Kringle Pharma : ［Delayed］Financial Results for the Fiscal Year Ended September 30, 2021 (Non-consolidated)

This is a translation of the original document in Japanese prepared for the convenience of readers outside Japan. The original in Japanese shall prevail in the event of any discrepancies between the translation and the original.

Financial Results for the Fiscal Year Ended September 30, 2021

[Japanese GAAP] (Non-consolidated)

November 12, 2021

Company name: Kringle Pharma, Inc.

Stock exchange listing: Tokyo Stock Exchange

Code number: 4884

URL: https://www.kringle-pharma.com/en/

Representative: Kiichi Adachi, President & CEO

Contact: Yutaka Matsuura, Member of the Board, Director of Corporate Planning Management

Phone: +81-72-641-8739

Scheduled date of the Annual General Meeting of Shareholders: December 24, 2021

Scheduled date of filing securities report: December 27, 2021

Scheduled date of commencing dividend payments: -

Availability of supplementary explanatory materials on quarterly financial results: Available

Schedule of financial results briefing session: Scheduled

Reference: Equity earnings (losses) of affiliates: Fiscal year ended September 30, 2021: ¥ ― million Fiscal year ended September 30, 2020: ¥ ― million

Note:1. Although potential shares existed, diluted earnings per share are not shown, as a net loss per share was recorded.

1. 2. We conducted a 20-for-1 share split on November 12, 2020. Basic earnings per share are calculated as if the share split had taken place at the beginning of the fiscal year ended September 30, 2020.

2. Financial Position

Reference: Equity: Fiscal year ended September 30, 2021: ¥2,506 million Fiscal year ended September 30, 2020: ¥2,188 million

Note: We conducted a 20-for-1 share split on November 12, 2020. Basic earnings per share are calculated as if the share split had taken place at the beginning of the fiscal year ended September 30, 2020.

(3) Cash flows

2. Dividends

3. Financial Results Forecast for the Fiscal Year Ending September 30, 2022 (October 1, 2021 - September 30, 2022)

(% indicates changes from the previous corresponding period.)

* Notes:

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
3. Total number of issued and outstanding shares (common shares)
4. 1. Total number of issued and outstanding shares at the end of the period (including treasury shares):

Note: We conducted a 20-for-1 share split on November 12, 2020. Total number of issued and outstanding shares, total number of treasury shares, and average number of shares are calculated as if the share split had taken place at the beginning of fiscal year ended September 30, 2020.

• These quarterly financial results are outside the scope of quarterly review by certified public accountants or an audit firm.
• Explanation of the proper use of financial results forecast and other notes
  The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and certain assumptions deemed reasonable at the time of the release of these materials. Actual results may differ significantly from these forecasts due to various factors. Actual results may differ significantly from these forecasts due to various factors. Please refer to "1. Overview of Operating Results, etc. (4) Explanation of Financial Results Forecast and Other Forward-looking Information" on page 5 of the Attachments for the conditions on which financial results forecasts are based and the notes on the use of these forecasts.

1

1. Overview of Operating Results, etc.

(1) Overview of Operating Results for the Fiscal Year Under Review

In the Japanese pharmaceutical market, substitution by generic drugs is progressing in response to the increase in medical costs associated with the aging of the population. Drug prices are declining significantly due to the forced NHI price revision by the government that now occurs annually from 2021. Development cost of new drug increases to accommodate the growing scale of clinical trials, which accelerates alliance or M&A of pharmaceutical companies in Japan and overseas to expand their corporate scale. Within a company, R&D focuses on selected therapeutic areas of priority and such company is actively looking for in-licensing opportunities outside the organization.

