Gni Group Ltd. · TSE:2160

Gni — Q1 2024 Earnings Presentation

50 slides from Gni's earnings presentation, September 2024

Slide 1: Financial Results for Q1 FY2024
GNI Group Ltd. Financial Results for Q1 FY2024 Reference Translation Securities Code: 2160
Slide 3: Agenda
Agenda 1. Company Overview 2. Financial Highlights 3. Q1 FY2024 Topics 4. Financial Forecats for FY2024 5. FY2024 Topics 6. GNI Group’s Hidden Value 7. Supplementary Materials © 2024 GNI Group Ltd. All rights reserved Reference Translation 2
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 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: Major subsidiaries
Major subsidiaries Area Name Business NASDAQ listed Holding F351's non-Chinese rights Gyre Therapeutics, Inc. (Gyre Therapeutics) Developing NASH therapeutics Pharmatech Operating drug discovery and pharmaceutical business in the PRC Having over 500 MR and building sales network Gyre Pharmaceuticals
Slide 8: Major Pharmaceutical & Drug Discovery
Major Pharmaceutical & Drug Discovery ＜Pharmaceutical＞ ETUARY®（Commercial name：Pirfenidone）・Chinese：艾思瑞、English：ETUARY® ・Treatment for idiopathic pulmonary fibrosis (IPF) Dominant market share in the PRC ・Clinical developments are underway for expansion of indications（Three Phase３trials）・Donating
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, Profitable Drug Discovery Company
Who we are (2) A Rare, Profitable Drug Discovery Company (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 = Operat
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® Satisfactory safety profile 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 deta
Slide 12: Who we are (4): Holding a NASDAQ listed subsidiary
Who we are (4) Holding a NASDAQ listed subsidiary Extremely rare among Japanese TSE listed companies to have a NASDAQ listed company* as a subsidiary *Gyre Therapeutics, Inc. © 2024 GNI Group Ltd. All rights reserved Reference Translation 11
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 the PRC 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 unlimite
Slide 14: GNI Group: growth stock and value stock
In other words, GNI Group maintains strong growth (Growth stock) while possessing many assets and a facet of an under-valued stock (Value stock). © 2024 GNI Group Ltd. All rights reserved Reference Translation 13
Slide 16: Income statement summary
Income statement summary Record-high in revenue and profit in the first quarter Q1 FY2023 Q1 FY2024 Vs. revenue Vs. revenue Inc. / (Dec.) Millions of yen Cumulative total Cumulative total Revenue 4,206 100.0% 5,948 100.0% 41.4% Gross profit 3,632 86.4% 4,731 79.5% 30.2% Selling, general and 2,646 62
Slide 17: Balance sheet summary
Balance sheet summary Retained earnings increased significantly due to profit boost FY2021 End FY2022 End FY2023 End Q1 FY2024 Inc. / (Dec.) Millions of yen Actual Actual Actual Cumulative total Total non-current assets 12,109 16,759 31,487 33,620 6.8% Total current assets 18,187 17,147 30,907 31,97
Slide 18: Ample cash
Ample cash 12.5 billion yen 24.8 billion yen 98% increase Q1 FY2023 Q1 FY2024 Current Assets Cash and cash equivalents 10.5 billion yen 20.3 billion yen Time Deposits 190 million yen 1.11 billion yen Non-Current Assets 1.78 billion yen 3.41 billion yen Long-term Deposits © 2024 GNI Group Ltd. All ri
Slide 19: R&D expenses
R&D expenses Making steady progress (Millions of yen) FY2021 FY2022 FY2023 Q1 FY2024 Actual Actual Actual Cumulative total Consolidated R&D expenses 2,015 2,545 2,557 688 Capitalized development costs 336 606 940 258 Total 2,351 3,151 3,497 947* *27% YoY increase © 2024 GNI Group Ltd. All rights res
Slide 21: Solid progress in the segments
Q1 FY2024 Topic (1) Record-high in profits in the first quarter Solid progress in the segments (100 million yen) ETUARY® Sales 40 MedTech Group Sales 32 22% 120 % 13 increase 6 increase Q1 FY2023 Q1 FY2024 Q1 FY2023 Q1 FY2024 Expecting for further acceleration © 2024 GNI Group Ltd. All rights reserv
Slide 22: Additional profit sources (Pharmatech): Generic orphan drug pipeline
Q1 FY2024 Topic (2) Additional profit sources (Pharmatech) Supplementary Generic Orphan Drug* Pipeline Enhancement of sales pipeline Products under development Avatrombopag Maleate Tablets Indication: Thrombocytopenia due to chronic liver disease Fingolimod Hydrochloride Capsules Indication: Multipl
Slide 23: Acquisition of rights to Nintedanib
Q1 FY2024 Topic (2) Additional profit sources (Pharmatech) Acquisition of rights to other pulmonary fibrosis drug Nintedanib to (May 2024) consolidate leading position in fibrosis || Responding to the needs for non-IPF pulmonary fibrosis Bringing in additional revenue / profit in 2024 and beyond Eff
Slide 24: Expanding the business to Australia
Q1 FY2024 Topic (3) Beyond F351 (Biotech) Expanding the business to Australia 4th operating countries after Japan, the U.S., and the PRC Accelerating the submission of IND application © 2024 GNI Group Ltd. All rights reserved Reference Translation 23
