Third Quarter Consolidated Financial Results
f theforth Fiscal
Fi l YearYEnding
E di March
M h 31,2009
31 2009● Consolidated Financial Results● Main Product Sales Update● Main R&D Activities● Results and Forecast ofMain Subsidiary Companies

February 5, 2009

KYORIN Co.,Ltd.

Outline of Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2009
Third Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2009
Net sales reached ¥66.4¥66 4 billion (up 6.5%6 5% year on year),year) driven by strong sales of major products and anincrease in sales of domestic new drug due to the merger with Nisshin Kyorin Pharmaceutical,
offsetting a significant fall in lump-sum money income.
【Income】 Gross profit rose about ¥100 million, with the decline in lump-sum money income more than offset bytheh expansion
i off new domestic
di drugs.
dSG&A expenses increased about ¥600 million because of the merger with Nisshin Kyorin
Pharmaceutical and other factors. As a result, operating income was ¥5.3 billion (down 7.8%).
y loss of about ¥3.2 billion,, net income stood at ¥0.8 billion
After the subtraction of an extraordinary(declining 68.6%).
＊The earnings forecast announced on October 29, 2008 has not been changed.
【Sales】

Units:
Millions ofyen

Third quarter
March 31,31
2006

Third quarter
March 31,31
2007

Third quarter
March 31,31
2008

Third quarter
March 31,31
2009

YoY change(%)

Year ending March 31,
2009 (forecast)

YoY change(%)

Net sales

55,83656,961

62,32566,361

6.5％

88,600

9.3％

Operatingincome

7 129
7,129

5 814
5,814

5 788
5,788

5 339
5,339

▲7 8％
▲7.8％

6 7006,700

7 2％
7.2％

Ordinary
income

7,689

6,101

6,278

5,451

▲13.2％

7,000

5.4％

Net income

4,670,

3,483,2,687,842▲68.6％

1,600,▲26.9％＊ First quarter Consolidated financial results until March 31,2006 are KYORIN Parmaceutical Co.,Ltd.
First quarter Consolidated financial results from March 31,2007 and Forecast for Interim term Ending in September 30,2008 and March 31,2009 apply to KYORIN Co.,Ltd.
＊Since the quarterly reporting system was introduced for the first time in the current fiscal year, figures for the same period in previous fiscal years used for comparison andanalysis have not been reviewed by a third-party auditor.

1Consolidated Financial Results
for the Third Quarter March 31, 2009
Units: Billions of yen

ThirdQuarter
March 31,2008
Net sales(total)◆ Sales of new
ethical drugs
Japan

62.3
52.4

ThirdQuarter
March 31,
2009

66.4
55.5

Changeg(+4.1)(+3.9)

・ Kipres・ Pentasa
・ Uritos
・ Mucodyne

18.1
11.7
1.3
15.3

(+4.1)( 4.9)(+4.9)(+0.7)(▲0.6)

2.5 billion
191.9(▲ 0.8)(▲0 2）(▲0.2）

4.6 billion(+0.8)

08.3(1Q)(results)

Change+4.1+3.1

49.1

53.0+3.9

OOverseas

33
3.3252.5▲0 8▲0.8◆ Genericdrugs

3.8

4.6+0.8◆ Consumer
healthcare
business5.4

5.4±0◆ Otherbusinesses

0.8

0.9+0.1

Operatingincome

5.8

5.3

▲
▲0.5

Ordinary
income

6.3

5.5

▲0.8

Net income

2.70.8●Sales of new ethical drugs in Japan

66.4 billion
53.0 billion■ Net sales
14.0
6.8
0.6
15.9

→→→→

08.3(1Q)(results)＊ Other factors for decrease ： Baynas,Hespander sales termination , Discontinuation ofcommercialization of Gatiflo, decrease in lump-sum money income● Sales of new ethical drug overseas
・ Gatifloxacin
G tifli21
2.1→
・ Decrease in lump-sum income● Generic drugs

・ Expansion of sales of main products, launch of new products and relocated products● Consumer healthcare business・ Milton
1.5→
・ Dr.Program Co.,Ltd.
2.4→● Other businesses◆ Cost of sales ratio ： up 3.6 points

5.4 billion
1.4
2.6
0.9 billion(38.2%→41.8%)(± 0)(▲0. 1））(▲(＋0.2）（＋0.1）

Factors for increase: ： price revision (kyorin pharmaceutical: approx 4%),decrease of lump-sum money income and change product configuration.

