News Release

GNI Group summary Q&A from Q1 2023 financial results analyst call and other recent inquiries

(Call held on May 18, 2023)


This presentation contains statements concerning the current plans, expectations, and strategies of GNI Group Ltd. (GNI Group). Any statements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements. Forward-looking statements may include, but are not limited to, words such as “believe,” “plan,” “strategy,” “expect,” “forecast,” “possibility” and similar words that describe future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or written, are based on judgments made by the management of GNI Group, based on information that is currently available to it. As such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking statements.


The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Any decision to invest in or acquire securities of GNI Group must be based wholly on the information contained in the preliminary offering circular issued or to be issued by GNI Group in connection with any such offer and not on the contents hereof.


This English summary translation is for convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.


Note: In places, pro forma figures in the pages which follow may be rounded to underscore direction of the business.


GNI Group Ltd. (single entity in Japan): the Company

The Company and its subsidiaries: the Group or we

Beijing Continent Pharmaceuticals Co., Ltd.: BC

Catalyst Biosciences, Inc.: CBIO

Berkeley Advanced Biomaterials LLC: BAB

Targeted Protein Degradation: TPD

Nonalcoholic Steatohepatitis: NASH

Q1: What will be the impact of Series C funding on Cullgen’s cashflow?

A1: Extensive of cash runway under current budget into 2025.


Q2: What did the investors in this round receive in return for their investments? Common stocks, preferred stocks, and / or warrants?

A2: As typical in venture capital financing rounds, the investors received preferred shares of Cullgen.


Q3: Why did GNI not invest more than $6M to keep the ownership level (35%) on a fully diluted basis prior to Series C? Was the reduction in GNI’s ownership intentional and a part of the steps toward de-consolidating Cullgen?

A3: That was not necessarily our intention. Through GNI USA’s participation in the Series C financing, the GNI Group just maintained its investment in Cullgen in the low 30% level on a fully diluted basis, reflecting the continued confidence we have in Cullgen’s platform technology and ongoing programs.


Q4: Did GNI exercise all the Cullgen’s warrants it held along with Series C funding?

A4: Yes.


Q5: You have said Cullgen’s fund raising of $40m covers 3 years of its operations. Since GNI consolidated Cullgen, does that mean GNI’s R&D cost will increase?

A5: Yes, it will slightly increase R&D costs, but it is worth it. Cullgen is our future, and we look forward to seeing Cullgen grow in the future, and 30-ish% ownership is an ideal position for us.


Q6: What is in “Others” on Slide 24 in the presentation material?

A6: Others are research reagents and other general healthcare-related products handled by Reef. Our intention was to separate them from pharmaceutical revenues so that pharmaceutical revenues can be clearly identified.


Q7: Regarding the NASH Phase IIa test, you have said the protocol has been agreed. Will CBIO sponsor the trial alone? Who will sponsor the phase after IIa?

A7: We are afraid that we cannot comment on this more than what we have already disclosed.


Q8: Cullgen’s taking time to start TPD clinical trial. When will it likely start? Could it start this year?

A8: We are afraid that we cannot comment on this more than what we have already disclosed.


Q9: Cullgen has eight drugs one their pipeline. Which one will likely be the next one to proceed to a clinical trial?

A9: We are afraid that we cannot comment on this more than what we have already disclosed.


Q10: GNI used to give more guidance on future prospects before, but has your policy changed not to disclose anything about a future event?

A10: We cannot comment on CBIO’s plan because there are ongoing discussions and filings with the US SEC, and we must strictly comply with all the rules over there. Besides, CBIO is a public company in the US, so we cannot speak for them in Japan from now on. We apologize for the inconvenience. If any material information is disclosed by CBIO themselves, we will let you know.

Cullgen has other INDs in preparation, but we cannot disclose the name of the target until an IND is filed because TPD is a very hot field and therefore is crowded with competitors. If such sensitive information is made available to our competitors, it could damage Cullgen. We appreciate your understanding. As soon as Cullgen discloses a target name in an R&D or industry conference, we will be open to discuss it with the public.