Kyowa Kirin Co., Ltd. · TSE:4151

Kyowa Kirin — Kyowa Hakko Kirin — FY2018 Earnings Presentation

53 slides from Kyowa Kirin's earnings presentation, February 2019

  1. Slide 1: Results Presentation Fiscal 2018

    Results Presentation Fiscal 2018 Kyowa Hakko Kirin Co., Ltd. © Kyowa Hakko Kirin Co., Ltd.

  2. Slide 2: Agenda

    Agenda FY2018 Financial Review & FY2019 Forecasts Outlook of the Mid‐term Business Plan Shareholder Returns Plan R&D Review Business Topics President & COO Masashi Miyamoto, Ph.D. Q&A President & COO Masashi Miyamoto, Ph.D. Executive Officer, Head of R&D Division Mitsuo Satoh, Ph.D. Executive Office

  3. Slide 3: Forward-looking statements

    Forward‐looking statements This document contains certain forward‐looking statements relating to such items as the company’s (including its domestic and overseas subsidiaries) forecasts, targets and plans. These forward‐looking statements are based upon information available to the company at the pr

  4. Slide 4: FY2018 Financial Review

    FY2018 Financial Review © Kyowa Hakko Kirin Co., Ltd. 4

  5. Slide 5: Summary of the Consolidated Results

    Summary of the Consolidated Results 2017 2018 2018 Achieved Results Results Changes Plan Rate (30-Oct-2018) Revenue 353.4 346.5 ‐6.8 335.0 103% (‐2%) Core OP 57.7 58.7 +1.0 54.0 109% [Margin] [16.3%] [16.9%] (+2%) [16.1%] OP: Operating Profit Profit 42.9 54.4 +11.5 52.0 105% (+27%) ( Billion Yen / R

  6. Slide 6: Consolidated: YoY Analysis 2017 vs 2018 - Profit

    Consolidated: YoY Analysis 2017 vs 2018 ‐Profit‐ Profit (Jan‐Dec) +11.5 billion yen (¥Bn)  Gain on sale/valuation of Kyowa Medex shares +11.0  Gain on reversal of impairment losses +3.3  Gain on sales of fixed assets +3.0  Pharmaceuticals +1.5  Bio‐Chemicals +1.1  Upfront revenue from the lice

  7. Slide 7: Summary of the Results by Segment

    Summary of the Results by Segment  Pharmaceuticals: Almost same as 2017 due to the higher overseas revenue & improved equity‐method loss despite the higher expenses & lower domestic revenue.  Bio‐Chemicals: Core OP increased due to improved profitability despite the lower revenue. 2017 2018 Change

  8. Slide 8: Pharmaceuticals: YoY Analysis - Revenue

    Pharmaceuticals: YoY Analysis ‐Revenue‐ ‐4.3 billion yen  Domestic Drug ‐6.5 • Positive: Rituximab‐BS which was launched in Jan (+4.3), (incl. forex effect +0.9) Orkedia which was released in May (+2.4), and the other new products such as G‐Lasta (+2.6), Lumicef (+1.0), Nouriast (+0.9), Dovobet (+0

  9. Slide 9: Pharmaceuticals: YoY Analysis - Core OP

    Pharmaceuticals: YoY Analysis ‐Core OP‐ ‐0.2 billion yen  Gross Profit +1.5 (incl. forex effect +0.7) • Increased due to the favorable overseas drug (incl. forex effect ‐0.2) segment, despite the impact of the drug price cut and competitors/generics’ penetration in Japan and the deconsolidation of

  10. Slide 10: Pharmaceuticals: Domestic Revenue of Major Items

    Pharmaceuticals: Domestic Revenue of Major Items 2017 2018 Changes Reason 2019 Changes Item Results Results Plan Nesp+AG* 56.3 53.7 ‐2.6(‐5%) Drug price cut 48.4 ‐10% A competitor’s market Regpara 18.5 13.3 ‐5.3(‐28%) 5.1 ‐62% penetration & shift to Orkedia Orkedia ― 2.4 +2.4(－%) Newly launched 9.5

