First Quarter Consolidated Financial Results
for the Fiscal Year Endingg March 31,, 2011
● Overview of consolidated results● Main Product Sales Update● Development pipelines
Reference・Segment information for the First Quarterof the Fiscal Year Ending March 31,2011
・Consolidated Financial Results for theFirst Quarter of the Fiscal Year Ending March 31,2011
・Results and Forecast of Main Subsidiary Companies

July 30, 2010

KYORIN Holdings, Inc.

Outline of First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2011
Firstquarter
June 30,
2010

Sep/10Interim term(forecast)First quarter
June 30,2007First quarter
June 30,2008

First quarter
June 30,2009

Net sales

21,891

20,75623,28924,6555.9％

46,5001.7%

100,300

0.5％

Operatingincome

4,082

995

3,156

2,216

△29.8％

2,500△45.3%

12,700△4.2％

OrdinaryO
diincome

4,321

1,228

3,417

2,421

△29.2％

2,900△43.9%

13,400△5.9％

Net income

2,600

540

1,976

1,799

△9.0％

1,700

△48.4%

8,500

△3.9％

YoY
change(%)

YoYchange(%)

Year ending
March 31,2011(forecast)

Units:
Millions ofyen

YoYchange(%)

Fi t QFirst
Quartert C
Consolidatedlid t d Fi
Financial
i lRResults
lt ffor ththe FiFiscall Y
Year EEndingdi MMarchh 3131, 2011
＜ Year on Year＞【 Net sales】 Although prices of ethical drugs were revised, sales of new ethical drugs in Japan rose on a year-onyear basis
basis. Sales of generic drugs also increased.
increased As a result,result consolidated net sales stood at ¥24.6¥24 6 billion
billion, up 5.9%
5 9%year on year.
【Income】With the increase in net sales, gross profit rose. However, R&D expenses also increased (up 89.3% yearon year)
year). Consequently
Consequently, operating income was ¥2.2
¥2 2 billion (down 29.8%
29 8% year on year),year) and net income was ¥1.8
¥1 8billion (falling 9.0%).

Consolidated Financial Results for the Fiscal Year Ending March 31, 2011(forecast)
The results forecasts for the first half and the full year announced on May 11, 2010 remain unchanged. (Progresscompared with the forecast for the first half: net sales: 53.0%; operating income: 88.6%)
1

Highlights of Business Performance for the First Quarter EndedJune 30, 2010
Highlight ①

Despite drug price revisions (in the 6%
range for KYORIN Pharmaceutical),
nett sales
l rose ¥1.4
¥1 4 billi
billion year on year,and gross profit increased ¥0.9 billion.

（ Units: ¥ ｂillion ）NetsalesNetsalesCost ofsales

R&D

R&D

2.2

4.1

SG&A expenses(excluding
R&D expenses)

9.3

Highlight ②

R&D expenses increased about ¥2.0billion from a year ago, reflecting theprogress of development pipelines, forwhich the Company is making utmostefforts.

9.2

8.7

0

Cost ofsales

Operatingincome

First Quarter Ended
June 30,30 2009

Highlight ③

SG&A expenses(excludingR&D expenses))

9.1

SG&A expenses excluding R&A
Expenses were reduced.
(The ratio of SG&A expenses, excluding
R&D expenses, declined
d li d 2.8
2 8 percentagetpoints.)

