Third Quarter Consolidated Financial Results
f the
for
th Fiscal
Fi l YearY
Ending
E di March
M h 31,2010
31 2010● Consolidated Financial Results● Main Product Sales Update● Main R&D Activities● Results and Forecast ofMain Subsidiary Companies

February 3, 2010

KYORIN Co.,Ltd.

Outline of Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2010
Third Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2010
【Sales】 Net sales increased to ¥74.6 billion, up 12.4% year on year, due to strong sales ofmainstay products in domestic new ethical drugs and growth in generic drugs.
【Income】 Although sales costs and general administrative overheads (SG&A expenses) increased because of themerger with Nisshin Kyorin Pharmaceutical Co., Ltd., gross profit rose due to sales growth andImprovement in the cost of sales ratio. Operating income climbed 106.9% year on year to ¥11.0 billion
and net income grew 794.7% to ¥75.0 billion.
*Regarding the full-year business forecast
Sales grew steadily in the nine months ended December 31, 2009.
In terms of spending the funds budgeted for SG&A expenses, expenses are predicted to accrue within the current
fiscal year despite a carry over. Therefore, the forecast of consolidated results announced on November 10, 2009
remains unchanged at this stage.
stage
Units:
Millions of yen

Third quarter
March 31,
2007

Third quarter
March 31,
2008

Third quarter
March 31,
2009

Third quarter
March 31,2010

Change(%)

Year ending March 31,
2010 (forecast)

Change（%）

Net sales

56,961

62,32566,361

74,57912.4％

99,5009.5％

Operatingincome

5,814

5,788

5,339

11,045106.9％

12,00034.0％

Ordinary
income

6 101
6,101

6 278
6,278

5 451
5,451

11 86011,860117 6％
117.6％

12 80012,800

39 0％
39.0％

Net income

3,483

2,687

842

7,537

794.7％

8,100

297.6％
1

Consolidated Financial Results for the Third Quarter
March 31, 2010 (Point of Financial Results)(Billion yen)

Point ①
Sales increased ¥8.2
¥8 2 billion（Kipres,Pentasa etc.）

Point ③
Point ②

Cost of sales ratio decreased
percentage
g ppoints5.0 p・In-house production of Pentasa、
Uritos increased, etc.
・COGS decreased ¥0.3 billion

SG&A expenses(excluding R&D expenses)
decreased 1.5 percentage points
・Although SG&A expenses(excluding R&D expenses)
increased mainly due to the merger with
Nisshin Kyorin Pharmaceutical,
the SG&A expenses ratio decreased
1.5 percentage points
due to the rise in sales.
Operating income increased ¥5.7 billion
・The operating income margin increased
6.8 percentage points, to 14.8%

2

Consolidated Financial Results
for the Third Quarter March 31, 2010
Units : Billions of yen
Third
QuarterMarch 31,
2009

Third
QuarterMarch 31,2010

ChangeNet sales(total)

66.4

74.6

+8.2

◆ Sales of new

55.5

63.1

+7.6

Japan

53.0

61.2

+8.2

Overseas

2.5

1.9

▲0.6

◆ Generic
drugs

4.6

5.4

+0.8

◆ Consumer
healthcare
business

54
5.4

▲0 1
5 3 ▲0.1
5.3◆ Otherbusinesses

0.9

0.9

±0

Operatingincome

5.3

11.0

+5.7

Ordinary
income

5.5

11.9

+6.4

Net income

0.8

7.5

+6.7

ethical drugs■ Net sales

74.6 billion●Sales of new ethical drugs in Japan
61.2 billion
09.3（3Q）(results)
10.3（3Q）(results)
Kipres18.1→
21.6
・Kipres・Pentasa
11.7
→
15.2
・Uritos
1.3
→
2.6
15.3
→
16.0
・Mucodyne＊Other factors for increase: Sales of RapidTesta increased, etc.

