ANALYST NET Company Report

SymBio Pharmaceuticals Ltd.
Issue date: August 21,2018（4582 JASDAQ）

Therapies Using Treakisym Becoming Standard
Treakisym being used in standard therapies

Follow-up Report

The company’s sales engine, Treakisym, has been the beneficiary of some ground-breaking news
since February 2018. From a survey conducted on SymBio’s behalf by an external entity it appears
that, as of the end of March, the use of Treakisym in combination with rituximab (B-R therapy)
for the treatment of untreated low-grade non-Hodgkin’s lymphoma had achieved a market
penetration rate in excess of 50%, thereby surpassing by a large margin the conventional R-CHOP
therapy.
Further, in the 2018 edition of Guidelines for Clinical Practice in Hematopoietic Tumors, publishedby the Japan Society of Hematology on July 20, Treakisym was newly selected as a standard
treatment option for all approved indications. According to SymBio, this is the first time in almost
20 years that a standard therapy has been so designated. This event means that Treakisym hasestablished itself in theory and in fact as a standard therapy in the field of malignant lymphoma
and has thereby moved a step closer to achieving a market penetration of 80% by the end of 2020.

Fair Research Inc.
Tsuyoshi Suzuki

Company Information
LocationTokyo

President

Fuminori Yoshida

Good progress in pipeline development

EstablishedMarch 2005

The company’s pipeline is developing steadily. With Treakisym, of particular note is the Phase 3
clinical trial targeted at relapsed/refractory middle-high grade non-Hodgkin’s lymphoma (r/r
DLBCL). Of the 60 cases targeted for the trial, 20 patients have now completed registration and48 more are expected to do so by year end. It would seem, therefore, that development is moving
steadily toward a target application date in the first half of 2020 and an approval date some timein 2021. In terms of product life-cycle management the company began preparing application
documents in June for the approval of the RTD preparation and expects approval to come in 2021.
As for the RI preparation, using guidance from the Pharmaceuticals and Medical Devices Agency(PMDA) the company started drawing up plans for clinical trials in May with the expectation thattrials (36 cases) will begin in 2019. Approval is expected in 2022.
Rigosertib development seems to be on a similarly steady path. The schedule is for the registrationof subjects in Japan for the Phase 3 injection preparation to be completed in October. 4 subjects
have already been registered for Phase 1 trials for the rigosertib oral preparation of rigosertib, andfrom next year the company intends to participate in the international collaborative Phase 3 trials
being planned by Onconova Therapeutics, Inc.

CapitalJPY 11,834 mil.

ListedOctober, 2011

URL

www.
symbiopharma.com

Industry

Pharmaceuticals

No. of employees

82

Even with dilution from exercise of multi-year stock options, stock still undervalued
Treakisym is establishing itself as the crucial element in treating malignant lymphoma, rendering
the forecast in our last report of a possible total market size of over JPY20 billion even morefeasible. However, while the company’s pipeline is going ahead, since our last report there has
been no evolution to Phase 3 so our trial calculation of that pipeline remains unchanged. Thismeans that, taking into account the company’s possible development of its own sales structure andafter allowing for costs associated with on-going drug search activities, the corporate value of
SymBio, including end-June cash and cash equivalents, works out at JPY30.4 billion (discountrate 10%, pre-tax).
The development of its own sales structure and full-fledged clinical testing means that for the next
three years (2018-2020) the company will continue to chalk up losses in excess of JPY3 billion.
However, the issue in April 2018 of stock options with multi-year exercise rights (maximum
proceeds JPY10 billion) has relieved concerns that the company’s cash reserves might run out.
Excluding the rights exercised up to the first half, the company’s market value combined with an
expected further financing valued at a maximum of around JPY8.5 billion comes to no more than
JPY15.7 billion, as against a corporate value of JPY30.4 billion pre-tax, and JPY21 billion aftertax. It therefore seems possible that SymBio stock, even allowing for a level of dilution, is being
undervalued by the market.

