ANALYST NET Company Report

SymBio Pharmaceuticals Ltd.
Issue date: April 16, 2019(4582 JASDAQ）

We revise up the pipeline value to around JPY52 billion
Moving up from drugs venture firm to pharmaceuticals company
SymBio does not itself undertake drug discovery research but rather uses its judgement andits links with drug discovery companies around the world to introduce and develop promising
new drug formulations. In particular, it focuses its development efforts on drugs for lesscommon conditions in oncology and hematology in which, despite a felt medical need, themajor pharmaceutical companies show little interest. In this niche area it seeks to maximize
market share and revenues. In most cases, new drug candidates so selected have a proventrack record of efficacy and safety, and therefore entail limited risk. Thus, the company’s firstsuccessful product (Treakisym®) went from adoption by the company through to approval
and launch in the market in a mere five years. More recently, this product has achieved
standard therapy status. The company is now about to establish its own in-house sales
structure to capitalize on additional indications and formulations, which will have the effectof lengthening the product’s patent life cycle. The company will thereby become, in nameand in fact, a full-fledged pharmaceuticals company.

Basic Report
Fair Research Inc.
Tsuyoshi Suzuki
Company Outline
Location

Tokyo, Japan

President

Fuminori Yoshida

Additional indications and life cycle management to generate earnings surplus

EstablishedMarch 2005

After being approved for the treatment of relapsed/refractory non-Hodgkin's lymphoma, atype of malignant lymphoma, and mantle cell lymphoma in 2010, Treakisym® was further
approved in 2016 for chronic lymphocytic leukemia and untreated low-grade non-Hodgkin's
lymphoma and mantle cell lymphoma. The company is now working on still further
indications, notably relapsed/refractory medium/high grade non-Hodgkin’s lymphoma(DLBCL) and has already completed registration of patients for Phase 3 clinical trials. It isalso looking to extend the patent life-cycle of the product by changing formulations, since in2020 ten years will have passed since Treakisym® was first approved and there is a risk fromgenerics. This risk has been reduced by the introduction of an easy-to-use liquid formulationfrom the US company, Eagle Pharmaceuticals Inc., to replace the current freeze-dried
formulation.
These measures could expand the Treakisym® market size at peak sales to around JPY20.4
billion. A lot of attention has recently been focused on the use of Treakisym® together with
CAR-T, a leukemia therapy, and other new combination therapies, which could further
expand the market of Treakisym®. The company has a lot of costs to confront, including
those necessary for additional indications, and the introduction of a liquid formulation ofTreakisym®. It also has to finance costs associated with the development of its second major
product, rigosertib, for its ongoing search for new drugs and for the establishment of its own
in-house sales structure. Despite this burden, however, it is likely that in the period ending
December 2020 the company will achieve an operating profit surplus on the back of increased
sales of Treakisym®.
Pipeline value after deducting new drug search costs: around JPY52 billion (pre-tax)

Capital

JPY12,972 million

ListedOctober 2011

URL

www.
symbiopharma.com

Industry

Pharmaceuticals

Employees

90 (parent basis)On the assumption that the company has its own in-house sales structure in place we revise
upward to JPY40.4 billion our estimate of the pre-tax present value of Treakisym®. This
reflects ① The rise in gross margin arising from the switch to a liquid formulation; ② Aslightly earlier introduction of the liquid formulation; and ③ Treakisym’s status as the
backbone of treatment for hematopoietic tumours. We put the 100% success probability
expected in trials on relapsed/refractory medium-high grade non-Hodgkin’s lymphoma (r/r
DLBCL) at 100%.
We have revised up the present value of rigosertib to JPY18.7 billion, mainly because of therise in its probability of success to 50% as a reflection of the favourable outcome of Phase 2
clinical trials of the oral formulation.
Deducting SymBio’s ongoing new drug search costs and company-wide costs from the total
value of both pipelines yields the company’s corporate value, estimated at JPY52 billion(before tax). There is a significant difference between the company’s market value andcorporate value, even if we allow for the approximately JPY7 billion in new financing
expected over the next two years.
Results

Revenues YOY OP Income
JPY mil%
JPY mil

YOY%

RP
JPY milYOY%

Key Indicators (at April 15, 2019)
Stock Price

190

Year High272

Year Low

116

Shares Issued

82,398 thousand

Trading Unit

100 shares

Market Cap

15,656 mil. JPY

Dividend (est)0

EPS (est)-43.88JPY

PER (est)na

BPS (actual)

53.06 JPYPBR (actual)

3.58X(Note: EPS,PER,BPS,PBR are on the basis ofshares outstanding, excl. treasury shares)

Net Income YOY
JPY mil%

EPS
JPY

Share Price
High
Low

2014/12 Actual

1,955

27.6

-1,303NA-1,110NA-1,115NA-36.26393

196

2015/12 Actual

1,933

-1.1

-2,551NA-2,630NA-2,632NA-81.30383

177

2016/12 Actual

2,368

22.5

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

173

2017/12 Actual
2018/12 Actual

3,444
3,835

45.4
11.4

-3,947-2,656NANA-3,976
-2748

NA
NA

-3,977-2,752NANA-79.78-41.38

311
263

200
116

2019/12 Forecast

4,465

16.4

-3,587NA-3,612NA-3,616NA-43.88

1/19
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 isbased on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any contents
without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Company outline and philosophy
Business Model

