Interim Term Financial Results Ended
September 2015

November 6 , 2015
KYORIN Holdings, Inc.
President Minoru Hogawa

Outline of Consolidated Financial Results
Trends of mainstay products
Consolidated Financial Results Forecast and Dividends
Status of development pipeline1Outline of Consolidated Financial Results2Outline of Consolidated Financial Results for theInterim Term Ended September 2015
（unit : ¥billion）

Change(forecast)

Mar/15

Mar/16

Sep/14

Sep/15

ChangeNet Sales

51.1

52.4

＋1.3

＋2.5

－2.0

113.1

120.2

Operating
Income4.6

4.1－0.5 －10.6

＋0.3

14.7

16.0

Ordinary
Income4.9

4.3－0.6 －12.9

＋0.3

15.5

16.3

Net Income

3.5

3.0

－0.5 －15.1

＋0.4

12.1

11.5

Change(%)(forecast)※The results forecasts for the full year announced on May 13, 2015 remain unchanged.
3

Segment Sales（unit : ¥billion）

Sep/14

Sep/15

ChangeChange(%)

Change(forecast)

51.1

52.4

＋1.3

＋2.5

－2.0

50.5

51.8

＋1.3

＋2.5

－1.9

40.8

42.2

＋1.4

＋3.6

－0.7

Japan

40.4

41.6

＋1.2

＋3.0

－0.9

Overseas

0.3

0.6

＋0.3

＋78.7

＋0.2

Generic drugs

7.8

7.4

－0.4

－5.1

－1.3

Over-the-counter drugs

2.0

2.2

＋0.2

＋9.5

＋0.2

0.6

0.6

0.0

＋1.7

－0.1

Net Sales

Ethical drugs
business

Sales of new
ethical drugs

Healthcare Businesschange(y/y)

change(forecast)

New ethicaldrugs (Japan)

＋1.2

－0.9

Main product(Flutiform, Kipres, etc.) increased year on year
Flutiform decreased compared to forecast

New ethicaldrugs (overseas)

＋0.3

＋0.2

sales of Gatifloxacin increased（sales of Allergan：FY14 second half $14MM→FY15 second half $14MM）

Generic drugs

－0.4

－1.3

increase of Health insurance pharmacy market’s sales , decrease of Contract manufacturing’s sales
Health insurance pharmacy market’s and Contract manufacturing’s sales decreased compared to forecast

Explanation of Variances4Highlights of Business Performance（Units: ¥billion）

Net Sales increased ¥1.3billion year
on year.

Cost of Sales

Cost of Sales

・increase of main prodicts(Flutiform,Mucodyne,Uritos)

21.6

21.3

Cost of sales ratio decreased 0.6%.

Cost of Sales Ratio

Cost of Sales Ratio

・Sales of main product increased
・Sales of generic drugs decreased

41.2%

41.8%
Net sales

SG&A

Net sales(excluding R&D)

R&D

R&D

6.7

7.3

SG&A

SG&A

(excluding R&D)

25.2

SG&A
(excluding R&D)

SG&A

26.7
Operating
IncomeOperating
IncomeSep/14

SG&A expenses increased¥1.5billion year on year.

19.5

18.5

■Gross Profit increased ¥1.0billion
year on year

・R&D expenses increased ¥0.6billion(cost of new WATARASE research
center , progress of project)

・SG&A(excluding R&D) increased¥1.0billion(increase of patent royalty ,sales costs)■Operating Income decreased¥0.5billion year on year.

Sep/155Breakdown of Gain and Loss
（unit : ¥billion）

Sep/14

Sep/15

ChangeChange(%)

Change(forecast)

Net Sales

51.1

52.4

＋13

＋2.5

－2.0

Cost of Sales

21.3

21.6

＋3

＋1.0

－

SG&A

25.2

26.7

＋15

＋6.1

－

R&D expenses

6.7

7.3

＋6

＋8.9

－0.1

SG&A expenses

18.5

19.5

＋10

＋5.1

－

Operating Income

4.6

4.1

－5

－10.6

＋0.3

Ordinary Income

4.9

4.3

－6

－12.9

＋0.3

Net Income

3.5

3.0

－5

－15.1

＋0.4

change(y/y)

Operating
Income－0.5change(forecast)＋0.3

Explanation of Variances【y / y】
・Gross profit rose 1 billion yen year on year due to increase of sales and decrease in the cost ratio. At the otherside, SG & A expenses increased 1.5 billion yen (R&D expense increased 0.6 billion yen) year on year ,consequently, operating income decreased 0.5 billion yen year on year.
【forecast】
・Gross profit decreased forecast due to fall of sales.
At the other side, SG & A expenses(sales expense) decreased , consequently, operating income increased 0.3
billion yen year on year.

6

Mainstay Product Sales（unit : ¥billion）

Change(%)

Change(forecast)

Sep/14

Sep/15

ChangeKipres

17.4

18.8

＋1.4

＋7.9

＋0.7

Flutiform

0.9

3.0

＋2.1

＋216.2－1.1

Uritos

3.4

3.7

＋0.3

＋9.3

－0.1

Mucodyne

6.2

5.9

－0.3

－3.6

＋0.7

Pentasa

8.6

8.1

－0.5

－5.9

－0.3

Generic drugs

7.8

7.4

－0.4

－5.1

－1.3

7

Trends of mainstay products

8

■New drugs group
Kipres 【Bronchial asthma and allergic rhinitis treatment】

Sales （unit : ¥billion）

39.6
34.5

40.2

41.2

41.8

■status in first half 2015
LT antagonists market ： expand 5%

36.8¥56.2bln（FY14 first half） ⇒ ¥58.8bln（FY15 first half） ※1

share of Kipres sales
37.2%（FY14 first half ） ⇒ 38.5%（FY15 first half ） ※2

2nd
half

※ Both allergic rhinitis, and asthma prescription expanded■effort for FY2015
Establish position as base drug for treatment ofallergic rhinitis(perennial and seasonal) andgrowth in new prescriptions
Further promote prescription to asthma patient
1st
half
（実績）

