FAQ

Modalis Therapeutics Corporation was founded in Tokyo Japan in January 2016.
The consolidated subsidiary, Modalis Therapeutics Inc. was founded in Cambridge, Massachusetts USA in April 2016.

Modalis (pronounced “MO-DA-LIS”) is an original name that the Company has chosen to represent the Company’s proprietary gene modulation technology, CRISPR-GNDM, as a new modality (therapeutic technology) to assist patients fighting with genetic disorders. It is the key to treatment of genetic diseases, and the logo of the company name expresses “a gene switch” becoming the target of the CRISPR-GNDM technology.

You can see the outline of our business on the “Our Science” and “Business” pages.

Although all of our board of directors, with the exception of Mr. Morita, are non-executive director, our governance structure is similar more to the U.S. model, which is structured in such a way that directors and execution are separated and executive officers are delegated to execute the company’s operation.
The officers are currently three members: CEO who is in overall charge, CSO who oversees R&D, and CFO who oversees finance and administration. In addition, there are directors with relevant experience in pharma/biotech industries under them. So, we believe that we have a solid human resource base.
However, we also believe that strengthening our team structure is important for our future development, and we intend to continue to acquire excellent human resources.
(April 1, 2022)

The U.S. laboratory currently has approximately 30 people.
Of these, about 20 are involved in research and about 5 are involved in development, which consists of process development, preclinical, and project management. The rest are in administration.
The typical profile of research department personnel is that of a researcher with a Ph.D. and post-doctoral experience and a technician who had earned a master’s degree. Other mid-career personnel have experience in gene therapy research and development at pharmaceutical companies and other biotech companies.
(April 1, 2022)

Privacy Policy
Declaration on Our Approach and Policy Regarding Personal Information Protection

Modalis Therapeutics Corporation. (hereinafter, “the Company”) recognizes that the appropriate handling of personal information obtained through its business activities is a critical matter for operational management and a social responsibility. To protect personal information, the Company will faithfully implement the following matters.

1. Compliance with Laws and Regulations
The Company shall comply with all applicable laws, regulations, national guidelines, and other norms. We shall establish internal regulations concerning information management, build an information management system, ensure thorough awareness among officers and employees, and strive for the appropriate handling of personal information.

2. Acquisition of Personal Information
The Company shall acquire personal information fairly and lawfully, without deception or other improper means, for the purposes stated below, unless otherwise required by law or regulation.

3. Purpose of Use of Personal Information
The Company will use personal information within the scope necessary to achieve the following purposes:
・To contact individuals regarding inquiries, review their content, and conduct investigations
・For recruitment screening, employee employment management, and providing information and contacting former employees
Note: Documents submitted by applicants during recruitment screening (resumes, CVs, etc.) will be properly disposed of by the Company and will not be returned.
・To provide various conveniences from the Company to shareholders in their capacity as shareholders
・For shareholder management, including creating data based on prescribed standards under various laws and regulations
・For exercising rights or fulfilling obligations based on laws, regulations, or contracts.

4. Provision of Personal Information to Third Parties
The Company will not provide personal information to third parties except in any of the following cases:
・When required to provide it based on laws and regulations
・When prior consent or approval has been obtained from the individual
・When necessary to protect human life, body, or property, and obtaining the individual’s consent is difficult
・When particularly necessary for improving public health or promoting the sound development of children, and obtaining the individual’s consent is difficult
・When cooperation is necessary for a national agency, local government, or their entrusted party to perform duties prescribed by law, and obtaining the individual’s consent may hinder the performance of such duties
・When outsourcing all or part of the handling of personal data to a third party within the scope necessary to achieve the purpose of use.

5. Security Management of Personal Information
To ensure the accuracy of personal information, we have established an information management system based on internal regulations. We strive to prevent the leakage, loss, or damage of personal information and otherwise manage personal data securely. We also periodically review this system and correct any deficiencies.

