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.

November 12, 2021

Summary of Consolidated Financial Results
for the First Nine Months of the Fiscal Year Ending December 31, 2021 (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: November 12, 2021
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 nine months of the fiscal year ending December 31, 2021 (January 1, 2021 toSeptember 30, 2021)(1) Consolidated operating results (cumulative)(Percentage figures represent changes from the same period of the previous fiscal year.)Net sales

Operating profit

First nine months ended
million yen%
million yen%
September 30, 2021
1,623
183.0
107
–
September 30, 2020
573
(19.0)(600)–
Note: Comprehensive income
Nine months ended September 30, 2021:
Nine months ended September 30, 2020:
Earnings per share (Basic)
First nine months ended
September 30, 2021
September 30, 2020

Profit attributable toowners of parent

Ordinary profit
million yen%

million yen

%

238
(615)
195 million yen(703) million yen

–
–

169
(698)

–
–

[–%]
[–%]

Earnings per share (Diluted)

yen

yen

8.08
(33.35)8.08–(2) Consolidated financial position
Total assets
Net assets
Equity ratio
As ofmillion yen
million yen%
September 30, 2021
4,502
4,208
93.2
December 31, 2020
4,251
4,011
94.1
Reference: Equity As of September 30, 2021: 4,197 million yen As of December 31, 2020: 3,999 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, 2020
Fiscal year ending–
0.00–
December 31, 2021
Fiscal year ending
December 31, 2021
(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, 2021 (January 1, 2021 to December 31,
2021)(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
2,246 102.9
61–
December 31, 2021
Note: Revisions to the forecasts of results most recently announced: None

million yen%

million yen

%

yen

184

–

118

–

5.65

* Notes(1) Changes in significant subsidiaries during the first nine months ended September 30, 2021 (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: Noneb. Changes in accounting policies due to other reasons: Yes
c. 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 September 30, 2021

20,955,142 shares

As of December 31, 2020

20,951,642 sharesb. Total number of treasury shares at the end of the period
As of September 30, 2021

50 shares

As of December 31, 2020

50 sharesc. Average number of outstanding shares during the period (cumulative from the beginning of the fiscal year)
For the first nine months ended September 30, 2021

20,952,322 shares

For the first nine months ended September 30, 2020

20,950,500 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.

Contents of attachment
1.

Qualitative information regarding settlement of accounts for the first nine 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. ......................................................................................................................................... 8
Significant subsequent event .................................................................................................................................... 8

-1-

1.

Qualitative information regarding settlement of accounts for the first nine months(1) Qualitative information regarding consolidated operating results
1) Financial results
In the pharmaceutical industry during the first nine months ended September 30, 2021, initiatives have been active for thedevelopment of new drugs, and competition for developing new vaccines and drugs for COVID-19 has been accelerating.
Under such conditions, the Group achieved the following financial results during the first nine months.
The financial results of marketed drug products were as follows:
Regarding human drug products, strong sales of the drug for gastro-esophageal reflux disease (tegoprazan/brand name: K-CAB®)
licensed to HK inno.N Corporation (headquarters: Seoul, South Korea) continue to be seen from the first half of the fiscal year
under review.
With regard to pet drug products, sales increased by 11.1% year on year as sales of the EP4 antagonist (grapiprant/brand name:GALLIPRANT®), which has been marketed as a drug for osteoarthritis in dogs, remained strong although sales of the Ghrelin
receptor agonist (capromorelin/brand name: ENTYCE®), which has an indication for anorexia management for dogs, weresluggish. These drugs are licensed to Elanco Animal Health Inc. (headquarters: Indiana, U.S.).
Regarding licensed-out drug products, for the retinoic acid receptor alpha agonist (tamibarotene/TM-411/SY-1425) licensed toSyros Pharmaceuticals Inc. (headquarters: Massachusetts, U.S.) by the Company’s consolidated subsidiary TMRC Co., Ltd.
(“TMRC”), the Phase II clinical trial (SELECT-AML-1) of a combination with venetoclax and azacitidine for RARA-positive
newly diagnosed unfit patients with acute myeloid leukemia (AML) started, and TMRC received a milestone payment.
In addition, in the third quarter ended September 30, 2021, the Company concluded a license agreement with Xgene
Pharmaceutical Co. Ltd. (headquarters: Hong Kong, China, CEO: Gene Hsu, Ph.D.) regarding a TRPM8 blocker with the aim ofdeveloping a drug for the treatment of chronic pain. Under the terms of the agreement, the Company received an upfront payment
as consideration.
As for other collaborative research projects, collaborative research with ASKA Pharmaceutical Co., Ltd. is progressing steadily.
In parallel, the Group has been promoting internal research projects to generate development candidate compounds.
Accordingly, financial results for the first nine months, the reporting period, were as follows. Business revenue for the period was
1,623 million yen (up 183.0% year on year), operating profit totaled 107 million yen (compared with operating loss of 600 million
yen a year earlier), ordinary profit totaled 238 million yen (compared with ordinary loss of 615 million yen a year earlier), andprofit attributable to owners of parent was 169 million yen (compared with loss attributable to owners of parent of 698 million
yen a year earlier).
Total business expenses were 1,515 million yen (up 29.1% year on year). This total mainly consists of cost of business revenue(268 million yen, a 176.4% increase from the same period of the previous fiscal year), research and development expenses (780
million yen, a 15.6% increase from the same period of the previous fiscal year) and other selling, general and administrative
expenses (466 million yen, a 16.0% increase from the same period of the previous fiscal year). A main reason for an increase ofother selling, general and administrative expenses is that cost for the Ordinary General Meeting of Shareholders associated withshareholder proposals was 60 million yen, more than double that of ordinary years.
2)

