Slide 1: GNI Group Ltd. Financial Results for Q2 FY2024
GNI Group Ltd. Financial Results for Q2 FY2024 Reference Translation Securities Code: 2160
Slide 2: We Bring New Hope to Life
We Bring New Hope to Life. © 2024 GNI Group Ltd. All rights reserved Reference Translation 1
Slide 3: Agenda
Agenda 1. Company Overview 2. Financial Highlights 3. Q2 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
Slide 4: 1. Company Overview
1. Company Overview © 2024 GNI Group Ltd. All rights reserved Reference Translation 3
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
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
Slide 7: Business model: Pharmatech, Biotech, Medtech
Business model Pharmatech Biotech Medtech (Biomaterials) Name Gyre Therapeutics,Inc. Berkeley Advanced Biomedicals LLC (BAB) Cullgen Inc. Gyre Pharmaceuticals Berkeley Biologics LLC (BB) • Listed on NASDAQ • Drug discovery platform (TPD) in • Development of anti-fibrotic and cancers and others Topic
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
Slide 9: Who we are (1): From Drug Discovery Success to Pharmaceuticals
Who we are (1) From Drug Discovery Success to Pharmaceuticals (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
Slide 10: Who we are (2): A Rare Drug Development Company
Who we are (2) A Rare Drug Development Company With Commercialization Capability and Operating Profit (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 202
Slide 11: Who we are (3): Globally recognized for high development capabilities
Who we are (3) Globally recognized for high development capabilities Successful development of ETUARY® Near completion of 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
Slide 12: Listed Subsidiaries is GNI's Strategy for Value Realization and Global Expansion
Who we are (4) Listed Subsidiaries is GNI’s Strategy for Value Realization and Global Expansion 1. GYRE’s successful listing on NASDAQ enables Japanese shareholders to see the value of our strong presence in China 2. Cullgen will be our second in pipeline to give GNI’s expansion on global stage 3. M
Slide 13: GNI Group is a group company that operates globally
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
Slide 14: Growth stock and 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
Slide 15: 2. Financial Highlights
2. Financial Highlights © 2024 GNI Group Ltd. All rights reserved Reference Translation 14
Slide 16: Income statement summary
Income statement summary Although the core business is doing well, a temporary loss has occurred on the accounting base. Q2 FY2023 Q2 FY2024 (Ref.) Gyre* Cumulative Vs. revenue Cumulative Vs. revenue Inc. / (Dec.) Q2 FY2024 Millions of yen total total total Revenue 14,096 100.0% 11,733 100.0% (16.8)
Slide 17: Details of temporary losses (accounting based, non-cash)
Details of temporary losses (accounting based, non-cash) Breakdown Countermeasure ① Other expences Stock valuation loss related to stock Expected to be resolved by forward contract with Macquarie increasing corporate value through events in the second :1,044 million yen half of 2024 (refer to p.30)
Slide 18: Balance sheet summary
Balance sheet summary FY2021 End FY2022 End FY2023 End Q2 FY2024 Inc. / (Dec.) Millions of yen Actual Actual Actual Cumulative total Total non-current assets 12,109 16,759 31,487 38,145 21.1% Total current assets 18,187 17,147 30,907 30,847 (0.2)% Total assets 30,296 33,906 62,394 68,993 10.6% Total
Slide 19: Sufficient cash
Sufficient cash 16.9 billion yen 23 billion yen 36% increase Q2 FY2023 Q2 FY2024 Current Assets Cash and cash equivalents 14.0 billion yen 16.3 billion yen Time Deposits 190 million yen 2.19 billion yen Non-Current Assets 2.66 billion yen 4.52 billion yen Long-term Deposits © 2024 GNI Group Ltd. All
Slide 20: R&D expenses
R&D expenses Making steady progress (Millions of yen) FY2021 FY2022 FY2023 Q2 FY2024 Actual Actual Actual Cumulative total Consolidated R&D expenses 2,015 2,545 2,557 1,419 Capitalized development costs 336 606 940 568 Total 2,351 3,151 3,497 1,987* *13% YoY increase © 2024 GNI Group Ltd. All rights
Slide 21: 3. Q2 FY2024 Topics
3. Q2 FY2024 Topics © 2024 GNI Group Ltd. All rights reserved Reference Translation 20
Slide 22: Solid progress in the Segments
Q2 FY2024 Topic (1) Growth of existing businesses Solid progress in the Segments (100 million yen) ETUARY® Sales MedTech Group Sales 78 73 25 120 % 8% 12 increase increase Q2 FY2023 Q2 FY2024 Q2 FY2023 Q2 FY2024 For the further expansion Reference Translation 21
Slide 23: New products expected to commercialize in 2024
Q2 FY2024 Topic (2) Increased future profits (Pharmatech) New products expected to commercialize in 2024 1. Nintedanib • Production and sales rights acquired (May 2024) • Indications: IPF, systemic sclerosis-associated interstitial lung disease (SSc-ILD) and progressive fibrotic interstitial lung di
