Interim Term Financial Results Ended
September 2008
● Summary of Performance and Basic Policies
Business Policy for FY 2008 and Effort in the Interim Term
● Current Business Performance and Forecast
Consolidated Financial Results for the Interim Term
Ended September 2008 and Forecast March 2009

November 12,2008
KYORIN Co., Ltd.

Interim Term Financial Results Ended
September 2008
● Summary of Performance and Basic Policies
Business Policy for FY 2008 and Effort in the Interim Term
● Current Business Performance and Forecast
Consolidated Financial Results for the Interim Term
Ended September 2008 and Forecast March 2009

November 12,2008
KYORIN Co., Ltd.

Outline of Consolidated Financial Results for theInterim Term Ended September 2008
Consolidated Financial Results for the Interim Term Ended September 2008

[Sales]An advance in domestic new drug sales increased net sales by 2.3% from a year earlier to ¥40.3 billion.
[Income] Despite an increase in net sales, a decrease in lump-sum money income and a drug price revision rose cost of sales ratio, thereby decreasing grossprofit by approximately ¥2.1 billion. SG&A expenses decreased about ¥0.6 billion, resulting in a 55.4% year-over-year decrease in operating income
to ¥1.2
2 billibillion.
Net loss of ¥1.6 billion was recorded as a result of extraordinary losses such as a ¥2.6 billion loss due to our voluntary discontinuation ofcommercialization of Gatiflo tablets and a ¥0.4 billion valuation loss on investments in securities.

Forecast Consolidated Financial Results for the Term Ending March 2009
[Sales]Despite the impact of the discontinuation of commercialization of Gatiflo tablets on domestic new drug sales, a sales advance for mainstay products
and the merger with Nisshin Kyorin Pharmaceutical Co., Ltd. that was implemented as of October 1, 2008, are expected to increase consolidated net
sales by 9.3% year over year to ¥88.6 billion.
[Income] The merger with Nisshin Kyorin Pharmaceutical Co., Ltd. will contribute to earnings and we expect a 7.2% increase in operating income to ¥6.7
billion. Net income will decrease 26.9% year over year to ¥1.6 billion due to a predicated extraordinary loss of approximately ¥3.4 billion.

Units:
Millions of yen

Sep/06
Interim term

Sep/07
Interim term

Sep/08Interim term

YoY change(%)

Year ending March
31, 2009 (forecast)

YoY change(%)

Year ending March
31,2009(originally forecast)

Net sales

35 09335,09339 36339,36340 261
40,2612 3%
2.3%

88 60088,6009 3%
9.3%

90 40090,400Operating income

1,940

2,788

1,243

▲ 55.4%

6,700

7.2%

8,000

Ordinary income

2,061

3,118

1,175

▲ 62.3%

7,000

5.4%

8,400

N income
Net
i

833

953

▲1 606▲1,606

－

1 600
1,600

▲26 9%▲26.9%

4 900
4,900

EPS（yen）

11.21

12.74

▲21.48

－

21.39

－

65.49

Total assets

117,915

121,776

123,299

1.3%

－

－

－

Total equity

94,99397,427

94,304▲ 3.2%－－－

1

The Basic Policies of Kyorin Group

Improvement ofcorporate value

Corporate
Philosophy: Your
Health is
Kyorin’s Mission

Foster employee’s
motivation and challenge（reassurance stability）（reassurance,

Nurturing a spirit that celebrates life and benefits society by contributing
to the good health of people everywhere

New Corporate Image
and Identity
A distinguished and integrated healthcare company based on reliablenesswith the core business in global drug creation.

Mid term Management Plan
Mid-term｢Kyorin MIC-’09 Plan｣

The customer
intention

Stockholder valuing■Continue the Kyorin MIC Plan currently being promoted“Working for more fair and transparent management”
2

FY2008 Management Policies
FY2008 Management Policies
Building
g new road ensures g
growth– Accelerate growth of ethical drug business, and develop potential of
peripheral businesses –Focus Points■Promote management whichemphasizes brands■ Maximize merger effects● Ethical
Ethi l ddrug bbusinessi
iis proceeding
di wellll ● Delays
D larisingi i ini peripherali hl businesses
b i

FY08 positioning：Towards achieving goals of the Kyorin MIC-’09 Plan,
FY08 is the year to correct issues which became clear in FY05
FY05-07
07

Accelerate ethical drug business growth●Enhancement of ethical drug businessgrowth●Produce synergy effects from merger with
Nisshin Kyorin Pharmaceutical Co., Ltd.

Build solid growthi peripheralini hl businessesb i●Aim for returning in the black(KYORIN Rimedio,
Ri di Dr.Program)
D P)
3

Acceleration of New Drug Business(1)Further enhancement of domestic sales

FC strategy

Cooperation withthe wholesale trade

Enhancement of domestic sales
FC Strategy：Efficient and effective strategy in the domestic pharmaceutical market

Franchise Customer 3 (FC3) areas—respiratory
areas respiratory internal medicine,
medicine otolaryngology and urology
Continued advance in sales of Kipres
Addition of dosage forms and features(Fi t h(Firsthalf
lf off fi
fiscall 2008
2008: an increaseioff¥2.5 billion)

Advanced sales of Pentasa
Business integration(Fi t h(Firsthalf
lf off fi
fiscall 2008:
an increase of ¥2.7 billion)

Advanced sales of Uritos
Lifting of the ban on long-termprescription(First half of fiscal 2008: an increase of¥0.1 billion)

First half of fiscal 2008 Domestic sales on the drug price basis increased by 15%.
15%
This growth rate in domestic drug sales for medical treatment is the industry’s No. 2 among the top 40
companies.
Effect of Merger with
Nisshin Kyorin PhamaceuticalYear ending March 31,2009:
Aiming at 10% or greater increase in domestic sales in addition to boosting Pentasa sales.
（9.07 actual ）（9.08 forecast）

Domestic sales of new drug ＊ 30.3⇒31.2＊Include of lump-sum money income（FY07 actual))（FY08 forecast))

63.3⇒69.9

Unit:
Billions of yen
4

Acceleration of New Drug Business(2) Reinforcement of the FC areas by introducing new drugs:
Status of the KRP－108

Licensing in anti-asthmatic treatment KRP－108(Flutiform)◆Onset long
long-acting
acting beta
beta-agonist
agonist with the inhaled steroid
・ License agreement with Skyepharma PLC as of April 22,2008 on
flutiform, developing and selling in Japan
PhⅡ in Japan (August(A2008))
Reference

ICS:LABA

Current of anti-asthmatic treatment market（Drugs for long- term management ）DevelopDl Flutiform
Fl tiftot aim
i att enteringt i
the ICS/LABA market, which is thesecond largest asthma market

LT antagonist
Theophylin
OthersTotal:180 billion

ICS：Inhaled corticosteroid
LABA：Long-acting beta-agonist

Aim for further presence in
Anti-asthmatic treatment market

Data:Kyorin
pharmaceutical
Units：billion yen（NHI price）
Term：FY07

Kipres5

Acceleration of New Drug Business(3) Progress of pipeline: Status of diabetes treatment drug KRP－104◆PhⅡa ended overseas (August 2008) and established the POC◆Summary
Both KRP-104 dose groups demonstrated comparable, high significant, reductions in
HbA1c in the 60mg BID and 120mg QD groups, respectively, compared with placebo
over 12 weeks. No significant difference was observed between BID and QD dosages.

