ペプチドリーム（4587） – Consolidated Financial Results for the Three Months Ended March 31, 2022 [IFRS]

Consolidated Financial Resultsfor the Three Months Ended March 31, 2022[IFRS]PeptiDream Inc.4587Patrick C. Reid, President & Chief Executive OfficerYuko Okimoto, Head of Investor RelationsCompany name:Stock code:Representative:Inquiries:Scheduled filing date of quarterly securities report:Scheduled starting date of dividend payments:Supplementary briefing materials on quarterly financial results:Explanatory meeting on quarterly financial results:May 16, 2022—NoNoTokyo Stock ExchangeURL https://www.peptidream.com/May 12, 2022TEL: +81-44-223-66121. Consolidated Financial Results for the Three Months Ended March 31, 2022 (January 1, 2022 to March 31, 2022)(1) Consolidated operating results(Amounts of less than one million yen are rounded down)(% indicates changes from the previous corresponding period)Total comprehensiveincomeProfit attributableto owners of parentProfit before taxRevenueOperating profitThree Months endedMarch 31, 2022Three Months endedMarch 31, 2021Million yen% Million yen% Million yen% Million yen% Million yen419(71.6)(1,166)1,477-(5)–(1,123)(39)–(829)(221)–(681)(184)Basic earningsper shareDiluted earningsper shareYen(6.39)(1.74)Yen(6.39)(1.74)Three Months endedMarch 31, 2022Three Months endedMarch 31, 2021(2) Consolidated financial positionAs of March 31, 2022As of December 31, 20212. Payment of DividendsTotal assetsNet assetsEquity attributable toowners of parentRatio of equityattributable to owners ofparent to total assetsMillion yen52,10427,034Million yen24,67525,350Million yen24,67525,3501st quarter-end2nd quarter-end3rd quarter-endYear-endTotalAnnual dividendsYen-Fiscal Year endedDecember 31, 2021Fiscal Year endingDecember 31, 2022Fiscal Year endingDecember 31, 2022(forecast)(Note) Revisions to the dividend forecast announced most recently: No-Yen0.000.00Yen0.000.000.003. Consolidated Financial Forecasts for the Fiscal Year Ending December 31, 2022 (January 1, 2022 to December 31, 2022)RevenueOperating profitProfit before taxMillion yen / %Million yen / %Million yen / %Million yen / %Profit attributable toowners of parentBasic earningsper share-yen-Fiscal Year endingDecember 31, 2022(Note) Revisions to the consolidated financial forecast announced most recently: Yes24,500-Yen—%–%47.493.8Yen0.00The Company is in the process of examining the impact of the March 28, 2022 acquisition of PDRadiopharma Inc. on its financial results, suchas the purchase price allocation, and plans to disclose the consolidated financial forecasts for the fiscal year ending December 31, 2022 for itemsother than revenue as soon as they are finalized.Non-consolidated financial forecasts, which form the basis for preparing consolidated financial forecasts, remain unchanged from the financialforecasts disclosed in the FY2021 financial results on February 9, 2022.[Notes]Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scope ofconsolidation) :YesNewly included : 1 company (PDRadiopharma Inc.)Excluded : –(2) Changes in accounting policies and changes in accounting estimates1) Changes in accounting policies required by IFRS2) Changes in accounting policies due to other reasons3) Changes in accounting estimates: None: None: None(3) Number of shares issued (common stock)1) Number of shares issued at the end of the period(including treasury stock)2) Number of treasury stock at the end of the period3) Average number of shares during the periodAs of March 31,2022As of March 31,2022Three monthsended March 31,2022130,010,400shares183,005shares129,827,419sharesAs of December31, 2021As of December31, 2021Three monthsended March 31,2021130,010,400shares182,964shares127,136,706shares(Note)The number of treasury shares at the end of the period includes shares in the Company held by the Custody Bank of Japan, Ltd. (TrustAccount E) (182,800 shares as of December 31, 2021 and 182,800 shares as of March 31, 2022). In addition, the shares in theCompany held by the Custody Bank of Japan, Ltd. (Trust Account E) are included in treasury shares excluded from calculating theaverage number of shares during the period (193,600 shares for the three months ended March 31, 2021 and 182,800 shares for thethree months ended March 31, 2022).* Quarterly financial results reports are not required to be subjected to quarterly review by a certified public accountant or anaudit firm* Explanation on the appropriate use of operating forecasts and other special instructions(Caution regarding forward-looking statements)Financial forecasts and other statements regarding the future presented in these materials are based on information currentlyavailable and certain assumptions deemed to be reasonable and are not meant to be taken as commitment of the Company toachieve such results. Actual performance may differ substantially due to various factors.(Adoption of International Financial Reporting Standards (IFRS))IFRS is applied from the three months ended March 31, 2022, in place of the Japanese standard. Accordingly, the figures forthe same period of the previous fiscal year and the previous fiscal year are also calculated in accordance with IFRS forcomparison purposes.Index of Appendix1. Qualitative Information on Quarterly Financial Results for the Period under Review ……………………………………………………….. 2(1) Explanation of Operating Results …………………………………………………………………………………………………………………………. 2(2) Explanation of Financial Position …………………………………………………………………………………………………………………………11(3) Efforts to Tackle COVID19, Financial Forecasts and Other Forward-looking Information …………………………………………..122. Condensed Quarterly Consolidated Financial Statements and primary notes……………………………………………………………………14(1) Condensed Quarterly Consolidated Statements of Financial Position ………………………………………………………………………..14(2) Condensed Quarterly Consolidated Statements of Profit or Loss ………………………………………………………………………………16(3) Condensed Quarterly Consolidated Statements of Comprehensive Income ………………………………………………………………..17(4) Condensed Quarterly Consolidated Statements of Changes in Equity………………………………………………………………………..18(5) Condensed Quarterly Consolidated Statements of Cash Flows …………………………………………………………………………………19(6) Notes to Condensed Quarterly Consolidated Financial Statements ……………………………………………………………………………21(Notes regarding going concern assumption) …………………………………………………………………………………………………………..21(Notes in case of significant changes in equity) ……………………………………………………………………………………………………….21(Segment information)………………………………………………………………………………………………………………………………………….2111. Qualitative Information on Quarterly Financial Results for the Period under ReviewSince the beginning of the three months ended March 31, 2022, the Group has adopted IFRS in place of the formerly usedJapanese GAAP. Accordingly, figures for the three months ended March 31, 2021 and the previous fiscal year are reclassified inaccordance with IFRS for the purpose of comparative analysis.