Slide 1: New Mid-term Business Plan “IBI 18”
New Mid-term Business Plan “IBI 18” CHUGAI PHARMACEUTICAL CO., LTD. President, COO Tatsuro Kosaka January 28/29, 2016
Slide 2: Forward-Looking Statements
New Mid-term Business Plan “IBI 18” Forward-Looking Statements This presentation may include forward-looking statements pertaining to the business and prospects of Chugai Pharmaceutical Co., Ltd. (the “Company”). These statements reflect the Company’s current analysis of existing information and tre
Slide 3: Review of 2013 – 2015 Mid-term Business Plan “ACCEL 15”
New Mid-term Business Plan “IBI 18” Review of 2013 – 2015 Mid-term Business Plan “ACCEL 15”
Slide 4: Business Performance during ACCEL 15
New Mid-term Business Plan “IBI 18” Business Performance during ACCEL 15 Revenue (bn JPY) Core OP (bn JPY) 498.8 100.0 2012-15 500.0 461.1 423.7 90.0 CAGR 386.6 400.0 80.0 70.0 Revenue 300.0 60.0 +8.9% 50.0 200.0 40.0 30.0 core OP 100.0 20.0 +6.3% 75.6 79.9 77.3 90.7 10.0 0.0 0.0 2012 2013 2014 2015
Slide 5: ACCEL 15 Achievements
New Mid-term Business Plan “IBI 18” ACCEL 15 Achievements Initial Objective Result Status Core EPS CAGR* Mid to high single-digit +18.3% ** （2012-15） growth ** Approx. in 5 yr average Core EPS Payout ratio average 50.3% 50% * CAGR: compound annual growth rate (%) ** Core EPS growth rate: average con
Slide 6: Achievement of ACCEL 15 Strategic Themes
New Mid-term Business Plan “IBI 18” Achievement of ACCEL 15 Strategic Themes Status Achieved above average market growth (Domestic, Actemra Increase of overseas) marketing Domestic MR sales productivity up more than 22%, reached productivity top-class level Alecensa: out-licensed to Roche, app
Slide 7: Powerful Product Portfolio and Late-stage Development Projects
New Mid-term Business Plan “IBI 18” Powerful Product Portfolio and Late-stage Development Projects (as of End of 2015) Annual sales New products PoC – to be launched over 20 bn JPY (2013-) (NMEs) • Avastin (93.8bn) • Perjeta* • GA101 • Herceptin* (32.7bn) • Kadcyla* • atezolizumab Oncology • Rituxan
Slide 8: Projected Submissions (Post PoC NMEs and Products)
Overview of Development Pipeline Projected Submissions (Post PoC NMEs and Products) NME line extension in-house Filed in-licensed AVASTIN (RG435) Cervical Cancer AVASTIN ACTEMRA (RG435) (MRA) Renal Cell Carcinoma Systemic Sclerosis ALECENSA (AF802/RG7853) NSCLC [post-crizotinib] atezolizumab KADCYLA
Slide 9: Business Environment and Vision for Growth
New Mid-term Business Plan “IBI 18” Business Environment and Vision for Growth
Slide 10: Environment Expected Around the Pharma Industry during the Next Mid-term Plan
New Mid-term Business Plan “IBI 18” Environment Expected Around the Pharma Industry during the Next Mid-term Plan 【Globally】 Increasing importance of pharmaceutical drugs due to increase of global population and aging societies Expansion of opportunities to create innovation based on advancements in
Slide 11: Mid-term Events and Performance Trend
New Mid-term Business Plan “IBI 18” Mid-term Events and Performance Trend Trend of Core OP （Actual・Forecast , After one-time profit and loss equalization ） Toward dramatic New mid-term growth globally business plan ACCEL 15 Special (Huge-seller) 90.7 re-pricing rule ▼： Domestic 71.0 price revision 1
Slide 12: Potential of Projects after PoC
New Mid-term Business Plan “IBI 18” Potential of Projects after PoC （Outlook as of End of 2015） Chugai original • emicizumab • Alecensa • SA237 products • nemolizumab • atezolizumab • lebrikizumab In-licensed products • GA101 • peretinoin • gantenerumab • Underline： Antibody drug 【Peak sales scale】
Slide 13: Realizing the Goal of “Top Pharmaceutical Company”
New Mid-term Business Plan “IBI 18” Realizing the Goal of “Top Pharmaceutical Company” Company that focuses on first-in-class/best-in-class products Corporate and services, and continuously provides new solutions to patients and medical communities around the world. Vision － Innovation all for patie
