Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31,
31 2015
1. Overview of consolidated results
2. Highlights of Business Performance
3. Actual and Forecast of Main Subsidiary Companies
4 Main Product Sales Update
4.
5. Development pipeline【Reference】
6. Segment information
7. Financial summary
February 2, 2015

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 due
to various factors in the future.

Outline of Third Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2015（¥ million）

Dec/2011

Dec/2012

Dec/2013

Dec/2014

YoY change(%)

Mar/2015(forecast)

YoY change(%)

Net Sales

77 41377,41379 22979,22983 43083,43083 602
83,602

＋0 2%
＋0.2%

111,700＋0.3%

Operating Income

11,66813,711

13,503

10,691－20.8%

13,800－21.6%

Ordinary Income

12,35814,288

13,961

11,181－19.9%

14,300－21.8%Net Income

7 227
7,227

9 262
9,262

9 272
9,2729 571
9,571

＋3 2%
＋3.2%

11 60011,600－3.5%
3 5%

Third Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2015

【 Net sales 】 Overall net sales increased 0.2% year on year to ¥83.6 billion. Sales growth was driven by year on year
increased in a new product Flutiform (prescription limitation was lifted in Dec/2014) and generic drug sales, despite
lower sales in the ethical drug due to drug price revision.
【 Net income 】 Gross profit declined ¥2.8
¥2 8 billion year on year due to a rise in the cost ratio
ratio, mainly reflecting therevision in the National Health Insurance drug pricing and changes in the product sales mix in the Ethical drugs Business.
Operating income amounted to ¥10.6 billion (a decrease of 20.8% year on year) due to a fall in selling, general, andadministrative expenses (including R&D expenses) . Net income increased at ¥9.5 billion (up 3.2% year on year) due toposting extraordinary income ¥4.5
¥4 5 billion and extraordinary loss ¥1.7
¥1 7 billion .
Consolidated Financial Results for the Fiscal Year Ending March 31, 2015 (forecast)【Net sales,sales Net income】 We will not revise the full-year (consolidated) results forecast of Net sales and Net incomeannounced on November 4, 2014 at this moment .
(degree of progress: Net sales: 74.8%, operating income: 77.5%)
1

Highlights of Business Performance（ Units: ¥ billion ）Cost of Sales

Cost of Sales

31.8

34.7

¾Net Sales increased ¥0.2billion¥0 2billion year onyear.
・decrease of new ethical drugs sales.
・increase of generic drugs sales.
¾Cost of Sales increased ¥2.9 billion.
(Cost of sales ratio increased 3.4%)
・Drug price revisions
・Sales of generic drugs increased
・Sales of ethical drug overseas decreased

Cost of Sales Ratio
Cost of Sales Ratio

38.1%
Net sales

41.5%
Net sales

R&D

8.7

■G■GrossProfit
P fit decreased
dd ¥2.8billion¥2 8billi year
on year

R&D

9.6
SG&A

SG&A

(excluding R&D)

38 2
38.2

29.5

(excluding R&D)

Operating
IncomeDec/13

SG&A

SG&A

38.2

28.6
Operating
Income¾SG&A expenses remained same level.
・R&D expenses increased ¥0.9billion（up front payment）・SG&A(excluding R&D) decreased¥0.9billion■Operating Income decreased¥2.8billion year on year.

Dec/142

Consolidated Financial Results
for the Third Quarter ending March 31, 2015
（unit : ¥ billion）
Dec/2013

Dec/2014

change

83.4

83.6

＋0.2

82.2

82.6

＋0.4

●Overseas

70.3
68.8
1.4

67.6
67.0
0.6

－2.7
－1.8
－0.8

◆Generic drugs

8.8

11.9

＋3.1

◆Over-thecounter drugs

3.1

3.2

＋0.1

Healthcare(Skin care)Business

1.2

1.0－0.2

Net Sales (total)

Ethical drugs
Business◆Sales of new
ethical drugs●JapanYear on Year
■Net Sales¥83.6bln(+ 0.2)◆Ethical drugs business¥82.6bln(+ 0.4)¥67.0bln(‐1.8)¥0.6bln(‐0.8)● Sales of new ethical drugs
Dec/2013⇒Dec/2014

・ Kipres・ Mucodyne
・ Pentasa
P t・ Uritos
・ Flutiform

29.6
14.0
14 5
14.5
5.9
0.3

⇒
⇒
⇒
⇒
⇒

29.3
10.6
13 4
13.4
5.5
2.6

(－0.3)(－3.4)( 1 1)(－1.1)(－0.4)(＋2.3)●Sales of new ethical drugs in Overseas

・ Gatifloxacin 1.2⇒ 0.3((－0.9)
0.9)●Sales of Generic drugs¥11.9bln(+ 3.1)
・Contract manufacturing’s sales and Health insurance pharmacy market’s sales increased¥3.2bln(+ 0.1)
●Sales of Over-the-counter drugs◆Healthcare (Skin care) Business¥1.0bln(‐0.2)■Operating Income¥10.7bln(‐2.8)◆Operating Income margin decreased 3.4 percentage points to 12.8%●Cost of Sales Ratio : 38.1%⇒41.5% increased 3.4 percentage points

OperatingIncome

13.5

10.7－2.8

OrdinaryIncome

14.0

11.2－2.8

Net Income

93
9.396
9.6＋0 3＋0.3・Druggp
price revisions ((in the 6%range
g for KYORIN Pharmaceutical).
)・Sales of generic drugs increased. ・Sales of Gatifloxacin decreased.

