2Q FY2013(Fiscal Year Ending March 31, 2014)

Financial Results Presentation
Eisai Co., Ltd.

November 1, 2013

Safe Harbor Statement

1•

Materials and information provided during this presentation may contain so-called “forwardlooking statements.” These statements are based on current expectations, forecasts andassumptions that are subject to risks and uncertainties which could cause actual outcomes andresults to differ materially from these statements.

•

Risks and uncertainties include general industry and market conditions, and general domestic
and international economic conditions such as interest rate and currency exchange fluctuations.
Risks and uncertainties particularly apply with respect to product-related forward-looking
statements. Product risks and uncertainties include, but are not limited to, technologicaladvances and patents attained by competitors; challenges inherent in new productdevelopment, including completion of clinical trials; claims and concerns about product safety
and efficacy; regulatory agency’s examination period, obtaining regulatory approvals; domestic
and foreign healthcare reforms; trends toward managed care and healthcare cost containment;
and governmental laws and regulations affecting domestic and foreign operations.

•Also, for products that are approved, there are manufacturing and marketing risks anduncertainties, which include, but are not limited to, inability to build production capacity to meetdemand, unavailability of raw materials, and failure to gain market acceptance.

•

The Company disclaims any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise.

•This English presentation was translated from the original Japanese version. In the event of
any inconsistency between the statements in the two versions, the statements in the Japaneseversion shall prevail.

1H FY2013 Consolidated Financial Results
EPS showed recovery from bottom-out(Billion yen, %)1H FY2012
Results

1H FY2013%

Results%

YoY

Net Sales

288.5

100.0

307.5

100.0

107

Cost of Sales

85.0

29.5

93.3

30.3

110

Gross Profit

203.5

70.5

214.2

69.7

105

R&D Expenses

57.4

19.9

70.4

22.9

123

SG&A Expenses

108.7

37.7

108.4

35.3

100

Operating Income

37.3

12.9

35.4

11.5

95

Ordinary Income

34.6

12.0

32.7

10.6

95

Net Income

24.5

8.5

27.7

9.0

113

EPS (yen)

85.90

-

96.97

-

113

Pharma EBIT*1

94.8

32.9

105.8

34.4

112

Cash Income*2

50.1

52.0

104

*1: Pharma EBIT: Operating Income+ R&D Expenses*2: Cash income is the total amount of cash available for investments for growth, business development, dividend payment, and repayment of borrowings, etc.
Cash income: Net income + Depreciation of PP&E and Amortization of intangible assets + In-process R&D + Amortization of goodwill + Impairment loss
(including loss on devaluation of investment securities)
2 1H FY2013 average exchange rates: U.S.$ = 98.85 yen (YoY +24.5%), Euro = 130.00 yen (YoY +29.2%), GBP = 152.48 yen (YoY +21.5%)

Robust Growth of 2Q (July-September)2Q result outperformed 1Q
108%

105%

vs. 2Q FY2012

vs. 1Q FY2012

1Q

104%
vs. 1Q FY2012

2Q

Consolidated net sales

1Q

106%
vs. 2Q FY2012

2Q

Gross profit on sales

Achieved high growth rate YoY in all income items
Operating income
Net income

145%YoY

EPS

145%YoY

Cash income
3

117% YoY

116% YoY

1H FY2013 Analysis of Attribution Factors for
Increased/ Decreased Operating Income

Operating income increased before R&D related milestone payment+6.1*(Billion yen)

-11.0*

+9.7*

50

-6.7*
40

30

42.1

37.3

35.4

20

10

0

1H FY2012
OperatingincomeRapid growth of
next-generation
six products
Halaven
Fycompa
BELVIQ
HumiraLunesta
Lyrica*1
Growing
segments
Asia Region
Generic
Business

4

Continuous cost
optimization
including alliance
cost

Investment
associated with
BELVIQ launch
Increase in R&D
investment
associatedwith progressionof projects andothersR&D milestone
payment
1H FY2013
Operatingincome(before R&D
milestone
payment*2)* Figures shown on attribution factors of increase and decrease in operating income are approximate*1 Alliance revenue *2 Lenvatinib melanoma POC*3 achievement, BAN2401 Ph. II initiation, and E7438 Ph. I/II initiation *3 Proof of Concept

Lenvatinib melanoma
POC*3 achievement
BAN2401 Ph. II
initiation
E7438 Ph. I/II initiation

1H FY2013
OperatingincomeRapid Growth of Next-Generation Six Products
Accounting for 60% of increase in consolidated sales
Total
43.2B yen(Billion yen)

136% YoY

50
500

ハラヴェン
HalavenTotal
31.8B yen

400
40

Fycompa
30
300

Total
22.5B yen

ヒュミラ
Humira*リリカ
Lyrica*200
20

Lunesta
ルネスタ
10
100

BELVIQ0

1H FY20112011年度上期
51H FY20122012年度上期

1H FY20132013年度上期*Alliance revenueOncology Franchise Achieved 111% YoY Growth
Epilepsy Franchise Achieved 148% YoY Growth
Oncology Franchise(Billion yen, %)1H FY2012

