Fiscal Year 2022 (Period Ending March 2023)

First Half Financial Results Briefing
November 8, 2022
TSE Prime 4559

Mitsuhiro Ibe, Representative Director, President

Zeria Pharmaceutical Co., Ltd.

1

I. Consolidated Financial Highlights
for the First Half of Fiscal Year 2022
I-1 Overview
I-2 Ethical Pharmaceuticals Business
I-3 Consumer Healthcare Business
I-4 Overseas Net Sales

22

I-1 Overview

Year-on-YearDifference

Forecast
Announced
in MayDifferenceWith Publicly
Announced
Forecast

33,71217.9%

33,0002.2%

20,14324,335

20.8%－17,470

18,441

5.6%－R&D Expenses

2,986

1,607

-46.2%－Advertising
Expenses

816

1,175

44.1%

－Operating Profit

2,672

5,894

120.6%

3,500

68.4%

Ordinary Profit

3,116

5,18266.3%

3,50048.1%

Profit Attributable toOwners of Parent

2,115

3,998

89.0%

2,800

42.8%

First Half of
Fiscal Year
2021 Results

First Half of
Fiscal Year2022 Results

Net Sales

28,606Gross Profit
Selling, General, andAdministrative Expenses(Unit: Million yen)

ZERIA Pharmaceutical Co., Ltd.

3

I-2 Ethical Pharmaceuticals Business: Net Sales by Product The top three products, including Asacol, performed well Dificlir made a significant contribution to sales growthFirst Half ofFiscal Year 2021
(Unit: Million yen)

Ethical Pharmaceuticals
BusinessResults

First Half of Fiscal Year 2022
Results

Year-on-Year Growth

17,99721,505

19.5%

Asacol

8,506

9,881

16.2%

Dificlir

2,279

3,895

70.9%

Entocort

2,245

2,935

30.7%

Acofide

1,580

1,541

-2.4%

Others

3,386

3,251

-4.0%

ZERIA Pharmaceutical Co., Ltd.

4

I-2 Ethical Pharmaceuticals Business
Factors Causing Changes from Previous Year
Year-on-Year
Comparison

Factors Causing Change
DomesticOverseas

Sales declined owing to the impact ofcompeting products and drug price revisions

 Robust performance in major markets suchas the UK and Northern Europe
 Good performance of 1600mg tablets

Asacol+16.2%

Dificlir+70.9%

Entocort+30.7%

Robust performance despite being impacted
by drug price revisions-2.4%

Although there were temporary sales
accompanying the beginning of independent
promotion in the previous year, there wereno such temporary sales in this year

-4.0%

Although sales of Ferinject, etc., grew,
overall sales declined owing to thesuspension of sales of some productsAcofideOthers

ZERIA Pharmaceutical Co., Ltd.

Performed well thanks to the success ofaggressive sales resource investment

Performed well in markets such as Canadaand Northern Europe5I-3 Consumer Healthcare Business: Net Sales by Product Sales of the Hepalyse range are trending toward recovery
 In particular, there has been a notable recovery in the convenience store market

First Half ofFiscal Year 2021
(Unit: Million yen)

Results

First Half of Fiscal Year 2022
Year-on-Year
GrowthResults

10,533

12,131

15.2%

Hepalyse range

3,237

4,698

45.1%

Pharmaceuticals

1,958

2,256

15.2%

Soft Drinks
Dietary Supplements

1,278

2,442

91.0%

Chondroitin range

2,595

2,634

1.5%

WithOne range

647

620-4.1%

Others

4,052

4,177

3.1%

Consumer Healthcare Business

ZERIA Pharmaceutical Co., Ltd.

6I-3 Consumer Healthcare Business
Factors Causing Changes from Previous Year

Hepalyse range

Year-on-Year
Comparison

Factors Causing Change

Pharmaceuticals+15.2%

Secured new customers by promoting product features, such as“Fatigue recovery” and “Metabolism improvement/promotion”

Soft Drinks
Dietary Supplements+91.0%

Significant increase in sales thanks to the easing of self-imposed
restrictions related to COVID-19 and a recovery in social activities

Chondroitin range+1.5%

Robust performance thanks to the impact of active advertising
investment, etc.

WithOne range-4.1%

Unable to attract new customers due to competing products resulting
in a decrease

Others+3.1%

Growth in cosmetics, etc.

ZERIA Pharmaceutical Co., Ltd.

7

I-4 Overseas Net Sales
Asacol, Entocort, and Dificlir performed well, and overseas net sales grew significantly
Overseas net sales ratio
47.4%(Million yen)

40,00040.9%
30,00015,969 Overseas11,689
20,00010,000

Domestic

02021 first half

ZERIA Pharmaceutical Co., Ltd.

