August 6, 2018
Whom It May Concern
Company:

KYORIN Holdings, Inc.

Representative: Minoru Hogawa
Representative Director, President(Security Code: 4569, TSE 1st Sec.)Contact:

Shuji Miyaki
Director, Corporate Communication
President OfficeTelephone:(0)3-3525-4707(Corrections: Corrections of Numeric Data)
On the Partial Correction of the Summary Accounts of the First Quarter of the Business YearEnding in March 2019 [Japanese Standard] (Consolidated)

This is to correct the partial wrong statements in the Summary Accounts of the First Quarter of the Business YearEnding in March 2019 [Japanese Standard] (Consolidated) and otherwise publicly announced on July 31, 2018, of
which we already informed you in the Scheduled Corrections of the Statements in the Summary Accounts of theFirst Quarter of the Business Year Ending in March 2019 [Japanese Standard] (Consolidated) dated August 3, 2018,
and to disclose the revised version thereof as below.
Remarks
1. Reasons for the correction above
In April 2018, KYORIN Pharmaceutical Group Facilities Co., Ltd., which was established by means ofconsolidation of three production sites of the Group, started to operate. Although the accounting system was also
adjusted to adapt to the consolidation, the errors in calculation of the sales cost due to improper setting in some parts
were found.
2. Details of the corrections
The corrections made in the Summary Accounts of the First Quarter of the Business Year Ending in March 2019
[Japanese Standard] (Consolidated) and the Supplementary Materials of the Settlement of the Business Year Endingin March 2019. There are several corrections, and as such, the entire documents, both wrong and corrected, thereofmarked with “Wrong” and “Corrected”, respectively, will be attached. The corrected parts were underlined.

WrongSummary of Consolidated Financial Results(For the First Quarter Ended June 30, 2018) [Japanese Standard]
July 31, 2018
Tokyo Stock Exchange
Company name : KYORIN Holdings, Inc.
Code number : 4569
Web site : http://www.kyorin-gr.co.jp/
Representative : Minoru Hogawa, Representative Director, President and Chief Executive Officer
Contact : Yoh Ito, Senior Corporate Officer, Director, Finance & Accounting
TEL (03) 3525-4701
Scheduled date for submitting quarterly report : August 10, 2018
Scheduled date for starting dividend payment : ―(Amounts rounded down to the nearest million yen)
1. Consolidated Results for the Three Months Ended June 30, 2018 (From April 1, 2018, to June 30, 2018)(1) Consolidated Operating Results(Percentage changes relative to previous corresponding period)
Net sales
Operating income
Ordinary income
Million yen% Million yen%
Million yen%
Three months ended
25,131(5.0)
1,178(54.6)
1,455(48.1)
June 30, 2018
Three months ended
26,458(4.5)
2,595(20.0)
2,805(19.5)
June 30, 2017
Notes : Comprehensive income : Three months ended June 30, 2018 : 209 million yen (93.8)%
Three months ended June 30, 2017 : 3,351 million yen 35.0%
Profit attributable toowners of parent
Million yen%
Three months ended
June 30, 2018
Three months ended
June 30, 2017

Net income per share(Diluted)

Net income per share
Yen

Yen

979

(59.1)

13.27

—

2,393

(7.3)

32.54

—

(2) Consolidated Financial Position
Total assets
Net assets
Million yen
Million yen
As of192,038
160,691
June 30, 2018
As of
196,736
163,297
March 31, 2018
Notes : Equity : As of June 30, 2018
: 160,691 million yen,
As of March 31, 2018
: 163,297 million yen

Equity ratio
%
83.7
83.0

2. Dividends
Dividend per share
End of the 1stquarterYen

End of the 2nd
quarterYen

End of the 3rdquarter
Yen

Year-end

Total

Yen
Yen
Fiscal year ended
—
20.00
—
38.00
58.00
March 31, 2018
Fiscal year ending—
March 31, 2019
Fiscal year ending
March 2019
30.00
—
45.00
75.00
(Forecast)
Note : Revisions to the dividend forecast in the current quarter : Yes
See “Revision of Dividend Forecast in Fiscal Year ended March 31, 2019” released on July 31, 2018 for moredetails.
1

3. Forecast of Consolidated for the Year Ending March 31, 2019 (From April 1, 2018, to March 31, 2019)(Percentage changes relative to previous corresponding period)
Net sales
Operating income
Ordinary income
Million yen% Million yen% Million yen%
First half
50,200
(1.1)
1,900
31.6
2,200
29.9
Full year
114,400
3.4
8,600
(2.5)
9,200
(1.6)
Profit attributable to
Net income per shareowners of parent
Million yen%
Yen
First half
1,500
20.9
20.34
Full year
6,600
0.4
89.49
Note : Revisions to consolidated business forecast in the current quarter : None
4. Other(1) Changes in major subsidiaries during the period under review : Yes
Consolidation (Inclusion) : —Excluded : 1 (Company name : KYORIN Pharmaceutical Facilities Co., Ltd.)(2) Application of special accounting methods in the preparation of quarterly financial statements : None
(3) Changes in accounting policies, changes in accounting estimates and restatements
1) Changes due to mandatory changes of accounting standards : None
2) Changes other than 1) : Yes
3) Changes in accounting estimates : Yes
4) Restatements : None
(4) Number of shares issued (common stock)1) Number of shares issued and outstanding at the end of the period (including treasury stock)
As of June 30, 2018 : 74,947,628 shares,
Year ended March 31, 2018 : 74,947,628 shares
2) Number of shares of treasury stock at the end of the period
As of June 30, 2018 : 1,138,474 shares,
Year ended March 31, 2018 : 1,194,974 shares
3)Averaged number of shares during the period (quarterly cumulative period)
Three months ended June 30, 2018 : 73,783,188 shares,Three months ended June 30, 2017 : 73,548,939 shares* This quarterly financial report is not subject to the review procedures for quarterly financial statements by
Certified Public Accountants or audit firm.
* Explanations about the appropriate use of the business forecasts and other noteworthy points
These forecast performance figures are based on information currently available to the Company and may include
uncertain factors or risk that affect our future performance. Accordingly, actual business results and other points
may materially differ from the forecasted figures due to various factors in the future.
(Methods for obtaining supplementary materials)
Supplementary materials will be made available on the Company’s website in conjunction with the Summary ofConsolidated Financial Results.

