Outline of Consolidated Financial Results
for the 2nd Quarter Ended September 30, 2023
November 15, 2023
NIPPON SHINYAKU CO., LTD.

2Q FY2023 Summary◆ Revenue：

73,314 million yen（ + 3.1% ）◆ Operating profit：

20,878 million yen（ + 9.0% ）◆ Profit before tax：

21,146 million yen（ + 9.0% ）Profit attributable：

16,176 million yen（ + 6.3% ）◆ to owners of parent
Revenue

Operating profit

Profit before tax

Profit attributable toowners of parent（Million yen）

2

Segmental Review - Pharmaceuticals 60,499-3,020
Revenues from the licensingof industrial property rights+4,110-601+489

60,988（Million yen）
Ethical drugs
Revenues from the licensing ofindustrial property rights

Profit in co-promotion
Revenue

1H FY2022

YoY Change

1H FY2023

Results

Ratio

Results

Ratio

Amt

%

41,02367.8%

38,00362.3%-3,020-7.4%

14,46923.9%18,58030.5%+4,110+28.4%

5,005

8.3%

4,404

7.2%

-601

-12.0%

60,499100.0%

60,988100.0%

+489

+0.8%

Despite the effect of price revision by MHLW* and generic products, revenue of consolidated
pharmaceuticals segment increased by 0.8% due to increase of sales of “Viltepso” and “Uptravi”,
and royalty revenue from Uptravi’s overseas sales.
*MHLW : Ministry of Health, Labour and Welfare3Segmental Review - Functional Food 10,637+1,127
+97
+315
+147
-0
+1,68812,325（Million yen）

1H FY2022

1H FY2023

YoY Change

Results

Ratio

Results

Ratio

Amt

%

Protein preparations

7,360

69.2%

8,487

68.9%

+1,127+15.3%

Preservatives

1,424

13.4%

1,522

12.3%

+97

+6.9%

Supplements

671

6.3%

987

8.0%

+315

+46.9%

Health food ingredients

511

4.8%

659

5.4%

+147

+28.9%

Others

668

6.3%

668

5.4%

-0

-0.1%

Revenue

10,637100.0%

12,325100.0%+1,688+15.9%

Revenue of consolidated functional food segment increased by 15.9% throughsales increase of protein preparations and supplements.
4Operating profit
19,161+2,178+2,671-668-2,825-209+570+1,716

20,878（Million yen）
Revenue

1H FY2022
Results

1H FY2023

Ratio

Results

YoY Change

Ratio

Amt

%

71,136100.0%

73,314100.0%+2,178+3.1%(Pharmaceuticals)(60,499)(85.0%)(60,988)(83.2%)(+489)(+0.8%)(Functional Food)(10,637)(15.0%)(12,325)(16.8%)(+1,688)(+15.9%)

Cost of sales

27,991

39.3%

25,32034.5%-2,671-9.5%

SG&A expenses

16,28422.9%

16,952

23.1%

+668

+4.1%

R&D expenses

9,691

13.6%

12,51717.1%+2,825+29.2%

Other income

2,805

3.9%

2,596

3.5%

-209

-7.5%

(2,521)(3.5%)(2,261)(3.1%)(-260)(-10.3%)

Other expenses

813

1.2%

242

0.3%

-570

-70.2%

Operating profit

19,161

26.9%

20,87828.5%+1,716+9.0%(Foreign exchange gain)

5

Profit attributable to owners of parent
15,222+1,716
+28

+2
-793

+954

16,176（Million yen）

1H FY2022

1H FY2023

Results

Results

YoY Change
Amt%

Operating profit

19,161

20,878+1,716+9.0%

Finance income

297

326

+28

+9.5%

Finance costs

60

57

-2

-4.5%

Profit before tax

19,39821,146+1,747+9.0%

Income tax expense, etc

4,176

4,970

+793

+19.0%

15,222

16,176

+954

+6.3%

Profit attributable toowners of parent

6

Business Forecast for FY2023
FY2022(Million yen)

FY2023

YoY Change

1H

FY

1H

FY

Results

Results

Results

Forecasts

71,136

144,175

73,314(Pharmaceuticals)(60,499)(121,988)(Functional Food)(10,637)

Operating profit
Profit before tax

Revenue

Profit attributable toowners of parent

Exchange rate
(JPY)
1USD

Amt

％

147,000+2,825+2.0%(60,988)(125,000)+3,012+2.5%(22,187)(12,325)(22,000)

-187

-0.8%

19,161

30,04920,87833,500+3,451+11.5%

19,39830,48921,14634,000+3,511+11.5%

15,222

22,812

16,17626,000+3,188+14.0%

1H

FY

1H

2H

Actual rate

Actual rate

Actual rate

Forecast rate

134.0円

135.5円

141.0円

140.0円FY2022

FY2023

We expect royalty revenue from Uptravi’s overseas sales and revenue ofconsolidated functional food segment to exceed the previous projection.
Therefore, we have revised our annual forecasts of Revenue, Operating profit,
Profit before tax, and Profit attributable to owners of parent.
7Segmental Forecast - Pharmaceuticals FY2022(Million yen)

Ethical drugs
Revenues from the licensing ofindustrial property rights

Profit in co-promotion
Revenue

FY2023

YoY Change

1H

FY

1H

FY

Results

Results

Results

Forecasts

41,02381,75338,003

14,46930,714

5,005
60,499Amt%

78,200-3,553-4.3%

18,58038,000+7,286+23.7%

9,520

4,404

8,800

-720

-7.6%

121,988

60,988125,000+3,012+2.5%

Despite the effect of price revision by MHLW* and launch of genericproducts, we predict revenue of consolidated pharmaceuticals segment toincrease, due to increase of sales of “Viltepso” and “Uptravi”, and royalty
revenue from Uptravi’s overseas sales.

