Kyowa Kirin Co., Ltd. · TSE:4151
Kyowa Kirin — Kyowa Hakko Kirin — FY2014 Earnings Presentation
46 slides from Kyowa Kirin's earnings presentation, Feb 2, 2015
Slide 1: Results Presentation Fiscal 2014
Results Presentation Fiscal 2014 Kyowa Hakko Kirin Co., Ltd. February 2, 2015
Slide 2: Agenda
Agenda Business overview Nobuo Hanai, Executive Director of the Board; President and CEO Financial review Kazuyoshi Tachibana, Managing Executive Officer R & D review & Topics Nobuo Hanai, Executive Director of the Board; President and CEO Q & A session 2
Slide 3: Forward-looking statements
Forward-looking statements This document contains certain forward-looking statements relating to such items as the companyʼs (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
Slide 4: Business overview
KYOWA KIRIN Business overview ss copyright© 2008 Kyowa Hakko Kirin Co.,Ltd. All Rights Reserved 4
Slide 5: FY2014 Business Overview
FY2014 Business Overview Steady progress in line with medium-term business plan within a changing business environment Drug price revisions implemented in April 2014 Impact of generics and biosimilars on core products ALLELOCK®,GRAN® and others is expanding Received approval for and began sale
Slide 6: Summary of 2014 results (consolidated) YoY
Summary of 2014 results (consolidated) YoY Sales and profits declined due to the effects of drug price revisions in April and an increase in R&D expenses (Unit: ¥bn) FY2013 results FY2014 results Change -7.1 Net sales 340.6 333.4 (-2%) Operating income 51.7 36.1 -15.6 Operating margin 15.2% 10.8% (-
Slide 7: FY2014 Divergence from earnings forecast
FY2014 Divergence from earnings forecast Main factors influencing actual performance compared to forecast for this period Consolidated Operating (Unit: ¥bn) Income Reasons for decrease in operating income (from beginning of FY2014): 600 60.0 51.7 • Impact of generics on long-listed products 43.0 • D
Slide 8: Expansion of overseas business base
Expansion of overseas business base Proceed with expansion of overseas business base to become GSP with PSK at the core ProStrakan performance (Unit: GBP million) Strong performance due to 3 growth Sales driver products 2014 2015 (Forecast) Abstral® £55.8M→ £59.6 M PecFent® £7.5M → £23.3 M Sancuso®
Slide 9: Financial review
KYOWA KIRIN Financial review ss copyright© 2008 Kyowa Hakko Kirin Co.,Ltd. All Rights Reserved 9
Slide 10: Summary of 2014 results (consolidated) YoY
Summary of 2014 results (consolidated) YoY Sales and profits declined due to the effects of drug price revisions in April and an increase in R&D expenses (Unit: ¥bn) FY2013 results FY2014 results Change -7.1 Net sales 340.6 333.4 (-2%) Operating income 51.7 36.1 -15.6 Operating margin 15.2% 10.8% (-
Slide 11: Summary of FY2014 financial results by segment (YoY)
Summary of FY2014 financial results by segment (YoY) In the Pharmaceuticals business, sales and profits declined due to effects of drug price revisions and an increase in R&D expenses In the Bio-Chemicals business, sales and profits increased due to an growth in APIs and a weaker yen FY2013 FY2014 (
Slide 12: Pharmaceuticals business: FY2014 Analysis of YoY profit changes
Pharmaceuticals business: FY2014: Analysis of YoY profit changes Net sales Operating income FY2013 Domestic sales 261.0 FY2013 46.1 (parent) -9.7 Gross profits -9.9 Exports (parent) +1.2 SG&A (excl. R&D Technology licensing -3.4 (parent) -0.6 expenses) Overseas sales (including +9.8 R&D expenses -3.