Key Indicators as of Aug.17, 2018
Share Price

120

Year High268

Year Low

116

Shares outstanding

62,353 thousand

Trading Unit

100 shares

Market Cap

7,482 million

Dividend (est)0

EPS

JPY-50.62

Forecast PERna

BPS (actual)

JPY46.22

PBR (actual)

2.60X

Note: EPS, PER,BPS,PBR are on basis of shares outstanding, excl.
treasury shares

見出し
Results

Revenues
JPY milYoY％

OP Income
JPY milYoY％RP
JPY milYoY％

Net Income
JPY mil

YoY
％

EPS
JPY

Share Price
High
Low

2015/12 Actual

1,933

-1.1

-2,551NA-2,630NA-2,632

NA

-81.3

383

177

2016/12 Actual

2,368

22.5

-2,127NA-2,316NA-2,313NA-58.82509

173

2017/12 Actual
2017/12 2Q Actual

3,444
1,786

45.4
47.5

-3,947-1,235NANA-3,976-1,268NANA-3,977-1,266NANA-79.78-26.09

311
311

200
200

2018/12 2Q Actual

1,928

8.0

-1,324NA-1,377NA-1,388NA-23.79247

144

2018/12 Forecast

4,201

22.0

-2,981NA-3,044NA-3,056NA-50.62

1/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on the informationand materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility whatsoever for any
results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and other transactions. The intellectual property
right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

Company outline and philosophy
Business Model

Requiring neither labs nor
factories SymBio is apharmaceuticals venture withnone of the risks assumed bydrug
discovery
firms,
operating a niche strategy
focusedon
maximizing
profits.

SymBio Pharmaceuticals Ltd. is regarded as a bio-venture but has the following
special characteristics:
1. Controls risk and maximises earnings with a “labless” and “fabless” strategy.
In terms of business model, the company does not itself conduct basic research on
new drugs. Rather, it seeks out and carefully investigates new drug candidates
developed by drug discovery ventures and pharmaceutical companies around theworld. A new drug selected as a result of this process is the subject of a licensing
agreement and, following development in Japan, is either licensed out to anothercompany for commercialization or commercialized by SymBio itself.
(Since the company itself conducts drug development in Japan it should berecognized as not simply a technology trader but as a bio-drug company).
2. Targets large market share and high earnings using a niche strategy.
The company focuses its development efforts on drugs for relatively rare
conditions in, for example, oncology, hematology and pain management which,despite strong medical needs, the major pharmaceutical companies have mostly
avoided. It seeks to maximize market share and profits using this niche strategy.
3. Post-POC (proof of concept) strategy
In most cases proof of concept has already been established. By insisting on priorevidence of efficacy and safety in human subjects, the company reduces thedevelopment risks of new drug candidates.

The
determinantsofcommercial
successareinteractions with a network of
drug discovery companies andthe ability to discern andevaluate.
The company is a bio-venturein the rare position of having a
product which was approvedand brought to market within
five years of being adopted

Company structure and staff
quality are key

The success or failure of this business model is dependent on having a network of
drug discovery companies worldwide and a keenly discerning eye.
This business model is one which seeks to control the risk inherent in drug
discovery and, at the same time, secure good returns from pharmaceuticals.
Evidence of this ability is provided by the company’s track record. Normally, ittakes some 10-20 years to bring a drug from basic research to the market. In termsof the probability of success, some estimates suggest that, counting from thechemical compound stage, it is less than 1/30,000, and even from the POC stage,around 7 to 8%. But SymBio managed to get its first product, Treakisym, fromadoption to manufacturing and commercial approval in around five years, and in
the three years following launch captured 57% of the market. In the eleven or so
years since founding, the company has screened 1,500 drug candidates, of which
over 600 have been formally investigated in-house. And of these, five products
have been adopted and two are currently under development.
We believe this track record has been made possible by the expertise of thecompany’s staff and by the way the company is organized. SymBio has aworkforce of 82, of whom more than 40 are involved in research and development.
The drug search function is supported by a Scientific Advisory Board (SAB) of
specialists (including Nobel Prize candidates) who support drug search activities.
Needless to say, the presence of the company’s founder and CEO, Fuminori
Yoshida, is of great value in terms of both the experience h brings and his extensive
personal network (for CV’s of the SAB members and of Fuminori Yoshida pleasesee our previous report released on February 19, 2018).