Accounting for 17% in consolidated sales

1H FY2013(Billion yen)

Results

Results

YoY

Halaven

10.8

13.9

129

Aloxi

17.9

21.4

120

Dacogen

8.8

9.2

105

Fragmin

5.3

4.1

77

Treakisym/
Symbenda

1.8

2.0

110

Others

3.9

3.1

80

Oncology-related
products total

48.5

53.8

111
(Billion yen,%)1H FY2012
Results

6

48.5

111%
YoY

1H FY2012

1H FY2013

Epilepsy Franchise
Accounting for 4% in consolidated sales(Billion yen)

1H FY2013
Results

YoY

Fycompa

0.1

0.9

1,346

Zonegran

3.2

4.4

139

Inovelon/Banzel

3.2

4.2

132

Others*

1.0

1.5

155

Epilepsy-related
products total

7.4

10.9

148

* Zebinix and Fostoin

53.8

10.9
7.4
1H FY2012

148%
YoY

1H FY2013

Halaven: Product Value Maximization Project
Seek to find innovative evidence
and new potential indications• Phase III study(Study
302) is steadily ongoing• Plan to submit within
FY2013

Submission under review in EU
Metastatic
breast cancer(earlier line
treatment)

Study 301*1
Additional
posthoc
analysis

NSCLC(Late line
treatment)• Phase III study issteadily ongoing• Plan simultaneous
submission in
FY2014 in Japan, Soft-tissue
sarcoma
U.S., EU, andAsian countries

Product Value
Maximization
Project
HER2 negative
breast cancer(first/secondline treatment)

Liposomal
formulation
Phase I study is steadily ongoing

Microtubule dynamics inhibitory effect+Potential inhibitory effect on tumor
metastasis in non-clinical study+
Aim to find novel evidence on clinicaldata
Among the patient groups confirmed
to have a newly detected metastasis
at the PFS determination, a grouptreated with Halaven recorded a trend
favoring extended OS, than a grouptreated with capecitabine.

Halaven 15.5 months
capecitabine 12.9 months
The study did not meet the co-primary end points of PFS and OS

Plan to achieve FPI*2
within 3Q FY2013
for Phase III study
led by ACCRU*3
Poster presentation
European Cancer Congress 2013

7

*1: Open-label, randomized, two-parallel-arm, multicenter study designed to evaluate Halaven versus capecitabine in patients with locally advanced or metastatic breast cancer who had up to three priorchemotherapy regimens in the (neo) adjuvant setting, and no more than two prior regimens for locally advanced and/or metastatic disease.
*2: FPI : First Patient In *3: ACCRU: The Academic and Community Cancer Research UnitedFycompa: Product Value Maximization Project
Seek to expand new potential indications
U.S.
Plan launch following
final DEA*2
schedulingPhase III study
is ongoing• U.S.A. and EU*1:
approved in 34 countries• Emerging markets:
Submission in 15 countries• Japan: Plan submission in
FY2014Phase II study
is ongoing

Adjunctive therapy
for partial-onset
seizure(Japan, China,
and Asiancountries)

Suspension
program inpediatric andadult patients(U.S. and EU)

Product Value
Maximization
Project

Monotherapy
forpartial-onset
seizurePhase III study
in preparation
8

Global Phase III
study is ongoing
Plan submission
in FY2014

Adjunctive
therapy for
PGTC*3(Global)Adjunctive
therapy for
Lennox-Gastautsyndrome

Phase III study inpreparation
Designated asorphan drugin the U.S.

*1: Indication for age 12 yeas and older *2: Drug Enforcement Administration *3: Primary Generalized Tonic-Clonic SeizurePharmaceutical Business in Japan

Enhance activity on Aricept by Integrated Community hhc unit
mainly focus on medical districts
Sado/ Kaetsu/ Niigata
Medical district

Example:Niigata District
☆ ☆
☆◎
☆

Central Niigata/ Chuetsu/ Uonuma
Medical district

◎
☆

☆

☆
◎

Joetsu Medical district

☆
☆◎

☆ ☆
☆
◎
☆
◎☆

Northern
Hokkaido
Southern
Hokkaido

238 medical-districts nationwide
based on community-based
medical consultation
Allocate over 1,400 MRs

Northern
TohokuNiigata

KoshinHokuriku

Hyogo
Eastern
Gifu
Keiji
Chugoku
Hiroshima-Yamaguchi
Northern Kyushu-Oita
Fukuoka-Okinawa◎: AD* medical center (6 centers)
Saga-Nagasaki☆: AD support doctor (18 doctors): AD patients’ medical consultation area
: New district of AD patients’ medical consultation
Southern Kyushu
area through MR activities