  11. Slide 11: Pharmaceuticals: Overseas Revenue of Major Items

    Pharmaceuticals: Overseas Revenue of Major Items 2017 2018 Changes Reason 2019 Changes Item Results Results Plan Crysvita ― 7.7 +7.7(－%) Newly launched Undisclosed ― POTELIGEO ― 2.1 +2.1(－%) Newly launched 10.0 +378% Abstral 11.9 12.8 +0.8(+7%) Steady market penetration 12.3 ‐4% Technology licensing

  12. Slide 12: Bio-Chemicals: YoY Analysis - Revenue

    Bio‐Chemicals: YoY Analysis ‐Revenue‐ ‐2.9 billion yen (incl. forex effect +0.2)  Overseas ‐1.4 (incl. forex effect +0.2) • Americas ‐0.8 (incl. forex effect ‐0.2) Due to fiercer competition in certain products. (¥Bn) • Europe ‐0.7 (incl. forex effect +0.5): Due to fiercer competition in certain pr

  13. Slide 13: Bio-Chemicals: YoY Analysis - Core OP

    Bio‐Chemicals: YoY Analysis ‐Core OP‐ +0.9 billion yen (incl. forex effect +0.0) (¥Bn)  Gross Profit +1.1 (incl. forex effect +0.1) • Manufacturing costs decreased by an increase in the overseas production.  SG&A ‐0.3 (incl. forex effect ‐0.0) • Increased advertisement aimed at expanding the mail

  14. Slide 14: Aim for further leaps forward as a GSP

    Aim for further leaps forward as a GSP © Kyowa Hakko Kirin Co., Ltd. 14

  15. Slide 15: Aim for further leaps forward as a GSP

    Aim for further leaps forward as a GSP Achievement of the important targets in the FY2016‐2020 Mid‐term Business Plan (‐2018) Leaping forward to Proactive investment  EU/US Crysvita ES/US market for R&D Approval/ Launched Leaping forward Global Management Creating shared value  US POTELIGEO  EU/U

  16. Slide 16: Aim for Further Leaps Forward as a GSP

    Aim for Further Leaps Forward as a GSP External environment Strategic issues (2019 ‐)  Japan: Fundamental revision to the drug  Maximize the value of the global pricing system, changes in the strategic products environment surrounding MR activities  Promote the market penetration of new  US: Unc

  17. Slide 17: Establish the "One Kyowa Kirin" Structure

    Establish the “One Kyowa Kirin” Structure Newly establish North America as an independent region, and start a management structure based on a matrix of regional axis X functional axis EMEA EMEA Global JapanHQ US US /ROW /ROW Japan Global HQ /CAN /CAN Asia Asia /Oceania /Oceania Global management str

  18. Slide 18: Reform Business Structure of KHK Group

    Reform Business Structure of KHK Group Maximize the corporate value of Kyowa Hakko Bio, and focus our resources on Pharma business Kirin Holdings Kyowa Hakko Kirin Group Kyowa Hakko Bio Increase business speed in the health and well‐being domain Leaping forward Further synergies as a GSP with Kirin

  19. Slide 19: Reform Business Structure of KHK Group

    Reform Business Structure of KHK Group Quickly shift to a global business model, and strengthen the business foundation in Japan Solicitation of voluntary retirement © Kyowa Hakko Kirin Co., Ltd. 19

  20. Slide 20: FY2019 Forecast

    FY2019 Forecast © Kyowa Hakko Kirin Co., Ltd. 20

  21. Slide 21: FY2019 Consolidated Plan

    FY2019 Consolidated Plan 2018 2019 Change Results Plan Revenue 346.5 ‐41.6 (‐12%) 305.0 Pharmaceuticals 271.5 +33.5 (+12%) Core OP 58.7 ‐5.7 (‐10%) [Margin] [16.9%] 53.0 [17.4%] Pharmaceuticals 50.3 +2.7 (+5%) [18.5%] Profit 54.4 68.0 +13.6 (+25%) ( Billion Yen / Rounded ) © Kyowa Hakko Kirin Co., L