SymBio is evolving fromdrugs
venturetopharmaceuticals company
which, with neither labs nor
factories,
andtherebyabjuring some of the risks ofdrug discovery, operates aniche strategy focusing on
maximising profits

SymBio Pharmaceuticals
characteristics:

Ltd.

has

the

following

distinguishing① Controls risk and maximises earnings with a “labless” and “fabless”
strategy.
The company does not itself conduct research on new drug discovery.
Rather, in its business model it seeks out and carefully investigates new
drug candidates developed by drug discovery ventures andpharmaceutical companies around the world. A new drug candidate
selected as a result of this process would typically be the subject of alicensing agreement and, following development in Japan, would either
be licensed out to another company or commercialized by SymBio itself
to maximise profits.
(Since the company itself conducts drug development in Japan it is not
simply a technology trader and can be classified as a bio-pharmaceuticals
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 and hematology 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 prior evidence of efficacy and safety in human subjects, the company
reduces the development risks of new drug candidates.
The above characteristics of the company’s business model allow it to avoid mostof the risks confronting drug discovery companies, while at the same time
maximising earnings potential.

The
determinantsofcommercial success areinteractions with a networkof
drug
discovery
companies and the ability todiscern and evaluate
The company is a bioventure in the rare positionof having a product which
was approved and brought
to market within five yearsof being adopted

The success or failure of this business model is, of course, dependent on having a
network of drug discovery companies worldwide and a keenly discerning eye.
Evidence of this is provided by the company’s track record. Normally, it takessome 10-20 years to bring a drug from basic research to the market. In terms of theprobability of success, some estimates suggest that, counting from the chemicalcompound stage, it is less than 1/30,000, and even from the POC stage, only around
7-8%. But SymBio managed to get its first product, Treakisym®, from adoption
to manufacturing and commercial approval in only five years or so, and as earlyas July 2018 had established it as a recommended standard therapy. In the elevenor so years since founding, the company has screened 1,500 drug candidates, ofwhich over 600 have been formally investigated in-house. And of these, fiveproducts 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 a staff of90, 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 toCompany structure and staff say, the role played by the company’s founder and CEO, Fuminori Yoshida, is ofgreat value in terms of both the experience he brings and his extensive personalquality are key
network (see CV below).
2/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Fuminori Yoshida - Career1949 Born in Tokyo
Graduated from the Science Faculty1971 (majored in Chemistry) of Gakushuin
University
1973

Obtained master's degree from M.I.T(specialised in Life Sciences)
Studied Management and Medical Policy
Theory at Harvard University Graduate
School1975 Joined Mitsubishi Corporation
1977 Joined AHS Japan (currenty Baxter)
1980 Founded Japan Bio-Rad Laboratories
1991 Joined Japan Syntex (now Roche)
CEO Amgen Japan, Vice-President
Amgen Inc.
Founded SymBio Pharmaceuticals
2005
Limited
1993

Source: Fair Research Inc. using Securities Report filings and other information

Main pipeline products

SymBio is on its way to becoming a full-fledged pharmaceuticals company. In
2018 its major product, Treakisym®, became a standard therapy, and thedevelopment of various drugs, including additional indications and formulation
changes, is proceeding well. In addition, the company has decided to set up its own
in-house sales structure.
As of March 2019 there were two main pipeline products under development:
Treakisym® and rigosertib(Supplementary information)
In October 2015 SymBio concluded an agreement with The Medicines Company in the UnitedStates under which it would license-in the self-administration pain control drug, IONSYS. The
lump sum contract payment was JPY1 billion and Phase 3 clinical trials in Japan began in June
2016. In May 2017, however, the other party abruptly announced it was considering withdrawing
from that business. Patient registration was therefore halted and in November 2017 theagreement was terminated. SymBio has requested the International Chamber of Commerce toarbitrate on its claim for compensation in the amount of JPY9 billion from The Medicines
Company(1) Treakisym®/SyB L-0501 (Freeze-dried agent)/SyB L-1701 (RTD
preparation)/SyB L-1702 (RI preparation)/SyB C-0501 (oral preparation)

Source: SymBio company briefing

3/19
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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Treakisym® (generic name: bendamustine) is an anti-cancer agent which was firstdeveloped in Germany in 1971. It is used as a therapeutic drug for low-grade nonHodgkin's lymphoma among malignant lymphoma and for chronic lymphocytic
leukemia.
Malignant lymphoma
Lymphoma is a blood disease that is caused by lymphocytes (a type of white blood
cell that activates immunity) becoming cancerous. There are two main types:
Hodgkin's lymphoma (hereinafter HL) and non-Hodgkin's lymphoma (NHL). In
the case of Japanese patients, malignant lymphomas are mostly (94%) of the NHL
type. NHL is classified into one of the following three, depending on speed of
disease progression. The Treakisym® treatment target is NHL, shown in red.
Types of malignant lymphoma
Degree of Maligancy

T ype(speed of progression)
L ow-grade

Small Lymphocytic
MALT(measured in years)

Follicular(Grade 1-3a)
Marginal Zone B cell
Lympa Plasma cell
Nodal marginal B cell