Southern
TohokuIbarakiTochigi-Gunma
Saitama
Chiba
East Tokyo
NagoyaWest Tokyo
Mikawa Shizuoka Tama
Mie
North Osaka
Yokohama
Kagawa-Tokushima Osaka
Sagami-Shonan
Ehime-Kochi South Osaka
Nara-Wakayama

Aim for patients to seek early consultation/treatmentby networking with AD medical centers,
AD support doctors, and caregivers
9* AD: Alzheimer’s disease

Aricept in Japan

Successful progress of new business model
based on patients’ medical environment
ブランド内アリセプトシェア
Achieved
1H FY2013 targetの低下率は縮小
Net sales 35.6B yen, 103% of target

Transition of Aricept
share in donepezil*(%)
100

Decline trend of Aricept sharein donepezil market seems to
be flattening

(%)
100

Transition of Aricept
share in brand products*

Number of Aricept
decreasing quantity*

Decline trend of Aricept sharein brand products seems to
be flattening

Decline trend of Aricept
quantity seems to bereaching a floor(million tablets)
160

80
80

120

60

60

80

40

40

20

20

0
11年度下期
2H
FY2011 12年度上期
1H FY2012 12年度下期
2H FY201213年度上期
1H FY201340

0

0
11年度下期
12年度上期
2H
FY2011 1H
FY2012 12年度下期
2H FY2012 13年度上期
1H FY201311年度下期
2H
FY2011 12年度上期
1H FY2012 12年度下期
2H FY2012 13年度上期
1H FY2013

Decline trend of Aricept sales is slowing down
Toward the achievement of FY2013 forecast of 67B yen
10* Internal estimate

Aricept in Japan

Seek to find further contribution with Aricept
New indications

Submission for DLB*1 indication
Initiation of Phase II study for regression
symptoms in people with Down syndrome

2 Formulation improvement

Developed the smallest 10mg ODT torealize ease of intake (disintegration) andprescribing (strength)

New formulation
3 basedon patients’ needs

Develop newly launched dry syrup and patch
formulation (in progress) to pursue easierintake for patients with difficulty swallowing

Distinctive plans to achieve
patient contribution by Aricept

1

11

Aim forlong-term LCM*2

4

Efficacy andsafety information

Timely delivery of efficacy and safety information
including possible side effects related to dose-up to
10mg

5

hhc customer
support call center24/7 call center dealt with over 70,000 Aricept
related inquiries for 14 years since Aricept
launchSolid support
for AD treatment

Nationwide AD-related training
6 programs for pharmacies

Share knowledge with medical staffs atpharmacies on how to communicate
with AD patients and their families

7

Value maximization

Aricept is more favorable on overall clinical conditions than otheracetylcholinesterase inhibitors*3
Aricept and appropriate care would have potential to extend
life*48

Creation of
new evidence

Seek new evidence through post-marketingsurveillance for further contribution
to patients*1: Dementia with Lewy bodies *2: Life Cycle Management *3: Shigeta, M et al, Geriat. Med. 51(9): 957- 963, 2013 *4：AAIC 2013

Seek
new evidenceHalaven in Japan

Enhance contribution to MBC patients in earlier line treatment*1

Aim to achieve OS*2 extension and maintain HR-QoL*3 in treatment of MBC
Confirmed potential of OS extension in earlier line treatment from EMBRACE study and Study 301*4
Aim to expand market share in the second line*5
Further contribution to patients with HER2 negative MBC(accounting for approx. 80% of all breast cancer)
Halaven(Billion yen)including triple negative type
121% YoY growth4
７％→１４％→２３％(Internal estimate)Strengthen activities at 397 cancer consultation cooperation hub hospitals

0

East Japan
District

2011年度上期
2012年度上期
2013年度上期
1H FY2011
1H FY2012
1H FY2013

Central/Kansai
DistrictWest Japan
Districts

Composition of breast
cancer specialist
Metropolitan
Districts

2

General Surgery

3 products in Oncology unit
Halaven, Treakisym, and Gliadel
130% YoY growth(Billion yen)

6

Breast Surgery
Medical Oncology
and others(Internal estimate)

4
2
0

12

*1: Metastatic breast cancer *2: Overall survival *3: Heath-QoL *4: The study 301 did not meet the co-primary endpoints of
PFS and OS *5: Treatment after anthracycline and taxanes

1H FY2012

1H FY2013

Growth Drivers in Japan BusinessLeading drivers in Japan business
Next-generation 3 products, generic business, and OTC
Next-generation 3 products
Humira, Lyrica, and Lunesta
128% YoY growth(Billion yen)

300
30
20
200

OTC business
Achieved 103% YoY growth
in matured OTC market throughdissemination to expand Chocola
brand and expansion of new market
Chocola brand for supporting
beauty and vitalization