Slide 13: Pharmaceuticals business: Domestic sales of key products
Pharmaceuticals business: Domestic sales of key products The effects of drug price revisions significantly impacted long- listed products ALLELOCK® and GRAN® Product name, FY2013 FY2014 Change FY2014 Rate of other Reason for change forecast* achievement information NESP® 56.0 55.3 -0.7 Drug price re
Slide 14: Bio-Chemicals business: FY2014 Analysis of YoY profit changes
Bio-Chemicals business: FY2014: Analysis of YoY profit changes Net sales Operating income FY2013 82.9 FY2013 5.6 Healthcare (parent) +0 Pharma/ industrial Gross profits +3.0 use (parent) -0.4 SG&A (excl. R&D Overseas sales +1.4 expenses) -1.0 Daiichi Fine Chemical +1.2 R&D expenses -0.3 Other/ Elimi
Slide 15: Summary of full-year consolidated results: Analysis of YoY profit changes
Summary of full-year consolidated results: Analysis of YoY profit changes FY2014 net income: Analysis of YoY changes Pharmaceuticals -¥9.9bn Kyowa Hakko Kirin (parent) -¥12.5bn (drug price revision -¥9.1bn, return of (¥bn) (億円) Busulfex development and sales rights -¥2.1bn, decrease in sales volume
Slide 16: FY2015 consolidated forecasts
FY2015 consolidated forecasts Focus on market penetration of new products and sustained cash generation Continue to invest in R&D to raise business value FY2015 Change (Unit: ¥bn) FY2014 results forecasts (%) Net sales 333.4 354.0 20.5 (+6%) Operating income 36.1 41.5 5.3 Operating margin 10.8% 11.7
Slide 17: Pharmaceuticals business FY2015 forecasts
Pharmaceuticals business FY2015 forecasts (Unit: ¥bn) FY2014 results FY2015 forecasts Change 16.9 Net Sales 253.0 270.0 (+7%) Operating income 29.0 32.0 2.9 Operating margin 11.5％ 11.9% (+10%) [Operating income YoY change] • Increase sales volumes, FY2014 results 29.0 focused on new products such Gr
Slide 18: Bio-Chemicals business FY2015 forecasts
Bio-Chemicals business FY2015 forecasts (Unit: ¥bn) FY2014 results FY2015 forecasts Change 5.0 Net sales 83.9 89.0 (+6%) Operating income 7.2 9.5 2.2 Operating margin 8.7% 10.7% (+31%) [Operating income YoY change] • Increase in sales volumes of core products such as amino acids, FY2014 results 7.2
Slide 19: Financial strategy/shareholder returns policy
Financial strategy/shareholder returns policy Maximize corporate value = maximize shareholder value Global CMS (¥/$/£/€) Dividends/ payout ratio Increase efficiency of group-wide treasury management and reduce currency risk Payout ratio (before amortization (％)of goodwill) (%) Introduced at U.S. and
Slide 20: R&D review
KYOWA KIRIN R&D review a copyright© 2008 Kyowa Hakko Kirin Co.,Ltd. All Rights Reserved 20
Slide 21: Update on key domestic timeline events
Update on key domestic timeline events ☑ Approval for additional indications for humanized CCR4 monoclonal antibody POTELIGEO® ・ Untreated CCR4-positive adult T-cell leukemia/lymphoma (December) ・ Relapsed or refractory CCR4-positive peripheral T-cell lymphoma (March) ・ Relapsed or refractory CCR4-p
Slide 22: Global development update (1) KW-0761
Global development update (1) KW-0761 Indication Country/ Development stage Annual incidence per disease, other region ATL Untreated Japan Approved (Dec. 2014) Japan: approx. 1,1001 patients Relapsed/ Japan Approved (March 2012) refractory ATL Relapsed/ U.S. Phase 2 Europe, U.S.: Investigating refra
Slide 23: Global development update (2) KW-6002, KRN23
Global development update (2) KW-6002 Indication Country/ Development Annual incidence per disease, other region stage Parkinson’s disease NA Phase 3 U.S.: More than 570,0001 patients Europe Special Protocol Assessment agreed with FDA Others KRN23 Indication Country/ Development Patient numbers, oth
