The 7th Five-Year Medium-Term Management Plan
(FY2024 - FY2028)-For Global Growth Beyond the CliffMay 28, 2024
Nippon Shinyaku Co., LTD.
Toru Nakai
Representative Director, President

Agenda•

Review of the 6th Five-Year Medium-Term Management Plan•

Corporate Philosophy and Vision for 2035•

The 7th Five-Year Medium-Term Management Plan

2

3

Review of the 6th Five-Year Medium-Term
Management Plan

The 6th Five-Year Medium-Term Management Plan

4

As "a company playing a meaningful role in the global healthcare sector“,
we took on the challenge of six actions to enhance our presence in the society.
1

Six Actions

2
3

Creation of new value through R&D

results

Further enhancement of R&D capabilities
Challenge for new drug modalities
Launch of new products that meet market needs(Pharmaceuticals) Launch at least one new product per year on average(Functional food) Continuous development of new products

issues(Pharmaceuticals) Speed and probability of success in clinical development
research on new modalities

Development of global businessresults

Building an organizational structure suitable for global
business development in all divisions(Pharmaceuticals) Launch of Viltepso in the U.S. by our own marketing
Launch of Gaslon N in China by our own marketing

issues(Pharmaceuticals) Marketing capabilities of Viltepso in the U.S.

results

Improvement of the recognition by external parties (Inclusion in ESG
indices (FTSE), Approval by SBTi)

results

Introducing various systems to create a comfortable working environment
for diverse human resources
Designation as a "White 500" Health & Productivity Management
Outstanding Organization

results

Promoting DX themes by DX department and each department together
based on our DX vision (Designated as Digital Transformation
Certification)
Introducing generative AI and data analysis AI to improve theenvironment

results

Introducing a budget management system and promoting costmanagement to achieve a highly profitable and efficient management
structure
Disclosure accordance with International Financial Reporting Standards(IFRS)

Increase in corporate value by strengthening
ESG management
Strengthening ESG (Environmental, Social and Governance)
management initiatives through business activities

Creation of organizational climate in which
every employee can flourish

4

5

6

Providing opportunities for each employee to take on
positive challenge and grow
Respect diversity without distinction of gender, nationality,
culture, etc.

Active use of AI and adoption of IT
Improving productivity through active use of AI and RPA,
etc.

Further strengthening of businessfoundation
High profitability of business, cost management,
effective use of management resources and restructuringof management systems

Products Planned to Be Launched During the 6th Medium-Term Management Plan

PLCM

In-licensing In-house

Products planned to be launched by FY2023
NS-065/NCNP-01

NS-089/NCNP-02

DMD Viltepso

DMD

domestic and overseas

NS-73

Defitelio

domestic and overseas

domestic

NS-018myelofibrosis

overseas

NS-73

domestic

sinusoidal obstruction syndrome (treatment)

sinusoidal obstruction syndrome (prophylaxis)

NS-32
MonoVerdomesticiron deficiency anemia

Fintepla
ZX008
domesticrare intractable epilepsy

NS-304domestic
NS-304arteriosclerosis obliterans

Uptravi

domestic

chronic thromboembolic pulmonary hypertension

macitentan

domestic

chronic thromboembolic pulmonary hypertension

NS-17
AML

Products with delayed development schedules
NS-050/NCNP-03

NS-051/NCNP-04

DMD

DMD

domestic and overseas

LaunchDelay

Vidazadomestic

6 products
Terminated: 3 products
Delayed: 4 products
Launched:

domestic and overseas

Termination

DMD : Duchenne Muscular Dystrophy
AML : Acute Myeloid Leukemia

5

Major Management Issues❶Speed and success probability
in clinical development❷R&D speed for new modalities

Delay of start of the studies for NS-089/NCNP• The length of time for development of next02 and NS-050/NCNP-03
generation nucleic acid drugs and gene
• Prolonged clinical trials and termination oftherapeutics
development for NS-018• Termination of the development for
Major issues identified in
NS-161•the 6th Medium-Term
Management Plan

❸Marketing capabilities overseas••

Delay of initial sales growth of Viltepso in
the U.S.
Struggling to increase market share 3 years
after launch of Viltepso in the U.S.

During the 7th Medium-Term Management Plan, we will resolve issues
identified in the 6th Medium-Term Management Plan.

6

Targets of the 6th Medium-Term Management PlanAmong FY2023 targets in the plan, we have achieved
functional food segment revenue an company ROE.

Target in FY2023

Results in FY2023

Revenue

150 billion yen

148.2 billion yen

Pharmaceuticals

133 billion yen

125.1 billion yen

Functional Food

17 billion yen

23.1 billion yen

Operating profit

40 billion yen

33.2 billion yen

Profit attributableto owners of parent

30 billion yen

25.8 billion yen

EPS

445 yen

383 yen

ROE

10% or more

12.4%

7

Summary of Review of the 6th Medium-Term Management Plan
In the 6th Medium-Term Management Plan, we established afoundation for global expansion through working on our own
marketing in the U.S. and China, and achieved growthwith record high revenue and respective profits.
Net Sales/Revenue (billions of yen)

148.2
114.7

Operating profit and profit attributable toowners of parent (billions of yen)8

9Corporate Philosophy and Vision for 2035

Environmental Recognition

•
•
•
•
•
•
•

External environment

Internal environment<Global><Nippon Shinyaku>Management issues from The
6th Medium-Term
Management Plan
Uptravi's patent cliff
Increase in R&D expenses

Population growth
Advancement of R&D
Development of AI anddigital technology
Climate change
Increase in natural disasters
Increased geopolitical risk
Diversification of values

•
•
•
•
•

<Japan>Declining birthrate and aging
population
Population decline
Promotion of generic products
Annual NHI price revision
Drag lag and drug losses

•
•
•

10

Important initiatives for Nippon Shinyaku
 In a drastically changing business environment, we see not only Japan but also the global
market as a growth market.
 We will respond quickly to technological evolution with an enterprising spirit.
 We will provide products and services that meet the diversifying needs of people's lives.

Vision for 2035

A global healthcare company from Kyoto
creating various types of new ways of life
for each person around the world
Today, when the environment is changing rapidly and the future is uncertain, what is needed is a discovery
for a new form of happiness and a new way of life.
Nippon Shinyaku has a strong belief in creating a world where all people can live happily.
Nippon Shinyaku has always been serious about one’s life and has boldly taken on unprecedented and difficult
challenges.
Nippon Shinyaku inherits the venture spirit of pioneering the future with an enterprising spirit rooted in Kyoto.
That is why Nippon Shinyaku will help create a new world in the future.
In this time when there are various ways of thinking and life,
all of our employees think about one’s life together and we will provide values to the world without being boundby existing products and frameworks.
By doing this, we aim to contribute to the life of people around the world.

11

Realization of Management Philosophy and Vision for 2035

12

In two business segments of pharmaceuticals and functional food, we will differentiate
ourselves from competitors and achieve continuous new product launches globally.
Through these initiatives, we aim to resolve issues of materiality and achieve Vision for 2035
“A global healthcare company from Kyoto creating various types of new ways of life
for each person around the world”.

There are as many ways of life as people

Pharmaceuticals

Functional foodWith thinking lives of all people
based on patient centricity andclient perspective, we will
create a new way of life by
products or services based on
two business segments,
pharmaceuticals and functional
food, and contribute to help
people lead healthier, happier
lives.

Toward the Realization Vision for 2035

13

Toward realizing Vision for 2035, we aim to resolve issues of materiality
by integrating management policy and sustainability policy in our operations.

Management Policy

Materiality

Basic Policies to achieve Vision for 2035

①Realizing a healthy futureby creating innovation②Developing diverse humanresources and realizing
employee well-being③Resolving social issues andcoaxing with thecommunity④Strengthening efforts toprotect the global
environment⑤Strengthening governancea• Supply Unique and High-quality Products andServices (customers)• Earn the Trust of Society (society)• Develop Each Employee (employees)

Sustainability Policy
Policies to clarify our stanceon promoting sustainability management
Recognizing responses to environment and social
issues as material in our management,
Nippon Shinyaku Group aims to realize a sustainable
society. To fulfill this aim, the Group conducts
educational and awareness-raising activities intended
for all employees to further develop conscious ofsustainability among them.