Improvement of product value in the life cycle
management
・「KIPRES® OD Tablets 10mg」：Approval in August 2015
(the drug price in Japan is due to list on December)※1,2 （ Source：Copyright 2015 IMS JAPAN IMS –JPM. Unauthorized copying prohibited ）9■New drugs group
Flutiform 【Anti-asthmatic】
Sales （unit : ¥billion）

10.3■ Status in first half 2015
ICS/LABA market ： expand 17%¥43.8bln（FY14 first half） ⇒ ¥51.4bln（FY15 first half） ※1

share of Flutiform sales
2nd
half

7%（September 2015） ※2■ effort for FY2015
Further promote prescription to partly controlled asthma patients・ Even if it has taken controller, 60 to 80% of the patients (treatment steps2~4) are Partly
Controlled
・ New prescriptions acquisition (treatment interruption and, patients of exacerbation)

3.6

Promote understanding of the advanced pMDI device(The device makes it easy to inhale the drug and allows the drug to reach the central
airway and the distal airways.)

1st
half

Further promote prescription of a longer-term prescription
formulation(30days,120 inhalations)※1,2 （ Source：Copyright 2015 IMS JAPAN IMS –JPM. Unauthorized copying prohibited ）10

■Original products group
Pentasa 【 Ulcerative colitis and Crohn’s disease treatment 】
Sales （unit : ¥billion）

19.4
18.0

17.6

18.6
17.2

■ status in first half 201517.1

market（Mesalazine etc.）： expand 4％
・¥18.9bln（FY14 first half ） ⇒ ¥19.6bln（FY15 first half ） ※1
share of Pentasa sales
51.6%（FY14 first half ） ⇒ 46.7%（FY15 first half ） ※2

2nd
half

■ effort for FY2015
Improvement of product value in the life cycle
management
・「PENTASA Granules 94%」：Approval in August 2015
(the drug price in Japan is due to list on December)Organization of IBD task force to start promotion(October)

1st
half

market penetration of suppositories
・ FY2015 first half sales：¥0.9bln、 FY2015(forecast) ¥1.9bln※1,2（Source：Copyright 2015 IMS JAPAN IMS –JPM. Unauthorized copying prohibited）

Advantages of “PENTASA Granules 94%” in terms of administration
Reduces the burden on a patient taking medicine interms of dosage form (tablet size) or number of tablets,
leading to simple drug administration

or「PENTASA Tablets 250mg」 「PENTASA Tablets 500mg」
× 8 tablets
× 4 tablets「PENTASA Granules 94% 2000mg」
×1 package

11

■Generic drugs

Sales （unit : ¥billion）

18.2■Status in first half 2015

15.5

Sales of Health insurance pharmacy market’s
decreased compared to forecast
2nd
half

12.0

・Supplementary Item and main products etc.

Sales of Contract manufacturing decreased
compared to forecast

10.1
8.9

8.7

■effort for FY2015
increase of strategic products and Supplementary
Item
1st
half
（実績）

【June supplementary Item】 Clopidogrel, Naftopidil【Dec supplementary Item】 Amvalo, sertralinePromote in-house development and contracting
work

12

Consolidated Financial Results Forecast
and Dividends

13Consolidated Financial Results Forecast
for the Year Ending March 31, 2016
（unit : ¥billion）

FY2014FY2015 forecast

ChangeChange(%)

113.1

120.2

＋7.1

＋6.3

111.8

118.6

＋6.8

＋6.1

1.3

1.6

＋0.3

＋25.5

Operating Income

14.7

16.0

＋1.3

＋8.6

Ordinary Income

15.5

16.3

＋0.8

＋5.2

Net Income

12.1

11.5

－0.6

－4.7

Net Sales

Ethical drugs business
Healthcare(skincare)Business

Net
sales

FY2015
Forecastchangenew ethical drugs (Japan)

94.7

＋3.6

•increase of new ethical drugs , such as Flutiform

new ethical drugs (Overseas)

1.0

0.0

（sales of Allergan：FY14 $32MM→FY15 $23MM）

18.2

＋2.7

Generic drugs

Operating Income

16.0

＋1.3

Explanation of Variances•increase of Health insurance pharmacy market’s salesgross profit•We expect gross profit rise due to the increase of net sales.
R&D expense ： ¥13.4bln (－¥0.1bln year on year)
SG&A Expenses (excluding R&D Expenses) ： increase of sales and labor costs【for reference: year on year】①Cost of sales ratio : increased 1% points ② SG&A ratio(include R&D expense): decreased 1% points※The results forecasts for the full year announced on May 13, 2015 remain unchanged.

14Forecast of Mainstay Product Sales（unit : ¥billion）

FY2014FY2015
Forecast

ChangeChange(%)

Kipres

41.2

41.8

＋0.6

＋1.5

Flutiform

3.6

10.3

＋6.7

＋185.4

Uritos

7.3

7.9

＋0.6

＋9.4

Mucodyne

14.0

11.8

－2.2

－15.6

Pentasa

17.2

17.1

－0.1

－0.3

Generic drugs

15.5

18.2

＋2.7

＋17.6

※The results forecasts for the full year announced on May 13, 2015 remain unchanged.

