First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31
31, 2015
1 Overview of consolidated results
1.
2. Main Product Sales Update
3. Development pipelines【Reference】
4. Segment
ginformation
5. Consolidated Financial

July 29, 2014

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 First Quarter Consolidated Financial Results
for the Fiscal Year Ending March 31, 2015
YoYchange(%)

Interim term
Sep / 2014
(forecast)＋0.6％

51,300

YoYchange(%)

Year ending
Mar / 2015
(forecast)

YoYchange(%)

First quarter
Jun / 2011

First quarter
Jun / 2012

First quarter
Jun / 2013

First quarter
Jun / 2014

Net sales

24,80925,422

26,23926,397

Operatingincome

4,100

4,080

4,465

3,575 －19.9％

5,500 －11.5%

15,800－10.3%

Ordinary
income

4 300
4,300

4 351
4,351

4 681
4,681

17 8％
3 847 －17.8％
3,847

12 7%
5 700 －12.7%
5,700

16 30016,300－10.8%10 8%

Net income

2,697

2,838

2,996

2,681 －10.5％

3,900 －11.3%

11,300－6.0%

Units:
millions of yen＋0.9% 112,200＋0.7%

Fi t QFirstQuartert C
Consolidated
lid t d Financial
Fii l ResultsR
lt forf theth Fiscal
Fil YearYEnding
E di March
M h 31,31 2015

[Net Sales]
Overall net sales increased 0.6% year on year to ¥26.4bln. Sales growth was driven by year on year increased in generic
ddrugsales,lddespite
it llower sales
l iin ththe ethicalthi l ddrug.

[Income]Cost of sales ratio increased due to the drug price revision, increase of generic drugs, decrease of overseas ethical drug,
gross profit decreased ¥1.1bln year on year. SG & A expenses fell given a decrease in general expenses. Consequently,
operating income decreased 19.9% to ¥3.6bln, net income decreased 10.5% to ¥2.7bln year on year.

Consolidated Financial Results for the Fiscal Year Ending March 31, 2015(forecast)
The results forecasts for the first half and the full year announced on May 9, 2014 remain unchanged. (Progresscompared with the forecast for the first half: net sales: 51.5%; operating income: 65.0%)
1

Highlights of Business Performance（ Units: ¥ billion）
cost ofSales ratio

cost ofSales ratio

36.4%

41.2%

Highlight ①¾Net Sales increased ¥0.2bln year on year.

Highlight ②

売上高
Netsales26.2

Costt off
CsalesCost ofsales

9.6

10.9
Net sales

R&D

R&D

2.4
SG&A
((excludingl diR&D)

26.4
SG&A

12 2
12.2

9.8

¾Gross Profit decreased ¥1.2bln year on year.

2.5
SG&A
((excludingl diR&D)

Highlight ③
SG&A

12.0

◇SG&A expenses
pdecreased ¥0.2bln yyear on yyear.
・decrease of general expenses
・increase of R&D expense (¥0.1bln)

9.5
OperatingincomeJun / 2013

¾Cost of Sales Ratio increased 4.8 points.
¾Cost of Sales increased ¥1.3bln.
・Drug price revisions
・Sales of generic drugs increased
・Sales of ethical drug overseas decreased

Operatingincome◆Ope at g Income◆Operatingco e decreased
dec eased ¥0.9bln
0 9b year
yeaon year.

Jun / 20142Consolidated Financial Resultsfor the first Quarter ending
g March 31,, 2015
Year onYear（¥ billion）

Jun/2013

Jun/2014

change■Net Sales¥26.4bln(+ 0.2)◆Ethical drugs business¥26.1bln(+ 0.3)¥21.0bln(－0.6)¥0.2bln(－0.4)¥4 0bl¥4.0bln( 1.3)(+1 3)● Sales of new ethical drugs
Jun/2013⇒Jun/2014

・ Kipres・ Mucodyne
・ Pentasa
・ Uritos
・ Flutiform

8.7
4.5
4.7
1.90⇒
⇒⇒⇒⇒

9.1
3.4
4.3
1.6
0.4

(＋0.4)(－1.1)((－0.4))(－0.3)(＋0.4)Net Sales

26.2

26.4

＋0.2

Ethical drugsBusiness

25.8

26.1＋0.3

21.2－1.0●Sales of new ethical drugs in Overseas

21 021.0－0 6－0.6●Sales of Generic drugs●Overseas

22.2
21 6
21.6
0.6

0.2－0.4

・ Health insurance pharmacy market’s sales and Contract manufacturing’s sales increased●Sales of Over-the-counter drugs¥0.9bln( 0.0)

