Gni Group Ltd. · TSE:2160

Gni — Q3 2024 Earnings Presentation

45 slides from Gni's earnings presentation, December 2024

  1. Slide 1: Financial Results for Q3 FY2024

    GNI Group Ltd. Financial Results for Q3 FY2024 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 Overview 2. Financial Highlights 3. Q3 FY2024 Topics 4. Financial Forecats for FY2024 5. Second Half of FY2024 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 Overview

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

  5. Slide 5: Company Overview

    Company Overview Head Office Main Business 3rd Floor, Nihonbashi Honcho YS Building, Global pharmaceutical R&D, 2-2-2, Nihonbashi-Honcho manufacturing and distribution, Chuo-ku, Tokyo 103-0023 and biomaterials business Incorporation Director, Representative Executive November 2001 Officer, President

  6. Slide 6: Ying Luo Ph.D., Director, Representative Executive Officer, President and CEO

    Director, Representative Executive Officer, President, and CEO Ying Luo Ph.D. • As a Chinese-American, he pioneered the new profitable business model that leverages the unique strengths of the pharmaceutical industry in the PRC, the U.S., and Japan in developing new therapeutic products for unmet me

  7. Slide 7: Business model: Pharmatech, Biotech, Medtech

    Business model Pharmatech Biotech Medtech (Biomaterials) Name Berkeley Advanced Biomedicals LLC Gyre Therapeutics,Inc. (BAB) Cullgen Inc. Gyre Pharmaceuticals Berkeley Biologics LLC (BB) • Listed on NASDAQ • Announced reverse marger • M&A executed last year • Development of anti-fibrotic and agreeme

  8. Slide 8: Major Pharmaceutical & Drug Discovery

    Major Pharmaceutical & Drug Discovery ＜Pharmaceutical＞ ETUARY®（Generic name：Pirfenidone） ・Chinese：艾思瑞、English：ETUARY® ・Treatment for idiopathic pulmonary fibrosis (IPF) and market leader in PRC ・Clinical developments are underway for expansion of indications（Three Phase３trials） ・Donating to NPO for

  9. Slide 9: From Drug Discovery Success to Pharmaceuticals

    GNI Group is (1) From Drug Discovery Success to Pharmaceuticals (100 million yen) ETUARY® Revenue 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 company in the industry

    GNI Group is (2) A rare profitable company in the industry (Millions of yen) ■ Operating profit before R&D* (left axis) ーRevenue (right axis) 30,000 40,000 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 * Operating profit before R&D = Oper

  11. Slide 11: Globally recognized for high development capabilities

    GNI Group is (3) Globally recognized for high development capabilities Successful development of ETUARY® Completed Phase 3 trial for F351* Ongoing large-scale joint research with Astellas Pharma Investment let by AstraZeneca into Cullgen with one board seat *Phase 2 clinical trial results are detail

  12. Slide 12: Aiming to realize value by listing each global subsidiary

    GNI Group is (4) Aiming to realize value by listing each global subsidiary Pharma Biotech Medtech 2023 Listed on NASDAQ 2024 Announced Listing on listing in the future NASDAQ Recognized value of subsidiaries GNI’s Valuation © 2024 GNI Group Ltd. All rights reserved Reference Translation 11

  13. Slide 13: GNI Group is a group company that...

    GNI Group is a group company that • Operates globally in the U.S. and China as well as Japan. • Demonstrates world-class development capabilities while succeeding in drug discovery and making profits as a pharmaceutical manufacturer. • Accelerates further new drug development and realizes huge growt

  14. Slide 14: As a Growth stock and a Value stock

    In other words, As a Growth stock, we will continue our strong curve of growth in the coming years, especially after F351 commercialization. As a Value stock, we will deliver values to our shareholders through individual listing of our strong subsidiaries. © 2024 GNI Group Ltd. All rights reserved R

  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 Steady growth as the Group, excluding an upfront payment last year Q3 FY2023 Q3 FY2024 (Ref.) Gyre* Cumulative Vs. revenue Cumulative Vs. revenue YoY Q3 FY2024 Millions of yen total total total Revenue 20,547 100.0% 17,192 100.0% (16.3)% 11,796 Gross profit 18,178 88.4% 13,6

  17. Slide 17: Stock valuation gains and foreign exchange gains in Q3

    Stock valuation gains and foreign exchange gains in Q3 ① Other income (stock valuation gains) Stock valuation gain of shares relating to Forward transactions with Macquarie : 582 million yen ② Finance costs Foreign Exchange gain relating to the Gyre reverse merger transaction* : 1,042 million yen Th