Medium -grade

Plasma cell tumor
Mantle cell(measured in months)

Follicular (Grade 3b)
Diffuse large cell typeHigh grade(measured in weeks)

Treakisym® got approval
only five years after
introduction, and SymBio
has since been adding new
indications
In 2010, the first approval
was given, and two further
indications were approvedin 2016, thus providing
further penetration of themarketIn July 2018 Treakisym®
became a standard
therapy

Precusor B Lymphoblastic
Burkitt Lymphoma

Source: Therapy Guide prepared by Eisai and SymBio

In December 2005, SymBio acquired from Astellas Pharma GmbH, the European
subsidiary of Astellas Pharma Inc., the sole development and marketing rights inJapan. As a result of subsequent product development, in October 2010, just five
years later, it had won approval for use on relapsed/refractory low-grade NHL andmantle cell lymphoma (MCL). Sales began in December of that year. Further, inAugust 2016 chronic lymphocytic leukemia and in December untreated low-grade
NHL/MCL became additional approved indications. In the 2018 edition of
Guidelines for Clinical Practice in Hematopoietic Tumors, published by the Japan
Society of Hematology in July, Treakisym® was newly selected as a standard
treatment option for all approved indications.
Behind this was the demonstration of superior performance of the B-R therapy,
which combines Treakisym® (generic name: bendamustine) and rituximab, versus
the conventional standard therapy, CHOP-R (see note below).

4/19
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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Comparative tests: CHOP-R therapy and B-R Therapy

Source: Abstracted from company briefing materials. Shows superior results for BR therapy
Note: CHOP-R therapy
A combination therapy of rituximab, a molecular target drug, cyclophosphamide,
an anticancer drug, doxorubicin hydrochloride, vincristine sulfate, andprednisolone, a steroid drug.

The market penetration of Treakisym® consequently rose from an annual averageof 35% in 2017 to 56% at the end of September 2018, completely outdoing the RCHOP therapy, which had been the standard. In 2018, its eighth year on theJapanese market, sales (NHS price basis) rose to JPY8.5 billion.
Market position of the B-R therapy

Source: Compiled by SymBio Pharmaceutical from M3 market surveys

5/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

SymBio moves to set up its
own sales sructure

In August 2008 SymBio licensed out to Eisai the joint development rights and sole
sales rights of Treakisym® in Japan, buying in Treakisym® from Astellas
Deutschland GmbH and wholesaling to Eisai, with Eisai having sole distribution
rights in Japan and, we infer, bearing half the Treakisym® development costs. The
licensing-out agreement with Eisai expires in 2020 and SymBio announced in
October 2018 that it would have its own sales capability in place by 2021 (this inhouse sales structure is described later in this report).

Patient registrations
completed for Phase 3
targeting relapsed/refractoryintermediate-high gradeNHL

As of March 2019 development is going ahead with the aim of finding still further
qualifying indications. In January 2018 the first patients were registered for Phase
3 clinical trials targeting the area of relapsed/refractory medium-high grade NHL(below, r/r DLBCL). Later, as a result of discussions with the PMDA, there was achange in the number of cases targeted and registrations completed in April 2019.
Looking ahead, after completion of the period of follow-up on registered cases itwill be necessary to statistically analyse efficacy and safety, and then to apply asscheduled in the first half of 2020 for authorisation for r/r DLBCL as an additional
indication. In addition, Phase 1 clinical trials of the oral formulation to treat
progressive solid cancers began in January 2018 and are presently ongoing. As of
March 2019, 12 cases have been registered, with the main focus on confirming
safety and seeking out cancer types against which the oral formulation is effective.
In addition, in July 2018, pre-clinical studies were started in collaboration with the
Keio University Medical School on systemic lupus erythematosus (SLE), a typeof autoimmune disease. The plan is to move to Phase 1 some time in the second
half of 2019.
Note: In Japan the most commonly occurring intermediate-grade NHL is diffuse
large B-cell lymphoma (DLBCL).

In addition to B-R, a varietyof new combination
therapies have beendeveloped

In addition, there has recently been a lot of research and findings on various
agents in combination with Treakisym®. Some actual examples are given below:① A therapy combining anti-CD20 antibody obinutuzumab (brand name
Gazaiba) and Treakisym® was approved for follicular lymphoma on July 2,
2018, thereby adding a new treatment option.
Note: Follicular lymphomas account for approximately 80% of low-grade non- Hodgkin's
lymphomas② The CAR-T therapy (generic name: Kymriah) developed by Novartis is wellknown as a ground-breaking therapy for the treatment of hematopoietic
tumors including leukemia, and in March 2019 was authorised in Japan as atherapy for relapsed/refractory acute lymphocytic leukemia (ALL) andDLBCL. Rather than competing with this CAR-T therapy, Treakisym® wasapproved as a drug to be combined with the pretreatment of the CAR-T
therapy.
③ A SymBio survey has shown that in the United States and Europe there are
now over a hundred studies underway testing new combinations of agents(BR+X) for therapies in the area of blood cancer. This fact suggests that the
B-R therapy has now established itself as the main pillar in the area ofhematopoietic tumours.