◆Generic drugs

2.74.0＋1.3◆Over-thecounter drugs

0.90.90.0◆Sales of newethical drugs●JapanHealthcare(Skin care)
B iBusiness0.5⇒

0.1(－0.4)◆Healthcare (Skin care) Business¥0.3bln(－0.1)■Operating Income¥3.6bln(－0.9)◆Operating Income margin decreased 3.5 percentage points to 13.5%●Cost of Sales Ratio : increased 4.8 percentage points (36.4%⇒41.2%)

0.4

0.3－0.1

Operating
Income4.5

3.6－0.9

Ordinary
Income4.7

3.8－0.9

Net Income

・ Gatifloxacin

3.0

2.7－0.3

・Drug price revisions (in the 3%range for KYORIN Pharmaceutical).
Sales of generic drugs increased
increased.
・Sales・Sales of Gatifloxacin decreased.

●R&D Ratio : increased 0.2 percentage points (9.1%⇒9.3%)
・¥2.4bln⇒¥2.5bln +¥1bln●SG&A Ratio (excluding R&D expenses) : decreased 1.4 percentage points(37 4%⇒36 0%)(37.4%⇒36.0%)
・¥9.8bln⇒¥9.5bln －¥0.3bln
decrease of head office relocation expenses etc.

■Net Income¥2.7bln(－0.3)
3

Actual and Forecast of Main Subsidiary Companies（ Units: ¥ billion ）KYORIN
pharmaceuticalFirst quarter
Jun/2013（results）

First quarter
Jun/2014（results）

FY 2013

FY2014（results）（forecast）

Sales

23.3

22.7

97.7

98.5

Operating profit

4.1

2.9

15.4

14.3

Net profit

3.02.4

10.8

10.4

KYORIN Rimedio

First quarter
Jun/2013（results）

First quarter
Jun/2014（results）

FY 2013

FY2014（（results））（（forecast））

Sales

2.94.1

12.4

13.2

Operating profit

0.2

0.6

101.007
0.7

Net profit

0.1

0.4

0.6

0.5

Dr. ProgramFirst quarter
Jun/2013（results）

First quarter
Jun/2014（results）

FY 2013

FY2014（results）（forecast）

Sales

0.4

0.3

1.8

1.7

Operating profit

0.1

0.0

0.2

0.0

Net profit

0.1

0.0

0.2

0.04

Main Product Sales Update（ Units: ¥ billion ）Interim term
FY2013(results)FY2014(forecast)

FY2013(results)

FY2014(forecast)

Kipres

17.1

17.3

40.2

40.3

8.7

9.1

＋4.5%

52.1%

22.5%

8.2

7.2

18.4

16.0

4.5

3.4

－25.3%

46.7%

21.0%

9.4

8.9

18.6

17.5

4.7

4.3

－7.5%

48.0%

24.6%

3.7

3.7

8.1

8.2

1.9

1.6

－17.8%

42.1%

19.4%

15
1.5

12
1.2

28
2.8

25
2.5

08
0.8

06
0.6

27.6%
6%
－27

42 8%
42.8%

21 9%
21.9%

－0.8

0.6

2.8

－0.4

－

55.5%

15.3%

1.0

0.1

1.5

0.5

0.5

0.1－75.6%

80.9%

22.5%

1.0

1.0

2.1

2.0

0.5

0.4

－4.9%

44.3%

21.9%

Mucodyne（Mucoregulant）(Ulcerative colitis andCrohn’s diseasetreatment)

Uritos（Kyorin）(Overactive bladder)( o bronchial(Forb o c a asthma
ast a aanddcerebrovasculas disorders)

Flutiform(Anti-asthmatic)

Over-thecounter
drugs

FY2013(results)

FY2014(results)

Y Y
YoYchange(%)

Progress toInterim term
forecast(%)

Progress toFull term
forecast(%)

Pentasa

Ketas

Sales ofnew ethicaldrugs (overseas)

First quarter（April 1 to June 30）

P d t nameProduct（LT receptor antagonist）

Sales ofnewethicaldrugs(Japan)

Full term

Gatifloxacin(Bulk・Royalty)

Milton(Disinfectant)5

Main R&D Activities -1 (July 29, 2014 Release)
Ph III ~ Application submitted
StageJapan
Application
submitted(3/2014)

Overseas(Europe)
Almirall: Launched(9/2012)※Changes from the previous announcement (May 9 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 features
f tsuchh 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(US)
ForestPharmaceuticals

Origin: Launched (12/2012)

Features

PhⅢ(8/2013)(Europe) Almirall: Application
submittedb itt d (10/2013)(US)
Forest Laboratories: PhⅢ

KRPAB1102F(Fixed dosecombinationinhaled drug)

Chronic
Obstructive
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.