  22. Slide 22: Consolidated: YoY Analysis 2018 vs 2019 - Profit

    Consolidated: YoY Analysis 2018 vs 2019 ‐Profit‐ Profit (Jan‐Dec) +13.6 billion yen (¥Bn)  Pharmaceuticals +25.9 (ref) Domestic revenue +3.0 Overseas revenue +31.5  Gain on sale of Kyowa Medex ‐11.0  Bio‐Chemicals ‐29.0  Gain on reversal of impairment losses ‐3.4  Gain on sales of fixed assets

  23. Slide 23: Outlook of Mid-term Business Plan

    Outlook of Mid‐term Business Plan © Kyowa Hakko Kirin Co., Ltd. 23

  24. Slide 24: Forecast for Achieving the Targets in the Mid-term Business Plan

    Forecast for Achieving the Targets in the Mid‐term Business Plan  Global strategic products: Launch the global strategic products (Crysvita, Poteligeo） in Europe and the US  Launch new products in Japan (Lumicef, Orkedia, Rituximab‐BS)  BS business: Start sales of Hulio in Europe  Global strateg

  25. Slide 25: Forecast for Achieving the Targets in the Mid-term Business Plan

    Forecast for Achieving the Targets in the Mid‐term Business Plan By definitely maximizing the value of the three global strategic products, aim to achieve the management targets of “core operating profit of 100 billion yen”, “ROE of at least 10%” and “Percentage of overseas sales of 50%” early in th

  26. Slide 26: Shareholder Returns Plan

    Shareholder Returns Plan © Kyowa Hakko Kirin Co., Ltd. 26

  27. Slide 27: Repurchase and Cancellation of Treasury Shares

    Repurchase and Cancellation of Treasury Shares ‐Repurchase‐  Objective Improvement of Capital Efficiency and Further Enhancement of Returns to Shareholders  Date February 6th, 2019  Number Up to 10,700,000 shares  Amount Up to JPY 27 billion  Procedure Tokyo Stock Exchange Trading Network syste

  28. Slide 28: Dividend Plan

    Dividend Plan  2018 full‐year dividend will be increased by 8 yen to 35 yen.  2019 full‐year dividend is planned to be further increased by 5 yen to 40 yen.  The subsequent dividend is aimed to be continually increased based on a payout ratio of 40%. (Plan) *ROE: Return On Equity [Basic policy fo

  29. Slide 29: R&D Review

    R&D Review © Kyowa Hakko Kirin Co., Ltd. 29

  30. Slide 30: Key development events in 2018 (1)

    Key development events in 2018 (1) Generic name Country/ Indication Month Event Code region Bardoxolone methyl Diabetic kidney Mar. Designated under the SAKIGAKE system1 Japan RTA 402 disease May Initiated phase 3 study Europe Jan. Approved (BN: Fasenra) Benralizumab2 Asthma KHK4563 Approved (BN: Fa

  31. Slide 31: Key development events in 2018 (2)

    Key development events in 2018 (2) Generic name Country/ Indication Month Event Code region Evocalcet Secondary Japan Mar. Approved (BN: Orkedia tablets) KHK7580 hyperparathyroidism Granisetron Chemotherapy induced Malaysia Jan. Approved (BN: Sancuso) ‐ nausea and vomiting May Extended PDUFA goal da

  32. Slide 32: Key development updates in 18Q4 (1)

    Key development updates in 18Q4 (1) • Initiation of the phase 2 clinical study of KHK4083 for the treatment of atopic dermatitis in Japan, the U.S., Canada, and Europe ClinicalTrials.gov identifier: NCT03703102 © Kyowa Hakko Kirin Co., Ltd. 32