6/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

New combination therapies now being developed
By Disease

By Stage

Source: Compiled by SymBio from SyteLine Data

④Studies to test immunity checkpoint inhibitor combinations are being
conducted worldwide and it is possible that their use will expand
Immunity checkpoint inhibitor combination therapies
Mechanism

PD-1

PD-L1

Name

Stage

Indications

Combinations

Status

Ph1/Ph2

r/r DLBCL

BR therapy+Opdivo+Gemcitabine

In progress

Ph2

HL

B single agent+Opdivo +Adcetris

In progress

Ph1/Ph2

r/r HL

B single agent+Opdivo+Gemcitabine

In progress

Ph1/Ph2

r/r HLBR therapy+Opdivo +Adcetris

Completed

Tecentriq® (atezolizumab) Ph1/Ph2

NHL

B single agent+Tecentriq+Obinutuzumab

Completed

Opdivo®(nivolumab)

Bavencio® (avelumab)

Phase 3r/r DLBCL

BR therapy+Bavencio+Utomilumab

In progress

Imfinzi® (durvalumab)

Ph1/Ph2

NHL-CLL

B +/- R+Imfinzi

In progress

Note: Utomilumab is an immuno-conjugate stimulator now at the clinical stage ofdevelopment
Source: Company briefing materials

In addition, the company isalso proceeding steadily
with life-cycle management
via changes in formulation

A further important point is the issue of patent life-cycle management usingchanges in formulation. Treakisym® will be ten years from its initial approval in2020 and from 2021 will face the risk posed by increasing competition fromgenerics. To deal with this it plans to extend the life of the product (until 2031) byintroducing new formulations. On September 21, 2017 SymBio announced that it
was introducing two liquid formulations, a ready-to dilute (RTD) formulation anda rapid-infusion (RI ) formulation from the US company, Eagle Pharmaceuticals
Inc., to add to the existing freeze-dried (FD) version. While the current FD
formulation can be stored at room temperature, it needs to be dissolved in a solvent
first and diluted with physiological saline solution before administration, whichtakes time and effort. The liquid formulation, on the other hand, needs to be
refrigerated but after that only requires dilution, making it less troublesome andless time-consuming for the medical facility. In the US, Teva PharmaceuticalIndustries brought out an FD formulation in 2014, and in January 2016 brought tothe market an RI formulation (generic name: Bendeka, licensed in from Eagle
Industries) which can be ready for administration in an even shorter time. Within
7/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019the space of only two years Bendeka accounted for 97% of the Treakisym®
market.
Comparison of FD, RTD and RI formulations

Source: SymBio company briefing

Life-cycle probably
extended to 2031 byintrodction of liquid
formulations

The company has come to an agreement with the Pharmaceuticals and Medical
Devices Agency (PMDA) that, since the RTD formulation has the same efficacy
as the FD formulation, and is administered in the same way, no additional trials
are necessary, and that pharmaceutical stability data alone will satisfy application
requirements. This probably means that approval of the RTD formulation can bebrought forward from 2021 to the October-December period of 2020. With respect
to the RI formulation, it differs in terms of density and length of time required foradministration, meaning that safety trials are required. Nevertheless, the PMDA
has agreed that major tests are not necessary and that 36 cases confirming safety
will be sufficient. The first patient registrations for clinical tests were completed
in April 2019. An application for approval of the RI formulation will be submitted
after completion of the main tests, with product launch scheduled for the first halfof 2022. These formulations will have the effect of extending the product’s life
cycle to the end of 2031.
(2) Rigosertib (SyB L-1101 injection formulation, SyB C-1101 oral formulation)

Rigosertib is being
developed as both an oral
and injection formulation
mainly targeted at MDS

Rigosertib is an anti-cancer agent now being developed by the US company,
Onconova Therapeutics, mainly as a therapy for myelodysplastic syndromes(MDS). In July 2011, after Onconova had completed Phase 2 trials, SymBio
acquired sole development and distribution rights of the oral and injection
formulations in Japan and South Korea (contract lump sum estimated at JPY800
million).
The current development status is as follows:(a) Injection formulation
Joint international Phase 3 trials are now underway targeting patients with highrisk MDS who are unresponsive to the standard hypomethylating agent (HMA
8/19

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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019refractory) or have relapsed after treatment. SymBio is responsible for Phase 3 inJapan.
Under the IPSS (International Prognostic Scoring System), high risk MDS isclassified as risk group 2, which is the higher of the two intermediate groups andsuggests a high risk of transitioning to leukemia. The current standard treatments
are azacitidine (trade name: Vidaza) and decitabine (Dacogen) but some high-risk
MDS cases are resistant to the standard treatments or relapse after treatment.
Rigosertib is indicated for such relapsed/refractory cases, ant there is at present nocompeting medicine authorized
Onconova completed Phase 3 (ONTIME) trials targeting relapsed/refractory highrisk MDS in February 2014. The results of the trials showed no statisticallysignificant difference between the cohort receiving rigosertib and the cohort
receiving palliative care. However, if we look solely at HMA refractory cases orat cases in which there was deterioration during pre-treatment, a statisticallysignificant difference was recognised in overall survival (OS) between therigosertib cohort (7.9 months) and the control group (4.1 months). Onconova thenchanged the study design based on the results of subset analysis and from August
2015 initiated international joint Phase 3 (INSPIRE) tests for high-risk MDS
patients who are HMA non-responsive or have-post treatment relapse.
Results of ONTIME trial (left) and subset analysis (INSPIRE tests withsame cases, right)

