Gni Group Ltd. · TSE:2160

Gni — FY2023 Earnings Presentation

55 slides from Gni's earnings presentation, 2024

  1. Slide 1: FY2023 Full Year Financial Results Corporate Presentation

    GNI Group Ltd. FY2023 Full Year Financial Results Corporate Presentation Reference Translation Securities Code: 2160

  2. Slide 2: We Bring New Hope to Life

    We Bring New Hope to Life. © 2024 GNI Group Ltd. All rights reserved Reference Translation 1

  3. Slide 3: Agenda

    Agenda 1. Company Profile 2. Financial Highlights 3. 2023 Topics 4. 2024 Fiscal Year Guidance 5. 2024 Topics 6. GNI Group’s Hidden Value 7. Supplementary Materials © 2024 GNI Group Ltd. All rights reserved Reference Translation 2

  4. Slide 4: 1. Company Profile

    1. Company Profile © 2024 GNI Group Ltd. All rights reserved Reference Translation 3

  5. Slide 5: Company Overview

    COMPANY OVERVIEW Head Office Address Main business 〒103-0023 Global pharmaceutical R&D, manufacturing 2-2, Nihonbashi-Honcho 2-chome, and distribution, and bio-materials Chuo-ku, Tokyo businesses Nihonbashi Honcho YS Building 3rd Floor Incorporation President and CEO 2001 November Ying Luo Ph.D. Pai

  6. Slide 6: Ying Luo

    Director, Representative Executive Officer, President and CEO Ying Luo • As a Chinese-American, he pioneered the new profitable business model that leverages the unique strengths of the pharmaceutical industry in China, the US and Japan in developing new therapeutic products for unmet medical needs.

  7. Slide 7: Major subsidiaries

    Major subsidiaries 分野 会社名 事業内容 Nasdaq listed Developing MASH therapeutics Holds F351's non-Chinese rights Gyre Therapeutics, Inc. (GYRE) Pharmatech Drug Discovery and Pharmaceutical Business Development in China Have over 500 MR and build a sales network Beijing Continent Pharmaceutical Manufacturin

  8. Slide 8: Major Drug Discovery・Pharmaceutical

    Major Drug Discovery・Pharmaceutical ＜Pharmaceutical＞ Etuary （Commercial Name：Pirfenidone） ・Chinese：艾思瑞、English：ETUARY® ・Treatment for idiopathic pulmonary fibrosis (IPF), Dominant market share in China ・Clinical development underway for expansion of indications（Phase３trials） ＜Drug Discovery＞ F351（Co

  9. Slide 9: From Drug Discovery Success to Pharmaceuticals

    What is GNI ① From Drug Discovery Success to Pharmaceuticals (Unit: 100 million yen) ETUARY® Sales 200 156 150 129 97 100 69 50 50 28 16 0 2017 2018 2019 2020 2021 2022 2023 © 2024 GNI Group Ltd. All rights reserved Reference Translation 8

  10. Slide 10: A Rare, Profitable Drug Discovery Company

    What is GNI ② A Rare, Profitable Drug Discovery Company (Millions of yen) ■ Operating profit before R&D* (left) ーRevenue (right) 30,000 40,000 20,678 30,000 15,666 15,000 20,000 10,000 3,640 3,923 3,112 2,060 1,098 0 422 0 2017 2018 2019 2020 2021 2022 2023 2024 * Operating profit before R&D = Opera

  11. Slide 11: High development capabilities recognized worldwide

    What is GNI ③ High development capabilities recognized worldwide Successful Development of Commercialization of Etuary Satisfactory Safety Profile for F351 Ongoing large-scale collaborative research with Astellas Pharma Investment let by AstraZeneca into Cullgen with one board seat *Phase 2 trial re

  12. Slide 12: Hold a Nasdaq-listed company

    What is GNI ④ Hold a Nasdaq-listed company Extremely rare among listed Japanese companies To have a Nasdaq-listed company As a subsidiary *GYRE © 2024 GNI Group Ltd. All rights reserved Reference Translation 11

  13. Slide 13: Operates globally and demonstrates world-class development

    GNI Group is, in the end, is a group that Operates globally in the USA and China as well as Japan Demonstrates world-class development capabilities while succeeding in drug discovery and making profits as a pharmaceutical manufacturer Under the vision of “We Bring New Hope to Life" Further enhances

  14. Slide 14: Growth stock with value stock facets

    In other words GNI Group Maintains strong growth (growth stock) but also Possesses many assets and has a facet of an under-valued stock (value stock) © 2024 GNI Group Ltd. All rights reserved Reference Translation 13

