New Medium-Term Business Plan
“HOPE 100-Stage 3-” (Fiscal 2020～2023)

KYORIN Holdings, Inc.

Structure of Management Planning１）Corporate Philosophy
Kyorin continues to fulfill its mission of cherishing life, and benefiting
society by contributing to better health.
２）Corporate Message
Your Health is Kyorin‘s Mission.

CorporatePhilosophy
CorporateMessage
Long-Term Vision－HOPE 100－

Long-Term Vision－HOPE１００－
Aim for Health Of People and our Enterprises

The future of the Group looking forward to 2023, the 100thanniversary of the founding of Kyorin＜statement＞
The Kyorin Group will promote diversified business expansion and thedevelopment of the consumer healthcare business, and by 2023, will berecognized within and outside the Group as a company that supports
sound and healthy lifestyles.

Medium-Term Business Plan

-Stage1-Stage2-Stage32010～2015 2016～2019 2020～2023

Medium-Term Business Plan
A comprehensive plan of basic management policies andachievement targets for the medium-term period2Overall of Long-Term Vision－HOPE１００－
Long-Term Vision「HOPE100」【Statement】
The Kyorin Group will promote diversified business expansion
and the development of the consumer healthcare business, andby 2023, will be recognized within and outside the Group as acompany that supports sound and healthy lifestyles.

Stage２

Stage１
2010

2015【Statement】

2016

Stage３
2019

2020

2023

【Statement】

Improvement of the ability to realize
reorganization and establish thesystem for promotion of individual
businesses toward achievement of
the long-term vision

Commit to change (reform andrenovation) toward realization of thelong-term vision and maintainsustainable growth

Focus on enhancement of development
pipeline and maximization of diffusion ofcore products.

Focus on four priority strategies in orderto overcome decline in sales associatedwith expiry of patent for Kipres.

The final Stage ofHOPE1003Basic Concept of New Medium-Term Business Plan
“Hope 100-Stage 3”
External Environment
・Further strengthening of health care cost
containment measures
・Increased difficulty of new drug creation
・Application of Drug Sales Promotion Guideline

Internal Environment
・Appearance of new drugs as growth drivers
・Expectation for new business (diagnosis business)

Realize growth trend by pursuing Kyorin’s originality.
Use sustainable revenue growth as basis for accomplishing our goal of creating innovative new drugs【Statement】 “Realization of growth trend through pursuit of originality”（Image）

Realization of growth trend

Diagnosis businessbusiness
Diagnosis

New drugs group
Original drugs group

Stage1

Stage2

Stage34

New Medium-Term Business Plan
“Hope 100-Stage 3”「HOPE100」 Statement
The Kyorin Group will promote diversified business expansion and the developmentof the consumer healthcare business, and by 2023, will be recognized within andoutside the Group as a company that supports sound and healthy lifestyles.
Vision in Stage 3
Aim to become a globally recognized company through the creation of innovative new drugs.
To this end, expand the new drugs business、GE business、infection-related business(prevention, diagnosis and treatment of infections) in an integrated manner to widely support
people’s health.

Become a globally recognizedcompany through the creationof innovative new drugs

GEbusinessNewdrugs
business

Infectionrelated
business

Subcontracted drug manufacturingbusiness

5Overview of New Medium-Term Business Plan
“HOPE 100-Stage 3-”
・Shift to business based on the proposal of solutions andaccelerate the growth of new drug groups.
・ Enhance pipeline to support medium-term growthBusiness Strategy（S）
Strategy・ Strengthen drug discovery capability to realize the creation of
innovative new drugs.
・ Improve cost competitiveness・ Expand overseas revenue

Organization Strategy (O)Organization

Performance Targets （P）
Performance

・ Aim to be the No. 1 company as Best worthwhilenessplace of work

・Growth potential and profitability
・Capital policy and shareholder returns

6Overview of New Medium-Term Business Plan
“HOPE 100-Stage 3-”Strategy

Shift to business based on the proposal of solutions andaccelerate the growth of new drug groups.
●Shift to business based on the proposal of solutions to problems bycombining ethical drugs business and infection-related business andmake Kyorin’s unique contribution to health care workers.
●Accelerate the growth of new drug groups as much as possible(Flutiform, Desalex, Beova, Lasvic, etc.).