Vision for 2035
A global healthcare company
from Kyoto creating various typesof new ways of life
for each person around the world

In March 2023, we revised the issues of materiality
due to drastic changes in our business environment

Changes in the business environment•

Increase in R&D expenses •Uptravi's patent cliff ••Development of AI and digital technology•

Declining birthrate and aging population •Advancement of R&D•

Natural disasters

Promotion of the generic products•

Annual NHI price revision

Overview of Management
Management Philosophy

Values and decision criteria for our businessHelping People Lead Healthier, Happier Lives

SloganA catchy phrase for the management philosophy
A new way of life

Vision for 2035

A shareable vision of how to provide our value to society over a specific long-term period of time and how to increase
corporate value sustainably over the long term
A global healthcare company from Kyoto creating various types of new ways of life for each person around the world

Management Policy

Basic Policies for realizing Vision for 2035
・Supply Unique and High-quality Products and Services (customers)
・Develop Each Employee (employees)

Sustainability Policy

・Earn the Trust of Society (society)

Policies to clarify our stance of promoting sustainability management
Recognizing responses to environment and social issues as material in ins management, Nippon Shinyaku Group aims
to realize a sustainable society. To fulfill this aim, the Group conducts educational and awareness-raising activities
intended for all employees to further develop conscious of sustainability among them.

NS Mind
Guidelines for action

Attitude and awareness that all employees aim for・Give your all for yourself ・Give your all for others ・Give your all for society
Guiding for the work process
・Challenge ・Speed ・Investigation ・Smile

Issues of materiality

Material issues for sustainable growth with society
・Realizing a healthy future by creating innovation
・Developing diverse human resources and realizing employee well-being
・Resolving social issues and coexisting with the community
・Strengthening efforts to protect the global environment
・Strengthening governanceManagement plan

Scenario for growing toward Vision for 2035
The 7th Five-Year Medium-Term Management Plan (FY2024-FY2028)“For Global Growth Beyond the Cliff”

14

15

The 7th Five-Year Medium-Term
Management Plan
-For Global Growth Beyond the Cliff-Positioning of the 7th Medium-Term Management Plan
During the 7th Medium-Term Management Plan,
we
willSeventh
grow sustainably
with overcoming
Uptravi’s
The
Medium-Term
Management
Plan
patent cliff as well as strengthen
the foundation forisprovidingour products
and services
the
world
Overcoming
the patent
cliffs of totheUptrabiwith thinking about the life of each of patients andand building a foundation for growth.
customers to realize Vision for 2035.

A scenario that grows toward what it wants tobe beyond that.
FY2024FY2019The 6th Medium-Term Management Plan

16
2035

FY2028

Vision for 2035
A global healthcare company
from Kyoto creating various
types of new ways of life
for each person around theworld

The 7th Medium-Term Management Plan

A Scenario for growing toward
vision for 2035 with overcoming
the patent cliff of Uptravi

Establishing a Foundation for Growth Overcoming the Patent Cliff

17

The patent of Uptravi, which has supported Nippon Shinyaku‘s growth, will expire in
FY2027, and royalty revenue, which accounts for the majority of revenues from thelicensing of industrial property rights, are expected to decline significantly.
During the 7th Medium-Term Management Plan, we will focus on overcoming Uptravi’s
patent cliff by prior investment for future growth and establishing a revenue base that is
not dependent on royalty revenue.
<Image of operating profit development>

Overcoming thePatent Cliff for
GrowthThe 7th Medium-Term Management Plan
Revenues from the licensing ofindustrial property rights
40.3 billion yen

Operating profit
30 billion yen

Operating profit
33.2 billion yen

Royalty revenue from Uptravi’s
overseas sales is expected to
decline significantly.

Profits are expected to decline temporarily due toprior investment to establish a foundation for growth.

FY2023

FY2030Operating profit
50 billion yen scale

FY2028Establishing a foundation for growth overcoming the patent cliff

18

We plan to achieve revenues of 300 billion yen in FY2030 by promoting
investment in R&D pipeline, in-licensed products, M&A, etc. during the 7th
Medium-Term Management Plan period.
＜ Image of revenue development ＞

To be a company with revenue of 300 billion yen

The 7th Medium-Term Management Plan
230 billion yen

150billionyen ormore

148.2 billion yen

We will expand sales of focus products
such as Vyxeos.
We promote PLCM of Gazyva andUptravi as well as early market
penetration.

Pharmaceuticals (Overseas)
Pharmaceuticals (domestic)
Functional foodFY2023

We will promote sales of CAP-1002 andvarious of nucleic acid drugs.
We aim to acquire at least one in-licensed
product per year.
We will achieve an overseas sales ratio of
more than 50% to expand sales regions,mainly in Japan and the U.S..

FY2028FY2030Overview of the 7th Medium-Term Management Plan
During the 7th Medium-Term Management Plan, we will promote "three key themes andstrengthening five management foundations" to realize Vision for 2035. In each of thePharmaceuticals and Functional Food segments, we will thoroughly allocate management resources
and reduce costs by prioritizing them based on business strategies, and manage the capital efficiencyof each segments by ROIC* to secure earnings that exceed the cost of capital.
*ROIC (%) = Operating profit after tax / Invested capital (Non-current assets + Net working capital)

Targets
in FY2028
basic
policyRevenue
230 billion yen
EPS 341 yen

ROE 8% or moreI

Three Key Themes

Strengthening
five managementfoundations

Fostering growth
drivers to replace
Uptravi①
Promotingsustainable
management forrealizingsustainable
society

Operating profit
30 billion yen
ROIC 9% or more

II

III.

Expanding global
development

Continuous
pipeline expansion②
Speeding up
R&D

③

④

Promoting humancapital managementthat allows each
employee to growand diverse humanresources to play anactive role

Business process
reengineeringand productivity
improvement bypromotingdigitalization⑤
Financialstrategy forsustainablegrowth19

20

Our Business Strategies

Business Strategy for Pharmaceutical Segment
Business
Strategy

Launching an average of two or more new products per year
through the three pillars of in-house drug discovery, in-licensing,and PLCM, prioritizing response to the patent cliff.

■In-house drug
discovery, PLCM

Focusing on nucleic acid and small molecule drug discovery, concentrate management
resources on diseases and areas where we can aim for global expansion
In particular, nucleic acids will be focused on DMD and non-DMD diseases, with theaim of bringing products for non-DMD diseases to market by 2035

■In-licensing

Focused as much as in-house drug discovery■SalesBased on global marketing, consider and promote the best way to proceed with
out-licensing, self-sales, etc. in each country to quickly launch products in eachregion and increase market share

Pharmaceutical Business Segment
Targets

FY2028

Revenue

203 billion yen

Operating profit

28.2 billion yen

ROIC
ROIC

≧ 9%

21

Business Strategy for Functional Food Segment
Business
Strategy■B to B BusinessTransition to a stable highly profitable structure by providing
high quality, unique and high value-added materials andfinal products.
Focus on preservatives, for which demand is expected to increase due tothe focus on reducing food loss

■B to C Business

Further accelerate growth of sports supplement 「WINZONE Whey Protein」
Enhance lineup of anti-aging care supplements by developing new products■Overseas Expansion

Developing initiatives and systems for business development in
Asian countries and other overseas markets

Functional Food Business Segment
Targets

FY2028

Revenue

27 billion yen

Operating profit

1.8 billion yen

ROIC

≧ 9%

22

23

Three Key Themes

Three Key Themes
I. Fostering growth drivers to replace Uptravi
As growth drivers during the 7th Medium-Term Management Plan, we will launchvarious DMD products globally (CAP-1002, NS-089/NCNP-02, NS-050/NCNP-03, NS051/NCNP-04), new hematologic cancer products in Japan (Vyxeos, pirtobrutinib,
NS-401) and lifecycle management of approval drug products (PLCM) (Gazyva forrenal disease, Fintepla, Uptravi for pediatric and high-dose formulations) and achieve
early market penetration.