10
100110% YoY
00

2012年度上期
2013年度上期
1H FY2012
1H FY2013

Generic business 126% YoY growth Focus on attracting younger
consumers by utilizing new media

120
12

Expand mail-order market to support
consumers’
beauty and health80
8137% YoY(Billion yen)

40
4
00
13

2012年度上期
1H FY20122013年度上期
1H FY2013

 Focus on attracting consumers in 40’s with
“Beauty Chocola” supplement andvegetable juice with collagenRapid Growth in Asia Region

Emerging markets account for approx. 10%of consolidated sales(Billion yen)(Billion yen)

28.1

Operating income
167% YoY

Net sales
143% YoY

19.6

6.9

4.1
FY2012
1H
1H FY2012

FY20131H
1H FY2013

FY2012
1H
1H FY2012

FY20131H
1H FY2013

Net sales

1H FY2013 YoY(%)

China

South
Korea

Hong
Kong

Taiwan Thailand Indonesia Malaysia

143

145

99

149

134

132

148

Singapore Philippines

148

144

India

Total

241

143

China and South Korea as drivers of remarkable performance in Asia

14

China

・ Rapid growth targeting annual sales of over 30B yen
・ Steady growth of leading products (Aricept, Pariet, and Methycobal)
・ Informative detailing utilizing iPads to achieve increase in prescriptions

South
Korea

・ Target annual sales of over 10B yen
・ Maximize patient contribution with the launch of Aricept 23mg
・ Enhancement of oncology franchise with the launch of HalavenAricept 23mg Launch in Asian Countries
Expand contribution to patients with severe AD

Achieved launch in 3 countries in FY2013
South Korea in August

India and Hong Kong in OctoberPlan to launch in Philippines, Indonesia, Thailand, and Malaysia in FY2014

Transition of Aricept sales in Asia region(JPY base)

FY2011FY2012

Target 150% YoY growth withlaunch of Aricept 23mg

FY2013

Seek further contribution to AD patientsby delivering 5mg, 10mg, and 23mg to cover all the stages of AD symptoms
15

Progress of Pricing Policy
Aiming to Increase Patients’ Access

Increase patients’ access to Halaven in India by 8 times
Increase of Halaven’s patient contribution(internal estimate)
Patient contribution through Tiered Pricing
Patient contribution through traditional business model

Tiered Pricing
Price ranging from full out-of pocket payment
to 4 cycles at price-zero

Precise price setting in considerationof each patients’ income level

8 times

Minimize the financial burden on
low-income level patients

1time

1st year

2nd year

3rd year

4th year

5th year

Treatment cycle

Expand contribution to patients
through drastic increase ofpatients’ access＋Transformation to
Low-Margin & High-Volume model

SchemeHighincome
patients

Traditional
business model

１

２

３

４

Reimbursement*1
Out-of-pocket*2

1 cycle price-zeroPartially
out-of-pocket2 cycles price-zero

Lowincome 3 cycles price-zeropatients 4 cycles price-zero

Price-zero*1 Health insurance system for national and local government officers,which covers less than 5% of entire population in India*2 Wealthy population who are not insured by public health insurance

16

Toward Elimination of Lymphatic Filariasis
Initiated supply of price-zero DEC tablet

Vizag plant in India manufactured diethylcarbamazine (DEC)tablets for the treatment of lymphatic filariasis

Received prequalification from WHO; the first prequalification
given to a pharmaceutical company for
Neglected Tropical Diseases treatment
First shipment of DEC tablets to
Papua New Guinea, Kiribati, Fiji, and Tuvalu in October 2013
Plan to supply 2.2B tablets by 2020 for price-zero
Eisai manufactured
DEC tablet and bottle

A patients with lymphatic
filariasis

WHO mass drug administration program to be serially conducted
toward 250 million people living at risk communities

WHO Western Pacific Region
・Papua New Guinea
・Kiribati・Fiji ・Tuvalu
・French Polynesia
・Federated States of Micronesia
・Lao PDR ・Samoa ・Malaysia

WHO South-East Asia
RegionWHO Regions ofAmericas・Indonesia
・Bangladesh
・Myanmar ・Nepal
・Timor-Leste

・Brazil・Dominican Republic ・Egypt
・Guyana・Haiti26 countries as of October 2013

WHO Eastern
Mediterranean
RegionWHO African Region
・Gambia ・ Kenya
・Comoros
・Madagascar
・Sao Tome and Principe
・Zambia ・Zimbabwe

Creation of pharmaceutical markets in developing countries and emerging markets
Long-term investment to support expanding middle-income group as a return17

Execution on BELVIQ Commercial Strategy®

Commercial payers, physician education, patient awareness

AccessCommercial Payers• Significant access decisions*1 since product launch
including Express Scripts/Medco and multiple
BlueCross/BlueShield plans• Progress towards 50% commercial coverage target• Major additional payer decisions expected by January
MR buildup

