Slide 1: H1 FY2020 Financial Results & Strategy Update
NON-CONFIDENTIAL H1 FY2020 Financial Results & Strategy Update Six-month period ended June 30, 2020 August 13, 2020 | Sosei Group Corporation (TSE:4565)
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general background information about Sosei Group Corporation and its subsidiaries (collectively, the “Company”) as of the date of this presentation. This material has been prepared solely for informational purposes and is not to be construed
Slide 3: Agenda
Agenda 1 Overview of Financial Results 2 Operational Highlights 3 Strategy Update 4 Appendix Note: This material was created to explain the details of our company and is not intended to be used for investment decisions. In addition, the contents reflect the views of our company at the time of the cr
Slide 4: Overview of Financial Results
1 Overview of Financial Results Chris Cargill, CFO 4
Slide 5: H1 2020 Financial Results Commentary
H1 2020 Financial Results Commentary Six-month period ended June 30, 2020 COVID-19 pandemic forced us to adapt quickly to ensure business continuity. R&D facility 1 operational throughout entire UK lockdown to support our partners, with high levels of scientific productivity maintained. New discover
Slide 6: H1 2020 Financial Results Commentary (continued)
H1 2020 Financial Results Commentary (continued) Six-month period ended 30 June 2020 Stable cash balance maintained despite accounting loss. June cash balance totalled JPY15,362m 4 (USD142.6m). Unique and diversified business model focused around partnered and in-house drug discovery and early devel
Slide 7: H1 2020 revenue decline driven by low upfront fee and milestones
H1 2020 revenue decline driven by low upfront fee and milestones, with the prior period benefitting from a USD15m milestone JPY m USD m 5,056 45.9 547 5.0 135 1.2 • Upfront Fees (UF) & Milestones: prior 2,516 H1 2019 period contained 23.2 3,173 28.8 a one-time USD15m 544 milestone from 5.0 753 Astra
Slide 8: Costs carefully managed – 'technical' Q2 tax charge accentuates net loss
Costs carefully managed – ‘technical’ Q2 tax charge accentuates net loss Consolidated Income Statement JPY m USD m Commentary 6m ended 6m ended 6m ended 6m ended 30 Jun 2020 12 30 Jun 2019 12 30 Jun 2020 12 30 Jun 2019 12 • Cash R&D: declined due to successful recovery of Revenue 2,516 5,056 23.2 45
Slide 9: Diversified biotech business model generated significant cash inflows from operating activities
Diversified biotech business model generated significant cash inflows from operating activities Consolidated Balance Sheet JPY m USD m Cash Flow Bridge (6m to 30 Jun 2020)2 As of As of As of As of USD m 30 Jun 31 Dec 30 Jun 31 Dec 202012 20191 202012 20191 Goodwill & intangibles 25,304 27,364 234.9
Slide 10: Unchanged FY2020 Financial Guidance (12m to 31-Dec-20)
Unchanged FY2020 Financial Guidance (12m to 31-Dec-20) Cash R&D expenses Cash G&A expenses JPY 4,200 to 4,700m JPY 1,800 to 2,300m Increase number of programs fully New ERP* project has commenced Guidance funded by partners with Oracle Netsuite selected (FY2020) Extract savings from enhanced
Slide 11: Successful International Offering raised net proceeds of JPY 20.9bn
Successful International Offering raised net proceeds of JPY 20.9bn Long-term growth capital to fast track our corporate ambition Proforma Cash Flow Bridge JPY m Largest biotech-focused capital raise out of Japan during COVID-19 pandemic Despite uncertain global economic outlook, strong levels o
Slide 12: H1 FY2020 Operational Highlights
2 H1 FY2020 Operational Highlights Shinichi Tamura, Chairman and CEO 12
Slide 13: Summary Operational Highlights
Summary Operational Highlights Six-month period ended June 30, 2020 New Discovery Collaboration and Option to License Agreement with AbbVie discover, develop and commercialize novel small molecules targeting inflammatory and autoimmune diseases Enerzair® Breezhaler® (QVM149) was approved in Japan
Slide 14: Summary Operational Highlights (continued)
Summary Operational Highlights (continued) Six-month period ended June 30, 2020 Initiated COVID-19 R&D Program to identify novel compounds that block the activity of the SARS-CoV-2 MPro protease and future variants, a protein essential for the viral life cycle Search underway for potentially trans
Slide 15: Swift action kept our R&D facility open throughout lockdown
Swift action kept our R&D facility open and operational throughout lockdown, maintaining high levels of drug discovery productivity Remote working procedures in place. 1 90% Essential R&D staff working optimized rotas Social distancing and enhanced hygiene Drug Discovery 2 measures enacted at all of
Slide 16: On track to meet FY2020 goals outlined in February
On track to meet FY2020 goals outlined in February 1 2 3 4 5 6 Maintain Enter new high Achieve Seed multiple Advance Create new technology value drug important new in-house selected in- long-term and platform discovery and milestones on drug house asset-centric leadership in development exis