◆ R&D ratio ： down 1.8 points(13.2%→11.4%)
R&D: down from ¥8.3 billion to ¥7.6 billion
Factors for increase: ： lump-sum contract deposit of Fultiform ,integration with
Nissin Kyorin.
yFactors for decrease: ：co-development expenses for the previous term due tothe difference of closing dates◆ SG&A expenses ratio (excluding R&D expenses): down 0.4points (39.2%→38.8%)
SG&A expenses (excluding R&D expenses) up from ¥24.4 billion to ¥25.7 billion (approx,1.3 billion up)▲1.9 ■

Factors for increase ：SG&A expenses increase by merger with Nissin Kyorin.

Operating income

5.3 billion（▲ 0.5）＊ The operating income margin decreased 1.3 percentage points , to 8.0%

■ Net income

0.8 billion＊Special loss：approx 3.2 billion(Gatiflo about 2.6 billion yen,loss on revaluation of investments in securities about 0.4 billon yen.)（▲1.9）
２

Consolidated Results for
Second Quarter and Third Quarter（April 1to September 30,2008）（October 1to December 31,2008）
Units: Billions of yen

April 1toSeptember 30,2008

Net sales

40.3
17.7

October 1toDecember 31,
2008

Change+0.9

Net sales

26.1+3.0

COGS% Sales

10.0
38.4％

ChangePoint+3.1 ＊Sales were favorable overall. Sales ofPentasa and Kipres rose ¥2.2 billion+0.9 and ¥1.6 billion respectively.

COGS% Sales

44.0％

Gross profit

22.5

▲2.2

Gross profit

16.1

SG&A expenses

21.3

▲0.6

SG&A expenses

12.0

R&D expenses
p50
5.0

▲0 7
▲0.7

R&D expenses

2.6±0SG&A expenses(excluding R&Dexpenses):

16.3+0.1

SG&A expenses(excluding R&Dexpenses)

9.4+1.2 ＊SG&A （excluding R&D ）expenses＊The cost of sales ratio fell in+2.3 association with the start of in-housemanufacturing of Pentasa.

+1.2

increase by merger with Nissin Kyorin.

OperatingOti
income

121.2

▲1 6
▲1.6

Operatingincome41
4.1+1 1 ＊Operating income rose significantly+1.1

Ordinary
income1.2▲1.9

Ordinary
income4.3+1.1Net income▲1.6▲2.6

Net incomei2.4+0.7

with an increase in SG&A expenses
offset by an expansion in net sales.

In the interim term, sales rose but income fell because of a fall in lump-sum
lump sum money income and other factors.
Both sales and income increased in the third quarter thanks to the merger with Nisshin Kyorin Pharmaceutical anda continued rise in sales of new domestic drugs, among other factors.
３

Consolidated Financial Results
for the Third Q
Quarter March 31,, 2009
（ Units: ¥ million ）Second quarter
FY07(results)

Sales

Full term

FY08(forecast)

FY07(results)

Third quarter（April 1,2008 to December 31,2008）

FY08(forecast)

FY07(results)

FY08(results）

ChangeYoYchange(%)

Progress
to fullterm
forecast(%)

39,36340,261

81,07088,60062,32566,361+4,036

6.5％

74.9％

32,801

33,046

67,631

73,10052,39755,529+3,132

6.0％

76.0％

Japan

30,28931,23963,296

69,90049,11753,001+3,884

7.9％

75.8％

Overseas

2,512

1,806

4,334

3,200

3,279

2,527

▲752

▲22.9％

79.0％

Generic drugs

2,539,

2,929,

5,088,

6,300,3,786,

4,583,+797

21.1％

72.7％

Consumerhealthcare
business

3,545

3,684

7,296

8,000

5,372

5,392

+200.4％

67.4％

Other
businesses

477

600

1,054

1,200

769

855

+86

11.2％

71.3％

Operatingincome

2,788

1,243

6,251

6,700

5,788

5,339

▲449

▲7.8％

79.7％

OrdinaryOdi
Income

3,118

1,175

6,643

7,000

6,278

5,451

▲827

▲13.2％

77.9％

Net income

953▲1,606

2,189

1,600

2,687

842

▲1,845▲68.6％

52.6％

Sales of new
ethical drugs

４Main Product Sales Update（ Units: ¥ ｂillion ）Second quarterProduct name

FY07(results)

