Going beyond it all, to the future of medicine.

Outline of Consolidated Financial Results
for the 2nd Quarter Ended Sep 30, 2018
November 8, 2018
NIPPON SHINYAKU CO., LTD.

1H FY2018 Summary◆ Net sales： 53,497 million yen （+7.7%）◆ Operating profit：

7,569 million yen （-18.3%）◆ Ordinary profit：

8,196 million yen （-15.3%）

Profit attributable：

6,037 million yen （-13.7%）◆ to owners of parent(Million yen)2

Segmental Review - Pharmaceuticals 42,706＋2,101
Revenues from the licensing ofindustrial property rights+730+564
46,102（Million yen）
Ethical drugs
Revenues from the licensing ofindustrial property rights

Profit in co-promotion
Net sales

1H FY2017

YoY Change

1H FY2018

ResultsRatio

Results

Ratio

Amt%

35,27882.6%

37,37981.1%+2,101

+6.0%

5,536

13.0%

6,267

13.6%

+730

+13.2%

1,891

4.4%

2,455

5.3%

+564

+29.9%

42,706100.0%

46,102100.0%+3,396+8.0%

3

Three Main Fields of Focus(million yen)

PAH

Hematology
14,900Urology
15,70016,00015,00020,000vs. 2018 1H
Forecast

vs. 2018 1HForecast

vs. 2018 1H
Forecast

104.4%

107.6%

103.0%
12,00010,00015,000

9,060

7,362

18,09010,078

8,032

8,000

10,000

4,000

5,000

00

9,331

5,176
5,0000FY20171H

FY20181H

FY2018
forecast

FY2017
1H

Uptravi (domestic)

VidazaOpsumit (Profit in co-promotion)

Cylocide

Adcirca

Others

FY20181H

FY2018
forecast

FY20171H

FY20181H

FY2018
forecast

Zalutia

Cialis

Eviprostat

Others4

Segmental Review - Functional Food 6,960+229+12+153+38
7,394（Million yen）

1H FY2017

1H FY2018

YoY Change

ResultsRatioResults

Ratio

Amt%

Protein preparations

4,711

67.7%

4,941

66.8%

+229

+4.9%

Preservatives

1,128

16.2%

1,140

15.4%

+12+1.1%

Health food ingredients

432

6.2%

585

7.9%

+153

+35.6%

Others

688

9.9%

726

9.9%

+38

+5.5%

Net sales

6,960

100.0%

7,394

100.0%

+433

+6.2%

5

Operating profit
9,266+3,396+433-2,608-1,324-1,593
7,569（Million yen）

1H FY2017

1H FY2018

YoY Change

Results

Ratio

Results

Ratio

Amt%

49,666100.0%

53,497100.0%+3,830+7.7%(Pharmaceuticals)(42,706)(86.0%)(46,102)(86.2%)(+3,396)(+8.0%)(Functional Food)(6,960)(14.0%)(7,394)(13.8%)(+433)(+6.2%)

Operating expenses

40,40081.3%

45,92785.9%+5,526+13.7%

Cost of sales

22,47945.3%

25,08746.9%+2,608+11.6%

SG&A expenses

11,651

23.4%

12,97524.3%+1,324+11.4%

R&D expenses

6,270

12.6%

7,864

14.7%

+1,593+25.4%

Operating profit

9,266

18.7%

7,569

14.1%

-1,696-18.3%Net sales

6Profit attributable to owners of parent
6,998-1,696＋255-41+5206,037（Million yen）
Operating profit

1H FY2017

1H FY2018

Results

Results

YoY Change
Amt%

9,266

7,569-1,696-18.3%

Non-operating income597

853+255+42.8%

Non-operating expenses

184226+41+22.5%

Ordinary profit

9,678

8,196-1,482-15.3%

Income taxes, etc

2,679

2,158-520-19.4%

6,998

6,037-961-13.7%

Profit attributable toowners of the parent

7

Business Forecast for FY2018
FY2017（Million yen）

FY2018YoY Change

1HFY

1HFY

Results

Results

ResultsForecast

Net sales

49,666

101,448

53,497

Operating profit

9,266

17,079Ordinary profit

9,678
6,998

Profit attributable toowners of the parent

FY2018Amt%(5th MMP)

