■ Overview of the business of Sumedo <4263>.

The application for the partial change approval of the insomnia treatment app will be submitted for manufacturing and sales approval in August 2024.

Regarding the insomnia treatment app 'Sasmido Med CBT-i(R)', a sales partnership agreement was concluded with Shionogi & Co., Ltd. in December 2021 (granting Shionogi & Co., Ltd. exclusive sales rights in Japan and receiving a total of up to 4,700 million yen as milestone income based on upfront payments and development progress). On February 15, 2023, it obtained manufacturing and sales approval from the Ministry of Health, Labour and Welfare. It had been preparing for insurance coverage by submitting a request for insurance coverage application to the Ministry of Health, Labour and Welfare in FY 2024 medical fee revision. However, on January 29, 2024, the request for insurance coverage application was temporarily withdrawn. This is because, in the discussions during the FY 2024 medical fee revision, insurance coverage for doctor-performed face-to-face cognitive behavioral therapy for insomnia, which was also proposed for insurance coverage, was postponed. As a result, it was decided to postpone insurance coverage for the company's 'Sasmido Med CBT-i(R)' as well.

Subsequently, on August 30, 2024, an application for partial change approval of manufacturing and sales approval items (an application for changing a part of the approval items for pharmaceuticals, medical devices, etc. that have already obtained manufacturing and sales approval) was made. This was done in anticipation of insurance coverage by the revised system, after repeated consultations with regulatory authorities based on the new system, as the evaluation of disease treatment programs as specified insurance medical materials was reviewed during the FY 2024 medical fee revision.

In the future, if the partial change approval of the manufacturing and sales approval items is approved, insurance coverage will generally be carried out through deliberation by specialized organizations for insurance medical materials and approval by the Central Social Insurance Medical Council. However, the specific schedule is undecided. The technology for the company's insomnia treatment app has been patented in Japan, the United States, South Korea, and Indonesia, and has received a patent evaluation from the European Patent Office in February 2023. The company continues to prepare for manufacturing and sales approval items partial change approval and insurance coverage in collaboration with Shionogi & Co., Ltd.

The development pipeline as of August 2024 consists of 12 projects.

Development pipeline of therapeutic and diagnostic apps

The development pipeline of the company's therapeutic and diagnostic apps consists of 12 projects as of August 9, 2024 (including the insomnia treatment app 'Sasmido Med CBT-i(R)').

The exploratory trial of the breast cancer patient exercise therapy app "SMD401" (developed in partnership with the National Cancer Center) and the Advanced Care Planning (ACP) program medical device "SMD402" (developed in partnership with the Jikei University School of Medicine) targeting advanced cancer has been completed, and preparations are underway for the next trial. The expected effects of using SMD402 include alleviating patients' psychological distress, improving anxiety and depression symptoms, and discontinuing inappropriate treatments. The results of the exploratory trial were presented at the oral session of the American Society of Clinical Oncology (ASCO) Annual Meeting in June 2024.

The exploratory trial of the chronic kidney disease rehabilitation app "SMD201" (developed in partnership with Tohoku University and the Japanese Kidney Rehabilitation Society) has been completed, and preparations are underway for the next trial. The expected effects of the app include improving or suppressing the deterioration of renal function and preventing the transition to dialysis treatment. Renal rehabilitation, including exercise therapy, is recommended for improving or suppressing the deterioration of renal function in patients with chronic kidney disease in the maintenance phase. In order to achieve both the quality and efficiency of medical care, the company believes that treatment apps utilizing smartphones are in line with medical needs. Apps targeting persistent grief disorder (SMD102, developed in partnership with the University of Zurich) and opioid-induced constipation (SMD202) are currently under development in preparation for exploratory trials.

The specific clinical study of the app "SMD403" (developed in partnership with Kyorin Pharmaceutical) targeting tinnitus is currently being conducted. The app "SMD105" (developed in partnership with Nagoya City University) for Acceptance and Commitment Therapy (ACT) targeting postmastectomy pain syndrome (PMPS) has completed the clinical study and is preparing for the exploratory trial. The app "SMD106" (developed in partnership with Asuka Pharmaceuticals) targeting the obstetrics and gynecology field is currently under development in preparation for the exploratory trial. The app "SMD107" (developed in partnership with Niigata University) targeting persistent postural perceptual dizziness (PPPD) was presented at the 125th Annual Meeting and Academic Lecture of the Japan Society for Ear, Nose, and Throat and Head and Neck Surgery in May 2024, and clinical trials began in August of the same year.

In the diagnostic field, the app "SMD103" (developed in partnership with Nagoya University) targeting antenatal and postnatal depression is currently under development in preparation for the exploratory trial, with already granted patents for the algorithm and device. The app "SMD104" targeting ADHD (Attention Deficit Hyperactivity Disorder) and eye-gaze analysis is also currently under development in preparation for the exploratory trial.

Based on the contract for joint research and development of "SMD403" with Kyorin Pharmaceutical concluded in November 2022, the company has recorded temporary income of 200 million yen for the fiscal year ending June 2024, consisting of a one-time payment of 100 million yen at the time of contract conclusion and milestone income of 100 million yen upon the start of clinical research. In addition, in September 2023, the company entered into a contract with Asuka Pharmaceuticals, a specialty pharma in the obstetrics and gynecology field, for joint research and development of the obstetrics and gynecology treatment app "SMD106" and sales after product launch (contract one-time payment of 200 million yen, milestone income totaling 2,500 million yen depending on the development stage, and royalties based on sales after product launch), and has already received the one-time payment of 200 million yen (not yet recognized as revenue).

(Authored by FISCO guest analyst Masanobu Mizuta)