A business model centered on out-licensing to pharmaceutical companies following research and development

「A business model that generates revenue by out-licensing product development, manufacturing and marketing rights to pharmaceutical companies in Japan and overseas」

「For TRIM3 and TRIM4, novel regenerative medicine candidate compounds following retasemtiv, the company steadily accumulated experimental data from disease-model animals and continued to make progress in business development activities aimed at out-licensing them.」

「For candidate compounds, the company conducts, independently or jointly with universities, research institutions and partner companies, activities ranging from manufacturing-process development, nonclinical pharmacology and efficacy studies (Note 7), and safety studies (Note 8) to early-stage clinical trials (Note 9). After enhancing the probability of success in drug development and the value of its intellectual property, the company licenses development, manufacturing, sales and other rights for its products to domestic and overseas pharmaceutical companies, generating (a) upfront payments, (b) milestone income paid according to development progress, (c) royalty income calculated as a specified percentage of sales after product launch, and (b) sales milestone income paid each time a sales target is achieved.」

「For candidate compounds, the company conducts, independently or jointly with universities, research institutions and partner companies, activities ranging from manufacturing-process development and nonclinical pharmacology and efficacy studies to safety studies and early-stage clinical trials. After enhancing the probability of success in drug development and the value of its intellectual property, the company licenses development, manufacturing, sales and other rights for its products to domestic and overseas pharmaceutical companies, generating (a) upfront payments, (b) milestone income paid according to development progress, (c) royalty income calculated as a specified percentage of sales after product launch, and (b) sales milestones paid each time a sales target is achieved.」

「Under the license agreement, we have received a total of ¥4,046 million to date in upfront payments and milestone income.」

「In April 2023, we achieved a milestone related to development of redasemtide as a treatment for acute cerebral infarction and recognized a milestone payment of ¥2.35 billion as business revenue in the third quarter.」

「For candidate compounds, the company conducts, independently or jointly with universities, research institutions and partner companies, activities ranging from manufacturing-process development and nonclinical pharmacology and efficacy studies to safety studies and early-stage clinical trials. After enhancing the probability of success in drug development and the value of its intellectual property, the company licenses development, manufacturing, sales and other rights for its products to domestic and overseas pharmaceutical companies, generating upfront payments, milestone income and royalty income under its business model.」

「We satisfied the conditions for receiving the upfront payment under this agreement and received an upfront payment of ¥1,400 million.」

「As a specific development, under the agreement dated 30 June 2020 with Shionogi & Co.,Ltd., the licensee of redasemtide, to accelerate clinical development of redasemtide for multiple diseases, we partially satisfied the conditions for receiving the upfront payment and received an upfront payment of ¥210 million. We expect to receive up to ¥1,190 million from Shionogi & Co.,Ltd. in the future as consideration under this agreement.」

「We partially satisfied the conditions for receiving the upfront payment under this agreement and received an upfront payment of ¥210 million. We expect to receive up to ¥1,190 million from Shionogi & Co.,Ltd. in the future as consideration under this agreement.」

「As a specific development, under the agreement dated 30 June 2020 with Shionogi & Co.,Ltd., the licensee of redasemtide, to accelerate clinical development of redasemtide for multiple diseases, we partially satisfied the conditions for receiving the upfront payment and received an upfront payment of ¥210 million. We expect to receive up to ¥1,190 million from Shionogi & Co.,Ltd. in the future as consideration under this agreement.」

「Under a new agreement with Shionogi & Co.,Ltd., we expect to receive total consideration of up to ¥3.1 billion, of which ¥1.7 billion has already been received.」

「Following completion of the Phase II investigator-initiated clinical trial of KOI2, a bone-marrow mesenchymal stem cell mobilization medicine consisting of an HMGB1 peptide for dystrophic epidermolysis bullosa, the milestone payment conditions stipulated in the license agreement with Shionogi & Co.,Ltd. dated 14 November 2014 and the memorandum of understanding with the same company dated 8 October 2015 were satisfied. Accordingly, milestone income of ¥400 million related to this agreement was recognized as business revenue.」

「For candidate substances, we conduct, independently or jointly with universities, research institutions or partner companies, activities ranging from manufacturing process development and nonclinical pharmacology studies to safety studies and early-stage clinical trials. After increasing the probability of success in drug development and the value of the associated intellectual property, we out-license rights including development, manufacturing and marketing rights to pharmaceutical companies in Japan and overseas. In return, we receive (a) upfront payments, (b) milestone payments based on development progress, (c) royalty income consisting of a fixed percentage of post-launch sales, and (b) sales milestones paid upon achievement of specified sales targets.」