Gni Group Ltd. · TSE:2160

Gni — Q3 FY2023 Earnings Presentation

47 slides from Gni's earnings presentation, December 2023

Slide 1: Financial Results for FY2023 Q3
GNI Group Ltd. Financial Results for FY2023 Q3 Reference Translation Securities Code: 2160
Slide 3: Agenda
Agenda 1. Company Profile 2. Financial Highlights 3. Upward Revision of Full-year Forecast 4. Topics 5. GNI’s Value 6. Supplementary Material © 2023 GNI Group Ltd. All rights reserved Reference Translation 3
Slide 5: Company Overview
COMPANY OVERVIEW Head Office Address Main business 〒103-0023 Global pharmaceutical R&D, manufacturing and distribution, and 2-2, Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo bio-materials businesses Nihonbashi Honcho YS Building 3rd Floor Incorporation President and CEO 2001 Nov. Ying Luo Ph.D. Common
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 USA and Japan in developing new therapeutic products for unmet medical needs
Slide 7: Group Structure
Group Structure GNI Group Ltd. Tokyo and Japan (TSE: 2160) 100% 74% 100% GNI 26% Shanghai GNI USA Hong Kong Genomics 60% 100% 20% 85%1) 39% 80% 80% Miclene Berkeley Shanghai OsDerma Gyre Shanghai Advanced Cullgen Genomics Healthcare (NASDAQ listing) Leaf Biomaterials Technology DMAH (selected Drug D
Slide 8: Major subsidiaries
Major subsidiaries Name Full Name/Description Berkeley Advanced Biomaterials LLC BAB Biomaterial Business Development in the U.S. (Medical Device Segment) Gyre Therapeutics, Inc. Gyre Developing MASH therapeutics Holds F351's non-Chinese rights Beijing Continent Pharmaceutical Co., Ltd Drug Discover
Slide 9: From Drug Discovery Success to Pharmaceuticals
What is GNI Group (1) From Drug Discovery Success to Pharmaceuticals (１００ Million JPY) © 2023 GNI Group Ltd. All rights reserved. Reference Translation 9
Slide 10: Industry's scarce, profitable companies
What is GNI Group (2) Industry's scarce, profitable companies (Millions of yen) Pre-R&D Operating Profit (left) Revenue (Right) 10,000 25,000 9,000 8,579 8,000 20,000 7,000 6,000 15,000 5,000 3,923 4,000 3,640 10,000 3,112 3,000 2,060 2,000 5,000 1,098 1,000 422 0 0 2017 2018 2019 2020 2021 2022 202
Slide 11: High development capabilities recognized worldwide
What is GNI Group (3) High development capabilities recognized worldwide Signed a large-scale contract with Astellas Pharma Inc. totaling ~¥300 billion (Subsidiary Cullgen) Investment received from AstraZeneca funds (Subsidiary Cullgen) © 2023 GNI Group Ltd. All rights reserved Reference Translation
Slide 12: Hold a Nasdaq-listed company
What is GNI Group (4) Hold a Nasdaq-listed company Extremely rare among listed Japanese companies To have a Nasdaq-listed company As a subsidiary © 2023 GNI Group Ltd. All rights reserved Reference Translation 12
Slide 13: GNI Group is a Japanese corporate group that operates globally
GNI Group is, in the end, is a Japanese corporate 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 fo
Slide 15: Income Statement Summary
Income Statement Summary Dramatic increases in both sales and profits Record-high sales and profits 2022 3Q YTD Vs. Revenue 2023 3Q YTD Vs. Revenue Increase Rate Millions of yen Revenue 12,761 100.0% 20,547 100.0% 61.0% Gross profit 10,853 85.1% 18,178 88.5% 67.5% SG&A 7,498 58.8% 9,556 46.5% 27.4%
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights Substantial increase in liquidity on hand 2020 End 2021 End 2022 End 2023 3Q Increase Rate Millions of yen Total non-current assets 10,194 12,109 16,759 21,766 29.9% Total current assets 13,024 18,187 17,147 26,701 55.7% Total assets 23,219 30,296 33,906 48,468 42.9% Total n
Slide 17: Ample Cash
Ample Cash Cash 21.3 billion yen Current assets 26.7 billion yen Cash and cash equivalents 18.14 billion yen Other financial assets (long-term deposits) 3.16 billion yen © 2023 GNI Group Ltd. All rights reserved Reference Translation 17
Slide 18: R&D Expenses
R&D Expenses (Millions of yen) FY2020 FY2021 FY2022 FY2023 Full year Full year Full year Q3 YTD Consolidated R&D costs 1,243 2,015 2,545 1,776 Capitalized development costs 60 336 606 655 Total 1,303 2,351 3,151 2,431 © 2023 GNI Group Ltd. All rights reserved Reference Translation 18
Slide 20: Upward Revision of Full-year Results
Upward Revision of Full-year Results ① Strong revenue from ETUARY® ② Stable monthly revenue based on a large-scale contract with Astellas Pharma Inc. (Reference) Previous Forecast Actual figures Change Rate of change (%) Previous year (A) (B) (B-A) Millions of yen (FY2022) Revenue 25,273 26,267 994
Slide 21: Strong sales of ETUARY
Topic (1) Strong sales of ETUARY® ① Revenue size Q3 2022 YTD Q3 2023 YTD 9.7 billion yen → 11.7 billion yen (Q2 YTD: ¥6.3 billion) (Q2 YTD: ¥7.3 billion) ② Further expansion = In order to meet various needs, Active clinical trials to expand indications © 2023 GNI Group Ltd. All rights reserved Refer
Slide 22: Signing a large-scale contract with Astellas Pharma
Topic (2) Signing a large-scale contract with Astellas Pharma Inc. In addition to one-time income Monthly stable earnings are generated © 2023 GNI Group Ltd. All rights reserved Reference Translation 22