8Segmental Forecast - Functional Food FY2022

FY2023

YoY Change

1H

FY

1H

FY

Results

Results

Results

Forecasts

Protein preparations

7,360

15,3838,487

14,800

-583

-3.8%

Preservatives

1,424

2,905

1,522

3,000

+95

+3.3%

Supplements

671

1,428

987

1,900

+472

+33.0%

Health food ingredients

511

1,118

659

1,100

-18

-1.6%

Others

668

1,351

668

1,200

-151

-11.2%

Revenue

10,63722,187

12,32522,000

-187

-0.8%

(Million yen)Amt%

We predict revenue of consolidated functional food segment todecrease due to the effect of sales price reduction of several products.

9Forecast of Consolidated Statements of Income
FY2022(Million yen)

Revenue

FY2023

YoY Change

1H

FY

1H

FY

Results

Results

Results

Forecasts

Amt%

71,136

144,175

73,314147,000+2,825+2.0%(Pharmaceuticals)(60,499)(121,988)(60,988)(125,000)(+3,012)(+2.5%)(Functional Food)(10,637)(22,187)(12,325)(22,000)(-187)(-0.8%)

Cost of sales

27,991

55,98025,32049,000-6,980-12.5%

SG&A expenses

16,28434,812

16,95236,000+1,188+3.4%

R&D expenses

9,691

24,135

12,51729,500+5,365+22.2%

Other income

2,805

1,908

2,596

1,400

-508

-26.7%

Other expenses

813

1,106

242

400

-706

-63.8%

Operating profit

19,161

30,04920,87833,500+3,451+11.5%

Finance income

297

575

326

600

+25

+4.3%

Finance costs

60

136

57

100

-36

-26.5%

Profit before tax

19,39830,48921,14634,000+3,511+11.5%

Income tax expense, etc

4,176

7,676

4,970

8,000

+324

+4.2%

15,222

22,812

16,17626,000+3,188+14.0%

Profit attributable to ownersof parent

10Dividends Forecast
FY2022
FY2022

FY2023
FY2023

InterimInterim

¥57
¥57

¥62
¥62

AnnualAnnual

¥114
¥114

¥124
¥124

Basic
earnings
Basicearningsper
pershareshare¥338.70¥338.70¥386.03¥386.03

Payoutratio(consolidated)
Payoutratio(consolidated)

33.7％
％
33.7

32.1
32.1％％

Dividends
per
Dividends
pershare
share*Interim dividend for FY2023 is raised from 60 yen to 62 yen per share*Annual dividend for FY2023 is raised from 120 yen to 124 yen per share

(Yen)

124
110

114

99
86
AnnualInterim11(estimated)

R&D Pipeline

R&D Pipeline (Domestic)
Code No.
(Generic name)<Origin>Application
type

Indications

NME

Duchenne muscular dystrophy<in-house>
NS-87（daunorubicin /cytarabine）<in-license>New
combination

ZX008(fenfluraminehydrochloride)<Distribution

Preparation

PI/IIfor PI/IIPI

NS-065/NCNP-01(viltolarsen)

PI

Preparation

PII

for PIIPIIPIII

NDA filing

LaunchPIIPIII
in progress

High-risk acute myeloid
leukemia

Lennox-Gastaut syndromeNew
indication

CDKL5 deficiency disorderpartnership>

Lupus nephritis

GA101（obinutuzumab）<in-license>

New
indication

Pediatric nephrotic syndrome

Extra renal lupus

New
NS-304indication

Arteriosclerosis obliterans(selexipag)<in-house>
New dose

Pediatric pulmonary arterial
hypertension： Changes from 1st Quarter FY2023

13

R&D Pipeline (Domestic)
Code No.
(Generic name)<Origin>Application
type

Indications

PI

Preparation
for PI/II

PI/II

Preparation
for PIIPIIPIII

NDA filing

LaunchEndometriosis
NS-580<in-house>

NME

Chronic prostatitis / Chronic
pelvic pain syndrome
NS-089/NCNP-02(brogidirsen)

NME

Duchenne muscular dystrophy<in-house>

NS-229<in-house>

NME

NS-401(tagraxofusp)

NME<in-license>

NS-050/NCNP-03<in-house>

NME

NS-917(radgocitabine)

