Slide 1: Q2/FY2017 Financial Results
Q2/FY2017 FINANCIAL RESULTS ENDED SEPTEMBER 30, 2017 Yoshihiko Hatanaka President and CEO Astellas Pharma Inc. October 31, 2017
Slide 2: Cautionary Statement Regarding Forward-Looking Information
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING 2 INFORMATION In this material, statements made with respect to current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Astellas Pharma. These sta
Slide 3: Agenda
AGENDA 3 I Q2/FY2017 Financial Results Initiatives to Build Resilience for II Sustainable Growth III Profit Distribution Policy
Slide 4: Q2/FY2017 Financial Results (Core Basis)
Q2/FY2017 FINANCIAL RESULTS (CORE BASIS) 4 On-track toward FY2017 FCST Excl impacts FY17 Achieve- from Fx and (billion yen) Q2/FY16 Q2/FY17 Change business FCST* ment transfer Net sales 651.7 639.8 -1.8% 1,279.0 50.0% -1.9% Cost of sales 146.2 148.8 +1.8% % of sales 22.4％ 23.3% SG&A expenses 220.8 2
Slide 5: Sales Analysis (Year on Year)
SALES ANALYSIS (YEAR ON YEAR) 5 Growth drivers in good shape, slight decrease in net sales due to GEs impacts in Japan (billion yen) Q2/FY16 651.7 XTANDI/OAB products Others GEs impacts in Japan, etc. Dermatology business Decrease in transfer * amortisation of deferred revenue Long listed drug trans
Slide 6: Core OP Analysis (Year on Year)
CORE OP ANALYSIS (YEAR ON YEAR) 6 Development costs for late-stage projects increased (billion yen) Q2/FY16 166.5 Gross profit* Decrease in net sales SG&A expenses* Efficient spending and optimal resource allocation R&D expenses* Increase in late-stage development Others* Gross profit decrease due t
Slide 7: Q2/FY2017 Financial Results (Full Basis)
Q2/FY2017 FINANCIAL RESULTS (FULL BASIS) 7 Other expenses due to wind-down of Agensys research operations Achieve- （billion yen） Q2/FY16 Q2/FY17 Change FY17FCST* ment Core operating profit 166.5 136.4 -18.1% 254.0 53.7% Other income 0.4 10.0 - Other expenses 9.8 50.3 +414.4% Operating profit 157.1 9
Slide 8: Cash Flow Analysis
CASH FLOW ANALYSIS 8 Cash flows from operating business increased by 28% (YoY) Implemented active business investment and flexible shareholder return Q2/FY16 Q2/FY17 +115.3 (billion yen) +90.1 Acquisition of Ogeda -61.6 -19.9 -72.7 Share buyback -35.5 -50.2 -28.3 +10.3 -85.9 Operating Investing Fina
Slide 9: Sales in Three Key Areas
SALES IN THREE KEY AREAS 9 XTANDI increase on a global basis (billion yen) Q2/FY16 Q2/FY17 Change CER growth Oncology 153.9 167.8 +9.1% +3% XTANDI 126.0 140.3 +11.4% +6% OAB in Urology 105.5 107.3 +1.7% -3% Vesicare 59.8 49.7 -16.9% -20% Betanis/Myrbetriq/BETMIGA 45.7 57.6 +26.0% +21% Transplantatio
Slide 10: Revised Forecasts for FY2017 (Core Basis)
REVISED FORECASTS FOR FY2017 (CORE BASIS) 10 Revision of initial forecasts based on Q2/FY2017 results and Fx trend FY2017 FY2017 (billion yen) Initial Revised Change Forecasts Forecasts Net sales 1,279.0 1,297.0 +18.0 R&D expenses 218.0 218.0 - as % of sales 17.0% 16.8% Core operating profit 254.0 2
Slide 11: Revised Forecasts for FY2017 (Full Basis)
REVISED FORECASTS FOR FY2017 (FULL BASIS) 11 Revision of initial forecasts based on other income and expenses booked in Q2/FY2017 FY2017 FY2017 (billion yen) Initial Revised Change Forecasts Forecasts Net sales 1,279.0 1,297.0 +18.0 R&D expenses 218.0 218.0 - as % of sales 17.0% 16.8% Operating prof
Slide 12: Agenda
AGENDA 12 I Q2/FY2017 Financial Results Initiatives to Build Resilience for II Sustainable Growth III Profit Distribution Policy
Slide 13: Achieving Sustainable Growth
ACHIEVING SUSTAINABLE GROWTH 13 (same as Strategic Plan 2015-2017 slide) New products will drive mid-term growth; Sustainable growth will be reinforced by continuous selective investment in innovation and strengthening of the business foundation Maximizing the Creating Innovation Product Value Enhan
Slide 14: Maximize the Product Value
| MAXIMIZE THE PRODUCT VALUE
Slide 15: XTANDI
XTANDI 15 Global sales steadily grew Quarterly sales (local currency) Sales by region Americas (million USD) 340 (+5%) 140.3 (+11%) 126.0 2.5 US (+5%) 1.6 51.3 40.8 Asia/Oceania 206 EMEA (million EUR) (+3%) EMEA Americas Japan 50 71.8 73.6 FY15 FY16 FY17 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 • Further penet