108,000+6,552+6.5%

110,000

7,569

18,500+1,421+8.3%

18,00017,451

8,196

19,000+1,549+8.9%-

12,953

6,037

14,000+1,047+8.1%

12,000

MMP: Medium-Term Management Plan

8Segmental Forecast - Pharmaceuticals -FY2017（Million yen）

Ethical drugs
Revenues from the licensing ofindustrial property rights

Profit in co-promotion
Net sales

FY2018YoY Change

1HFY

1H

FY

Results

Results

Results

Forecast

35,27873,07637,37972,800

-276

-0.4%

5,536

10,3786,267

15,500+5,122+49.4%

1,891

3,962

2,455

5,300

+1,338+33.8%

42,70687,416

46,10293,600+6,184

+7.1%

Amt%

9

Segmental Forecast - Functional Food FY2017（Million yen）

FY2018YoY Change

1H

FY

1HFY

Results

Results

Results

Forecast

Protein preparations

4,711

9,454

4,941

Preservatives

1,128

2,298

Health food ingredients

432

Others
Net sales

Amt%

9,585

+131+1.4%

1,1402,450

+152

+6.6%

927

585

960

+33

+3.5%

688

1,350

726

1,405

+55

+4.1%

6,960

14,031

7,394

14,400

+369

+2.6%

10

Consolidated Statements of Income (Forecast)
FY2017（Million yen）

FY2018YoY Change

1H

FY

1H

FY

Results

Results

Results

Forecast

49,666

101,448

53,497(Pharmaceuticals)(42,706)(87,416)(Functional Food)(6,960)Amt%

108,000+6,552+6.5%(46,102)(93,600)(+6,184)(+7.1%)(14,031)(7,394)(14,400)(+369)(+2.6%)

22,47946,92925,087

48,700+1,771+3.8%(45.3%)(46.3%)(46.9%)(45.1%)

SG&A expenses

11,651

24,217

12,97527,200+2,983+12.3%

R&D expenses

6,270

13,221

7,864

13,600

+379

+2.9%

Operating income

9,266

17,0797,569

18,500+1,421+8.3%

Non-operating income

597

1,122853

1,000-122-10.9%

Non-operating expenses

184751

226

500-251-33.4%

Ordinary income

9,678

17,451

8,196

19,000+1,549+8.9%

Income taxes, etc

2,679

4,497

2,158

5,000+503+11.2%

6,998

12,953

6,037

14,000+1,047+8.1%

Net sales

Cost of sales(Cost of sales ratio)

Profit attributable toowners of the parent

11Dividends Forecast
FY2017FY2018Interim¥26¥29

Annual

¥52

¥58

ＥＰＳ

¥192.31¥207.86

Dividends payout ratio

27.0 ％

27.9 ％

Dividends per share Dividends Policy
Target payout ratio(performance-based)is around 30%.

(Yen)
60

58
Annual40

48

Interim2025

522802014

2015

2016

2017

2018
12

Status of Product Pipeline

R&D Compounds (Domestic)
Code No.
(Generic name)<Origin>NS-73(defibrotide)<in-license>

Application
typeNMENew

Indications

Preparation fordevelopmentPIPIIPIII

NDA filing

Veno-occlusive
disease (treatment)
Veno-occlusive

indication disease (prevention)
Chronic thromboembolic

NS-304(selexipag)<in-house>

pulmonary hypertension

New

Arteriosclerosis

indication

obliterans

PIII
PIII

Lumbar spinal
stenosisNS-580<in-house>
NS-17(azacitidine)<in-license>
NS-065/NCNP-01(viltolarsen)<in-house>
NS-32<in-license>
NS-917<in-license>
NS-87<in-license>

NME

Endometriosis

New

Acute myeloid

indication

leukemia

NME

NME
NME
NME

Duchenne muscular

PI

PIIPI

PII

dystrophy
Iron deficiency
anemiaRelapsed/refractory acute
myeloid leukemia

Secondary acute
myeloid leukemia： change from the first quarter14

R&D Compounds (Overseas)
Code No.
(Generic name)<Origin>prulifloxacin<in-house>
NS-065/NCNP-01(viltolarsen)<in-house>
NS-018<in-house>

