Second Quarter Business Resultsfor Fiscal 2022

November 7, 2022

TSUMURA & CO.

1

agenda01

Second Quarter Business Results for FY 2022

02

R&D Direction and Recent Progress22

Second Quarter Business Resultsfor Fiscal 2022

November 7, 2022
President and Representative Director, CEO

Terukazu Kato3agenda01

Second Quarter Business Results for FY 2022

02

Initiatives and Progress for
Domestic Business and China Business03

FY 2022 Earnings Forecast

44

2Q Business Results for FY 2022
[Million yen]

2Q FY 2022
Revised Plan
（3/8/2022）

2Q FY 2022
results

Achievement
rate

YoY
AmountChange68,90070,107101.8％

Domestic business－

62,922－－－China business

－

7,184

－

－

－

Operating profit

10,70011,677109.1%（6）（0.1）%

Domestic business－

11,765－－－China business

－

△87

－

－

－

14,00015,965 114.0%+2,556+19.1%

9,600

11,889 123.8%+1,923 +19.3%

Sales

Ordinary profit
Profitattributable to owners ofparentPL translation rate (CNY)

18.98

－

Ratio to total sales+6,690 +10.5%

+2.32

－

Prescription
Kampo Products
85.8%
External sales by
consolidated subsidiaries
10.9%
OTC Kampo etc 2.9%
Other prescription
pharmaceuticals 0.4%

5Firstly, I will give an overview of second quarter performance in fiscal
2022.
As you can see, net sales and profits as each level slightly overshot ourrevised plans for the first half.

Net sales totaled 70.1 billion yen, 1.8% above our revised plan for the
first half and up 10.5% year-on-year.
This breaks down to sales in the domestic business of 62.9 billion yen
and sales in the China Business of 7.1 billion yen.
The sales mix ratios are shown in the pie graph to the right above.
Operating profit came to 11.6 billion yen, 9.1％ above our revised plan for
the first half but down 0.1% year-on-year.
Ordinary profit amounted to 15.9 billion yen, 14.0% above our revisedplan for the first half and an increase of 19.1% year-on-year.
Meanwhile, profit attributable to owners of the parent totaled 11.8 billion
yen, 23.8％ above our revised plan for the first half and a growth of
19.3％ year-on-year.
I will explain the key points in performance on the next slide.

5

Key Points in Performance
Achieved revised plan for sales and profits at each level
Net sales

70,107

million yen

Achievement
rate＋101.8％YoY＋10.5％◼ Sales of the 129 prescription Kampo products: 60,191 million yen, grew 6.8％ year-on-year◼ Sales of OTC Kampo formulations and other healthcare products: 2,003 million yen, rose 20.0％ year-on-year◼ China business sales: 7,184 million yen

Operating profit
Operating profit
margin11,677
16.7

million yen

Achievement
rate＋109.1％

YoY(0.1％)％

vs. revised
plan＋1.2ptYoY(1.7pt)◼ Cost-to-sales ratio: 50.3％, down 0.1pt vs. revised plan but up 1.9pt year-on-year; YoY comparison: Mainly impact of a climb
in energy expenses and a growth in external sales in China◼ SG&A ratio: 33.0％, down 1.1pt vs. revised plan and down 0.1pt year-on-year; YoY comparison: Rise in sales mainly
absorbed the one-off rise in expense in tandem with operations at the Tianjin Plant

Ordinary profit

15,965

million yen

Achievement
rate＋114.0％

YoY＋19.1％◼ Foreign exchange gain primarily related to loans to overseas subsidiaries: 3,950 million yen, up 2,765 million yen; foreignexchange impact (acceleration in the devaluation of the yen)

Profit attributable to owners ofparent11,889million yen

Achievement
rate＋123.8％YoY＋19.3％
6

Sales of the 129 prescription Kampo products in the domestic business were 60.1
billion yen, a rise of 6.8% versus the same period, a year earlier. In addition to anincrease in e-promotion benefits in line with initial plans, this reflects a growth in salesof formulations related to COVID-19 symptoms, including fever and cough, andaftereffects, such as cough, fatigue and anxiety, and seasonal symptoms due to theintense summer heat, including poor appetite and summer weight loss.
Sales of OTC Kampo formulations, etc. attained 2.0 billion yen, an expansion of 20%
versus the same period, a year earlier. This reflects activities undertaken by Tsumura
to provide information at pharmacies and drugstores to get pharmacists andregistered sales staff to conduct sales by recommending a Kampo formulation thatsuits the symptoms of each customers.
Sales in the China Business came to 7.1 billion yen, owing to an expansion in salesof raw material crude drugs in the crude-drug platform.
The cost-to-sales ratio was 50.3％, down 0.1pt below the revised plan and nearly inline with year-on-year plan.
The year-on-year rise in this ratio of 1.9pt was mainly attributable to an increase inenergy cost and a rise in external sales in the China Business.
The SG&A ratio was 33.0％. Due to a shift in the posting period for some expenses,
the SG&A ratio declined 1.1pt versus the revised plan and was 0.1pt lower than thesame period, a year earlier, due to an increase in sales.
Meanwhile, non-operating income was substantially impacted by an expansion inforex gain due to an acceleration in the devaluation of the yen against major
currencies.
6Factors Triggering Changes in Operating Profit (YoY)（ Million yen ）（ Million yen ）Breakdown of change in net sales: +2,999
Domestic
Overseas+2,999（960）（1,646）＋2,201＋797

Breakdown of change in cost-to-sales: (960)
Crude drug procurement cost
(Domestic: decline in unrealized profit)（400）

Raw material expense (Domestic: Soaring expense formaterials other than raw material crude drugs)

Processing expense, etc.
(Domestic: Mainly soaring energy prices)

Outside sales in China (Overseas: Growth at China business
which has a high cost-to-sales ratio)

11,684

11,677

(170)
(274)
(641)

Breakdown of change in SG&A expense: (1,646)
Depreciation(Mainly increase in tandem with operations at Tianjin Plant)

Profit impact Profit impact Profit impact Profit impact
2Q FY 2021
2Q FY 2022
from changes
due todue toOperating profit due to changes
Operating profit
in SG&A
exchangechanges inin salesexpensesrate
cost-to-sales

+126

(449)

Advertising

(129)

R&D

(103)

Sales promotions(73)

Salary allowance＋14

Other (Mainly rise in volume of activities, system introduction)(905)

Foreign exchange impact (400 million yen)

7

Operating profit was 11.6 billion yen, nearly unchanged year-on-year.
As the main factor triggering change, there was positive impact of 2.99 billion
yen reflecting a growth in sales.
This breaks down to positive impact from domestic sales of 2.2 billion yen andfrom overseas sales of 790 million yen.
Next, there was negative impact of 960 million yen due to an increase in costto-sales.
This breaks down to a positive impact of 120 million yen reflecting a decline incrude drug procurement cost due to a decrease in unrealized profit, and an
improvement in productivity reflecting an increase in production volume. ]On the down sides, there was a negative impact of 270 million yen due to arise in processing expense in tandem with soaring energy prices, and anegative impact of 170 million yen due to soaring expense for materials otherthan crude drugs reflecting an increase in commodity prices. There was also
negative impact of 640 million yen due to an increase in external sales in the
China Business.
Then, there was negative impact of 1.64 billion yen due to a boost in expenses.
A break down is shown in the table to the right.
Note that we will start posting expense at the Tianjin Plant due to the start ofprocess validation which was commenced from August. Tsumura will post thismanufacturing cost in the second half.
There was also negative impact of 400 million yen from foreign exchanges due
to a depreciation in the yen.
7

