Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2020
1. Overview of consolidated results
2. Highlights of Business Performance
3. Main Product Sales Update
4. Development pipeline
5. Segment information
6. Financial Results and Forecasts

February 5, 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 dueto various factors in the future.

Overview of Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2020（¥ million）

Dec/2016

Dec/2017

Dec/2018

Dec/2019

Y to Y change(%)

Mar/2020(forecast)

Y to Y change(%)

86,83682,92382,01778,614－4.1

109,400－3.7

Operating Income

7,313

7,805

6,794

5,271－22.4

6,500－27.6

Ordinary Income

7,716

8,246

7,124

5,836－18.1

7,100－24.8

Net Income

4,723

6,119

5,112

4,374－14.4

5,400－21.4

Net Sales

Third Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2020
[Net Sales] In new ethical drugs (Japan), results remained lower than a year ago due to effects from the suspended supply of Desalex and NHI drug
price revisions, despite the growth of the mainstay product Flutiform and Beova. Meanwhile, sales increased in generic drugs due to the salesof Mometasone Nasal (authorized generic [AG]), and sales increased in new ethical drugs (Overseas) . As a result net sales decreased 3,402
million yen (down 4.1%) from year on year, to 78,614 million yen.
[Profit]

Gross profit declined 1,737 million yen year on year due to a fall in net sales and effect of revision of NHI drug price. Selling, general andadministrative expenses decreased 215 million yen year on year (of which research and development expenses decreased 150 million yen).
Operating income was 5,271 million , down 1,522 million yen (down 22.4%) from year on year and Profit attributable to owners of parent was
4,374 million yen (down 14.4% year on year).

Consolidated Financial Results for the Fiscal Year Ending March 31, 2020 (forecast)
The results forecasts for the full year announced on November 7, 2019 remain unchanged.
(Progress compared with the forecast for the fiscal year ending March 31, 2020: net sales: 71.9%; operating income: 81.1%)
There is no change to the dividend forecast announced on May 13, 2019 (annual dividend of 75 yen per share).

1

Highlights of Business Performance( Units: ¥ billion )80
Net Sales decreased ¥3.4billion year on year

Cost of
Sales Ratio

70

47.8%

60

47.7%

Cost ofSales

30

82.0

78.4

7.7
SG&A

28.3

SG&A

36.1

6.8
Dec / 2018

6.8

SG&A expenses decreased ¥0.3billion year on year

R&D

7.6
SG&A
(excluding R&D)

28.3

OperatingIncome100■Gross Profit decreased ¥1.7billion year on year

Net Sales
R&D(excluding R&D)

20

・Increase by NHI drug price revisions
・Decrease by product mix

37.5

Net Sales
40

Cost of sales ratio decreased 0.1%

Cost ofSales

39.2

50

・Decrease of sales of new drugs in Japan(Effects from the suspended supply of Desalex)

Cost ofSales Ratio

・R & D expenses decreased ¥0.1billion
・SG&A(excluding R&D) remained flat

SG&A

35.8

■Operating Income decreased¥1.5billion year on year

Operating
Income5.3

5.3

Dec / 20192Consolidated Financial Results
for the Third Quarter ending March 31, 2020
（Year on Year）( unit : ¥ billion )Dec/2018

Dec/2019

ChangeNet Sales (total)

82.0

78.6

－3.4

Ethical drugs
Business

77.6

74.2

－3.4

◆Sales of new
ethical drugs

56.2

52.2

－4.0

●Japan55.5
0.6

51.0
1.2

－4.5
＋0.6

●Overseas■Net Sales◆Ethical drugs business●Sales of new ethical drugs in Japan¥78.6bln¥74.2bln¥51.0bln

19.3（3Q）

20.3（3Q）

・Flutiform・Desalex
・Kipres・Nasonex
・Uritos・Beova・Pentasa
・Mucodyne

9.8
4.8
10.0
4.1
5.1
0.7
10.5
5.1⇒
⇒⇒⇒⇒⇒⇒⇒●Sales of new ethical drugs in Overseas（－3.4）（－3.4）（－4.5）

10.8
0.8
8.6
3.8
4.6
2.2
10.3
4.5

（ ＋1.0）（ －4.0）（ －1.4）（ －0.3）（ －0.5）（ ＋1.5）（ －0.2）（ －0.6）¥1.2bln（＋0.6）¥22.0bln（＋0.6）

Increased the sales of Gatifloxacin●Sales of Generic drugs

The contribution to sales made by Mometasone Nasal (AG)◆Generic drugs

HealthcareBusiness

21.4
4.4

4.4＋0.60◆Healthcare Business¥4.4bln（■Operating Income¥5.3bln（－1.5）

0）◆Operating Income margin decreased 1.6 percentage points to 6.7%
●Cost of Sales Ratio : 47.8%⇒47.7% decreased 0.1 percentage points

Operating
Income6.8

Ordinary
Income7.1

Net
Income22.0

5.3－1.5[Increase] NHI drug price revisions, etc.
[Decrease]Product mix (Increase of Sales of Beova and Flutiform) ,etc.