II. Expanding global development
In the U.S. and China, where we have already run by our own marketing, we will
strengthen the product line-up.
We will expand marketing areas to Europe such as U.K., Germany and France, as wellas other regions, by various means including M&A.

III. Continuous pipeline expansion
We will continue to expand our pipeline by in-licensing clinical trial stage products
and strengthening in-house drug discovery through open innovation and AI drug
discovery.

24

Key Theme I : Fostering Growth Drivers to Replace Uptravi
As growth drivers during the 7th Medium-Term Management Plan, we will launch
new products in the DMD group, the hematology group, and the PLCM group.

DMD

Hematology

CAP-1002 : P3 in progress

Vyxeos : Launch

NS-089/: P2 in progress
NCNP-02

LY3527727

High-risk acute myeloid leukemia

NS-050/ ：P1 in preparation
NCNP-03

Mantle cell lymphoma：Application
Chronic lymphocytic leukemia：P3 in progress

NS-051/ ：P1 in preparation
NCNP-04

NS-401 : P1/2 in progress

PLCM
Uptravi : Under application
Pediatric pulmonary arterial
hypertension

Fintepla : P3 in progress
CDKL5 gene deficiency

Gazyva : P3 in progress
Blastic plasmacytoid dendritic cell
neoplasm

Lupus nephritis
Pediatric nephrotic syndrome
SLE without nephropathy

25

Key Theme I : Fostering Growth Drivers to Replace Uptravi

26

Within the period of this plan, we plan to launch an average of at least two new products per year.
We aim to acquire at least one in-licensed product each year.
We will conduct an additional P3 study of Viltepso and aim to launch it in Europe and China.

Target for launching new products

Domestic

FY 2024

FY 2025

FY 2026

FY 2027

FY 2028

NS-87 (VYXEOS)

NS-401

NS-089/NCNP-02

NS-050/NCNP-03: high-risk AML※：BPDCN※

: DMD

: DMD

LY3527727(pirtobrutinib)

ZX008 (Fintepla)

GA101 (Gazyva)

NS-051/NCNP-04: CDKL5 gene deficiency: SLE without nephropathy: DMD

CAP-1002 (U.S.)

NS-089/NCNP-02 (U.S.)

NS-050/NCNP-03 (U.S.)

: DMD

: DMD

: DMD

: MCL※

NS-304 (Uptravi)

GA101 (Gazyva): pediatric PAH※

: lupus nephritis

GA101 (Gazyva)

Overseas: pediatric nephrosis

NS-051/NCNP-04 (U.S.): DMD

NS-065/NCNP-01 (EU,CN): DMD※ high-risk AML: high-risk acute myeloid leukemia; MCL: mantle cell lymphoma; pediatric PAH: pediatric pulmonary arterial hypertension;
BPDCN: blastic plasmacytoid dendritic cell tumor
The launch date for pirtobrutinib (LY3527727) for chronic lymphocytic leukemia has not been determined.

Key Theme I : Fostering Growth Drivers to Replace Uptravi

27

Domestic Sales Strategy - Establish an organization that can act quickly and efficiently to achieve market
penetration of a wide range of products. -The areas of greatest focus are hematology, pulmonary hypertension, and pediatric neurology. When adding
indications to existing products or launching new products, we will promote omni-channel activities utilizing
MR and digital channels, with the highest priority on early start-up.

Hematology
Vyxeos and pirtobrutinib are scheduled to be launched in FY2024, and NS-401 in FY2026.
(Existing products: Gazyva, Defitelio, Vidaza, Trisenox, Amnolake, Cylocide)
Establish a position as the No. 1 pharmaceutical company in the field while maximizing each product.

Pulmonary Hypertension
Addition of pediatric indication for Uptravi in FY2024. And expansion of the lineup thereafter in addition to existing
Uptravi, Opsumit, and Adcirca. Establish the positioning of each drug with a focus on Uptravi, and maximize overall PH
treatment products as the No. 1 pharmaceutical company in the field.

Pediatric Neurology
Epilepsy: In March 2024, Fintepla received an additional indication for Lennox-Gastaut syndrome. Deliver Fintepla topatients with Dravet and Lennox-Gastaut syndrome as soon as possible and develop it into a much-needed drug.
DMD: Viltepso's activities have led to the identification of DMD patient concentration facilities, and medical coordinationfrom non-specialized facilities to DMD concentration facilities has also been established. These medical coordination
schemes will be utilized for future products to be launched to deliver treatment as soon as possible.

Key Theme I : Fostering Growth Drivers to Replace Uptravi
Global revenue of three focus areas in FY2028⇒ Aiming for over 130 billion yen

Image of sales growth during the 7th
Medium-Term Management Plan
Revenue(billions of yen)
130
Pediatric Neurology
60

Pulmonary Hypertension(excluding Uptravi royalty)

Hematology

FY2024FY202828

Key Theme II : Expanding Global Development

Growth Strategies for Overseas Subsidiaries
U.S. subsidiary (NS Pharma, Inc.)
In addition to Viltepso, other DMD investigational drugs (CAP-1002, NS089/NCNP-02, NS-050/NCNP-03, NS-051/NCNP-04) to be launched••••

Increase sales quickly, marketing efficiently
Expand sales structure (HUB service, Patient support, market access)
Expand advocacy activities ⇒ Create an environment where patients and their families can continue
treatment with peace of mind
Expand medical activities ⇒ Penetrate a novel cell therapy

China subsidiaries (Beijing Nippon Shinyaku Co., Ltd.;
Tianjin Nippon Shinyaku Co., Ltd.)
Development and establishment of a marketing system for Viltepso and functional
food in China

29

Key Theme II : Expanding Global Development

30

Further global expansion,
establishment of optimal supply chain
 Promote global expansion by in-house sales, alliances, and M&A in order to provide Viltepso andother development products in the pipeline to patients around the world.
 In the U.S. and China, maximize the value of the existing products as well as promote licensing
activities to expand our business with sales of in-licensed products.
 Strengthen group collaboration among R&D, clinical development, manufacturing, quality assurance,and overseas subsidiaries to promote smooth global expansion.
Business promotion
for global growth・Develop and implement adevelopment policy for Europe
・Survey of global businessdevelopment regions and businesspromotion
・Establishment of a global
intellectual property system

・Global collaboration of business
management departments

Global expansion
on Reliability assurance system

・Consideration, investigation, andconstruction of a system that cancomply with regulations in a wide
range of marketing countries
・Establishment of a reliability
assurance system that supports
new modalities

Develop and strengthen
global supply chain
・Reducing procurement costs andimplementing sustainable procurement

・Increase in the value of the
Odawara central factory
Production start-up of the nucleic
acid API purification plant
Revitalization of existing plants

・Expansion of a global supply
chain system
・Establishment of global cold chain

Key Theme III : Continuous Pipeline Expansion
Licensing in products in the clinical stage and strengthen in-house drug
discovery by leveraging open innovation and AI drug discovery system tocontinuously expand the pipeline.
In-house drug discovery
・Promotion of nucleic aciddrug discovery
DMD
Central nervous system

In-licensing
・ Activities with attention
to priority
・Strengthening negotiation
capabilities
・Acquire more than 1 item
every year

・Promote small molecule
drug discovery
Hematology
Intractable/rare diseases
Urology and Gynecology

New / Outside Technology
・Utilization of open innovationand new drug discovery modalities
・Promote research and developmentusing AI

Continuous
Pipeline
Expansion

PLCM
・Consider clinical trials forsecondary indications
simultaneously to maximize thevalue of the product31

Key Theme III : Continuous Pipeline Expansion

32

Promotion of Nucleic Acid Drug Discovery
Nucleic acid drugs act on genetic information

・ Able to act on previously unapproachable targets
・ Enables treatment of the root cause Work on development of nucleic acid drugs for disease of the central nervous system (CNS), where
there are many diseases for which causative genes have been identified but for which there are noeffective treatments.
・ A candidate product for triplet repeat disease*, aiming to enter clinical trials in FY2026.
 In the long term, we will continue to create distinctive drugs in the DMD and CNS fields by utilizing
new drug discovery modalities.
・ Work on Nucleic acid drugs that utilize nucleic acid-loaded exosomes, gene expression-enhancing
nucleic acids, RNA editing and RNA trans-splicing, and work on oral nucleic acid drugs, etc.
・ Work on the development of "nucleic acid/small molecule complex drug" which combines the featuresof nucleic acid drug discovery and small molecule drug discovery.