15

Shareholder Returns
Basic Policy
The Company seeks to enhance its management base by balancing investments for
growth and business continuity with shareholder returns. To this end, the Company
aims for a consolidated payout ratio to shareholders of 30%.

Net Income

Net Income

FY14

FY15 (forecast)¥12.1bln¥11.5bln

FY14

FY15 (forecast)¥52.00（interim ¥10.00）¥52.00(interim ¥20.00)

32.2％

33.8%

Dividends

Dividend per share (Yen)Consolidated payout ratio(%)

16

Status of development pipeline17Drug Development Pipeline : schedule of FY2015
Product &development code

PhⅠ

PhⅡ

PhⅢ

Approval/
Launchapplication

Eklira Genuair
Respiratory

KRP-AB1102F
Ad-SGE-REIC

Infections

launchPhⅠ／PhⅡ

KRP-AM1977X

15/4 PhⅢ

KRP-AM1977Y
Otolaryngolo
gical

Urological

IBD

KRP-209（ Desloratadine
Co-Marketing Agreement for Japan with MSD K.K. affiliate.

PhⅡ）

KRP-114V

KRP-203schedule of FY201518

Drug Development Pipeline : Progress in FY2015
Product &development code

PhⅠ

PhⅡ

PhⅢ

Approval/
Launchapplication

Eklira Genuair
Respiratory

15/5 launch

KRP-AB1102F
Ad-SGE-REIC

15/7 PhⅠ／PhⅡ

Kipres OD
Infections

15/8 approval

KRP-AM1977X

15/4 PhⅢ

KRP-AM1977Y
Otolaryngolo
gical

Urological

IBD

KRP-209

15/8 PhⅡ（ Desloratadine
Co-Marketing Agreement for Japan with MSD K.K. affiliate.

15/10
application(MSD)）

KRP-114V
Pentasa Granules

KRP-203

15/8 approval
discontinued of IBD

progress of FY2015

Novartis has decided to proceed with development of KRP-203 for GvHD.

19

KRP-203
 Mode of action : Sphingosine-1-Phosphate Receptor Agonist
 Business partner : Novartis (License agreement executed on February 2006)

Based on the data in the various clinical trials conducted worldwide,
the competing products and the priorities in our pipeline, we decided to focus on thedevelopment in GvHD indication and discontinued the development in IBD.

Current status and prospects of GvHD treatment
 Graft-versus-host disease (GvHD):
Alloreactive lymphocyte driven reaction that occurs after hematopoietic stem cell transplantation. Skin, liver and intestine are mostfrequently affected.

Current treatment of GvHD:
Steroids and immunosuppressants are commonly treated for GvHD patients, but often result in inadequate control or poor prognosis
due to lack of efficacy or adverse effects. Thus, major current challenges are reducing the onset of severe GvHD symptoms andsubsequent mortality.

Number of patients (allogeneic haemopoietic stem cell transplantation ):22,000 cases/year (worldwide); 3,500 cases/year (Japan)

Our priority aim is to develop KRP-203 as a treatment for GvHD,
which constitutes an area of high unmet medical needs worldwide.

Antiallergic Agent「 Desloratadine」
Co-Marketing Agreement for Japan with MSD K.K. affiliate(November 2014)
MSD Submits New Drug Application(October 2015)【 Details of application】【 Antihistamine market】（unit : ¥billion）

2500
250

Features： second generation histamine H1-receptor antagonist
Compound： Desloratadine
Therapy area/Action： allergic rhinitis, hives, itching resulting
from skin diseases (eczema/dermatitis, pruritus cutaneous)

2000
200

150
1500

Generic
drugs

1000
100

Long listeddrugs

Dosage and administration： Once dailyMarketing method ： Co-Marketing for Japan with MSD K.K.

【Features】

500
50

New drugs

・High affinity for a histamine receptor and low central nerve transition
・New 2nd-generation antihistamine drug with balanced efficacy and safety

0

2010年
FY2010

2011年
FY2011

2012年
FY2012

2013年
FY2013 2014年
FY201421

Antibacterial agent : KRP-AM1977X , KRP-AM1977Y
International Nonproprietary Name ： lascufloxacin （r-INN）【 Features 】
・Have a broad antibacterial spectrum from Gram-positive bacteria to Gram-negative bacteria andatypical bacteria. Also have stronger antibacterial activity to anaerobic bacteria than similar agents.
・High safety (QT prolongation, abnormal blood glucose level, photosensitivity, digestive symptom,etc.) is expected.
Status of develpoment：KRP-AM1977X（Oral agent）

Status of develpoment：KRP-AM1977Y（ Injection ）Clinical trials: Ph2 ： Results (announced in May 2015)

Clinical trials: Ph2 ： Results (announced in November◆ Evaluated efficacy and safety for patients with mild to moderatecommunity acquired pneumonia
・High efficacy with low dose is confirmed
・High safety is suggested

2015)◆ Evaluated efficacy and safety for patients with mild to severe
community acquired pneumonia
・ High efficacy including early therapeutic effect is confirmed
・ High safety is suggested

Clinical trials: Ph3 (started in April 2015)

Clinical trials: Ph3 ：◆Respiratory field
Study design: Double-blind comparative study in patients with
community acquired pneumonia◆Otorhinolaryngology field
Study design: Double-blind comparative study in patients withsinusitis

To be prepared

Aim for early application and commercialization

22

Gene-Therapy Product「Ad-SGE-REIC」
Features : It is expected to have direct effect on primary tumor lesions and indirect effecton metastatic tumor lesions as a gene-therapy drug that simultaneously induces
tumor cell-selective apoptosis and the activation of antitumor immunity. Ad-SGEREIC used in this project uses an adenovirus as a vector.
Development environment :・Gene-Therapy Product adopted as Next Generation Technology Transfer Program(NexTEP) by JST. ※1
・Creation of the conditional/time limited approval system (Nov/2014)※2

Started clinical trial (Ph1 / Ph2) In July 2015
Target disease : Malignant Pleural Mesothelioma※1 A system through which the Japan Science and Technology Agency (JST) supports large-scale
development that enterprises undertake using the seeds based on research results from academia and that
may involve development risks to facilitate practical application.
※2 A system under which products for regenerative medicine, including gene-therapy drugs, are speciallyapproved with conditions and for a limited period of time if they are presumed to be effective and theirsafety is confirmed, even if the number of cases is small.

