First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2020
1. Overview of consolidated results
2. Highlights of Business Performance
3. Main Product Sales Update
4. Financial summary
5. Development pipeline【Reference】
6. Segment information

July 31, 2019

KYORIN Holdings, Inc.
These forecast performance figures are based on information currently available to theCompany and may include uncertain factors or risk that affect our future performance.
Accordingly, actual business results may materially differ from the forecasted figures dueto various factors in the future.

Outline of First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2019
Interim term
Sep / 2019
(forecast)Year ending
Mar / 2020
(forecast)First
quarter
Jun / 2016

Firstquarter
Jun / 2017

First
quarter
Jun / 2018

Firstquarter
Jun / 2019

YoYchange(%)

27,70726,45825,131

25,749＋2.5％

52,100＋3.5%

114,100＋0.4%

Operating income

3,244

2,595

1,320

1,575

＋19.3％

2,300－19.4%

9,100

＋1.4%

Ordinary income

3,485

2,805

1,596

1,827

＋14.5％

2,500－21.5%

9,600

＋1.7%

Net income

2,580

2,393

1,077

1,280

＋18.9％

1,900－14.3%

7,100

＋3.4%

Units:
millions of yen

Net sales

YoYchange(%)

YoYchange(%)

First Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2020
[Net sales] Sales from our main product Flutiform grew, and the new product Beova and the newly released last year product Nasonex
nasal spray contributed to grow, so sales of new drugs in Japan remained higher than the year-ago level. Regarding sales of the New drugsin overseas sales increased. While sales from generic drugs decreased from the year-ago, overall revenues in the Ethical Drugs Businessincreased . Sales from healthcare business remained flat. As a result, overall net sales stood at 25,749 million yen, as up 618 million yen
from year on year (up 2.5% from year on year).
[Profit] Gross profit increased 167 million yen due to the increase of sales of new drugs in Japan and overseas. SG&A declined 87 million
yen (of which R&D expense increased 67 million yen). Operating Income was 1,575 million yen, as up 255 million yen from year on year (up19.3% from year on year), and profit attributable to owners of parent was 1,280 million yen (up 18.9% from year on year).

Consolidated Financial Results for the Fiscal Year Ending March 31, 2020(forecast)
The results forecast for the first half and full year announced on 13th May, 2019 remain unchanged as of this moment.
(Progress compared with the forecast for the first half: net sales: 49.4%; operating income: 68.5%)

1

Highlights of Business Performance(Units: ¥ billion)

Highlight
Net Sales increased ¥0.6bln
Cost of sales ratio increased 0.6%
・Product mix, ect.

Gross Profit increased ¥0.2bln

SG&A expenses remained falt
・R&D expense remained flat.
・SG&A(excluding R&D) decreased

Operating Income increased ¥0.3bln

2

Consolidated Financial Results
for the first Quarter ending March 31, 2020(¥ billion)
Net Sales

Jun/2018

Jun/2019

Change

25.1

25.7

＋0.6

■ Net Sales￥25.7binYear on Year(＋0.6)◆ Ethical drugs business￥24.4bin(＋0.7)￥16.7bin(＋0.6)● Sales of new ethical drugs

18.6（1Q）

Ethical drugs
Business

23.7

24.4

＋0.7

◆Sales of newethical drugs

16.2

17.1

＋0.9

●Japan16.1

16.7＋0.6●Overseas

0.1

0.4

＋0.3

3.0
・ Flutiform
1.5
・ Desalex
3.3
・ Kipres0・ Nasonex
1.7
・ Uritos
0・ Beova
3.5
・ Pentasa
1.7・ Mucodyne● Sales of new ethical drugs in Overseas ¥◆Generic drugs

7.5

7.3

－0.2

●Sales of Generic drugs

1.4

1.3

－0.1

Healthcare
Business
Operating
Income1.3

Ordinary
Income

1.6

Net Income

1.1

1.6
1.8
1.3

＋0.3
＋0.2
＋0.2

19.6（1Q)

⇒⇒
⇒⇒⇒⇒
⇒
⇒

3.5
03.0
1.7
1.6
0.2
3.5
1.5

( ＋0.5)( －1.5)( －0.3)( ＋1.7)( －0.1)( ＋0.2)0)(( －0.2)

0.4bin(＋0.3)¥ 7.3bin(－0.2)◆ Healthcare Business¥ 1.3bin(－0.1)■ Operating Income¥ 1.6bin(＋0.3)

・Decrease of MONTELKAST AG sales, etc.