Financial Condition/Cash Flow Position（ Million yen ）402,930
275,438
127,492
124,628
47,75476,873
278,30251,948

Total net assets

350,981229,420
121,561
92,87145,875
46,996258,109

Equity ratio

68.3％

63.8%

（4.5）pt

FY 2021

FY 2022
2Q

Total assets
Current assets
Non-current assets

Total liabilities
Current liabilities

Work in process
Raw materials andsupplies

92,751 100,764
10,247
10,138
13,614
13,13968,88977,485

+269

+44

1,004

31,756
1,879
29,877
20,192

Change

+96

（80）

675

Of which,
Exchange rate

8,012

7,470

（109）

408

（475）

238

8,596

6,823

Financing activities

Merchandise andfinished goods

5,931

Investing activities

Inventories（ Hundred million yen ）46,017

Cash and cash equivalents at
beginning of period(March 2022)

Bond issuance: 30 billion yen (Sep. 8, 2022)

Operating activities

Non-current liabilities

ChangeCash and cash
equivalents at end of
periodFY 20222Q

FY 2021

Impact of exchange ratetranslations(March 2022)

8

Moving on, I will only explain the points to our financial condition andcash flow position.
The rise in current assets of 46.0 billion yen is primarily attributable to anincrease in cash and deposits of 32.8 billion yen accompanying a bondissuance and proceeds of 8.5 billion yen from inventories owing topositive foreign exchanges impact.
Non-current assets increased mainly attributable to impact from capex intandem with plant construction at Tianjin Tsumura Pharmaceuticals andforex translation impact.
Non-current liabilities rose chiefly attributable to a 30.0 billion yen bondissuance.
Extrapolating from this, the equity ratio stood at 63.8％, a decline of 4.5pt.
Cash flows are shown in the waterfall chart on the right.

8Bond Issuance
Procure funds through bond issuance to use to fund growth investments
and for the redemption of outstanding bonds
No. 1 unsecured bondNo. 2 unsecured bondNo. 3 unsecured bondNo. 4 unsecured bond

(7-year bond)(10-year bond)(7-year bond)(10-year bond)Totalissuance

15.0 billion yen

15.0 billion yen

15.0 billion yen

15.0 billion yen

Issuancedate

June 2017

June 2017

September 2022

September 2022

Maturity

May 2024

June 2027

September 2029

September 2032

Use of funds procured from the issuance of the No. 3 andNo. 4 unsecured bonds

Redemption foroutstanding bonds
Portion of funds will be forthe redemption of the No. 1
unsecured bond

Growth investment
CAPEX & DX investment
Improve productivity via capacity boost, automation andDX (digital transformation): roughly 115.0 billion yen

9

On September 8, Tsumura newly issued a total of 30.0 billion yen inbonds. This breaks down to 15.0 billion yen in 7-year bonds and 15.0
billion yen in 10-year bonds.
In the first medium-term management plan, we planned investments ofaround 115.0 billion yen to enhance productivity through a boost to
production capacity and automation and digitalization.
A portion of this financing will go to growth investments and will also be
used to redeem existing bonds which will reach maturity in 2024.
We implemented this fund procurement at this timing, mainly taking into
account the market environment.

9agenda01

Second Quarter Business Results for FY 2022

02

Initiatives and Progress for
Domestic Business and China Business03

FY 2022 Earnings Forecast

10

Secondly, I will explain the activities at our domestic business and the
China Business and the progress we are making.

10Comparison with the Prescription Pharmaceutical Market
On a NHI drug price basis, grew 9.6% year-on-year
Gap with the market expanded 0.9pt, versus 1Q(YoY/drug price basis)

All sales channels
Tsumura

7.9%

9.6%
7.7%
6.6%

Gap withmarket＋5.0pt7.1%

5.4%

Prescription
pharmaceutical
2.5%
market

4.2%

1Q

2Q

FY2021

3.6%

4.6%

Gap withmarket＋4.1pt

2.9%
1.3%

3Q

4Q

1Q

2Q

FY2022
Copyright © 2022 IQVIA. Proprietary calculation by Tsumura based on “JPM Apr. 2022 – Sep. 2022”
Reproduction prohibited11

As you can see, this graph shows a comparison with the ethicalpharmaceuticals market.
This show the year-on-year growth rate on an NHI drug price basis for all
sales channels at hospitals and general clinics.
Trends at Tsumura are basically the same as in the market.
In the second quarter, the growth rate was +9.6%.
This is a gap of 5.0pt with the market and an expansion of 0.9pt incomparison with the first quarter.
A comparison by sales channel appears in the appendix.

11

Sales of Drug-fostering Program Formulations/Growing
Formulations（ Million yen ）Net sales
Product No./formulation nameRanking

FY 2021 2Q

FY 2022 2Q

Ratio to total sales

YoY

100 Daikenchuto

4,790

4,927

+137

+2.9%

2

54 Yokukansan

3,720

3,775

+55

+1.5%

4

43 Rikkunshito

3,557

3,698

+141

+4.0%

8

107 Goshajinkigan

1,736

1,755

+18

+1.1%

23

14 Hangeshashinto

678

708

+30

+4.4%

Total sales for drug-fostering program formulations

14,482

14,865

+382

+2.6%

4,060

+319

+8.5%

Drug-fostering program
formulations

1

Growing formulations2

41 Hochuekkito

3,741

5

17 Goreisan

2,680

3,198

+517

+19.3%

7

24 Kamishoyosan

2,415

2,583

+168

+7.0%
+7.6%

16

108 Ninjin’yoeito

961

1,034

+73

17

137 Kamikihito

849

1,013

+164

+19.3%

Total sales for growing formulations

10,647

11,890+1,242+11.7%

Total sales for 119 formulations other than drugfostering program and growing formulations

31,24733,435+2,188+7.0%

Total sales for 129 prescription Kampo
products

56,37760,191+3,814+6.8%

Drug-fostering
programformulations

25%
129
prescription
119 formulations
other than drugfostering programand growing
formulations

Growing
formulations

20%

55%

12

This slide shows sales of prescription Kampo products and growing
formulations.

