FY2023 Second Quarter
Business Summary(Year Ending March 31, 2024)（TSE 4539）

ContentsHighlights

2-3

Three Plus 1 Principal Goals

14

Sales and Income

4-5Roadmap

15

Pharmaceutical Sales

6-7

New drug development: Pipelines

16

Sales Distribution by Launch Year

8

In-house Development Pipelines

17-18

Sales of Diagnostics

9

In-licensing Pipelines

Balance Sheet

10

Multifaceted Development of Alkalizer 20

Cash Flow

11

DropScreen

21

Overseas Business

23

Expenditure and Per Share Information 12
Indexes19

131Highlights 1■Sales
Net sales： Down 8.6% YOY, records 45.4% to full year forecast①Pharmaceutical products: Down 13.7% YOY, records 45.7% to full year forecast
Factors contributing to growth in sales:・Growth in products released in the previous fiscal year and contribution from products
released during the current fiscal year
Factors contributing to decline in sales:
・Impact of NHI drug price revisions implemented in April 2023
・Impact of shipping adjustments
・Counter-reaction to sales growth driven by alternative demand during the year-ago period②Diagnostics: Up 46.7% YOY, records 40.4% to full year forecast
・Sales increased significantly due to brisk expansion of the DropScreen allergy screening
kit and reagent■Operating Profit
・Although we made efforts to reduce costs, they were not enough to fully compensate for thedecline in sales, and we consequently recorded an operating loss of ¥298 million

2Highlights 2■Other Profit
・As a result of recording ¥337 million of foreign exchange gains, profit attributable to ownersof parent was ¥31 million■Topics
・DropScreen installations in Japan reached 800 units as of the end of September（At the end of March 2024, we expect to 1,000 installations in Japan.）・Phase I of NC-2800 has finished administration in the current period and is analyzing the data・DFP-17729 and DFP-14323 has finished phase 2 trial and preparing for next stage

3

Sales and Income to Year-on-Year(¥mn)

FY2022

Net sales
Pharmaceutical products segment
Generics, proprietary products
and new drugs
Diagnostics
Others segment
Cost of sales
SG&A expenses
R&D expenses
Operating profit/loss
Ordinary profit
Net profit attributable toowners of parent

FY2023

2Q
Amount16,237% ofSales
100.0

Full Year
Amount31,5592Q
Amount14,837% ofSales
100.02QChange(1,400)

YOY
(%)
(8.6)

15,79897.3

30,543

14,293

96.3(1,505)(9.5)

13,695
1,239
439
11,976
4,093

84.3
7.6
2.7
73.8
25.2

26,1482,780
1,015
23,374
8,425

11,815
1,817
544
11,204
3,931

79.6
12.3
3.7
75.5
26.5

(1,880)578
104(771)(162)(13.7)
46.7
23.8
(6.4)
(4.0)

1,022
167
752

6.3
1.0
4.6

2,419(241)
58

1,006
(298)
10

6.8
－
0.1

(16)
(466)
(741)

(1.6)
－(98.6)

896

5.5

339

31

0.2

(865)

(96.5)

4

Sales and Income to Full Year Forecasts(¥mn)
FY2022

Net sales
Pharmaceutical products segment
Generics, proprietary products
and new drugs
Diagnostics
Others segment
Cost of sales
SG&A expenses
R&D expenses
Operating profit/loss
Ordinary profit
Net profit attributable toowners of parent

FY2023Full Year
Amount31,559% ofSales
100.0

2Q
Amount14,837% ofFull Year
Sales
Forecasts
100.0
32,700－96.3

30,54396.8

14,293

26,1482,780
1,015
23,374
8,425

82.9
8.8
3.2
74.1
26.7

11,815
1,817
544
11,204
3,931

79.6
12.3
3.7
75.5
26.5

25,8704,500－
－
－

45.7
40.4－
－－

2,419(241)
58

7.7－
0.2

1,006(298)106.8－
0.1

2,820
200
100

35.7－
10.6

339

1.1

31

0.2

60

52.5

Progress
Rate (%)
45.4－

5

Pharmaceutical Sales to Year-on-Year
Generics, Proprietary Products and New Drugs
2Q
Amount13,695