Physician Education• Medical sales representatives are doubling to approx. 400• Physician reach expanded from approx. 26,000 to approx.
65,000• More than 1,000 physicians engaged through speakertraining, product theaters, webcast and regional meetings• More than 4,500 pivotal study reprints downloaded
DTC*2

18

Patient Awareness and Support• Patient awareness via DTC advertising online and in print now
launched• Patient support through BELIEVE EVERYDAY SUPPORT SM
program*1 Reference: BusinessOne Technologies*2 Direct to Consumer

Physician
Education

Commercial
PayersPatient
Awareness &SupportBELVIQ Leading Indicators®

®

BELVIQ Prescribers

Patient Access & Rx Refills• Over 10,000 physicians have prescribed BELVIQ• Savings Cards and Vouchers at approx. 60% of TRx*1• Call-list physicians currently write more than 75% ofprescriptions and are more productive(more Rx/ call-list physicians)• Approx. 40% of prescriptions filled are covered bycommercial payers*3

BELVIQ Prescribers
TRx prescribed by call-list physicians

TRx

TRx prescribed by non-call-list

19

Source: IMS Xponent• Steady growth in number of Savings Card
redemptions indicating prescription refills% Savings Card of Total Discounted TRxs *2

Sales force expansion and professional campaign toexpand physician list and further increase productivity• Access improvements are resulting in reductions inpatient out-of-pocket costs

Toward net sales increase
Savings Card Utilization

5-Jul 19-Jul 2-Aug 16-Aug30-Aug13-Sep27-Sep*1: Symphony Health & Internal estimates*2: Internal estimates *3 :IMS Xponent Plantracks (Standard Method of Payment)

Obesity Market Seasonality and Expansion
Obesity market growth trend• The weight management marketplace has experienced regular growth throughout
the 1st half of the calendar year followed by tightening in the 2nd half
• BELVIQ’s market launch occurred at a time of usual market contraction• Heightened awareness from weight loss medicine approvals in 2012 andcommercialization in 2013 have resulted in enhanced overall market expansion

Number of TRxs in Obesity Market(thousand)

20

2,100

2,000

1,900

1,800

1,700

1,600

BELVIQ
LaunchBELVIQ
Approval by FDA

Execution oncommercial strategy tobend the trend curve
MR expansion, DTC
campaign, payer coveragedecisions
Current trend(Illustrative)

1,500
Source: IMS NPA
Market TRx includes products requiring a prescription in
the anti-obesity (Systemic and Non-Systemic) market

Innovative Projects Based on Pathogenesis
Efforts to create next generation
investigational compound for AD

Disease modifiers based on Amyloid-beta theory

BAN2401 Synaptic dysfunction

E2609
SOLUBLE

APP*1
Intracellular*1 APP: Amyloid precursor protein*2 BACE: Beta-secretase21& lossMonomericA-betaA-betaExtracellular

BACE*2

Oligomeric/Protofibril A-beta

Amyloid plaqueGamma-secretase

Neuronal death

Neurofibrillary tangle

E2609Investigational inhibitor developed in-house
A next-generation investigational compound for Alzheimer’s disease developed in-house being exploredfor potential symptomatic improvement and disease modifying therapy by BACE inhibitory activity

Phase I study

Phase II study

 Subjects: Healthy adult volunteers
 Demonstrated a reduction in
cerebrospinal fluid (CSF) A-betalevel in 14-days dosing

Plan to initiate Phase II study
in 4Q FY2013
based on the conclusion fromthe meeting with FDA

Change in CSF A-beta(1-x) after 14 days dosing
compared to baseline％ Change from baseline

0



-20
-40



-60

**
-80

-100

**p<0.001 vs Placebo

**

**

**

E2609
E2609
E2609
E2609
プラセボ群
25 E2609
50 E2609
100 E2609
200
Placebo* E2609
25mg
50mg
100mg
200mg
mg群
mg群
mg群
mg群

Subjects: patients with MCI*1
due to AD and possibly mild AD
Confirm Amyloid using amyloid
PET
Endpoint is an in-housedeveloped composite score*2
with enhanced sensitivity toclinical course and treatment
effect for early AD patients*Result calculated from pooled placebo data
22

*1 Mild cognitive impairment*2 Composite score: composed of components of ADAS-Cog, MMSE, and CDR

BAN2401

Unique investigational antibody with high selectivity
for A-beta protofibrils
An investigational antibody targeting A-beta protofibrils in development as a potential disease
modifying therapy for Alzheimer's disease through a partnership with BioArctic

 High affinity and selectivity
for A-beta protofibrils
Commercial mAb 6E10*2

mAb158*1

 Reduce brain protofibrils
levels in vivo
 Facilitate their uptake in vitro Reduce plaque load in two
animal models

18 weeks treatment with mAb158 reduces
6E10 positive plaque in old Tg2576 animal*3
IC50(nmol/L)

Antibody

Ratio of IC50

A-Beta protofibrils A-Beta (1-40) Monomer

23

BAN2401(for human)

