Fuji Pharma Co., Ltd. · TSE:4554
Fuji Pharma — Q2 FY9/2022 Earnings Presentation
55 slides from Fuji Pharma's earnings presentation, May 18, 2022
Slide 1: FY9/2022 2Q Investor Meeting Materials
FY9/2022 2Q Investor Meeting Materials May 18, 2022 Fuji Pharma Co., Ltd. TSE Prime 4554
Slide 2: Agenda
Agenda Chapter 1 Summary of FY9/22 2Q Consolidated Financial Results Chapter 2 Mid-Term Business Plan Progress ◼ Overview ◼ Women’s Healthcare ◼ Biosimilar ©2022 Fuji Pharma Co., Ltd. All rights reserved. 2
Slide 3: Summary of FY9/22 2Q Consolidated Financial Results
Chapter Summary of FY9/22 2Q 1 Consolidated Financial Results ©2022 Fuji Pharma Co., Ltd. All rights reserved. 3
Slide 4: FY9/22 2Q Financial Result Highlights
FY9/22 2Q Financial Result Highlights ⚫ Net sales and profits increase YoY contributed bynew products, product acquisition, and existing women's healthcare products Net sales：+2.6% YoY due to increase of new products, product acquisition, and and existing women's healthcare products Operating Pr
Slide 5: Summary of FY9/22 2Q Consolidated Financial Results
Summary of FY9/22 2Q Consolidated Financial Results ⚫ Net sales：+449 JPY million (+2.6% YoY) - Increase of new products, product acquisition, and existing women's healthcare products ⚫ Operating profit：+26 JPY million (+1.0% YoY) – Increase in SG&A and R&D expenses was absorbed by the increased gros
Slide 6: Summary of FY9/22 2Q Consolidated Financial Results (YoY)
Summary of FY9/22 2Q Consolidated Financial Results (YoY) Net Sales（Unit:¥million） Operating Profit（Unit:¥million） *1 IOPAMIDOL ▲149 IOHEXOL ▲213 ▲484 +137 Filgrastim ▲332 +408 ▲341 +115 +120 +254 ▲134 ▲62 +451 ▲78 ▲287 ▲156 ▲115 +647 Product acquisition from Nihon Pharma +659 17,726 17,277 CMO Busi
Slide 7: Summary of FY9/22 2Q Consolidated Financial Results (v. Forecast)
Summary of FY9/22 2Q Consolidated Financial Results (v. Forecast) Net Sales（Unit:¥million） Operating Profit（Unit:¥million） ▲836 +70 ＋2 +168 +379 ＋1 +213 ▲8 ▲43 +75 +383 +9 ＋786 +123 17,726 17,473 2,712 Product acquisition from Nihon Pharma +659 Non- CMO Business(FUJI) ∔362 OLIC 1,643 consolidated ∔6
Slide 8: Sales by Therapeutic Category
Sales by Therapeutic Category FY9/18 FY9/19 FY9/20 FY9/21 FY9/22 YoY Change First half First half First half First half First half (\million) Old accounting Old accounting Old accounting Old accounting New accounting standards standards standards standards standards Amount Ratio Hormone drugs 5,290
Slide 9: Sales of Top 15 Products
Sales of Top 15 Products FY9/18 FY9/19 FY9/20 FY9/21 FY9/22 YoY Change Product Name Therapeutic FY9/22 First half First half First half First half First half (Old accounting standards) Old accounting Old accounting Old accounting Old accounting New accounting Progress (\million) Category standards s
Slide 10: Sales by Medical Field and Drug Form Category
Sales by Medical Field and Drug Form Category Sales Breakdown by Medical Field CMO Business FY9/18 FY9/19 FY9/20 FY9/21 FY9/22 (OLIC) YoY Change Medical Field Category First half First half First half First half First half (Old accounting standards) Others 7.9% Old accounting Old accounting Old acco
Slide 11: Sales of Acute Medical Care and Women's Healthcare
Sales of Acute Medical Care and Women’s Healthcare Acute Medical Care Net Sales Percentage Others FY9/18 FY9/19 FY9/20 FY9/21 FY9/22 YoY Change Acute Medical Care First half First half First half First half First half (Old accounting standards) 25.5% Old accounting Old accounting Old accounting Old
Slide 12: FY9/22 2Q Summary of Consolidated Balance Sheet
FY9/22 2Q Summary of Consolidated Balance Sheet FY9/21 FY9/22 YoY Change (\million) Year End End of 2Q Amount Ratio Assets Decrease due to Current Assets 34,834 33,510 ▲ 1,324 -3.8% Toyama Plant Capex Cash and Deposits 10,199 5,975 ▲ 4,224 -41.4% Notes and Accounts Receivable - Trade 11,866 12,393 5