*Triplet repeat disease: a genetic neurological disease caused by abnormal elongation of three-base repeat sequence (triplet repeat) in
the gene (Fragile X syndrome, Huntington's disease, Spinal and bulbar muscular atrophy, etc.).

33

Strengthening Five Management Foundations

①Promoting Sustainability Management for Realizing a Sustainable Society

34

To realize a sustainable society, we will engage in activities to resolve our five materialities.
A new department dedicated to investor relations was established to strengthen information disclosure.
With promoting initiatives for environment and social issues, we aim to be trusted by society as a global
healthcare company from Kyoto creating various types of new ways of life
for each person around the world in 2035.

Environment

Society Greenhouse gas reduction target (FY2030)
・Scope 1+2 : -42% (compared to FY2020)
・Scope 3 Category 1 : -25% (compared to FY2020)
 Resource management and resource recycling
・The percentage of recycle waste plastic 65% or
more・Continuous reduction of water consumption per
100 million yen

・Reduce human rights risks by implementing
due diligence, etc.
・Continuous contributions to healthcare
through public research grant system

Governance・Strengthening the global governance system
・Strengthening risk management framework

Improve recognition by external parties and corporate value
through information disclosure
Scope 1: Direct GHG emissions from owned or controlled sources, Scope 2: Indirect emissions from the generation of purchased electricity and heat
Scope 3: Indirect emissions, other than Scope1 and Scope 2 emissions, from the supply chain, Category 1: Purchased products and services

② Speeding Up R&D

35

Increase efficiency and speed of drug discovery research
Establish a system to launch one in-house product per year Resource allocation and project prioritization to determine which and how much of thelimited resources will be invested in which areas.
・Achieve a balanced R&D pipeline portfolio by investing based on priorities. (probability of success, profitability,
focus areas, business value, etc.)

 System and initiatives to achieve the launch of one in-house product per year

・ Establish a new collegial decision-making council to ensure prompt information sharing, issue resolution, and thoroughprogress management.
・ All researchers propose new themes.
・ Shorten timeframe by organizing and optimizing the drug discovery process.

 Promote efficient research and development using AI<Image>
cause

A

A
cause

C

B

disease

cause

A

B

disease

C

B

cause

C

B

diseaseB

Huge amount of information ondiseases, symptoms, genes, etc.
in papers and databases

Gathering information andcreating inferences using AI

Confirmationand verificationof inferences by
the researcher

Earlier startof research
activities

② Speeding Up R&D

36

Speed up clinical development by flexibly changing the global development system
according to the pipeline, strengthening the response to regulatory authorities in eachcountry, accelerating the timing of investment with an eye to the next phase, andcreating robust study plans and confirming feasibility.

Speeding up clinical development
Strengthen project
management

Pursue the possibilityof early approval・ Strict progress check acrossmanagement

・ Improve negotiation skills withoverseas authorities by hiring
qualified medical doctors
・ Building a clinical development
system that can respond flexibly
globally・ Use of project management tools
・ Review of development step
meetings, bringing forward
preparation for POC exams

Improved probability ofsuccess・ Robust clinical study planning・ Strengthening of POC exams planning
・ Promote biomarker search fromearly stage
・ Efforts to reach consensus withauthorities

・ Prioritization of clinical trial projects
・ Consider partnering after obtaining
POC・ Thoroughness of timing of study
planning
・ Establishment of a system topromote health technology
assessment (HTA) and clinicaldevelopment in parallel③ Promoting Human Capital Management that Allows Each Employee to Grow and Diverse Human Resources to Play an Active Role

37

Maximizing individual potential without increasing the number of domestic
human resources, we will become a small but unique team.
GlobalDomestic••

Acquisition and development of human resources capable of performing on a global scale
Increase in the number of local human resources with global expansion in the U.S., China, and Europe.

•

The placing of the right employee in the right position, Selection of younger employees,
Implement motivation in management
Development of human resources who can promote BPR (Business process reengineering)
through the use of digital technology.

•＜ Action to achieve the goal ＞
Human Resources Strategy＜ Balance between employee and workload ＞
Organizational Culture Reform
Increase in workload
accompanying thepromotion of global
expansion• Acquisition and development of humanresources to support global expansion• Development human resources topromote company-wide DX• Providing opportunities to experience
different cultures• Realization of treatment that suits thereroles, responsibilities, and performance• Realization of proactive careerdevelopment and the right people in theright places

Labor-saving bydigital utilization
Increase in
human
resources tosupportglobalexpansion• Penetrating Vision 2035 through Nippon
Shinyaku Group• A small but unique team
• Well-being, engagement• Creating a highly psychologically safe

Workload
WorkloadHuman
resources

Human
resources

environment

present

future④Business Process Reengineering and Productivity Improvement by Promoting Digitalization

Since digital technology is advancing rapidly, we will invest in digital systems andhuman resource development to take advantage of it proactively.
We will take data-driven responses quickly to issues from R&D or sales promotion.
It is difficult to make profits continuously without improving
operational efficiency and productivity while promoting
globalization.
⇒ We will determine "DX themes" that should be prioritizedand promote them with the involvement of the
management team.
To change the way we do our daily work and increase
productivity, we will develop “human resources for BPR” whocan actively utilize digital technology as well as make all
employees had digital skills and digital literacy.
Development of humanresources for DX

KPI

Human resources
for BPR

10% of all employees

Human resources
for promoting DX

25% of all employees

Fixation ratio of
basic knowledge for DX

100% of all employees

38

⑤Financial Strategy for Sustainable Growth39

Develop a capital allocation and make strategic investments
necessary for sustainable growth while ensuring financial soundness.
allocation

5-year operating CF
275 billion yen(Before deductionof R&D expenses)

Cash on hand, etc.
95 billion yen

ReturnMaximize operating CF
by promoting the three
key themes toward“Vision for 2035”

Investment for growth

cash resource

R&D expenses
190 billion yen

Capital Investment
38 billion yen
Flexible Allocation
100 billion yen
Dividends
42 billion yen

Active investment to promote
global development

New R&D and manufacturing
facilities, renovations, and digital
investments in response to growth
Licensing activities and arranging
overseas bases to implement
growth strategies
Considering shareholder returns
through acquisition of treasure
stock
Maintain stable dividends while
taking into consideration thedividend on equity ratio（DOE）

40

Management Targets

Targets in FY2028

41

We will achieve our targets by strategically investing our management resources to strengthen
our three key themes and five management foundations.
To lay the foundation for a company with sales of 300 billion yen in FY2030, and beyond that,a company with sales of 500 billion yen.

FY2023

FY2028

Revenue

148.2 billion yen

230 billion yen

Operating profit

33.2 billion yen

30 billion yen

EPS

383 yen341 yen

ROE

12.4%

≧ 8%

ROIC

19.3%

≧ 9%

1USD

144.6 yen

140.0 yen

42

Shareholder Returns

Shareholder Returns Policy

43

The Company‘s policy is to maintain stable dividends while taking
into consideration the dividend on equity ratio（DOE）.
DOE and Shareholders' Equity

Dividend Payout Ratio and Dividend per Share
200
180
Dividend
payout160
ratio
140
(%)

34.3

120
100

86

32.2

99

32.2

110

33.7

114

40

32.3
124

34.1

124

80

4.1

35

20

145.4

15

0

0

5

2019 2020 2021 2022 2023 2024

4.1

4.0

162.2

176.4

195.6

220.2

Total
equity(billionsof yen)

60

10

4.4

DOE
(%)

30
Maintainstable25
dividends

Dividend40
per share
20
(Yen)

4.3

2028

2019

2020

2021

2022

2023

Toward a society where good health isenjoyed by everyone around the worldSafe Harbor Statement• Materials and information provided during this presentation may contain so-called “forward-looking statements.” Thesestatements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties
which could cause actual outcomes and results to differ materially from these statements.
• Risks and uncertainties include general industry and market conditions, and general domestic and international
economic conditions such as interest rate and currency exchange fluctuations. Risks and uncertainties 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 by competitors; 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 cost containment; and governmental laws and regulations affecting domestic and foreign operations.

• Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, which include, 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 aresult 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 Japanese original and the English translation, the former shall prevail.

Nippon Shinyaku Co., Ltd.
7th Five-Year Medium-Term Management Plan Meeting
May 28, 2024

Presentation
Nakai: I am Toru Nakai, President of Nippon Shinyaku, Co., Ltd.
Thank you very much for taking time out of your busy schedule to participate in our 7th Five-Year MediumTerm Management Plan Meeting. I appreciate it very much.
I will now give an overview of our 7th Five-year Medium-Term Management Plan, "For Global Growth
Beyond the Cliff," which began in April of this year.

This is what we will be discussing today.

To begin, I would like to review our 6th Five-Year Medium-Term Management Plan, which began in April 2019and ended in March of this year.
In the 6th Five-Year Medium-Term Management Plan, we have taken on the challenge of the six initiatives
shown here with the aim of enhancing our significance in society as "a company playing a meaningful role in
the global healthcare sector."
As a result, although there are issues to be overcome, such as the speed of R&D, we were able to achieve
results in each of the six initiatives, including the launch of an average of at least one new product per year,
the start of in-house sales of Viltepso in the US, SBTi approval, continued recognition as a White 500 company,
and acquisition of DX certification.

This slide shows the items planned for launch at the time of disclosure of the 6th Medium-Term Management
Plan and the status of achievement for each item.
By launching Viltepso, Defitelio, Monover, and Fintepla, as well as expanding the indications for Uptravi andVidaza to a total of six new products, we were able to achieve our goal of launching an average of at least one
new product per year.
On the other hand, the development of NS-018 was discontinued and the development of three subsequent
nucleic acid drugs was delayed.

We believe that the 6th Medium-Term Management Plan clarified issues such as "speed and probability ofsuccess in clinical development, speed of R&D for new modalities, and overseas sales capabilities," and wewill work to resolve these management issues in the 7th Medium-Term Management Plan.

Regarding the quantitative plan, the functional foods segment and ROE achieved their targets. On the other
hand, in the pharmaceuticals segment, royalty income from Uptravi exceeded the plan, partly due to the weakyen, but fell short of the plan due to the implementation of the annual revision of NHI drug prices and thefailure to achieve the expected start-up of new products due to the effects of the global outbreak of COVID19, including the suppression of medical treatment and consultations.
In terms of profit, each profit was below target due to aggressive overseas expansion efforts, higher selling
costs due to inflation in the U.S., and higher R&D expenses.

Although we did not reach the quantitative targets of the medium-term management plan, we believe that
we were able to achieve sustainable growth, with record-high sales and respective profits in the final year of
the plan, by achieving the establishment of a foundation for global expansion, including our own sales efforts
in the US and China.

Next, I will explain the corporate philosophy and vision that form the premise of the 7th Medium-Term
Management Plan.

We believe that the business environment surrounding our Company will continue to change drastically in the
future: on a global scale, with the advancement of R&D, the development of AI/digital technology, and thediversification of values; and in Japan, with the low birthrate, aging and declining population, and thestrengthening of measures to control medical costs.
As for the internal environment, management issues became clear during the 6th Medium-Term Management
Plan period, and in addition to the increase in R&D expenses, we are preparing for the patent cliff of Uptravi.
In this environment, we believe it is important to view the global market as a growth market, to respondquickly to increasingly sophisticated technologies with an enterprising spirit, and to provide products andservices that meet the diversifying needs of people’s live.

Therefore, based on this recognition of the environment and our corporate philosophy, we have establisheda long-term vision of how we want to be by 2035.
In 2035, we would like to become "a global healthcare company from Kyoto creating various types of new
ways of life for each person around the world."
In other words, amidst the diversity of ways of thinking and living, we aim to contribute to society byaddressing the concept of "to live" in order to fulfill our corporate philosophy of "contributing to the creationof healthy and fulfilling lives for people."In order to contribute to people's "to live," we will continue to work on two businesses: pharmaceuticals andfunctional foods. Through both businesses, we will deliver a new way of "to live" to the world by providing
products and services that differentiate us from our competitors, with an awareness of Patient Centricity andthe customer perspective.

In addition, in consideration of the changing environment and ease of understanding shown here, we revised
to simplify the number of materiality issues to five in March 2023. We believe that the ideal state in 2035 is
the state that can be achieved through management that sees the management policy and the sustainability
policy as one and the same, and through efforts to resolve materiality.

In summary, we will conduct our business to contribute to the creation of healthy and affluent lifestyles, which
is our corporate philosophy, and aim to realize our vision of what we want to be in 2035. To this end, we will
manage our business by integrating our management policy and sustainability policy, and all employees willpractice the NS Mind and Guidelines for action.
In order to ensure our sustainable existence and growth, we have identified materiality, and the 7th MediumTerm Management Plan is designed as a scenario that will also help us resolve materiality.

I will now begin to explain our 7th Five-Year Medium-Term Management Plan, "For Global Growth Beyond
the Cliff."
The 7th Medium-Term Management Plan is positioned as a scenario for overcoming the patent cliff andachieving future growth, as well as a scenario for further solidifying the foundation for providing products andservices to the world by considering "to live" of each and every patient and customer, with the aim of realizing
our ideal state by 2035.

Although we have achieved significant growth with Uptravi, we expect a significant decrease in royalty income
in FY2028, the final year of our medium-term plan, due to its patent expiration.
During the 7th Medium-Term Management Plan period, profits are expected to temporarily decline due toprior investments for future growth, but we will focus on overcoming patent cliffs and establishing a revenue
base that is not dependent on royalty income, aiming for an operating profit JPY50 billion scale in FY2030.

During the 7th Medium-Term Management Plan period, we will invest in R&D, acquisition of in-licensed
products, M&A, etc., promote sales of CAP-1002 and nucleic acid drug groups, and grow overseas sales morethan domestic sales to become a company with sales revenue of JPY300 billion and overseas sales ratio ofover 50% in FY2030.
In other words, as I indicated as my commitment when I became the president, I have drawn up a scenario in
which we will achieve our goal of more than doubling our FY2020 actual sales and operating income.

As part of the process of achieving the targets for FY2030, we target sales revenue of JPY230 billion, operating
profit of JPY30 billion, EPS of JPY341, ROE of 8% or higher, and ROIC of 9% or higher for FY2028, the final yearof the medium-term management plan.
To this end, the 7th Medium-Term Management Plan promotes three key themes and the strengthening offive management foundations, and aims to achieve this goal by using ROIC as an indicator for managementwith an awareness of capital efficiency that exceeds the cost of capital in both the pharmaceuticals andfunctional food businesses.

I will now outline our business strategies for each of the pharmaceuticals and functional foods segments.
In the pharmaceuticals segment, we will launch an average of two or more new products per year throughthe three pillars of in-house drug discovery, in-licensing, and PLCM, and will develop the business with priority
given to responding to patent cliffs.
In the pharmaceuticals segment, we target revenue of JPY203 billion, operating profit of JPY28.2 billion, and
ROIC of 9% or higher in FY2028.

In the functional food segment, we will focus on BtoC sports supplements and BtoB quality stabilizing
preservatives, and aim to transform the business into a stable and highly profitable structure by providing
high-quality, unique, and high-value-added ingredients and finished products, targeting net sales of JPY27
billion, operating profit of JPY1.8 billion, and ROIC of 9% or higher in FY2028.

The following section describes the three key themes of the Seventh Medium-Term Management Plan thatwill be addressed in overcoming the patent cliff and moving toward subsequent growth.
The "Three Key Themes" are to nurture growth drivers to replace Uptravi, which include the steady launchand early market penetration of products in the DMD drug group, the new blood cancer product group, and
the PLCM product group.
In the expansion of global development, we will strengthen our product lineup in the US and China, andexpand our sales area to Europe and other regions, including the UK, Germany, and France.
In the ongoing expansion of the pipeline, we will acquire in-licensed products after the clinical stage andstrengthen in-house drug discovery through the use of open innovation and AI drug discovery to promote theexpansion of the pipeline.

