English translation(Securities code 4582)

March 9, 2022

To Our Shareholders
2-2 Toranomon 3-chome, Minato-ku, Tokyo

SymBio Pharmaceuticals Limited
Representative Director,
President and CEO

Fuminori Yoshida

Notice of Convocation of
the 17th Ordinary General Meeting of Shareholders
Notice is hereby given that the 17th Ordinary General Meeting of Shareholders will be held as set forth below. If
you will not be attending the meeting, you may exercise your voting rights in writing or via the internet. Please review
the Reference Documents for the Ordinary General Meeting of Shareholders accompanying this letter, and exercise
your voting rights by no later than 5:30 p.m. on Monday, March 28, 2022 (JST), following the instructions below.
[Exercise of voting rights by mail]Please review the Reference Documents for the Ordinary General Meeting of Shareholders accompanying this letter,and indicate your approval or disapproval of the proposals in the enclosed voting form to exercise your voting rights,
and return this form to us so that it arrives prior to the deadline indicated above.
[Exercise of voting rights via the Internet]
Please review the instructions under the “Procedures for the exercise of voting rights” to exercise your voting rights
prior to the deadline indicated above.
In the event that a voting right is exercised both by returning a voting form by mail and via the Internet, only voting
via the Internet will be deemed valid and supersede the mailed voting form.
In the event that a voting right is exercised via the Internet more than once, the most recent exercise will supersedeand be considered valid.

1

1.
2.

Date/Time:
Place:

3.

Objectives:
Reports

Tuesday, March 29, 2022 at 10:00 a.m. (Doors open at 9:30 a.m.)
Sapia Tower 5th Floor, 7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Station Conference Tokyo, Room 501(Please see the attached map)
1. Business report for the 17th Term (January 1, 2021 to December 31, 2021)
2. Financial report for the 17th Term (January 1, 2021 to December 31, 2021)

Items for resolution:
Proposal 1:
Partial amendments to the Articles of Incorporation
Proposal 2:
Election of five (5) Directors (excluding Directors serving as Audit & Supervisory Committee
Members)
Proposal 3:
Election of three (3) Directors serving as Audit & Supervisory Committee Members
Proposal 4:
Election of one (1) Director serving as Substitute Audit & Supervisory Committee Member
Proposal 5:
Determination of the amount of compensation for Directors (excluding Directors serving as
Audit & Supervisory Committee Members)
Proposal 6:
Determination of the amount of compensation for Directors serving as Audit & Supervisory
Committee Members
Proposal 7:
Terms and conditions of stock options issued as Directors’ compensation----------------------------------------------------------------------------------1. If attending the Ordinary General Meeting of Shareholders in person, in order to exercise your voting rights, pleasesubmit the enclosed voting form at the reception desk upon arrival at the venue on the day of the meeting.
2. Please also bring this Notice of Convocation to the meeting with you to save on resources.
3. If you are unable to attend the Ordinary General Meeting of Shareholders, you can exercise your voting rights bysending another shareholder with voting rights to the meeting as your proxy. Please note, however, that it isnecessary to submit a document evidencing the authority of the proxy.
4. Please be advised that should any modification to the attachment of the Notice of Convocation or the Reference
Documents for the Ordinary General Meeting of Shareholders be required, the modified Notice or Reference
Documents will be posted on our website (https://www.symbiopharma.com/index_e.html).

2

Measures to Prevent the Spread of COVID-19
SymBio Pharmaceuticals Limited has adopted measures as described below to prevent the spread of COVID-19 at
our 17th Ordinary General Meeting of Shareholders scheduled for Tuesday, March 29, 2022. We sincerely appreciate
your understanding and cooperation in this regard.
We request that our shareholders monitor their health and consider exercising their voting rights in advance either
by mail or online. For details on how to vote by mail or online, please review the instructions under the “Proceduresfor the exercise of voting rights” section of this notification to exercise your voting rights by mail or online.
For individual who may be at higher risks, such as senior citizens, those with underlying conditions, or expectant
mothers, we strongly recommend avoiding attendance in person.
If, upon careful consideration of the state of the spread of the virus on the day of the meeting as well as your healthstatus, you decide to attend in person, we request that you wear a mask and as well as take other measures to prevent
infection. We also request that you use hand sanitizer stations available at the venue, and permit us to measure yourtemperature upon entry. If you seem unwell or are running a fever, we may request that you refrain from entering thevenue.
Meeting staff and members of SymBio management will in principle be wearing masks at the meeting.
We have taken extra precautions to ensure that the meeting is conducted in a safe and smooth manner. Chairs will
be set apart from each other to allow for social distancing, and we have prepared a simplified agenda so as to minimize
the amount of time spent at the meeting venue.
In the event that any substantial alterations to meeting plans may be necessary due to circumstances, such notification
will be published via our website (https://www.symbiopharma.com/index_e.html).

3

Proposals and reference matters
Proposal 1: Partial amendments to the Articles of Incorporation
1. Reasons for the proposal(1) The Company would like to shift from a Company with an Audit & Supervisory Board to a Company with an
Audit & Supervisory Committee to further enhance corporate governance by strengthening the supervisory
function of the Board of Directors and further enhancing its monitoring system through having the Audit &Supervisory Committee Members, who are responsible for auditing the execution of duties by Directors,
concurrently serve as members of the Board of Directors. For the transition to a Company with an Audit &Supervisory Committee, the Company would like to newly establish provisions concerning Directors serving as
Audit & Supervisory Committee Members and the Audit & Supervisory Committee, as well as delete provisions
concerning Audit & Supervisory Board Members and the Audit & Supervisory Board. In addition, the Company
would like to make necessary revisions, such as the correction of words and phrases, in accordance with thesechanges.
(2) The revised provisions set forth in the proviso of Article 1 of the Supplementary Provisions of the “Act Partially
Amending the Companies Act” (Act No. 70 of 2019) will come into effect on September 1, 2022. To prepare forthe introduction of the system to provide materials for the General Meeting of Shareholders in electronic format,
the Company would like to newly establish the following provisions with respect to information contained inreference documents for the General Meeting of Shareholders, etc.: provisions to take measures to provide
information in electronic format, and provisions to limit the scope of matters to be stated in documents to bedelivered to shareholders who have requested for delivery of documents. At the same time, the Company would
like to make changes to delete the provisions regarding online disclosure and deemed provision of reference
documents for General Meeting of Shareholders, etc., and establish supplementary provisions regarding theeffective date, etc.
2.

Details of the change
The details of the change are as follows.
The amendments to the Articles of Incorporation in relation to this proposal shall come into effect at the conclusionof the General Meeting of Shareholders. The amendments to the Articles of Incorporation in connection with theintroduction of the system to provide materials for the General Meeting of Shareholders in electronic format, as
described in 1. (2) above, shall come into effect in accordance with the provisions of the supplementary provisions
regarding the effective date, etc.
(The changes are underlined.)
Current Articles of Incorporation

Proposed Change

Chapter 1 General Provisions
Articles 1–3 (Text omitted)
Article 4 (Corporate bodies)
The Company shall have the following corporate bodies
in addition to the General Meeting of Shareholders andDirectors.
(1) Board of Directors(2) Audit & Supervisory Board Members(3) Audit & Supervisory Board(4) Accounting Auditor
Article 5 (Text omitted)

Chapter 1 General Provisions
Articles 1–3 (Same as current)
Article 4 (Corporate bodies)
The Company shall have the following corporate bodies
in addition to the General Meeting of Shareholders andDirectors.
(1) Board of Directors(2) Audit & Supervisory Committee(Deleted)(3) Accounting Auditor
Article 5 (Same as current)

Chapter 2 Shares
Articles 6–12 (Text omitted)

Chapter 2 Shares
Articles 6–12 (Same as current)

Chapter 3 General Meeting of Shareholders
Articles 13–14 (Text omitted)
Article 15 (Convener and chairperson of General Meeting of
Shareholders)
1. Unless otherwise provided for in laws and regulations, thePresident and Representative Director shall convene theGeneral Meeting of Shareholders and serve as thechairperson.
2. In the absence of the President and Representative
Director due to an accident, another Director shallconvene the General Meeting of Shareholders and serveas the chairperson, in accordance with the order ofsuccession previously determined by the Board ofChapter 3 General Meeting of Shareholders
Articles 13–14 (Same as current)
Article 15 (Convener and chairperson of General Meeting of
Shareholders)
1. Unless otherwise provided for in laws and regulations, theChairman or President shall convene the General Meetingof Shareholders and serve as the chairperson.
2. In the absence of the Chairman and President due to an
accident, another Director shall convene the General
Meeting of Shareholders and serve as the chairperson, in
accordance with the order of succession previously
determined by the Board of Directors..

4

Current Articles of Incorporation
Directors.
Article 16 (Online disclosure and deemed provision ofreference documents for General Meeting of Shareholders,etc.)
The Company deems that information related tomatterstobestatedorindicatedinreference documents for the General Meeting of
Shareholders, business reports, financial statements, andconsolidated financial statements, which are provided
when convening the General Meeting of Shareholders, tohave been provided to shareholders by disclosing theinformation online in accordance with the provisions oflaws and regulations.
Articles 17–18 (Text omitted)

Proposed Change
Article 16 (Measures to provide information in electronic
format, etc.)
1. The Company shall take measures to provide information
contained in reference documents, etc. for the General
Meeting of Shareholders in electronic format whenconvening the General Meetings of Shareholders.
2. The Company may choose not to include all or part of theinformation to be provided in electronic format specified
in the Ordinance of the Ministry of Justice in the
documents to be delivered to shareholders who haverequested the delivery of documents by the record date forvoting rights.
Articles 17–18 (Same as current)

Chapter 4 Directors and Board of Directors
Article 19 (Number of Directors)
The Company shall have no more than ten (10) Directors.

Chapter 4 Directors and Board of Directors
Article 19 (Number of Directors)
1. The Company shall have no more than ten (10) Directors(excluding Directors serving as Audit & Supervisory
Committee Members).
2. The Company shall have no more than four (4) Directors
serving as Audit & Supervisory Committee Members.
Article 20 (Election of Directors)
1. Directors shall be elected at the General Meeting of
Shareholders, distinguishing between Directors serving as
Audit & Supervisory Committee Members and other
Directors.
2–3 (Same as current)
Article 21 (Same as current)
Article 22 (Term of office of Directors)
1. The term of office of Directors (excluding Directors
serving as Audit & Supervisory Committee Members)
shall expire at the conclusion of the Ordinary General
Meeting of Shareholders in the final fiscal year ending
within one (1) year after their election.
2. The term of office of Directors serving as Audit &Supervisory Committee Members shall expire at theconclusion of the Ordinary General Meeting of
Shareholders in the final fiscal year ending within (2)years after their election.
3. The term of office of a Director serving as Audit &Supervisory Committee Member elected as a substitutefor a Director serving as Audit & Supervisory Committee
Member who will retire before the expiration of their termof office shall expire at the time of expiration of the termof office of the retired Director.
Article 23 (Representative Director and Executive Directors)
1. The Board of Directors shall, by its resolution, select a
Representative Director from among the Directors(excluding Directors serving as Audit & Supervisory
Committee Members).
2. The Board of Directors may, by its resolution, appoint one(1) person each as Chairman of the Board and President
from among the Directors (excluding Directors serving as
Audit & Supervisory Committee Members) and a few
Executive Vice Presidents, Senior Managing Directors,
and Managing Directors.
Article 24 (Convener and chairperson of Board of Directors
meetings)
1. Unless otherwise provided for in laws and regulations, theChairman or President shall convene the meetings ofBoard of Directors and serve as the chairperson.
2. In the absence of the Chairman and President due to an
accident, another Director shall convene the meetings ofthe Board of Directors and serve as the chairperson, in
accordance with the order of succession previously
determined by the Board of Directors.

Article 20 (Election of Directors)
1. Directors shall be elected at the General Meeting of
Shareholders.
2–3 (Text omitted)
Article 21 (Text omitted)
Article 22 (Term of office of Directors)
The term of office of Directors shall expire at theconclusion of the Ordinary General Meeting of
Shareholders in the final fiscal year ending within one (1)year after their election.

Article 23 (Representative Director and Executive Directors)
1. The Board of Directors shall, by its resolution, select theRepresentative Director.
2. The Board of Directors may, by its resolution, appoint one(1) President and Representative Director and a few
Executive Vice Presidents, Senior Managing Directors,
and Managing Directors.

Article 24 (Convener and chairperson of Board of Directors
meetings)
1. Unless otherwise provided for in laws and regulations, thePresident and Representative Director shall convene themeetings of Board of Directors and serve as thechairperson.
2. In the absence of the President and Representative
Director due to an accident, another Director shallconvene the meetings of Board of Directors and serve as
the chairperson, in accordance with the order of5Current Articles of Incorporation

Proposed Change

succession previously determined by the Board of
Directors.
Article 25 (Notice of convocation of meetings of the Board of
Directors)
1. Notice of convocation of meetings of the Board of
Directors shall be issued to each Director and Audit &Supervisory Board Member at least three (3) days prior
to the date of the meeting. However, the period may be
shortened in case of emergency.
2. A meeting of the Board of Directors may be held without
following the procedures for convening a meeting if theconsent of all Directors and Audit & Supervisory Board
Members is received.
(Newly established)

Article 25 (Notice of convocation of meetings of the Board of
Directors)
1. Notice of convocation of meetings of the Board of the
Directors shall be issued to each Director at least three(3) days prior to the date of the meeting. However, theperiod may be shortened if there is an urgent need.
2. A meeting of the Board of Directors may be held without
following the procedures for convening a meeting if theconsent of all Directors is received.
Article 26 (Delegation of decision on the execution ofimportant business)
Pursuant to the provisions of Article 399-13, Paragraph 6of the Companies Act, the Company may, by resolutionof the Board of Directors, delegate all or part of thedecisions on the execution of important business(excluding the matters listed in each item of Paragraph 5of the same Article) to the Directors.
Article 27 (Method of resolution by the Board of Directors)
1. (Same as current)
2. The Company shall deem that the Board of Directors has
decided to the effect of passing the resolution when all
Directors have consented to the matters to be resolved at
the meeting of the Board of Directors in writing or byelectromagnetic record.

Article 26 (Method of resolution of the Board of Directors)
1. (Text omitted)
2. The Company shall deem that the Board of Directors has
decided to the effect of passing the resolution when all
Directors have consented to the matters to be resolved at
the meeting of the Board of Directors in writing or byelectromagnetic record. However, this shall not apply if
any of the Audit & Supervisory Board Members raises anobjection.
Article 27 (Text omitted)
Article 28 (Compensation)
Salaries, bonuses, and other property benefits Directors
receive from the Company as consideration for the
execution of duties (hereinafter referred to as“Compensation”) shall be determined by a resolution of
the General Meeting of Shareholders.

Article 28 (Same as current)
Article 29 (Compensation)
Salaries, bonuses, and other property benefits Directors
receive from the Company as consideration for the
execution of duties (hereinafter referred to as“Compensation”) shall be determined by a resolution of
the General Meeting of Shareholders, distinguishing
between Directors serving as Audit & Supervisory
Committee Members and other Directors.
Articles 30 (Same as current)

Articles 29 (Text omitted)
Chapter 5: Audit & Supervisory Board Members and Audit &Supervisory Board
Article 30 (Number of Audit & Supervisory Board Members)
The Company shall have no more than four (4) Audit &Supervisory Board Members.
Article 31 (Election of Audit & Supervisory Board Members)
1. Audit & Supervisory Board Members shall be elected at
the General Meeting of Shareholders.
2. Resolutions to elect Audit & Supervisory Board Members
shall be made by a majority vote of shareholders present
at the meeting, whereby shareholders holding one-third or
more of the voting rights of shareholders entitled toexercise voting rights shall be present.
Article 32 (Term of office of Audit & Supervisory Board
Members)
1. The term of office of Audit & Supervisory Board
Members shall expire at the conclusion of the Ordinary
General Meeting of Shareholders in the final fiscal year
ending within four (4) years after their election.
2. The term of office of an Audit & Supervisory Board
Member who is appointed as an substitute for a Audit &Supervisory Board Member who retires before theexpiration of their term of office shall expire at the time of
expiration of the term of office of the retired Audit &Supervisory Board Member.
Article 33 (Full-time Audit & Supervisory Board Member)(Deleted)(Deleted)(Deleted)(Deleted)(Deleted)

6

Current Articles of Incorporation
The Audit & Supervisory Board shall, by its resolution,
select a full-time Audit & Supervisory Board Member.
Article 34 (Notice of convocation of a meeting of the Audit &Supervisory Board)
1. Notice of convocation of a meeting of the Audit &Supervisory Board shall be issued to each member of the
Audit & Supervisory Board at least three (3) days prior to
the date of the meeting. However, the period may be
shortened if there is an urgent need.
2. A meeting of the Audit & Supervisory Board may be held
without following the procedures for convening a meeting
if the consent of all Audit & Supervisory Board Members
is received.
Article 35 (Regulations of the Audit & Supervisory Board)
Matters relating to the Audit & Supervisory Board shallbe governed by the Regulations of the Audit &Supervisory Board established by the Audit &Supervisory Board in addition to laws and regulations andthese Articles of Incorporation.
Article 36 (Compensation)
The compensation of Audit & Supervisory Board
Members shall be determined by a resolution of theGeneral Meeting of Shareholders.
Article 37 (Exemption from liability of Audit & Supervisory
Board Members)
1. The Company may, by a resolution of the Board of
Directors, exempt any Audit & Supervisory Board
Members (including those who served as Audit &Supervisory Board Members in the past) from the liability
under Article 423, Paragraph 1 of the Companies Act tothe extent of the limit set forth in laws and regulations,insofar as the Audit & Supervisory Board Members has
performed their duties in good faith and without grossnegligence.
2. The Company may enter into an agreement with an Audit& Supervisory Board Member to assume responsibility
for the liability of the Audit & Supervisory Board Member
under Article 423, Paragraph 1 of the Companies Act, up
to the higher of a predetermined amount of 1,000,000 yen
or more or an amount stipulated by law, insofar as the
Audit & Supervisory Board Member has performed theirduties in good faith and without gross negligence.

