Financial Results
Ended March 2023

May 12 , 2023
KYORIN Pharmaceutical Co., Ltd.
Representative Director, President and CEO

Yutaka Ogihara

Outline of Consolidated Financial Results
Trends of mainstay products, generic productConsolidated Financial Forecast
Status of R&D Pipeline
Overview of the Long-term Vision “HOPE 100 –Stage 3–”
New Long-term Vision “Vision 110”(FY2023-FY2032)
and Medium-term Business Plan “Vision 110 –Stage 1–”(FY2023-FY2025)2

Outline of Consolidated Financial Results3

Breakdown of Gain and Loss FY2022（Units: JPY billions）

FY2021Year-on-year

FY2022

Vs forecast(announced on May 11, 2022)

ChangeChange (%)

Change

105.5

113.3

+7.8

+7.3

＋1.3

69.7

74.8

+5.1

+7.2

+0.3

1.0

0.3

－0.7

－70.1

－0.4

34.8

38.2

+3.4

+9.8

+1.5

Cost of sales

56.1

63.1

+7.0

+12.5

－

SG&A
(R&D)

44.4

45.0

+0.6

+1.4

－

(8.9)

(10.9)(+2.0)(+22.5)(0)Operatingprofit

5.0

5.1

+0.1

+2.3

－ 0.4

Ordinary
profit

5.6

5.8

+0.2

+4.6

－ 0.2

Profit attributable to owners ofparent

3.9

4.7

+0.8

+20.1

+0.2

Net Sales
New drugs, etc.
(Japan)New drugs (Overseas)
Generic drugs

4

Highlights of Business Performance (1/3) YoY: Net Sales(Units: JPY billions)[Net Sales 113.3]

120.0

105.5

113.3

+ 5.1

[Factors of increase]

100.0

34.8
80.0

1.0

38.2
0.3

60.0

40.0

New drugs, etc. (Japan): sales increased⚫

New drugs (Beova, Dezalex, Lasvic) grew
⚫ Increase in sales of out-licensing product (Beova)[Factor of decrease]⚫ Decrease in sales of long-listed products

New drugs (Overseas): sales decreased

69.7

74.8

Decline in the income of lump-sum payment of out
licensing product

Generic drugs: sales increased

20.0

0.0
FY 2021

FY 2022

－0.7

+ 3.4

⚫

Increase in sales of Kipres AG and Nasonex AG etc.

⚫

New generic drugs launched in FY2022
contributed to sales

5Highlights of Business Performance (2/ 3) YoY: Operating Profit(Units: JPY billions)[Operation profit ＋0.1]

6

5.0

5.1

+0.7

5

＋2.0

-1.4

4

3

Gross profit increased
Net sales+ 7.8

Cost ofsales ratio+ 2 . 5 %pt

Factor of
Increase

New drugs (Beova, Dezalex etc) grew

Factor of
Increase

NHI drug price revision (KYORIN Pharm: 8%)
Sales increased in generic drugs,
effect of exchange rate

R&D expenses increased

2

+ 0.7

+ 2.0

8.9 (FY2021) ⇒ 10.9 (FY2022)
Progress of pipeline (Milestone payment etc.)

1

SG&A (excluding R&D) decreased
0
Operating profit
FY2021Gross profit

R&D expenses

SG&A
Operating profit(excluding R&D)
FY2022－1.4

35.5 (FY2021) ⇒ 34.1 (FY2022)
Decrease in selling, personal expenses and license fees etc.
・Decline of upfront payment posted in FY2021

Highlights of Business Performance (3/3) vs Forecast（Units: JPY billions）

FY2021Net Salesvs forecast

Year-on-year

FY2022(announced on May 11, 2022)

ChangeChange (%)

Change

105.5

113.3

+ 7.8

+ 7.3

+ 1.3

69.7

74.8

+ 5.1

+ 7.2

+ 0.3

1.0

0.3

－0.7

－70.1

－0.4

34.8

38.2

+ 3.4

+ 9.8

+1.5

Cost of sales

56.1

63.1

+ 7.0

+ 12.5

－

SG&A
(R&D)

44.4

45.0

+ 0.6

+ 1.4

－

(8.9)