Slide 14: Positioning of New Mid-term Business Plan
New Mid-term Business Plan “IBI 18” Positioning of New Mid-term Business Plan Transform Chugai into a globally successful company through our competitive advantage that leverages the Strategic Alliance with Roche and through the realization of the “Top Pharmaceutical Company” goal (late 2010’s) 13
Slide 15: FY2016-18 New Mid-term Business Plan “IBI 18”
New Mid-term Business Plan “IBI 18” FY2016-18 New Mid-term Business Plan “IBI 18”
Slide 16: Name of New Mid-term Business Plan: IBI
New Mid-term Business Plan “IBI 18” FY2016-2018 Name of New Mid-term Business Plan IBI 18 IBI： Innovation Beyond Imagination 15
Slide 17: Chugai Business Model
New Mid-term Business Plan “IBI 18” Chugai Business Model KSF: From Japanese top level to global top level （Drug discovery – （Late development – Post-marketing) Early development) Originality Economy of scale in global development Variety Optimal operations in local areas Seeds Acceleration
Slide 18: Priority Agenda of IBI 18
New Mid-term Business Plan “IBI 18” Priority Agenda of IBI 18 Acquisition and implementation of competitiveness at a top global level Selection and Concentration strategy for acceleration of growth Pharmaceutical Sales/Medical Drug Discovery Development Technology Affairs/Safety Continuous creat
Slide 19: Priority Agenda ①: Drug Discovery
New Mid-term Business Plan “IBI 18” Priority Agenda ①: Drug Discovery Continuous creation of FIC, BIC projects utilizing innovative technologies Strengthening of Creation and Drug Continuous creation of engineered antibody research utilization of discovery foundation proprietary core goal projects t
Slide 20: Priority Agenda ②: Development
New Mid-term Business Plan “IBI 18” Priority Agenda ②: Development Promotion of faster launch and quick market penetration based on global top-class TCR* and development activities Execution of global top-class early development Acceleration of emicizumab and atezolizumab development as a top priori
Slide 21: Priority Agenda ③: Pharmaceutical Technology
New Mid-term Business Plan “IBI 18” Priority Agenda ③: Pharmaceutical Technology Strengthening of PT system for “Multiple and simultaneous global development,” “Fast global launch,” and “Cost reductions” Enhancement of CMC development Research ~ Early Late Development ~ infrastructure for early PoC
Slide 22: Priority Agenda ④: Sales/Medical Affairs/Safety
New Mid-term Business Plan “IBI 18” Priority Agenda ④: Sales/Medical Affairs/Safety Provision of advanced and diverse solutions through both independent roles and cross-functional cooperation Diverse local healthcare delivery system Realization of sales growth by concentrating and needs on sales dri
Slide 23: Priority Agenda ⑤: Global Top-level Talent
New Mid-term Business Plan “IBI 18” Priority Agenda ⑤: Global Top-level Talent Accelerate acquisition, development, and assignment of talents who are key for creating innovation and responding to environmental changes Acquisition and implementation of Selection of critical positions to accelerate co
Slide 24: IBI Quantitative Outlook
New Mid-term Business Plan “IBI 18” IBI 18 Quantitative Outlook Content Mid-term outlook Core EPS CAGR* Low single digit ** (2015-18) * CAGR: compound annual growth rate (%) ** Core EPS growth rate: constant average exchange rate for 2015, ~3% growth range 23
Slide 25: Basic Principles of Increasing Corporate Value and Shareholder Returns
New Mid-term Business Plan “IBI 18” Basic Principles of Increasing Corporate Value and Shareholder Returns Increase in Shareholder Basic Strategy Achievement corporate value returns Realization of high capital efficiency by growth being the driver Reinvestment Dividend （Core EPS payout ratio: Mid-te
