CMIC : Consolidated Financial Results For the 3rd Quarter Ended June 30, 2022

(Note) This translation is prepared and provided for readers' convenience only. In the event of any discrepancy between this translated document and the original Japanese document, the original document shall prevail.

July 29, 2022

CMIC HOLDINGS Co., Ltd. Consolidated Financial Results

For the 3rd Quarter Ended June 30, 2022

(The Fiscal Year Ending September 30, 2022, Japan Accounting Standards)

Highlights:

◆Net sales grew 32.5% year on year to ¥78,367 million on a consolidated basis ◆Operating income increased 159.9% to ¥9,280 million

◆Earnings per share: ¥330.30

◆Order received grew 29.8%, order backlog grew 10.1% year on year

Tokyo, July 29, 2022 - CMIC HOLDINGS Co., Ltd. (TSE Prime Code: 2309) today reported financial results for the 3rd quarter ended June 30, 2022.

CMIC Group aims at transitioning to PHVC (Personal Health Value Creator) business model that "maximizes the individual health value", while using our unique PVC (Pharmaceutical Value Creator) model that fully supports the value chain of pharmaceutical companies as the foundation for sustainable growth.

In the fiscal year ending September 2022, which marks the 30th anniversary of the company's founding, the Group will position the year as the first year of its third founding and strengthen its response to drug development and digitalization using new basic technologies for drug discovery. At the same time, we will expand our business domain into the healthcare field and promote support for efforts to provide total care for diseases, from prevention to diagnosis, treatment, and prognosis. With an eye on the post-COVID business environment, we intend to strengthen the Group's business foundation and make great strides toward sustainable growth.

CMIC Group is promoting "Pharmaceutical solutions" based on our PVC model and "Healthcare solutions" that contribute to the individual's health through medical institutions and municipal governments, in alignment with the focus activities in the mid-term business plan (FY2022-2025) 1) Evolution of healthcare business, 2) Comprehensive support for disease prevention, treatment R&D, and marketing, and 3) Contribution to sustainable society through services with high social benefits.

[Consolidated operating results for the third quarter]

During the third quarter of the current fiscal year, as part of our efforts to address the key issues in our mid-term plan, we focused on sales activities to propose business solutions for local governments that support local communities in terms of both digital and human resources, and to win new contracts for pharmaceutical development and manufacturing.

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The invasion of Ukraine by Russia in February 2022 has caused social instability and there continues to be concern about the impact on our business, but the impact on our Group through the third quarter of the current consolidated fiscal year has been minimal.

In the third quarter of the current fiscal year, the results significant increased over the same period previous year, mainly due to significant growth in the Healthcare Solutions segment, including vaccine development and vaccination support services for new coronavirus infections. Sales were ¥78,367 million (up 32.5% from the same period of the previous year), operating income was ¥9,280 million (up 159.9% from the same period of the previous year), ordinary income was ¥10,440 million (up 179.6% from the same period of the previous year), and net income attributable to shareholders of the parent company was ¥5,932 million (up 205.2% from the same period of the previous year).

• Effective from the first quarter of the current fiscal year, the Company has adopted the new revenue recognition standard.

The business results by segment are listed as below:

Effective from the fiscal year ending September 30, 2022, the Group's reportable segments have been changed to two segments, "Pharmaceutical Solutions" and "Healthcare Solutions". Year-on-year comparisons of operating results by segment have been made based on the new segments.

We are developing a PVC (Pharmaceutical Value Creator) business model that provides solutions to the value chain of pharmaceutical companies through our CRO (drug development support), CDMO (drug formulation development and manufacturing support) and Market Solutions (pharmaceutical sales support, development, manufacturing, sales and distribution of orphan drugs, etc.) businesses.

Sales increased to ¥56,977 million (up 13.6% year on year) due to growth in all businesses, and operating income increased to ¥4,139 million (up 13.9% year on year).

The application of the accounting standard for revenue recognition increased sales by ¥1,899 million and segment income by ¥120 million compared with the previous method.