6. Requests for Disclosure, Correction, Suspension of Use, or Suspension of Provision of Personal Information; Inquiries and Complaints Regarding the Handling of Personal Information
For requests regarding the disclosure, correction, suspension of use, or suspension of provision of personal information, or for inquiries and complaints concerning the handling of personal information, please contact us via the inquiry form.

7. Changes to This Declaration Regarding Our Approach and Policy on Personal Information Protection
The content of this Declaration Regarding Our Approach and Policy on Personal Information Protection may be changed without prior notice.
Unless otherwise specified by our company, the revised Declaration Regarding Our Approach and Policy on Personal Information Protection shall apply from the time it is published on this website.

Revised February 2026
Modalis Therapeutics Corporation.

We announce our financial results at the beginning of the month following the month after the end of each quarter.
February and August: Briefings for analysts and institutional investors
May and November: Online briefings for individual investors
Please refer to the “IR Calendar” page for the schedule and hosting platform.

Annually on December 31st.

Please see the “Financial Results” page for past business results.

We provide video streaming of our analyst meetings. Please see the video library available on our website.

The earnings forecasts are not presented due to the difficulty of formulating reasonably accurate estimates at this time.

Since we do not disclose earnings forecasts, we cannot give a specific number of years as to when the company will become profitable.
We believe that the value inflection point shall come around 2024, considering the current pipeline status. This is because we are developing MDL101 based on the assumption that we will file IND in 2023 and interim results will be available within a short period of time after the start of clinical trials, as we have announced before. We believe that the pipeline that we are licensing out to our partners may also reach clinical trials at the same time, and the clinical results of these three pipelines should be enough to make a big leap forward. This does not preclude ample opportunities to earn upfront and milestone payments from the pipelines even before then.
(April 1, 2022)

Our major operating revenues consist of upfront and milestone payments in R&D collaborations, as well as revenue from clinical/sales milestones and royalties from license agreements. Each revenue is recorded as operating revenue when the contract is signed or when the conditions stipulated in the contract are met. As a result, our operating revenue is not reported monthly or quarterly but fluctuates depending on achievement of results.

Rise in U.S. interest rates:
Because we have no debt, we are not directly affected by interest payments.

Yen’s depreciation against the US dollar:
Since we have a laboratory in Massachusetts, US, where we conduct R&D, most of our payments are made in US dollars, so if the yen depreciates, our costs in Japanese yen will increase. On the other hand, if revenue is received on a dollar basis, the yen equivalent would increase, which would offset the future effect.
(November 7, 2022)

“Key audit matters (KAM)” are audit matters that the auditor determines to be of particular importance of the auditing company and are defined and described in the annual audit report.
The auditor makes a final judgment on the matters at the end of each fiscal year, so we are not in a position to tell what that will be for this year. That of last fiscal year was “Appropriateness of judgment on the necessity of recognition of impairment loss of non-current assets in the company’s gene therapy drug development business”. Please refer to the following for details.
March 29, 2022 “Audit Report on Current Consolidated Financial Statements” (bit.ly/edinetE35518)
Generally speaking, non-current assets may be fully or partially impaired if it is determined that they cannot be capitalized according to certain accounting rules. (For your note, as of 3Q 2022, the recorded fixed assets includes tangible fixed asset of 349 million yen, intangible fixed assets of 657 million yen, and liabilities corresponding to intangible assets of -292 million yen).
Since impairment is an accounting matter, there is no actual cash out, and business value and these assets themselves do not disappear even it is applied.
(November 7, 2022)

Modalis listed on the Tokyo Stock Exchange Mothers on August 3, 2020 and on the Growth Market on April 4, 2022.

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We have not paid dividends since the establishment. As we will continue to carry out R&D activities that require large up-front investments, we will not pay dividends for the time being and will prioritize securing funds for continuing R&D activities.
We recognize that returning profits to shareholders is an important management issue. If the stable profit can be earned in the future and sufficient profit can be secured to cover R&D funds, we will also consider profit distribution after comprehensively considering the need to enhance internal reserves to prepare for R&D activities.

