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November 8, 2021 KYORIN Holdings, Inc.
■ Disclaimer
This material contains performance forecasts, goals and plans, and other forward-looking statements related to the Group. These statements are based on the judgment of the Group’s assumptions and outlooks based on the information and forecasts available at the time of preparation of this material, and contain known or unknown risks and uncertainties. Therefore, due to various factors that may occur, the actual performance, progress / success / failure of the development and other insights may differ significantly from the description. It also contains information about medicines (including those under development), but the description is not for the purpose of advertising or medical advice.

Second Quarter Consolidated Financial Results for the Fiscal Year Ending March 31, 2022
[Net sales] Although the respiratory and otolaryngology markets, which are our priority areas, remained sluggish due to the impact of NHI drug price revisions and the spread of the new coronavirus infection etc., sales of New ethical drugs increased by active promotion, and sales of long-listed products increased due to quality problem of some generics drug companies, then sales of New ethical drugs, etc. (Japan) were higher than the previous year. In addition, Generic drugs increased, and overall sales were 49,102 million yen. [Profit] Despite an increase of sales, gross profit decreased to 22,369 million yen due to an increase in the cost ratio (24,822 million yen in same period a year ago). Although an upfront payment for a drug for treating chronic cough was posted, SG&A expenses(including R & D expenses)  was 22,438 million yen, down from year on year due to cost reduction, etc. (23,320 million yen in same period a year ago). As a result, Operating loss was 68 million yen, Ordinary income was 285 million yen, Net income was 121 million yen. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2022 The forecast for the full year announced on May 11, 2021 remain unchanged at this moment. There is no change to the dividend plan announced on May 11, 2021 (Annual dividend of 52 yen per share). *From the beginning of the current term for the fiscal year ending March 31, 2022, "Accounting Standards for Revenue Recognition" (ASBJ Statement No. 29, Mar 31,2020) etc. have been applied, and the revenue recognition standards for the previous second quarter is different from the current second quarter, the amount of increase / decrease compared to the current second quarter and the YoY change rate (%) are not shown. There is no impact on operating loss, ordinary loss, and net loss, from the application of the "Accounting Standard for Revenue Recognition".
(Units : ¥ billion) Sep / 2020
Net sales increased
Cost of sales ratio increased <Reasons of increase> ● Impact of NHI drug price revisions (Kyorin Pharmaceutical : 6% range) ●  Sales of Generic drugs increased ● Loss on retirement of inventories, etc. increased <Reason of decrease> ● Product mix
Gross profit decreased
SG&A cost decreased ●  Cost of R&D decreased Upfront payment for AKP-009 in FY2020 ●  SG&A (excluding R&D) remained flat Cost reduction Upfront payment for Gefapixant citrate Operating income decreased
*The impact of the application of the "Accounting Standard for Revenue Recognition" was sales decreased by 611 million yen and SG&A expenses decreased by 611 million yen, and there is no impact on operating loss, ordinary loss, and net loss. ● SG&A (excluding R&D expenses) : ¥ 18.1bln（2Q FY2020 : ¥ 18.1bln） Decrease in sales and labor costs, Increase in patents royalty (Upfront payment for Gefapixant citrate) ■ Net Income
¥ 0.1bln
( − 2.0)
From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition".

<Capital expenditure (Actual / Forecast)>

Development pipeline
Ph Ill ～ Application submitted

POC Project (Ph I ～ Ph II)

Licensing development (License-in)
*Additional Ph I study at a higher dose started (Sep 2021)
Licensing development (License-out)

9
From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition". 10
From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition". 11
From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition". 13
• Sales of transfer of intellectual property and APIs in FY2020 ● Generic drugs ¥ 10,172mil ( n/a ) • Sales increase in 3 AG products (Kipres AG, etc.) From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition". 14
From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition". 15

<Breakdown>

From the beginning of the first quarter for the Fiscal Year Ending March 31, 2022, "Accounting Standards for Revenue Recognition"  (ASBJ Statement No. 29, Mar.31,2020) etc. have been applied, and the second quarter results, second quarter forecast, and the full-year forecast are based on the "Accounting Standard for Revenue Recognition". 17