Quarterly trends and results

Cumulative		FY03/21				FY03/22				FY03/22
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales		129	193	249	313	75	134			58.9%	228
	YoY	-11.5%	-34.2%	-42.8%	-43.3%	-42.1%	-30.5%				-27.2%
Gross profit		120	171	219	275	62	111
	YoY	-4.1%	-28.3%	-39.6%	-42.1%	-48.2%	-35.1%
	Gross profit margin	93.0%	88.7%	87.9%	87.8%	83.3%	82.8%
SG&A expenses		334	682	1,079	1,578	561	1,143
	YoY	-46.5%	-26.1%	-16.6%	-0.2%	67.7%	67.7%
	SG&A-to-sales ratio	-	-	-	-	-	-
Operating profit		-214	-510	-860	-1,303	-498	-1,032			-	-1,804
	YoY	-	-	-	-	-	-				-
	Operating profit margin	-	-	-	-	-	-				-
Recurring profit		-218	-527	-895	-1,279	-502	-1,023			-	-1,751
	YoY	-	-	-	-	-	-				-
	Recurring profit margin	-	-	-	-	-	-				-
Net income		-219	-2,082	-2,451	-2,836	-465	-975			-	-1,734
	YoY	-	-	-	-	-	-				-
	Net margin	-	-	-	-	-	-				-
Quarterly		FY03/21				FY03/22
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		129	64	56	64	75	59
	YoY	-11.5%	-56.7%	-60.6%	-45.5%	-42.1%	-6.9%
Gross profit		120	51	48	56	62	49
	YoY	-4.1%	-55.0%	-61.4%	-50.3%	-48.2%	-4.2%
	Gross profit margin	93.0%	79.9%	85.2%	87.2%	83.3%	82.2%
SG&A expenses		334	348	397	499	561	583
	YoY	-46.5%	16.6%	6.9%	74.2%	67.7%	67.7%
	SG&A-to-sales ratio	-	-	-	-	-	-
Operating profit		-214	-296	-350	-443	-498	-534
	YoY	-	-	-	-	-	-
	Operating profit margin	-	-	-	-	-	-
Recurring profit		-218	-309	-368	-384	-502	-522
	YoY	-	-	-	-	-	-
	Recurring profit margin	-	-	-	-	-	-
Net income		-219	-1,863	-369	-385	-465	-511
	YoY	-	-	-	-	-	-
	Net margin	-	-	-	-	-	-

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Company forecast represent most recent figures.
Note: Figures that exceed 1,000% YoY are denoted by “-.”

Cumulative		FY03/21				FY03/22
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
R&D expenses		212	462	760	1,173	445	941
	YoY	-56.9%	-33.5%	-20.6%	1.8%	110.4%	103.6%
SG&A excl. R&D		123	220	319	405	115	203
	YoY	-8.0%	-3.7%	-5.5%	-5.6%	-6.1%	-7.7%
Quarterly		FY03/21				FY03/22
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
R&D expenses		212	250	298	413	445	495
	YoY	-56.9%	23.3%	13.6%	112.0%	110.4%	97.8%
SG&A excl. R&D		123	97	99	86	115	88
	YoY	-8.0%	2.3%	-9.1%	-6.1%	-6.1%	-9.8%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

1H FY03/22 results

Sales: JPY134mn (-30.5% YoY)
Operating loss: JPY1.0bn (versus loss of JPY510mn in 1H FY03/21)
Recurring loss: JPY1.0bn (versus loss of JPY527mn)
Net loss attributable to owners of the parent: JPY975mn (versus loss of JPY2.1bn)

Sales comprised revenue from the supply of raw materials for cosmetics, sales of medical devices in the PRP business, and development milestone payments.

On the profit front, gross profit declined 35.1% YoY to JPY111mn due to lower sales. Operating and recurring profit also fell (i.e., losses expanded) due to a 67.7% increase in SG&A expenses to JPY1.1bn. Net loss attributable to owners of the parent narrowed, as in 1H FY03/21 the company booked a JPY1.6bn goodwill impairment charge as an extraordinary loss following the July 2020 absorption-type merger with AccuRNA, Inc., while in 1H FY03/22 no such loss was booked.

R&D spending accounted for JPY941mn (+103.6% YoY) of SG&A expenses.

Main clinical pipeline progress

Gene therapy drug VB-111

With regard to VB-111, a gene therapy drug in-licensed from Vascular Biogenics (VBL) of Israel in November 2017 for development and marketing rights in Japan, VBL is conducting a global Phase III clinical trial (the OVAL study) in recurrent platinum-resistant ovarian cancer patients. NanoCarrier decided to participate in Japan, where it has initiated a clinical trial. As of October 2021, at least 320 patients had registered for the OVAL study, and the target of 400 should be met by end-FY03/22. NanoCarrier plans to enroll 30 patients for the study in Japan, across 12 clinical trial sites. The first dose was administered in June 2021, and patient enrollment was at least 50% complete as of October 2021.

VBL is also conducting Phase II trials overseas for colon cancer and glioblastoma.

New pipeline drug in otolaryngology disease area (ENT103)

With respect to ENT103, a pipeline drug in the otorhinolaryngology disease area based on a joint development agreement with CEOLIA Pharma Co., Ltd., NanoCarrier conducted a Phase III clinical trial in otitis media patients in Japan. Target enrollment of 200 patients was completed in May 2021. In September 2021, the company announced this study met its primary endpoints, as ENT103 improved the clinical findings in otitis media patients with persistent purulent otorrhea. Accordingly, NanoCarrier is now preparing to apply for manufacturing and marketing approval.

