Seikagaku Corporation · TSE:4548
Seikagaku — Q1 FY2023 Earnings Presentation
64 slides from Seikagaku's earnings presentation, August 2023
Slide 1: Financial Results for the 1st Quarter of Fiscal Year 2023
Exploring the Innovative Promise of Glycoscience Financial Results for the 1st Quarter of Fiscal Year 2023 （TSE：4548）
Slide 2: Contents
Exploring the Innovative Promise of Glycoscience Contents 1Q Results P3 Research and Development P10 Net Sales P3-7 SI-6603 P11 (Lumbar disc herniation) Income P8 SI-614 (Dry Eye) P12 Trend in R&D Expenses P9 SI-722 P13 (Interstitial cystitis and bladder pain syndrome) SI-449 (Adhesion Barrier) P14
Slide 3: Overview for 1Q of FY 2023
Exploring the Innovative Promise of Glycoscience Overview for 1Q of FY 2023 (Reference) Year-on-Year 1Q FY2023 Comparison with Forecasts Results Degree of Change % of Change Change (Millions of Yen) Progress Net sales 9,661 +1,353 +16.3% 32,550 29.7% Operating Income 1,298 +172 +15.3% 100 1,298.8% O
Slide 4: Net sales by Business Segment (1Q of FY2023)
Exploring the Innovative Promise of Glycoscience Net sales by Business Segment (1Q of FY2023) 1Q FY2023 Year-on- % of Domestic Pharmaceuticals (Millions of Yen) Results Year Change ▶ ARTZ（Joint-function improving agent） Net sales 9,661 +1,353 +16.3% • Slight market contraction (-1.9%) • Deliveries t
Slide 5: Net sales by Business Segment (1Q of FY2023)
Exploring the Innovative Promise of Glycoscience Net sales by Business Segment (1Q of FY2023) 1Q FY2023 Year-on- % of Domestic Pharmaceuticals (Millions of Yen) Results Year Change ▶ OPEGAN series（Ophthalmic viscoelastic devices） Net sales 9,661 +1,353 +16.3% • Market growth trend accompanying popul
Slide 6: Net sales by Business Segment (1Q of FY2023)
Exploring the Innovative Promise of Glycoscience Net sales by Business Segment (1Q of FY2023) 1Q FY2023 Year-on- % of Overseas Pharmaceuticals (Millions of Yen) Results Year Change *Foreign exchange impact on Overseas Pharmaceuticals: approx. +190million yen Net sales 9,661 +1,353 +16.3% ▶ Gel-One i
Slide 7: Net sales by Business Segment (1Q of FY2023)
Exploring the Innovative Promise of Glycoscience Net sales by Business Segment (1Q of FY2023) 1Q FY2023 Year-on- % of Bulk Products / CDMO (Millions of Yen) Results Year Change • Sales up on growth from bulk products and the positive effect of yen depreciation on contract Net sales 9,661 +1,353 +16.
Slide 8: Income for 1Q of FY2023 (Year-on-Year)
Exploring the Innovative Promise of Glycoscience Income for 1Q of FY2023(Year-on-Year) 1Q FY2023 Year-on- % of Operating Income 1,298 (+172) (Millions of Yen) Results Year Change Cost of sales ratio（+6.4pt） Net sales 9,661 +1,353 +16.3% • Cost of sales ratio up because of NHI drug price reductions a
Slide 9: Trend in R&D Expenses
Exploring the Innovative Promise of Glycoscience Trend in R&D Expenses 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 10: Pipeline List
Exploring the Innovative Promise of Glycoscience Pipeline List 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 11: SI-6603 (Treatment for Lumbar Disc Herniation)
Exploring the Innovative Promise of Glycoscience SI-6603 (Treatment for Lumbar Disc Herniation) Statistically significant results in the primary endpoint obtained in May 2023 Development status Administration image ▶ U.S. Phase III ：Starting February 2018 • Follow-up observation completed in March S
Slide 12: SI-614 (Dry Eye)
Exploring the Innovative Promise of Glycoscience SI-614 (Dry Eye) Phase III clinical study in the U.S. initiated in May 2022 Follow-up observation completed in June 2023 Development status Administration image ▶ U.S. : P III Starting May 2022 • Evaluation of efficacy and safety • Follow-up observati
Slide 13: SI-722 (Interstitial cystitis and bladder pain syndrome)
Exploring the Innovative Promise of Glycoscience SI-722 (Interstitial cystitis and bladder pain syndrome) 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 14: SI-449 (Adhesion Barrier / Medical Device)
Exploring the Innovative Promise of Glycoscience SI-449 (Adhesion Barrier / Medical Device) Follow-up observation in a pivotal study completed in June 2023 Statistically significant results in the primary and secondary endpoints obtained in July 2023 Development status Administration image ▶ Japan p
Slide 15: Basic Policy on Profit Distribution
Exploring the Innovative Promise of Glycoscience Basic Policy on Profit Distribution 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 p
Slide 16: Appendix
Exploring the Innovative Promise of Glycoscience Appendix 16
Slide 17: Overview of Forecasts in FY2023
Exploring the Innovative Promise of Glycoscience Overview of Forecasts in FY2023 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 18: Forecasts (Net sales) in FY2023
Exploring the Innovative Promise of Glycoscience Forecasts (Net sales) in FY2023 FY2023 Year-on-Year Net sales Forecasts % of (Millions of Yen) Change Forecasting a sales decrease to result from the Change impact of shipment timing on sales of overseas pharmaceuticals, despite projected increases in
Slide 19: Forecasts (Income) in FY2023
Exploring the Innovative Promise of Glycoscience Forecasts (Income) in FY2023 FY2023 Year-on-Year Operating Income Forecasts % of (Millions of Yen) Change Cost of sales ratio Change • Increase reflecting soaring fuel costs and Net sales 32,550 -906 -2.7% development of an expanded production system
Slide 20: 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 21: Safety Information on Joint Function Improving Agent JOYCLU
Exploring the Innovative Promise of Glycoscience Safety Information on Joint Function Improving Agent JOYCLU 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 22: Domestic Pharmaceuticals (FY2023 Forecast Year-on-Year)
Exploring the Innovative Promise of Glycoscience Domestic Pharmaceuticals (FY2023 Forecast Year-on-Year ) 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 23: Overseas Pharmaceuticals (Year-on-Year)
Exploring the Innovative Promise of Glycoscience Overseas Pharmaceuticals (Year-on-Year ) 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 24: Overseas Pharmaceuticals (FY2023 Forecast Year-on-Year)
Exploring the Innovative Promise of Glycoscience Overseas Pharmaceuticals (FY2023 Forecast Year-on-Year ) 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 25: Sales of LAL Business
Exploring the Innovative Promise of Glycoscience Sales of LAL Business (year-on-year / value basis) LAL Business FY2022 Results：+17.2% (Year-on-Year) Sales trend ＊Foreign exchange impact: approx. + 1,650million Overseas ＜Breakdown＞ (Millions of Yen) Sales increase due to the impact of yen depreciati