2

Corrected

Summary of Consolidated Financial Results(For the First Quarter Ended June 30, 2018) [Japanese Standard]
July 31, 2018
Tokyo Stock Exchange
Company name : KYORIN Holdings, Inc.
Code number : 4569
Web site : http://www.kyorin-gr.co.jp/
Representative : Minoru Hogawa, Representative Director, President and Chief Executive Officer
Contact : Yoh Ito, Senior Corporate Officer, Director, Finance & Accounting
TEL (03) 3525-4701
Scheduled date for submitting quarterly report : August 10, 2018
Scheduled date for starting dividend payment : ―(Amounts rounded down to the nearest million yen)
1. Consolidated Results for the Three Months Ended June 30, 2018 (From April 1, 2018, to June 30, 2018)(1) Consolidated Operating Results(Percentage changes relative to previous corresponding period)
Net sales
Operating income
Ordinary income
Million yen% Million yen%
Million yen%
Three months ended
25,131(5.0)
1,320(49.1)
1,596(43.1)
June 30, 2018
Three months ended
26,458(4.5)
2,595(20.0)
2,805(19.5)
June 30, 2017
Notes : Comprehensive income : Three months ended June 30, 2018 : 307 million yen (90.8)%
Three months ended June 30, 2017 : 3,351 million yen 35.0%
Profit attributable toowners of parent
Million yen%
Three months ended
June 30, 2018
Three months ended
June 30, 2017

Net income per share(Diluted)

Net income per share
Yen

Yen

1,077

(55.0)

14.60

—

2,393

(7.3)

32.54

—

(2) Consolidated Financial Position
Total assets
Net assets
Million yen
Million yen
As of160,790
192,184
June 30, 2018
As of
196,736
163,297
March 31, 2018
Notes : Equity : As of June 30, 2018
: 160,790 million yen,
As of March 31, 2018
: 163,297 million yen

Equity ratio
%
83.7
83.0

2. Dividends
Dividend per share
End of the 1stquarterYen

End of the 2nd
quarterYen

End of the 3rdquarter
Yen

Year-end

Total

Yen
Yen
Fiscal year ended
—
20.00
—
38.00
58.00
March 31, 2018
Fiscal year ending—
March 31, 2019
Fiscal year ending
March 2019
30.00
—
45.00
75.00
(Forecast)
Note : Revisions to the dividend forecast in the current quarter : Yes
See “Revision of Dividend Forecast in Fiscal Year ended March 31, 2019” released on July 31, 2018 for moredetails.
1

3. Forecast of Consolidated for the Year Ending March 31, 2019 (From April 1, 2018, to March 31, 2019)(Percentage changes relative to previous corresponding period)
Net sales
Operating income
Ordinary income
Million yen% Million yen% Million yen%
First half
50,200
(1.1)
1,900
31.6
2,200
29.9
Full year
114,400
3.4
8,600
(2.5)
9,200
(1.6)
Profit attributable to
Net income per shareowners of parent
Million yen%
Yen
First half
1,500
20.9
20.34
Full year
6,600
0.4
89.49
Note : Revisions to consolidated business forecast in the current quarter : None
4. Other(1) Changes in major subsidiaries during the period under review : Yes
Consolidation (Inclusion) : —Excluded : 1 (Company name : KYORIN Pharmaceutical Facilities Co., Ltd.)(2) Application of special accounting methods in the preparation of quarterly financial statements : None
(3) Changes in accounting policies, changes in accounting estimates and restatements
1) Changes due to mandatory changes of accounting standards : None
2) Changes other than 1) : Yes
3) Changes in accounting estimates : Yes
4) Restatements : None
(4) Number of shares issued (common stock)1) Number of shares issued and outstanding at the end of the period (including treasury stock)
As of June 30, 2018 : 74,947,628 shares,
Year ended March 31, 2018 : 74,947,628 shares
2) Number of shares of treasury stock at the end of the period
As of June 30, 2018 : 1,138,474 shares,
Year ended March 31, 2018 : 1,194,974 shares
3)Averaged number of shares during the period (quarterly cumulative period)
Three months ended June 30, 2018 : 73,783,188 shares,Three months ended June 30, 2017 : 73,548,939 shares* This quarterly financial report is not subject to the review procedures for quarterly financial statements by
Certified Public Accountants or audit firm.
* Explanations about the appropriate use of the business forecasts and other noteworthy points
These forecast performance figures are based on information currently available to the Company and may include
uncertain factors or risk that affect our future performance. Accordingly, actual business results and other points
may materially differ from the forecasted figures due to various factors in the future.
(Methods for obtaining supplementary materials)
Supplementary materials will be made available on the Company’s website in conjunction with the Summary ofConsolidated Financial Results.