Slide 24: Biosimilars development update
Biosimilars development update Each development project is making strong progress in line with the initial plan Development Reference medical Stage Country/ number product Region Biosimilar FKB327 Adalimumab (humira) Phase３ US, other Biosimilar FKB238 Bevacizumab (avastin) Phase１ UK Biosimilar Not d
Slide 25: Topics
TOPICS 1. Mogamulizumab in immuno-oncology 2. New market formation sought by G-Lasta® 3. Further strengthen oncology category 25
Slide 26: Mogamulizumab in immuno-oncology
Mogamulizumab in immuno-oncology Mogamulizumab (Japan trade name POTELIGEO®) is an anti-CCR4 antibody developed by Kyowa Hakko Kirin ・The world’s first therapeutic antibody utilizing POTELLIGENT® enhanced antibody technology ・Indications approved in Japan for CCR4-positive hematopoietic organ tumors
Slide 27: Mogamulizumab in immuno-oncology: clinical trial collaborations
Mogamulizumab in immuno-oncology New possibilities for Mogamulizumab in immuno-oncology Accelerate exploratory trials in solid tumors under Clinical trial collaboration agreements MEDI4736 PF-05082566 Nivolumab Tremelimumab Mogamulizumab anti-CCR4 27
Slide 28: New market formation sought by G-Lasta
New market formation sought by G-Lasta® Accumulation of drug information over the more than 20 years since the launch of GRAN® Become clear category leader in this field with the launch of G-Lasta® Sales forecast to increase (Unit: ¥bn) (億円) GRAN® Syringe/Injection: 75, 150, M300 16.0 •Hematopoietic
Slide 29: New market formation sought by G-Lasta: prophylactic administration
New market formation sought by G-Lasta® Indication for prophylactic administration gives support to patients and healthcare workers ↓Completion of treatment with anti-cancer agents Convenience of treatment: GRAN® administration • Reduces the burden of drug administration on ↓↓↓↓↓・・・・ patients • Decr
Slide 30: Further strengthen oncology category: entinostat license
Further strengthen oncology category Entered license agreement for entinostat, a Class I selective HDAC inhibitor Overview of agreement with Syndax • Date of agreement: December 19, 2014 • Scope: License agreement for exclusive rights to develop and commercialize entinostat • Regions: Japan and Sout
Slide 31: Expectation for synergies in oncology category
Further strengthen oncology category Expectation for synergies in oncology category Potential for use in combination with cancer immunotherapy Synergies centered on breast cancer treatment Cancer immunotherapy Immune therapy combination drug Fentos® entinostat • Expectations for effectiveness G-Last
Slide 32: Business value improvement story
Business value improvement story Close in on various milestones in 2016 and accelerate evolution towards GSP 2014 2015 2016 2017 2018 Application Application Clinical trial completed •KW-3357 •KHK4827 • KHK4563 (asthma) Phase 3 • KW-6002 (Parkinson’s disease) Phase 3 • KW-0761 (CTCL) Phase 3 • KRN23
Slide 33: Q & A session
KYOWA KIRIN Q & A session a copyright© 2008 Kyowa Hakko Kirin Co.,Ltd. All Rights Reserved 933
Slide 34: Group mission and 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. If you have any inquiries regarding this presentation please call: Corporate Communications Depa
Slide 35: List of acronyms
List of acronyms APIs Active Pharmaceutical Ingredients ATL Adult T-cell Leukemia/Lymphoma CCR4 Chemokine ( C-C motif ) Receptor 4 CMS Cash Management System CTCL Cutaneous T-Cell Lymphoma G-CSF Granulocyte - Colony Stimulating Factor GSP Global Specialty Pharmaceutical Company HDAC Histone Deacetyl