Proposed Change(Deleted)(Deleted)(Deleted)(Deleted)(Newly established)(Newly established)

Chapter 5 Audit & Supervisory Committee
Article 31 (Full-time Audit & Supervisory Committee
Member)
The Audit & Supervisory Committee may, by its
resolution, select a full-time Audit & Supervisory
Committee Member.
Article 32 (Notice of convocation of Audit & Supervisory
Board Meetings)
1. Notice of convocation of meetings of the Audit &Supervisory Committee shall be issued to each Audit &Supervisory Committee Member at least three (3) days
prior to the date of the meeting. However, the period may
be shortened if there is an urgent need.
2. A meeting of the Audit & Supervisory Committee may beheld without following the procedures for convening ameeting if the consent of all Audit & Supervisory
Committee Members is received.
Article 33 (Method of resolution of the Audit & Supervisory
Committee)
Resolutions of the Audit & Supervisory Committee shallbe adopted by a majority of the Directors serving as Audit& Supervisory Committee Members present at themeeting, where a majority of the Directors serving as
Audit & Supervisory Committee Members and who areentitled to participate in the voting are present.

(Newly established)(Newly established)

7

Current Articles of Incorporation

Proposed Change
Article 34 (Regulations of the Audit & Supervisory
Committee)
Matters relating to the Audit & Supervisory Committee
shall be governed by the Regulations of the Audit &Supervisory Committee established by the Audit &Supervisory Committee in addition to laws andregulations and these Articles of Incorporation.

Chapter 6 Accounting Auditor
Articles 38–39 (Text omitted)
Article 40 (Compensation)
The compensation of the Accounting Auditor shall be
determined by the Representative Director with theconsent of the Audit & Supervisory Board.

Chapter 6 Accounting Auditor
Articles 35–36 (Same as current)
Article 37 (Compensation)
The compensation of the Accounting Auditor shall be
determined by the Representative Director with theconsent of the Audit & Supervisory Committee.

Chapter 7 Calculation
Articles 41–44 (Text omitted)

Chapter 7 Calculation
Articles 38–41 (Same as current)

Supplementary Provisions
Article 1 (Text omitted)(Newly established)

Supplementary Provisions
Article 1 (Same as current)
Article 2 (Exemption from liability of Audit & Supervisory
Committee Members)
1. The Company may, by a resolution of the Board of
Directors, exempt any Audit & Supervisory Committee
Members (including those who served as Audit &Supervisory Committee Members in the past) from theliability under Article 423, Paragraph 1 of the Companies
Act for acts committed prior to the conclusion of the 17th
Ordinary General Meeting of Shareholders, to the extent
of the limit set forth in laws and regulations, insofar as the
Audit & Supervisory Committee Members perform theirduties in good faith and without gross negligence.
Article 3 (Transitional measures concerning measures toprovide information in electronic format, etc.)
1. The deletion of Article 16 (Online disclosure and deemed
provision of reference documents for General Meeting of
Shareholders, etc.) of the Articles of Incorporation before
amendment by resolution of the 17th Ordinary General
Meeting of Shareholder and the establishment of Article
16 (Measures to provide information in electronic format,etc.) of the proposed amendments to the Articles ofIncorporation after deletion and amendment shall comeinto effect on September 1, 2022.
2. Notwithstanding the provisions of the preceding
paragraph, Article 16 of the Articles of Incorporation
before amendment by resolution of the 17th Ordinary
General Meeting of Shareholders shall remain in effectwith respect to the General Meeting of Shareholders to beheld on or before the last day of February 2023.
3. The provisions of this Article shall be deleted after
March 1, 2023 or after three (3) months have elapsed
from the date of the General Meeting of Shareholders set
forth in the preceding paragraph, whichever is later.

(Newly established)

8

Proposal 2: Election of five (5) Directors (excluding Directors serving as Audit & Supervisory Committee
Members)
If Proposal 1, “Partial amendments to the Articles of Incorporation,” is approved as proposed, the Company will
shift to a Company with Audit & Supervisory Committee, and all four (4) Directors will retire from office upon
expiration of their terms of office when the amendments to the Articles of Incorporation take effect regarding thetransition to a Company with Audit & Supervisory Committee. Accordingly, the Company proposes the election offive (5) Directors (excluding Directors serving as Audit & Supervisory Committee Members; the same shall apply
hereinafter in this proposal) after the transition to a Company with Audit & Supervisory Committee to strengthen the
management structure. Please note that Shigeo Kimura has resigned from the position of Director as of June 30, 2021.
This proposal shall come into effect on the condition that the amendments to the Articles of Incorporation regarding
the transition to a Company with Audit & Supervisory Committee set forth in Proposal 1, “Partial amendments to the
Articles of Incorporation,” become effective.
Profiles of the candidates for Directors are as follows:#

Name(Date of birth)

Career summary, status/responsibility at the Company andsignificant concurrent positions
January 1980

1

Fuminori Yoshida(January 19, 1949)

July 1991
May 1993
March 2005
April 1994
January 2002
April 2005
October 2006
March 2008

2*

Hirotaka Ito(December 10, 1968)

October 2012
October 2014
January 2016
April 2017
October 2017
June 2018
April 2021
February 2022

Representative Director and President,
Nippon Bio-Rad Laboratories Co., Ltd.
Representative Director and President,
Nippon Syntex K.K.
Representative Director and President, Amgen K.K.
Corporate Vice-President, Amgen Inc. (U.S.)
Established the Company; Representative Director, President
and CEO of the Company (current)
Research Scientist, Discovery Research Institute, Chugai
Pharmaceutical Co., Ltd.
Researcher, Research Center for Advanced Science andTechnology, University of Tokyo
Researcher, Forerunner Pharma Research Co., Ltd.
Molecular Imaging Marketing Leader, GE Yokogawa Medical
Systems, Inc.
Head of Marketing Planning Department, GE Healthcare Japan
Corporation
Director of Strategic Marketing, GE Healthcare Asia Pacific
Special Lecturer, Graduate School of Medical Engineering,
Kyoto University
Head of Headquarters Sales, GE Healthcare Japan Corporation
Visiting Associate Professor, Graduate School of Management,
GLOBIS University
President and Representative Director, Tecan Japan Co., Ltd.
Outside Director, Adways Inc. (current)
Professor, Graduate School of Management, GLOBIS
University (current)
Executive Vice President, Corporate Officer and COO of theCompany (current)-9-

Number ofCompany
shares owned

1,074,700
shares

None

#

Name
(Date of birth)

Career summary, status/responsibility at the Company andsignificant concurrent positions
April 1972
April 2002

3

Shigetoshi Matsumoto(August 12, 1949)
Outside Director termof office: four years

March 2007
April 2011
October 2011
June 2015
October 2015
March 2017
March 2018
July 1971
July 1973
July 1974
July 1977

4

Bruce David Cheson(April 6, 1946)
Outside Director termof office: three years

October 1984
June 2001
July 2002
March 2013
August 2016
December 2018
March 2019
May 2021
April 1980
April 2002
April 2003
December 2008

5

Eiji Ebinuma(July 3, 1957)
Outside Director termof office: one year

January 2013
June 2014
June 2016
March 2019
June 2019
March 2021

Joined Chugai Pharmaceutical Co., Ltd.
General Manager of the Audit Office,
Chugai Pharmaceutical Co., Ltd.
Full-time Audit & Supervisory Board Member, Chugai
Pharmaceutical Co., Ltd.
Senior Advisor, Chugai Pharmaceutical Co., Ltd.
Advisor, APO PLUS STATION Co., Ltd.
Senior Advisor, Protiviti LLC (current)
Audit Practice Counselor, Japan Audit &Supervisory Board Members Association (current)
Outside member of the Audit & Supervisory of the Company
Outside Director of the Company (current)Internship of Internal Medicine, University of Virginia Hospital
Senior Assistant Resident of Internal Medicine, University ofVirginia Hospital
Clinical and Research Fellow of Hematology, New England
Medical Center Hospital
Assistant Professor of Medicine, Hematology/Oncology of
University of Utah School, University of Utah Hospital
Senior Investigator and Head of Medicine Section, National
Cancer Institute, Cancer Therapy Evaluation Program
Scientific Advisory Board, Lymphoma Research Foundation(current)
Deputy Chief, Hematology-Oncology, Head of Hematology,
Georgetown University Hospital, Lombardi Comprehensive
Cancer Center
Hematology-Oncology Fellowship Program Director GUH
Outside Director, Morphosys
Frank M. Ewing Foundation Chair in Hematology-Oncology
Outside Director of the Company (current)
Doctor, The Center for Cancer and Blood Disorders (current)
Joined the Industrial Bank of Japan, Ltd.
(currently Mizuho Bank, Ltd.)
Deputy Head of HR Planning Team, Mizuho
Bank, Ltd.
Head of President Office and Planning
Department, Olympic Group Corporation
Registered as an Attorney-At-Law
Attorney-At-Law, Toranomon Sougoh Law
Firm
Attorney-At-Law, Partner, Tanabe & Partners Law Firm
(current)
Outside Director, MIRAIT Holdings Corporation
Outside Director, Rakuten Bank, Ltd.
(current)
Outside member of the Audit & Supervisory Board of theCompany (current)
Audit & Supervisory Board Member, Toko Electrical
Construction Co., Ltd. (current)
Outside Director of the Company (current)

Number ofCompany
shares owned

None

None

None

(Notes) 1. Candidate numbers with * next to them represent candidates for newly appointed Directors .
2. There are no special interests between any of the above candidates and the Company.
3. Shigetoshi Matsumoto, Bruce David Cheson, and Eiji Ebinuma are proposed as candidates for the position of Outside
Director.
4. Candidates Shigetoshi Matsumoto and Eiji Ebinuma have been designated as independent officers in accordance withthe provisions of the Tokyo Stock Exchange (TSE) and are registered as such with the TSE.
5. The reasons for election of the candidates for Outside Director and a summary of their expected roles are as follows:(1) The Company proposes to elect Shigetoshi Matsumoto as Outside Director to seek his advice and opinion on the
Company’s management, having an objective perspective independent from the Company’s management engaged
in business operations, leveraging his extensive knowledge and years of experience in business practice and audit
at companies in the same industry.
(2) The Company proposes to elect Bruce David Cheson as Outside Director to seek his advice and opinion on the
Company’s management, having an objective perspective independent from the Company’s management engaged- 10 -

in business operations, leveraging his knowledge and experience as a physician. We note that, although Dr. Cheson
has never been involved in the management of corporation other than in the capacity of an outside director or
auditor, we nevertheless conclude that, for the aforementioned reasons, he is capable of properly conducting theduties of Outside Director of the Company.
(3) The Company proposes to elect Eiji Ebinuma as Outside Director to seek his advice and opinion on the Company’s
management, having an objective perspective independent from the Company’s management engaged in business
operations, leveraging his abundant knowledge and experience as an attorney. We note that, although Mr. Ebinuma
has never been involved in the management of corporation other than in the capacity of an outside director or
auditor, we nevertheless conclude that, for the aforementioned reasons, he is capable of properly conducting theduties of Outside Director of the Company..
6. The Articles of Incorporation of the Company stipulate that the Company may enter into an agreement with Directors(excluding those who engage in business execution) to limit their liability for damages due to negligence of their duties.
If the election of the above-mentioned candidates for Outside Director is approved, the Company will continue thecurrent liability limitation agreement or enter into a new liability limitation agreement with each candidate.
A summary of the contents of the liability limitation agreement is as follows:- In the event that a Director is deemed to be liable for damages stipulated in Article 423, Paragraph 1 of the Companies
Act, liability will be limited to the higher of 1,000,000 yen or the maximum liability amount set forth in laws andregulations, provided that the Director has performed his/her duties in good faith and without gross negligence.
7. The Company has obtained the indemnification contract covering each current Director and Audit & Supervisory Board
Member. In addition to expenses related to shareholder lawsuits that arise due to misconduct, the indemnification contract
will cover a wide range of expenses that may be incurred by individual executives and the Company, such as the costsof dealing with criminal proceedings and public investigations that may be incurred by individual officers outside Japan.
An indemnification contract was also concluded for Director Shigeo Kimura, who resigned on June 30, 2021. If Proposal
2 is approved as proposed, the Company plans to conclude an indemnification contract for Candidate No. 2, Hirotaka
Ito.
8. The Company has obtained Directors and Officers Liability Insurance Policies covering each current Director and Audit& Supervisory Board Member. If a candidate for Director is elected, the contract will renew automatically with the samecontents with each candidate as the insured.
The said contract covers the loss incurred by the insured due to damages arising from improper acts based on the positionof Director.
Costs of premiums paid on the aforementioned insurance are borne entirely by the Company.

