Consolidated Financial Results for the Nine Months of the Fiscal Year Ending December 31, 2021 (under IFRS)

(Percentages indicate year-on-yearchanges.)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.

November 10, 2021

	Consolidated Financial Results for the Nine Months of
	the Fiscal Year Ending December 31, 2021
	(under IFRS)
Company name:	Solasia Pharma K.K.
Listing:	Tokyo Stock Exchange
Securities code:	4597
URL:	https://solasia.co.jp/en/
Representative:	Yoshihiro Arai, President and Chief Executive Officer
Contact:	Toshio Miyashita, Chief Financial Officer
	TEL: [phone]

Scheduled date to file quarterly securities report:	November 10, 2021
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results presentation meeting:	None

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated financial results for the first nine months of the fiscal year ending December 31, 2021 (from January 1, 2021 to September 30, 2021)

(1) Consolidated operating results (cumulative)

				Revenue				Operating profit	Profit before tax			Profit
Nine months ended		Millions of yen		%		Millions of yen	%	Millions of yen		%	Millions of yen		%
September 30, 2021		283		(1.5)		(2,063)	-	(2,084)		-			(2,111)		-
September 30, 2020		287		(1.3)		(1,902)	-	(1,928)		-			(1,937)		-
			Profit attributable to		Total comprehensive	Basic earnings			Diluted earnings
				owners of parent		income		per share				per share
Nine months ended		Millions of yen		%		Millions of yen	%					Yen					Yen
September 30, 2021		(2,111)			-		(2,099)	-					(16.36)					(16.36)
September 30, 2020		(1,937)			-		(1,938)	-					(16.64)					(16.64)
(2) Consolidated financial position
														Ratio of equity	Equity attributable
				Total assets			Total equity	Equity attributable		attributable to
							to owners of parent
						to owners of parent		owners of parent to
												per share
														total assets
As of				Millions of yen			Millions of yen	Millions of yen				%				Yen
September 30, 2021		3,713			2,956			2,956				79.6				22.14
December 31, 2020		5,775			3,652			3,652				63.2				29.78
2. Cash dividends
									Annual cash dividends per share
				First quarter-end		Second quarter-end	Third quarter-end		Fiscal year-end	Total
Fiscal year ended			Yen				Yen		Yen				Yen			Yen
			-			0.00			-				0.00				0.00
December 31, 2020
Fiscal year ending				-			0.00			-
December 31, 2021
Fiscal year ending
December 31, 2021															0.00				0.00
(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending December 31, 2021 (from January 1, 2021 to December 31, 2021)

(Percentages indicate year-on-year changes.)

										Profit		Basic earnings
	Revenue	Operating profit	Profit before tax	Profit		attributable to
		per share
										owners of parent
	Millions	%	Millions	%	Millions	%	Millions		%	Millions		%	Yen
Fiscal year ending	of yen		of yen		of yen		of yen			of yen
600	32.1	(2,500)	-	(2,500)	-	(2,500)		-	(2,500)		-	(18.73)
December 31,2021
Note: Revisions to the consolidated earnings forecasts most recently announced: Yes

• Notes
• 1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
  2. Changes in accounting policies and changes in accounting estimates
  3. 1. Changes in accounting policies required by IFRS: None
     2. Changes in accounting policies due to other reasons: None
     3. Changes in accounting estimates: None
  4. Number of issued shares (ordinary shares)
  5. 1. Total number of issued shares at the end of the period (including treasury shares)

		As of September 30, 2021	133,946,210 shares
		As of December 31, 2020	123,081,210 shares
2)	Number of treasury shares at the end of the period
		As of September 30, 2021	440,000 shares
		As of December 31, 2020	440,000 shares
3)	Average number of shares during the period (cumulative from the beginning of the fiscal year)
		For the Nine months ended September 30, 2021	129,017,987 shares
		For the Nine months ended September 30, 2020	116,447,636 shares

• Quarterly consolidated financial results reports are not subject to quarterly review procedures by the Company's independent auditor.
• Proper use of earnings forecasts, and other special matters

The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual business and other results may differ from the statements herein due to various factors.