2

WrongFirst Quarter Consolidated Financial Resultsg March 31,, 2019
for the Fiscal Year Ending
1. Overview of consolidated results
2 Highlights of Business Performance2.
3. Main Product Sales Update
4. Changes in Capital Policy and Shareholder Return Policy
5 Financial summary
5.
6. Development pipeline【Reference】
7. Segment information
July 31, 2018

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 First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2019
Units:
millions of yen

Firstquarter
Jun / 2015

First
quarter
Jun / 2016

First
quarter
Jun / 2017

First
quarter
Jun / 2018

YoYchange(%)

Net sales

26 567
26,56727 707
27,70726 45826,45825 131
25,131-5.0％
5 0％

Operating income

2,173

3,244

2,595

1,178

Ordinary income

2,316

3,485

2,805

Net income

1,757

2,580

2,393

Interim term
Sep / 2018
(forecast)

YoYchange(%)

Year ending
Mar / 2019
(forecast)

YoYchange(%)

50 20050,200-1.1%
1 1%

114 400
114,400

+3.4%
3 4%

-54.6％

1,900+31.6%

8,600

-2.5%

1,455

-48.1％

2,200+29.9%

9,200

-1.6%

979

-59.1％

1,500+20.9%

6,600

+0.4%

First Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2019
[Net sales] While sales of our main products Flutiform and Desalex grew, sales of new drugs in Japan remained lower than
the year-ago level because of the effect of the drug price system reforms. Meanwhile, sales of generic drugs increased, but
overall sales in the Ethical Drugs Business declined. As a result, overall net sales stood at 25,131 million yen (down 5.0% year
on year).
year)[Profit] Gross profit declined 1,545 million yen year on year due to the fall in sales of new drugs in Japan and a rise in thecost of sales ratio following the drug price system reforms. SG&A expenses decreased 129 million yen from a year ago (ofwhich R&D expenses declined 33 million yen) thanks to our efforts to reduce costs, but operating income was 1,178 million
yen (down 54.6% year on year), and profit attributable to owners of parent was 979 million yen (down 59.1% year on year).

Consolidated Financial Results for the Fiscal Year Ending March 31, 2019(forecast)

Dividends (forecast）

The results forecasts for the first half and the full year announced on May 10, 2018 remain unchanged as of this moment.
((Progressog
comparedo pa d with the forecast
o a foro the first half:a net sales:a50.1%;
50 %; opoperatinga g income:o
62.0%)
6 0%)
We revised the dividend forecast for the fiscal year ended March 2007, which was announced on May 10, 18, to July 31, 18.
Original forecast ￥58/ share (￥38 at the end of the term) ⇒ revised forecast ￥75/ share (￥45 at the end of the term)
1

Highlights of Business Performance（ Units: ¥ billion）

30
Highlight

25

cost of
Sales ratio

45.0%

Cost of
sales

11.9

15

10

5

12 1
12.1

Sales

26.5

25.1

2.5

95
9.5

SG&A

Gross Profit decreased ¥1.6bln

R&D

2.5

12.0

SG&A
(excluding
R&D)

Operatingincome

9.4

2.6

0

Jun / 2017

Cost of sales ratio increased 3.2%.

Sales

R&D

SG&A
(excluding
R&D)

・ Decreased in sales of drugs due to drug pricerevisions.
・Sales of generic drugs increased.
・ decrease in loss on retirement of inventories.

48.2%

Cost ofsales

20Net Sales decreased ¥1.4bln

cost of
Sales ratio

SG&A

SG&A expenses decreased ¥0.2bln
・R&D expense is flat.
・SG&A(excluding R&D) decreased ¥0.１bln

11.8
OperatingincomeOperating Income decreased ¥1.4bln

1.2

Jun / 20182

Consolidated Financial Results
for the first Quarter ending
g March 31,, 2019（¥ billion）
Net Sales

Jun/2017

Jun/2018

Change

26.5

25.1

－1.4

Ethical drugs
Business

25.1

23.7

－1.4

◆Sales of new
ethical drugs

18.2

16.2

－2.0

●Japan

18.0

16.1

－1.9

02
0.2

0.1

0.1
－0.1

●Overseas◆Generic drugs

Healthcare
Business
Operating
Income

6.9
1.3
2.6

7.5
1.4
1.2

＋0.6
＋0.1
－1.4

Ordinary
Income

28
2.8

15
1.5

－1.3
13

Net Income

2.4

1.0

－1.4

■ Net Sales￥25.1binYear onYear(－1.4)◆ Ethical drugs business￥23.7bin(－1.4)● Sales of new ethical drugs￥16.1bin(－1.9)

17.6（1Q）

18.6（1Q）

⇒
⇒
⇒
⇒
⇒
⇒

2.8
3.0
1.9
1.7
05
0.5
15
1.5
5.2
3.3
4.0
3.5
2.1
1.7
※Launch(11/2016)● Sales of new ethical drugs in Overseas ¥0.1bin
・ Flutiform
・ Uritos
・ DesalexDl ※・ Kipres・ Pentasa
・ Mucodyne¥7.5bin●Sales of Generic drugs
・Increase of MONTELKAST AG sales(＋0.2)(－0.2)(＋1 0)(＋1.0)(－1.9)(－0.5)（－0.4)( －0.1)( ＋0.6)

