Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31,
31 2014
1. Overview of consolidated results
2. Highlights of Business Performance
3. Actual and Forecast of Main Subsidiary Companies
4 Main Product Sales Update
4.
5. Development pipeline【Reference】
6. Segment information
7. Financial summary
February 4, 2014

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 due
to various factors in the future.

Outline of Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2014（¥ million）

Dec/2010

Dec/2011

Dec/2012

Dec/2013

YoY change(%)

Mar/2014(forecast)

YoY change(%)

Net Sales

75 82175,82177 41377,41379 22979,22983 43083,430

＋5 3%
＋5.3%

112,600＋5.2%

Operating Income

11,312

11,66813,711

13,503－1.5%

18,200＋1.4%

Ordinary Income

11,84812,35814,288

13,961－2.3%

18,800＋0.7%

Net Income

7 535
7,535

7 227
7,227

9 262
9,2629 272
9,272

＋0 1%
＋0.1%

12 40012,400－0.2%
0 2%

Third Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2014

【 Net sales 】 Sales of main product, new product (Pentasa Suppositories , Flutiform), royalty (licensing out product) ,KYORIN Pharmaceutical Facilities and generic drugs contributed to increase of net sales. As a result, consolidated netsales increased 5.3% yyear on year,y , to ¥83.4bln.
【 Net income 】 Gross profit rose due to the increase of Net sales. SG&A expenses increased due to mainly R&D
expenses and general expenses. Consequently operating Income fell 1.5% year on year to ¥13.5bln, and Net Income
rose 0.1%, year on year to ¥9.3bln.
Consolidated Financial Results for the Fiscal Year Ending March 31, 2014 (forecast)【Net sales, Net income】 We will not revise the full-year (consolidated) results forecast of Net sales and Net incomeannounced on November 5, 2013 at this moment .
(degree of progress: Net sales: 74.1%, operating income: 74.2%)
1

Highlights of Business Performance（ Units: ¥ billion ）Hi hli ht ①Highlight80◇ Net Sales increased ¥4.2billion

Cost of Sales

70
60

Net sales

29.6

79.2

Cost of Sales Ratio

50
40

Net sales Cost of Sales Ratio

37.3%
7.6

38.1%

Highlight ②R&D

◇ Cost of Sales ratio increased 0.8
percentage points

8.7◇Gross Profit increased ¥2.0billion

83.4

SG&A

30

83.4

R&D

79.2

・increase of Japan new ethical drugs andgeneric drugs sales
・effect of KYORIN pharmaceutical Facilities sales
・sales of royalty (licensing out product)

31.8

Cost of Sales

SG&A((excludingl di R&D)

36.028.4

SG&A

SG&A

(excluding R&D)

38 2
38.2

29.5

Highlight ③◇SG&A expenses
pincreased ¥2.2billion
・R&D expenses increased ¥1.1billion
・SG&A(excluding R&D) increased ¥1.1billion

20
Operating Income

10

Operating Income

13.7

0Dec/12

13.5

Operating Income decreased ¥0.2billion

Dec/132

Consolidated Financial Results
for the Third Quarter ending March 31, 2014
Year onYear（¥ billion）

Dec/2012

Dec/2013

change■Net Sales¥83.4bln(+ 4.2)◆Ethical drugs business¥82.2bln(+ 4.4)¥68.8bln(+ 3.7)● Sales of new ethical drugs
Dec/2012⇒Dec/2013

Net Sales (total)

79.2

83.4＋4.2

Ethical drugs
Business77 877.8

82 2
82.2＋4 4＋4.4

66.8
65.1
1.7

70.3
68.8
1.4＋3.5＋3.7－0.3●Sales of new ethical drugs in Overseas

・Health insurance pharmacy market’s sales and contract manufacturing’s sales increased.
¥3.1bln(‐0.3)●Sales of Over-the-counter drugs◆Sales of newethical drugs●Japan●Overseas◆Generic drugs

7.7

8.8＋1.1◆Over-thecountert ddrugs

343.4313.1－00.3
3

Healthcare(Skin care)Business

1.4

1.2

－0.2

・ Kipres・ Mucodyne
・ Pentasa
・ Uritos

28.4
14.6
13.85.7⇒
⇒⇒
⇒

29.6
14.0
14.5
5.9

(+ 1.2)(- 0.6)((+ 0.7))(+ 0.2)・ New product (Pentasa Suppositories , Flutiform) ,Sales of KYORIN Pharmaceutical Facilities , Sales of royalty (licensing out product)

・ Gatifloxacin

1.4 ⇒

1.2

¥1.4bln(‐0.3)¥8.8bln(+ 1.1)((- 0.2)●Sales of Generic drugs◆Healthcare (Skin care) Business¥1.2bln(‐0.2)■Operating Income¥13.5bln(‐0.2)◆Operating Income margin decreased 1.1 percentage points to 16.2%●Cost of Sales Ratio : 37.3%⇒38.1% increased 0.8 percentage points