●R&D Ratio : 9.4%⇒9.6% increased 0.2 percentage points

5.8－1.3＊¥7.7bln⇒¥7.6bln（¥－0.1bln）●SG&A Ratio （excluding R&D） : 34.5%⇒35.9% （＋1.4%）

5.1

4.4－0.7＊¥28.3bln⇒¥28.3bln（¥0bln）■Net Income¥4.4bln（－0.7）
3

Main Product Sales Update（Units: ¥billion）

Flutiform(Combination drug for asthma treatment)

Desalex(Antiallergic Agent)

Kipresfor adult(Leukotriene Receptor Antagonist)for children
Sales ofnew
ethicaldrugs(Japan)Nasonex（Spray type allergic rhinitis remedy）

Uritos（Kyorin）(Therapeutic agent for overactive bladder)

Beova（Kyorin）(β3 adrenergic receptor agonist overactive bladder therapeutics )Pentasa(Ulcerative colitis and Crohn’s disease treatment)

Mucodyne（Mucoregulant）

Montelukast Tablets “KM”
GenericDrugs（LT receptor antagonist）

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

Over-thecounter
drugs

Milton(Disinfectant)

Sep/
2018

Sep/
2019

Dec/
2018

Dec/
2019

ChangeChange(%)

Mar/2019

Mar/2020(forecast)

6.1

6.7

9.8

10.8

+1.0

＋10.0

13.1

14.1

2.8

0

4.8

0.8

－4.0

－83.2

3.7

5.0

2.9

2.4

4.4

3.8

－0.6

－14.7

6.2

4.7

3.3

3.0

5.5

4.8－0.7

－13.0

7.6

6.3

1.3

2.7

4.1

3.8

－0.3

－7.4

12.8

6.2

3.5

3.0

5.1

4.6

－0.5

－9.6

6.6

5.9

―

0.6

0.7

2.2

＋1.5

＋203.0

0.7

2.8

7.1

6.8

10.5

10.3

－0.2

－1.8

13.5

12.7

3.1

2.8

5.1

4.5

－0.6

－11.8

6.8

6.1

5.3

5.4

8.3

8.3

0－0.5

11.9

11.5

―

0.4

－

1.1

＋1.1

－―

1.8

1.1

1.1

1.7

1.7

0－3.6

2.2

2.2
4

Development pipelineDevelopment pipeline
Main R&D Activities -1 (as of February 5 2020)※Changes from the previous announcement (Nov 7 2019)Ph III ~ Application submitted
Stage

Compound/CodeTherapy 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 abscessPreparing forApplication

KRP-116D

Interstitial
cystitis―

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

Application(7/2019)

KRP-108P

Anti-asthmatic(U.K.)
Vectura

Expand the indication of Flutiform to pediatric patients

Japan

Overseas

OriginFeatures

Comments

・MK-7264, a drug for chronic coughing: MSD is working on Phase III development.
Concluded a memorandum of understanding for sales collaboration.

※ Oral new quinolone synthetic antibacterial agent “Lasvic tablets 75mg”: released in January 2020.

6Development pipeline
Main R&D Activities -2 (as of February 5 2020)※Changes from the previous announcement (Nov 7 2019)

POC Project (Ph I ~ Ph II)
StageJapan

Overseas

PhⅡ(6/2018)

Compound/Code

Therapy area
/Action

Ad-SGE-REIC

malignantpleuralmesothelioma

OriginFeatures

Comments

Okayama
UniversityA 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)※ It was decided to discontinue development of "KRP-N118", for it was estimated difficult for realization of pre-configured product profiles.

Status of Introduced Program※[ATYR1923] : Code of aTyr Pharma, Inc・ Entered into collaboration and license agreement with aTyr Pharma, Inc (1/2020)
・ Ph 1b/2a Clinical Trial is in progress in the United States by aTyr Pharma, Inc
・ It is a fusion protein drug having the action to suppress, by binding to neuropilin-2 (NRP2) receptor, the excessive activation of immune cells, and is a potential first-in-class therapy totreat inflammatory diseases such as pulmonary sarcoidosis.

Status of Licensed Compound / Program
Stage/
Overseas

Compound/CodeLicensee /CollaborativeresearchTherapy
area/Action

PhⅠ

FPR-2 agonistprogram

BMS

Nondisclosure

PhⅠ

KRP-203

Implementing
licensingactivities

GvHD

OriginIn-house

Features

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 to
discontinue development of KRP-203 forstrategic reasons, Kyorin receive the returnof development rights.

7

Segment information
for the Third Quarter Ending March 31, 2020

Sales, Profit or Loss of each report segment（unit : ¥billion）

Sales

change Y/YProfitchange Y/Y

Net Sales (total)

78.6

－3.4

5.3

－1.5

Ethical drugs business

74.2

－3.4

4.7

－1.6

52.2

－4.0

51.0
1.2

－4.5
＋0.6

22.0＋0.6

4.4

0

0.5＋0.3

ーー0.1－0.2◆Sales of new ethical drugs○Japan○Overseas◆Generic drugs

Healthcare businessAmount of adjustment8

Consolidated Financial Results
for the Third Quarter ending March 31, 2020
（unit : ¥million）

Sep/2018

Sep/2019

Dec/2018

Dec/2019

Change% Y/YMar/2019

Mar/2020(forecast)

Sales

50,36048,29982,01778,614－3,402－4.1113,620

109,400

Ethical drugs business

47,58145,50577,601

74,223－3,377－4.4

107,859

103,400◆Sales of new
ethical drugs

34,02831,33956,16552,185－3,980－7.1

78,52572,400●Japan33,42430,94955,53550,960－4,575－8.2

77,69471,000

604

390

629

1,224

＋595

＋94.5

830

1,400

13,552

14,166

21,43622,038＋602＋2.8

29,33431,000healthcare business

2,779

2,793

4,415

4,390

－25

－0.6

5,761

5,900

Operating Income

2,852

783

6,794

5,271

－1,522

－22.4

8,972

6,500

Ordinary Income

3,183

1,076

7,124

5.836

－1,287－18.1

9,438

7,100

Net Income

2,217

834

5,112

4,374－738

－14.4

6,869

5,400

●Overseas◆Genericdrugs

9