First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 3131, 2017
1. Overview of consolidated results
2. Highlights of Business Performance
3. Main Product Sales Update
4 Development pipeline
4.
【Reference】
5. Segment information
5
6. Financial summary
July 29, 2016

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, 2017
YoYchange(%)

Interim term
Sep / 2016
(forecast)

YoYchange(%)

Year ending
Mar / 2017
(forecast)

YoYchange(%)

27,707＋4.3％

53,900＋2.9%

120,000

＋0.4%

2,173

3,244

+49.2％

3,900

－4.9%

14,500 －26.2%

3 847
3,847

2 316
2,316

3 485
3,485

+50.5％
50 5％

4 200
4,200－1.5%
1 5%

25 5%
14 900 －25.5%
14,900

2,681

1,757

2,580

+46.9％

3,000

＋1.1%

10,700First quarter
Jun / 2013

First quarter
Jun / 2014First quarter
Jun / 2015

First quarter
Jun / 2016

Net sales

26,23926,397

26,567

Operatingincome

4,465

3,575

Ordinary
income

4 681
4,681

Net income

2,996

Units:
millions of yen－21.6%

Fi t Quarter
FirstQt Consolidated
Clid t d Financial
Fii l ResultsR
lt forf theth Fiscal
Fil Year
YEnding
E di MarchMh 31,31 2017

[Net Sales]

Sales increased in ethical drug business (new ethical drugs, generic drugs). The sales growth was driven by year on year
increase of our main product “Flutiform”
Flutiform . Overall net sales increased 4.3%
4 3% year on year to ¥27.7bln.
¥27 7bln[Income]Cost of sales ratio increased due to the drug price revision. Meanwhile, gross profit increased ¥0.4bln year on year. At theother side
side, SG & A expenses decreased year on yearyear. Consequently
Consequently, operating income increased 49
49.2%
2% to ¥3.2bln¥3 2bln andnet income increased 46.9% to ¥2.6bln year on year, .

Consolidated Financial Results for the Fiscal Year Ending March 31, 2017(forecast)
The results forecasts for the second half and the full year announced on May 12, 2016 remain unchanged.
(Progress compared with the forecast for the first half: net sales: 51.4%; operating income: 83.2%)
1

Highlights of Business PerformanceHighlight¾Net Sales increased ¥1.1bln¥1 1bln（ Units: ¥ billion）

cost ofSales ratio

cost ofSales ratio

42.0%

41 1%
41.1%

¾Net Sales increased ¥1.1bln

Cost ofsales

Cost ofsales

Sales

R&D

99
9.9

Jun / 2015

Gross Profit increased ¥0.4bln

R&D

3.0

3.6
SG&A
(excludingR&D)¾Cost of sales ratio increased 0.9%.

11.6

10 9
10.9
Sales

Highlight

SG&A

13.5

SG&A
(excludingR&D)

SG&A

12.8

¾SG&A expenses decreased ¥0.7bln
・decrease of R&D expense (¥0(¥0.6bln)
6bln)
・SG&A(excludingR&D) expense remainedat the same level.

Operating Income increased ¥1.0bln

9.8
OperatingincomeOperatingincomeJun / 20162

Consolidated Financial Results
for the first Quarter ending
g March 31,, 2017
Year onYear（¥ billion）

Net Sales

Jun/2015

Jun/2016

change26.6

27.7＋1.1■Net Sales¥27.7bln(+ 1.1)

◆Ethical drugs business¥26.4bln(+ 1.1)¥21.7bln(+ 0.4)● Sales of new ethical drugs
Jun/2015⇒Jun/2016

Ethical drugs
Business25 325.3

26 4
26.4＋1 1＋1.1◆Sales of newethical drugs

21.5

21.8＋0.3●Japan21.3

21.7＋0.4●Overseas

0.2

0.1－0.1●Sales of new ethical drugs in Overseas¥0.1bln01(－ 0)◆Generic drugs

3.8

4.6＋0.8●Sales of Generic drugs¥4.6bln(+0.8)

Healthcare
Business

13
1.3

13
1.30

◆Healthcare Business¥0 3bln¥0.3bln(■Operating Income¥3.2bln(＋1.0)

OperatingIncome

2.23.2＋1.0

Ordinary
Income2.3

3.5＋1.2

Net Income

1.8

2.6＋0.8(Note ) The details of the Sales Segment have been changed from the first quarter ending
March 31, 2017. Following the change, the Pharmaceutical Business comprises New Drugs
and Generic Drugs, while the Health Care Business comprises Skincare, Environmental
Hygiene and Over the Counter Drugs and Others.