2022 first half

8Ⅱ. Consolidated Financial Forecast for Fiscal Year 2022
Ⅱ-1 Ethical Pharmaceuticals Business
Ⅱ-2 Consumer Healthcare Business
Ⅱ-3 Overview of Consolidated Financial Resultsfor Fiscal Year Ending March 31, 2023
Ⅱ-4 Development Pipeline Status
Ⅱ-5 Initiatives for Sustainable Growth99

Ⅱ-1 Ethical Pharmaceuticals Business Significant growth in the overseas market in the first half offiscal year 2022
 Continue to focus on rolling out the following products inJapan and overseasDomestic:
Overseas:
Ethical Pharmaceuticals Business Ethical Pharmaceuticals Business

ZERIA Pharmaceutical Co., Ltd.

AsacolAsacolAcofideDificlir

Ferinject

Entocort10Ⅱ-1 Ethical Pharmaceuticals Business: Overseas Business Development

8 Subsidiaries Established
Overseas businessdevelopment

EthicalPharmaceuticalsBusiness

ZERIA Pharmaceutical Co., Ltd.

Consumer
Healthcare Business2004 Ireland2008 Sweden
2010 UK, Czechoslovakia
2011 Spain2013 Germany
2016 France
2021 Italy

Products are sold in 64 countries
around the world11

Ⅱ-1 Ethical Pharmaceuticals Business: Trends in Overseas Net Sales
In addition to Asacol and Entocort, Dificlir has also contributed to sales growth

35,000(Million yen)
30,00025,00020,00015,00010,000

Tillotts Pharma
Made a wholly
owned subsidiary

5,000020092015

2020

2022
Expectation

ZERIA Pharmaceutical Co., Ltd.

12

Ⅱ-1 Ethical Pharmaceuticals Business: Asacol
Expect growth in the overseas market to continue(Million yen)

20,000

Domestic

15,00010,000Overseas Market
Overseas

5,000 Good performance of 800mg tablets
 Growth in sales of 1600mg tablets, launched in 2018

02019

2020

2021

Asacol net sales
ZERIA Pharmaceutical Co., Ltd.

13

Ⅱ-1 Ethical Pharmaceuticals Business: Asacol 1600mg Tablet
Sales are growing, particularly in Europe

1600mg tablets

 Sales of 1600mg tablets are steadily increasing It is being promoted to encourage switchingfrom competing high-dose formulations
 We plan to continue to expand sales to morecountries

2018

2021

Asacol net sales in the overseas market(Swiss francs basis)

ZERIA Pharmaceutical Co., Ltd.

14

Ⅱ-1 Ethical Pharmaceuticals Business: Dificlir
A favorable market environment for Dificlir development is being prepared It was recommended as a treatment for Clostridium difficile infection in multiple
clinical guidelines published in 2021
European Society of Clinical Microbiology andInfectious Diseases (ESCMID)The Society for Healthcare Epidemiology of America(SHEA) /Infectious Diseases Society of America (IDSA)
National Institute for Health and Care Excellence(NICE)

Initial treatment
Cases with high riskof recurrenceFirst-line drug

Initial treatment
First recurrenceFirst-line drug

Initial treatment
Cases of recurrence

Second-line drugFirst-line drug We believe the recommendations in these guidelines will create a good environmentfor Dificlir in major European markets including France and the UK We will proactively invest sales resources to strengthen access to medical institutions

ZERIA Pharmaceutical Co., Ltd.

15Ⅱ-1 Ethical Pharmaceuticals Business: Dificlir
Sales grew significantly in 2021
Thousand
USD

50,000Other

40,000 Nov. 2020

Tillotts acquired rights

 2021

It was recommended as a first-line drug forthe treatment of Clostridium difficile infection
in multiple clinical guidelines

ITALY
SPAIN

30,000GERMANY

20,000UK

Notable growth in France and the UK
10,000FRANCE02020

2021
Source: Aggregated by the Company based on
IQVIA Analytics Link data for2020 and 2021
(Market definitions according to the Company)
Unauthorized reproduction prohibited
Copyright © 2022 IQVIA.

ZERIA Pharmaceutical Co., Ltd.

16

Ⅱ-2 Consumer Healthcare BusinessConducted TV commercials and other mass media advertisingand online advertising and promotional campaigns centered on SNS

Chondroitin range

ZERIA Pharmaceutical Co., Ltd.

Hepalyse range

WithOne range

17Ⅱ-2 Consumer Healthcare Business: Hepalyse Range
 Sales of the Hepalyse range are trending toward recovery
 In particular, there has been a notable recovery in theconvenience store market(Million yen)Hepalyse W range(Million yen)

8,000

Pharmaceutical
Hepalyse range

8,000

6,000
6,000

4,000

Second half(forecast)

2,000

4,000

Second half(forecast)

2,000First half0First half
0

2019
ZERIA Pharmaceutical Co., Ltd.

2020

2021

2022

2019

2020

2021

2022
18

Ⅱ-2 Consumer Healthcare Business
Focusing on cultivating chondroitin, Hepalyse, WithOne, and European herbal
preparation

Chondroitin range(arthritis, lumbago therapeutic Pharmaceutical Hepalyse range WithOne range(nutrient tonics)(laxatives)
agent)

Main OTC drug product ranges

Hi Jelly range(nutrient tonics)

Prevaline range(drug for the skin)

Other OTC drugs

ZERIA Pharmaceutical Co., Ltd.