※PhⅢ
Clinical trial
to beprepared

PhⅡclinical
PhⅡli i l trial
t i l enddMerck & Co.,KRP 114VKRP-114V

OOveractivetibladder

M k & Co.,
MerckCKRP 114V iis expected
KRP-114Vt d tot improveiurinaryi
ffrequency
through stimulation of the beta 3 receptor in bladderwhich improves bladder muscle relaxation.

Comments
License agreement with
Almirall (2/2011)

License agreement withMerck & Co., Inc.,(7/2014)※ Discontinued development of KIPRES（ChewableKIPRES（Chewable、Oral
Oral Granules’s
Granules s additional indication for pediatric patient ） deleted it from the list of R&D activities.
activities6Main R&D Activities -2 (July 29, 2014 Release)※Changes from the previous announcement (May 9 2014)

POC Project (Pre-clinical ~ Ph II)
StageJapan

Overseas

Compound/Code

Therapy area/Action

OriginFeatures

CommentsPhⅡ（8/2011）

PhⅢ
Merz

KRP-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 antagonisticti ti activity
ti itLicense agreement with
Merz (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,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)

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

PhⅠ（10/2013）

KRP-EPA605

Overactive bladder

In-house

KRP-EPA605 is a novel selective prostaglandin EP1
receptor, and expected to improve urinary frequency bysuppressing detrusor overactivity of the bladder・Co-development withKISSEI PHARMACEUTICALCO., LTD.

※ planning to develop gene-therapy product 「Ad-SGE-REIC」 for the treatment of Malignant Pleural Mesothelioma

7Reference8

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

Sales

Year on Year

ProfitYear on Year

26.4

＋0.2

3.6

－0.9

26.1

＋0.3

3.5

－0.8

21.2

－1.0

●Overseas

21.0
0.2

－0.6－0.4◆◆Genericdrugs

404.0＋1 3＋1.3◆Over-the-counter drugs

0.90.0

Healthcare(Skincare) business030.3－0.10100
0.0－0.101－－0.10.0

total
Ethical drugs business◆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 first Quarter ending March 31, 2015
Interim termFirst quarter （April 1 to June 30）

Full term

Progressto interim
term forecast(%)

Progress tofull term
forecast
(%)

＋0.6%

51.5%

23.5%

＋292

＋1.1%

51.6%

23.6%

21,206－1,008

－4.5%

50.4%

22.8%

21,582,

20,981
,

－600

－2.8%

50.3%

22.8%

1,000

633

224

－408

－64.5%

56.2%

22.5%

11,987

12,700

2,686

3,973

＋1,286＋47.9%

62.1%

31.3%

2,100

4,172

4,600

899

913

＋14

＋1.6%

43.5%

19.9%

810

700

1,721

1,700

438

303

－134

－30.8%

43.3%

17.8%

Operatingincome

6,213

5,500

17,60715,8004,465

3,575－889－19.9%

65.0%

22.6%

Ordinary
yincome

6 531
6,531

5 700
5,700

18 281
18,281

16 30016,300

4 681
4,681

3 847
3,847

834
－834

－17.8%
17 8%

67 5%
67.5%

23 6%
23.6%

Net income

4,397

3,900

12,025

11,300

2,996

2,681

－315

－10.5%

68.7%

23.7%

FY2013(results)

FY2014(forecast)

FY2013(results)

FY2014(forecast)

FY2013(results)

FY2014(results)

ChangeYoYchange(%)

Sales

50,85151,300111,400

112,200

26,23926,397＋157

Ethical drugs
business

50,04050,600109,678

110,500

25,801

26,093

ethical drugs

42,85842,10093,518

93,10022,215●Japan41,697,41,700,91,668,,
92,100

1,160

400

1,849

◆Genericdrugs

5,184

6,400

◆OTC drugs
and others

1,997

Consumerhealthcareb ibusiness(Units: ¥million)◆Sales of new●Overseas10