Sales of the 129 prescription Kampo products totaled 60.1 billion yen, agrowth of 6.8% year-on-year.
Starting from fiscal 2022, the lineup of growing formulations was replacedwith Ninjin’yoeito and Kamikihito. In light of this, the ratio of sales of the 129
prescription Kampo products dropped 2pt year-on-year to 20%. Given thehigh growth rate for Goreisan and Kamikihito, growing formulations rose
11.7% year-on-year, substantially outperforming the overall growth rate.
The number of facilities accepting deliveries of Goreisan increased owing tomeasures, mainly lectures in the cardiovascular domain.
In addition, sales of Kamikihito continued to grow. In addition to an
improvement in recognition of Kamikihito owing primarily to e-promotions,this reflects a response to needs such as anxiety in tandem with fatigue,
including COVID-19 aftereffects.
Sales of the other 119 formulations was 33.4 billion yen, a growth of 7.0%
year-on-year, owing to a rise in demand for common cold-related
formulations owing to the spread of the Omicron virus.
12Results owing to Transformation in Information Provision Activities
Increase the number of doctors newly prescribing Kampo formulations and the number ofdoctors boosting the number of Kampo prescriptions they write by improving the recognition of
Kampo information
450000Detailing impact cases*1 (Monthly average number of cases)

400000e-Promotion
350000300000Level prior to
COVID-19

250000E-mail magazine being
sent to Medical Site members
・Rise in Web lecture participants
・Increase in video viewership200000

Number of doctors newly prescribing
Kampo formulations*2

150000MR
activities

100000approx. 6,000 doctors*4
Number of doctors boosting the numberof Kampo prescriptions they write*3

50000
0

2019年度FY20192020年度FY20202021年度FY20212022年度2Q
2Q
FY2022

Source: INTAGE Healthcare Inc. “Impact Track”*1: Number of detailing impact cases: Number of cases of information recognition from various channels, including MR activities
and the Internet(MR activities: Detailing via MR, online interviews, in-hospital presentations, etc.; e-Promotions: Online information provision
activities other than those via MR.)approx. 20,000 doctors*4
Tsumura survey*2: Confirmed number of doctors going from writing no Kampo prescriptions
to writing prescriptions*3: Confirmed number of doctors increasing the number of Kampo
prescriptions they write*4: Increase as of September 30, 2022 starting from April 1, 2022

13

This graph depicts “detailing impact” trends, which is the number of cases of doctor
information recognition owing to MR activities (green portion) and e-promotions(yellow portion).
Reflecting the concentrated investment in digital technologies and tools up to FY
2021, detailing impact, which was driven by e-promotions, continued to increase to
above levels seen prior to COVID-19 in FY 2019.
MR activities, in which MRs interview doctors and hold presentations in person andonline, have not returned to level before COVID-19. Although online activities
increased, face-to-face activities are still restricted, including visitation limitations.
We aim for a full lineup of content on our Medical site for e-promotions, in other words
information provision activities not conducted via MRs, including Web lectures andvideo streaming.
The number of Medical Site members is smoothly increasing. Consequently,
prescription explanation videos on the site and Web lecture viewership have become
fixed through the distribution of periodic e-mail magazines.
Participation at lectures held face-to-face prior to COVID-19 were at several hundred
persons level. In contrast, Web lectures are drawing in several thousands to several
tens of thousands.
Consequently, based on our analysis, in the second quarter of fiscal 2022, doctorsthat are newly prescribing Kampo formulations totaled around 6,000 doctors and thenumber of doctors that increased the number of Kampo prescriptions they are writing
was around 20,000.

13Impact of Intense Heat (Heat Stroke/Summer Fatigue Formulation: Seishoekkito)<Medical Site: Video library (Kampo lesson)>Seishoekkito sales

Kampo formulation/use by disease/symptoms “Heatstroke/summer fatigue”

250(Million yen)Kampo Lesson
Heat stroke/summer fatigue
Supervised by: Dr. Shuji Ono, director of the Ono Clinic

2022
200

150

Commentary on “heat stroke/summer fatigue,”conditions unique to the summer months

100

2021

Kampo lesson: Heat stroke/summer fatigue
Use depending on timing

Goreisan50

Seishoekkito Hochuekkito

0

4月
Apr

5月
May

6月
Jun

7月
Jul

8月
Aug

9月
Sep

Bar graph: Japan Meteorological Agency data
Line graph: Tsumura actual sales (invoice price) data

Heat stroke
symptoms start toshow

Exhaustion due toheat stroke, andcontinual dry mouthand sweat

Heat sensation, sweating
and dry mouth symptoms
dissipate but
gastrointestinal
symptoms

14

In addition to information provision activities via MR activities and epromotions, the following three factors, including the intense summer
heat from June 2022 and the spread of Omicron variant BA.5, led todemand trends that largely differed from usual summers.
The first factor is the intense summer heat.
This graph shows a year-on-year comparison of monthly sales ofSeishoekkito in the first half.
Seishoekkito is a formulation to treat weight loss in the summer (in otherwords, summer fatigues). Sales of Seishoekkito rose 35% in June and
53% in July, reflecting the intense heat.

14

COVID-19 Impact (1)Growth in common cold-related formulation
adjustments for acetaminophen formulations

sales

due

Number of new COVID-19 patients & total sales for 4 common cold-related formulations

500
450

shipment

Number of newly infectedindividuals

Acetaminophen formulation (10,000 people)
700
shipment adjustments

600yen)(Million
550

toKakkonto
Maoto
Maobushisaishinto
Shosaikotokakikyosekko

600
500
400

400
300

350

200

300
250

100

200

0

BA.2

BA.5
Bar graph: Ministry of Health, Labour and Welfare open data; Number of newindividuals testing positive (by day)
15
Line graph: Actual sales (Invoice price: Tsumura data)

The second factor is impact from a rapid spread of COVID-19 and sharp
increase in infected individuals.
Entering 2022, the Omicron virus BA.2 spread. Furthermore, from around
June, this was replaced with BA.5, a stronger variant. From July, when
the Omicron virus BA.5 started to spread, sales of formulations related tothe common cold, sharply increased.
During the summer months, sales of the four representative common
cold-related formulations enjoyed highly specific demand in contrast with
July-September 2021.
An adjustment in shipments of acetaminophen, an antipyretic analgesic,
occurred in tandem with a rapid rise in infected individuals, at an
unprecedented scale. Owing to this impact, there was a sharp increase indemand for common cold-related formulations, including formulations totreat fever and tonsillitis.

15

COVID-19 Impact (2)Growth in sales of formulations related to Long-COVID symptoms due to anincrease in the number of people infected with the omicron strain
Differences in Omicron and Delta strain symptoms
39%

デルタ株
Delta
strain34%

オミクロン株
Omicronstrain30%

Number of COVID-19 patients and sales of formulations related to Long-COVID symptoms
Number of
newly-infected
700
individuals

900yen)(Million(10,000 people)

800

Hochuekkito (fatigue)

600

700
500

600

26%
23%

22%

400

500
400

300

Bakumondoto (cough)

300
10%

11%

200

200
100

100

Tokyo iDC After-Effect Task Force
Based on analyzed data from consultations with the COVID
After-effect consultation desk at Tokyo metropolitan andpublic hospitals