(10.9)(+ 2.0)(+ 22.5)(0)Operating profit

5.0

5.1

+ 0.1

+ 2.3

－0.4

Ordinary profit

5.6

5.8

+ 0.2

+ 4.6

－0.2

Profit attributable to owners ofparent

3.9

4.7

+ 0.8

+ 20.1+ 2.0

New drugs, etc.
(Japan)New drugs (Overseas)
Generic drugs【Difference from the Forecast (Announced on May 11, 2022)】
Net sales: Sales of new drugs etc. (Japan) and generic drugs exceeded forecast due to increase in sales of Desalex, Nasonex, Kipres AG accompanying high volume of Airborne pollen.
Operating profit: Gross profit was lower than forecast due to increase of cost of sales ratio, since sales in new drugs came lower than estimated and sales in generic drugs wereincreased. SG&A expenses were lower than forecast. As a result, operating profit was slightly lower than forecast. R&D expenses were ¥10.9 bln.
Profit: Extraordinary profit of ¥1,979 mln (gain on insurance of ¥881 mln, income of compensation for damages of ¥401 mln, regarding a fire at Nishinihon delivery center, gain onsale of investment securities ¥685 mln)
Extraordinary loss of ¥900 mln (Impairment losses of ¥110 mln, provision for loss on liquidation of subsidiaries and associates of ¥605 mln regarding dissolution of ActivX) 7

FY2022 Main Product Sales Update（Units: JPY billions）

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

Lyfnua(selective P2X3 receptor antagonist / chronic cough)Desalex(Antiallergic Agent)

Flutiform(Combination drug for asthma treatment)

Pentasa(Ulcerative colitis and Crohn’s disease treatment)

New drugs,
etc. (Japan)

Kipres(Leukotriene Receptor Antagonist)

Mucodyne(Mucoregulator)

Nasonex(Spray type allergic rhinitis remedy)

Uritos (KYORIN)(Therapeutic agent for overactive bladder)

Milton(Disinfectant)

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

Generic
drugs

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

Imidafenacin tablets & OD“KYORIN”(Therapeutic agent for overactive bladder)

FY2021

FY2022

8.6

vs Forecast

Year-on-year(announced on May 11, 2022)

ChangeChange (%)

Change

12.9

＋4.3

＋49.8

－1.2

1.8

2.5

＋0.7

＋35.0

－0.5

－

0.2

＋0.2

－

－0.3

7.1

8.5

＋1.4

＋20.6

＋0.5

12.6

12.0

－0.6

－4.8

0

14.0

12.8

－1.2

－8.4

＋0.3

8.4

6.6

－1.8

－21.7

－0.2

3.5

3.5

0

＋1.5

＋0.6

2.4

2.5

＋0.1

＋4.1

＋0.7

1.3

0.7

－0.6

－44.2

0

2.1

2.0

－0.1

－2.4

0

2.1

2.1

0

－0.7

＋0.1

12.2

13.3

＋1.1

＋9.5

+ 2.6

3.6

4.7

＋1.1

＋28.5

+ 1.1

0.8

0.7

－0.1

－9.9

+ 0.2

Trends of Mainstay Products and Generic Drugs

9[Mainstay products] Beova (Therapeutic agent for OAB)
Anticholinergic agents

OAB market

β3 receptor antagonist others

Beova(KYORIN) share（Units: JPY billion）（Units: JPY billion）

100

91.3

Sales

96.3

97.7

(%)

93.0

89.0

20

20

15

15

16.7
80

60

53.3

48.1

40.3

30.6

20.9

10.2

8.6
40

5.0

38.0
20

0.6

57.4

10

62.4

18.9
12.9

68.1
5

5

7.3

8.6

4.3

48.2
0

0

0
19/3

10

20/3

21/3

22/3

20/3

21/3

22/3

23/3

23/3

24/3
(Forecast)

Copyright © 2023 IQVIA. JPM Calculated based on Mar 2019 MAT- Mar 2023 MAT Reprinted with permission

OAB market: Shrink 4.3%
93.0 (Mar 2022 MAT) ⇒ 89.0 (Mar 2023 MAT）*● NHI drug price revision and launch for generic drug
● Market expansion of β3 adrenergic receptor (+9.1％)

Share of Beova (KYORIN) sales: Expand 6.5%pt
10.2% (Mar 2022 MAT）⇒ 16.7% (Mar 2023 MAT)*