  33. Slide 33: KHK4083: Phase 1 Study Result (Atopic Dermatitis)

    KHK4083: Phase 1 Study Result (Atopic Dermatitis) ClinicalTrials.gov Identifier: NCT03096223 • Study Design • Target：Moderate to Severe Atopic Dermatitis Subjects • Con Med： Moisturizer （Topical corticosteroids were prohibited to use 2 wks 1 week prior to 1st administration of KHK4083） Enroll Treatm

  34. Slide 34: KHK4083: Phase 2 Study Design (Atopic Dermatitis)

    KHK4083: Phase 2 Study Design (Atopic Dermatitis) ClinicalTrials.gov Identifier: NCT03703102  Double‐blind, Placebo‐Controlled study for subjects with moderate to severe atopic dermatitis 36 weeks treatment period KHK4083‐SC Arm A KHK4083‐SC Arm B R* KHK4083‐SC Arm C KHK4083‐SC Arm D *Randomization

  35. Slide 35: Key development updates in 18Q4 (2)

    Key development updates in 18Q4 (2) • Initiation of the phase 2b clinical study of KW‐6356 for the treatment of Parkinson’s disease in Japan ClinicalTrials.gov identifier: NCT03703570 © Kyowa Hakko Kirin Co., Ltd. 35

  36. Slide 36: KW-6356: Phase 2a Study Result (Parkinson's disease)

    KW‐6356: Phase 2a Study Result ( Parkinson’s disease) ClinicalTrials.gov Identifier: NCT02939391 Study schema Treatment Period Safety Follow‐up Period 12 weeks 2 weeks Placebo (n=55) Screening Period KW‐6356 low dose (n=55) up to 8 weeks KW‐6356 high dose (n=58) Randomization Week2 Week4 Week8 Week1

  37. Slide 37: KW-6356: Study design of phase 2b clinical study

    KW‐6356: Study design of phase 2b clinical study ClinicalTrials.gov Identifier: NCT03703570 A multicenter, randomized, double‐blind, placebo‐controlled phase 2b study to evaluate the efficacy and safety of KW‐6356 in patients with Parkinson’s disease* on treatment with Levodopa‐containing preparatio

  38. Slide 38: Key development events in 2019 (after January)

    Key development events in 2019 (after January) • Application for approval of Burosumab (KRN23) for the treatment of FGF23‐related hypophosphatemic rickets and osteomalacia in Japan Note: Listed event was completed between January 1, 2019 and February 4, 2019. © Kyowa Hakko Kirin Co., Ltd. 38

  39. Slide 39: Business Topics

    Business Topics © Kyowa Hakko Kirin Co., Ltd. 39

  40. Slide 40: Strengthen the renal business in Japan

    Enhance the lineup and pipeline of renal products Strengthen the renal business in Japan based on the healthcare needs 2018  March: Received approval for Orkedia; Received priority review designation for RTA 402  May: Initiated Ph3 clinical study in Japan for RTA 402 targeting diabetic kidney dise

  41. Slide 41: Product lineup/R&D pipeline (Nephrology area)

    Product lineup/R&D pipeline (Nephrology area) Renal function deterioration CKD Disease Progression CKD/not on dialysis（Stage 3‐5） ESRD/on dialysis High blood pressure Coniel（1991） Coversyl（1998） Diabetes Onglyza（2013） Primary disease Comorbidity RTA 402 NESP（2007） Darbepoetin alfa 「KKF」（2019 E） Anem

  42. Slide 42: Commercialization agreement for HP-3000

    Commercialization agreement for HP‐3000 • Commercialization agreement for HP‐3000 in Japan, a potential new Transdermal Patch for Parkinson’s Disease developed by Hisamitsu Pharmaceutical © Kyowa Hakko Kirin Co., Ltd. 42

  43. Slide 43: Appendix

    Appendix © Kyowa Hakko Kirin Co., Ltd. 43

  44. Slide 44: FOREX Information

    FOREX Information Average FOREX Rate [ Yen ] Currency 2017 Results 2018 Results Changes 2019 Plan USD/JPY 112 110 ‐2 110 EUR/JPY 126 131 +5 130 GBP/JPY 144 148 +4 145 2018 FOREX Effect (YoY) [ Billion Yen] Segment Currency Revenue Core OP USD ‐0.3 ‐0.1 Pharmaceuticals EUR +0.1 +0.0 GBP +1.0 ‐0.1 USD