23

Macrocyclic/Constrained Peptides Drug Discovery[November 2015] Peptide Discovery Collaboration Agreement with PeptiDream Inc.
Collaboration by using PDPS* technology to generate macrocyclic/constrained peptides
against target protein.
[Summary]
・Use PeptiDream’s proprietary PDPS technology, which we consider to be one of the new drug
discovery approaches, to generate macrocyclic/constrained peptides with a high affinity for specifictargets of interest.
・Promote clinical development and commercialization of new drugs that are easy to use and haveexcellent therapeutic efficacy in the priority area/disease selected by our company.
※ PDPS (Peptide Discovery Platform System)

24

about our future drug discovery
Aim to become a manufacture of original new drugs thatcan contribute to the health of the world’s people.
【a new Pharmaceutical Discovery Research Laboratories】

WATARASE Research Center

History of KYORIN Pharmaceutical’s drug discovery

KRP-203
Licensed to Novartis(2006)

Fleroxacin
Licensed to Roche(1985)

Gatifloxacin
Licensed to BMS(1996)

Norfloxacin
Licensed to Merck (1980)

KRP-297
Licensed to Merck(1999)

25

Reference

26

■New drugs group
Uritos 【Overactive bladder】

Sales （unit : ¥billion）■ Status in first half 2015

8.1
7.5

7.9

OAB market ： expand 13%¥37.8bln （FY14 first half） ⇒ ¥42.6bln （FY15 first half）※1

7.3

share of Uritos sales
10.3% （FY14 first half） ⇒ 9.6% （FY15 first half） ※2

6.3
5.5

2nd
half

■ effort for FY2015■Uncovering potential markets

FY14 : consultation rate 30%■ Pervading usability

prescriptions based on EBM (OAB patient with BPH ※3)
1st
half

※1,2 （ Source：Copyright 2015 IMS JAPAN IMS –JPM. Unauthorizedcopying prohibited ）※3 benign prostatic hypertrophy

27

■Original products group
Mucodyne 【 Mucoregulating drug】

Sales （unit : ¥billion）

21.3■Status in first half 2015

21.5
19.1

expectorant market： expand 2%

18.4¥17.7bln（FY14 first half） ⇒ ¥18.0bln（FY15 first half） ※1

share of Mucodyne sales in expectorant market
41.3%（FY14 first half ） ⇒ 37.8% （FY15 first half ） ※2

14.0

share of generic (Carbocisteine)

11.8

10.8%（FY14 first half ） ⇒ 13.3% （FY15 first half ） ※3

2nd
half

■ effort for FY2015■ Maximize uptake and prescriptions of new

formulation 「DS50％」
1st
half

※1,2、3 （Source：Copyright 2015 IMS JAPAN IMS –JPM. Unauthorized copyingprohibited）

28

P&L Summary: Consolidated Results – (1)（unit : ¥million）

Sep/2014
Actual% Sales＜ Breakdown ＞

Sep/2015
Actual% Sales% Change

Year on Year
Change■Sales

51,112100.0%

52,386100.0%＋2.5%＋1,274■Ethical Drugs
business

50,51898.8%

51,783

98.8%

＋2.5%

＋1,264＋1,473◆Sales of new
Ethical Drugs

40,75579.7%

42,229

80.6%

＋3.6%

40,422

79.1%

41,634

79.5%

＋3.0%

＋1,211

332

0.6%

594

1.1%

＋78.7%＋261◆Generic Drugs

7,790

15.2%

7,393

14.1%

－5.1%

－397

◆Over-thecounter Drugs
and Others

1,972

3.9%

2,160

4.1%

＋9.5%

＋188

593

1.2%

603

1.2%

＋1.7%

＋10

○Japan○Overseas■Consumer
Healthcare
Business

Sales（＋¥1,274mil）¥52,386mil● Ethical drug sales in Japan（＋¥1,211mil）¥41,634mil

Sep/20134⇒Sep/2015(¥ billion)

・ Kipres・ Mucodyne
・ Pentasa
・ Uritos
・ Flutifom

17.4
6.2
8.6
3.4
0.9

⇒
⇒
⇒
⇒
⇒

18.8
5.9
8.1
3.7
3.0

(＋1.4)(－0.3)(－0.5)(＋3.0)(＋2.1)● Ethical drug sales overseas¥594mil・ Gatifloxacin（ ＋ ¥261mil）¥0.1bln → 0.4bln （ ＋ ¥0.3bln）● Generic Drugs¥7,393mil（ － ¥397mil）・increase of Health insurance pharmacy market’s sales
・decrease of Contract manufacturing’s sales● Over-the-counter Drugs and Others¥2,160mil（＋ ¥188mil）<Subsidiaries and Equity-method Affiliates>
Consolidated subsidiaries (8) ：・KYORIN Pharmaceutical Co., Ltd.
・Kyorin USA, Inc.
・Kyorin Europe GmbH・ActivX Biosciences, Inc.
・KYORIN Rimedio Co., Ltd.
・Dr. Program Co., Ltd.
・KYORIN Medical Supply Co., Ltd.
・KYORIN Pharmaceutical Facilities Co.,Ltd.
Equity-Method Affiliates： ・Nippon Rika Co., Ltd.

