First Quarter Consolidated Financial Results
for the Fiscal Year Endingg March 31,, 2012
● Overview of consolidated results● Main Product Sales Update● Development pipelines
Reference・Segment information for the First Quarterof the Fiscal Year Ending March 31,2012
・Consolidated
Clid d Fi
Financial
i lRResultsl ffor thehFirst Quarter of the Fiscal Year Ending March 31,2012
July 29, 2011

KYORIN Holdings, Inc.
These forecast
Thft performance
ffiguresfiare basedbd on information
i fti currently
tl available
il bl tot thethCompany 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 First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2012
Year ending
March 31,2012
(forecast)First quarter
June 30,
2008

First quarter
June 30,
2009

First quarter
June 30,
2010

First quarter
June 30,
2011

YoYchange(%)

Sep/11
Interim term
(forecast)

Net sales

20,75623,28924,65524,8090.6％

49,2005.3% 106,500

2.3％

Operatingincome995

3,156

2,216

4,100

85.0％

6,10045.2%

16,600

1.0％

Ordinaryincome

1,228

3,417

2,421

4,300

77.6％

6,400

40.9%

17,2000.5％

Net income

540

1,976

1,799

2,697

49.9％

4,000

35.2%

10,900△0.3％

Units:
Millions of yen

YoYchange(%)

YoYchange(%)

First Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2012
【 Net sales】

Of ethical drugs in Japan, sales of Kipres and Uritos were strong, but overall ethical drug sales in Japan declined slightly
year on year, reflecting an increase in distribution inventory at the end of the fiscal year ended March in association with
the Great East Japan Earthquake. Sales of overseas ethical drugs rose from a year ago, attributable to strong exports ofmainstay products. As a result, consolidated net sales increased 0.6% year on year, to ¥24,809 million.

【Income】
Gross profit
Gfi rose dued to a ddecline
li iin theh cost off sales
l ratio.
i Meanwhile,M
hil SG&A expenses fell,
f ll given
ia decreasedini R&D
expenses. Consequently, operating income climbed 85.0% year on year, to ¥4,100 million, and net income rose 49.9%, to¥2,697 million.

Consolidated Financial Results for the Fiscal Year Endingg March 31,, 2012(forecast)
The results forecasts for the first half and the full year announced on May 11, 2011 remain unchanged. (Progress compared with theforecast for the first half: net sales: 50.4%; operating income: 67.2%)
1

Highlights of Business Performance for the First Quarter Ended
June 30, 2011
Highlight ①（ Units: ¥ ｂillion ）25
Netsales20

Net sales remained flat (rose¥0 1 billion year on year).
¥0.1year)

Cost ofsales

Netsales929.21524.7

41
4.1

24.8

SG&A expenses(excluding
R&D expenses)

13.3

Highlight ②8.3

Cost of sales declined ¥0.9 billion.
(The cost of sales ratio fell 3.8 points.)
Gross profit increased (up( ¥1 billionyear on year).

R&D

Highlight ③

SG&A expenses dropped ¥0.9
¥0 9 billion year onyear. (Of SG&A expenses, R&D expenses
SG&A expenses decreased ¥1.2 billion.)(excluding◆Operating income rose ¥1.9
R&D expenses)

29
2.9

R&D105

Cost ofsales

Operatingincome

2.2First Quarter Ended
June 30,
30 2010

12.4

billion year on year.
year

Operatingincome414.1
First Quarter Ended
June 30,30 20112

Consolidated Financial Results for the First Quarter
Ended June 30, 2011
（ Units: ¥ ｂillion ）First Quarter
June 30, 2010

First Quarter
June 30
30, 2011

ChangeNet sales (total)

24.7

24.8＋0.1

Ethical drugs
business

24 0
24.0

24 2
24.2＋0 2＋0.2

20.8
20.2
0.6

21.1
20.1
1.1＋0.3△0.1＋0.5◆Sales of new
ethical drugs○Japan○Overseas◆Generic drugs

2.12.1△0.0◆Over-the-counterdrugs

101.010
1.0

△0 0
△0.0

Healthcare(Skin care)Business

0.70.6△0.1

Year onYear■Net sales◆Ethical drugs business●Sales of new ethical drugs
in Japan・ Kipres
・ Mucodyne
・ Pentasa
・ Uritos●Sales of new ethical drugsin Overseas
・ガチフロキサシン¥24.8billion¥24.2billion¥20.1billion
11.3(1Q) (results)
7.4
1.3
5.6
5.0