◆ Operating Income margin increased 0.8 percentage points to 6.1%
● Cost of Sales Ratio : increased 0.6 percentage points (47.6%⇒48.2%)
・Product mix, etc.

● R&D Ratio : remained flat (9.8%⇒9.8%)
R&D expenses ¥2.5bln⇒¥2.5bln● SG&A Ratio (excluding R&D expenses) : decreased 1.5 percentage points
・¥9.4bln⇒¥9.2bln ¥－0.2bln(37.3%⇒35.8%)
・Decrease of selling costs■Net Income¥ 1.3bin(＋0.2)
3

Main Product Sales Update(Units: ¥ billion)

Interim term

ProductFlutiform(Combination drug for asthma treatment)

DESALEX(Antiallergic Agent)

KIPRES for adult(Leukotriene Receptor Antagonist)for children
Sales ofnew
ethicaldrugs(Japan)(Leukotriene Receptor Antagonist)

NASONEX(Spray type allergic rhinitis remedy)

URITOS(Kyorin)(Therapeutic agent for overactive bladder)

Beova(β3 adrenergic receptor agonist overactivebladder therapeutics )PENTASA(Ulcerative colitis andCrohn’s disease treatment)

MUCODYNE(Mucoregulant)

GenericDrugs

MONTELUKAST Tablets“KM”

Over-thecounterdrugs

Milton(Leukotriene Receptor Antagonist)(Disinfectant)

Full termFirst quarter（April 1 to June 30）
Progress toFull term
forecast(%)

Sep/2018

Sep/2019(forecast)

Mar/2019

Mar/2020(forecast)Jun/2018

Jun/2019

YoY change(%)

Progress toInterim term
forecast(%)

6.1

6.6

13.1

14.0

3.0

3.5

＋16.0%

53.0%

25.0%

2.8

－※

3.7

8.0

1.50－－－

2.92.2

6.2

4.5

1.6

1.4

－13.4%

61.6%

30.1%

3.3

2.7

7.6

6.1

1.7

1.6

－4.5%

60.4%

26.7%

1.3

3.1

12.8

6.2

0

1.7

－53.8％

26.9％

3.5

3.1

6.6

6.0

1.7

1.6

－5.8%

51.7%

26.7%

0

0.7

0.7

2.5

0

0.2

－34.7％

9.7％

7.1

6.3

13.5

12.0

3.5

3.5

＋1.3%

55.9%

29.4%

3.1

2.7

6.8

6.0

1.7

1.5

－6.9%

57.0%

25.6%

5.3

5.5

11.9

11.6

3.3

3.0

－9.3%

54.1%

25.7%

1.1

1.2

2.2

2.3

0.60.5

－7.2%

43.2%

22.6%

※It is not reached decision of resumption supply of Desalex and the sales forecast for interim term is not disclosed.

4

Financial summary5Consolidated Financial Results
for the first Quarter ending March 31, 2020
Interim term
(Units: ¥million)

First quarter （April 1 to June 30）

Full term

Sep/2018

Sep/2019(forecast)

Mar/2019

Mar/2020(forecast)

Sales

50,36052,100113,620

114,100

Ethical drugs
business

47,581

49,100107,859

ethical drugs

34,02833,800●Japan34,424

YoYchange(%)

Progressto interimterm forecast(%)

Progress tofull term
forecast(%)

Jun/2019

Change25,131

25,749

+618

+2.5%

49.4%

22.6%

108,000

23,73524,408

+673

+2.8%

49.7%

22.6%

78,52575,80016,204

17,104

+900

+5.6%

50.6%

22.6%

33,40077,69474,40016,057

16,727

+670

+4.2%

50.1%

22.5%

604

400

830

1,300

146

376

+230

+157.3%

94.0%

28.9%

◆Generic
drugs

13,552

15,30029,33432,200

7,531

7,304

-227

－3.0%

47.7%

22.7%

Healthcare
business

2,779

2,900

5,761

6,100

1,396

1,341

-55

－3.9%

46.2%22.0%

Operatingincome

2,852

2,300

8,972

9,100

1,320

1,575+255+19.3%

68.5%

17.3%

Ordinary income

3,183

2,500

9,438

9,600

1,596

1,827+231+14.5%

73.1%

19.0%

Net income

2,217

1,900

6,869

7,100

1,077

1,280+203+18.9%

67.4%

18.0%

Jun/2018◆Sales of new●Overseas

6Main R&D Activities -1 (as of July 31 2019)Ph III ~ Application submittedStage※Changes from the previous announcement (May 13 2019)