KRP-104

Compared with placebo
reduction in HbA1c
HbA1c 7%
7%*

KRP-104

a split dose of 60mg/ daya total daily dose of 120mg-0.64%
P<0.0001-0.54%
P=0.0003

approximately 40%：220 patients (baseline of mean hemoglobin A1c (HbA1c)of 7.9%)type 2 diabetes inadequately controlled on metformin alone.
T t method
Testth d ：TheTh randomized,d i d doubled bl blind,
bli d placebolb controlled
ll d test(placebo,( lb a totall d
daily
il d
dose off 120
120mg off KRP
KRP-104,
104 administeredd i id eitheri h as a once
Objectdaily dose or as a split dose of 60mg.

※The American Diabetes Association(ADA) recommended guideline of HbA1c < 7%

Aim to shift up licensing activity quickly based on these tests
6

Acceleration of New Drug Business(4) Effect of Merger with Nisshin Kyorin Phamaceutical■Efficient operating activity
・Increase
Increase main products sales including Pentasa.
Pentasa
・Increase the number of MRs to 750 MRs.

■Enhancement of R&D
・Increase the number of researchers by nearly 40 to enhance immune and flammation
areas
・Reinforce the clinical development department■Efficient management
・Establish an effective manufacturing structure by closing the Osaka Plant.
the Kamifukuoka Research Laboratories,, head office and sales branches into・Integrateg
KYORIN Pharmaceutical Co., Ltd.

Cost reduction measures including cutting 120 employees (¥0.8～1 billion a year)

Strive to create further synergic effect by integration

7

Discontinuation of Commercialization of Gatiflo Tablets
Sales：Voluntarily discontinue commercialization (September 30 2008)

Back ground ：After the launch, serious hyperglycemia and hypoglycemia of which the relationship withSales
figures

the product could not be denied were reported.
reported In response to such reports,
reports we warned of
possible serious hyper/hypoglycemia and changed the product label to contraindicate use
in patients with diabetic mellitus in addition to the issuance of “Dear Dr. Letter” in March
2003. As the result of such our efforts, incidence of dysglycemia has been decreased, Gatiflo
Tablets have been prescribed by a number of expert physicians.
The Food and Drug Administration (FDA) recently announced on the Federal Register its
decision that Tequin was delisted from the Orange Book for the reason of safety, etc. Under
the circumstances, we have discussed the handing of Gatiflo Tablets in Japan seeking opinionsfrom various sectors.
Despite a lower incidence of dysglycemia, we have decided to voluntarily discontinuecommercialization of Gatiflo Tablets, taking into consideration future risk-benefit of patientsfor the use of Gatiflo Tablets.

：About 3.5 billion yen (Fiscal year ended in March 2008, NHI price basis)

Impact on business performance:
performance Revised the forecast of net sales downward from initially forecast ¥2.3 billion to¥0.6 billion and recorded an extraordinary loss of approximately ¥2.6 billion.
There is no impact
pon the business related to g
gatifloxacin ophthalmicpsolution.

Allergan (US)Senjyu Pharmaceutical8

Support and Strength of Peripheral Business(1）KYORIN Rimedio Effort in the first half FY08
Unit:
Billions of yen

Outline of the first half （Compared with the previous year）■ Net sales■Operating
incomeIncrease in sales by succeeding products ofNisshin Kyorin Pharmaceutical Co., Ltd.
・Increase in sales through existing mainstay
products and new items.
items
・Increase in cost of sales ratio due to the drug
price revision and intensified price competition
First half of fiscal 2008 (Our efforts）

Measures to address issues◆Lower and thoroughly manage

the cost of sales ratio
・Appropriate pricing
・Expand wholesale channels
・Reduce SG&A expenses
Second half of fiscal 2008 （Measures）

Enhancementof SalesNumber of customer accounts: Increased by 9400
MR 76 personnel
Assure sales channel by recommended companies（Toho Yakuhin, Alfresa ）Sales increase by optimizing succeeded companies’ operation・・・
Approximate number of customer accounts: 10,000
Sales increase through wholesale channels・・・
30% wholesalers： 70 % retailers
Reinforce sales structure (increase the number of MRs and change the system)

Reduction of
cost percent

Start commissioned manufacture of Kyorin
pharmaceutical’s main product (4/08～)

Reduce costs by enhancing operation rate of plants
Stop production of unprofitable products

Generic products relocation of 3 items of Kyorin
pharmaceuticalhti l andd 13 ititems off Ni
Nissini K
Kyorini
Products.
Launched new products : 4 items

Smoothly succeed customers and deliver products
Expand new products (Second half: to release 3 items)

Product
Line

Acquire stability by expansion of customers and reduction of cost ratio.
(Aim for returning in the black in the second half of FY08)9

Support and Strength of Peripheral Business(2) Dr. Program Effort in the first half FY08
Sales

Effort in thefirst half

◆Favorable sales of two new products that were released in April 2008
◆Sales through a new sales channel (TV shopping)
INNER WHITE ESSENCECAMILK EXUV CARE◆Sales activities strictly within the budget for advertising and sales promotion

Future effort◆Implement effective sales promotion activities to acquire new customers (develop new media)◆Prevent personnel increase by standardizing, enhancing efficiency of and systematizing operations

Units : million people

Number ofCustomer list

10

Kyorin MIC-’09 Mid-Term Business Plan
Kyorin MIC-’09（（FY05
FY05～FY09
FY09））◆Keynote:yEvolution & Innovation II

Kyorin MIC-’09 Basic Strategy:① Establish
E bli h K
Kyorini as a Global
Gl b l Drug
D
CreationC
i Company
C② Increase the Competitive Strength of Our Pharmaceuticals Business to Support
Investments for Drug Creation③ Develop
D
l New
NBusinesses
B ithat
th t Will B
Build
ild on theth FFoundationd tiof the Pharmaceuticals Business and Contribute to Future Growth
Continue to expand steadynew-drug business

Reinforce alliance strategies◆Aggressively promote introducing products of the FC areas.
◆Quickly introduce drug candidate compounds.

Aim to achieve 7.0% of ROE for FY200911

Interim Term Financial Results Ended
September 2008
● Summary of Performance and Basic Policies
Business Policy for FY 2008 and Effort in the Interim Term
● Current Business Performance and Forecast
Consolidated Financial Results for the Interim Term
Ended September 2008 and Forecast March 2009

November 12,2008
KYORIN Co., Ltd.

