Consolidated Financial Results for the Three Months Ended April 30, 2022

Consolidated Financial Results

for the Three Months Ended April 30, 2022

[Japanese GAAP]

June 14, 2022

Company name: SanBio Company Limited

Stock exchange listing: Tokyo Stock Exchange

Code number: 4592

URL: https://www.sanbio.com/

Representative: Keita Mori, Representative Director and President

Contact: Yoshihiro Kakutani, Corporate Officer of Management Administration

Phone: +81-3-6264-3481

Scheduled date of filing quarterly securities report: June 14, 2022

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on financial results: No

Schedule of financial results briefing session: No

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Three Months Ended April 30, 2022 (February 1, 2022 to April 30, 2022)

(Note) Comprehensive income: Three months ended April 30, 2022: ¥(2,945) million [-%] Three months ended April 30, 2021: ¥(1,491) million [-%]

(Note) Diluted net income per share is not stated as net loss per share was recorded although there are potential shares with dilutive effect.

(2) Consolidated Financial Position

(Reference) Equity: As of April 30, 2022: ¥2,056 million As of January 31, 2022: ¥1,708 million

2. Dividends

(Note) Revision to the forecast for dividends announced most recently: No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending January 31, 2023 (February 1, 2022 to January 31, 2023)

(% indicates changes from the previous corresponding period.)

(Note) Revision to the financial results forecast announced most recently: No

(Note) As of June 14, 2022, the NHI drug price which will be determined after the manufacture and marketing approval of the Company's regenerative medicine product SB623 for the chronic traumatic brain injury in Japan (hereinafter referred to as the "Approval") is not yet determined. For this reason, operating revenue related to SB623 is not reflected in the above financial results forecast. The Company will consider disclosing operating revenue and other data after the date of the drug price is determined. The financial results forecast figures in this document were estimated on the basis of projections until the Approval. The Company plans to revise these forecast figures to reflect its post-approval business plans once being sure that the Approval will be granted.

Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No
2. Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: No
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Primary Notes, (3) Notes to the Quarterly Consolidated Financial Statements (Changes in accounting policies)" on page 7 of the attachment.

1. Total number of issued shares (common shares)
2. 1. Total number of issued shares at the end of the period (including treasury shares): April 30, 2022: 54,703,402 shares
      January 31, 2022: 51,793,402 shares

1. Total number of treasury shares at the end of the period: April 30, 2022: 196 shares
   January 31, 2022: 196 shares
2. Average number of shares during the period

Three months ended April 30, 2022: 52,807,026 shares

Three months ended April 30, 2021: 51,786,683 shares

*These quarterly financial results are outside the scope of quarterly review by a certified public accountant or an audit corporation.

* Explanation of the proper use of the financial results forecast and other notes

The earnings forecasts and other forward-looking statements herein are based on information available to the Company at the time of preparation and certain assumptions deemed to be reasonable, and the Company does not assure the achievement of any of these. Furthermore, actual results may vary significantly due to various factors. For the assumptions and notes for earnings forecasts, please refer to "1. Qualitative Information on Quarterly Financial Results for the Period under Review, (3) Explanation of Consolidated Financial Results Forecast and Other Forward- looking Information" on page 3 of the attachment.

1

1. Qualitative Information on Quarterly Financial Results for the Period under Review

(1) Explanation of Operating Results

In the Japanese regenerative medicine industry, amid ongoing promotion of the industry by implementation of the Act on the Safety of Regenerative Medicine and the Revised Pharmaceutical Affairs Act of November 2014, a record number of five products were approved for manufacture and marketing as regenerative medicine products in 2021. In addition, in the US, the Regenerative Medicine Advanced Therapy (RMAT) Designation program was established under the 21st Century Cures Act which was passed in December 2016, which enables expedited approval of regenerative medicine products for the purpose of treatment of serious diseases. In 2021, biologics license applications (BLAs) were approved for three products designated as RMAT, including one that received BLA approval as an RMAT-designated product for the first time. In 2022, as of the end of April, two products were already approved for manufacture and marketing as regenerative medicine products in Japan, and the practical application of regenerative medicine continued to steadily progress.

In this environment, the Group (hereinafter referring to three companies: the Company, SanBio, Inc. of Mountain View, California, US, and SanBio Asia Pte. Ltd. of Singapore) promoted research and development aiming at the commercialization of its unique regenerative cell medicine, SB623, mainly for central nervous system diseases with high unmet medical needs.

For the SB623 development program for treatment of chronic traumatic brain injury, in the Phase 2 global clinical trial including Japan and involving 61 patients, the Group obtained positive results in November 2018 that the "patients treated with SB623 cells demonstrated a statistically significant improvement in their motor function compared to the control group, and the primary endpoint was met." In April 2019, the development program for treatment of chronic traumatic brain injury in Japan was chosen as a designated regenerative medical product by the Ministry of Health, Labour and Welfare under the "SAKIGAKE Designation System." Since the designation, under the framework of the SAKIGAKE Designation System, the Company has negotiated with the Pharmaceuticals and Medical Devices Agency (PMDA), completed the SAKIGAKE comprehensive evaluation consultation in January 2022, and submitted the application for approval of manufacture and marketing of regenerative medicine products in Japan (hereinafter referred to as the "application for approval") in March 2022 for the first time. The Company will respond to the review by PMDA in order to obtain approval, and steadily proceed with preparations for establishment of sales structure so that sales can be started promptly after approval is obtained.

For the SB623 development program for treatment of chronic hemorrhagic stroke that began following the positive results of the program for treatment of chronic traumatic brain injury, efforts are being made to begin clinical trials in Japan.

For the SB623 development program for treatment of chronic ischemic stroke, efforts are being made to begin clinical trials in Japan based on the results of an additional analysis on the Phase 2b clinical trial in 163 patients in the US, which failed to meet its primary endpoint.

Under these circumstances, during the three months ended April 30, 2022, the Company recorded ¥1,370 million in research and development expenses mainly consisting of manufacturing-related costs incurred in applying for approval with respect to the SB623 development program for treatment of chronic traumatic brain injury. As a result, operating loss was ¥1,844 million (operating loss of ¥1,540 million for the same period in the previous fiscal year). On the other hand, the Company recorded ¥2,729 million of foreign exchange gains as non- operating income owing to the foreign exchange gains resulting from fluctuations in foreign exchange rates. Furthermore, ordinary income was ¥869 million (ordinary loss of ¥855 million for the same period in the previous fiscal year), income taxes - deferred was ¥1,184 million, and net loss attributable to owners of parent was ¥315 million (net loss attributable to owners of parent of ¥860 million for the same period in the previous fiscal year).

The Group consists of a single business segment, regenerative cell therapy using modified allogeneic stem cells. Therefore, description of business performance by segment is omitted.

2