●R&D Ratio : 10.4%⇒11.5% increased 0.9 percentage points＊¥8.7bln⇒¥9.6bln（＋¥0.9bln） up front payment of KRP-114V●SG&A Ratio : 35.4%⇒34.2% decreased 1.2 percentage＊¥29.5bln⇒¥28.6bln（－¥0.9bln）
decrease of sales costs, labor costs, general expenses■Net Income¥9.6bln(+ 0.3)・extraordinary income : 4.5 billion yen for the transfer of the land and building of the former head office building・extraordinary losses : 1.7 billion yen for the use of the vacant lot of the Pharmaceutical Discovery Research Laboratories

3Actual and Forecast of Main Subsidiary Companies（unit : ¥billion）

Mar/2015

Dec/2013

Dec/2014

Mar/2014

Sales

73.6

72.6

97.7

97.1

Operating Income

12.1

8.8

15.4

11.5

8.6

8.4

10.8

10.2

Dec/2013

Dec/2014

Mar/2014

Sales

9.1

12.2

12.4

15.3

Operating Income

0.5

1.5

1.0

1.6

Net Income

0.3

1.0

0.6

1.0

Dec/2013

Dec/2014

Mar/2014

Sales

1.2

1.0

1.8

1.6

Operating Income

01
0.1

－00.1
102
0.2

00
0.0Net Income

0.1

－0.1

0.2

0.0

KYORIN pharmaceutical

Net Income

KYORIN Rimedio

Dr ProgramDr.

(forecast)

Mar/2015(forecast)

Mar/2015(forecast)4

Main Product Sales Update（ Units: ¥ billion ）Interim term

Third quarter

Product nameKipres（LT receptor antagonist）

Mucodyne（Mucoregulant）(Ulcerative colitis andCrohn’s disease treatment)

Uritos（Kyorin）(Overactive bladder)

Ketas
((For
bronchial asthma andcerebrovasculas disorders)

Flutiform（Combination drug for asthmatreatment）

Sales of new
ethical drugs(over seas)

Over-thecounter drugs

Gatifloxacin(Bulk・Royalty)

Milton(Disinfectant)

Progress tofull term
forecast(%)

Mar/2014

Mar/2015

Sep/2013

Sep/2014

Dec/2013

Dec/2014

Change

17.1

17.4

29.6

29.3

－1.1%

72.9%

40.2

40.2

8.2

6.2

14.0

10.6

－24.6%

76.2%

18.4

13.8

9.4

8.6

14.5

13.4

－7.3%

80.3%

18.6

16.7

3.7

3.4

5.9

5.5

－7.5%

72.6%

8.1

7.5

15
1.5

11
1.1

22
2.2

16
1.6

26.8%
8%
－26

76.5%

282.8

21
2.1

－0.9

0.3

2.6

＋641.6%

64.2%

0.6

3.9

1.0

0.1

1.2

0.3

－75.1%57.4%

1.50.5

1.0

1.0

1.6

1.5－2.4%

76.9%

2.1

1.9

Pentasa
Sales of new
ethical drugs(Japan)

Full term(forecast)

5Main R&D Activities -1 (Feb 2 , 2015 Release)
Ph III ~ Application submitted
StageJapan
Application
submitted(3/2014)

Overseas(Europe)
AstraZeneca: Launched(9/2012)※Changes from the previous announcement (Nov 4 2014)

Compound/CodeTherapy
area/Action

KRP-AB1102（Inhaleddrug）

Chronic
Obstructive
Pulmonary
Disease(COPD)

Almirall- New Chemical Entity: Aclidinium Bromide- Long Acting Muscarinic Agonist (LAMA)- Twice Daily administration-Onset of Action on the first dayGenuair®
1) Designed with a feedback system, which through a'colored control window' and anaudible click helps confirm that the patient has inhaledcorrectly2) Counter for remaining doses
3) Safety
S f t featuresf t
such
h as an anti-double-dosing
ti d bl d imechanism and an end-of-dose lock-out
system to prevent use of an empty inhaler

KRPAB1102F(Fixed dosecombination
inhaled drug)

ChronicObstructive
Pulmonary
Disease(COPD)

Almirall

Combination of aclidinium bromide with the longacting beta agonist formoterol :Thi combination
Thisbi ti iis aimed
i d att providing
idi higher
hi h efficacy
ffi
than each component alone,as well as the improved
convenience of having the two products in the sameeasy to use inhalation device.This is currently inphase Ⅲ clinical development.

KRP 114VKRP-114VO
Overactive
tibladderM k & Co.,
MerckCKRP 114V iis expected
KRP-114Vt d tot improveiurinaryiffrequency
through stimulation of the beta 3 receptor in bladderwhich improves bladder muscle relaxation.