Not at the moment.

100 shares

Please contact your securities company.

Annually in March.

As our fiscal year ends at the end of December, the date for determining voting rights for the ordinary general meeting of shareholders to be held in March next year is the last trading date in December this year. If you buy our shares by two business days prior to the final trading day for determining voting rights, you will be able to obtain voting rights.

Regarding individual inquiries about IR, from the perspective of fair disclosure, we have determined that it is appropriate to enhance information disclosure on our website and other platforms to ensure broad public awareness, rather than responding directly to individual inquiries. Accordingly, we have implemented the following procedures:
We accept inquiries via the “Contact Form” on our website.
We will review each inquiry to determine whether it should be disclosed; only those deemed appropriate for disclosure will be published on our website or in our disclosure materials.
We also disclose information required by law in a timely manner; please refer to our website, IR site, press releases, and disclosure documents.
Please note that we are unable to transfer calls for inquiries received by telephone; we appreciate your understanding in advance.
We remain committed to ensuring fair and equitable disclosure of information to our shareholders and investors, and we appreciate your continued understanding.

In our IR process, we accept questions only on our website (We do not respond to telephone inquiries), confirm all questions we receive, and answers to those that we believe need to be addressed are made public on our website and in disclosure documents. This is based on our policy that individual responses are not fair in terms of fair-disclosure, and that information that is deemed to require a response should be disclosed in a broad and fair manner. Therefore, we do not respond to individual inquiries by telephone or e-mail. We also do not offer tours of our offices or research facilities from security and confidentiality standpoints.
(April 1, 2022)

The company is currently in R&D phase, so the release of IR regarding the status of individual pre-clinical R&D activities is restricted. Depending on the progress and expansion of future pipelines, we believe there may be increased opportunity for IR.

Moreover, regarding the status of individual R&D activities, we have decided that publicly disclosing this information is not favorable from a competition standpoint, as it could be advantageous for our competitors and could have a harmful impact on stock value in the long-term. Furthermore, when a license is being negotiated, details of the research status can be communicated only to the negotiating party, so restrictions on public disclosure are standard.

Disclosures regarding individual R&D activities occasionally give stockholders expectations which may have an excessive influence on the stock price. The company has decided to proactively disclose information that will have serious impacts for stockholders.

In accordance with laws, regulations, and rules, we will proactively disclose important corporate information, such as contracts that have a significant impact on our business performance, to investors in a timely manner. While we are unable to say whether or not such information should be disclosed on an individual basis, we believe that important corporate information, such as license-out agreements, is subject to timely disclosure.

On the other hand, we are unable to disclose any unpublished information that we deem not to be in a situation to be disclosed, even if we receive inquiries about it.

We had previously disclosed our partnering objectives and timelines regarding our in-house pipeline, believing this information would be useful to investors.
However, since partnering depends not only on the progress of development and our own intentions but also on the intentions and strategies of our partners, we determined that disclosing factors beyond our control would not be appropriate for investment information. Furthermore, disclosing our intentions and deadlines regarding partnering does not have a positive impact on negotiations, and there have been cases where such impacts have actually occurred. Therefore, we have adopted a policy of not disclosing our partnering targets.

First, patents that are eligible for press-release must be patents that have a significant impact on our business, such as patents related to our pipelines, and the PR of such patents will not have a negative impact on our business.
In the case of a co-filed patent with a partner, only those patents that have been agreed upon will be disclosed. Therefore, not all patents are subject to disclosure. On the other hand, there are many resources that allow us to know the status of the patents. So it is possible for you to search by yourself if you wish.

