Outline of Consolidated Financial Results
for the 2nd Quarter Ended September 30, 2014NIPPON SHINYAKU CO., LTD.

FY2014 2Q SummaryNet Sales• 36,470 Million yen （YonY Change＋2.5％）

売上高incomeOperating• 2,033 Million yen （YonY Change -34.5％）

Ordinaryincome
営業利益• 2,272 Million yen （YonY Change -29.4％）

Net income• 1,440 Million yen （YonY Change -32.9％）

Topics◆Launch Zalutia for urinary disorder caused by benign prostatic hyperplasia (Apr.)◆ACT-064992(Macitentan)・・・Application by Actelion Pharmaceuticals Japan (May)◆NS-304・・・Overseas : Meets Primary Endpoint in PⅢ (Jun.)◆NS-304・・・Overseas : Preparation for NDA by Actelion Pharmaceuticals Ltd.
◆NS-304・・・Japan: Orphan drug designation by MHLW (Sep.)◆NS-24・・・Application (Jun.)◆Announcement of 5th Five-Year Medium-term-Management Plan “Aiming for New◆Growth-Pursuit of Originality-” (Aug.)2

Segmental Review－ Pharmaceuticals －（Million yen）

2QFY2013
Results

Ethical drugs

2QFY2014

Ratio

Results

Ratio

YoY Change
Amt%

28,56098.3%

29,011

98.5%

451

1.6%

Revenues from the licensingof industrial property rights

230.1%

640.2%

40

172.6%

Prulifloxacin

370

1.3%

364

1.2%

-5-1.5%Contract manufacturingbusiness

105

0.3%

130.1%-92-87.4%

29,060100.0%

29,454100.0%

393

1.4%

Net sales

Increase in sales：

Decrease in sales：・ Tramal ( +715 million yen, +162.1% )・ Hypen ( -495million yen, -32.0% )（ non-steroidal analgesic andanti-inflammatory agent ）（ cancer pain,chronic pain)

・ Vidaza ( +438 million yen, +9.5% )（ myelodysplastic syndromes )・ GaslonN ( -479 million yen, -19.8% )New Product：・ Zalutia ( +753 million yen )・ Selectol ( -260 million yen, -27.7% )（ urinary disorder caused by benign
prostatic hyperplasia)（ gastric ulcer, gastritis)（ hypertension,angina pectoris）

etc
etc.

.

3

New Products Review－ Pharmaceuticals －◆Sales Growth of New Products Group
NewProducts

FY2013 2Q

FY2014 2Q

Y on Y
ChangeSales of Ethical Drugs

Vidaza

4,610

5,048

+9.5%

28,560

Lunabell

2,735

2,999

+9.7%
(Million Yen）

Cialis

1,917

1,737

29,011+22.0%-9.4%
30,000AdcircaTramal
Zalutia

1,311

1,440+9.9%441

1,156+162.1%

－753

－

25,00011,37913,881

20,000
New Products
15,000

Others
17,181

15,130FY2013 2Q

FY2014 2Q

10,000Erizas209399+90.5%

Regtect

154345+123.7%

Total

11,37913,8815,000
0+22.0%4

Segmental Review－ Pharmaceuticals －30,000（Million yen）

Net sales 29,454 million yen
29,060Year-on-Year change

29,454+ 393 million yen ( +1.4% )02Q FY2013

2Q FY2014
5Segmental Review－ Functional Food －（Million yen）

2QFY2013
Results

2QFY2014

RatioResults

Ratio

YoY Change
Amt%

Health food ingredients

446

6.8%

352

5.0%

-93-20.9%

Preservatives

833

12.8%

916

13.1%

82

9.9%

Nutritional ingredients

967

14.8%

1,155

16.5%

187

19.4%

Protein preparations

3,569

54.6%

3,836

54.7%

267

7.5%

Others

715

11.0%

754

10.7%

39

5.5%

Net sales

6,532

100.0%

7,015

100.0%

483

7.4%

6

Segmental Review－ Functional Food －10,000（Million yen）

Net sales 7,015 million yen
Year-on-Year change
6,532+ 483 million yen ( +7.4% )7,015

02Q FY2013

2Q FY2014
7Net Sales
50,000(Million yen)

Net sales 36,470 million yen
Year-on-Year change+ 877 million yen ( +2.5% )35,59336,470

6,532

7,015

29,06029,4540
2Q FY2013

2Q FY2014

Functional Food
Pharmaceuticals
8Consolidated Statements of Income ①（Million yen）