Medium to long-term market outlook
Shrinking market due to NHI drug price revision and launch generic drugMarket expansion for β3 adrenergic receptor* Copyright © 2023 IQVIA. JPM Calculated based on Mar 2022 MAT, Mar 2023 MAT Reprinted with permission

Status in FY2022
NHI drug price revision in Apr 2022: ｰ 4.6%
● End of restrictions on shipment in Aug 2022
● Focus on providing information● Patients acquisition rate of OAB agents: No.1 (for Vibegron)

Effort for FY2023
NHI drug price revision in Apr 2023: ｰ 4.6%
● Promotion to expand patients acquisition rate of OAB agents● Aim to establish evaluation of Beova as first line treatment for OAB

10

[Mainstay products] Lasvic (New quinolone synthetic antibacterial agent)
Oral antimicrobial market

Lasvic share（Units: JPY billions）

Sales

(%)

120.0

12
3

80.0

8
2

105.6

96.2

40.0

3.2

4.0
63.3
1.9

0.9

4

2.9
62.3

60.5

22/3

23/3

0.0

20/3

21/3

Copyright © 2023 IQVIA. JPM Calculated based on Mar 2019 MAT, Mar 2023 MAT Reprinted with permission

Oral antimicrobial market: Shrink 2.9%
62.3 (Mar 2022 MAT)⇒ 60.5 (Mar 2023 MAT)*●Reducing the number of patients due to infection prevention measure result toshrink market.
Share of Lasvic sales: Expand 1.1 %pt
2.9% (Mar 2022 MAT) ⇒ 4.0% (Mar 2023 MAT)*

Medium to long-term market outlook
Expect to tend to remain flat in oral antimicrobial market for respiratory and otolaryngology* Copyright © 2023 IQVIA. JPM Calculated based on Mar 2022 MAT, Mar 2023 MAT Reprinted with permission

1.8
1.1

0

19/3

2.5
1

0.9

0
20/3

21/3

Launch ofLasvic tab(Jan 2020)

Launch ofLasvic IV(Mar 2021)

22/3

23/3

24/3
(Forecast)Status in FY2022
NHI drug price revision in Apr 2022: ｰ 3.2% (oral), ｰ 0.9% (iv)
● Expand prescriptions in elderly or patients with underlying disease in infectiondiseaseEffort for FY2023
NHI drug price revision in Apr 2023: ｰ 5.3% (oral), ｰ 0% (iv)
⚫ Aim to be first line treatment for old people/patients with disease⚫ Strive for improving the recognition as the drug recommended by the guideline⚫ Aim to be No.1 share in new quinolone market

15

[Mainstay products] Lyfnua (Cough treatment)
The number of estimated patients

Chronic chough patients

Sales
1.5

RCC/UCC patients

2,500 K

400 K ~ 500 K
1.0

1.3

Definition of Refractory/Unexplained Chronic Cough

0.5

RCC/UCC
0.0

0.2
23/3

24/3
(Forecast)Refractory chronic
coughChronic cough despite theappropriate treatment ofprimary disease, Asthma,
GERD, UACS etc.

Unexplained
chronic cough
Cough without identify
primary disease, despite thethorough diagnostic
evaluation is preformed.

Status in FY2022⚫ Enhancement of better understanding for product characteristic to respiratory
specialists⚫ Strive to promote in university hospitals or core hospitals
Issue: Difficult to diagnosis and recognize the patients of RCC/UCC

Effort for FY2023
Dismantling of prescription limitation on May

Appealing thatis the only drug which has indication for refractory chronic
Aim to No.1 in Market
ofLyfnua
OAB
cough
⚫

⚫ Growth of prescriptions for the patients with chlonic cough despite treatment⚫ Spread of understanding from Dr to Dr

GERD: gastroesophageal reflux disease
UAUS: upper airway cough syndrome13

[Mainstay products] Desalex (Antiallergic Agent)
Antihistamine market
New drugs（Units: JPY billions）