(1) Explanation of Operating ResultsDuring the three months ended March 31, 2022 (from January 1, 2022 to March 31, 2022), PeptiDream Inc. (“the Company”)continued to make excellent progress in leveraging the PDPS (Peptide Discovery Platform System) technology, its proprietary drugfinding platform, across its four (4) business models; 1) Collaboration Discovery and Development, 2) PDPS Technology Transfer,3) In-House/Strategic Discovery and Development, and 4) Radiopharmaceutical.As of March 31, 2022, the Company’s pipeline consisted of 124 discovery & development programs (representing a net increaseof 1 program from the end of the prior fiscal quarter ending December 31, 2021).The below table is a snapshot of the Company’s program(s) across the three drug discovery approaches at the end of the current【Number of programs for each drug discovery approach】As of March 31, 2022fiscal quarter.Peptide drugsSmall molecule drugsPeptide drug conjugates (“PDCs”)Multi-functional peptide conjugates (“MPCs”)The below table is a snapshot of the number of program(s) currently at each stage of the discovery and development process,compared to the end of the prior fiscal year.As of December 31, 2021As of March 31, 2022【Number of programs at each stage of the discovery anddevelopment process】Target Validation-to-Hit Stage73511243160218400124Total3756189300123The figures in the above table include programs in the Collaboration Discovery and Development businessand the In-House/Strategic Discoveryand Development business, and DO NOT include programs in the PDPS Technology Transfer business nor the Radiopharmaceuticals BusinessHit-to-Lead StageLead-to-GLP-Tox StageGLP-Tox-to-IND StagePhase IPhase IIPhase IIISegment.Total2The below table is a snapshot of the development status of main programs.Drug Discovery and Development Business Segment:In the Collaboration Discovery and Development Business;During the current fiscal quarter under review there was no milestone events to which the Company was able to issue a pressrelease due to contractual restrictions in the Collaboration Discovery and Development business.The Company continues to receive various R&D support payments from its big pharma discovery and development partners,in addition to being eligible for potential pre-clinical and clinical milestones payments as the programs advance, as well as beingeligible for commercial sales milestones and royalties on net sales of any commercialized products. The Company looks forwardto announcing future updates as additional milestones are met, and as allowed by the partner companies. In addition, the Companycontinues to receive considerable interest from multiple big pharma companies interested in partnering with the Company ondiscovery and development programs.In the PDPS Technology Transfer Business;As of March 31, 2022, the Company has non-exclusively licensed its PDPS technology to 10 companies; Bristol-Myers Squibb(2013), Novartis (2015), Lilly (2016), Genentech (2016), Shionogi (2017), MSD (U.S.-Merck & Co. Kenilworth, NJ, USA) (2018),MiraBiologics (2018), Taiho Pharmaceutical (2020), Janssen (2020), and Ono Pharmaceutical (2021).In accordance with all PDPS technology license agreements, the Company is not informed as to what specific discovery anddevelopment programs are being prosecuted by the licensee company until certain initial pre-clinical milestones are achieved. TheCompany continues to receive various technology license and management payments from the licensee companies, in addition topotential preclinical and clinical milestone payments as programs advance. In addition, the Company continues to receive interestfrom multiple companies interested in licensing the PDPS technology.3In the In-House/Strategic Discovery and Development Business;The Company continues to advance and expand the number of In-House/Strategic Discovery and Development programs.The goal of these efforts is to develop the programs to at least the lead and/or clinical candidate stage or potentially post-PhaseI/II stage, before seeking to license these programs out to big pharma companies, leveraging the Company’s existing network ofpartners, for significantly higher financials than can be attained from standard discovery and development deals. The Companyhas continually been expanding its capabilities in turning hit candidates identified from the PDPS technology into 1) peptidetherapeutics, 2) small molecule therapeutics, 3) peptide drug conjugates (“PDCs”) and 4) multi-functional peptide conjugates(“MPCs”). Programs being developed with Strategic partners, Strategic partners being companies that bring proprietarytechnology/know-how to combine with the Company’s, are under a cost-sharing agreement, in which the costs of discovery anddevelopment are shared, allowing for the Company to have a far larger share in the program and future revenues if successful. Inaddition, the Company continues to pursue a number of in-house fully-owned programs and looks forward to providing futureupdates as these programs progress toward the clinic.The Company has announced strategic partnerships with JCR Pharmaceuticals Co., Ltd. (“JCR Pharma”), Modulus Discovery,Inc. (“Modulus Discovery”), Heptares Therapeutics Ltd., (“Sosei-Heptares”), Kleo Pharmaceuticals, Inc. (now BiohavenPharmaceutical Holding Company Ltd. (“Biohaven”)), Nihon Medi-Physics Co., Ltd. (“NMP”), POLA Chemical Industries(“POLA”), Kawasaki Medical School, the Bill & Melinda Gates Foundation (“Gates Foundation”), JSR Corporation (“JSR”),Mitsubishi Corporation (“MC”) (PeptiGrowth Inc. (“PeptiGrowth”)), RayzeBio Inc.(“RayzeBio”), PeptiAID Inc. (“PeptiAID”),and Amolyt Pharma (“Amolyt”).The Company and JCR Pharma have successfully development a series of constrained peptides that bind to the transferrinreceptor (TfR) and are capable of carrying various therapeutic payloads across the blood-brain barrier (BBB) for delivery/targetingto the brain, and for the delivery of therapeutic payloads to muscle, arising from the joint research collaboration between thecompanies initiated in February 2016. Most therapeutics do not readily cross the BBB into the brain, with only a small fraction ofthe drug ever entering the central nervous system (CNS), posing a significant challenge to the development of effective therapeuticsfor the treatment of CNS disorders. The developed peptide carriers, when conjugated to various therapeutic payloads (hereinreferred to as a peptide-drug conjugates or “PDC”), function to facilitate the transport of the payload across the BBB into the brain,thereby significantly increasing the amount of the therapeutic in the brain, and/or can function to deliver the therapeutic payloadsspecifically to muscle, thereby significantly increasing the amount of therapeutic targeted to muscle. Potential payloads range fromantibody and protein therapeutics to nucleic acid, peptide, and small molecules drugs. The two companies are focusing on third-party licensing activities, with PeptiDream leading such activities from execution of agreement to supply of peptide carriers, withthe Dec 22, 2020 announced collaborative research and exclusive license agreement to create PDCs for neuromuscular diseaseswith Takeda Pharmaceutical Company Limited, representing the first of such licensing deals. The Company announced on July 27,2021, a further expansion of the collaborative research and license agreement with Takeda Pharmaceutical Company extendinginto CNS Diseases. The companies are looking to conjugate the peptide carriers to a number of Takeda payloads, and thecollaboration has the potential to yield a number of therapeutics products in the neuromuscular, muscular, and CNS disease space.The Company continues to discuss additional potential research and license agreements with various companies. The companieswill share related revenues from licensing activities.The Company and Modulus Discovery are working to leverage the expertise of both companies to jointly discover and developsmall molecule clinical candidates based on peptide hit candidates identified from the PDPS technology against high value targets.Modulus Discovery is utilizing its computational chemistry technology and expertise to design small molecule candidates incollaboration with the Company and its internal efforts. The companies jointly share the costs of the discovery and developmentprograms and will co-own any resulting products. The Company has already identified hit candidate peptides