⇒
⇒⇒
⇒

(＋0.1)(＋0.2)(△0.1)
12.3(1Q) (results)
8.3
1.6
5.1
4.6

¥1.1billion
0.5⇒(＋0.5)
1.0

2.2

4.1

＋1.9

OrdinaryIncome

2.4

4.3

＋1.9Net income

1.8

2.7

＋0.9

(＋ 0.5)◆Healthcare (Skin care)Business ¥0.6billion¥0 6billi(△0 1)(△0.1)●Sales declined at Dr. Program Co., Ltd.

(△0.1)(＋1.9)¥4.1billion■Operating income◆Operating income margin rose 7.5
7 5 percentage points YoY to 16.5%.
16 5%●Cost of sales ratio: 33.4%, down 3.8 percentage points YoY(37.2%⇒33.4%)
Increased sales of in-house products with lower cost of sales ratios (includingoverseas sales), a rise in the factory operation ratio, and a decrease in the cost ofsales ratio at KYORIN Rimedio●R&D ratio: 11.8%, down 5.0 percentage points YoY

Operatingincome( ＋0.9)( ＋0.3)( △0.5)( △0.4)△(16.8%⇒11.8%)＊¥4.1 billion ⇒ ¥2.9 billion (down ¥1.2 billion)(Expenses associated with the completion of the R&D of KRP-108 Ph2b wereposted in the first quarter of the previous fiscal year)●SG&A ratio ((excluding●g R&D expenses):p) 38.3%,, up
p 1.3 ppercentageg(37.0%⇒ 38.3 %)points YoY＊¥9.1 billion ⇒¥9.5 billion (up ¥0.4 billion)■Net income¥2.7billion(＋0.9)
3

Actual and Forecast of Main Subsidiary Companies（ Units: ¥ ｂillion ）KYORIN
pharmaceuticalFirst quarter
June 30, 2010
（results）

First quarter
June 30, 2011
（results）

FY 2010FY2011（results）（forecast）

Sales

21.5

22.5

92.5

95.1

Operating profit

2.0

3.9

15.6

15.7

Net profit

1.7

2.7

10.7

10.4

KYORIN
ORimedioi diFirst quarter
June 30, 2010
（results）

First quarter
June 30, 2011
（results）

FY 2010FY2011（results）（forecast）

Sales

2.4

2.4

10.3

11.0

O
Operatingti profit
fit

020.2030.308
0.807
0.7

Net profit

0.2

0.2

0.6

0.7

Dr.Program
SalesFirst quarter
June 30, 2010
（results）

First quarter
June 30, 2011
（results）

FY 2010FY2011（results）（forecast）

0.7

0.6

2.8

3.0

Operating profit

△0.0

△0.0

0.1

0.1

Net profit

△0.0

△0.0

0.1

0.04

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

Product name

Full termFirst qquarter（Aprilp 1 to June 30）
FY2010(results)

FY2011(results)

YoYchange(%)

Mucodyne
Sales ofnew
ethicaldrugs(Japan)（Mucoregulant）

Progress toFull term
forecast(%)

FY2011(forecast)

FY2010(results)

FY2011(forecast)

14 1
14.1

16 2
16.2

34 5
34.5

36 5
36.5

74
7.4

83
8.3

12 0%
12.0%

51.1%
%

22.6%
%

9.4

9.7

21.3

22.1

5.6

5.1

△8.7%

52.4%

22.9%

9.9

9.7

19.4

19.2

5.0

4.6

8.3%
△8.3%

46.9%

23.7%

2.4

3.0

5.5

6.6

1.3

1.6

24.3%

52.4%

23.5%

2.0

1.8

4.0

3.8

1.0

0.9

△13.4%

48.8%

24.8%

1.3

1.1

2.2

1.2

0.5

1.0

94.3%

92.0%

77.0%

0.91.0

1.9

2.0

0.5

0.5

△0.9%

47.2%

23.0%

Kipres（LT receptor antagonist）

Progress toInterim term
forecast(%)

FY2010(results)

Pentasa(Ulcerative colitis andC h ’ disease
Crohn’sdittreatment)tt)

Uritos（Kyorin）(Overactive bladder)

Ketas(For bronchial asthma andcerebrovasculas disorders))

Sales of new
ethical drugs(over seas)

Gatifloxacin

Over-thecounter
drugs

Milton(Bulk・Royalty)(Disinfectant)Sales of Gatifloxacin included bulk sales to licensees and running royalties in accordance with sales at licensees.