Cisplatin Guiding Micelle (NC-6004 Nanoplatin®)

Together with Orient Europharma Co., Ltd. (OEP), NanoCarrier has been conducting clinical trials globally.

The company is conducting an NC-6004 Phase II clinical study in combination with the checkpoint inhibitor Keytruda®, for head and neck cancer. The Phase IIa clinical study met its primary endpoint (determining recommended dosage for combination therapy with Keytruda®) in June 2020. The Phase IIb clinical trial, a comparative trial with Keytruda monotherapy, began in Europe and Taiwan in November 2020 and is proceeding apace, with about 90% of the target enrollment complete.

Epirubicin Micelle (NC-6300)

NanoCarrier is conducting a Phase I/II trial in the US of NC-6300 as a treatment for soft tissue sarcoma.

Among the subtypes of soft tissue sarcoma in which NC-6300 demonstrated efficacy in the Phase I study, the c selected angiosarcoma as the target indication for NC-6300 and conducted an additional study in an expansion cohort of patients with angiosarcoma for the purpose of confirming both efficacy and safety. The study had favorable results, which the company presented at the annual meeting of the American Society of Clinical Oncology (ASCO) in May 2021.

This drug has received an orphan drug designation as a treatment for soft tissue sarcoma from the US Food and Drug Administration (FDA), and was awarded fast track review status for the treatment of angiosarcoma. The company is now undertaking licensing activity, premised on FDA recognition of NC-6300 as a drug promising to be highly effective in rare cancers with no alternative treatments.

siRNA therapeutic NC-6100 (SRN-14/GL2-800)

NC-6100 (SRN-14/GL2-800) is an siRNA therapeutic targeting the transcription factor PRDM14, which is known to be overexpressed in breast cancer (roughly 50%). An investigator-initiated Phase I clinical trial of a nucleic acid DDS therapeutic for advanced unresectable or metastatic HER2-negative breast cancer was started at the Cancer Institute Hospital of Japanese Foundation for Cancer Research (JFCR) from September 2020 (ongoing as of end-Q1).

New pipeline product progress

In regard to expanding the pipeline, the company is developing nucleic acid therapeutics that were researched by AccuRNA, Inc., which the company acquired through an absorption-type merger. Nucleic acid therapeutics provide a new treatment option by targeting RNA transcribed from genes, which low molecular weight drugs and antibody drugs have been unable to target. The company's DDS technology facilitates in vivo transportation of nucleic acid therapeutics and resolves issues with the complicated manufacturing process of conventional DDS methods. In addition, the company has been promoting joint research with academia and collaborating with other companies to find new pipeline candidates.

The company undertook non-clinical studies jointly with Nagoya University of the Tokai National Higher Education and Research System (THERS) on an ASO (antisense oligonucleotide) targeting the long-chain non-coding RNA TUG1, with an eye to transitioning to clinical trials in glioblastomas, highly malignant brain tumors, as a new pipeline candidate. This research project was granted support by the Japan Agency for Medical Research and Development (AMED)’s Practical Research for Innovative Cancer Control Program.

In April 2021, NanoCarrier established PrimRNA, Inc. in conjunction with Axcelead, Inc., to develop an mRNA/micellar nanoparticle formulation of RUNX1, a transcription factor for cartilage differentiation/proliferation. PrimRNA began preparing to conduct non-clinical trials, establish GMP-compliant manufacturing systems, and transition to Phase I clinical studies. This project has been awarded support from AMED’s Cyclic Innovation for Clinical Empowerment Program.

Sales business

Cosmetics business

NanoCarrier supplies raw materials for the skincare serum Eclafutur and the whitening agent Excia AL Whitening Immaculate Essence IDD, both sold by Albion. NanoCarrier and Albion also jointly promoted sales of Depth, a scalp care product for men the two companies co-developed.

Acti-PRP (platelet-rich plasma separator)

In April 2019, NanoCarrier acquired sales rights in Japan for Acti-PRP (platelet-rich plasma separator used in regenerative medicine) from Aeon International Inc. NanoCarrier has been selling Acti-PRP to medical facilities that are members of this study group and conducting clinical research on the subjects.

Full-year company forecasts

Company forecasts		FY03/21			FY03/22
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Est.	FY Est.
Sales		193	120	313	134	94	228
	YoY	-34.2%	-53.7%	-43.3%	-30.5%	-21.9%	-27.2%
Cost of sales		22	16	38	23
Gross profit		171	104	275	111
	YoY	-28.3%	-56.1%	-42.1%	-35.1%
	Gross profit margin	88.7%	86.3%	87.8%	82.8%
SG&A expenses		682	896	1,578	1,143
Operating profit		-510	-792	-1,303	-1,032	-772	-1,804
	YoY	-	-	-	-	-	-
	Operating profit margin	-	-	-	-	-	-
Recurring profit		-527	-752	-1,279	-1,023	-728	-1,751
	YoY	-	-	-	-	-	-
	Recurring profit margin	-	-	-	-	-	-
Net income		-2,082	-754	-2,836	-975	-759	-1,734
	YoY	-	-	-	-	-	-

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

NanoCarrier 4571