against a number ofhigh-value kinase targets, that exhibit the desired inhibition activity independent of ATP-binding (allosteric inhibitors) and obtaineda number of crystal structures of these candidates in complex with their respective kinase targets yielding the structural informationneeded to enable computational small molecule design efforts. Using this approach, the companies have now identified highlyselective and potent small molecule lead compounds for KIT, a specific high value kinase target which is considered to play animportant role in allergic diseases and have recently completed in vivo proof of concept studies validating the lead candidate’s4efficacy. The companies are jointly continuing preclinical development efforts with the plan to nominate a clinical candidate in2022 and are actively discussing a variety of partnering and out-licensing options for the program. The Company currently holdsless than 5% equity stake in Modulus Discovery.The Company and Sosei-Heptares are working to discover, develop and commercialize novel therapeutics targeting ProteaseActivated Receptor 2 (PAR2), which is a well validated target for multiple indications in pain, cancer, and inflammatory disease.The strategic partnership brings together two powerful technologies, Sosei-Heptares’s StaR platform for GPCR target proteinproduction and the Company’s PDPS hit finding technology, in addition to considerable preclinical and clinical developmentcapabilities. Under the agreement, the companies jointly share the costs and will co-own any resulting products. As announced onMay 12, 2021, the companies have previously identified high affinity and selective inhibitors against PAR2 and those candidateshave been optimized to be sufficiently stable in the gut for oral administration, and therefore are now considered lead candidates.The candidates are now advancing through preclinical studies with the objective of developing a novel oral peptide therapy to treatinflammation and pain in gastrointestinal (GI) disorders, such as Inflammatory Bowel Disease. The companies are activelydiscussing a variety of partnering and out-licensing options for the program.The Company and Biohaven (As announced on January 4, 2021, Biohaven agreed to merge and take over full control of Kleoand its discovery and development programs) continue to work to co-discover and develop novel Antibody Recruiting Molecule(“ARMsTM”) or Synthetic Antibody Mimic (“SyAMs”) products in multiple indications. The Company will receive a tiered shareof the proceeds of any products developed. Biohaven has taken over clinical development control of the 2 clinical candidates, bothof which are referred to as CD38-ARMs (ARMTM ), and currently termed “BHV-1100( KP1237, ARM) + Autologous NK cells”and “BHV-1100 (ARM)”. The CD38-ARMs are designed to recruit endogenous antibodies to multiple myeloma (“MM”) cancercells, targeting them for destruction via the body’s innate antibody-mediated immune mechanisms. CD38 is a validated “MM”target, which is also overexpressed in chronic lymphocytic leukemia and other cancers. “BHV-1100 (ARM) + Autologous NK cells”is a short-acting ARM, whereas “BHV-1100 (ARM)” is a long-acting ARM and intended for a larger market of MM patientsrelapsed / refractory to Daratumumab therapy. BHV-1100 (ARM) + Autologous NK cells received Orphan Drug Designation onSeptember 8, 2020. BHV-1100 shows similar or better activity to Johnson & Johnson’s Darzalex, with the significant advantagebeing that it does not deplete the patients CD38-expressing immune effector cells. While many recent advances have been madeto benefit MM patients, most patients will unfortunately still relapse, and the companies believe that BHV-1100 enabled NK cellswill kill CD38-positive MM cells and recruit other immune effector cells to assist in reducing the tumor burden. As announced onOctober 27, 2021, the first patient has been enrolled in the Ph Ia/Ib study (ClinicalTrials.gov Identifier: NCT04634435). The clinicaltrial will assess the safety and tolerability, as well as exploratory efficacy endpoints, in newly diagnosed MM who have testedpositive for minimal residual disease (MRD+) in first remission prior to autologous stem cell transplant (ASCT).The Company and NMP have been working together across a variety of programs to conjugate Company’s constrained peptideswith NMP’s radioisotopes to create novel therapeutic and diagnostic peptide-radioisotope (RI) products. Under the terms of thedeal, both companies will independently fund their efforts, and the development and commercialization rights will be sharedbetween the companies under a cost-sharing structured arrangement. The lead program in the collaboration continues to makeprogress and advance to the nomination of a clinical candidate, expected sometime in 2022. The companies will look tocommercialize products in Japan & Asia, and potentially license out such products to the United States and Europe.The Company and POLA Chemical Industries (“POLA”) are working on the discovery and development of dermatologyfocused peptide-based cosmetics, quasi-drugs, and therapeutics. The Company has been identifying candidates using its PDPStechnology against applicable dermatological targets based on POLA’s extensive expertise in the field and the companies areworking together to commercialize such cosmetic products. The Company retains the development and commercialization rightsto any therapeutic use for any such products arising from the collaboration. The companies have identified a number of leadcandidates that are now being tested in in-vitro and ex-vivo models for efficacy.The Company and Kawasaki Medical School have been working to develop a novel Myostatin peptide inhibitor for thetreatment of Duchenne Muscular Dystrophy (“DMD”). DMD is the most common type of muscular dystrophy, a fatal hereditarygenetic disorder characterized by progressive weakness. Due to mutations in the dystrophin gene, dystrophin, which is importantfor maintaining muscle cells, becomes deficient or abnormal, with rapid muscle weakness in skeletal muscle and diaphragm5resulting in difficulty with jumping, running, and walking, and later effecting the heart and respiratory muscles, which caneventually cause acute respiratory failure. It is a rare and fatal disease in which patients’ quality of life is significantly reduced.Research and development efforts have largely focused on the discovery and development of antibody-based therapeutics and/ornucleic acid based therapeutics, such as gene therapy, exon skipping, stop codon read-through, and gene repair, spanning multiplemechanisms of action, and while exciting progress has been made, there is no current effective therapeutic that can be used to treata wide range of patients and be considered as a first line therapy, therefore there remains a significant unmet medical need for morebroadly effective therapies for DMD. Myostatin (also known as growth differentiation factor 8, or GDF8) is a protein producedand released by myocytes that acts on muscle cells to inhibit muscle cell growth and is widely distributed in blood and muscletissue (including diaphragm and extremity muscles) in normal individuals. Animals either lacking myostatin or that have beentreated with myostatin inhibitors exhibit significantly more muscle mass and strength, and therefore represents an attractive targetto inhibit to promote muscle growth and improve muscle function (stop or slow muscle degeneration), in patients with DMD andother muscle wasting diseases. The companies believe the current candidate could have a broad beneficial impact to all DMDpatients and significantly increase their quality of life. Efforts in the