●Consumer Healthcare（skincare） Business¥603mil（＋ ¥10mil）

29

P&L Summary: Consolidated Results – (2)（unit : ¥million）

Sep/2014
Actual% Sales＜ Breakdown ＞

Sep/2015
Actual% Sales% Change

Change◆Cost of Sales Ratio :down 0.6 percentage points Y/Y (41.8％→41.2％)
・Sales of main product increased
・Sales of generic drugs decreased

Sales

51,112100.0%

52,386100.0%＋2.5%＋1,274

Cost of Sales

21,34041.8%

21,561

41.2%

＋1.0%

＋220

Gross Profit

29,77158.2%

30,825

58.8%

＋3.5%

＋1,053◆R&D Ratio :up 0.8 percentage points Y/Y (13.1％→13.9％)＊¥6.7bln→¥7.3bln (＋0.6bln)

SG&A(Incl. R&D expenses)

25,18349.3%

26,726

51.0%

＋6.1%

＋1,542・ cost of new WATARASE research center , progress of project(6,674)(13.1%）(7,270)(13.9%）(＋8.9%)（＋595）

4,587

9.0%

4,099

7.8%

－10.6%

0.6%
0.0%

206
39

0.4%
0.1%

－34.7%－109

Non-Operating Expenses

315
5＋591.7%＋33

Ordinary Income

4,898

9.6%

4,266

8.1%

－12.9%－631

Extraordinary Profits
Extraordinary Losses

29
32

0.1%
0.1%

0
107

0.0%
0.2%

－98.4%＋232.0%－28

Income before
income taxes

4,894

9.6%

4,159

7.9%

－15.0%－735

Corporate, inhabitantsand enterprise taxes

1,692

3.3%

936

1.8%

－44.6%－755

Tax adjustments

－292

－0.6%

255

0.5%

―

＋548

Net Income

3,495

6.8%

2,967

5.7%

－15.1%－528

Operating
IncomeNon-Operating Income

－488

＋74

◆SG&A (exclude R&D) Expenses :up 0.9 percentage Points Y/Y(36.2％→37.1％)＊¥18.5bln→¥19.5bln (－¥1.0bln）
・increase of patent royalty,sales costs,■Operating Income ¥4,099mil (－ ¥488mil)＊Operating Income margin decreased 1.2percentage
points to 7.8%
■Net Income ¥2,697mil (－ ¥528mil)■Dividend per share(interim dividend) ¥20.0

30

BS Summary: Consolidated Results（ Units: ¥ million ）Current Assets

Mar/2015
Actual%total129,064

70.4%

Mk securities
Inventory
Other

30,65247,007
17,86725,9297,607

Fixed Assets

54,318

Tangible assets
Intangible assets
Investments

19,374
1,184
33,760Cash, deposits
Notes and accounts receivable

Sep/2015

―

29.6%

―

Actual% total124,080
45,04338,6096,286
27,101
7,039

63,64923,535
1,060
39,053

66.1%

change－4,984

―

―

33.9%

＋9,330――Total Assets

183,383

100.0%

187,729100.0%＋4,346

Current Liabilities

27,773

15.1%

27,591

14.7%

－181

Notes payable
Other

11,25916,513―

10,98016,611――

Non-Current Liabilities

7,009

3.8%

8,491

4.5%

＋1,482

Total Liabilities

34,78219.0%

36,08319.2%＋1,301

Owner’s Equity

140,51876.6%

141,375

75.3%

＋856

8,082

4.4%

10,271

5.5%＋2,188

―

9,989
183
98

―

―

Other Comprehensive
IncomeUnrealized holding gain (loss) on securities

Foreign currency translation adjustments

7,798
168
115

Total Equity

148,600

81.0%

151,64680.8%＋3,045

Total Liabilities and Equity

183,383

100.0%

187,729100.0%＋4,346＜ Breakdown ＞■ Current Asset ： －4,984
・ Cash, deposits（＋14,390）
・ Notes and accounts receivable （－8,398）
・ Mk securities（－11,580）
・ Inventory（＋1,171）■ Fixed Assets ： ＋9,330
・ Tangible Assets
・ Intangible Assets
・ Investments（＋4,161）（ －124）（ ＋5293）■ Current Liabilities ： －181
・ Notes Payable
・ Other

（
（

－278）
＋97）

■ Non-Current Liabilities ： ＋1,482

31

Financial summary (Consolidated)（unit : ¥million）

Sep/2013

Sep/2014

Mar/2015

Sep/2015

Mar/2016(forecast)

Sales(Exports)

50,851(1,160)51,112(332)

52,386(594)

113,121(1,032)120,200(1,000)

Cost of Sales(cost of Sales Ratio )(%)

19,097(37.6%)

21,340(41.8%)

21,561(41.2%)

46,598(41.2%)―

SG&A
Ratio to Sales (%)

25,541(50.2%)

25,183(49.3%)

26,726(51.0%)

51,785(45.8%)―

R&D Expenses
Ratio to Sales (%)

6,119(12.0%)

6,674(13.1%)

7,270(13.9%)

13,514(11.9%)

13,400(11.1%)

Operating Income
Ratio to Sales (%)