FY08(forecast)

FY08(results)

YoYchange (%)

Kipres

7.9

10.4

19.1

23.4

14.0

18.1

29.3％

77.3％

Gatiflo（Kyorin）

1.1

0.9

2.3

0.6

1.8

0.7

▲60.0％

―

9.0

8.7

21.2

20.7

15.9

15.3

▲3.7％

73 9％
73.9％

Baccidal

0.2

0.2

0.5

0.4

0.4

0.3

▲22.0％

75.9％

Ketas

2.8

2.6

5.4

5.2

4.3

3.9

▲9.6％

75.2％

Aplace

0.9

0.8

1.8

1.5

1.4

1.2

▲16.6％

79.9％

Rocaltrol

0.9

0.8

1.8

1.6

1.4

1.2

▲13.9％

76.2％

Pentasa

4.4

7.1

8.8

15.5

6.8

11.7

71.1％

75.3％

Uritos（Kyorin）

0.5

0.6

0.7

1.9

0.6

1.3

130.5％

69.1％

1.6

1.4

3.0

2.6

2.1

1.9

▲10.5％

74.6％

B lk)
NorfloacinNfl i ( Bulk)

0.1

0.1

0.3

0.1

0.2

0.2

▲4.0％

151 8％
151.8％

Milton(Disinfectant)

1.0

0.9

1.9

2.0

1.5

1.4

▲7.0％

71.5％

（Antibacterial agent）

M
Mucodyned（Mucoregulant）（Antibacterial agent）（For bronchial（Fbhi l asthmahanddcerebrovasculas disorders）（Anti-ulcer agent）（Osteoporosis（Oi remedy）
d ）(Ulcerative colitis and Crohn’sdisease treatment)（Overactive bladder)

Sales of newethicaldrugs((over seas))

Consumer
Healthcare
business

Gatifloxacin(Bulk・Royalty)

FY07(results)

Third quarter（April 1 to December 31,2008）
FY07(results)（LT receptor antagonist)

Sales of newethicaldrugs(Japan)Full term
FY08(forecast)

Progress toFull term
forecast(%)

５

Main R&D Activities① （ February 5 , 2009 Release)
PhⅡ～Application
Stage※ Describe the latest changes

Compound/CodeTherapy area/Action

OriginPENTASA
Tablets 250
500

Ulcerative
colitis/ Crohn’sdisease remedy

FerringPharmaceuticals

New remission therapy of Pentasa for the treatmentof ulcerative colitis in its active phase.
(4,000 mg divided into two doses per day)(Galderma,Launched)

PEKIRON
Nail lacquer

Anti-mycotic
agent

In-house

First nail varnish formulation for nail mycosis inJapanPhⅡ（１０/04）

KRP-204（ Tablets ）Anti-obesity

Nisshin
Flour
Milling

A highly selective beta3-agonist that may improveobesity and have less cardiac effect in comparison toprevious compounds.

Co-development with
Nisshin Flour Milling

KRP-204（ Tablets ）OveractivebladderNisshinFlourMilling

A highlyg y selective beta3-agonist
gthat mayy relax
bladder smooth muscle and improve urine storage
dysfunction by activating beta3 receptor on bladder.

Co-development
pwith
Nisshin Flour Milling
PhⅡa ended(EisaiPhⅢ)

AS-3201（Tablets ）Diabetic
neuropathy

Dainippon
Sumitomo

Aldose reductase inhibitor to reduce the sorbitol
accumulation in the cell, and improve diabetic
neulopathy

Co-development with
Dainippon Sumitomo・PhⅡb（9/07）

PhⅡ（6/04）

KRP-101（Tablets ）Antidyslipidemia
with antidiabetes

In-house

A PPAR-alpha agonist. It may have an effect ondiabetes in addition to lipid metabolism improvement
including reduction of neutral fat.

PhⅡa ended

PhⅡ（2/08）

PhⅡ（9/07）

KRP-104
KRP
104

Anti diabetes
Anti-diabetes
agent

In-house
InhouseA DPPⅣ inhibitor to reduce blood glucose throughsuppression of the degradation of insulin-releasing
hormone. Diabetic therapy with fewer side effects is
expected than existing treatments.

＊PhⅡa ended(8/08)

PhⅡ（8/08）(Abbott in theUS andMundipharma
in the rest of theworld excludingthe Americas.)