In the development of new drugs, the target is shifting from so-called "blockbuster drugs," which have a large number of potential patients and can generate large, stable future profits, to drugs that can provide effective treatment to specific patient groups. Thus, biotech companies now assume a greater role because they usually concentrate their resources on a certain specific field and are swift and agile to make decisions. In response to these trends, the Japanese government, primarily led by central ministries including the Ministry of Health, Labour and Welfare (MHLW) and the Ministry of Economy, Trade and Industry (METI), has launched the Medical Innovation Support Office (MEDISO) and compiled the "Ito Review 2.0: Biomedical Edition" as part of its efforts to proactively support Japan-based biotech companies. In addition, the Conditional Early Approval System and the SAKIGAKE Designation System for pioneering drugs have been legislated in order to promote drug discovery in Japan.

On the other hand, although the spread of COVID-19 has increased public interest in the pharmaceutical industry, more pharmaceuticals resources are currently directed to development of vaccines and treatments for COVID-19, causing potential delay in clinical development of other drugs.

Amidst above business environment, the Company continued to focus its managerial resources on the recombinant human hepatocyte growth factor (HGF) protein and developed the business activities outlined below, as the Company believes development of recombinant human HGF protein will lead to therapeutic innovation, creating business opportunities and maximizing the value of the Company.

1. Drug development activities

(a) Acute spinal cord injury (SCI)

The Company conducted a Phase I/II clinical trial with Professor Masaya Nakamura of the Department of Orthopaedic Surgery, Keio University School of Medicine as a coordinating investigator and obtained results that confirmed the safety and indicated the efficacy of the drug. The Company designed the next Phase III clinical trial to verify the proof of concept (POC; a preliminary evidence of efficacy detected in human with a new drug candidate under development) obtained in the Phase I/II clinical trial. On June 9, 2020, the Company submitted a clinical trial notification for the Phase III study to the Pharmaceuticals and Medical Devices Agency (PMDA).

In July 2020, the Company started the Phase III study at Spinal Injuries Center, Hokkaido Spinal Cord Injury Center, and Murayama Medical Center. With the addition of Japanese Red Cross Kobe Hospital and Aijinkai Rehabilitation Hospital in March 2021, the phase III clinical trial is now ongoing and proceeding in line with plans at the five medical facilities where patients are being enrolled.

In order to submit marketing authorization application for the treatment of acute SCI, the Company is conducting various tests related to the process of manufacturing recombinant human HGF. Trial manufacturing (process validation) is currently underway for the drug substance, which is required for the submission, using the same process as commercial manufacturing. The spread and prolongation of the COVID-19 pandemic has led to a global decline in plant operating rates and a prioritization of supply of raw materials for the production of COVID-19 vaccines, resulting in a decline in volume and delays in the supply of the raw materials required for the Company's development and manufacturing of HGF. Accordingly, several trials that were scheduled to be completed in the current fiscal year have been rescheduled for completion in the next fiscal year.

For the purpose of identifying more effective administration methods and timing with recombinant human HGF for SCI, the Company launched a new joint research program with Keio University School of Medicine in February 2021 to investigate possible combination with the transplantation technology for iPS cell-derived neural progenitor cells.

In June 2021, the APSS Congress Best Clinical Research Award was given for the presentation on Phase I/II clinical trial for acute SCI at the 13th Combined Meeting of Asia Pacific Spine Society & Asia Pacific Paediatric Orthopaedic Society (APSS-APPOS 2021; held from June 9 to 12, 2021 at Kobe International Conference Center).

(b) Amyotrophic lateral sclerosis (ALS)

The investigator-initiated Phase II clinical trial started in May 2016 at Tohoku University Hospital and Osaka University

2

Hospital by Professor Masashi Aoki of the Department of Neurology, Tohoku University. In November 2020, the enrollment of patients completed and the administration of the investigational drug is now continuing. As the supplier of the investigational drug, the Company has long worked to engage in the trial by supplying the investigational drug, supporting clinical trial operations, and performing the drug stability tests. The Company has continued to perform the drug stability tests in the current fiscal year.

