SanBio : Presentation for Financial Results for the 2nd Quarter of the Fiscal Year Ending January 31, 2021

Financial Results for the 2nd Quarter of the Fiscal Year Ending January 31, 2021

September 15, 2020

SanBio Company Limited

(TSE Mothers: 4592)

Table of contents

1. Financial results
2. Product approval filing for TBI program in Japan

3 US Phase 2 analysis results for ischemic stroke program

4 Going forward

©2020 SanBio Company Limited

• TBI: Traumatic Brain Injury
  1

1. Financial Results

©2020 SanBio Company Limited

2

Consolidated Income Statement

R&D costs fell by JP¥214 million YoY due to lower clinical trial expenses,

despite a rise in manufacturing-related expenses.

				1H FY2020.1		1H FY2021.1		(B)-(A)	FY2021.1
				Results (A)		Results (B)		Forecast
			Unit: Million yen
		Revenue	427		-		-427	-
			R&D cost	2,013		1,798		-214	3,757
		Operating	2,812		2,570		-242	5,453
		expenses
		Operating income	-2,385		-2,570		+185	-5,453
		Net income	-2,048		-3,207		-1,158	-5,544
		Yen/US$	109.93		107.48		-	110.00
		exchange rate
				©2020 SanBio Company Limited				3

Consolidated Balance Sheet

Although cash and deposits decreased by JP¥2,738 million, maintained a stable financial base with progress as planned.

				As of January	As of July 31,		(B)-(A)	Factors of Difference
			Unit: Million yen	31, 2020 (A)	2020 (B)
			Cash & cash	13,646	10,907		▲2,738
			equivalents
			Supplies	469	448		▲20
		Current assets	14,626	11,728		▲2,897
		Non-current assets	979	2,068		+1,089	Increase mainly due to
			valuation gain on
								investment securities
		Total assets	15,605	13,796		▲1,808
		Current liabilities	1,175	2,619		+1,444	Mainly increase in long-
			term loans payable
		Non-current liabilities	3,500	2,157		▲1,342	The decrease
			accompanying increase in
								long-term payable
		Total liabilities	4,675	4,776		+101
		Net assets	10,930	9,019		▲1,910
		Total liabilities and	15,605	13,796		▲1,808
		net assets
				©2020 SanBio Company Limited				4

2. Product approval filings for TBI program in Japan

©2020 SanBio Company Limited

5

Progress on three key issues

Progressing as planned toward product approval filings in Japan.

Issues	Status

Technology transfer under new arragements

Mostly complete

Establishing the management system for	Progressing as
commercial production	planned

Establishing standard testing procedures	Progressing as
planned

	©2020 SanBio Company Limited	6

Timeline of product approval filings in Japan

Aiming to file for approval in FY2021.1.

FY2021.1

Now (planned)

Clinical trial	Filing	File for	Approval - Market launch
preparation	approval

As the product received the Sakigake designation for accelerated review, the review period is expected to take six months instead of the usual one year.

	©2020 SanBio Company Limited	7

3. Analysis results for US Phase 2 study for the Treatment of Patients with Chronic

Stroke (STR-02)

©2020 SanBio Company Limited

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Study STR02 analysis results（Press Release 9/14/2020）

	©2020 SanBio Company Limited	9

SB623 Study (STR02) -Previously Announced

A Double-Blind, Controlled Phase 2b Study of the Safety and Efficacy of Modified Stem Cells in Patients with Chronic Motor Deficit from Ischemic Stroke

◼

◼

The Fugl-Meyer Motor Scale (FMMS) is widely recognized as a clinically relevant measure of body function impairment

The FMMS includes items measuring movement, upper extremity subscale (scored 0-66) and lower extremity subscale (scored 0-34)

FMMS Responders at Month 6 - primary endpoint (mITT)

	Screening	Baseline	Sham or Cell	Follow-Up Period
	Administration
	-28 to -6	-5 to -2	Pre-op	Post-op	Post-op	Week	Month s
Time	1, 3, 6, 9,
days	days	day -1	day 1	day 2	1
	12
Site	Assessme	Assessme		Surgery		Assessme
nt	nt			nt

FMMS Responder: >= 10 points improvement from baseline in FMMS motor total score.