KRP-108

anti-asthmatic
treatment

SkyePharma
PLC

An ICS/LABA combination product, which offers
better compliance and convenience to the patients.

Licensing agreementwith SkyePharma (4/08)

Domestic

Overseas※Approval(12/08)

PhⅡ（3/07）

PhⅡ（3/05）

Features

Comments
Additional dosage andadministration

６

Main R&D Activities② （ February 5 , 2009 Release)
POC Project （Pre-clinical～PhⅠ）
Stage
Domestic

Overseas

Compound/CodeTherapy area/
ActionOriginFeatures

Comments

Licensing agreementwith Novartis (2/06)

PhⅠ(7/07)

KRP-203

Transplantati
on andautoimmune
diseasestreatment

In-house

An immunosuppressant with novel mechanism
called S1P-agonist. It may have a better safety
profile than previous ones as well as an excellent
effect under concomitant use with other types ofimmunosuppressants.

PhⅠ(10/07)

KRP-105

Antidyslipidemia

In-house

A highly selective PPARα agonist. In addition tolipid metabolism improvement, KRP-105
increased adiponectin, reduced leptin, andsuppressed weight gain in animal models,suggesting potential to be a unique and antd li id i agent.
dyslipidemiat＊KRP‐107

Transplantati
on andautoimmune
diseasest
treatmenttt

In-house

Selective S1P1 receptor agonist.

Pre-clinical７

Main R&D Activities③ （ February 5 , 2009 Release)
Licensing development
Product name・CodeStage

Licensee ・Collaborative
research

Therapy area/Action

OriginComments

Alphagan/Alphagan P

Domestic
PhⅢ（7/07）

Senju Seiyaku

Glaucoma

Allergan (US)・Licensed from Allergan（Cross license of gatifloxacin ophthalmicsolution ）・License-out
License out to Senju（5/04）

Ketas

Overseas
PhⅡ（8/05）

MediciNova (US)

Cerebrovasculardisorders

In-house

・KYORIN grants MediciNova an exclusive
license in all countries worldwide except forJapan,China, South Korea and Taiwan todevelop, manufacture and sell the compoundand products for the multiple sclerosis
indication.(10/04)
Result of PhⅡ was reported in April 2008.

KCA-757

Overseas
PhⅢ((Anti-bronchialAsthma:11/06)
PhⅡ/Ⅲ(Interstitial
cystitis:5/05)

MediciNova (US)Anti-bronchialasthma andInterstitial cystitis
agent

In-house

・KYORIN grants MediciNova an exclusive
license in all countries worldwide except forJapan China South Korea and Taiwan toJapan,China,develop, manufacture and sell the compoundand products・Interstitial cystitis:Results of PhⅡ/Ⅲ wasreported inJanuary 2007 and ceased development
・Bronchial asthma: Clinical trial oversea
was discontinued.

KRP-203

Overseas
PhⅠ（7/07）

Novartis(Switzerland)

Transplantation
and autoimmune
diseases treatment

In-house

An immunosuppressant with novel
mechanism called S1P-agonist. It may have abetter safety profile than previous ones aswell as an excellent effect under concomitant
use with other types of immunosuppressants.
８Actual and Forecast of Main Subsidiary Companies（ Units: ¥ billion）

KYORIN
pharmaceutical

3 ／08（results）

3 ／09（forecast）

Third quarter3 ／08（results）

S lSales

70.5

75.9

54.6

57.7

Operating profit

6.9

6.4

6.6

5.5

Net p
profit

3.8

2.7

3.9

2.2

KYORIN
Rimedio

1 ／08（results）

1 ／09（forecast）

Third quarter1 ／08（results）

6.0

7.7

4.5

5.3

Operating profit

▲0.7

▲0.3

▲0.6

▲0.4

Net profit

▲1 4
▲1.4

▲0 5
▲0.5

▲1 1▲1.1

▲0 5
▲0.5

Sales

Third quarter3 ／09（results）

Third quarter1 ／09（results）＊KYORIN Rimedio moved into the black in thethird quarter (from August through October 2008).

1 ／08（results）

1 ／09 （forecast）

Third quarter1 ／08（results）

3.4

4.0

2.4

2.6

OOperatingi profit
fi

▲0 3
▲0.3

00.1

▲0▲0.4▲0▲0.1

Net profit

▲0.4

0▲0.3

▲0.1

Dr.ProgramSales

Third quarter1 ／09（results）

９