Midterm Business Plan for 2020-2022“REVOLUTION”
May 18 th, 2020
JCR Pharmaceuticals Co., Ltd.

Toru Ashida, Senior Executive Director,
Executive Director, Sales Division,
In charge of Corporate Strategy

Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

FORWARD-LOOKING STATEMENT
This presentation contains forward-looking statements that are subject
to a number of risks and uncertainties, many of which are outside ourcontrol. All forward-looking statements regarding our plans, outlook,strategy and future performance are based on judgments derived fromthe information available to us at this time.
All forward-looking statements speak only as of the date of thispresentation.
Except as required by law, we assume no obligation to update theseforward-looking statements publicly or to update the factors that could
cause actual results to differ materially, even if new information
becomes available in the future.
This document is not intended to guarantee and advertise the efficacyof the product under development.
The progress of clinical development may be affected by the pandemicof novel coronavirus infection (COVID-19) in the future .
1Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

Contents
General Overview of “HIYAKU”(Previous Business Plan for FY2015-FY2019)
Mid- to Long-Term Management Vision “Toward 2030”–––––––Corporate Philosophy
Mid- to Long-Term Management Vision
Core Values
History of Growth and Characteristics of Our R&D
Potential of Our Basic Technology
R&D Direction
R&D Timeline

Midterm Business Plan for FY2020-FY2022 “REVOLUTION”––––Keyword
Important Business Challenges
Guidance for 2022
JCR’s Sustainability
2Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

General Overview of “HIYAKU”(Previous Business Plan for FY2015-FY2019)3

Achievements during Previous Business Plan
FY2015• Feasibility Study Agreement with Sumitomo
Dainippon Pharma and Eisai for J-Brain Cargo®
• Application for Marketing Authorization ofGROWJECT® Liquid Formulation• Office nursery “JCR Kids Land”

FY2016• CTMC/CPC Completed• Initiation of Darbepoetin Alfa BS Injection JCR PIII trial in Japan• Approval and Launch of GROWJECT® Liquid Formulation• Initiation of JR-141 PI/II trial in Japan

FY2017• Development Agreement with Teijin for JTR-161/JR161 in Japan• Business and Capital Alliance with MEDIPAL HOLDINGS• Application for Marketing Authorization of Agalsidase
Beta BS I.V. Infusion in Japan• Research Agreement with Nanocarrier

FY2018• Initiation of Second Clinical Trial Material• Approval and Launch of Agalsidase Beta
Manufacturing Center Construction
BS I.V. Infusion in Japan• Initiation of GROWJECT® PIII trial for SHOX • Application for Marketing Authorization ofdeficiency in Japan
Darbepoetin Alfa BS Injection JCR in Japan• Initiation of PIII trial in Japan and PII trial in • Application for Marketing Authorization ofBrazil for JR-141
TEMCELL® HS inj. for Epidermolysis• Orphan designation for JR-141 in US and EU
Bellosa in Japan

FY2019• Initiation of JR-142 PI trial in Japan• Creation of constrained peptide withPeptiDream• Initiation of TEMCELL® HS inj. PI/II trial in
Japan for neonatal hypoxic ischemic
encephalopathy

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• Approval and Launch of TEMCELL® HS inj.
• Research agreement with PeptiDream• MoU with the Grand Duchy of Luxemburg on Leasingof industrial site
• License Agreement for J-Brain Cargo® withSumitomo Dainippon Pharma• Foundation of JCR USA• Designation of JR-141 under “Sakigake”• Expansion for Research Facilities• Approval and Launch of Darbepoetin
Alfa BS Injection JCR in Japan• Agreement of an acquisitionof Armagen, Inc.

4

Achievements during Previous Business Plan

FY2015 to FY2019

Sales： ¥17.4 bil to ¥24.7 bil

Operating income： ¥2.15 bil to ¥3.24 bil

Operating income to sales ： 12.3%

to 13.1%

5Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

Achievements during Previous Business Plan

2019

Num. Employees(Non-consolidated)
654

41.4

Duration ofService8.9

2018

613

41.4

8.8

¥8.3 mil

2017

540

41.6

9.0¥8.2 mil

2016

522

41.4

8.6

¥8.1 mil

2015

487

41.1

8.3

¥8.1 mil

FY

Avg. Age

Avg. Annual Salary¥8.3 milAs of Mar. 31,2019
No. of Employees ： 654
Avg. age： 41.4
Avg. salary： ¥8.3 mil
As of Mar. 31, 2016