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CRO Business

-Sales increased from the same period of the previous year -Increased inquiries for development projects

-Partnership with Science 37® to promote Decentralized Clinical Trials (DCT) and speed up drug development; more trials incorporating DCT (telemedicine, home nursing, ePRO, etc.) -Launched Oracle Argus Safety multi-tenant rental service for pharmacovigilance operations

-In the bioanalysis business, CMIC supports drug discovery in cutting-edge areas where modalities are diversifying, such as next-generation biopharmaceuticals and gene therapy drugs

CDMO Business

-Sales increased from the same period of the previous year

-Growing need to ensure stable supply in response to the spread of new coronavirus infections and generic quality issues

-Rising prices for energy, raw materials, and packaging materials in manufacturing

-Respond to supply shortage risks, such as prolonged delivery times, in cooperation with customers and suppliers

-Delayed recovery in US performance, focus on acquiring new projects

Market Solutions Business

-Sales increased from the same period of the previous year

-Acquired new projects and made steady progress in existing projects in MR dispatch services -Exclusive license agreement for the development, manufacturing and marketing of glycerol phenylbutyrate (overseas trade name: Ravicti®) for the treatment of urea cycle disorders in Japan

The Site Support Solutions business provides comprehensive support for healthcare-related facilities and healthcare professionals, and the Healthcare Revolution business provides solutions using a new ecosystem for healthcare to individuals and local governments.

Sales increased to ¥21,862 million (up 132.5% year on year) and operating income increased to ¥6,210 million (up 602.0% year on year) due to significant growth in vaccine development and vaccination support services for new coronavirus infections and other services.

The application of the accounting standard for revenue recognition increased sales by ¥292 million and segment income by ¥105 million compared with the previous method.

Site Support Solutions Business

-Sales significantly exceeded the same period of the previous year

-Increase in development projects for vaccines and therapeutic drugs for new coronavirus infections and needs for call center projects

-Needs for clinical trials (researches) and other support for medical institutions are expanding -Promote collaboration with academia

Healthcare Revolution Business

-Sales significantly exceeded the same period of the previous year

-Significant increase in vaccination support services for new coronavirus infections, etc.

-Expansion of businesses that integrate disease prevention, health information, and IT technologies -Promote cooperation with local governments

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-Promote the use of harmo® as a Healthcare Communication Channel in PHRs, etc. -Promotion of Selcheck® self-check service

Ordinary Income

Ordinary income in the consolidated cumulative third quarter was ¥10,440 million (up 179.6% year-on- year).

Foreign exchange gains and other of ¥1,314 million were recorded as non-operating income, and interest expenses and other of ¥153 million were recorded as non-operating expenses.

Profit attributable to owners of parent

Profit attributable to owners of parent in the consolidated cumulative third quarter was ¥5,932 million (up 205.2% year-on-year).

CMIC recorded an extraordinary loss of ¥79 million for loss on retirement of fixed assets and loss on valuation of investment securities, income taxes of ¥4,258 million, and net profit for the quarter attributable to non-controlling interests of ¥170 million for the period.

Overview of the financial condition

Assets, liabilities, and net assets

Total assets at the end of the consolidated cumulative third quarter increased by ¥5,488 million compared with the end of the previous consolidated fiscal year to ¥96,681 million. This was mainly due to increases in notes and accounts receivable, trade and contract assets, "Other" (suspense paid income taxes) in current assets, and property, plant and equipment.

Total liabilities increased by ¥1,053 million compared with the end of the previous consolidated fiscal year to ¥57,759 million. This was mainly due to an increase in "Other" (contract liabilities) in current liabilities.

Total net assets increased by ¥4,435 million compared with the end of the previous consolidated fiscal year to ¥38,921 million. This is due mainly to an increase in retained earnings.

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Future Outlook

The outlook for the fiscal year ending September 30, 2022, incorporates the outlook for future work related to COVID-19 and the impact of the situation in Ukraine on our business, based on information available at this time.

For COVID-related operations, we expect therapeutic drug and vaccine development projects will continue, and the number of inquiries from local governments are expected to increase due to another wave of COVID.

The situation in Russia and Ukraine has no direct impact on our business, as we do not operate any business bases in either country. The impact of the situation on our business is expected to be limited, although there will be price increases in energy, raw materials, packaging materials, and other items.

Based on the above, we have revised upward our full-year forecasts for the fiscal year ending September 30, 2022, to net sales of ¥ 106,000 million, operating income of ¥ 8,600 million, ordinary income of ¥ 9,200 million, and net income attributable to owners of the parent of the company of ¥ 4,500 million, respectively, in light of continued strong performance in vaccine development and vaccination support services for new coronavirus infection during the first half of the current fiscal year.

Cautionary statement:

This material includes forward-looking statements based on assumptions and beliefs in light of the information currently available to management, and is subject to significant risks and uncertainties. Actual financial results may vary materially from the content of this material depending on a number of factors. While this material contains information on pharmaceuticals (including compounds under development), this information is not intended to make any representations or advertisements regarding the efficacy or effectiveness of their preparations, promote any kind of unapproved uses, nor provide medical advice of any kind.

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