OperatingincomeFirst Quarter Ended
June 30,
30 20102

Consolidated Financial Results for the First Quarter
Ended June 30, 2010
（ Units: ¥ ｂillion ）First Quarter
June 30, 2009First Quarter
June 30, 2010

ChangeNet sales (total)

23.3

24.7

＋1.4

Ethical drugs
business

22.5

24.0＋1.5○Overseas

19.5
18.9
0.6

20.820.20.6＋1.3＋1.3＋0.0◆Generic drugs

1.8

2.1＋0.3◆Over-the-counterdrugs

1.2

1.0△0.1

H lh
Healthcarebusiness0.80.7△0.1◆Skin care

0.80.7△0.1◆Sales of newethical drugs○JapanOperatingincome

3.2

2.2

△0.9

■Net sales◆Ethical drugs business●Sales of new ethical drugs
in Japan

Change10.3(1Q)(results)

・ Kipres・ Mucodyne
・ Pentasa
・ Uritos●Sales of new ethical drugs

6.6
5.1
4.8
0.8

¥0.6billion

in Overseas
0.6●Generic drugs¥2.1billion＊SalesSales increased on main products.

●Over-the-counter drugs◆Healthcare Business●Skin care(+1.4)(+1.5)(+1.3)¥24.7billion¥24.0billion¥20.8billion
11.3(1Q)(results)

⇒⇒
⇒
⇒

7.4
5.6
5.0
1.3（＋0）
⇒

0.5

3.4

2.4

△1.0

Net income

2.0

1.8

△0.2

(Note 1) The results for the first quarter under review are compared with results for the firstquarter of the previous fiscal year that have been rearranged by a convenient method.
(Note 2) The products and services included in the Consumer Healthcare Business are different
from those in the disclosed results for the fiscal year ended March 2010 and earlier periods.

（△0.1）（＋0.3）¥1.0billion(△0.1)¥0.7billion(△0.1)¥0.7billion(△0.1)¥2.2billion■Operating income(△0.9)◆The operating income margin decreased 4.6 percentage points , to 9.0%
●Cost of sales ratio is almost level(37.2%⇒37.2%)

Factors for increase: price revision
F t
Factors
ffor ddecrease ： Sales
S l off in-housei hproducts,
d t whichhi h hhave llow costs
t off sales,
lincreased.The cost of sales ratio of KYORIN Remedio declined● R&D ratio ： up 3.3 pointsOrdinary
Income（+ 0.8)（+ 0.5）（+ 0.2）（+ 0.5）(9.4%⇒16.8%)＊¥2.2billion⇒¥4.1billion
The progress of development pipelines（KRP-108 Ph2ｂ ended）● SG&A expenses ratio(39 8%⇒37 0%)(39.8%⇒37.0%)(excluding R&D expenses): down 2.8 points
Factors for decrease： A reduction in general expenses■Net income¥1.8billion(△0.2)

3

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

Product nameFY09(results)

Full term

FY10(forecast)FY09(results)

First quarter（April 1,2010 to June 30,2010）

FY10(forecast)

FY09(results)

FY10(resuls)

YoYchange (%)

Progress toInterim term
forecast(%)

Kipres（LT receptor antagonist）

Mucodyne（Mucoregulant）
Sales of new
ethical drugs(Japan)Progress toFull term
forecast(%)

12.7

13.7

29.2

31.4

6.6

7.4

11.6%

54.1%

23.5%

9.3

9.5

20.9

21.4

5.1

5.6

9.5%

58.3%

26.0%

9.7

9.8

19.4

20.1

4.8

5.0

3.2%

50.7%

24.7%

1.6

2.2

3.7

5.1

0.8

1.3

58.3%

57.3%24.8%

2.3

2.2

4.6

4.0

1.1

1.0

△10.8%

45.9%

25.4%

1.1

1.0

2.2

1.3

0.6

0.5

△9.7%

50.3%

39.8%

1.0

1.0

1.9

2.1

0.5

0.5

△2.6%

44.3%

22.1%

Pentasa(Ulcerative colitis andCrohn’sdisease treatment)

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)4

Main R&D Activities① ( July 30 , 2010 Release)
Ph II～ApplicationStage
DomesticiOverseas

Ph III(12/2009)

Compound/CodeTherapy area/
ActionOriginFeatures

PENTASA
Tablets

Ulcerative colitis

FerringPharmaceuticals

New dosage regimen for ulcerative colitis in the remission
phase (once a day)Comments

