First Quarter Consolidated Financial Results
f thforthe Fiscal
Fi l YYear EEndingdi MMarchh 3131, 2010
● Consolidated Financial Results● Main Product Sales Update● Main R&D Activities● Reference・ Consolidated Financial Results for theFirst Quarter Ended June 30, 2009
・Results and Forecast of Main Subsidiary Companies

August 5, 2009

KYORIN Co., Ltd.

Outline of First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2010
First Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2010
<Year on Year>[Net sales] Consolidated sales increased 12.2%
12 2% year over year to ¥23¥23.3
3 billion due to the favorable progress of new priority drugs inJapan.
[Income] Despite an increase in sales costs and general administrative overhead due to the merger with Nisshin Kyorin
Pharmaceutical Co., Ltd., sales increased and the cost of sales ratio improved due to the in-house production of Pentasa, our newpriority drug. As a result, operating income surged 217.0% year over year to ¥3.2 billion and net income jumped 265.8% to ¥2.0billion.
billi<Progress to Forecast>
Operating income exceeded the forecast amount for the interim term ending September 2009 due to a gap that occurred in theaccounting terms for R&D expenses, which is a component of sales costs and general administrative overhead, in addition to thesales increase. However, because future R&D expenses are expected that could offset the aforementioned gap, we are not changing
the projections for the interim term ending September 2009 and the fiscal year ending March 2010 that were announced on May 13,
2009, at this time.
Units:
Millions ofyenFirst
quarterJune 30,
2006

Firstquarter
June 30,
2007

Firstquarter
June 30,2008

Firstquartert
June 30,2009

YoYchange(%)

Sep/09Interim term
(forecast)Year ending
March 31,31
20010(forecast)

YoYchange(%)

YoYchange(%)

Net sales

18,68521,891

20,75623,28912.2％

43,1007.1%

96,400

6.1％

Operatingincome

1,686

4,082

995

3,156

217.0％

2,500

101.0%

11,50028.5％

Ordinary
income

1,690

4,321

1,228

3,417

178.2％

2,900

146.7%

12,30033.6％

N t iincome
Net782

2 600
2,600

540

1 976
1,976

265 8％
265.8％

1 500
1,500

－7 3007,300

258 3％
258.3％1

Highlights of Business Performance for the First Quarter Ended
June 30, 2009, and Forecasts
Highlight ①
Net sales increased ¥2.5 billion. (Kipres, Pentasa, Uritos, generic products)（ Units: ¥ ｂillion ）

25

売上高

Net sales

Highlight ②
Cost of sales ratio declined 6.1
percentage points.
・In-house production of Pentasa, etc.

20
C t off sales
Costl

915

10

8.7

20.8

23.3
2.6

R&D

2.2

SG&A expenses(excluding R&D expenses)

59.3

8.1
Operating income0First Quarter
June 30, 2008

1Highlight ③
Sales costs and general administrative
overhead other than R&D expenses
were almost level(increased 0.6 percentage point).
・Although there was a difference inaccounting terms for R&D expenses,
sales costs and general administrative
overhead other than R&D expenses
increased due to the merger with
Nisshin Kyorin Pharmaceutical Co., Ltd.
・The ratio of sales costs and generaladministrative overhead other thanR&D expenses was almost level due tothe sales increase
increase.

3.2
First Quarter
June 30, 2009

※Forecast of business performance (Operating income exceeding the forecast amount for the interim term ending
September 30 ,2009 was recorded.)A gap of less than ¥2 billion was incurred between the projection and the actual amount of sales costs for the firstquarter, which was, however, mostly due to the difference of accounting term of R&D expenses.

2

Consolidated Financial Results for the First Quarter(Ended June 30, 2009)
Units: Billions of yen

Net sales (total)◆ Sales of new
ethical drugs
JapanFirst Quarter
June 30, 2008

First Quarter
June 30, 2009

Change20.8

23.3+2.5

17.3

19.5

+2.2

16.5

18.9

+2.4

Overseas0.9

0.6▲0.3◆ Generic drugs

1.4

1.8+0.4◆ Consumer
healthcare
business

1.7

1.7± 0◆ Otherbusinesses

0.3■Net sales● Sales of new ethical drugs in Japan・ Kipres・ Mucodyne
・ Pentasa
・ Uritos
・ Gatiflo

09.3(1Q)(results)¥23.3billion¥18.9billion
10.3(1Q)(results)

⇒
6.6
5.7
⇒
51
5.1
5.0
⇒
4.8
3.1
⇒
0.8
0.20
⇒
0.5
＊Sales of Gatiflo discontinued as of September 30, 2008.

