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SymBio Pharmaceutials｜4582｜

Shared Research Report

SymBio Pharmaceuticals | 4582 |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 at http://www.sharedresearch.jp and various professional platforms. Our sponsored research reports provide an in-depth
and informative view of the companies we cover, and contain the latest available information updated in a timely manner.

On November 11, SymBio Pharmaceuticals announced earnings results for Q3 FY12/16.
FY12/15

Quarterly performance (cumulative)

FY12/16

FY12/16(JPYmn)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Sales

408

976

1,332

1,933

193

1,211

1,408

135.0%

0.1%

-1.2%

-1.1%

-52.7%

24.0%

5.6%

YoY

Gross profit

Q4% of FY
60.2%

FY Est.
2,339
21.0%

120

283

395

583

57405

478

YoY

272.1%

14.3%

11.8%

10.7%

-53.1%

43.2%

21.1%

GPM

29.5%

28.9%

29.7%

30.2%

29.2%

33.4%

34.0%

453

931

1,383

3,135575

1,225

2,011

1.1%

4.2%

4.7%

71.3%

27.0%

31.6%

45.4%110.9%

95.3%

103.8%

162.1%

297.6%

101.2%

142.8%

-332

-648

-988

-2,552-518-820-1,532

YoY--------

OPM--------

SG&A expenses
YoY
SG&A-to-sales ratio

Operating profit

Recurring profit

--419

-674

-1,056-2,630-655-1,177-1,917

YoY--------

RPM--------Net income--2,778

-420

-676

-1,059-2,632-653-1,175-1,916

YoY--------Net margin--------

FY12/15Quarterly performance(JPYmn)

Q2

Q3

Q4

Q1

Q2

Q3

Gross profit

408
135.0%
120

568-29.2%
162

356
-4.5%
113

601
-1.0%
188

193
-52.7%
57

1,018
79.2%
348

197
-44.7%
74

YoY

272.1%-24.5%

5.8%

8.5%-53.1%

114.8%-34.6%

GPM

29.5%

28.6%

31.6%

31.3%

29.2%

34.2%

37.4%

453

478

452

1,752

575

650

786

1.1%

7.3%

6.0%

243.7%

27.0%

36.0%

73.8%

110.9%

84.1%

127.0%

291.6%

297.6%

63.9%

399.2%

-332
--316
-

-340
--1,564--518--302-

-712
-

-419
-

-255
-

-382
-

-1,574
-

-655
--522
--740
--420
--256
--383
-

-1,573
-

-653
--523
--741
-

YoY

SG&A expenses
YoY
SG&A-to-sales ratio

Operating profit
YoY
OPM

Recurring profit
YoY
RPM

Net income
YoY

Net margin-2,815

FY12/16

Q1Sales--2,811

Q4

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

Q3 FY12/16 sales totaled JPY1.4bn (+5.6% YoY) thanks to domestic sales of Treakisym. Product sales through Eisai werelargely in line with forecasts, and products sales rose 3.3%. It also booked a non-recurring revenue resulting fromachieving the sales milestone of SyB L-0501 in Taiwan.
SG&A expenses rose 45.4% YoY to JPY2.0bn. R&D expenses rose to JPY981mn (+64.1% YoY) primarily due to expenses
associated with obtaining the approval for the additional indications of TREAKISYM®, the clinical trial for the intravenousand oral formulations of Rigosertib Sodium, and preparations for the clinical trial of SyB P-1501. SG&A expenses excluding
R&D expenses were up 31.2% at JPY1.0bn on expenses for the introduction of new development candidates andexpenses for acquisition of companies that own the rights to new drug candidates.

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SymBio Pharmaceutials｜4582｜

As a result, operating loss totaled JPY1.5bn (loss of JPY988mn in Q3 FY12/15). The company also reported a recurring lossof JPY1.9bn (loss of JPY1.1bn last year) due to non-operating expenses of JPY391mn (mainly on forex losses of JPY356mn).
Net loss was JPY1.9bn (loss of JPY1.1bn).

