Financial Results for Fiscal Year 2020

May 12 , 2021
KYORIN Holdings, Inc.
Representative Director, President and Chief Executive Officer

Yutaka Ogihara➢Outline of Consolidated Financial Results
・Trends of mainstay products➢Consolidated Financial Forecast➢Status of R&D Pipeline➢Initiatives toward realization of
the long-term vision “HOPE 100”・Medium-Term Business Plan “HOPE 100-Stage3-”(Fiscal Year 2020～2023）

2

Impact of COVID-19 on our Business■Promotion Activities etc.
Although it is predicted the impact on sales activities will decrease
after October 2020, promotion activities was affected by the state of
emergency due to the arrival of the third wave
・Patient’s suppressive behavior to medical consultation diminishes KYORIN
pharmaceutical’s main products market(esp. Respiratory, ENT, Pediatrics)
・Hand washing, gargling, and wearing masks have reduced the number ofpatients suffering from infectious diseases, and the antibacterial agent
market has been sluggish.
・Although efforts were made to promote digitally, the market penetration of
new drug groups was delayed due to MR visit restrictions esp. in hospitals.

■R&D
Some project was affected, but overall development schedule does not
fall far behind■Production＆Procurement
As a result of strengthening procurement management of raw
materials and other materials, there was no impact on stable supply
3Outline of Consolidated
Financial Results

4Breakdown of Gain and Loss

（Units: ¥billion）

ChangeChange(forecast)(%)

Announced on
Nov 5,2020

FY 2020

Change

110.0

102.9

－7.1

－6.4

－5.1

New ethical drugs, etc.
（Japan）

77.5

69.7

－7.8

－10.1

－4.1

New ethical drugs（Overseas）

1.5

1.0

－0.5

－33.2

－0.1

Generic drugs

31.0

32.2

＋1.2

＋3.9

－0.8

53.0

51.3

－1.7

－3.2

－

49.5
(11.0)

45.8
(9.7)

－3.7
(－1.3)－7.4(－11.7)

Operating Income

7.5

5.8

－1.7

－22.9

－2.0

Ordinary Income

8.2

6.4

－1.8

－21.1

－2.0

Net Income

6.1

6.1

0

－0.3

－1.1

Sales

Cost of Sales
SG&A
（R&D）

FY 2019－

The classification of reporting segment ("Prescription drugs business" and "Healthcare business") was consolidated to a single segment from the first quarter consolidated financial
results for the fiscal year ended March 31, 2021.Along with this, the classification of sales was changed to combine the existing “New ethical drugs (Japan)” and “healthcare business”
to "New ethical drugs, etc. (Japan)". There is no change in "New ethical drugs (overseas)" and "Generic drugs".

5

Highlights of Business Performance:①Net sales（Units: ¥billion）

120.0

110.0

102.9

New ethical drugs, etc.(Japan)¥－7.8 bln

100.0

31.0
32.2
80.0

1.5
1.0

60.0

40.0

【Net Sales ¥－7.1 bln】

・Market shrinkage due to new coronavirus infection
・Sales decrease due to NHI drug price revision(Kyorin Pharmaceutical 2% range)
・Although new drugs ("Beova" and "Desalex“ etc.)
grew, decrease in sales of long-listed products

New ethical drugs（Overseas）

77.5¥－0.5 bln

・ Decrease in revenue from Gatifloxacin

69.7
Generic drugs

20.0¥＋1.2 bln

・Sales increase in Nasonex AG・Launch of Uritos AG and new generic drugs
contributed to sales

0.0
FY 2019

FY 20206

Highlights of Business Performance ②（Income）【Operating Income ¥－1.7 bln】

(Units: ¥ billion)
8

Gross Profitー¥5.4 bln

Net Sales：
Decreased ¥7.1bln year on year
Cost of sales ratio :Increased 1.7% year on year

6・Impact of NHI price revision
・Increase in generic sales ratio

－5.4
4

ー2.4

7.5

R&D expenses

－1.3

5.8

2

ー1.3 bln¥11.0 bln（FY2019）⇒¥9.7 bln（FY2020）・Development project progress and development
discontinuation (Ad-SGE-REIC, etc.)