Contract manufacturingʼs sales decreased◆ Healthcare Business¥1.4bin( ＋0.1)■ Operating Income¥1.2bin( 1 4)(－1.4)◆Operating Income margin decreased 5.1 percentage points to 4.7%
●Cost of Sales Ratio : increased 3.2 percentage points (45.0%⇒48.2%)
・Drug price revision ・Sales of generic drugs increased●R&D Ratio : increased 0.4 percentage points (9.4%⇒9.8%)
flat ・¥2.5bln⇒¥2.5bln●SG&A Ratio (excluding R&D expenses) : increased 1.5 percentage points
・¥9.5bln⇒¥9.4bln ¥－0.1bln(35.8%⇒37.3%)
・Decrease of labor costs
costs.

■Net Income¥1.0bin(－1.4)
3

Main Product Sales Update
Interim term

（ Units: ¥ billion ）First quarter（April 1 to June 30）

Full term

Product nameMar/2019(forecast)Jun/2017

Jun/2018

YoY change(%)

Progress toInterim term
forecast(%)

5.4

5.7 11.9 12.3

2.8

3.0

＋9.4%

52.5%

24.4%

36
3.6

3.4

7.2

68
6.8

1.9

1.7

－8.8%

50.1%

24.7%

0.9

3.0

4.9

8.1

0.5

1.5

＋230.8%

48.6%

18.4%

3.9

2.9

8.3

6.0

2.0

1.6

－23.1%

53.7%

25.9%

5.1

2.9 10.5

7.2

3.1

1.7

－45.7%

57.6%

23.5%

8.0

7.3 15.3 14.5

4.0

3.5

－12.4%

47.2%

24.0%

（Mucoregulant）

3.9

3.2

8.7

7.2

2.1

1.7

－22.5%

51.4%

22.8%

MONTELUKAST Tablets
“KM”

5.0

4.8 11.7

9.8

2.7

3.3

＋21.9%

68.1%

33.6%

Milton

1.1

1.1

2.3

0.5

0.6

＋3.7%

47.6%

24.3%

Sep/2017

Flutiform(Combination drug for asthma
treatment)

Uritos（Kyorin）(Overactive bladder)

Desalex

Sales ofnew
ethicaldrugs(Japan)(Antiallergic Agent)

Kipres（LT receptor antagonist）

For children

Pentasa(Ulcerative colitis andCrohn’s diseasetreatment)

Mucodyne

Generic
drugsOver-thecounter
drugs(Disinfectant)

Sep/2018(forecast)

Mar/2018

2.2

Progress toFull term
forecast(%)

4

Changes in Capital Policy andShareholder Return Policy

5Changes in Capital Policy
Before the change
・While maintaining the sound financial base, we adopt the capital policy ensuring both growthinvestment and stable return to shareholders.
As for the return to shareholders, we aim for “stable dividends” on a basis of the present dividend standard.

Reason of the Changes in Capital Policy◇Considering the perspective of the recovery of the corporate earnings caused by the
implementation of our key strategies.
◇ Taking into consideration the current capital market conditions and the financial situation of theCompany, we decided to change the policy from capital accumulation to capital efficiency
improvement◇We aim to continue this new shareholder return policy unless there is a special change in thebusiness environment.

Changes in Capital Policy and Shareholder Return Policy
Basic idea
■Please note that there is no change in our business strategy towards the realization of the medium-termbusiness plan “HOPE100-Stage 2-”, and we will continue to make our best efforts to achieve our target
figures in that business plan by investing for continuous growth.
■ We aim to further improve the shareholder's value and increase efficiency of capital tostrengthen the return to shareholdersby strengthening shareholder return taking DOE(shareholders' equity dividend rate) into account6

Shareholder Returns
Basic Policy(After the change)
・WhileWhil maintainingi t i itheth soundd financial
fi
i l base,b
we aimi tto iimprove th
the capitalit lefficiency through growth investment and returns to shareholders.
・We will maintain stable dividends taking DOE (Dividend on Equity ratio) into
account.

Dividends

Dividend pershare (Yen)Consolidated
payout ratio(%)

FY2017FY2018（（orginal
i l forecast）
ft）

FY2018（（revisei fforecast）
t）

¥58

¥58

¥75

（Yea end ¥38）
（Year-end（Yea end ¥38）
（Year-end（Yea end ¥45）
（Year-end

65 9%
65.9%

65 ７％
65.７％

84 9％
84.9％

※ We revised the dividend forecast for the ﬁscal year ended March 2007, which was announced on May 10, 18, to July 31, 18.