discovery and development of myostatin inhibitors, largelyfocused on antibody-based therapeutics, and while they have shown significant promise in animal models, that promise has yet totranslate into therapeutic benefits in humans for a variety of reasons. A constrained macrocyclic peptide-based myostatin inhibitorapproach represents a potentially attractive alternative, as the current clinical candidate exhibits a high level of both potency andexposure in muscle tissue, both of which are known to be key attributes for any myostatin inhibitor. The companies plan to engagePeptiStar Inc., for candidate scale up and production of GLP/GMP batches, with the intention of conducting long-term safetystudies, anticipating an entry into the clinic in 2023. Since DMD has been designated as a rare and intractable disease, the companieswill work with the related agencies to seek priority review and shorten development timelines. The companies have initiateddiscussions with multiple potential partners for the joint development/partnering and/or out-licensing of the program.The Company and the Gates Foundation are working on discovery and development programs aimed at identifying noveltherapeutic macrocyclic peptide candidates to treat Malaria and Tuberculosis, two infectious diseases that disproportionately affectpeople in the world’s poorest countries. On Nov 1, 2019, the Company announced that it had been awarded a second grant fromthe Gates Foundation to fund the next phase of development of a candidate series originally identified under the first grant, awardedin November 2017, for the potential treatment of Tuberculosis caused by Mycobacterium infection. The original grant providedfunding for multiple discovery programs aimed at the original November 2017 grant provided funding for identifying noveltherapeutic macrocyclic peptide candidates (“hit candidates”) to treat Malaria and Tuberculosis, and the second November 2019grant provided funding for turning one of the most promising hit candidate series into lead candidates (“hit-to-lead developmentfunding”) suitable for future preclinical development. The current lead candidate series is for the treatment of Tuberculosis, andthe Company is currently focused on optimizing the lead candidates for orally bioavailability. One of the main advantages of thelead series is that it may be effective against dormant Tuberculosis. Bacterial infections are among the leading causes of morbidityand mortality globally. The global burden of tuberculosis is staggering, with up to one-third of the world’s population latently-infected, and with 10.4 million new active cases and 1.8 million deaths occurring annually. Under the terms of the grant(s), anyGates Foundation-funded products will be made available by PeptiDream at an affordable price in lower middle-income countries(LMIC). PeptiDream will be able to merchandise each product in developed countries on its own, through licensees or acombination of both.The Company and JSR are working to identify peptides suitable for use in affinity chromatography processes for the purificationof certain biopharmaceuticals, namely antibody therapeutics. The manufacturing process for complex biopharmaceuticals, such asantibody therapeutics, generally consists of a target protein generation process, followed by a purification process that uses affinitychromatography to separate the target protein from the cells and various impurities by binding the proteins to a specific ligand orpeptide. The development and commercialization of new affinity chromatography media based on unique, synthetic peptides hasthe potential to simplify the purification process and lower overall costs. This development effort will specifically focus on ensuringconsistent quality and reliable mass production of ligands based on unique peptides that will enhance purification efficiencyenabling the purification of biopharmaceuticals that are generally considered difficult to purify through conventional affinitychromatography.6The Company and MC established a joint venture company, PeptiGrowth to develop, produce and sell peptide alternatives togrowth factors, key ingredients of cell culture, used in the manufacturing of cell therapy, regenerative medicines and otherbiopharmaceuticals. PeptiGrowth will leverage the expertise and know-how of both parent companies to work towards theadvancement of cell therapies, regenerative medicines, and other biopharmaceuticals in the pharmaceutical industry. Growth factorsare a class of proteins that are widely present in humans and other animals. In addition to playing important roles in cell growthand proliferation, they are crucially involved in induction of differentiation of stem cells (iPS cells, ES cells, etc.) into nerve, blood,and other types of cells. Currently, growth factors are mainly extracted from animal serum or produced by recombination technology,however, their production presents a number of challenges to the pharmaceutical industry, including safety risks due tocontamination with impurities, variation in quality among production lots, and high production costs. PeptiGrowth will utilizePeptiDream’s proprietary drug discovery platform system, PDPS (Peptide Discovery Platform System), to identify alternativepeptides that perform the equivalent function as growth factors and develop new chemical synthetic routes that do not use animalserum or recombination technology, and by establishing such a commercial manufacturing process, PeptiGrowth can producehomogenous products of high purity, ensuring less lot to lot variation, at lower costs. Dozens of growth factors have been identifiedto date, and in order to realize a completely Xeno-Free culture medium, multiple growth factors need to be replaced with chemicallysynthesized alternative compounds. This is a world-first in terms of the comprehensive development of chemically synthesized,peptide alternatives to multiple growth factors, and both MC and PeptiDream believe such an initiative is essential for furtheradvancement of cell therapy and regenerative medicines in the industry. PeptiGrowth will fully leverage the MC Group’s globalnetwork and its broad customer base to enhance marketing and sales functions. In 2021, PeptiGrowth launched two products; PG-001 (a peptide alternative to hepatocyte growth factor (HGF)) and PG-002 (a peptide inhibitor of TGFβ1). On March 31, 2022, PeptiGrowth announced the launch of PG-003, a peptide alternative to brain derived neurotropic factor (BDNF). The Company isprogressing a number of peptide alternative growth factor programs in parallel, with PG-004 expected to be launched in Q3, 2022,with additional products to follow. The Company is in active discussions with multiple potential partners regarding the therapeuticuse of these alternative peptides, to which PeptiDream holds the exclusive development and commercialization rights. TheCompany currently holds a 39.5% equity stake in PeptiGrowth, with MC holding the remaining 60.5%.The Company and RayzeBio are working to discover and development peptide-RI conjugates for use as therapeutics (“PeptideRadiotherapeutics”). The two companies are working on a number of programs against targets mutually agreed to, with PeptiDreamproviding peptide candidates, identified and optimized using its proprietary Peptide Discovery Platform System (PDPS) technology,to RayzeBio for further development as radiotherapeutics, with RayzeBio holding exclusive worldwide development andcommercialization rights to the program peptides for use with RIs. PeptiDream will lead preclinical discovery and optimizationefforts, with RayzeBio leading translational biology efforts to further characterize peptide-RI conjugates