Ph II（3/2005）(Eisai: PhⅢ)

AS-3201（Tablets ）Diabetic
neuropathy

Dainippon
Sumitomo

Aldose reductase inhibitor to reduce the sorbitol accumulationin the cell, and improve diabetic neuropathy

Co-development with
Dainippon Sumitomo
PhⅡb（9/2007）

Ph II（2/2008）

PhⅡ（9/2007）

KRP-104
KRP104Anti-diabetes
Antidiabetes
agent

In-houseInhouse

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

PhⅡb in overseas (11/2009)
PhⅡb in domestic
completed （3/2010）

Ph II（8/2008）

US: Abbott
NDA filed(3/2009)

KRP-108

anti-asthmatic

SkyePharma
PLC

An ICS/LABA combination product, which offers better
compliance and convenience to the patients.

License Agreement withSkyePharmaSye a a ((4/2008)/ 008)Ph II completedin domestic (4/2010)

Europe:Mundipharma
MAA submitted(3/2010)

Other Comments※Orally Disintegrating Tablet of Immidafenasin（INN),
a Drug for Overactive Bladder: Application(12/2009)5

Main R&D Activities② （ July 30 , 2010 Release)
POC Project （Pre-clinical～Ph I）
Stage
Domestic
Ph I
inpreparation

Overseas

Compound/
Code

Therapy area/
ActionOriginFeatures

Comments

License agreementwith Novartis (2/2006)

Ph I(7/2007)

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
immunomodulator

PhⅠ inpreparation

KRP-110

Opioidinduced
constipation
andintractablepruritusitIn-house

A highly selective μ-opioid receptor antagonist.
It is expected to block constipation induced by
opioid analgesics without interrupting theanalgesic effect of opioids. It is orally effective invarious itching models, indicating potential of anovell anti-itchti it h drug
d g ffor iintractablet t bl pruritus.
itOriginFeatures

In licensing
Stage
Domestic
Ph-IIinpreparation

Overseas
Ph-III(Merz)

Compound/
CodeKRP-209

Therapy area/
ActionTinnitus

Merz

KRP-209 (Neramexane) is expected to improve
the patients’ annoyance and difficulties in theirlife caused by tinnitus through mainly its two
pharmacological properties:
1)NMDA antagonistic activity and2)Nicotinic acetylcholine antagonistic activity

Comments

License Agreementwith Merz (11/2009)
PhⅠclinical trial inJapanese (single dosePK) in US completedby Merz (03/2010)
6

Main R&D Activities③（ July 30, 2009 Release)
Licensing development
Product name・CodeStage

Licensee ・Collaborativeresearch

Therapy area/Action

OriginCommentsAlphagan/Alphagan P

Domestic
Ph III（7/2007）

Senju Seiyaku

Glaucoma

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

Ketas

Overseas
Ph II（8/2005）

MediciNova (US)

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 forf the multiple sclerosis
indication.(10/2004)
Result of PhⅡ was reported in April 2008.

KCA-757

Overseas
Ph III(Anti-bronchialAsthma:11/2006)
Ph II/III(Interstitial cystitis:5/2005)

MediciNova (US)Anti-bronchialasthma andInterstitial cystitis
agentIn-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・Interstitial cystitis:Results of PhⅡ/Ⅲ wasreported inJJanuary
2007 andd ceased
dddevelopment
l・Bronchial asthma: Clinical trial oversea wasdiscontinued.