In addition, during the current fiscal year, the Company has supported the clinical trial financially mainly covering the cost for contract research organization (CRO), in order to avoid a delay of the study due to the termination of subsidies provided by Japan Agency for Medical Research and Development (AMED) in March 2021.

In September 2021, Professor Masashi Aoki gave a presentation on the development of recombinant human HGF protein as a therapeutic agent for ALS at the Pan-Asian Consortium for Treatment and Research in ALS (PACTALS).

(c) Vocal fold scarring (VFS)

For VFS, a disorder in which the vocal fold mucosa hardens and degenerates (fibrosis), an investigator-initiated Phase I/II clinical trial confirmed safety of intracordal administration of the recombinant human HGF. It also detected signals of efficacy showing functional recovery of the vocal cord with some patients (J Tissue Eng Regen Med. 2017; 1-8.).A preliminary consultation meeting with PMDA was conducted in July 2019, based on which discussion is ongoing with Kyoto Prefectural University of Medicine to design details of the next phase trial (double-blind,placebo-controlled comparative study) aimed at obtaining POC, and the Company has formulated a plan in the current fiscal year to commence the study in the fiscal year ending September 2022. In addition, in order to promote the development of the drug for this indication, the Company has continued to work to obtain subsidies, including applying for the 6th Cyclic Innovation for Clinical Empowerment (CiCLE) project sponsored by the Japan Agency for Medical Research and Development (AMED).

(d) Supply of drug substance to Claris Biotherapeutics, Inc.

The Company concluded a license and supply agreement with Claris Biotherapeutics, Inc. of the U.S. in April 2020 to supply HGF drug substance for clinical development by Claris Biotherapeutics to treat ophthalmologic diseases in the U.S. During the fiscal year, the Company's supply of HGF drug substance to Claris Biotherapeutics was continued for the use of manufacturing the investigational product and conducting preclinical studies. Claris Biotherapeutics filed an investigational new drug (IND) application* in May 2021 to initiate a Phase I/II clinical trial for neurotrophic keratitis utilizing the various preclinical and clinical information related to HGF provided by the Company, and the first patient received treatment in August 2021.

• Clinical trial application filed with the U.S. Food and Drug Administration (FDA)

2. Business development activities

During the fiscal year ended September 30, 2021, the Company had business development discussion with potential business partners to expand development of acute SCI outside Japan. In September 2021, "oremepermin alfa" was registered as the International Nonproprietary Name (INN) for recombinant human HGF protein (five amino acid-deleted, glycosylated; development code, KP-100), the main component of our development pipeline.

As a result of the above, the business results for the current fiscal year are as follows.

Net sales during the fiscal year ended September 30, 2021 were ¥289,756 thousand (¥467,616 thousand during the previous fiscal year, a year-on-year decrease of ¥177,860 thousand or 38.0%). This was due to sales of drug substances supplied to Claris Biotherapeutics and technology access fees.

Cost of sales during the fiscal year ended September 30, 2021 was ¥71,598 thousand (there was no cost of sales during the previous fiscal year). Until the previous fiscal year, the Company sold drug substances that had been recognized as research and development expenses in previous years. However, from the current fiscal year, the commencement of cost accounting for drug substances has resulted in cost of sales being recognized.

Selling, general and administrative expenses during the fiscal year ended September 30, 2021 totaled ¥576,038 thousand (¥639,219 thousand during the previous fiscal year, a year-on-year decrease of ¥63,181 thousand or 9.9%). Research and development expenses included in selling, general and administrative expenses were ¥398,518 thousand (¥489,508 thousand during the previous fiscal year, a year-on-year decrease of ¥90,990 thousand or 18.6%). Research and development expenses included ¥71,457 thousand related to the ALS pipeline (¥32,704 thousand during the previous fiscal year, a year-on-year increase of ¥38,753 thousand or 118.5%), ¥153,448 thousand related to the SCI pipeline (¥300,662 thousand during the previous fiscal

3