and advance suchconjugates into clinical development and commercialization activities. Under the terms of the agreement, PeptiDream received anequity interest in RayzeBio, as well as being eligible for certain payments associated with product development and commercialsuccess, in addition to royalties on future sales of any products that arise from the partnership. In October 2020, RayzeBioannounced the completion of their $45 million Series A funding round, on December 2020, the completion of their $105 millionSeries B funding round, and on June 15,2021, the completion of their $108 million Series C funding round. The Company receiveda milestone payment in November 2020 for the progress made across multiple programs in the discovery and development ofpeptide-radiotherapeutics, and announced a second milestone payment on June 10, 2021, as a number of programs make progresstoward the election of clinical candidates, with the Company expecting to announce the first clinical candidate in 1H, 2022. TheCompany currently holds a 5% equity stake in RayzeBio.The Company and PeptiAID, a joint venture with Fujitsu, Mizuho Capital, Takenaka Corporation, and Kishida Chemicalestablished November 12, 2020, are working on the development of therapeutics for the treatment of COVID19 and potentiallyany future coronavirus diseases. The Company has been applying its proprietary PDPS technology in a multi-pronged strategytoward identifying peptide candidates targeting different sites/regions of the COVID19 viral “spike“ protein, which is essential forcoronavirus to enter human cells, and PeptiAID, has obtained some of Company’s COVID19 candidate compounds. On March 23,2021, PeptiAID announced the initiation of preclinical studies of the Company’s PA-001 candidate which exhibits highly potentantiviral activity against conventional SARS-CoV-2, as well as mutant strains such as the Alpha, Beta, Gamma, Delta and Omicron7mutant strains. An in vitro study also demonstrated high synergistic effectiveness when used in combination with drugs that arecurrently approved for emergency use against COVID-19. Preclinical studies of PA-001, consisting of toxicity, safety pharmacology,and genotoxicity studies have been completed and confirmed the safety of PA-001. The initiation of early-stage exploratory clinicalresearch of PA-001 based on the Clinical Trials Act, was approved by the Clinical Research Review Board. Clinical research hasstarted in February 2022 (jRCT (Japan Registry of Clinical Trials) Trial ID: jRCTs031210601). The Company and PeptiAID areactively in discussions with interested third parties on potential partnering or licensing of the program. PeptiAID raised anadditional JPY 803m in September 2021 and the Company currently holds a 39.4% equity stake in PeptiAID.The Company and Amolyt entered into a strategic partnership and license option agreement, announced December 8, 2020, OnSeptember 9, 2021, the Company announced that Amolyt had exercised its option to globally license a portfolio of macrocyclicpeptide growth hormone receptor antagonists (GHRA) under the terms of the research collaboration agreement with the Companyannounced in December 2020. PeptiDream will be eligible for certain payments associated with development, and commercialsuccess of any GHRA product(s), as well as be eligible for certain royalties on future net sales. The identified, optimized drugcandidate, AZP-3813, is being developed as a potential treatment for acromegaly and neuroendocrine tumors (NET), to be used incombination with somatostatin analogues (SSAs), for patients who do not adequately respond to SSAs alone. Amolyt is currentlyworking to advance AZP-3813 through IND-enabling studies with the goal of filing an IND and initiating the first clinical trial bythe end of 2022. On September 16, 2021, Amolyt announced the closing of an $80 million Series B round, with the funds to beused in part toward the development of AZP-3813.The Company expects to continue to form strategic partnerships with select-technology-leading bioventures and leadinginstitutions, both in Japan and abroad, to accelerate and expand our clinical pipeline of best-in-class and first-in-class medicines.The Company continues to pursue a number of in-house fully owned programs. Some basic highlights are presented below.The Hemagglutinin (HA) program for the treatment of influenza: The Company has previously identified highly selectivepotent lead candidates for the treatment of influenza. The lead candidate (referred to as PD-001) binds to the highly conservedstalk region of the influenza viral envelope protein HA, and shows strong broad efficacy against group 1 strains, including theH5N1 strain, and further enhanced potency in combination with existing influenza treatments, such as Tamiflu, in in vivo animalstudies. The Company has identified no preclinical toxicity for the lead candidates. The Company is actively discussing a varietyof partnering and out-licensing options for the program.IL17 and related inflammatory cytokine program(s) for inflammatory diseases: The Company has previously identifiedseveral highly selective potent lead candidates against a variety of pro-inflammatory cytokines for the potential treatment of avariety of inflammatory diseases. The Company is continuing preclinical development efforts against a number of high value pro-inflammatory targets, and has been investigating combining various candidates into multi-functional peptide conjugates (MPCs;by linking peptides together into heterodimeric/multimeric peptide conjugates), as there is growing clinical evidence thatantagonizing multiple pro-inflammatory pathways in parallel may represent a superior therapeutic strategy to the treatment ofinflammatory disease, and the belief that MPCs may represent a superior modality to bispecific antibodies toward this goal.PDC programs for the treatment of cancer and other diseases: The Company has been actively working to develop anumber of in-house fully owned peptide candidates to a variety of targets applicable to the treatment of cancer and/or specifictissue/organ targeting, for potential conjugation to radionuclide, siRNA, small molecule, etc., payloads, for use as PDCs. TheCompany now has a growing pipeline of promising candidates that have been optimized for high affinity, high selectivity, andstability, spanning a variety of cell membrane/receptor targets, with which the Company intends to take forward into in vivobioimaging studies, which is critical to validating the effective targeting of such conjugates and their ability to effectively deliverthe payload of interest. The recent acquisition of PDRadiopharma will allow the Company to rapidly move the most promisingcandidates into such in vivo bioimaging studies, as the existing business has such capabilities, and based upon those results, theCompany anticipates prioritizing the most promising programs with the goal of nominating its first clinical candidate by the endof 2022. Additionally, upon the in vivo cell/tissue targeting validation of candidates as peptide-RI conjugates, the Companyintends to actively investigate other potential payloads, on its own or potentially in collaboration with various existing and/or newpartners.8In the Radiopharmaceutical Business Segment:On September 2, 2021, the Company announced its intention to fully acquire a newly established company, PDRadiopharmaInc. (“New Company”) that succeeds the radiopharmaceutical business (“acquired company”) of Fujifilm Toyama Chemicalthrough an absorption-type split, and to make the New Company a subsidiary of the Company under a share purchase agreementsigned with FUJIFILM Corporation (“FUJIFILM”). The acquired