SG&A(excluding R&D) ー2.4 bln¥38.5bln（FY2019）⇒¥36.1 bln（FY2020）
・Mainly reduction of selling, personnel and general
expenses0
Operating Income Gross Profit（FY2019）

R&D

Operating Income
SG&A(excluding R&D) （FY2020）7

Highlights of Business Performance ③（Change : Revised forecast)（Units：¥billion）

FY 2019

FY 2020

ChangeChange(%)

Change(Forecast)
Announced in
Nov 5,2020

110.0

102.9

－7.1

－6.4

－5.1

New ethical drugs, etc.(Japan)

77.5

69.7

－7.8

－10.1

－4.1

New ethical drugs (Overseas)

1.5

1.0

－0.5

－33.2

－0.1

Generic drugs

31.0

32.2

＋1.2

＋3.9

－0.8

53.0

51.3

－1.7

－3.2

－

49.5
(11.0)

45.8
(9.7)

－3.7
(－1.3)－7.4(－11.7)

Operating Income

7.5

5.8

－1.7

－22.9

－2.0

Ordinary Income

8.2

6.4

－1.8

－21.1

－2.0

Net Income

6.1

6.1

0

－0.3

－1.1

Net Sales

Cost of Sales
SG&A
（R&D）

－

■Difference from Revised Forecast(Nov 5, 2020)
Net Sales：Despite efforts to promote digitally, the arrival of the third wave of COVID-19 delayed the penetration of new druggroups into the market, and sales of generic drugs were lower than expected.
Operating Income：SG & A expenses decreased due to efforts to reduce costs and refraining from activities. On the other hand,【Explanationof wasVariances（Change：revised
operating income
lower than expected because offorecast）】
gross profit decrease caused by unmet sales goal.
Net Income：Due to the partial exemption of repayment obligation for long-term debt from JST(Japan Science and Technology
Agency), debt exemption gain etc. totally ¥1.9 bln was recorded as an extraordinary income.

8

Main Product Sales Update
Change（単位：億円）FY 2019
Flutiform(Combination drug for asthma treatment)

Desalex(Antiallergic Agent)

Beova(β3 adrenergic receptor agonist overactive
bladder therapeutics )Lasvic tablets(New quinolone synthetic antibacterial agent)

Pentasa(Ulcerative colitis andCrohn’s disease treatment)

New ethicaldrugs,etc.
(Japan)Uritos（Kyorin）(Overactive bladder)

Nasonex（Spray type allergic rhinitis remedy）

Kipresfor adult(Leukotriene Receptor Antagonist)for children
Mucodyne（Mucoregulant）

Milton(Disinfectant)

Rubysta(Disinfectant)

FY 2020

ChangeChange(%)(forecast)
Announced on Nov
5,2020

14.6

13.3

－1.3

－9.0

－1.2

2.6

5.7

＋3.1

＋120.7

－1.8

4.3

7.3

＋3.0

＋70.2

0

1.1
13.3
5.8
6.0

0.9
12.8
2.3
2.8

－0.2

－19.6

－0.9

－0.5

－4.3

＋0.3

－3.5

－60.1

＋0.1

－3.2

－54.0

＋0.4

5.3

3.9

－1.4

－25.4

＋0.1

6.5
5.8
2.4
1.5

4.4
3.3
2.1
2.0

－2.1

－33.0

＋0.1

－2.5

－43.4

0

ー0.3

ー10.2

ー0.2

＋0.5

＋34.9

－0.1

11.5

10.8

－0.7

－6.1

＋0.6

2.8

3.8

＋1.0

＋37.0

＋0.3

－

0.7

+0.7

－

－0.1

..