・ KipresKi・ Flutiform
・ Uritos
・ Mucodyne
・ Pentasa

9.5
1.5
1.9
3.2
4.1

⇒
⇒⇒⇒⇒

9.9
2.3
2.0
2.4
4.0

(＋0.4)(＋0.8)(＋0.1)(－0.8)(－0.1)

・Increase of Health insurance pharmacy market’s sales0)◆Operating Income margin increased 3.5 percentage points to 11.7%●Cost of Sales Ratio : increased 00.9
9 percentage points (41.1%⇒42.0%)(41 1%⇒42 0%)・due to the drug price revision.
●R&D Ratio : decreased 2.7 percentage points (13.6%⇒10.9%)
・¥3.6bln⇒¥3.0bln －¥0.6bln
・The effect of the increased due to Last year of project progress.

●SG&A Ratio (excluding R&D expenses) : decreased 1.8
1 8 percentage points(37.1%⇒35.3%)
・¥9.9bln⇒¥9.8bln －¥0.1bln■Net Income¥2.6bln(+ 0.8)3

Main Product Sales Update（ Units: ¥ billion ）Interim term

P d t nameProductKipres（LT receptor antagonist）

Flutiform(Anti-asthmatic)

Sales ofnewethicalthi ldrugs(Japan)Uritos（Kyorin）((Overactive bladder))Mucodyne（Mucoregulant）

Pentasa(Ulcerative colitis andCrohn’sCrohns diseasetreatment)
Desloratadine(INN)(allergic rhinitis)

Over theOver-thecounter
drugs

MiltMilton(Disinfectant)

Full termFirst quarter（April 1 to June 30）

Sep/2015

Sep/2016(forecast)

Mar/2016

Mar/2017(forecast)Jun/2015

Jun/2016

Y Y
YoYchange(%)

18.8

17.6

44.1

33.3

9.5

9.9

＋4.6%

56.3%

29.7%

3.0

5.4

7.2

12.9

1.5

2.3

＋48.6%

42.4%

17.7%

3.7

3.6

7.5

7.8

1.9

2.0

＋4.6%

54.1%

25.1%

5.9

4.8

13.0

10.8

3.2

2.4

－25.3%

48.6%

21.9%

8.1

7.4

16.1

15.8

4.1

4.0

－1.5%

53.5%

25.2%

―――

1.9

―――――

1.0

1.0

2.1

2.1

0.5

0.5

＋4.3%

49.7%

24.4%

Progress toInterim term
forecast(%)

Progress toFull termforecast(%)

4Main R&D Activities -1 (as of July 29 2016)Ph III ~ Application submittedStageJJapanO
OverseasPhⅢ(1/2015)

PhⅡclinical trialend
Merck & Co.,

Compound/Code※Changes from the previous announcement(May 12 2016)

Therapy area/Action

OriginFeatures

Comments

KRP-114V

Overactive bladder

Merck &Co.,

KRP-114V is expected to improve urinary
frequency through stimulation of the beta 3
receptor in bladder which improves bladdermuscle relaxation.

PhⅢ(4/2015)

KRP-AM1977X(Oral agent）

New quinolone
synthetic antibacterialagent

In-house

PhⅢ(3/2016)

KRP AM1977Y
KRP-AM1977Y(Injection）

New quinolone
synthetic antibacterial
agent

In-house
Inhouse-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

License agreement withMerck & Co., Inc.,(7/2014)
Co-Development and CoMarketing Agreement with
Kissei Pharmaceutical Co.,,
Ltd. affiliate . (3/2016)

for reference
StageApplication submitted by MSD
K.K. (10/2015)

Compound/
Code
Desloratadine

Therapy area/Action

Features

Comments

allergic rhinitis, hives, itching resulting from skindiseases (eczema/dermatitis, pruritus cutaneous)second generation histamine
H1-receptor antagonist※ Revised the co-marketing agreement withMSD, to be exclusively marketed by Kyorin(5/2016)※ Kyorin Pharmaceutical and Kaken
Pharmaceutical signed a Contract forthe co-promotion (7/2016)

5Main R&D Activities -2 (as of July 29 2016)
POC Project (Ph I ~ Ph II)
StageJapan

