Seikagaku Corporation · TSE:4548
Seikagaku — FY2022 Earnings Presentation
64 slides from Seikagaku's earnings presentation, Feb 8, 2023
Slide 1: Financial Results for the Fiscal Year 2022
Exploring the Innovative Promise of Glycoscience Financial Results for the Fiscal Year 2022 (April 1, 2022 – March 31, 2023) （TSE：4548）
Slide 2: Contents
Exploring the Innovative Contents Promise of Glycoscience FY2022 Results P3 Research and Development P19 Net Sales / Income P4-8 SI-6603 P20 (Lumbar disc herniation) FY2023 Forecasts P9 SI-614 (Dry Eye) P21 Net Sales / Income P10-11 SI-722 P22 Trend in R&D Expenses P12 (Interstitia
Slide 3: Overview of FY 2022
Exploring the Innovative Overview of FY 2022 Promise of Glycoscience FY2022 Year-on-Year Comparison with Forecasts Results Change % of Change Change % of Change (Millions of Yen) Net sales 33,456 -1,394 -4.0% -43 -0.1% Operating Income 2,114 -2,381 -53.0% +414 +24.4% Ordinary Income 3,069 -2,325 -43
Slide 4: Net sales by Business Segment (FY2022) - Domestic Pharmaceuticals
Exploring the Innovative Net sales by Business Segment (FY2022) Promise of Glycoscience FY2022 Year-on- % of Domestic Pharmaceuticals (Millions of Yen) Results Year Change ▶ ARTZ（Joint-function improving agent） Net sales 33,456 -1,394 -4.0% • Sales down due to the impact of NHI drug price reductions
Slide 5: Net sales by Business Segment (FY2022) - Overseas Pharmaceuticals
Exploring the Innovative Net sales by Business Segment (FY2022) Promise of Glycoscience FY2022 Year-on- % of Overseas Pharmaceuticals (Millions of Yen) Results Year Change *Foreign exchange impact on Overseas Pharmaceuticals: approx. +1,150 million yen Net sales 33,456 -1,394 -4.0% ▶ Gel-One in the
Slide 6: Net sales by Business Segment (FY2022) - Bulk, Royalty, LAL
Exploring the Innovative Net sales by Business Segment (FY2022) Promise of Glycoscience FY2022 Year-on- % of Bulk Products / CDMO (Millions of Yen) Results Year Change Bulk product sales up CDMO sales at Dalton Pharmaceutical up, reflecting Net sales 33,456 -1,394 -4.0% the impact of yen depreciatio
Slide 7: Income for FY2022
Exploring the Innovative Income for FY2022 Promise of Glycoscience FY2022 Year-on- % of Operating Income 2,114 (-2,381) (Millions of Yen) Results Year Change Cost of sales ratio（-0.3pt） • Ratio at the prior-year level because of change in Net sales 33,456 -1,394 -4.0% the sales mix, despite the impa
Slide 8: Income in FY2022 (Forecasts 11/8)
Exploring the Innovative Income in FY2022 (Forecasts 11/8) Promise of Glycoscience FY2022 Compa. with % of Net sales (Millions of Yen) Results forecasts Change Sales broadly in line with forecast due to higher shipments of domestic pharmaceuticals, despite Net sales 33,456 -43 -0.1% lower sales from
Slide 9: Overview of Forecasts in FY2023
Exploring the Innovative Overview of Forecasts in FY2023 Promise of Glycoscience FY2023 FY2022 Results (Millions of Yen) Forecasts Results Change % of Change Net sales 32,550 33,456 -906 -2.7% Operating Income 100 2,114 -2,014 -95.3% Ordinary Income 1,550 3,069 -1,519 -49.5% Net Income 1,450 2,236 -
Slide 10: Forecasts (Net sales) in FY2023
Exploring the Innovative Forecasts (Net sales) in FY2023 Promise of Glycoscience FY2023 Year-on-Year Net sales Forecasts % of Change Forecasting a sales decrease to result from the (Millions of Yen) Change impact of shipment timing on sales of overseas pharmaceuticals, despite projected increases in
Slide 11: Forecasts (Income) in FY2023
Exploring the Innovative Forecasts (Income) in FY2023 Promise of Glycoscience FY2023 Year-on-Year Operating Income Forecasts % of Change Cost of sales ratio (Millions of Yen) Change • Increase reflecting soaring fuel costs and Net sales 32,550 -906 -2.7% development of an expanded production system
