JCR Pharmaceuticals : FY2023 Second Half Results Briefing Session Script （2,257KB）

JCR Pharmaceuticals Co., Ltd.

Financial Results Briefing for the Fiscal Year Ended March 2024

May 13, 2024

Event Summary

[Company Name]	JCR Pharmaceuticals Co., Ltd.
[Company ID]	4552-QCODE
[Event Language]	JPN
[Event Type]		Earnings Announcement
[Event Name]	Financial Results Briefing for the Fiscal Year Ended March 2024
[Fiscal Period]	FY2023 Q4
[Date]		May 13, 2024
[Number of Pages]	23
[Time]		14:30 - 15:30
		(Total: 60 minutes, Presentation: 28 minutes, Q&A: 32 minutes)
[Venue]		Webcast
[Venue Size]
[Participants]
[Number of Speakers]	6
		Shin Ashida		Representative Director, Chairman,
				President, and CEO
		Toru Ashida		Senior Vice President Sales Executive
				Director, Sales Division
		Hiroyuki Sonoda, Ph.D.	Vice President, Research Executive Director,
				Research Division
		Yoh Ito		Senior Corporate Officer Corporate Strategy
				Executive Director, Corporate Strategy
				Division
		Yoshihiro Ohta		Director, Accounting Department, Corporate
				Strategy Division
		Anne Bechet		JCR Europe B.V. General Manager
[Analyst Names]*	Hidemaru Yamaguchi		Citigroup Global Markets
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Kazuaki Hashiguchi	Daiwa Securities
Fumiyoshi Sakai	UBS Securities Japan
Shinichiro Muraoka	Morgan Stanley MUFG Securities
Shinya Tsuzuki	Mizuho Securities
Yo Mizuno	Tokio Marine Asset Management

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives.

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Presentation

Moderator: We will now commence the financial results briefing of JCR Pharmaceuticals, Co., Ltd. for the fiscal year ended March 31, 2024. First, let me explain today's language settings. Please select "off", "Japanese", or "English" channel by clicking the translator icon at the bottom of your Zoom window.

Before we begin the briefing, I would like to say a few words to the audience. In the following discussion, we may make forward-looking statements based on our current expectations, all of which are subject to risks and uncertainties. Investors are advised in advance that actual results may differ materially from the forecasts.

Today's presentation and the material used today are intended to provide shareholders, investors, and the press with information about the Company's business. Information on developed products and pharmaceuticals is not intended as advertising, medical advice, or as a guarantee of future results or of the efficacy of products under development. This briefing is being recorded for posting on our website at a later date. Let me now introduce today's speakers. Representative Director, Chairman, President, and CEO, Shin Ashida.

Shin Ashida: Thank you very much.

Moderator: Toru Ashida, Senior Vice President Sales Executive Officer, Sales Division.

Toru Ashida: Thank you very much.

Moderator: Hiroyuki Sonoda, Ph.D., Vice President, Research Executive Director, Research Division.

Sonoda: Thank you very much.

Moderator: Yoh Ito, Senior Corporate Officer Corporate Strategy Executive Director, Corporate Strategy Division.

Ito: Thank you very much.

Moderator: Yoshihiro Ohta, Director, Accounting Department, Corporate Strategy Division.

Ohta: Thank you very much.

Moderator: Finally, Anne Bechet, JCR Europe B.V. General Manager.

Bechet: Thank you.

Moderator: These six speakers are present today. The document to be used today was posted on our website on May 13, at 11:45 AM. Please download and refer to it as necessary.

Today's presentation and Q&A session will last approximately one hour. Questions will be taken in batches after all presentations are completed. The Q&A session will last approximately 30 minutes.

We will now give an overview of the financial results and business activities. Today, after a greeting from Chairman Ashida, Anne Bechet will explain the progress of development pipelines, Sonoda will explain the next wave of technology innovations, and finally, Ito will explain the consolidated financial results for the fiscal year ended March 31, 2024.

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Shin Ashida: My name is Ashida. Thank you very much for all your help. Thank you again for your cooperation today. Today, We would like to explain the status of clinical development, new progress in research, and achievements.

Sales for the fiscal year ended March 2024 exceeded JPY40 billion for the first time. Operating profit was slightly below the forecast. We have been thinking of creating a system that allows us to conduct our own clinical development on a global basis. To do so, we invested to enhance our European, US, and Brazilian sites, and to bring in new people and set up a system that would allow us to do our own clinical development. As a result, operating profit was lower than expected.

Regarding clinical development, we currently have projects, JR-141 and JR-441, both of which are progressing very well. Anne Bechet will explain the status later. In research, we are also working on something new in addition to what we have been doing for rare diseases, which is to deliver protein products into the brain. Sonoda will explain what this is all about.