Montelukast tablets “KM”
(Leukotriene Receptor Antagonist)

Generic
drugs

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

Imidafenacin tablets & OD
“KYORIN”Overactive bladder)9Trends of mainstay products
and Generic drugs

10

■Mainstay productFlutiform（Anti-asthmatic）（Units: bln）

Flutiform share
（%）

140.0

20

15.5

120.0
100.0
80.0
60.0

11.4

12.2

13.2

113.6

115.1

10

123.2

10
8
6

101.3

40.0

14
12

15

9.7
120.3

Sales

Market Sales

ICS/LABA market

5

11.9

13.1

14.6

13.3

13.9

21/3

22/3

4
2

20.0
0.0

0
17/3

18/3

19/3

20/3

21/3

0
18/3

19/3

※Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2017 MAT-Mar 2021 MAT Reprinted with permission■ICS/LABA market： Shrink 18％¥123.2bln(FY2019) ⇒ ¥101.3bln(FY2020) ※1●Patient’s suppressive behavior to medical
consultation by the spread of COVID-19●Generic for a competitive product launched■Share of Flutiform sales：expand2.3％
13.2%（FY2019） ⇒ 15.5%(FY2020)※ 1■Medium to long-term market outlook
Market shrinks due to annual NHI drug price revision
and GE launch impact

20/3(Forecast)◼Status in FY 2020
●Expand indications for pediatric asthma（June 2020）◼Effort for FY 2021
● Appeal the utility of the aerosol formulations
To understand and permeate the significance ofadministration to patients with cough symptoms● Aim to penetrate pediatric indications and increase market
share※1 Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2020 MAT-Mar 2021 MAT Reprinted with permission

11

■Mainstay product
Desalex (Antiallergic Agent)(Units: ¥ billion)

New drugs

15.0

173.5

(Units: ¥ billion)

Antihistamine market
long-listed drugs and generics Approx.

200.0

178.2
162.1

180.0

156.2
137.0

10.0

106.8

100.0

95.7

85.2

5.0
3.0

66.8
0.5

2.9

66.4

17/3

18/3

19/3

71.0

8

160.0
140.0

6

Supply suspended :about 10 months

120.0
98.6

78.2

Sales

Desalex share

4.9

1.7

38.3

20/3

21/3

0.0

100.0

4

7.2

80.0
60.0
40.0

2

4.9

5.7
3.7

20.0
0.0

2.6

0
18/3

19/3

20/3

21/3

22/3
(Forecast)※Copyright© 20201IQVIA. calculated based on MIDAS Mar 2017 MAT-Mar 2021 MAT Reprinted with permission■Antihistamine market：shrink 12%¥156.2bln（FY2019） ⇒ ¥137.0 bln（FY2020） ※1●Patient’s suppressive behavior to medical consultation by the
spread of COVID-19●Market of aged 12 or over : 110 billion yen■Share of Desalex sales
1.7%（FY2019) ⇒ 4.9%（FY2020） ※1⚫Dec 2018 : 6.3%※2 (before supply suspended)⚫Mar 2021 : 6.7%※2 (after supply resumed)■Medium to long-term market outlook◼Status of FY2020⚫Worked on recovery to market share before supply stop
through real interviews and webinars and achieved its
goal in March 2021

◼Effort for FY2021● Realization of prescription acquisition rate No.1 inotolaryngology⚫ Focus on expanding the number of general internal
medicine clinics and acquiring prescriptions

Market shrinks due to annual NHI drug price revision and GE
launch impact※1 Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2020 MAT-Mar 2021 MAT Reprinted withpermission※2 Copyright© 2021 IQVIA. calculated based on MIDAS Dec 2018 Month, Mar 2021 Month Reprinted withpermission

12

■Mainstay product
Beova / Uritos (Therapeutic agent for overactive bladder)(Units: ¥ billion)
100

OAB market

β3 receptor antagonist others

90.2

91.0

91.3

(%)

anticholinergic agent

96.3

80
60

59.9

56.9

53.0

47.8

Beova share

97.7

20

40.2

15

(Units: ¥ billion)

Sales

10.1

10
8

7.2

7.3

10.4

10.5

0.7

0.7

4.3

0.7

7.0

6

8.6

10
40

20

48.5

57.5

38.3
30.4

34.1

8.6

0.6

5.0

19/3

20/3

0

4

5
0

17/3

18/3

21/3

7.2

6.6

2.7

0
19/3

20/3

¥96.3bln（FY2019） ⇒ ¥97.7（FY2020） ※1•β3 receptor agonist market :expand 18.9% (compared with 17/3)◼Share of Beova and Uritos⚫Share of Beova sales