Domestic
Treakisym (SyB L-0501; anticancer agent; generic name: bendamustine hydrochloride)The company markets the anticancer agent Treakisym in Japan through its business partner, Eisai Co., Ltd. (TSE1: 4523)
for the indications of refractory or relapsed low-grade non-Hodgkin’s lymphoma (NHL) and mantle cell lymphoma (MCL).
In Q3, product sales to Eisai were largely in line with plan.
In Japan, the company submitted a new drug application (NDA) to Japan’s Pharmaceuticals and Medical Devices Agency(PMDA) in December 2015 for a first-line treatment of low-grade NHL and MCL. Meanwhile, in Europe, though thecompany received notification on January 2016 from Astellas Pharma that its application had been withdrawn, it plans tocontinue with the domestic approval process upon consulting with the PMDA.
Regarding chronic lymphocytic leukemia (CLL), the company filed an NDA in December 2015, and obtained approval forthe additional indication in August 2016. The company developed and applied for this indication upon request of theMinistry of Health, Labour and Welfare in Japan as one of the “Unapproved or Off-Labeled Drugs with High MedicalNeeds.” This is the second approval after the approval of an sNDA for the indication of refractory/relapsed low-grade NHL
and mantle cell lymphoma which the company has already received in October 2010.

Rigosertib Sodium (SyB L-1101 [IV]/SyB C-1101 [oral]; anticancer agent; generic name: Rigosertib Sodium)
Regarding these agents, for which a licensing agreement was entered into in July 2011, the company changed theirgeneric name from “Rigosertib” to “Rigosertib Sodium” in accordance with the notice of decision on its JapaneseAccepted Names for Pharmaceuticals (JAN) received in October 2016. Onconova Therapeutics, Inc., the licensor, iscurrently conducting a global Phase III trial and SymBio Pharmaceuticals started the Japan trial in December 2015. Theglobal Phase III trial addresses higher risk myelodysplastic syndrome (MDS) patients who do not respond to treatment or
relapsed after treatment with hypomethylating agents (HMAs), the current standard of care (“Primary HMA Failure”) andis under way at clinical trial sites in more than ten countries worldwide. The company has taken steps to register patients,
and completed the first patient enrollment in July 2016. Enrollments are currently accumulating.
SymBio started domestic Phase I clinical trials for the oral (IV) form of Rigosertib Sodium (used in combination withazacitidine) for higher-risk myelodysplastic syndrome (MDS) in December 2015. Due to delays in the supply of drugs forthe joint trials, patient enrollment has not started as of November 11, 2016. The company is looking to start patientregistration upon resolution of this issue, and complete joint trials in line with its plans. SymBio is considering
participating in the global clinical trial to be conducted by Onconova.

SyB P-1501, a post-operative patient-controlled analgesia
The company started a domestic phase III clinical trial for SyB P-1501—licensed by the Medicines Company (through its
wholly owned subsidiary Incline Therapeutics)—for the short-term management of acute post-operative pain duringhospitalization in June 2016. The company is looking to complete the phase III clinical trial quickly, and obtain regulatory
approval in 2019.

New drug candidates
From a long-term perspective, SymBio will continue to search for and evaluate promising drug candidates, and acquire

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SymBio Pharmaceutials｜4582｜

global rights for these drugs to become a sustainable and profitable pharmaceutical company with growth potential andprofitability. 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 toactively acquire rights over new drug development candidates globally, and engage in development andcommercialization in major markets including the US, Japan, and Europe to accelerate the process of turning into a global
specialty pharmaceutical company.

Overseas
The company marketed Treakisym in Korea, Taiwan, and Singapore, and saw overseas sales progress largely in line withplans in Q1 because shipments to overseas clients are planned from Q2 and after.

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

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