ANALYST NET Company Report

SymBio Pharmaceuticals, Ltd.
Issued: Nov.4 2020

（4582 JASDAQ）

Should turn profitable in 2021
Entering the second-time startup
SymBio Pharmaceuticals Ltd. does not undertake research in new drugs. Rather, it
relies on a worldwide network of drug discovery companies and its own expertiseto adopt and develop promising new drugs. It occupies a niche, seeking to maximise
market share and earnings by focusing on areas of medical need in rare diseases(particularly hematopoietic tumours) unmet by the drug majors. Most of the drugcandidates it takes on already have a proven record of efficacy and safety, whichmakes them a low-risk development proposition. The company’s first, and leading,drug is Treakisym®, which was approved five years after being adopted by thecompany and received standard treatment status in 2018. In October 2019, thecompany announced its third product, acquiring the sole global license(development, manufacturing and sale) for Brincidofovir. The company thereby
evolved into a licensor, not only in Japan but also globally, firstly in Asia generally(including China) and the US. At present, it is proceeding with an expansion ofTreakisym® indications and undertaking a series of Treakisym® formulation
changes as one plank in its lifecycle management policy. Furthermore, preparations
have been completed for the launch in 2021 of in-house sales. The company has
therefore entered the second phase of its existence as a pharmaceutical company
specialising in hematology.
Revamping pipeline strategy
When Brincidofovir (BCV) was first adopted by Symbio the stated intention
initially was to develop an injectable formulation for the prevention of viralhemorrhagic cystitis after hematopoietic stem cell transplantation, an area of poor
prognosis and high lethality – i.e. strong unmet medical needs. However, on thebasis of the consultations with the company’s Global Advisory Board in February2020 a new global development strategy was announced in August 2020. It was
decided to give top priority to development in areas where no alternative therapeutic
agent was available, where there was a strong unmet medical need and where there
was a good expectation of success. On this basis it was decided to focus on
adenovirus infections in children and adults during hematopoietic stem celltransplantation (HSCT). The company plans by itself to use overseas CRO’s topursue global development. Turning to rigosertib, the Phase III trials (INSPIRE
trials) did not demonstrate a significant difference from physician’s choice oftherapy. However, based on cross-analysis with genome analysis and the analysis
results of Japanese subjects alone a new approach is scheduled for next spring.
Could start turning profitable in 2021
Fair Research Inc. believes the company is now in sight of achieving profitability
in 2021, followed by an earnings trajectory in the region of 10-20% in terms of 1020% on an operating profits basis. In addition to the change in sales revenues due
to direct sales by the company, there will also be an effect from a switch to the
Treakisym® RTD formulation, leading to a reduction in costs. In addition, R&D
spending will be curtailed by the peaking of Treakisym® development costs, thediminution of milestone payments for formulation changes, by the temporary
review of rigosertib development and by a review of the BCV development plan.
Starting in 2022, the successful expansion of indications to r/r DLBCL will
gradually boost sales to double the prevailing level. At the same time, there will bea further fall in costs due to formulation changes. However, it is expected that theBCV development objectives will be expanded and rigosertib development will beresumed, and it is highly likely that new licensing and M&A investment activity
will emerge in order to capture long-term growth opportunities. SymBio’s
management planning will have to strike a balance with company profits.

Follow-up Report
Fair Research Inc.
Tsuyoshi Suzuki

Company Information
LocationTokyo
Fuminori
YoshidaPresident
EstablishedMarch 2005

Capital

JPY16,519 mil.

ListedOct. 2011
www.

URL

symbiopharma.com

Industry

Pharmaceuticals

Employees

125（unconsol.）

Key Indicators Nov. 2 2020
Share price355

52-week high791

52-week low

264

Sharesoutstanding

35,198 thou

Trading unit

100 shares

Market cap

JPY12,495mil.

Est. dividend0

EPS-116.16 JPY

Forecast PER

NA

Actual BPS

147.68 JPY

Actual PBR

2.40X(EPS 、 PER 、 BPS 、 PBR based onshares outstanding excl. treasury
shares)YoY％

Op.
Income
JPY mil

YoY
％

R.P.
JPY milYoY％

Net Income
JPY mil

YoY
％

EPS
JPY

1,933

-1.1

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

NA

2,368

22.5

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

2017/12 Actual
2018/12 Actual

3,444
3,835

45.4
11.4

-3,947-2,656NANA-3,976-2,748NANA-3,977-2,752

2019/12 Actual
2020/12 Forecast

2,837
3,043

-26.0
7.2

-4,301-4,592NANA-4,376-4,656NANA-4,376-3,796

Results

Revenues
JPY mil

2015/12 Actual
2016/12 Actual

Share Price JPY
High

Low

-325.01,532

708-253.3

2,036

692

NA
NA

-319.1-165.5

1,244
1,052

800
464

NA
NA

-189.03-116.16

1,088

542

1/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

Company outline and philosophy
Business Model

SymBio Pharmaceuticals has the following characteristics:① Post-POC strategy
The company does not itself undertake drug discovery research but investigatescandidates developed by drug discovery ventures and pharmaceuticals
companies around the world. Usually, proof of concept has already been
established. That is to say, by insisting on prior evidence of efficacy and safetyin human subjects the company reduces the development risks of new drugcandidates.