6,213(12.2%)

4,587(9.0%)

4,099(7.8%)

14,737(13.0%)

16,000(13.3%)

Ordinary Income
Ratio to Sales (%)

6,531(12.8%)

4,898(9.6%)

4,266(8.1%)

15,490(13.7%)

16,300(13.6%)Net Income
Ratio to Sales (%)

4,397(8.6%)

3,495(6.8%)

2,967(5.7%)

12,064(10.7%)

11,500(9.6%)EPS (¥)¥58.85¥46.78¥40.10¥161.63¥155.51

Capital

700

700

700

700

―

Assets155,840

164,354

187,729

183,383―

Total Equity

130,098

139,037

151,646

148,600―

BPS (¥)¥1,741.24¥1,860.90¥2,047.91¥2,009.45―

ROE (%)

3.4%

2.5%

2.0%

8.4%

―

Equity Ratio (%)

83.5%

84.6%

80.8%

81.0%

―

Employees

2,481

2,482

2,448

2,445

―

Capital Expenditure

1,618

1,557

5,637

2,655

8,700

Depreciation Expense

1,460

1,462

1,658

3,053

3,800

32

Segment information
for the Second Quarter Ended Sep 30, 2015
Sales, Profit or Loss of each report segment
Sales

change Y/YProfitchange Y/Y

Net Sales (total)

52.4

＋1.3

4.1

－0.5

Ethical drugs business

51.8

＋1.3

4.0

－0.5

42.2

＋1.4

○Overseas

41.6
0.6

＋1.2
＋0.3

◆Generic drugs

7.4

－0.4

◆Over-the-counter drugs

2.2

＋0.2

Healthcare(Skincare) business

0.6

0

0

0

0.1

0

◆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.

33

P&L summary : KYORIN pharmaceutical(Non-consolidated)-(1)＜ Breakdown ＞（unit : ¥million）

Year on Year

Sep/2014
Actual% Sales

Sales

43,922■Ethical Drugs
business◆Sales of new
Ethical Drugs

Sep/2015■

Actual% Sales100.0%

46,157100.0%＋5.1%＋2,23443,922100.0%

46,157100.0%＋5.1%＋2,23439,353

89.6%

41,108

89.1%

＋4.5%

＋1,754% Change

Change89.0%

40,604

88.0%

＋3.8%

＋1,496

246

0.6%

504

1.1%

＋104.9%＋258◆Generic Drugs

3,120

7.1%

3,283

7.1%

＋5.2%

＋162

◆Over-thecounter Drugs
and Others

1,448

3.3%

1,765

3.8%

＋21.9%＋317○Overseas（＋¥2,234mil）¥46,157mil● Ethical drug sales in Japan（＋¥1,496mil）¥40,604mil

Sep/2014⇒Sep/2015(¥ billion)

・ Kipres・ Mucodyne
・ Pentasa
・ Uritos
・ Flutiform

17.4
6.2
8.6
3.4
0.9

⇒
⇒
⇒
⇒
⇒

18.8
5.9
8.1
3.7
3.0

(＋1.4)(－0.3)(－0.5)(＋0.3)(＋2.1)● Ethical drug sales overseas

39,107○JapanSales¥504mil・ Gatifloxacin● Generic Drugs（＋ ¥258mil）¥0.1bln → ¥0.4bln （＋ ¥0.3bln）¥3,283mil（＋ ¥162mil）● Over-the-counter Drugs and Others¥1,765mil（＋ ¥317mil）・milton¥1.0bln → ¥1.0bln（

・Rubysta¥0.2bln → ¥0.3bln（＋ ¥0.1bln）

0）34

P&L summary : KYORIN pharmaceutical(Non-consolidated)-(2)（unit : ¥million）

Sep/2014
Actual

Sep/2015% Sales

Actual% Sales% Change

ChangeSales

43,922100.0%

46,157100.0%＋5.1%＋2,234

Cost of Sales

17,35439.5%

18,358

39.8%

＋5.8%

＋1,003Gross Profit

26,56760.5%

27,799

60.2%

＋4.6%

＋1,231

SG&A(R&D Expenses)

23,069（6,334）

52.5%

53.4%

＋6.8%

（14.4%）

24,637（6,903）（15.0%）（＋9.0%）＋1,567（＋569）

Operating Income

3,498

8.0%

3,161

6.8%

－9.6%

－336

Non-Operating Income

459
0

1.0%
0.0%

306
0

0.7%
0.0%

－33.3%＋348.2%

－153
0

3,957

9.0%

3,468

7.5%

－12.4%

－489

29
7

0.1%
0.0%

－
45

－%
0.1%

－%
＋538.5%

－29
＋38

3,979

9.1%

3,422

7.4%

－14.0%－557

Corporate, inhabitantsand enterprise taxes

1,361

3.1%

701

1.5%

－48.5%－659

Tax adjustments

－321

－0.7%

239

0.5%

－174.5%

＋561

2,940

6.7%

2,481

5.4%

－15.6%－459

Non-operating Expenses

Ordinary Income
Extraordinary Profits
Extraordinary Losses
Income before
income taxes

Net Income＜ Breakdown ＞◆ Cost of Sales Ratio :up 0.3 percentage points Y/Y (39.5％→39.8％)◆R&D Ratio : up 0.6percentage points Y/Y(14.4％→15.0％)＊¥6.3bln→¥6.9bln(＋¥0.6 bln)・ cost of new WATARASE research center , progress of project◆SG&A (exclude R&D) expenses :UP 0.3 percentage points Y/Y (38.1％→38.4％)■ Operating Income ¥3,161mil （－¥336mil）＊Operating Income margin decreased 1.2 percentage
points to 6.8%