Slide 26: FY2015 Consolidated Financial Overview (IFRS based)
FY2015 Consolidated Financial Overview (IFRS based) CHUGAI PHARMACEUTICAL CO., LTD. Executive Vice President, CFO Yoshio Itaya January 28/29, 2016
Slide 27: Full Year Results Summary
FY2015 Consolidated Financial Overview Full Year Results Summary Revenues: 498.8 billion yen (+37.7, +8.2% YoY) • Domestic sales excl. Tamiflu: increase due to steady growth of new products and mainstay products (+28.5, +8.2%) • Overseas sales: increase due to growth in Actemra export driven by bo
Slide 28: IFRS and Core Results Jan – Dec
FY2015 Consolidated Financial Overview IFRS and Core Results Jan – Dec IFRS results Non-core items Core results (Billions of JPY) 2015 Intangible 2015 (Billions of JPY) Others Jan - Dec assets Jan - Dec Non-Core items Revenues 498.8 498.8 1. Intangible assets Amortization +1.6 Sales 468.4 468.4 Impa
Slide 29: Financial Overview Jan – Dec
FY2015 Consolidated Financial Overview Year on Year (Core) Financial Overview Jan – Dec 2014 2015 (Billions of JPY) Jan - Dec Jan - Dec Growth (Billions of JPY) vs. Revenues vs. Revenues Revenues 461.1 498.8 +37.7 +8.2% Royalties and other operating income +6.2 Sales 436.9 468.4 +31.5 +7.2% Increase
Slide 30: Sales (excl. Tamiflu) Jan – Dec
FY2015 Consolidated Financial Overview Year on Year Sales (excl. Tamiflu) Jan – Dec Sales by Disease Area, Sales by Products, Year on Year Comparisons Year on Year Changes (Billions of JPY) 460.2 +36.4, +8.6% 423.8 Pegasys Avastin 82.2 -5.1 (1.9) (93.8) +11.5 Overseas -72.9% +14.0% 74.3 +7.9, +10.6%
Slide 31: Tamiflu Sales Performance
FY2015 Consolidated Financial Overview Tamiflu Sales Performance Fiscal Term Sales (Billions of JPY) FY2009.12 FY2010.12 FY2011.12 FY2012.12 FY2013.12 FY2014.12 FY2015.12 Seasonal Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Sales 20
Slide 32: Operating Profit Jan – Dec
FY2015 Consolidated Financial Overview Year on Year (Core) Operating Profit Jan – Dec (Billions of JPY) M&D (Billions of JPY) 2014 2015 Growth Jan - Dec Jan - Dec -3.0 Revenues 461.1 498.8 +37.7 R&D G&A Royalties and other operating income +6.2 Cost of sales -217.0 -238.9 -21.9 -1.3 +1.8 Gross profi
Slide 33: Financial Overview Oct – Dec
FY2015 Consolidated Financial Overview Year on Year (Core) Financial Overview Oct – Dec 2014 2015 (Billions of JPY) Oct - Dec Oct - Dec Growth (Billions of JPY) vs. Revenues vs. Revenues Revenues 127.7 131.1 +3.4 +2.7% Decrease in gross profit from sales -7.3 Sales 121.7 115.2 -6.5 -5.3% Decrease in
Slide 34: Financial Overview Jan – Dec vs. Forecast
FY2015 Consolidated Financial Overview vs. Forecast (Core) Financial Overview Jan – Dec 2015 Jan - Dec (Billions of JPY) Forecast Actual +/- Achievement Revenues 486.5 498.8 +12.3 102.5% Sales 460.8 468.4 +7.6 101.6% excl. Tamiflu 453.4 460.2 +6.8 101.5% Domestic 360.9 378.0 +17.1 104.7% Export to R
Slide 35: Sales Progress (excl. Tamiflu) Jan – Dec
FY2015 Consolidated Financial Overview vs. Forecast (Core) Sales Progress (excl. Tamiflu) Jan – Dec Sales by Disease Area, Sales by Products, Actual vs. Forecast Actual vs. Forecast (Billions of JPY) 453.4 +6.8, +1.5% 460.2 Overseas Actemra Avastin -10.3, -11.1% 82.2 -12.1 (overseas) (93.8) +5.6 (63
Slide 36: Impact from Foreign Exchange
FY2015 Consolidated Financial Overview vs. Forecast (Core) Impact from Foreign Exchange [Reference] (Billions of JPY) 2015 Jan - Dec Forecast rate Historical exchange rate to the JPY (FX impact vs. forecast rate) (as of Jan. 28, 2015) JPY +4.0 150 2015 EUR 2015 CHF 2014 EUR 2014 CHF 145 Revenues Sal
Slide 37: Balance Sheet Items
FY2015 Consolidated Financial Overview vs. 2014 Year End Balance Sheet Items < Assets, Liabilities, and Net Assets > (Billions of JPY) Increase in net working capital +5.2 2014 2015 (Billions of JPY) Change Decrease in trade accounts receivable -6.8 Dec Dec Trade accounts receivable 141.3 134.5 - 6.