Total
Generics
To medical institutions
To other makers*
Proprietary products and new drugs
UralytOthersChemiphar, ODM Generics
TotalGenerics (ODM)(¥mn)
FY2022% ofSales
100.0

FY2023Full YearAmount
26,1482Q
Amount11,815% ofSales
100.0

2Q
Change(1,880)YOY(%)(13.7)

11,146
10,736
409
668
282
385

94.3
－
－
5.7
－
－

(1,863)(1,686)
(177)
(16)
(8)
(8)

(14.3)(13.6)(30.2)
(2.4)
(2.9)
(2.1)

11,559412－－(2,067)(204)(15.2)(33.1)

13,01012,423
586
685
291
394

95.0
－
－
5.0
－
－

24,803
23,698
1,105
1,345
575
769

13,627617－－

25,881
1,078* Includes exports.

6Pharmaceutical Sales to Full Year Forecasts
Generics, Proprietary Products and New Drugs(¥mn)
FY2023

FY2022

Total
Generics
To medical institutions
To other makers*
Proprietary products and new drugs
UralytOthersChemiphar, ODM Generics
TotalGenerics (ODM)

Full Year
Amount26,148

% of
Sales
100.0

2Q
Amount11,815% ofFull Year
Sales
Forecasts
100.0
25,87024,803
23,698
1,105
1,345
575
769

94.9
－
－

94.3
－
－

5.1
－
－

11,146
10,736
409
668
282
385

25,881
1,078－－

11,559412

Progress
Rate (%)
45.7

5.7
－
－

24,64023,830
810
1,230
530
700

45.2
45.150.6
54.4
53.4
55.1

－
－

25,670
1,030

45.0
40.1

7

Sales Distribution by Launch Year(¥mn)
FY2022
2Q
Amount
FY2019 and before
FY2020
FY2021

11,977688
224

FY2023Distrib.
(%)

2Q
Amount

92.1
5.3
1.7

9,824
550
201

Distrib.
(%)

YOY
(%)

Product Lineup

88.1(18.0)

4.9

・Memantine(20.1) ・Celecoxib

1.8

・Eszopiclone(10.3) ・Duloxetine

FY2022

118

0.9

500

4.5・Febuxostat
321.3 ・Esomeprazole

FY2023－－680.6－ ・Azilsartan

Total

13,010100.0

11,146100.0(14.3)

8

Sales of Diagnostics■Sales of Diagnostics（¥mn）

Sales of 2Q FY2023: ¥1,817 million（46.7% YOY, 40.4% to forecast）■Domestic target of DropScreen（Unit of equipment）

At the end of September 2023：
800 units

9Balance Sheet(¥mn)
FY2022
March 31, 2023

FY2023
Sept. 30, 2023

Current assets

33,436

34,677

Non-current assets
Total assets

15,134
48,571

16,19350,870ChangeReason for changes

Cash and deposits
Notes and accounts
receivable―trade, and1,240 Inventories
Construction in progress
1,058 Investment securities
2,298791(412)
1,124 For increased production
1,161
*248

Purchase payables

(72)
116
1,616

Current liabilities
Non-current liabilities
Total net assets

14,766
15,27018,534

14,82917,492
18,548Current portion of long62 term borrowings
2,222 Long-term borrowings
13

Total liabilities and net assets

48,57150,870

2,298

*

*

* Additional installation at Building No. 3 of our Tsukuba Factory.

10

Cash Flow
(¥mn)

(¥mn)

11

Expenditure and Per Share Information
Capital Expenditure and Other(¥mn)
FY2022

Capital expenditure
Depreciation and amortization

FY2023

2Q
AmountFull Year
Amount2Q
AmountYOY(%)

299
737

573
1,500

1,301715

Full Year(Forecast)

Usage
Rate (%)

3,700
1,450

35.2
49.4

334.8
(2.9)

Note to expenditure: We are budgeting for total capital expenditure of ¥3,700 million as we envision additional
installation at Building No. 3 of our Tsukuba Factory to meet the need for increased production.