Company, as part of FUJIFILM’s healthcare business, engagesin research, development, manufacturing and marketing of radiodiagnostics and radiotherapeutics. On March 28, 2022, theCompany completed the acquisition of all shares of the New Company, and it became a wholly-owned subsidiary of the Company.It is one of only two companies operating in the radiopharmaceuticals business in Japan and offers radiodiagnostic agents forSPECT (Single Photon Emission Computed Tomography) and PET (Positron Emission Tomography),in addition toradiotherapeutics, such as, “Raiatt MIBG-I 131 injection”, which received marketing authorization on September 27, 2021 as aradiotherapeutic for the treatment of pheochromocytoma and paraganglioma, well known diseases that cannot be treated surgically.PDRadiopharma has facilities in Chiba, Kawasaki (Kanagawa), and Ibaraki (Osaka), Japan, employees a staff of 461 employees(across research, development, manufacturing, and marketing functions), and currently markets 24 approved radiodiagnosticproducts and 8 approved radiotherapeutic products and forecasts FY2022 revenue of 11.5 billion JPY.The Company has been employing its proprietary PDPS discovery platform, to identify highly potent and selective hitmacrocyclic peptide candidates for use in peptide-drug conjugate (PDC) therapeutics for a number of years, and has been activelyengaged in the discovery and development of peptide-RI conjugates for use as radiodiagnostics and radiotherapeutics incollaboration with BMS (radiodiagnostics), Bayer(radiodiagnostics), NMP (radiodiagnostics/therapeutics), Novartis(radiodiagnostics/therapeutics), and RayzeBio (radiodiagnostics/therapeutics), and has established itself as one of the major playersin the discovery and development of such products. In addition, the Company has also recently been working to develop an in-house pipeline of fully-owned peptide-RI conjugates, in addition to its in-house PDC efforts.The Company anticipates significant synergies from the acquisition, as the acquired company possess advanced technologiesand know-how in radionuclides, pre-clinical and clinical development, manufacturing, approval, and marketing capabilities, alongwith a track record of in-licensing and commercialization of radiopharmaceuticals from overseas partners. The Companypossesses experience and know-how in discovering and developing the carrier peptides to deliver the radionuclides selectively totargeted cells and tissues, enabling the continuous discovery of next-generation radiopharmaceuticals to feed into the pipeline, andthe ability to leverage its global network of partners (both existing and future) to strengthen and accelerate both in-licensing andout-licensing activities. By combining the strengths and capabilities of the two companies, the Company believes it can not onlysignificantly accelerate its own in-house peptide-RI conjugates programs, leading to higher value out-licensing/partnering deals,while retaining Japan commercialization rights, but also leverage those programs to maximize in-licensing activities. Theacquisition will not only strengthen the Company’s position in the radiopharmaceutical space, but also allow the Company tounlock more of its core value faster by enhancing all of its PDC programs (in which verification of specific cell or tissue targetingof the peptide conjugate in appropriate models, which is best done using RI payloads, represents a critical validation step for anyPDC program, irrespective of payload), while providing the Company more control over the clinical development of its programs.the Company announced that the acquisition consideration has been reduced to 22.1 billion yen from the original 30.5 billion yen,and that the Company is funding the acquisition through a long-term loan of 22.4 billion yen from a syndicate of Mizuho Bank,Development Bank of Japan, and Sumitomo Mitsui Trust Bank.9Other Information Related to the Company;The Company has previously announced, along with Shionogi & Co., and Sekisui Chemical Co., Ltd, the formation of PeptiStarInc., a Contract Development and Manufacturing Organization (“CDMO”) for the research and commercial manufacture of peptidetherapeutics. PeptiStar brings together the most cutting-edge technologies and innovations in large-scale peptide production fromvarious companies throughout Japan in order to manufacture peptides of the highest quality and purity, while simultaneously drivingdown the cost of production. It is anticipated that PeptiStar will become the go-to CMO for many of the Company’s discovery anddevelopment partners, in addition to the Company’s own in-house/strategic partnered programs. The PeptiStar manufacturingfacility is located in Osaka and became fully operational from October of 2019. On Dec 6, 2019, PeptiStar Inc., and AMED (TheJapan Agency for Medical Research and Development) announced they had accomplished the CiCLE project goal, “establishmentof a global leading contract manufacturing organization (CMO) for constrained peptide medicines”. On Dec 1, 2020, PeptiStarannounced that it had successfully raised funds totaling 1,790 million yen through a third-party allotment. PeptiDream currentlyholds less than 15% equity stake in PeptiStar.The Company continues its commitment to promoting ESG (Environmental, Social, and Governance) initiatives and itssustainability efforts including focus areas, ten most material issues, relevant policies and data are proactively disclosed on thecorporate website (https://www.peptidream.com/esg/data_en.html). The Company will continue to strive to meet the higheststandards for environmental responsibility, social promotion, and good corporate governance. On June 15 2021, the Companyannounced that the Sustainability and Governance Committee was established to further promote these ESG efforts at the core ofmanagement and continue to deliberate and monitor issues related to sustainability and governance from a medium- to long-termperspective.In order to ensure that the 2℃ goal under the Paris Agreement is achieved, the Company had set a goal to decrease GHG emissions (Scope 1 and Scope 2) per employee by 50%, compared to the fiscal year ended June 2018, by the year 2030. TheCompany newly adopted the RCP8.5 scenario (IPCC), which is the highest scenario for future climate change, with reference tothe recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD) and conducted an analysis on theimpact of climate change from a medium-term perspective until 2026. The Company will continue to strengthen governance onmeasures to address climate change, implement scenario analysis based on risks/opportunities analysis and their financial impact,respond to climate change risks and opportunities, and engage in further enhancement of disclosure, with the goal to achieve”carbon neutral” within its operations by 2026. As GHG (greenhouse gas) emissions (Scope 1+2) produced by our businessoperations mainly derive from electronic power consumption, the Company has selected an electricity supplier which proactivelypromotes the shift towards renewable energy. To further take this initiative, the Company has decided to introduce CO2 (carbondioxide)-free power from its supplier for use at our head office and laboratory. This means that we will achieve our medium-termgoal of the realization of “carbon-neutral” business operations 4 years earlier than originally planned. In addition, for the first time,the Company participated in the Climate Change Program of CDP (Carbon Disclosure Project), an organization engaged inenvironmental information disclosure initiatives, and received a score of B (management level) in 2021.On September 17, 2021, the Company announced that it was