Operating
Income13.7

Ordinary
Income14.3

14.0－0.3

Net Income

9.3

9.3

0.0

13.5－0.2【increase】effect of of KYORIN pharmaceutical Facilities , exchange rate
【decrease】increase of royalty(licensing out product)●R&D Ratio : 9.5%⇒10.4% increased 0.9 percentage points＊¥7.6bln⇒¥8.7bln（+¥1.1bln） progress of the pipeline(KRP-209 Ph2a)●SG&A Ratio
R ti : 35.9%⇒35.4%
35 9%⇒35 4% ddecreased
d00.5
5 percentaget＊¥28.4bln⇒¥29.5bln（+¥1.1bln）increase of general expenses (head office relocation expense , patent royalty etc.)■Net Income¥9.3bln(0)3Actual and Forecast of Main Subsidiary Companies（unit : ¥billion）

Mar/2014

Dec/2012

Dec/2013

Mar/2013

Sales

71.3

73.6

95.9

99.5

Operating Income

13.2

12.1

17.1

17.0

92
9.2

86
8.6

11 9
11.9

11 9
11.9

Dec/2012

Dec/2013

Mar/2013

Sales

7.8

9.1

10.4

11.8

Operating Income

0.1

0.5

0.4

0.4

Net Income

0.1

0.3

0.5

0.2

Dec/2012

Dec/2013

Mar/2013

1.4

1.2

1.9

1.7

Operating Income

－0.2

0.1

－0.2

0.1

Net Income

－0.2

0.1

－0.3

0.1

KYORIN pharmaceutical

Net Income

KYORIN Rimedio

Dr. Program
gSales(forecast)

Mar/2014(forecast)

Mar/2014(f(forecast)t)4

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

Third quarter

Product nameKipresp（LT receptor antagonist）

Mucodyne（Mucoregulant）

Sales of new
ethical drugs(Japan)Uritos（Kyorin）(Overactive bladder)

Ketas(For bronchial asthma andcerebrovasculas disorders)

Sales of new
ethical drugs(over seas)

Over-thecounter drugs

Progress tofull term
forecast(%)

Mar/2013

＋4 3%
＋4.3%

73 5%
73.5%

39 6
39.6

40 3
40.3

14.0

－3.8%

74.3%

19.1

18.8

13.8

14.5

＋4.9%

78.2%

17.6

18.5

3.7

5.7

5.9

＋3.2%

73.8%

7.5

8.0

1.5

1.5

2.3

2.2

－2.7%

77.1%

3.0

2.9

0.9

1.0

1.4

1.2

－14.2%

66.6%

1.6

1.8

10
1.0

10
1.0

16
1.6

16
1.6

－3.0%
3 0%

75 8%
75.8%

20
2.0

20
2.0

Sep/2012

Sep/2013

Dec/2012

Dec/2013

Change

16 3
16.3

17 1
17.1

28 4
28.4

29 6
29.6

8.3

8.2

14.6

9.0

9.4

3.6

Pentasa(Ulcerative colitis andCrohn’s disease treatment)

Gatifloxacin(Bulk・Royalty)

Milton(Disinfectant)

Full term
Mar/2014(forecast)5

Main R&D Activities -1 (Feb 4 , 2014 Release)
Ph III ~ Application submitted
StageJapan
PhⅢ(9/2012)

Overseas(Europe)
Almirall: Launched(9/2012)※Changes from the previous announcement(Nov 5 2013)

Compound/CodeTherapy
area/Action

KRP-AB1102（Inhaleddrug）

Chronic
Obstructive
Pulmonary
Disease(COPD)

Almirall- New Chemical Entity: Aclidinium Bromide- Long Acting Muscarinic Agonist (LAMA)- Twice Daily administration-Onset of Action on the first dayGenuair®
1) Designed with a feedback system, which through a'colored control window' and anaudible click helps confirm that the patient has inhaledcorrectly2) Counter for remaining doses
3) Safety
S f t features
f tsuchh as an anti-double-dosing
ti d bl d imechanism and an end-of-dose lock-out
system to prevent use of an empty inhaler

License agreement withAlmirall (2/2011)

KIPRESBronchialAsthmaMerck

For pediatric patient：Allergic Rhinitis

・Additional indication
・Co-development withMSD K.K.

ChronicObstructive
Pulmonary
Disease((COPD))

Almirall

Combination of aclidinium bromide with the longacting beta agonist formoterol :This combination is aimed at providing higher efficacy
than each component alone,as well as the improved
convenience of having the two products in the sameeasy to use inhalation device.This
device This is currently inphase Ⅲ clinical development.