NME<in-license>

NS-161<in-house>

NS-025<in-house>

NS-863<in-house>

Eosinophilic granulomatosis
with polyangiitis

Blastic plasmacytoid dendritic
cell neoplasm

Duchenne muscular dystrophy

Relapsed/refractory acute
myeloid leukemia

NME

Inflammatory diseases

NME

Urological diseases

NME

Cardiovascular diseases： Changes from 1st Quarter FY2023

14

R&D Pipeline (Overseas)
Code No.
(Generic name)<Origin>Application
type

Indications

PI

Preparation
for PI/II

PI/II

Preparation
for PIIPIIPIII

NDA filing

LaunchNS-065/NCNP-01(viltolarsen)

NME

Duchenne muscular dystrophy

NME

Duchenne muscular dystrophy

NME

Myelofibrosis

NME

Duchenne muscular dystrophy

PIII
in progress<in-house>

CAP-1002<partnership>

NS-018(ilginatinib)<in-house>
NS-089/NCNP-02(brogidirsen)<in-house>

NS-229<in-house>

NS-050/NCNP-03<in-house>

NME

NME

Eosinophilic granulomatosis
with polyangiitis

Duchenne muscular dystrophy

15Reference Materials

Consolidated Balance Sheet
End of

End of 1H

YoY Change

End of

End of 1H

YoY Change

FY2022

FY2023Amt

FY2022

FY2023

Amt(Million yen)

Assets237,451

249,499+12,047

Current assets

157,873

163,459+5,585

Non-current assets

79,57886,040+6,462

Liabilities

41,51837,725-3,792Current liabilities

35,18332,109-3,074Non-current liabilities

6,334

5,616

-718

195,933

211,774+15,840

237,451

249,499+12,047

EquityTotal assets

237,451

249,499+12,047＝Assets＝Total liabilities
and equity＝Liabilities and Equity＝Cash and cash equivalents+2,807

Income tax payable-2,109Trade and other receivables+4,038Retained earnings＋12,373

Other financial assets+6,14217

Consolidated Statements of Cash Flows（Million yen）

1H FY2022

1H FY2023

YoY Change

Results

Results

Amt

Operating activities

12,817

7,938-4,879Investing activities-5,882-1,693+4,189Financing activities-4,911-4,685+226

63,44962,855-593

Cash and cash equivalents
at end of period+12,817+7,938-5,88263,44960,566

Cash andcash equivalents
at beginning of period-1,693-4,911

OperatingCF

InvestingCF

FinancingCF

Cash andcash equivalents
at end of period-4,68562,85560,047

Cash andcash equivalents
at beginning of period

OperatingCF

InvestingCF

FinancingCF

Cash andcash equivalents
at end of period18NS-065/NCNP-01 (viltolarsen)- Treatment for Duchenne muscular dystrophy Development Phase

・Japan : Launch・USA : Launch・Global : PIII in progress

OriginCo-development :National Center of Neurology and Psychiatry

Development

Nippon Shinyaku

Mechanism ofactionExon 53 Skipping

Indication

Duchenne muscular dystrophy

Dosage form

Injection

Feature・Improvement in symptoms and prevention of the diseaseprogression by recovery of dystrophin protein expression・Morpholino based oligonucleotide with possible highsafety profile and maximized activity

19

NS-87 (daunorubicin / cytarabine)- Treatment for high-risk acute myeloid leukemia Development Phase

Japan : NDA filing

Origin[Mar. 2017]
Licensed-in from: Jazz Pharmaceuticals plc

Development

Nippon Shinyaku

Mechanism of action

Liposomal combination of daunorubicin and cytarabine

Indication

High-risk acute myeloid leukemia (High-risk AML)

Dosage form

Injection

Feature・NS-87 is the first therapy for the treatment ofhigh-risk AML in Japan・Accumulation of NS-87 in the bone marrow enhance
antitumor activity and reduces adverse events.

20

ZX008 (fenfluramine hydrochloride)- Treatment for rare intractable epilepsy Development Phase

Japan : Launch (Dravet syndrome)
Japan : NDA filing（Lennox-Gastaut syndrome)
Japan：PIII (CDKL5 deficiency disorder)

Origin[Mar. 2019] Distribution partnership in Japan : UCB S.A.
(former Zogenix, Inc.)

Development

UCB S.A. (former Zogenix, Inc.)

Mechanism of action

5-HT (serotonin) releaser with agonist activity at several
5-HT receptors

Indication

Dravet syndrome
Lennox-Gastaut syndrome
CDKL5 deficiency disorder

Dosage form

Oral liquid agent

Feature・Effective for Dravet syndrome, Lennox-Gastautsyndrome and CDKL5 deficiency disorder patients
refractory to existing treatment options
・ZX008 can be used in combination with other drugs, asstandard of care for intractable epilepsy based on
combination therapy
21

CAP-1002- Treatment for Duchenne muscular dystrophy Development Phase

USA : PIII

Origin[Jan. 2022] Partnership for commercialization in the US[Feb. 2023] Partnership for commercialization in Japan: Capricor Therapeutics, Inc.

Development

Capricor Therapeutics, Inc.