2QFY2013
Results
Ratio
Revenue
Net sales

2QFY2014
Results
Ratio

YoY Change
Amt%35,593100.0%

36,470100.0%

877

2.5%

Pharmaceuticals

29,06081.6%

29,454

80.8%

393

1.4%

Functional Food

6,532

18.4%

7,015

19.2%

483

7.4%

Operating expenses

32,486

91.3%

34,436

94.4%

1,949

6.0%

Cost of sales

18,26851.3%

19,529

53.5%

1,261

SG&A expenses

9,686

27.3%

10,663

29.3%

977

R&D expenses

4,532

12.7%

4,243

11.6%

-288

Operating income

3,106

8.7%

2,033

5.6%

-1,072-34.5%

9

Consolidated Statements of Income ②（Million yen）

2QFY2013
Results
Ratio
Operating income

2QFY2014
Results
Ratio

YoY Change
Amt%

3,106

8.7%

2,033

5.6%

-1,072-34.5%

402

1.1%

442

1.2%

39

9.9%

287

0.8%

203

0.6%

-84-29.2%

Ordinary income

3,220

9.0%

2,272

6.2%

-948

-29.4%

Income taxes, etc

1,075

3.0%

831

2.3%

-243

-22.6%Net income

2,145

6.0%

1,440

4.0%

-705

-32.9%

Non-operating
incomeNon-operating
expenses10

Consolidated Balance Sheet（Million yen）
YoY
FY2014
ChangeFY2013

FY2014

YoY
ChangeFY2013

4Q
Results

2Q
Results

Amt

4Q
Results

2Q
Results

Assets118,188

118,342

154

Liabilities

25,00223,801-1,200(Current assets)

74,68372,568-2,115(Current liabilities)

15,257

13,877-1,380(Fixed assets)43,504

45,774

2,269(Long-termliabilities)

9,744

9,924

179

Net assets

93,186

94,541

1,354

Total liabilities andnet assets

118,188

118,342

154

Total Assets

118,188

118,342

154

Amt11

Consolidated Statements of Cash Flows（Million yen）

2QFY2013

2QFY2014

YoY Change

Results

Results

Amt

Operating activities

6,364

1,690

-4,673

Investing activities-2,468-2,367

100

Financing activities-801-893-91

23,206

19,647-3,559Cash and cash equivalents
at end of quarter

Cash and cash equivalents at end of quarter : -1,582 Million yen (YonY FY2013)

12Capital Investment（Million yen）

Capital Investment and Depreciation

Capital investment
Depreciation

2QResults
FY2013
FY20146608081,261
1,294

Amt Chg14733（Million yen）

Breakdown of Capital Investment
FY2013

2QResults
FY2014

Amt Chg<NIPPON SHINYAKU CO.,LTD.>
Production
R&D
Others623
38454
130762381
316
64139343-137-66<Sioe Pharmaceutical Co.,Ltd.>