●Sales of new ethical drug overseas
・Gatifloxacin
1.9
・Sales of Norfloxacin decreased, etc.
●Generic drugs

Change(+8.2)(+8.2)((+3.5)
3.5)(+3.5)(+1.3)(+0.7)

1 9 billion
1.9
→
1.7

(▲0 6)(▲0.6)(▲0.2)

5.4 billion(+0.8)

・Factors for increase: New products and products acquired from Nisshin Kyorin●Consumer healthcare business
5 3 billion
5.3(▲0 1)(▲0.1)
・Milton
1.4→
1.5(+0.1)
・Dr.Program Co., Ltd.
2.6
→
2.5
(▲0.1)●Other businesses
0.9 billion(±0)◆Cost of sales ratio： down 5.0 points (41.8%→36.8%)
Factor for decrease : Cost of sales ratio declined due to in
in-househouse production ofPentasa and Sales of Uritos increased, etc.
◆R&D ratio: down 0.3 points (11.4%→11.1%)
R&D expenses： up from ¥7.6 billion to ¥8.3 billion
Factors for increase : integration with Nisshin Kyorin Pharmaceutical◆SG&A expenses ratio(excludingi ( l di R&D espenses)：down) d1.5
5 pointsi(38 8% 37 3%)(38.8%→37.3%)
SG&A expenses ratio (excluding R&D expenses)： ¥25.7 billion → ¥27.8 billion(¥2.1 billion)

Although SG&A expenses (excluding R&D expenses) increased mainly due tothe merger with Nisshin Kyorin Pharmaceutical, the SG&A expenses ratio
decreased 1.5 percentage points due to the rise in sales.

■ Operating income

11 billion(+5 7)(+5.7)＊The operating income margin increased 6.8 percentage points, to 14.8%■ Net income

7.5 billion(+6.7)
3

Consolidated Results for the Three Months Ended December 31, 2009
(From October 1 to December 31)
Units: Billions of yen
Three months ended
December 31,2008

Three months ended
December 31,2009

Net sales

26.1

28.9

+2.8

COGS
% Sales

10.0

10.4

+0.4

38.4%

36.0%

(down 2.4 points）

Gross profit

16.1

18.5

+2.4

SG&A expenses

12.0

12.0

±0

R&D expenses

2.6

2.6

±0

SG&A expenses(excluding R&D
expenses)

9.4

9.4

±0

Operatingincome

4.1

6.5

+2.4

Ordinaryy
income

4.3

6.7

+2.4

Net income

2.4

4.2

+1.8

Change(%)

Point
*One
One year has passed since the October 2008
merger with Nisshin KyorinPharmaceutical*Sales of mainstay products of KYORIN
Pharmaceutical progressed favorably
Kipres +1.2 billion、Pentasa +9 billion
Uritos+3 billion、Mucodyne+1 billion*Mainly due to increased sales of Pentasa
and Uritos whose cost of sales ratios are low（d（down
2 4 points）
2.4
i t ）

*Operating income increased to ¥6.5
billion, up ¥2.4 billion year on year

Three-months performance also continued strongly
4Consolidated Financial Results
for the Third Q
Quarter March 31,, 2010
Units:Millions of yen

Second quarter
FY08(results)

Full term

Third quarter（April 1,2009 to December 31,2009）

FY09(results)

FY08(results)

FY09(results)

YoYchangeYOY
Change(%)

Progress tofull term
forecast(%)

FY08(results)