The company is a specialty
pharmaceuticalcompany
using a niche strategy andtargeting high returns. It
does not have laboratories or
manufacturing
facilities,
avoiding the risks which ② SymBio is a specialty pharma operating a high return, high market share niche
they entail
strategy.
The company focuses its efforts on drugs for relatively rare indications in, forexample, cancer and hematology, where the need is high, but where the major
pharmaceuticals companies are unrepresented. Using this niche strategy, thecompany seeks high market share and high returns. The company’s businessmodel thus far has involved entering into licensing agreements on new drugcandidates it has selected, developing them in Japan and then licensing out toother pharmaceuticals companies. However, it has now set up its own sales
function and is ready to enter phase 2 of its evolution as a pharma specialisingin hematology.
③ Evolving into a global licensor
Further, in September 2019, SymBio acquired exclusive rights (development,
production and sales) to Brincidofovir, a product with global applications.
SymBio has thus evolved from a company seeking licenses in Japan to one
providing licenses around the world, firstly in Asia, including China, and also
the US and Europe.
The
determinantsofcommercial success areinteractions with a networkof
drug
discovery
companies
andthecompany’s own expertise

The success or failure of this business model is dependent on the company’s
network of pharma-collaborators around the world and the company’s own
expertise.
Hence, the company’s track record. Normally, it takes some 10-20 years to bring adrug from basic research to the market. In terms of the probability of success, someestimates suggest that, counting from the chemical compound stage, it is less than
1/30,000, and even from the POC stage, around 7-8%. But SymBio managed to get
its first product, Treakisym®, from adoption to manufacturing and commercial
approval in only five years, and in July 2018 it became recognised as a standard
therapy. In its fifteen-year history the company has ultimately adopted 6 products,
and at the moment 3 of these are under development or in the planning stage.
We believe this track record has been made possible by the expertise of thecompany’s staff and by the way the company is organised. SymBio has a staff of125, of whom 44 are involved in R&D. The drug search function is supported by a
Scientific Advisory Board (SAB) of experts (including Nobel Prize candidates).

Sets up own sales network
Evolves into global licensor

In 2018, Treakisym®, the company’s leading product, became established as astandard therapy, and steady progress has been seen in terms of expanded indications
and formulation changes. The company’s decision to set up its own internal sales
structure demonstrated it was ready to evolve from bio-venture to specialist pharma
in the area of hematology. In September 2019, the company acquired an exclusive
license to the worldwide rights of Brincidofovir, thereby transforming itself into a
global licensor.

2/18This 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 basedon the information 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 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）
Update on development of
product pipelines

Issued: Nov. 4 2020

As of October 2020, SymBio’s major development products are Treakisym® forrelapsed / refractory diffuse large B-cell lymphomas (r / r DLBCL) and the RI
preparation for product life cycle management of Treakisym®, together with
injectable and oral rigosertib for myelodysplastic syndrome (MDS), and the antiviral
agent Brincidofovir (BCV) for multiple viruses.

At the present time the company has completed preparations for the switch to inPhase 2 of the company’s
house sales. It has also completed an application for an extension of Treakisym®
development calls for aapproved indications to r/r DLBCL and has received approval for use of the RTD
review of pipelines
formulation (RTD = ready-to-dilute without dissolving). The company is therefore
on the verge of entering its second phase of development and it appears a lot ofpipeline revamping is going on behind the scenes.
(1) Treakisym® (generic name: bendamustine)（SyB L-0501, SyB L-1701、SyB L-1702）

