Mitsubishi Tanabe Pharma CorporationBusiness Briefing

November 20, 2018
Masayuki Mitsuka
President & Representative Director

Content of Today’s Presentation

Today’s presentation will cover the progress madeto date with the Medium-Term Management Plan

16-20, the revision of our Management Figures,and our initiatives to accelerate growth.

2Agenda
1. Progress of Medium-Term Management Plan 16-20 andRevision of Fiscal 2020 Numerical Management Objectives① Maximizing Pipeline Value / Accelerating U.S. Business Development② Strengthening IKUYAKU and Marketing / Reforming Operational Productivity③ Gilenya / Invokana Royalty Revenues Forecast④ Fiscal 2020 Management Figures⑤ Shareholder Return Policy

2. Initiatives Targeting Fiscal 2023
① U.S. / European Market② Japanese Market③ Strengthening Our Platform for Growth

3. Open Up the Future① Creating Pharmaceuticals and Healthcare Services with Differentiated Value② Expanding Drug Discovery Opportunities by Leveraging Modalities

4. Targeting the Resolution of Social Issues

31. Progress of Medium-Term Management Plan 16-20
and Revision of Fiscal 2020 Management Figures41. Progress of Medium-Term Management Plan 16-20 and Revision of Fiscal 2020 Management Figures❶Maximizing Pipeline Value /Accelerating U.S. Business Development
Up to fiscal 2018

(includingforecasts)

Maximizing
Pipeline Value

Start of late-stage development for
7 drug candidates

Discovery of 10Late-stage DrugCandidates

CNS: Radicava oral formulation

Up to fiscal 2020
Start of late-stage development for
additional 4 drug candidates
CNS: ND0612, MT-8554

Valbenazine
Immuno-inflammatory: Fasinumab

Diabetes and kidney:

Immuno-inflammatory : MT-7117,MT-2990

Vadadustat
Canaglu (diabetic nephropathy)
Vaccines: Influenza VLP vaccine
Pentavalent vaccine
Accelerating U.S.
BusinessDevelopment
U.S. Sales Target¥80.0 billion

As expected start-up for Radicava
Fiscal 2017: ¥12.3 billion
Fiscal 2018: ¥31.5 billion
Approval in CanadaExpanding Radicava launch regions
North America: ¥40.0 billion+ expanded launch countries
Radicava oral suspension filing

Influenza VLP vaccine:
Filing (adults)

Influenza VLP vaccine :Launch (adults)
Elderly/pediatric filing

ND0612: Development delay inU.S./Europe

ND0612: Steadily advancing P3 trial51. Progress of Medium-Term Management Plan 16-20 and Revision of Fiscal 2020 Management Figures❷Strengthening IKUYAKU and Marketing /Reforming Operational Productivity
Up to fiscal 2018

Strengthening
IKUYAKU andMarketing
Domestic EthicalDrug Revenue¥300.0 billion
New Drug andPriority productrevenue ratio:
75%

Reforming
Operational
Productivity
Cost of Sales/SG&AExpenses¥20.0 billion
Reduction(includingforecasts)

Up to fiscal 2020

Revenue: ¥296.2 billion
Priority products ratio: 70%

Revenue: Approx. ¥300.0 billion
Priority products ratio: up to 75%

Immuno-inflammatory:
Top share among biologics (40%)
Stelara/Rupafin sales

Immuno-inflammatory:
Simponi additional dosage form

Diabetes and kidney diseases:
Canalia launchDiabetes and kidney diseases:
Vadadustat launch
Expanding in the kidney field

Vaccines: Investment in
BIKEN Co., Ltd.

Vaccines:
Strengthening domestic
manufacturing/sales system¥19.0 billion reduction¥30.0 billion reduction(vs. fiscal 2015)(vs. fiscal 2015)6

1. Progress of Medium-Term Management Plan 16-20 and Revision of Fiscal 2020 Management Figures❸Gilenya / Invokana
Royalty Revenues Forecast
Up to fiscal 2018

(includingforecasts)