successful in its bid for Lots 2-11 and 2-12 (Address: 3-chome,Tonomachi, Kawasaki-ku, Kawasaki City, Kanagawa) in the public tender for land that was conducted by the Urban RenaissanceAgency as follows: Location: 102-20 and 102-21, 3-chome, Tonomachi, Kawasaki-ku, Kawasaki City, Kanagawa, Land area:11,635.60 m2, Bid-winning price: 3.2 billion yen. KING SKYFRONT has been designated as an international strategic zone andthe Keihin-Rinkai Life Innovation Comprehensive Global Strategic Special Zone. It is an open innovation hub for the creation ofnew industries based on world-class R&D in life science fields that are expected to grow globally. Following the successful bid,the Company will conclude a land purchase agreement with the Urban Renaissance Agency. The Company plans to expand theCompany’s head office and research laboratory on the land, and to strengthen and expand its drug discovery and developmentfunctions, in light of strong growth across its collaboration, strategic partnership, and in-house discovery and developmentbusinesses. Details of the plan will be announced as soon as they are finalized.The Company intends to finance the purchase of the land using fund on hand, and the construction of the future building usingfunds on hand and long-term loans from financial institutions.As of March 31, 2022, the Group had a total of 639 employees (approximately 25.4% of employees are women). The Company10had a total of 178 employees (185 employees when including its seven directors) and PDRadiopharma Inc. had a total of 461employees, including temporary staff.As a result of the above, for the three months ended March 31, 2022, the Group recorded revenue of 419,526 thousand yen (a1,058,276 thousand yen decrease year on year), operating loss of 1,166,661 thousand yen (a 1,160,978 thousand yen increase yearon year), loss before tax of 1,123,765 thousand yen (a 1,084,085 thousand yen increase year on year), and loss attributable toowners of parent of 829,296 thousand yen (a 607,493 thousand yen increase year on year).(2) Explanation of Financial Position1) Analysis of financial positionprevious fiscal year to 52,104,179 thousand yen.Total assets at the end of the three months ended March 31, 2022 increased by 25,069,583 thousand yen from the end of theThis was mainly because of an increase of 9,041,048 thousand yen in property, plant and equipment, and an increase of11,101,667 thousand yen in goodwill, despite a decrease of 1,469,051 thousand yen in cash and cash equivalents. The increasein assets included the amount recognized in line with the consolidation of PDRadiopharma Inc.Liabilities increased by 25,744,792 thousand yen from the end of the previous fiscal year to 27,429,137 thousand yen. Thiswas mainly because of an increase of 20,001,129 thousand yen in borrowings (non-current). The increase in liabilities includedthe amount recognized in line with the consolidation of PDRadiopharma Inc.Equity decreased by 675,208 thousand yen from the end of the previous fiscal year to 24,675,042 thousand yen. This wasmainly because of a decrease of 829,296 thousand yen in retained earnings due to the recording of loss.2) Analysis of status of cash flowsprevious fiscal year to 10,277,478 thousand yen.Cash and cash equivalents for the three months ended March 31, 2022 decreased 1,469,051 thousand yen from the end of theStatus of cash flows and related factors during the three months ended March 31, 2022 are described below.(Cash flows from operating activities)Cash flows from operating activities resulted in a cash outflow of 8,387 thousand yen (compared with an inflow of 4,718,018thousand yen in the same period of the previous fiscal year). This was mainly due to the recording of loss before tax of 1,123,765thousand yen, despite the recording of decrease (increase) in trade and other receivables of 678,361 thousand yen.(Cash flows from investing activities)Cash flows from investing activities resulted in a cash outflow of 23,743,690 thousand yen (a 23,327,794 thousand yen increasein outflow year on year). This was mainly due to payments for acquisition of subsidiaries of 23,302,440 thousand yen.(Cash flows from financing activities)Cash flows from financing activities resulted in a cash inflow of 22,187,112 thousand yen (a 22,167,382 thousand yen increasein inflow year on year). This was mainly due to proceeds from long-term borrowings of 22,400,000 thousand yen.11(3) Efforts to Tackle COVID19, Financial Forecasts and Other Forward-looking InformationThe COVID19 pandemic has had a certain impact on the Company’s operations. Although the Company has returned to thenormal business operation after the state of emergency was lifted, it has been continuing the utmost efforts to reduce the risk ofcorona virus infection for its employees, business partners and their families, by continuing to implement both clean/hygienicconditions/practices within office premises and various measures for social distancing to avoid “close contact” with one another.Further to the Company’s efforts to contribute to the discovery and development of therapeutics for the treatment of COVID19,on June 12, 2020, the Company announced a new discovery and development collaboration with MSD to develop peptidetherapeutics capable of neutralizing both COVID19 and potential future CoV outbreaks. On November 12, 2020, the Companyalso announced the establishment of a joint venture PeptiAID, aimed at the development of therapeutics for the treatment ofCOVID19 and potentially any future coronavirus diseases. On November 11, 2021, PeptiAID announced the completion ofpreclinical studies of the Company’s PA-001 candidate. On February, PeptiAID announced initiation of clinical research of PA-001. The Company will continue to strive to prevent the spread of infection within the Company and, through the development ofeffective therapeutic treatments, contribute to overcoming the threat of COVID19 and/or any other future coronavirus pandemic toFrom a medium-term perspective, the Company expects to maintain its growth trend in both sales and profits while sustainablysociety as a whole.increasing its corporate value【Key indices】Resultsfor the full yearended December31, 20202020/Jan~2020/DecResultsfor the threemonths endedMarch 31, 20212021/Jan~2021/MarResultsfor the full yearended December31, 20212021/Jan~2021/DecResultsfor the threemonths endedMarch 31, 20222022/Jan~2022/MarForecasts for thefull year endingDecember31, 20222022/Jan~2022/Dec566Capital Expenditures(JPY millions)Depreciation Expense(JPY millions)Research and DevelopmentExpenses (JPY millions)Year-end headcount(people)(Notes) 1. The amount that will actually be paid is shown for capital expenditures.1,4605591572471493391586331,6381,300177417179394651—-2. Capital Expenditures of fiscal year ending December 31, 2021, includes advance payments (644 million yen) forthe purchase of the land.3. The Group has adopted International Financial Reporting Standards (IFRS) from the results for the first quarter ofthe fiscal year ending December 31, 2022, and major management indicators for the Group as a whole are listed.4. The Company is in the process of examining the impact of the March 28, 2022 acquisition of PDRadiopharma Inc.on its financial results, such as the purchase price allocation, and plans to disclose the consolidated financialforecasts for the fiscal year ending December 31, 2022 as soon as they are finalized.12The Company announced a new Mid-Term Management Targets on March 25, 2021 for the period from the fiscal year endedDecember 31, 2021 to the fiscal year ending December 31, 2026. Specifically, the Company anticipates 4 or more new therapeuticdrugs (not including diagnostics) to be launched (approved), 32 or more programs to be in clinical development, and 160 or moreprograms to be in preclinical development, by the end of FY2026. In order to fully support and promote these targets, the Companywill continue to actively expand through the hiring of highly skilled and talented professionals. In addition, in order to realize ourgoal of being a global “Drug Discovery Powerhouse”, the Company will continue to expand our partnership network and ourleading position as the hub in the global peptide-based drug discovery ecosystem (*1).Mid-Term Targets by the end of FY2026As of March 31, 2022(1) New drugs*2 launched (approved)(2) Number of clinical programs(3) Number of preclinical drug discovery programs(4) Number of employees4 or more32 or more160 or more220 or more04120185(5) Establishing foundation as a “Drug Discovery Powerhouse”*1 Mid-Term Targets on a non-consolidated basis.