Application
type

NME

NME

NME

Indications

Preparation fordevelopment

PI

PII

PIII

NDA filing

Bacterial infections
Duchenne muscular
dystrophy
Myelofibrosis

15

Reference Materials

Consolidated Balance Sheet
End of

End of 2Q

YoY Change

End of

End of 2Q

YoY Change

FY2017FY2018Amt

FY2017FY2018

Amt155,887

160,377+4,49030,19729,480-717

Current assets

95,176

99,515+4,339

Current liabilities

22,454

22,496+42

Fixed assets

60,71060,862+151

Long-term liabilities

7,743

6,983

-759

125,689

130,897+5,208155,887

160,377+4,490（Million yen）
AssetsLiabilities

Net assets
Total assets

155,887

160,377+4,490＝Assets＝Total liabilities
and net assets＝Liabilities and Net assets＝Cash and deposits+2,610Notes and accounts payable-1,150Notes and accounts receivable+2,063

Accounts payable+425-428

Retained earnings+4,286Inventories
Investment securities+1,06517

Consolidated Statements of Cash Flows（Million yen）

1H FY2017

1H FY2018

YoY ChangeResults

Results

Amt

Operating activities-2,221

4,625+6,846

Investing activities-3,844-304+3,539Financing activities-2,034-1,757+277

27,83630,081+2,244

Cash and cash equivalents
at end of year
(Million yen)

+ 4,625-2,221-304
35,914-1,757-3,844-2,034
27,836

27,51030,08118

NS-73 (defibrotide)- Treatment of hepatic veno-occlusive disease Development Phase

Japan : NDA filing (treatment)
Japan : PIII (prevention)

Origin[Mar. 2017]
Licensed-in from : Jazz Pharmaceuticals

Development

Nippon Shinyaku in Japan (treatment)
Co-development in Japan :Jazz Pharmaceuticals (prevention)

Mechanism of action

Protective action on vascular endothelium, normalization of
the coagulation/fibrinolysis balanceIndication

Hepatic veno-occlusive disease (VOD)

Dosage form

Injection

Feature･VOD is a life-threatening complication which develops inpatients following HSCT, and in severe cases, leading todeath at high rates.
･NS-73 is the only drug for the treatment of VOD (EU/USguideline). It has been launched in 35 countries.
･NS-73 is the only drug for the prevention of VOD.
19

NS-304 (selexipag)- Treatment for pulmonary hypertension, arteriosclerosis obliterans, lumbar spinal stenosis -Development Phase<CTEPH> Japan: PIII
<ASO>
Japan: PIIb
<LSS>Japan: PIIa

OriginNippon Shinyaku

Development

・[Apr. 2008] Licensed-out to (outside Japan):
Actelion Pharmaceuticals Ltd. (Switzerland)
・Co-development in Japan:
Actelion Pharmaceuticals Japan Ltd. (CTEPH)
・Nippon Shinyaku (ASO)
・Nippon Shinyaku (LSS)

Mechanism of action

Selective IP receptor agonist

Indication

・Chronic thromboembolic pulmonary hypertension (CTEPH)
・Arteriosclerosis obliterans (ASO)
・Lumbar spinal stenosis (LSS)

Dosage form

TabletFeatureLong-acting oral drug20

NS-580- Treatment for endometriosis Development Phase

Japan: PIIa

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

Inhibition of membrane-associated prostaglandin E syntase-1

Indication

Endometriosis

Dosage form

Oral agent

FeatureTreatment for endometriosis without hormonal effect and withpossible analgesic potency

21NS-17- Treatment for acute myeloid leukemia Development Phase

Japan: PII

Origin[Oct. 2006]
Licensed-in from :Celgene Corporation

Development

Nippon Shinyaku

Mechanism of action

Inhibition of DNA methylation, Cytotoxic effects

Indication

Acute myeloid leukemia

Dosage form

Injection

Feature・Standard Treatment for acute myeloid leukemia thatineligible for intensive chemotherapy
・Improvement for life prognosis22

NS-065/NCNP-01 (viltolarsen)- Treatment for Duchenne muscular dystrophy Development Phase