No. of Employees ： 487
Avg. age： 41.1
Avg. salary： ¥8.1 mil

Transition of Stock Price

All-time high：¥11,060（Feb. 21th, 2020）

12000

10000

As of Mar. 31, 2019
Close：¥9,420
Market Cap. ：¥305.4 bil

8000

6000

4000

As of Apr. 1, 2015
Close：¥2,480
Market Cap. ：¥80.4 bil

All-time low：¥1,801（Feb. 12th, 2016）

2000

0
2015/4/1

6
2016/4/1

2017/4/1

Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

2018/4/1

2019/4/1

General Overview of Previous Business Plan

JCR achieved substantial results for the next stage
during “HIYAKU” with “Speed First” spirit.
– Approval and launch of TEMCELL® HS inj. ,GROWJECT® liquid formulation,
Agalsidase beta BS I.V. infusion and Darbepoetin alfa BS injection– On-track progress of JR-141 PI/II trial in Japan and PII trial in Brazil– PII trial in Brazil, the first global development for JCR, successfully initiated withthe support of the patient advocacy group and medical experts– Acquisition 100% ownership of ArmaGen Inc. to fortify the lysosomal enzyme
replacement therapy (ERT) franchise– Construction of CTMC (Clinical Trial Material Center) and its annex, CTMC2,for lysosomal drug candidates– Construction of CPC (Cell Processing Center) for DPC (Dental Pulp Cell)regenerative medicine candidate

To strengthen licensing activities for rare diseasebusiness to maximize corporate value
7Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

Sustainability
Through our business activities centered on the field of pediatric rarediseases, we will strive to “contribute to unmet medical needs” andenhance activities related to “Rare Diseases: RD, ESG”.
Initiatives

Rare Diseases (RD)Conduct awareness-raising activities
as a company promoting researchand development of orphan drugs.

Society (S)Maintain a comfortable working environmentand conduct initiatives aimed at society.

Courtesy of the Mothers’ and Children’s Health and Welfare Association

Launched the "RARE DISEASE" project, with
“What JCR can do” as its motto, promoteawareness-raising activities and initiatives
for Rare Disease Day.

To contribute to addressing the unmet medical needs ofpatients all over the world, we support the GLOBAL
FOUNDATION FOR LIFE SCIENCE (a non-profit foundation inSwitzerland), the Mother and Child Health Encouragement
Award, and Momiji House (a short-term residential facility
for severely ill children and their families).

Environment (E)Corporate Governance (G)Implemented efforts to reduce
the environmental impact ofbusiness activities.

Establish and operate a system tomaintain legality, transparency andobjectivity of management.

Contribution
Promote the “Realizing medical care for those living with rare diseases”
through our business8Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

Mid-to Long-Term Management Vision“Toward 2030”

Research-Oriented
Specialty Pharma
with
Global ExposureCore Value“Team JCR”

9Corporate Philosophy
JCR is committed to challenging rare diseases by uniting our R&D andmanufacturing capabilities to contribute to the patients and children
around the医薬品を通して人々の健康に貢献するworld.

Contributing towards people’s healthcare
through pharmaceutical products
Reliability

Confidence

BeliefWe strive to establish a reliable company
for all stakeholders by actions with highsense or duty in addition to compliance.

We take a unique approach inadvancing our research anddevelopment and provide high-quality
products and information withconfidence in the aim of providing worldclass pharmaceuticals.

We aim for further corporate growth in
the belief of “Think by oneself,act by oneself”
under the basic philosophy.

10
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Mid-to Long-Term Management Vision ”Toward 2030”
Our Goal

Research-oriented specialty pharma with global exposure
Corporate Image in Detail◎Global specialty pharma in the rare disease arena◎Continuing challenges to create “one step beyond” technologies basedon our unique technology platform such as J-Brain Cargo®
◎Continuing challenges to keep on creating new values with “R&D” and“Manufacturing”◎Continuing challenges with stalwart faith to contribute to rare diseases
Basic Strategy◎Focus on “R&D” and “Manufacturing” with the foundation spirit of◎“Team JCR” as our source of values◎Cultivate human resources with “Team JCR” spirit so that they can◎flourish in each section◎Secure three pillars of business: Revenue from domestic products,◎Revenue from global market of ERT for lysosomal storage disease◎products and Revenue from licensing of our technologies
Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

