R SymBio Pharmaceuticals / 4582
Coverage

Update 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 November 10, 2020, SymBio Pharmaceuticals Ltd. announced earnings results for Q3 FY12/20.
FY12/19

Cumulative

FY12/20

FY12/20

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Sales

1,611

2,005

2,008

2,838

551

1,361

2,333

YoY

81.4%

4.0%

-33.8%-26.0%-65.8%-32.1%

16.2%

609

529

563

865

128

330

611

144.0%
37.8%

-7.7%
26.4%

-39.1%
28.0%-26.3%
30.5%-79.0%
23.2%-37.7%
24.2%

8.5%
26.2%

(JPYmn)Gross profit
YoY
GPM

SG&A expenses

1,205

2,545

4,099

5,166

1,090

2,170

3,753

YoY
SG&A ratio

25.0%
74.8%

34.1%
126.9%

44.8%
204.1%

34.9%
182.1%-9.6%
197.6%-14.7%
159.5%-8.4%
160.9%

Operating profit-596-2,015-3,536-4,302-962-1,840-3,142

-

-

-

-

-

-

-

-616

-2,069-3,642-4,377-991-1,883-3,221

-

-

-

-

-

-

-

Net income-617-2,070-3,641-4,376-992-1,885-2,694YoY
Net margin

-

-

-

-

-

-

-

Q1

Q2

Q3

Q4

Q1

Q2

Q3

1,611
81.4%
609

394
-62.2%-793-99.7%
33

830
3.3%
302

551
-65.8%
128809
972
105.7% 31539.1%
202
281

144.0%
37.8%--90.5%
-

21.4%
36.4%

-79.0%
23.2%

25.0%

738.4%
28.9%

YoY
OPM

Recurring profit
YoY
RPM

Quarterly(JPYmn)Sales
YoY

Gross profit
YoY
GPM

FY12/19

FY12/20

SG&A expenses

1,205

1,340

1,555

1,067

1,090

1,080

1,583

YoY
SG&A ratio

25.0%
74.8%

43.4%
340.4%

66.5%
-

7.0%
128.6%-9.6%
197.6%-19.4%
133.5%

1.8%
162.9%

Operating profit-596--1,419--1,521
-

-765
-

-962
-

-878
-

-1,302--616--1,453--1,573
-

-735
-

-991
-

-892
-

-1,338--617--1,453--1,571
-

-736
-

-992
-

-893
-

-809
-

YoY
OPM

-

Recurring profit
YoY
RPM

-

Net income
YoY
Net margin

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Q4

% of Est.

FY Est.

76.7%

3,043
7.2%

-

-4,592---4,656---3,796
-

Q4

-

-

-

-

-

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

Breakdown of SG&A expenses
FY12/19

Cumulative(JPYmn)
SG&A expenses

FY12/20

Q1

Q2

Q3

Q4

Q1

Q2

Q3

1,205

2,545

4,099

5,166

1,090

2,170

3,753

25.0%

34.1%

44.8%

34.9%

-9.6%

-14.7%-8.4%

R&D expenses

472

963

1,972

2,442

438

834

1,745

YoY

13.4%

14.8%

52.5%

33.2%

-7.1%

-13.4%-11.5%

733

1,582

2,127

2,725

651

1,336

2,008

33.8%

49.3%

38.3%

36.5%

-11.1%-15.5%-5.6%

YoY

SG&A expenses excl. R&D
YoY

FY12/19

Quarterly(JPYmn)
SG&A expenses
YoY

FY12/20

Q1

Q2

Q3

Q4

Q1

Q2

Q3

1,205

1,340

1,555

1,067

1,090

1,080

1,583
1.8%

25.0%

43.4%

66.5%

7.0%

-9.6%

-19.4%

R&D expenses

472

491

1,009

470

438

396

911

YoY

13.4%

16.2%

122.1%-13.0%-7.1%-19.4%-9.7%

SG&A expenses excl. R&D
YoY

Q4

733

849

546

597

651

685

672

33.8%

66.0%

13.8%

30.6%

-11.1%-19.3%

23.2%

Q4

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

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R SymBio Pharmaceuticals / 4582
Coverage

Update Notes

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

Cumulative Q3 FY12/20 results▷

Sales:▷

Recurring loss:

JPY3.2bn (loss of JPY3.6bn in Q3 FY12/19)

Net loss:

JPY2.7bn (loss of JPY3.6bn in Q3 FY12/19)▷▷

JPY2.3bn (+16.2% YoY)

Operating loss: JPY3.1bn (loss of JPY3.5bn in Q3 FY12/19)

Sales increased YoY, as the company booked sales of Treakisym®.
Losses narrowed across the board on higher sales and lower SG&A expenses. SG&A expenses declined 8.4% YoY to JPY3.8bn and
R&D expenses declined 11.5% YoY to JPY1.7bn. This included expenses for conducting clinical trials of intravenous formulationsof Treakisym® and rigosertib. Excluding R&D expenses, SG&A expenses fell by 5.6% YoY to JPY2.0bn. The company incurred
development costs for its in-house sales organization. The difference between recurring and net losses is attributable to a
JPY525mn settlement payment booked as extraordinary income.