  18. Slide 18: Balance sheet summary

    Balance sheet summary FY2021 End FY2022 End FY2023 End Q3 FY2024 YoY Millions of yen Actual Actual Actual Cumulative total Total non-current assets 12,109 16,759 31,487 35,485 12.7% Total current assets 18,187 17,147 30,907 27,263 (11.8)% Total assets 30,296 33,906 62,394 62,748 0.6% Total non-curre

  19. Slide 19: Sufficient cash; Gyre shares are cashable assets

    Sufficient cash Shares of listed subsidiary GYRE are cashable assets 21.3 billion yen 149.7 billion yen 2023 Q3 2024 Q3 Cashable Assets Cash and cash equivalents 18.14 billion yen 14.04 billion yen Time Deposits 190 million yen 1.11 billion yen Gyre`s Market Cap GNI owns* 0 yen 130.33 billion yen No

  20. Slide 20: R&D expenses

    R&D expenses Steady progress in drug development (Millions of yen) FY2021 FY2022 FY2023 Q3 FY2024 Actual Actual Actual Cumulative total Consolidated R&D expenses 2,015 2,545 2,557 1,917 Capitalized development costs 336 606 940 618 Total 2,351 3,151 3,497 2,535* *4% YoY increase © 2024 GNI Group Ltd

  21. Slide 21: 3. Q3 FY2024 Topics

    3. Q3 FY2024 Topics © 2024 GNI Group Ltd. All rights reserved Reference Translation 20

  22. Slide 22: Expansion of sales lineup

    Q3 FY2024 Topic Increased future profits Expansion of sales lineup Product Indication Present Feature Systematic sclerosis-associated Interstitial Phase 3 ongoing Lung Disease（SSc-ILD） • Clinical developments are ETUARY® Dermatomyositis Interstitial Lung Disease underway for expansion of Phase 3 ong

  23. Slide 23: F351 Phase 3 clinical trial completed

    Q3 FY2024 Topic Increased future profits F351 Phase 3 clinical trial completed About F351 • Potential to be the first treatment for the approximately 150 million liver fibrosis patients in China =Potential blockbuster drug • Designated as a "breakthrough therapy" by the NMPA • Planned clinical trial

  24. Slide 24: Cullgen's listing announcement

    Q3 FY2024 Topic Increased future profits Cullgen's listing announcement Rapid listing through reverse merger with Pulmatrix, Inc. a NASDAQ listed company Increase Cullgen's visibility and credibility Promote future new drug development Other income (within operating income) : Approximately 14.5 bill

  25. Slide 25: 4. Financial Forecasts for FY2024

    4. Financial Forecasts for FY2024 © 2024 GNI Group Ltd. All rights reserved Reference Translation 24

  26. Slide 26: Financial Forecasts for FY2024

    Financial Forecasts for FY2024 Subject to progress of some key events in the 2nd half of 2024 FY2023 FY2024 YoY (Millions of yen) Actual Forecast Revenue 26,010 39,556 52.1% Gross profit 22,431 34,624 54.4% Operating profit 13,108 16,286 24.2% Income before income taxes 12,612 15,552 23.3% Net incom

  27. Slide 27: 5. Second Half of FY2024 Topics

    5. Second Half of FY2024 Topics © 2024 GNI Group Ltd. All rights reserved Reference Translation 26

  28. Slide 28: Featured events in the 2nd half of 2024

    FY2024 Topic (1) Featured events in the 2nd half of 2024 1. Receive results of Preparing to release top-line data Phase 3 clinical trial of F351 by the end of the year 2. Cullgen's listing Announced Listing 3. Progress of R&D and clinical trials Progressing well Negotiating with a target 4. M&A comp

  29. Slide 29: Path to the future

    FY2024 Topic (2) Path to the future 1. Prime Market In progress toward transitioning to Prime Market 2. Aiming to be selected in JPX indices Goal of FY2024: JPX-Nikkei Mid and Small Cap Index • Effective from August 30 • Currently 1.86% of the portfolio (The end of September) • GNI Group has a high

  30. Slide 30: 6. GNI Group's Hidden Value

    6. GNI Group’s Hidden Value © 2024 GNI Group Ltd. All rights reserved Reference Translation 29

  31. Slide 31: Point: Book value versus market value

    Point: Book value versus market value Book value Current Value Gyre Therapeutics* 115.5 billion yen (incl. Gyre Pharmaceuticals) 13.0 billion yen (GNI owned portion) * Listed on NASDAQ Madrigal (a competitor) market cap: 776.1 billion yen ※Based on November 12, 2024 close Cullgen 7.3 billion yen ???