Delta strain

2022年9月
Sep
2022

2022年8月
Aug
2022

2022年7月
l 2022Jun 2022
Ju2022年6月

2022年5月
May
2022

2022年4月
Apr
2022

2022年3月
Mar
2022

2022年2月
Feb
2022

n 2022
Ja2022年1月

Dec
2021
2021年12月

Nov
2021
2021年11月

Oct
2021
2021年10月

Sep
2021
2021年9月

Aug
2021
2021年8月

l 2021
Ju
2021年7月

Taste
Olfactory
嗅覚障害 味覚障害
impairment impairmentn 2021
Ju2021年6月

Fatigue
倦怠感

May
2021
2021年5月

Cough
咳

0

Apr
2021
2021年4月

0Omicron strain
Bar graph: Ministry of Health, Labour and Welfare open data; Number of newindividuals testing positive (by day)
16
Line graph: Actual sales (Invoice price: Tsumura data)

The third factor is impact from an increase in the number of longCOVID-19 patients, in other word individuals suffering from aftereffects.
As shown in the graph on the left, the Omicron variant replaced theDelta strain. Owing to this, there is an increase in the ratio of individuals
with ongoing coughs and fatigue symptoms after infection.
Meanwhile, as shown in the graph on the right, Bakumondoto is beingprescribed for coughs and Hochuekkito for fatigue. In comparison withthe same period, a year earlier, this shows a very high level of growth.
Based on monthly sales trends and recent demand trends byformulation for the past several years, we formulated production plans
using the demand forecast system.
In FY 2022, owing to the three particular factors, we are in a situation
where we can address a production increase by reorganizing productionplans several times to temporarily deal with hikes in demand.
We are disseminating on seasonal formulations and formulations withhigh demand mainly through email magazines and via videos on our
Medical Site. According to our analysis, the establishment of this type ofenvironment, which facilitates the obtaining of information on Kampo
formulations, is one factor driving the expansion of prescription
opportunities.

16

Impact on Shipments of Intense Heat and COVID-19
April

May

June

July

AugustSeptember

Response

BCP
response
Intense heat
Shanghai lockdown Domestic plants
Substitute production

COVID-19
Seventh wave•

Boost production capacity for seasonal
formulations, common cold-related
formulations•

Change production plans to boost capacity➡ Limited shipments for some
Kampo formulations

Forecast
・Ongoing demand for common cold-related Kampo formulations owing toincrease in Long-COVID patients・Increase in demand for common cold-related Kampo formulations owing toseasonal influenza trends and the re-expansion of COVID-19
17

Operations at the Shanghai Tsumura Plant were halted due to impact
from the Shanghai lockdown over the two months of April and May 2022.
In light of this, in accordance with our business continuity plan, we
reorganizes our production plan by alternating production to plants inJapan. Consequently, we were able to maintain our supply system andaddress the 6.9% year-on-year rise in demand.
Furthermore, given the overlapping of the three factors I explained, there
was a rapid increase in one-off orders which led to short supply of
specific formulations. Accordingly, we implemented a limited shipment of
28 items from August 29, 2022, reflecting our goal to avoid the risk ofrunning out of inventory due to an uneven distribution of retail inventory.
We note limited shipments of two items, one of them being Seishoekkito,
were lifted on October 3, 2022. Furthermore, limited shipments of 3 items
were lifted on November 4, 2022.
We will continue to pour energies into sequentially lifting shipment
restrictions by taking into account our production plans and demand
trends.
In addition, we plan to further strengthen our supply system to deal withcases in which actual demand exceeds forecasts.

17

China Business Sales
Crude drug platform: Achieved the 1H plan owing to an expansion inraw material crude drug sales
about 7.1
57.4％
growth※billionRaw material crude drugs

about 4.5
billionDrug pieces (chopped crude drugs)

2Q FY2021

2Q FY2022“Yakushokudogen”
products※local currency basis：38.2％ growth18

Next is trends at the China Business.
In the first quarter, due to lockdowns triggered by COVID-19
some sales activities and shipments for raw material crude drugs,
which account for a high ratio of sales, were delayed versus plans.
However, in the second quarter, we cleared our plan for the first
half.
The growth rate was 57.4% year-on-year.
That being said, regarding M&A in the formulation platformbusiness, we are continuing negotiations to sign contracts forseveral deals.
We are not at a stage where I can comment. I will report whenpossible.

18

agenda01

Second Quarter Business Results for FY 2022

02

Initiatives and Progress for
Domestic Business and China Business03

FY 2022 Earnings Forecast

19

Thirdly, I will now explain our earnings forecast for fiscal 2022.

19

FY 2022 Earnings Forecast【Million yen】

FY 2021
Results

FY 2022
Forecast

YoY
AmountChange129,546

138,500＋8,953＋6.9%

Domestic business－

124,300－－

China business－

14,200－－22,37620,800(1,576)(7.0)％

Domestic business－

21,200－－China business

－

(400)

－

－

25,904

21,200(4,704)(18.2)%

18,83615,000(3,836)(20.4)％

64 yen64 yenEPS

246.2 yen

196.1 yen

ROE

8.2 %

6.0 ％

Net sales

Operating Profit

Ordinary Profit
Profit attributableto owners of parent

Dividends （per share）(Note) Foreign exchange impact (non-operating profit) is
not factored into the earnings forecast as it isdifficult to make reasonable calculations given
trends in the foreign exchange market.
20

Our earnings forecast remains unchanged from our initial forecast. We
anticipate net sales of 138.5 billion yen, operating profit of 20.8 billion yen,ordinary profit of 21.2 billion yen, profit attributable to owners of theparent of 15.0 billion yen, and an ROE of 6.0%.
As I explained, this reflects impact from the repeated reworking of our
production plans.
Our earnings forecast for fiscal 2022 is in line with the forecast we
released at the start of the fiscal year.

20Shareholder Returns
Policy◼ We aim to improve our corporate value by continually expanding domestic businessand through growth investments in the China business, and by building foundations.
Accordingly, we plan to implement stable dividends, taking into account factors such as
medium/long-term profit levels and cash flow conditions.
45 .0 %

100

32.1%

35.9% 35.7%

31.9% 33.5%

35.6%

32.6%

31.9%

40 .0 %

35 .0 %

80

26.0％

25.0%

30 .0 %

60

40

25 .0 %

32

32

32

32

32

32

32

32

32

32

15 .0 %

20

From Oct. to Mar.

20 .0 %

From Apr. to Sept.

10 .0 %

32

32

32

32

32

32

32

32

32

2013

2014

2015

2016

2017

2018

2019

2020

2021

0

32

Dividends payout ratio
5. 0%

0. 0%

2022forecast
2022

Note: The FY 2022 year-end dividend and payout ratio (forecast) are an estimate based on the assumption that the dividend resolution isapproved at the 87th Ordinary General Meeting of Shareholders.

21

Lastly, I will cover our shareholder returns.
In addition to a continuing expansion of the Kampo business in Japan,
we plan to execute growth investments in particular, including carryingout M&A deals in the China Business. We also plan to take steps toimprove corporate value through the strengthening of the foundation of
the China Business.
It is our policy to implement stable dividends, taking into accountmedium/long-term profit levels and cash flow trends.
We ask for your continued support.