●Streamline the healthcare business into business focused on
infection-related fields.

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Solution Provision Activities in Infection Domain
Response to changing environment（MR activities/Medical care provision system）
Rebuild sales structure and enhance details

Shift to business based on
proposal of solutions

Treatment

治療

Lasvic Tablets
KRP-AM1977Y

ソリューション

Doctors/Pharmacists/Nurs
esPrevention

ICT/AST*

MiltonRubystaDiagnosis
GeneSoC・GeneSoC

Total Information Provision* ICT: Infection Control Team
AST: Antimicrobial Stewardship Team

Establish a group-wide sales structure to make
Kyorin’s unique contribution to health care workers.

8Overview of New Medium-Term Business Plan
“HOPE 100-Stage 3-”Strategy

Enhance pipeline to support medium-term growth●Actively invest in enhancements to the pipeline that will contribute to businessperformance in the medium term, with diseases surrounding the three
specialities* of franchise customers, infections, and rare and intractable*Respiratory Medicine, Otolaryngology, Urology
disease as the domains for in-licenshing.

Strengthen drug discovery capability to realize thecreation of innovative new drugs.
●Continue adding new layers to existing priority research domains andtechnologies and taking on new research domains and technologies.
●Pursue R&D based on clarification of healthcare value of new drugcandidates.
●Achieve proof of concept ourselves, as a general rule, and aim forearly global out-licensing.
●Increase diversity by actively acquiring drug discovery seeds.

9Efforts on innovative drug discovery
Cooperation

Watarase Resarch CenterActivX(USA)Open innovation

Open innovation

Academia, Venture

Pharmaceutical companies inJapan and overseas

Selection and Concentration

Priority study area
Kinase / Fibrogenesis study

Drug discovery
Outside thecompany
Theme(Diversity)

Multi-tiered efforts

Novel drug discovery target

Worldwide (world-class drug discovery)
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Overview of New Medium-Term Business Plan
“HOPE 100-Stage 3-”Strategy

Improve cost competitiveness・Increase cost competitiveness of the GE business by improving theefficiency of the GE sales structure.
・Strengthen the ability to create new generics for listing in JP.
・Establish a manufacturing structure to achieve stable supply and low
cost while also enabling expansion of subcontracted manufacturing.
Improve cost competitiveness at KYORIN Pharmaceutical Group Facilities Co., Ltd
Control outsourcing expenses by equalizing the manufacturing capabilities of each factory.
Facilitate efficient operation through the flexible transfer of employees among factories.
Use existing facilities more effectively.
Examine new production base to expand production capacity (Takaoka, Toyama Prefecture).
Noshiro plant (Akita)

Inami plant (Toyama）Shiga plant （Shiga）

Expected effects of reorganization: total cost reduction of approximately 1,000 million yen by 2023.

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Overview of New Medium-Term Business Plan
“HOPE 100-Stage 3-”Strategy

Expand overseas revenue●Expand overseas revenue through the promotion of global
out-licensing.
●Steadily take steps towards direct entry to the Asia market.

12Overview of New Medium-Term Business Plan
“HOPE 100-Stage 3-”
Organization

Aim to be the No. 1 company as Best worthwhilenessplace of work・Train and attract human resources to support our development as anext-generation company, aiming to be the No. 1 place to work
Performance

・Numerical targets
Consolidated net sales: CAGR of at least 5%
Consolidated operating income before deduction of R&D expenses:
At least 20% of net sales（Operating income + R&D expenses）

・Capital policy and shareholder returns
While maintaining the sound financial base, we aim to improve the capitalefficiency through growth investment and returns to shareholders.
We will maintain stable dividends taking DOE (Dividend on Equity ratio)
into account.

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