Viewclear range(eye drops)

PrefeminBelfemin(therapeutic agent for premenstrual (treatment for amelioratingfoot swelling)
syndrome (PMS))

Colpermin(treatment to improve
irritable bowel syndrome(IBS))

European herbal preparation series

Masdent range

IONA Cosmetics

Hepalyse Wseries

Cosmetics

Soft drinks(medicated toothpaste)

Oral care19Ⅱ-3 Ethical Pharmaceuticals Business: Outlook for the Second Half of Fiscal Year 2022
Domestic: Ethical Pharmaceuticals Business AsacolDecline in sales owing to the impact of drug price revisions and competing products Acofide
Further relaxation of patient consultation restraints, spread of gastroscopy
Increase in sales based on aggressive sales resource investment
 Ferinject
Increase in sales based on aggressive sales resource investment

Overseas: Ethical Pharmaceuticals Business AsacolIncrease in sales of 800mg and 1600mg tablets, addition of new pharmaceutical preparations in launchcountries, etc.
 Dificlir
Favorable change in the market environment amid prescriptions being recommended by clinicalguidelines Entocort
Good performance to continue in Canada, Northern Europe, etc.
ZERIA Pharmaceutical Co., Ltd.

20

Ⅱ-3 Consumer Healthcare Business: Outlook for the Second Half of Fiscal Year 2022
Consumer Healthcare Business Hepalyse range
We expect sales to recover as the impact of the spread of COVID-19 eases and we enter the year-end/New Year
period of peak demand– Pharmaceutical Hepalyse range
Continue promotion activities that clearly communicate product features– Hepalyse W range
Implement sales promotion campaigns via SNS and tie-up projects with convenience stores
 Chondroitin rangeIncrease in sales by implementing promotion activities that clearly communicate the ingredient features
 WithOne range
Implement promotion activities that clearly communicate the ingredient features through new TV commercials,etc.
 European herbal preparation range
Acquire potential customers by expanding awareness of “European Herbal Preparation drugs”

ZERIA Pharmaceutical Co., Ltd.

21

Ⅱ-3 Consolidated Financial Forecast for Fiscal Year Ending March 31, 2023
Fiscal Year Ended
March 31, 2022
(Million yen)

Results

Fiscal Year Ending March 31, 2023
Expectation

Year-on-Year
Growth RateNet Sales

59,53266,00010.9%

Operating Profit

6,366

7,000

10.0%

Ordinary Profit

5,935

7,000

17.9%

Profit Attributableto Owners of Parent

3,961

5,600

41.4%

Dividend Per Share35 yen

36 yen (expected)

R&D Expenses

4,789

5,000

4.4%

Advertising
Expenses

1,963

2,900

47.7%

Overseas Net Sales

24,66829,65020.2%

ZERIA Pharmaceutical Co., Ltd.

22

Ⅱ-4 Development Pipeline Status
Domestic Development
Development
Code/Name

Development
Company/Institution

Z-338(Acofide)

Zeria

ZG-801

Zeria

Hyperkalemia

Kyushu University

Esophagogastricjunction outflow
obstruction(Investigatorinitiated trial)

Z-338(Acofide)

Indication

Phase1

Phase2Phase3

Application

ApprovalAcquisition

Sales

Phase1

Phase2Phase3

Application

ApprovalAcquisition

Sales

Pediatric
functional
dyspepsia

Overseas Development
Development
Code / Name

Development
Company/Institution

Indication

Z-338(Acofide)

Zeria

Functional
dyspepsia

EuropeZ-338(Acofide)

Meiji Seika
PharmaFunctional
dyspepsia

Thailand and Indonesia

Z-338(Acofide)

Faes Farma

Functional
dyspepsia

Mexico and Honduras

8 Latin-American countries** Chile, Colombia, Peru, Ecuador, Dominican Republic, Costa Rica, Guatemala, andPanama

ZERIA Pharmaceutical Co., Ltd.

23This document includes statements related to future performance. These statements are not aguarantee of future performance and include risks and uncertainties. Please keep in mind thatfuture business results may differ from expectations due to changes in the business environmentand other factors. In addition, this document is for informational purposes only and is not intended
to solicit transactions.

Contact: Attn: Nishizawa, Public Relations Division
Tel. 03-3661-1039
Fax. 03-3663-4203

ZERIA Pharmaceutical Co., Ltd.