(US)
ActavisOrigin: Launched (12/2012)

PhⅢ(8/2013)(Europe)
AstraZeneca: Approval
Al (11/2014)(US)
Actavis: PhⅢ※PhⅢ(1/2015)

PhⅡclinical
PhⅡli i l trial
t i l enddMerck & Co.,

Features

Comments
License agreement withAlmirall (2/2011)

License agreement withMerck & Co., Inc.,(7/2014)

6

Main R&D Activities -2 (Feb 2 , 2015 Release)※Changes from the previous announcement (Nov 4 2014)

POC Project (Pre-clinical ~ Ph II)
StageJapan

Overseas

Compound/
Code

Therapy area/Action

OriginFeatures

Comments

PhⅡ（8/2011）

PhⅢ
MerzKRP-209

Tinnitus

Merz

KRP-209 (Neramexane) is expected to improve thepatients' annoyance and difficulties in their life causedby tinnitus, mainly through its two pharmacologicalproperties: 1) NMDA antagonistic activity and 2)
Ni ti i acetylcholine
Nicotinict l h li antagonistict
i ti activity
ti it

License agreement withMerz (11/2009)
Merz:Ph I clinical trial ofJapanese patients in US
completed (3/2010)

PhⅡ（3/2013）

PhⅡ（POC)(12/2010)(Novartis)

KRP-203

Transplantation,
autoimmune
diseases,andIBD

In-house

An immunosuppressant with a novel mechanism called
an S1P-agonist. It may have a better safety profile thanprevious ones as well as an excellent effect underconcomitant use with other types of immunomodulator.

License agreement withNovartis (2/2006)
New license agreement
IBD (11/2010)

PhⅡ（9/2013）

KRP-AM1977X(Oral agent）

New quinolone
synthetic
antibacterial agent

In-house

PhⅡ（6/2014）

KRP-AM1977Y( j(Injection）

New quinolone
ysynthetic
antibacterial agent

In-house①Superior ability to combat drug-resistant grampositive bacteria (incl. MRSA)②Outstanding ADME (oral absorption, tissuemigration)③High degree of safety expected since safety
hurdles cleared prior to clinical trials

for referenceStageunder development by MSD K.K.

Compound/CodeDesloratadine

Therapy area/Action

Featuresallergic rhinitis, hives,
itching resulting fromskin diseases(eczema/dermatitis,pruritus cutaneous)second generation histamine H1-receptor antagonist

Comments
Co-Marketing Agreement for Japan with
MSD K
K.K.
K affiliate (11/2014)7

Reference8

Segment information
for the Third Quarter Ending March 31, 2015
Sales, Profit or Loss of each report segment（ Units: ¥ billion ）Saleschange Y/YProfitchange Y/Y

Net Sales ((total))

83.6＋0.2

10.7－2.8

Ethical drugs business82.6＋0.4

10.6－2.4

67.6－2.7○Overseas

67.0
0.6－1.8－0.8◆◆Genericdrugs

11 9
11.9＋3 1＋3.1◆Over-the-counter drugs

3.2＋0.1

Healthcare(Skincare) business101.0－0.202

－0.1
01

－0.202－－0.2－0.2◆Sales of new ethical drugs○JapanAmount of adjustment(Note ) The Company is applying the Revised Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation and the Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information.
As a result, the reported segments are the Ethical Drugs Business and the Consumer Healthcare Business.

9Consolidated Financial Results
for the Third Quarter ending March 31, 2015
Interim term

Third quarter

Full term（unit : ¥million）

Progress tofull term
forecast(%)

Mar/2014

＋0.2%

74.8%

111,400

111,700

＋406

5%
＋0.5%
＋075 1%75.1%

109,678

110 000
110,000

67,564－2,711

－3.9%

74.4%

93,51890,80068 843
68,84366 986
66,986－1,856
1,856

2.7%
7%
－2

74 7%
74.7%

91,66889 70089,700

332

1,433

577

－855

－59.7%

57.8%

1,849

1,000

5,184

7,790

8,806

11,873＋3,066＋34.8%

79.2%

11,987

15,000◆OTC drugs andothers

1,997

1,972

3,140

3,191

＋51

＋1.6%

76.0%

4,172

4,200

Consumerhealthcare business

810

593

1,206

972

－234

－19.4%

60.8%

1,721

1,600

Operatingincome

6,213

4,587

13,503

10,691－2,812－20.8%

77.5%

17,607

13,800Ordinary
income

6,531
,

4,898
,

13,961,

11,181,－2,779－19.9%

78.2%

18 281
18,281

14,300,Net income

4,397

3,495

9,272

9,571

＋298

＋3.2%

82.5%

12,025

11,600

Sep/2013

Sep/2014

Dec/2013

Dec/2014

Sales

50,851

51,112

83,43083,602＋172

Ethical drugs
b ibusiness

50 04050,04050 51850,51882 22382,22382 62982,629ethical drugs

42,85840,75570,276●Japanp

41 697
41,69740 42240,422●Overseas

1,160◆Generic drugs◆Sales of new

Change% Y/Y

Mar/2015(forecast)10