Source: SymBio web page

Treakisym® (generic name: bendamustine) is an anti-cancer drug developed inGermany in 1971 and used to treat low-grade non-Hodgkin lymphoma and chronic
lymphocytic leukemia.
In December 2005, SymBio acquired exclusive development and sales rights inJapan from the Astellas Pharmaceuticals European subsidiary (now named Astellas
Deutschland GmbH). Within a mere 5 years, in October 2010, it had received
approval for two indications, low grade r/r NHL and mantle cell lymphoma (below,
MCL) and, in December, commenced sales. Further approvals were received inAugust 2016 for chronic lymphocytic leukemia (below, CLL), and in December for
untreated NHL/MCL. Finally, in July 2018, with respect to all approved indications,
Treakisym® was newly listed in the Guidelines for Clinical Practice in
Hematopoietic Tumours for 2018 (edited by the Japanese Society of Hematology)
as a standard treatment option.
The company is currently working on development which will extend approved
indications to relapsed /refractory diffuse large B-cell lymphomas (r/r DLBCL).
RTD formulation approvedin September 2020

① Progress in product life-cycle management: RTD formulation approval
On September 18 2020 the RTD formulation for Treakisym® received regulatory
approval, and in the first quarter of 2021 information on this formulation will be
The switch to direct sales insupplied to healthcare providers prior to product launch. In December 2020, the2021 together with thesales channel for Treakisym® will be switched from Eisai to direct sales and it ischangeinformulation
expected that the conventional freeze-dried (FD) formulation will rapidly be
3/18
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 basedon the information 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 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）

Issued: Nov. 4 2020should ease the problem of replaced by the RTD formulation. In addition, since the FD formulation supplierdefective products(Astellas Deutschland GmbH), will be replaced by the RTD supplier (the US
company Eagle Pharmaceuticals Inc, it is hoped that there will be some ameliorationof the problem over the last two years of defective products.

Source: SymBio company briefing materials

At the same time there has been steady progress in the development of the RI
Development of the very formulation, which is convenient and quick. It was announced on March 17, 2020
convenient RI formulation is that the last of 36 cases for clinical trials of this formulation had been registered, andalso proceeding steadily
on September 9, 2020 that the observation period for all subjects had been completed(last patient last visit). It is expected that approval will be given in the second halfof 2022.
In 2020, ten years will have passed since Treakisym® was first approved, but
successful life cycle management means that its product life can be extended to2031.
② Application for expansion of approved indications to relapsed / refractory
diffuse large B-cell lymphoma (r/r DLBCL)Good progress has also been made on development work to further expand
approved indications. On September 18, 2019 the observation period was
In May 2020, application completed for of all patients in Phase 3 clinical trials of the B-R dual drug therapy
submitted for expansion of combining Treakisym® (generic name: bendamustine) and Rituxan® (genericapproved indications to r/r name: rituximab) for the treatment of relapsed/refractory diffuse large B-cell
DLBCL
lymphomas (r/r DLBCL). On November 5 of the same year, the company
announced that primary endpoint results had exceeded expectations. The company
then, on May 11 2020, submitted an application for the approval of the B-R therapy
for the treatment of r/r DLBCL.
Details of this study were presented at the European Society of Hematology (EHA)in June 2020. It was reported that the overall response rate (ORR) was 76.3% andthe complete response rate (CR) was 47.4%. A particularly noteworthy achievement
was the high efficacy confirmed even in the case of elderly people (aged 65 years orolder) whose treatment by hematopoietic stem cell transplantation is not the standard
therapy. Even for non-GCB type DLBCL, which has a poor prognosis, the complete
response rate (CR) was 39%

4/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

Results of Phase 3 clinical trials of the B-R therapy targeting r/r DLBCL(n)

ORR(%)

38

74.3

47.4

26.9

～65 years old

7

85.7

71.4

14.3

65～75 years old

20

75.0

45.0

30.00

75～ years old

11

72.7

36.4

36.3

All patients

CR(%)

PR(%)

Response rate by age

Source: Symbio company briefing materials

r/r DLBCL is mostly confined to elderly patients (73% of patients are aged 65 andover) with multidrug therapy being the mainstream therapy for such patients.
However, when multiple anticancer drugs are taken in combination, adverse side
effects can be problematic. B-R therapy uses only two drugs, Treakisym® and
Rituxan®, and has an excellent response rate and level of safety. It is very likely,
therefore that it will be recognized as one of the standard therapies for this condition.
Age distribution of DLBCL patients (SymBio study)

75～ years old
20%～ 65 years old
27%

70～75 years old
24%
65～70 years old
29%

Source: SymBio company briefing materials

Expanded indications could
mean doubling of market
size

The expansion of indications could mean a doubling of patients being treated and aconsequent major increase in the size of the Treakisym® market. The current
expectation is that approval will come in the first half of 2021 for a product launchin the second half.
Trend in patient numbers with expanded indications for Treakisym®

Source: SymBio company briefing materials

5/18
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 basedon the information 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 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）