Slide 12: Trend in R&D Expenses
Exploring the Innovative Trend in R&D Expenses Promise of Glycoscience Continuing to focus on drug discovery specializing in Glycoscience Undertaking improvement in R&D efficiency R&D Expenses Ratio to Net sales ● Ratio to Net sales(excluding royalty income) 30.0% 29.7% (Millions of Yen) 29.2% 28.3%
Slide 13: Domestic Pharmaceuticals (Year-on-Year)
Exploring the Innovative Promise of Glycoscience Domestic Pharmaceuticals (Year-on-Year) Sales at the prior-year level, with higher Domestic Pharmaceuticals FY2022 Results volume due to switching from competitors Sales trend -1.5% （Sales） of ARTZ and OPEGAN offsetting NHI drug price reductions (Mill
Slide 14: Safety Information on Joint Function Improving Agent JOYCLU
Exploring the Innovative Safety Information on Joint Function Improving Agent JOYCLU Promise of Glycoscience Blue Letter (rapid safety information) issued in June 2021 Seikagaku is further raising awareness among healthcare professionals and taking measures to identify the cause Dear Healthcare Prof
Slide 15: Domestic Pharmaceuticals (FY2023 Forecast Year-on-Year)
Exploring the Innovative Domestic Pharmaceuticals (FY2023 Forecast Year-on-Year ) Promise of Glycoscience Domestic Pharmaceuticals FY2023 Forecast Projected sales increase, with volume increases for ARTZ and other products Sales trend + 6.0% offsetting NHI drug price reductions （Sales） Full year (Mi
Slide 16: Overseas Pharmaceuticals (Year-on-Year)
Exploring the Innovative Overseas Pharmaceuticals (Year-on-Year ) Promise of Glycoscience Sales increase, with the positive impact Overseas Pharmaceuticals FY2022 Results of yen depreciation offsetting the Sales trend + 11.5% impact of ARTZ shipment adjustments （Sales） and the spread of COVID-19 in
Slide 17: Overseas Pharmaceuticals (FY2023 Forecast Year-on-Year)
Exploring the Innovative Overseas Pharmaceuticals (FY2023 Forecast Year-on-Year ) Promise of Glycoscience Projected decrease to result from lower Overseas Pharmaceuticals FY2023 Forecast local sales because of a system change in Sales trend -14.5% the U.S. and the impact of shipment （Sales） timing F
Slide 18: Sales of LAL Business
Exploring the Innovative Sales of LAL Business (year-on-year / value basis) Promise of Glycoscience LAL Business FY2022 Results：+17.2% (Year-on-Year) Sales trend ＊Foreign exchange impact: approx. + 1,650million (Millions of Yen) Overseas ＜Breakdown＞ Sales increase due to the impact of yen depreciati
Slide 19: Pipeline List
Exploring the Innovative Pipeline List Promise of Glycoscience Development code/ Appli- Market Indication (Product name) PI PⅡ PⅢ cation approval SI-6603 SI-6603 Lumbar Disk Herniation （Condoliase） US SI-614 SI-614 Dry eye US （Modified Hyaluronate） SI-613 SI-613 Target Market US：Knee Osteoarthritis
Slide 20: SI-6603 (Treatment for Lumbar Disc Herniation)
Exploring the Innovative SI-6603 (Treatment for Lumbar Disc Herniation) Promise of Glycoscience Follow-up observation completed in March 2023 Preparations for results analysis underway Administration image Development status ▶ U.S. Phase III ：Starting February 2018 • Subject enrollment complete in M
Slide 21: SI-614 (Dry Eye)
Exploring the Innovative SI-614 (Dry Eye) Promise of Glycoscience Phase III clinical study in the U.S. initiated in May 2022 Subject enrollment completed in February 2023, with follow-up observation underway Development status Administration image ▶ U.S. : P III Initiated May 2022 • Clinically benef
Slide 22: SI-722 (Interstitial cystitis and bladder pain syndrome)
Exploring the Innovative SI-722 (Interstitial cystitis and bladder pain syndrome) Promise of Glycoscience Subject enrollment for PI/PII studies in the U.S. completed Currently considering the future development policy Administration image Development status ▶ U.S. Phase I/II：Starting November 2019 ・