5.0%（FY2019） ⇒ 8.6%（FY2020）※2⚫Share of Uritos sales
7.0%（FY2019） ⇒ 3.0%（FY2020）※2

21/3

1.0

Uritos22/3(Forecast)※Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2017 MAT-Mar 2021 MAT Reprinted with permission◼OAB market： expand 1.5%

Beova

5.8

2

18/3

Imidafenacin
AG◼Status of FY2020●Launched Imidafenacin AG (June 2020)◼Effort of FY2021● Aim to contribute to urology together with Zymso *1● After clearing shipping adjustment *2, aim for the top share soon
※1: Refer to P29※2: At each OEM manufacturer, they are working to expand facilities
and launch new manufacturing sites.
Shipment adjustments are expected to be lifted during FY2022※1 Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2020 MAT-Mar 2021 MAT Reprinted with permission※2 Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2020 MAT-Mar 2021 MAT Reprinted with permission

13

■Mainstay productLasvic (New quinolone synthetic antibacterial agent)(Units: ¥ billion)
3(Units: ¥ billion)

150

Oral antibacterial agent market

Sales

2

100

144.6

2.8

125.9
105.6

50

96.2

1

63.3

1.1

0.9

0
17/3

18/3

19/3

20/3

21/3

※Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2017 MAT-Mar 2021 MAT Reprinted with permission

0
20/3
Released Lasvic Tablets
January 2020

21/3
Released Lasvic Injection
March 2021

22/3
(Forecast)■ Oral antibacterial agent market: Shrink 34%¥96.2bln(FY2019)⇒¥63.3bln(FY2020)※1● The number of patients from infectious diseases has
decreased by washing hands, gargling, and wearing masks■Status of FY2020●Launched Lasvic IV drip infusion kit (Mar 2021)◼ Share of Lasvic⚫ Share of Lasvic sales 1.9%（FY2020）※1⚫ Promotion of proper use of antibacterial agents against AMR●Appeal both dosage forms can cover respiratory infections■ Medium to long-term market outlook◼Effort of FY2021●Increase in-hospital and outpatient treatment options
Tablets: Aim to maximize product penetration
Injection: Aim for early adoption and widespread use

The market for oral antibacterial agents in respiratory andotolaryngology is expected to shrink significantly compared to before
COVID-19.
※1 Copyright© 2021 IQVIA. calculated based on MIDAS Mar 2020 MAT-Mar 2021 MAT Reprinted with permission

14

■Status of Generic Drugs
Kei(Units: ¥ billion)

35
31.0
29.3

30
27.7
25
20

◼Status of FY2020

33.1
32.2

11.7

11.9

2.8

11.5

0.7

3.8

0.7

3.5

9.2
10.8

IMIDAFENACINAG
MOMETASONE
AG⚫Released of Imidafenacin AG(June)⚫Montelukast AG, Mometasone AG, Imidafenacin
AG maintain the market share of more than
50% in the GE market●Released in June 2020: 7 ingredients 13 items

MONTELUKAST
AG

Levocetirizine hydrochloride tablets 2.5mg/5mg,
DS0.5%
Memantine hydrochloride OD5mg/10gm/20mg, etc.

●Released in Dec 2020: 2 ingredients 4 items
Pregabalin OD Tablets 25/75/150mg,
LoreAce Combination Tablets

15◼Effort for FY2021

10

16.0

17.4

16.7

16.8

19.7

Other GE

⚫Expand sales of strategic products andSupplementary Items
Contribution of launched items in FY2020 through the year
Release in June 2021: 5 items⚫Promotion of AG strategy
Aim to maintain market share of more than 50% forMontelukast AG, Mometasone AG and Imidafenacin AG in
the GE market

5
0
18/3

19/3

20/3

21/3

22/3
(Forecast)

15

Consolidated Financial Forecast

16Consolidated Financial Forecast
for the Year Ending March 31, 2022
(Units: ¥ billion)