Mechanism ofactionExosomes released from cardiosphere-derived cells

Indication

Duchenne muscular dystrophy

Dosage form

Injection

Feature・Exosomes released from this drug are expected to reduce
oxidative stress, inflammation, fibrosis, and increase cell
energy and myocyte generation, resulting in improvementof motor and cardiac functions
・Its broad applicability makes it suitable for patients
regardless of the type of genetic mutation
22

GA101 (Obinutuzumab)- Treatment for lupus nephritis, pediatric nephrotic syndrome, extra renal lupus -Development Phase

Japan：PIII（LN）
Global : PIII（PNS）
Japan：PIII（ERL）

Origin[Nov. 2012]
Licensed-in from : Chugai Pharmaceutical Co., Ltd.

Development

Co-development : Chugai Pharmaceutical Co., Ltd.

Mechanism ofactionAnti-CD20 monoclonal antibody

Indication

Lupus nephritis (LN)
Pediatric nephrotic syndrome (PNS)
Extra renal lupus (ERL)

Dosage form

Injection

FeatureAnti-CD20 monoclonal antibody, increased antibodydependent cellular cytotoxicity (ADCC) activity and direct
cytotoxicity

18

NS-304 (selexipag)
for pulmonary
hypertension,-- Treatment
Treatment
for Luhritis- arteriosclerosis obliterans Development Phase

Japan : PIIb（ASO）
Japan : PII （Pediatric PAH）

OriginNippon Shinyaku

Development

・Nippon Shinyaku（ASO）
・Co-development :Janssen Pharmaceutical K.K. (Pediatric PAH)

Mechanism of action

Selective IP receptor agonist

Indication

・Arteriosclerosis obliterans (ASO)
・Pediatric pulmonary arterial hypertension (Pediatric
PAH)

Dosage form

TabletFeatureLong-acting oral drug24

NS-580
for endometriosis,
Chronic prostatitis/Chronic
pelvic pain syndrome -- Treatment
Treatment
for Luhritis
Development Phase

Japan : PIIb (Endometriosis)
Japan : PIIa (CP/CPPS)

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

Inhibition of membrane-associated prostaglandin E
synthase-1

Indication

Endometriosis
Chronic prostatitis/Chronic pelvic pain syndrome(CP/CPPS)

Dosage form

Oral agent

Feature・Treatment for endometriosis without hormonal effectand with possible analgesic potency
・Treatment for CP/CPPS with high safety and long-term
pain control25

NS-018 (ilginatinib)- Treatment for myelofibrosis Development Phase

Global : PII

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

JAK2 inhibitor

Indication

Myelofibrosis

Dosage form

TabletFeature・Potent and highly selective JAK2 inhibitor
・High efficacy and safety are expected for myelofibrosis(MF) patients with low platelet count26

NS-089/NCNP-02（brogidirsen）- Treatment for Duchenne muscular dystrophy Development Phase

Global：Preparation for PII

OriginCo-development :National Center of Neurology and Psychiatry

Development

Nippon Shinyaku

Mechanism ofactionExon 44 Skipping

Indication

Duchenne muscular dystrophy

Dosage form

Injection

Feature・Improvement in symptoms and prevention of the diseaseprogression by recovery of dystrophin protein expression・Morpholino based oligonucleotide with possible highsafety profile and maximized activity27

NS-229- Treatment for Eosinophilic granulomatosis with polyangiitis Development Phase

Global：Preparation for PII

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action

JAK1 inhibitor

Indication

Eosinophilic granulomatosis with polyangiitis （EGPA)

Dosage form

Oral agent

Feature・Potent and highly selective JAK1 inhibitor
・High efficacy and good safety profiles are expected in
the treatment for EGPA28

NS-401 (tagraxofusp)- Treatment for blastic plasmacytoid dendritic cell neoplasm Development Phase

Japan : PI/II

Origin[Mar. 2021]
Licensed-in from: The Menarini Group

Development

Nippon Shinyaku

Mechanism of action

Induction apoptosis of cells by inhibiting protein synthesisby specifically targeting cancer cells expressing CD123

Indication

Blastic plasmacytoid dendritic cell neoplasm (BPDCN)

Dosage form

Injection

Feature・Composed of diphtheria toxin (DT) fusion protein andrecombinant human IL-3
・Novel targeted therapy directed to CD123 on tumor cells
・IL-3 binds to CD123-expressing tumor cells and delivers
the cytotoxic diphtheria toxin to the cells, resulting in
the blockage of protein synthesis in the cell and causing
cell death in CD123-expressing cells
29NS-050/NCNP-03- Treatment for Duchenne muscular dystrophy Development Phase

Global：Preparation for PI/II

OriginCo-development :National Center of Neurology and Psychiatry

Development

Nippon Shinyaku

Mechanism ofactionExon 50 Skipping

Indication

Duchenne muscular dystrophy

Dosage form

Injection

Feature・Improvement in symptoms and prevention of the diseaseprogression by recovery of dystrophin protein expression・Morpholino based oligonucleotide with possible highsafety profile and maximized activity30

NS-917 (radgocitabine)- Treatment for relapsed or refractory acute myeloid leukemia Development Phase

Japan : PI

Origin[Mar. 2017]
Licensed-in from : Delta-Fly Pharma, Inc.