180.0

162.1

Desalex share（%）

15.0

156.2

95.7

85.2
98.6

90.0

125.6

122.0

30.0

10

83.7

8.1

6.6

8
10.0

6

74.5

4.9
60.0

（Units: JPY billions）

137.0

150.0
120.0

Sales
Long-listed and generic drugs

66.4
3.0

5.0

71.0
1.7
38.3

41.9

47.5

22/3

23/3

0.0
20/3

21/3

5.7

8.5

8.9

23/3

24/3

7.1

2

2.6
0.0

19/3

4

0
20/3

21/3

22/3

(Forecast)

Copyright © 2023 IQVIA. JPM Calculated based on Mar 2019- Mar 2023 Reprinted with permission

Antihistamine Market: Shrink 2.8%
125.6 (Mar 2022 MAT) ⇒ 122.0 (Mar 2023 MAT)*1●Shrinking market due to NHI drug price revision and launch generic drug

Share of Desalex sales: Expand 1.5 %pt
6.6% (Mar 2022 MAT) ⇒ 8.1% (Mar 2023 MAT) * 1●Dec 2018 single month：6.3%（Before supply suspension)⇒ 10.0% *2 (Mar 2023 single month)

Status in FY 2022
NHI drug price revision in Apr 2022: ｰ 9.6%
●Appealing as effective and usability drug
Usability: less sleepiness, no-limitation for drive, administration with or without
meals

Effort for FY 2023
NHI drug price revision in Apr 2023: ｰ 9.1%
Aim to be first line treatment as effective and usability drug
●Aim to be No.1 prescription in otolaryngology

Medium to long-term market outlook
Shrinking market due to NHI drug price revision and launch generic drug
*1: Copyright © 2023 IQVIA. JPM Calculated based on Mar 2022 MAT, Mar 2023 MAT Reprinted with permission*2: Copyright © 2023 IQVIA. JPM Calculated based on Dec 2018 single month, Mar 2023 single month Reprinted with permission

13

[Mainstay products] Flutiform（Anti-asthmatic）
ICS/LABA market（Units: JPY billions）（Units: %）

140.0

20

15.5

120.0
100.0

Sales

Flutiform share

12.2

15.9

16.0

13.2

120.3

123.2

15

10

101.3

40.0

14
12

80.0
60.0

（Units: JPY billions）

10
8

14.6

6

90.4

85.6

5

20.0

13.3

12.6

12.0

11.4

22/3

23/3

24/3

4
2

0.0

0
19/3

20/3

21/3

22/3

23/3

0
20/3

ICS/LABA market: Shrink 5.4%
90.4 (Mar 2022 MAT) ⇒ 85.6 (Mar 2023 MAT)*1● Impact of NHI drug price revision and expansion of triple therapy● Launch of GE in competing product21/3(Forecast)

Copyright © 2023 IQVIA. JPM Calculated based on Mar 2019 MAT-Mar 2023 MAT Reprinted with permission

Status in FY 2022
NHI drug price revision in Apr 2022: ｰ 6.2%
● Appeal the utility of aerosol formulations to suitable for patient with weak inspiration● Increase market share on a volume-basis 17.3% (Mar 2022 single month) ⇒ 17.8%(Mar 2023 single month)

Share of Flutiform sales: Expand 0.1 %pt
15.9% (Mar 2022 MAT) ⇒ 16.0% (Mar 2023 MAT) *1

Medium to long-term market outlook
Shrinking market due to NHI drug price revision and launch generic drug
*1 Copyright © 2023 IQVIA. JPM Calculated based on Apr-Sep 2021, Apr-Sep 2022 Reprinted with permission

Effort for FY 2023
NHI drug price revision in Apr 2023: ｰ 6.1%
● Appeal the utility and easy-to-use of aerosol formulation
Elderly patients and those have inflammations of small airways in asthma● Aim to sustainable growth14

Status of Generic Drugs
Sales in GE

Sales in AG (three products) among with the sales at left

（Units: JPY billions）（Units: JPY billions）

40

20

30

15

20

31.0

32.2

34.8

38.2

36.6

10

14.3

15.4

16.6

18.7
14.8

5

10

0

0
20/3

21/3

22/3

23/3

24/3

20/3

21/3

22/3

23/3

(Forecast)Status in FY2022

Effort for FY2023● Increased market share for strategic products● Expand sales of strategic products● Launched new products● Strive for stable supply