Per Share Information(¥)
FY2022

Earnings per share

Book value per share
Dividends per share
Dividend payout ratio (%)

FY2023

2Q
AmountFull Year
Amount2Q
Amount248.43
Sept. 30,2022
5,252.48

94.07March 31,
2023
5,130.65

8.72
Sept. 30,2023
5,139.65

0.00
－

50.00
53.2

0.00
－

ChangeFull Year(Forecast)(239.71)

16.62
Full Year
Change(Forecast)－(112.83)
0.00－50.00300.812Indexes
FY2019FY2020

FY2021

FY20222Q FY2023

Cost of sales ratio (%)
SG&A Expense to sales ratio (%)
Operating profit to sales ratio (%)
R&D expenses to sales ratio (%)
EBITDA (millions of yen)

60.5
38.4
1.1
6.8
1,704

63.7
34.5
1.8
6.3
2,099

72.1
25.4
2.5
7.4
2,727

74.1
26.7－

75.5
26.5
－

7.7
1,682

6.8795Current ratio (x)Debt-to-equity ratio (%)
Equity ratio (%)

2.13x
85.2
37.9

2.16x
84.0
38.2

2.00x
78.9
37.4

2.26x
81.0
38.1

2.34x
90.4
36.5

Return on equity (%)
Net income ratio (%)
Total asset turnover (%)
Financial leverage (%)

2.5
1.4
68.4
267.1

2.8
1.6
67.8
258.3

3.8
2.2
67.3
261.2

1.8
1.1
64.4
264.7

0.2
0.2
29.8
268.1

Dividend payout ratio (%)

41.2

36.3

25.7

53.2

－13Three Plus 1 Principal Goals
We striving to increase our capacity to generate earnings through generic drugs and diagnostics
and expand our business domains by leveraging alkalizers and new drugs. Further, we intend tostrengthen our overseas activities to maximize our corporate value and achieve sustainable growth.

Mission 1

Mission 2Generics

Put quality first and strengthen our earnings structure byadded value and improved efficiency.

Diagnostics

Roll out our allergy measurement reagent technologies inJapan and abroad to maximize revenue.

Alkalizers

Ensure multifaceted application of our expertise
regarding alkalization therapy.

Drug discovery

Roll out our unique drugs on a global scale through inhouse drug discovery and in-licensing.

Overseas Business

Apply our three goals to overseas markets and target
sustainable growth.

Mission 3Plus 1

14

Roadmap
Many parallel activities leads to achieve our three plus 1 principal goals.
We show timeline of new methods from FY2021―2030.
GoalActivity

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Expand domestic market. / Target of installation: 2,000 in FY2025. / Aim to achieve continuous business expansion through creating new series of measuring reagents.

Diagnostics

Sequential launch in Europe, the Americas and Asia.

Expand sales of DropScreen
Create new version of equipment for domestic market and additional reagents for abroad.

DFP-14323: Develop anti cancer
agent
Alkalizer

Phase 1/2 forpancreaticcancer

Consider expanding applications
to include additional chronic
kidney disease-related indications

Application,approval andlaunching

Evaluation and preparation./ Phase 3
PMDA
counseling andconsultations.

Examine new potential therapeutic use for chronic kidney disease-relatedindications, move to clinical phase.

Agreements

NC-2800: Conduct phase 1 and 2a with
Sumitomotrials; out-license

Application, approvaland launching

Licensee company will conduct
phase 2b and 3 trials.

Conduct phase 1 and 2a trials in accordance with AMED’s CiCLE program

PharmaLicensee company is developing in China as a treatment for hyperuricemia and gout.

NC-2500: Out licencing activity
by additional indications
Drug
discovery

NC-2600: Out licencing activity
by additional indications.
DFP-14323: Develop anti cancer
agent
Discover new compounds byutilizing AIOverseas
business

Continue licencing activity by another indication.