Development

Nippon Shinyaku

Mechanism of action

DNA strand-break by incorporating itself into DNA

Indication

Relapsed or refractory (r/r) acute myeloid leukemia (AML)

Dosage form

Injection

Feature・Significant anti-leukemic activity with uniquemechanism of action from other nucleoside analogs at
low dose continuous infusion
・Tolerable safety profile available to elderly patients with
r/r AML31

NS-161- Treatment for inflammatory diseases Development Phase

Japan : PI

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action－

Indication

Inflammatory diseases (to be determined)

Dosage form

Oral agent

Feature－32

NS-025- Treatment for urological diseases Development Phase

Japan : PI

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action－

Indication

Urological diseases (to be determined)

Dosage form

Oral agent

Feature－33

NS-863- Treatment for cardiovascular diseases Development Phase

Japan : PI

OriginNippon Shinyaku

Development

Nippon Shinyaku

Mechanism of action－

Indication

Cardiovascular diseases (to be determined)

Dosage form

Oral agent

Feature－34

Safe Harbor Statement• Materials and information provided during this presentation may contain so-called “forward-looking
statements.” These statements are based on current expectations, forecasts and assumptions thatare subject to risks and uncertainties which could cause actual outcomes and results to differ materiallyfrom these statements.
• Risks and uncertainties include general industry and market conditions, and general domestic andinternational economic conditions such as interest rate and currency exchange fluctuations. Risks anduncertainties particularly apply with respect to product-related forward-looking statements. Product risks
and uncertainties include, but are not limited to, technological advances and patents attained bycompetitors; challenges inherent in new product development, including completion or failure of clinical
trials; claims and concerns about product safety and efficacy; regulatory agency’s examination, obtaining
regulatory approvals; domestic and foreign social security reforms; trends toward healthcare cost
containment; and governmental laws and regulations affecting domestic and foreign operations.
• Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, which
include, but are not limited to, inability to build production capacity to meet demand, unavailability of raw
materials, and competition with others.
• The Company disclaims any intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
• This English presentation was translated from the original Japanese version.
In the event of any inconsistency between the statements in the two versions, the statements in theJapanese version shall prevail.

Nippon Shinyaku Co., Ltd.
IR Meeting (2Q FY2023)
November 15, 2023

Presentation
Nakai: I am Toru Nakai, President of Nippon Shinyaku, Co., Ltd.
Thank you very much for participating in our presentation for the Q2 financial results for FY2023. I appreciate
it very much.
Today, I would like to report on our business performance for Q2 for FY2023 and our full-year business
forecast for FY2023, and Mr. Takagaki will explain to you the progress of our R&D items.

As an overview of our performance in Q2 of FY2023, we reported consolidated revenue of JPY73,314 million,
operating profit of JPY20,878 million, profit before income tax of JPY21,146 million, and profit attributable toowners of parent of JPY16,176 million.

In the pharmaceuticals business, consolidated net sales increased 0.8% YoY to JPY60,988 million despite theeffect of price revision by MHLW and generic products, due to growth in sales of Viltepso, a treatment for
Duchenne muscular dystrophy, and Uptravi, a treatment for pulmonary arterial hypertension and chronic
thromboembolic pulmonary hypertension, and royalty income from overseas sales of Uptravi.

In the functional food business, sales of protein preparations and supplements increased, and consolidated
net sales in the functional food business increased 15.9% YoY to JPY12,325 million.

Next, as for operating expenses, the cost to sales ratio improved by 4.8 percentage points YoY to 34.5%, due
to factors such as the sales mix, including an increase in industrial property and other revenues.
SG&A expenses increased 4.1% YoY to JPY16,952 million, mainly due to increased sales expenses in the US
and promotional commission fees due to increased domestic sales of Uptravi.
R&D expenses totaled JPY12,517 million, up 29.2% YoY, mainly due to an increase in contract researchexpenses and investigational drug manufacturing costs.
Other income totaled JPY2,596 million, mainly due to foreign exchange gains.
As a result, operating profit was JPY20,878 million, up 9.0% YoY.

Profit before tax was JPY21,146 million, up 9% YoY, and profit attributable to owners of parent was JPY16,176
million, up 6.3% YoY.

As announced on November 13, we have revised our consolidated forecast for FY2023, which was announced
in May.
Consolidated revenue was revised from JPY145,000 million to JPY147,000 million because royalty income
from overseas sales of Uptravi and the functional food business are expected to exceed the initial forecast.
As for consolidated profit, we revised operating profit from JPY32,000 million to JPY33,500 million, profit
before tax from JPY32,500 million to JPY34,000 million and profit attributable to owners of parent from
JPY25,000 million to JPY26,000 million.
The exchange rate assumption was changed from JPY130 to USD1 at the beginning of the period to JPY140 to
USD1.

In the pharmaceutical business, we forecast revenue of JPY12,500 million, an increase of 2.5% YoY.
Despite the effect of price revision by MHLW and launch of generic products, we expect an increase in revenue
due to growth in sales of Viltepso and Uptravi, as well as growth in royalty revenue from overseas sales ofUptravi.

In the functional food business, revenue is expected to be JPY22,000 million, down 0.8% YoY due to the impactof lower sales prices of some products.