  15. Slide 15: 2. Financial Highlights

    2. Financial Highlights © 2024 GNI Group Ltd. All rights reserved Reference Translation 14

  16. Slide 16: Income Statement Summary

    Income Statement Summary Record-high sales and profits 2022 Full year 2023 Full year Vs. revenue Vs. revenue YoY Change Millions of yen Cumulative total Cumulative total Revenue 17,418 100.0% 26,010 100.0% 49.3% Gross profit 14,744 84.6% 22,431 86.24% 52.1% Selling, general and 10,965 62.9% 15,292 5

  17. Slide 17: Balance sheet highlights

    Balance sheet highlights Large increase in liquidity and shareholders' equity 2020 End 2021 End 2022 End 2023 End YoY Change Millions of yen Total non-current assets 10,194 12,109 16,759 31,487 87.8% Total current assets 13,024 18,187 17,147 30,907 80.2% Total assets 23,219 30,296 33,906 62,394 84.0

  18. Slide 18: Ample Cash

    Ample Cash 12.2 billion yen 26.4 billion yen 2022 2023 Current Assets Cash and cash equivalents 11.0 billion yen 21.6 billion yen Time Deposits 190 million yen 1.5 billion yen Non-Current Assets Long-term Deposits 970 million yen 3.3 billion yen © 2024 GNI Group Ltd. All rights reserved Reference Tr

  19. Slide 19: R&D

    R&D Increasing R&D expenses while increasing profit (Millions of yen) 2020 2021 2022 2023 Full year Full year Full year Full year Consolidated R&D costs 1,243 2,015 2,545 2,557 Capitalized development costs 60 336 606 940 Total 1,303 2,351 3,151 3,497 © 2024 GNI Group Ltd. All rights reserved Refere

  20. Slide 20: 3. 2023 Topics

    3. 2023 Topics © 2024 GNI Group Ltd. All rights reserved Reference Translation 19

  21. Slide 21: Achieved profitability at major subsidiaries

    Topic ① 2023 Achieved profitability at 3 major subsidiaries Pharmatech Biotech Medtech ・Further sales expansion of ・Ongoing revenues from ・High profitability ETUARY® Astellas Pharma ・Stable incomes © 2024 GNI Group Ltd. All rights reserved Reference Translation 20

  22. Slide 22: ROE

    Topic ② 2023 ROE ~30% Significant growth 30.0% 29.6% 25.0% 20.0% 15.0% 11.6% 10.0% 7.1% 5.0% 1.6% 2.0% 0.0% FY2019 FY2020 FY2021 FY2022 FY2023 *ROE (Equity Ratio) = Net Income Attributable to Owners of the Parent / Equity Attributable to Owners of the Parent (Average between the beginning and the en

  23. Slide 23: EBITDA

    Topic ③ 2023 EBITDA Significant Increase In Million JPY 10,000 7,665 5,000 1,864 1,465 1,110 1,105 0 2019 2020 2021 2022 2023 EBITDA=Operation Cash Flow + Tax + Interest Paid – Interest Received © 2024 GNI Group Ltd. All rights reserved Reference Translation 22

  24. Slide 24: Strong ETUARY sales

    Topic ④ 2023 (Pharmatech) (Unit: 100 million yen) Strong ETUARY® sales 156 ETUARY® Sales 129 97 69 50 28 16 2017 2018 2019 2020 2021 2022 2023 For further expansion || In order to meet various needs, Drive more clinical trials to expand indications © 2024 GNI Group Ltd. All rights reserved Reference

  25. Slide 25: Birth of Gyre, listed on Nasdaq

    Topic ⑤ 2023 (Pharmatech) Birth of Gyre Listed on Nasdaq (As of October 31, 2023) Groundwork for GNI Group to become a global mid-sized pharmaceutical company || Acquire global valuations © 2024 GNI Group Ltd. All rights reserved Reference Translation 24

  26. Slide 26: F351 Phase 3 enrollment completed

    Topic ⑥ 2023 (Pharmatech) F351 Phase 3 clinical trial enrollment completed (October, 2023) Over 2 months ahead of original schedule 2024: Last Patient Out →Aim to launch quickly after approval © 2024 GNI Group Ltd. All rights reserved Reference Translation 25

  27. Slide 27: Partnership with Astellas Pharma

    Topic ⑦ 2023 (Biotech) Partnership with Astellas Pharma Joint development with Astellas Pharma Using proprietary technology, develop multiple pharmaceutical products that degrade proteins causing cancer and other diseases In addition to upfront payment, Generate stable income with ability to earn mi