Slide 36: Appendix
KYOWA KIRIN APPENDIX —kk{&<<—*—CCi—iSe copyright© 2008 Kyowa Hakko Kirin Co.,Ltd. All Rights Reserved 36
Slide 37: Appendix: FOREX related
Appendix: FOREX related Period average rate Average exchange FY2013 2014 Change FY2015 rate Results Results Forecast ¥/$ ¥96 ¥105 + ¥9 ¥109 ¥/€ ¥127 ¥140 +¥13 ¥139 ¥/£ ¥150 ¥173 +¥23 ¥178 FY2014 currency effects (YoY) Segment Currency Net sales Operating income Pharmaceuticals $ +¥0.8bn -¥0.0bn busi
Slide 38: Summary of FY2014 consolidated results and comparison with forecasts
Appendix: Summary of FY2014 consolidated financial results and comparison with forecasts One-time payment associated with licensing agreement, increase in R&D expenses associated with progress of overseas development (Unit: ¥bn) FY2014 forecasts FY2014 results Change -2.6 Net sales 336.0 333.4 (-1%)
Slide 39: Summary of FY2014 results by segment and comparison with forecasts
Appendix: Summary of FY2014 financial results by segment and comparison with forecasts Pharmaceuticals business: Products licensed from Syndax, aggressive investment in overseas development Bio-Chemicals business: shipments of amino acids fell, in particular in Asia and the U.S. (Unit: ¥bn) FY2014 f
Slide 40: Pharmaceuticals business: FY2015 forecast analysis of YoY profit changes
Appendix: Pharmaceuticals business: FY2015 forecast: Analysis of YoY profit changes Net sales Operating income FY2014 Domestic sales 253.0 Previous year FY2014 29.0 (parent) +8.7 Gross profits +9.7 Exports (parent) +1.3 SG&A (excl. R&D Technology licensing -6.0 expenses) -4.7 (parent) Overseas sales
Slide 41: Bio-Chemicals business: FY2015 forecast analysis of YoY profit changes
Appendix: Bio-Chemicals business: FY2015 forecast: Analysis of YoY profit changes Net sales Operating income FY2014 83.9 FY2014 7.2 Healthcare (parent) +1.7 Gross profits +3.4 Pharma/ industrial -0.8 use (parent) SG&A (excl. R&D Overseas sales +3.9 expenses) -1.2 +0.0 Daiichi Fine Chemical -0.2 R&D
Slide 42: Appendix: Business combination accounting treatment, Archimedes
Appendix: Business combination accounting treatment Archimedes Opening balance sheet (accounting treatment as of August 5, 2014 acquisition date) －Balance sheet after appraisal of intangible assets according to the PPA* method （Unit: GBP million) Assets 40.9 Liabilities 27.3 Deferred tax liabilities
Slide 43: Appendix: Effect of consolidation of Archimedes
Appendix: Effect of consolidation of Archimedes ProStrakan (Unit: GBP million) *1 Amortization of goodwill and marketing rights is not included in Selling, general and administrative expenses Amortization of goodwill and marketing rights= Depreciation + amortization of goodwill *2 EBITDA＝Operating i
Slide 44: Appendix: Key antibody targets in cancer immunotherapy
Appendix：Key antibody targets in cancer immunotherapy PD-L1 44
Slide 45: Appendix: Development progress with outlicensed compounds
Appendix: Development progress with outlicensed compounds Phase Name Partner Remarks I II III Cancer Tivozanib AVEO (VEGF receptor inhibitor) (KRN951) Asthma (Anti-IL-5R antibody) Benralizumab AstraZeneca (KHK4563) (MEDI-563) /MedImmune POTELLIGENT® COPD KRN5500 DARA Peripheral neuropathy RGI2001 RE
Slide 46: Appendix: Pharmaceuticals businesses in Asia
Appendix: Pharmaceuticals businesses in Asia Consolidated subsidiary MRs Net sales Pharmaceuticals business across Asia Year established Products South Korea ¥5.0bn Est. May 1991 30 NESP®, GRAN®, Neulasta®, Renagel®, REGPARA®, Kyowa Hakko Kirin Korea ALLELOCK®, LEUNASE®, Co.,Ltd. Mitomycin-C, Nplate