In July 2020 application also
submitted for joint use of
Polivy® in Japan

Issued: Nov. 4 2020

③ Application for approval of joint use with Polivy® (Japan)
In June 2019 the FDA announced the expedited approval of a three-drug therapy forthe treatment of relapsed or refractory non-Hodgkin lymphoma for transplantineligible patients. This therapy consists of the B-R therapy of bendamustine(Treakisym®) + rituximab (Rituxan®) together with the anti-CD79 antibody drugconjugate polatuzumab vedotin (product name: Polivy®, developed by Genentech
and Roche). In Japan an application for approval of the joint B-R and Polivy®
therapy was submitted in July 2020. While the amount of Treakisym® required for
the B-R therapy alone is 120mg per administration, for the three-drug therapy it is
90mg. However, at present it seems that the three-drug therapy will be seen as
supplementary to the B-R therapy (the B-R therapy has a longer OS) so we do notthink there will be a big impact on the amount of Treakisym® used.
④ Development status of competing products
Kyowa Kirin is developing as a single agent Zendelisib (phosphatidylinositol 3kinase δ: PI3Kδ inhibitor) for low-grade B-cell non-Hodgkin's lymphoma in Japan,
but has only just started Phase 2 trials (October 2020).

At the present time there
appears to be no pressing
competitition from otherproducts

The US company, Karyopharm Therapeutics, has developed a drug, Xpivo®
(Selinexor), which received approval from the FDA in July 2019. It has a novel
mechanism (XPO1: exportin 1 inhibitor) and was originally indicated for thetreatment of 5-drug resistant multiple myeloma patients. Subsequently, in June 2020,
it was given fast-track approval for the treatment of r/r DLBCL. In October 2017,
the Japanese company, Ono Pharmaceutical Co., Ltd., concluded an exclusive
licensing agreement with Karyopharm covering the development and merchandisingof Selinexor and its successor, KPT-8602, for the treatment of all cancer types inJapan, S. Korea, Taiwan and Kong and the ASEAN countries. However, in early
2020, it ceased development for reasons of its own and surrendered its rights. Somedevelopers of XPO1 inhibitors have suggested that Xpivo® is limited to multidrugresistant cases due to its poor reversibility and worrying side effects.

6/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

(2) Rigosertib; SyB L-1101、SyB C-1101）

Source: SymBio website

Rigosertib
has
been
developed mainly to treat
myelodysplastic syndromes(MDS)

Rigosertib is a cancer drug indicated mainly for myelodysplastic syndromes (MDS).
Onconova Therapeutics Inc. in the US is an important developer of the drug. After
Onconova completed Phase II clinical trials in July 2011, SymBio acquired soledevelopment and sales rights for injectable and oral formulations in Japan and South
Korea (the one-off contract payment is thought to be JPY800 million).
Onconova finished Phase III trials (ONTIME trials) targeting recurrent and veryrefractory MDS in February 2014.The results of these trials showed no statisticallysignificant difference between the cohort receiving rigosertib and the control group(palliative care). However, the overall survival for the patient cohort receiving
rigosertib was 7.9 months versus 4.1 months for the control group in cases where
patients were resistant to the standard treatment using hypomethylating agents(MHA), or when during prior treatment the disease had progressed. This wasrecognised as significant and on this basis Onconova revised the trial design andfrom August 2015 proceeded with international collaborative Phase III clinical trials(INSPIRE trials) targeting high risk MDS patients who were unresponsive to HMA
or had a relapse after treatment. SymBio was responsible for the Japan segment of
the Phase III trials.
Reference: The International Prognostic Scoring System classifies high risk MDS intohigher risk and medium risk, with the latter subdivided into two risk levels, thehigher of which denotes a likelihood of transitioning to leukemia. Currently, thestandard treatment is administration of azacitidine (trade name Vidaza) anddecitabine (trade name Docagen), but some high-risk MDS occurrences are resistantto the standard treatment or relapse after treatment. Rigosertib is indicated for such
relapsed or refractory high-risk MDS, and there are no competing approved drugs
yet.

The top-line results for theinternational Phase III
clinical trials (INSPIRE
trials) did not demonstrate asignificant difference withphysician’s
choiceoftreatment

Now conducting crossanalysis of genome analysis.
SymBio plans to re-examine
its development policy on
the basis of the results andon the basis of the Japanonly data

① Top-line results for international collaborative Phase III trials (INSPIRE
trials) for injectable drugs
On August 24 2020 Onconova, the product originator, released the top-line resultsof the INSPIRE trials. The primary endpoint was overall survival (OS).
Unfortunately, the ITT-based results showed no statistically significant differencein OS between injection rigosertib (6.4 months) and physician’s choice of treatment(6.3 months). (The P value was 0.33). However, safety analysis showed thatrigosertib was generally well tolerated and serious adverse events were relatively
rare.
Onconova will conduct genome cross-analysis of registered patient cases andconsider again the development of rigosertib. This is because, in recent years, genemutation analysis of hematopoietic tumours has progressed rapidly with thedevelopment of genomic research, and much more is known about the relationshipbetween therapeutic responsiveness and genomic mutation. In addition, SymBio will
re-examine its development approach on the basis of cross-analysis and the analysis
results of 50 Japanese cases from Onconova.
7/18

