April 24, 2019
Company name: Mitsubishi Tanabe Pharma Corporation
Representative: Masayuki Mitsuka
President and Representative Director
Code number:Contact:4508, First Section, Tokyo Stock Exchange
Yoshiaki Takai, Vice President,
Head of Corporate Communications Department(TEL: +81-6-6205-5211)

Revision to Consolidated Financial Forecasts for Fiscal Year Ending March 31, 2019
Mitsubishi Tanabe Pharma Corporation (hereinafter, “MTPC”) will revise the full-year business
forecast for the fiscal year ending March 2019 announced on May 9, 2018, considering the recent
trend of business results, as follows.
1.

Revised consolidated financial forecast for the full fiscal year ending March 2019(from April 1, 2018 to March 31, 2019)(Unit: million JPY)
RevenueCore
operatingprofitOperatingprofitProfitbefore tax

Previous forecast (A)435,000

70,00067,00067,50044,50047,000

Revised forecast (B)424,500

55,50050,00050,00032,00037,000Difference (B-A)△10,500△14,500△17,000△17,500△12,500△10,000

433,855

78,54977,28578,76453,992

57,963

Percentage change (%)(Reference) Results of theprevious year (FY2017)

△2.4

△20.7

△25.4

△25.9Profit attributable
Profit for theto owners of theperiod
Company△28.1△21.3

Basic earnings per share: Previously announced 83.81 yen; revised forecast 65.98 yen; actual result for the previous
fiscal year 103.35 yen※In applying IFRS, our group has introduced “core operating profit” as a staged profit that indicates the company'sordinary profitability, and has positioned it as an important indicator of business management. “core operatingprofit” is the operating income excluding profits and losses due to non-recurring factors as defined by our group.

2.

Reasons for the revisions

As MTPC announced on February 20, 2019 in our "Mitsubishi Tanabe Pharma Received Noticeof Request for Arbitration," MTPC is currently in the arbitration proceedings with Novartis Pharma
AG (hereinafter "Novartis"), and among the GILENYA® Royalty amounts that MTPC is going toreceive from Novartis, MTPC has decided not to recognize some of those amounts, whichcorrespond to the clauses in the 1997 License Agreement of which Novartis has protested thevalidity, as our revenue because such payments do not satisfy one of the requirements underIFRS15, i.e., “Revenue under contract with customers,” which requires a payment to be madebecause “the parties to the contract acknowledge the contract, and each signing party iscommitted to fulfilling the obligations.”1

Additionally, “RADICAVA®,” which is a treatment option for amyotrophic lateral sclerosis (ALS),
did not reach the expected number of newly administered patients in the U.S. and fell below ourinitial estimate. For the above reasons, the revenue for fiscal year ending in March 2019 isexpected to fall below our previous forecast announced on May 9, 2018.
On the other hand, in terms of profit and loss, in addition to the above, MTPC has been
accelerating growth investment for the future. As MTPC has increased R&D expenses, each profit
under core is also expected to fall below the previously announced forecast.
MTPC has been discussing with the U.S. Food and Drug Administration (FDA) regarding thereview of the development plan of ND0612, a development drug candidate for our consolidated
subsidiary, NeuroDerm Ltd. (located in Rehovot, Israel, hereinafter, “NeuroDerm”). MTPC haslargely agreed with the FDA on the revised development plan and conducted an impairment test
for intangibles related to NeuroDerm products and did not observe any impairment.
3.

Regarding dividend forecast

There is no change to the year-end dividend forecast from 28 JPY per share announced on May
9, 2018. (Annual dividend of 56 JPY per share)
4.

Regarding future forecasts

With regard to the “GILENYA® Royalty” amounts, during the period of the arbitration proceedings,
among the "GILENYA® Royalty" amounts that MTPC is going to receive from Novartis, MTPC willcontinue the accounting practice of not recognizing those amounts which correspond to theclauses in the 1997 License Agreement of which Novartis has protested the validity as sales
revenue, as MTPC does in fiscal year 2018.
In addition, at the announcement of financial results for the fiscal year ending in March 2019,
which is scheduled on May 10, 2019, MTPC is planning on disclosing the consolidated business
forecast for the fiscal year ending in March 2020. Regardless of the disclosed amounts, MTPC
maintains it is entitled to receive the full royalty amounts due according to the 1997 LicenseAgreement with Novartis, and MTPC will rigorously pursue its rights in the arbitration.
As for the amounts among the “GILENYA® Royalty” amounts which will not be recognized as
sales revenue, those will be recognized as revenue at the end of the arbitration, depending on
the outcome of the arbitration.
(Note) The above forecasts are based on judgments and assumptions based on the information available as of thedate of release of this statement, and actual performance may differ greatly depending on various factors in the future.

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