  32. Slide 32: Resolution of valuation gap

    Point: GNI Group’s Hidden Value Market Cap 155.1 billion yen ≠ Resolution of valuation gap Pharmatech Biotech Medtech Listed on NASDAQ in 2023 Announced listing on NASDAQ Prepare for the future listing in 2024 Market cap GNI owns Market cap GNI owns Market cap GNI owns 179.2 billion yen Soon to be r

  33. Slide 33: MADRIGAL's market cap and the future of GYRE

    (Ref) MADRIGAL's market cap and the future of GYRE MADRIGAL GYRE Market Cap as of October 18, 2024 Date Stock price Market cap* 197 billion JPY Dec. 18, 2022 （Announced positive 63.8 USD 200 billion JPY results from the P3 ） Dec. 19, 2022 234.83 USD 765 billion JPY Approx. 3.8 times When F351 Succee

  34. Slide 34: Increase in the ratio of institutional investors

    Increase in the ratio of institutional investors • The institutional investor ratio has doubled over the past year and a half • Actively expand IR activities to institutional investors to North America and Europe in the future Institutional investors ratio* 23.13% 11.48% 2022 2024 Q3 *In-house total

  35. Slide 35: Macro Economy Discussion

    Macro Economy Discussion • Since September, short selling has stopped and the stock price have been recovering • Short interest decrease, recovering to 3,000 yen • However, still high level of short interest GNI stock price and balance trends Expected Sell Balance 10,000,000 3,500 3,025 Loan balance

  36. Slide 36: 7. Supplementary Materials

    7. Supplementary Materials © 2024 GNI Group Ltd. All rights reserved Reference Translation 35

  37. Slide 37: Group structure

    Group structure GNI Group Ltd. Tokyo, Japan (TSE: 2160) 100％ 74％ 100％ GNI GNI 26％ Shanghai USA Hong Kong Genomics 60％ 100％ 20％ 85％ 40％ 65％ 80％ Miclene Berkeley Advanced Gyre Therapeutics Shanghai Shanghai Healthcare OsDerma Cullgen Genomics Biomaterials (NASDAQ: GYRE) REEF Technology DMAH Biomateria

  38. Slide 38: Development Pipeline of Gyre Therapeutics & Gyre Pharmaceuticals

    Development Pipeline of Gyre Therapeutics & Gyre Pharmaceuticals Candidate Indication Location Preclinical Phase 1 Phase 2 Phase 3 NDA Marketed MASH-Associated Plan to initiate Phase 2a trial in 2025 USA F351 Liver Fibrosis (Hydronidone) CHB-Associated Liver Completed Phase 3 trial Fibrosis in Octob

  39. Slide 39: Development pipeline of Cullgen

    Development pipeline of Cullgen Hit Target Drug Lead PCC IND Target Indication Selection discovery Optimization Selection enabling PhaseⅠ 第１相臨床試験 TRK Solid tumors TRK Acute and chronic pain Leukemia and GSPT1 MYC + cancers Epigenetic Prostate, lung & Factor bladder cancers Clinical trial initiated N

  40. Slide 40: Trends in the Number of Pulmonary Fibrosis Patients in China

    Trends in the Number of Pulmonary Fibrosis Patients in China IPF PD CTD-ILD Million people （単位：百万人） 3.92 3.65 IPF： 3.43 0.33 Etuary：Launched in 2014 3.26 0.20 0.12 Nintedanib：Acquired 0.08 Production and sales rights 1.01 0.92 0.97 0.85 Pneumoconiosis(“PD”) Etuary： Phase 3 trial ongoing 2.57 CTD-ILD

  41. Slide 41: Market size of F351: Liver Fibrosis Patients in China

    Market size of F351: Trends in the Number Liver Fibrosis Patients in China Others MASH Hepatitis B Million people 153.6 139 146.2 135.8 39.9 41.7 36.6 38.1 CAGR: CAGR: CAGR: 0.6% 1.0% 1.0% 53.3 32.8 36.7 44.9 Target areas 66.4 64.2 61.4 58.6 （Hepatitis B ・MASH） 2017 2021 2026E 2031E Source: Frost&Su

  42. Slide 42: F351 Phase 2 trial top-line data overview (1/3)

    F351 Phase 2 trial top-line data overview (1/3) Efficacy Results F351: 60mg/dose F351: 90mg/dose F351: 120mg/dose Efficacy Analyses Placebo 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

  43. Slide 43: F351 Phase 2 trial top-line data overview (2/3)

    F351 Phase 2 trial top-line data overview (2/3) Efficacy results: additional analyses for patients with Ishak score = 6 (cirrhosis stage) Efficacy analyses Placebo F351 (all groups) Ishak score decreased by ≥ 1 point 1 12 after 52 weeks treatment (FAS) (1/4, 25%) (12/15,80%) Ishak score decreased by

  44. Slide 44: F351 Phase 2 trial top-line data overview (3/3)

    F351 Phase 2 trial 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/dose, 3 doses/day group: 2.38%  F351: 90mg/dose, 3 doses/day group: 2.38%  F351: 120

  45. Slide 45: 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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