As growth drivers during the 7th Medium-Term Management Plan, we will launch four new products for DMD,
three new products for hematologic cancers, and new products with expanded indications for Uptravi,
Fintepla, and Gazyva.

Our detailed launch target, including schedule, is to launch an average of at least two new products per year
during the period, depending on new products already in clinical trials, in-licensed products, and PLCM. In
addition, we will focus on acquiring new in-licensed products to further expand the number of items on themarket.

We will conduct an additional P3 study of Viltepso and aim for approval and launch in Europe and China during
the mid-term plan period.

Next, regarding our domestic sales strategy, we will focus on the hematology, pulmonary hypertension, andpediatric neurology fields, aiming to launch products as early as possible in line with PLCM and new productlaunches. As the way physicians work is changing, we will promote omni-channel activities utilizing the sales
rep channel and digital channels to penetrate the market for our products so that they can be used by as many
patients as possible.

In the hematology area, we will promote Vyxeos, as well as pirtobrutinib and NS-401 in Japan, and inpulmonary hypertension, we will further maximize the value of Uptravi by adding pediatric indications. In thearea of pediatric neurology, in addition to expanding the indications for Fintepla, we aim to achieve total salesof JPY130 billion or more in 2028 in the three focused areas by globally marketing nucleic acid drugs following
CAP-1002 and Viltepso.

With regard to the second priority theme, expansion of global business development, our US subsidiary NS
Pharma plans to launch new DMD treatments such as CAP-1002 in addition to Viltepso. We will focus oneffective and efficient marketing and patient-support services with the aim of launching these items as soon
as possible.
In addition to preparing for the launch of Viltepso, the Chinese subsidiary will also work to build a sales
structure for functional food products in China.

In addition to strengthening our sales structure in the US and China, we will accelerate our global expansion
into Europe and other regions by considering means such as in-house sales, alliances, and M&A in order toprovide Viltepso and other items in our pipeline to patients worldwide.
To this end, we will promote our business with an awareness of global growth, and strengthen our reliability
assurance system and supply chain globally.
In regions where we have established a sales structure, we will also promote licensing activities with a viewto selling in-licensed products.
Through these activities, we will establish a structure that will enable us to supply and market multiple
pharmaceutical products globally.

The third key theme is to continuously expand the pipeline based on the three pillars of in-house drug
discovery, in-licensing, and PLCM.
For in-house drug discovery, we will work to strengthen the combination of our strengths and othercompanies' technologies by utilizing open innovation and AI drug discovery.
For in-licensing, priority will be given to items that will lead to global sales, and efforts will be made to acquireat least one in-licensed item per year.
For PLCM, we will begin working on the second indication earlier than before to maximize the value of thedrug.

As for the future development policy for nucleic acid drugs, they are characterized by the fact that they act
on genetic information and can act on targets that are difficult to approach with small molecules or antibodies,
thus making it possible to treat the underlying cause.
We have been engaged in the discovery of nucleic acid drugs mainly for Duchenne muscular dystrophy, but
we will also work on the discovery of drugs for the central nervous system, aiming to enter clinical trials in
FY2026.
In nucleic acid drug discovery, we believe that the utilization of new drug discovery modalities, especiallythrough open innovation, will become important, and we will promote initiatives to broaden the scope ofdrug discovery, such as our joint research with MiNA Therapeutics of the UK.

The next section describes the strengthening of the five management foundations.
To begin with, we can only survive if we have a sustainable society. We promote sustainability management
to realize a sustainable society and engage in ESG activities to resolve the five materialities. With regard to IR,
we will enhance our corporate value by disclosing information more proactively than ever before, mainly
through the dedicated IR department newly established in April of this year to strengthen information
disclosure.

The second way to strengthen the management foundation is to speed up research and development. First,
in drug discovery research, we aim to shorten the time from the conception of a theme to its entry into clinical
trials, and to establish a system that will enable us to launch one in-house product per year.
The project will promote prioritization of projects, allocation of management resources, review of decisionmaking meetings, use of AI, etc. Regarding the use of AI, we will work to have AI collect a vast amount of
information on diseases and symptoms in articles and databases, and use it to create inferences that linkcauses and diseases. By reducing the time it used to take researchers to conduct research and prepare
inferences, we will work to speed up the drug discovery research cycle and build a system that will enable us
to launch one in-house product per year by starting research activities at an early stage.

To speed up clinical development, several clinical trials were delayed during the 6th Medium-Term
Management Plan period. To resolve these issues, we will focus on strict progress checks by the entire
management, strengthening project management by enhancing our response to regulatory authorities in eachcountry and accelerating the timing of investment, pursuing the possibility of expedited approval, developing
robust trial speed up the process by focusing on improving the probability of success through planning andconducting feasibility checks.

The third is the promotion of human capital management. In order to promote global development andexpand our pipeline, it is necessary for each and every employee to grow and for diverse human resources toplay an active role.
While the volume of work will increase as we expand globally, we will maximize the potential of eachindividual and reform our human resource strategy and organizational culture by acquiring and training
human resources who can be active globally, and by saving labor through digitalization, we will respondwithout increasing the number of domestic employees.

To strengthen the fourth management foundation, "business process reengineering and productivity
improvement by promoting digitalization," we will also aggressively invest in systems and human resource
development. We will respond to issues that arise in R&D and sales promotion activities based on data to
speed up and improve efficiency.
We will promote the development of DX human resources by defining transformational human resources as
those who are able to identify issues by utilizing business skills in addition to digital technology, and who arecapable of making fundamental changes in operations and creating new businesses. In addition, we will
promote DX themes internally, with management involvement, to drive company-wide transformation.

The fifth is a financial strategy for sustainable growth. The basic policy of capital allocation is to actively makethe investments necessary for sustainable growth while ensuring financial soundness.
We are considering a total of JPY190 billion for R&D investment over five years, JPY38 billion for capital
investment, including the construction of a new research building at the Drug Discovery Research Institute torespond to new technologies and create innovation, and up to JPY100 billion for flexible allocation, including
growth investments such as M&A, in-licensing, and share buybacks, and JPY42 billion in total for shareholder
returns. We will ensure financial soundness through a divestiture of the cross-shareholdings and, if necessary,borrowing.

In terms of management targets, we aim to achieve sales revenue of JPY230 billion, operating profit of JPY30
billion, EPS of JPY341, ROE of 8% or higher, and ROIC of 9% or higher in the final year of the plan, FY2028. On
this basis, we will work to strengthen our three key themes and five management foundations to lay thefoundation for becoming a company with sales of JPY300 billion in FY2030, and beyond that, a company withsales of JPY500 billion.

Next is our shareholder return policy.
The Company's policy is to continue to pay stable dividends while taking into consideration the dividend on
equity ratio (DOE), and to return profits to shareholders. In addition, the Company will consider the sharebuyback within the framework of flexible allocation.
This concludes my explanation of the 7th Medium-Term Management Plan.

Presentation Q&A on the 7th Five-Year Medium-Term Management Plan (summary)May 28, 2024
No.

Questions

Answer.

1

I believe that the data from the global P3 trial (RACER53 study) of Viltepso

Clinical trials 201 and 202 are to compare to the natural history of North

is currently being analyzed. Is there heterogeneity in the impact of steroids

American patients who matched to the patient population; the global P3 trial

and the improvement or decline in motor function?

(RACER53 study) is a global trial conducted in various countries, with

The global P3 trial (RACER53 study) was a global study conducted in 17

backgrounds such as different steroid regimens※ in each country, which wecountries, so it is possible that the data may have been skewed bybelieve will increase the heterogeneity of the patient population.

geographic spread. Could you share with us at this point what you havefound so far?