Regarding timing, the process from the filing of a patent application to its registration is, in principle, one year and six months after the filing date, the application is published to the general public (application publication).
At this stage, the application is not yet granted, but the examination process continues, and the patent is granted by receiving a notice of allowance for those applications that pass the examination. After that, the application is officially registered as a patent after payment of a registration fee.
Typically, disclosure is made after receiving an examiner’s notice of allowance that the patent is certain to be registered to some extent.
(Published February 14, 2022, updated September 1, 2022)

We had been disclosing our intention and target timing of partnering goals for our own pipelines because we believed it would contribute to investment information.
However, since partnering depends not only on the progress of the development and our intentions, but also on the intentions and strategies of the other party, we have determined that disclosing information that is not within our control is not appropriate for investment information.
In addition, disclosing our partnering intentions and deadlines would not have a positive impact on negotiations, and in fact there have been cases where such an impact has occurred. Therefore, we have decided not to disclose our partnering goals.
(August 5, 2022)

It is our policy to disclose any significant changes in development plans through press releases or other means. In the case of ordinary revisions, our policy is to disclose such revisions in each quarter and at other times.
(September 15, 2022)

Stock prices is not under our control, so we cannot answer that question.
However, we believe that if we steadily advance our business and, as a result, our value is recognized by everyone, this will lead to an increase in our stock price.

The Company’s method of administering therapeutics is envisioned to deliver our proprietary CRISPR-GNDM® in an adeno-associated virus (AAV) vector to target cells in the body.
In other words, AAV is a delivery tool that delivers CRISPR-GNDM® to target cells.
(September 15, 2022)

The success of gene therapy since the 2010s has been largely due to adeno-associated virus (AAV) vectors, which are considered relatively safe and have a low risk as not self-replicating in the body mor inserting into chromosomes after transduction into cells. This was a major safety advantage over the previous generations.
Early gene therapies using AAV were developed initially for applications that requires local administration such as ophthalmology, and the remarkable results of these therapies have led to the expansion of their use to muscle diseases that require systemic high-dose administration. Currently, the pipelines of various companies for the treatment of Duchenne Muscular Dystrophy (DMD) are reaching to the late-stage clinical trials and regulatory submissions, and the results of clinical trials have led to discussions of various issues associated with large systemic dosing. To tackle these problems, academia and the pharmaceutical industry have developed improved AAV vectors with enhanced tropism to target tissues such as muscle, and several recently developed improved vectors have been confirmed to have more than 10-fold improved tropism and other characteristics compared to the conventional type.　These profiles are expected to have a disruptive impact in terms of reduced toxicity in off-target organs such as the liver and lower manufacturing costs due to lower dosage requirements.
Under these circumstances, we have come to believe that the significance of continuing development with the current technology is largely lost and that ethical issues arise in administering products developed based on the old technology, which has concerns, when there are new technologies with higher safety standards.
We believe that products developed based on new technologies are superior in terms of efficacy, safety, manufacturing cost, and probability of success, and that although this may temporarily delay development in the short term, it will have a positive impact in the long term by increasing product and corporate value.
(September 15, 2022)

There are two main causes of side effects: one is capsid (cargo)-related, and the other is payload-related.
Among capsid-related side effects, the most significant one common to general gene therapy is liver toxicity. Based on previous cases, we have a reasonable understanding of the dosage levels at which such toxicity occurs; we believe it is controllable and, even if it does occur, it is either transient or manageable through appropriate measures.
As for the other type of side effect, those derived from the payload, immune-related side effects are a possibility. When exogenous proteins, including GNDM molecules, are administered, they are recognized as foreign substances by the body, so an immune response is naturally likely to occur. In the case of GNDM, since it is expressed intracellularly, we believe that cellular immunity could be the primary concern. As reported in our published papers, no major issues have arisen in monkeys to date.
(Mar 2026 updated)

Although we continue to have dialogues with potential partners, we are proceeding with our business with the belief that advancing development toward clinical trials as planned will ultimately add value to the program and technology and lead to the realization of an alliance on better terms.
Since the decision to enter into an alliance depends on the timing and intent of the other party as well as our own, it is not something that can be achieved solely through our efforts. On the other hand, as we recognized again at CureCMD conference, where we participated, MDC1A is a life-threatening disease, and given the current situation where the drug we are developing is a hope of the patients, the best thing we can do and manageable to us is to proceed with the development as fast as possible while we are waiting for a right partner who has strong commitment to develop the molecule together will make a decision at an appropriate time and under the appropriate conditions.
(August 5, 2022)

Considering patient recruitment challenges for DMD where prior marketed drugs exist, we selected LAMA2-CMD—a completely non-competitive target but share the same mechanism of action—to establish clinical proof-of-concept (PoC) for our product and technology faster.

