R SYMBIO PHARMACEUTICALS / 4582
CoverageUpdate Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

This PDF document is an updated note on the company. A comprehensive version of the report on the company, including this latest update, isavailable on our website and various professional platforms.

On August 7, 2018, SymBio Pharmaceuticals Ltd. announced earnings results for 1H FY12/18.
FY12/17

Cumulative

FY12/18(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Sales870

1,7862,417

3,444888

1,928

YoY350.2%

47.5%

71.7%

45.4%

2.1%

8.0%

Gross profit

239

510

675

1,031

250

573

YoY

323.0%

26.0%

41.0%

14.1%

4.4%

12.4%

GPM

27.5%

28.5%

27.9%

29.9%

28.1%

29.7%

764

1,746

4,183

4,978

964

1,898

YoY

32.9%

42.5%

108.0%

64.2%

26.1%

8.7%

SG&A ratio

87.9%

97.7%

173.1%

144.5%

108.5%

98.4%

Operating profit

SG&A expenses

FY12/18Q3

Q4% of FY
45.9%

FY Est.
4,201
22.0%

-525

-1,236-3,508-3,947-715-1,325

YoY------

OPM-------583-1,268-3,547-3,977-749-1,378

YoY------

RPM-------583-1,266-3,546-3,978-760-1,389YoY-------Net margin-------

Recurring profit

Net income

FY12/17

Quarterly(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Gross profit

916
-9.9%
271

631
220.3%
165

1,028
7.0%
357

888
2.1%
250

1,040
13.5%
324

YoY

323.0%-22.2%

123.8%-16.2%

4.4%

19.5%

GPM

27.5%

29.6%

26.1%

34.7%

28.1%

31.1%764982

2,437

795

964

934

YoY

32.9%

51.1%

210.1%-22.1%

26.1%

-4.9%

SG&A ratio

87.9%

107.1%

386.5%

77.4%

108.5%

89.8%

Operating profit

-525
-

-711
-

-2,272
-

-439
-

-715
-

-610
-

-583
-

-685
-

-2,279
-

-430
-

-749
-

-629
-

-583
-

-684
-

-2,280
-

-432
-

-760
-

-629
-

YoY

SG&A expenses

YoY
OPM

Recurring profit
YoY
RPM

Net income
YoY

Net margin-2,981---3,044---3,056

FY12/18870
350.2%
239

Sales-Q3Q4Source: Shared Research based on company data.
Note: Figures may differ from company materials due to differences in rounding methods.

1H FY12/18 results
1H FY12/18 sales totaled JPY1.9bn (+8.0% YoY) mainly owing to domestic sales of Treakisym®.
Due to the sales increase, gross profit came to JPY573mn (+12.4% YoY). Gross profit margin was 29.7% (+1.2pp).
SG&A expenses rose 8.7% YoY to JPY1.9bn. R&D expenses came in at JPY839mn (-0.1% YoY). There were expenses for clinical
trials for intravenous and oral formulations of Treakisym® and rigosertib. SG&A expenses excluding R&D expenses were up 16.9%
at JPY1.1bn.
As a result, operating loss totaled JPY1.3bn (loss of JPY1.2bn in 1H FY12/17). The company also reported a recurring loss ofJPY1.4bn (loss of JPY1.3bn in 1H FY12/17) partly due to non-operating expenses of JPY54mn (mainly on forex losses). Net loss was
JPY1.4bn (loss of JPY1.3bn in 1H FY12/17).

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R SYMBIO PHARMACEUTICALS / 4582
Coverage

Update Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Domestic
Treakisym® (SyB L-0501/SyB L-1701 (RTD) /SyB L-1702 (RI) /SyB C-0501 (oral); anticancer agent; generic name: bendamustinehydrochloride)The company markets the anticancer agent Treakisym® in Japan through its business partner, Eisai Co., Ltd. (TSE1: 4523) for theindications of refractory or relapsed low-grade non-Hodgkin’s lymphoma (NHL) and mantle cell lymphoma (MCL), untreatedlow-grade NHL and MCL, and chronic lymphocytic leukemia (CLL). (The company obtained marketing approval for refractory or
relapsed low-grade NHL and MCL in October 2010, for untreated low-grade NHL and MCL in December 2016, and for CLL inAugust 2016.)
As a result of additional indications, Treakisym® is steadily increasing its market share in the area of first-line treatment byreplacing R-CHOP, the conventional standard treatment, and sales of Treakisym® based on the National Health Insurance (NHI)
drug price grew significantly by22.3% YoY. Product sales to Eisai is also progressing in line with plan.
In addition to the above three approved indications, the company has started Phase III clinical trials for the fourth indication ofrelapsed or refractory diffuse large B-cell lymphoma (DLBCL) and is currently enrolling patients for the trial with an aim to obtainapproval. In response to strong medical needs, the company finished consultation with the Pharmaceuticals and Medical Devices
Agency (PMDA) and began phase III clinical trials toward the addition of an indication in August 2017, enrolling the first patientin January 2018.
In addition to efforts for new indications, in September 2017, the company concluded an exclusive licensing agreement withEagle Pharmaceuticals (based in New Jersey, US) to develop, market, and sell liquid formulations of Treakisym® (RTD and RIformulations) in Japan for Treakisym®’s product life cycle management. The RTD and RI products offer significant value added topatients and healthcare professionals, and extend Treakisym®’s product life cycle until 2031. The company has already consulted
with PMDA on the details of the application for approval of the RTD formulation and clinical trial design for the RI formulation,and is preparing for the launch of Treakisym® liquid formulation in Japan in 2021 or later.
In July 2018, Symbio obtained approval for the partial revision to the marketing authorization. As a result, Treakisym® can now be
used in combination with not only rituximab but also obinutuzumab after the latter’s launch for the treatment of low-grade NHL,
enabling the company to provide patients with a new treatment therapy.
SymBio will explore further expansion of the Treakisym® business by developing an oral formulation in addition to the injection
currently under development or on sale to treat solid tumors and autoimmune diseases. In this context, the companycommenced a phase I clinical trial for progressive solid tumors in January 2018, with the aim of examining the recommended
dosage and schedule as well as tolerability and safety of the oral formulation of Treakisym®, and narrowing down the types ofpotential target tumors. The enrollment of the first patient was completed in May 2018. To evaluate the effect of oral
administration of Treakisym® on the immune system, the company concluded a joint research agreement with Keio University in
May 2018 and began a preclinical study to verify the efficacy of the oral form of Treakisym® in treating systemic lupus
erythematosus (SLE), a form of autoimmune disease.