7

Financial summary8

Consolidated Financial Results
for the first Quarter ending March 31, 2019
Interim term
(Units: ¥million)

First quarter （April 1 to June 30）

Full term

Progressto interim
term forecast(%)

Progress tofull term
forecast(%)

Jun/2017

Jun/2018

ChangeYoYchange(%)

110,640 114,400

26,45825,131-1,327

-5.0%

50.1%

22.0%

47,400104,703 108,400

25,112

23,735-1,377

-5.5%

50.1%

21.9%

34,972

34,10077,04180,90018,242

16,204-2,038-11.2%

47.5%

20.0%

34,44933,60073,702

79,90017,99916,057-1,942-10.8%

47.8%

20.1%

523

500

3,339

1,000

242

146

-96

-39.7%

29.2%

14.6%

◆Generic
drugs

13,005

13,20027,662

27,400

6,870

7,531

＋661

＋9.6%

57.1%

27.5%

Healthcare
business

2 781
2,781

2,800

5 937
5,937

6 000
6,000

1 346
1,346

1,396

＋50

＋3 7%
＋3.7%

49 9%
49.9%

23 3%
23.3%

Operatingincome

1,443

1,900

8,822

8,600

2,595

1,178

-1,417-54.6%

62.0%

13.7%

Ordinary income

1 693
1,693

2 200
2,200

9 345
9,345

9 200
9,200

2 805
2,805

1 455
1,455

-1,3501 350-48 1%-48.1%

66 1%
66.1%

15 8%
15.8%

Net income

1,240

1,500

6,574

6,600

2,393

979

-1,414-59.1%

65.3%

14.8%

Sep/2017

Sep/2018
S/2018(forecast)

Mar/2018

Sales

50,75850,200

Ethical drugs
business

47,977

ethical drugsg●Japan◆Sales of new●Overseas

Mar/2017M/2017(forecast)9

Main R&D Activities -1 (as of July 31 2018)
Ph III ~ Application submitted
Stage
Japan

Overseas

Application(9/2017)PhⅢ:
UROVANT

Compound/
Code

Therapy area
/ActionOriginFeatures

KRP-114V

Overactive
bladderMerck & Co.,

-Expectation of high compliance in taking medicine
with
ith lless side
id effects
ff t ththan ththe conventionaltild
drugs ffor
overactive bladder-- Less drug interaction as β3 receptor agonist - β3
agonist including this agonist may constitute the firstline drug for treatment of overactive bladder

Application(4/2017)

KRPAM1977X(Oral agent）

New quinolone
synthetic
antibacterial
agent

In-house

PhⅢ(3/2016)

KRPAM1977Y(Injection）

New quinolone
synthetic
antibacterial
agent

In-house-Superior ability to combat drug-resistant grampositive bacteria (incl(incl. MRSA)-has a powerful antimicrobial activity against
anaerobic bacteria- Expectation of high clinical effects with excellent
tissue penetration-High degree of safety expected since safety hurdles
cleared prior to clinical trials

PhⅢ(3/2017)

KRP-116D

Interstitial
cystitis―

Evaluation committee on unapproved or off-labeled
drugs with high medical needs“Dimethyl sulfoxide(DMSO)”

PhⅢ(6/2017)

KRP-108P

Anti-asthmatic(U.K.)
Vectura

Expand the indication of Flutiform to pediatric patients

Comments
・License agreement with Merck & Co., Inc.,(7/2014)
・Co-Development
Co Development and Co
Co-Marketing
Marketing Agreement with
Kissei Pharmaceutical Co., Ltd. affiliate (3/2016)･License agreement with Merck & Co., Inc., for Asia
(4/2017)10

Main R&D Activities -2 (as of July 31 2018)
POC Project (Ph I ~ Ph II)
Stage
Japan

Overseas

Compound/
Code

Therapy area
/Action※Changes from the previous announcement (May 10 2018)

OriginFeatures

Comments

PhⅡ

KRP-N118(SK-1404)

Nocturia Dueto Nocturnal
Polyuriay

SANWA
KAGAKUKENKYUSH
O CO., LTD.

A vasopressin V2 receptor agonist that promotes the reabsorption of waterby the collecting duct of the kidney to reduce the amount of urine(antidiuretic action). With its high efficacy and safety, the drug is expectedt betob a ththerapeuticti agentt ffor nocturia
t i duedtto nocturnaltl polyuria.
li・License agreement with
SANWA KAGAKUKENKYUSHO CO., LTD,
(3/2018)※PhⅡ（6/2018）

Ad-SGE-REIC

malignantpleuralmesothelioma

Okayama
University

A gene-therapy product using a novel tumor suppressor gene of reduced
expression in immortalized cells/ Dickkopf-3 (REIC/Dkk-3), which was
discovered by researchers from Okayama University, as a therapeutic gene.
It is expectedpto have direct effect on p
primary
y tumor lesions and indirect
effect on metastatic tumor lesions as a gene-therapy product thatsimultaneously induces tumor cell-selective apoptosis and the activation of
antitumor immunity respectively.

Adopted to Next
generation Technology
Transfer Program((NexTEP))(6/2014)【US】
Momotaro-Gene
prostate
cancer(PhⅠ/Ⅱ)【JP】
Okayama University
liver cancer(PhⅠ/Ⅰb)

Licensing development
Stage/
Overseas
PhⅠ

Compound/
Code
FPR-2 agonist
programLicensee /Collaborative
research
BMS

Therapyarea/Action
Nondisclosure

OriginIn-house

Features
FPR-2 agonists that mainly inhibit the
migration of neutrophils and exhibit antii flinflammatorytaction.
tiComments
License agreement with BMS(12/2015)

11Reference

12Segment information
for the first Quarter Ending March 31, 2019
Sales, Profit or Loss of each report segment(Units:¥ billion)

Sales

Year on Year

ProfitYear on Year

25.1

－1.4
1.4

1.2

－1.4
1.4

23.7

－1.4

1.1

－1.4

16 2
16.2

－2.0
20

●Overseas

16.1
0.1

－1.9
－0.1

◆Generic drugs

7.5

＋0.6

Healthcare business

1.4

＋0.1

0

0

－

－

0.1

0

total
Ethical drugs business◆Sales of new ethical drugs●JapanAmount of adjustment