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 basedon the information 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 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）

Issued: Nov. 4 2020

② Rigosertib as a RAS pathway inhibitor
It has been established that rigosertib acts as a RAS mimicking molecule. It is thoughtthat rigosertib competitively inhibits the activated RAS from binding to signaling
Rigosertib acts as a RAS
molecules (in the figure below these are RAF, and additionally PLK, RAL, and PI3K).
inhibitor with an anti-cancer
In so doing it is thought to block the RAS-RAF-MAPK signaling pathway,
effect, and may additionallysuppressing RAS-generated carcinogenesis.
act synergistically as an
immunity
checkpoint
Rigosertib’s mode of action
inhibitor

Source: Cell magazine, 165 (3).643, April 21, 2016, quoted in SymBio’s company
briefing materials

In addition, KRAS signals are thought to have a significant impact on the
microenvironment surrounding cancer. That is, it is thought that KRAS activation
leads to enhancement of a type-II macrophage (M2) and MDSC, which suppress
immunity, and further enhancement of IL-6, which suppresses T cells and the like.
KRAS inhibitors are thus thought to have a synergistic effect, altering the cancer
immune environment and enhancing the effectiveness of immune checkpoint
inhibitors. On June 22, 2020, Onconova began patient registrations for a physicianled study (Phase 1 / 2a) of the effect on KRAS (G12D)-positive advanced non-small
cell lung cancer of a therapy combining immune checkpoint inhibitor nivolumab(Opdivo®) and rigosertib.
KRAS signaling and the cancer micro-environment

Source: Onconova Therapeutics. “Key Opinion Leader Meeting”, February 7, 2019

SymBio could be ready with While SymBio is closely watching the development of a KRAS inhibitor bya revamped development Onconova, it plans to wait for the INSPIRE trial’s genome cross-analysis data withthe analysis of Japanese subjects only before deciding its future development policy.
policy by next Spring
The new policy may shape up at the earliest around the spring of 2021.

8/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

(3) Brincidofovir（BCV; SyB V-1901）

Source: SymBio web page

Acquired an exclusive On October 1, 2019 SymBio acquired from the US company, Chimerix Inc.,
global license for all exclusive global rights (development, manufacturing and merchandising) toindications except smallpox Brincidofovir (BCV) for all diseases except smallpox, making BCV the company’s
third strategic product after rigosertib. SymBio had previously been an acquirer oflicenses from overseas but this development allowed it to evolve into a provider of
product licenses globally.
(Note) Why Chimerix retains all rights to the smallpox indication
The US Biomedical Advanced Research and Development Authority (BARDA) has
provided Chimerix with more than USD100 million to develop BCV as one element
in countering bio-terror. In addition, the FDA has given BCV fast-track and Orphan
Drug status, and Chimerix received approval in April 2020 to initiate a ‘rolling
application’ (a staggered application for approval of a new drug), allowing it tocomplete the application within this year. It expects to generate cash flows of USD80100 million per year for smallpox in the period from five years after launch up to 12
years.

Characteristics of Brincidofovir
BCV is a highly active
antiviral drug which is Compared to other anti-viral drugs such as cidofovir (CDV) and foscarnet (FOS),
effective across a broad BCV is highly active and effective against multiple infectious diseases.
spectrum
Brincidofovir (BCV) is highly active across a broad spectrum

Note: EC50 (the concentration at which a drug or antibody shows a 50% maximum
response from the lowest value) indicates that the lower the number, the higher theactivity. In the upper figure, EC50 is color-coded depending on the level. Green has
high activity and red has low activity. The left-most BCV column is green for various
viruses = has a broad spectrum
Source: Chimerix

9/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

As can be discerned from the previous figure, cidofovir (CVD has a similar level ofactivity across as broad a spectrum as BCV. However, while CVD is nephrotoxic
and difficult to use, BCV has low toxicity and is very safe despite being highly
active.
At the time of licensing BCV in, SymBio indicated its first step would be to press
forward with the development of an injection formulation of BCV to treat viralhemorrhagic cystitis after hematopoietic stem cell transplantation. This is an area
which has a poor prognosis, is highly lethal, and is an area of strong unmet medical
needs.