2/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)
Main Points in First Half
Results
While first half sales growth
was on the surface a
restrained 8.0% due to anumber of one-off factors, themore realistic picture showsthat a growth trajectory of
more than 20% has been
maintained

SG&A expenses will rise as
the company takes on more
staff to strengthen its
marketing activities

Issue Date: August 21, 2018

First half performance
Revenues in the first half of 2018 (January-June 2018) derived entirely from salesof Treakisym. Sales revenues grew 8.0% to JPY1.93 billion. Domestic sales wereup 6.4% YoY to JPY1.76 billion. This appears superficially to represent a major
slowdown, given sales growth of 47.5% in the first half of 2017 and 43.2% in thesecond half, and given the company’s target of 22% for 2018. But in fact, sales ofTreakisym on the basis of approved drug prices rose 22.3% YoY to JPY4.07
billion. The company has explained that the difference was due to the shift to thesecond half of one drug lot which Symbio was due to ship to Eisai in June. By
adding that back in we can see that the sales growth trajectory is still at around the
20% level.
The cost of sales ratio stood at 70.3%, an improvement of 1.2% over the same
period of the previous year. SG&A expenses came in at JPY1.9 billion, up 8.7%
on the same period of the previous year, but within this, R&D expenses contributed
JPY840 million, on a par with the same period of the previous year. SG&A minus
R&D expenses rose to JPY1.06 billion, a significant 16.9% jump on the same
period of the previous year due to costs associated with taking on more staff tostrengthen marketing activities.
The final result was a loss on sales revenue of JPY1.32 billion, compared to a lossof JPY1.24 billion in the same period of the previous year, and a loss on net profit,
partly due to currency losses, of JPY1.38 billion, compared to a loss of JPY1.27
billion in the same period of the previous year.
Profit & Loss in the first half of 2018
(JPY mi l ）1H2018

1H2017

1,928

1,786

8.0%

47.5%

Unit cost

1,355

1,276

Pct

70.3%

71.4%

1,897
838
1,059

1,745
839
906

Op. profts-1,324-1,235

Net profits-1,388-1,266

Revenues
GrowthSales-SG&A
Of which, R&D
Non-R&D costs

Source: Fair Research Inc. using short-form results report

Losses may continue over the
medium term, but because ofmulti-year exercise of option
rights there is little fear thatfunds to finance development
will run out

On the other hand cash and cash equivalents on the balance sheet now stand at
JPY3 billion, about the same level as December 2017. Of the stock option issueannounced in April (maximum proceeds of JPY10 billion over 3 years) there has
been some progress in exercising the 2018 portion, such that, by the end of June,
cash of JPY1.5 billion was raised (by end of July the figure was JPY2.14 billion).
Of note also is the fact that SymBio’s medium term management plan (dated
February 2018) reveals that in the three years (2018-2020) prior to turning
profitable in 2021 the company will accumulate losses of around JPY10.7 billion.
However, concerns about running short of cash have been dispelled by this multiyear stock option issue.

3/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

Assets & Liabilities

Liquid Assets
Cash
Fixed Assets
Total Assets
Liquid Liabilities
Fixed Liabilites
Net ssets
Equi ty ra ti o

(JPY mil）
End Dec. 2017 End June 2018
4,036
4,645
2,947
3,049
215
200
4,252
4,845
1,011
1,364
1
1
3,239
3,479
63.6%
59.5%

Source: Fair Research Inc. using SymBio short form report

Reference: Medium term management plan

Source: SymBio, released Feb 7, 2018

No change in the company’s
own results forecast for 2018.
Losses will shrink because
new product introduction
costs in the previous year will
be absent

The company has not changed its forecast for full-year 2018 results. Using official
drug prices Treakisym sales in Japan retain a target level of JPY10.1 billion, andSymbio sales are forecast at JPY4.2 billion (up 22% on the year before). As noted
later, Treakisym sales are supported by the occurrence of a number ofdevelopments, such as achieving standard treatment status, so there is little needfor concern that sales will fall precipitously. R&D activities continue to be actively
pursued, but due to the fall-off of costs associated with the previous year’s
introduction of the RTD and RI preparations R&D expenditures are expected to
decline by as much as JPY700 million on the previous year, reducing SG&A
expenditures by JPY630 million (SG&A expenditures minus R&D expenditures
will rise as a result of increased spending on marketing). The end result of higher
revenues and lower SG&A expenditures will mean a significant decrease in losses
at both the operating level and the net earnings level.
FY 2018 earnings forecast