- 11 -

Proposal 3: Election of three (3) Directors serving as Audit & Supervisory Committee Members
If Proposal 1, “Partial amendments to the Articles of Incorporation,” is approved as proposed, the Company will
shift to a Company with an Audit & Supervisory Committee and proposes the election of three (3) Directors serving as
Audit & Supervisory Committee Members. The Company has obtained the consent of the Audit & Supervisory Board
with respect to the submission of this proposal.
This proposal will come into effect on the condition of the amendments to the Articles of Incorporation regarding
the transition to a Company with Audit & Supervisory Committee set forth in Proposal 1, “Partial amendments to the
Articles of Incorporation” becoming effective.
Profiles of the candidates for Directors serving as Audit & Supervisory Committee Members are as follows:#

Name(Date of birth)

Career summary, status/responsibility at the Company andsignificant concurrent positions
April 1974
June 1998
June 2003

1*

Kiyoshi Watanabe(May 16, 1951)

April 2005
October 2008
February 2011
June 2015
March 2017
September 1983
March 1984
March 1986
February 1991

2*

Kesao Endo
(November 28, 1951)

April 2000
June 2006
July 2012
October 2015
May 2016
May 2016
March 2018
April 2000
April 2002

3*

(Notes)Yasuhiro Tamo
(December 15, 1975)

November 2006
December 2007
August 2009
January 2019
March 2021

Joined The Industrial Bank of Japan (currently Mizuho Bank,
Ltd.)
Chief of the Americas Corporate Credit Office (stationed in
New York), The Industrial Bank of Japan
General Manager, Corporate Planning Office, Kyowa Hakko
Kogyo Co., Ltd.
General Manager, Medicine Planning Department, Kyowa
Hakko Kogyo Co., Ltd.
General Manager, Medicine Planning Department, Kyowa
Hakko Bio Co., Ltd.
Full-time Audit & Supervisory Board Member, Kawaguchi
Chemical Industry Co., Ltd.
Audit & Supervisory Board Member, Toho Acetylene Co., Ltd.
Outside member (full-time) of the Audit & Supervisory Boardof the Company (current)
Received certification as a Certified Public Accountant
Joined Price Waterhouse Consultant
Joined Deloitte and Touche and was stationed at the Los
Angeles and New York offices
Earned a USCPA (United States Certified Public Accountant)certification
Representative Partner, Kasumigaseki Audit Corp. (currently
Grant Thornton Taiyo LLC)
Outside member of the Audit & Supervisory Board, Akebono
Brake Industry Co., Ltd.
Representative Partner, BDO Sanyu & Co.
Representative, Endo CPA Firm (current)
Outside Director, Careerlink Co., Ltd. (current)
Representative Partner, ABS Audit Corporation (current)
Outside member of the Audit & Supervisory Board of theCompany (current)
Joined The Industrial Bank of Japan, Ltd.
(currently Mizuho Bank, Ltd.)
Transferred to Mizuho Corporate Bank, Ltd. (currently Mizuho
Bank, Ltd.)
Joined The Legal Research and Training Institute of Japan
Joined Yanagida & Nomura Law Firm
Joined Nomura & Partners Law Firm
Partner, Nomura & Partners Law Firm (current)
Outside member of the Audit & Supervisory Board of theCompany (current)

Number ofCompany
shares owned

None

None

None

1. Candidate numbers with * next to them represent candidates for newly appointed Directors.
2. Each candidate is a candidate for Outside Director and there are no special interests with the Company.
3. Each candidate is a candidate for the position of Director serving as Audit & Supervisory Committee Member.
4. Candidates Kiyoshi Watanabe and Kesao Endo continue to be designated as independent officers in accordance with theprovision of the Tokyo Stock Exchange (TSE) and are scheduled to be registered as such with the TSE.
5. The reasons for the appointment of each candidate and a summary of their expected roles are as follows.
(1) The Company proposes to elect Kiyoshi Watanabe as an Outside Director to receive advice and opinions from an
objective and fair standpoint regarding the performance of management oversight functions and the realization ofhighly effective audits, based on this extensive experience and knowledge as an Audit & Supervisory Board
Member of listed companies.
(2) The Company proposes to elect Kesao Endo, who is a certified public accountant and has considerable knowledgeof finance and accounting, as an Outside Director to obtain advice and opinions, based on his experience as an- 12 -

Audit & Supervisory Board Member of listed companies.
(3) The Company proposes to elect Yasuhiro Tamo as an Outside Director to receive advice and opinions, drawing on
his extensive experience and professional insight as an attorney at law. We note that, although Mr. Tamo has neverbeen involved in the management of corporation other than in the capacity of an outside director or auditor, wenevertheless conclude that, for the aforementioned reasons, he is capable of properly conducting the duties of
Outside Director of the Company.
6. The Articles of Incorporation of the Company stipulate that the Company may enter into an agreement with Directors(excluding those who engage in business execution) to limit their liability for damages due to negligence of their duties.
If the election of the above-mentioned candidates for Director serving as Audit & Supervisory Committee Member isapproved, the Company plans to enter into the said liability limitation agreement with each candidate.
A summary of the contents of the liability limitation agreement is as follows:- In the event that a member of the Audit & Supervisory Committee is deemed to be liable for damages stipulated in
Article 423, Paragraph 1 of the Companies Act, liability will be limited to the higher of 1,000,000 yen or the
maximum liability amount set forth in laws and regulations, provided that the member has performed his/her duties
in good faith and without gross negligence.
7. The Company has obtained the indemnification contract covering each current Director and Audit & Supervisory Board
Member. In addition to expenses related to shareholder lawsuits that arise due to misconduct, the indemnification contract
will cover a wide range of expenses that may be incurred by individual executives and the Company, such as the costsof dealing with criminal proceedings and public investigations that may be incurred by individual officers outside Japan.
If Proposal 3 is approved as proposed, the Company plans to conclude an indemnification contract for each candidate.
8. The Company has obtained Directors and Officers Liability Insurance Policies covering each current Director and Audit& Supervisory Board Member. If a candidate for Director serving as Audit & Supervisory Committee Member is elected,
the contract will renew automatically with the same contents with each candidate as the insured.
The said contract covers the loss incurred by the insured due to damages arising from improper acts based on the positionof Director serving as Audit & Supervisory Committee Member.
Costs of premiums paid on the aforementioned insurance are borne entirely by the Company.

- 13 -

Proposal 4: Election of one (1) Director serving as Substitute Audit & Supervisory Committee Member
If Proposal 1, “Partial amendments to the Articles of Incorporation,” is approved as proposed, the Company will
shift to a Company with Audit & Supervisory Committee. Accordingly, the Company requests the election of one (1)Director serving as Substitute Audit & Supervisory Committee Member in advance, in case of falling short of thenumber of Audit & Supervisory Committee Members stipulated in laws and regulations. With regard to the appointmentof the Director serving as Substitute Audit & Supervisory Committee Member coming into effect, the appointment may
be revoked by a resolution of the Board of Directors with the consent of the Audit & Supervisory Committee, but only
prior to taking office. The Company has obtained the consent of the Audit & Supervisory Board to submit this proposal.
This proposal will come into effect on the condition of the amendments to the Articles of Incorporation regarding
the transition to a Company with Audit & Supervisory Committee set forth in Proposal 1, “Partial amendments to the
Articles of Incorporation” becoming effective.
Profile of the candidate for Director serving as Substitute Audit & Supervisory Committee Member is as follows:
Name(Date of birth)

Career summary, status/responsibility at the Company andsignificant concurrent positions
April 1970
May 1996
March 2008

Takashi Watanabe(March 2, 1947)

June 2010
March 2011
June 2014

Joined the Industrial Bank of Japan, Ltd.
(currently Mizuho Bank, Ltd.)Manager of the Paris branch office, the Industrial Bank ofJapan, Ltd. (currently Mizuho Bank, Ltd.)
Outside member of the Audit & Supervisory Board (fulltime), Kawaguchi Chemical Industry Co., Ltd.
Outside member of the Audit & Supervisory Board, SMS
CO., LTD.
Outside member of the Audit & Supervisory Board (fulltime), SMS CO., LTD.
Outside member of the Audit & Supervisory Board, SMS
CO., LTD.

Number ofCompany shares
owned

None

(Notes) 1. There is no special interest between the above candidate and the Company.
2. Takashi Watanabe is proposed as a candidate for the position of Director serving as Substitute Audit & Supervisory
Committee Member (outside member).
3. The reasons for election and a summary of the expected roles of the candidate for Substitute Audit & Supervisory
Committee Member is as follows:
We request the election of Takashi Watanabe as an Outside Director serving as Substitute Audit & Supervisory Board
Member to receive advice and opinions concerning the audit of the Company’s Directors in the execution of theirofficial duties from an objective and fair perspective, leveraging his extensive experience and knowledge he gained asan Audit & Supervisory Board Member at listed companies. If he is appointed, the Company intends to register him
as an independent officer in accordance with the provision of the Tokyo Stock Exchange.
4. The Articles of Incorporation of the Company stipulate that the Company may enter into an agreement with Directors(excluding those who engage in business execution) to limit their liability for damages due to negligence of their duties.
If the above candidate is appointed as Director serving as Substitute Audit & Supervisory Committee Member, theCompany will enter into a liability limitation agreement with him.
A summary of the contents of the liability limitation agreement is as follows:- In the event that a member of the Audit & Supervisory Committee is deemed to be liable for damages stipulated in
Article 423, Paragraph 1 of the Companies Act, liability will be limited to the higher of 1,000,000 yen or the
maximum liability amount set forth in laws and regulations, provided that the member has performed his/her duties
in good faith and without gross negligence.
5. The Company has obtained Directors and Officers Liability Insurance Policies covering each current Director and Audit& Supervisory Board Member. If a candidate for Director serving as Audit & Supervisory Committee Member is elected,
each candidate will automatically be insured under the contract.
The contract covers losses incurred by the insured due to damages arising from improper acts based on the position of
Director serving as Audit & Supervisory Committee Member.
Costs of premiums paid on the aforementioned insurance are borne entirely by the Company.

- 14 -

Proposal 5: Determination of the amount of compensation for Directors (excluding Directors serving as Audit& Supervisory Committee Members)
The maximum amount of compensation for Directors was resolved as an annual amount of 130 million yen (21million yen for Outside Directors) at the Extraordinary General Meeting of Shareholders held on August 3, 2005.
If Proposal 1, “Partial amendments to the Articles of Incorporation,” is approved as proposed, the Company will
shift to a Company with Audit & Supervisory Committee. Accordingly, the Company requests approval for thefollowing matters with respect to the amount of compensation for Directors (excluding Directors serving as Audit &Supervisory Committee Members; the same shall apply hereinafter in this proposal) after the transition to a Company
with Audit & Supervisory Committee, taking into consideration the recent economic situation and various othercircumstances: the maximum amount shall remain unchanged at 130 million yen per year, while the maximum amountfor Outside Directors shall be changed to 40 million yen per year; and the specific amount and timing of payment toeach Director shall be determined by resolution of the Board of Directors. The Company’s basic policy is to set thecompensation for Directors after the transition to a Company with Audit & Supervisory Committee at an appropriate
level in consideration of their responsibilities. The amount of compensation related to this proposal shall be paid as afixed compensation based on this policy and is deemed to be appropriate.
The amount of compensation for Directors shall not include the share of salary as an employee for Directors who areconcurrently serving as employees.
The current number of Directors of the Company prior to the transition to a Company with Audit & Supervisory
Committee is four (4) (including three (3) Outside Directors). However, if Proposal 1, “Partial amendments to the
Articles of Incorporation” and Proposal 2, “Election of five (5) Directors (excluding Directors serving as Audit &Supervisory Committee Members)” are approved as proposed, the number of Directors after the transition to a
Company with Audit & Supervisory Committee will be five (5) (including three (3) Outside Directors).
This proposal shall come into effect on the condition of the amendments to the Articles of Incorporation regarding
the transition to a Company with Audit & Supervisory Committee set forth in Proposal 1, “Partial amendments to the
Articles of Incorporation” becoming effective.

- 15 -

Proposal 6: Determination of the amount of compensation for Directors serving as Audit & Supervisory
Committee Members
If Proposal 1, “Partial amendments to the Articles of Incorporation,” is approved as proposed, the Company will shift
to a Company with Audit & Supervisory Committee. Accordingly, the Company requests approval for the following
matters with respect to the amount of compensation for Directors serving as Audit & Supervisory Committee Members
after the transition to a Company with Audit & Supervisory Committee, taking into consideration the recent economic
situation and other various circumstances: the maximum amount of compensation shall be 30 million yen per year, andthe specific amount and timing of payment to each Director serving as Audit & Supervisory Committee Member shallbe determined through consultation among Directors serving as Audit & Supervisory Committee Members. The amountof compensation related to this proposal is deemed to be appropriate considering the responsibilities of Directors
serving as Audit & Supervisory Committee Members.
If Proposal 1, “Partial amendments to the Articles of Incorporation” and Proposal 3, “Election of three (3) Directors
serving as Audit & Supervisory Committee Members” are approved as proposed, the number of Directors serving as
Audit & Supervisory Committee Members after the transition to a Company with Audit & Supervisory Committee willbe three (3).
This proposal shall come into effect on the condition of the amendments to the Articles of Incorporation regarding
the transition to a Company with Audit & Supervisory Committee set forth in Proposal 1, “Partial amendments to the
Articles of Incorporation” becoming effective.

- 16 -

Proposal 7: Terms and conditions of stock options issued as Directors’ compensation
As described in Proposal 5, “Determination of the amount of compensation for Directors (excluding Directors
serving as Audit & Supervisory Committee Members),” the maximum amount of compensation for Directors was
resolved as an annual amount of 130 million yen (21 million yen for Outside Directors) at the Extraordinary General
Meeting of Shareholders held on August 3, 2005. In addition, it was resolved that compensation for Directors in theform of stock acquisition rights as stock options be granted up to a maximum annual amount of 80 million yen (22million yen for Outside Directors) at the 8th Ordinary General Meeting of Shareholders held on March 28, 2013.
Furthermore, changes to stock acquisition rights as per the same conditions as (1), (3)–(7), (9) of “Contents of stockacquisition rights as stock compensation-type stock options to Directors” below were approved at the 9th Ordinary
General Meeting of Shareholders held on March 27, 2014. In addition, given the increasingly important roles playedby Outside Directors in enhancing management supervision function, it was resolved at the 11th Ordinary General
Meeting of Shareholders held on March 30, 2016 that the annual maximum amount of compensation for Outside
Directors in the form of stock acquisition rights as stock options be increased to 30 million yen, with such annual
maximum amount for Directors as a whole remaining at 80 million yen.
At the 16th Ordinary General Meeting of Shareholders held on March 24, 2021, the following changes were approvedin accordance with the revision of the Companies Act: the maximum number of stock acquisition rights to be issued
within one (1) year from the date of the Company’s Ordinary General Meeting of Shareholders for each fiscal year
shall be 3,200; and, in the event that a specific proposal is approved, the condition that the Company may acquire thestock acquisition rights without consideration (as per the same conditions as (8) of "Contents of stock acquisition rights
as stock compensation-type stock options to Directors" below) shall be added to the terms and conditions for theissuance of stock acquisition rights.
If Proposal 1, “Partial amendments to the Articles of Incorporation,” is approved as proposed, the Company will
shift to a Company with Audit & Supervisory Committee. Accordingly, the Company requests approval for theapplication of the following stock option compensation for Directors (excluding Directors serving as Audit &Supervisory Board Members; the same shall apply hereinafter in this proposal), separately from Proposal 5,“Determination of the amount of compensation for Directors (excluding Directors serving as Audit & Supervisory
Board Members)”: the maximum amount of stock acquisition rights to be granted as stock options shall be increased
to 90 million yen per year, while the maximum amount for Outside Directors shall remain at 30 million yen per year;
the maximum number of stock acquisition rights to be issued within one (1) year from the date of the Company’s
Ordinary General Meeting of Shareholder for each fiscal year shall remain at 3,200 units; and other conditions shallremain the same as before. The Company’s basic policy is to establish a compensation system for Directors after thetransition to a Company with Audit & Supervisory Committee that is linked to shareholders’ interests so that it will
fully function as an incentive for the sustainable enhancement of corporate value, and to determine the compensationof individual Directors at an appropriate level in consideration of their responsibilities. The amount of compensationin relation to this proposal shall be paid based on the above policy, and is believed to be appropriate.
The amount of compensation as stock options for Directors shall not include the employee salary for Directors who
concurrently serve as employees.
The current number of Directors of the Company prior to the transition to a Company with Audit & Supervisory
Committee is four (4) (including three (3) Outside Directors). However, if Proposal 1, “Partial amendments to the
Articles of Incorporation” and Proposal 2, “Election of five (5) Directors (excluding Directors serving as Audit &Supervisory Committee Members)” are approved as proposed, the number of Directors after the transition to a
Company with Audit & Supervisory Committee will be five (5) (including three (3) Outside Directors).
This proposal shall come into effect on the condition of the amendments to the Articles of Incorporation regarding
the transition to a Company with Audit & Supervisory Board set forth in Proposal 1, “Partial amendments to the Articles
of Incorporation” becoming effective.
<Contents of stock acquisition rights as stock compensation-type stock options to Directors>(1) Class and number of shares to be granted upon exercise of stock acquisition rights
The number of shares to be granted upon exercise of one unit of stock acquisition right shall be 25 shares of
the Company’s common stock.
However, in the event that adjustments are made to the number of shares as set forth below, adjustments
shall be made likewise.
In the event that the Company undertakes the stock split or stock consolidation, the number of shares subject
to unexercised stock acquisition rights shall be adjusted using the formula set forth below, and any fractions
resulting in less than one share shall be rounded down.
(Number of shares after adjustment) = (Number of shares before adjustment) x (Ratio of split orconsolidation)
In addition to aforementioned cases, in the event it is necessary to adjust the number of shares subject tounexercised stock acquisition rights, the Company may make reasonable adjustments.
(2) Total number of stock acquisition rights
Total number of stock acquisition rights issued within one (1) year from the date of the Ordinary General
Meeting of Shareholders for each business year shall not exceed the aforementioned annual amount of 80- 17 -

(3)

(4)
(5)

(6)

(7)
(8)