5Main R&D Activities① ( July 29 , 2011 Release)*Changes from the previous announcement(May 11, 2011)

Ph IIb Application submitted
Stage

Compound/C dCodeTherapy
area/Action/A iOrigin

PhⅢ(12/2009)

Pentasa(tablet)

Ulcerativecolitis

FerringPharmaceuticals

New dosage regimen for ulcerative colitis in theremission phase (once a day)PhⅢ(11/2010)

Pentasa(suppository)

Ulcerativecolitis

FerringPharmaceuticals

Consideration of a new dosage form for the active
phase of ulcerative colitis (once a day)*Development of a newdosage formJapanOverseasFeatures

CommentsPhⅢ(8/2010)(US)
SkyePharma: Application
submitted (3/2009)（Europe）
Mundipharma: Application
submitted (3/2010)

KRP-108(Inhalant)

Antiasthmatic

SkyePharma PLC

An ICS/LABA combination product, which offers
better compliance and convenience to the patients・License agreement with
SkyePharma (4/2008)
・Domestic Ph II completed(4/2010)

PhⅡ（2/2008）

PhⅡ（9/2007）

KRP-104

Antidiabetes
agent

In-house

A 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.

・Overseas Ph II b completed(3/2011)・Domestic Ph II b completed(3/2010)* The Company has cancelled the AS-3201 (diabetic neuropathy) co-development agreement with Dainippon Sumitomo forstrategic reasons and has deleted AS-3201 from the list of R&D activities.

66

Main R&D Activities② （ July 29 , 2011 Release)
POC Project (Pre-clinical ~ Ph II)
Stage
Japan

Overseas

Compound/
Code

Therapyarea/Action

OriginFeatures

Comments

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 than previous ones as well as an excellent
effect under concomitant use with other types of
immunomodulator.

PhⅠ（8/2010）

KRP 110
KRP-110

Opioid-inducedOi id i dd
constipation andintractable pruritus

I hIn-house

A hihighlyhl selectivel ti μ-opioid
i id receptor
t antagonist.
ti t It iis
expected to block constipation induced by opioid
analgesics without interrupting the analgesic effectof opioids. It is orally effective in various itchingmodels, indicating potential of a novel anti-itch drug
for intractable pruritus.

PhⅡ
preparations

PhⅢ
Merz

KRP-209

Tinnitus

Merz

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

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

Preparingfor clinicaltrials（Europe）
Almirall: Preparing for
application(US)Foresto es
Pharmaceuticals: Preparing for
application

KRP-AB1102（Inhaled drug）

Chronic Obstructive
Pulmonary Disease(COPD)

AlmirallThis bronchodilating agent has an acetylcholine
receptor antagonist action that offers long-lasting
improvement for breathing difficulty and shortness ofbreath associated with COPD.
①Fewer sistemic side effects②Twice-daily②
w ce da y dosage oofferse s a full-day
u day
improvement in symptoms and respiratory
function③Short time required for the maximum effectLicense agreement withAlmirall (2/2011)

PhⅠ
preparationsKRP-AM1977X(Oral agent）

New quinolone
synthetic
antibacterial
tib t i l agentt

In-house

PhⅠ
preparations

KRP-AM1977Y(Injection）

New quinolone
synthetic
antibacterial agent

In-house①Superior ability to combat drug-resistant grampositive bacteria (incl. MRSA)②O t t di ADME ((orall absorption,②Outstandingbtiti
tissuemigration)③High degree of safety expected since safety
hurdles cleared prior to clinical trials