Consolidated Financial Results
for the Interim Term Ended September 30, 2008
Change（ Units: ¥ billion ）¥40.3billion¥31.2 billion■ Net sales●Sales of new ethical drugs in Japan
9/07(actual)・Mucodyne
・Kipres・Pentasa・Uritos

9.0
7.9
4.4
0.5

⇒
⇒
⇒
⇒

9/08(actual)

8.7
10.4
10
4
7.1
0.6

（＋0.9）（＋0.9）（＋0.9）（＋ 0.3）（▲ 0.3）（（+2.5））（+2.7）（+ 0.1）（▲ 0.3）（+ 0.9）0 9）（+ 0.1）（▲0.1）

9/07
actual

9/08
actualChangeNet sales(total)

39.4

40.3

＋ 0.9

＊Other (Baynas,Hespander sales termination), decrease in lump-sum money income＊Discontinuation of commercialization of Gatiflo(September 30)◆ Sales of new

32.8

33.0

＋ 0.2

● Sales of new ethical drug overseas

ethical drugs

・Gatifloxacin

1.6⇒¥1.8billion（▲0. 7）（＋0.2 ）

1.4（▲0. 2）（+0. 1）（+ 0.4）（+0. 3）

・Decrease in lump-sum income

Japan

30.3

31.2

＋ 0.9

● Generic drugs¥2.9billion

Overseas

2.5

1.8

▲ 0.7

●Consumer healthcare business¥3.7billion＋ 0.4

・Milton・Dr.Program Co.,Ltd

＋ 0.2
02

●Other business◆C t off sales◆Costl ratioti : up 6
6.7
7 points
i t¥0.6billion（37 3%⇒44 0%）（37.3%⇒44.0%）◆R&D ratio： down 2.1 points（14.4%⇒12.3%）◆ Generic
drugs

2.5

2.9

◆ Consumer
healthcare
business

35
3.5

37
3.7

◆ Otherbusinesses

0.5

0.6

＋ 0.1

Operatingincome

2.8

1.2

▲1.6

Ordinary
income

3.1

1.2

▲1.9

Net
income

1.0

▲1.6

▲2.6

Compared to forecast

・Expansion
pa s o oof sa
sales
es oof maina p
products,o c s, launcha c oof new
ew p
productso c s anda relocatede oca e p
products.
o c s.
1.0
1.6

⇒
⇒

0.9
1.9

（+ 0.2）（±0）（▲ 0.1）（＋ 0.3）（▲ 0.1）（± 0）（＋ 0.1）（+ 0.1）＊Factor of increase : price revision (approx,4%) decrease of lump-sum money income andchange product configuration.

R&D: down from ¥5.7 billion to ¥5.0 billion

Factor of decrease: co-development expenses for the previous term due tothe difference of closing dates
Factor of increase : lump-sum contract deposit of Faltiform.

◆SG&A expenses ratio (excluding R&D expenses): down 0.5 points (41.1%⇒40.6%)
SG&A expenses (excluding R&D expenses) up from ¥16.2 billion to ¥16.3 billion(approx,0.1 billion up)¥1.2 billion（▲1.6）◆The operating income margin decreased 4.0 percentage points , to 3.1%▲¥1.6 billion（▲2.6）■Net income■ Operating income＊Special loss：approx 3.1 billion(Gatiflo about 2.6 billion yen,loss on revalution of investments in securities about 0.4 billon yen.)■ Cash dividends （At the end of the second quarter）¥4.00（+ 1.0）（▲1.5）
12

Consolidated Financial Results Forecast
for the Year Ending March 31, 2009
ChangeUnits: Billions of yen

Net sales(total)FY07
actualFY08
forecast

Change

81.1

88.6

＋ 7.5

■ Net sales¥88.6 billion¥69.9 billion●Sales of new ethical drugs in Japan
FY08 forecast
FY07 actual
・Mucodyne
・Kipres・Pentasa・Uritos・Gatiflo

3.0

73.1

＋ 5.5

Japan

63.3

69.9

＋ 6.6

●Generic drugs

Overseas

4.3

3.2

▲ 1.1

●Consumer healthcare business◆ Generic
drugs

5.1

6.3

＋ 1.2

◆ Consumer
healthcare
business73
7.3◆ Otherbusinesses

1.1

Operatingincome6.3

Ordinary
Income6.6

Net income

2.2

ethical drugs

80
8.0

＋ 0.7
07

⇒
⇒
⇒
⇒
⇒

（▲ 0.9）（+1 8）（+1.8）（+ 0.4）（▲ 0.1）（▲1.7）

2.6（▲1 1）（▲1.1）（▲ 0.4）（▲0 8）（▲0.8）（▲0. 3）¥6.3 billion（+1.2）（+ 0.2）¥3.2billion⇒＊Gain of sales of Allergan’s “ZYMAR” on sites (＄98ＭＭ→＄103ＭＭ:local sales)＊Influence of exchange rate fluctuations.
・ Decrease in lump-sum money income.
※Factor of gain of sales: Relocation of GE of Nisshin Kyorin, launch of new
products,
d t andd expansion
i off sales
l off maini products.
d t・Milton・Dr.Program Co.,Ltd

1.9
3.4

●Other business◆Cost of sales ratio : Up about 1 points¥8.0 billion（+ 0.7）¥1.2 billion（+ 0.1）

＋ 0.1

2.0
4.0

⇒
⇒

（+ 0.1）（+0.6）（▲ 0.1）（▲0.1）（±0）（±0）＊C t off sales＊Costl ratioti＊Price revision (about 4%), decrease in lump-sum money income and product configuration. remained on the◆R&D ratio： down 1 points

1.2（▲1.8）（▲0.9）（▲ 0.5）（ 4 3）（+4.3）（+6.7）（+1.2）（▲1.7）

20.7
23.4
15.5
1.9
0.6

・Decrease in lump-sum money income.

●Sales of new ethical drug overseas
・Gatifloxacin

67.6◆ Sales of new

21.2
19.1
8.8
0.7
2.3

（+ 7.5）（+ 6.6）C
Comparedd tto
original forecast

almost same level

13.4%⇒12.4%※ R&D expenses up from ¥10.8 billion to ¥11.0 billion※Effect of integration with Nisshin Kyorin, lump-sum contract deposit of Fultiform fromSkyepharma.

＊SG&A expensesp
ratio(excluding R&D
expenses):
down about 1 points＋ 0.4◆SG&A expenses ratio (excluding R&D expenses):remained on the almost same level

7.0

＋ 0.4

■Operating income¥6.7 billion◆The operating margin decreased 0.1 percentage points , to 7.6%（+0. 4）（▲1.3）

1.6■Net income（▲0.6）（▲3.3）▲0.6

6.7

SG&A expenses increase by merger with Nissin Kyorin.

＊Extra ordinary loss about 3.4 billion yen.

■Cash dividends＊ Policy for dividend: aim for dividend payout 50%¥1.6 billion¥11.00(forecast)13

ReferenceMain R&D Activities① (November 11 , 2008 Release)
PhⅡ～Application
Stage＊Describe the latest changes

Compound/
Code

Therapy area/
ActionOriginFeatures

Pentasa

Anti-Ulcerative
Colitis andCrohn disease
agent

FerringChanges in methods ofuse and dose Anti-Ulcerative
Colitis agent (additional dosage)(Galderma,
Launched)

PEKIRON Nailqlacquer

Anti-mycotic
agentgIn-house

First nail varnish formulation for nail mycosis in JapanPhⅡ（１０/04）

KRP-204（ Tablets ）Anti-obesity

Nisshin Flour
Milling

A highly selective beta3-agonist that may improve obesity andhave less cardiac effect in comparison to previous compounds.

Co-development with
Nisshin Flour Milling

KRP-204（ Tablets ）Overactive
bladder

Nisshin Flour
Milling

A highly selective beta3-agonist that may relax bladdersmooth muscle and improve urine storage dysfunction by
activatingti ti bbeta3
t 3 receptor
t on blbladder.
dd

Co-development with
Nisshin Flour Milling
ＰｈⅡa endedd d(EisaiPhⅢ)

AS-3201（Tablets ）Diabetic
neuropathy

Dainippon
Sumitomo

Aldose reductase inhibitor to reduce the sorbitol accumulationin the cell, and improve diabetic neulopathy

Co-development with
Dainippon Sumitomo
・PhⅡb（9/07）

PhⅡ（6/04）

KRP-101（Tablets ）Antidyslipidemia
with antidiabetes

In-house

p agonist.
g
It mayy have an effect on diabetes in
A PPAR-alphaaddition to lipid metabolism improvement including reductionof 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 is expected thanexisting treatments.