[Attached Material]
	Index
1. Qualitative information regarding results for the first three months ...................................................................	2
(1)	Explanation of operating results ..................................................................................................................	2
(2)	Explanation of financial position.................................................................................................................	5
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements..............................	5
2. Condensed quarterly consolidated financial statements and significant notes thereto ........................................	6
(1)	Condensed consolidated statement of financial position.............................................................................	6
(2)	Condensed consolidated statement of profit or loss ....................................................................................	7
(3)	Condensed consolidated statement of comprehensive income....................................................................	8
(4)	Condensed consolidated statement of changes in equity.............................................................................	8
(5)	Condensed consolidated statement of cash flows........................................................................................	9
(6)	Notes to condensed quarterly consolidated financial statements...............................................................	10

1

1. Qualitative information regarding results for the first nine months

1. Explanation of operating results

1. Overview of results Operating results

			(Millions of yen)
	Nine months ended	Nine months ended	Year-on-year
	September 30, 2020	September 30, 2021
Revenue	287	283	(4)
Gross profit	186	125	(60)
Operating profit (loss)	(1,902)	(2,063)	(161)
Profit (loss)	(1,937)	(2,111)	(173)

The Group intends to focus business operations on expanding its oncology development pipeline, which consists of two products that have already been launched and two in the later stage of development. Under this goal, the Group primarily engaged in the following business activities in the nine months ended September 30, 2021.

[Launched products (development completed)] SP-01(Chemotherapy-induced nausea and vomiting)

SP-03 (Oral mucositis/stomatitis caused by chemotherapy and radiotherapy)

The COVID-19 pandemic significantly restrained marketing activities of the Group's and sales partners' medical representatives (MRs), including their access to medical sites. This in turn had an impact on the prescription and delivery volumes of Sancuso® (SP-01) and episil® (SP-03), which were mainly sold in China.

[Pipeline products in the clinical study and later phase] SP-02 (Relapsed or Refractory Peripheral T-cell Lymphoma)

In 2020, the Company achieved the primary endpoint (antitumor effect) in the Global Phase II clinical trial (pivotal study) of our pipeline product SP-02. In September 30, 2021, we filed a New Drug Application (NDA) for the drug with the regulatory authority in Japan.

SP-05 (Increase in antitumor efficacy of fluorouracil）

Based on the interim analysis of the global Phase III clinical trial of SP-05, a pivotal study before filing for regulatory approval, the target number of patients enrolled in the study should be 440, the minimum number specified in the trial protocol. As of the submission date of this document, the Company is continuing the trial with the minimum target number of patients with the aim of bringing the product to market.

[Pipeline products in the non-clinical study phase] SP-04(Chemotherapy-induced peripheral neuropathy)

Based on the results of the Phase III clinical trial of SP-04 targeting oxaliplatin-induced peripheral neuropathy, the Company has decided to park the development of the pipeline product for this indication; instead, we are conducting additional animal studies to investigate the product's potential in treating taxane-induced peripheral neuropathy.

2

As indicated above, we have focused on achieving progress in terms of both our products and pipeline products. On the financial front, however, we continue making up-front investments, as product sales have just entered the initial stages. Given these circumstances, our financial performance during the nine months ended September 30, 2021, was as follows.

[Revenue, Gross profit]

During the nine months ended September 30, 2021, revenue totaled 283 million yen. Revenue mainly came from the sales of pipeline products of Sancuso® (SP-01) and episil® (SP-03). In addition, gross profit amounted to 125 million yen.

Breakdown of R&D and SG&A expenses

			(Millions of yen)
	Nine months ended	Nine months ended	Year-on-year
	September 30, 2020	September 30, 2021
R&D expenses	1,003	822	(181)
SG&A expenses	1,085	1,367	281
Total	2,089	2,189	100
(Breakdown)	458	581	122
Personnel expenses
Outsourcing expenses	1,117	1,051	(66)
Depreciation and amortization of	372	371	(0)
intangible assets
Other	140	185	44

[R&D expenses, SG&A expenses, Operating profit (loss), Profit (loss)]

R&D expenses amounted to 822 million yen. This amount is mainly attributable to expenses incurred for a multinational phase II clinical study (pivotal study) and the submission cost of New Drug Application for SP-02 and a multinational phase III clinical study of SP-05. SG&A expenses amounted to 1,367million yen, up 281 million yen year on year.

The Company incurred an operating loss of 2,063 million yen. The Company incurred an overall loss of 2,111 million yen.

[Capitalized costs included in intangible assets and amortization of intangible assets]

The Group posted a 160 million yen increase in intangible assets attributable to development costs and in- licensing expenses recognized as assets among pipeline investment outlays. In the nine months ended September 30, 2021, pipeline investment amounted to 982 million yen. This figure includes the 160 million yen in intangible assets derived from capitalization of such outlays and 822 million yen in R&D expenses. However, amortization of intangible assets related to the pipeline product Sancuso® (SP-01) and episil® (SP-03), leading to amortization of 329 million yen during the nine months under review. As a result, the balance of intangible assets was 2,187 million yen as of September 30, 2021.

3