21

Second Quarter Business Resultsfor Fiscal 2022
—R&D Direction and Recent Progress, etc.—
November 7, 2022
Executive Officer, Head of Kampo Research & Development Division / International
Pharmaceutical Research & Development Division

Akihito Konda

22

“Further” Build Foundation for Standard Treatments—Expand Existing Research and Dig Deep—【Geriatric Health】
・Conduct research related to frailty based on more detailed types, including from social,physical and mental aspects
・Conduct research pertaining to behavioral and psychological symptoms of dementia(BPSD), including mild cognitive impairment, and Stages I, II, III, etc.
・Implement the full-fledged building of evidence in the circulatory domain, including
congestive heart failure and cardio-renal related diseases【Cancer】
・Conduct research related to support for cancer survivorship(Provide employment support assistance from social, physical and mental viewpoints)【Women’s Health】“Implement research that is close-knit with the life stages of women”
23“Geriatric health,” “cancer” and “women’s health” are important domains
at Tsumura.
Among these three important domains, today I would like to takeadvantage of the rising momentum in promoting the participation of
women in society and the workplace, and focus on “women’s health,” a
topic we have touched upon time and again in our medium-term
management plan.

23

Agenda01

Women’s Health Initiatives at Tsumura (Origin of Founding)& Confirmation of Changes in the External Environment

02“Further” Build Foundation for Standard Treatments
Research Results Thus Far & Research Pipeline

03

Propose New Treatment Methods (Tackling Personalized Medicine)
Tackle Presymptomatic Diseases*Points to consider
This presentations contains a plethora of information related to matters such as pharmaceuticals. This information is not for the purpose of solicitation or advertising.
24

First, I will confirm activities in the domain of women’s health at Tsumura,our roots in the domain at the time of the company’s founding andchanges in the external environment.

24Tsumura has Been a Company that is Close-knit to Women’s Health
Since its Foundation

Jusha Tsumura (founder of Tsumura Juntendo, the predecessor to modern-day Tsumura) improved a drug for
women’s disorders that was passed down through the Fujimura family, his mother’s family
Tsumura Juntendo launched the drug, Chujoto in 1893 in Nihonbashi, Tokyo

We aim to assist in preconception and conception care that is closeknit to the health of women throughout their lives!
*Preconception care: Women and couples face their lives and health while considering a future pregnancy
25

Through Chujoto, a medicine for women, Tsumura founder Jusha
Tsumura aimed to create a significant business that was a part ofsociety’s public interest while keeping close to women. Given thishistorical background, the women’s domain is positioned as one of thefirst and foremost areas at Tsumura.
As a part of the DNA of Tsumura employees, it is our desire to aid in thehealth of women throughout their lifetime, including providing care before
and after pregnancy, such as “preconception and conception care.”25

Transformation in the Promotion of Women’s Activities
2015•Act on the Promotion of Female Participation and Career Advancement

Work conditions for Japanese females
1990s: M-curve in the employment rate; rate drops for women in theirlate 20s and 30s and rises once again from those 40 and older

in the Workplace established

2000s: M-curve in the employment rate become gradual2021•Act on Childcare Leave, Caregiver Leave, and Other Measures for the
Welfare of Workers Caring for Children or Other Family Members•Infertility prevention and support package

In and after 2020: L-curve for the regular employment rate peaked for
women in their late 20s; Declines after pregnancy ➡ Need to improvethe continued employment rate
Femtech market forecast to reach about JPY2 trillion/year by 2025

•Femtech nominated for the “new word & buzzword of the year award”•“Femtech promotion” included in the basic policy 2021
2022
•Infertility treatment covered by insurance•Basic policy 2022 established•Declaration on the Promotion of Sexual and Reproductive Health andRights: Japan Society of Obstetrics and Gynecology

Expert consultation/support

Simple test kit

Consult on anxieties
and concerns

Easily know physicalconditions

Health management/tracking

Medical support

Aim for daily
healthmanagement

Alleviate out-patient andexam burden

Other
Aim to try more superior
solutions◆Measures against population decline◆Women’s employment assistance policy◆Femtech gains momentum

Source: Prepared by Tsumura, having modified https://www.femtech-projects.jp/ (“Femtech:
Creating a new “matter of course” for a society where it is comfortable for women to work”(METI))*Femtech ＝ Female + Technology
Femtech is a coined word that combines “Female” and “Technology.” Products andservices that solve women’s health issues with technology.
26

Looking back at the changes in the promotion of women’s participation insociety and the workplace, the strengthening of measures, including a
support package to prevent infertility and the expansion of infertility
treatment, can be interpreted as a part of measures to address thedecline in Japan’s population.
In addition, measures to aid the employment of women have become
pronounced. Furthermore, I believe that opportunities in femtech, in otherwords products and services that solve women’s health issues withtechnology, are growing.

26

Agenda01

Women’s Health Initiatives at Tsumura (Origin of Founding) &Confirmation of Changes in the External Environment

02“Further” Build Foundation for Standard Treatments
Research Results Thus Far & Research Pipeline

03

Propose New Treatment Methods (Tackling Personalized Medicine)
Tackle Presymptomatic Diseases*Points to consider
This presentations contains a plethora of information related to matters such as pharmaceuticals. This information is not for the purpose of solicitation or advertising.
27

Taking this background into account, going forward today I will unfold
research results in the women’s health domain at Tsumura and theresearch pipeline.

27

Kampo Research Pipeline—Research Strategy by Life Stage in Women’s Health—High↑
Estrogensecretion
volume↓Low

Average age of
first
menstruation
among
Japanese
women is 12
years and twomonthsAverage age ofJapanese women when
they start menopause:
50.5 years old

Average age of Japanesewomen when they give birth totheir first child: 30.7 year old

80% of women over 60
years old suffer fromdysuria

Preconceptions (care prior to pregnancy)

Menstrual troubles, including premenstrual syndrome (PMS)
TJ-23 Tokishakuyakusan: menstrual irregularity/difficulty, infertility,
miscarriage, etc.
TJ-24 Kamishoyosan: menstrual irregularity/difficulty, chi-no-michi-sho, etc.
TJ-106 Unkeito: menstrual irregularity/difficulty, neurosis, chills, etc.

Various symptoms related to endometriosis

Commonconditions/diseases

TJ-23 Tokishakuyakusan

Infertility/various
pregnancy disorders
TJ-23 Tokishakuyakusan
TJ-106 Unkeito

Menopause

Ovulation factor (ovulation disorder)
Tubal factor (blockage, constriction, adhesion）
Uterine factor (uterine fibroid, endometriosis)
Cervical factor (cervical mucus disorder）
Immunity factor (antisperm antibodies）

Frailty

TJ-67 Nyoshinsan pre/postnatal neurosis, etc.
TJ-108 Ninjin'yoeito Anemia, fatigue, etc.

10

20

30

Co-existing
pharmaceuticals

Infancy

Puberty40

TJ-40 Choreito
Urination pain, constanturge to urinate, etc.

TJ-41 Hochuekkito
Poor appetite, boost endurance,etc.

Postpartum depression

Age

Female lower urinary tract
symptoms

TJ-24 Kamishoyosan
TJ-25 Keishibukuryoganryo

50

60

70

80（歳）

Symptomatic therapy: LEP, etc.