13

Corrected
First Quarter Consolidated Financial Resultsg March 31,, 2019
for the Fiscal Year Ending
1. Overview of consolidated results
2 Highlights of Business Performance2.
3. Main Product Sales Update
4. Changes in Capital Policy and Shareholder Return Policy
5 Financial summary
5.
6. Development pipeline【Reference】
7. Segment information
July 31, 2018

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 First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2019
Units:
millions of yen

Firstquarter
Jun / 2015

First
quarter
Jun / 2016

First
quarter
Jun / 2017

First
quarter
Jun / 2018

YoYchange(%)

Net sales

26 567
26,56727 707
27,70726 45826,45825 131
25,131-5.0％
5 0％

Operating income

2,173

3,244

2,595

1,320

Ordinary income

2,316

3,485

2,805

Net income

1,757

2,580

2,393

Interim term
Sep / 2018
(forecast)

YoYchange(%)

Year ending
Mar / 2019
(forecast)

YoYchange(%)

50 20050,200-1.1%
1 1%

114 400
114,400

+3.4%
3 4%

-49.1％

1,900+31.6%

8,600

-2.5%

1,596

-43.1％

2,200+29.9%

9,200

-1.6%

1,077

-55.0％

1,500+20.9%

6,600

+0.4%

First Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2019
[Net sales] While sales of our main products Flutiform and Desalex grew, sales of new drugs in Japan remained lower than
the year-ago level because of the effect of the drug price system reforms. Meanwhile, sales of generic drugs increased, but
overall sales in the Ethical Drugs Business declined. As a result, overall net sales stood at 25,131 million yen (down 5.0% year
on year).
year)[Profit] Gross profit declined 1,420 million yen year on year due to the fall in sales of new drugs in Japan and a rise in thecost of sales ratio following the drug price system reforms. SG&A expenses decreased 127 million yen from a year ago (ofwhich R&D expenses declined 33 million yen) thanks to our efforts to reduce costs, but operating income was 1,320 million
yen (down 49.1% year on year), and profit attributable to owners of parent was 1,077 million yen (down 55.0% year on year).

Consolidated Financial Results for the Fiscal Year Ending March 31, 2019(forecast)

Dividends (forecast）

The results forecasts for the first half and the full year announced on May 10, 2018 remain unchanged as of this moment.
((Progressog
comparedo pa d with the forecast
o a foro the first half:a net sales:a50
50.1%;%; op
operatinga g income:o
69.5%)
69 5%)We revised the dividend forecast for the fiscal year ended March 2007, which was announced on May 10, 18, to July 31, 18.
Original forecast ￥58/ share (￥38 at the end of the term) ⇒ revised forecast ￥75/ share (￥45 at the end of the term)
16

Highlights of Business Performance（ Units: ¥ billion）

30
25

cost of
Sales ratio

cost of
Sales ratio

Highlight

45.0%

47.6%

Net Sales decreased ¥1.4bln

Cost ofsales

・ Decreased in sales of drugs due to drug pricerevisions.
・Sales of generic drugs increased.
・ decrease in loss on retirement of inventories.

Cost of
sales

20

11.9

12.0

Sales

15

26.5
10

5

Sales

R&D

Cost of sales ratio increased 2.6%.

2.5

SG&A
(excluding
R&D)

9.5

25.1
SG&A

R&D

12.0

SG&A
(excluding
R&D)

Operatingincome

9.4

2.6

0

Jun / 2017

Gross Profit decreased ¥1.4bln

2.5
SG&A

11.8
Operatingincome1.3

SG&A expenses decreased ¥0.2bln
・R&D expense is flat.
・SG&A(excluding R&D) decreased ¥0.１bln

Operating Income decreased ¥1.3bln

Jun / 201817

Consolidated Financial Results
for the first Quarter ending
g March 31,, 2019（¥ billion）
Net Sales

Jun/2017

Jun/2018

Change

26.5

25.1

－1.4

Ethical drugs
Business

25.1

23.7

－1.4

◆Sales of new
ethical drugs

18.2

16.2

－2.0

●Japan

18.0

16.1

－1.9

02
0.2

0.1

0.1
－0.1

●Overseas◆Generic drugs

Healthcare
Business
Operating
Income

6.9
1.3
2.6

7.5
1.4
1.3

＋0.6
＋0.1
－1.3

Ordinary
Income

28
2.8

16
1.6

－1.2
12

Net Income

2.4

1.1

－1.3

■ Net Sales￥25.1binYear onYear(－1.4)◆ Ethical drugs business￥23.7bin(－1.4)● Sales of new ethical drugs￥16.1bin(－1.9)

17.6（1Q）

18.6（1Q）

⇒
⇒
⇒
⇒
⇒
⇒

2.8
3.0
1.9
1.7
05
0.5
15
1.5
5.2
3.3
4.0
3.5
2.1
1.7
※Launch(11/2016)● Sales of new ethical drugs in Overseas ¥0.1bin
・ Flutiform
・ Uritos
・ DesalexDl ※・ Kipres・ Pentasa
・ Mucodyne¥7.5bin●Sales of Generic drugs
・Increase of MONTELKAST AG sales(＋0.2)(－0.2)(＋1 0)(＋1.0)(－1.9)(－0.5)（－0.4)( －0.1)( ＋0.6)

Contract manufacturingʼs sales decreased◆ Healthcare Business¥1.4bin( ＋0.1)■ Operating Income¥1.3bin( 1 3)(－1.3)◆Operating Income margin decreased 4.5 percentage points to 5.3%
●Cost of Sales Ratio : increased 2.6 percentage points (45.0%⇒47.6%)
・Drug price revision ・Sales of generic drugs increased●R&D Ratio : increased 0.4 percentage points (9.4%⇒9.8%)
flat ・¥2.5bln⇒¥2.5bln●SG&A Ratio (excluding R&D expenses) : increased 1.5 percentage points
・¥9.5bln⇒¥9.4bln ¥－0.1bln(35.8%⇒37.3%)
・Decrease of labor costs
costs.