Next, regarding operating expenses, the cost to sales ratio is expected to be 33.3%, an improvement of 5.5
percentage points YoY.
SG&A expenses are expected to be JPY36,000 million, and R&D expenses are expected to be JPY29,500 million.
As a result, operating profit is expected to be JPY33,500 million and profit before tax is expected to be
JPY34,000 million.
Profit attributable to owners of parent is expected to be JPY26,000 million, an increase from the previous year.

As for dividends, we plan to pay dividends with a consolidated payout ratio of around 35% as a performancelinked dividend for the period of the Sixth Mid-Term Management Plan.
In accordance with this dividend policy, we plan to increase the interim dividend by JPY2 per share to JPY62
per share, and the annual dividend forecast by JPY4 per share to JPY124 per share for FY2023, as profit
attributable to owners of parent is expected to exceed the initial forecast.
This concludes my presentation for the financial results for Q2 for FY2023 and the forecast for FY2023.

Takagaki: I will continue with the progress of R&D items.
First, I would like to explain the development situation in Japan.
Duchenne muscular dystrophy treatment drug NS-065/NCNP-01, Viltepso that skips exon 53, was launched in
May 2020 and is currently in global Phase III trials.
The Phase I/II study for NS-87, a treatment for high-risk acute myeloid leukemia, was completed and an
application for approval was filed in June 2023.
In June 2023, UCB submitted a partial change application for ZX008, a drug for the treatment of intractableepilepsy, for an additional indication for Lennox-Gastaut syndrome. In addition, UCB is conducting a Phase III
study for CDKL5 deficiency starting in July 2023.
For GA101, a Phase Ill study for lupus nephritis and a Phase Ill study for pediatric nephrotic syndrome arebeing conducted in collaboration with Chugai Pharmaceutical Co. In addition, a Phase Ill study for extra renal
lupus was initiated in October 2023.
A Phase IIb study of NS-304 for arteriosclerosis obliterans is being conducted by Nippon Shinyaku on its own.
In addition, a Phase II study for pediatric pulmonary arterial hypertension is underway in collaboration with
Janssen Pharmaceutical K.K.

Phase IIb study is underway for NS-580, an endometriosis treatment. In addition, a Phase Ila study for chronic
prostatitis and chronic pelvic pain syndrome was initiated in June 2023.
A global Phase II study for NS-089/NCNP-02, a treatment for Duchenne muscular dystrophy that skips exon
44, is in preparation.
A global Phase II study for NS-229, a treatment for eosinophilic granulomatosis with polyangiitis, is inpreparation.
A Phase I/II study of NS-401 for the treatment of blastic plasmacytoid dendritic cell neoplasm is underway.
A global Phase I/II study for NS-050/NCNP-03, a treatment for Duchenne muscular dystrophy that skips exon
50, is in preparation.
Phase I trials for NS-917 for the treatment of relapsed/refractory acute myeloid leukemia is underway.
Phase I trials are underway for NS-161, which is being developed for the treatment of inflammatory diseases,
and for NS-025, which is being developed for the treatment of urological diseases.
For NS-863, which is under development for the treatment of cardiovascular diseases, Phase l trials were
initiated in August 2023.

Next, I will explain the status of overseas development.
NS-065/NCNP-01, Viltepso, for the treatment of Duchenne muscular dystrophy, was launched in the US in
August 2020 and are currently in a global Phase III study.
We have signed a partnership agreement for commercialization for CAP-1002 for the treatment of Duchenne
muscular dystrophy with Capricor Therapeutics, Inc. in the US in January 2022 and in Japan in February 2023.
Capricor Therapeutics, Inc. is currently conducting Phase III trials in the US.
A global Phase II study for NS-018, a drug for myelofibrosis, is underway.
We are currently preparing global trials for NS-089/NCNP-02, NS-229 and NS-050/NCNP-03.
This concludes the overview of our R&D activities.

FY2023 Q2 Financial Results Briefing Q&A (Summary)

Held on November 15, 2023
NO

Questions

Answers

1

In the U.S., sales of Viltepso in the second quarter are lower than in the first quarter in US dollars. Did the timing

The number of cases for Viltepso is steadily increasing, but the shipments at the end of September were delayed. Theof the shipment, the quick start program, and ELEVIDYS have an impact on the sales of Viltepso in the second

shipments were confirmed in October. However, we lowered its full-year forecast for dollar-based sales of Viltepso

quarter?

slightly. The number of patients has been increasing steadily, but it has not kept up with the initial assumption slightly.
The accelerated approval for Sarepta's gene therapy, ELEVIDYS, at the end of June and they released topline resultsfrom P3 study of ELEVIDYS at the end of October. There are few patients who can be treated with ELEVIDYS by theapproval in June, and the doctors cannot decide the treatment plan with its topline results. That is the reason for theslow pace of patient acquisition of Viltepso. In addition, the quick start program was launched in late June. We initiallyexplained that this would accelerate the increase of patients switching from the competitor’s drug, but we have actuallyacquired the patients switching from it without using the quick start program. The U.S. team carefully introduces thequick start program because if we emphasize quick start program and acquire patients, this can be prescribing guidance.
We would like the patients to switch to Viltepso due to its efficacy. After they making the decision to use our drug, we
explain the quick start program as a support to fill the insurance gap. If they do not need it, they normally switch without
it. Previously I may have explained the quick start program will be a catalyst for future sales, but I would like to correct
what I said before. Also, to the question of whether gene therapy has an impact on Viltepso, our answer is that it could
have an impact in terms of acquiring the patients which has been slightly slower than expected at the beginning of thisfiscal year but there is no patient switching from Viltepso to competitor’s drug.