Revenues
Growth(JPY mil）
FY2017FY2018(Actual） （Forecast）
3,444
4,201
45.4%

22.0%

2,412

2,833

Unit costchangeSales-SG&A
Of which, R&D
Non-R&D costs
Op. profits

70.0%

67.4%

4,978
3,017
1,961
-3,947

4,350
2,311
2,039
-2,981

Net profits-3,977-3,056

Source: From SymBio results meeting materials

4/12
This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)
Treakisym achieves
standard therapy status
In July 2018, theB-Rtreatment using Treakisym
was listed in clinical practiceguidelines as a standard
treatment
Rapid increase in market
share to above 50%

Issue Date: August 21, 2018

Since February 2018 the company’s revenues driver, Treakisym, has been thesubject of some significant developments. In March, SymBio arranged for an
external consultant to conduct a survey of 200 internal medicine physicians
specialising in hematology. The survey found that the use of Treakisym in
combination with rituximab (B-R therapy) for the treatment of untreated low-grade
non-Hodgkins lymphoma had achieved a market penetration rate in excess of 50%,
thereby surpassing by a large margin the conventional R-CHOP therapy. Next, inthe 2018 edition of Guidelines for Clinical Practice in Hematopoietic Tumours,
edited by the Japan Society of Hematology and published on July 20, Treakisym
was newly listed as an additional standard treatment option for all approved
indications. According to SymBio, this is the first time in almost 20 years that astandard therapy has been so designated. This development means that Treakisym
has established itself in theory and in fact as a standard therapy in the field ofmalignant lymphomas and has thereby moved a step closer to achieving a market
penetration rate of 80% by the end of 2020.
Comparison of market penetration trend: B-R therapy and R-Chop therapy

Considerable effort is now
going into the development of
new combined drug therapies
in which Treakisym is the
basic
component,
andTreakisym has establisheditself as the backbone ofvarious therapies to treat
malignant lymphomas

Note: Target indication: untreated low-grade NHL
Source: SymBio IR meeting materials

There is now a lot of work going on to develop new combined drug therapies inwhich Treakisym is the basic component. On July 2, 2018 approval was given for
a new anti-CD20 antibody called obinutuzumab (commercial name Gazyva,
developed by Roche, and in Japan jointly by Chugai Pharmaceutical and Nippon
Shinyaku) to be used in combination with Treakisym for the treatment of follicularlymphoma. According to Symbio, in Europe and the US in the field of malignant
lymphoma there are now more than 160 therapies being developed combining BR and novel pharmaceutical preparations. Also, it is understood that development
is proceeding on combination therapies involving immunity checkpoint inhibitors.
Treakisym is likely to be used as the key component even if new therapies appear,
and this position is unlikely to be challenged in the near term.

5/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

Status of novel treatment developments targeting B-R combinations
By indication

Steady progress in proceduresto change to more easily
administerednewpreparations. By means ofthese changes the company
aims to extend patent
protection and product life
cycle to 2031

By development stage

Note: NHL=non-Hodgkin’s lymphoma; FL=follicular lymphoma; DLBCL= diffuse
large B-cell lymphoma; CLL=chronic lymphocytic leukemia; MCL=mantle cell
lymphoma; HL=Hodgkin's lymphoma
Source: Prepared by SymBio using data from Syteline

The company is gradually moving ahead in the process to change drug
preparations, as one plank in its product life cycle management strategy for
Treakisym products. For the RTD preparation, the preparation of documents
related to an application for approval began in June and approval is expected in
2021. For the RI preparation the company received guidance from thePharmaceuticals and Medical Devices Agency (PMDA) and began preparing
planning documentation for clinical trials in May. It will commence trials on 36
cases in 2019 with the aim of winning approval in 2022
Reference: Comparison of different types of administration

Source: SymBio IR meeting materials

Decision approaching on
building a sales structure

For sales post-2021, the company is still debating whether to establish its own
marketing structure or set up a business partnership with another company. It hasreceived tie-up approaches from a considerable number of companies and plans tocome to a conclusion by the end of September.
In passing, arbitration on the company’s dispute with The Medicines Company in
the US concerning the self-pain management product IONSYS is still ongoing(SymBio has requested the International Chamber of Commerce to rule on its
claim for compensation in the amount of JPY9 billion against The Medicines
Company).