■Net Income¥1.1bin(－1.3)
18

Main Product Sales Update
Interim term

（ Units: ¥ billion ）First quarter（April 1 to June 30）

Full term

Product nameMar/2019(forecast)Jun/2017

Jun/2018

YoY change(%)

Progress toInterim term
forecast(%)

5.4

5.7 11.9 12.3

2.8

3.0

＋9.4%

52.5%

24.4%

36
3.6

3.4

7.2

68
6.8

1.9

1.7

－8.8%

50.1%

24.7%

0.9

3.0

4.9

8.1

0.5

1.5

＋230.8%

48.6%

18.4%

3.9

2.9

8.3

6.0

2.0

1.6

－23.1%

53.7%

25.9%

5.1

2.9 10.5

7.2

3.1

1.7

－45.7%

57.6%

23.5%

8.0

7.3 15.3 14.5

4.0

3.5

－12.4%

47.2%

24.0%

（Mucoregulant）

3.9

3.2

8.7

7.2

2.1

1.7

－22.5%

51.4%

22.8%

MONTELUKAST Tablets
“KM”

5.0

4.8 11.7

9.8

2.7

3.3

＋21.9%

68.1%

33.6%

Milton

1.1

1.1

2.3

0.5

0.6

＋3.7%

47.6%

24.3%

Sep/2017

Flutiform(Combination drug for asthma
treatment)

Uritos（Kyorin）(Overactive bladder)

Desalex

Sales ofnew
ethicaldrugs(Japan)(Antiallergic Agent)

Kipres（LT receptor antagonist）

For children

Pentasa(Ulcerative colitis andCrohn’s diseasetreatment)

Mucodyne

Generic
drugsOver-thecounter
drugs(Disinfectant)

Sep/2018(forecast)

Mar/2018

2.2

Progress toFull term
forecast(%)

19

Changes in Capital Policy andShareholder Return Policy

20Changes in Capital Policy
Before the change
・While maintaining the sound financial base, we adopt the capital policy ensuring both growthinvestment and stable return to shareholders.
As for the return to shareholders, we aim for “stable dividends” on a basis of the present dividend standard.

Reason of the Changes in Capital Policy◇Considering the perspective of the recovery of the corporate earnings caused by the
implementation of our key strategies.
◇ Taking into consideration the current capital market conditions and the financial situation of theCompany, we decided to change the policy from capital accumulation to capital efficiency
improvement◇We aim to continue this new shareholder return policy unless there is a special change in thebusiness environment.

Changes in Capital Policy and Shareholder Return Policy
Basic idea
■Please note that there is no change in our business strategy towards the realization of the medium-termbusiness plan “HOPE100-Stage 2-”, and we will continue to make our best efforts to achieve our target
figures in that business plan by investing for continuous growth.
■ We aim to further improve the shareholder's value and increase efficiency of capital tostrengthen the return to shareholdersby strengthening shareholder return taking DOE(shareholders' equity dividend rate) into account21

Shareholder Returns
Basic Policy(After the change)
・WhileWhil maintainingi t i itheth soundd financial
fi
i l base,b
we aimi tto iimprove th
the capitalit lefficiency through growth investment and returns to shareholders.
・We will maintain stable dividends taking DOE (Dividend on Equity ratio) into
account.

Dividends

Dividend pershare (Yen)Consolidated
payout ratio(%)

FY2017FY2018（（orginal
i l forecast）
ft）

FY2018（（revisei fforecast）
t）

¥58

¥58

¥75

（Yea end ¥38）
（Year-end（Yea end ¥38）
（Year-end（Yea end ¥45）
（Year-end

65 9%
65.9%

65 ７％
65.７％

84 9％
84.9％

※ We revised the dividend forecast for the ﬁscal year ended March 2007, which was announced on May 10, 18, to July 31, 18.

22

Financial summary23

Consolidated Financial Results
for the first Quarter ending March 31, 2019
Interim term
(Units: ¥million)

First quarter （April 1 to June 30）

Full term

Progressto interim
term forecast(%)

Progress tofull term
forecast(%)

Jun/2017

Jun/2018

ChangeYoYchange(%)