Research and development activities

Research and development expenses of the Group during the first nine months were 780 million yen. For the first nine months,
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 September 30, 2021 were 4,502 million yen, an increase of 251 million yen (up 5.9%) from the end of theprevious fiscal year. This is mainly attributable to an increase in cash and deposits of 1,142 million yen, a decrease inaccounts receivable – trade of 349 million yen and a decrease in securities of 508 million yen.
Liabilities
Total liabilities as of September 30, 2021 were 294 million yen, an increase of 54 million yen (up 22.5%) from the end of
the previous fiscal year. This is mainly attributable to an increase in accounts payable – trade of 53 million yen.
Net assets
Total net assets as of September 30, 2021 were 4,208 million yen, an increase of 197 million yen (up 4.9%) from the end of
the previous fiscal year. This is mainly attributable to the recording of profit attributable to owners of parent of 169 million
yen.
Consequently, the equity ratio was 93.2% (down 0.9 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 September 30, 2021 amounted to 2,209 million yen (compared with
2,310 million yen a year earlier), an increase of 148 million yen (up 7.2%) from the end of the previous fiscal year.
The respective cash flows in the first nine months and the factors thereof are as follows.
Cash flows from operating activities
Net cash provided by operating activities was 561 million yen (compared with net cash of 95 million yen used a year earlier).
This is mainly attributable to the recording of profit before income taxes of 243 million yen and depreciation of 103 million
yen, and a cash inflow from a decrease in trade receivables of 349 million yen.
Cash flows from investing activities
Net cash used in investing activities was 487 million yen (compared with net cash of 246 million yen provided a year earlier).
This is mainly attributable to payments into time deposits of 317 million yen and purchase of investment securities of 200
million yen.
Cash flows from financing activities
Net cash used in financing activities was 6 million yen (compared with net cash of 0 million yen used a year earlier). Thisis mainly attributable to repayments of lease obligations of 8 million yen.
(3) Qualitative information regarding consolidated earnings forecasts
At the present time, there are no changes to the figures in “Notice Concerning Revision to Full-Year FY12/21 Consolidated
Earnings Forecast” announced on June 30, 2021.

-3-

2.

Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Thousands of yen)
As of December 31, 2020

As of September 30, 2021

1,394,128
530,818
719,418
6,540
36,41250,24396,671
2,834,232

2,536,445
181,323
211,360
11,866
23,838134,493
38,092
3,137,419

78,501
208,278
46,187
332,967

72,718208,935
39,994
321,648

4,439
27,927639
33,005

4,035
31,095639
35,7701,037,601
10
2,959
10,457
1,051,029
1,417,002
4,251,235

995,348
172
2,959
9,445
1,007,926
1,365,345
4,502,764

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Supplies
Advance payments - trade
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
Long-term prepaid expenses
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets-4-