9/15/2020

	©2020 SanBio Company Limited	10

Background of Composite FMMS settings

Minimally Clinically Important Difference (MCID)

• A statistically significant mean difference does not necessarily represent a difference that is perceived as meaningful by patients3
• Regulatory agencies require an outcome to be BOTH statistically significant AND clinically meaningful
• Minimally Clinically Important Difference (MCID) is defined as the smallest change on a measure that is reliably associated with a meaningful change in a patient's clinical status, function, or quality of life1,2
• We determined MCID by performing all three methods: Delphi Expert panel, Anchoring on the GRPC form TBI trial and Distribution methods
• The expert panel recommended to assess the MCID separately for the upper and lower extremity, as it would be clinically more relevant
• Composite endpoint is a modified version of the Fugl-Meyer Motor Scale: FMMS Total, FMMS Upper Extremity, and FMMS Lower Extremity subscales
• Composite endpoint requires attaining MCID threshold in at least one of the following at 24 weeks:
• • FMMS Total ≥9 points improvement from baseline
  • FMMS UE ≥6 points improvement from baseline
  • FMMS LE ≥4 points improvement from baseline

*1:Revicki D, Hays RD, Cella D, Sloan J. Recommended methods for determining responsiveness and minimally important differences for patient-reported outcomes. Journal of Clinical Epidemiology. 2008;61:102-109. *2:Malec JF, Kean J, Monahan PO. The Minimal clinically important difference for the Mayo-Portland adaptability inventory. Journal of Head Trauma Rehabilitation. 2017;32:E47-E54.

*3:Malec JF, Ketchum JM. A standard method for determining the minimal clinically important difference for rehabilitation measures. Archived of Physical Medicine and Rehabilitation. 2020;101:1090-1094.

	©2020 SanBio Company Limited	11

Results of Additional Analysis:

FMMS Composite Endpoint at Month 6

In patients with infarct size less than a certain amount, there was a 30% difference in "Composite Response %" between SB623 group (49%) and control group (19%).

N=163

Condition 1.

Select patients with infarct size less than a certain amount

N=77

Condition 2.

Composite endpoint requires attaining in at least one of the following:

1. FMMS Total ≥9 points improvement from baseline
2. FMMS UE ≥6 points improvement from baseline
3. FMMS LE ≥4 points improvement from baseline

Overall Population: Of the 163 enrolled patients, 158 were evaluable at 6 months

	Count	Composite	Avg. Baseline	Composite
	Responders	FMMS	Response (%)
Treatment	107	42	44.87	39%
Control	51	16	47.35	31%
p-value		0.42	0.33	0.42

Population with infarct size less than a certain amount (77patients: 48.7%)

	Count	Composite	Avg. Baseline	Composite
	Responders	FMMS	Response %
Treatment	51	25	48.55	49%
Control	26	5	49.42	19%
p-value		0.02	0.8	0.02

	©2020 SanBio Company Limited	12

Significance of volume of stroke's in clinical and preclinical (animal behavioral) outcomes and biology of stroke brain tissue

Is there any clinical relationship Vol Stroke & functional outcomes?

In Human

Baseline FMMS vs Volume of Stroke

Association of follow-up infarct volume with functional outcome in acute ischemic stroke: a pooled analysis of seven randomized trials

[April 7, 2018]. J Neurointerv Surg. Doi:10.1136/neurintsurg Anna M M Boers

1665 included patients, 83% were imaged with CT. Median

Follow-up infarct volume (FIV)

was 41 mL (IQR 14-120). A large

FIV was associated with worse

functional outcome with

OR=0.88(95% CI 0.87 to 0.89) per 10 mL in adjusted analysis.

In Animal

In Biology, Is there any explanation at the tissue level

SB623 cells were noticeably scattered in the penumbral regions (tissue which is still viable, but not functional, located between normal tissue and stroke core and relevant to the impairment). persistence of these cells in this condition are better than in severe stroke environments.

	©2020 SanBio Company Limited	13

4. Going forward

©2020 SanBio Company Limited

14

Excerpt from 1H FY2020.1 financial results presentation

Although the timeline is behind the target, the direction remains unchanged, aiming to become a pharmaceutical company and become a global leader.

	©2020 SanBio Company Limited	15

New management for global leadership

Senior Managing Director and Corporate Officer Akihiro Tsujimura becomes Executive Vice President, Corporate Officer, and COO.

Career

Mr. Tsujimura amassed wide ranging experience regarding overseas business administration with Nichimen Corporation (now Sojitz Corporation) and also served as the head of North America and Asia operations at Santen Pharmaceutical Co., Ltd., engaging in business development and M&A activities. Leveraging the accumulated experience and knowledge, he will lead SanBio operations in Japan and the US in pursuit of becoming a global leader.