AAV (adeno-associated virus) vectors are currently the predominant delivery tool for gene therapy for genetic diseases. This is because of their superiority in terms of delivery efficiency and safety. On the other hand, the flip side of safety is that the virus does not replicate in the delivered cells, so the effect is attenuated each time the cells divide. Thus, the effect will not persist in cells that are actively proliferating.
For this reason, regardless of our technology, potential targets for gene therapy using AAV are limited to organs and tissues with relatively inactive cell proliferation, and as a result, cells such as muscle and central nervous system cells are often targeted, while blood cells and cancer cells are avoided.
Also, in the case of cancer cells, if the vector is not delivered to close to 100% of the cells, the effect will be temporary because growth will occur again from the undelivered cancer cells which will grow.
Some gene and cell therapies target cancer, but in such cases, they do not target the cancer itself, but rather aim to increase cancer-killing cell activity by introducing genes into cancer-killing cells.
(November 7, 2022)

We have several new candidates, including those for which we are currently exploring the possibility of collaboration and those that are being incubated in-house. We plan to promote these to the pipeline at an appropriate stage.
Among existing pipelines, we will promptly discontinue those for which we believe there is no longer a possibility to continue research and development, such as MDL-204.
We believe that it is reasonable to optimize the size and quality of our portfolio by conducting an appropriate metabolism.
We also believe that making decisions at an early stage, especially at the research stage, is effective in increasing the chances of success in the costly development stage.
(January 7, 2022)

With clinical trials imminent, we are currently in a phase where R&D investments are taking precedence.
Our policy is to conduct business based on the principle that, while maintaining fiscal discipline, advancing development is our top priority for enhancing corporate value.

To encourage companies to develop treatments for rare diseases, governments around the world offer substantial financial incentives, such as granting exclusive marketing rights for a certain period through a system known as “Orphan Drug Designation” in the United States. Furthermore, the currently approved gene therapy for Duchenne muscular dystrophy (DMD) carries a price tag of $3 million per dose. Therefore, even for rare diseases, there is potential to ensure sufficient profitability.

Although you might imagine manufacturing scale for rare disease product is also small, it may not be the case for some of the genetic disorders. For instance, many type of muscular disorders require systemic injection and 1000L scale of production, which is a largest batch in many of the GTx manufacturing facilities, can produce products only for single digit to low 2-digit patients.
It is important to manufacture those products in a way that complies with GMP, and it makes sense for us to work with CDMO, which has experience, capability, and capacity to manufacture.
Our current strategy is to work with the CDMO which we made an alliance this time and revisit the strategy when we establish clinical PoC and risk is well mitigated.
(November 5, 2021)

To support clinical-scale manufacturing of products such as MDL-101, we conduct small-scale manufacturing and process development in-house; however, due to capacity constraints and other factors, we must outsource large-scale manufacturing to an external CDMO. Process development for MDL-101 has already been completed, and a manufacturing method for large-scale production has been established.
(Mar 2026 updated)

We plan to present our findings at various conferences, including the ASGCT (American Society of Gene & Cell Therapy) and other academic and business conferences.