(Thousands of yen)
As of December 31, 2020

As of September 30, 2021

41,83018,281
52,66649,86820,882
3,133–
186,662

95,696
17,49446,60247,254
20,614
6,442
9,889
243,994

27,23812,031
14,17353,443
240,106

19,453
12,104
18,67650,234294,2292,255,401
2,445,184(706,157)(21)
3,994,407

2,256,920
2,446,703(536,824)(21)
4,166,779

4,809
4,809
11,912
4,011,129
4,251,235

30,90630,906
10,8504,208,535
4,502,764

Liabilities
Current liabilities
Accounts payable - trade
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Other
Total current liabilities
Non-current liabilities
Lease obligations
Asset retirement obligations
Deferred tax liabilities
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-(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income (cumulative)(Thousands of yen)First nine months ended
September 30, 2020
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
Gain on valuation of compound financial instruments
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share issuance costs
Loss on valuation of compound financial instruments
Loss on valuation of derivatives
Settlement package
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on redemption of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of investment securities
Loss on redemption 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 nine months ended
September 30, 2021

573,550

1,623,136

97,312
675,005
402,002
1,174,320(600,770)

268,927
780,550
466,478
1,515,956
107,179

3,428
23,092
–
1,500
2,250
522
30,793

1,352
16,154
127,264
5,785
–
2,817
153,373–
45,20178–––
045,279(615,256)

905
–
120
2,820
8,760
9,600
–
22,207238,345

750
8,430
–
9,180

–
3,382
2,267
5,650

348
5,778
6,127
(612,203)
86,449(698,652)–(698,652)–––
243,996
74,662
169,333–
169,333

Consolidated statement of comprehensive income (cumulative)(Thousands of yen)First nine months ended
September 30, 2020
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 nine months ended
September 30, 2021

(698,652)

169,333(4,599)(4,599)(703,252)

26,09626,096
195,430(703,252)

195,430––

(3) Consolidated statement of cash flows(Thousands of yen)First nine months ended
September 30, 2020
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Interest income
Interest income on securities
Foreign exchange losses (gains)
Subsidy income
Loss (gain) on valuation of compound financial
instruments
Interest expenses
Share issuance costs
Loss (gain) on valuation of derivatives
Settlement package
Loss (gain) on sales of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on redemption of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in advance payments - trade
Decrease (increase) in prepaid expenses
Increase (decrease) in accounts payable - other
Decrease (increase) in accounts receivable - other
Decrease (increase) in consumption taxes refund
receivable
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies received
Income taxes paid
Settlement package paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of 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 nine months ended
September 30, 2021

(612,203)
86,405(3,428)(23,092)
40,648(1,500)243,996
103,842(1,352)(16,154)(98,967)(5,785)(2,250)

2,820

–
78
–
–
(750)
(8,081)
5,778
615,409959
5,950(17,698)(53,806)(30,030)
4,238

905
120
8,760
9,600
–
(3,382)(2,267)349,495(5,326)53,866
12,573(84,250)(5,017)
12,045(31,850)

51,770(11,837)(37,058)
30,321–
1,500(90,013)–(95,249)(1,890)625,403
15,581(905)
5,785(74,694)(9,600)561,570––(84,387)750(4,115)(106,933)
387,515
53,775
185
246,788(317,510)(100,000)(82,303)–(12,983)(200,649)
110,923
115,065424(487,032)––

10,000(10,000)

110

1,855

(555)
(445)
(41,248)
109,844
2,200,206
2,310,051(8,571)(6,716)80,641
148,462
2,061,316
2,209,778

(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.
Income taxes is the amount inclusive of income taxes - deferred.
Changes in accounting policies(Change in methodology for calculating tax expenses)
Tax expenses were calculated in the same method as that used in year-end closing of accounts. However, the Company has
adopted the consolidated tax payment system starting from the first quarter ended March 31, 2021, aiming to perform quarterly
closing of accounts quickly and efficiently. Accordingly, the calculation method has been changed starting from the firstquarter ended March 31, 2021. With the changed calculation method, tax expenses are calculated by multiplying the profit
before income taxes for the quarter by the reasonably estimated effective tax rates after the application of tax effect accounting
to the profit before income taxes for the fiscal year.
As the effect of this change on quarterly consolidated financial statements is immaterial, no retrospective application has been
performed.
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,
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 nine months ended September 30, 2020 (January 1, 2020 to September 30, 2020)
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 nine months ended September 30, 2021 (January 1, 2021 to September 30, 2021)
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.

-8-