Slide 23: SI-449 (Adhesion Barrier / Medical Device)
Exploring the Innovative SI-449 (Adhesion Barrier / Medical Device) Promise of Glycoscience Subject enrollment for pivotal study completed in September 2022 Aiming to obtain approval and initiate a clinical study in the U.S. during the mid-term management plan period Administration image Development
Slide 24: Progress Against the Mid-Term Management Plan in Fiscal 2022
糖質科学で未来を創る Progress Against the Mid-Term Management Plan in Fiscal 2022 Ⅰ Accelerate R&D utilizing unique drug-discovery technologies Sept. 2022 Completion of subject enrollment for a pivotal clinical study in Japan of SI-449 (an adhesion barrier) Feb. 2023 Completion of subject enrollment for a
Slide 25: Basic Policy on Profit Distribution
Exploring the Innovative Basic Policy on Profit Distribution Promise of Glycoscience Make investments for sustained profit growth and corporate value enhancement and pay stable dividends Shareholder returns Consider dividend increases with ¥26 per share as a guideline, taking into account business
Slide 26: Appendix
Exploring the Innovative Promise of Glycoscience Appendix 26
Slide 27: Trend in NHI Reimbursement Price of ARTZ to Domestic
Exploring the Innovative Trend in NHI Reimbursement Price of ARTZ to Domestic Promise of Glycoscience ¥1,526 ¥1,453(-7.4%) 1,500 ¥1,348(-7.2%) ¥1,155 (-14.3%) ¥968 (-13.1%) ¥813 1,000 (-12.6%) ¥780 (-4.1%) ¥1,114 (-3.6%) ¥930 500 (-3.9%) 0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY20
Slide 28: Trend in Deliveries of ARTZ / OPEGAN to Domestic Medical Institutions
Trend in Deliveries of ARTZ / Exploring the Innovative Promise of Glycoscience OPEGAN to Domestic Medical Institutions Joint-function improving agent Ophthalmic viscoelastic devices ARTZ OPEGAN The first HA joint function improving agent The first domestically HA formulation in the world Used
Slide 29: Overview of JOYCLU
Exploring the Innovative Overview of JOYCLU Promise of Glycoscience Manufacturing and marketing approval in Japan obtained in March 2021 For the indication of osteoarthritis (knee joint and hip joint) May 19 NHI drug price listing and launch Product name JOYCLU®30mg Intra-articular Injection Generic
Slide 30: Overview of JOYCLU
Exploring the Innovative Overview of JOYCLU Promise of Glycoscience Improvement of symptoms expected by administration once every 4 weeks First joint function improvement agent in Japan indicated for the treatment of osteoarthritis of the hip joint Features ▶ Hyaluronic acid and diclofenac chemicall
Slide 31: SI-613 (Treatment of Osteoarthritis/Enthesopathy)
Exploring the Innovative SI-613 (Treatment of Osteoarthritis/Enthesopathy) Promise of Glycoscience Development of SI-613-ETP discontinued Prioritize identification of cause of JOYCLU side effects Development status Administration image ▶ SI-613 (osteoarthritis of the knee) U.S. /China/South Korea •
Slide 32: Four types of lumbar disc herniation
Exploring the Innovative Four types of lumbar disc herniation Promise of Glycoscience 1. Protrusion 2. Subligamentous extrusion The hernia does not extend beyond the Although the hernia extends beyond the outermost layer of the annulus fibrosus outermost layer of the annulus fibrosus, it is covered
Slide 33: Physician and Facilities Requirements for HERNICORE Use
Exploring the Innovative Physician and Facilities Requirements for HERNICORE Use Promise of Glycoscience Setting of physician and facility requirements for HERNICORE use to promote appropriate use and ensure safety 【Physician requirements 】 【Japanese Society for Spine Surgery and Related Research】 :
Slide 34: Market Situation of Hyaluronic Acid Products in the U.S.