Joint international Phase 3
trials now underway withdesign changes made by themain developer, Onconova.
SymBio involved on theJapan side
In January 2018 cases wereincreased on the back ofintermediate results.
Submission of application
expected around 2021

Oral formulation Onconova now planning tojoin currently proposed
Phase 3 joint international

Source: Company briefing materials

From June 2012 SymBio began Phase 1 trials on relapsed/refractory high risk
MDS, which were completed in October 2015. As a result of deliberations with
Onconova and with the authorities, SymBio from December 2015 participated injoint international Phase 3 (INSPIRE) trials conducted by Onconova, taking chargeof the clinical trials in Japan. In January 2018, on the basis of intermediate resultsfrom the INSPIRE trials, Onconova decided to continue with a larger number ofcases (from 225 =>360) and SymBio did the same in Japan. As of March 19 2019,
registrations have risen to 42 cases (50 cases targeted), so that it is thought anapplication can be made in in or around 2021 with approval following in or around2022.
(b) Oral formulation
The safety and efficacy of the oral formulation (in combination with azacitidine)
has already been demonstrated in Europe and the United States by Phase1/2 trials
targeting high-risk MDS (14th International MDS Symposium, 2017). Further, the9/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）
trialsIssue Date: April 16, 2019

Phase 2 results of oral formulation rigosertib were presented at the 2018
symposium of the American Society of Hematology (ASH). In combination withazacitidine these showed good tolerance and an excellent overall response rate in
HMA untreated and relapsed/refractory MDS patients.
Rigosertib Phase 2 clinical trials (ASH- 2018)
Response rate

HMA untreated

HMA refractory（2006 IWG basis）(1st line, 29 cases）(2nd line, 26 cases）

Overall response rate(ORR)

26 cases (90%)

14 cases (54%)

Complete remission (CR)

10 cases (34%)

1 case (4%)

Partial remission (PR)

0 cases

1 case (4%)

Source: Company briefing materials

Given these circumstances, Onconova in December 2018 applied to the FDA for aSpecial Protocol Assessment (SPA) and is now planning to conduct Phase 3 trials,
in combination with azacitidine, targeting untreated high-risk MDS.
Note on SPA: After the completion of Phase 2 trials a sponsor may seek the FDA’s
prior approval of the indications targeted at Phase 3, the purpose, study design,
endpoints (notably the primary and secondary assessment criteria) and thestatistical methodology. After completion of the trials these are accepted as they are
as fulfilling the approval review requirements. This system increases the likelihoodof approval if the endpoints are met and reduces the review process and the timerequired.

After consultations with the FDA scheduled for the first half of 2019, Onconova
will commence Phase 3 trials in which the primary endpoint criteria is the overall
response rate. Once the SPA is approved by the FDA, SymBio plans to join Phase
3 of the international joint trials scheduled by Onconova.
It is understood that the activity location of rigosertib is not downstream in the Ras
pathway (e.g. MEK or ERK) but at a point where it can inhibit the Ras-RAF
interaction. In recent years gene mutation analysis of hematologic malignancies
has made rapid advances in line with the development of genome research, leading
to a recognition of many types of illness. It seems in the future as the proper
reaction to an illness with a particular gene mutation becomes clearer, we can hopefor improvements in full response rates.
The rigosertib action mechanism

Source: Onconova presentation materials, October 2018

10/19
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SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

A product now under development which could compete with rigosertib is Syros
Pharmaceuticals’ SY-1425 (oral formulation). It has completed Phase 2 clinical
trials and preparations are now being made for Phase 3. It has been reported thatin Phase 2 trials (10 cases) in combination with azacitidine and targeting acute
myeloid leukemia (AML) and high risk MDS the full response rate was 50-60%.
It should be borne in mind that among AML cases it targets only those with thegene variant RARα positive. Hence, there are few patients.

11/19
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contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Results for the 2018 business year and company’s outlook for 2019
SymBio’s sources of revenue consist of product sales and milestone income. It
recorded a surplus in operating profit in the period ending December 2008 as aresult of receiving a lump sum contract payment from Eisai to whom it hadlicensed out sole distribution rights of Treakisym® in Japan. Other than that,
however, SymBio has consistently recorded operating losses.
The fall-off in sales growthin 2018 was due to one-off
factors. In 2019, taking into
account the temporary
standstill in sales promotion
activities prior to the switch
to in-house marketing, we
see sales rising at a rate of
16%

Sales in 2018 came to JPY3.83 billion, but most of that consisted of wholesaling
Treakisym® to Eisai. The cost of sales (mainly the cost of acquisition from
Astellas Deutschland GmbH) was JPY2.66 billion and the gross profit margin was
JPY1.17 billion. We estimate that the wholesale price paid by SymBio to Eisai for
Treakisym® was about 50% of the NHS price, and the wholesale cost to SymBioof buying in from Astellas Deutschland GmbH was around 66% of the wholesale
price. Sales growth in 2018 was slower than that recorded in 2017. This was mainly
because in October 2018, 87% of 25 ml. vials were visibly defective and shipments
were temporarily stopped.
Sales in 2019 are forecast at JPY4.46 billion, a 16% increase. The Treakisym®
sales target (on the basis of NHS prices) is JPY10.1 billion, representing adownward revision from the previous forecast, but this takes account of an
expected reduction in sales promotion activity on the part of Eisai as the transition
to in-house marketing approaches.