Compound/CodeTherapy area/Action

Application(4/2017)

KRPAM1977X(Oral agent）

New quinolone
synthetic
antibacterialagent

In-house

PreparingforApplication

KRPAM1977Y(Injection）

New quinolone
synthetic
antibacterial
agent

In-house

PreparingforApplication

KRP-116D

Interstitial
cystitis―

Evaluation committee on unapproved or off-labeled
drugs with high medical needs“Dimethyl sulfoxide(DMSO)”※Application

KRP-108P

Anti-asthmatic(U.K.)
Vectura

Expand the indication of Flutiform to pediatric patients

Japan

Overseas

OriginFeatures

Comments-Superior ability to combat drug-resistant grampositive bacteria (incl. MRSA)-has a powerful antimicrobial activity against
anaerobic bacteria- Expectation of high clinical effects with excellent
tissue penetration-High degree of safety expected since safety hurdles
cleared prior to clinical trials

・MK-7264, a drug for chronic coughing: MSD is working on Phase III development.
Concluded a memorandum of understanding for sales collaboration.

7

Main R&D Activities -1 (as of July 31 2019)
POC Project (Ph I ~ Ph II)
StageJapan

Overseas

Compound/
Code

Therapy area/Action

OriginFeatures

Comments

PhⅡ（8/2018）

KRP-N118(SK-1404)

Nocturia Dueto Nocturnal
Polyuria

SANWA
KAGAKUKENKYUSH
O CO., LTD.

A vasopressin V2 receptor agonist that promotes the reabsorption of water by thecollecting duct of the kidney to reduce the amount of urine (antidiuretic action). With
its high efficacy and safety, the drug is expected to be a therapeutic agent for
nocturia due to nocturnal polyuria.

・License agreement with
SANWA KAGAKUKENKYUSHO CO., LTD,
(3/2018)

PhⅡ（6/2018）

Ad-SGE-REIC

malignantpleuralmesothelioma

Okayama
University

A gene-therapy product using a novel tumor suppressor gene of reduced expression
in immortalized cells/ Dickkopf-3 (REIC/Dkk-3), which was discovered byresearchers from Okayama University, as a therapeutic gene.
It is expected to have direct effect on primary tumor lesions and indirect effect on
metastatic tumor lesions as a gene-therapy product that simultaneously induces
tumor cell-selective apoptosis and the activation of antitumor immunity respectively.

Adopted to Next
generation Technology
Transfer Program(NexTEP)(6/2014)【US】
Momotaro-Gene
prostate cancer(PhⅠ/Ⅱ)【JP】
Okayama University
liver cancer(PhⅠ/Ⅰb)

Licensing development
Stage/Overseas

Compound/Code

Licensee /CollaborativeresearchTherapy
area/Action

PhⅠFPR-2 agonist
program

BMS

Nondisclosure

PhⅠ

KRP-203

Implementing
licensingactivities

GvHD

OriginIn-house

Features

Comments

FPR-2 agonists that mainly inhibit themigration of neutrophils and exhibit antiinflammatory action.

License agreement with BMS(12/2015)

Sphingosine-1-Phosphate Receptor Agonist

Because Novartis (licensee) decided todiscontinue development of KRP-203 forstrategic reasons,kyorin receive the returnof development rights.

8Reference9

Segment informationfor the first Quarter Ending March 31, 2020
Sales, Profit or Loss of each report segment(Units:¥ billion)

Sales

Year on Year

ProfitYear on Year

25.7＋0.6

1.6+0.3

24.4

＋0.7

1.5+0.2

17.1

＋0.9

◆Generic drugs

7.3

－0.2

Healthcare business

1.3

－0.1

0.1

+0.1

000.1

0

total
Ethical drugs business◆Sales of new ethical drugs●Japan●Overseas

Amount of adjustment

16.7
0.4

＋0.6
＋0.3

10