Slide 16: XTANDI
XTANDI 16 Upward revision of initial forecasts “277.7 291.3 billion yen” Growth in more profitable ex-US markets such as EMEA Sales since launch by region +1% +7% 280Japan +11% 1400 Americas -11%* (billion yen) (million USD) 180 900 US (+5%) 80 400 -20 *+19% excl. NHI drug price cut impacts -100 E
Slide 17: OAB Franchise in Urology
OAB FRANCHISE IN UROLOGY 17 Sales weight of Betanis/Myrbetriq/BETMIGA steadily expands Sales by product Sales composition ratio by (billion yen) product (yen basis) 105.5 107.3 (+2%) Betanis/Myrbetriq/ 45.7 57.6 54% 46% BETMIGA Vesicare Betanis/Myrbetriq/ 59.8 BETMIGA 49.7 Vesicare • The market shar
Slide 18: Create Innovation: Pipeline
| CREATE INNOVATION PIPELINE
Slide 19: Robust Pipeline of Astellas
ROBUST PIPELINE OF ASTELLAS 19 Evaluating >30 new molecular/biological entities as potential drivers of future growth Phase 1 Phase 2 Phase 3 Filed enzalutamide (HCC) enzalutamide enzalutamide ● AGS67E (M0 CRPC, M0 BCR:US/EU/Asia, (Tablet, JP) ● AGS-16C3F ● AGS62P1 (Renal cell carcinoma) M1 HSPC:US/
Slide 20: Steady Progress in Development
STEADY PROGRESS IN DEVELOPMENT 20 SUMMARY OF PROGRAM PROGRESS FROM JULY 2017 TO OCT 2017 Steady progression of pipeline P2 P3 Regulatory P1 Entry Filing Entry Entry Decision ASP8374/PTZ-201 fidaxomicin solifenacin Cancer Filed in Jul. 2017 NDO for pediatric (US) • Granted for 6-months exclusivity In
Slide 21: Enzalutamide: Maximize the Value for Prostate Cancer Patients
ENZALUTAMIDE: MAXIMIZE THE VALUE FOR PROSTATE 21 CANCER PATIENTS Positive TLR obtained for PROSPER study Localized Castration Anti-Androgens Chemotherapy Therapy* M0 BCR M0 CRPC EMBARK >>> >>> PROSPER -T PSA/ Chemo-naive Tumor Post-chemo M1 HSPC volume >>> >>> ARCHES** (PREVAIL) (AFFIRM) Cabazitaxel
Slide 22: Enzalutamide: PROSPER Study in M0 CRPC
ENZALUTAMIDE: PROSPER STUDY IN M0 CRPC 22 Positive TLR obtained for PROSPER study Study design Non-metastatic CRPC (M0 CRPC) Disease background safety follow-up safety follow-up enzalutamide screening long-term Prostate cancer progressed despite of ADT, but no detectable radiographic evidence of can
Slide 23: Gilteritinib: Treatment Landscape in AML
GILTERITINIB: TREATMENT LANDSCAPE IN AML 23 Fast Track designation granted for gilteritinib development in relapsed or refractory FLT3 mutation positive AML patients Phase 1 study Ongoing Chemo Maintenance High- consolidation GOSSAMER study intensity induction chemo Transplant Maintenance FLT3 + AML
Slide 24: Enfortumab Vedotin: Planned/On-going Studies
ENFORTUMAB VEDOTIN: PLANNED/ON-GOING STUDIES 24 FPI achieved for P2 study in metastatic urothelial cancer patients with prior immune Check Point Inhibitor (CPI) treatment Phase 2 study Phase 1b combination study Study design: single-arm, open-label, multicenter Study design: single-arm, open-label,
Slide 25: Roxadustat: Robust Phase 3 Program
ROXADUSTAT: ROBUST PHASE 3 PROGRAM TO SUPPORT 25 FILING AND REIMBURSEMENT IN EUROPE AND JAPAN Positive TLR obtained for JP P3 study in peritoneal dialysis (PD) patients. Dialysis Non-dialysis HIMALAYAS: DOLOMITES, vs darbepoetin Incident dialysis, vs epoetin alfa Enrollment completed ALPS, vs placeb
Slide 26: Roxadustat: Japanese Phase 3 Study
ROXADUSTAT: JAPANESE PHASE 3 STUDY 26 Positive TLR from the first Japanese Phase 3 study in PD patients Study design: Phase 3, multi-center, open-label, randomized study Patient population: Peritoneal dialysis chronic kidney disorder patients with anemia Treatment: Three time a week, up to 24 weeks
Slide 27: Expected Key Pipeline Events in FY2017
EXPECTED KEY PIPELINE EVENTS IN FY2017 27 Important milestones from POC through registration *Subject to internal assessment, decision and regulatory consultation, as appropriate Data Readouts Filing* Regulatory Decisions Phase 2 (POC) study Phase 3 study solifenacin/mirabegron enzalutamide Concomit
Slide 28: Potential Growth Drivers
POTENTIAL GROWTH DRIVERS 28 Future growth driven by compounds that already have achieved POC gilteritinib enzalutamide solifenacin/ (label expansion) mirabegron enfortumab (Combination therapy) vedotin evolocumab IMAB362 (Cardiovascular outcome study) roxadustat linaclotide ASP0113 (Chronic constipa