＊PhⅡa ended(8/08)＊PhⅡ(8/08)(Abbott in the
US andMundipharma
in the rest of theworld excludingth A
theAmericas.)i)

KRP-108

anti-asthmatic
treatment

Skye
Pharma PLC

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

Licensing agreement with
SkyePharma(4/08)

Domestic

Overseas＊Application(12/07)PhⅡ（3/07）
PhⅡ（3/05）

Comments

14

Main R&D Activities② (November 11 , 2008 Release)
Pre-clinical ～ PhⅠ
Stage
Domestic

Overseas

Compound/Code＊Describe the latest changes

Therapy area/
ActionOriginFeatures

Comments

Licensing agreementwith Novartis (2/06)

PhⅠ(7/07)

KRP-203

Transplantation
and autoimmune
diseases treatment

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 of
immunosuppressants.

PhⅠ(10/07)

KRP-105

Anti-dyslipidemia

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.
dyslipidemiat＊KRP‐107

Transplantation
and autoimmune
diseases treatment

In-house

Selective S1P1 receptor agonist.

Pre-clinical15

Main R&D Activities③ (November 11 , 2008 Release)
Licensing development＊Describe the latest changes

Product name・
Code

Stage

Licensee ・Collaborative
research

Therapy area/
ActionOriginComments

Alphagan/Alphagan P

Domestic
PhⅢ（7/07）

Senju Seiyaku

Glaucoma

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

Ketas

Overseas
PhⅡ（8/05）

MediciNova(US)

Cerebrovasculardisorders

In-house

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

KCA-757

Overseas
PhⅢ(Anti-bronchial
A
Asthma:11/06))
PhⅡ/Ⅲ(Interstitial
cystitis:
5/05)

MediciNova(US)

Anti-bronchialasthma andInterstitial cystitis
agent

In-house

・KYORIN grants MediciNova an exclusive license in all
countries worldwide except for Japan,China, South Korea
and Taiwan to develop, manufacture and sell thecompound and products・Interstitial cystitis:Results of PhⅡ/Ⅲ was reported in
January 2007 and ceased development
・Bronchial asthma: Clinical trial oversea was discontinued.

KRP-203

Overseas
PhⅠ（7/07）

Novartis(Switzerland)

Transplantation
and autoimmune
diseases treatment

In-house

An immunosuppressant with novel mechanism called S1Pagonist. It may have a better safety profile than previous
ones as well as an excellent effect under concomitant use
with other types of immunosuppressants.

16

Overactive Bladder Treatment Drug : Uritos
1． Actual results and Forecast
FY07
Interim term(actual)¥0.5 billion

Full term(actual)¥0.7 billion

FY08

Interim term(actual)()¥0.6 billion

Full term(forecast)()¥1.9 billion

2．Effort in FY08
Interim term (FY08)

FY08◆Although the planned target was not◆Urologists
Urologists’ evaluation of Uritos

achieved, the restriction on dosage period waslifted in July 2008, which leveraged monthly
sales of Uritos to more than ¥0.1 billion.
◆For the first half, the resulted number ofcustomers was slightly below the target
number despite our efforts to increasecustomers with high demand .

was as we had expected.
◆Strive to expand the number ofcustomers not only in urology but
also in general internal medicine
and other departments other thanurology

3 Overactive Bladder Treatment Drug market trend
3．
billion yen: NHI price

Uritos share about 2%

Secure a certain position in
the overactive bladdertreatment drug market
Target share 8～10% at peak

（9/08 ：MAT）

Appeal and penetrate the feature (convenient) of Uritos in the market.

17

Leukotriene Receptor Antagonist : Kipres
1．Kipres Results and Forecast 2. Effort in FY08
FY07
Interim term(actual) Full term(actual)¥7.9 billion

Asthma¥19.1 billion

Age:1－5

Age:6－14

Fine granules 4mg

Chewable tablet 5mg

Tablet 10mg,Tablet 5mg（two tablets）

・Started
St t d administeringd i i t idose in October 2008
Dosage period
restriction was lifted.

・SynergyS
off finefigranules 4mg

・Use
U off Kipres
Ki
with
ith iinhaledh l d steroid
t id or separate
t
use

FY08

Age:15～＊Contributes to treatment of patients at all ages from the baby stage through to adulthood.

I t i tterm(actual)
Interim( t l) Full term(forecast)¥10.4 billion¥23.4 billion

Allergic rhinitis

Tablet 10mg,Tablet 5mg（two tablets）
・Expansion of prescription①Appeal Safety (less sleepiness)②Administration(once-daily administration)③Promote administration in perennial andseasonal rhinitis.

3． Leukotriene ReceptorpAntagonist market Trend◆Fine granules 4mg
launched◆Tablet 10mg
Additional functions
ｆor allergic rhinitis◆ Fine granules 4mg

The restriction on dosage
period was lifted◆ Tablet 10mg launched（billion yen:Company sales）（billion yen：NHI price）
Full term(forecast）

Leukotriene
receptonantagonist market

Kipres Sales
FY07
share
22％

9/08
（MAT）
share
24％

The goal in
an increase to
30% in FY09

18

Mucoregulating Drug: Mucodyne
2．Efforts

1． Actual results and Forecast＊Despite the effect of generic products, we will nurture Mucodyne asa basic drug for acute and chronic respiratory ailments.

FY07

Interim term(actual)

Full term(actual)¥9 0 billion
¥9.0
billi

¥21 2 billion
¥21.2
billi

FC strategy

FY08Interim term(actual)

Approach to exacerbations of COPD
Obtained the permission to prescribe Mucodyne for chronic
respiratory ailments.
ailments

Reinforcing respiratory tract
Medicine and otorhinology

Full term(forecast)¥8 7 billion¥8.7

Promoting LCM¥20 7 billion¥20.7

PEACE Study◆Significantly reduces incidence of COPD exacerbations●Improvement in QOL●Significant reduction in incidence of cold
●The report published in the Lancet(6/08)

LCM： Short for Life Cycle Management
FC： Short for Franchise Customer

We will nurture Mucodyne as a basic drug for respiratory ailments
The present share of 47%(9/08)⇒The goal in an increase to 50% or more in FY09
3．Sales Transition of Mucodyne
Units:
billions yen
20.0＊Considering
Considering additional new
formulations and indications.