Symptomatictherapy: HRT, etc.

Symptomatic therapy: β3,
Anticholinergic agent

Sexual maturation

Climacteric period

Elderly years
28

First, the building of evidence and research in the domain of women’s
health is an extremely sensitive area given its correlation to giving birth.
In particular, it is difficult to delve into R&D related to diseases andcomplaints before and after pregnancy. Consequently, many companies
are concerned about how to move forward.
Amid this backdrop, the efficacy of Kampo is being declared in thestabilization of fetuses. Kampo is actually is being used in the frontlines
of medical scenes, and its use is cumulatively rising. In light of this, avast population of female subjects is being leveraged for application in
epidemiological research.
When conducting epidemiological research, recently there has been agreat deal of use of realworld data, in other words medical big data. From
this perspective, Kampo formulations are one drug that can be used inthis research.
At present, we are collaborating with research institutes at universities
and moving forward with several epidemiological research studies thatutilize medical big data.

28

Actual Trends in Kampo Treatments for Various Diseases during Pregnancy
Research Report based on Real World Data (Medical Big Data)“Benefit of Kampo medicine on birthrates among women with a history ofrecurrent pregnancy loss (including habitual abortion, etc.)
Goal: Examine efficacy of Kampo medicine for overall childbirth rate among patients with a history ofrecurrent pregnancy loss (habitual abortion)
Target: Extract women diagnosed with recurrent pregnancy loss from January 2005 to August 2018
(5,517 women)
Analysis of childbirth rate after 2 years, after 4 years (Kampo usage rate: 29.9%; percentage
using Tokishakuyakusan: 60%, other Kampo 40%)
Kampo medicine(1,651)

Non-Kampo medicine(3,302)Childbirth rate after 2 years

15.7 %

11.2 %

Childbirth rate after 4 years

22.6 %

17.8 %
Childbirth rate comparison during tracking period: P = 0.0003
log-rank test

Reviews of medical big data have indicated that Kampo formulations, including Tokishakuyakusan,
possibly contribute to an improvement in birthrates among women with a history of recurrent pregnancy
loss
Prepared by Tsumura based on International of Journal of Gynecology & Obstetrics153(3) 489-495 (2021) data

29

I will now introduce one example. This case involves the birth rate ofpatients experiencing recurrent pregnancy loss, mainly thoseexperiencing habitual miscarriages, and an examination of the efficacy of
Kampo. This study was conducted from January 2005 to August 2018
and involved 5,517 women that were diagnosed as experiencing
recurrent pregnancy loss. We analyzed the childbirth rate after 2 years
and after 4 years, the general evaluation period. As reference, the usage
rate for Kampo was 29.9%, of which around 60% were administered
Tokishakuyakusan.
In a comparison of the group that used Kampo versus the group that did
not during the tracking period, the results showed that the childbirth rate
for the group using Kampo was 15.7%, two years after the start oftreatments, and 22.6% after four years from the start of treatments. This
showed a significantly high birth rate.
Naturally, this is merely the result of research using medical big data
therefore it is not all-encompassing. However, this does indicate thepossibility that Kampo, including Tokishakuyakusan, contributed to an
improvement in birth rates. In light of this, we plan to continue to build
evidence from various perspectives.

29

Expand Standard Kampo Treatments (Build Evidence: Publish）

How Tokishakuyakusan works for the rat infertility model
1. Adhesion

2. Infiltration: Infertility modelPregnancy

3. Endometrial cell differentiation

Tokishakuyakusan

Fertilized
egg
Fertilized
egg

Endometrium
Implantation
factor（LIF）

Endometrial celldifferentiation

Implantation
Successful
pregnancy

Endometrial gland
Prepared by Tsumura based on J Ethnopharmacol. 2021, 265:113288 data

30

Actually, one very interesting point is that basic research also shows
Kampo had a positive impact on birth rates as if to back Kampo research
reports based on recent medical big data. As a start, we are seeing
results that indicate possibilities that support this.
This shows Tokishakuyakusan’s improvement mechanism has on the rat
infertility model.
The rat infertility model, like the red arrow, shows a decrease in thenumber of necessary elements (LIF) for implanting an egg into theendometrial membrane. The differentiation of the endometrial cells does
not advance and therefore the patient cannot get pregnant.
Meanwhile, it was found that the administration of Tokishakuyakusan
increases the number of necessary elements (LIF) for implantation,enhances the differentiation of endometrial cells and aids in creating anenvironment conducive for pregnancy.
Naturally, not everything can be discussed with only this basic research.
Despite the desire to have children, there are people that have difficulty
becoming pregnant. It is our mission to see if Kampo can help thesepeople. Keeping this in mind, it is our goal to continue to further build
more in-depth evidence.
30

Changes in the Performance of Working Females and Related Labor Loss
In comparison with healthy conditions, work performance for around half of females drops
to below 50% due to premenstrual syndrome or catamenial symptoms
Performance ratio for less than half of working females is 45%
1

Low

6

０点points

5

Performancepoints３点

310

1点points
2点points

1

14

9

points
４点
points５点
points６点
points７点

16

21

points８点
points９点
points
１０点

14

High
Assuming the score for working in a healthy condition is 10 points, self-assessment
when experiencing premenstrual syndrome or catamenial symptoms (n=2000)
Source: Figures modified by Tsumura based on data from Survey on Health Promotion and Working Women2018, Health and Global Policy Institute (HGPI)
https://hgpi.org/wp-content/uploads/1b0a5e05061baa3441756a25b2a4786c.pdf (revised)
31

Earlier, I touched upon measures to support employment for women,along with measures to address the population decline in Japan amidchanges in the promotion of the participation of women in society and theworkplace.
According to a report by the Health and Global Policy Institute, it wassurmised that nearly 50% of women suffer a decline in performance ofaround half of regular levels due to PMS and paramenstrual symptoms.
On top of this, according to a survey by The Japan Society of Obstetrics
and Gynecology, it is estimated that the annual work loss (for example,
absence, a decline in workload or work efficiency, etc.) due to menstrual
symptoms in Japan is around 490 billion yen.

31

Expand Standard Kampo Treatments (Build Evidence: Publish）
Efficacy of Tokishakuyakusan on lesions and pain in the endometriosis-like model★In 2018-2019, number of downloads is in the top 10% of papers selected

Suppress endometriosis-like lesions

Alleviate pain
10

1mm

1mm

Tokishakuyakusan
Endometriosis-like model Control
Lesion exacerbation factor(Interleukin 33)

Degree of pain relief

Endometriosis-like lesions

Pain response due
to heat stimulation〈Pain measurement test〉
＊

＊

8
6
4
2
0
Pre-operative
Tokishakuyakusan
Comparison
mouse

Average + standard deviation,* p<0.05, Student’ t-test (Restricted)

Tokishakuyakusan: Mechanism of Action〇 Action on lesion exacerbation factor
Inhibit interleukin 33 mRNA

Pathological findings

Epithelial cyst Interleukin 33〇 Action on the source of pain
Inhibit cyclooxygenase 2 mRNA
Prepared by Tsumura based on Am J Reprod Immunol. 2019 Nov;82(5):e13182 data

32

Amid these conditions, we collaborated with university research
institutions and conducted basic research on the effects ofTokishakuyakusan on lesions and pain using an endometriosis-like model.
The results showed shrinkage in endometriosis-like lesions owing to theuse of Tokishakuyakusan, as shown in the picture on the upper left, andthe suppression of pain, a major symptom of endometriosis, as shown in
the graph on the upper rights. The picture at the lower left shows thehistopathology of an endometriosis-like lesion. This study aims to prove a
mitigation in pain owing to a suppression of exacerbating factors.
Based on these results, the mechanism of action for Tokishakuyakusan
potentially has the effect of suppressing exacerbating factors forendometriosis. We are starting to take action to conduct further
examinations.
It should be noted that this research paper was selected for the front
page of the November 2019 edition of the American Society for
Reproductive Medicine magazine. This research was also among the top
10% of selected downloads in 2018-2019.