Domestic
Preparations for in-house sales organization begin
The business alliance agreement between SymBio and Eisai Co., Ltd. under which Eisai acts as a sales agent expires in December
2020. The company plans to transition to its in-house sales organization for domestic sales of Treakisym® in January 2021. Thisshould facilitate a move into the black from FY12/21 and ongoing profit growth thereafter and lay the groundwork for futurebusiness development.
In Q3, the company has started work on transferring marketing operations from Eisai, and as planned, has deployed a nationwide
network of 51 marketing representatives as well as six hematology experts to cover each region.
In September 2020, the company concluded a basic agreement with Suzuken Co., Ltd (hereafter, Suzuken Group) and Toho
Pharmaceutical Co., Ltd (a consolidated subsidiary of Toho Holdings Co., Ltd., hereafter Kyoso Mirai Group) for the procurement
and sale of pharmaceuticals. SymBio will use Suzuken Group and Kyoso Mirai Group as its sole distributors once the marketing
agreement with Eisai expires. The company will have two distribution centers, one in Eastern Japan and the other in WesternJapan, under management by S.D. Collabo Co., Ltd.

Stable product supply
SymBio imports lyophilized Treakisym® for injection from Astellas Deutschland (consolidated subsidiary of Astellas Pharma), which
is marketed in Japan by sales agent Eisai. Treakisym® inventories were substantially depleted in 1H relative to year-ago levels, butinventory levels were recovering as of Q3 as secondary packaging and quality tests were applied to some batches of Treakisym®
100mg vials imported from Astellas Deutschland while shipments to Eisai were on track with plan.

Treakisym® (SyB L-0501[lyophilized injection]/SyB L-1701 [RTD]/SyB L-1702 [RI]/SyB C-0501 [oral]; anticancer agent; generic name:bendamustine hydrochloride)
The anticancer agent Treakisym® is used for the indications of untreated low-grade non-Hodgkin’s lymphoma and mantle cell
lymphoma (marketing approval obtained in December 2016), refractory or relapsed low-grade NHL and MCL(October 2010),
and chronic lymphocytic leukemia (August 2016).
The combination therapy of Treakisym® and rituximab (BR therapy) was newly included in the Practical Guidelines for
Hematological Malignancies 2018 edited and published by Japanese Society of Hematology as a standard treatment option,
which applies to all of the approved indications. This has seen Treakisym® establish its position as a standard treatment for
lymphatic cancer.
Also, SymBio obtained approval for the partial revision to the marketing authorization of Treakisym® in July 2018. Treakisym® can
now be used in combination with new anti-CD20 antibodies and not just rituximab for the treatment of CD20-positive follicular

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R SymBio Pharmaceuticals / 4582
Coverage

Update Notes

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

lymphoma, the most common histological type of low-grade NHL. This allows the company to provide patients a new treatment
option: combination therapy with obinutuzumab. In March 2019, SymBio obtained approval for the partial revision to its
application to use Treakisym® as a pretreatment agent in tumor-specific T cell infusion therapy. This allows Treakisym® to be used
as a pretreatment agent for Kymriah® intravenous infusion, which was the first chimeric antigen receptor T-cell (CAR-T) therapy
approved in Japan and on the NHI drug price list from May 2019.
In the phase III clinical study of Treakisym® administered in combination with rituximab (BR therapy) targeting relapsed or
refractory diffuse large B-cell lymphoma (r/r DLBCL), an additional indication following the above approved ones, results showedthat the response rate (primary endpoint) was better than expected. Based on this, the company filed for approval for partial
revision to manufacturing and marketing approval in May 2020. It is currently conducting a follow-up study with overall survival
as the primary endpoint, because evaluating the survival data (e.g., overall survival and progression-free survival) for Treakisym®
administered in combination with rituximab is crucial for establishing Treakisym® as a treatment for DLBCL. Also, after Chugai
Pharmaceutical Co., Ltd. applied for manufacture and marketing approval for polatuzumab vedotin in combination with BR
therapy to treat r/r DLBCL in June 2020, the company made a partial change to its application for approval for Treakisym® incombination with polatuzumab vedotin and rituximab. If the new drug applications by Chugai and SymBio are approved andpolatuzumab vedotin is added to the NHI drug price list, Treakisym® can be used with polatuzumab vedotin in combination withBR therapy. At present there are no effective treatments for the additional indication of r/r DLBCL, which is usually treated by a
combination of anticancer agents as salvage chemotherapy, so development of a highly effective but safe new drug would be
ideal. Since BR therapy is already being used in the West to treat r/r DLBCL, patient organizations and related academic societies
have petitioned MHLW so that it can be used in Japan as soon as possible.
The company concluded an exclusive licensing agreement in Japan with Eagle Pharmaceuticals (based in New Jersey, US) in
September 2017 for the RTD and RI formulations of Treakisym®. Manufacturing and marketing approval of the RTD formulation
was obtained in September 2020, and the company plans to launch it in Q1 FY12/21. SymBio commenced a clinical trial for the RI
formulation in November 2018 primarily to confirm safety, and the follow-up period for all patients enrolled in the trial wascompleted in September 2020 (LPLV: Last Patient Last Visit). The company will apply for approval without delay after the end of
the clinical trial of the RI formulation and aims to begin sales in 2H FY12/22. The RI formulation can be administered in just 10
minutes versus 60 minutes for the current lyophilized injection and RTD formulation. This reduces the burden on patients andhealthcare professionals, providing significant value added. Multiple patent protections in the form of a liquid product license will
enable the extension of the product life of Treakisym® to 2031.