Slide 25: New investment arm to seed future growth
Q1 FY2024 Topic (3) Beyond F351 Toward the establishment of a new investment arm to seed future growth Purpose：Future profit opportunities 1. Profits into PL 2. Proceeds from sale Method：Investment through fund || Minimizing impact on PL & BS © 2024 GNI Group Ltd. All rights reserved Reference Trans
Slide 26: Business alliance with Governance Partners Inc.
Q1 FY2024 Topic (3) Beyond F351 Business alliance with Governance Partners Inc. Speeding up the investment segment 1. Accelerating M&A and search for potential investment targets (incl. listed companies) 2. Strengthening value of portfolio companies © 2024 GNI Group Ltd. All rights reserved Referenc
Slide 27: Joint fund formation
Q1 FY2024 Topic (3) Beyond F351 Joint fund formation Concluded the agreement* aiming to establish US$100 million industrial development fund 1. Investment in a wide range of cutting-edge technologies including AI 2. Investment in healthcare sector *Parties: GNI, Wuxi Binhu City Industrial Developmen
Slide 28: Business alliance with alt Inc.
Q1 FY2024 Topic (3) Beyond F351 Business alliance with alt Inc. Utilizing AI for drug discovery and investment Utilizing AI for the following purposes 1. Assist in remote diagnosis 2. Facilitate clinical development 3. Expand access to future technology © 2024 GNI Group Ltd. All rights reserved Refe
Slide 30: Financial forecasts for FY2024
Financial forecasts for FY2024 Aiming for significant increase in revenue and profit for the second consecutive year 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 ta
Slide 32: Path to the future
FY2024 Topic (1) Path to the future 1. Officially announced* the preparation to move to the Prime Market 2. Aiming to be selected in JPX indices Goal of FY2024: JPX-Nikkei Mid and Small Cap Index Goal after FY2025: JPX-Nikkei Index 400 Index *For more information, please refer to the release dated o
Slide 33: Expansion of operation in Japan through synergistic M&A
FY2024 Topic (2) Expansion of operation in Japan through synergistic M&A Establishment of domestic sales Striking the area balance © 2024 GNI Group Ltd. All rights reserved Reference Translation 32
Slide 34: Revenue expansion and global rollout
FY2024 Topic (3) Revenue expansion and global rollout To complete clinical 1. F351 in the PRC / Phase 3 development in the PRC / Phase 3 To prepare for future clinical 2. NASH in the U.S. / Phase 2a development 3. Operations in Australia 4. Enhancement of product pipeline © 2024 GNI Group Ltd. All r
Slide 35: Preparing for Cullgen's listing
FY2024 Topic (4) (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 34
Slide 36: New CEO appointed in the MedTech Group
FY2024 Topic (5) (MedTech) New CEO was appointed in the MedTech Group Aiming to achieve US$100 million in revenue IPO © 2024 GNI Group Ltd. All rights reserved Reference Translation 35
Slide 38: Point: Book value versus market value
Point: Book value versus market value Book value Current Value Gyre Therapeutics* 180.8 billion yen (incl. Gyre Pharmaceuticals) 13.0 billion yen (GNI owned portion) * Listed on NASDAQ Madrigal Pharmaceuticals Inc. (a competitor) market cap: 703.2 billion yen ※Based on May 14, 2024 close Cullgen 7.3
Slide 39: What is the fair market value?
Point: GNI Group’s Hidden Value GNI market cap 122.3 billion yen GYRE market cap 212.0 billion yen ※ Based on May 14, 2024 close Net cash 18.9 billion yen Gyre (GNI-owned portion) 180.8 billion yen Cullgen ??? billion yen MedTech Group (BAB + BB) ??? billion yen What is the fair market value? © 2024
Slide 40: Point: Market value-based PBR
Point: Market value-based PBR GNI market cap 122.3 billion yen Book Value Basis (BS) Market value basis Liabilities Liabilities 27.8 billion yen 27.8 billion yen Assets Net assets Net assets at market Market value of 65.6 billion yen 34.5 billion yen value assets Non-controlling 215.5 billion yen 24
Slide 41: Point: Growth + Value
Point: Growth + Value GNI Group maintains strong growth (Growth stock) while possessing many assets and a facet of an under-valued stock (Value stock). © 2024 GNI Group Ltd. All rights reserved Reference Translation 40
Slide 43: 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 44: 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 46: Market size of ETUARY: IPF drug market in the PRC
Market size of ETUARY®: Idiomatic Pulmonary Fibrosis (IPF) drug market in the PRC (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 (con
Slide 47: 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 48: 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 49: 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 50: Contact Info: 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 — Q1 2024 Earnings Presentation on 6ix

