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Omega Investment Co., Ltd.

Chiome Bioscience (In-Depth 2Q update)

Share price (8/20)¥244PER(21/12CE)– X
52weeks high/low¥328/178PBR(20/12act)3.46 X
ADVT (¥ mn, monthly)¥187 mnROE(20/12act)-45.60%
Shrs out.40.291 mn, shrsMkt cap¥9.8 bn
Listed marketTSE MothersShr eqty ratio (21/6)85.30%
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4583CB2021Q2UD0827EN

CBA1205 clinical trial progressing well
Starting out-licensing activities following the PCDC patent information disclosure

FY12/2021Q2 financial results: Sales increased by 122% YoY, losses shrank

Chiome Bioscience’s financial results for FY12/2021Q2 were net sales of ¥384mn (up ¥211 mn YoY), operating loss of ¥415mn (operating loss of ¥735mn in 12/2020Q2), ordinary loss of ¥409mn (ordinary loss of ¥735mn in 12/2020Q2), and net loss of ¥408mn (net loss of ¥736mn in 12/2020Q2). Net sales increased 122% and the losses shrank at all levels.

In the Drug Discovery Business, an up-front income for the out-licensing contract  of LIV-2008 / 2008b was recorded in Q1, resulting in the sales of ¥103mn (¥1mn in 12/2020Q2). Sales of the Drug Discovery Support Business was ¥281mn, increasing by ¥ 110mn due to stable expansion of the sales to existing customers. R&D expenses were ¥459mn and decreased by ¥149mn. This is thanks to the declines in the cost of CMC development for CBA-1205 from the previous fiscal year.

As per BS, cash decreased by ¥385mn from the end of December 2020, and total assets were ¥3,328mn (¥3,494mn at the end of December 2020).

Pipeline progress: (see the figure in the next page)

* CBA-1205; The first half of the Phase I trial at the National Cancer Center is progressing well. The Company has changed the development plan and will acquire a larger amount of safety data than originally planned. The second half of the Phase I trial is scheduled to begin some time between the end of 2021 and the first half of 2022.

* CBA-1535; The investigational drug substance is being manufactured by CMO. Although CMC development was delayed from the initial schedule due to COVID-19, the Company maintains that there will be no impact on the clinical trial application schedule. They are considering a change to a clinical trial application in Japan instead of the UK, which they originally planned.

* BMAA: The Company focuses on in-house research and development, as the option contract with SemaThera terminated in May 2021. They will consider diseases other than diabetic macular edema.

* PCDC: In July 2021, the World Intellectual Property Organization published the patent information, and the Company is progressing the out-licensing activities. The target molecule is CDCP1, a first-in-class antibody that targets solid cancers (lung cancer, head and neck cancer, esophageal cancer, colorectal cancer and cervical cancer, etc.).

Utilisation and improvement of ADLib®︎ system:

The Company participated in the Grant Program of the Japan Agency for Medical Research and Development (AMED). By continuing to work on the core technology development utilising and improving the ADLib®︎ system, the company should be able to improve the technology related to the Drug Discovery Support Business and strengthen the in-house Drug Discovery pipeline.

 JPY, mn, %

Net sales

YoY
%

Oper.
profit

YoY
%

Ord.
profit

YoY
%

Profit
ATOP

YoY
%

EPS
(¥)

12/2017

259

3.0

-887

-883

-882

-33.48

12/2018

212

-18.1

-1,539

-1,533

-1,533

-57.26

12/2019

447

110.3

-1,401

-1,410

-1,403

-44.61

12/2020

480

7.4

-1,283

-1,291

-1,293

-39.06

12/2021 (CE)

12/2020 Q2

173

23.1

-735

-735

-736

-22.01

12/2021 Q2

384

122.1

-415

-409

-408

-10.16

Drug discovery and development – pipeline

Note) As of August 13, 2021. is new progress in Q2.
Source: Company materials

About the new progress in Q2;

* For the out-licensed product LIV-2008 / 2008b, a development plan has been formulated and is in progress at the out-licensing company Shanghai Henlius.

* For PCDC, the progress is as mentioned above. See the figure below for the evaluation of the efficacy of PCDC. It shows the antitumor effect of prostate cancer and the mice with Anti-CDCP1 ADC shows suppression of tumor . The Company is planning the derivation as an antibody for ADC.

Source: Company materials

Financial data

FY, (¥mn)12/201912/202012/2021
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2
[Statements of income]
Net sales64771421659182139169246139
 Drug Discovery and Development Business0112811011030
 Drug Discovery Support Business63761421379082138168143138
Cost of sales27265852614659706462
Gross profit3751841133036809918277
SG&A expenses464374503346456346424303337337
    R&D expenses363273407256343266342206216243
Operating loss-426-324-419-233-426-310-344-204-155-260
Non-operating income0140203070
Non-operating expenses64400210110
Ordinary loss-432-327-418-233-425-311-351-205-150-259
Extraordinary income2160  00  
Extraordinary expenses          
Loss before income taxes-430-326-412-233-425-310-351-205-150-247
Total income taxes10101011111
Net loss-431-326-413-234-425-311-352-206-161-248
[Balance Sheets]
Current assets3,0483,2062,8072,5612,3092,8053,3163,2493,2943,088
   Cash equivalents and ST marketable securities2,7762,8992,4692,1061,9672,4722,8812,6862,5802,302
Non-current assets219217242247247249249246244241
   Tangible assets151412111098766
   Investments and other assets204204230236237240241239237235
Total assets3,2673,4233,0492,8082,5563,0543,5663,4953,5373,329
Current liabilities177207154145315427378343378428
   Short-term borrowings    142199199180180190
Non-current liabilities41414141424242424242
Total liabilities219248196187357469420385420470
Total net assets3,0483,1752,8532,6222,1992,5853,1463,1103,1182,859
Total shareholders’ equity3,0483,1752,8532,6222,1992,5853,1463,1103,1182,859
   Capital stock5,8566,0846,1326,1326,1338461,3031,3881,4711,471
   Legal capital reserve5,8466,0746,1226,1226,1232,4462,9032,9873,0713,071
   Retained earnings-8,682-9,008-9,421-9,655-10,080-736-1,088-1,294-1,455-1,703
   Subscription rights to shares28262022243028293019
Total liabilities and net assets3,2673,4233,0492,8082,5563,0543,5663,4953,5373,329
[Statements of cash flows]
Cash flow from operating activities-677-1,537-528-1,360-560
   Loss before income taxes-755-1,401-734-1,290-396
Cash flow from investing  activities-26 3
   Purchase of investment securities  –  –  –   –  –
Cash flow from financing activities1,2481,3418941,944176
 Proceeds from issuance of common shares1,2491,345697 1,769166
Net increase in cash and cash equiv.570-222366580-384
Cash and cash equiv. at beginning of period2,3282,3282,1052,1052,686
Cash and cash equiv. at end of period2,8992,1052,4722,6862,301
Note)   For the cash flow statement, Q2 is the cumulative of Q1 to Q2, and Q4 is the cumulative of Q1 to Q4. Therefore, the beginning balance will be the beginning balance of Q1 for both Q2 and Q4.
Source: Omega Investment from Company materials