Company expects to (i)strengthen its drug discovery value chain by acquiring platform technology, (ii) increase revenues by hybridizing its businessmodel, and (iii) strengthen and expand its oncology area’s drug discovery.
In May 2024, FIMECS achieved its initial milestone in joint research with Astellas Pharma Inc. (headquarters: Chuo-ku, Tokyo;“Astellas Pharma”). FIMECS has been using RaPPIDS™ in joint research with Astellas Pharma for the discovery of targeted
protein degraders for multiple targets related to cancer treatment since 2022, and the recently achieved milestone relates to one
specific program within this collaboration. This resulted in a lump-sum payment from Astellas Pharma to FIMECS.
-3-Accordingly, financial results for the first six months, the reporting period, were as follows. Business revenue for the period was
1,411 million yen (up 39.1% year on year), operating loss totaled 154 million yen (compared with operating loss of 23 million
yen a year earlier), ordinary loss totaled 277 million yen (compared with ordinary profit of 36 million yen a year earlier), and loss
attributable to owners of parent was 323 million yen (compared with profit attributable to owners of parent of 25 million yen a
year earlier).
Total business expenses were 1,565 million yen (up 50.9% year on year). This mainly consists of cost of business revenue of 226
million yen (up 85.6% year on year), research and development expenses of 832 million yen (up 38.0% year on year) and otherselling, general and administrative expenses of 505 million yen (up 62.1% year on year).
2)

Research and development activities

Research and development expenses of the entire Group during the first six months were 832 million yen. For the first six months,
there were no material changes to the research and development activities.
(2) Qualitative information regarding consolidated financial position
1) Analysis of assets, liabilities and net assets
AssetsTotal assets as of June 30, 2024 were 10,125 million yen, an increase of 3,253 million yen (up 47.3%) from the end of theprevious fiscal year. This is mainly attributable to a decrease in cash and deposits of 534 million yen, an increase in goodwillof 4,000 million yen, and a decrease in investment securities of 473 million yen.
Liabilities
Total liabilities as of June 30, 2024 were 4,477 million yen, an increase of 3,726 million yen (up 495.8%) from the end of
the previous fiscal year. This is mainly attributable to increases in current portion of long-term borrowings of 500 million
yen, advances received of 165 million yen, and long-term borrowings of 2,868 million yen.
Net assets
Net assets as of June 30, 2024 were 5,648 million yen, a decrease of 472 million yen (down 7.7%) from the end of theprevious fiscal year. This is mainly attributable to the recording of loss attributable to owners of parent of 323 million yen
and a decrease in valuation difference on available-for-sale securities of 153 million yen.
Consequently, the equity ratio was 55.6% (down 33.1 percentage points from the end of the previous fiscal year).

-4-

2)

Analysis of cash flows

The balance of cash and cash equivalents (“net cash”) as of June 30, 2024 amounted to 3,114 million yen (compared with 3,565
million yen a year earlier), a decrease of 550 million yen (down 15.0%) from the end of the previous fiscal year.
The respective cash flows in the first six months and the factors thereof are as follows.
Cash flows from operating activities
Net cash used in operating activities was 129 million yen (down 81.9% year on year). This is mainly attributable to cash
outflows from increases in trade receivables of 172 million yen and prepaid expenses of 154 million yen and cash inflows
from a decrease in consumption taxes refund receivable of 115 million, despite the recording of loss before income taxes of
273 million yen, depreciation of 91 million yen and amortization of goodwill of 67 million yen.
Cash flows from investing activities
Net cash used in investing activities was 3,669 million yen (up 1,141.6% year on year). This is mainly attributable to thepurchase of property, plant and equipment of 33 million yen, proceeds from sale of investment securities of 258 million yen,and the purchase of shares of subsidiaries resulting in change in scope of consolidation of 3,879 million yen.
Cash flows from financing activities
Net cash provided by financing activities was 3,194 million yen (up 286.4% year on year). This is mainly attributable toproceeds from long-term borrowings of 3,357 million yen, repayments of long-term borrowings of 131 million yen, andrepayments of lease liabilities of 32 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,
2024 presented in “Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2023 (JGAAP)”
published on February 14, 2024.

-5-

2.