3.3

3,300

1,000

mAb158(for animal)

5

6,000

1,200

*1 mAb158 has also been tested as a therapeutic for AD in passive immunization oftransgenic animal-models. The antibody has been humanized and named BAN2401.
*2 Beta amyloid antibody clone 6E10 is commercially available. The epitope is locatedin the N terminus. It reacts to the various forms of A-Beta and can be used to detect theplaque burden in AD brain tissue*3 Tg2576 animal overexpressing human APP695 with the “Swedish” mutation develop
memory deficits and plaques with age

Reducedby approx.
50%

Reducedby approx.
23%

BAN2401

Investigational Clinical trial
with unique, in-house developed adaptive design

Phase II study is steadily ongoing
Number of patients

Objectives:

Placebo arm

Demonstrate clinical efficacy(POC)

Active drug arm 1
Active drug arm 2
Active drug arm 3

Subjects:
MCI*1 due to AD and mild AD
diagnosed by imaging

Active drug arm 4

Design:Period of fixedallocation ofpatients

Novel Bayesian adaptive
design*2

Endpoint:
New composite score*3

Superior
arms
IA•Fixedenrollment for
first 196
patients

IA

IA

IA

IA

IA

More patients are preferentiallyallocated to an arm with higher
efficacy and safety•Begins at 196 patientsenrolled (first IA)•Successive IA at 250 andevery 50 patients enrolled
until full enrollment

IA

IA: Interim Analysis

Full enrollment•Successive IA
every 3 months
from full enrollment
until all patientscomplete 12
months trials

 Enrolled 121 patients (as of Oct 22, 2013)
 Target first Interim Analysis (IA) within 4Q FY2013*1 Mild cognitive impairment *3 Composite score: composed of components of ADAS-Cog, MMSE and CDR

24*2 Adaptive design trials use a multi-stage process in which the design of the ongoing trial is adapted based on the results of interim data analyses

Conceptual Framework of
Shareholder Value Creation

Financial strategy to support proactive investment
Aim to maintain annual
dividend of
150 yen for FY2013

Sustainability

Financial Integrity
Seek 0.20 level of Net DER
at the end of FY2013
Credit Rating AA-

FY2013 cash income 100B yen

Maximization ofshareholder
value

Dividend
payment
approx.40%

GrowthInvestment
approx.40%

Retention for
repayment
approx.20%

EPS recoveredfrom bottom-out
Double-digit growth
in FY2013

Debt Capacity
200B yensecuredProactive strategic investment

ROE
Management
ROE for
FY2013: 11.5%(Emerging markets, in-licensing, and technology acquisition)

VCIC (Value-Creative Investment Criteria) inaugurated
Ensure real shareholder value creation
Risk-adjusted hurdle rate for each project to be
applied to NPV*1 and IRR*2 assessment

Figures for FY2013 on this slides are based on forecast*1 NPV: Net Present Value *2 IRR: Internal Rate of Return25

Forecast for FY2013 Consolidated Financial Results
Shareholder value enhancement throughEPS recovery from bottom-out(Billion yen, %)FY2012
Results%

Forecast

%

YoY

573.7

100.0

578.0

100.0

101

174.1

30.3

180.5

31.2

104

Gross Profit

399.6

69.7

397.5

68.8

99

R&D Expenses

120.4

21.0

127.5

22.1

106

SG&A Expenses

208.7

36.4

191.5

33.1

92

Operating Income

70.5

12.3

78.5

13.6

111

Ordinary Income

65.6

11.4

74.9

13.0

114

Net Income

48.3

8.4

53.2

9.2

110

Pharma EBIT*1

190.8

33.3

206.0

35.6

108

Sales

Cost of Sales

26

FY2013

EPS (yen)

169.4

186.6

ROE (%)

10.9

11.5

Equity Spread (%)*2

2.9

3.5

DOE (%)

9.6

9.2

Cash Income*3

100.7

100.0

Dividends (yen)

150

150

*1: Pharma EBIT: Operating Income + R&D Expenses*2: Equity Spread = ROE – Cost of Equity (%)*3: Cash income is the total amount of cash available for investments for growth, business development, dividend payment, and repayment of borrowings, etc.
Cash income: Net income + Depreciation of PP&E and Amortization of intangible assets + In-process R&D + Amortization of goodwill + Impairment loss
(including loss on devaluation of investment securities)
FY2012 average exchange rates: U.S. $ = 83.10 yen, Euro = 107.14 yen, GBP = 131.13 yen FY2013 estimated exchange rates: U.S. $ = 95 yen, Euro = 125 yen, GBP = 145 yenReference27

Sales by Segment(Billion yen, %)1H FY2012
Results%

1H FY2013
Results

%

YoY
Japan

Japan*1

157.5

54.6

159.8

52.0

[$ million]

75.2
[947]