Jun 2022
Dec 2022○ Febuxostat tablets 10mg/20mg/40mg○ Duloxetine Capsules 20mg/30mg○ Ramelteon Tablets 8mg○ Esomeprazole Capsules 10mg/20mg

24/3(Forecast)〇 Optimization of manufacturing and order plan
● Launch new products

June 2023

Eplerenome tablets 25mg/50mg/100mg
Fluticason FR Nasal Solution 27.5mg 50/120
Azilsaltan OD tablets 20mg/40mg

15

Consolidated Financial Forecast FY2023

16

Consolidated Financial Forecast FY2022(Unit: JPY billion)

FY2022

FY2023113.3
New drugs, etc.
(Japan)Year-on-year
ChangeChange (%)

116.2

+ 2.9

+ 2.6

74.8

79.1

+ 4.3

+ 5.8

New drugs(Overseas)

0.3

0.4

+ 0.1

+ 29.6

Generic drugs

38.2

36.6

－1.6

－4.2

Cost of sales

63.1

-

-

-

SG&A (R&D)

45.0

-

-

-

(10.9)(9.6)(－1.3)(－12.0)Operating profit

5.1

6.0

+ 0.9

+ 17.1

Ordinary profit

5.8

6.5

+ 0.7

+ 11.5

4.7

4.9

+ 0.2

+ 3.7

Net Sales

Profit attributable to ownersof parent【Key factors for Increase/decrease (Year-on-Year)】Net sales : The sales of new drugs (Japan) are expected to increase due to expansion in sales of mainstay products, Beova, Lyfnua and Lasvic etc. The
sales of generic are expected to decrease due to decline of sales in AG etc. Net sales are expected to increase.
Operating profit: Gross profit are expected to increased although impact on NHI drug price revisions. Operating profit are expected to increase despite
increase SG&A expenses.
Cost of sales ratio: approx. －1.5%pt. SG&A expenses (excluding R&D expenses): approx. +2%pt. R&D expenses: －1.3 (from 10.9 to 9.6 billion yen)17

Forecast of Mainstay Products Sales(Unit: JPY billions)

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

Lyfnua(Selective P2X3 receptor antagonist / chronic cough)Desalex(Antiallergic Agent)

Flutiform(Combination drug for asthma treatment)

Pentasa

New drugs,
etc. (Japan)(Ulcerative colitis and Crohn’s disease treatment)

Kipres(Leukotriene Receptor Antagonist)

Mucodyne(Mucoregulator)

Nasonex(Spray type allergic rhinitis remedy)

Uritos (KYORIN)(Therapeutic agent for overactive bladder)

Milton(Disinfectant)

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

Generic
drugs

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

Imidafenacin tablets & OD“KYORIN”(Therapeutic agent for overactive bladder)Year-on-year

FY2022

FY2023(Forecast)

ChangeChange (%)

12.9

18.9

+ 6.0

+ 46.8

2.5

3.2

+ 0.7

+ 32.6

0.2

1.3

+ 1.1

+ 595.4

8.5

8.9

+ 0.4

+ 4.6

12.0

11.4

－0.6

－4.2

12.8

11.8

－1.0

－7.0

6.6

5.3

－1.3

－19.2

3.5

3.0

－0.5

－12.5

2.5

1.2

－1.3

－49.6

0.7

0.2

－0.5

－58.9

2.0

1.9

－0.1

－1.0

2.1

2.1

0

+ 3.0

13.3

11.0

－2.3

－16.7

4.7

3.4

－1.3

－26.6

0.7

0.4

－0.3

－30.7

18

Shareholders 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

Dividend

FY2020

FY2021

FY2022

FY2023(Forecast)

Dividend pershare (Yen)

¥75

¥52

¥52

¥52

(Year-end ¥45)

(Year-end ¥32)

(Year-end ¥32)

(Year-end ¥32)

Consolidated
payout ratio

70.9%

76.9%

64.0%

61.7%

〇The year-end dividend of 32 yen have been decided at in the Board Meeting scheduled in May 22, 2023

19

Status of R&D Pipeline20

Status of R&D Pipeline in FY2022

Development code

Respiratory
Infections
Urology

Ph1

Ph2

Ph3

MRCT ※1（April 2021)（Completed
by Aska)