The Initial Targeted Engagement for Regulatory Advice on CBER Products (INTERACT) meeting is a forum through which the U.S. FDA provides informal, pre-IND consultation for products in the pre-IND stage; it offers an opportunity for the FDA to provide consultation on specific challenges associated with the development of innovative R&D candidates.
Additionally, the pre-IND meeting serves as an opportunity for sponsors (such as development companies) to share their plans with the FDA and confirm the requirements necessary for an IND.
During these two dialogue sessions, we shared our preclinical data, plans for future GLP studies, GMP manufacturing plans, and clinical trial plans with the FDA to confirm the validity of these plans. As a result, our plans were generally accepted, and we confirmed that only minor revisions were required.
(April 2024)

We are delighted to see that epigenetic modulation is now widely recognized as an effective drug discovery technique.
The Company believes that, in addition to the protection provided by our existing intellectual property, we can continue to maintain our leading position by based on the collective experience we have gained in the six years since our establishment.
(February 14, 2022)

The U.S. Patent Office (USPTO) had been conducting an interferences (#106,115) between Broad Institutes (Broad) and the University of California, the University of Vienna, and Dr. Emmanuelle Charpentier (collectively, CVC), challenging the prior inventions in the U.S. On February 28, 2022, the USPTO Board of Appeals (PTAB) ruled that Broad’s rights were not effectively interfered with in this interferences.
On February 28, 2022, the PTAB ruled in favor of Broad, holding that there was no interference in fact with the interferences.
The PTAB also rejected the CVC’s argument in No. 106,048, which was also the subject of an earlier interferences proceeding.
This indicates that Broad’s patent application for genome editing technology in eukaryotes, including humans, is valid in the United States.
As a result, the CRISPR foundational patents, which we have a right through the license agreement with Editas, will continue to be valid in our business areas and will continue to secure our business.
(May 9, 2022)

Unlike the sale of general merchandise, partnering is not a sales transaction; rather, it is an exchange agreement in which short-term licensing fees are swapped for long-term profits derived from future product sales. Therefore, if a company has sufficient financial resources, I believe that choosing not to pursue partnering is a valid option, given the strategic flexibility it affords.
If capital allows, developing with funds raised in-house is preferable from the perspective of speed and other factors; however, if the company cannot raise funds on its own, it may be necessary to continue development by securing external funding through partnering or similar means.
Given our current financial environment, partnering is certainly a necessary option; however, since such transactions can only be established with a counterpart, we believe it is difficult to predict the timing, regardless of development progress or results.
Furthermore, while we disclose our goals regarding partnerships to facilitate dialogue with investors, specifying a target timeline would effectively communicate our intended negotiation deadline to potential partners, which is indeed undesirable from a strategic negotiation standpoint. We understand that some may feel uneasy because partnerships, including MDL-101, have not yet been finalized. However, our R&D—which is paramount to value creation—is progressing, and discussions with interested companies are ongoing; therefore, we believe it is only a matter of time before these partnerships are established.
(March 2026 updated)

Since we do not yet have a dedicated clinical team, our policy is to outsource monitoring and other activities to a clinical CRO, while bringing some of the function in-house in the future.

Unfortunately, neither of clinical trials or patient registration has yet started. When it is decided, we will release it on our website and on the clinical trial registration sites of each country such as clinicaltrials.gov and clinicaltrialsregister.eu. If you contact us via our website, we will put you to our contact list. However, please note that this does not guarantee the order or a slot. In addition, the patient networks for each disease, including LAMA2-CMD, are relatively well organized and we are also collaborating with them, so we recommend that you participate in such organizations.

Branded goods are not for sale and are for internal use only.

It has become clear that additional analysis is required, and the company has determined that conducting this analysis is necessary to improve the likelihood of a successful development outcome. While this will result in a delay in the start of the trial, we believe that sufficient efficacy can still be demonstrated even with a reduced clinical trial size, and we therefore expect to maintain the timeline for achieving proof of concept (PoC) and submitting an application for conditional approval.

Although we considered this as an option, in the case of MDL-101, we believe it would be difficult to conduct trials in Australia or New Zealand due to their small populations and the limited pool of eligible patients. However, we believe there is room for consideration regarding investigator-initiated trials (IITs) in China.
*CTA (Clinical Trial Authorization): The application submitted to regulatory authorities in Europe, Australia, and other regions to initiate clinical trials of new drugs.
^#IIT (Investigator-Initiated Trial): A clinical trial initiated by a physician.