Noile-Immune Biotech Inc.

All pipelines are at the research and development stage, and none have completed clinical trials, obtained manufacturing and marketing approval, or commenced sales. CAR-T cell therapy for solid tumors has no approval precedent across the entire industry, and PRIME CAR-T cell therapy is likely to require more time and expense to develop than conventional pharmaceuticals. If development is discontinued, the invested research and development expenses would become unrecoverable, having a material adverse effect on the business, financial condition, and operating results.

Net losses for the three most recent fiscal years were ¥1,130,014 thousand for FY2023 (ended December 2023), ¥964,455 thousand for FY2024 (ended December 2024), and ¥793,536 thousand for FY2025 (ended December 2025), reflecting continuing losses, while business revenue sharply declined to ¥5,000 thousand in FY2025 (ended December 2025). Operating cash flow is expected to remain negative until product launch, and if the Company is unable to raise funds at appropriate timing and terms, material concerns regarding business continuity could arise. There is also a risk of dilution to existing shareholders through capital increases.

All of the Company's businesses specialize in CAR-T cell therapy based on the PRIME Technology Platform, resulting in an extremely high degree of technology dependence. If a serious safety issue originating from the structure or mechanism of action of PRIME technology is identified during clinical trials, the impact could spread beyond a specific pipeline to all pipelines, causing material adverse effects on business continuity. There is also a risk that competitive advantage could be lost due to the emergence of superior new technologies.

The patents underlying PRIME technology depend on licenses from Yamaguchi University and Yamaguchi TLO Co., Ltd., and the joint research agreement and license agreement concluded in 2016 and 2018 form the foundation of the business. If the relationship deteriorates or the agreements are terminated or revised unfavorably, disruption to research and development and manufacturing and marketing of all pipelines could occur, and the Company's social credibility could also be damaged. Representative Director Koji Tamada also serves as a professor at Yamaguchi University, which entails an inherent conflict of interest risk.

The majority of business revenue depends on upfront payments, milestone income, and royalties from a limited number of licensees, including Adaptimmune Limited, Autolus Limited, and Chugai Pharmaceutical Co., Ltd., and there is a risk that revenue could fluctuate significantly due to changes in a licensee's management policy or termination of an agreement. In fact, the license agreement with Takeda Pharmaceutical ended in June 2024, and business revenue for FY2025 (ended December 2025) plummeted to ¥5,000 thousand. The fact that the Company cannot control licensees' development decision-making also makes revenue forecasting difficult.

The Company has no track record of completing clinical trials, and currently only has pipelines at the Phase I clinical trial stage. Because the target population consists of cancer patients who are refractory or unsuitable for standard treatment, securing trial subjects is difficult, and the occurrence of adverse events such as side effects, as well as social concerns regarding genetically modified immune cell therapies, could make it even more difficult to secure subjects. Delays or discontinuation of clinical trials directly lead to delayed or lost milestone income, having a material adverse effect on financial condition.

Representative Director Koji Tamada, who is both the developer of PRIME technology and the Chief Executive Officer, exerts significant influence over overall management strategy, research and development, and business development. If he becomes unable to continue his duties for any reason, this could not only stall research and development but also adversely affect the relationship with Yamaguchi University, potentially causing material disruption to business strategy and operating results. Although the Company is working to strengthen its organization, a high degree of dependence on this specific individual is expected to continue for the time being.

The Company does not own manufacturing facilities for immune cells and outsources the manufacturing and supply of all pipelines to third-party CMOs. The number of operators with CAR-T cell manufacturing capabilities is limited, and changing manufacturing partners requires lengthy validation, technology transfer, and regulatory approval, making it difficult to secure alternatives. If a manufacturing partner violates laws and regulations, terminates its contract, or experiences manufacturing troubles, research and development, obtaining manufacturing and marketing approval, and sales could be delayed, potentially having a material adverse effect on the business and financial condition.

The manufacturing and marketing of pharmaceuticals requires approval from regulatory authorities such as the Ministry of Health, Labour and Welfare, the FDA, and the EMA, and approval review is subject to substantial discretion by regulatory authorities. The Company plans to utilize expedited approval systems (such as conditional and time-limited approval), but the application of such systems depends on regulatory discretion, and there is also a risk that approval could be revoked if efficacy and safety are not ultimately confirmed following conditional approval. If domestic or international pharmaceutical regulatory revisions work unfavorably for the Company, substantial response costs and development delays could result.

Major domestic and international pharmaceutical and biotech companies are expanding their entry into the genetically modified immune cell therapy market, including CAR-T and TCR-T, and competitors may possess greater management resources and development experience than the Company. If competitors obtain manufacturing and marketing approval ahead of the Company, or if new technologies surpassing PRIME technology are developed, the Company's competitive advantage could decline. There is also a risk that market expansion could fall short of the Company's expectations due to geopolitical risks or fluctuations in the global economy.