10 K108/1994

15.0
Release of generic drug

Fine granules
ムコダイン細粒87.11’11/1987

10.0
5.0

Added indicationsin the otorhinology area
11/1988

Syrop 5%
10/1987

0
81

82

83

84

85

86

87

DS
Release3/2003Upgraded drug 12/2003

Start of
FC Strategy

500mg
g tablet
10/1996

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

19

Ulcerative Colitis and Crohn’s Disease Treatment
Drug: Pentasa
1． Actual results and Forecast

2．Effort in FY08

Familiarize and increase prescription of Pentasa
in the IBD area by continuing to provide the latest information

FY07
Interim term(actual)

Full term(actual)¥4.4 billion¥8.8 billion

FY08

Interim term(actual)¥7 1 billion¥7.1

Full term(forecast)Targeting product sales of 20 billion yen¥15 5 billion¥15.5

3．Number of IBD patient and Pentasa Sales trend
Patients

tablets 250(Additional
Pediatric Indication)(3/08)

160,000
140,000
120,000

Crohn’s Disease＋Ulcerative Colitis registered patient

100,000
80,00060,00060 21260,212

66,91773,96978,6676.7

40,0003.7

20,0000Enteroclytic
Release June 2003

Pentasa sales (Kyorin Pharmaceutical and Nissin Kyorin Pharmaceutical)
ペンタサ売上（ｷｮｰﾘﾝ製薬＋日清ｷｮｰﾘﾝ製薬）

86,36599,08393,73310.0
7.6

99,96611.2

106,910

133,620
16 7
16.7

200.0
17.5

（9/08
MAT）
）

tablets 500
10/08 launched

12.3

180.0
160 0
160.0
140.0
120.0
100.0

88
8.8

Ulcerative Colitis

4.2
Crohn’s Disease

17
1.7

FY96
９６年度

115,232
14.2

123,020
123
020
15.2

billion yen

80.0

104,760
Change in methodsof use and dose
Anti-ulcerative coltis
agent(additional
dosage)(Application)
28,860

60.0
40.0
20.0
0.0

FY97
９７年度

FY98
９８年度

FY99
９９年度

FY00
００年度

FY01
０１年度

FY02
０２年度

FY03
０３年度

FY04
０４年度

FY05
０５年度

FY06
０６年度

FY07
０７年度

source：Kyorin pharmaceutical
Ministry of Health, Labour and Welfare

FY08
０８年度
20

Update on Bistner business fund・Start:September 2000
・Investment:¥5 billion (¥4 .4billion already paid to Bistner by KYORIN, andBistner already invested ¥2.7 billion in 27 cases )・Focus:Pharmaceuticals Medical Treatment,
・Focus:Pharmaceuticals,
Treatment Nursing
Nursing, Health care
Safe-Tech
Healthfoodregion①44 million yen②Manufacturing,sales of scentlesssoybean powder etc.

Dr programDr.
①3,397 million yen②Development and sales ofskin-care products

Cosmetic
regionDrug creation related to drug
region 7

Drug creation
regionMedical related region 12
Health food region 3

Environment,

IRYO DENSHI SEIKO①－②Development of heat
treatment equipment for
Hepatitis C virus infection

MedicalregioniCompanies invested

other

Bioselent①51 million yen② Industrial
I d
i l waste
resolution etc. ,basedon Biotechnology

Cosmetic region 3
Environment, other

2①Sales Turnover(Previous Term)②Main activities

JMA①540 million yen②Medical facilities
and equipment lease●Early business making at investment destination
by strengthening the operation management about the fund.
●Selection of investment region centering on health care and wellness region.

21

The Best Out of Merger EffectNisshin Kyorin
Pharmaceutical

KYORIN Group

FY07
Sales

Sales

Sales of new ethical drugs¥11.9 billion

Generic drugs ¥ 1.0 billion

S l off new ethicalSales
thi l drugs
d¥8.0 billion

Generic drugs ¥1.0 billion

Relocation to
K i Pharmaceutical
KyorinPhi l

Relocation
R lti tto Kyorin
K i Rimedio
Ri di

Other business ¥ 1.1 billion
Cost ratio

37％

R&D cost

About ¥ 2.0 billion

SG&A expenses(excluding
R&D expenses）

About ¥ 5.5 billion

Operating
P fit
Profit¥1.2 billion

Net Profit¥0.6 billion

Promote efficiency
Staff about 300⇒about 180
0.8~1.0 billion yen
of cost reduction

Merger consideration¥3.51 billion
Goodwill¥0.6 billion
amortization five years
22Actual and Forecast of Main Subsidiary Company（ Units: ¥ billion）
Sep/07
Interim term

Sep/08Interim term

34.2

34.4

70.5

75.9

77.8

Operating profit

3.1

1.7

6.9

6.4

7.6

Net profit

1.7

▲0.3

3.8

2.6

5.1

Jul/07
Interim term

Jul/08Interim term

3.0

3.4

6.0

7.7

7.7

Operating profit

▲0.4

▲0.4

▲0.7

▲0.3

0.1

Net profit

▲0.9

▲0.5

▲1.4

▲0.5

▲0

Jul/07
I t i tterm
Interim

Jul/08I t i tterm
Interim

1.6

1.9

3.4

4.0

4.0

Operating profit

▲0.2

▲0.1

▲ 0.3

0.1

0.1

Net profit

▲0.1

▲0.1

▲ 0.4

0

0

Kyorinpharmaceutical
Sales

KYORIN Rimedio

Sales

Dr.ProgramSales

3 ／ 081 ／ 071 ／ 08

3／09

3 ／ 09（OriginalF
Forecastt)（Forecast）

1／09

1 ／ 09（Original
Forecast ）（Forecast）

1／09

1 ／ 09（Original（Forecast）

Forecast ）23

Outline of Consolidated Financial Results
for the Interim Term Ended September 2008

P&L summary ： Consolidated-1（ Units: ¥ million)¥ million ）Sep/08Sep/07
I
Interimi termActualAffiliated companies (2) Nisshin Kyorin Parmaceutical
Parmaceutical,

I
Interimi term% Sales

Actual% Sales

Consolidated companies (9)KYORIN pharmaceutical, Kyobundo,
Bistner,Kyorin USA, Kyorin Europe GmbH,Bistner Fund No.1,
ActivX Biosciences,Inc., KYORIN Rimedio,Dr.Program

YoY

Nihon Rikagaku Yakuhin

Amt chgSales

39,363100.0%

40,261100.0%

2.3%

897

Sales of new

32,801

83.3%

33,046

82.1%

0.7%

244

Change¥40,261million■ Net sales（＋ ¥897 million ）● Sales of new ethical drugs
g in Japanp¥31,239million

ethical drugs

Sep/07 Interim term（＋ ¥950 million ）Sep/09 Interim term（¥billion）

9.0

→

8.7

（▲ 0.3）

Japan

30,28976.9%31,239

77.6%

3.1%

950

・Mucodyne
・Kipres

7.9

→

10.4

(＋2.5）O
Overseas

2 512
2,512

6 4%
6.4%

1 806
1,806

4 5%
4.5%

1%
▲28.1%▲28▲705

・Pentasa
P t

44
4.4

→

71
7.1

(＋2
(＋2.7）
7）

・Uritos

Generic drugs

2,539

6.5%

2,929

7.3%

15.4%

390

0.5

→

0.6

(＋0.1）

Consumerhealthcare
business

3,545

9.0%

3,684

9.2%

3.9%

139

Other
businesses

477＊Other (Baynas,Hespander sales termination), decrease in lump-sum money income＊Discontinuation of commercialization of Gatiflo(September 30)● Sales of new ethical drugs overseas¥ 1,806million
1 806 illi

1.2%

600

1.5%

25.8%

123

（ ▲￥705million▲￥705 illi ）（Units:¥billion）

・ Gatifloxacin

1.6

→

1.4

(▲0.2）＊decrease in lump-sum money income● Generic drugs¥2,929million（（+¥390
million ）＊・Expansion of sales of main products, launch of new products
and relocated products.