Slide 13: FY9/22 2Q Summary of Consolidated Statements of Cash Flows
FY9/22 2Q Summary of Consolidated Statements of Cash Flows FY9/21 FY9/22 YoY Change (\million) First half First half Amount Ratio Cash Flows from Operating Activities 4,405 ▲ 1,076 ▲ 5,481 -124.4% (Major Breakdown) Profit Before Income Taxes 2,871 2,865 ▲6 -0.2% Depreciation 978 1,100 122 12.5% Amor
Slide 14: FY9/22 Consolidated Forecast
FY9/22 Consolidated Forecast ⚫ Net sales：Expected to be in line with forecast, as new products, product acquisition, and existing women's healthcare products as a whole trended in line ⚫ Operating profit：Expected to be in line with forecast, as R&D expenses are delayed to the second half FY9/21 FY9/
Slide 15: FY9/22 Shareholder Return
FY9/22 Shareholder Return ⚫ Our dividend policy is to achieve a dividend payout ratio of 30% with stable dividends Therefore, we plan to pay 32 yen annual dividend by applying dividend payout ratio of 30% to FY9/22 forecast profit（Interim 15 yen, Year-end 17 yen） ⚫ Announced that the interim dividen
Slide 16: Mid-Term Business Plan Progress
©2022 Fuji Pharma Co., Ltd. All rights reserved. 2 Chapter Progress Mid-Term Business Plan 16
Slide 17: Agenda: Overview
Agenda Chapter 1 Summary of FY9/22 2Q Consolidated Financial Results Chapter 2 Mid-Term Business Plan Progress ◼ Overview ◼ Women’s Healthcare ◼ Biosimilar ©2022 Fuji Pharma Co., Ltd. All rights reserved. 17
Slide 18: Overview: Fuji Pharma as a Specialty Pharma (Business Domain)
Overview：Fuji Pharma as a Specialty Pharma (Business Domain) ⚫ The market share of generic drugs in Japan reached almost 80% (governmental target) ⚫ While the generic drugs market is expected to be flat, biosimilars and the Women's Healthcare drugs markets are expected to grow ➢ Domestic Women‘s Hea
Slide 19: Overview: Road to Specialty Pharma
Overview : Road to Specialty Pharma ➢ Our net sales trends and Women’s Healthcare new drug line-up 2008 2013 2013 2021 Dysmenorrhea Dysmenorrhea Ovulation induction drugs Oral natural progestogen drugs Treatment drugs Treatment drugs Clomid® tablets F-meno® Capsules LUNABELL® Tablets LD LUNABELL® Ta
Slide 20: Overview: Fuji Pharma as a Specialty Pharma
Overview : Fuji Pharma as a Specialty Pharma ⚫ Aggressively allocating management resources to the growing market → Women’s Healthcare and Biosimilars gain more share in sales WH 35.0 WH FY2029/9 WH FY2024/9 Sales 20.0 11.5 Sales JPY 100 bil FY2021/9 JPY 50 bil (plan) Sales (plan) JPY 34 bil BS BS C
Slide 21: Overview: Mid-term Business Plan (Announced in May 2020)
Overview :Mid-term Business Plan (Announced in May 2020) Theme Fujiらしくをあたらしく Target in 9/2029 “Evolving Fuji” Sales Business Plan based Roadmap to achieve Goal Positioning on Vision for 2030 Vision for 2030 100 JPY bil+ ⚫ No.1 in Women’s Healthcare (WH) Growth ⚫ Evolving into sustainable Contrast Me
Slide 22: Overview: Key Financial Targets (Announced in May 2020)
Overview : Key Financial Targets (Announced in May 2020) Sales(JPY bil) Operating Profit (JPY bil) Operating profit Operating margin 10.0% 50.0 5.0 9.9% 9.7% 9.3% 36.0 33.8 34.0 3.1 3.3 3.5 FY9/20 FY9/21 FY9/22 FY9/24 FY9/20 FY9/21 FY9/22 FY9/24 (Actual) (Actual) (Forecast) (Plan) (Actual) (Actual)
Slide 23: Overview: Progress Topics for the first half of FY9/2022
Overview : Progress Topics for the first half of FY9/2022 Women’s Contrast Biosimilars Overseas Healthcare Media Launched ✔ F-meno® capsules Sales started PROPESS® ✔ Developing FSN-013 ✔ ✔ (Japan, ASEAN) NHI drug price listing and additional indication for ✔ insurance coverage of infertility treatme
Slide 24: Overview: Capex on Toyama Plant
Overview：Capex on Toyama Plant 2019 2020 2021 2022 2023 WH Ground PV (Nov.) New tablet building Breaking ⚫ Hormone tablet manufacturing / expand (Dec.) testing capacity ⚫ High containment technology for hormone tablet manufacturing ⚫ Response to PIC/S GMP * inspection standards JPY 3.9 bil Ground PQ