Exploring the Innovative Market Situation of Hyaluronic Acid Products in the U.S. Promise of Glycoscience Market size of US$980 mil. in 2022 ■U.S. market share by number of injections (Value basis, including competitors) Single injection Multiple injection Five-inj.: Single-injection：50% Three-injec
Slide 35: Trend in Overseas Sales of Hyaluronic Acid Products
Exploring the Innovative Trend in Overseas Sales of Hyaluronic Acid Products Promise of Glycoscience Including (Millions of Yen) impact of yen 9,000 Including depreciation impact of yen depreciation 8,000 8,534 7,000 Start of full scale sales 7,466 7,652 for Gel-One Aug.2012 7,300 7,113 Including 6,
Slide 36: Recombinant LAL reagent PyroSmart NextGen
Exploring the Innovative Recombinant LAL reagent「PyroSmart NextGen」 Promise of Glycoscience April 2021 launch at ACC Product to be marketed globally, with a launch in Japan planned for May or later in 2021 Product Features ▶ Product manufactured using recombinant technology without using blood harve
Slide 37: The LAL Business
Exploring the Innovative The LAL Business Promise of Glycoscience Endotoxin detection reagents Glucan detection in vitro (Seikagaku Corporation, ACC) diagnostic agents (ACC) Manufacture and sale of reagents for detecting Manufacture and sales of in vitro diagnostic endotoxins* in the manufacturi
Slide 38: Outline of Associates of Cape Cod, Inc.
Exploring the Innovative Outline of Associates of Cape Cod, Inc. Promise of Glycoscience Developed the world’s first endotoxin detection reagent and obtained FDA approval in 1977 / Sales network spanning 80 countries Associates of Cape Cod, Inc. （ACC社） Headquarters：Massachusetts, U.S.A. Establis
Slide 39: Outline of Acquisition: Dalton
Exploring the Innovative Outline of Acquisition Promise of Glycoscience Dalton, a Canadian CDMO, becomes a subsidiary Acquiring a pharmaceuticals manufacturing base compliant with US/Canadian GMP Outline of acquisition Name：Dalton Chemical Laboratories, Inc. Acquisition cost：Up to CAD 41 million
Slide 40: Outline of SEIKAGAKU NORTH AMERICA CORPORATION
Exploring the Innovative Outline of SEIKAGAKU NORTH AMERICA CORPORATION Promise of Glycoscience Established new company in Canada, promoting development of Seikagaku pharmaceuticals and medical devices in North America SEIKAGAKU NORTH AMERICA CORPORATION Location ：Toronto, Ontario Province, Canada
Slide 41: Trend in Financial Index
Exploring the Innovative Trend in Financial Index Promise of Glycoscience new revenue recognition standard 60% 52.2% ● 50% 46.2% 46.4% 46.1% 44.8% 43.1% 43.7% 44.8% ● ● Sales Cost Ratio 41.6% ● (excluding royalty 40% income) 29.2% R&D Expenses Ratio 27.9% 26.5% 27.9% (excluding royalty income) 30% 2
Slide 42: Trends in Depreciation & Capital Investments
Exploring the Innovative Trends in Depreciation & Capital Investments Promise of Glycoscience Impairment loss taken in FY2019 Depreciation will trend toward ¥1.0 billion ■ Trend in Depreciation of Yen) 3,191 3,500 (Millions 2,920 2,925 2,902 2,500 1,778 1,700 1,500 1,327 1,051 808 500 ~~ FY2015 FY20
Slide 43: Overview of Current Mid-term Management Plan
Mid-term Management Plan Exploring the Innovative Overview of Current Mid-term Management Plan Promise of Glycoscience FY2025 numerical targets Net sales ¥40.0 billion Operating income ¥7.0 billion Next mid-term management plan Next Stage Current mid-term management plan Fiscal 2022 to Fiscal 2025 P
Slide 44: Overview of Key Measures