Rigosertib Sodium (SyB L-1101 [IV]/SyB C-1101 [oral]; anticancer agent; generic name: Rigosertib Sodium)
Onconova Therapeutics, Inc., the licensor, conducted a global phase III trial (INSPIRE study) across more than 20 countries
addressing higher-risk myelodysplastic syndromes (higher-risk MDS) with overall survival as the primary endpoint. The target ispatients who do not respond to the current standard treatment with hypomethylating agents, relapse after treatment under thecurrent standard of care, or are intolerant to hypomethylating agents. In August 2020, Onconova announced a comparator trial
to physicians’ choice of treatment failed to achieve the primary endpoint. The company leads clinical trials conducted in Japanand is looking to apply the knowledge gleaned from genomic analysis of the INSPIRE study to rigosertib development going
forward.
Regarding the oral formulation of rigosertib, Onconova completed a phase I/II clinical trial for the drug used in combination withazacytidine, whose results suggested the efficacy and safety of the combination therapy. To verify the tolerability and safety of
the high-dose oral formulation of rigosertib as an initial treatment for higher-risk MDS among Japanese patients, SymBio began aphase I clinical trial in Japan in June 2017 and completed patient enrollment in June 2019.

Antiviral drug for the treatment of infections SyB V-1901 (generic name: Brincidofovir）
In September 2019, SymBio concluded an exclusive global license agreement with Chimerix Inc. (hereafter Chimerix) for
brincidofovir (SyB V-1901, hereafter BCV IV and BCV Oral), an antiviral drug for the treatment of infections in intravenous and oral
forms). The company acquired exclusive global rights to develop, manufacture, and market BCV for all diseases except smallpox.

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R SymBio Pharmaceuticals / 4582
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Update Notes

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After a review at the global advisory board held in February 2020, the company concluded that it would prioritize global
development of BCV IV (mainly in Japan, the US, and Europe) to treat adenovirus (AdV) infections in patients receiving
hematopoietic stem cell transplantation to address an unmet medical need. Based on safety and efficacy data acquired from its
study, the company plans to review the drug’s efficacy against dsDNA viral infections in patients receiving hematopoietic stem
cell transplantation and extend its target indications to include multiviral infections. By exploring the potential for expanding
target disease areas to viral infections related to organ transplants (including kidney transplants), the company aims to grow themarket for and maximize the business value of BCV. The company is presently in preparation to initiate a dose-finding study ofthe liquid formulation of BCV in pediatric patients slated to begin in December 2021.
Clinical trials by Chimerix have demonstrated superior, broad-spectrum antivirus activity of BCV Oral against dsDNA viruses,
raising expectations for its potential as a safe and effective therapy to prevent and treat a range of viral infections in patients
receiving hematopoietic stem cell transplantation.

SyB P-1501, a post-operative patient-controlled analgesia
Regarding SyB P-1501 licensed by The Medicines Company, the company initiated an arbitration against The Medicines
Company (MDCO), under the rules of the International Chamber of Commerce, seeking damages of USD82mn arising from
MDCO’s repudiation of the license agreement. SymBio argued that MDCO’s failure to provide sufficient assurance to thecompany regarding the performance of obligations under the license agreement in light of its decision to withdraw from businessactivities relating to SyB P-1501 in the European and US markets was a material breach of the license agreement. In September
2020, SymBio announced it had received the arbitration judgment and although the Court of Arbitration did not award damages
sought by the company, it did order MDCO to pay 50% of legal costs (about USD5mn) sought by the company.

Overseas
The company marketed SyB L-0501 in South Korea, Taiwan, and Singapore, and product sales were in line with the company’splans.

In-licensing of drug candidates
The company is currently focusing on unrolling global development plans for antiviral drug brincidofovir it in-licensed in
September 2019. It is constantly looking into multiple licensing deals and looking for and evaluating promising in-licensing drugcandidates.

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

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