First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2021
1. Overview of Consolidated Financial Results
2. Highlights of Business Performance
3. Main Product Sales Update
4. Financial Results and Forecast
5. Development Pipeline

August 3, 2020

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.

Overview of First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2021
Units:millions of yen

Firstquarter
Jun / 2017

Firstquarter
Jun / 2018

Firstquarter
Jun / 2019

Firstquarter
Jun / 2020

YoYchange(%)

Interim term
Sep / 2020
(forecast)

Net sales

26,45825,131

25,74924,689－4.1％

52,800Operating income

2,595

1,320

1,575

2,014

Ordinary income

2,805

1,596

1,827

Net income

2,393

1,077

1,280

YoYchange(%)

Year ending
Mar / 2021
(forecast)

YoY change(%)＋9.3%

115,500＋5.0%＋27.8％

2,400 ＋206.2%

9,700＋29.3%2,265＋24.0％

2,600 ＋141.6%

10,200＋24.8%

1,609＋25.7％

1,900 ＋127.8%

7,600＋23.6%

First Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2021
[Net sales] In new ethical drugs, etc.(Japan), sales was17,010 million yen which remained lower than a year ago level due to the decreaseof sales of long-listed drugs from NHI drug price revisions and patient’s suppressive behavior to go to a medical institution and the delay inmarket penetration of new products by voluntary restriction on MR activities in COVID-19 coronavirus outbreak, despite the growth of themainstay product Beova and Desalex. On the other hand, sales from generic drugs increased from the year-ago. As a result, overall net
sales stood at 24,689 million yen, as down 1,060 million yen from year on year (down 4.1% from year on year).
[Profit] Gross profit declined 232 million yen year on year due to a fall in sales. Meanwhile, owing to cost reduction, and voluntary restriction
on MR activities (by COVID-19 coronavirus outbreak), SG&A decreased 671 million yen year on year (of which R&D expense decreased
475 million yen), as a result Operating Income was 2,014 million yen, as up 438 million yen from year on year (up 27.8% from year on year),and profit attributable to owners of parent was 1,609 million yen (up 25.7% from year on year).

Consolidated Financial Results for the Fiscal Year Ending March 31, 2021(forecast)
The forecast for the first half and full year announced on May 12, 2020 remain unchanged at this moment.
(Progress compared with the forecast for the first half: net sales: 46.8%; operating income: 83.9%)
The Company have been paying full attention for the future trend of business performance by the delay of market penetration of newproducts and mainstay products with continuation or spread of the COVID-19.
There is no change to the dividend forecast announced on May 12, 2020 (annual dividend of 75 yen per share).
1

Highlights of Business Performance(Units: ¥ billion)

30

25

Cost ofSales Ratio

48.2%
Cost ofSales

NetSales25.7

Cost of sales ratio decreased 1.2%
•Improvement of product mix, etc.

47.0%

2015

Net Sales decreased ¥1.0bln year on year

Cost ofSales Ratio

12.4
R&D

2.5

Gross Profit decreased ¥0.2bln year on year

Cost ofSalesNetSales

11.6

24.7

R&D

SG&A expenses decreased ¥0.7bln year on year
•R&D expenses decreased ¥0.5bln•SG&A(excluding R&D) decreased ¥0.2bln

2.010

Operating Income increased ¥0.4bln year on year
SG&A
(excluding R&D)

59.2

SG&A

11.8

SG&A
(excluding R&D)

9.0

1.6
Jun / 2019

1.6

11.1
OperatingIncomeOperating
Income0SG&A

2.0

2.0

Jun / 2020
2Consolidated Financial Results
for the first Quarter ending March 31, 2021
■Net Sales(¥ billion)

Jun/2019 Jun/2020

Change●New Ethical drugs, etc. （Japan）
19.6（1Q）

Net Sales

25.7

24.7

－1.0

New ethical drugs,etc.（Japan）

18.1

17.0

－1.1

New ethical drugs（Overseas）

0.4

0.2

－0.2

Generic drugs

7.3

7.5

＋0.2

Operating
Income1.6

2.0＋0.4

Ordinary
Income

1.8

2.3

＋0.5

Net Income

1.3

1.6

＋0.3

・Flutiform
・Desalex
・Beova・Lasvic
・Pentasa・Uritos・Nasonex
・Kipres・Mucodyne¥ 24.7bln

Year on Year（－1.0）¥ 17.0bln（－1.1）

20.6（1Q）

3.1
0.9
1.9
0.1
3.2
1.2
0.3
1.8
0.7

（ －0.4）（ ＋0.9）（ ＋1.7）（ ＋0.1）（ －0.3）（ －0.4）（ －1.4）（ －1.2）（ －0.8）●New Ethical drugs business（Overseas）¥ 0.2bln（－0.2）●Generic drugs¥ 7.5bln（＋0.2）