  45. Slide 45: Burosumab: Collaboration with Ultragenyx (summary)

    Burosumab: Collaboration with Ultragenyx (summary) KHK group Ultragenyx Splits profits in half with Books sales KHK for first 5 years U.S.A Splits profits in half with Ultragenyx for first 5 years After 5 years, receives mid Canada After 5 years, pays mid to high 20% range sales to high 20% ran

  46. Slide 46: Development schedule of major pipeline - review

    Development schedule of major pipeline ‐ review As of December 31, 2018 +：Estimated time of regulatory decisions Generic name Country/ Indication 2018 2019 2020~ Code region Bardoxolone methyl Diabetic kidney Japan  FPI Phase 3 RTA 402 disease Benralizumab1 U.S., Europe TBD COPD KHK4563 Japan TBD P

  47. Slide 47: Development schedule of major pipeline - review (cont.)

    Development schedule of major pipeline ‐ review (cont.) As of December 31, 2018 Country/ Code Indication 2018 2019 2020~ region Recurrence of FSGS in Bleselumab de novo kidney U.S. Phase 2 ASKP1240 4 transplant Ulcerative colitis U.S., Europe Phase 2 KHK4083 U.S., Europe, Atopic dermatitis  FPI Pha

  48. Slide 48: Development schedule of major pipeline

    Development schedule of major pipeline As of December 31, 2018 +：Estimated time of regulatory decisions Generic name Country/ Indication 2019 2020 2021~ Code region Bardoxolone methyl Diabetic kidney Japan Phase 3 RTA 402 disease Bleselumab Recurrence of FSGS in de U.S., Europe Phase 2 Phase 3 ASKP1

  49. Slide 49: Development schedule of major pipeline (cont.)

    Development schedule of major pipeline (cont.) As of December 31, 2018 Country/ Code Indication 2019 2020 2021~ region Ulcerative colitis U.S., Europe Phase 2 Phase 3 KHK4083 U.S., Europe, Atopic dermatitis Phase 2 Phase 3 Japan Hyperphosphatemia KHK7791 Japan Phase 2 Phase 3 in CKD KW‐6356 Parkinso

  50. Slide 50: Progress in products under the alliances with partners

    Progress in products under the alliances with partners Country/ Product Indication Month Event region Feb. Approved Dovobet Gel  Psoriasis Japan Jun. Launched  CD20 positive, B‐cell non Hodgkin’s lymphoma Rituximab BS  CD20 positive, B‐cell Intravenous lymphoma under Japan Jan. Launched Infusion

  51. Slide 51: Biosimilar product development

    Biosimilar product development As of December 31, 2018 Development Reference bio medical product Development stage Country/region code Generic name Brand name Phase 2 Phase 3 Application FKB3271 Adalimumab HUMIRA U.S., others FKB2382 Bevacizumab Avastin U.S., Europe, others Not Not Not Not disclosed

  52. Slide 52: List of acronyms

    List of acronyms BS Biosimilar COPD Chronic Obstructive Pulmonary Disease CTCL Cutaneous T‐Cell Lymphoma CKD Chronic Kidney Disease DKD Diabetic Kidney Disease ESRD End Stage Renal Disease FSGS Focal Segmental Glomerulosclerosis HAM HTLV‐1 Associated Myelopathy ITP Idiopathic (immune) Thrombocytopen

  53. Slide 53: Kyowa Hakko Kirin Group mission and IR contact

    The Kyowa Hakko Kirin Group companies strive to contribute to the health and well‐being of people around the world by creating new value through the pursuit of advances in life sciences and technologies. Kyowa Hakko Kirin Co Ltd Corporate Communications Dept, IR Group Tel: +81‐3‐5205‐7206 © Kyowa Ha

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