※

Regimen: A chronological plan of drug treatment, including the type andamount of drug, duration, and procedures.
2

If an additional clinical trial of Viltepso is required in the future, will it be

We would like to design a clinical trial so that there is as little heterogeneity as

designed to prevent heterogeneity, such as by narrowing the number ofpossible. There are already approved drugs in Japan and the U.S. For example,

countries?

if we conduct a placebo-controlled clinical trial, we would like to select thecountries and the facilities, taking into consideration how the patient's decision
will affect enrollment.

3

Do you mean that placebo-controlled clinical trials are more difficult?

Specifically, if a placebo-controlled clinical trial is conducted in a country whereapproved drugs are available, patients would prefer to use them and be lesswilling to participate in clinical trials.

4Regarding the global P3 trial (RACER53 study), there was no difference

We cannot disclose this information at this time.

from placebo on the primary endpoint of Time to Stand from Supine. Are
there significant differences in the other endpoints?
5

I understood that the results differ by country and treatment background.

We are planning to conduct such an analysis. Other than that, nothing can be

Is there a possibility to do subgroup analysis by region? Or have you alreadydisclosed yet at this time.

started?

6

The global P3 trial (RACER53 study) presented that while there was a trend

As announced on May 27, 2024 in the press release of Viltolarsen (NS-toward increased TTSTAND (time to rise from the floor) velocity in the

065/NCNP-01) for the treatment of Duchenne Muscular Dystrophy Preliminary

active drug cohort, there was a similar trend toward increased velocity in

Results of the Analysis of the global P3 trial (RACER53 study), a trend toward

the placebo cohort. Does this mean that the active drug cohort and theincreased velocity was also observed in the active drug cohort, and a similarplacebo cohort were compared and no improvement was seen in the active

trend toward increased velocity was also observed in the placebo cohort.

drug cohort? Or does it mean that there was a trend toward some
improvement, although it did not reach statistically significance?
7

Was there any difference in the results between the active drug cohort and

There is some difference in the results between them. Since this is before

the placebo cohort?

discussions with the authorities, we cannot disclose how they differ at this
time.

8

As to why there was no difference between the active drug cohort and the

As announced yesterday, in the global P3 trial (RACER53 study), the placebo

placebo cohort in the results of the analysis, was the placebo morecohort also showed a trend of increasing velocity (rise/sec) of Time to Stand

effective than expected or was the active drug less effective thanfrom Supine.

expected?

This is not the case in the natural history data from the P2 clinical trial wherethe velocity was decreasing.
Whether this is noise in the data is still being analyzed and it is not clear
whether this is a placebo effect or a steroid effect.
We would like to analyze and investigate the reason why the data for theplacebo group was better than expected.

9In your analysis to date, have you identified significant differences in

We have been able to ascertain the specific steroid use for each patient andsteroid use between the active drug cohort and the placebo cohort?

are currently analyzing the data.

Has it been confirmed to any degree at this stage that there is a difference

The protocol of the global P3 trial (RACER53 study) allows for the enrollment

in the percentage, type, and amount of steroids used in the active drugof patients who have been receiving steroids for more than 3 months,

cohort and the placebo cohort, which leads to a difference in steroid

regardless of their method of use, but there are some discussions that 3

intensity between those two cohorts?

months may have been too short. Since steroids are effective for 6 months to

Or is this only a possible factor at this point?

1 year, we thought that this may have been statistical noise in the global P3
trial (RACER53 study).
In addition, the way steroids are used - daily or intermittent administration varies from country to country, facility to facility, or physician to physician.
The statistical noise in the global P3 trial (RACER53 study) may have beencaused by the fact that the clinical trial only specified patients who had beenon steroids for 3 months and did not fully take into account the duration ofeffect of steroids.

10

NS-089/NCNP-02 has started P1/2 clinical trial and NS-050/NCNP-03 is

Steroids act on inflammation and have no effect on dystrophin expression

also about to start the trial. These clinical trials are designed to testlevels because they do not act directly on dystrophin genes.

dystrophin protein expression, not motor function. Is there a risk thatsteroids will affect the amount of dystrophin expression?

11

Do steroids boost motor function by reducing inflammation?

In the early stages, inflammation in the DMD patient's body damages
the muscle, which turns muscle into fibers and fat, and his muscle isgradually wasted. Because steroids have the effect of reducing inflammationand delaying muscle loss caused by inflammation-induced fibrosis, steroids are
more effective than exon skipping drugs earlier in the period when the patient's
muscles are damaged and symptoms are progressing.
Steroids do not continue to improve the disease, and their effectivenessgradually declines. Steroids are a good treatment in the early stages because
they are very effective in slowing the loss of muscle mass. However, as theeffectiveness gradually declines, other treatments are needed to support thatstage.

12

PDUFA ※ date of Sarepta's gene therapy drug is approaching (June 21,

Steroids are given to most DMD patients in the U.S. In the global P3 trial2024). What do patients and doctors think about DMD treatment based on(RACER53 study), Viltepso was added as a treatment for patients who were

the global P3 trial (RACER53 study) results? Gene therapy is difficult toalready on steroids. Please note that patients will not be switched to steroids

use, and the global P3 trial (RACER53 study) of Viltepso did not show good

based on the results of the global P3 trial (RACER53 study) because that they

results.

are already on steroids. We shared the information with HCPs after the global

As a result, will the cheapest steroid be more likely to be used in the short

P3 trial (RACER53 study) results were released. We would like to convey theterm?

message that Viltepso is a useful drug, based on the results of the preceding

Assuming that it will take about a year for the authorities to make aclinical trial. We would like to work to make sure that the drug continues to be

decision on whether or not Viltepso needs an additional clinical trial andused in the market.

the content of that trial, I think that it could have an impact on the sales of

In Japan, we briefed some doctors as a first report yesterday. They said safety

Viltepso. I would like to know the impact on the current year's results.

was not a problem.
It has been presented in the past at conferences and other meetings that the※

PDUFA : A PDUFA date serves as a goal date for the U.S. FDA to make a

P1/2 clinical trial in Japan has shown a trend toward improvement in dystrophin

decision about whether or not to approve new medications.

protein expression and motor function, and that many cases have shown
clinical efficacy.
Therefore, we have heard from doctors that they are not going to stop
immediately. At this point, we have not yet contacted a large number ofphysicians, so it is difficult to make a general statement, but we do not believethat Viltepso's situation will be significantly changed.

13

Regarding the global P3 trial (RACER53 study) in the US, you mentioned

The global P3 trial (RACER53 study) enrolled patients who had already beenthat steroids were used for 3 months before the clinical trial started. Are

on steroids for 3 months, and the patients would continue on steroids. At thesteroids usually used longer than that?

start of the clinical trial, we thought that the effect of steroids would plateau
or wane after 3 months. However, we now know that the latest paper showsthat the effect lasts a little longer. Please understand that this is ourassumption.

14

Is there a risk that more patients might choose gene therapy because of

If Sarepta's gene therapy is granted full approval in June, while Viltepso was

the results of the global P3 trial (RACER53 study)? Before the results were

granted accelerated approval, we expect an impact, although we cannot

disclosed, we thought that Viltepso would be in a better position than genedefinitively say how much. There are no patients currently receiving Viltepso

therapy in motor function. However, the current results seem to indicate

who wish to switch to gene therapy. However, this is because their condition isthat this will not be the case any longer. What do you think will be in thestable on Viltepso. Regarding future patient acquisition, we believe that iflabeling for Sarepta's gene therapy drug, and what do you think the

Sarepta's gene therapy is fully approved, they may choose that option.

likelihood of full approval is this coming June? Also, what would be your

However, it is known in the U.S. that there have been safety issues with genenext action on these matters?

therapy products that are now in clinical trials. When patients choose genetherapy, such risks will be taken into consideration.

15

Do you have data on the history of steroid administration for the patients

In each case, we have all the data on what drugs the patient is using. We know

in the global P3 trial (RACER53 study)? Is it possible that the data is not

the types of drug, whether it is administered daily or intermittently.

available and cannot be analyzed?
16

The best case scenario for Viltepso would be to get full approval with a

Depending on the results of future detailed data analysis, the best casedetailed analysis of the global P3 trial (RACER53 study) data. If full

scenario is that this data may be approved without an additional clinical trial.

approval were not granted for Viltepso, would the P3 clinical trial for Europe

In the future, depending on the analysis data available and negotiations withand China also serve for the U.S.?

the authorities, it will be discussed whether a new P3 trial will be conducted
and which protocol and patient population will be used.