198-11<Tajima Shokuhin Kogyo Co.,Ltd.>

173720Total capital investment

660808147

13

Business Forecast for FY2014（Million yen）

FY2013ResultsRatioFY2014
Forecast Ratio

YoY ChangeAmt%

Net sales

76,517100.0%

81,000100.0%

4,483

5.9%

Operating income

8,038

10.5%

8,500

10.5%

462

5.7%

Ordinary income

8,598

11.2%

8,700

10.7%

102

1.2%

Net income

5,750

7.5%

6,000

7.4%

250

4.3%

14

Segmental Forecast－ Pharmaceuticals －70,000（Million yen）

Net sales 67,600 million yen
67,600Year-on-Year change

63,345+4,255 million yen ( +6.7% )0FY2013
Results

FY2014
Forecast15Segmental Forecast－ Pharmaceuticals －（Million yen）

FY2014FY2013Results

Ethical drugsRatio

Forecast

YoY Change

Ratio

Amt%

62,18598.2%

64,420

95.3%

2,235

3.6%

Revenues from the licensingof industrial property rights

50

0.1%

2,200

3.2%

2,150

4272.7%

Prulifloxacin

861

1.3%

800

1.2%

-61

- 7.1%

Contract manufacturing business

248

0.4%

180

0.3%

-68

- 27.5%63,345100.0%

67,600100.0%

4,255

6.7%

Net sales

16Segmental Forecast－ Functional Food －20,000（Million yen）

Net sales 13,400 million yen
13,172Year-on-Year change

13,400+ 228 million yen ( +1.7% )0FY2013
ResultsFY2014
Forecast
17

Segmental Forecast－ Functional Food －（Million yen）

FY2013Results

Health food ingredients

FY2014

Ratio

Forecast

YoY Change

Ratio

Amt%

855

6.5%

920

6.9%

65

7.6%

Preservatives

1,764

13.4%

1,800

13.4%

36

2.0%

Nutritional ingredients

2,032

15.4%

2,050

15.3%

180.8%

Protein preparations

7,126

54.1%

7,200

53.7%

74

1.0%

Others

1,393

10.6%

1,430

10.7%

372.7%Net sales

13,172100.0%

13,400100.0%

228

1.7%

18

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

FY2013ResultsRatio
Revenue
Net sales

FY2014
ForecastRatio

YoY Change
Amt%

76,517100.0%

81,000100.0%

4,483

5.9%

Pharmaceuticals

63,345

82.8%

67,600

83.5%

4,255

6.7%

Functional Food

13,172
68,479

17.2%
89.5%

13,40072,500

16.5%
89.5%

228
4,021

1.7%
5.9%

SG&A expenses

39,033
19,914

51.0%
26.0%

41,70021,300

51.5%
26.3%

2,667
1,386

R&D expenses

9,530

12.5%

9,500

11.7%

Operating income

8,038

10.5%

8,500

10.5%

△ 30

Operating expenses
Cost of sales

462

5.7%

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

FY2013Results
Ratio

FY2014
Forecast

YoY Change

Ratio

Amt%

Operating income

8,038

10.5%

8,500

10.5%

462

5.7%

Non-operating income

1,019

1.3%

700

0.9%

-319

- 31.3%Non-operating expenses

460

0.6%

500

0.6%

40

8.6%

Ordinary income

8,598

11.2%

8,700

10.7%

102

1.2%

Income taxes, etc

2,847

3.7%

2,700

3.3%

-147

- 5.2%Net income

5,750

7.5%

6,000

7.4%

250

4.3%

20

Dividends Forecast

FY2013

FY2014

Interim¥11¥12Year-end¥12¥13Annual¥23¥25EPS¥85.25¥89.02

Dividends payout ratio

27.0 ％

28.1 ％

Dividends per share21Capital Investment Plan
Capital Investment and Depreciation（Million yen）

FY2013Results

FY2014
Forecast

Amt Chg

1,072
2,704

1,400
2,800

327
95

Capital investment
Depreciation

Breakdown of Capital Investment<NIPPON SHINYAKU CO.,LTD.>
Production
R&DOthers<Sioe Pharmaceutical Co.,Ltd.><Tajima Shokuhin Kogyo Co.,Ltd.>
Total capital investment（Million yen）

FY2013Results

FY2014
Forecast

Amt Chg

1,017
202661153

1,300480620200

282277-41
462232406017271,072

1,400327
22

Status of Development Pipeline

R&D Compounds(Domestic)
Code No.
(Generic name)<Origin>Application
typeACT-064992（macitentan）<in-license>

NME

NS-24
（tramadolhydrochloride）<in-license>

newformulation

GA101(obinutuzumab)<in-license>

NS-304（selexipag）<in-house>

NME

NME

Indications

Stagepulmonary arterial
hypertension

Application

cancer pain
chronic pain

Application

FY2012FY2013PⅢ

pulmonary arterial
hypertension

PⅡ

chronic thromboembolic
pulmonary hypertension

PⅡ

arteriosclerosis obliterans

PⅡ

FY2015NDA
FilingPⅢ

NDAFilingPⅢ

indolent non-Hodgkin's
lymphomaaggressive non-Hodgkin's
lymphoma

FY2014PⅢ
NDA
FilingPⅡ

PⅡ

PⅡ

24

R&D Compounds(Domestic)

Code No.
(Generic name)<Origin>Application
type

NS-141<in-house>

NME

pruritus associated withcutaneous disease

PⅡ

NS-986<in-license>

NME

nocturia

PⅡ

Indications

Stage

FY2012FY2013

FY2014FY2015PⅡ

PⅡ

25

R&D Compounds(Overseas)