32

Kampo Research Pipeline—Research Strategy by Life Stage in Women’s Health—High↑
Estrogensecretion
volume↓Low

Average age of
first
menstruation
among
Japanese
women is 12
years and twomonthsAverage age ofJapanese women when
they start menopause:
50.5 years old

Average age of Japanesewomen when they give birth totheir first child: 30.7 year old

80% of women over 60
years old suffer fromdysuria

Preconceptions (care prior to pregnancy)

Menstrual troubles, including PMS
TJ-23 Tokishakuyakusan: menstrual irregularity/difficulty, infertility,
miscarriage, etc.
TJ-24 Kamishoyosan: menstrual irregularity/difficulty, chi-no-michi-sho, etc.
TJ-106 Unkeito: menstrual irregularity/difficulty, neurosis, chills, etc.

Various symptoms related to endometriosis

Commonconditions/diseases

TJ-23 Tokishakuyakusan

Infertility/various
pregnancy disorders
TJ-23 Tokishakuyakusan
TJ-106 Unkeito

Menopause
TJ-24 Kamishoyosan
TJ-25 Keishibukuryoganryo

Ovulation factor (ovulation disorder)
Tubal factor (blockage, constriction, adhesion）
Uterine factor (uterine fibroid, endometriosis)
Cervical factor (cervical mucus disorder）
Immunity factor (antisperm antibodies）

Frailty

TJ-67 Nyoshinsan pre/postnatal neurosis, etc.
TJ-108 Ninjin'yoeito Anemia, fatigue, etc.

10

20

30

Co-existing
pharmaceuticals

Infancy

Puberty40

TJ-40 Choreito
Urination pain, constanturge to urinate, etc.

TJ-41 Hochuekkito
Poor appetite, boost endurance,etc.

Postpartum depression

Age

Female lower urinary tract
symptoms

50

60

70

80（歳）

Symptomatic therapy: LEP, etc.

Symptomatictherapy: HRT, etc.

Symptomatic therapy: β3,
Anticholinergic agent

Sexual maturation

Climacteric period

Elderly years
33

In this manner, we are building a research pipeline that is close-knit to
the life stages of women by working with doctors nationwide to co-create
value. In other words, we are in the process of building a research
pipeline in accordance with our “value co-creation” spirit.
These participating doctors are also becoming keener about prescribing
these Kampo medicines by taking it upon themselves to partake in thecreation of added value for Kampo. We look forward to having long ties
with these doctors.
We aim to leverage our mutual strengths with many doctors we work withto conduct epidemiological research using medical big data, basic
research rich with variations, and various clinical research originatingfrom case reports. Interconnected with this, we plan to create a morerobust research pipeline that is unique to Tsumura by exploring optimal
solutions.

33

Agenda01

Women’s Health Initiatives at Tsumura (Origin of Founding) &Confirmation of Changes in the External Environment

02“Further” Build Foundation for Standard Treatments
Research Results Thus Far & Research Pipeline

03

Propose New Treatment Methods (Tackling Personalized Medicine)
Tackle Presymptomatic Diseases*Points to consider
This presentations contains a plethora of information related to matters such as pharmaceuticals. This information is not for the purpose of solicitation or advertising.
34

Next, I will discuss proposals for new treatment methods (initiatives torealize personalized medicine) and the challenges we are undertaking totackle pre-symptomatic diseases.

34

Research for a Kampo Diagnosis Support System(Focus on Women’s Health)Top 10 commonly experience
disorders (Multiple choice)※1

Overall (n=1,000)
1st

Fatigue/sluggishness

2nd Chill
3rd

Frustration

4th

Damaged skin (acne, eczema, etc.), blemishes

5thHeadaches

6th

Anxiety

7th PMS※2※2
8th

Lower back pain

9th

Difficulty falling asleep, wake up feeling poorly,
light sleeper, insomnia
10th Menstrual cramps, irregular menstruation,
abdominal pains pre/post menstruation*1: Fact-finding survey on concealing pain (March 3, 2021,
implemented by Tsumura)https://www.tsumura.co.jp/newsroom/topics/2021/03031750.html*2: Poor physical condition due to menstrual cycle (frustration, fatigue,headache, etc.)

35

In March 2021, Tsumura conducted a “fact-finding survey on concealingpain” targeting 10,000 women in their 20s-50s.
Consequently, we found that around 80% of the women surveyed
endured poor health conditions while doing household tasks or work.
The poor health conditions regularly experienced by women “concealingpain” were feelings of being “tired/lethargic” (No. 1), being “cold/chilly”(No. 2) and feeling “irritated” (No. 3).
Of these disorders, we focused on leading research related to being
cold/chilly. We found there was a correlation with recurrent pregnancy
loss, including habitual miscarriages. The percentage of women that are
regularly cold/chilly that experience premature births is reported to be
3.4-times. In light of this, being regularly “cold/chilly” can be interpreted
as “a disease risk factor.”
Furthermore, there were occasional reports citing being “cold/chilly” as a“risk factor for complications” and “frequent complaints by patients thatare aware of being cold/chilly.” We are focusing on this as one of ourresearch themes.

35Direction in R&D of Kampo Diagnosis Support System (Women’s Health Examples)
1st Medium-Term Management Plan

2nd Medium-Term Management Plan

(2022～2024)(2025～2027)(2028～2031)

Research phase

Development phase

Social implementation

Develop a questionnaire system(Truth-fake/chills & fever/qi, blood, fluid)

3rd Medium-Term Management Plan

Multi-faceted research,
pivoting around chills, etc. topersonalize medicine

Validation testingfor formulation
selection

Research to clarify genetic
background, mechanism ofchills and correlation

Automatic Kampo medical exam

Expand medical treatment data /improve forecast precision

ChillsRelated to genes

Physical symptoms*Genetic testing＋blood flow /intestinal bacterial flora
36

Earlier I touched upon the rising opportunities for femtech, along with myintroduction of measures to address Japan’s shrinking population and tosupport employment for women, amid changes in the promotion of theparticipation of women in society and the workplace.
Verbally quoting the results of a survey implemented the other day by
Cross Marketing Inc., the height of recognition of and expectations infemtech appears to be pronounced, particularly among women in their
20s and 30s, the generation that will uphold the future.
Factoring in these conditions, we are collaborating with university
research institutions to carry out research originating from an emphasison the social implementation of a Kampo exam support system while
also focusing on indefinite complaints, including women feeling cold/chilly.
Recently, while looking at the correlation of medical questions asked inWestern medicine and Kampo medicine, we are at the stage of planning
improvements to the predictive precision of a Kampo exam support
system, including hot and cold flashes in women.