AKP-009*2
KRP-114VP

Approval/Launch

MRCT*1

KRP-R120
KRP-A218

Application（August 2022)*1 MRCT: Multi-Regional Clinical Trials*2 Additional Ph1 study to confirm the maximum effect at a higher dose has been completed (ASKA)［Licensed Compound］
Compound/CodeKRP-203

LicenseePriothera

Stage

Ph3

Features⚫Sphingosine-1-Phosphate receptor Agonist⚫Target: AML patients undergoing HSCT
⚫Assignment of IP and drug substances (Sep. 2020)21

Plan of R&D Pipeline in FY2023

Development code

Respiratory
Infections

Ph1

Ph2

Application

Approval/Launch

MRCT*1

KRP-R120
MRCT ※1（April 2021)

KRP-A218

Urology

Ph3（Completed
by Aska)

AKP-009*2
KRP-114VP（August 2022)*1 MRCT: Multi-Regional Clinical Trials*2 Ph1 study under preparation (ASKA)［Licensed Compound］
Compound/CodeKRP-203

LicenseeStage

Priothera

Ph3

Features⚫Sphingosine-1-Phosphate receptor Agonist⚫Target: AML patients undergoing HSCT
⚫Assignment of IP and drug substances (Sep. 2020)［DTx development］
Compound/Code

Proposed Indication

KRP-DT123

Tinnitus

Features⚫ Specified clinical trial is scheduled
22

Initiative toward Realization of the Long-term Vision “HOPE 100”23

Overview of Medium-Term Business Plan “HOPE 100-Stage 3-”Long-Term Vision [HOPE100]
Statement
The Kyorin Group will promote diversified healthcare business expansion and by 2023 be recognizedboth within and outside as a company that supports sound and healthy lifestyles.

Stage 1

Stage 2

Stage 3

FY2010-FY2015

FY2016-FY2019

FY2020-FY2023(2022)

Statement
Statement
Business organization, the building of a system
Making reforms (changes and innovations)to promote each business, and the enhancement and achieving continuous growth in an effortof the driving force of each businessto realize our long-term vision

Vision in Stage 3

Statement
Realization of growth trend throughpursuit of originality

Realization of
growth trend

Aim to become a globally recognized company through thecreation of innovative new drugs. To this end, expand the new
drugs business, GE business, infection-related business in an
integrated manner to widely support people’s health.

Diagnosis businessNew drugs businessGE businessStage 1

Stage 2

Stage 3

Renovated our structure and formulate a new long -term vision in FY2023, the 100th
anniversary of our foundingOverview of Medium-Term Business Plan “HOPE 100-Stage 3-”

Statement

Realize growth trend by
pursuing Kyorin’s originality

Business
Strategy● Shift to business based on the proposal of solutions andaccelerate the growth of new drug groups● Enhance pipeline to support medium-term growth● Strengthen drug discovery capability to realize the creation of
innovative new drugs● Improve cost competitiveness● Expand overseas revenue

Organization
Strategy● Aim to be the No. 1 company for career fulfillment

Performance
Targets● Growth potential and profitability● Capital policy and shareholder returns

25

Look-back of Stage 3: Strategy/Organization
Strategy

1

Shift to business based on the
proposal of solutions and accelerate
the growth of new drug groups⚫ Solution-based marketing activities
Ratio of new drugs Projected: at least 50% Actual: 42.0% (FY2022)
Launched
FY2020: Lasvic IV

LCM
In-license

2Enhance pipeline to support
medium-term growth
LCM

FY2021: Zymso
FY2022: Lyfnua
FY2020: Flutiform (additional indication n pediatric patients)
FY2020: AKP-009
FY2021: Lyfnua (MSD), Lagevrio (co-promotion agreement with MSD)
FY2022: Agent for Fabry disease (CellGen Tech)
FY2022: DTx in otolaryngology (SUSMED)FY2022: KRP-114VP (Ph1 in pediatric patients)

FY2021: KRP-A218
FY2021: FPR2 program (discontinued)⚫ ActivX (Dissolution in FY2022)

3

Strengthen drug discovery capability torealize the creation of innovative new
drugs

In-house

4

Improve cost competitiveness⚫ GE drugs: launched 6 ingredients (average for the past 3 years)⚫ Construction of Takaoka new plant (The operation is scheduled in Apr 2024)