Slide 29: Create Innovation: New Initiatives
CREATE INNOVATION NEW INITIATIVES
Slide 30: Initiatives to Create Innovation (1)
INITIATIVES TO CREATE INNOVATION (1) 30 Exclusive worldwide license agreement to research, development and commercialization in collaboration with Universal Cells for a novel cell therapy AIRM Utilizing Universal Cells’ Universal Donor Cell technology • Technology to create stem cell therapies that
Slide 31: Initiatives to Create Innovation (2)
INITIATIVES TO CREATE INNOVATION (2) 31 Facilitating open innovation through a new drug discovery program called “JOINUS” using drug-repositioning compound libraries Drug-repositioning Evaluation compound libraries Generated Offer Japanese research institutions Investment in Tokyo Institute of T
Slide 32: Create Social Value
CREATE SOCIAL VALUE 32 Resolve social issues and enhance our enterprise value over the long-term Initiatives for Access to Health Participation in Collaborative development Support of Action on Fistula Development of Access Accelerated agreement for rice-based pediatric formulation oral vaccine for
Slide 33: Pursue Operational Excellence
PURSUE OPERATIONAL EXCELLENCE
Slide 34: Initiatives to Continuous Strengthening of Management Foundation
INITIATIVES TO CONTINUOUS STRENGTHENING OF 34 MANAGEMENT FOUNDATION Resource allocation from scratch responding to environment changes Investment priority • Investment in growth areas and withdrawal from non- growth areas Initiatives in 1H/FY2017 • Sufficient investment to deal with new risks Tran
Slide 35: Agenda
AGENDA 35 I Q2/FY2017 Financial Results Initiatives to Build Resilience for II Sustainable Growth III Profit Distribution Policy
Slide 36: Profit Distribution Policy
Profit Distribution Policy 36 Top priority on investment for growth business Dividends to be increased continuously based on mid-and long-term growth Share buybacks to be implemented in a flexible manner （billion yen） 40 250 （yen） Profit for the Dividends per year** (right axis) Share* (Left axis) 2
Slide 37: Realize Sustainable Growth
REALIZE SUSTAINABLE GROWTH 37 Turn innovative science into value for patients on the forefront of healthcare change New technologies/ modalities * Pre-POC projects Post-POC projects Strategic resource allocation -Transfer of dermatology business -Transfer of US manufacturing subsidiary -Transfer of
Slide 38: Appendix
APPENDIX
Slide 39: Q2/FY2017: Sales by Region
Q2/FY2017: SALES BY REGION 39 Q2/FY16 Q2/FY17 Change Japan (billion yen) 237.2 213.0 -10.2% of sales in Japanese market 221.8 194.1 -12.5% Americas (million USD) 1,963 1,876 -4.4% EMEA (million EUR) 1,406 1,339 -4.8% Asia/Oceania (billion yen) 41.8 49.4 +18.1%
Slide 40: FX Rate (Actual)
FX RATE (ACTUAL) 40 Average rate for the period (yen) Currency Q2/FY16 Q2/FY17 Change USD 105 111 +6 EUR 118 126 +8 Change in closing rate from PY end Currency Q2/FY16 Q2/FY17 USD -12 +1 EUR -14 +13 Exchange rate change +: Yen Weakening, - : Yen Strengthening
Slide 41: FY2017 FCST: FX Sensitivity
FY2017 FCST：FX SENSITIVITY 41 Forecast rates from Q3/FY2017 onwards: 110 USD/yen, 130EUR/yen Estimated Fx sensitivity (Q3 and onward) of FY2017 forecasts by 1 yen appreciation* Year-end rate Average rate 1 yen higher than Currency 1 yen higher than assumption assumption Net sales Core OP Core OP USD
Slide 42: Balance Sheet/Cash Flow Highlights
BALANCE SHEET/CASH FLOW HIGHLIGHTS 42 (billion yen) FY2016 end Sep. 2017 Total assets 1,820.9 1,895.7 Cash and cash equivalents 340.9 307.9 Total net assets 1,271.8 1,350.9 Equity ratio (%) 69.8% 71.3% (billion yen) Q2/FY16 Q2/FY17 FY2016 Cash flows from operating business 90.1 115.3 235.6 Cash flow
Slide 43: Profit Distribution
PROFIT DISTRIBUTION 43 FY2017 FY2015 FY2016 (forecast) EPS (yen) 89.75 103.69 88.15 Divided per share (yen) 32 34 36 (forecast) ROE 15.0% 17.3% - DOE 5.4% 5.6% - 68 million shares 60 million shares Share buyback - 119.3 billion yen 91.4 billion yen Treasury stock 38 million shares 68 million shares
Slide 44: On the Forefront of Healthcare Change
ON THE FOREFRONT OF HEALTHCARE CHANGE