The company’s initial target
following licensing-in was
viral hemorrhagic cystitis
following
HSCT,
butchanged this to adenovirus
infections in children andadults following HSCT

However, on the basis of consultations with the Global Advisory Board in February2020 a new global development strategy was announced in August 2020. It was
decided to give top priority to development in areas where no alternative therapeutic
agent was available, where there was a strong unmet medical need and where there
was a good expectation of success. On this basis it was decided to focus on
adenovirus infections in children and adults following hematopoietic stem celltransplantation (HSCT). The company plans by itself to use overseas CRO’s topursue global development.
BCV development strategy (August, 2020)

Source: SymBio company briefing materials

We see the company
releasing its detailed plans in
the Spring. The schedule isfor dosage trials for children
to be initiated in the US andEurope in the first half of2021, expanding the dosage
trials to adults

From the first half of 2021 the company at present plans to give priority todeveloping therapies for children where there is a stronger medical need. Now that
Chimerix has produced data confirming safety, a start will be made on trials in Japan,
the US and Europe to determine dosages (global Phase II clinical trials), following
which, while the trials for children are underway, it is planned to begin determining
adult dosages.
It seems that SymBio is now internally refining detailed plans, with the trial designand schedule likely to be released in around the Spring of 2021. It is hoped thecompany will include figures on market size for each BCV indication.

Subsequently, the company will look at the interim results of Pivotal tests on
Subsequently, there will be a adenovirus infections in children and, as with the original assumptions made at thestagedexpansionof time of the in licensing-in, will consider a staged expansion of indications to otherindications
toother viruses (such as HHV-6 and BKV). The plan then is to go beyond HSCT to organ
10/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

infections and post-organ transplant infections. Elsewhere, an improved formulation of the oral drugtransplantation infections
discontinued by Chimerix is being developed.
In the plan released in August, the company also indicated the possibility of
expanding beyond antiviral use in surgical operations to ophthalmological (eyedrops) and dermatological (ointment) formulations. It is thought there is apronounced medical need in these areas, where anti-bacterial agents are mainstream
There may be applications in
but antiviral agents barely exist. SymBio has, it seems, been approached by several
the areas of dermatology
pharmaceutical companies with an interest in these areas to discuss BCV(ointment)
andapplications. Looking ahead, it is thought that several companies will pursue
ophthalmology (eye drops)
development in the light of compatibility between formulation (eye drops orointment) and API.

11/18
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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）

Issued: Nov. 4 2020

Status of in-house sales capability
There are an estimated 4,000 or so physicians in Japan specialising in hematology,
and around 1,200 hospitals with hematology departments. SymBio sees itself
Progress made in building
covering around 400, or 30%, of the key facilities and will target around 1,200
an in-house sales structure
physicians. Leading up to the launch of its in-house sales structure in 2021 it hasof sufficient size and quality
been recruiting professional staff since 2018, with a view to having a total of 57 such
staff serving six blocs nationwide.

In particular, there is a 7person group consisting of
the KOL manager and theHematology Experts who
network closely with the
Key Opinion Leaders

The company successfully completed its recruitment on schedule in June 2020. It
now has 51 Medical Representatives highly qualified in the area of hematology, six
RSM’s (Regional Sales Managers), six HE’s (Hematology Experts), and one person(KAM) coordinating the Key Opinion Leaders (KOL’s). SymBio believes this is anextremely strong network, particularly because the KAM and HE’s work so closelywith the KOL’s. Even in the context of the current coronavirus pandemic,
appointments can be made and consultations held online between the highly
qualified staff and KOL’s. The size of the sales group is 57, which compares
favourably with other companies considering they are restricted to one area inoncology (Eisai has a staff of 150 MR’s covering three oncology areas).
The in-house sales structure at SymBio

Source: SymBio company briefing materials

Operations started to secure
the takeover from Eisai
Completion of the logistics
network and core systems

On September 7 SymBio announced it was starting work to take over from Eisai
with a view to switching to its own sales structure after the termination of its tie-up
with Eisai on December 9. In addition, the company concluded basic transaction
agreements with Suzuken and Toho Pharmaceutical with a view to using them as
general agencies for the conduct of transactions. With the establishment of two
logistic centres, one for East Japan and one for West, it was then able to announce
the completion of its logistics network. In parallel, both the construction of the ERP
system and the upgrade of the IT system were completed in the second quarter of
2020.

12/18
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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）
Earnings outlook for 2020

Issued: Nov. 4 2020

Revision of 2020 results forecast and impact on mid-term management plan
The company’s first half results were seriously affected by the coronavirus pandemic
and by the lingering effects of a defective product problem. This was reflected in arevised earnings outlook released on September 17, 2020.

