July 31, 2019

SEIKAGAKU CORPORATION
Consolidated Financial Results (Japan GAAP) (Summary)for the First Three Months of Fiscal 2019
(Three-Month Period Ended June 30, 2019)
Listed exchanges: Tokyo Stock Exchange (First Section)
Stock code number: 4548
URL: https://www.seikagaku.co.jp/en/(All amounts have been rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Three Months of Fiscal 2019(from April 1, 2019 to June 30, 2019)(1) Consolidated Financial Results(Percentages indicate changes from the same period in the previous fiscal year)
Net sales
Millions ofYen

Operating income
Millions ofYen%

Ordinary income
Millions ofYen%%First three months of fiscal 2019

7,649

5.8

964

81.7

1,251(19.5)

First three months of fiscal 2018

7,226(3.7)

530(39.3)

1,554

23.7

Net income attributable toowners of parent
Millions of%
Yen

Net income per share

Diluted net income
per share

YenYenFirst three months of fiscal 2019980

(18.6)

17.38-

First three months of fiscal 2018

1,204

30.4

21.29

-(Note) Comprehensive income:First three months of fiscal 2019: 786 million yen [ 50.4%]
First three months of fiscal 2018: 522 million yen [ (42.9)%](2) Consolidated Financial Position
Total assets

Total equity

Equity ratio

Millions of Yen

Millions of Yen%

As of June 30, 201979,48873,08991.9

As of March 31, 201980,23873,036

91.0(Reference) Shareholders’ equity:
As of June 30, 2019: 73,089 million yen
As of March 31, 2019: 73,036 million yen

2. Dividends
1st QuarterYen-

2nd Quarter
Yen
13.00

Fiscal 2018
Fiscal 2019
Fiscal 2019
13.00
(Forecast)(Note) Revision of the forecasts most recently announced: NoDividends per share
3rd Quarter
Yen-Year-end

AnnualYen
13.00

Yen
26.00

13.00

26.00

3. Forecast of Consolidated Financial Results for Fiscal 2019 (from April 1, 2019 to March 31, 2020)(Percentages indicate changes from the previous fiscal year)
Net income
Net income
Operating income
Ordinary income
attributable toper shareowners of parent

Net sales

Fiscal 2019

Millionsof Yen%28,250(0.5)

Millionsof Yen400%

Millionsof Yen(59.1)

2,300%(19.6)

Millionsof Yen2,000%(10.9)

Yen

35.46(Note) Revision of the forecasts most recently announced: No* Notes(1) Changes in the status of material subsidiaries during the period: No(2) Application of specific accounting methods for preparing the quarterly consolidated financial
statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and retrospective restatements(a) Changes in accounting policies accompanying revisions in accounting standards: No(b) Changes other than those in (a) above: No(c) Changes in accounting estimates: No(d) Retrospective restatements: No(4) Number of shares issued (common stock):(a)Number of shares at the end of the period(including treasury stock)

As of June 30,
201956,814,093 shares

As of March 31,
201956,814,093 shares(b) Number of treasury stock at the end ofthe period

As of June 30,
2019410,205 shares

As of March 31,
2019

410,176 shares(c) Average number of shares issued during
the period (three months)

First three monthsof fiscal 201956,403,902 sharesFirst three monthsof fiscal 2018

56,582,946shares*This financial reports are not subject to the quarterly review procedures of the certified public accountant and audit
firm.
* Disclaimer regarding forward-looking information including appropriate use of forecasted financial results
The forecast shown in these materials are based on information currently available and certain assumptions that theCompany regards as reasonable. Actual performance and other results may differ materially from these forecasted figures due
to various factors.

1. Results of Operations for the First Quarter of Fiscal 2019 (Three-Month Period Ended June 30, 2019)(1) Qualitative explanation on quarterly financial results
In the first three months (April 1 to June 30, 2019) of the fiscal year ending March 31, 2020 (fiscal 2019), netsales were ¥7,649 million, up 5.8% year on year. The result is attributable to growth from the pharmaceuticals
business in Japan and overseas.
Operating income rose 81.7% year on year to ¥964 million as a result of the sales increase coupled with adecrease in selling, general and administrative expenses, mainly R&D expenses. Ordinary income fell 19.5%
year on year to ¥1,251 million, reflecting factors including a decrease in gain on sale of investment securities,and net income attributable to owners of parent fell 18.6% year on year to ¥980 million.
1) Net sales by segment
Pharmaceutical Business-Domestic Pharmaceuticals (¥3,689 million, up 5.4% year on year)
Although deliveries to medical institutions of ARTZ, a joint function improving agent, decreased due in part tooverall market contraction, the Company’s sales increased, partly as a reflection of a low level of shipments inthe first quarter of the previous fiscal year due to the impact of an inventory adjustment by the sales partner.
Deliveries to medical institutions and market share of the OPEGAN series of ophthalmic viscoelastic
devices grew due to strong performance from SHELLGAN, and the Company’s sales increased as well.
The Company’s sales of MucoUp, a submucosal injection agent for endoscopic surgery, decreased due to theimpact of introduction of competing products on the market.
The Company is striving for a phased rollout of HERNICORE, a treatment for lumbar disc herniation
launched in August 2018, while engaging in information provision activities directed at medical institutions toensure appropriate use and safety together with the sales partner, and market penetration is steadily progressing.
The Company had no first-quarter sales because of the annual shipment plan to the sales partner.
-Overseas Pharmaceuticals (¥1,956 million, up 8.4% year on year)
Local sales volume and the Company’s sales of Gel-One, an intra-articular single-injection viscosupplement for
the treatment of knee osteoarthritis, increased due to sales expansion measures by the sales partner coupled withqualification for preferential reimbursement status from multiple private insurers.
Local sales volume and the Company’s sales of SUPARTZ FX, an intra-articular 5-injection for thetreatment of knee osteoarthritis, declined as a result of an increasing tendency in the U.S. market toward
preference for products that require a low number of injections, such as single-injection and 3-injection products.
Local sales volume of ARTZ in China (P.R.C.) and the Company’s sales increased, reflecting sales force
expansion and successful sales expansion activities targeting both urban and surrounding areas by the sales
partner.
-Bulk Products (¥290 million, up 14.4% year on year)
Sales of hyaluronic acid increased, while sales of chondroitin sulfate decreased.
As a result of these developments, sales from the pharmaceuticals business segment rose 6.8% year on year to¥5,936 million.
LAL Business
Overseas subsidiary Associates of Cape Cod, Inc. is focusing on expanding both direct and distributor based
sales operations for its Bacterial Endotoxin Testing (BET) and Clinical Diagnostic reagents. Due to strong
performance from these products, sales of the LAL business rose 2.8% year on year to ¥1,712 million.

(2) Explanation of forward-looking information, including the forecast of consolidated financial results
Although in the first quarter the Company achieved the full-year forecast for operating income in the forecast ofconsolidated financial results for fiscal 2019 announced on May 10, 2019, in light of factors such asconcentration of selling, general and administrative expenses, mainly R&D expenses, in the second quarter andbeyond, there is no change to the forecast of consolidated financial results.
Note: The above forecast has been prepared on the basis of economic circumstances, market trends, and otherassumptions made at the time of release of this document. Actual results may differ from the forecast due to avariety of factors.
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