11

Core Values“Team JCR” is our source of values.
JCR’s growth has been driven by “R&D” and “Manufacturing” capabilities.
Each and every person who has been inspired by JCR’s philosophy has
founded a robust business platform and created its various cutting-edge
technologies including J-Brain Cargo® which is now the cornerstone of its
forthcoming global business.
JCR, with sturdy certitude that its source of value is “Team JCR”, will
promote its corporate culture in our global business era, will accelerateinnovation by focusing on “R&D” and “Manufacturing”, and will contributeto rare diseases by creating new added value.
JCR, in principle, will not deploy its subsidiary for marketing products
abroad, but will focus its resources on “R&D” and “Manufacturing”
promoting its corporate culture, “Team JCR”.
JCR will value collaborations with other companies whose cultures are intune with ours based on the certitude that mid-to long-term steady growthis coming from “Team JCR” spirit.

JCR, looking ahead to its globalization in the near future, will promote its“Team JCR” culture, will consolidate its robust management foundation
which can make audacious and appropriate decisions in due time and will
pursue steady growth in the growing uncertainty of the pharma business.
Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

11

History of Growth History and Characteristics of Our “R&D”
Purification technology cultivated since JCR's foundation, growth hormone businessentered since 1985, and recombinant DNA and regenerative medical technologies
engaged since 2000 contributed to the steady growth of JCR to date.
From genetic recombination technology

From human-derived material

・Epoetin Alfa BS inj. ”JCR” (2010)
・Agalsidase Beta BS infujion. “JCR” (2018)
・Darbepoetin Alfa BS inj. “JCR” (2019)
・J-Brain Cargo® applied candidates including JR-141

・Urokinase/Ulinastatin (urine)・Epidermal Growth Factor (urine)・Interferon (blood)・Kallidinogenase (urine)・Fibronectin (blood)・Thrombomodulin (urine)

From regenerative technology
・TEMCELL ® HS inj. (2016)
・JTR-161/JR-161
・Gene therapy technology
2013
Kobe API Plant

2010
Kobe Annex Plant

10 billion yen

1986
Seishin Plant

1992
Research Center

2008
Murotani Plant

2000
Kobe Plant

Sales trajectory form foundation
1975

1980

1985

1990

1995

2000

Purification tech.

¥24.7 bil（FY2019）

2005

2010

2015

Cell construction fermentation tech.
Foray to regenerative area 12Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

JCR’s “R&D”

Steady R&D activity with robust business base from growth hormone revenue (since 1993) .

Purification technology as our fundamental technology starting from urokinase business,
cultivated through over 20 years of R&D using human-derived materials such as urine andblood.
Recombination DNA technology since the early 2000s when JCR shifted to the area of its
R&D focus. Our first product was the first domestic biosimilar in Japan, Epoetin Alfa BS
launched in 2010.
JCR has been engaging in the development of drugs for lysosomal storage diseases fromearly 2000s.
Mesenchymal stem cell research since 2003. Our first product was the first allogenic cell
product in the world, TEMCELL® HS, launched in 2016.
JCR has been engaging in the development of dental pulp cells for acute cerebral infarction.
Cutting-edge technologies J-Brain Cargo®, Modified albumin-based long-acting technology,J-Mig (High Expression system), and J-Glyco S/M (Glycosylation technology) resulting fromthorough and repeated hypothesis verification.

14Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

JCR’s Potential -J-Brain Cargo®Effective drugs are desired for lysosomal storage diseases,a group of ultra-rare diseases.
With the development of our drug candidates utilizing JCR’s
proprietary Blood Brain Barrier (BBB)-penetrating technology,
JCR expects potential expansion of market penetration.
Estimated number of patients and size of market for five lysosomal storage diseases
Indication

Number of patients※1

Market size※2

JapanWorldJapan (2019)

World (2019)MPS II (Hunter)

250

7,800

¥7.6 bil¥87.0 bil

Pompe

80

10,600¥3.0 bil¥110.0 bil

MPS I (Hurler/Hurler Scheie/Scheie)

60

3,600

¥1.6 bil¥28.0 bil

60

6,890

——

MPS IIIA (Sanfilippo A)

MPS IIIB (Sanfilippo B)※1 Calculated internally based on the date from MHLWCopyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

※2 Actual sales of existing ERT and data from Evaluate Pharma and IQVIA

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R&D Direction
Our current antibody-based J-Brain Cargo® technology is more amenable
to target proteins rather than small molecules and nucleic acids.
JCR is now investigating new modalities to enable those moieties topenetrate BBB by expanding the technological possibilities of J-BrainCargo®, a transferrin receptor mediated drug delivery system.
JCR seeks to create next generation of J-Brain Cargo® technologies
through combination with other in-house technologies as well as throughjoint research with partners for constrained peptides and nanomicelles.
JCR is also now investigating the possibility of gene therapy technology.
Our R&D activities may lead to creation of new treatment options toaddress, for example, central nervous system diseases caused by a lackof essential molecules or genetic mutations.
In the area of regenerative medicine, JCR is taking on the challenges increating new treatment options for unmet medical needs leveraging ourunique stem cell and recombinant DNA technologies.