36Kampo is a “Long Tail Drug”
Calculating the tail portion,
comes to a considerable number…

Niche products

Sales volume

Popular products

Profile for specifically detected ingredients in plasma
after administration of Kampo medicines

Tail portion〈Reference〉
Business model for lineup of omni-directional products

Estimated
ingredients

Unidentified
ingredients

Prepared by Tsumura based on NPJ Syst Biol Appl. 2017, 3, 32 data
37

There are doctors that call Kampo a “long-tail drug.” This is due to theexertion of synergistic effects owing to the use of aggregate substances.
For instance, in a business model that strengthens the lineup ofomnidirectional-type products, even if only a few products are sold in a nichemarket, given that this can add up to a fairly large number of products being
sold, a product lineup should including many products from popular to niche
items, and a company should employ a long-tail strategy to maintain thestrength of this business model.
Looking at the graph on the left from this perspective, we profiled, in
collaboration with a research institution, the “specific detection ofcomponents in plasma” after administration of Kampo. The estimatedcomponents are in red and the unidentified components are in blue. We areaiming to use the development of a new market leveraging the special
characteristics of Kampo, which is a multicomponent drug, as a steppingstone for example to develop the “pre-symptomatic disease” market.

37

“A Chill Can Lead to All Kinds of Diseases”: Treating a Chill as a
“Presymptomatic Disease,” Pursue Clues to a Solution in KAMPOmics
TJ-23 Tokishakuyakusan 3D HPLC Pattern

Western medicine

Kampo medicine

Single ingredientMultiple ingredients

IngredientA

Ingredient A, C, E･･･
a, b, B*, c ,C*, e ･･･

Metabolite/Conjugate

Kampo

Organism
Multiple
ingredients

Receptor

Receptor, etc.

Enzyme

RNA

Lipid

DNA

･･･

System biology
ActionMetabolism

Intestinal
Multiple ingredientsbacterial flora

Biologicalnetwork

Symptoms
Variation

Pharmacokinetics of ingredients, Function of intestinal bacteria, Function of biological metabolite,
Diverse biological response,Metabolism of ingredients

KAMPOmicsⓇ

38

In Japanese, “being cold is the source of all types of diseases” is a frequently usedsaying. We view indefinite complaints, including “coldness” among women, as a presymptomatic disease. We plan to utilize KAMPOmics, an analysis technology for
multicomponent drugs, a strength of Tsumura, while exploring clues for problemsolving.
For instance, we are accruing data on changes in pharmacokinetics within the body,which differs between individuals. While employing technologies such as genetic
polymorphism analysis, we plan to examine complaints of feeling cold on a genetic
level by conducting further R&D into multicomponent drugs and improving optimal
matching technology for personalized medicine.
This is an area that is difficult to implement in Western medicine which uses singlesubstance drugs. Conversely, this can be done owing to Kampo, which is amulticomponent drug. This is a business that Tsumura has been engaged in for many
years that is why this is a matter that is possible for Tsumura to handle.
During our ten-year plan, we aim not to restrict the experience of Kampo specialists
accumulated thus far to the realm of experience or oral traditions,but look to carry out
various exploratory research that will contribute to the development of a Kampo exam
support system, execute verification research and social implementation.
Consequently, more than before, we plan to use this to support exams conducted bya broad range of many doctors. Finally, it is our goal to do our best to improve thefuture value of Tsumura by leveraging cutting-edge technology to be close-knit to the
problems of each individual while further realizing the beliefs behind our founding.

38

Inquires about these materials
Corporate Communications Dept.

Investor Relations Groupinvestor_madoguchi@mail.tsumura.co.jp
Cautionary items regarding forecasts⚫ The materials and information provided in this presentation contain so-called forward-looking
statements. Readers should be aware that the realization of these statements can be affected by avariety of risks and uncertainties and that actual results could differ significantly.
⚫ Changes in Japan or other foreign countries related to healthcare insurance systems or regulations
set by medical treatment authorities on drug prices or other aspects of healthcare or in interest andforeign exchange rates could negatively impact the Company’s performance or financial position.

⚫ In the unlikely event that sales of the Company’s core products currently on the market be halted orshould sales substantially decline due to a defect, unforeseen side effect or some other factor, there
could be a major impact on the Company’s performance or financial position.

39

39

Appendix

40

Comparison with the Prescription Pharmaceutical Market
TsumuraPrescription pharmaceutical market(YoY/drug price basis)

12%
10%

9.6%
7.9%

8%

6%
Overall

7.7%
4.2%

2.5%

4%

7.1%

6.6%

5.4%

4.6%

3.6%

2.9%

1.3%

2%
0%
-2%
1Q
FY2021

General clinics (GP)

2Q

3Q

11.1%
9.1%

6%
0.7%

8.7%

2.3%

7.5%

1.9%

7.8%

2.4%

8%
6%

6.3%

5.2%

2Q

6.4%
4.7%

4.1%

5.1%
3.9%

4%
2%

1.4%

1%

3.1%

3.4%

2.7%

3.7%

0%
1Q

-4%

1Q
FY2022

Hospital market (HP)

16%
11%

4Q

FY2021

2Q

3Q

4Q

1Q
FY2022

2Q

-2%
-4%

1.1%

3.2%

1.1%
1Q
FY2021

2Q

3Q

4Q

1Q

2Q

FY2022

Copyright © 2022 IQVIA. Proprietary calculation by Tsumura based on “JPM Apr. 2022 – Sep. 2022”
Reproduction prohibited

41

41

COVID-19 impact（shipment volume basis：growth rate）

Increase reflecting changes inliving environment•••

Increase owing to omicron strain

Anxiety/insomnia (6 formulations)Dizziness (2 formulations)
Loss of appetite, fatigue (2 formulations)•

Common cold, influenza and hay fever (13 formulations)
140% Cold-related formulations

Increase owing to theuse of masks•

Skin irritation, acne (4 formulations)

110%

120%

Formulations owing to
impact of environmental
change118%

129 prescriptions

108%
105%

FY20202Q

FY2021
2Q

FY20222Q

42

42

Number of Doctors that Write 10 or More Kampo Prescriptions
The number of doctors that write 10 or more Kampo prescriptions increasedaround 10,000 doctors, a ratio of 29%
Number of doctors that write 10 or more Kampo prescriptions

Clinicians: 320,000

50％
approx. 84,000
doctors

26％

Rise ofapprox.
10,000
doctors

approx. 94,000
doctors

50%
-plus

29％
*Tsumura survey

End-FY202
2021年度末

2Q FY2022
2022年度2Q

End-FY2024
2024年度末First medium-term management plan
4343