R&D spending effectivelyrose in 2018, suggestingthat productdevelopment is making
progress

R&D expenditure in 2018 came to JPY1.83 billion, down on the previous year’s
JPY3.02 billion. However, JPY1.38 billion of the previous year figure was theestimated lump sum payment to Eagle Pharmaceuticals Inc. for the licensing-in of
the liquid formulation, and JPY400-500 million was for costs associated with theself-administered IONYS pain control drug (development terminated in February2018). If we deduct those items from the 2017 figure, we are left with JPY1.1-1.2
billion, against which the 2018 figure represents a YoY increase of JPY600-700
million. This shows that product development is, in reality, proceeding well. (Inthe 2018 R&D outlays, we estimate that around JPY1 billion was earmarked forTreakisym®, some JPY400 million for rigosertib, and JPY400 million for new
drug search activities.) R&D in 2019 is forecast at JPY2.5 billion, up JPY670
million due to an increase in product development activity.

SG&A expenditures excluding R&D in 2018 came to JPY1.99 billion, roughly the
SG&A will continue to grow same level as the previous year. Basic selling costs were around JPY1.4 billion,
because of costs associated but we believe the 2017 figure was bloated by litigation costs related to IONSYS
with the new sales structure and by the initiation of various measures related to the company’s transition to an
in-house sales structure (e.g. 10 TM’s taken on). For 2019, the company isplanning for SG&A expenditures excluding R&D of JPY2.54 billion, reflecting
more thorough preparations for the in-house sales group (20 TM structure
described below).
End-2018 cash on thebalance sheet stood at
JPY4.8 billion. The
company will continue to
produce deficits in both2019 and 2020, but multiyear fund raising will help it
avoid a cash crunch

Looking at the company’s balance sheet, the sale of warrants to EVO Fund andWhiz Fund and the exercise of those warrants represents funding of JPY3.5 billion,
boosting end-2018 cash on the balance sheet to JPY4.82 billion. We see acontinuation of losses in 2019 and 2020 as spending rises on pipeline development
and provision of an in-house sales structure, but also the continuation of scheduled
warrant issues and exercise of the warrants to bring in funding of approximately
JPY3.5 billion in each year.

12/19
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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Evolution of SymBio’s balance sheet and P&L(JPYmil)
Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18Dec-19(Forecast）

Sales
Product revenues
Milestone revenues
Cost of goods sold

1,532
1,432
100
1,214

1,955
1,940
15
1,428

1,933
1,933
0
1,483

2,368
2,137
231
1,737

3,444
3,444
0
2,413

3,835
3809
25
2,662

4465
4,457
7
2,998

SG&A
R&D costs

1,999
1,053

1,830
774

3,135
2,035

3,031
1,667

4,978
3,017

3,828
1,832

5,053
2,508

Operating income-1,681-1,303-2,552-2,127-3,947-2,656-3,587

Recurring profit-1,601-1,110-2,630-2,317-3,976-2,748-3,612

Profit before tax
Net profit-1,601
4-1, 605-1,112
4-1, 116-2,6284-2, 632-2,3094-2, 313-3,974
4-3, 978-2,7484-2, 752-3, 616

Liquid assetsof which, cash
Fixed assets
Liquid liablitiesof which, payables
Fixed liabilitiesof which, bonds
Shareholders equity
Warrants
Net assets

7,634
6, 163
53
251
207
3
0
7,336
97
7,433

7,290
5, 692
164
488
143
2
0
6,763
200
6,964

4,827
4, 261
158
551
184
2
0
4,132
300
4,432

6,685
5, 719
193
942
553
451
450
5,054
431
5,485

4,037
2, 947
216
1,011
331
1
0
2,702
537
3,239

6,038
4, 821
200
1,336
504
1
0
4,372
530
4,901

Source: Compiled by Fair Research Inc. using company filings

13/19
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contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019Market size for Treakisym® and rigosertib
We estimate the value ofTreakisym® for the three
approved indications at
JPY10.6 billion, and thevalue of the market for r/r
medium-high grade NHL(now in Phase 3) at JPY9.8
billionWe see the market for Treakisym® growing on the back of rising market
penetration and an increase in qualifying indications. Looking first at areas inwhich approval has been received: ①Relapsed /refractory low grade NHL / MCL；
②Chronic lymphocytic leukemia (CLL)；and ➂untreated low grade NHL / MCL.
In the case of ➀ sales have reached JPY4.72 billion but the number of patientsrequiring treatment is estimated at 9,336 and it is thought market penetration is
now at 58%. It is expected that sales in this segment will be sustained by changes
in formulation. For ➁CLL and ➂untreated low-grade NHL/MCL it is not longsince approval was received and both together still bring in only JPY2.68 billion
in terms of sales (FY2017). Patients indicated for this treatment total 656 for the
first and 6,967 for the second, and market penetration stood at an estimated annual
average of 65% in 2017, but there is an expectation this could change. Were we toassume that the market penetration of ② CLL rose to 55%, the size of the market
would be JPY340 million. If we were to assume a maximum market penetrationof 75% for ➂ untreated low-grade NHL/MCL then the market size would be
JPY5.57 billion. Again, in the area of Phase 3 relapsed /refractory medium-highrisk NHL (r/r DLBCL) it is estimated there are somewhere in excess of 18,000
patients, and we model the market size, assuming a 60% penetration rate, at
JPY9.77 billion.
As indicated above, total sales for the three indications for which approval has
been secured come to JPY10.63 billion, and we estimate that adding in sales forthe r/r DLBCL indication, now at Phase 3, will bring total sales to JPY20.4 billion.
It should be noted that sales for new combination therapies, such as CAR-T, are
not included in our current sales model.
The Treakisym® market

