Outline of Consolidated Financial Results
for the Year Ended March 31, 2017

May 15, 2017NIPPON SHINYAKU CO., LTD.

Outline of Consolidated Financial Results
for the Year Ended March 31, 2017

May 15, 2017NIPPON SHINYAKU CO., LTD.

FY2016 Summary（Million yen）

FY2015Results
Ratio

FY2016
Results
Ratio

YoY ChangeAmt%

Net sales

84,209100.0%

98,781100.0%

14,571

17.3%

Operating income

8,549

10.2%

15,280

15.5%

6,730

78.7%

Ordinary income

8,952

10.6%

16,244

16.4%

7,291

81.4%

Net income attributableto owners of the parent

6,340

7.5%11,749

11.9%

5,409

85.3%

Topics◆NS-304（selexipag） ・・・
Europe : Approved in May 2016, Launched in June 2016
Japan : Orphan drug designation by MHLW for CTEPH in June 2016
Approved for PAH in September 2016, Launched in November 2016
◆NS-065/NCNP-01・・・Fast track designation by FDA in October 2016, Orphan drug designation andrare pediatric disease designation in January 2017
◆NS-32 ・・・licensed-in for iron deficiency anemia in December 2016
◆NS-917 ・・・licensed-in for relapsed/refractory acute myeloid leukemia, NS-73 ・・・licensed-in forhepatic veno-occlusive disease and NS-87 ・・・licensed-in for high risk acute myeloid leukemia,
in March 2017

3Segmental Review-Pharmaceuticals（Million yen）

FY2015Results
Ethical drugs
Profit in co-promotion
Revenues from the licensingof industrial property rights
Active Pharmaceutical
Ingredients

Net sales

FY2016

Ratio

Results

YoY Change

Ratio

Amt%

66,04093.7%

67,784

79.5%

1,744

2.6%

393

0.5%

2,928

3.4%

2,534

643.8%

3,208

4.6%

7,408

8.7%

4,199

130.9%

846

1.2%

7,193

8.4%

6,347

749.4%

70,489100.0%

85,315100.0%

14,826

21.0%

Increased in sales:・ Zalutia (+2,668 million yen, +47.3%)(urinary disorder caused bybenign prostatic hyperplasia (BPH))

・ Vidaza (+1,725 million yen, +14.0%）

Decreased in sales:・ Lunabell ( -1,167million yen, -17.5% )(dysmenorrhea)

・ Eviprostat (-904 million yen, -21.4%)(BPH)(myelodysplastic syndromes)
・ Milestone revenue for the approval of Uptravi in Europe,royalty revenue from overseas sales of Uptravi andsales of active pharmaceutical ingredients

4Segmental Review-Pharmaceuticals90,000(Million yen）

Net sales 85,315 million yen
70,489Year-on-Year change

85,315+14,826 million yen (+21.0%)

0FY2015

FY2016

5Segmental Review-Functional Food（Million yen）

FY2015Results

Health food ingredients

FY2016

Ratio

Results

Ratio

YoY Change
Amt%

827

6.0%

847

6.3%

20

2.4%

Preservatives

1,906

13.9%

2,211

16.4%

305

16.0%

Protein preparations*

9,601

70.0%

9,088

67.5%

-513

-5.3%

Others

1,385

10.1%

1,318

9.8%

-66

-4.8%

Net sales

13,720100.0%

13,466100.0%-254-1.9%* Protein preparations including nutritional ingredients

6Segmental Review-Functional Food14,000(Million yen）

Net sales 13,466 million yen
13,720Year-on-Year change

13,466-254 million yen (-1.9%)

0FY2015

FY2016
7

Net Sales
120,000

84,20998,781(Million yen)

13,466

Net sales 98,781 million yen

13,720Year-on-Year change+14,571 million yen (+17.3%)