Slide 24: Ongoing research and development
Q2 FY2024 Topic (2) Increased future profits Ongoing research and development IND (Investigative Drug Application) approved (May 2024) F230 ・Indication: Pulmonary arterial hypertension(PAH) ・Licensed from Eisai Co., Ltd. IND application submitted (July 2024) CG009301 (GSPT1 protein-targeting decompo
Slide 25: Expanding the business to Australia
Q2 FY2024 Topic (3) Global expansion (Biotech) Expanding the business to Australia 4th operating countries after Japan, the U.S., and China Aiming to prompt start clinical trials © 2024 GNI Group Ltd. All rights reserved Reference Translation 24
Slide 26: Partnership with the Governance Partners
Q2 FY2024 Topic (4) Beyond F351 Partnership with the Governance Partners 1. A partnership enable GNI to invest into cutting edge technologies in Japan 2. Attract global investors including US, Europe and China 3. Forge strategic relationship in the fast-growing Asia Pacific economy © 2024 GNI Group
Slide 27: Further developments in Japan
Q2 FY2024 Topic (4) Beyond F351 Further developments in Japan Partnership with Governance Partners Consolidation of Governance Partners ASIA Fund as a Subsidiary Holding 18.5% in Japan Asia Investment Co., Ltd. shares through ASIA Fund* *Out of the 18.5%, the portion held according to the ASIA Fund'
Slide 28: 4. Financial Forecasts for FY2024
4. Financial Forecasts for FY2024 © 2024 GNI Group Ltd. All rights reserved Reference Translation 27
Slide 29: Financial forecasts for FY2024
Financial forecasts for FY2024 Subject to progress of some key events in the 2nd half of 2024 FY2023 FY2024 Inc. / (Dec.) (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%
Slide 30: 5. Second Half of FY2024 Topics
5. Second Half of FY2024 Topics © 2024 GNI Group Ltd. All rights reserved Reference Translation 29
Slide 31: Notable events in the 2nd half of 2024
FY2024 Topic (1) Notable events in the 2nd half of 2024 1. Receive results of Phase 3 clinical trial of F351 2. Cullgen’s listing as a public company 3. Progress of R&D and clinical trials 4. M&A 5. Progress in preparation for transition to Prime © 2024 GNI Group Ltd. All rights reserved Reference T
Slide 32: Path to the future
FY2024 Topic (2) Path to the future 1. Officially announced the preparation to move to the Prime Market 2. Aiming to be selected in JPX indices Achieved in Q2 FY2024 Goal of FY2024: JPX-Nikkei Mid and Small Cap Index (effective from August 30) Goal after FY2025: JPX-Nikkei Index 400 Index © 2024 GNI
Slide 33: 6. GNI Group's Hidden Value
6. GNI Group’s Hidden Value © 2024 GNI Group Ltd. All rights reserved Reference Translation 32
Slide 34: 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 Pharmaceuticals Inc. (a competitor) market cap: 776.1 billion yen ※Based on August 12, 2024 close Cullgen
Slide 35: Macro Economy Discussion
Macro Economy Discussion Macro factors: interest rate trends • As interest rates began to rise in April, growth stocks were sold in inverse proportion to the market. • Among these, our company's stock, which has a large liquid market capitalization, was sold. → Japan Securities Dealers Associations'
Slide 36: 7. Supplementary Materials
7. Supplementary Materials © 2024 GNI Group Ltd. All rights reserved Reference Translation 35
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％ Shanghai Miclene Berkeley Advanced Gyre Therapeutics Shanghai OsDerma Cullgen Genomics Healthcare Biomaterials (NASDAQ: GYRE) REEF Technology DMAH Biomateria
Slide 38: Development Pipeline of Gyre Therapeutics & Gyre Pharmaceuticals
Development Pipeline of Gyre Therapeutics & Gyre Pharmaceuticals Candidate Indication Preclinical Phase 1 Phase 2 Phase 3 Marketed Location NASH-Associated Liver Fibrosis Plan to initiate Phase 2a trial in 2025 USA F351 (Hydronidone) Completed enrollment of CHB-Associated Liver Fibrosis patients in
Slide 39: Development pipeline of Cullgen
Development pipeline of Cullgen © 2024 GNI Group Ltd. All rights reserved Reference Translation 38
Slide 40: Market size of ETUARY: IPF drug market in China
Market size of ETUARY®: Idiomatic Pulmonary Fibrosis (IPF) drug market in China (100 million yen) 1,400 1,274 1,200 1,133 987 1,000 848 800 716 603 600 508 408 400 322 244 188 200 64 95 19 33 - 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: Frost & Sullivan (conve
Slide 41: 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
Slide 42: 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
Slide 43: 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
Slide 44: 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