Rigosertib Sodium (SyB L-1101 [IV]/SyB C-1101 [oral]; anticancer agent; generic name: Rigosertib Sodium)
Onconova Therapeutics, Inc., the licensor, is currently conducting a global Phase III trial and SymBio Pharmaceuticals started theJapan trial in December 2015 (36 patients enrolled so far). The global Phase III trial addresses higher-risk myelodysplastic
syndromes (MDS), which do not respond to the current standard treatment with hypomethylating agents, which relapse aftertreatment under the current standard of care, or which are intolerant to hypomethylating agents, and is under way at clinical trialsites in more than 20 countries worldwide. Patient enrollments are smoothly accumulating. Based on the results of an interim
analysis performed in January 2018, SymBio decided to continue the trial, increasing the number of patient enrollment inaccordance with a pre-determined statistical criteria. Based on these results, the company plans to apply for approval in Japan at
the same time as in the U.S. and Europe.

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R SYMBIO PHARMACEUTICALS / 4582
CoverageUpdate Notes

Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Regarding the oral formulation of rigosertib, Onconova is conducting Phase I/II clinical trials for the drug used in combination
with azacytidine as first-line treatment for higher-risk MDS and Phase II clinical trials for transfusion-dependent lower-risk MDS inthe U.S. To verify the tolerability and safety of the oral formulation of rigosertib among Japanese patients, SymBio began Phase I
clinical trials in Japan in June 2017 and is steadily enrolling patients. After completing the Phase I trials, the company plans topromptly start clinical trials for rigosertib used in combination with azacytidine, participate in international Phase III clinical trialsof the drug used in combination with azacytidine as first-line treatment for higher-risk MDS Onconova is planning, and apply for
approval of the oral formulation of the drug in Japan at the same time as in the U.S. and Europe. In regards to development ofrigosertib for transfusion-dependent lower-risk MDS, the company is considering participating from Japan while monitoring
Onconova’s development progress.

SyB P-1501, a post-operative patient-controlled analgesia
Regarding SyB P-1501 licensed by the Medicines Company (through its wholly owned subsidiary Incline Therapeutics, Inc.) inOctober 2015, SymBio found a fact that raised concerns about the continuity of its business, and in the interests of patientwelfare, it suspended further patient enrollment in April 2017. The license agreement was terminated in November 2017, andthe development of the drug was terminated in February 2018.
The Company initiated an arbitration against The Medicines Company in October 2017, under the rules of the International
Chamber of Commerce, seeking damages of USD82mn (approximately JPY9.0bn) arising from The Medicines Company’s
repudiation of the license agreement. Arbitration proceedings against The Medicines Company are still ongoing.

New drug candidates
From a long-term perspective, SymBio continues to search for and evaluate promising drug candidates, in a bid to acquire global
licensing rights for these drugs and grow into a sustainable and profitable biopharmaceutical company with growth potential andprofitability. The company is considering licensing rights for several drug candidates. Further, in May 2016, the company
established SymBio Pharma USA, Inc., a wholly owned US-based subsidiary, as a strategic base for overseas business development.
The company looks to leverage this subsidiary to actively acquire rights over new drug development candidates globally, andengage in development and commercialization in major markets including the US, Japan, and Europe to transition to a global
specialty pharmaceutical company.

Overseas
The company marketed SyB L-0501 in Korea, Taiwan, and Singapore, and sales were largely in line with plans.

Full-year company forecasts
FY12/17

FY12/18(JPYmn)
Sales
SG&A expensees

1H Act.
1,786
1,746

2H Act.
1,658
3,233

FY Act.
3,444
4,978

1H Act.
1,928
1,898

2H Est.
2,273
2,452

R&D expenses
SG&A excluding R&D
Operating profit

840
906-1,236

2,177
1,055-2,711

3,017
1,961-3,947

1,059
839-1,3251,252
1,200-1,656

Recurring profit-1,268-2,709-3,977-1,378-1,666-3,044

Net income-1,266-2,712-3,978-1,389-1,667-3,056------

SG&A ratio

OPM
RPM

Net margin

97.7%-

194.9%-

144.5%

-

98.4%

-

107.9%-FY Est.
4,201
4,350

103.5%

2,311
2,039-2,981-

Source: Shared Research based on company data.
Figures may differ from company materials due to differences in rounding methods.

This note is the most recent addition to the full report.

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