(9)

million yen (30 million yen for Outside Directors) and no more than 3,200 units of shares shall be issued.
Amount to be paid for stock acquisition rights
The amount to be paid shall be the fair value of stock acquisition rights on the allotment date of stockacquisition rights as calculated using the Black-Scholes Model. The person who receives the allotment of stockacquisition rights shall set off his/her claims for compensation against the Company in lieu of payment ofmonies for the stock acquisition rights allotted.
Value of property to be contributed upon exercise of stock acquisition rights and its calculation method
The value of property to be contributed upon exercise of stock acquisition rights shall be determined bymultiplying the exercise price per share to be granted, set as 1 yen, by the number of shares granted.
Period for exercising stock acquisition rights
The period for exercising stock acquisition rights shall be determined at the meeting of Board of Directors,
sometime between the next day of allotment of stock acquisition rights and the day on which ten (10) years
have passed after such allotment.
Conditions for exercising stock acquisition rights(i) The holder of the stock acquisition rights (the “Holder”) must be the Company’s Director at the time of
exercise. However, if the person retires due to expiry of her/his term or other such legitimate reason, suchrequirement may be waived.
(ii) Fraction less than one unit of a stock acquisition right shall be un-exercisable.
(iii) The Holder may exercise the rights starting from the date of resolution by the below mentioned General
Meeting of Shareholders or the Board of Directors meeting until one day before the effective date of theOrganizational Restructuring as followed, regardless the conditions set out in (5) above of exercise periodoriginally stipulated, when the Organizational Restructuring is approved by the resolution of theCompany’s General Meeting of Shareholders (including the case where resolution of General Meeting of
Shareholders is deemed to exist pursuant to the provision of Article 319 of the Companies Act, hereinafter
the same shall apply.) or the Board of Directors meeting (limited to the case where no resolution ofGeneral Meeting of Shareholders is required for the said Organizational Restructuring) before the exercise
period of the stock acquisition rights comes into effect: an absorption-type merger or an incorporationtype merger where the Company becomes a dissolving company, an absorption-type company split or an
incorporation-type company split where the Company becomes a split company or a share exchange or ashare transfer where the Company becomes a wholly-owned subsidiary (collectively, “Organizational
Restructuring” as mentioned above).
(iv) In the event where the Holder passes away, in accordance with the contract for allotment of stockacquisition right between the Company and the Holder, the inheritor assumes the rights of the Holder andmay exercise such rights.
(v) Other conditions relating to exercise shall be determined at the Board of Directors meetings.
Limitations on obtaining the stock acquisition rights by transfer
The approval from the Company’s Board of Directors shall be required to obtain stock acquisition rights bytransfer.
Provisions concerning the acquisition of stock acquisition rights
If any one of the proposals (1) through (5) below is approved at an ordinary general meeting of shareholdersof the Company (or resolved by the Board of Directors of the Company if a resolution at an ordinary general
meeting of shareholders is not required), the Company may acquire offered subscription rights to shares
without consideration on a day separately determined by the Board of Directors:(1) a proposal for approval of a merger agreement, under which the Company is to be dissolved;(2) a proposal for approval of a company split agreement or an incorporation-type company split plan, underwhich the Company is to be a split company;(3) a proposal for approval of a share exchange agreement or a share transfer plan, under which the Company
will become a wholly-owned subsidiary;(4) a proposal for approval of an amendment to the Articles of Incorporation of the Company to add an article
to the effect that, as a feature of all shares the Company issues, an approval of the Company for acquisitionof such shares through transfer is required;(5) a proposal for approval of an amendment to the Articles of Incorporation of the Company to add an article
to the effect that, as a feature of shares to be issued upon exercise of offered subscription rights to shares,
an approval of the Company for acquisition of such shares through transfer is required, or the Company
shall acquire all of such class shares by resolution at an ordinary general meeting of shareholders
Other matters regarding stock acquisition rights
The Bylaws set out in (1) to (8) above and other matters relating to stock acquisition rights shall be
determined at the Company’s Board of Directors meeting where decisions regarding offering of stockacquisition rights are to be discussed.

- 18 -

1. Business Performance of SymBio Pharmaceuticals Limited(1) Business conditions and operating results
Progress in the Company’s business for the fiscal year under review is as follows.
(i) Domestic business[Transition to the Company’s own sales infrastructure and business expansion]
With the expiration of the business partnership agreement with Eisai Co., Ltd. in December 2020, theCompany began selling TREAKISYM® (generic name: bendamustine hydrochloride) through its own salesorganization. As a result, the Company attained profitability in FY 2021, which was its top priority for the fiscal
year, and solidified the foundation for future business growth. The Company aims to achieve sustainable growth
going forward.
With the shift to in-house sales, the Company began providing information tailored to the needs of each target
market and worked to cultivate demand. It also offered detailed information on its products and held seminars.
Through these efforts, the Company was able to further improve the productivity of its salesforce. In addition tosales representatives, the Company assigned hematology experts with more in-depth knowledge of the field toeach region of its operation. Moreover, to build a nationwide distribution network, we have entered into
agreements with Suzuken Co., Ltd. and Toho Pharmaceutical Co., Ltd., making both companies exclusive
wholesalers of our products. We have also begun working with S.D. Collabo Co., Ltd. to build a nationwide
logistics system and set up two logistics centers—one in Eastern Japan and the other in Western Japan.
During the fiscal year under review, the Company commenced sales of the ready-to-dilute (RTD) intravenous
formulation of TREAKISYM® in January 2021, having obtained marketing approval in September 2020, andpromoted the shift from the existing freeze-dried (FD) formulation to the newly approved formulation. In March
2021, the Company obtained approval for a partial change to the marketing authorization of the FD formulationof TREAKISYM®, allowing the product to be used in the bendamustine-rituximab (BR) therapy as well as in
the genetically engineered polatuzumab vedotin plus bendamustine-rituximab (P+BR) therapy to treat
recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL). After the approval was granted, the FD
formulation of TREAKISYM® immediately became available for use in the BR therapy, and the Company
further promoted the switch from the conventional multidrug therapy.
In April 2021, the Company obtained approval for a partial change to the marketing approval of the RTD
formulation of TREAKISYM® for its use in the BR and P+BR therapy for the treatment of r/r DLBCL. In May
2021, genetically engineered polatuzumab vedotin was listed in the NHI drug price list, allowing
TREAKISYM® to be used in the P+BR therapy.
[Stable product supply]
The Company commenced sales of the RTD formulation of TREAKISYM® in January 2021, and has steadily
worked to promote the switch from the FD formulation to the RTD formulation.
The Company currently imports the FD formulation of TREAKISYM® from Astellas Deutschland GmbH, asubsidiary of Astellas Pharma Inc., and it imports the RTD formulation of TREAKISYM® from Eagle
Pharmaceuticals, Inc. (head office: New Jersey, U.S.).
The Company conducts secondary packaging and quality screening on imported batches of both the FD and
RTD formulations of TREAKISYM® in Japan and works to maintain stable quality.
In terms of supply, we diligently worked to replace the FD formulation of TREAKISYM® with the RTD
formulation. Due to slower than anticipated conversion, the risk of the FD formulation going out of stock aroseand controls were implemented on shipments of the FD product from September 2021. Owing to theunderstanding and collaboration of healthcare providers, the conversion from the FD to RTD formulation has
made rapid progress. The Company has secured sufficient inventory of RTD formulation to ensure stablesupply.
[Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB L1702 (rapid infusion (“RI”) injection) (generic name: bendamustine hydrochloride or bendamustinehydrochloride hydrate, trade name: TREAKISYM®)]
SymBio obtained marketing approval for TREAKISYM® for the indication as first-line treatment of lowgrade non-Hodgkin’s lymphoma (low-grade NHL) (Note 1) and mantle cell lymphoma (MCL) in December 2016,
and for the indications of recurrent/refractory low-grade NHL and MCL in October 2010 and chronic
lymphocytic leukemia (CLL) in August 2016. TREAKISYM® is thus being used to treat a wide array ofmalignant lymphoma. Further, bendamustine-rituximab (BR) therapy was added to the Guidelines for Tumorsof Hematopoietic and Lymphoid Tissues published by the Japanese Society of Hematology in July 2018, andrecommended as a standard treatment for all previously approved indications. With this development,
TREAKISYM® has established its foothold as the standard treatment for malignant lymphoma.
In July 2018, the Company obtained approval for a partial change to the marketing authorization of
TREAKISYM®, allowing the product to be used in combination with not only rituximab but also other new
anti-CD20 antibodies for the treatment of CD-20 positive follicular lymphoma (FL), a typical histologic type of- 19 -

low-grade NHL. Having obtained approval for the partial change, TREAKISYM® is available to patients as a
new treatment option in combination with obinutuzumab (Note 2). In March 2019, the Company obtained approval
for a partial change to the marketing authorization, allowing the use of TREAKISYM® as a pretreatment agent
for tumor-specific T-cell infusion therapy (Note 3). This allowed TREAKISYM® to be used as a pretreatment
agent for Kymriah® intravenous infusion (Note 4), the first chimeric antigen receptor T-cell (CAR-T) therapy (Note 5)
to be approved in Japan. Owing to the spread of its use as a pretreatment agent for regenerative medicine andother pharmaceutical products, the status of TREAKISYM® as the standard treatment for malignant lymphoma
has further solidified.
In addition to the already-approved indications, SymBio conducted a Phase III clinical trial of BR therapy
targeting r/r DLBCL, and in May 2020 it applied for a partial change to the marketing authorization to include
this additional indication. The approval was granted in March 2021. In April 2021, the Company obtained
approval for a partial change to the marketing approval of the RTD formulation of TREAKISYM® for its use in
BR and P+BR therapies for the treatment of r/r DLBCL. Further, the Company conducted a follow-up study
with overall survival as the primary endpoint, since survival data (e.g., overall survival and progression-freesurvival) for BR therapy is crucial in establishing TREAKISYM® as a DLBCL treatment. The Company
presented the results of the study at the annual meeting of the Japanese Society of Hematology and otheracademic conferences, and is currently preparing to publish the results in academic journals. In June 2020,
Chugai Pharmaceutical Co., Ltd. filed for marketing approval of genetically engineered polatuzumab vedotin(Note 6) used in combination with BR therapy in treating r/r DLBCL. In response, in July 2020 the Company
applied for a partial change to the marketing authorization of TREAKISYM® used in combination withgenetically engineered polatuzumab vedotin and rituximab and obtained approval in March 2021. In May 2021,
genetically engineered polatuzumab vedotin was included in the NHI drug price list, allowing TREAKISYM®
to be used in the combination therapy of genetically engineered polatuzumab vedotin and BR therapy (P+BR).
Because there existed no effective treatment for r/r DLBCL, combination therapies comprising multiple
anticancer drugs had been used as rescue chemotherapy, and the development of highly effective and safe drugs
was in dire need. BR therapy is already used to treat patients with r/r DLBCL in Europe and the U.S. In Japan,
patient organizations and relevant academic societies have requested to the Ministry of Health, Labour andWelfare to make BR therapy available as soon as possible. Going forward, the Company expects
TREAKISYM® to be widely available as a treatment option for many patients by promoting the shift from theconventional multidrug therapies.
In September 2017, SymBio concluded an exclusive license agreement with Eagle Pharmaceuticals for the
RTD formulation and rapid infusion (RI; enabling shorter administration time) injection (Note 7) of
TREAKISYM® in Japan. The Company obtained marketing approval for the RTD formulation in September
2020, and launched the product in January 2021. For the RI injection, the Company concluded clinical trials
aimed at confirming the drug’s safety, and in May 2021, submitted a partial change application. Further, inNovember 2021, the Company was granted approval for its partial change application to extend the shelf life of
the RTD formulation to 30 months based on the results of long-term stability studies.
Unlike the current FD formulation, RTD formulation of TREAKISYM® does not require the cumbersome
manual work of dissolving the drug (i.e., drug reconstitution), shortening preparation time and reducing burdens
on healthcare providers.
Further, the RI injection significantly reduces the infusion time from the one hour required by theconventional FD and RTD formulations, providing great benefit and value to both patients and healthcare
providers.
(Note 1)

Non-Hodgkin’s lymphoma (NHL) refers to malignant lymphoma other than Hodgkin’s lymphoma. Malignant
lymphoma is a cancer of the lymphatic system in which lymphocytes develop malignant growths. The majority ofJapanese malignant lymphoma patients are suffering from NHL.

(Note 2)

Obinutuzumab (Gazyva®, marketed by Chugai Pharmaceutical Co., Ltd.): Like rituximab recommended bytreatment guidelines for non-Hodgkin’s lymphoma in Japan and overseas, obinutuzumab is a glycoengineered type
II anti-20 monoclonal antibody that directly binds to CD20 (a protein expressed on B-cells other than stem cells
or plasma cells) on target B-cells to attack and destroy them along with the body’s immune system.

(Note 3)Tumor-specific T-cell infusion therapy is a treatment method in which tumor-specific T-cells (T-cells thatspecifically recognize cancer cells) taken from cancer patients are artificially bestowed with cancer specificity
extracorporeally, amplified and then administered to the patient.

(Note 4)

Kymriah® intravenous infusion (generic name: tisagenlecleucel, marketed by Novartis Pharma K.K.): Kymriah®
intravenous infusion is the first chimeric antigen receptor T-cell (CAR-T) therapy approved within Japan. Novartis
Pharma received manufacturing and marketing approval for Kymriah® for use in the treatment of CD19 positive
recurrent/refractory B-cell acute lymphoblastic leukemia (B-ALL) and CD19 positive DLBCL in March 2019.
Kymriah® intravenous infusion was included in NHI price listings in May 2019.

(Note 5)Chimeric antigen receptor T-cell (CAR-T) therapy is a type of tumor-specific T-cell infusion therapy that
introduces genes that code chimeric antigen receptors (CARs) into T-cells, amplifies these cells and then infuses- 20 -

them. These chimeric antigen receptors are produced by combining the intracellular domains of T-cell receptors
with the antigen binding sites of antibodies capable of recognizing membrane antigens attached to tumor cells. In
clinical trials using CARs to target CD19 that expresses on B-cells, CD19-targeting CARs were introduced into
T-cells that were later administered to patients with B-cell tumors. These modified cells produced clear clinicaleffects.
(Note 6)Developed by Roche using Seattle Genetics’ antibody-drug conjugate (ADC) technology, genetically engineered
polatuzumab vedotin is a first-in-class anti-CD79b ADC (targeting CD79b) built by conjugating humanizedmonoclonal antibody targeting CD79b to a tubulin polymerization inhibitor. CD79b protein is specifically
expressed on the surface of many B-cells, and is expected to be a promising target in new drug development.
Genetically engineered polatuzumab vedotin selectively binds to CD79b while minimally affecting normal cells,
and destroys B-cells with the chemotherapeutic agent it contains.

(Note 7)

Ready-to-dilute (RTD) and rapid infusion (RI) are pre-dissolved liquid formulations that differ from theconventional freeze-dried (FD) formulation. The RTD formulation significantly reduces the preparation time andlabor cost for healthcare providers, and the RI injection substantially reduces infusion duration from the current
one hour, providing significant benefit and value to both patients and healthcare providers.

[Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name:rigosertib sodium)]
U.S. licensor Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S.) has conducted global Phase III
clinical trials (with trial sites in more than 20 countries; INSPIRE study) of the intravenous formulation ofrigosertib for higher-risk myelodysplastic syndromes (HR-MDS) which failed to respond to the current standard
treatment with hypomethylating agents, relapsed after treatment under the current standard of care, or wereintolerant to hypomethylating agents; the primary endpoint of the study is overall survival. In August 2020,
Onconova announced that the primary endpoint—improved survival compared to physician’s choice oftreatment—was not met. The Company is responsible for clinical development in Japan, and is reviewing ways
to use the findings from the additional analysis of the INSPIRE study in the future development of rigosertib(intravenous formulation).
As for the oral formulation of rigosertib, Onconova completed a Phase I/II clinical trial of the investigational
drug (in combination with azacitidine (Note 8)) in the U.S. in first-line HR-MDS patients, and the results suggested
that the oral formulation of rigosertib used in combination with azacitidine was safe and effective. In June 2017,
the Company initiated a Phase I clinical trial in Japan to confirm the safety and tolerability of high-dosemonotherapy and tolerance in Japanese patients, and completed patient enrollment in June 2019.
With the aim of maximizing the business value of rigosertib and TREAKISYM®, the Company will conduct
joint research with the University of Tokyo and Gunma University to investigate the efficacy of the drugs usedin combination with each other as well as in combination with other existing drugs, and to look for new
indications.
(Note 8)

Azacitidine (Vidaza®, marketed by Nippon Shinyaku Co., Ltd.): This hypomethylating agent (for injection) wasapproved in 2011 upon successful confirmation of extended overall survival for the first time in the Phase III
clinical trial for the indication of MDS, and is currently used as a first-line drug for MDS patients who havedifficulties in hematopoietic stem cell transplantation. MDS is a preleukemic state, and decrease in tumor
suppressor gene due to excessive methylation of DNA is thought to be related to the disease. Hypomethylating
agents such as azacitidine are thought to suppress progress to leukemia by restoring tumor suppressor gene with adeterrent effect against methylation of DNA.