6/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)
Product pipeline progress

Issue Date: August 21, 2018

SymBio’s development strategy focuses on expanded applications and different
formulations for Treakisym, and the development of rigosertib. In terms of a newlicensing-in this product is at an early stage of development and the costs oflicensing-in are regarded as small.
(1) Treakisym (general name: bendamustine)(SyB L0501 (Freeze-dried agent)/SyB L1701 (RTD preparation)/SyB L-1702 (RI preparation)/SyB C-0501 (oral preparation)）

Treakisym

Treakisym pipeline

Source: SymBio IR meeting materials

Patient enrolment for Phase 3
trials directed at r/r DLBCL
proceeding smoothly, aiming
for approval in 2021

Currently in Phase 3 clinical trials for second-line treatment of relapsed/refractory
middle and high-grade non-Hodgkin’s lymphoma (r/r DLBCL). The company istargeting 60 cases and by the end of July 2018 had completed enrolment of 20
patients, with 48 targeted by year-end 2018. The general schedule is for application
for approval to be submitted in the first half of 2020 for approval in 2021.

In April 2018, Novartis submitted for approval its CAR-T therapy for the treatment
The CAR-T therapy is a third- of r/r DLBCL. However, this is intended as a third-line therapy and therefore notline therapy and therefore is a direct competitor to Treakisym, which is mainly for second-line indications.
not in direct competition with
Treakisym
Patient enrolment for Phase 1 trials for the Treakisym oral preparation started in
May 2018 and 4 cases had been completed by July. Targeted indications areadvanced breast cancer, progressive small cell lung cancer, glioblastoma,metastatic brain tumour, non-small cell lung cancer and mesothelioma. In addition
Four subjects now enrolled for to confirming safety considerations the plan is to search for carcinomas against
oral
formulation
Phase which oral agents are effective. In addition, in collaboration with the Keio1(targeting solid cancers).
University School of Medicine the company has initiated a pre-clinical study to
Seeking amenable carcinomas confirm the therapeutic effect on systemic lupus erythematosus (SLE), which is
one type of autoimmune disease. The pre-clinical study should be completed
within the year, with Phase 1 beginning in the first half of next year.
As noted earlier, the process involved in changing drug formulations is goingwell. As a result of these changes the Treakisym group could see its life-cycle
extended to 2031.

7/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)
Rigosertib

Issue Date: August 21, 2018

(2) Rigosertib (injection preparation:SyB L-1101/Oral preparation SyB C-1101
Rigosertib pipeline

MDS: Myelodysplastic syndromes

Source: SymBio IR meeting materials

The plan is to complete patient
enrolment
forinjection
formulation Phase 3 trials by
October. Good progress isbeing made toward an
application date in 2021

Enrolment of subjects for thePhase 1 oral formulation is
now underway. Following
that, the company plans toparticipate in the Phase 3
international
collaborative
trials being organised by
Onconova.
Rigosertib has the potential to
become a cancer therapy
targeting Ras. Its successcould be a dramatic event

Rigosertib injection formulation (SyB L-1101)
In January 2018, as a result of the interim analysis of Phase 3 international
collaborative trials (INSPIRE trials) it was decided to continue the trials,
increasing the number of cases from 225 to 360. SymBio is also continuing inJapan, raising its number of cases to 40. As of the end of July 2018, 36 patient
enrolments have been completed and it is expected that 40 cases will be reachedby October. Phase 3 will be more or less completed in the next business year and,in 2021, the plan is to apply for approval to target those high-risk myelodysplastic(MDS) patients for whom the standard therapy was ineffective or for whom there
was a relapse.
Rigosertib oral formulation (SyB C-110)
Enrolment now underway of subjects for Phase 1 first-line oral formulation
treatment of relapsed/refractory high-risk MDS. In Europe and the US, the original
licensor, Onconova, is conducting Phase 1/2 trials in combination with azacitidine
and expects to issue the final results in December 2018. After completing Phase 1
in Japan Symbio plans to participate in the international collaborative Phase 3 trials
planned by Onconova, and then submit an application.
In addition, it has been established that rigosertib acts as a mimicking molecule ofRAS (a cancer-related gene) and competes to inhibit a signalling molecule binding
to an activated RAS. In other words, it is possible that rigosertib has the effect of
inhibiting carcinogenesis by activated RAS, or inhibits the proliferation of cells
which have already become cancerous due to an activated RAS. Apparently, some
30% of cancer patients have RAS mutations, but there has to date been no example
of a successful cancer therapy targeting RAS. At present a lot of attention is
focused on clinical studies of rasopathies under the leadership of the NCI.
Reference: How rigosertib acts on RAS