Source: SymBio company briefing materials

Considering the outlook for the next 3-4 years, as the company gets closer to theswitch from delegating sales to Eisai to going it alone, there is a risk that Eisai will
reduce its sales promotion activities and inventories will accumulate as a result.
The subsequent possibility of a kickback in sales should therefore be taken into
account.
Reflecting this possibility, SymBio has reduced its outlook for market penetrationfor 2020 in the untreated indication segment from 75% to 70% and is now looking
14/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

to achieving the 75% level in late 2021. Additionally, there is an expectation of an
inventory adjustment (shrinkage in Eisai’s inventories) before the switchover inthe second half of 2020, leading to slow sales growth in 2020.
The company has also made a change to its outlook for the r/r DLBCL therapy, thelaunch of which should be on target in the first half of 2021. However, sales
directed at r/r DLBCL will only really get going after 2022.
Treakisym® sales (NHS price basis)
JPY100 mi l
250

In-house sales force
200
RI feedstck

150
Fall prior to change inselling strucure in Q4 2020
RTD accepted100

Inventories rise5002010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Note: Actual sales figures until 2018. Company target figure for 2019. From 2020,
estimates by Fair Research Inc.
Source: Company briefing materials and Fair Research Inc.

Reference: SymBio Pharmaceutical’s medium-term management plan
(JPY mil.)Note: Sales during the period of the medium-term management plan are related toTreakisym®. Rigosertib market launch not planned. Sales via Eisai until 2020, withcompany’s own sales from 2021
Source: SymBio Medium-Term Management Plan, February 2019

Potential For rigosertib
injection formulation
JPY4.6 billion, and oral
formulation JPY11.6 billion

The rigosertib injection formulation is indicated only for high-risk MDS patients
who are HMA non-responsive. The number of such patients is estimated at 900
and using the price of Vidaza as reference we surmise the market has a value ofaround JPY4.6 billion. As for the oral formulation, we estimate the number of highrisk MDS patients not indicated for the injection formulation at 2,300. We
therefore surmise the size of the oral formulation market at JPY11.6 billion,
bringing the total for both formulations to around JPY16 billion. However, themarket size may fluctuate if, in the future, higher complete remission rates aresought by restricting indications to illnesses associated with a specific genemutation.
15/19

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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Building own sales structure

Plans a staff of 60 for inhouse sales unit

As early as 2018 SymBio had taken on ten specialists to undertake Treakisym®
sales activities as TM’s (Treakisym Managers). Then, in 2019 the company
increased this number to 20, and in 2020 plans to bring in 40 co-promotion partners(working partially on sales through other pharmaceuticals companies) or cancerspecific contract MR’s (CSO’s), bringing the total to 60.
It is estimated there are 1,100-1,200 hospitals and clinics nationwide withhematology departments, of which 800-900 are hospitals. SymBio expects to cover
the major institutions, that is about one-third or 400. It has divided the country into
two areas and six blocs, to be covered by the 20 TM’s (20 institutions for one TM),reinforced by the co-promotion managers and cancer-specific contract MR’s.
Because of the personnel expenses for TM’s and MR’s, together with the costs ofpromotion activities, Treakisym® sales expenses are expected to come to JPY1.7
billion annually, around JPY1 billion higher than in 2018.

Source: Company briefing materials

16/19
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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Modeling the present value of the SymBio pipeline
Modelling pipeline andcorporate value