85,31570,4890
FY2015FY2016

Pharmaceuticals
Functional Food
8

Consolidated Statements of Income (1)（Million yen）

FY2015ResultsRatio
Revenue
Net sales

FY2016
ResultsRatio

YoY ChangeAmt%

84,20970,48913,720100.0%
83.7%
16.3%

98,781
85,315
13,466100.0%
86.4%
13.6%

14,571
14,826
-254

17.3%
21.0%
-1.9%

89.8%
52.3%
25.9%
11.6%

83,501
44,83523,762
14,903

84.5%
45.4%
24.0%
15.1%

7,840
818
1,857
5,164

10.4%

R&D expenses

75,66044,016
21,904
9,739

Operating income

8,549

10.2%

15,280

15.5%

6,730

78.7%

Pharmaceuticals
Functional Food

Operating expenses
Cost of sales
SG&A expenses

9Consolidated Statements of Income (2)（Million yen）

FY2015Results
RatioOperating income

FY2016
Results
Ratio

YoY Change
Amt%

8,549

10.2%

15,280

15.5%

6,730

78.7%

1,246

1.5%

1,587

1.6%

341

27.4%

842

1.1%

623

0.7%

-219

-26.1%

8,952

10.6%

16,244

16.4%

7,291

81.4%

Extraordinary loss

--766

0.8%

766

-

Income taxes, etc

2,612

3.1%

3,727

3.7%

1,115

42.7%

Net income attributableto owners of the parent

6,340

7.5%

11,749

11.9%

5,409

85.3%

Non-operating
incomeNon-operating
expenses
Ordinary income

10Dividends

FY2015FY2016

Interim¥14¥18

Year-end¥14¥30

Annual¥28

¥48

EPS

¥94.10¥174.42Dividends payout ratio

29.8 %

27.5 %

DOE

1.9 %

3.0 %

Dividends per share11Consolidated Balance Sheet（Million yen）
YoY
FY2016
ChangeFY2015FY2016

YoY
ChangeFY2015

4Q
Results

4Q
Results

Amt

4Q
Results

4Q
Results

Assets135,370

150,905

15,535

Liabilities

32,60736,5893,981(Current assets)

85,401

98,787

13,386(Current liabilities)

20,56927,001

6,431(Fixed assets)

49,96852,1182,149(Long-termliabilities)

12,0379,587-2,450Net assets102,762

114,316

11,554

Total liabilities andnet assets

135,370

150,905

15,535

Total assets

135,370

150,905

15,535Amt

12

Consolidated Statements of Cash Flows（Million yen）

FY2015FY2016YoY Change

Results

Results

Amt

Operating activities

8,915

19,082

10,167

Investing activities-3,978-5,916-1,937

Financing activities-1,907-2,193-285

Cash and cash equivalents
at end of year

24,74835,914

11,16613

Capital Investment（Million yen）

Capital investment and Depreciation

Capital investment
Depreciation

FY2015Results
3,554
2,452

FY2016
Results3,949
2,648

Amt Chg394196（Million yen）

Breakdown of Capital Investment

FY2016FY2015Results

Results

Amt Chg

3,445

3,906461

Production674

2,324

1,650

（Manufacturing facility forhighly active medicines）(108)(1,874)(1,766)

R&D
Others

2,460
311

726
855

-1,733
544

109

42-66

3,554

3,949

394

<NIPPON SHINYAKU CO.,LTD.><Consolidated subsidiary>
Total capital investment

14

Business Forecast for FY2017（Million yen）

FY2016
ResultsRatio

FY2017
Forecast Ratio

YoY ChangeAmt%

Net sales

98,781100.0%

99,500100.0%719

0.7%Operating income

15,28015.5%

16,500

16.6%

1,220

8.0%

Ordinary income

16,24416.4%

17,000

17.1%

756

4.7%

Net income attributableto owners of the parent

11,74911.9%12,500

12.6%

751

6.4%

15

Segmental Forecast-Pharmaceuticals90,000(Million yen)

Net sales 85,500 million yen
85,315Year-on-Year change

85,500+185 million yen (+0.2%)