Overseas

Compound/CodeTherapy area/Action

OriginFeatures

CommentsPhⅡ(8/2015)

PhⅢ
Merz

KRP-209

Tinnitus

Merz

KRP-209 (Neramexane) is expected to improve thepatients' annoyance and difficulties in their life caused bytinnitus, mainly through its two pharmacological properties:
1) NMDA antagonistic activity and 2) Nicotinic acetylcholine
antagonistic activity

License agreement withMerz (11/2009)
Merz:Ph I clinical trial ofJapanese patients in US
completed (3/2010)

PhⅠ,Ⅱ（7/2015）(US)
Momotaro-Gene
prostate cancer(5/2014)

Ad-SGE-REIC

malignant pleural
mesothelioma

OkayamaUniversityA gene-therapy product using a novel tumor suppressor
gene of reduced expression in immortalized cells/ Dickkopf3 (REIC/Dkk-3), which was discovered by researchers fromOkayama 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 g
genetherapy product that simultaneously induces tumor cellselective apoptosis and the activation of antitumor
immunity respectively.

Adopted to Next
generation Technology
Transfer Program(NexTEP)(6/2014)

6Main R&D Activities -3 (as of July 29 2016)Licensing development（preclinical）
Compound/Code

Licensee /CollaborativeresearchTherapy
area/Action

KRP-203

Novartis

GVHD

Stage/Overseas
PhⅠ

OriginIn-house

Features
Sphingosine-1-Phosphate Receptor Agonist .
immunomodukatory drug.

Comments
License agreement with Novartis(2/2006)
Novartis has decided to proceed with
development of KRP-203 for GvHD.

Preclinical-BMS

Nondisclosure

In-house

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

License agreement with BMS(12/2015)

7Reference8Segment informationfor the first Quarter Ending March 31, 2017
Sales, Profit or Loss of each report segment(Units:¥ billion)

Sales

Year on Year

ProfitYear on Year

27.7＋1.1

3.2＋1.0

26.4

＋1.1

3.1＋1.0

21.8＋0.3●Overseas

21.7
0.1

＋0.4
－ 0.1

◆Generic drugs

4.6＋0.8

Healthcare business1.3

00.0＋0.1

0.1

0

total
Ethical drugs business◆Sales of new ethical drugs●JapanAmount of adjustment－－(Note ) The details of the Sales Segment have been changed from the first quarter ending March 31
31, 2017
2017.
Following the change, the Pharmaceutical Business comprises New Drugs and Generic Drugs, while the HealthCare Business comprises Skincare, Environmental Hygiene and Over the Counter Drugs and Others.
9Consolidated Financial Results
for the first Quarter ending March 31, 2017
Interim termFirst quarter （April 1 to June 30）

Full term

Progressto interim
term forecast(%)

Progress tofull term
forecast
(%)

＋4.3%

51.4%

23.1%

＋1,097

＋4.3%

51.6%

23.2%

21,805

＋306

＋1.4%

52.2%

23.6%

21,309,21,741
,

＋432

＋2.0%

52.4%

24.6%

3,800

189

64

－125

－66.1%

21.3%

1.7%15,465

21,500

3,816

4,606

＋790

＋20.7%

49.5%

21.4%

2,700

5,512

6,000

1,252

1,295

＋43

＋3.4%

48.0%

21.6%

4,099,099

3,900

19,636

14,500

2,173
, 3

3,244
3,,＋1,071＋＋49.2%

83.2%
83%

22.4%
%

Ordinary
income

4,266

4,200

19,995

14,900

2,316

3,485

＋1,169＋50.5%

83.0%

23.4%

Net income

2 967
2,967

3 000
3,000

13 63913,63910 70010,700

1 757
1,757

2 580
2,580

＋823

＋46.9%

86 0%
86.0%

24 1%
24.1%

Mar/2016

Mar/2017((forecast))

Jun/2015

Jun/2016

ChangeYoYchange(%)

53,900

119,483

120,000

26,567

27,707＋1,14049,741

51,200113,970

114,000

25,315

26,412

ethical drugs

42,35741,80098,506

92,40021,499●Japan41,762,

41,500,92,920,,88,500

594

300

5,586

◆Genericg
drugs

7,383

9,300

Healthcare
business

2,645

Operatingincome(Units: ¥million)
Sep/2015

Sep/2016((forecast))

Sales

52,386

Ethical drugs
business◆Sales of new●Overseas10