Up to fiscal 2020

Fiscal 2016: ¥53.7 billion
Fiscal 2017: ¥57.7 billion
Gilenya Royalties

Anticipate a certain level of(+¥3.9 billion YoY)
royalty revenues for a certain
First half fiscal 2018: ¥29.9 billion period of time, depending on(+¥0.4 billion YoY) Gilenya sales
The U.S. Patent and Trademark Office(PTAB*1) upheld Novartis’s U.S.
dosage regimen patent
Sales favorable, revenue increasing
Fiscal 2016: ¥18.8 billion
Fiscal 2017: ¥13.9 billion

Invokana
Royalties

Large-scale clinical trial results
expected to contribute to sales(-¥4.8 billion YoY)
growthFirst half fiscal 2018: ¥4.9 billion
CANVAS (reduce the risk of MACE*2)(-¥2.3 billion YoY)CREDENCE (diabetic nephropathy)
Substantially lower than initialexpectation

OtherOut-licensing
Milestones

MT-1303 milestone revenues
were expected, but the contract
was canceled.

Aiming to select candidates andimplement new partnering
initiative*1 PTAB: Patent Trial and Appeal Board, a part of the U.S. Patent and Trademark Office.
*2 MACE: Major Adverse Cardiovascular Event7

1. Progress of Medium-Term Management Plan 16-20 and Revision of Fiscal 2020 Management Figures➍Fiscal 2020 Management Figures (Revenue)
Despite domestic business expansion and higher Radicava sales,
forecasting ¥430.0 billion in revenue due to lower Invokanaroyalty revenues, delayed M&A contribution, etc.
Unit: ¥ billion

500.0

－30.0
430.0

Revenue

Domestic －10.0
Overseas －30.0

Initial

RR/MS

RR: royalty revenues
MS: milestone payments

Domesticbusiness(including NHI
drug pricerevision)

Transfer ofgenerics
business

NHI:National Health Insurance

Radicava

Delayed M&Acontribution,etc.

Revised8

1. Progress of Medium-Term Management Plan 16-20 and Revision of Fiscal 2020 Management Figures➍Fiscal 2020 Management Figures(Core Operating Profit)

For future growth, maintain R&D investment at a high level andrevise fiscal 2020 core operating profit target to ¥60.0 billion
Extend target date for achieving revenue of ¥500.0 billion and core
operating profit of ¥100.0 billion to three years laterCore operating profit

100.0

Unit: ¥ billion

－30.0
60.0

Domestic +10.0

Initial

RR/MS

Acceleration of Priority Addition ofNHI drug price products,
reformreductionetc.
operational
productivity

Overseas －20.0Radicava

Increase in R&D
expensesand delayed M&A
contribution,etc.

RevisedInitial objective

After revision

Revenue500.0430.0

Core operating profit

100.060.091. Progress of Medium-Term Management Plan 16-20 and Revision of Fiscal 2020 Management Figures❺Shareholder Return Policy Enhance stable, continuous return toshareholders, targeting a consolidated
dividend payout ratio of 50%
 Maintain current amount of dividends(annual dividend of ¥56) during period ofMedium-Term Management Plan 16-2010

2. Initiatives Targeting Fiscal 2023

11

2. Initiatives Targeting Fiscal 2023

Fiscal 2023 Management Figures
The target date for achieving revenue of ¥500.0 billion and core
operating profit of ¥100.0 billion will be extended to three years later.
However, aiming for future growth, we will aggressively implement
R&D/strategic investment
Fiscal 2023

• Revenue• Core operating profit• R&D investment

More than ¥500.0 billion
More than ¥100.0 billion¥80.0 billion(Strategic investment funds of ¥300.0 billion are planned forfiscal 2019 through fiscal 2023)

12

2. Initiatives Targeting Fiscal 2023

Initiatives in U.S/Europe and Japan
Accelerate growth in the U.S. and Europe with 3 growth drivers,
maintain revenue of ¥300.0 billion in Japan through new drug
launches and IKUYAKUU.S. and EuropeJapanNew drugs(partnering)

300.0

Growth drivers

Radicava(including oralsuspension)(70.0 - 100.0)
Influenza VLP
vaccine(40.0 - 60.0)

Vadadustat
PentavalentvaccineExistingdrugs

Fasinumab

ND0612(50.0 - 80.0)
Royalties

Valbenazine
Canaglu
Diabetic
nephropathy(Peak sales (¥ billion))(50.0 - 70.0)