0FY2016
results

FY2017
forecast

16Segmental Forecast-Pharmaceuticals（Million yen）

FY2017FY2016
Results

Ratio

Forecast

YoY Change

Ratio

Amt%

Ethical drugs

74,97887.9%

69,70081.5%-5,278-7.0%

Profit in co-promotion

2,928

3.4%

4,700

5.5%

1,772

60.5%

Revenues from the licensingof industrial property rights

7,408

8.7%

11,100

13.0%

3,692

49.8%

Net sales

85,315100.0%

85,500100.0%

185

0.2%

17

Segmental Forecast-Functional Food15,000(Million yen）

Net sales 14,000 million yen
13,466Year-on-Year Change

14,000+534 million yen (+4.0%)

0FY2016
results

FY2017
forecast

18

Segmental Forecast-Functional Food（Million yen）

FY2016
Results

Health food ingredients

FY2017

Ratio

Forecast

YoY ChangeRatioAmt%

847

6.3%

850

6.1%

30.3%

Preservatives

2,211

16.4%

2,400

17.1%

189

8.5%

Protein preparations*

9,088

67.5%

9,400

67.1%

312

3.4%

Others

1,318

9.8%

1,350

9.7%

32

2.4%

Net sales

13,466100.0%

14,000100.0%

534

4.0%* Protein preparations including nutritional ingredients19

Consolidated Statements of Income(Forecast) (1)（Million yen）

FY2016
Results
Ratio
Revenue
Net sales

FY2017
Forecast

Ratio

YoY ChangeAmt%

100.0%(86.4%)(13.6%)
84.5%
45.4%
24.0%
15.1%

99,500(85,500)(14,000)
83,00046,20023,50013,300100.0%(85.9%)(14.1%)
83.4%
46.4%
23.6%
13.4%

719
(185)
(534)
-501
1,365
-262
-1,6030.7%(0.2%)(4.0%)-0.6%

R&D expenses

98,781(85,315)(13,466)
83,501
44,83523,762
14,903Operating income

15,28015.5%

16,500

16.6%

1,220

8.0%

Pharmaceuticals
Functional Food

Operating expenses
Cost of sales
SG&A expenses

20Consolidated Statements of Income(Forecast) (2)（Million yen）

FY2016
ResultsRatio

FY2017

YoY Change

ForecastRatio

Amt%

Operating income

15,28015.5%

16,50016.6%

1,220

8.0%

Non-operating income

1,587

1.6%

1,000

1.0%

-587

-37.0%

Non-operating expenses

623

0.7%

500

0.5%

-123

-19.8%

16,24416.4%

17,000

17.1%

756

4.7%

Extraordinary loss

766

0.8%

---766-

Income taxes, etc

3,727

3.7%

4,500

4.5%

773

20.7%

Net income attributableto owners of the parent

11,74911.9%12,500

12.6%

751

6.4%

Ordinary income

21Dividends Forecast
FY2016FY2017

Interim¥18¥25

Year-end¥30¥25

Annual

¥48¥50EPS¥174.42¥185.58

Dividends payout ratio

27.5 %

26.9 %

Dividends per share

22

Capital Investment Plan
Capital investment and Depreciation（Million yen）

FY2016
Results

FY2017
Forecast

Amt Chg

3,949
2,648

3,150
2,900-799
252

Capital investment
Depreciation

Breakdown of Capital investment<NIPPON SHINYAKU CO.,LTD.>
Production（Manufacturing facility forhighly active medicines）
R&D
Others<Consolidated subsidiary>
Total capital investment（Million yen）

FY2016
Results

FY2017
Forecast

Amt Chg

3,906
2,324

3,000
1,950-906-374(1,874)(1,300)(-574)

726
855

650
400-76-45542150108

3,949

3,150-799
23

Status of Development Pipeline

R&D Compounds (Domestic)
Code No.
(Generic name)<Origin>NS-304(selexipag)<in-house>
GA101(obinutuzumab)<in-license>
NS-065/NCNP-01<in-house>
NS-580<in-house>
NS-32<in-license>
NS-917<in-license>
NS-73<in-license>
NS-87<in-license>