New Executive Vice President, position Chief Operating Officer,

SanBio, Inc. CEO

Akihiro Tsujimura

Key responsibility

Provide sound management for the

company's growing operations

	©2020 SanBio Company Limited	16

SanBio taking on the challenge of change

Launched a new management team spearheaded by leaders with proven experience and expertise in their respective fields, fully-equipped with the

functions needed to fuel the company's growth.

Executive directors

				Executive		CEO	Executive Vice
				Chairman		SanBio, Inc. Chairman	President, COO
				Toru Kawanishi		Keita Mori	SanBio, Inc. CEO
								Akihiro Tsujimura
Corporate officers
		Manage pharmaceuticals,
			process and analytical
		development, supply chain,
		contract manufacturing, and
			product quality
						Business Head	Management
		New post		CMO
		CTOO (Chief Technical Operations Officer)		(Chief Medical Officer)	(Japan/Asia)	Administration
			Bijan Nejadnik	Hiroshi	Yoshihiro
		Chris Horan
				Yamamoto	Kakutani
						©2020 SanBio Company Limited			17

Summary of STR-02 additional analysis results

We conducted additional analysis using a modified primary endpoint in a selected patient group. As a result, we now expect to obtain statistically superior results and clinically meaningful improvement in the next trial.

	Endpoint	Patients selected	Analysis results
	for analysis
Analysis	Proportion of patients that achieved a total	All patients enrolled in	Primary endpoint not met
defined in the	FMMS score improvement of 10 points or more	No statistical significance
protocol	STR-02 trial
from baseline at 24 weeks post-dose.	versus the control group
(Jan. 29, 2019)
	Composite FMMS: Proportion of patients that
Additional	achieved at least one of the following three	Among all patients	Showed statistical
FMMS improvement criteria (versus baseline) at	enrolled in STR-02	significace versus the
analysis	6-monthpost-dose		trial, those with infarct	control group
(Today's	- FMMS for upper extremity: +6 points or more	size of less than a	Control group (19%: 5/26)
announcement)
	- FMMS for lower extremity:	+4 points or more	certain amount	SB623 group (49%: 25/51)
	- FMMS total:	+9 points or more

• For additional analysis, the primary endpoint was reviewed in light of the minimal clinically important difference (MCID: the smallest change that could be interpreted as a clinically beneficial change in patients) and the results of the Phase 2 trial for TBI program. Even when compared to the primary endpoint originally established, we believe the appeal of the clinical significance of the treatment responses stands.
• The group of patients selected for analysis represented approximately half of the total STR-02 trial subjects, and we believe this is a feasible patient group.

	©2020 SanBio Company Limited	18

Development plans

Resuming preparations for domestic clinical trials for ischemic stroke and

hemorrhagic stroke programs based on latest analysis results and TBI program

trial results. Expected to start from Phase 2b or Phase 3.

Ischemic stroke program

	Research		Clinical trial
	to non-
Market
clinical
	I	II	III
	trial
Japan
Global
(US, Europe, etc.)

Hemorrhage stroke program

	Research		Clinical trial
	to non-
Market
clinical
	I		II	III
	trial
Japan
Global
(US, Europe, etc.)

• Clinical trials will begin from Phase 2b onward as safety has been confirmed in previous clinical trials for
  ischemic stroke and TBI programs.

	©2020 SanBio Company Limited	19

Development plans

Prioritizing domestic clinical trials for ischemic stroke and hemorrhagic stroke programs. Global Phase 3 trials for TBI program postponed to FY2022.1 onward.

				Top priority
		Traumatic brain injury		Approval filing planned		Clinical trials scheduled
				for FY2021.1 postponed
		(chronic phase)		for FY2021.1
				to FY2022.1 onward*.
				Plan to discuss initiation		Planning to start clinical
		Ischemic stroke		of Phase 2b or 3 clinical		trials from FY2022.1
				trials with PMDA		onward*.
				Plan to discuss initiation		Planning to start clinical
		Hemorrhagic stroke		of Phase 2b or 3 clinical		trials from FY2022.1
				trials with PMDA		onward*.
		* Considering in-house development and partnership options
				©2020 SanBio Company Limited			20

Market size

		TBI: 11 million*4				TBI: 5.51 million*10
TBI: 6.57 million*1			TBI: 40,000*7
Ischemic stroke: 3.01 million*2		Ischemic stroke: 15.73 million*5		Ischemic stroke: 780,000*8		Ischemic stroke: 6.85 million*11
Hemorrhagic stroke: 600,000*3		Hemorrhagic stroke: 1.5 million*6		Hemorrhagic stroke: 140,000*9		Hemorrhagic stroke: 1.02 million*12

*1~*3,*10~*12: In-house analysis based on multiple sources

*4: Arch Neurol. 1986;43(6):570-572 (Wang et al.)