In the following we seek to model corporate value. To do this we take the value ofTreakisym® (assuming indications are expanded to included r/r DBLCL,
assuming also changes in formulation and a transition to in-house sales), and thevalue of rigosertib (both oral and injection formulations) using the discounted cash
flow (DCF) method. From the sum of these two we deduct the total of companywide costs (drug search activities and company-wide administrative costs) again
using the DCF method. We assume a discount rate of 10% given that, whileconsistently running at a loss, SymBio is a pharmaceuticals venture which
minimizes risk by operating without a research function or manufacturingfunction, and which actually has a product in the market.
＜Assumptions for Treakisym®＞
For market size we assume, as noted earlier, that peak sales are achieved in the
fourth year following launch, that for the following three or four years peak sales
are maintained, that subsequently the market shrinks at an annualised rate of 5%,
and that from 2031 it contracts sharply at an annualised rate of 10%. Further, weinfer a 100% probability of success to clinical trials targeting relapsed/refractory
medium-high grade NHL, given that Treakisym® has established itself as astandard treatment in the area of hematopoietic tumours.
Eisai will continue to provide the sales channel until 2020, but from 2021 SymBio
will itself take over. Also, from 2021 there will be an almost complete switch toliquid formulations (RTD and RI formulations). We assume these formulations
will come with an improved cost compared to the current formulation. We assume
the cost after the formulation changes will be about 30%, including royalties
payable to Eagle Pharmaceuticals. Approval of the RTD formulations will generate
milestone payments, which we assume will be approximately JPY700 million.
Development costs will be borne in full by the company, estimated at JPY1.6-1.7
billion per year from 2019 to 2020, and JPY500-600 million in 2021-2022.
Further, as noted earlier, sales costs will expand to an annual JPY1.7 billion
assuming a 60-strong sales force headed by 20 TM’s.
<Assumptions for rigosertib>
For market size we assume, as noted in the previous page, that peak sales areachieved in the fourth year following launch, that for the following three of four
years peak sales are maintained, that subsequently the market shrinks at anannualised rate of 5%, and that from 2035 it contracts sharply at an annualised rateof 10%. The timing for market launch we infer is around 2023 for the injection
formulation and 2024 for the oral formulation. Given the current clinical trial
stages we posit the probability of success at 50% for the injection formulation(Phase 3) and 50% for the oral formulation (preparations now underway for Phase3). We further posit formulation supply and royalty payments to Onconova at 25%
of sales. Milestone payments will be payable on market launch for bothformulations, and we are modelling JPY500 million for the injection formulation
and JPY1.5 billion for the oral formulation. We have not included sales costs, sincerigosertib will use the same sales channels and MR’s as Treakisym®.
Quite apart from the two products dealt with above, R&D costs to cover thecompany’s new drug candidate search and investigation activities, and companywide administration costs, are generated on an annual basis. We have modelledrecurrent new drug R&D costs of JPY200-300 million and company-wide
17/19

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contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

administration costs of JPY1.4 billion, for a total of JPY1.7 billion.
Using the assumptions noted above, we have calculated the discounted present
value of the company’s pipeline and present our conclusions in the table below.
Treakisym® has a value (before tax) of JPY40.4 billion and rigosertib a value(before tax) of JPY18.7 billion, for a total of JPY59.1 billion.
Our modelling suggests that SymBio’s product pipeline value (before tax), taking
into account both products, together with the present value of company-wide costs
and current cash and deposits on the balance sheet, comes to around JPY51.8
billion. Using a discount rate of 8% yields a value of around JPY61.8 billion.
Taking into account the costof recurring drug discovery
activities, company-wide
management costs, andcurrent cash and deposits,
the value of SymBio's
pipeline (pre-tax) is
estimated at JPY51.8 billion(10% discount rate).

Modelling SymBio’s pipeline value(JPY100 mil）
Discount Rate
10%

8%

518.5

618.5

Treakisym

404.7

469.7

Rigosertib

187.1

232.1

Company-wide costs-121.5-131.5

Cash, etc.

48.2

48.2

Total (pre-tax）(Ref） Asssuming eff. tax rate of 31%
Discount rate
Total (after tax)

10% Discount rate
357.8

8%

426.8

2019/4/12
Market value

154.9

Source: Calculated by Fair Research Inc.

Addendum
On February 28, 2019, SymBio announced a stock consolidation to combine fourshares into one at the end of June. As a result of consolidation: ➀ Administration
costs are lower due to the smaller number of shares; and ➁ While low-priced stocks
are more easily a target of speculation, appreciation of the stock price can correctthat. On the other hand, it has been pointed out that even if the stock priceapparently rises due to the consolidation, this will only make it more susceptible toa subsequent fall. This opinion reflects the fact, observable from multiple
occurrences, that the stocks of a company with poor long-term results becomes alow-priced stock and is then subjected to consolidation. It is necessary to focus on
fundamentals, which are the key to stock price formation, and to bear in mind thatstock consolidation does not, of itself, bring about a change in corporate value.

Fair Research Inc.
AI Bldg. Kayabacho 511, 1-6-12 Shinkawa, Chuo-ku, Tokyo 104-0033
Tel. 03-6403-9217
E-Mail: info@fair-research-inst.jp

18/19This 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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
contents without permission is legally prohibited.

SymBio Pharmaceuticals (4582 JASDAQ）

Issue Date: April 16, 2019

Disclaimer□

This report is prepared by Fair Research Inc. ("Fair Research") for the purpose of providing information to investors for fees under acontract with a covered company, and not for solicitation of securities trading.

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Although in preparing the report, Fair Research has obtained information through interviews with the covered company, assumptions andviews set forth in the report are not of the said company but are in principle based on analysis and evaluation by Fair Research.

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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 forth in the report represent judgment by Fair Researchat 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 arising from the use of, or
reliance to, this report. Investors should take full responsibility for securities and other transactions.

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19/19
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 thisis based on the information and materials that Fair Research judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability and timeliness. Fair Researchshall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should takeresponsibility for securities and other transactions. The intellectual property rights of this report belong to Fair Research, and any copy, transmission or quotation of any
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