Application
typeIndications

Stage

Chronic thromboembolic
pulmonary hypertension

PIII

Arteriosclerosis
obliterans

PII

Indolent non-Hodgkin's
lymphoma

PIII

NME

Duchenne muscular
dystrophy

PI/IINME

Endometriosis

PINME

Iron deficiency anemia

PI

NME

Relapsed/refractory
acute myeloid leukemia

Preparation fordevelopment

NME

Veno-occlusive disease

Preparation fordevelopment

NME

Secondary acutemyeloid leukemia

Preparation fordevelopment

NME

NME

FY2015FY2016PII

FY2017FY2018

PIII

PII
PIII

NDA Filing

PI/IIPIPI

25

R&D Compounds (Overseas)
Code No.
<Origin>Application
type

Indications

Stage
China

prulifloxacin<in-house>

NME

NS-065/NCNP-01<in-house>

NME

Duchenne muscular
dystrophy

USA
PII

NS-018<in-house>

NME

Myelofibrosis

USA
PI/II

Bacterial infections

Preparation

FY2015FY2016FY2017FY2018

Lee's Pharma
NDA Filingfor NDA

PIIPI/II26

NS-304 (Selexipag)- Treatment for pulmonary hypertension and arteriosclerosis obliterans -Development Phase<CTEPH> Japan: PIII
<ASO>
Japan: PIIbOrigin

Nippon Shinyaku

Development

・[Apr. 2008] Licensed-out to (outside Japan):
Actelion Pharmaceuticals Ltd.(Switzerland)
・Co-development in Japan:
Actelion Pharmaceuticals Japan Ltd.(CTEPH)
・Nippon Shinyaku (ASO)

Mechanism of action

Selective IP receptor agonist

Indication

・Chronic thromboembolic pulmonary hypertension (CTEPH)
・Arteriosclerosis obliterans (ASO)

Dosage formTabletFeature

Long-acting oral drug27

GA101 (Obinutuzumab)- Treatment for non-Hodgkin’s lymphoma -Development Phase

・Overseas: PIII (Multinational studies, Roche)
・Japan: PIII (Multinational studies)

Origin［Nov. 2012］
Licensed-in from: Chugai Pharmaceutical Co., Ltd.

Development

Co-development in Japan: Chugai Pharmaceutical Co., Ltd.

Mechanism of action

Anti-CD20 monoclonal antibody

Indication

Indolent non-Hodgkin’s lymphoma

Dosage formInjection

FeatureAnti-CD20 monoclonal antibody, increased antibody-dependent
cellular cytotoxicity (ADCC) activity and direct cytotoxicity
28NS-065/NCNP-01- Treatment for Duchenne muscular dystrophy -Development Phase

・USA : PII
・Japan: PI/IIOrigin

Nippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

Exon 53 SkippingIndication

Duchenne muscular dystrophy

Dosage form

Injection

Feature・Improvement in symptoms and prevention of the diseaseprogression by recovery of dystrophin protein expression・Morpholino based oligonucleotide with possible high safety profileand maximized activity29

NS-580- Treatment for endometriosis -Development Phase

Japan: PIOrigin

Nippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

Inhibition of membrane-associated prostaglandin E syntase-1

Indication

Endometriosis

Dosage form

Oral agent

FeatureTreatment for endometriosis without hormonal effect and withpossible analgesic potency

30NS-32- Treatment for iron deficiency anemia Development Phase

Japan: PIOrigin[Dec. 2016]
Licensed-in from: Pharmacosmos A/SDevelopment

Nippon Shinyaku

Mechanism of action

Strongly bound Iron Carbohydrate complex enabling ironcorrection in a single or low number of visits