Results in the first half wererevised down to reflect the
tough sales environment;
but heading toward a
recovery in the second half
Operating profit was revised
up by JPY500 million, sincecosts were sevely limited toestablishing the in-housesales structure and topreparing for BCV trials
next period

Adding in partial legal cost
payments from the MDCO,
net earnings was revised up
by JPY1 billion

There are three main points:① Sales for the 2020 full year were revised down by JPY360 million, and rosefrom JPY1.36 billion in the first half to JPY1.68 billion in the second.
Demand for Treakisym® is greater in the second half than the first due toseasonality, in addition to which overseas sales are expected to rise in thesecond half.
② Operating profit was revised up by just under JPY500 million due to a big
reduction in SG&A expenses. Top priority is being given to investments
required for the in-house sales system starting on December 10, 2020, toundertake actions to achieve profitability in 2021, and to prepare for BCV's
global Phase II trials scheduled for the first half of 2021. All other expenses
are being pared back. Cost of sales and SG&A figures have not been released
but R&D expenses come to about JPY2.2 billion (includes milestone incomeof JPY500 million from the approval of the RTD formulation). R&D aside,
we expect SG&A expenses will be held at around JPY3.3 billion.
③ Net earnings have been revised up by around JPY1 billion. This is becauseof an upward revision in operating income, and extraordinary earnings fromthe expected USD495 million payment to SymBio from The Medicines
Company (MDCO).
Results revisions for the 2020/December period(JPY-mil）(Ref.）

2020
Initial
Sales

3,404

Cost of goods sold

2,258

SG&A

Revised3,043

2020 H1

1,360

Revised H2

1,683

2019 Actual2019 H1

H2

2,838

2,004

834

1,030

1,973

1,475

498

6,236
2,731 c.JPY2.2 bil
3,505 c.JPY3.3 bil

2,169
833
1,336

5,166
2,442
2,724

2,544
962
1,582

2,622
1,480
1,142

Op. profits-5,090-4,592-1,839-2,753-4,302-2,015-2,287Rec. profits-5,134-4,656

Net profits-4,803-3,796-1,884-1,912-4,376-2,069-2,307

R&D
excl.R&D

Notes: 2019 H2 R&D includes JPY540 mil. contract payment to Chimerix.
2020 R&D includes JPY500 mil. milestone payment to Eagle corp. for 2H

Source: Compiled by Fair Research Inc., using financial results and other filings

Note:
In October 2015, SymBio concluded a licensing-in contract (contract lump sum about
JPY1 billion) with The Medicines Company (MDCO) in the United States for apatient-administered pain management drug, IONSYS. Phase III clinical trials
started in Japan in June 2016. However, in May 2017, MDCO suddenly announced
the possibility of withdrawal from the business, leading to the cancellation of patientregistrations and, in November 2017, to the cancellation of the contract. An
arbitration request for compensation was filed with the International Chamber of

13/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

Commerce (ICC) seeking compensation in the sum of JPY9 billion. (Incidentally,
MDCO was acquired by Novartis AG in January 2020.) A hearing was conductedunder the auspices of the ICC Arbitration Court in June 2019, the arbitration
proceedings were completed in December, and an arbitration finding was handed
down on July 21, 2020. Unfortunately, SymBio's claim for damages was not granted,
but MDCO was required to pay SymBio half of the costs associated with thearbitration proceedings.

he company had cash on thebalance sheet of JPY5.4
billion at the end of June
2020 so there is no concern
in the meantime of running
short of cash

While SymBio expects to record a JPY1.9 billion loss on a net earnings basis for thesecond half of 2020, as of June 2020 it does have cash on the balance sheet of around
JPY5.4 billion. In addition, in October, investors will begin exercising rights for new
shares on the company’s 51st options issue (expected procurement: JPY1.6 billion),so there is very little possibility of running out of funds in the near term.
Note:

New
investments
inlicensing-in and M&A tosecure long-term growth
opportunities will be put on
the back-burner for the timebeing

On October 13 the company announced changes to the use of funds plan for theproceeds of the companys’s 50th options issue (exercise completed) governed by aresolution in February, and for the proceeds of the 51 st options issue (exercise
underway), in addition to announcing the start of the exercise period for the 51 stissue. The amount raised by the 50th issue failed to meet the targeted JPY3.8 billion.
Because of weak market conditions it raised only JPY2.28 billion, less than theamount required for the development of new licensed-in product pipelines andfinancing of the company’s in-house sales structure. For that reason the company isgoing to divert the proceeds of the 51st issue to prioritise product pipeline
development and sales structure, and will consider raising funds again when theneed arises in the future to finance long-term growth opportunities with new licenseacquisitions and M&A.