Mid-term Management Plan Exploring the Innovative Overview of Key Measures Promise of Glycoscience Five Key Measures (Strategic Pillars) Ⅰ Ⅱ Ⅲ Ⅳ Ⅴ Maximize the Maintain and Accelerate Construct a Expand the product value enhance the R&D utilizing global LAL business of SI-6603 business value unique
Slide 45: Accelerate R&D Utilizing Unique Drug-Discovery Technologies
Mid-term Management Plan Exploring the Innovative Accelerate R&D Utilizing Unique Drug-Discovery Technologies Promise of Glycoscience Aim to leverage Seikagaku’s GAG-related technologies to create products needed by patients Unmet medical needs Existing fields Creation of new (orthopedics,ophthalm
Slide 46: Pipeline List (Research and Development themes)
Mid-term Management Plan Exploring the Innovative Pipeline List (Research and Development themes) Promise of Glycoscience Development code/ Appli- Market Indication (Product name) PI PⅡ PⅢ cation approval SI-6603 SI-6603 SI-6603 Lumbar Disk Herniation （Condoliase） US US SI-614 SI-614 Dry eye US （Mod
Slide 47: Plan until Market Introduction of SI-6603
Mid-term Management Plan Exploring the Innovative Plan until Market Introduction of SI-6603 Promise of Glycoscience Obtain clinical study findings during FY2025 Aim for an NDA and approval during the period of the current mid-term management plan Steps leading up to market introduction Follow-up obs
Slide 48: Maintain and Enhance the Business Value of Joint Function Improving Agents
Mid-term Management Plan Maintain and Enhance the Business Value of Joint Exploring the Innovative Promise of Glycoscience Function Improving Agents Pursue corporate value enhancement through maximization of Seikagaku products in the market for joint function improving agents and cost structure impr
Slide 49: Construct a Global Production System
Mid-term Management Plan Exploring the Innovative Construct a Global Production System Promise of Glycoscience Further reinforce a stable supply of products on the basis of a GMP-compliant, appropriate governance system Seikagaku Corporation Takahagi Plant DALTON CHEMICAL LABORATORIES, INC. (Ibaragi
Slide 50: Strategic Direction for the LAL Business
Mid-term Management Plan Exploring the Innovative Strategic Direction for the LAL Business Promise of Glycoscience Aim to be a leading company in the market for recombinant endotoxin detection reagents and glucan detection in vitro diagnostics Pursuit of Unique Value Refine the joint development sys
Slide 51: Initiatives for Expansion of the LAL Business
Mid-term Management Plan Exploring the Innovative Initiatives for Expansion of the LAL Business Promise of Glycoscience Accomplish a transformation necessary from a long-term perspective in addition to continuation of current businesses and product improvement 1. Endotoxin detection reagent business
Slide 52: Materiality
Mid-term Management Plan Exploring the Innovative Materiality Promise of Glycoscience Seikagaku has identified important issues that should be addressed on a priority basis in the interest of achieving sustainable development of society and enhancement of corporate value ① Creation of truly useful p
Slide 53: Sustainability-Related Initiatives
Mid-term Management Plan Exploring the Innovative Sustainability-Related Initiatives Promise of Glycoscience Acceleration of multinational expansion and new drug development. Strengthening and utilization of original GAG-related basic technologies Healthcare Product improvement and post-market
Slide 54: Numerical Targets