81.3
26.1
［823］

26.4

Asia*3

19.6

6.8

9.1

Americas*2

28.1

101

108
［87］

55%

52%

52%

Americas

Asia

143
EMEA

EMEA*4OTC (Japan)*5

12.5
10.3

4.3
3.6

15.5
10.5

5.0
3.4

124
103

ReportingSegment Total

275.1

95.4

295.2

96.0

107

Others

13.4

4.6

12.3

4.0

92

288.5 100.0

307.5

100.0

107

Consolidated
Sales[ ] based on local currency

Pharmaceutical Businesses of Japan, Americas, Asia, and EMEA
Segment profit from Americas pharmaceutical business in local currency was calculated
based on average exchange rate

*1 Prescriptions, generic drugs, and diagnostics*3 China, South Korea, Taiwan, India, and ASEAN*5 Nonprescription drug
28

26%

24%

7%
4%
8%

9%

10%

5%
7%

7%

1H FY2012

1H FY2013

Plan“HAYABUSA”
FY201526%*2 North, Central, and South America*4 Europe, Middle East, Africa, Russia, and Oceania

7%

OTC (Japan)
and others

Profit by Segment(Billion yen, %)1H FY2012
Results%

1H FY2013
% on
Sales

Results

%

% on
Sales

Change fromprevious year

Japan*1

69.6

70.3

44.2

83.2

75.1

52.1

119

13.6

Americas*2[$ million]

16.7
[210]

16.8

22.1

11.1
［113］

10.0

13.7

67
［54］

(5.5)
［(97)］

Asia*3

4.1

4.2

21.2

6.9

6.2

24.6

167

2.8

EMEA*4

0.6

0.6

4.5

1.5

1.4

10.0

272

1.0

OTC (Japan)*5

1.7

1.8

16.9

1.8

1.6

17.0

103

0.05

Reporting Segment
Total

92.7

93.6

33.7

104.5

94.4

35.4

113

11.8

Others

6.3

6.4

47.1

6.2

5.6

50.8

99

(0.1)

122

(13.7)

95(2.0)

R&D expenses & Nonallocated SG&A expenses(61.7)

Consolidated
Operating Profit

37.3(75.4)
12.9

35.4

Pharmaceutical Businesses of Japan, Americas, Asia, and EMEA
Segment profit from Americas pharmaceutical business in local currency was calculated based on average exchange rate

29

YoY

*1 Prescriptions, generic drugs, and diagnostics*4 Europe, Middle East, Africa, Russia, and Oceania*2 North, Central, and South America*5 Non-prescription drugs

11.5[ ] based on local currency*3 China, South Korea, Taiwan, India,and ASEAN

Sales of Aricept and Pariet/AcipHex
Aricept
1H FY2012

Results

Pariet/AcipHex(Billion yen, %)1H FY2012

1H FY2013

Results(Billion yen, %)ResultsYoY

1H FY2013

Results

YoY

Japan*1

40.3

35.6

88

Japan*1

25.7

25.1

98

Americas*2[$ million]

7.4
[94]

2.9
[29]

39
[31]

Americas*2[$ million]

23.4
[295]

30.6
[309]

131
[105]

Asia*3

3.9

5.9

154

Asia*3

2.2

2.7

124

EMEA*4

1.8

0.9

52

EMEA*4

1.9

0.3

15

Total

53.4

45.3

85

Total

53.3

58.7

110

[ ] based on local currency*1 Prescriptions, generic drugs, and diagnostics*2 North, Central, and South America*4 Europe, Middle East, Africa, Russia, and Oceania

30[ ] based on local currency*3 China, South Korea, Taiwan, India,and ASEAN

Performance of Japan Pharmaceuticals Business(Billion yen, %)1H FY2012
Results

31

1H FY2013%

Results

%

YoY

Sales

157.5

100.0

159.8

100.0

101

Prescriptions

146.0

92.7

146.0

91.4

100

Aricept

40.3

25.6

35.6

22.3

88

Pariet

25.7

16.3

25.1

15.7

98

HUMIRA

11.8

7.5

14.4

9.0

122

Methycobal

13.4

8.5

13.3

8.3

100

Actonel

4.6

3.0

4.1

2.6

89

Generic drugs

8.6

5.4

10.8

6.8

126

Diagnostics

2.9

1.8

2.9

1.8

101

Segment Profit

69.6

44.2

83.2

52.1

119

Performance of Americas Pharmaceuticals Business(Billion yen, %)1H FY2012
Results

