Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

Equity Bottom-Up

Key drivers / Concerns<ul>
<li>SanBio is a one drug company</li>
<li>Key pipeline candidate, SB623 (allogeneic regenerative cell medicine for chronic motor deficit from ischemic stroke or traumatic brain injury, PhIIb) targeting $2b+ market opportunity
</li>
<li>Retained Japan rights for stroke and TBI and US rights for TBI, whereas, JD with Sumitomo Dainippon for stroke in the US</li>
<li>Potential Japan approval for TBI in FY20e (under conditional and time-limited expedited approval system) and the US approval for stroke in FY22e</li>
</ul>Investment thesis<ul>
<li>Crucial catalysts, for the key pipeline candidate SB623, upcoming in YE FY18 and FY19e</li>
<li>Targeting large patient population with high unmet need</li>
<li>Double digit royalty of ~17% from Sumitomo Dainippon from FY22e</li>
</ul>Valuation<ul><li>Our explicit revenue projection until 2030e, which includes probability adjusted SB623 (TBI) sales (Japan PoS 65%; US PoS 40%) and royalty income from Stroke indication (US PoS 50%), yields DCF based fair value of ¥ 4,300 / share.</li></ul>

Key drivers / Concerns
SanBio is a one drug company
Key pipeline candidate, SB623 (allogeneic regenerative cell medicine for chronic motor deficit from ischemic stroke or traumatic brain injury, PhIIb) targeting $2b+ market opportunity

Retained Japan rights for stroke and TBI and US rights for TBI, whereas, JD with Sumitomo Dainippon for stroke in the US
Potential Japan approval for TBI in FY20e (under conditional and time-limited expedited approval system) and the US approval for stroke in FY22e
Investment thesis
Crucial catalysts, for the key pipeline candidate SB623, upcoming in YE FY18 and FY19e
Targeting large patient population with high unmet need
Double digit royalty of ~17% from Sumitomo Dainippon from FY22e
ValuationOur explicit revenue projection until 2030e, which includes probability adjusted SB623 (TBI) sales (Japan PoS 65%; US PoS 40%) and royalty income from Stroke indication (US PoS 50%), yields DCF based fair value of ¥ 4,300 / share.

SanBio Co Ltd

Investment Thesis and Valuation