Source: SymBio IR meeting materials

8/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

Conclusion
With Treakisym’s acceptanceas a standard therapy it is now
approvedforthreeindications. And with its
current Phase 3 status withrespect to r/r DLBCL our trial
calculation of a JPY20 billion
market size is looking morefeasible

In our previous report (dated 19th February 2018) we gave details on the market
size of Treakisym and rigosertib. That estimate is given added credence as a resultof Treakisym’s recognition in the first half as a standard therapy. We therefore
adhere to our modelling of JPY10.6 billion market size for Treakisym’s three
approved indications: 1 recurrent/refractory low-grade NHL/MCL; 2 chronic
lymphocytic leukemia (CLL); and 3 untreated low-grade NHL /MCL. We also
reiterate our market-size estimate of JPY9.8 billon for r/r DLBCL, now at Phase
3.
The Treakisym market

Source: SymBio IR meeting materials

We posit the potential market size for the rigorsertib injection formulation at
Rigosertib has a potential JPY4.6 billion, and for the oral formulation at JPY11.6 billion (for details see ourmarket of JPY16.2 billion
previous report).
While pipeline development isproceeding well there has
been no progress to Phase 3.
Hence, we maintain ourestimate of pipeline value
unchanged

We have maintained our estimate of pipeline value unchanged because since ourlast report there has been no progress to Phase 3 (for all assumptions underlying
our estimate see our previous report).
For Treakisym, assuming that the company takes on its own merchandising from2021 we posit a value of JPY31.9 billion (before tax, discount rate 10%). For
Rigosertib, we posit a value of around JPY9 billion (before tax, discount rate 10%)assuming a probability of success of 50% for the injection preparation and 30%
for the oral preparation. As for SymBio’s total value (before tax),we must take into
account not only the two drugs but also the present value of the total company’s
costs, such as basic research costs and cash in hand, which produces an estimatedtotal of JPY30.4 billion. Assuming a discount rate of 8% the figure we posit is
JPY36.7 billion.

9/12
This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

Estimates of corporate value and pipeline value
Takinginto account thecompany’s normal drug
search activities, all-company
administration costs and cash,
we arrive at an estimatedcorporate value of JPY30.4
billion before tax and around
JPY21.0 billion after tax (taxrate 31%)(JPY100 mil)Discount rate
10%

8%

Total (before tax)

303.6

367.0

Treakisym

319.2

369.1

Rigosertib

89.6

113.9

All-company costs-135.7-146.5

Cash

30.5

30.5

(Ref） As s umi ng eff. Ta x ra te 30%
Di s c. ra te
Tota l (pre-ta x)

10%
209.5

Di s c. ra te

8%
253.2

13/08/2018
Ma rket va l ue

72.3

Source: Calculated by Fair Research

Even after allowing for the
dilution attendant on exerciseof multi-year stock options it
seems that the stock market isundervaluing SymBio shares

The company’s market value as of August 17 stands at JPY7.48 billion (shares
outstanding as of end of June). Adding to the company’s market value themaximum proceeds, around JPY8.5 billon, from the exercise of stock option rights
unexercised as off the end of June 2018, yields a sum of JPY16 billion. There isthus a disparity with the company’s value, JPY30.4 billion (before tax) or JPY 21.0
billion (after tax). Hence, even taking into account the dilution generated by thefinancing it seems likely that the stock market has undervalued SymBio.

10/12
This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

Fair Research Inc.
AI Bldg. Kayabacho 5F
1-6-12 Shinkawa
Chuo-ku
Tokyo 104-0033
Japan
Tel. 03-6403-9217
E-mail: info@fair-research-inst.jp

11/12This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.

SymBio Pharmaceuticals Ltd. (4582 JASDAQ)

Issue Date: August 21, 2018

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12/12
This report is prepared by Fair Research Inc. (Fair Research) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on theinformation and materials that Fair Research judged reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Research shall not take any responsibility
whatsoever for any results including direct or indirect damage arising from the use of, or reliance to, this report. Investors should take their own responsibility for securities and othertransactions. The intellectual property right of this report belongs to Fair Research, and any copy, transmission or quote of any contents without permission is legally prohibited.