From export to local development
and production

Realize licencing out targeting chronic cough and contribution to earnings through milestones.

Conduct phase 2

Application,approval andlaunching

Evaluation and preparation./ Phase 3

Searching for and identifying targets, optimize new compound.

ASEAN and China: Sell eleven products to four countries until FY2025.
Middle East and Africa: Multipul application for approval until FY2025

Preclinical phase/
License out

Discovery of new compounds throughthe application of new methods.

Ongoing efforts aimed at expanding our product lineup and the numberof countries in which these products are sold.

15

New drug development: Pipelines
In-house drug development＞ As of September 2023.
Item
NC-2500
NC-2600
NC-2700
NC-2800
DFP-17729
DFP-14323
CalvanDevelopment through alliances

Development by licensees

Function(Target)Preclinical

Phase 1

Phase 2Phase 3

XOR inhibitor(Hyperuricemia, gout)
P2X4 receptor antagonist(Neuropathic pain, chronic cough)URAT1 inhibitor(Hyperuriceia, gout)δ opioid receptor agonist(Depression/Anxiety)
Cancer microenvironment
improving agent (Pancreatic cancer)
Anti cancer agent(Non-small cell lung cancer)
α1β1 blocker(Huntington's disease)16

Pipelines ― In-house Development Pipelines①
NC-2500 (XOR inhibitor)
Stage
TargetFinished phase 1
Hyperuricemia, gout
Feature・Suppresses uric acid production by inhibiting
XOR.
・We confirmed its unique property to lowers
blood uric acid levels gradually in phase 1 trials,
suggesting it may rectify acute attack of gout.

Originator
LicenseeNippon Chemiphar
Nanjing Neiwa Faith Pharmaceutical Co., Ltd.
Note・We signed a licensing agreement with Nanjing Neiwa Faith for gout andhyperuricemia in 2023, and preparations are underway to conduct clinical
trials in China.
・Preliminary data indicates that NC-2500 is effective against
neurodegenerative disorders. We are exploring the possibility of expanding
the application of NC-2500 to include such disorders.

NC-2600 (P2X4 receptor antagonist)
Stage
Finished phase 1

TargetNeuropathic pain and chronic coughFeature・Has a unique mechanism of action that inhibits
P2X4 receptors.

Originator
Joint research including
Chemiphar

Joint developper
N.A.

Note・In vivo tests have confirmed its effectiveness against chronic cough, andwe are exploring the drug’s potential as a therapeutic agent with a newmechanism without side effects such as loss of taste.
・Conducting out-licensing activities.

17

Pipelines ― In-house Development Pipelines②
NC-2700 (URAT 1 inhibitor)
Stage
TargetFinished preclinicalHyperuricemia, goutFeature
・Promotes the excretion of uric acid from thebody by inhibiting the transporter URAT 1.

Originator
Joint developper
Joint research including Chemiphar―Note・Non-clinical studies have shown that it's facilitates the excretion of uricacid but ameliorates aciduria, thereby helping to prevent kidney damage
and kidney stones, which are concerns when uric acid is excreted.

NC-2800 (Delta opioid receptor agonist)
StageTarget
Originator
Joint developper
Phase 1anxiety and depression Joint research including Chemiphar
Sumitomo Pharma Co., Ltd.
FeatureNote・The drug targets δ opioid receptors, and data suggest it has fewer ・AMED’s CiCLE project selected it for public
side effects such as dependence, tolerance, constipation, andfunding and support the development.
respiratory depression than opioid μ receptor agonists like morphine, ・Administration will be completed by September 2023
and strikes an excellent balance between safety and efficacy.
and data will be analyzed.

18

Pipelines ― In-licensing Pipelines
DFP-17729 (Cancer microenvironment improving agent)
Stage
TargetFinished phase 2
Pancreatic cancer
Feature・By alkalizing tumor microenvironments, DFP17729 has been shown to suppress cancer cell
activities and facilitate the efficacy of anticancer
agents.