2

Estimates from Sarepta's sales suggest that more than 20 people had undergone the gene therapy. Does theYour understanding is correct. It is not clear whether the gene therapy will be fully or partially approved. The medical

confusion of medical sites continue until how FDA judges topline results for ELEVIDYS become clear?

sites are currently reviewing treatment policies.

1

3

Now the medical sites in the U.S. are waiting for how the FDA approves ELEVIDYS, but I think they are waiting

As you pointed out, some of the patients amenable to exon 53 skipping drugs are probably waiting for the FDA’s

for it because they are interested in using it to a certain extent. Does that mean that there may be some patients todecision. Still, with regard to whether patients who opt for gene therapy will return to exon skipping therapy, we havechoose gene therapy if the indications are extended?

started to discuss how to use both gene therapy and exon skipping drugs with payers. One of the payers has a policy ofreimbursement for exon skipping drugs after using gene therapy, although this is only one example. The environment
for combining gene therapy and exon skipping has started to be prepared. We are trying to tell the doctors and the payersthat the administration of exon skipping drugs after gene therapy is meaningful.

4

Does the top-line results from ELEVIDYS P3 study show no change in the clinical field?

It's been a few weeks since the topline results were released at the end of October, and we haven’t seen any dramaticchanges.

5

It can be imagined that ELEVIDYS makes the medical sites confused, but how long will it take for this situation

Regardless of the trend in gene therapy, we would like to continue to convey straightforwardly with 4-Year of clinicalto settle down?

trial data of Viltepso that starting therapy as early as possible will lead to the maintenance and improvement of the longterm prognosis of patients. The U.S. team is working on this policy.

6

Please tell us about the age groups of new and existing patients of Viltepso in the U.S. Do the patients and doctors

Regarding the age groups, we are unfortunately unable to obtain the information because it is personal information, so

take a positive view of the combination of exon skipping drugs and gene therapy, as the payer reimburses thewe cannot answer the question. However, we can explain the ratio of drug-naïve and switching from competitor’s drug

combination?

to all of our patients. 30% of the patient administering Viltepso has switched from competing products, and 90% ofthem had been treated by 53 skipping drugs and the other 10% had been treated by 51 skipping. The total number ofpatients administered Viltepso is still less than the number of patients of competing products, but the number of patientsusing competing products is decreasing. We obtained the information that one of the payers has a policy ofreimbursement for exon skipping drugs after using gene therapy recently, and we don’t know what decision the patientor doctors will make based on the policy.

7

You said that one of the payers has a policy of reimbursement for exon-skipping drugs after using gene therapy.

It is unclear whether there are patients who have been reimbursed for the combination according to the payer’s policy.

I think that about two years have passed since the first dose of gene therapy, ELEVIDYS. Is there anyone alreadycombining it with nucleic acid drugs? If so, did the combination trigger the reimbursement ?
8

Is there any information that the exon skipping drugs have been used after using gene therapy?

I have not heard of it.

9

I think the RACER53, P3 study of Viltepso, will be completed soon and then the data will be analyzed. WhenThe study was completed on October 19 after the examination of the last patient, and the data will be compiled andwill you be able to obtain the results and how will you unveil them?

analyzed. We expect to be able to unveil the results of the analysis of the data around next spring. We will inform youof how to unveil it.

210

Please tell us your evaluation of the topline results in P3 study of ELEVIDYS.

I would like to avoid making comments on other companies. In general, full approval cannot be obtained unless theprimary endpoints are achieved. However, we cannot predict how FDA will judge ELEVIDYS.

11

12

It is difficult to compare Viltepso and ELEVIDYS because primary endpoints of their P3 trial are different.

The primary endpoint of Viltepso is TTSTAND. We cannot compare their primary endpoints directly, but we think that

Therefore, depending on the situation, patients aged 4 to 5 years may be treated with gene therapy, and afterward

it is possible to compare them including secondary endpoints of P3 study of ELEVIDYS. With regard to which drug to

if their condition progresses, they may switch to exon skipping drugs. If the results of the P3 study of Viltepso

use first, some doctors have suggested that it might be better to use exon skipping drugs first when stem cells areare good, I think there is an option of administering exon skipping drugs from the beginning. Is there anything

sufficient and then use gene therapy when they are decreased. This is a problem that can be solved after the actual

you can suggest, although each data is not apples to apples comparison?

clinical experience has been accumulated.