5

Expand overseas revenue

Out-license

FY2020: KRP-203 (Priothera), hearing-loss (Otonomy), Vibegron (Eisai)
FY2021: Lascufloxacin (Nanjing Neiwa Faith)
FY2022: Vibegron (Sumitomo Pharma)

Organization
Aim to be the No. 1 company for career
fulfillment● Flexible working style● Initiatives for health management26

Look-back of Stage 3: Performance■ Performance to realize sustainable growth
Growth potential

Net Sales

CAGR at least 5%＋1. 0%

Profitability

Operating profit before
deduction of R&D expenses

At least 20% of net sales

14. 2%<Negative Factors>
Revision of
the NHI drug price

Annual NHI drug price revisions,applied to items with an average
deviation rate of “exceed 0.625 times”

COVID-19 pandemic caused:• Suppression by patients ofvisiting medical institutions• Shrink market of mainstay
products

Markets of mainstay products(year on year)
FY2020 85.4%*
FY2021 95.0%*
FY2022 97.3%**1 Copyright © 2023 IQVIA. JPM Calculated based on Mar 2021 MAT, Mar 2023 MAT Reprinted with permission■ Shareholders returns
Aiming for stable divisions

Taking into increase by demand for funds for investment for growth, including the
expansion of the development pipeline and capital expenditure, we have lowered
the DOE

27

Look-back of Stage 3: Our issue

Our Issue
New drugs business(core business)● Continued the development of new drugs● Expansion of development pipeline● Growth of new drugs● Growth in GE business

Helthcare-related
business

Corporate foundation● Stable supply of products, stable procurement of API● Enhancement of the duagnostics business● Cost competitiveness● Environmental issues, compliance, and governance, etc.

28

New long-term vision “Vision 110”(FY2023-FY2032)
and medium-term business plan “Vision 110 –Stage 1 –”(FY2023-FY2025)

29

Kyorin Group: Long-term vision “Vision 110”

Long-term Vision

Vision for 110 th anniversary[Our goal]

A company that contributes broadly to people's health bycomprehensively developing healthcare-related businesses,with a core focus on the new drug business, which
continuously provides high-value new drugs that meet
medical needs[Term]
10 years: FY2023 - FY2032
Medium-term business plan
Stage 1

FY2023 - F Y 2025

Stage 2

FY2026 - F Y 2029

Stage 3

FY2030 - F Y 2032

30

Vision 110 -Stage 1
1.
2.
3.
4.
5.

Stage 1

Strengthening drug discovery capability to create high-value new drugs that meet medical needs
Expansion of development pipeline through in-licensing
Maximization of the ratio of new drugs
Promoting healthcare-related businesses that have synergies with the new drugs business
Building a sustainable corporate foundation● Strategic image

Stage 1Drug Discovery
Reorganization

New drugs
business

Healthcarerelated
business

Development

Strengthen the drug discovery capability to create high-value new
drugs that meet medical needs〇Try for drug innovation through new drug discovery strategies
Creation of new drugs from long-term perspective
Expansion of development pipeline through in-licensing〇Significantly strengthen in-licensing ability 〇Promote DTxdevelopment

Investment of resource

Enhancement of development pipeline

Marketing, SCM,
Reliability Assurance

Maximization of the ratio of new drugs〇Maximize the extension of new drugs 〇Ensure the stable supplyof high-quality drugs

Driving force of revenue

Maximization of profitability

GE business

Other businessStage 2-3

〇Achieve sustainable growth in the generic drugs business〇Strengthen production capacity for drugs and reduce
manufacturing costs〇Promote infectious disease-related business31

Vision 110 -Stage 1

1. Strengthening drug discovery capability to create high-value new drugs that meet medical needs

Try for drug innovation through new drug discovery strategies
Development of new
research themes

Strengthen
basic technology

New targets

Small molecule drugs

Known targets

Nucleic acid medicines〇 Fibrosis〇Immune/inflammatory disorder〇 Others

New technology(Open innovation)

Drug discovery capability to create high-value new drugs that meet medical needs

32

Vision 110 -Stage 1

2. Expansion of development pipeline through in-licensing

Strengthen the foundation of new drug business by enhancement of in-licensing and alliancefunction and expansion of development pipeline