Slide 17: Strategy update
3 Strategy update Shinichi Tamura, Chairman and CEO 17
Slide 18: Organic growth plan focused on building a broad pipeline
Organic growth plan focused on building a broad pipeline to fuel multiple high value partnerships and co-owned investments Extend technology / SBDD platform leadership ORGANIC Generate novel candidates, with the aim of 2 new GROWTH PLAN preclinical candidate nominations per year Advance broad dr
Slide 19: Productive StaR/SBDD drug discovery engine continues to generate candidates
Productive StaR®/SBDD drug discovery engine continues to generate multiple high quality candidates for the pipeline LAST 10 YEARS (StaR® / SBDD GENERATED) MEDIUM-TERM OUTLOOK DRUG DISCOVERY EARLY DEVELOPMENT TECHNOLOGY DRUG DISCOVERY Produced Deliver at least Generate on average Generated 24 7 4 2 I
Slide 20: Broad and deep pipeline will continue to fuel future value creation
Broad and deep pipeline will continue to fuel future value creation Pre-Discovery / Preclinical Phase 1 Phase 2 Approved Marketed Discovery development Single target A2A ant. A2a ant. combo(s) Enerzair® Breezhaler® Ultibro® Breezhaler® Discovery Metabolic Solid tumors mCRPC Asthma COPD Collaboration
Slide 21: Executing high value partnerships and co-owned investments are core to our strategy
Executing high value partnerships and co-owned investments are core to our balanced strategy Approaches to drug discovery and development RISK Strategic focus on generating programs Self-developed that will attract large partnership and opportunities with global pharma and commercialized biotech o
Slide 22: Newly announced deal with AbbVie consistent with strategy
Newly announced deal with AbbVie consistent with strategy to execute high value partnerships and co-owned investments Initial focus on novel small molecules targeting autoimmune and 1 inflammatory diseases “Combining AbbVie’s more Sosei Heptares to apply its StaR®/SBDD capabilities and take candidat
Slide 23: New deal with AbbVie the latest of three major deals in the past 12 months
New deal with AbbVie the latest of three major deals in the past 12 months Upfront / Near Potential Partner Program Additional Details Term Payments Total Deal Value1 2020 Discovery Inflammatory and autoimmune Collaboration and $32m $400m+ diseases Option to License2 2019 Multi-target $26m $1.2bn+ I
Slide 24: Strategic growth plan focused on acquiring a revenue generating asset
Strategic growth plan focused on acquiring a revenue generating asset, and investing in technologies at the forefront of science Seek out a transformative revenue-generating acquisition STRATEGIC Future-proof drug discovery platform by GROWTH PLAN investing in novel technologies Expand beyond GP
Slide 25: We are searching for a transformative revenue-generating acquisition
We are searching for a transformative revenue-generating acquisition Illustrative Example – Pro Forma Revenue Impact Acquisition search has commenced for JPY 10bn+ (USD 100m+) revenue-generating companies, products or per year assets Core target criteria includes minimum revenue generation of at
Slide 26: We plan to future-proof our drug discovery platform
We plan to future-proof our drug discovery platform, and also expand into new drug target classes OUR CURRENT APPROACH FUTURE-PROOFING DRUG DISCOVERY BY INVESTING IN NEW TECHNOLOGIES TO DRUG DISCOVERY EXPANDING DRUG DISCOVERY BEYOND GPCRs INTO NEW TARGET CLASSES Bioinformatics AI / Machine Learning
Slide 27: We plan to in-license late-stage assets for the Japanese market
We plan to in-license late-stage assets from global pharma and develop them specifically for the Japanese market DRUG DISCOVERY EARLY DEVELOPMENT LATE STAGE DEVELOPMENT PRE-DISCOVERY DISCOVERY PRECLINICAL PH 1a PH 1b/2a PH 2b/3 APPROVAL StaR® Technology SBDD DMPK SAD Dosing assessment • Bring novel
Slide 28: Strongly enabled to fast-track our corporate ambitions
Strongly enabled to fast-track our corporate ambitions ORGANIC GROWTH PLAN STRATEGIC GROWTH PLAN Extend technology / Generate high quality Seek out revenue- Invest / collaborate in platform leadership novel candidates generating acquisitions novel technologies Advance discovery and Execute high valu
Slide 29: Appendix
4 Appendix 29
Slide 30: Proforma Unaudited Balance Sheet (As of 30-Jun-20)
Proforma Unaudited Balance Sheet (As of 30-Jun-20) Adjusted for net proceeds (USD194m) of Int’l Offering of new shares and convertible bonds JPY million USD million As of 30 Jun 2020 As of 31 Dec 2019 As of 30 Jun 2020 As of 31 Dec 2019 Goodwill & intangibles 25,304 27,364 234.9 249.8 Property, plan
Slide 31: Locations
Locations SOSEI HEPTARES PMO Hanzomon 11F Steinmetz Building North West House 2-1 Kojimachi, Chiyoda-ku Granta Park, Cambridge 119 Marylebone Road Tokyo 102-0083 CB21 6DG London NW1 5PU Japan United Kingdom United Kingdom