FY09(forecast)Sales

40,26145,714

66,361

74,579+8,217

12.4%

75.0%

90,88999,500S l off newSales

33,04638,011

55,52963 06863,068+7,539

13.6%

76.8%

75,69082,100Japan

31,23936,73353,001

61,176+8,174

15.4%

77.0%

71,93579,500Overseas

1,806

1,278

2,527

1,891

▲635

▲25.2%

72.7%

3,755

2,600

Generic drugs

2,929

3,584

4,583

5,352

+768

16.8%

62.2%

6,264

8,600

Consumerhealthcare
business

3,684

3,469

5,392

5,281

▲110

▲2.1%

69.5%

7,725

7,600

Other
businesses

600

649

855

876

+20

2.4%

79.6%

1,208

1,100

Operatingincome

1,243

4,569

5,339

11,045+5,705106.9%

92.0%

8,952

12,000Ordinary
Income

1,175

5,172

5,451

11,860+6,408117.6%

92.7%

9,208

12,800Net income▲1,606

3,293

842

7,537

+6,695794.7%

93.0%

2,037

8,100

ethical drugs※ Because the closing date of KYORIN Rimedio is planned to be changed, the projections of business performance for the fiscal year ending
March 31, 2010, will cover 14 months.

5

Main Product Sales Update（ Units: ¥ ｂillion ）Product name

Kipres（LT receptor antagonist)
Mucodyne（Mucoregulant）

Pentasa
Sales of new
ethical drugs(Japan)(Ulcerative colitis and Crohn’sdisease treatment)

Ketas（For bronchial asthma andcerebrovasculas disorders）

Uritos（Kyorin）（Overactive bladder)

Aplacep（Anti-ulcer agent）

Rocaltrol（Osteoporosis remedy）

Sales of new
ethical drugs(over seas)

Gatifloxacin

Consumer
Healthcare
business

Milton(Disinfectant)(Bulk・Royalty)

Second quarter
FY08(results)

FY09(results)

Third quarter（April 1 to December 31,2008）
FY08(results)

FY09(results)

ChangeProgress to fulltermeforecast(%)

Full term
FY08(results)

FY09(forecast)

10.4

12.7

18.1

21.6

19.3%

75.0%

25.2

28.7

87
8.7

93
9.3

15 3
15.3

16 0
16.0

4 8%
4.8%

74 5%
74.5%

20 6
20.6

21 5
21.5

7.1

9.7

11.7

15.2

30.0%

78.4%

15.7

19.3

2.6

2.3

3.9

3.6

▲6.9%

77.3%

5.0

4.7

0.6

1.6

1.3

2.6

98.9%

69.1%

2.0

3.7

08
0.8

07
0.7

12
1.2

11
1.1

▲7.5%
▲7
5%

76 3%
76.3%

15
1.5

14
1.4

0.8

0.7

1.2

1.1

▲8.2%

79.4%

1.5

1.4

1.4

1.1

1.9

1.7

▲13.2%

75.0%

2.5

2.2

09
0.9

10
1.0

14
1.4

15
1.5

3 2%
3.2%

73 6%
73.6%

18
1.8

20
2.0

6

Main R&D Activities① (February 3 , 2010 Release)
PhⅡ～Application
Stage
Domestic※PhⅢ(12/09）PhⅡ（3/05）Ph
PhⅡ（2/08）

PhⅡ(8/08)

Compound/
Code

Therapy area/
ActionAmorolfine
HCl Nail lacquer

Antionycomycosis

Roche

First nail varnish formulation for nailmycosis in Japan

Pentasa(Tablets)

Ulcerative
ColitisFerringPharmaceuticals

New dosage regimen for ulcerative colitis in
the remission phase (once a day)AS-3201（Tablets ）Diabetic
neuropathy

Dainippon
Sumitomo

Aldose reductase inhibitor to reduce thesorbitol accumulation in the cell, andimprove diabetic neulopathy

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

KRP-104
R
0

Anti-diabetes
t d abetes
agent

In-houseouse

A DPPⅣ inhibitor to reduce blood glucose
through suppression of the degradation of
insulin-releasing hormone. Diabetic therapy
with fewer side effects is expected thanexisting treatments.