Slide 38: Net Cash
FY2015 Consolidated Financial Overview vs. 2014 Year End Net Cash Total increase in net working capital, etc. -15.9 Total investment Operating cash flow after adjustments +105.4 Operating profit +86.8 (Billions of JPY) -24.8 Depreciation and amortization, etc. +18.6 Operating cash flow Others after
Slide 39: Free Cash Flow Jan - Dec
FY2015 Consolidated Financial Overview Year on Year Free Cash Flow Jan - Dec 2014 2015 (Billions of JPY) (Billions of JPY) Change Jan-Dec Jan-Dec Operating profit - IFRS basis 75.9 86.8 +10.9 Operating profit, net of operating cash adjustments +9.0 Depreciation and impairment of Property, plant and
Slide 40: Forecast 2016 Jan – Dec
FY2015 Consolidated Financial Overview 2016 Forecast (Core) Forecast 2016 Jan – Dec Actual Forecast Growth (Billions of JPY) 2015 Jan - Dec 2016 Jan - Dec vs. Revenues vs. Revenues Revenues 498.8 495.0 -3.8 -0.8% Sales 468.4 475.4 +7.0 +1.5% excl. Tamiflu 460.2 466.8 +6.6 +1.4% Domestic 378.0 379.0
Slide 41: Operating Profit 2016 Jan – Dec
FY2015 Consolidated Financial Overview 2016 Forecast (Core) Operating Profit 2016 Jan – Dec (Billions of JPY) Gross profit -19.0 Gross profit from sales -8.2 National Health Insurance drug price revision Royalties and other operating Decline in price income Increase in of Actemra sales volume, One-t
Slide 42: Foreign Exchange Impact on Cost of Sales
FY2015 Consolidated Financial Overview Foreign Exchange Impact on Cost of Sales Note: Figure and numbers below are for illustrative purposes Cost of sales for the year Cost of sales depends on FX Cost of sales will be fixed is enclosed by red rate at the time of purchase even if FX rate change witho
Slide 43: Sales (excl. Tamiflu) Forecast vs. 2015 Actual
FY2015 Consolidated Financial Overview 2016 Forecast (Core) Sales (excl. Tamiflu) Forecast vs. 2015 Actual Sales by Disease Area, Sales by Products, Year on Year Comparisons Year on Year Changes (Billions of JPY) 460.2 +6.6, +1.4% 466.8 Overseas -3.7 Oxarol Actemra +5.7 (9.2) (overseas) 82.2 +5.6, +
Slide 44: Dividend Policy
FY2015 Consolidated Financial Overview Dividend Policy Policy Aiming to ensure stable profit for all shareholders and a consolidated dividend payout ratio of 50% on average to Core EPS, taking account of strategic funding needs and earnings prospects. Annual dividends per share (JPY) Core payout ra
Slide 45: Capital Investments
FY2015 Consolidated Financial Overview Current Status / Plan for Major Capital Investments Objective - Simultaneous development and quick launch of therapeutic antibodies, etc. - Reduction of manufacturing costs for in-house products 2012 2013 2012 2013 2014 2014 2015201 2016 2017 2018 2019 2020 202
Slide 46: Overview of Development Pipeline
Overview of Development Pipeline CHUGAI PHARMACEUTICAL CO., LTD. Executive Vice President Yutaka Tanaka January 28/29, 2016
Slide 47: Next-Generation Core Technologies
Overview of Development Pipeline Next-Generation Core Technologies Small molecule Antibody Middle molecules ex) cyclic peptide • Encompassing advantages of small- molecule and antibody drugs • Target ₋ intercellular molecules which require high specificity ₋ protein-protein interaction Outside cell
Slide 48: Acceleration in Antibody Discovery
Overview of Development Pipeline Acceleration in Antibody Discovery SMART-Ig Neuromyelitis optica SA237 ART-Ig Hemophilia A ACE910 New technologies Research Non-clinical Clinical 47
Slide 49: ACE910 (emicizumab) Development Programs