・USA : PII
・Japan: PI/IIOrigin

Co-development: National Center of Neurology and Psychiatry

Development

Nippon Shinyaku

Mechanism of action

Exon 53 Skipping

Indication

Duchenne muscular dystrophy

Dosage form

Injection

Feature・Improvement in symptoms and prevention of the diseaseprogression by recovery of dystrophin protein expression・Morpholino based oligonucleotide with possible high safety profileand maximized activity23

NS-32- Treatment for iron deficiency anemia Development Phase

Japan: PIOrigin[Dec. 2016]
Licensed-in from: Pharmacosmos A/SDevelopment

Nippon Shinyaku

Mechanism of action

Strongly bound Iron Carbohydrate complex enabling ironcorrection in a single or low number of visits

Indication

Iron deficiency anemia

Dosage form

Injection

Feature・Allows high iron doses to be given with a good safety profile
・Minimal potential toxicity from release of labile iron due to tightiron binding in a matrix structure of interchanging isomaltosideand iron・Low immunogenic potential based on the short and linear
oligosaccharide, isomaltoside・No profound hypophosphatemia24NS-917- Treatment for relapsed or refractory acute myeloid leukemia -Development Phase

Japan: Preparation for Clinical Development

Origin[Mar. 2017]
Licensed-in from: Delta-Fly Pharma

DevelopmentNippon Shinyaku

Mechanism of action

DNA strand-break by incorporating itself into DNA

Indication

Relapsed or refractory (r/r) acute myeloid leukemia (AML)

Dosage form

Injection

Feature・Significant anti-leukemic activity with unique mechanism ofaction from other nucleoside analogs at low dose continuous
infusion・Tolerable safety profile available to elderly patients with r/r
AML25

NS-87- Treatment of secondary acute myeloid leukemia -Development Phase

Japan: Preparation for Clinical Development

Origin[Mar. 2017]
Licensed-in from : Jazz Pharmaceuticals

Development

Nippon Shinyaku

Mechanism of action

Liposomal combination of cytrabine and daunorubicin

Indication

Secondary acute myeloid leukemia (secondary AML)

Dosage form

Injection

Feature・NS-87 is the first therapy for the treatment of secondary
AML in Japan.
・The enhancement of antitumor activity and reducing adverse
events are expected by NS-87 accumulated in bone marrow.

26

Prulifloxacin- Quinolone antibacterial Japan
Licensee・Meiji Seika Pharma Co., Ltd.

Development phase・Launch (Dec. 2002) / Sword® Tablets

Overseas
LicenseeDevelopment phase

・Angelini (Italy)・Approval (Sep. 2004)
・Launch in Italy (Nov. 2004)
・Approval in European countries (Apr. 2005)

・Lee’s Pharmaceutical Holdings Ltd. (Hong Kong)

・NDA filing in China

・Algorithm (Lebanon)

・Launch in Lebanon (Jan. 2012)
・Preparation for launch in 1 country and
NDA filing in 5 countries27

NS-018- Treatment for myelofibrosis Development Phase

Overseas (USA): PI/IIOrigin

Nippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

JAK2 inhibitor

Indication

Myelofibrosis

Dosage form

TabletFeature

・Highly selective for active form of JAK2
・Possibly best-in-class treatment for myelofibrosis

28

Safe Harbor Statement• Materials and information provided during this presentation may contain so-called “forward-lookingstatements.” These statements are based on current expectations, forecasts and assumptions thatare subject to risks and uncertainties which could cause actual outcomes and results to differ materiallyfrom these statements.
• Risks and uncertainties include general industry and market conditions, and general domestic andinternational economic conditions such as interest rate and currency exchange fluctuations. Risks anduncertainties particularly apply with respect to product-related forward-looking statements. Product risks
and uncertainties include, but are not limited to, technological advances and patents attained bycompetitors; challenges inherent in new product development, including completion or failure of clinical
trials; claims and concerns about product safety and efficacy; regulatory agency’s examination, obtaining
regulatory approvals; domestic and foreign social security reforms; trends toward healthcare costcontainment; and governmental laws and regulations affecting domestic and foreign operations.

• Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, whichinclude, but are not limited to, inability to build production capacity to meet demand, unavailability of raw
materials, and competition with others.
• The Company disclaims any intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
• This English presentation was translated from the original Japanese version.
In the event of any inconsistency between the statements in the two versions, the statements in theJapanese version shall prevail.