FY2021

FY2020
Net
sales

Y/Y

（forecast）

ChangeChange(%)

102.9

102.6

n/a

n/a

New ethical drugs,etc.(Japan)

69.7

68.6

n/a

n/a

New ethical drugs(Overseas)

1.0

0.8

n/a

n/a

32.2

33.1

n/a

n/a

Cost of Sales

51.3

ー

ー

ー

SG&A
(R&D)

45.8
(9.7)

ー
（9.2）

ー
（ー0.5）

ー(ー5.2)

Operating Income

5.8

3.3

ー2.5

ー43.0

Ordinary Income

6.4

3.8

ー2.8

ー41.1

Net Income

6.1

2.7

ー3.4

ー56.0

Generic drugs

Apply the "Accounting Standards for Revenue Recognition" from the fiscal year ending March 31, 2022, and the consolidated earnings forecast
for the fiscal year ending March 31, 2022 incorporates these changes.

Net Sales: Although sales of main products (Desalex, Lasvic, etc.) will grow, sales of new ethical drugs (Japan) are expected todecrease due to NHI drug price revisions (Kyorin Pharmaceutical 6% range). Meanwhile, GE's sales are expected to increase
Operating Income: Gross profit decrease due to a decrease in sales. Despite efforts to reduce SG & A expenses(including R&D expenses), profits are expected to decline due to investment costs to expand the development pipeline
Cost of sales ratio: Increase about 3.5 points, SG&A expenses ratio (excluding R&D expenses): Decrease about 1 point,
R&D: Decrease ¥0.5 bln (¥9.7 bln ⇒¥9.2 bln)17

Forecast of Mainstay Products Sales（Units：¥billion）

ChangeChange(%)

13.9

＋0.6

＋4.8

5.7

7.2

＋1.5

＋27.2

7.3

8.6

＋1.3

＋18.3

0.9

2.8

＋1.9

＋229.0

12.8

11.7

－1.1

－7.8

2.3

1.0

－1.3

－56.3

2.8

1.8

－1.0

－33.7

8.3

6.9

－1.4

－16.1

3.3

2.9

－0.4

－9.6

2.1

2.2

＋0.1

＋5.6

2.0

2.1

＋0.1

＋8.3

10.8

9.2

－1.6

－14.2

Mometasone Nasal 50mg “KYORIN”

3.8

3.5

－0.3

－6.4

Imidafenacin tablets & OD
“KYORIN”(Overactive bladder)

0.7

0.7

0

＋5.9

(Combination drug for asthma treatment)

Desalex(Antiallergic Agent)

Beova(Kyorin)(β3 adrenergic receptor agonist overactive bladdertherapeutics )Lasvic(New quinolone synthetic antibacterial agent)

Pentasa(Ulcerative colitis andCrohn’s disease treatment)

Uritos（Kyorin）(Overactive bladder)

Nasonex（Spray type allergic rhinitis remedy）

Kipres(Leukotriene Receptor Antagonist)

Mucodyne（Mucoregulant）

Milton(Disinfectant)

Rubysta(Disinfectant)Montelukast tablets “KM”
(Leukotriene Receptor Antagonist)

Generic
drugs(Forecast)

13.3

Flutiform

New ethicaldrugs,etc.
(Japan)YoY

FY2021

FY2020(Actual)（Spray type allergic rhinitis remedy）

18

Shareholder Returns
Capital Policy
・While maintaining the sound financial base, we aim to improve the capitalefficiency through growth investment and returns to shareholders
・We will maintain stable dividends taking DOE (Dividend on Equity ratio) into
account

Revision of Dividend Level
In consideration of dramatic changes in the business environment, risingdemand for growth investments such as expansion of development pipelines,
investment in facilities, we will lower the level of DOE while maintaining thecapital policy

Dividends

FY2018FY2019FY2020※

FY2021（forecast）

Dividend pershare (Yen)

¥75

¥75

¥75

¥52

(Year-end ¥45)

(Year-end ¥32)

71.1%

112.0%

Consolidated
payout ratio（Year-end ¥45） (Year-end ¥45)