● SalesS l off new ethicalhi l drug
doverseas
・ Gatifloxacin
・ Norfloxacin¥0.6 billion▲0.11.0Ordinaryincome

1.2

3.4+2.2

Net income

2.6

2.0+1.5

3.2+2.2(+2.4)（+0.9）（+ 0.1）
0 1）（+ 1.7）(+0.6)(▲0.5)(▲0.1)(▲0.1)● Generic drugs¥1.8 billion(+0.4)●Consumer healthcare business¥1.7 billion(±0)●Other businesses¥0.2billion(▲0.1)＊Sales increased on products acquired from Nisshin Kyorin Pharmaceutical Co., Ltd.
and main products.

( 3 3%⇒37 2%)(43.3%⇒37.2%)

Factors for decrease: Cost of sales ratio declined due to in-house production of Pentasa.

◆ R&D ratio ： down 3.3 points

Operatingincome

0.60⇒⇒0.70.1◆ CostCoff sales
l ratio
i ： downd6.1 points
i0.2

Change(+2.5)(12.7%⇒9.4%)＊R&D expenses down from ¥2.6 billion to ¥2.2 billion.
Difference in accounting terms of R&D expenses◆ SG&A expenses ratio (excluding R&D expenses): up 0.6 points (39.2%⇒39.8%)
Factors for increase: Effect of the merger with Nisshin Kyorin Pharmaceutical Co., Ltd., etc.

(+2.2)¥3.2 billion■ Operating income◆ TheTh operatingi incomei
margini increasedid 8.8
8 8 percentage points
i, to 13.6%
3 6%■ Net income¥2.0 billion(+1.5)
3

Main Product Sales Update（ Units: ¥ ｂillion ）Interim term
Product nameKipres（LT receptor antagonist）

Mucodyne
Sales of new
ethical drugs(Japan)（Mucoregulant）

Pentasa(Ulcerative colitis andCrohn’sdisease treatment)

Ketas（For bronchial asthma andcerebrovasculas disorders）

Uritos（Kyorin）

FY08(results)

Full term

FY09(forecast)

FY08(results)

First quarter（April 1,2008 to June 30,2010）

FY09(forecast)

FY08(results)

FY09(resuls)

Y Y
YoYchange (%)

Progress toInterim term
forecast(%)

Progress toFull term
forecast(%)

10.4

11.8

25.2

27.4

5.7

6.6

16.9%

56.4%

24.2%

87
8.7

91
9.1

20 6
20.6

21 5
21.5

50
5.0

51
5.1

1 5%
1.5%

55 7%
55.7%

23 6%
23.6%

7.1

8.9

15.7

18.6

3.1

4.8

57.2%

54.2%

25.9%

26
2.6

26
2.6

50
5.0

50
5.0

13
1.3

11
1.1

2%
▲10.2%▲1044.7%

23.2%

0.6

1.5

2.0

3.7

0.2

0.8

235.0%

51.6%

21.5%

0.80.8

1.5

1.5

0.4

0.4

▲0.8%

50.7%
0 %

26 2%
26.2%

0.8

0.7

1.5

1.4

0.4

0.4

▲9.8%

51.2%

26.4%

1.4

1.3

2.5

2.3

0.7

0.6

▲14.1%

43.8%

25.2%

0.9

0.9

1.8

2.0

0.5

0.5

3.1%

50 7%
50.7%

23 3%
23.3%

（Overactive bladder)

Aplace（Anti-ulcer agent）

Rocaltrol（Osteoporosis remedy）
Sales of new
ethicaldrugs(overseas)

Gatifloxacin

C
Consumer
Healthcare
business

Milton(Disinfectant)(Bulk・Royalty)