*2 Diagnostic agents and products other than therapeutics are not included.Regarding the 5th target, the aim to solidify PeptiDream’s position and reputation as a global “Drug Discovery Powerhouse”,we will particularly focus our efforts on the following five initiatives:① To further lead the expansion of the global peptide-based drug discovery eco-system and our partnership network through② To continue to expand the number of licensees of our proprietary PDPS technology and its position as “the most widely-usedexpanding our role as the central hub.peptide-based drug discovery platform”.③ To create a healthy, safe, and diverse work environment where all employees can maximize their abilities, have equalopportunities, and be considered a “best place to work”④ To strive toward a “transparent, responsive, and balanced corporate governance structure”, ensure the highest business ethicalstandards, and maintain a continuous and open dialogue with all internal and external stakeholders.⑤ To promote operational efficiency for the sustainable growth of society, minimize our environmental impact with a focus onwater, waste, and energy efficiency, and become “carbon neutral” in our operations by 2026.132. Condensed Quarterly Consolidated Financial Statements and primary notes(1) Condensed Quarterly Consolidated Statements of Financial PositionAs ofJanuary 1, 2021(Transition date)As ofDecember 31, 2021(Thousands of yen)As ofMarch 31, 202215,641,51913,836,42517,887,087Property, plant and equipment5,766,8566,437,151AssetsCurrent assetsCash and cash equivalentsTrade and other receivablesOther financial assetsInventoriesIncome taxes receivableOther current assetsTotal current assetsNon-current assetsGoodwillIntangible assetsInvestments accounted for usingequity methodOther financial assetsDeferred tax assetsRetirement benefit assetOther non-current assetsTotal non-current assetsTotal assets11,746,529811,09669,047925,13810,415274,19775,502603,003–––2,37913,198,17027,034,59610,277,4784,624,16969,0482,076,377244,534595,47915,478,20011,101,667398,670543,044–201,56840,48834,217,09252,104,1796,080,1336,453,4527,149,3587,530,5846,241585,981369,353––78,683294,9273,800,421549,646–8,92110,499,45726,140,97614As ofJanuary 1, 2021(Transition date)As ofDecember 31, 2021As ofMarch 31, 2022Trade and other payables2,562,788886,1241,586,78414,404712,5954,862,168475,5171,376,047Liabilities and equityLiabilitiesCurrent liabilitiesBorrowingsOther financial liabilitiesIncome taxes payableProvisionsOther current liabilitiesTotal current liabilitiesNon-current liabilitiesBorrowingsOther financial liabilitiesDeferred tax liabilitiesRetirement benefit liabilityTotal non-current liabilitiesEquityShare capitalCapital surplusTreasury sharesRetained earningsOther components of equityTotal equity attributable to owners ofparentTotal equityTotal liabilities and equityTotal liabilities4,862,168––––––308,298308,2981,684,3453,956,7384,452,358(620,123)16,372,6871,188,58925,350,25025,350,25027,034,5962,887,0892,186,070263,14311413,464828,2716,178,15420,001,129474,224634,911140,71721,250,98227,429,1373,956,7384,459,144(620,211)15,543,3901,335,98024,675,04224,675,04252,104,179––––––––3,933,88510,305,306(655,383)7,503,531191,46821,278,80821,278,80826,140,97615(2) Condensed Quarterly Consolidated Statements of Profit or LossThree months ended March 31, 2021 and March 31, 2022(Thousands of yen, unless otherwise stated)Three months endedMarch 31, 2021Three months endedMarch 31, 2022RevenueCost of salesGross profit or lossSelling, general and administrative expensesResearch and development expensesOther incomeOther expensesOperating lossFinance incomeFinance costsShare of profit (loss) of investments accountedfor using equity methodLoss before taxIncome tax expenseLossProfit attributable to:Owners of parentLossEarnings (loss) per shareBasic earnings (loss) per share (Yen)Diluted earnings (loss) per share (Yen)1,477,802547,382930,419574,324363,6871,99990(5,682)233,536–(267,533)(39,680)182,122(221,802)(221,802)(221,802)(1.74)(1.74)419,526495,544(76,018)695,452394,189–1,000(1,166,661)102,855–(59,959)(1,123,765)(294,469)(829,296)(829,296)(829,296)(6.39)(6.39)16(3) Condensed Quarterly Consolidated Statements of Comprehensive Income(Thousands of yen)Three months endedMarch 31, 2021Three months endedMarch 31, 2022Loss(221,802)(829,296)Other comprehensive incomeItems that will not be reclassified to profit orloss:Financial assets measured at fair valuethrough other comprehensive incomeTotal of items that will not be reclassified toprofit or lossOther comprehensive incomeComprehensive incomeComprehensive income attributable to:Owners of parentComprehensive income(Note) Items in the financial statements above are disclosed net of tax.36,96136,96136,961(184,841)(184,841)(184,841)147,390147,390147,390(681,906)(681,906)(681,906)17(4) Condensed Quarterly Consolidated Statements of Changes in EquityThree months ended March 31, 2021Equity attributable to owners of parentShare capitalCapitalsurplusTreasurysharesRetainedearnings(Thousands of yen)Othercomponentsof equityTotal equityattributable toowners ofparentTotal equity3,933,88510,305,306(655,383)7,503,531191,46821,278,80821,278,808Balance at January1, 2021LossOthercomprehensiveincomeTotal comprehensiveincomeIssuance of newsharesTransfer from othercomponents ofequity to retainedearningsShare-basedpaymenttransactionsTotal transactionswith ownersBalance at March31, 2021Balance at January1, 2022LossOthercomprehensiveincomeTotal comprehensiveincomePurchase oftreasury sharesShare-basedpaymenttransactionsTotal transactionswith ownersBalance at March31, 202210,03210,032–20,06520,065(221,802)–(221,802)(221,802)36,96136,96136,961(221,802)36,961(184,841)(184,841)(24,175)24,175–––––410,301–410,301410,30110,032420,333(24,175)24,175430,366430,3663,943,91810,725,640(655,383)7,257,552252,60521,524,33321,524,333Three months ended March 31, 2022Equity attributable to owners of parentShare capitalCapitalsurplusTreasurysharesRetainedearnings(Thousands of yen)Othercomponentsof equityTotal equityattributable toowners ofparentTotal equity3,956,7384,452,358(620,123)16,372,6871,188,58925,350,25025,350,250－ (829,296)－ (829,296)(829,296)－－147,390147,390147,390－ (829,296)147,390(681,906)(681,906)－－－－－－(87)(87)6,7856,7856,785(87)6,6976,6973,956,7384,459,144(620,211)15,543,3901,335,98024,675,04224,675,042––––－－－－6,785–––––－－－－－－–––––––(87)－18(5) Condensed Quarterly Consolidated Statements of Cash FlowsThree months endedMarch 31, 2021(Thousands of yen)Three months endedMarch 31, 2022Cash flows from operating activitiesLoss before taxDepreciation and amortizationInterest and dividend incomeForeign exchange loss (gain)Share of loss (profit) of investments accountedfor using equity methodDecrease (increase) in trade and otherreceivablesDecrease (increase) in inve