[Antiviral drug: SyB V-1901 (generic name: brincidofovir)]
In September 2019, the Company concluded an exclusive global licensing agreement for intravenous and oral
formulation of antiviral drug brincidofovir (Note 9) (SyB V-1901; “BCV IV” and “BCV Oral,” respectively) with
Chimerix Inc. (head office: North Carolina, U.S.). Under this agreement, the Company acquired exclusive rights
for the worldwide development, marketing, and manufacture of BCV for all human indications, excluding
orthopox viruses.
The Company decided to prioritize the global development of BCV IV, primarily in Japan, the U.S. andEurope, targeting adenovirus (AdV) infections occurring after hematopoietic stem cell transplantation, an areawith high unmet medical needs as there currently exists no effective treatment. In March 2021, the Company
submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) toinitiate a Phase II clinical trial targeting AdV infections primarily in pediatric patients (also including adultpatients). In April 2021, the FDA granted the development program a fast-track designation. In August 2021,
the investigational drug was administered to the first patient enrolled (first patient in or FPI) in the clinical trial.
Further, In January 2022, the Company successfully filed a Clinical Trial Application (CTA) to the Medicinesand Healthcare products Regulatory Agency (MHRA) of the U.K.
Based on the efficacy and safety findings from clinical trials targeting AdV infections, the Company plans toinvestigate the efficacy of BCV against a range of dsDNA(Note 10) viral infections and expand target indications
to include multiple viral infections occurring after hematopoietic stem cell transplantation. It also intends to- 21 -

pursue the possibility of expanding target indications to viral infections after kidney or other organtransplantation. Through these efforts, the Company aims to expand the market for BCV and maximize its
business value. BCV Oral demonstrated highly active antiviral effects in earlier clinical trials conducted inEurope and the U.S. These trials also confirmed that BCV Oral had broad-spectrum antiviral effects. Based onthese extensive antiviral effects of BCV Oral against various dsDNA viruses, the Company expects BCV IV tobe also effective and safe in the treatment and prevention of various viral infections occurring after
hematopoietic stem cell transplantation.
In addition to strong antiviral effects, BCV is also expected to have antitumor effects. Through joint researchwith the National Cancer Centre Singapore and University of California San Francisco (UCSF) Brain Tumor
Center, SymBio is investigating new indications for BCV in oncology, including rare brain tumors and EpsteinBarr (EB) virus-positive lymphoma.
In December 2020, Chimerix announced that the FDA accepted its New Drug Application (NDA) for BCV
Oral as a medical countermeasure against smallpox; Chimerix obtained FDA approval in June 2021.
(Note 9)

Brincidofovir is a lipid conjugate of cidofovir (CDV). CDV is an antiviral drug already approved and marketed in
the United States and the European Union, but unapproved in Japan. It is quickly absorbed into the lipid bilayer
membrane and efficiently transferred into cells, and the bound lipid chain is metabolized and separated from thestructure by intracellular phospholipases. This process generates an activator (CDV-PP; CDV diphosphate) that is
retained in the cells for a long period of time, significantly raising the compound’s antiviral activity. Furthermore,
BCV avoids nephrotoxicity, a fundamental issue plaguing CDV, as the lipid conjugation prevents the accumulationof the compound in renal tubular epithelial cells through organic anion transporter 1 (OAT1) and CDV is released
at low levels in the bloodstream.

(Note 10)

Double-stranded DNA (dsDNA) viruses include herpesviridae, adenoviridae, polyomaviridae, papillomaviridae,
poxviridae families of viruses, such as cytomegalovirus (CMV), adenovirus (AdV), human herpesvirus 6 (HHV6), herpes simplex virus type 1 or 2 (HSV-1/2), BK virus (BKV), varicella zoster virus (VZV), humanpapillomavirus (HPV), JC virus, and smallpox virus.

(ii) Business outside JapanThe Company’s U.S.-based wholly-owned subsidiary SymBio Pharma USA, Inc. (President: Fuminori
Yoshida) appointed Dr. Carolyn Yanavich as its Vice President and Head of Project Management and Clinical
Operations in October 2021, and launched full-scale operations aimed at accelerating global development ofantiviral drug brincidofovir toward commercialization.
(iii) Licensing of new drug candidates
SymBio is moving ahead with global development of brincidofovir, an antiviral drug in-licensed in
September 2019. At the same time, the Company continues to evaluate new drug candidates for potential inlicensing. Through these efforts, it aims to create medium- to long-term business value as a profitablebiopharmaceutical company with growth potential.
(iv) Business results
As a result of the above, sales in FY 2021 grew substantially to 8,256,924 thousand yen (+176.4% year-onyear), driven by the transition to in-house sales of TREAKISYM®. The contributions from the sales transition
more than offset the negative impacts of residual inventories of TREAKISYM® FD formulation in the market
sold by Eisai before the transition and the resurgence of COVID-19 cases, which resulted in postponed medical
treatments as well as constrained sales activities due to tighter restrictions on visits to facilities. From the third
quarter of FY 2021 in particular, postponed medical treatments resumed as COVID-19 vaccination of theelderly patients made progress. Sales of TREAKISYM® for r/r DLBCL also began to increase from the third
quarter owing to approval of BR and P-BR therapies for the additional indication of r/r DLBCL granted in
March 2021, and the inclusion of Chugai Pharmaceutical’s genetically engineered polatuzumab vedotin in the
NHI drug price list in May 2021. As a result, net sales in the second half of FY 2021 increased substantiallyyear-on-year from 1,626,402 thousand yen a year ago to 5,110,316 thousand yen.
Gross profit rose substantially to 5,800,110 thousand yen (+569.1% year-on-year) on the back of sales growthand improved gross profit margin resulting from the rapid progress in the switch from the freeze-dried (FD)formulation of TREAKISYM® to ready-to-dilute (RTD) formulation. On the other hand, an inventory loss of
331,866 thousand yen of the FD formulation of TREAKISYM® was recorded primarily as a result of the switchfrom the FD to RTD formulation.
Selling, general and administrative expenses totaled 4,784,109 thousand yen (-11.0% year-on-year), including
research and development expenses of 1,736,126 thousand yen (-23.4% year-on-year) primarily due to expenses
associated with clinical trials for TREAKISYM®, rigosertib, and brincidofovir, as well as other selling, generaland administrative expenses of 3,047,982 thousand yen (-1.8% year-on-year), including higher selling expenses
due to the transition to in-house sales.
As a result, the Company recorded operating profit of 1,016,001 thousand yen in FY 2021 (versus an
operating loss of 4,506,220 thousand yen in FY 2020). Although the Company recorded non-operating income- 22 -

of 17,462 thousand yen, consisting mainly of 14,757 thousand yen in commission income, it also recorded nonoperating expenses of 32,330 thousand yen, primarily comprising foreign exchange losses of 20,186 thousand
yen and commission expenses of 9,499 thousand yen. As a result, ordinary profit totaled 1,001,133 thousandyen (versus an ordinary loss of 4,615,903 thousand yen in FY 2020). Bottom-line profit totaled 2,032,203
thousand yen (versus a loss of 4,090,216 thousand yen in FY 2020) due mainly to the recording of 1,275,759
thousand yen in deferred tax assets as a result of a careful assessment of the recoverability of deferred tax assets
in light of business results for FY 2021.
Segment information has been omitted since the Company operates within a single segment, which includes
the research and development, manufacturing, and marketing of pharmaceutical drugs and other related
activities.
(v) Capital investment
The total amount of capital expenditures during the fiscal year under review was 63,837 thousand yen, mainly
consisting of office investments and the purchase of appliances, network devices, and business software.
(2) Status of assets and profit and loss
Fiscal year
Classification
Net sales
Operating profit (loss)
Ordinary profit (loss)
Profit (loss)
Profit (Loss) per share (yen)Total assets
Net assets
Net assets per share (yen)FY 2018
The 14th Term

FY 2019
The 15th Term

3835,530(2,656,072)(2,748,730)(2,752,533)(165.54)
6,239,423
4,901,799
212.23

2,837,753(4,301,615)(4,376,655)(4,376,258)(189.03)5,273,955
4,400,116
143.07(Unit: thousands of yen)
FY 2021
FY 2020
The 17th Term
The 16th Term(current)
2, 987,051
8,256,924(4,506,220)
1,016,001(4,615,903)
1,001,133(4,090,216)
2,032,203(124.13)53.04
6,274,707
8,452,997
4,657,318
6,745,672
105.76162.26(Note) The Company conducted a 1-for-4 consolidation of common shares on July 1, 2019. Profit (loss) per share and net assets per
share have been calculated based on the assumption that this consolidation was conducted at the beginning of FY 2018.

(3) Issues to be addressed by the Company
The Company is committed to focusing on the following key management objectives.
(i) Further expansion of the pipeline
In order to enhance the enterprise value as a specialty pharmaceutical company, we need to expand thepipeline through ongoing in-licensing of new drug candidates for development.
The Company is conducting or planning development of the following anticancer agents: SyB L-0501, SyB
L-1101, SyB C-1101, SyB L-1701, SyB L-1702, and antiviral drug SyB V-1901. Currently we are in discussion
with counterparties regarding the in-licensing of several new drug candidates, and will continue with active
efforts to in-license new drug candidates for development in order to further expand our pipeline.
(ii) Life cycle management of products in the existing pipeline
In order to enhance the business value, both in-licensing new drug candidates and promoting product life
cycle management are important. Therefore, it is critical to maximize returns from each drug underdevelopment through indication expansion after the in-licensed drugs’ initial approval.
TREAKISYM® is approved for manufacturing and marketing in Japan for the indications ofrecurrent/refractory low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma, chronic lymphocytic
leukemia, and first-line treatment of low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma.
TREAKISYM® was also granted approval for recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL)in March 2021. In addition, the Company in-licensed the RTD formulation and RI injection of TREAKISYM®
from Eagle Pharmaceuticals in order to maximize the business value of TREAKISYM® by promoting the life
cycle management of the product. For the RTD formulation, the Company obtained manufacturing andmarketing approval in September 2020, and launched the product in January 2021. For the RI injection, theCompany filed a partial change application in May 2021.
With respect to rigosertib, U.S. licenser Onconova had been conducting a global Phase III study (INSPIRE
study) of the drug in patients with myelodysplastic syndromes (MDS), but in August 2020, it announced that the
primary endpoint of the study—improved overall survival compared to physician’s choice of treatment—had
not been met. The Company is in charge of clinical development in Japan and is reviewing ways to utilize
findings from the additional analysis of the INSPIRE study in future development of rigosertib.
With the aim of maximizing the business value of rigosertib and TREAKISYM®, the Company intends to
conduct joint research with the University of Tokyo and Gunma University, to investigate the efficacy of the- 23 -

drugs used in combination as well as used in combination with other existing drugs and look for new
indications.
The Company has proceeded with the global development of antiviral drug brincidofovir targeting adenovirus
infections occurring after hematopoietic stem cell transplantation, an area with a high unmet medical need,ahead of any other indications. It has also begun to explore the potential of the drug in treating viral infections
associated with organ transplants and virus-induced cancers. We aim to maximize earnings through managing
the lifecycle of our products as we transform into a specialty pharmaceutical company with the capacity to
expand into global markets.
(iii) The establishment of the Company’s own salesforce
With the business partnership agreement with its sales agent Eisai Co., Ltd. (Eisai) expired in December
2020, the Company began preparing to establish its own sales organization for the domestic sales of
TREAKISYM® in October 2018 and completed the process in FY 2020. Following the expiration of its business
partnership agreement with Eisai, the Company transitioned the sale of TREAKISYM® to its own sales system
in December 2020. Providing specialized technical information will enable the Company to more accurately
understand the needs of the market and respond more swiftly, allowing it to contribute to the benefit of patients
while aiming to maximize the business value of TREAKISYM®.
(iv) Global expansion for further growth
In addition to Japan, the Company identifies China, South Korea, Taiwan, and Singapore as strategic
countries in Asia and has moved forward with business development in Asia. However, with expanding medical
expenditures due to the aging population in Japan, and the advent of the “era of generic drugs comprising 80%
of all drugs dispensed” as a governmental policy of Japan, the business environment for innovative drug
developers is expected to remain challenging. Such a policy may also be implemented by other Asian countries.
Under these circumstances, the Company will promote global expansion aiming for further growth. Utilizing
its experience fostered through its business in Asia, the Company will search, evaluate, and negotiate
concerning new drug candidates that can follow antiviral drug brincidofovir in order to acquire their rights on a
global scale.
(v) Securing personnel
The Company places the highest priority on personnel as the Company’s principal management resource.
Without talent, we cannot make superior achievements in terms of exploring, developing, and providing
information concerning new drugs; nor can we roll out these new drugs on a global scale. We have been
continually recruiting talented people; especially after being listed, we have recruited the best and brightest
people in order to strengthen the management organization. Going forward, we plan to continue to further
strengthen our human resources by providing on-the-job training and employee development programs.
(vi) Financial issue
It is necessary for the Company to raise funds required for business activities such as R&D expenditures as
pipeline development and global business expansion progress and as drug candidates increase in number.
Therefore, we make every effort to further strengthen the financial base by continually diversifying themethod of fund raising and curtailing costs through tight budget control.
(4) Major business activities (as of December 31, 2021)
The Company regards underserved therapeutic areas that lack the development of new drugs, despite significant
unmet medical needs, as business opportunities. We develop new drugs with a primary focus on the treatment of rarediseases, mainly in the areas of oncology, hematology, and multiple viral infections, and conduct integrated businessactivities that encompass search for new drug candidates, development, manufacturing, and sales.
(5) Main office and employees(i) Main office (as of December 31, 2021)
Name

Location

Main office

Minato-ku, Tokyo(ii) Employees (as of December 31, 2021)
Classification
Male

Number of employees
105

Increase or decrease
from previous fiscal
year end
10 (increase)- 24 -

Average age (years)
51.3

Average number ofyears of service
3.5

Female36

4 (increase)

46.4

4.5

Total or average141

14 (increase)

50.1

3.8

(Notes) 1. Number of employees refers to full time employees.
2. The above number of employees does not include 45 temporary staff.

(6) Status of parent company and significant subsidiaries
Not applicable.
(7) Status of main lenders (as of December 31, 2021)
Not applicable.

- 25 -

2. Matters Related to Stock (as of December 31, 2021)(1) Total number of authorized shares
Common stock: 41,750,000 shares(2) Total number of shares outstanding
Common stock: 38,374,588 shares (excluding 82,618 shares of treasury stock)(3) Number of shareholders
38,073(4) Major shareholders (10 largest)
Name of shareholder
Rakuten Securities, Inc.
Fuminori YoshidaMatsui Securities Co., Ltd.
SMBC Nikko Securities Inc.
Nomura Securities Co., Ltd. self-deposit account
SBI Securities Co Ltd.
Nomura PB Nominees Limited Omnibus-Margin
Sukenori Ito
Hitoshi Imamura
Nomura Securities Co., Ltd.

Number of shares held
1,345,100
1,074,700
738,500
727,300
550,000
403,608
303,650
302,000
225,700
207,731

Shareholding ratio
3.5%
2.8%
1.9%
1.9%
1.4%
1.1%
0.8%
0.8%
0.6%
0.5%

(Notes) Shareholding ratio (%) indicates the percentage of shares outstanding held. Shares outstanding is equal to the number ofshares issued minus treasury shares.