FY18

FY20

FY23

FY18

FY20

FY23

(Peak sales (¥ billion))13

2. Initiatives Targeting Fiscal 2023

➊U.S. and European Markets
Aiming to substantially expand sales by fiscal 2023 with the growthdrivers: Radicava oral suspension, influenza VLP vaccine, and ND0612

Sales in U.S. and Europe

More than 4 times

201820202023(FY)

Radicava oralsuspension(fiscal 2021 launch)
Influenza VLP vaccine
ND0612(fiscal 2020 launch)(fiscal 2022 launch)14

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

Radicava
Maximize revenue by successively expanding to other countries,launching oral suspension (MT-1186) in the U.S. in fiscal 2021
advantage ofRadicava
oralsuspension

 Eliminates extended treatment time for patientsresulting from intravenous infusion administration
 Eliminates limits on number of administration sites
 Development of suspension that is easy for ALS patients
to take

Sales in U.S. and Europe

Oral suspension launch
Oralsuspension¥31.5 billion＋Infusion

2018

2020

Switzerland EU
Expand countries where infusion isavailable(fiscal 2019)

2023

Peak saleslevel¥70.0 billion¥100.0 billion

(FY)

U.S.
Oral suspension launch(fiscal 2021 launch)15

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

Accelerating Development of Radicava Oralsuspension

The oral suspension has a similar pharmacokinetic profile as theintravenous infusion

Oral low-dose

Plasma concentration

Oral high-dose
Intravenous infusion 60mg/60min(approved dosage)

Hour
Plan to announce details at the International Symposium on ALS/MND (Glasgow, Scotland, December 7-8)
＊ALS ：Amyotrophic Lateral Sclerosis
MND：Motor Neuron Disease16

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

Seasonal Influenza Vaccine Market
In the U.S. market, non-egg-based vaccines, including Medicago
VLP vaccines, are expected to record growth
Medicago
VLP vaccinefeatures

 Shorter time for manufacture Matches circulating strains (no egg adaptation)

U.S. seasonal influenza vaccine market forecast
3,000

Medicago VLP vaccines

Sales ($ million)

Non-egg-based vaccines (except VLP)

2,000

1,000

Egg-based vaccines
02018

2023

17

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

Seasonal Influenza VLP Vaccine
P3 clinical trial for adults completed, preparing
for commercialization
 U.S. application (planned for fiscal 2018)
 U.S. sales start (from 2020-2021 season）
 Full-scale supply system through operation of newplant in Quebec (from 2023-2024 season)

Sales in U.S.

Operation of new
Quebec plant

Capital investment
Approx. ¥25.0 billion

North Carolina plant
2.5 million doses to3.5 million doses

2018

Quebec plant
20.0 million
doses

2020

Launch for adults

2023 and later(FY)Peak saleslevel¥40.0 billion ¥60.0 billion

Additional elderly/pediatric indications18

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

Status of ND0612
Revision of development plan to establish a global, unified
product label through simultaneous development in U.S. andEurope, aiming for fiscal 2022 launches in U.S. and Europeanmarkets
Before revision

After revision

Filing in fiscal 2018

Filing in fiscal 2021

U.S.

Simultaneous developmentin U.S. and Europe

PK study
BeyoND trial (long-term safety)

EuropeiNDiGO trial (efficacy)
BeyoND trial (long-term safety)

Peak saleslevel¥50.0 billion¥80.0 billion

Efficacy trial
BeyoND trial (long-term safety)
Designing a clinical trial that can better clarify drug
action and usage method(505(b)(2) pathway)

19

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

Strengths of ND0612
Through continuous subcutaneous administration, the plasma
concentration of levodopa stabilized.
→Improvement of motor complications in Parkinson’s disease patientsInterim results of BeyoND trial (long-term safety)— When ND0612 is administered for 24 hours —“Off” time, when the drug’s effectiveness wears
off and motor function declines(hour)

6“On” time not accompanied by dyskinesia (involuntarymovement) that causes difficulties in daily living(hour)

135432121110

Note: This is interim data, and it could be different from final results accordingly.