I think the sales of Viltepso in US dollars in the second quarter were lower than in the first quarter. Was there any

If so, it would be a little higher than in the first quarter because the shipments in late June and early July were delayed.

possibility that the sales in the second quarter exceed those in the first quarter lower if the shipment had not been

The number of patients administered Viltepso has been steadily increasing.

delayed ?
13

I think it is a risk for you that one wholesaler is taking charge of a distribution of big sales in the U.S. Do you

As a major wholesaler, we do business with two wholesalers, which are taking responsibility for delivering Viltepso forhave the idea of diversifying this risk?

home infusion. The other wholesalers also deliver it directly to hospitals. Specialty pharmacy, a wholesaler undertaking
the delivery for home infusion, is the cause of the delayed shipment. However, because of their ability to prepare forhome infusion, we think that doing with them is the best way in terms of access to drugs. We will make a judgment
about whether this can be a risk or not with seeing both the advantages and disadvantages.

14

15

16

I hope that the sales scale of Viltepso will be a level that is less affected by timing of shipments as soon as possible.

If the current situation continues, this could happen. We aim to grow the gross sales which is less affected by the timing

Will this kind of shipping delays in the future as well?

of shipments.

In the quarterly report, sales in other regions are stated as 1.2 billion yen. Why did sales there increase YoY in

Sales in other regions include the sales related to supplying Viltepso as an unapproved drug delivery program. Viltepso

spite of few sales last year? As the cost of sales ratio is declining, please tell us if the sales in other regions affectis unapproved outside Japan and the U.S., but with aiming to expand to supply Viltepso to other countries more, it is

the cost of sales ratio.

recorded in sales in other regions. Cost of sales for it is incurred.

If you record the amount of Viltepso about the same as the its cost in the sales in other regions, will this cause theAs unapproved drug delivery program, Viltepso is provided by another company, so administrative fees and othercost of sales ratio to deteriorate? How would an increase in the supply of Viltepso as an unapproved drug delivery

overhead costs. Therefore, we provide Viltepso to the company for the amount of the cost plus extra fees. The increaseprogram affect cost of sales?

in sales of this will have a slight negative impact on the current average cost rate.

3

17

18

The forecast for SG&A expenses and R&D expenses for FY2023 is increased. Are there any factors that increase

Milestone becomes an asset. Exchange rate is the biggest factor behind the increase of their forecast. For SG&A

them other than foreign exchange? If the interim analysis of CAP-1002 works well, it will probably trigger the

expenses, it was as planned in the first half, and in the second half costs for NS Pharma will increase due to foreign

milestone, but even if you pay it, I think it will only be recorded in the balance sheet and it will not affect R&D

exchange factors. As you can see, R&D expenses were not achieved the target for the first half because the costs ofexpenses. What other factors contributed to the increase in the forecast for FY2023 despite the failure to achieve

nucleic acid production were partially delayed to the second half. In addition, the costs for clinical development in thethe initial target for R&D expenses in the first half?

U.S., will increase due to foreign exchange factors.

Isn’t the foreign exchange gain considered much in the full-year forecast?

If the current level of ¥151 per dollar (in mid-November) continues until March next year, the exchange rate gain will
increase because our forecast rate is ¥140 per dollar in the second half.

19

Although the development of NS-089 and NS-050 was initially planned for FPI in the first half of FY2023, theAs you can see, neither of them achieved FPI in the first half. The FPI of NS-089 is delayed due to a variety of factors,

status has not changed from preparing for next study. Please tell us about the situation.

including lack of manpower at medical institutions. NS-050 is also delayed due to the hospitals' circumstances, we
believe both will be able to achieve FPI by the end of this fiscal year.

20

P2 study of NS-580 for endometriosis is about to be completed. Will the future development plan be decided on

The clinical trial data for endometriosis has not unveiled. Based on the results of the P2 study for endometriosis, wethe basis of the results of the recently launched P2a study for chronic prostatitis/chronic pelvic pain syndrome, or

intend to proceed its development without waiting for the results of the P2a trial for chronic prostatitis/chronic pelvic

will the development for endometriosis proceed without waiting for the results of the P2a study? If you adopt thepain syndrome. The market of this disease is a major, so we basically consider pursuing its development on a global

latter case, are you going to include overseas as well as domestic? Are you looking for partners to sell?

scale while looking for partners overseas. We will continue to make preparations for the clinical trial consultations
overseas without delay, while seeking partners.

21

I heard that interim analysis of P3 study of CAP-1002 was by the end of the year. Is it unchanged?

The interim analysis will be conducted as scheduled.

22

As for CAP-1002, the results of the interim analysis of Cohort A in the P3 study will be unveiled by the end of

Cohort A is a cohort that uses CAP-1002 manufactured at an investigational drug site. That's enough to get the approval.

this year, and the final results will probably come out next year. Please tell us the purpose of Cohort B.

Cohort B will be tested with it manufactured at another site that has been set up for commercial use from the outset.
This is a test to confirm whether the same result can be obtained even using it from different manufacturing sites. The
specific schedule is not disclosed. We would like you to think cohort B will be completed a few years after thecompletion of cohort A.

23

Did you consider the buyback based on the current stock price situation?

We have received questions and requests about whether or not the Board of Directors is discussing the buyback atvarious meetings or other occasions. Our executives always sincerely discuss the buyback, effective use of cash on handand stock prices. The Board of Directors has also begun the discussion.

24

What is a theme of the R&D Meeting this December?

It will mainly be our pipeline updates. We will let you know the details later.

4