■Net Income ¥2,481mil （－ ¥459mil）

35

BS Summary: KYORIN Pharmaceutical(Non-consolidated)（unit : ¥million）

Mar/2015
Actual＜ Breakdown ＞

Sep/2015% totalActual% totalchange68.4%

92,433

63.1%－5,38914,58743,22012,804
21,763
5,447―

22,93735,381
6,003
22,443
5,667――

Fixed Assets

45,145

31.6%

54,02536.9%＋8,880

Tangible assets
Intangible assets
Investments

12,324376
32,444―

15,881
331
37,812――

Total Assets

142,967

100.0%

146,458

100.0%＋3,491

Current Liabilities

20,958

14.7%

20,89914.3%－58

Notes Payable
Other

8,323
12,635―

7,893
13,005―

Non-Current Liabilities

3,762

2.6%

5,003

3.4%

＋1,240Total Liabilities

24,72017.3%

25,90217.7%＋1,182

Owner’s Equity

110,534

77.3%

110,639

75.5%

＋104

7,712

5.4%

9,916

6.8%

＋2,203

Total Equity

118,24682.7%

120,555

82.3%＋2,308

Total Liabilities and Equity

142,967

100.0%

146,458

100.0%＋3,491

Current Assets

97,822

Cash, deposits
Accounts receivable
Mk securities
Inventory
Other

Valuation andtranslation adjustments■ Current Assets ：－5,389mil
・ Cash, deposits （＋¥8,350mil）
・ Accounts receivable （－¥7,838mil）
・ Mk securities （－¥6,801mil）・ Inventory （＋¥679mil）■ Fixed Assets ： ＋ ¥8,880mil
・Tangible Assets （＋¥3,557mil）・Intangible Assets （－¥45mil）
・Investments （＋¥5,367mil）■ Current Liabilities ： － ¥58mil
・Notes Payable （－¥429mil）
・Other （＋¥370mil）■ Non-Current Liabilities ： ＋¥1,240mil―

36Financial Summary: KYORIN Pharmaceutical(Non-consolidated)（unit : ¥million）

Sep/2013

Sep/2014

Mar/2015

Sep/2015

Mar/2016(forecast)

Sales(Exports)

44,933(1,097)43,922(246)

46,157(504)

98,452(840)

105,300(700)

Cost of Sales（cost of sales ratio ）％

15,609(34.7%)

17,354(39.5%)

18,358(39.8%)

38,951(39.6%)―

SG&A
Ratio to Sales (%)

23,748(52.9%)

23,069(52.5%)

24,637(53.4%)

47,349(48.1%)―

R&D Expenses
Ratio to Sales (%)

5,848(13.0%)

6,334(14.4%)

6,903(15.0%)

12,843(13.0%)

12,700(12.1%)

Operating Income
Ratio to Sales (%)

5,575(12.4%)

3,498(8.0%)

3,161(6.8%)

12,151(12.3%)

13,300(12.6%)

Ordinary Income
Ratio to Sales (%)

6,087(13.5%)

3,957(9.0%)

3,468(7.5%)

13,115(13.3%)

13,800(13.1%)Net Income
Ratio to Sales (%)

4,261(9.5%)

2,940(6.7%)

2,481(5.4%)

10,412(10.6%)

10,000(9.5%)EPS (¥)¥57.38¥39.60¥33.41¥140.20―

Capital

4,317

4,317

4,317

4,317

―

Assets122,396

126,945

146,458

142,967―

Total Equity

103,608

110,288

120,555

118,246―

BPS (¥)¥1,395.06¥1,485.00¥1,623.24¥1,592.16―

ROE (%)

4.1%

2.7%

2.1%

9.1%

―

Equity Ratio (%)

84.7%

86.9%

82.3%

82.7%

―

Employees

1,797

1,801

1,762

1,771

―

Capital Expenditure

929

635

4,435

1,125

6,100

Depreciation Expense

807

814

961

1,667

2,200

37

Consolidated Financial Results
for the Second Quarter and full year forecast（unit : ¥million）

Mar/2015

Mar/2016

Sep/2014

Sep/2015

Change

% Y/Y

Sales

51,112

52,386＋1,274＋2.5%

113,121120,200■Ethical Drugs business

50,51851,783＋1,264＋2.5%

111,771

118,600◆Sales of new Ethical Drugs

40,75542,229＋1,473＋3.6%

92,111

95,70040,422

41,634＋1,211＋3.0%

91,07994,700○Overseas

332

594

＋261

＋78.7%

1,032

1,000

◆Generic Drugs

7,790

7,393

－397

－5.1%

15,477

18,200

1,972

2,160

＋188

＋9.5%

4,183

4,500

593

603

＋10

＋1.7%

1,349

1,600

Operating Income

4,587

4,099

－488

－10.6%

14,737

16,000Ordinary Income

4,898

4,266

－631

－12.9%

15,49016,300Net Income

3,495

2,967

－528

－15.1%

12,064

11,500○Japan◆Over-the-counter Drugs
and Others■Consumer Healthcare
Business(forecast)38

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

KYORIN pharmaceutical

Sep/2014

Mar/2016

Mar/2015

Sep/2015(forecast)

43.9

46.2

98.5

105.3

Operating Income

3.5

3.2

12.2

13.3

Net Income

2.9

2.5

10.4

10.0

Sales

KYORIN Rimedio

Sep/2014

Mar/2015

Mar/2015

Sep/2015(forecast)