Slide 25: Gyre Therapeutics description
Topic (1) Description GNI Group A subsidiary with 85.2% ownership* Gyre Therapeutics, Inc.(GYRE) A subsidiary 69.7% ownership Beijing Continent (BC) *After conversion of preferred stock © 2023 GNI Group Ltd. All rights reserved Reference Translation 25
Slide 27: Significance of the Gyre listing
Topic (1) Significance ・Accelerate Global Growth ・Groundwork for becoming a global mid-tier pharmaceutical company = Acquiring of global valuations © 2023 GNI Group Ltd. All rights reserved Reference Translation 27
Slide 28: Completed F351 Ph3 enrollment
Topic (2) Drug Discovery Progress Completed F351 Ph3 enrollment Over 2 months ahead of schedule Achieved in October 2024 data announced →Aim to launch early F351 is a promising therapeutic drug candidate which BC is developing for pulmonary fibrosis for which an approved drug still does not exist. I
Slide 29: F351 Phase III Clinical Trial Enrollment Progress
F351 Phase III Clinical Trial Enrollment Progress October 26, 2023 Target enrollment of 248 subjects completed Number 300 of subjects enrolled Target: 248 248 250 235 200 157 150 100 94 74 48 50 21 8 0 2022Q1 2022Q2 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2023/10/26 © 2023 GNI Group Ltd. All rights reser
Slide 30: BC - F351 in China; Gyre non-Chinese F351
Topic (2) Future Developments BC - F351 in China Expansion of Ice Revue Application Gyre - Non-Chinese F351 MASH in the USA* Phase II trial to be initiated Toward global expansion *Previously known as Nonalcoholic steatohepatitis (NASH) →Metabolic Associated Steatohepatitis © 2023 GNI Group Ltd. All
Slide 31: Biomaterials Business M&A
Topic (3) Biomaterials Business M&A A Nasdaq-listed company Elutia Acquisition of orthobiologics business ↓ Biomaterials business Increase revenue to ¥5 billion for the next fiscal year || To increase stable earnings © 2023 GNI Group Ltd. All rights reserved Reference Translation 31
Slide 32: Increasing market capitalization
Topic (4) Increasing market capitalization Partial revision of corporate valuation Increasing Market capitalization ↓ Moving up to Tokyo Stock Exchange Prime Market in sight © 2023 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 (incl. BC) 400 million yen 251.7 billion yen *Listed on Nasdaq (GNI owned portion) ※ Based on November 30, 2023 close Cullgen 8.8 billion yen ???? billion yen *Arvinas (a comparable) market cap: more than ¥130 billion BAB 6.4 billio
Slide 35: What is the fair market capitalization?
Point: GNI Group’s Value GNI market capitalization 160.6 billion yen ※ Based on November 30, 2023 close Net cash 20.0 billion yen Gyre (GNI-owned portion) 251.7 billion yen Cullgen ???? billion yen BAB ???? billion yen What is the fair market capitalization? © 2023 GNI Group Ltd. All rights reserved
Slide 36: Market value-based PBR
Point: Market value-based PBR GNI market capitalization of ¥160.6 billion Book Value Basis (BS) Market value basis Liabilities 21.8 billion Liabilities 21.8 billion yen yen Assets Net assets Net assets at market 48.4 billion yen 24.2 billion yen Fair value assets * value Non-controlling 299.7 billio
Slide 37: Growth + Value
Point: Growth + Value GNI Group is the corporate group which Maintains high growth (growth stock) but also Possesses ample assets and has a facet of an under-valued stock (value stock) © 2023 GNI Group Ltd. All rights reserved Reference Translation 37
Slide 38: Warrants Removed
Point: Warrants Removed 46th and 47th = All exercised 48th = All bought back All cancelled Remaining warrants for institutional investors => None Resolved future dilution concerns © 2023 GNI Group Ltd. All rights reserved Reference Translation 38
Slide 40: BC's Development Pipeline
BC's Development Pipeline Beijing Continent pharmaceutical co. ltd Product Indication Preclinical Phase I Phase II Phase III NDA ETUARY® Dermatomyositis Interstitial Lung Fibrosis-associated (Pirfenidone) disease (DM-ILD) Systemic Sclerosis-associated Pulmonary Diseases Interstitial Lung Disease (SS
Slide 41: Cullgen's Development Pipeline
Cullgen's Development Pipeline Target Area Indication preclinical Phase I Phase II Phase III NDA Breast, pancreatic, lung cancer, malignant Cell cycle (a) melanoma, novel immunotherapeutics Cell cycle (b) Breast and ovarian cancer Epigenetics Prostate and bladder cancer Metabolism Novel Immunotherap
Slide 42: 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
Slide 43: ETUARY Unit Price Trends
ETUARY® Unit Price Trends (Unit: yen) ETUARY® Average Price per Bottle 15,000 12,462 12,305 12,211 12,335 12,198 12,150 10,000 5,000 0 FY2020 FY2021 FY2022 FY2023Q1 FY2023Q2 FY2023Q3 © 2023 GNI Group Ltd. All rights reserved Reference Translation 43
Slide 44: 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
Slide 45: 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)
Slide 46: 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
Slide 47: 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