72.6%

70.9%

※The year-end dividend of 45 yen in the fiscal year ended March 2021 will be decided at in the Board Meeting scheduled in May 20

19

Status of R&D pipeline20Drug R&D Pipeline: Progress in FY2020
Progress in FY2020
development code

PhⅠ

PhⅡ

PhⅢ

application

KRP-108P

Approval/
LaunchPediatric
Indication (Jun)Respiratory

KRP-R120
Infections(Jul)

KRP-AM1977Y

Launched (Mar)KRP-116D

Approved (Feb)

Urology

AKP-009

ASKA inprogress● Gefapixant citrate: MSD：PhⅢ

Concluded a momorandum of understanding for sales collaboration.（May 2019）【 Licensed Compound / Program 】
Compound/CodeLicenseeStage

FeaturesBMS

PhⅠ

・FPR-2 agonists that mainly inhibit the migration of neutrophils and exhibit
anti-inflammatory action.
・Therapy area : Non-disclosure

KRP-203

Priothera

PhⅠ・Sphingosine-1-Phosphate Receptor Agonist
・ Target：AML patients undergoing HSCT・Assignment of intellectual properties and drug substances(Sep.2020)

Compound for
Sensorineural
Hearing Loss

OtonomyNon-clinical・「OTO-6XX」 (Otonomy’s Development Code)・License Agreement (Aug.2020)

FPR2 agonist
program21

Drug R&D Pipeline: Progress in FY2021
Progress in FY2021

PhⅠ

development code

PhⅡ

PhⅢ

application

Approval / Launch

KRP-R120
Respiratory

Gefapixant
citrateMSD(2021)

KRP-A218(Apr)

Infections

KRP-116D
UrologyLaunched (Apr)

AKP-009

ASKA inprogress※ Gefapixant citrate: Concluded Distribution Agreement in Japan with MSD（Apr 2021）【 Licensed Compound / Program 】
Compound/CodeLicenseeStage

FeaturesBMS

PhⅠ

・FPR-2 agonists that mainly inhibit the migration of neutrophils and exhibit
anti-inflammatory action.
・Therapy area : Non-disclosure

KRP-203

Priothera

PhⅠ・Sphingosine-1-Phosphate Receptor Agonist
・ Target：AML patients undergoing HSCT・Assignment of intellectual properties and drug substances(Sep.2020)

Compound for
Sensorineural
Hearing Loss

OtonomyNon-clinical・「OTO-6XX」 (Otonomy’s Development Code)・License Agreement (Aug.2020)

FPR2 agonist
program22

Progress of Medium-Term Business Plan
“HOPE 100-Stage 3-”(Fiscal Year 2020～2023)

23

Overview of Medium-Term Business Plan
“HOPE 100-Stage 3-”
Statement : Realize growth trend by pursuing Kyorin’s originality
・Shift to business based on the proposal of solutions andaccelerate the growth of new drug groups.
・ Enhance pipeline to support medium-term growthBusiness Strategy

・ Strengthen drug discovery capability to realize the creation of
innovative new drugs.
・ Improve cost competitiveness・ Expand overseas revenue

Organization Strategy

Performance Targets

・ Aim to be the No. 1 company for career fulfillment

・Growth potential and profitability
・Capital policy and shareholder returns

24

Shift to business based on the proposal of solutions and accelerate the growth of new drug groups

Solution Provision Activities in Infection Domain
Response to changing environment（MR activities/Medical care provision system）
Rebuild sales structure and enhance details

Shift to business based on
proposal of solutions“Lasvic IV Drip Infusion Kit 150mg”
launched (Mar)・Contribute to respiratory and ENT
infection along with tablets“KRP-A218”(Rhinovirus)PhⅠ
・Expand pipeline in infection medicines

Treatment

治療
LasvicTablets/Injection
ソリューション
Baccidal Tablets
etc.

Contribution to
infection control
in medical
institutions

Doctors/Pharmacists/Nurses

ICT/AST*
Prevention
MiltonRubysta
etc.