32

1H FY2013%

Results

%

YoY

Sales

75.2

100.0

81.3

100.0

108

Aricept

7.4

9.9

2.9

3.5

39

AcipHex

23.4

31.1

30.6

37.6

131

Halaven

5.8

7.7

6.5

8.0

112

Aloxi

17.9

23.8

21.4

26.3

120

Dacogen

8.8

11.7

9.2

11.3

105

Total MGI

27.8

36.9

31.2

38.4

112

Fragmin

5.3

7.1

4.1

5.1

77

Total oncology-related products

40.6

54.0

41.9

51.5

103

Segment Profit

16.7

22.1

11.1

13.7

67

Performance of U.S. Pharmaceuticals Business($ million, %)1H FY2012

Results%

Results

%

YoY

Sales

946

100.0

820

100.0

87

Aricept

94

9.9

29*

3.6

31

AcipHex

295

31.2

309

37.7

105

Halaven

73

7.7

64

7.9

89

Aloxi

225

23.8

217

26.4

96

Dacogen

110

11.7

93

11.4

84

Total MGI

350

37.0

316

38.5

90

Fragmin

67

7.1

42

5.1

62

511

54.1

422

51.5

83

Total oncology-related products*Including $19M from Aricept 23mg sales

33

1H FY2013

Performance of Asia Pharmaceuticals Business<Asia>(Billion yen, %)1H FY2012

Results

Sales
Aricept
ParietMethycobal
HUMIRA
Stronger Neo-Minophagen C/
Glycyron Tablets
Segment Profit

1H FY2013%

Results

%

YoY

19.6
3.9
2.2
5.1
2.2

100.0
19.8
11.2
25.9
11.1

28.1
5.9
2.7
7.6
3.4

100.0
21.2
9.7
27.1
12.3

143 [113]
154 [121]
124 [99]
150 [118]
158 [126]

2.3

11.7

2.5

8.8 108

4.1

21.2

6.9

24.6 167 [124][84][ ] based on local currency<China>(MM RMB, ％)1H FY2012
Results

Sales
Methycobal
Stronger Neo-Minophagen C/
Glycyron Tablets
Aricept
Pariet34

1H FY2013%

Results

%

YoY

835
356

100.0
42.7

932
403

100.0
43.2

112
113

180

21.6

151

16.2

84

86
53

10.3
6.4

111
62

11.9
6.7

129
117

Performance of EMEA and Consumer Healthcare Business(OTC and other businesses)＜EMEA*＞(Billion yen, %)1H FY2012
Results

1H FY2013%

Results

%

YoY

Sales

12.5

100.0

15.5

100.0

124

[97]

Halaven

2.2

17.9

4.0

25.9

180

[141]

Zonegran

2.2

17.2

3.2

20.8

149

[117]

Aricept

1.8

14.1

0.9

5.9

52

[41]

Pariet

1.9

15.5

0.3

1.9

15

[12]

Fycompa

0.1

0.5

0.8

5.4

1323

[1040]

Segment Profit

0.6

4.5

1.5

10.0

272

[84]

[ ] based on local currency*Europe, Middle East, Africa, Russia, and Oceania＜Consumer Healthcare business- Japan＞(Billion yen, %)1H FY2012
Results

35

1H FY2013%

Results

%

YoY

Sales

10.3

100.0

10.5

100.0

103

Chocola BB Group

5.7

56.1

6.3

59.8

110

Segment Profit

1.7

16.9

1.8

17.0

103

List of Major R&D Pipeline Products
Phase I
Oncology
E7050
solid cancer
Lenvatinib+E7050solid cancer
PRI-724
hematological cancer
E7438
hematological cancer

Phase II
Halavenneo-adjuvant forbreast cancer

Phase III

Halavenadjuvant forbreast cancer

Lenvatinib
endometrial
carcinoma

Lenvatinib
RCC
Lenvatinib
NSCLC

E7040
embolization device
for hypervascularized tumor

MORAb-004
sarcoma
MORAb-004
melanoma

Lenvatinib
HCC

E2609
AD Ph. IIin preparation

Aricept
patch
formulation

E2006
insomnia Ph.IIin preparation

BAN2401
AD
Aricept
regression symptoms
in people with Down
syndrome(Japan)

Monotherapy for partial onset seizure
Ph.III in preparation

Fycompa
Lennox-Gastaut syndrome
Ph.III in preparation
Fycompa
E0302
Primary
generalized*2
ALS
Tonic Clonic seizure

Immunology, etc.

Aricept
lewy bodydementia(Japan)Avatrombopag

E6011(KANAb001)
IBD

ITP

E1224
Chagas’ disease
36

Farletuzumab
platinum-sensitive
ovarian cancer
Fycompa

Neurology

Halavenbreast cancer
2nd line(Europe)Halaven
NSCLC

Farletuzumab
NSCLC

MORAb-004
colorectal cancer

Lenvatinib
thyroid cancer

Halavensoft tissue sarcoma

Lenvatinib
melanoma(RET translocation)

Lenvatinib
gliomaHalavenbreast cancer
1st line

Under
review

Avatrombopag
aTLD*1*1 aTLD: Improvement in platelet count of patients with chronic thrombocytopenia associated with chronic liver disease on whom elective operation is planned*2 ALS: amyotrophic lateral sclerosis