GNI Group — Q3 FY2023 Earnings Presentation on 6ix

Gni — Q3 FY2023 Earnings Presentation

Slide 1: Financial Results for FY2023 Q3

Slide 2: We Bring New Hope to Life

Slide 3: Agenda

Slide 4: 1. Company Profile

Slide 5: Company Overview

Slide 6: Ying Luo

Slide 7: Group Structure

Slide 8: Major subsidiaries

Slide 9: From Drug Discovery Success to Pharmaceuticals

Slide 10: Industry's scarce, profitable companies

Slide 11: High development capabilities recognized worldwide

Slide 12: Hold a Nasdaq-listed company

Slide 13: GNI Group is a Japanese corporate group that operates globally

Slide 14: 2. Financial Highlights

Slide 15: Income Statement Summary

Slide 16: Balance Sheet Highlights

Slide 17: Ample Cash

Slide 18: R&D Expenses

Slide 19: 3. Upward Revision of Full-year Forecast

Slide 20: Upward Revision of Full-year Results

Slide 21: Strong sales of ETUARY

Slide 22: Signing a large-scale contract with Astellas Pharma

Slide 23: 4. Topics

Slide 24: Birth of Gyre

Slide 25: Gyre Therapeutics description

Slide 26: Gyre listed on NASDAQ

Slide 27: Significance of the Gyre listing

Slide 28: Completed F351 Ph3 enrollment

Slide 29: F351 Phase III Clinical Trial Enrollment Progress

Slide 30: BC - F351 in China; Gyre non-Chinese F351

Slide 31: Biomaterials Business M&A

Slide 32: Increasing market capitalization

Slide 33: 5. GNI Group's Value

Slide 34: Book Value versus Market Value

Slide 35: What is the fair market capitalization?

Slide 36: Market value-based PBR

Slide 37: Growth + Value

Slide 38: Warrants Removed

Slide 39: 6. Supplementary Material

Slide 40: BC's Development Pipeline

Slide 41: Cullgen's Development Pipeline

Slide 42: Market Size of ETUARY: Pulmonary Fibrosis Drugs Market in China

Slide 43: ETUARY Unit Price Trends

Slide 44: F351 Phase II Top-line Data Overview (1/3)

Slide 45: F351 Phase II Top-line Data Overview (2/3)

Slide 46: F351 Phase II Top-line Data Overview (3/3)

Slide 47: Contact Info: GNI Group Ltd. Investor Relations