SanBio Company Limited (4592) Earnings Call Transcript & Summary

Hello. This is Keita Mori from SanBio. Thank you for joining this call today. As always, I am delighted to share updates with everyone. So we have the usual format, and I would like to start off with the financial results. First of all, our income statement. As the development stage company, I think the investors and everybody is looking at the R&D expense as well as the operating expense. In this half year, we spent about JPY 3 billion in the last 6 months. And this expense is mainly consisting of manufacturing-related costs incurred towards the -- our efforts to get the product approval for SB623. Next, I would like to go over the balance sheet. Here, I think the investors again looking at the cash and cash equivalent, so I will focus on this in my updates. As you can see, we have some slight reduction from last time point, but we continue to maintain a certain level of cash necessary for obtaining the product approval. Specifically, we do have JPY 4.6 billion at the end of this quarter. So this time, I would like to go some of the details on the financial results as we have experienced some differences between the forecast and the actual results. So this table is -- the first row is the forecast. Second row is the actual results. The third row is the change, so this is the row that I would like everybody to keep an eye on here. So we experienced a difference of about JPY 686 million difference. Basically, we spent more than we forecasted. This increase was driven by two things: one is the increased cost due to the manufacturing. And the second component is from the -- we conducted a restructuring of our U.S. subsidiaries, SanBio Inc., and this is a onetime expense, which we incurred this past quarter. So now I would like to provide updates on our business. Just to remind everyone, we are in the regenerative medicine space. We aspire to be a global leader in regenerative cell medicine and by initially focusing and establishing the category of the [ CNS ] regenerative medicine. We aspire to regenerate brain. This is something that people have been thinking is impossible for 100 years, but we have a product candidate that we believe we can change this norm. Within the regenerative medicines for CNS or brain or eyes or spine, we have a number of our product candidates. The most advanced product is SB623. We've tested this product in our various indications, stroke, TBI and others. We've taken stroke and TBI into clinical trial. And of the two, TBI is furthest along, and we are aiming to get our first product approval in Japan. And there is a reason why we focus on Japan. Regenerative medicine framework or regulatory framework was infused in 2014, allowing one of the most proactive framework, if not the most, proactive framework in this -- compared to the other -- rest of the world. So based on this, I would like to focus on our Japan initiative of our product candidate, SB623 and mainly for the TBI patients. This slide shows the entire process from the prefiling through filing, approval and the launch. This is something that we already updated in the past. We completed the filing of our product candidate back in 2022, so that's been already filed. We wanted to get the approval within 6 months and Sakigake designation, which is the idea of this framework. It did take us somewhat double time, and it's been about 1.5 years, and we continue to work with the agency to get the approval. We continue to remain optimistic and that we are working on this program. So now I'd like to focus on our progress in our last 3 months, last quarter. A little bit of background. Our update has been focusing on production and especially production yield because this is the remaining area that we believe is the area that we need to resolve and practicing to our agency satisfaction. In other words, there are other areas, clinical and nonclinical, the review has gone smoothly in our eyes and we believe that the remaining is a production. In the last quarter and the quarter before, we did provide a very detail update on our production challenge yield. And in the last quarter, we announced that we'll be working additional efforts in this area, and we expected to get the outcome and announced this in August of this year, so that was the last move. So here is a press release that we issued 2 weeks ago on August 31. The 3 months, we have very rigorously worked on investigation, the measures and production run. And as the result, we did confirm improvement in the production yield. Regarding the details and more actual background, we actually are in a position to have to keep this confidential due to the fact that the review with the agency has progressed. And we will continue to pursue the product approval within this fiscal year. So this is the update of the 3 months. And the other areas like clinical, nonclinical, we have not had any surprises in the last 3 months, and our work is steadily progressing. So now I would like to turn over to Mr. Naoki Tsukahara, to talk about the launch readiness activities. So Tsukahara-san, please.

Okay. Thank you, Keita-san. Okay. Let me explain the status for the post-approval activities. As shown in the slide, there are several items we need to prepare more set up to launch SB623 after regulatory approval. We are already in negotiating drug price and how to get medical treatment fee for cell preparation and surgical procedures to be approved. Preparation for logistics of SB623 and the governance and sales structures of promoting SB623 are also already set up. So we are ready, and we are just wanted to get the final approval.

This is Keita Mori again. And now I would like to continue on the expansion strategy or maximizing the company value. So Naoki and myself, we focused our updates on our initiative in Japan, SB623, because we must admit, it's a lot of work to get the completely a new category of medicine into approval and commercialization. It's completely a new modality, and we have lots of patients who are waiting on this new innovative products. So therefore, we intentionally emphasizing and focusing our efforts in our first approval. Our Japan approval is important, but it's beginning. And it's an important beginning where we will be taking this product into a global, U.S., Europe, China, and also extended into many indications, stroke and hemorrhage. We have already put this into a clinical stage, and that will be initially focusing on these 3 big indications in global commercialization. Our next slide also talks about our opportunities beyond the 3 big indications. And we have opportunities in other areas such as age-related macular degeneration, Retinitis pigmentosa. These are the retina, eye diseases, Parkinson's disease, spinal cord injury or Alzheimer’s and other diseases. And we are, I think, very excited that these are areas where either there are no drugs or whether there are no really effective drugs, I think these are really the worthwhile indications to pursue. We have a lot to do, but I think we are looking forward to get the first approval. And based on this progress and milestone, we intend to expand. And by tackling and helping many areas of diseases, we aspire to become a global leader in regenerative medicine. Thank you very much for your time for this quarter's update.