PhⅠ（12/2010）

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

77

Main R&D Activities③（ July 29, 2011 Release)
Licensing Development
Stage

Compound/CodeLicensee/Collaborative
research

Therapy area/Action

OriginComments

Applicationsubmitted（3/2011）

Alphagan/AlphaganP

Senju Pharmaceuticals

GlaucomaAllergan (US)・Licensed from Allergan(Cross license of gatifloxacin ophthalmic solution)
・License-out to Senju (5/2004)

Overseas Ph II（8/2005）

Ketas

MediciNova (US)

CerebrovasculardisordersdidIn-house

・KYORIN grants MediciNova an exclusive license in
all countries worldwide except for Japan, China,
South Korea and Taiwan to develop, manufactureand sell the compound and products for the multiple
sclerosis indication (10/2004)
Result of Ph II was reported in April 2008

Overseas Ph III(Anti-bronchialAsthma: 11/2006)
Overseas PhⅡ/Ⅲ(Interstitialcystitis: 5/2005)

KCA-757

MediciNova (US)Bronchial asthma andinterstitial cystitis

In-house

・KYORIN grants MediciNova an exclusive license in
all countries worldwide except for Japan, China,
South Korea and Taiwan to develop and sell thecompound and products・Interstitial cystitis: Result of Ph II/III was reported inJanuary 2007 and development ceased
・Bronchial asthma: Clinical trial overseas wasdiscontinued.

Overseas PhⅡ（POC)（12/2010）

KRP-203

Novartis (Switzerland)

Transplantation,autoimmune,andd IBD*In-house

・Kyorin grants the right to develop and commercialize
KRP-203 worldwide for use as an immunosuppressanti organ transplants,inlandd righti h to develop
dl andd
commercialize KRP-203 worldwide except in Japan,
Korea, China and Taiwan for the treatment ofautoimmune diseases and other diseases(February 2006)）
・New license agreement IBD (November 201088

ReferenceSegment information
for the First Quarter Ended June 30, 2011
Sales, profit or loss of each report segment
Sales（Units: ¥ billion）

Year on Year

ProfitYear on YearNet sales (total)

24.8＋0.2

4.1＋1.9

Ethical drugs
g business24.2＋0.2

4.1＋1.9○Overseas

21.1
20.1
1.1＋0.4△0.1＋0.4◆Generic drugs

2.1

△0.1

◆Over-the-counter drugs

1.0

△0.0

Healthcare(Skincare)business

060.6

△0 1
△0.1

△0 0
△0.0

△0 0
△0.0

0.1

△0.0

◆Sales of new ethical drugs○JapanAmount of adjustment△0.0(Note ) The Company is applying the Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related Information and the Guidance on the Accounting Standard forDisclosures 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 First Quarter Ended June 30, 2011
（ Units: ¥ million ）Interim term

Full termFirst quarter （April 1 to June 30）
FY2011(results)

YoYchange(%)

Progressto interimterm
forecast(%)

Progress
to fullterm
forecast(%)

FY2010(results)

FY2011(forecast)

FY2010(results)

FY2011(forecast)

FY2010(results)

Sales

46,70749,200104,069

106,500

24,65524,808

153

0.6%

50.4%

23.3%

◆Ethical drugs
business

45,37347,800101,271

103,500

23,95524,182

227

0.9%

50.6%

23.4%

Sales of new
ethical drugs

39,20841,20088,02088,90020,794

21,148

354

1.7%

51.3%

23.8%

Japan

37,70839,90085,284

87,10020,167

20,076

△91

△0.5%

50.3%

23.0%

Overseas

1,500

1,300

2,736

1,700

626

1,072

446

71.2%

82.5%

63.1%

Generic drugs

4,115

4,600

8,871

10,300

2,145

2,068

△77

△3.6%

45.0%

20.1%

Over-thecounter drugs

2,049

2,000

4,378

4,300

1,015

966

△49△4.8%

48.3%

22.5%

◆healthcare(Skincare)business

1,333

1,400

2,797

3,000

699

626

△73

△10.4%

44.7%

20.9%

Operatingincome

4,201

6,100

16,443

16,600

2,216

4,100

1,884

85.0%

67.2%

24.7%

Ordinary
Income

4,542

6,400

17,11017,200

2,421

4,300

1,879

△29.2%

67.2%

25.0%

Net income

2,959

4,000

10,927

10,900

1,799

2,697

898

49.9%

67.4%

24.7%

Change10