4Main R&D Activities ① （August 5 , 2009 Release)
PhⅡ～Application
Stage

Compound/CodeTherapy area/Action

OriginFeatures

Comments

PENTASA
Tablets 250
500

Ulcerative
colitis/ Crohn’sdisease remedy

FerringPharmaceuticals

New remission therapy of Pentasa for the treatment ofulcerative colitis in its active phase.
(4,000 mg divided into two doses per day)

Additional dosage andadministration(Galderma,(GaldermaLaunched)

PEKIRON Naillacquer

Anti-mycotic
agent

In-house

First nail varnish formulation for nail mycosis inJapan

PhⅡ（１０/04）

KRP-204（ Tablets ）Anti-obesity

Nisshin
Flour
MillingA highly selective beta3-agonist that may improveobesity and have less cardiac effect in comparison toprevious compounds.

Co-development with
Nisshin Flour Milling

KRP-204（ Tablets ）OveractivebladderNisshinFlourMilling

A highly selective beta3-agonist that may relax bladdersmooth muscle and improve urine storage dysfunction
by activating beta3 receptor on bladder.

Co-development with
Nisshin Flour Milling
PhⅡa ended(EisaiPhⅢ))

AS-3201（（Tablets ）Diabetic
neuropathypyDainippon
Sumitomo

Aldose reductase inhibitor to reduce the sorbitol
accumulation in the cell,, and improvepdiabeticneulopathy

Co-development withDainippon
pp Sumitomo
・PhⅡb（9/07）

PhⅡ（6/04）

KRP-101（Tablets ）Antidyslipidemia
with antidiabetes

In-house

A PPAR-alpha agonist. It may have an effect ondiabetes in addition to lipid metabolism improvement
including reduction of neutral fat.

PhⅡa ended

PhⅡ（2/08）

PhⅡ（9/07）

KRP-104

Anti-diabetes
agent

In-house

A DPPⅣ inhibitor to reduce blood glucose throughsuppression of the degradation of insulin-releasing
hormone. Diabetic therapy with fewer side effects isexpected than existing treatments.

・PhⅡa ended(8/08)
・PhⅡb in domestic（3/ 09）

PhⅡ（8/08）(Application :Abbott in the US
PhⅢ:
Mundipharma
in the rest of theworld excluding
the Americas.)

KRP-108

anti-asthmatic
treatment

SkyeyPharma
PLC

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

Licensingg agreement
gwith SkyePharma (4/08)

D
DomestictiO
Overseas

Approval(12/08)

PhⅡ（3/07）

PhⅡ（（3/05））

5

Main R&D Activities ② （August 5 , 2009 Release)
POC Project （Pre-clinical～PhⅠ）
StageDomestic

Overseas

Compound/CodeTherapy area/
ActionOriginFeatures

Comments

Licensing agreementwith Novartis (2/06)

PhⅠ(7/07)

KRP-203

Transplantation andautoimmune
diseasestreatment

In-house

An immunosuppressant with novel mechanism
called S1P-agonist. It may have a better safety
profile than previous ones as well as an excellent
effect under concomitant use with other types ofimmunosuppressants.

PhⅠ(10/07)

KRP-105

Antidyslipidemia

In-house

A highly selective PPARα agonist. In addition tolipid metabolism improvement, KRP-105
increased adiponectin, reduced leptin, andsuppressed weight gain in animal models,suggesting potential to be a unique and antd li id i agent.
dyslipidemiatPre-clinical

KRP‐107

Transplantation andautoimmune
diseasesttreatmenttt

In-house

Selective S1P1 receptor agonist.

Pre-clinical

KRP‐109

Acute lunginjury（ALI)

In-house

Neutrophil elastase inhibitor with highdistribution into lungs

6Main R&D Activities ③（August 5 , 2009 Release)
Licensing development（preclinical）
Product name・CodeStage

Licensee ・Collaborativeresearch

Therapy area/
ActionOriginComments

Alphagan/Alphagan P

DomesticPhⅢ（7/07）

Senju Seiyaku

Glaucoma

Allergan (US)・Licensed from Allergan（Cross license of gatifloxacin ophthalmicsolution ）・License out to Senju（5/04）
・License-outKetas

Overseas
PhⅡ（8/05）

MediciNova (US)

Cerebrovasculardisorders

In-house

・KYORIN grants MediciNova an exclusive
license in all countries worldwide except forJapan,China, South Korea and Taiwan todevelop, manufacture and sell the compoundand products for the multiple sclerosis
indication.(10/04)
Result of PhⅡ was reported in April 2008.