  28. Slide 28: Investment from AstraZeneca

    Topic ⑧ 2023 (Biotech) Investment from AstraZeneca 2023 Led by AstraZeneca-CICC Fund, etc. 2024 Accept a board director from the AstraZeneca-CICC Fund Appoint a scientific advisor from AstraZeneca (U.K.) © 2024 GNI Group Ltd. All rights reserved Reference Translation 27

  29. Slide 29: Acquisition of orthobiologics business

    Topic ⑨ 2023 (Medtech) Acquisition of orthobiologics business ↓ Increase biomaterials business sales to >JPY 5 billion || Aim to double the sales in 2 years to generate >1/3 of the net profit of the Group © 2024 GNI Group Ltd. All rights reserved Reference Translation 28

  30. Slide 30: No stock acquisition rights remaining for investors

    Topic ⑩ 2023 Toward the Future No stock acquisition rights remaining for investors Elimination of concerns about future dilution © 2024 GNI Group Ltd. All rights reserved Reference Translation 29

  31. Slide 31: 4. 2024 Fiscal Year Guidance

    4. 2024 Fiscal Year Guidance © 2024 GNI Group Ltd. All rights reserved Reference Translation 30

  32. Slide 32: FY2024 Guidance

    FY2024 Guidance Significant revenue and profit increase for the 2nd consecutive year In 2023 In 2024 YoY Change Millions of yen Full-year results Full-year guidance Revenue 26,010 39,556 52.1% Gross profit 22,431 34,264 52.8% Operating profit 13,108 16,286 24.2% Income before income taxes 12,612 15,

  33. Slide 33: 5. 2024 Topics

    5. 2024 Topics © 2024 GNI Group Ltd. All rights reserved Reference Translation 32

  34. Slide 34: Path to the future

    Topic ①2024 Path to the future (1) Preparation for the Prime Market (2) Aim to be selected in JPX indices Goal of 2024: JPX-Nikkei Mid and Small Cap Index Goal of 2025: JPX-Nikkei Index 400 Index © 2024 GNI Group Ltd. All rights reserved Reference Translation 33

  35. Slide 35: Establishing businesses in Japan

    Topic ②2024 Establishing businesses in Japan Loan replayment from GNI USA Effective utilization of increased assets M&A in Japan © 2024 GNI Group Ltd. All rights reserved Reference Translation 34

  36. Slide 36: Groundwork for the future

    Topic ③2024 Groundwork for the future Aiming to be a global mid-tier biopharmaceutical company Increase in stable shareholders and institutional investors Forward transactions 5 billion-yen range Institutional Investor Ownership Ratio* 22.17% 11.48% 2022 2023 2024 *In-house aggregation, custodian to

  37. Slide 37: Revenue Expansion and Global Rollout

    Topic ④2024 (Pharmatech) Revenue Expansion and Global Rollout (1) Phase 3 clinical trial for F351 in China (2) Indication expansion of ETUARY® (3) Planned launch of MASH* Phase 2 clinical trial in the United States *Formerly known as Non-Alcoholic Fatty Hepatic Infection (NASH) →Metabolic Dysfunctio

  38. Slide 38: Diversification of Revenue Sources

    Topic ⑤2024 (Pharmatech) Diversification of Revenue Sources Generic Orphan Drugs Strategy in Full Swing Effective use of existing manufacturing facilities and sales and marketing platform Supplement the current Orphan drug product - Etuary Products under development Avatrombopag Maleate Tablets Indi

  39. Slide 39: Preparing for Cullgen's listing

    Topics ⑥2024 (Biotech) Preparing for Cullgen’s listing Increased GNI Group’s ownership 31%→40% Voyagers Capital Partners I: net investment -> subsidiary (2023) Obtained from CVI Investments, Inc. (2024) © 2024 GNI Group Ltd. All rights reserved Reference Translation 38

  40. Slide 40: Joint research with Astellas Pharma

    Topics ⑦2024 (Biotech) Joint research with Astellas Pharma ⇒ Steady progress Founder of Pioneering Targeted Protein Degradation Technology. GNI Group: Providing Investment and Support Since Inception Possessing proprietary technology for exploring novel enzymes crucial in targeted protein degradatio

  41. Slide 41: Future Revenue to Reach JPY 10 Billion Range

    Topic ⑧2024 (Medtech) Future Revenue to Reach JPY 10 Billion Range ① Expansion of business in the United States ② Expansion of product sales in China ③ Application of biomaterial technology in aesthetics and other fields in China © 2024 GNI Group Ltd. All rights reserved Reference Translation 40