● Consumer healthcare business,million¥3,684（＋¥139 million ）（（Units:¥billion）

・ Milton

1.0

→

0.9

（▲ 0.1）・Dr. Program

1.6

→

1.9

（＋0.3）● Other businesses¥ 600million（＋ ¥123million ） 24

P&L summary ： Consolidated-2（ Units: ¥ million ）Sep/07
Interim term
Actual

Sep/08Interim term

% Sales

Actual% Sales◆ Cost of sales ratio: up 6.7 percentage points(37 3％→44 0％)(37.3％→44.0％)

YoY

Amt chgSales

39,363100.0%

40,261100.0%

2.3%

897

COGS

14,701

37.3%

17,718

44.0%

20.5%

3,017

Gross profit

24,661

62.7%

22,542

56.0%

▲8.6%

▲2,119SG&A（of which R&D)

21,873（5,676）

55.6%
14.4%

21,298（4,968）

52.9%
12.3%

▲2.6%
(▲12.5%)▲575（▲708）O
Operatingti profit
fit

2 788
2,788

7 1%
7.1%

1 243
1,243

3 1%
3.1%

4%
▲55.4%▲55

544▲1,544▲1

Non-op income
Non-op expense

525
195

1.3%
0.5%

418
486

1.0%
1.2%

▲20.5%▲107

148.4%

290

Recurring profit

3,118
,

7.9%

1,175
,

2.9%

▲62.3%,▲1,942

5
449

0.0%
1.1%

92
3,116

0.2%
7.7%

1530.4%593.9%

87
2,666

2675

6.8%

▲1,847▲4.6%

ー▲4,522

Corporate,inhabitantsand enterprise taxes

842

2.2%

1,353

.3.4%

60.7%

511

Tax adjustments

878

2.2%

▲1,594▲4.0%

ー▲2,473

Net profit

953

2.4%

,
▲1,606▲4.0%▲268.5%,▲2,560Extraordinary profits
Extraordinary losses
Pretax profit＊Price revision (about 4%), decrease in lump-sum money income
and product configuration.

◆ R&D ratio: down 2.1percentage points (14.4％→12.3％)
R&D: down from ¥5.7
¥5 7 billion to ¥5.0
¥5 0 billion

Factor of decrease: co-development expenses for the previous term
due to the difference of closing dates.
Factor of increase : lump-sum contract deposit of Fultiform.

◆ SG&A expenses ratio (excluding R&D
expenses):down 0.5 percentage pointup from ¥16.2 billion to ¥16.3 billion(41.1％→40.6％)■ Operating income(+ 1,544 million)¥1,243 million＊The operating income margin decreased 4.0 percentage
points,to3.1%.

■ Net income▲ ¥ 1,606 million(▲ 2,560 million)＊Special loss：approx 3.1 billion(Gatiflo about 2.6 billion yen,loss on revaluation of investments in securities about 0.4 billon yen.)■ Cash dividends

¥4.00

25

BS summary:Consolidated（ Units: ¥ million ）3／08% TotalActualCurrent assets

66,016

Cash, deposits
A/R, notes receivable
Mk securities
I
Inventoryt
Other

10,64728,995
2,209
19,770
4,392

Fixed assets

56,382

Tangible assets
I t
Intangible
ibl assetst
Investments

18,2142,356
35,811

Assets122,398■ Current assets

9／08

53.9%

% TotalActual69,16656.1%

Amt chg

3,150

12,93327,254
2,424
20,693
5,860
46.1%

54,132

15.7%

123,299

23,094100.0%

18.7%（down¥ 2,249million yoy)

▲2,24917,9891,522
34,620100.0%・Cash,deposits（ up ¥2,286 million yoy ）・A/R,notes receivable （ down ¥1,740million yoy ）・Mk securities（up ¥215million yoy ）・Inventory（up ¥ 923 million yoy ）・Other（ up
p ¥ 1,468,
million yoyy y）■ Fixed assets

43.9%(up ¥ 3,150 million yoy)・Tangible assets
・Intangible assets
・Investments(down ¥ 224million yoy)(down ¥ 834million yoy)(down ¥ 1,190million yoy)

■ Current liabilities( up ¥ 3,892million yoy)

・ A/P, notes payable
・Other(down ¥ 414 million yoy)(up ￥4,307million yoy)901

Current liabilities

19,201

3,892

A/P, notes payable Other

10,792
8,409

Non-current liabilities

6,012

4.9%

5,901

4.8%

▲111

Total liabilities

25,21420.6%

28,995

23.5%

3,781

Owner’s equity

96,401

78.8%

94,19276.4%▲2,208Net unrealized gain andtranslation adjustments

782

0.6%

111

0.1%

▲671

Minority interests

－

－

－

－

－

Total equity

97,18479.4%

94,30476.5%▲2,879Total liabilities and equity

122,398

100.0%

123,299

100.0%▲901

10,377
12,716■ Non-current liabilities (down ¥ 111 million yoy)26

R&D, capex & depreciation＜Consolidated＞
Interim term
（ Units: ¥ million ）
9/05

9/06

9/07
ActualR&D expense
Capex (book base)
Depreciation expense

3／09（Forecast ）

9/08
YoY

3／08
（Original
Forecast ）

6,001

3,982

5,676

4,968

▲12.5%

11,00012,200

982

1,223

1,451

1,115

▲23.2%

2,500

2,600

1,660

2,304

2,214

2,028

▲8.4%

3,800

4,000

＜ Capital expenditure （Actual／Forecast)＞
3／ 08
Actual（Actual）
Plant facilities(KYORIN Rimedio center etc.)
etc )Equipment for control, sales activities
Equipment for research(Actual/Forecast)(A
l/F)
Plant facilities
Equipment for control, sales activities
Equipment for research

3／ 09
Interimterm(actual)

Full term(forecast)¥1.2¥1
2 billion¥0.2 billion¥0.5 billion¥ 0.3billion¥ 0.5 billion¥ 0.3 billion¥ 1.0 billion¥ 0.8 billion¥ 0.7 billion

27

R&D, capex & depreciation ＜Consolidated＞ Full term
（ Units: ¥ million ）
3／04

3／05

3／06

3／07

3／09

3／08
ActualYoY（Forecast ）3／09（OriginalF
Forecastt）

R&D expense

8,219

12,698

10,107

8,609

10,826＋25.7%

11,00012,200Capex (book base)

5,670

6,172

4,605

2,954

1,952

▲33.9%

2,500

2,600

Depreciation
expense

4,774

3,894

3,645

4,544

4,536

▲0.2％

3,800

4,000

＜ Capital expenditure （Actual／Forecast)＞（Actual）
Plant facilities(KYORIN Rimedio center etc.)
Equipment for control, sales activities
Equipment for research(Forecast)
Plant facilities
Equipment for control, sales activities
Equipment for research

3／ 08¥1.2 billion¥0.2 billion¥0.5 billion

3／ 09¥ 1.0 billion¥ 0.8 billion¥ 0.7 billion

28

Product sales update ： Interim term
（ Units: ¥ billion ）

9／ 05

9／ 08

9／ 07

Actual3／09

YoY（Forecast ）3／09（Original
Forecast ）Kipres
p es

61
6.1

69
6.9

79
7.9

10 4
10.4

30 8%
30.8%

23 4
23.4

21 6
21.6

Gatiflo（Kyorin）

1.1

1.1

1.1

0.9

▲18.7%

0.6

2.3

Mucodyne

8.5

8.9

9.0

8.7

▲3.9%

20.7

21.6

B id lBaccidal

0.3

0.3

0.2

0.2

▲13.4%

0.4

0.4

Ketas

3.2

2.9

2.8

2.6

▲7.2%

5.2

5.2

Aplace

1.2

1.0

0.9

0.8

▲15.9％

1.5

1.6

Rocaltrol

1.1

1.0

0.9

0.8

▲12.2％

1.6

1.6

Pentasa

3.6

4.0

4.4

7.1

62.5％

15.5

15.1

05
0.5

06
0.6

25 9％
25.9％

19
1.9

20
2.0

（LT receptor antagonist）(Antibacterial agent)
Sales ofnew
ethicaldrugs(Japan)