- 26 -

3. Matters Related to Share Acquisition Rights(1) Share acquisition rights held by the Company’s Officers that were issued as compensation for services (asof December 31, 2021)
The 26th warrant
by resolution of the Board of
Directors meetingon April 17, 2012

The 30th warrant
by resolution of the Board of
Directors meetingon May 14, 2013

The 43rd warrant
by resolution of the Board of
Directors meetingon March 29, 2018

3,625 units

1,160 units

3,050 units

90,625 shares

29,000 shares

76,250 shares

None

None

19,800 yen per unit

2,220 yen per share

3,196 yen per share

1 yen per share

From: April 18, 2014
To: April 17, 2022

From: May 15, 2015
To: May 14, 2023

From: March 30, 2021
To: March 29, 2028

2,600 units (1 holder)
65,000 shares

645 units (1 holder)
16,125 shares

—

—

—

250 units (1 holder)
6,250 shares

The 48th warrant
by resolution of the Board of
Directors meetingon March 28, 2019

The 52nd warrant
by resolution of the Board of
Directors meetingon March 26, 2020

The 54th warrant
by resolution of the Board of
Directors meetingon March 24, 2021

Number of share acquisitionrights3,150 units

4,600 units

1,630 units

Number of shares to be issued
upon the exercise of shareacquisition rights (Note 4)

78,750 shares

115,000 shares

40,750 shares

Amount paid for shareacquisition rights (Note 2) (Note 4)

19,400 yen per unit

8,100 yen per unit

29,225 yen per unit

1 yen per share

1 yen per share

1 yen per share

From: March 30, 2022
To: March 29, 2029

From: March 27, 2023
To: March 26, 2030

From: March 25, 2024
To: March 24, 2031

1,400 units (1 holder)
35,000 shares

2,800 units (1 holder)
70,000 shares

1,000 units (1 holder)
25,000 shares

500 units (2 holders)
12,500 shares

800 units (2 holders)
20,000 shares

450 units (3 holders)
11,250 shares

Number of share acquisitionrightsNumber of shares to be issued
upon the exercise of shareacquisition rights (Note 4)
Amount paid for shareacquisition rights
Value of property to becontributed upon the exerciseof each share acquisition right(Note 1)

Period in which exercise ofshare acquisition rights ispossible
Status of possession by
Directors (excluding Outside
Directors) (Note 4)
Status of possession by
Outside Directors

Value of property to becontributed upon the exerciseof each share acquisition right(Note 1)

Period in which exercise ofshare acquisition rights ispossible
Status of possession by
Directors (excluding Outside
Directors) (Note 4)
Status of possession by
Outside Directors (Note 4)(Notes) 1. New shares were issued through the public offering on December 4, 2013, and third-party allotment on December 25,
2013, at the paid-in amount less than the value of property to be contributed upon the exercise of each share acquisitionright. Therefore, the stated value of property to be contributed upon the exercise of each share acquisition right excluding
those issued for the 32nd warrant and thereafter is adjusted in accordance with the adjustment provision.
2. The person who receives the allotment of share acquisition rights shall offset the amount to be paid for the relevant shareacquisition rights against cash compensation equivalent to the amount.
3. There are no share acquisition rights held by Audit & Supervisory Board Members.
4. The Company conducted a 1-for-4 consolidation of common shares on July 1, 2019. Number of shares to be issued upon
the exercise of share acquisition rights and exercise price have been adjusted accordingly.

- 27 -

(2) Share acquisition rights distributed to the Company’s employees as compensation for services during the
fiscal year under review (as of December 31, 2021)
The 55th warrant
by resolution of theBoard of Directors
meeting on March 24,
2021
Number of shareacquisition rights
Number of shares to beissued upon the exercise ofshare acquisition rights

4,565 units
114,125 shares

Amount paid for shareacquisition rights (Note 2)

29,225 yen per unit

Value of property to becontributed upon theexercise of each shareacquisition right1 yen per share

Period in which exercise ofshare acquisition rights ispossible
Status of allotment to theCompany’s employees (Note1)

From: March 25, 2024
To: March 24, 2031
4,375 units (127 holders)
109,375 shares(Notes) 1. Of the share acquisition rights mentioned above, 190 units (4,750 shares) have been forfeited due to the retirement or
resignation of employees.
2. The person who receives the allotment of share acquisition rights shall offset the amount to be paid for the relevant
share acquisition rights against cash compensation equivalent to the amount.

(3) Other important matters concerning share acquisition rights
Not applicable.

- 28 -

4. The Company’s Officers (as of December 31, 2021)(1) Names of Directors and Audit & Supervisory Board Members
Company position

Name

Responsibility and significant concurrent position

Representative Director

Fuminori Yoshida

Chief Executive Officer

Director

Shigetoshi Matsumoto

Director

Bruce David Cheson

Director

Eiji Ebinuma

Full-time Audit & Supervisory
Board Member

Kiyoshi Watanabe

Audit & Supervisory Board
MemberKesao Endo

Representative, Endo C.P.A Firm
Outside Director, Careerlink Co., Ltd.
Representative Partner, ABS Audit Corp.

Audit & Supervisory Board
MemberYasuhiro Tamo

Partner, Nomura & Partners

Senior Advisor, Protiviti LLC
Audit Practice Counselor, Japan Audit &Supervisory Board Members Association
Scientific Advisory Board, Lymphoma Research
Foundation
Doctor, Cancer and Blood Disorders Center
Partner, Tanabe & Partners
Outside Director, Rakuten Bank, Ltd.
Audit & Supervisory Board Member, Toko
Electrical Construction Co.

(Notes) 1. Of the Directors, Shigetoshi Matsumoto, Bruce David Cheson, and Eiji Ebinuma are Outside Directors.
2. Kiyoshi Watanabe, Kesao Endo, and Yasuhiro Tamo are outside member of the Audit & Supervisory Board.
3. Shigetoshi Matsumoto, Eiji Ebinuma, and Kesao Endo have been designated as independent officers pursuant to theprovisions of the Tokyo Stock Exchange (TSE) and registered as such with the TSE.
4. Kesao Endo possesses deep insight in finance and accounting, which he gained through his profession as a certified
public accountant.
5. Changes in Directors and Audit & Supervisory Board Members during the fiscal year under review are as follows:- Eiji Ebinuma was newly elected and assumed the office of Director at the 16th Ordinary General Meeting of
Shareholders held on March 24, 2021. He retired by resignation from the position of outside member of the Audit &Supervisory Board at the conclusion of the 16th Ordinary General Meeting of Shareholders.
- Yasuhiro Tamo was newly elected and assumed the office of Audit & Supervisory Board Member at the 16th Ordinary
General Meeting of Shareholders held on March 24, 2021.
- Director Shigeo Kimura resigned on June 30, 2021. At the time of his resignation, he was Director, Senior Managing
Corporate Officer and Head of Japan Business Unit.
6. The Company has adopted the Corporate Officer System. The Corporate Officers who do not hold concurrent positions
as Directors are as follows:
Corporate Officer Takaaki Fukushima
Corporate Officer Kozo Yoshida
Corporate Officer Masayuki Aboshi
Corporate Officer Yoshiharu Torikai(2) Summary of the contents of the liability limitation agreement
The Company has executed an agreement with each Director (excluding those who engage in business execution)and each member of the Audit & Supervisory Board with respect to the liability in Article 423, Paragraph 1 of theCompanies Act, setting forth that director liability will be limited to the higher of 1,000,000 yen or the maximum
liability amount set forth in laws and regulations in cases where the Director or member of the Audit & Supervisory
Board has performed their duties in good faith and without gross negligence.
(3) Summary of the contents of the indemnification contract
In addition to expenses related to shareholder lawsuits that arise due to misconduct, the indemnification contract
with Directors and Audit & Supervisory Board Members listed in “4. (1) Names of Directors and Audit & Supervisory
Board Members” will cover a wide range of expenses that may be incurred by individual executives and the Company,
such as the costs of dealing with criminal proceedings and public investigations that may be incurred by individual
officers outside Japan. An indemnification contract was also concluded for Director Shigeo Kimura, who resigned onJune 30, 2021. If Proposal 2 is approved as proposed, the Company plans to conclude an indemnification contract for
Candidate No. 2, Hirotaka Ito.
(4) Directors and Officers Liability Insurance Policies
The Company has obtained Directors and Officers Liability Insurance Policies covering the Directors and Audit &Supervisory Board Members of the Company and its subsidiaries.
- 29 -

The aforementioned insurance is payable as indemnification for losses suffered by the insureds as a result of a legal
action brought for alleged wrongful acts in their capacity as Directors and Audit & Supervisory Board Members.
Costs of premiums paid on the aforementioned insurance are borne entirely by the Company.
(5) Compensation of members of the Board of Directors and the Audit & Supervisory Board(i) Matters related to the policy for determining the details of individual compensation for Directors
The maximum amount of compensation for Directors was resolved as an annual amount of 130 million yen at
the Extraordinary General Meeting of Shareholders held on August 3, 2005. In addition, it was resolved thatcompensation for Directors in the form of share acquisition rights as stock options be granted up to a maximum
annual amount of 80 million yen at the 9th Ordinary General Meeting of Shareholders held on March 27, 2014. (Of80 million yen, 30 million yen was approved for Outside Directors, which was resolved at the 11th Ordinary
General Meeting of Shareholders held on March 30, 2016.)
The Audit & Supervisory Committee has the authority to make decisions on the policy concerning thedetermination of the amount of compensation, or the calculation method thereof, for Directors serving as Audit &Supervisory Committee Members. The contents of such authority and the scope of discretion shall be determinedby the Audit & Supervisory Committee with the consent of all of its members, within the limit of the total amountdetermined at the General Meeting of Shareholders.
1. Basic policy
The compensation system for Directors shall be linked to shareholders’ profit to function sufficiently as anincentive for the sustainable enhancement of corporate value. Furthermore, the compensation of individual
Directors shall be determined at an appropriate level based on the responsibilities of each position, andcompensation shall consist of basic compensation as fixed compensation and stock-based compensation.
2. Policy on determination of the amount of basic compensation (monetary compensation) by individual(including policies on determining the timing or conditions for granting compensation)
The basic compensation for Directors of the Company shall be a monthly fixed compensation, and shall be
determined based on a comprehensive consideration of the role, responsibilities, years of service taking into
account the level of compensation at other companies, the Company’s business performance, and the level of
employee salaries. In making the decision, the Company confirms that the decision is in line with the above
policy, based on the report of the Nomination and Compensation Committee, which is composed of a majorityof Outside Directors, with an Outside Director serving as the chairperson. The decision is then delegated to theRepresentative Director by a resolution of the Board of Directors. In addition, the Company ensuresreasonableness by delegating the decision to the Representative Director within the scope of the report that has
been appropriately reviewed by the Nomination and Compensation Committee.
3. Policy on determining the ratio of performance-linked compensation and other compensation
Performance-linked compensation may be linked to the Medium-Term Management Plan to raise awarenessof the need to improve business performance, and compensation may be paid in a way that links businessperformance to compensation, or stock options may be granted. The ratio of performance-linked compensation
to other compensation shall be considered by the Nomination and Compensation Committee. The Board of
Directors shall delegate the President and Representative Director to respect the content of the report of theNomination and Compensation Committee and to determine the content of compensation for each individual.
The ratio of compensation for Directors who engage in business execution is considered based on the level ofcompensation benchmarked to companies of a similar scale as the Company or companies in related industries
and business categories.
4. Matters concerning the determination of the content of individual compensation of Directors
The amount of compensation and stock options for each individual shall be reviewed by the Nomination andCompensation Committee. The Board of Directors shall delegate the Representative Director to make decisions
while respecting the content of the report of the Nomination and Compensation Committee. Based on thedelegation by the resolution of the Board of Directors, Fuminori Yoshida, Representative Director, decides theamount, timing, and method of payment of compensation to each Director for the current fiscal year. The above
authority was delegated to the President and Representative Director, as the Company deems it appropriate for
the Representative Director to make decisions on the contents of compensation in order to make decisions thattake into account the evaluation of each Director’s business performance while taking a comprehensive view of
the Company’s performance.
(ii) Reasons for the Board of Directors’ determination that the contents of the compensation of Directors for the
fiscal year under review is in line with the said policy
In determining the compensation for each individual Director, the Board of Directors has determined that thecontents of the decision is in line with the above policy, given that the Representative Director makes the decisionin line with the said policy.
- 30 -

(iii) Matters concerning the resolution of the General Meeting of Shareholders regarding compensation
At the Extraordinary General Meeting of Shareholders held on August 3, 2005, it was resolved that the maximum
annual amount of compensation for Directors shall be 130 million yen (21 million yen for Outside Directors). The
number of Directors at the conclusion of the said General Meeting of Shareholders was three (3) (including zero(0) Outside Directors). In addition, it was resolved that compensation for Directors in the form of share acquisitionrights as stock options be granted up to a maximum annual amount of 80 million yen at the 9th Ordinary General
Meeting of Shareholders held on March 27, 2014. (Of 80 million yen, 30 million yen was approved for Outside
Directors, which was resolved at the 11th Ordinary General Meeting of Shareholders held on March 30, 2016.) The
number of Directors at the conclusion of the said General Meeting of Shareholders was seven (7) (including five(5) Outside Directors).
The Company proposes in this Ordinary General Meeting of Shareholders, as set forth in Proposal 5, that the
maximum annual amount for Directors will remain unchanged at 130 million yen, of which the maximum annual
amount for Outside Directors will be changed to 40 million yen; and the maximum amount of stock acquisitionrights to be granted as stock options shall be changed to 90 million yen
The number of Directors at the conclusion of this Ordinary General Meeting of Shareholder is five (5) (including
three (3) Outside Directors).
At the Extraordinary General Meeting of Shareholders held on June 30, 2011, it was resolved that the maximum
annual amount of compensation for Audit & Supervisory Board Members shall be 30 million yen. The number ofAudit & Supervisory Board Members at the conclusion of the said General Meeting of Shareholders was four (4).
(iv) Total amount of compensation for Directors and Audit & Supervisory Board Members

Classification
Board of Directors(Outside Directors)
Audit & Supervisory
Board Members(outside members)

Total amount ofcompensation(thousand yen)
98,050(20,116)
21,593(21,593)

Total amount of compensation by type (thousandyen)
PerformanceBase
Non-monetary
linkedcompensationcompensationcompensation―
56,532
41,518(11,079)(9,037)(―)
21,593(21,593)

―
(―)

―
(―)

Number of
eligible
officers
5
(3)
4
(4)

(Notes) 1. Salary in the event of a Director doubling as an employee is not included in the above compensation for Directors.
2. The number of Directors or Audit & Supervisory Board Members compensated as stated above includes one (1)Director who resigned on June 30, 2021, and one (1) outside member of the Audit & Supervisory Board who was
appointed as an Outside Director on March 24, 2021.
3. The contents of non-monetary compensation are the amount of expenses recorded during the fiscal year under review
related to stock acquisition rights granted as stock options.

- 31 -

(6) Matters Concerning Outside Directors and outside members of the Audit & Supervisory Board(i) Status of main activities during the fiscal year under review
Position

Name

Status of attendanceat the Board of
Directors meetings

Director

Shigetoshi
Matsumoto15 out of 15(100%)

Director

Bruce David
Cheson15 out of 15(100%)

Director

Full-time Audit& Supervisory
Board Member

Audit &
Supervisory
Board Member

Audit &
Supervisory
Board Member

Eiji Ebinuma

KiyoshiWatanabeKesao Endo

Yasuhiro Tamo

12 out of 12(100%)

15 out of 15(100%)

15 out of 15(100%)

12 out of 12(100%)

Status of attendance at
the Audit &Supervisory Board
meetings

Opinions at the Board of Directors meetings
and the Audit & Supervisory Board meetingsand summary of duties performed in roles
expected to be fulfilled by Outside Directors—

Mr. Matsumoto expressed opinions from an
objective perspective independent from theCompany’s management engaged in business
operations, leveraging his extensive
knowledge and experience with the businesspractices of companies in the same industry
and with auditing work.

—

Dr. Cheson expressed opinions from an
objective perspective independent from theCompany’s management engaged in business
operations, leveraging his extensive
knowledge and experience as a physician.

4 out of 4
(100%)

Mr. Ebinuma expressed opinions from an
objective perspective independent from theCompany’s management engaged in business
operations, using his knowledge andexperience at financial institutions and as an
attorney at law, mainly in the area of labor
law, and his extensive knowledge as an
Outside Director.

15 out of 15(100%)

Mr. Watanabe actively expressed opinionsfrom an objective and fair perspective basedon his extensive experience and knowledge as
an audit & supervisory board member at listedcompanies in order to achieve highly effective
managerial supervision.

15 out of 15(100%)

Mr. Endo actively expressed opinions from aneutral perspective based on the specialized
knowledge and extensive experience heaccumulated as a certified public accountant inorder to achieve highly effective managerial
supervision.

11 out of 11(100%)

Mr. Tamo expressed opinions from an
objective perspective independent from theCompany’s management engaged in business
operations, based on his knowledge andexperience as an attorney at law, mainly in thearea of corporate law.

(Notes) 1. With regard to Director Eiji Ebinuma, his attendance at the meetings is calculated from the Board of Directors
meetings and the Audit & Supervisory Board meetings held up until his retirement on March 24, 2021. The statusof attendance also includes his attendance at meetings of the Board of Directors after his appointment as Director
on March 24, 2021.

2. With regard to Director Yasuhiro Tamo, his attendance at the meetings is calculated from the Board of Directors meetings
and the Audit & Supervisory Board meetings held after he assumed office on March 24, 2021.