16
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R&D Target Timeline
JCR is taking on challenges to create and deliver first-in-classdrugs from Japan with our proprietary technologies.

＊Only in-house R&D activities are listed.
Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

17

Midterm Business Plan for 2020-2022“REVOLUTION”

18

Keyword

By uniting our “Team JCR” capabilities,
JCR will pursue our “REVOLUTION” inquality and quantity for business toward 2030.

19
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“REVOLUTION”：Important Business Challenges
JCR will be addressing the 6 important business challenges
below in anticipation of our full-fledged globalization.
Top priority business challenge
in anticipation of growing presence of JCR in the rare disease area

[1]

Qualitative and quantitative reorganizationof the quality assurance system

Furthermore, JCR accelerates agendas listed below as important businesschallenges in anticipation of a rapid expansion of business in the late 2020s.
[2]

[3]
[4]

[5]
[6]

For strengthening our foundation for profits:

Action for sustainable growth of the sales of our products
Exploring new therapeutic targets in addition to lysosomal storage diseases:

Expansion of basic research activities
For full-fledged globalization in the near future:

Evaluation and implementation of further capital investment for
manufacturing and research
For maximizing business values in the lysosomal storage disease area:

Product strategy planning including evidence generation
For our full-fledged globalization:

Transformation of operations and organizations along withhuman resource development

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20REVOLUTION：GUIDANCE
Sales and Operating income in FY2022

Sales: ¥32〜36 billion

Operating income : ¥7〜10 billion(To target steady growth with year-to-year rise)
R&D expenditures

Around 20% of sales(Beyond 20% could be allocated, if required)
Dividend Ratio

Around 30%(Under a stable dividend policy, weighing ananticipation of our stockholders and the balance offinancial soundness)
21
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JCR’s Sustainability：Basic Policy during “REVOLUTION”
JCR will commit to development of a sustainable society throughour corporate philosophy, “Contributing towards people’s healthcare
through pharmaceutical products”.

Basis forRealizing medical care for those living with rare diseases
value creation
Basic Policy for Our Sustainability

JCR will commit to realization of sustainability in tune with the spirit“No one will be left behind” mentioned in the SDGs (SustainableDevelopment Goals) through our activities to address thesechallenges and to share and return the achievements to ourstakeholders focusing on “Rare Diseases”, “Environment“,“Society” and “Corporate Governance”.
22Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

JCR’s Sustainability：Efforts during “REVOLUTION”
JCR will commit to expansion of sustainability efforts in quality and quantity
in order to become a global specialty pharma company in the rare disease arena.
TargetRealization of sustainability through activities based on RD・E・S・G

Direction

Rare Diseases

RDContribution
through our business•••

Expansion of basic research for the treatments forrare diseases
Activities to gain recognition for rare diseases
Internal enlightenment activities for rare diseases

Unite the capabilities of “Team JCR” for the “REVOLUTION” of our business in quality and quantity

Acceleration of “Realizing medical care for those living with rare diseases”

23Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

JCR’s Sustainability：Efforts during “REVOLUTION”
JCR will commit to expansion of sustainability efforts in quality and quantity
in order to become a global specialty pharma company in the rare disease arena.
TargetRealization of sustainability through activities based on RD・E・S・G

DirectionESGContribution
through our businessEnvironment•Activities rooted in the community to reduce environmental burdenSociety• Improvement of work environment and cultivation of human resources for“Team JCR”
• Support for rare pediatric diseases and healthcare

Corporate Governance• Enforcement of the system for “stable supply” in anticipation of globalization• Enforcement of a management system which can make audacious andappropriate decisions• Implementation of risk management
Unite the capabilities of “Team JCR” for the “REVOLUTION” of our business in quality and quantity

Acceleration of “Realizing medical care for those living with rare diseases”

24Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.

Copyright © 2020 JCR Pharmaceuticals Co., Ltd. All rights reserved.