Mid-term Management Plan Exploring the Innovative Numerical Targets Promise of Glycoscience FY2021 results FY2025 target Net sales ¥34.8 billion ¥40.0 billion Operating income ¥4.4 billion ¥7.0 billion ≪Assumptions≫ U.S. market introduction of SI-6603 (treatment for lumbar disc herniation) Profi
Slide 55: Basic Policy on Profit Distribution
Mid-term Management Plan Exploring the Innovative Basic Policy on Profit Distribution Promise of Glycoscience Make investments for sustained profit growth and corporate value enhancement and pay stable dividends Shareholder returns • Consider dividend increases with ¥26 per share as a guideline, tak
Slide 56: Mid-term Management Plan Summary
Mid-term Management Plan Exploring the Innovative Mid-term Management Plan Summary Promise of Glycoscience A period for achieving growth Ⅰ Ⅱ Ⅲ Ⅳ Ⅴ Maximize the Maintain and Accelerate Construct a Expand the product value enhance the R&D utilizing global LAL business of SI-6603 business value unique
Slide 57: Basic Policy on Research and Development
Exploring the Innovative Basic Policy on Research and Development Promise of Glycoscience Continue Our R&D policy to make the most of our technology and knowledge Target Substances Orthopedic Glycoscience New disorders Products Area Osteoarthritis(OA) Lumbar disc GAG herniation, etc. GAG- Modified r
Slide 58: Clinical Study Information
Exploring the Innovative Clinical Study Information Promise of Glycoscience Develop- Target Development code/ Clinical Study Title Estimated Primary End Point ment Enroll- Indication (Study ID) Period (Primary Follow-up period) Location ment SI-6603 U.S. Phase III additional study May. 2018 – Leg pa
Slide 59: Contract Status by R&D Theme
Exploring the Innovative Contract Status by R&D Theme Promise of Glycoscience Planned receipt of milestone royalties in accordance with future progress in development and marketing Develop- Total Amount of Development Code ment Sales Partner Milestone Royalties Indication Location ( of which, in upf
Slide 60: Seikagaku's vision
Exploring the Innovative Seikagaku's vision Promise of Glycoscience A company that is valued by the world through its Our vision innovative drug discovery Core values Creativity, Fairness, Dreams and Passion (motto) We create safe and useful products for human well-being Creed with basic research ba
Slide 61: Special Profile: Specialization in Glycoscience
Exploring the Innovative Special Profile Promise of Glycoscience Specialization in Glycoscience Niche field, market not big enough for the major pharmaceutical companies to penetrate Focusing on this field more than 70 years State-of-the-art technology related to GAG Drug discovery expertise u
Slide 62: Our Business Segment
Exploring the Innovative Our Business Segment Promise of Glycoscience Pharmaceutical Business 67.9％ Ophthalmic Surgical Aids Domestic Pharmaceuticals 33.7％ Bulk Products/ CDMO 8.7％ Bulk Products Joint Function Improving Agents Net Sales Royalty income 0.0％ 34,851million Treatment for lumbar disc her
Slide 63: Main Hyaluronic Acid (HA) Products
Exploring the Innovative Main Hyaluronic Acid (HA) Products Promise of Glycoscience ARTZ® Joint function improving agent by multiple injections The first HA joint function improving agent in the world Main distributors: Kaken Pharmaceutical (Japan): ARTZ Bioventus (U.S.): SUPARTZ FX Kunming Bake
Slide 64: Cautionary Notes
■Cautionary Notes This material contains forward-looking statements regarding future management strategies or performance forecasts. These descriptions are based on judgments derived from information that is currently available to Seikagaku and are subject to risk and uncertainty. Actual results and