17※

According to ClinicalTrials.gov , the global P3 trial (RACER53 study) was

In preparation for the press release on results of the global P3 trial (RACER53

scheduled to end in October 2023. Please explain how the announcement

study), we had been consulting with the Japanese and U.S. authorities on theof the results was timed to coincide with the announcement of the 7thcontent of our disclosure. After consulting with both authorities, we were readyMedium-Term Management Plan.

to disclose this content, which led to yesterday's disclosure.

※

ClinicalTrials.gov: the U.S. FDA’s website and online database of clinicalresearch studies and information about their results.

18

Assuming that information sharing with the authorities began around the

The authority advised us to first do a proper data analysis and then set up theend of April, I assume that the date for the meeting with the FDA has

meeting based on that.

already been set. Do we have a general idea of what type of meeting, suchas Type-A, Type-B, will be held and when?
19

Are you saying that the analysis to have a meeting is not ready yet, so you

Yes. After the data analysis that is currently underway is properly completed,have not been able to approach the FDA to set a date?

we will discuss internally the direction of discussions with the FDA and set a
date.

20

Looking back on the 6th Medium-Term Management Plan, it was

We have already taken steps. We are well aware of these issues and have

unfortunate that there were delays in the trials for the exon-skipping drug,

begun to acquire required talents, improve our ability to negotiate with thewhich was discovered in-house. In the 7th Medium-Term Management

authorities, and change our decision-making structure, as explained in slides

Plan, you are planning to speed up clinical development and improveof the 7th Medium-Term Management Plan.

negotiation skills with authorities. Have you already taken concrete steps
or are you just getting started? Please tell us about the current situation.
21

Is there a possibility of appointing medical or other specialized personnel

There is a possibility.

from outside the company?
22

23

On page 39 of “The 7th Five-Year Medium-Term Management Plan”

This R&D expense of 190 billion yen will be based on the income statement.

presentation slides, it is stated that the company plans to spend 190 billion

Most of this will be for clinical trials of nucleic acid drugs, including the costs

yen on R&D as part of its cash allocation plan for the next five years. On

of NS-089/NCNP-02, NS-050/NCNP-03 and NS-051/NCNP-04, as well as thethe income statement, how much will be spent on R&D?

additional P3 trial of Viltepso.

If they are based on the income statement, then the 5-year cumulative R&D

As you can see the product launch schedule by fiscal year on page 26, the exon

expenses are considerably larger than the level of R&D expenses plannedskipping drugs are planned to be launched in the second half of the 7th Five-for the current term. At what pace will it increase?

Year Medium-Term Management Plan period.
A large part of R&D expenses required to launch these products will be incurredin FY2025 and FY2026.

24

As it relates to the 7th Five-Year Medium-Term Management Plan, CAP-

Please understand that we cannot rule out the possibility that Viltepso will be1002 appears to be making a substantial contribution to the planned

withdrawn from the market. However, as announced yesterday, we havefigures. I believe that Viltepso may also be included in the forecast figures,confirmed from the global P3 trial (RACER53 study) results that there are nowhich suggest that there will be no withdrawal from the market.

safety issues with Viltepso. And although analysis is needed, we believe that if

To what extent, if any, do you think there is a possibility that you will no

we have good data in the stratified analysis in the future, we will be able tolonger be able to sell Viltepso in the U.S.? And what if the results of the P3

explain that the drug is effective for a specific patient group.

clinical trial of CAP-1002 are unfavorable?

As I mentioned earlier the results of the P2 clinical trial, we are confident fromthe results of previous trials that Viltepso is a drug that is sought after by
patients in need of treatment.
Based on these results, we would like to proceed with negotiations with theauthorities in a positive manner.
If Viltepso were to withdraw from the market, the contents of the 7th Five-Year
Medium-Term Management Plan would change, and the plan would have to berevised accordingly.
The readout of the P3 clinical trial for CAP-1002 is scheduled for the end of
this year, and Capricor Therapeutics seems to think that they will be able tomanage to get the drug approved even if the trial results do not meet its
primary endpoints. The authorities know that DMD is a disease area where itis difficult to verify the efficacy of drugs, as other companies and products havenot been able to produce desirable results in trials. Physicians likewise havean understanding of the difficulty of validating DMD drugs.
Even if the results of the P3 clinical trial of CAP-1002 are not successful, if
there are data that suggest efficacy in other trials, we believe that theauthorities will accept the drug based on such data.
If CAP-1002 does not develop well, we will be left with no choice but to go
outside and acquire a pipeline through business development or M&A.

25

In terms of the Uptravi patent expiration, I think the pediatric exclusivity

We have already considered this, but, as far as Uptravi is concerned, nowill easily add six months to the Uptravi’s expiration, but are you alsomeasures have been found to extend its exclusivity.

pursuing the possibility of other extensions such as the use patent?
26

The 7th Five-Year Medium-Term Management Plan seems to assume that

CAP-1002 has a larger market because it can be used for all DMD patientsthe company will continue to be profitable even after the Uptravi exclusivity

regardless of the type of gene mutation. Please understand that it can beperiod ends.

expected to be widely used in older DMD patients because it is expected toAssuming that CAP-1002 and Vyxeos are included in these projections,improve and maintain upper arm function and myocardium in non-ambulatory

which products specifically will contribute the most to profits in suchpatients rather than in ambulatory patients.

projected period?

In this sense, we believe the drug has more potential than any of the other exonskipping drugs, which each represent a few percent of the total number of DMD
patients.

27

Do the figures for CAP-1002 account for a significant portion in the 7th

Slide 28 (Priority Theme I: Fostering Growth Drivers to Replace Uptravi: Image

Five-Year Medium-Term Management Plan? Does the pediatric neurology

of Sales and Revenue Expansion during the 7th Medium-Term Management

area in the sales graph (of page 28) refer to Viltepso and CAP-1002? ArePlan) shows the image for each area. For Viltepso, sales forecasts for China

the figures for Viltepso only for Japan and the U.S.?

and Europe are included in FY2028. Also, forecasted figures in FY2028 include
Viltepso’s revenue from Europe and China (in addition to Japan and the U.S.)
and other exon-skipping drugs.

28

Does CAP-1002 have the largest amount in the revenue forecast?

Yes, it does.

29

We now understand that Capricor Therapeutics would file an application

The P2 and P3 clinical trials have the same study design, with the P3 enrollingbased on the results of the P2 clinical trial even if the P3 clinical trial werea larger number of patients. We, too, believed that the P3 clinical trial would be

unsuccessful. Is there a risk that the probability of success of the P3

successful due to expectations for the trial's reproducibility and signed

placebo-controlled clinical trial will be reduced due to the heterogeneity of

distribution agreements with Capricor Therapeutics in 2022 (for U.S. territory)

the patient background or other reasons? Since the P2 placebo-controlled

and 2023 (Japan).

clinical trial was successful, I believe that the P3 clinical trial will also be
successful. Also, as the patients get older, the noise in the data may
decrease.
30

Do you think Capricor Thepeutics can handle the heterogeneity of patient

There are a lot of factors that can cause variability in the data, but when it

backgrounds in their clinical trial?

comes to the effect of steroids, you can say that the data is quite variable inthe younger age groups, but I suspect that the factor is somewhat consistentfor patients whose symptoms have progressed to the point where they are nonambulatory.

31

How have you discussed the stock price internally? The price-to-book (PB)

At each Board meeting, the directors discuss the situation and the reasons forratio will probably be less than 1x after this announcement. Has the Board

the weak stock price, how to increase the value of the company and how toof Directors discussed this?

communicate with external stakeholders. Last Friday (May 24, 2024), we
passed a resolution to introduce a restricted stock compensation plan forinternal directors. The introduction of such stock compensation system was afurther step in our efforts to be on the same page with our shareholders interms of share price awareness.
I would like to inform you that we are taking steps and discussing the stock
price through these efforts.