HEALIOS K.K. and its wholly owned subsidiary ProcellCure Inc. are developing a treatment for patients with pneumonia induced ARDS using HLCM051, a somatic stem cell regenerative medicine product. The company announced that after the completion of the 14-day review by the Pharmaceuticals and Medical Devices Agency (PMDA) regarding the clinical trial notification for this study submitted by ProcellCure, the preparation has been completed and the study is being initiated. Outline of the clinical study. conditions, Placebo-Controlled, Double-Blind, Randomized, Subjects, Patients with pneumonia-induced ARDS, Including Patients with pneumonia-induced AR DS caused by COVID-19, Enrollment, 80 (HLCM051 [n=40, placebo [n=40), Primary Endpoint, VFD (the number of days out of 28 during which a ventilator was not used for the patient), Secondary Endpoint (examples), Mortality (180 days after administration). Patient enrollment will begin after deliberations, etc. at the Clinical Trial Review Committee established at each investigational medical institution. There is no confirmed impact of this matter on business performance for the fiscal year ending December 31, 2024 at this time. The company will promptly announce any matters that should be disclosed in the future. Business framework for the development and marketing of ARDS. As announced in December 27, 2023, Healios and Nobelpharma K.K. ("Nobelpharma") entered into a letter of intent for a development and marketing alliance for HLCM051 for ARDS in Japan and are currently discussing detailed terms and conditions for the development and marketing of the drug in Japan. Healios will receive an upfront payment from Nobelpharma under the agreement, which will be finalized and executed in the future. Thereafter, Healios will receive a milestone payment upon approval. After approval, Healios will supply the final manufactured product to Nobelpharma, who will in turn distribute the product to the market, and Healios anticipates that it will generate meaningful net margins from such product supply. In addition to the above, Healios expects to receive sales milestone payments of approximately JPY 25 billion based on our projected sales as of the date of the
letter of intent, depending on accumulated sales.