In the future, considering that we are to deal with business in the rare diseases arena as we do, it will be difficult to develop if we only look at the Japanese market. So, we would like to consider doing clinical trials globally and reaping future profits there. For this reason, we have put in place the structure that allows us to focus on global development.

Sales for the current fiscal year were JPY40 billion, but we are currently working on development to increase this to JPY70 billion or even JPY100 billion for the future. We are confident that we will be able to achieve this goal. JR-141 and JR-441 are progressing very well. Anne Bechet will give you an update on the progress later.

I am contemplating making this year a year for the new younger generation to participate in management for the future, and to create a new structure for the next fiscal year.

We look forward to your continued support of JCR. Thank you very much.

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Bechet*: Thank you very much Chairman Ashida. We will start with an update concerning JR-141 currently in Phase III.

As previously presented, we are targeting to reach two objectives with our Phase III study.

The first one is to demonstrate that JR-141 has a superior activity on the CNS symptoms in MPS II compared to standard enzyme replacement therapy (ERT). At the same time, we would also like to demonstrate that the control of the somatic symptoms of the disease is as good as with standard enzyme replacement therapy.

At present, we have 21 sites open spanning over Europe, USA, and Latin America, and we are targeting to activate more sites in the course of 2024 to further enhance and accelerate recruitment. We are proud to report the full enrollment of the cohort B, which is the cohort comprising the attenuated patients.

Furthermore, we anticipate at present that we will have the number of patients required for the interim analysis of the cohort A enrolled by the end of the first half of this year. We are hands -on target, and we will follow now with the next slide with an update about JR-441 or MPS IIIA asset.

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You can see here an overview of our global Phase I/II study designed together with expert clinicians, but also with the close involvement of parents of children affected with MPS IIIA.

Our main objectives with this study are to establish the safety profile of JR-441, as well as early pharmacodynamics in order to set up the optimal dose for the next phase of development. At present, the trial is progressing very well.

The last patient is to be enrolled before the end of the first half of 2024, and the one -year result is expected by the end of 2025.

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On this slide, you see an overview of our R&D pipeline of those assets that are either in the clinic or soon to be, and with high priority.

Of course, one of our most important programs is JR-141 in the Global Phase III. Next to this asset, JR-171 is quite advanced in out-licensing discussions following the publication of the 52 weeks data of our Global Phase I/II study.

Also, the long -acting growth hormone asset known as JR-142 is on target to initiate our Phase III study in the second half of 2024, and filed for marketing authorization approximately in 2027.

Also worth mentioning here is an indication expansion trial for TEMCELL, JR-031, for the treatment of hypoxic ischemic encephalopathy in neonates.

As per the previous slide, the JR-441 Phase I/II study is progressing very well, with remarkably no hurdle in patient recruitment. Well, JR-446, in partnership with MEDIPAL, is on shuttle to start the clinical Phase I/II by the end of the third quarter of this year.

We are also working with MEDIPAL on the development of a medicine for Fucosidosis.

I will now hand over the presentation to Sonoda-san.

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Sonoda: From here, I will talk about the next wave of technology innovation.

This slide shows the history of our technology development. Since our establishment in 1975, we have conducted research and development of biopharmaceuticals and accumulated manufacturing technologies and know-how. As a result, we have developed biosimilars and cellular medicines, with our strength in recombinant protein medicines. Based on this technology, we have also established J-Brain Cargo technology, a drug delivery technology to the brain.

In addition, we are now focusing on rare diseases and are using J-Brain Cargo technology to develop drugs for rare diseases. For areas that we do not target, or that are broader in scope, we are engaged in a variety of activities in collaboration with other companies.

Recently, gene therapy is being tried more and more in rare diseases. We have been working on gene therapy technology for many years and have been trying to develop our own gene therapy technology.

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As you know, our proprietary J-Brain Cargo technology is a drug delivery technology to the brain. We have been working to establish a hybrid technology between this and adeno-associated virus (AAV)-based gene therapy.

As indicated here, we believe we have two options. The first is shown in green on the left. AAV capsid containing J-Brain Cargo and therapeutic proteins together is made and administered. After administration, J-Brain Cargo and the target protein are expressed as a fusion protein, which then reaches the brain.

The other is shown in pink on the right. This is done by attaching J-Brain Cargo molecules to the surface of the AAV itself and delivering the AAV itself to the brain. In some cases, the effects may be similar for a given disease, but one of them may be significant for a given disease. So, we believe that we have a very strong advantage in having these two types of technology.

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