Slide 26: 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 Pha
Slide 27: Overview of Current Mid-term Management Plan
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Overview of Current Mid-term Management Plan 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 28: Overview of Key Measures
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Overview of Key Measures 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 29: Accelerate R&D Utilizing Unique Drug-Discovery Technologies
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Accelerate R&D Utilizing Unique Drug-Discovery Technologies Aim to leverage Seikagaku’s GAG-related technologies to create products needed by patients Unmet medical needs Existing fields Creation of new (orthopedics,ophthalmol
Slide 30: Pipeline List (Research and Development themes)
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Pipeline List (Research and Development themes) 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 31: 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 32: 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 33: Construct a Global Production System
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Construct a Global Production System 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 34: Strategic Direction for the LAL Business
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Strategic Direction for the LAL Business 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 35: Initiatives for Expansion of the LAL Business
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Initiatives for Expansion of the LAL Business 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 36: Materiality
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Materiality 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 37: Sustainability-Related Initiatives
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Sustainability-Related Initiatives Acceleration of multinational expansion and new drug development. Strengthening and utilization of original GAG-related basic technologies Healthcare Product improvement and post-marketing pr
Slide 38: Numerical Targets
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Numerical Targets 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) Profit ex
Slide 39: Basic Policy on Profit Distribution
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Basic Policy on Profit Distribution 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 40: Mid-term Management Plan Summary
Mid-term Management Plan Exploring the Innovative Promise of Glycoscience Mid-term Management Plan Summary 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 41: Trend in NHI Reimbursement Price of ARTZ to Domestic
Exploring the Innovative Promise of Glycoscience Trend in NHI Reimbursement Price of ARTZ to Domestic ¥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 42: 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 in cat
Slide 43: Overview of JOYCLU
Exploring the Innovative Promise of Glycoscience Overview of JOYCLU 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 44: Overview of JOYCLU
Exploring the Innovative Promise of Glycoscience Overview of JOYCLU 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 45: SI-613 (Treatment of Osteoarthritis/Enthesopathy)
Exploring the Innovative Promise of Glycoscience SI-613 (Treatment of Osteoarthritis/Enthesopathy) 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 46: 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 47: Physician and Facilities Requirements for HERNICORE Use
Exploring the Innovative Promise of Glycoscience Physician and Facilities Requirements for HERNICORE Use 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 48: Market Situation of Hyaluronic Acid Products in the U.S.
Exploring the Innovative Promise of Glycoscience Market Situation of Hyaluronic Acid Products in the U.S. 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 49: Trend in Overseas Sales of Hyaluronic Acid Products
Exploring the Innovative Promise of Glycoscience Trend in Overseas Sales of Hyaluronic Acid Products 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 50: 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 51: The LAL Business
Exploring the Innovative Promise of Glycoscience The LAL Business 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 manufacturing p
Slide 52: Outline of Associates of Cape Cod, Inc.
Exploring the Innovative Promise of Glycoscience Outline of Associates of Cape Cod, Inc. 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. Established：
Slide 53: Outline of Acquisition
Exploring the Innovative Promise of Glycoscience Outline of Acquisition 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 Acq
Slide 54: Outline of SEIKAGAKU NORTH AMERICA CORPORATION
Exploring the Innovative Promise of Glycoscience Outline of SEIKAGAKU NORTH AMERICA CORPORATION 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 E
Slide 55: Trend in Financial Index
Exploring the Innovative Trend in Financial Index Promise of Glycoscience new revenue recognition standard 60% 52.2% ● 50% 44.8% 46.2% 46.4% 46.1% 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% 26.7% (excluding royalty income)
Slide 56: Trends in Depreciation & Capital Investments
Exploring the Innovative Promise of Glycoscience Trends in Depreciation & Capital Investments 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 57: Basic Policy on Research and Development
Exploring the Innovative Promise of Glycoscience Basic Policy on Research and Development 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 Promise of Glycoscience Clinical Study Information 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 Promise of Glycoscience Contract Status by R&D Theme 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 Promise of Glycoscience Seikagaku's vision 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
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 using m
Slide 62: Our Business Segment
Exploring the Innovative Promise of Glycoscience Our Business Segment 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％ 33,456million Treatment for lumbar disc her
Slide 63: Main Hyaluronic Acid (HA) Products
Exploring the Innovative Promise of Glycoscience Main Hyaluronic Acid (HA) Products 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 Baker No
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