KRP-203

Overseas
Ph I（7/2007）（）

Novartis(Switzerland)

Transplantation
and autoimmune
diseases treatment

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 withother types of immunosuppressants.
7

ReferenceSegment information
for the First Quarter Ended June 30, 2010
（Units: ¥ billion）

Sales, profit or loss of each report segment
Sales
金額

ProfitYear onYear

金額

Year onYear

Net sales ((total))

24.7

＋1.4

2.2

△0.9

Ethical drugs business24.0＋1.52.1－◆Sales of new ethical drugs○Overseas

20.8
20.2
0.6＋1.3＋1.3＋0◆Generic drugs

212.1＋0 3＋0.3◆Over-the-counter drugs

1.0

△0.1

Healthcare Business

0.7

△0.1

△0－

◆Skin care

0.7

△0.1

Amount of adjustment

－0.1

－

○Japan(Note 1) Starting the first quarter under review, the Company is applying the Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related Information and the Guidance on theAccounting 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.
(Note 2) The results for the first quarter under review are compared with results for the previous fiscal year, which have been modified using the most reasonable method.

8Consolidated Financial Results
for the First Quarter Ended June 30, 2010
Interim term
FY09((results)l )FY10(f(forecast))

Full term
FY09((results)l )（ Units
Units: ¥ million ）First quarter （April 1, 2010 to June 30,2010）

FY10(f(forecast))

FY09((results)l )FY10((results)l )Changeg

YoY change( )(%)

Progressto interim
term
forecast(%)

Progress
to fullterm
forecast
(%)

Sales

45,71446,50099,764

100,300

23,28924,655+1,365

5.9%

53.0%

24.6%

◆Ethical drugs
business

44,11544,791

96,421

96,56722,48523,955

+1470

6.5%

53.5%

24.8%

ethical drugs

38,011

38,89482,39584,33919,503

20,794+1,291

6.6%

53.5%

24.7%

JJapan

36 73336,73337 57537,57579 766
79,76682 56082,56018 91018,91020 167
20,167+1,257
1 257

6 6%
6.6%

53 7%
53.7%

24 4%
24.4%

Overseas

1,278

1,319

2,629

1,779

592

626

+34

5.7%

47.5%

35.2%

Generic drugs

3,584

3,611

8,642

7,647

1,829

2,145+316

17.3%

59.4%

28.1%

Over-thecounter drugs

2,519

2,286

5,384

4,576

1,153

1,015

△138

△12.0%

44.4%

22.2%

◆Consumer
healthcare
business

1,599

1,751

3,342

3,733

803

699

△104

△13.0%

39.9%

18.7%

Skin care

1,599

1,751

3,342

3,733803

699

△104

△13.0%

39.9%

18.7%

Operatingincome

4,569

2,500

13,261

12,700

3,156

2,216

△939

△29.8%

88.6%

17.4%

Ordinary
income

5,172

2,900

14,234

13,400

3,417

2,421

△996

△29.2%

83.5%

18.1%

Net income

3,293

1,700

8,848

8,500

1,976

1,799

△177

△9.0%

105.8%

21．2%

Sales of new(Note) The results in the first quarter under review and results forecasts for the first half and full year are compared with results for the previous fiscal year, which have been rearranged by a convenient method.

9Actual and Forecast of Main Subsidiary Companies（ Units: ¥ billion）

KYORIN
pharmaceutical

3 ／10（results）

3 ／11（forecast）

First quarter／10（results）（）
3／Sales

85.3

87.3

20.2

21.5

Operating profit

13.1

12.3

3.4

2.0

N profit
Netfi

95
9.5

84
8.4

25
2.5

17
1.7

1 ／10（results）

3 ／11（forecast）

First quarter1 ／10（results）

Sales

10.1

8.9

2.1

2.4

Operating profit

0.4

0.2

00.2

Net profit

0.4

0.1

0.1

0.2

3 ／10（results）／10（lt ）3 ／11 （forecast）（ft）

First quarter3 ／10（results）

3.3

3.7

0.8

0.7

pgp
profitOperating

△0.1

0.2

△0.2

△0Net profit

△0.1

0.2

△0.2△0KYORIN
Rimedio

Dr Program
Dr.Program
Sales

First quarter／11（results）（）
3／

First quarter3 ／11（results）

First quarter3／11（results）

10