Semi-annual consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Thousands of yen)
As of December 31, 2023

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade, and contract assets
Securities
Work in process
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
Goodwill
Trademark right
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets-6-

As of June 30, 2024

3,714,984
603,196
49,754
1,713
146,226
66,600188,128
186,290
4,956,894

3,180,614
775,635
33,599–174,886
32,715367,863
72,9084,638,223

59,173208,814305,620573,608

55,709190,944
289,139535,793–
4,544
25,57072
30,1874,000,921
4,441
26,04672
4,031,482

1,231,458
63,501
5,711
10,6101,311,281
1,915,077
6,871,972

758,308
42,53394,08625,185920,113
5,487,388
10,125,612

(Thousands of yen)
As of December 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term borrowings
Lease liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease liabilities
Asset retirement obligations
Provision for share awards
Provision for share awards for directors (and otherofficers)
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-7-

As of June 30, 2024

54,174
12,62064,301
158,888
54,197
19,687–
3,502
21,941
389,31362,669512,620
66,415
253,096
73,545
17,109165,593
18,69887,162
1,256,909

39,050251,747
12,32048,222

2,907,740
235,415
14,56049,332

10,875

13,593362,215
751,528

3,220,643
4,477,552

2,667,649
2,857,432
449,358(22)
5,974,418

2,672,254
2,862,037
125,497(39)
5,659,750

120,415
120,415
25,6106,120,443
6,871,972(33,520)(33,520)
21,8305,648,059
10,125,612

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income (cumulative)(Thousands of yen)First six months ended
June 30, 2023
Business revenue
Business expenses
Cost of business revenue
Research and development expenses
Other selling, general and administrative expenses
Total business expenses
Operating loss
Non-operating income
Interest income
Interest on securities
Foreign exchange gains
Gain on valuation of compound financial instruments
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commitment fees
Commission for syndicated loans
Share issuance costs
Loss on valuation of compound financial instruments
Loss on valuation of derivatives
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale of investment securities
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

First six months ended
June 30, 2024

1,014,084

1,411,048

122,278
603,336
311,839
1,037,453(23,369)

226,984
832,664
505,609
1,565,259(154,211)

280
2,893
90,265
5,490
9,662
108,592

2,574
2,012
74,689–11,257
90,535

3,026
3,499
–
3,930
–
38,0490
48,50636,716

15,843
4,868
140,499
204
650
51,770–213,837(277,513)

–
–

9,379
9,379

–
–
36,716
11,23525,481–
25,4815,600
5,600(273,734)
50,126(323,861)–(323,861)

Consolidated statement of comprehensive income (cumulative)(Thousands of yen)First six months ended
June 30, 2023
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-8-

First six months ended
June 30, 2024

25,481(323,861)

158,246
158,246
183,728(153,935)(153,935)(477,797)

183,728(477,797)––

(3) Consolidated statement of cash flows(Thousands of yen)First six months ended
June 30, 2023
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of goodwill
Interest income
Interest income on securities
Foreign exchange losses (gains)
Loss (gain) on valuation of compound financial instruments
Interest expenses
Commitment fees
Commission for syndicated loans
Share issuance costs
Loss (gain) on valuation of derivatives
Loss (gain) on sale of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in advances received
Decrease (increase) in advance payments to suppliers
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in accounts payable - other
Increase (decrease) in income taxes payable - factor based tax
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in provision for share awards
Increase (decrease) in provision for share awards for directors(and other officers)
Other, net
SubtotalInterest and dividends received
Interest paid
Commitment fees paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other payments
Net cash provided by (used in) investing activities-9-First six months ended
June 30, 2024

36,716
71,728–(280)(2,893)(70,801)(5,490)
3,026
3,499
–
3,930
38,049–(213,441)
133(59,717)–1,276(261,462)(33,752)(144,585)(4,831)(5,077)–(4,230)(273,734)
91,56467,812(2,574)(2,012)(55,781)
650
15,843
4,868
140,499
204
51,770(3,779)(172,439)(3,897)
8,495
27,58967,385(154,562)
19,867(55,663)
8,912
115,947
10,525
1,110

1,813

2,718

(25,748)(672,138)
9,962(3,118)(7,000)(54,869)
11,826(715,337)

6,502(82,177)
6,204(15,861)(3,279)(64,917)30,666(129,364)(119,998)(15,571)(160,000)–(33,081)(7,020)–258,563–(3,879,637)–(295,570)(8,815)(3,669,991)

(Thousands of yen)First six months ended
June 30, 2023
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Proceeds from issuance of shares
Purchase of treasury shares
Proceeds from issuance of shares resulting from exercise ofshare acquisition rights
Proceeds from issuance of share acquisition rights
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- 10 -First six months ended
June 30, 2024––
50,000(3,810)(21,808)
782,614–400,000(400,000)
3,357,800(131,310)(32,412)
–
(16)

188

–

19,362
826,545
70,799(113,562)
3,679,304
3,565,741–
3,194,060
54,770(550,525)
3,664,738
3,114,213

(4) Notes to semi-annual 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 semi-annual 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 first six months.
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.
Notes on segment information, etc.
[Segment information]
I. For the first six months ended June 30, 2023 (January 1, 2023 to June 30, 2023)
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 six months ended June 30, 2024 (January 1, 2024 to June 30, 2024)
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.

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