Indication

Iron deficiency anemia

Dosage form

Injection

Feature・Allows high iron doses to be given with a good safety profile
・Minimal potential toxicity from release of labile iron due to tightiron binding in a matrix structure of interchanging isomaltosideand iron・Low immunogenic potential based on the short and linear
oligosaccharide, isomaltoside・No profound hypophosphatemia31NS-917- Treatment for relapsed or refractory acute myeloid leukemia -Development Phase

Japan: Preparation for Clinical Development

Origin[Mar. 2017]
Licensed-in from: Delta-Fly Pharma

Development

Nippon Shinyaku

Mechanism of action

DNA strand-break by incorporating itself into DNAIndicationRelapsed or refractory (r/r) acute myeloid leukemia (AML)

Dosage form

Injection

Feature・Significant anti-leukemic activity with unique mechanism ofaction from other nucleoside analogs at low dose continuous
infusion・Tolerable safety profile available to elderly patients with r/r
AML32

NS-73- Treatment of hepatic veno-occlusive disease -Development Phase

Japan: Preparation for Clinical Development

Origin[Mar. 2017]
Licensed-in from : Jazz Pharmaceuticals

Development

Nippon Shinyaku in Japan

Mechanism of action

Protective action on vascular endothelium, normalization ofthe coagulation/fibrinolysis balance

Indication

Hepatic veno-occlusive disease (VOD)

Dosage form

Injection

Feature･VOD is a life-threatening complication which develops inpatients following HSCT, and in severe cases, leading todeath at high rates.
･NS-73 is the first therapy which improves the survival rate of
VOD patients. It has been launched in 31 countries.
33

NS-87- Treatment of secondary acute myeloid leukemia -Development Phase

Japan: Preparation for Clinical Development

Origin[Mar. 2017]
Licensed-in from : Jazz Pharmaceuticals

Development

Nippon Shinyaku in JapanMechanism of action

Liposomal combination of cytrabine and daunorubicin

Indication

Secondary acute myeloid leukemia (secondary AML)

Dosage form

Injection

Feature・NS-87 is the first therapy for the treatment of secondary
AML in Japan.
・The enhancement of antitumor activity and reducing adverse
events are expected by NS-87 accumulated in bone marrow.

34

Prulifloxacin- Quinolone antibacterial Japan
Licensee・Meiji Seika Pharma Co., Ltd.

Development phase・Launch (Dec. 2002) / Sword® Tablets

Overseas
LicenseeDevelopment phase

・Angelini (Italy)・Approval (Sep. 2004)
・Launch in Italy (Nov. 2004)
・Approval in European countries (Apr. 2005)

・Lee’s Pharmaceutical Holdings Ltd. (Hong Kong)

・Preparation for NDA

・Algorithm (Lebanon)

・Launch in Lebanon (Jan. 2012)
・Preparation for launch in 1 country and
NDA filing in 5 countries35NS-018- Treatment for myelofibrosis -Development Phase

Overseas (USA): PI/II

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

JAK2 inhibitor

Indication

Myelofibrosis

Dosage form

TabletFeature

・Highly selective for active form of JAK2
・Possibly best-in-class treatment for myelofibrosis

36Safe Harbor Statement• Materials and information provided during this presentation may contain so-called “forward-lookingstatements.” These statements are based on current expectations, forecasts and assumptions thatare subject to risks and uncertainties which could causeactual outcomes and results to differ materiallyfrom these statements.
• Risks and uncertainties include general industry and market conditions, and general domestic andinternational economic conditions such as interest rate and currency exchange fluctuations. Risks anduncertainties particularly apply with respect to product-related forward-looking statements. Product risks
and uncertainties include, but are not limited to, technological advances and patents attained bycompetitors; challenges inherent in new product development, including completion or failure of clinical
trials; claims and concerns about product safety and efficacy; regulatory agency’s examination, obtaining
regulatory approvals; domestic and foreign social security reforms; trends toward 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 and uncertainties, whichinclude, but are not limited to, inability to build production capacity to meet demand, unavailability of raw
materials, and competition with others.
• 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 theJapanese version shall prevail.