(ii) Summary of duties performed in roles expected to be fulfilled by Outside Directors
1. Shigetoshi Matsumoto and Eiji Ebinuma have been involved as members of the Nomination and Compensation
Committee from an objective and neutral standpoint in the selection of candidates for the Company’s Boardof Directors and the determination of compensation for Directors.
2. Bruce David Cheson has contributed to the enhancement of the Company’s group-wide governance andsupervisory functions from a global perspective, and to the monitoring and supervision of the management of
the Company from an independent standpoint.
3. Kiyoshi Watanabe has contributed to the enhancement and reinforcement of the Company’s corporate
governance and to the monitoring and supervision of the Company’s management from an independent
standpoint, leveraging his track record at financial institutions and his broad experience and deep insight inmanagement.
4. Kesao Endo has monitored and supervised the Company’s management from an independent standpoint,
drawing on his expertise and abundant experience as a certified public accountant.
- 32 -

5. Yasuhiro Tamo has contributed to strengthening the supervisory function of business execution from an
independent standpoint, based on his knowledge and experience as an attorney at law, mainly in the area ofcorporate law.

- 33 -

5. Status of Accounting Auditor(1) Name of accounting auditor
Ernst & Young ShinNihon LLC(2) Summary of the contents of the liability limitation agreement
Not applicable.
(3) Summary of the contents of the compensation agreement
Not applicable.
(4) Amount of compensation
Amount of compensation paid to the accounting auditor concerning the fiscal
year under review
Total amount of monetary and other property benefits to be paidby the Company

Amount paid
24,000 thousand yen
24,000 thousand yen(Notes) 1. Reasons for the Audit & Supervisory Board’s approval of the amount of compensation to be paid to the accounting
auditor
The Audit & Supervisory Board verified the contents of the audit planning by the accounting auditor, performance ofits duties in previous years, and status of planning and actual performance, and as a result of a careful review on theadequacy of the amount of compensation for the fiscal year under review, has approved the amount of compensation
to be paid to the accounting auditor, pursuant to the provisions of Article 399, Paragraph 1 of the Companies Act.
2. The amounts of compensation for audits paid in accordance with the Companies Act, and the audits conducted inaccordance with the Financial Instruments and Exchange Act, are not distinguished in the contract agreement between
the Company and the accounting auditor. It is not possible to distinguish between compensation paid for these two
types of audits; therefore the total amount thereof is stated.

(5) Policies for dismissal or non-reappointment of the accounting auditor
When it is deemed necessary to dismiss (or not reappoint) the accounting auditor for reasons relating to theaccounting auditor’s execution of duties, the Audit & Supervisory Board shall determine the contents of a proposal tobe presented to a General Meeting of Shareholders in respect of the dismissal (or non-reappointment). In addition, when
the accounting auditor falls under any of the items of Article 340, Paragraph 1 of the Companies Act, the Audit &Supervisory Board shall dismiss the accounting auditor with the consent of all members of the Audit & Supervisory
Board. If this is the case, an Audit & Supervisory Board Member selected by the Audit & Supervisory Board shallreport the dismissal of the accounting auditor and the reasons for such dismissal at the first General Meeting of
Shareholders convened after the dismissal.

- 34 -

6. System to Ensure the Appropriateness of Operations(1) The corporate system to ensure that Directors and employees comply with laws and ordinances, as well as
the Articles of Incorporation, in the process of performing their duties(i) Dissemination and thorough implementation of management philosophy
In order to implement its management philosophy, the Company has established a Corporate Action Charterand standards of conduct to which all Company members are expected to adhere. The Company informs all
executives and staff regarding these policies and asks for each member’s understanding regarding the spirit ofthese regulations and for thorough compliance with the same. All business activities of the Company are basedon the premise of compliance with laws and ordinances and the maintenance of corporate ethical standards (below,“compliance”).
(ii) Establishment of internal control committee
The Company develops internal control systems and employs other measures to support thorough compliance,risk management, and financial reporting. In addition, an internal control committee has been established to ensurecomplete observance of laws and ordinances, the Articles of Incorporation, and other internal regulations throughexhaustive supervision.
(iii) Establishment of internal audit office
The Company has established an internal audit office as an independent unit which conducts regular audits andrelated activities under the direct authorization by the Representative Director and President. Through such audits,objective assessments are made as to the effectiveness and efficiency of business, the reliability of various
financial reports, safeguarding of assets, compliance status of operations, and the appropriateness andeffectiveness of corporate risk management policies. When necessary, the Company ensures the efficacy ofinternal controls by accepting advice and proposals concerning recommended improvements to the maintenanceand operation of systems.
(iv) Establishment of compliance reporting and consultation hot-lines
The Company has established compliance reporting and consultation hot-lines both internal to and outside theCompany, and has designated compliance liaisons to respond to reports and requests for consultation from
employees, and to identify and resolve any compliance issues at the earliest stage possible.
(v) Systems for securing reliable financial reporting
The Company establishes internal control systems and oversees their appropriate operation in order to ensure
reliable financial reporting.
(2) Corporate system for maintenance and control of information regarding the performance of duties byDirectors
The Company appoints an individual to be responsible for the general management of corporate documents andto appropriately maintain and otherwise control all important documents containing information as to theperformance by Directors of their duties in addition to legally required records of proceedings of Shareholders
meetings and Board of Directors meetings, as provided in laws and ordinances as well as in the Company’s own“Rules for the Management of Documents.”(3) Corporate system for control of risk of loss, including in-house rules for such control
The Company practices risk control under its basic risk control policy and related rules. The Internal Control
Committee is responsible for the supervision and promotion of risk management. Additionally, the Company willswiftly respond to emergency situation by establishing an emergency response headquarters managed by the
Representative Director and President.
(4) Corporate system to ensure the efficient performance of duties by Directors(i) Directors and employees perform their duties in appropriate and efficient accordance with the “Rules for the
Board of Directors” and “Rules for the Internal Approvals,” as well as other related regulations.
(ii) The Company regularly holds Executive Management Committee meetings pursuant to the “Rules for the
Executive Management Committee” and reviews key proposals for the purpose of supporting careful and timely
decision-making from the Representative Director and President.
(iii) The Company develops mid- to long-term business plans and operates and expands its business in accordancewith these plans. In addition, the Company establishes numerical targets within its business plans for each fiscal
year and, through monthly closings, manages progress toward these targets while making relevant reports to
Directors.
(5) Basic policy against anti-social forces
The Company resolutely opposes anti-social forces that pose a threat to the order or safety of society and forbids
their participation in any and all business activities.
(6) Assistant to Audit & Supervisory Board Members
Audit & Supervisory Board Members may request that the Representative Director and President appoint an- 35 -

employee to act as an assistant to Audit & Supervisory Board Members. Upon receiving such a request, theRepresentative Director and President shall make an appropriate appointment.
(7) Ensuring the independence of assistants to Audit & Supervisory Board Members from Directors and theeffectiveness of the Audit & Supervisory Board Members’ instructions to employees(i) Assistants to Audit & Supervisory Board Members shall not receive instructions concerning their supporting
duties from anyone other than Audit & Supervisory Board Members.
(ii) Matters such as personnel evaluation and transfer and disciplinary actions concerning employees that assist Audit& Supervisory Board Members shall be subject to the prior consent of the Audit & Supervisory Board.
(8) Corporate system for Directors and employees to report to the Audit & Supervisory Board; corporate systemfor other reports to the Audit & Supervisory Board; and corporate system to ensure the efficient performanceof audits by the Audit & Supervisory Board(i) Any Director or employee shall promptly inform the Audit & Supervisory Board if and when he/she becomesaware of any circumstance that threatens to cause any significant damage to, or could adversely affect, theCompany.
(ii) Audit & Supervisory Board Members may participate in all matters that they consider important in terms ofgaining a better understanding of decision-making processes, conditions, and statuses of the Company’sbusinesses. Accordingly, they may attend Board of Directors meetings, Executive Management Committee
meetings, and other important meetings. In addition, they are permitted to view key decision-making documents
related to these meetings.
(iii) Audit & Supervisory Board Members may individually interview Directors and employees in key positions ofresponsibility to obtain information regarding the management conditions of the Company’s businesses.
(iv) Audit & Supervisory Board Members will regularly exchange opinions with the Representative Director andPresident and the accounting auditor.
(v) The Company will not apply any sort of unfavorable treatment or unjust punishment to individuals who makereports to the Audit & Supervisory Board.
(9) Matters related to the treatment of expenses or obligations associated with the execution of duties of Audit& Supervisory Board Members, including the procedures for prepayment or reimbursement of such expenses(i) The Company will respond without delay to claims for the prepayment of expenses made by Audit & Supervisory
Board Members under Article 388 of the Companies Act, accepting responsibility for associated expenses andprocessing related obligations, except in cases in which these have been determined unnecessary for the executionof the duties of Audit & Supervisory Board Members.
(ii) The Company authorizes and shoulders expenses incurred when Audit & Supervisory Board Members seek
opinions or advice from external experts, including attorneys and certified public accountants, if it is foundnecessary for the execution of their duties.
7. Summary of the Status of System to Ensure the Appropriateness of Operations(1) The Company is striving to foster a culture of compliance across the organization and ensure appropriate operationof internal control systems through its communications with Directors and employees, and through publication of
information such as the basic policies regarding internal control systems, corporate compliance conduct principles,basic risk control policies, and the whistleblowing system manual on the Company’s intranet bulletin board.
(2) At the Board of Directors meetings of the Company, Outside Directors participate in resolutions from an
independent standpoint and monitor and supervise the management. Each Audit & Supervisory Board Member
carries out management audits as well.
(3) Full-time Audit & Supervisory Board Members attend important meetings such as the Board of Directors meetings
as well as Executive Management Committee meetings, and exchange views with representative directors monthly.

- 36 -

Balance Sheet(As of December 31, 2021)
Item

AmountItem(Assets)(Liabilities)
Current liabilities
Accounts payable–trade
Accounts payable–other
Income taxes payable
Consumption taxes payable
Provision for sales returns
Other
Non-current liabilities
Provision for product changeover
Provision for retirement benefits

1,518,111
69,683515,075
383,599
516,036
4,342
29,373
189,213
186,437
2,776

Total liabilities

1,707,324

Current assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Semi-finished goods
Supplies
Advance payments
Prepaid expenses
Other
Non-current assets

6,747,838
3,860,106
2,147,510
125,265259,940
479
192,576
145,011
16,946
1,705,159

Property, plant and equipment

83,634

Buildings
Tools, furniture and fixtures
Accumulated depreciation
Intangible assets
Software
Software in progress
Investments and other assets
Shares of subsidiaries andassociates
Deferred tax assets

64,62072,734(53,719)
259,104
254,774
4,330
1,362,419
0(Net assets)
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings

1,275,759

Retained earnings brought
forwardTreasury shares
Share acquisition rights

Leasehold and guarantee deposits

Total assets

86,660(Unit: thousands of yen)Amount8,452,997(Note) Amounts of less than one thousand yen are rounded down.

- 37 -

6,226,573
17,157,628
17,132,501
17,127,628
4,873(27,977,510)(27,977,510)(27,977,510)(86,045)
519,099

Total net assets

6,745,672

Total liabilities and net assets

8,452,997

Statement of Income
January 1, 2021
( toFrom
December 31, 2021 )Item(Unit: thousands of yen)AmountI. Net sales

8,256,924

II. Cost of goods sold

2,452,471

Gross profit

5,804,452

Provision for sales returns

4,342

Gross profit–net
III. Selling, general and administrative expenses

5,800,110
4,784,109

Operating profit
IV. Non-operating income

1,016,001

Interest income
Interest on tax refund

57
68

Dividend income of insuranceCommission income

2,579
14,757Other

017,462

V. Non-operating expenses
Commission fee
Share issuance cost

9,499
1,950

Foreign exchange losses
Other

20,186693

Ordinary profit

32,3301,001,133

VI. Extraordinary income
Gain on reversal of share acquisition rights

198

Profit before income taxes
Income taxes–current

198
1,001,331

244,887

Income taxes–deferred(1,275,759)

Profit(1,030,871)
2,032,203(Note) Amounts of less than one thousand yen are rounded down.

- 38 -

Statement of Changes in Equity
January 1, 2021
( Fromto December 31, 2021 )(Unit: thousands of yen)

Shareholders’ equity
Capital surplus

Balance as of January 1, 2021

Capital stock

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus17,044,943

17,014,943

4,541

17,019,485

112,684

112,684

Retained earnings
Other retained
earnings
Retained earnings
brought forward(30,009,713)

Changes of items during period
Issuance of new shares(exercise of share acquisitionrights)

112,684
2,032,203

ProfitPurchase of treasury shares
Disposal of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items
during period
Balance as of December 31, 2021

331

112,684

112,684331

113,015

2,032,203

17,157,628

17,127,628

4,873

17,132,501(27,977,510)

Shareholders’ equity

Balance as of January 1, 2021

331

Treasury shares

Total shareholders’equity(17,538)

4,037,177

Share AcquisitionrightsTotal net assets

620,140

4,657,318

Changes of items during period
Issuance of new shares(exercise of share acquisitionrights)Profit225,368

225,368

2,032,203

2,032,203

Purchase of treasury shares(68,825)(68,825)(68,825)

Disposal of treasury shares

318

649

649

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance as of December 31, 2021

(101,041)(101,041)(68,507)2,189,396(101,041)

2,088,354(86,045)

6,226,573

519,099

6,745,672(Note) Amounts of less than one thousand yen are rounded down.

- 39 -

Notes to Non-Consolidated Financial Statements(Significant accounting policies)(1) Valuation basis and method of marketable and investment securities
Marketable and investment securities
Shares of subsidiaries and affiliates

Shares of subsidiaries are stated at cost determined by the movingaverage method.

Other marketable and investment
securities
Available-for-sale securities withdeterminable market value

Available-for-sale securities with a determinable market value arestated at fair value based on marketable value on the closing dateand other premises. Any valuation differences are included directly
in shareholders’ equity. Cost of securities sold is calculated by themoving-average method.

Available-for-sale securities
without determinable market value

Available-for-sale securities without determinable market value arestated at cost determined by the moving-average method.

Derivative transactions

Derivative financial instruments are stated at fair value.

Inventories

Merchandise and finished goods are stated at cost determined by
the first-in, first-out method, and semi-finished goods are stated atcost determined by the weighted average cost method. The amounton the balance sheet is calculated by reducing book value when thecontribution of inventories to profitability declines.

(2) Depreciation and amortization of non-current assets
Property, plant and equipment
Depreciation of property, plant and equipment is computed by the(excluding lease assets)straight-line method.
The useful lives of major property, plant and equipment aresummarized as follows:
Buildings
3 to 18 years
Tools, furniture and fixtures
4 to 20 years
Intangible assets(excluding lease assets)

Amortization of intangible assets is computed by the straight-line
method.
Capitalized software costs are being amortized over the period of
the internal use of five years.

Lease assets

Depreciation of lease assets is computed by the straight-line method
over the lease term with no residual value.

(3) Deferred assets
Share issuance costs and bondissuance costs

Share issuance costs and bond issuance costs are recorded as expenses infull at the time of expenditure.

(4) Basis for translating assets and liabilities denominated in foreign currencies into Japanese yen
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the spot
exchange rates prevailing on the closing date, and resulting gains or losses are credited or charged to income.
(5) Basis for reserves and provisions
Provision for retirement
The provision for retirement benefits is provided based on an estimatedbenefits
amount for retirement benefit obligations at the end of fiscal year underreview.
The Company applies the simplified method to calculate amounts ofprovision for retirement benefits and retirement benefit expenses. That is,
the amount of retirement benefit obligations are the payments required forvoluntary retirement as of each fiscal year end.
- 40 -

Provision for sales returns

An amount equivalent to the loss based on the estimated amount ofreturned goods in the future is recorded to prepare for losses from returned
merchandise and finished goods.

Provision for productchangeover

An estimated amount of expenses is recorded to prepare for expenses to be
incurred accompanying the changeover from the FD formulation to RTD
formulation of TREAKISYM®.