Sales

8.0

7.4

16.4

18.5

Operating Income

0.9

0.6

2.1

2.3

Net Income

0.6

0.4

1.5

1.6

Dr. Program

Sep/2014

Mar/2015

Mar/2015

Sep/2015(forecast)

0.6

0.6

1.4

1.6

Operating Income

0

0

0

0

Net Income

0

0

0

0

Sales

39

Main Product Sales Update（unit : ¥billion）

Sep/2015
Product name
Kipres（LT receptor antagonist）

Mucodyne（Mucoregulant）

Sales of new
ethical drugs(Japan)Pentasa(Ulcerative colitis andCrohn’s disease treatment)

Uritos（Kyorin）(Therapeutic agent for
overactive bladder)

Flutiform（Combination drug for asthma
treatment）

Sales of new
ethical drugs(over seas)

Gatifloxacin

Over-thecounter drugs

Milton(Bulk・Royalty)(Disinfectant)

Sep/2012

Sep/2013

Sep/2014

Actual% change

Mar/2015

Mar/2016(forecast)

16.3

17.1

17.4

188

＋7.9%

41.2

41.8

8.3

8.2

6.2

59

－3.6%

14.0

11.8

9.0

9.4

8.6

81

－5.9%

17.2

17.1

3.6

3.7

3.4

37

＋9.3%

7.3

7.9

－

－

0.9

30

＋216.2%

3.6

10.3

0.9

1.0

0.1

0.4

＋178.7%

0.6

0.4

1.0

1.0

1.0

1.0

＋8.5%

2.0

2.0

40

R&D Expenses, Capex & Depreciation（unit : ¥million）

Sep/2012

Sep/2013

Sep/2014

Sep/2015

changeMar/2015

Mar/2016(forecast)R&D expenses

4,892

6,119

6,674

7,270

＋8.9%

13,514

13,400Capitalexpenditure

1,181

1,618

1,557

5,637

+262.1%

2,655

8,700

Depreciation
expense

1,119

1,460

1,462

1,658

＋13.4%

3,053

3,800

<Capital expenditure (Actual/Forecast)>（unit : ¥billion）

Sep/2014

Mar/2015

Sep/2015

Mar/2016(forecast)

Plant facilities

0.9

1.3

1.5

2.9

Equipment for control,
sales activities

0.2

0.1

0.3

0.8

Equipment for research

0.4

4.2

0.8

5.0

41

Main R&D Activities -1 (as of Nov 5 2015)※Changes from the previous announcement(July 30 2015)

Ph III ~ Application submitted
Stage

Compound/
Code

Therapy area/Action

OriginFeatures

Comments

Japan

Overseas

PhⅢ(13年8月)(Europe)
AstraZeneca:Launched(1/2015)(US)
AstraZeneca: PhⅢ

KRP-AB1102F(Fixed dosecombination
inhaled drug)

Chronic Obstructive
Pulmonary Disease(COPD)

Almirall

Combination of aclidinium bromide with the longacting beta agonist formoterol :This combination is aimed at providing higher
efficacy than each component alone,as well as the
improved convenience of having the two productsin the same easy to use inhalation device.This iscurrently in phase Ⅲ clinical development.

PhⅢ(1/2015)

PhⅡclinical trial
end
Merck & Co.,KRP-114V

Overactive bladder

Merck &Co.,

KRP-114V is expected to improve urinary
frequency through stimulation of the beta 3
receptor in bladder which improves bladder muscle
relaxation.

KRP-AM1977X(Oral agent）

New quinolone
synthetic antibacterial
agent

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

PhⅢ(4/2015)

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

for referenceStage※Application submitted by
MSD K.K.

Compound/
Code
Desloratadine

Therapy area/Action

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

Comments
Co-Marketing Agreement for Japan withMSD K.K. affiliate (11/2014)42

Main R&D Activities -2 (as of Nov 5 2015)※Changes from the previous announcement(July 30 2015)

POC Project (Ph I ~ Ph II)
Stage
Japan

Overseas

Compound/
Code

Therapy area/Action

OriginFeatures

Comments※PhⅡ(8/2015)

PhⅢ
Merz

KRP-209

Tinnitus

Merz

KRP-209 (Neramexane) is expected to improve thepatients' annoyance and difficulties in their life caused bytinnitus, mainly through its two pharmacological properties:
1) NMDA antagonistic activity and 2) Nicotinic acetylcholine
antagonistic activity

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

PhⅡ（3/2013）※discontinued

License out :Novartis
PhⅡ（POC)(12/2010)

KRP-203

Transplantation,
autoimmune
diseases,and
IBD

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 with
Novartis (2/2006)
New license agreement
IBD (11/2010)※Discontinued
development of IBD for
KRP-203 in Japan.
Novartis has decided
to proceed with
development of KRP203 for GvHD.

PhⅡ (6/2014)

PhⅠ,Ⅱ（7/2015）(US)
Momotaro-Gene
prostate cancer(5/2014)

KRP-AM1977Y(Injection）

New quinolone
synthetic antibacterial
agent

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

Ad-SGE-REIC

malignant pleural
mesothelioma

Okayama
University

A gene-therapy product using a novel tumor suppressor
gene of reduced expression in immortalized cells/ Dickkopf3 (REIC/Dkk-3), which was discovered by researchers from
Okayama University, as a therapeutic gene.
It is expected to have direct effect on primary tumor lesions
and indirect effect on metastatic tumor lesions as a genetherapy product that simultaneously induces tumor cellselective apoptosis and the activation of antitumor
immunity respectively.

Adopted to Next
generation Technology
Transfer Program(NexTEP)(6/2014)43

■ 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 from theforecasted figures due to various factors in the future.

44