Changes to use of funds(JPY-mil）
Funds raised in 50th Funds rasised in
options issue
51st options issue①Dev. Of pipelines
licensed in②In-house Sales unit

Total funds raised

2,375=>1,380

55=>1,059

2,430＝＞2,439

1,431＝＞900

54＝＞585

1,485＝＞1,485

Disbursements
scheduled
2020/3/1~2021/June
2020/3/1~2021/June
Initially:③New licensing and M&A

1,535＝＞0

activity to secure long-term
growth opportunities

0=>0

Total

3,806＝＞2,280

1,535＝＞02020/10/1~2021/June

1,644=>1,644

Source: Compiled from SymBio company IR materials, October 13. 2020

The recent changes to the medium-term plan refer only to 2020. The years 20212022 are now being scrutinized and any changes to the figures will be released assoon as they are confirmed.
Medium-term management plan (provisional)(JPY-mil）

Changes to the mediumterm plan are for 2020 only,with 2021 onwards now
under consideration

Sales
Op. profit
Rec. profit
Net profit

2019

2020

(Actual）(Rev. forecast）

2,837-4,301-4,376-4,376

3,043-4,592-4,656-3,7962021

2022（Med.term plan）

9,008
1,031
987
1,356

（Med. term plan）

10,816
1,482
1,438
1,717

Source: SymBio medium-term management plan (February 2020) and 2020 revised
results (Sept. 2020)

14/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

Fair Research Inc. believes SymBio will achieve profitability in 2021 and will thenbe on track for 10-20% in terms of operating profit margin.
In 2021 the switch to the company’s own sales force will mean a new level of sales
for the company, and the switch to the Treakisym® RTD formulation will mean afall in the product cost ratio. In addition, R&D expenses are going to be capped by
the peak-out in Treakisym® R&D, by the falling milestone payments forformulation changes, the temporary review of rigosertib development, and changes
made to the development plan for BVC (expanding indications beyond pediatricadenovirus)
It is now possible to see thepath forward to profitability
being achieved in 2021 andthen operating earnings
growth in the region of the
mid-teens

From 2022, a contribution will come from the expansion of indications to r/r DLBCLwith sales revenues gradually doubling from the 2021 level. In addition, as theswitch to the RTD and RI formulations continue there will be further cuts to the costof sales. However, earnings growth will not be completely one-sided, since there
will also be expanded development of BCV and the resumption of rigosertib
development. There is also the fact that the company remains enthusiastic forinvestments in licensing-in and M&A to secure long-term growth opportunities.
SymBio’s management planning will have to carefully balance these needs withprofit potential.

15/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

Conclusion
The execution of thebusiness plan is proceedingwell and the company’s
second phase has begun

SymBio has, due to its establishment of an in-house sales structure and its
acquisition of the license to brincidofovir (BCV), established itself firmly for growth
as a specialist hematology pharma with a global license, thereby launching a second
phase of its evolution. Recently, sales of the company’s main product, Treakisym®,
have inevitably been revised down due to the coronavirus pandemic and the productquality problems caused by another company, but additional indication approvals
and formulation changes are proceeding well and preparations for the new sales
structure are well underway.

At this, the start of its second phase, the company will stand back to review its
At this, the start of a second
pipeline strategy. It plans to look again at the development strategy for rigosertib
phase, a review of productafter the INSPIRE results are released and following further detailed analysis. With
pipelines will be undertaken
regard to BCV, it thinks it can reduce the scale of initial testing for targetedindications by switching to more assuredly unmet medical needs. Whether that isthe case or not will be revealed at the time of its next medium-term management
plan scheduled for release in February 2021.
The
medium-term
managementplan
the company expects toannounce in February 2021
will be an opportunity to reevaluate
thereviseddevelopment strategy

We see a very high probability of SymBio’s operating profits turning positive in
2021 as a result of its in-house sales and pipeline review. Subsequently, our
expectation is for operating profits to trend at 10-20%. Investors will be alert for are-think of the company’s potential when it releases its medium-term management
plan in February 2021.
Symbio moving to a new stage

Source: SymBio results meeting materials

16/18
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 basedon the information 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 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）

Issued: Nov. 4 2020

Fair Research Inc.
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17/18This 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 basedon the information 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 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）

Issued: Nov. 4 2020

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analysis and evaluation by Fair Research□Although the report is written based on the information and materials that Fair Research judged reliable, there
is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Also, views and forecasts set forthin the report represent judgment by Fair Research at the time of issue of the report, and may be changed without
notice.
□ Fair Research shall not take any responsibility whatsoever for any results including direct or indirect damage
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18/18
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