Slide 25: Overview: Materiality (Identification, mapping, and priority)
Overview：Materiality（Identification, mapping, and priority) • As a starting point for sustainability strategy of Mid-Term Business Plan, defined 18 materiality at sustainability committee. • Prioritized 18 materiality thorough stakeholder surveys and company's executive interview. ⚫ Materiality・Map
Slide 26: Overview: Selected Actions on Materiality
Overview：Selected Actions on Materiality Environment Human Resource ➢ ISO14001 ➢ ISO45001 ➢ Selected as a Health and certificate certificate Productivity Management Organization ➢ Promoting women's empowerment （As of Apr 2022） • Number of female director and female manager ratio ‐ Female director：2
Slide 27: Agenda: Women's Healthcare
Agenda Chapter 1 Summary of FY9/22 2Q Consolidated Financial Results Chapter 2 Mid-Term Business Plan Progress ◼ Overview ◼ Women’s Healthcare ◼ Biosimilar ©2022 Fuji Pharma Co., Ltd. All rights reserved. 27
Slide 28: Contributing to well-being of women in the world
Women’s Healthcare：Contribution of Fuji to solving women’s health issues Vision for 2030 Contributing to well-being of women in the world Market Share growth growth Further expansion Women’s Healthcare • Social need is increasing • Half century activities in • Potential market high entry barrier mar
Slide 29: Contributing to well-being of women in the world
Women’s Healthcare：Contribution of Fuji to solving women’s health issues Vision for 2030 Contributing to well-being of women in the world Market Share growth growth Further expansion Women’s Healthcare • Social need is increasing • In high entry barrier • Potential market market, provides drugs oppo
Slide 30: Women's Healthcare: Contribution of Fuji to women's health issues
Women’s Healthcare：Contribution of Fuji to women’s health issues Changes in the social Women’s health issues environment ⚫ Increasing number of ⚫ Increase in menstrual disorders ⚫ Declining working women with increasing number of birthrate and ⚫ Increase in the length of lifetime menstruation aging
Slide 31: Women's health issues = Social issues
Women’s Healthcare：Women’s health issues=Social issues ✓ In recent years, media attention to women‘s health issues is rising. Media exposure has been increasing approx.1.8 times in 2 years. ✓ Increased recognition that women’s health issues is the social issue. (times) Media Exposure 8,000 Femtech 6
Slide 32: Women's Healthcare: Domestic market
Women’s Healthcare：Domestic market ⚫ Medication is one of the options for women’s health issues. ⚫ Gynecologic medical drug market is expanding despite population decrease. ➢ Transition of domestic gynecologic medical drug market and female population (age 10-69) (JPY bil) (1,000 people) JPY 86.7 10
Slide 33: Women's life stage and key health issues
Women’s Healthcare：Women’s life stage and key health issues 【 Puberty ～ Reproductive period 】 ⚫ Dysmenorrhea・Endometriosis • Dysmenorrhea Treatment drugs ： 63% increase on a volume basis in the last two years ※1 【 Reproductive period 】 ⚫ Birth control • Oral contraceptives ：Penetration rate 2.9％（Fra
Slide 34: Women's Healthcare: Raising awareness
Women’s Healthcare： Raising awareness ⚫ Sponsorship of various seminars on women's health ⚫ Utilization of health-support app "LiLuLa" Theme Title Organizer To support the Physiological Nikkei BP health and comfort project Research Institute promote the active role of women, mainly in physiology ⚫ S
Slide 35: Contributing to well-being of women in the world
Women’s Healthcare：Contribution of Fuji Pharma to solving women’s health issues Vision for 2030 Contributing to well-being of women in the world Market Share growth growth Further expansion Women’s Healthcare • Social need is increasing • In high entry barrier • Potential market market, provides dru