3.5
00.2
ー
3.5
1.6
1.7
3.0
1.5⇒
⇒
⇒
⇒
⇒
⇒
⇒
⇒
⇒

Increase of Nasonex AG sales、and Uritos AG and products released in June

■Operating Income¥ 2.0bln（＋0.4）◆ Operating Income margin increased 2.1 percentage points to 8.2%
● Cost of Sales Ratio : decreased 1.2 percentage points (48.2%⇒47.0%)[Decrease] Improvement of product mix[Increase] Impact of NHI price revision, increase of sales for Generic drugs● R&D Ratio : decreased 1.5 percentage points (9.8%⇒8.3%)
・R & D expenses decreased ¥0.5billion (¥2.5bln ⇒¥2.0bln)
Decrease in development project (Late-stage pipeline)※ The classification of reporting segment ("Prescription drugs business" and"Healthcare business") was consolidated to a single segment from the first quarterconsolidated financial results for the fiscal year ending March 31, 2021
Along with this, the classification of sales was changed to combine the existing “Newethical drugs (Japan)” and “healthcare business” to "New ethical drugs, etc. (Japan)".
There is no change in "New ethical drugs (overseas)" or "Generic drugs".

● SG&A Ratio(excluding R&D expenses) : increased 0.8 percentage points(35.8%⇒36.6%)
・SG&A(excluding R&D) decreased ¥0.2billion (¥9.2bln⇒¥9.0bln)■Net Income

decrease in selling costs, etc.

¥ 1.6bln（＋0.3）
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Main Product Sales Update(Units: ¥ billion)

Interim term

ProductFlutiform(Combination drug for asthma treatment)

Desalex(Antiallergic Agent)

Beova（Kyorin）(β3 adrenergic receptor agonist overactive bladder therapeutics)

Lasvic tablets(Oral new quinolone synthetic antibacterial agent)New
ethicaldrugs,etc.
(Japan)Pentasa(Ulcerative colitis and Crohn’s disease treatment)

Uritos（Kyorin）(Therapeutic agent for overactive bladder)

Nasonex(Spray type allergic rhinitis remedy)

Kipres for adult(Leukotriene Receptor Antagonist)

Kipres for children(Leukotriene Receptor Antagonist)

Mycodyne(Mucoregulant)

Milton(Disinfectant)Montelukast tablets “KM”
(Leukotriene Receptor Antagonist)

GenericDrugs

Mometasone Nasal 50mg “KYORIN”(Spray type allergic rhinitis remedy)

Imidafenacin tablets & OD “KYORIN”(Therapeutic agent for overactive bladder)

Full termFirst quarter（April 1 to June 30）

Sep/2019

Sep/2020(forecast)

Mar/2020

Mar/2021(forecast)Jun/2019

Jun/2020

YoY change(%)

Progress toInterim term
forecast(%)

Progress toFull term
forecast(%)

6.7

7.0

14.6

15.0

3.5

3.1

－10.0%

44.9%

21.0%

0

3.1

2.6

8.8

0

0.9

―

29.3％

10.4％

0.6

3.5

4.3

7.0

0.2

1.9

＋675.5％

53.8％

26.9％

－

1.4

1.1

4.1

－0.1

―

3.1％

1.1％

6.8

5.9

13.3

11.7

3.5

3.2

－8.5%

54.4%

27.5%

3.0

1.8

5.8

2.7

1.6

1.2

－23.8%

66.4%

43.8%

2.7

0.6

6.0

2.6

1.7

0.3

－79.6％

49.3％

13.0％

2.4

1.8

5.3

4.2

1.4

0.9

－34.4%

47.7%

20.9%

3.0

2.2

6.5

5.3

1.6

0.9

－45.4%

38.8%

16.5%

2.8

2.25.8

4.9

1.5

0.7

－52.3%

31.9%

14.9%

1.1

1.1

2.4

2.2

0.5

0.5

－1.2％

46.4％

23.3％

5.4

4.7

11.5

10.7

3.0

2.3

—21.2％

49.6％

21.7％

0.4

0.9

2.8

3.5

－

0.4

―

45.9％

12.3％

－

0.4

－

1.0－

0.2

―

39.4％

16.7％

4

Consolidated Financial Results
for the first Quarter ending March 31, 2021
Interim term
(Units: ¥million)

First quarter （April 1 to June 30）

Full term

Progressto interimterm forecast(%)

Progress tofull term
forecast
(%)