GeneSoC
Aim to launch IVD,
Reagent for extracting
nucleic acid, GeneSoC
mini

Diagnosis
GeneSoC
Reagent for COVID19,Reagent for RUO・GeneSoC* ICT: Infection Control Team
AST: Antimicrobial Stewardship Team

Infection-related product sales ¥5.8 bln(FY2020) ⇒ ¥8.3 bln(FY2021)

Kyorin’s unique contribution to health care workers in the infection fields

25Shift to business based on the proposal of solutions and accelerate the growth of new drug groups

Main products’ medium-term growth
Medium-term management plan “HOPE100－Stage 3－”
Accelerate new drugs group as much as possible
Product
nameMarketshare
FY2019ICS/LABA：¥100bln

Flutiform

13.2%

※1

Top Market

32%

※2

share
Flutiform

15.5%

OAB：¥100bln
Top Market

Beova

5.0%
※1

41%

※2

share
Beova

8.6%

Antihistamine：¥140bln

Desalex

1.7%

15%
4.9%
※1

Top Market
share

※2

Desalex

Oral Antibacterial Agent ¥60 bln

Lasvic(Oral)
0.9% ※1

Market environment/
Strategy

Current Status (FY2020)

6%
※2

1.9%
Top Market
share
lasvic●Market shrinks due to annual NHI
drug price revision and GE launch
impact■Aim to establish a first-choice
position for asthma treatment

Vision

ICS/LABA
combination
drug market: 30%●Market expanded by β3 receptor
agonist■Plan to clear shipping adjustment
in FY2022■Aim for a significant increase inpeak sales from FY2022

Market share
No.1●Market shrinks due to annual NHI
drug price revision and GE launch■No. 1 prescription acquisition ratein the field of otolaryngology■Expand prescriptions in internal
medicine

Sales more than
¥10 bil●Market shrinks due to COVID-19■Aim to maximize productpenetration(Expand the number ofprescriptions)

OAB market: Anticholinergic agents and β3 adrenoceptor agonists
Antibacterial agent market: includes all systemic antibacterial agents and children in all markets.

Top sales inantibacterial agent※1､2 Source：© 2021 IQVIA. calculated based on MIDAS Mar 2020 MAT-Mar 2021 MAT Reprinted with permission

26

Shift to business based on the proposal of solutions and accelerate the growth of new drug groups

Accelerate growth of new drug groups◼ Maximize the spread of Flutiform and Desalex◼ Establish Lasvic’s position as a quinolone for respiratory
and otolaryngological infections◼ Accelerate growth of Beova (after clearing shipping adjustment
in FY2022)

New Growth◼ Acquire Gefapixant citrate【Image diagram】
COVID-19
Annual NHI drug
price revision
Gefapixant citrate

Zymso
LasvicInjection Launched

Beova

Clear shipping
adjustment

DesalexFlutiform
FY201927
FY2020

FY2021

FY2022

FY2023

Enhance pipeline to support medium-term growth

New quinolone synthetic antibacterial agent ”Lasvic”
Lasvic Tablets 75mg

Launched in Jan 2020

■Indication
Pharyngitis, stomatitis, tonsillitis (including peritonsillitis and peritonsillar abscess), acute bronchitis,
pneumonia, secondary infection of chronic respiratory disease, middle ear infection, sinusitis■Dosage and Administration
The usual oral dosage for adults is 75mg of lascufloxacin once daily.
■Development background
Narrow down the treatment target to respiratory and otolaryngological infections,strengthen antibacterial activity against major causative bacteria including Gram-positive bacteria
and anaerobic bacteria
Lasvic tablets was developed with a concept different from the conventional one, improving
organizational migration.