20

2. Initiatives Targeting Fiscal 2023 ❶U.S. and European Markets

New Drug Launches
Original drugs from in-house research driving further growth
ProductIndication(Development stage)

Features

Expected peaksales

MT-8554

Vasomotor symptoms,
etc.
(P2)

Non-hormonal treatment with new mechanism of actionthat is expected to eliminate need for hormonal treatment
and offer a high level of safety>¥100.0 billion

MT-7117

Erythropoietic
protoporphyria(P2)

Oral, small-molecule treatment agent for prevention ofphotosensitivity(fast-track designated)>¥20.0 billion

MT-1303

Inflammatory bowel
disease, etc.
(P2)

Next-generation S1P receptor functional antagonist withlow risk of bradycardia manifestation>¥50.0 billion

MT-3995

Nonalcoholicsteatohepatitis, etc.
(P2)

Mineralocorticoid receptor antagonist that is expected tohave limited cardiovascular action and high efficacy.

>¥100.0 billion

MT-3921

Spinal cord injury, etc.
(pre-clinical)

Humanized anti-RGMa antibody that promotes neuronregeneration(Discovered jointly with Osaka University)>¥100.0 billion

RGMa: Repulsive Guidance Molecule a21

2. Initiatives Targeting Fiscal 2023

❷Japanese Market Newly Launched Products
Work to maintain domestic sales of approximately ¥300.0 billion
through new drug launches in 4 priority disease fields(total amount of peak sales: ¥50.0 billion to ¥70.0 billion)
Diabetes and kidney

Immuno-inflammatory

Vadadustat (renal anemia)
Fiscal 2020 launch

Fasinumab (osteoarthritis)
Fiscal 2022 launch

Canaglu (diabetic nephropathy)
Fiscal 2023 additional indication

Simponi (autoinjector)
Fiscal 2019 additional dosage form

VaccinesCNSMT-2355(pentavalent vaccine)
Fiscal 2022 launch

Valbenazine (tardive dyskinesia)
Fiscal 2022 launch222. Initiatives Targeting Fiscal 2023 ❷Japanese Market

Immuno-Inflammatory
Through launch of Simponi / Stelara and Fasinumab, maintain
top share among biologics in the Immuno-inflammatory field

Fasinumab
Osteoarthritis (pain)

Sales

Simponi
StelaraRemicade

2018

2020

2023

Simponi additional dosage
Fasinumab
form (autoinjector)(fiscal 2022 launch)(fiscal 2019)23

2. Initiatives Targeting Fiscal 2023 ❷Japanese Market

Diabetes and Kidney Diseases
Accelerate growth in kidney disease field through launch ofvadadustat and additional indication for Canaglu

Large increase in sales
in kidney disease field

Kidney Vadadustat
diseases Canaglu (diabetic nephropathy)
Kremezin

Sales

Diabetes

2018

Canalia
Canaglu
Tenelia

2020

2023

Vadadustat(fiscal 2020 launch)

Canaglu additionalindication(fiscal 2023 launch)24

2. Initiatives Targeting Fiscal 2023

❸Strengthening Platform for Growth
Work to optimize and increase efficiency of global management
system and to strengthen functions by reallocating management
resources (workforce / technologies / information, etc.)Basic Policy

１R&D System
Reforms

Strengthen/Develop２
Marketingand Production
Systems３

Reinforce
Corporate
Platform
Functions

Countermeasures

Issues➢Reform to highly diverse, agile
research structure

Aggressive use of external
collaboration
Reorganize/consolidate researchfunctions➢ Move toward an organization that puts
priority on U.S. launches➢

Make transition to global development
system➢Reinforce domestic sales capabilities(earnings power)➢

Reinforce supply chain based on
manufacturing capabilities➢

Reinforce global strategy functions➢

Reorganize/consolidate head quarter
functions➢

Reinforce shared business platforms➢

Promotion of the duties efficiency by theRPA utilization➢Track market needs and increase efficiency
through effective use of ICT, including both
MR & supporting staff➢ Increase production efficiency through theuse of new technologies
Reorganize/consolidate production andtechnology functions➢RPA：Robotic Process Automation25

2. Initiatives Targeting Fiscal 2023

Accelerating Growth
Revenue of more than ¥500.0 billion and core operating profitof more than ¥100.0 billion will be achieved in fiscal 2023,
even though the target date for achievement of the objectives
will be extended by three years
Future Growth Drivers

500.0

Radicava (includingoral suspension)

U.S. andEurope

Influenza VLP
VaccineOthers

ND0612
Vadadustat
Pentavalent vaccine

JapanFasinumab
Valbenazine
Canaglu (diabetic nephropathy)