Code No.
(Generic name)<Origin>Application
typeIndications

Stage

FY2012

pulmonary arterial
hypertension

US/EU
Preparation
for NDA

Actelion

NS-304（selexipag）<in-house>

NMEprulifloxacin<in-house>

NMEbacterial infections

China
PⅢ

NS-187（bafetinib）<in-house>

NME

B-cell chronic lymphocytic
leukemia

USPⅡ

NS-018<in-house>

NME

myelofibrosis

USPⅠ/Ⅱ

FY2013

PⅢ
Lee's Pharma PⅢ

FY2014FY2015NDA
FilingNDA
Filing

CytRx
PⅡ

PⅠ/Ⅱ

26

ACT-064992 (Macitentan)- Treatment for PAH Development phase・Overseas: Approval [ 2013, Europe and USA ]・Japan: Application ［May.2014 ］

Origin［Feb.2010］
Licensed-in from:Actelion Pharmaceuticals Ltd.(Switzerland)

Development

Co-development in Japan:
Actelion Pharmaceuticals Japan Ltd.

Indication

Pulmonary arterial hypertension

Mechanism of action

Tissue-specific dual endothelin receptor antagonist

Dosage form

TabletFeature

・Less hepatic toxicity
・Long-acting oral drug27

NS-24 (Tramadol)- Long-acting analgesic Development phase

Application [Jun.2014]

Origin［Mar.2010］
Licensed-in from:
Paladin Labs Inc. (Canada)(available in 17 countries in the world)

Development

Nippon shinyaku

Indication

・Cancer pain・Chronic pain

Dosage form

Sustained release tablet

Dosing regimen

Once a day

FeatureLong-acting analgesic with advantages of immediate releaseand sustained release28GA101 (Obinutuzumab)- Treatment for non-Hodgkin’s lymphoma -Develoment 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.

Indication

・Indolent non-Hodgkin’s lymphoma
・Aggressive non-Hodgkin’s lymphoma

Mechanism of action

Anti-CD20 monoclonal antibody

Dosage form

Injection

FeatureAnti-CD20 monoclonal antibody, increased antibody-dependent
cellular cytotoxicity (ADCC) activity and direct cytotoxicity
29

NS-304 (Selexipag)- Treatment for pulmonary hypertension Development phase・Overseas： Preparation for NDA
・Japan： PII

Origin・Nippon Shinyaku

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

Indication

・Pulmonary arterial hypertension
・Chronic thromboembolic pulmonary hypertension
・Arteriosclerosis obliteransDosage form

TabletMechanism of action

Selective PGI2 receptor agonistFeature

Long-acting oral drug
Orphan drug designation by EMA [Aug.2005]
Orphan drug designation by MHLW [Sep.2014]30

NS-141- Anti-pruritic drug -Development phase

Additional PII (exploratory study)

OriginNippon Shinyaku

Development

Nippon Shinyaku

Indication

Pruritus associated with cutaneous disease

Dosage form

Ointment

Feature・New mechanism of action (not antihistaminic)
・Effective against intractable pruritus which cannot betreated by existing treatments

31

NS-986- Treatment for nocturia Development phase

PII (exploratory study)

Origin［Mar.2013］
Licensed-in from:
Dainippon Sumitomo Pharma Co., Ltd.

Development

Nippon Shinyaku

Indication

NocturiaDosage form/ Dosing regimen

Tablet / Once a day

Mechanism of action

・Muscarinic receptor antagonist
・Na+ channel blocker

Feature・Rapid onset of effect・Improvement in nocturia refractory to existing
antimuscarinic drugs
32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)・ PIII (Jul. 2013)

・Algorithm (Lebanon)

・Launch in Lebanon (Jan. 2012)
・Preparation for NDA in 11 countries ofthe Middle East and North Africa
33

NS-187(Bafetinib)- Tyrosine kinase inhibitor Development phase

Overseas: PIIOrigin

Nippon Shinyaku

Development［Dec. 2005］
Licensed-out to (outside Japan):
CytRx Corporation (USA)

Indication

B-cell chronic lymphocytic leukemia

Dosage form

TabletMechanism of action

・Bcr-Abl tyrosine kinase inhibitor
・Lyn tyrosine kinase inhibitor

FeatureDual tyrosine kinase inhibitor34

NS-018- Treatment for myelofibrosis Development Phase

Overseas (USA): PI/IIOrigin

Nippon Shinyaku

Development

Nippon Shinyaku

Indication

Myelofibrosis

Dosage form

TabletMechanism of action

JAK2 tyrosine kinase inhibitor

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

35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 clinicaltrials; claims and concerns about product safety and efficacy; regulatory agency’s examination, obtaining
regulatory approvals; domestic and foreign social security reforms; trends toward healthcare costcontainment; and governmental laws and regulations affecting domestic and foreign operations.
• Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, which
include, 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.

36