Lasvic Intravenous Drip Infusion Kit

Launched in Mar 2021

■Indication
Pneumonia, lung abscess, secondary infection of chronic respiratory disease■Dosage and Administration
The usual dosage for adults is 300 mg of lascufloxacin on the first day of administration and 150 mg
once daily on the second and subsequent days of administration.
■Development background
The treatment target was defined as respiratory disease and developed as an injection that can beused for Pneumonia, lung abscess, secondary infection of chronic respiratory disease

Respond and contribute to treatment needs for respiratory andotolaryngological infections with two dosage forms (tablets and injections)28Enhance pipeline to support medium-term growthInterstitial cystitis “Zymso® Intravesical Solution 50%”
Indication
Improvement of symptoms of interstitial cystitis(Hunner type) (chronic pelvic pain, pressure anddiscomfort associated with the bladder, lower
urinary tract symptoms such as increased urgency
or pollakiuria)

Dosage and Administration
The usual dosage for adults is 50 mL of 50% (w/ w) dimethyl sulfoxide solution per vial (27g as
dimethyl sulfoxide) instilled into the bladder 6times at 2-week intervals

Product characteristics①First therapeutic agent for interstitial cystitis② Exhibits anti-inflammatory effect,shows
sedative and analgesic effects on inflammationin the bladder③ In domestic Phase III clinical trials,no serious
side effects were observed

LaunchLaunched in April 21, 2021

Patients
About 4,500(Survey in 2015 by Society of Interstitial Cystitis of Japan)

About 17,000(Survey in 2019 by M3, Inc)

As a new treatment option Zymso contributes topatient treatment and quality of life improvement
29

Enhance pipeline to support medium-term growth“Gefapixant Citrate” a Treatment for Chronic CoughAgreement with MSD
Date of agreement:
Apr 2021 (Press release Apr 26, 2021)
Essence of agreement : Exclusive distribution rights in Japan

Development status
Application submitted by MSD in Feb 2021

Target Treatment
Refractory chronic cough (RCC) or unexplained chronic cough (UCC)(Reported that the prevalence of chronic cough in Japan is about 2% among
Japanese 16 years and older)
Fujimura, Allergology International. 2012; 61: 573-581

Mode of Action
By inhibiting the binding of extracellular ATP and P2X3 receptor,
Gefapixant suppresses C fiber activation and suppresses coughCurrently, there is no therapeutic drug with theindication or effect of RCC and UCC, and Gefapixant
is expected as a new treatment option
30

Strengthen drug discovery capability torealize the creation of innovative new drugs
Cooperation

Watarase Research Center

ActivX(USA)Open innovation

Open innovation

Academia, Venture

Pharmaceutical companies inJapan and overseas

Selection and Concentration

Priority study area
Kinase / Fibrogenesis study

Drug discovery
Outside thecompany
Theme(Diversity)

Multi-tiered efforts

Novel drug discovery target

Worldwide (world-class drug discovery)
31

Strengthen drug discovery capability to realize the creation of innovative new drugs“KPR-A218” a Treatment for Rhinovirus infection
Development background
Discovered from Kinase research by Watarase Drug Discovery Center andActivX in the United States

Development status
Started PhⅠ in Apr 2021 in England

Target Treatment
Rhinovirus infection at risk of aggravation
Rhinovirus is known as the causative virus of the common cold, but the risk ofdeveloping a lower respiratory tract infection is becoming recognized as a medical
issue in immunocompromised patients.

Mode of Action
An antiviral drug that targets host molecules and suppresses viral growthin the body

● Expected to be widely effective against many rhinovirus
serotypes (types of surface antigens)● Less generate resistant virus by mutant strain
32

Improve cost competitiveness

Reform cost structure through intra-group optimization
Improve cost competitiveness at KYORIN Pharmaceutical
Group Facilities Co., Ltd◆ Control outsourcing expenses by equalizing the manufacturing capabilities ofeach factory◆ Facilitate efficient operation through the flexible transfer of employees among
factories◆ Use existing facilities more effectively
Noshiro plant (Akita)

Inami plant (Toyama）

Shiga plant （Shiga）

Expected effects of reorganization: Total cost reduction approximately 1,000 million yen by 2023.

Achieved ahead of schedule in FY2020
Next
Step

Aim to realize new factory construction(Takaoka, Toyama) to expand production capacity
33Key point of
Business Strategy in FY 2021

Increase
Business speed
andCost competitivenessDisclaimer

These forecast performance figures are based on information
currently available to the Company and may include
uncertain factors or risk that affect our future performance.
Accordingly, actual business results may materially differ fromthe forecasted figures due to various factors in the future.

36