Expand the scope of modality
and therapeutic area
Increase ofinvestment

Speedy assessment andacquisition of in-licensing

Organizational reform
Human resource

Promote and expand DTx
development

TargetAt least 6 in-licensing items (each 1 item in early/late stage per year)33

Vision 110 -Stage 1

3. Maximization of the ratio of new drugs

Products

Aimed status

Goal at FY2025

Beova®

First-line treatment
for OAB⚫ No.1 in OAB market as Beova
in FY2023⚫ 50% of patient’s share

Lasvic®

First-choice antibacterial
agent for elderly or patientswith underlying disease inrespiratory infection⚫ No.1 in oral new quinolone
market in FY2023⚫ No.1 in new quinolone market
in FY2025 for tablets/iv

Lyfnua®

Dezalex®
Fultiform®

Only one treatment
for chronic coughEffective and easyto-use drug

Aerosol for patientswith weak inspiration⚫ FY2025
approx. 10,000 of GP
approx. 2,000 of HP

Sales (JPY billions)

56.0

36.1

25.0

12.9

5.0

4.5

2.5
0.2
8.5
85

10.0

12.0

11.5

FY2022

FY2025⚫ Sales of 10 billion yen in FY2025⚫ Sustainable growth on volumebasis to FY2025 with CAGR of
low single digit %34

Vision 110 -Stage 1

4. Promoting healthcare-related businesses that have synergies with the new drugs business

Achieve sustainable growth in
the generic drugs business⚫ Enhance an ability of drug development and accelerate growth business⚫ Strive to stable supply by enhancement of manufacturing and SCM structure⚫ Develop of low cost system along business environment

Strengthen production capacity ⚫ Maximize manufacturing ability by operation at Takaoka plant and optimization each plants
for drugs and reduce⚫ Improve reliability and stable manufacturing by raise the level of GMP⚫ Cost reduction by improvement activities
manufacturing costs
Promote infectious diseaserelated business⚫ Develop of diagnostics business for future with enhancement in IVD area.
⚫ Spared of Rubysta and Milton brand

35

Vision 110 -Stage 1

5. Building a sustainable corporate foundation

Improve cost competitiveness

Enhance human capital

Respond to environmental
issues, compliance, governance,etc.

⚫ Cost optimization along business environment⚫
⚫
⚫
⚫

Human resource development for people leading Vision 110
Revision of human resource system to improve career fulfillment
Promote work-style reforms to meet divers of values
Promote initiatives the Health Management⚫ Set target of cutting CO2 emissions in 2030 and commit proactively toapproach it⚫ Abide by all low, regulation, codes of conduct, and the spirit thereof and act
with high ethical standard⚫ Strengthen corporate governance⚫ Appropriate actions to stakeholders

36Performance target for FY2025■ Performance targets (consolidated basis)
Growth potential“Net sales” CAGRAt least 2%

Profitability

Operating profit before deduction of R&D expenses(operating profit + R&D expenses)

At least 16%

Improve the company value according to meet highprofitability by executing the medium business plan
⚫ Maximize the ratio of new drugs and optimize cost competition⚫ Increase of R&D expenses (strengthen the drug discovery capability,
expand of development pipeline⚫ Expand capital investments⚫ Enhance human capital37

Performance target for FY2025■ Capital policy and shareholder returns
Our capital policy is to improve capital efficiency through investment for growthand shareholder returns, while maintaining a sound financial base.
Regarding shareholder returns, we will continue stable dividends, taking into
account the dividend on equity ratio (DOE).

38

FY2023 Management policy

Reform of management
group structureand new initiatives
Reform of R&D
systems

Expand ofdevelopment pipeline

Maximize theexpansion of sales
growth in new drugs

Improve costcompetitiveness39

Disclaimer

This material contains performance forecasts, goals and plans, and other forward-looking statements
related to the Group. These statements are based on the judgment of the Group’s assumptions andoutlooks based on the information and forecasts available at the time of preparation of this material,and contain known or unknown risks and uncertainties. Therefore, due to various factors that may occur,
the actual performance, progress / success / failure of the development and other insights may differ
significantly from the description. It also contains information about medicines (including those underdevelopment), but the description is not for the purpose of advertising or medical advice.

40