9／ 06(Mucuregulant)(Antibacterial agent)(For bronchial asthma andcerebrovasculas disorders）(Anti-ulcer agent)(Osteoporosis remedy)(Ulcerative colitis and Crohn’sdisease treatment)

Uritos（Kyorin）－－（Overactive bladder）

Sales
S
l
off
new
ethical
drugs
(Over
seas)

Total

4.2

2.2

2.5

1.8

▲28.1％

3.2

4.0

Gatifloxacin

3.5

1.8

1.6

1.4

▲12.3％

2.6

2.9

0.2

0.2

0.1

0.1

86.0％

0.1

0.2

12.6％

6.3%

6.4％

4.5％

3 6％
3.6％

4 4％
4.4％

1.1

1.0

1.0

0.9

（Bulk・Royalty）

Norfloxacin（Bulk）

Foreign sales ratio (%)
Consumer
Healthcare
business

Milton(Effervescent disinfectant）

―
▲2.5%

2.0

2.1

29

Product sales update ： Full term
（ Units: ¥ ｂillion ）
3／ 05

3／ 06

3／ 07

3／ 08
actualYoY

3／09（Original

Forecast ）Kipres

11.8

13.4

15.0

19.1

26.9%

23.4

21.6

Gatiflo（Kyorin）

2.3

2.5

2.5

2.3

▲5.9%

0.6

2.3

Mucodyne

19.0

19.9

20.4

21.2

3.6%

20.7

21.6

Baccidal

07
0.7

06
0.6

06
0.6

05
0.5

2%
▲12.2%
▲12

04
0.4

04
0.4

Ketas

6.6

6.3

5.8

5.4

▲6.2％

5.2

5.2

Aplace

2.6

2.4

2.0

1.8

▲13.0％

1.5

1.6

Rocaltrol

2.4

2.2

1.9

1.8

▲7.9%

1.6

1.6

Pentasa

6.4

7.3

8.0

8.8

9.3%

15.5

15.1

（LT receptor antagonist）(Antibacterial agent)
Sales ofnew
ethicaldrugs(Japan)

3／09（Forecast ）(Mucuregulant)(Antibacterial agent)(For bronchial asthma andcerebrovasculas disorders）(Anti-ulcer agent)(Osteoporosis remedy)(Ulcerative colitis and Crohn’sdisease treatment)

Uritos（Kyorin）

－

－

－

0.7

－

1.9

2.0

（Overactive bladder）＊

Sales ofnew
ethical
drugs
(Over
seas)

Total

8.8

8.6

5.8

4.3

▲24.8％

3.2

4.0

Gatifloxacin

8.0

6.7

3.2

3.0

▲7.2%

2.6

2.9

0.4

0.3

0.4

0.3

▲24.8%

0.1

0.2

13 3%
13.3%

11 6%
11.6%

7 5%
7.5%

5 3％
5.3％

3 6％
3.6％

4 4％
4.4％

2.3

2.1

2.1

1.9

2.0

2.1

（Bulk・Royalty）

Norfloxacin（ Bulk）

F i sales
Foreignl ratioi (%)( )Consumer
Healthcare
Business

Milton(Effervescent disinfectant）

―
▲5.8％

30

Financial summary (Consolidated)（ Units: ¥ million ）
9／06

9／07

9／08

3／09
（Forecast ）

3／08

3／09

（Original

Forecast ）Sales（Exports）

35,093（2,246）（2
246）

39,363（2,518)（2
518)

40,261（1,835)（1
835)

81,070（4,367)（4367)

88,600（3,200)（3200)

90,400（4,000)
（4
000)

COGS
Ratio to sales(％)

14,513（41.4％)

14,701（37.3％)

17,718（44.0％)

31,757(39.2%)――

SGA
Ratio to sales(％)

18,639（53.1％)

21,873（55.6％)

21,298（52.9％)

43,061(53.1%)――

R&D expense
Ratio to sales(％)

3,982(11.3%)

5,676（14.4％)

4,968（12.3％)

10,826(13.4%)

11,000（12.4%)

12,200(13.5%)

Operating profit
Ratio to sales(％)

1,940(5.5%)

2,788（7.1％)

1,243（3.1％)

6,251(7.7%)

6,700（7.6%)

8,000(8.8%)

Recurring
gp
profits
Ratio to sales(％)

2,061,（5.9％)

3,118,（7.9％)

1,175,(2.9%)

6,643,（8.2%)

7,000,(7.9%)

8,400,(9.3%)Net profit
Ratio to sales(％)

833(2.4%)

953（2.4％)▲1,606（▲4.0％)

2,189（2.7%)

1,600(1.8%)

4,900(5.4%)EPS (¥)

11.21

12.74

▲21.48

29.26

21.39

65.49

Capital

700

700

700

700

Assets117,915

121,776

123,299

122,398－－－

96,401

94,99397,427

94,304

97,184

BPS (¥)

1,268.91

1,301.82

1,260.93

ROE (%)

0.9％

1.0％

▲1.7％

2,2％

Equity ratio (%)

80.0％

80.0％

76.5％

79.4％

Employee

1,927

2,003

2,059

2,003

Capital expenditure

1,223

1,451

1,115

1,952

2,500

2,600

Depreciation expense

2,304

2,214

2,028

4,536

3,800

4,000

Shareholders’ equity
Total equity

1,298.89

31

P&L summary : Kyorin pharmaceutical-1（ Units: ¥ million ）Sep/07

ActualSales

34,171

Sep/08% Sales100.0%

actual

34,425% sales100.0%

Change■ Net sales¥34,425 million● Sales of new ethical drugs in Japan

YoY
0.7%

Amt chg¥31 239 million¥31,239
illi

32,68995.7%

32,988

95.9%

0.9%

（＋¥950 million
illi ）

254
Year ended September 30, 2007

Sales of new（＋¥254million ）Year ended September 30, 2008308

ethical drugs

・ Mucodyne

90
9.0

→

87
8.7

(▲0 3)(▲0.3)

・ Kipres

7.9

→

10.4

( ＋2.5)・ Pentasa

4.4

→

7.1

(＋2.7)・ Uritos（New product） 0.5→

0.6(＋0.1)

Japan

30,28988.7%

31,239

90.8%

3.1%

Overseas

2,399

7.0%

1,758

5.1%

▲26.7%

▲641

178

0.5%

146

0.4%

▲18.2%▲32 ＊Discontinuation of commercialization of Gatiflo(September 30)

1,303

3.8%

1,281

3.7%

▲1.7%

▲22

Generic drugs
Consumerhealthcare
business

950（ Units: ¥ ｂillion）＊Other (Baynas,Hespander sales termination), decrease in lump-sum money income● Sales of new ethical drugs overseas（▲¥ 641 million ）¥1,758 million（ Units: ¥ ｂillion）