－4.1%

46.8％21.4％－1,058

－5.9％

46.2％

21.3％

220

－156

－41.5%

73.5％

22.0％

7,304

7,458

＋154

＋2.1%

47.8％

21.4％

9,700

1,575

2,014

＋439

＋27.8%

83.9％

20.8％

8,175

10,200

1,827

2,265

＋438

＋24.0%

87.1％

22.2％

6,149

7,600

1,280

1,609

＋328

＋25.7%

84.7％

21.2％

Mar/2020

Mar/2021(forecast)Jun/2019

Jun/2020

ChangeYoYchange(%)

52,800109,983

115,500

25,74924,689

－1,06033,74236,80077,53579,70018,06817,010

390

300

1,490

1,000

376

14,166

15,60030,95734,900Operatingincome783

2,400

7,503

Ordinary
income

1,076

2,600

Net income

834

1,900

Sep/2019

Sep/2020(forecast)

Sales

48,299New ethical drugs,etc. (Japan)
New ethical drugs(Overseas)
Generic drugs※ The classification of reporting segment ("Prescription drugs business" and "Healthcare business") was consolidated to a single segment from the first quarter consolidated financial
results for the fiscal year ending March 31, 2021
Along with this, the classification of sales was changed to combine the existing “New ethical drugs (Japan)” and “healthcare business” to "New ethical drugs, etc. (Japan)".
There is no change in "New ethical drugs (overseas)" or "Generic drugs".

5Development pipeline
Main R&D Activities -1 (as of August 3 2020)
Ph III ~ Application submittedStage※Changes from the previous announcement (May 12, 2020)

Compound/Code

Therapy area/Action

Application(10 / 2019)

KRPAM1977Y(Injection)

New quinolone
synthetic
antibacterial
agent

In-house

A novel quinolone injection developed specifically for the treatmentof lower respiratory tract infections
1. Highly distributed in the lung, showing strong antibacterial
activity against pathogenic bacteria of respiratory tract
infection
2. Effective against both aerobic and anaerobic bacteria, andable to administer once a day
3. Showed effectiveness against aspiration pneumonia,pulmonary suppuration, and lung abscess

Application(3 / 2020)

KRP-116D

Interstitial
cystitis―

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

Japan

Overseas

OriginFeatures

Comments

・MK-7264, a drug for chronic coughing: Merck Phase III (Oversea).
Concluded a memorandum of understanding for sales collaboration (5 / 2019).

※KRP-108P (additional indication for pediatric use of Flutiform® 50 Aerosol, a combination drug for asthma treatment) : obtained approval in June, 2020

6Development pipeline
Main R&D Activities -2 (as of August 3 2020)※Changes from the previous announcement (May 12, 2020)

POC Project (Ph I ~ Ph II)
StageJapan

Overseas

PhⅠ※(7/2020)

PhⅠb/Ⅱa(aTyrpharma)

PhⅡ(6/2018)

Compound/CodeTherapy area
/ActionOriginFeatures

Comments

KRP-R120Interstitiallung disease :ILD
(pulmonarysarcoidosis)

aTyrpharma

It is a fusion protein drug having the action to suppress, by binding toneuropilin-2 (NRP2) receptor, the excessive activation of immune cells,
and is a potential first-in-class therapy to treat inflammatory diseases
such as pulmonary sarcoidosis.

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 atherapeutic gene.
It is expected to have direct effect on primary tumor lesions andindirect effect on metastatic tumor lesions as a gene-therapy productthat simultaneously induces tumor cell-selective apoptosis and theactivation 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)

Status of Licensed Compound / Program
Stage/
Overseas

Compound/Code

Licensee /Collaborative
research

Therapyarea/Action

PhⅠ

FPR-2 agonist
program

BMS

Nondisclosure

PhⅠ

KRP-203

Implementing
licensingactivities

GvHD

OriginIn-houseFeatures

Comments

FPR-2 agonists that mainly inhibit themigration of neutrophils and exhibit anti-inflammatory action.

License agreement with BMS (12/2015)

Sphingosine-1-Phosphate Receptor Agonist

Because Novartis (licensee) decided todiscontinue development of KRP-203 forstrategic reasons, Kyorin receive the returnof development rights.

※KYORIN Pharmaceutical Co., Ltd. signed license agreement with Otonomy, Inc. for the novel candidate compound for sensorineural hearing loss (8/2020)
The company granted Otonomy a global exclusive license to develop, manufacture and commercialize the therapeutic agent for the treatment of otic disorders such as hearing loss
(KYORIN Pharmaceutical Co., Ltd. reserves a commercialization right of the therapeutic agent in Japan).

7