*5: Circulation. 2017;135:759-771 (Wang et al., 2017).

*6: GHDx Healthdata IQVIA analysis 2020

*7: Ministry of Health, Labour and Welfare 2017 (The total number of intracranial injury patients)

*8: Ministry of Health, Labour and Welfare 2017 (The total number of cerebral infarction patients)

*9: Ministry of Health, Labour and Welfare 2017 (The total number of cerebral hemorrhage patients)

	©2020 SanBio Company Limited	21

Preparation update

Pre-launch medical activities for TBI, 80% completed

	Purpose	Issues for launch	Purpose	Issues for launch
			Understand the current status of maintenance phase		Collect and deliver further medical information to
			patient treatment and conduct strategic planning	Build	ensure appropriate use
			based on clinical department, insurance system, and
	Build sales	physician's perspective in each treatment phase	system for	Establish qualification assessment system that
	Carry out activities such as sound community	appropriate	leverages ICT
	structure
	collaboration efforts and post-surgeryfollow-ups	use
			Establish medical structure for appropriate use after
			Build appropriate cooperation system with patient		launch
			groups while ensuring compliance
			Establish patient registration system including	Review	Clarify necessary requirements and regulatory
	Build	medical fees	compliance
	regenerative medicine product traceability
	logistics		Present
	Carry out activities to build logistics scheme in
	system	Ensure to publicize results and achievements
	various communities	evidence
	Create	Prepare promotional materials and video content
	based on product marketing strategy
	promotional
	materials	Prepare website content based on product marketing
			strategy
	Pricing	Prepare documents to calculate appropriate drug
	prices
			©2020 SanBio Company Limited		22

Launching in Japan ahead of the rest of the world

Identify maintenance phase contact points between head trauma patients with motor impairment and physicians, and establish an appropriate information delivery scheme.

Acute phase

Recovery phase

Maintenance phase

Admission		Admission to
to TBI* Initial
	rehabilitation
Treatment
Patients	hospital
Center
with motor
	impairment

• TBI = traumatic brain injury. Source: M3 internet research Alum market survey

Outpatient visits

to TBI Initial

Treatment

Center

Outpatient visits to rehabilitation hospital

No emergency

designation

(clinics, etc.)

Home-based treatment only

• Neurosurgery dept.
• Neurosurgery dept.
• Orthopedics dept.
• Rehabilitation dept.
• Neurosurgery dept.
• Orthopedics dept.
• Rehabilitation dept., etc

©2020 SanBio Company Limited

23

Maintenance (Chronic) phase TBI:

Latent patient percentage by segment

Plans in place to carry out effective information delivery activities at launch

while considering latent patient segments.

Maintenance

Maintenance (Chronic) phase TBI: Latent patient percentage by segmentphase survey

Health Insurance/Nursing Care Insurance

	Tertiary	Secondary	Primary	No emergency
	emergency	emergency	emergency
	designation
	care facility	care facility	care facility
Neurosurgery	1.2%	11.7%	2.5%	4.0%
Orthopedics	0.6%	5.6%	1.2%	2.9%
Rehabilitation	0.2%	1.7%	0.2%	1.8%
Neurology	0.2%	1.7%	0.3%	1.5%
Internal	0.3%	3.0%	1.0%	7.0%
medicine

Home-based

treatment

(including out-of-pocket

rehabilitation)

51.7%

Source : Kumamoto head injury data bank

M3 internet research / Ministry of Health, Labour and Welfare data

©2020 SanBio Company Limited	SanBio external survey	24

Becoming global leader in regenerative medicine

Deliver novel therapeutics to patients as rapidly as

possible to maximize corporate value

	©2020 SanBio Company Limited	25

Disclaimer

This presentation material, including any comments made during or following the presentation, is provided solely for the purpose of reference to those investors who make their own evaluation of the company at their own risk. This material contains estimates, such as plans, strategies and judgments, that are forward-looking statements which are made based on management's assumptions and beliefs in light of the information currently available to it and may contain risks and uncertainty. Therefore you should not place undue reliance on them in making investment decisions.

SanBio cautions you that actual results may differ substantially from those discussed in this material due to various factors. We do not guarantee the accuracy or completeness of the information herein. Unless otherwise stated, estimates or forecasts are solely those of our company and subject to change without notice. We accept no liability whatsoever for any direct or consequential loss arising from any use of this report.

SanBio Company Limited

Management Administration

Contact: [e-mail]

	©2020 SanBio Company Limited	26