・ Gatifloxacin

16
1.6

→

14
1.4

（▲0 2）（▲0.2）＊Decrease in lump-sum money income● Generic drugs¥146 million（▲ ¥32 million ）● Consumer healthcare business¥1,281 million（▲ ¥22 million ）（ Units: ¥ ｂillion）

・ Milton

1.0

→

0.9

（▲

0.1）

32

P&L summary : Kyorin pharmaceutical-2（ Units: ¥ million ）Sep/07A
Actuall

Sep/08% SalesS l

A
Actuall% Sales
S l

Y Y
YoY

A
Amt
chg
h

Sales

34,171100.0%

34,425100.0%

0.7%

254

COGS

11,522

33.7%

14,096

40.9%

22.3%

2,537

Gross profit

22 64822,648

66 3%
66.3%

20 32820,328

59 1%
59.1%

2%
▲10.2%▲10319▲2,319▲2

SG&A（of which R&D)

19,571(5,155)

57.3%
15.1%

18,642(4,508)

54.2%
13.1%

▲4.8%
（▲12.6%）▲928（▲647）

Operating profit

3,076

9.0%

1,685

4.9%

▲45.2%▲1,390Non-op income
Non-op expense

347
100

1.0%
0.3%

456
16

1.3%
0.0%

31.4%
▲83.5%

109▲84

Recurring profit

3,323

9.7%

2,125

6.2%

▲36.0%▲1197

Extraordinary profits

9
83

0.0%
0.2%

76
2,646

0.2%
7.7%

723.9%
3070.9%

66
2,562

3,249

9.5%

▲443

▲1.3%

▲113.7%▲3,692

647

1.9%

1,257

3.7%

94.3%

610

868

2.5%

▲1,421▲4.1%▲263.6%▲2,289

1,733

5.1%

▲280

▲0.8%

▲116.2%▲2,013Extraordinary losses

Pretax profit
Corporate,inhabitantsand enterprise taxes

Tax adjustments
Net profit◆ CostC t off sales
l ratio:ti up 77.2
2 percentagetpointsi t(33.7％ → 40.9％)＊Factor of increase : price revision (approx,4%) decrease of
lump-sum money income and change product configuration.

◆ R&D ratio: down 2.0 percentage points(15.1％ → 13.1％)＊R&D expenses increased from¥5.2billion to¥4.5billion.

Factor of decrease : co-development expenses for the previous term
due to the difference of closing dates.
Factor of increase : lump-sum contract deposit of Fultiform.

◆ SG&A expenses ratio (excluding R&D
expenses):down 1.1 percentage point(42.2％ → 41.1％）■ Operating income¥1,685million (▲1,390 million)＊The operating income margin decreased 4.1
percentage points, to 4.9%.

■ Net income▲¥280million(▲2,013 million)

Extraordinary losses ：¥2.6 billion

33

BS summary : Kyorin pharmaceutical（ Units: ¥ million ）Mar/08ActualCurrent assets

57,044

Sep/08% Total54.4%

Actual% Total60,15656.5%

Amt chg3,112

Cash, deposits
Accounts receivable
Mk securities
Inventory
Other

7,755
25,895
2,007
17,156
4 229
4,229

Fixed assets

47,866

Tangible assets
Intangible assets
Investments

14,771
1,450
31,644

Assets104,910100.0%

106,478

100.0%

1,568

Current liabilities

13,82413.2%

16,784

15.8%

2,960

Notes payable
Trade accounts payable
Other

1,560
6,407
5,855

Non-current liab.

4,293

4.1%

4,336

4.1%

42

Total liabilities

18,11817.3%

21,121

19.8%

3,003

Owner’ss equity
Owner

86 14086,140

82 1%
82.1%

85 30385,303

80 1%
80.1%

▲837

651

0.6%

53

0.1%

▲597

Total equity

86,792

82.7%

85,35680.2%▲1,435

Total liabilities and equity

104,910100.0%

106,478

100.0%

1,568

Net unrealized gain andtranslation adjustments

10,21023,884
2,272
17,913
5 875
5,875
45.6%

46,32143.5%▲1,544

14,373778
31,169

2,678
4,913
9,192

■C
■Currentt assetst( ¥3,112(up¥3 112 million
illi yoy))（up ¥2,454 million yoy）

・Cash,deposits
・Accounts receivable
・Mk securities
・Inventory
・OtherOh(down ¥2,010 million yoy ）(up ¥265 million)(up ¥756 million)(up( ¥1,645
6 5 million
illi yoy))■Fixed assets(down¥1,544million yoy)・Tangible assets
・Intangible assets
・Investments(down ¥397million yoy)(down ¥672 million yoy)(down ¥ 474 million yoy)

■Current liabilities(up ¥2,960 million yoy)・ Notes ppayabley・ Trade accounts payable
・Other((down¥1,117,
million yoy)y y)(down ¥1,493 million yoy)(up ¥3,336 million yoy)■Non-current liabilities (up ¥42 million yoy)34

Financial summary : Kyorin pharmaceutical（Units: ¥ million）
9／05

9／06

9／07

3／08

9／08

3／09

3／09

（Original Forecast）（Forecast ）Sales（Exports）

31,609（4,043)（4043)

30,268（2,223)（2
223)

34,171（2,399)（2399)

34,425（1,758)（1
758)

70,480（4,155)（4
155)

75,900(3,200)(3200)

77,800（3,900)
（3
900)

COGS
Ratio to sales(％)

10,100(32.0％)

11,385(37.6%)

11,522(33.7%)

14,096(40.9%)

25,217(35.8%)――

SGA
Ratio to sales(％)

19,282(61.0%)

17,110(56.5%)

19,571(57.3%)

18,642(54.2%)

38,319(54.4%)――

R&D expense
Ratio to sales(％)

5,979(18.9%)

3,808(12.6%)

5,155(15.1%)

4,508(13.1%)

9,959(14.1%)

11,500(13.8%)

11,500(14.8%)

Operating profit
Ratio to sales(％)

2,226(7.0%)

1,772(5.9%)

3,076(9.0%)

1,685(4.9%)

6,942(9.8%)

6,400(8.4%)

7,600(9.8%)

Recurring profits
Ratio to sales(％)

2,378(7.5%)

1,666(5.5%)

3,323(9.7%)

2,125(6.2%)

7,328（10.4%)

7,400(9.7%)

8,400(10.8%)Net profit
Ratio to sales(％)

1,178(3.7%)

953(3.2%)

1,733(5.1%)▲280(▲0.8%)

3,776（5.4%)

2,700(3.6%)

5,100(6.6%)EPS (¥)

15 86
15.86

12 84
12.84

23 34
23.34

▲3 78
▲3.78

50 85
50.85

Capital

4,317

4,317

4,317

4,317

4,317

Assets107,014108,252

104,454

106,478

104,910

Shareholders’ equity

89,516－－－

86,140－91,476

86,14185,356

86,792

BPS (¥)

1,205.25

1,231.71

1,159.87

1149.31

1,168.63

ROE (%)

1.3％

1.0％

2.0％

▲0.3％

4.4％

Equity ratio (%)

83.6％

84.5％

82.5％

80.2％

82.7％

Employee

1,633

1,524

1,532

1,567

1,517

Capital expenditure

962

967

729

577

1,350

1,700

1,800

Depreciation expense

1,553

2,074

1,880

1,656

3,844

3,100

3,200

Total equity35