  42. Slide 42: 6. GNI Group's Hidden Value

    6. GNI Group’s Hidden Value © 2024 GNI Group Ltd. All rights reserved Reference Translation 41

  43. Slide 43: Point: Book Value versus Market Value

    Point: Book Value versus Market Value Book value Current Value Gyre (incl. BC) 13.0 billion yen 274.1 billion yen *Listed on Nasdaq (GNI owned portion) ※ Based on February 26, 2024 close Cullgen 4.1 billion yen ??? billion yen *Arvinas (a comparable) market cap: more than 403.6 billion yen ※ Based o

  44. Slide 44: What is the fair market value?

    Point: GNI Group’s Value GNI market capitalization 181.9 billion yen Gyre market capitalization 321.4 billion yen ※ Based on February 26, 2024 close Net cash 23.1 billion yen Gyre (GNI-owned portion) 274.1 billion yen Cullgen ??? billion yen BAB ??? billion yen What is the fair market value? © 2024

  45. Slide 45: Point: Market value-based PBR

    Point: Market value-based PBR GNI market capitalization 181.9 billion yen Book Value Basis (BS) Market value basis Liabilities 26.3 billion Liabilities 26.3 billion yen yen Assets Net assets Net assets at market Market value of 62.3 billion yen 33.7 billion yen value assets* Non-controlling 307.9 bi

  46. Slide 46: Growth + Value

    Point: Growth + Value GNI Group in a nutshell While maintaining high growth potential (Growth Stock) Rich in assets and possessing aspects of undervalued stocks (Value Stock) © 2024 GNI Group Ltd. All rights reserved Reference Translation 45

  47. Slide 47: 7. Supplementary Materials

    7. Supplementary Materials © 2024 GNI Group Ltd. All rights reserved Reference Translation 46

  48. Slide 48: Core Group Companies

    Core Group Companies GNI Group Ltd. Tokyo, Japan (TSE: 2160) 100％ 74％ 100％ GNI GNI 26％ Shanghai USA Hong Kong Genomics 60％ 100％ 20％ 85％ 40％ 80％ 80％ Berkeley Shanghai Gyre Shanghai Miclene Advanced OsDerma Cullgen Genomics （NASDAQ上場） REEF Healthcare Biomaterials Technology DMAH Biomaterials Biomateri

  49. Slide 49: GYRE / BC Pipeline

    GYRE / BC Pipeline © 2024 GNI Group Ltd. All rights reserved Reference Translation 48

  50. Slide 50: Cullgen Pipeline

    Cullgen Pipeline © 2024 GNI Group Ltd. All rights reserved Reference Translation 49

  51. Slide 51: Market Size of ETUARY: Pulmonary Fibrosis Drugs Market in China

    Market Size of ETUARY®: Pulmonary Fibrosis Drugs Market in China (１００ Million JPY) 1,400 1,274 1,200 1,133 987 1,000 848 800 716 603 600 508 408 400 322 244 188 200 95 64 19 33 - 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: Frost & Sullivan (converted to yen by

  52. Slide 52: F351 Phase II Top-line Data Overview (1/3)

    F351 Phase II Top-line Data Overview (1/3) Efficacy Results Efficacy Analyses Placebo F351：60mg/dose F351：90mg/dose F351：120mg/dose 3 doses/day 3 doses/day 3 doses/day Ishak score down by 1+ 11 17 23 18 As of 52nd week (FAS) (11/43, 25.58%) (17/42,40.48%) (23/41,56.10%) (18/41,43.90%) Ishak score do

  53. Slide 53: F351 Phase II Top-line Data Overview (2/3)

    F351 Phase II Top-line Data Overview (2/3) Efficacy Results: additional analysts for patients with Ishak score = 6 (cirrhosis stage) Efficacy Analyses Placebo F351 (all groups) Ishak score down by 1+ 1 12 As of 52nd week (FAS) (1/4, 25%) (12/15,80%) Ishak score down by 1+ 1 12 As of 52nd week (PPS)

  54. Slide 54: F351 Phase II Top-line Data Overview (3/3)

    F351 Phase II Top-line Data Overview (3/3) Safety and Tolerability Results ✓ Adverse Events severity: mild to moderate ✓ Serious Adverse Events incident rate: same among the groups ➢ Placebo: 4.65% ➢ F351：60mg/day 3 doses/day group: 2.38% ➢ F351：90mg/day 3 doses/day group: 2.38% ➢ F351：120mg /day 3

  55. Slide 55: Contact Info: GNI Group Ltd. Investor Relations

    Contact Info: GNI Group Ltd. Investor Relations : IR@gnipharma.com : www.gnipharma.com This presentation contains statements concerning the current plans, expectations and strategies of GNI Group Ltd. (GNI Group). Any statements contained herein that pertain to future operating performance and that

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