Originator
Developper
Delta-Fly Pharma, Inc. (DFP)
DFPNote・In 2020 we concluded a license agreement with DFP and acquired
exclusive rights to market in Japan.
・Finished phase 2 and data analysis for efficacy and safety is underway toprepare for the next phase of trials.
・We expect that DFP-17729 could be launched in FY2026 at the earliest.

DFP-14323 (Anti-cancer agent)
Stage
TargetFinished phase 2
Non-small cell lung cancer
Feature・Strengthens the immune response of cancer
patients by binding to aminopeptidase N. In thisway, the substance reduces the dose required ofstandard anticancer drugs, and enhances theirefficacy without increasing the side effects.

Originator
Developper
Delta-Fly Pharma, Inc. (DFP) DFP
Note・In 2022 we concluded a license agreement with DFP and acquired
exclusive rights to market in Japan.
・The phase 2 results were presented at the American Society of ClinicalOncology meeting held in June 2022.
・We expect that DFP-14323 could be launched in FY2027 at the earliest.

19

Multifaceted Development of Alkalizer
We are conducting multi-faceted development using alkalinization-related technologies and expertisethat we cultivated over many years through activities associated with our urine alkalizer, Uralyt.
＞Application of alkalization technologies
Uralyt• Gout• Hyperuricemia• Acidosis
Anti-cancer agent
DFP-17729 (forpancreatic cancer)

Conduct a wide range of activities
utilizing our alkalinization-related
technologies and expertise

For preventing progress ofchronic kidney disease
We are seeking possibility to takeadditional indication utilizing theresults of CKOALA study.

Health foods
We finished trial marketingof one supplement.
Examine that results, weare looking into thepossible development of
new products.

20

DropScreen
We will strongly continue to promote the sales of DropScreen. It facilitate the creation of a newmarket for in-house allergy testing which mainly outsource traditionally.
＞Allergy diagnostics market• In Japan: ¥12 billion• Global: ¥280 billion(North America is the largest.)＞Domestic activities*By in-house research
Measuring device A-1• In June 2023, FUJIFILM Medical Co., Ltd. has started selling DropScreen in partnership.
• From October 2022, we started promoting DropScreen cooperation with our pharmaceuticalsales department.
• At the end of FY2022, we recorded installations of over 500 units. We are targeting
installations of 2,000 units until FY2025.
＞Activities for overseas• We are developing it to overseas market and selecting candidate partner companies.
21

Overseas BusinessWe currently have approval for seven products in four countries: South Korea, China (including
Hong Kong), Thailand and Vietnam. In addition, we have applied for approval for three moreproducts in China and Vietnam. We are looking into marketing our generic drugs in the Middle
East and Africa.
＞Enroll our generic drugs to abroad.
•Nippon Chemiphar Vietnam (NC-VN)'s Rebamipide tablets, which were approved in Vietnam at theend of 2022 received Group 1 status in September 2023, which allows the drug to be sold at thehighest drug price under the country's bidding system. In Vietnam, we have several more drug
products which have been applied or are in process of apply.

•In China, Epinastine tablets were approved in May 2023. Preparations areunderway for release within this fiscal year.

•We conducted market research in the Middle East and Africa using advice
from the International Finance Corporation (IFC) of the World Bank
Group and its network. We are now arrowing down the scope of countries,partners, and specific products.

IFC officers visited factory of NC-VN

22

For further information contact:
Public Relations Department, Nippon Chemiphar Co., Ltd.
E-mail: ir@chemiphar.co.jp

Note about Forward-looking Statements and Forecasts
Statements made in this Highlights of Business Results, with respect to current plans, estimates, strategies and beliefs, and otherstatements of Nippon Chemiphar that are not historical facts are forward-looking statements about the future performance ofNippon Chemiphar.
These statements are based on management’s current assumptions and beliefs in light of the information currently
available to it and involve known and unknown risks and uncertainties. Consequently, undue reliance should not be placed onthese statements.
Nippon Chemiphar cautions the reader that a number of important factors could cause actual results to differ materiallyfrom those discussed in the forward-looking statements.

23