Overview of Development Pipeline ACE910 (emicizumab) Development Programs - 2015 2016 2017 2018 - Phase 1: Healthy adults and patients → Phase 1/2 (extension study): Patients Phase1 and 1/2: Japanese trials Others: global trials with Roche Non-interventional study: Patients (Main purpose: real-world
Slide 50: RG7446 (atezolizumab) Phase 3 Development Programs
Overview of Development Pipeline RG7446 (atezolizumab) Phase 3 Development Programs PDL1 selected All comer 1L: 1st line 2L: 2nd line *muscle invasive cancer Treatment line Cancer Study (planned filing year) Bladder Adjuvant* IMvigor 010 atezolizumab vs. observation (2018 and beyond) Advanced/metast
Slide 51: Oncology Field Projects under Development
Overview of Development Pipeline Oncology Field Projects under Development (as of 28 January, 2016) Phase I Phase II Phase III Filed CKI27 (RG7304) GC33 (RG7686) AF802 (RG7853) RG435 / Avastin (Japan / overseas) / codrituzumab / Alecensa (overseas) - cervical cancer - solid tumors - hepatocellular c
Slide 52: Primary Field Projects under Development
Overview of Development Pipeline Primary Field Projects under Development (as of 28 January, 2016) Phase I Phase II Phase III Filed ED-71 / Edirol (China) Bone & Joint - osteoporosis EOS789 Renal - hyperphosphatemia MRA / Actemra - large-vessel vasculitis - giant cell arteritis (overseas) Autoimmune
Slide 53: Development Status
Overview of Development Pipeline Development Status In- RG340 / Xeloda® licensed Gastric cancer (adjuvant indication added) Approved in November 2015 In- AF802 / Alecensa® house ALK positive, metastatic NSCLC who have progressed on or those intolerant to crizotinib Approved in December 2015 (US) In-
Slide 54: Development Status
Overview of Development Pipeline Development Status In- RG484 / Bonviva® (oral) licensed Osteoporosis Approved in January 2016 In- MRA / Actemra® house Systemic sclerosis Started global P3 in November 2015 In- ACE910 / emicizumab house Hemophilia A Started global P3 in November 2015 (inhibitor) In-
Slide 55: Other Progress
Overview of Development Pipeline Other Progress In- AF802 / Alecensa® house 150mg capsule (new dosage form) Launched in December 2015 In- CSG452 / DEBERZA® house Type 2 diabetes Licensed rights for development and marketing in the US and EU to Kowa Company in November 2015 In- RG3502 / lebrikizumab
Slide 56: Projected Submissions (Post PoC NMEs and Products)
Overview of Development Pipeline Projected Submissions (Post PoC NMEs and Products) NME line extension in-house Filed in-licensed AVASTIN (RG435) Cervical Cancer AVASTIN ACTEMRA (RG435) (MRA) Renal Cell Carcinoma Systemic Sclerosis ALECENSA (AF802/RG7853) NSCLC [post-crizotinib] atezolizumab KADCYLA
Slide 57: Updates on the Development Requests for Unapproved Drugs/Indications
Overview of Development Pipeline Updates on the Development Requests for Unapproved Drugs/Indications Review Committee of Development Requests for Unapproved Drugs/Indication • Ten indications (including additional dosages and administrations) of eight products from the first round requests have bee
Slide 58: Contacts: Corporate Communications Dept.
Contacts: Corporate Communications Dept. Media Relations Group Tel: +81 (0)3-3273-0881 Fax: +81 (0)3-3281-6607 e-mail: pr@chugai-pharm.co.jp Koki Harada, Hiroshi Araki, Sachiyo Yoshimura, Mitsuka Saito Investor Relations Group Tel: +81 (0)3-3273-0554 Fax: +81 (0)3-3281-6607 e-mail: ir@chugai-pharm.c