KCA-757

Overseas
PhⅢ(Anti-bronchial
Asthma:11/06)PhⅡ/Ⅲ(Interstitialcystitis:y5/05)

MediciNova (US)Anti-bronchialasthma andInterstitial cystitis
agentIn-house

・KYORIN grants MediciNova an exclusive
license in all countries worldwide except forJJapan,China,ChiSSouthth Korea
KanddT
Taiwanitto
develop, manufacture and sell the compoundand products・Interstitial cystitis:Results of PhⅡ/Ⅲ wasreported inJanuary 2007 and ceased development
・Bronchial asthma: Clinical trial oversea wasdiscontinued.

KRP-203

Overseas
PhⅠ（7/07）

Novartis(Switzerland)

Transplantation
and autoimmune
didiseasesttreatment
tt

In-house

An immunosuppressant with novel
mechanism called S1P-agonist. It may have ab tt safety
betterf t profile
fil ththan previous
iones aswell as an excellent effect under concomitant
use with other types of immunosuppressants.
7

ReferenceConsolidated Financial Results
for the First Quarter (Ended June 30, 2009)（ Units: ¥ million ）Interim term

FY08
(results)

Full term

FY09(forecast)

FY08(results)

First quarter （April 1, 2009 to June 30,2009）

FY09(forecast)

FY08(results)

FY09(results)

ChangeYoY change(%)

Progressto interim
term
forecast(%)

Progress
t ffulltoll
term
forecast
(%)

Sales

40,261

43,10090,88996,40020,75623,289+2,533

12.2%
%

54.0%
%

24.2%
%

Sales of new

33,04635,60075,69078,80017,34819,503+2,155

12.4%

54.8%

24.8%

Japan

31 23931,23934 00034,00071 93571,93576 10076,10016 487
16,48718 91018,910+2 423+2,423

14 7%
14.7%

55 6%
55.6%

24 8%
24.8%

Overseas

1,806

1,500

3,755

2,700

860

592

▲268

▲31.2%

39.5%

21.9%

Generic drugs

2,929

3,700

6,264

8,700

1,438

1,829+391

27.1%

49.4%

21.0%

3,684

3,600

7,725

7,800

1,654

1,719

+65

3.9%

47.8%

22.0%

Other
businesses

600

400

1,208

1,100

314

237

▲77

▲24.5%

59.3%

21.5%

Operatingincome

1,243

2,500

8,952

11,500

995

3,156

2,161

217.0%

126.2%

27.4%

Ordinary
income

1,175

2,900

9,208

12,300

1,228

3,417

2,189

178.2%

117.8%

27.8%

Net income▲1,606

1,500

2,037

7,300

540

1,976

1,436

265.8%

131.7%

27.1%

ethical drugs

Consumerhealthcare
business8Actual and Forecast of Main Subsidiary Companies（ Units: ¥ billion）

KYORIN
pharmaceutical

3 ／09（results）

3 ／10（forecast）

First quarter／09（results）（）
3／Sales

78.0

81.7

18.0

20.2

Operating profit

8.5

11.4

1.4

3.4

N profit
Netfi

4.0

7.7

1.0

2.5

KYORIN
Rimedio

1 ／09（results）

3 ／10（forecast）

First quarter1 ／09（results）

7.4

10.3

1.7

2.1

Operating profit

▲0.4

0.1

▲0.2

0

Net profit

▲0.6

0.1

▲0.2

0.1

3 ／09（results）

3 ／10 （forecast）

First quarter3 ／09（results）

Sales

4.1

3.80.80.8

Operating profit

0.1

0.1

▲0.2
0.2

▲0.2
0.2

Net profit

0.1

0.1

▲0.2

▲0.2

Sales

Dr.Programg※１※２

First quarter／10（results）（）
3／First quarter3 ／10（results）

First quarter3／10（results）*1. Due to the change of the closing date of Dr. Program Co., Ltd., the business results for the fiscal year ended March 2009 covered 14 months.
*2. Because the closing date of KYORIN Rimedio is planned to be changed, the projections of business performance for the fiscal year ending March 31, 2010, will cover 14 months.

9