110,640 114,400

26,45825,131-1,327

-5.0%

50.1%

22.0%

47,400104,703 108,400

25,112

23,735-1,377

-5.5%

50.1%

21.9%

34,972

34,10077,04180,90018,242

16,204-2,038-11.2%

47.5%

20.0%

34,44933,60073,702

79,90017,99916,057-1,942-10.8%

47.8%

20.1%

523

500

3,339

1,000

242

146

-96

-39.7%

29.2%

14.6%

◆Generic
drugs

13,005

13,20027,662

27,400

6,870

7,531

＋661

＋9.6%

57.1%

27.5%

Healthcare
business

2 781
2,781

2,800

5 937
5,937

6 000
6,000

1 346
1,346

1,396

＋50

＋3 7%
＋3.7%

49 9%
49.9%

23 3%
23.3%

Operatingincome

1,443

1,900

8,822

8,600

2,595

1,320

-1,275-49.1%

69.5%

15.3%

Ordinary income

1 693
1,693

2 200
2,200

9 345
9,345

9 200
9,200

2 805
2,805

1 596
1,596

-1,2091 209-43 1%-43.1%

72 5%
72.5%

17 3%
17.3%

Net income

1,240

1,500

6,574

6,600

2,393

1,077

-1,316-55.0%

71.8%

16.3%

Sep/2017

Sep/2018
S/2018(forecast)

Mar/2018

Sales

50,75850,200

Ethical drugs
business

47,977

ethical drugsg●Japan◆Sales of new●Overseas

Mar/2017M/2017(forecast)24

Main R&D Activities -1 (as of July 31 2018)
Ph III ~ Application submitted
Stage
Japan

Overseas

Application(9/2017)PhⅢ:
UROVANT

Compound/
Code

Therapy area
/ActionOriginFeatures

KRP-114V

Overactive
bladderMerck & Co.,

-Expectation of high compliance in taking medicine
with
ith lless side
id effects
ff t ththan ththe conventionaltild
drugs ffor
overactive bladder-- Less drug interaction as β3 receptor agonist - β3
agonist including this agonist may constitute the firstline drug for treatment of overactive bladder

Application(4/2017)

KRPAM1977X(Oral agent）

New quinolone
synthetic
antibacterial
agent

In-house

PhⅢ(3/2016)

KRPAM1977Y(Injection）

New quinolone
synthetic
antibacterial
agent

In-house-Superior ability to combat drug-resistant grampositive bacteria (incl(incl. MRSA)-has a powerful antimicrobial activity against
anaerobic bacteria- Expectation of high clinical effects with excellent
tissue penetration-High degree of safety expected since safety hurdles
cleared prior to clinical trials

PhⅢ(3/2017)

KRP-116D

Interstitial
cystitis―

Evaluation committee on unapproved or off-labeled
drugs with high medical needs“Dimethyl sulfoxide(DMSO)”

PhⅢ(6/2017)

KRP-108P

Anti-asthmatic(U.K.)
Vectura

Expand the indication of Flutiform to pediatric patients

Comments
・License agreement with Merck & Co., Inc.,(7/2014)
・Co-Development
Co Development and Co
Co-Marketing
Marketing Agreement with
Kissei Pharmaceutical Co., Ltd. affiliate (3/2016)･License agreement with Merck & Co., Inc., for Asia
(4/2017)25

Main R&D Activities -2 (as of July 31 2018)
POC Project (Ph I ~ Ph II)
Stage
Japan

Overseas

Compound/
Code

Therapy area
/Action※Changes from the previous announcement (May 10 2018)

OriginFeatures

Comments

PhⅡ

KRP-N118(SK-1404)

Nocturia Dueto Nocturnal
Polyuriay

SANWA
KAGAKUKENKYUSH
O CO., LTD.

A vasopressin V2 receptor agonist that promotes the reabsorption of waterby the collecting duct of the kidney to reduce the amount of urine(antidiuretic action). With its high efficacy and safety, the drug is expectedt betob a ththerapeuticti agentt ffor nocturia
t i duedtto nocturnaltl polyuria.
li・License agreement with
SANWA KAGAKUKENKYUSHO CO., LTD,
(3/2018)※PhⅡ（6/2018）

Ad-SGE-REIC

malignantpleuralmesothelioma

Okayama
University

A gene-therapy product using a novel tumor suppressor gene of reduced
expression in immortalized cells/ Dickkopf-3 (REIC/Dkk-3), which was
discovered by researchers from Okayama University, as a therapeutic gene.
It is expectedpto have direct effect on p
primary
y tumor lesions and indirect
effect on metastatic tumor lesions as a gene-therapy product thatsimultaneously induces tumor cell-selective apoptosis and the activation of
antitumor immunity respectively.

Adopted to Next
generation Technology
Transfer Program((NexTEP))(6/2014)【US】
Momotaro-Gene
prostate
cancer(PhⅠ/Ⅱ)【JP】
Okayama University
liver cancer(PhⅠ/Ⅰb)

Licensing development
Stage/
Overseas
PhⅠ

Compound/
Code
FPR-2 agonist
programLicensee /Collaborative
research
BMS

Therapyarea/Action
Nondisclosure

OriginIn-house

Features
FPR-2 agonists that mainly inhibit the
migration of neutrophils and exhibit antii flinflammatorytaction.
tiComments
License agreement with BMS(12/2015)

26

Reference27

Segment information
for the first Quarter Ending March 31, 2019
Sales, Profit or Loss of each report segment(Units:¥ billion)

Sales

Year on Year

ProfitYear on Year

25.1

－1.4
1.4

1.3

－1.3
1.3

23.7

－1.4

1.3

－1.2

16 2
16.2

－2.0
20

●Overseas

16.1
0.1

－1.9
－0.1

◆Generic drugs

7.5

＋0.6

Healthcare business

1.4

＋0.1

0

0

－

－

0.1

0

total
Ethical drugs business◆Sales of new ethical drugs●JapanAmount of adjustment28