・PhⅡb in overseas(11/09)・PhⅡ b in domestic(3/09)

AntiasthmaticSkyeyPharma PLC

An ICS/LABA combination p
product,, which
offers better compliance and convenience tothe patients.

g agreementgLicensingwith SkyePharma(4/08)

Overseas(Galderma,
Launched)(Eisai
PhⅢ)

（

）

Ph
PhⅡ
（9/07）（）((Abbott
in theUS andMundipharmain Europe)
PhⅢ※Describe the latest changes

KRP-108

OriginFeatures

Comments

Other Comments※Orally Disintegrating Tablet of Immidefenacin(INN),
a Drug for Overactive Bladder
p
agent
g
for overactive bladder “Uritos tablet”※ Therapeutic
Partial change of usage and dosage(Change of the maximum daily dosage)※Mucoregulating drug “Mucodyne DS50%”：Application （12/09）：Approval
pp（12/09）：Approval(1/10)
7

Main R&D Activities② (February3, 2010Release)
Pre-clinical ～ PhⅠ
Stage
Domestic

Overseas

Compound/Code※Describe the latest changes

Therapy area/
ActionOriginFeatures

Comments

Licensing agreementwith Novartis (2/06)

PhⅠ(7/07)

KRP-203

Transplantation
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 of
immunosuppressants.

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.
dyslipidemiatPre-clinical

KRP‐107

Transplantation
andautoimmune
diseasestreatment

In-house

Selective S1P1 receptor agonist.

Pre-clinical

KRP‐109

Anti acute lunginjury(ALI)

In-house

Neutrophil elastase inhibitor with highdistribution into lungs

License-in productStage
Domestic
Clinicaltrial to bepreparedOverseas
PhⅢ）((Merz）

Compound/
Code
KRP-209

Therapy area/
ActionTinnitus

OriginMerz

Features

Neramexane is expected to improve the patients’ psychologicalsuffering and difficalties in their life associated with tinnitus
via mainly its two pharmacological properties as1) NMDA antagonistic activity and2) Nicotinic acetylcholine receptor antagonistic activity.

Comments

Licensing agreementwith Merz (11/09)()

8

Main R&D Activities③ (February 3 , 2010 Release)※Describe the latest changes

Licensing development
Product name・CodeLicensee ・Collaborative
researchh

Stage

Therapy area/
ActionOriginComments

Alphagan/Alphagan P

Senju Seiyaku

Domestic
PhⅢ（7/07）

Glaucoma

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

Ketas

MediciNova (US)Overseas
PhⅡ（8/05）

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

MediciNova (US)Overseas
PhⅢ(Anti bronchial(Anti-bronchial
Asthma:11/06)
PhⅡ/Ⅲ(Interstitial
cystitis:
5/05)

Anti-bronchialasthma andInterstitial cystitis
agent

In-house

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

KRP-203

Novartis(Switzerland)Overseas
PhⅠ（7/07）

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.

9

Actual and Forecast of Main Subsidiary Company（ Units: ¥ ｂillion ）KyorinPharmaceutical

Third quarter3/09 （results）

3/09 (results)

Third quarter3/10 （results）

3/10 (forecast)

57 7
57.7

65 4
65.4

78 0
78.0

85 1
85.1

Operating income

5.5

11.1

8.5

11.8

Net income

2.2

8.1

4.0

8.6

Sales

KYORIN Rimedio

Third quarter1/09（results）

1/09 (results)

Third quarter3/10（results）

3/10 (forecast)※2

53
5.3

62
6.2

74
7.4

10 2
10.2

Operating income

▲0.4

0.2

▲0.4

0.3

Net income

▲0.5

0.2

▲0.6

0.2

Sales

Dr. Program

Third quarter1/09（results）

Third quarter3/10（results）

3/09 (results)※1

3/10 (forecast)

2.6

2.5

4.1

3.7

Operating income

▲0.1

▲0.2

0.1

0

Net income

▲0.1

▲0.2

0.1

0

Sales

*1. Due to the change of the closing date of Dr. Program Co., Ltd., the business results for the fiscal year ended March 2009 covered 14 months.
*2. Because the closing date of KYORIN Rimedio is planned to be changed, the projections of business performance for the fiscal year ending
March 31, 2010, will cover 14 months.

10