FY18

FY20

FY2326

3. Open Up the Future27

3.Open Up the Future❶Pharmaceuticals and Healthcare Services withDifferentiated Value

Throughout the patient journey, figuring out what the patient isfeeling, thinking, and doing. Taking steps to meet patient needs

Redefining “needs”
Identifying patientneeds at each stage

Neurological disorders
Patient journey

Beforeconsultation

Autoimmune diseases
Analysis of patient
samples at each stage*

 Providing solutions that address needs,including not only main symptoms but also
associated symptoms
 Initiatives targeting the realization ofdefinitive therapy
Diag
nosis

Initialtreatment

Middle stage oftreatment

Later stage oftreatment

Redefining “diseases”
 Analyzing symptoms in detail,identifying
patient segments with remaining needs
 Achieving precision medicine targeting
immunophenotypes of identified patient
segments* Joint research with Keio Research Park, Immune-Mediated Inflammatory Diseases Consortium for Drug Development, etc.

28

3.Open Up the Future❷Expanding Drug Discovery Opportunities byLeveraging Modalities
To meet needs, focusing on the following modalities in addition toongoing focus on small molecules and antibodies
For new modalities, utilize partnering to accelerate the process of meeting needs
Designed Pharmaceuticals(NeuroDerm Ltd.)
ND0612 (Parkinson’s)

Neurology

Digital Medicine
Medical app

Small molecules
Gene Therapy

MT-8554(vasomotor symptoms, etc.)
MT-7117(erythropoietic protoporphyria)

Antibodies

Immunology

MT-3921(spinal cord injury, etc.)
MT-2990(Immuno-inflammatory)

Joint research with
Jichi Medical University
Collategene

Nucleic Acid

MT-5745：STNM01 (Stelic Institute & Co.)
(inflammatory bowel disease)

Vaccines

VLP Vaccines(Medicago)
MT-2271 (influenza)
MT-5625 (rotavirus)
Norovirus

29

4. Targeting the Resolution of Social Issues

30

OUR PHILOSOPHY
We contribute to the healthier lives ofpeople around the world through thecreation of pharmaceuticals.

OUR VISION
We strive to be a global
research-driven pharmaceuticalcompany that is trusted by communities.

31

Targeting the Resolution of Social Issues
We will work to fulfill our social duty by taking steps to address
seven material issues (materiality) and will strive to contribute to
the extension of healthy lifespan.

Material Issues
Pharmaceuticals
and healthcare
services withdifferentiatedvalue
Appropriate useof products

Stakeholder
engagement

Socialcontribution
activities forhealthReliable products
and sustainablesupplyEthics, fairness
and sincerity inbusinesspractices

Extend healthy lifespanFulfill our social duty

Employee health,diversity andinclusion

SDGs: Sustainable Development Goals
Adopted by the UN for achievement by 2030.

32

3333

34

Appendix

35

Fiscal 2020: Management Figures¥ billion
Fiscal 2020: Initial

Fiscal 2020: revised

Revenue

500.0

430.0

Japan

300.0

300.0

U.S.

80.0

40.0

Royalty/milestone revenues

80.0

50.0

Others40.0

40.0Core operating profit

100.0

60.0

Net profit attributable toowners of the Company

70.0

40.0

R&D expenses

80.0

85.0

Overseas sales ratio

40%

30%

R&D investment

400.0

400.0

More than¥200.0(currently, ¥130.0)

U.S. strategic investment

Fiscal 2016 tofiscal 202036

DividendsEnhance stable, continuous return to shareholders, targeting a consolidated dividend payout
ratio of 50%



Maintain current level of dividends (annual dividend of ¥56) during period of Medium-Term
Management Plan 16-20
Commemorative dividend
Annual dividend
Dividend payout ratio
Dividend payout ratio (prior to amortization of goodwill)

(¥)

80

45.7

70

40.5

47.6

80.0

63.9 66.8

59.6
49.4（％）

60.0

40.9

40.0

38.8
1060

Commemorative
dividend

20.00.0

50-20.052

404042

FY 13

FY 145656565646-40.0-60.030-80.0

Japan GAAP

FY 15

FY 16

FY 17

FY 18

FY 19

FY 20

forecast

plan

plan

IFRS37