Gni — Q1 2024 Earnings Presentation

Slide 1: Financial Results for Q1 FY2024

Slide 2: We Bring New Hope to Life

Slide 3: Agenda

Slide 4: 1. Company Overview

Slide 5: Company Overview

Slide 6: Ying Luo Ph.D.

Slide 7: Major subsidiaries

Slide 8: Major Pharmaceutical & Drug Discovery

Slide 9: Who we are (1): From Drug Discovery Success to Pharmaceuticals

Slide 10: Who we are (2): A Rare, Profitable Drug Discovery Company

Slide 11: Who we are (3): Globally recognized for high development capabilities

Slide 12: Who we are (4): Holding a NASDAQ listed subsidiary

Slide 13: GNI Group is a group company that operates globally

Slide 14: GNI Group: growth stock and value stock

Slide 15: 2. Financial Highlights

Slide 16: Income statement summary

Slide 17: Balance sheet summary

Slide 18: Ample cash

Slide 19: R&D expenses

Slide 20: 3. Q1 FY2024 Topics

Slide 21: Solid progress in the segments

Slide 22: Additional profit sources (Pharmatech): Generic orphan drug pipeline

Slide 23: Acquisition of rights to Nintedanib

Slide 24: Expanding the business to Australia

Slide 25: New investment arm to seed future growth

Slide 26: Business alliance with Governance Partners Inc.

Slide 27: Joint fund formation

Slide 28: Business alliance with alt Inc.

Slide 29: 4. Financial Forecasts for FY2024

Slide 30: Financial forecasts for FY2024

Slide 31: 5. FY2024 Topics

Slide 32: Path to the future

Slide 33: Expansion of operation in Japan through synergistic M&A

Slide 34: Revenue expansion and global rollout

Slide 35: Preparing for Cullgen's listing

Slide 36: New CEO appointed in the MedTech Group

Slide 37: 6. GNI Group's Hidden Value

Slide 38: Point: Book value versus market value

Slide 39: What is the fair market value?

Slide 40: Point: Market value-based PBR

Slide 41: Point: Growth + Value

Slide 42: 7. Supplementary Materials

Slide 43: Group structure

Slide 44: Development Pipeline of Gyre Therapeutics & Gyre Pharmaceuticals

Slide 45: Development pipeline of Cullgen

Slide 46: Market size of ETUARY: IPF drug market in the PRC

Slide 47: F351 Phase 2 trial top-line data overview (1/3)

Slide 48: F351 Phase 2 trial top-line data overview (2/3)

Slide 49: F351 Phase 2 trial top-line data overview (3/3)

Slide 50: Contact Info: Investor Relations