(US)
ForestPharmaceuticals

Origin: Launched (12/2012)

PhⅢ(4/2013)
PhⅢ(8/2013)（Chewable、Oral Granules）(Europe) Almirall: Application
submitted (10/2013)(US)
Forest Laboratories: PhⅢ

KRPAB1102F(Fixed dosecombinationinhaled drug)g)Features

Comments※Pentasa Suppository , a treatment for ulcerative colitis : launched June/2013※Uritos , an overactive bladder drug : launched in Korea July/2013 (Chong Kun Dang Pharmaceutical Corp.)※Flutiform , a combination drug for asthma treatment : launched November/2013

6

Main R&D Activities -2 (Feb 4 , 2014 Release)
POC Project (Pre-clinical ~ Ph II)
StageJapan

Overseas

Compound/CodeTherapy area/Action

OriginFeatures

CommentsPhⅡ（8/2011）

PhⅢ
Merz

KRP-209

Tinnitus

Merz

KRP-209 (Neramexane) is expected to improve thepatients' annoyance and difficulties in their life causedby tinnitus, mainly through its two pharmacologicalproperties: 1) NMDA antagonistic activity and 2)
Ni ti i acetylcholine
Nicotinict l h li antagonistict
i ti activity
ti it

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

PhⅡ（3/2013）

PhⅡ（POC)(12/2010)(Novartis)

KRP-203

Transplantation,autoimmune
diseases,andIBD

In-house

An immunosuppressant with a novel mechanism called
an S1P-agonist. It may have a better safety profile thanprevious ones as well as an excellent effect underconcomitant use with other types of immunomodulator.

License agreement with
Novartis (2/2006)
New license agreement
IBD (11/2010)

PhⅡ（9/2013）

KRP-AM1977X
KRPAM1977X(Oral agent）

NNew
quinolonei lsynthetic
antibacterial agent

I hIn-house

PhⅠ（7/2012）

KRP-AM1977Y(Injection）

New quinolone
syntheticg
antibacterial agent

In-house①Superior①Si ability
bilit tto combat
b td
drug-resistanti t t grampositive bacteria (incl. MRSA)②Outstanding ADME (oral absorption, tissuemigration)③High degree of safety expected since safety
hurdles cleared prior to clinical trials

PhⅠ（10/2013）

KRP-EPA605

Overactive bladder

In-house

KRP-EPA605 is a novel selective prostaglandin EP1
receptor, and expected to improve urinary frequency bysuppressing detrusor overactivity of the bladder・Co-development withKISSEI PHARMACEUTICALCO., LTD.

7

Reference8

Segment information
for the Third Quarter Ending March 31, 2014Sales, Profit or Loss of each report segment（ Units: ¥ billion ）Saleschange Y/YProfitchange Y/Y

Net Sales ((total))

83.4＋4.2

13.5

－0.2

Ethical drugs business82.2＋4.4

13.0－0.8

70.3＋3.5○Overseas

68.8
1.4＋3.7－0.3◆G◆Genericdrugs

88
8.8＋1 1＋1.1◆Over-the-counter drugs

3.1－0.3

Healthcare(Skincare) business

121.2

－0.2
0201
0.1＋0 3＋0.3－－0.4＋0.3◆Sales of new ethical drugs○JapanAmount of adjustment(Note ) The Company is applying the Revised Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation and the Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information.
As a result, the reported segments are the Ethical Drugs Business and the Consumer Healthcare Business.

9Consolidated Financial Results
for the Third Quarter ending March 31, 2014
Interim term

Third quarter

Full term（unit : ¥million）

Progress tofull term
forecast(%)( )Mar/2013

＋5.3%

74.1%

107,031

112,600＋4,378

＋5.6%

74.1%

105,162

110,900

70,276＋3,520

＋5.3%

73.9%

90,686

95,10065,063

68,843＋3,779

＋5.8%

74.2%

88,28692,800

1,160

1,691

1,433

－258 －15.3%

62.3%

2,400

2,300

5,056

5,184

7,707

8,806

＋1,099 ＋14.3%

77.3%

10,095

11,400

2,292

1,997

3,382

3,140

－242

－7.2%

73.0%

4,379

4,300

Consumerhealthcare
business

920

810

1,383

1,206

－177 －12.8%

71.0%

1,869

1,700

Operatingincome

6,269

6,213

13,711

13,503

－207

－1.5%

74.2%

17,94818,200Ordinary
income

6 609
6,609

6 531
6,531

14 28814,288

13,961

－326

3%
－2.3%
－274 3%74.3%

18 676
18,67618 80018,800Net income

4,295

4,397

9,262

9,272

＋10

＋0.1%

74.8%

12,422

12,400

Sep/2012

Sep/2013

Dec/2012

Dec/2013

Change% Y/Y

Sales

47,95450,851

79,22983,430＋4,200

Ethical drugs
business

47,03450,04077,84582,223

ethical drugs

39,68442,85866,755●Japan38,661

41,697●Overseas

1,023◆Generic drugs◆OTC drugs andothers◆Sales of new

Mar/2014(forecast)10