(6) Accounting for consumption tax
Transactions are recorded at amounts exclusive of consumption tax.
(Notes on changes in accounting policy)(Changes in valuation method of inventories)
The valuation method of inventories was previously based on the weighted average cost method, but from thecurrent fiscal year, merchandise and finished goods are valued using the first-in, first-out method, and semi-finishedgoods are valued using the weighted average cost method. This change in valuation method is due to reexamining
the definition and valuation method of inventories from the perspective of conducting proper inventory valuationand periodic profit and loss calculation, as we shifted to an in-house sales system which made it possible to grasp
the movement of inventories in detail.
As a result, we adopted the first-in, first-out method for merchandise and finished goods, and the weighted
average cost method for semi-finished goods to ensure greater consistency with the movement of inventories heldby the Company. We have determined that doing so is reasonable from the standpoint of inventory valuation andperiodic profit and loss calculation, and that it more appropriately reflects the actual business conditions of theCompany.
The change has not been applied retrospectively since its impact is immaterial.
(Changes in presentation methods)(Application of the “Accounting Standard for Disclosure of Accounting Estimates”)
The Company has applied the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement
No. 31, March 31, 2020) starting from the financial statements for the current fiscal year end, and has included notes
regarding accounting estimates.
(Balance sheet items)
The Company reviewed the definition of merchandise and finished goods, and semi-finished goods from theperspective of conducting proper inventory valuation and periodic profit and loss calculation, as we shifted to an inhouse sales system which made it possible to grasp the movement of inventories in detail.
As a result, semi-finished goods, which amounted to 672,891 thousand yen and included in the Merchandise andfinished goods line of current assets for FY 2020, have increased in importance, and are therefore presented as aseparate line item for FY 2021.
(Notes to important accounting estimates)(1) Amount stated in the financial statements for the current fiscal year
Deferred tax assets recorded in the current fiscal year: 1,275,759 thousand yen(2) Information on the contents of important accounting estimates for identified items(i) Calculation method
The Company recognizes deferred tax assets resulting from temporary differences and operating loss
carryforwards as of the end of the current fiscal year to the extent that they will reduce taxable income infuture periods, in accordance with the company classification stipulated in the “Implementation Guidance on
Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, February 16, 2018). In recognizing deferred
tax assets, the Company estimates the taxable income before adjustment for temporary differences based on
its business plan.
(ii) Key assumptions
Taxable income based on future profitability is estimated according to the Company’s business plan, which
is formulated on certain assumptions that consider significant uncertainties, such as the impact on tax
adjustment items from sales status which is affected by sales volume of existing drugs and progress ofdevelopment plans.
(iii) Impact on financial statement for the next and subsequent fiscal years
If assumptions used in the estimates need to be revised due to changes in uncertain economic conditions
or other factors in the future, this may significantly impact the amount of deferred tax assets in the financial
statements for the next and subsequent fiscal years.
- 41 -

(Additional information)(Overdraft and commitment line contracts)
The Company has overdraft and commitment line contracts with three banks in a business relationship to
efficiently procure working capital. The status of the bank overdraft and loan commitments based on these contracts
at the end of the fiscal year under review is as follows:(Unit: thousands of yen)
3,150,000—
3,150,000

Total amounts of bank overdraft limit and loan commitment line
Balance of borrowing outstanding
Unused balance(Impact of COVID-19)
The outbreak of COVID-19 has made the outlook for the business environment more unpredictable. The
pandemic has led to changes in patient behavior and rescheduling of treatments, in addition to which a number ofhospitals continue to have visitor restrictions in place. Such impacts are considered in our asset impairment indicator
assessment and are reflected in the estimates report(Balance sheet)
Monetary assets receivable from subsidiaries are as follows.
Short-term monetary assets receivable:

11,385 thousand yen(Statement of income)(1) Inventories at fiscal year-end are stated after writing down based on the decrease in profitability. The
following amount is included within cost of sales as loss on valuation of inventories.
Cost of sales:
275,633 thousand yen(2) R&D costs included in general and administrative expenses:

1,736,126 thousand yen(3) Transaction volume with subsidiaries and affiliates is as follows.
Transaction volume other than operating transactions:
13,949 thousand yen(Statement of changes in equity)(1) Type and number of shares issued and treasury shares
At beginning ofcurrent period
Commonstock

Increase(Unit: number of shares)
At end of current
Decrease
periodShares issued

38,202,956

254,250－

38,457,206

Treasury shares

30,14353,025550

82,618(Notes) 1. Increase of 254,250 shares issued in common stock is due to the exercise of share acquisition rights.
2. Increase of 53,025 treasury shares in common stock is due to the purchase of shares less than one unit.
3. Decrease of 550 treasury shares in common stock is due to the sale of shares less than one unit to shareholders.

(2) Number of shares to be issued upon exercise of share acquisition rights issued at the end of the fiscal year
under review
Common stock
296,850 shares(Note) Excludes share acquisition rights for which the commencement date of the exercise period has not yet arrived.

(Tax effect accounting)Significant components of deferred tax assets and liabilities
Deferred tax assets:
Losses on valuation of inventories disallowed
Excess depreciation for lump-sum depreciable assets
Excess amortization for deferred assets
Research and development expenses disallowed
Accounts payable–other disallowed
Provision for retirement benefits disallowedEnterprise taxes payable disallowed- 42 -(Unit: thousands of yen)
85,728
1,714
913,461
2,134,997
1,158
850
44,987

57,087
2,124
158,948
4,598,356

Provision for product changeover disallowed
Asset retirement obligations disallowed
Share-based compensation expenses disallowed
Loss carried forward
Subtotal of deferred tax assets
Valuation allowances for loss carried forward
Valuation allowances for deductible temporary differences

7,999,414(4,227,270)(2,496,384)

Subtotal of valuation allowances
Total deferred tax assets(6,723,655)
1,275,759(Financial instruments)(1) Financial instruments(i) Policies for financial instruments
The Company procures the funds necessary in light of the pipeline development plan (primarily by third-party
allotment and offering by new share issuance). A temporary surplus fund is invested in financial instruments
which are highly safe and liquid.
As a principle, the Company does not enter into derivative transactions for speculative trading purposes but
uses them within the scope prescribed in the Company’s internal rules.
(ii) Types of financial instruments and related risks
Operating receivables such as accounts receivable–trade and advances paid in connection with joint
development are exposed to the credit risk of customers and joint development partners. Operating receivables
denominated in foreign currencies are exposed to foreign exchange fluctuation risk.
The Company intends to invest in marketable and investment securities which have a relatively low risk offalling below initial investments, however, it might entail a finite risk.
Operating payables such as accounts payable–trade and accounts payable–other are mostly due within 60 days.
Operating payables denominated in foreign currencies are exposed to foreign exchange fluctuation risk.
The Company uses derivative transactions to avoid foreign exchange fluctuation risks and enters into forward
exchange contracts within the scope prescribed in the internal rules based on balances of receivables and payables
denominated in foreign currencies as well as the actual volume of export and import transactions denominated inforeign currencies.
Leasehold and guarantee deposits are mostly security deposits related to leased office premises and theirrefunds are subject to the credit risk of the lessor.
(iii) Risk management for financial instruments
1. Monitoring of credit risks (the risk that customers or counterparties may default on obligations)
In accordance with the Company’s internal credit policies for managing credit risk arising from operatingreceivables, the department in charge periodically monitors the creditworthiness of major customers andmonitors due dates and outstanding balances by individual customers. In addition, the Company is making
efforts to promptly identify and mitigate risks of bad debts from customers who are having financial
difficulties.
The Company enters into derivative transactions only with financial institutions which have a sound credit
profile in order to mitigate the counterparty risk.
2. Monitoring of market risk (the risk arising from fluctuations in foreign exchange rates, interest rates, andothers)The Company deposits cash primarily with financial institutions with high credit ratings.
For marketable and investment securities, the Company intends to avoid risks of falling below initialinvestments by investing in securities with a satisfactory credit rating and investment period in accordancewith the Company’s internal investment policies.
The Company enters into forward exchange contracts in order to avoid foreign exchange fluctuation risks
in connection with receivables and payables denominated in foreign currencies.
Followed by appropriate authorization procedures prescribed in the Company’s internal rules, the Finance& Accounting department executes and monitors derivative transactions. Transaction performances arereported to the Executive Management Committee on a regular basis.
3. Monitoring of liquidity risks (the risk that the Company may not be able to meet its obligations on thescheduled due date)
Based on the report from each department, the responsible department of the Company prepares and updates
its cash flow plans on a timely basis and ensures to maintain the liquidity on hand to manage liquidity risk.

- 43 -

(iv) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is noquoted market price available, fair value is reasonably estimated. Since various assumptions and factors arereflected in estimating the fair value, different assumptions and factors could result in different fair value.
(v) Concentration of credit risk
As of the end of fiscal year under review, 100% operating receivables are from one particular major customer.
(2) Fair value of financial instruments
The carrying value on the balance sheet, fair values, and their differences as of December 31, 2021 are as follows.

(1) Cash and deposits(2) Accounts receivable–trade
Assets, total(1) Accounts payable–trade(2) Accounts payable–other(3) Income taxes payable(4) Consumption taxes payable
Liabilities, total
Derivative transactions (*)(Unit: thousands of yen)

Carrying value on the balance
sheet
3,860,106
2,147,510
6,007,617
69,683515,075
383,599
516,036
1,484,394—

Fair value

Difference

3,860,106
2,147,510
6,007,617
69,683515,075
383,599
516,036
1,484,394
—

—
—
—
—
—
—
—
—

(*) Receivables and liabilities arising from derivative transactions are presented on a net basis and net liabilities are shown inparentheses.
(Note) 1. Fair value measurement of financial instruments and other matters related to securities and derivative transactions
Assets(1) Cash and deposits and (2) Accounts receivable–trade
The carrying value is deemed as the fair value since these are scheduled to be settled in a short period of time.
Liabilities(1) Accounts payable–trade, (2) Accounts payable–other, (3) Income taxes payable and (4) Consumption taxes payable
The carrying value is deemed as the fair value since these are scheduled to be settled in a short period of time.
Derivative transactions
None to be reported.
(Note) 2. Financial instruments whose fair value is extremely difficult to determine
Leasehold and guarantee deposits (carrying value of 86,660 thousand yen) are not included in the above table since nomarket quote is available and their fair value is extremely difficult to determine.

(Note) 3. The redemption schedule for monetary assets and securities with maturities after the closing date

Due in one year or
less
Deposits
Accounts receivable–
trade
Total

3,860,106
2,147,510
6,007,617(Transactions with affiliated parties)
Category

Name of Location
Capital orcompany orinvestment
person(thousands ofyen)

Executive

Fuminori
Yoshida—Due after one year
through five years——

Business details or
profession

Ratio of voting
rights and otherforms ofownership (%)

Representative Director,
President and Chief
Executive Officer of theCompany(Ownership)
Direct: 2.83

- 44 -(Unit: thousands of yen)
Due after five years
Due after
through ten years
ten years
—
—

—

—

—

—

—

—

Relationships
with affiliatedparties

Transaction
details

Transaction
amount(thousands ofyen)

Account
title

Year-endbalance(thousands ofyen)

Exercise ofshareacquisitionrights

58,217(72,500 shares)——

(Note) This information describes the exercise during the fiscal year under review of share acquisition rights granted based on
resolutions of the Board of Directors meetings held on March 29, 2017 and March 29, 2018.

(Per-share information)(1) Net assets per share(2) Net profit per share
Average number of shares outstanding during the year
(Significant subsequent events)
None to be reported- 45 -

162.26 yen
53.04 yen
38,313,220 sharesIndependent Auditor’s ReportFebruary 21, 2022
The Board of Directors
SymBio Pharmaceuticals Limited
Ernst & Young ShinNihon LLC
Tokyo, Japan
Hironao Yazaki
Designated Engagement Partner
Certified Public Accountant
Kinuyo Matsuo
Designated Engagement Partner
Certified Public Accountant
OpinionPursuant to Article 436, Section 2, paragraph 1 of the Companies Act, we have audited the accompanying financial
statements, which comprise the balance sheet, the statement of income, the statement of changes in equity, the notes tonon-consolidated financial statements and the related supplementary schedules of SymBio Pharmaceuticals Limited(the “Company”) applicable to the 17th fiscal year from January 1, 2021 to December 31, 2021.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
and results of operations of the Company applicable to the fiscal year ended December 31, 2021, in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements sectionof our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Responsibilities of Management, the Corporate Auditor and the Board of Corporate Auditors for the
Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue asa going concern and disclosing, as required by accounting principles generally accepted in Japan, matters related togoing concern.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing the Company’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
Consider internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances for our risk assessments, while the purpose of the audit of the financial statements is not expressing
an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on- 46 -

the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation in accordance with accounting principles generally accepted in Japan.
We communicate with the Corporate Auditor and the Board of Corporate Auditors regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statement that we have compliedwith the ethical requirements regarding independence that are relevant to our audit of the financial statements in Japan,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

- 47 -

Report of the Audit & Supervisory Board
We, Audit & Supervisory Board Members, prepare this report of audit with regard to the execution of Directors’
duties during the 17th Term of the Company from January 1, 2021 to December 31, 2021, as the unanimous opinionof all the Audit & Supervisory Board Members after careful discussion based on the audit reports prepared by respective
Audit & Supervisory Board Members, and report as follows.
1. Method and Contents of the Audit by Audit & Supervisory Board Members and the Audit & Supervisory
Board
The Audit & Supervisory Board formulated the audit policy and plan for the Term reported, and received reports
from the respective Audit & Supervisory Board Members with regard to the state of implementation and results ofaudits as well as received the reporting from Directors and the accounting auditor with regard to the state of executionof their duties, and requested additional explanations as deemed necessary.
The respective Audit & Supervisory Board Members, in conformity with the standards for audits by Audit &Supervisory Board Members that the Audit & Supervisory Board set forth and in accordance with the audit policy andplan for the Term, strove to collect information and improve audit environments by communicating with Directors, theinternal audit section, and other employees. We also attended Board of Directors meetings and other important meetings,
received the reporting from Directors and employees with regard to the state of execution of their duties, requesting
additional explanations as deemed necessary, reviewed documents for important settlements, and researched thesituation of operations and assets. Moreover, with regard to the system to ensure that the execution of Directors’ duties
described in the business report was compliant with laws and ordinances and the Company’s Articles of Incorporationand other systems required to secure the appropriateness of operations as a stock company maintained based on thecontents of resolution by the Board of Directors with regard to the maintenance of systems stipulated by the Ordinancefor Enforcement of Article 100, Paragraph 1 and 3 of the Companies Act (hereinafter the “Internal Control System”),
we received reporting on the status of their establishment and operation from Directors and employees, requested
additional explanation as deemed necessary, and expressed our opinion. Based on the method described above, we
reviewed the business report and supplementary schedules with regard to the Term reported.
In addition, we monitored and inspected the independent position of the accounting auditor and the execution of
appropriate audits by the accounting auditor, and also received the reporting from the accounting auditor with regard
to the state of execution of its duties, requesting additional explanation as deemed necessary. Furthermore, we received
the notification from the accounting auditor that “the system to ensure that its duties are executed as appropriate (theitems listed by the respective paragraphs of Article 131 of the Ordinance on the Accounting of Companies)” ismaintained in accordance with “the standards for quality control of audits (Business Accounting Council, October 28,2005),” requesting additional explanation as deemed necessary. Based on the method described above, we reviewed
the financial report (including balance sheet, statement of income, statement of changes in equity, and notes to nonconsolidated financial statements) and related supplementary schedules for the Term reported.
2. Results of audit(1) Results of the audit of the business reporta. The business report and supplementary schedules fairly present the Company’s situation in accordance with laws
and ordinances and the Company’s Articles of Incorporation.
b. No misconduct in the execution of Directors’ duties or any material facts in violation of laws or ordinances or theCompany’s Articles of Incorporation was observed.
c. The contents of resolution by the Board of Directors with regard to the Internal Control System are appropriate.
Also, there is no matter to be noted as for the descriptions in the business report regarding such Internal Control
System and the execution of Directors’ duties.
(2) Results of the audit of the financial statements and related supplementary schedules
Both the method used for and the result of the audit conducted by the accounting auditor, Ernst & Young
ShinNihon LLC, are appropriate.
February 21, 2022
Audit & Supervisory Board,
SymBio Pharmaceuticals Limited____________________
Kiyoshi Watanabe
Full-time Audit & Supervisory Board Member (Outside)____________________
Kesao Endo
Audit & Supervisory Board Member (Outside)- 48 -

____________________
Yasuhiro Tamo
Audit & Supervisory Board Member (Outside)- 49 -

Location of the 17th Ordinary General Meeting of Shareholders
7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Sapia Tower 5th Floor
Station Conference Tokyo, Room 501
Phone +81-3-6888-8080
 Transportation
 One-minute walk from Shinkansen Express Exit
(Nihonbashi Exit) of JR Tokyo Station
 Two-minute walk from Yaesu North Exit of JR Tokyo
Station One-minute walk from Otemachi Station, Tokyo Metro
Tozai Line

- 50 -