Slide 36: Women's healthcare: Product Portfolio
Women's healthcare：Product Portfolio Age8~9 Around Age 19 Around Age 45 Around Age 55 Puberty Reproductive period Menopause Senium LUNABELL® tablets LD/ULD Dysmenorrhea Under development FSN-013 Oral Favoir® tablets Contraception Labellefille® tablets Emergency LEVONORGESTREL tablets Contraception E
Slide 37: Women's Healthcare: Sales Composition
Women’s Healthcare：Sales Composition l’estrogel 0.06% Favoir® tablets LUNABELL® tablets LD/ULD Others Oral 18.4% Contraceptives Labellefille® tablets 26.2% Dysmenorrhea FY9/21 Treatment drugs Women's 8.8% Medical Net sales JPY 12.1 bil Endometriosis Infertility Treatment UTROGESTAN® vaginal Treatmen
Slide 38: Women's Healthcare: Sales trends and market share
Women’s Healthcare：Sales trends and market share ⚫ As a pioneer in hormone drugs, established a solid presence in women's healthcare. ⚫ Our purpose is to contribute to improving well-being of women. ⚫ While enhancing its presence as a specialty pharma company, Fuji fulfills its mission of solving he
Slide 39: Fuji Pharma's contribution to issues: Dysmenorrhea, Endometriosis
Women’s Healthcare：Fuji Pharma's contribution to issues 【 Puberty ～ Reproductive period 】 ⚫ Dysmenorrhea・Endometriosis • Dysmenorrhea Treatment drugs ： 63% increase on a volume basis in the last two years ※ Development of “FSN-013” in Japan and ASEAN is going well Japan Tie Expected Dysmenorrhea Con
Slide 40: Fuji Pharma's contribution to issues: Birth control, Pregnancy
Women’s Healthcare：Fuji Pharma's contribution to issues 【 Reproductive period 】 ⚫ Birth control • Oral contraceptives ：Penetration rate 2.9％（France 33.1%，USA 13.7%）※1 • Emergency contraceptives ：Known by only 50％ of women ※2 Strengthen enlightenment and manufacturing capacity of oral contraceptives
Slide 41: Fuji Pharma's contribution to issues: Menopause
Women’s Healthcare：Fuji Pharma's contribution to issues 【 Menopause 】 ⚫ Menopausal disorder • Estimated as 7 million women, more than half of the menopausal generation, having menopausal symptom. Based on an online survey of 3,888 women of menopausal generation (40-60 years old) ※1 • 155 thousand pe
Slide 42: Agenda: Biosimilar
Agenda Chapter 1 Summary of FY9/22 2Q Consolidated Financial Results Chapter 2 Mid-Term Business Plan Progress ◼ Overview ◼ Women’s Healthcare ◼ Biosimilar ©2022 Fuji Pharma Co., Ltd. All rights reserved. 42
Slide 43: Biosimilars: Domestic market
Biosimilars：Domestic market ⚫ Biopharmaceuticals, launched in the 1970s, faces patent expiry. ⚫ Biosimilars are gradually replacing expensive biopharmaceuticals to reduce medical costs, and the market is expanding Biopharmaceuticals as a percentage of global Domestic Biosimilar Market ($1 billion) p
Slide 44: Biosimilars: Domestic Situation
Biosimilars：Domestic Situation ⚫ Gradually advancing the use of biosimilars as a national medical policy ➢ April 2020: New incentive for introduction of biosimilars was established at the time of Revision of Medical Fee ➢ September 2021: Promoting the use of biosimilars was specified in the Pharmace
Slide 45: Biosimilars: Domestic approval status and our strategy
Biosimilars：Domestic approval status and our strategy ⚫ Biosimilars have high entry barriers ➢ High cost for domestic development (clinical trials are required) ➢ Necessity of securing API to achieve stable supply ➢ Manufacturing facilities and technologies for a wide variety of dosage forms of biop
Slide 46: Biosimilars: Development progress
Biosimilars：Development progress ⚫ November 2018：Agreed the partnership with Alvotech to commercialize biosimilars in Japan ⚫ February 2022：Agreed the terms with Alvotech for the development and marketing of 1 product in Japan Fuji & Alvotech have reached agreement on the terms for total 6 products
Slide 47: Biosimilars: Acquisition of products from Nihon Pharmaceutical
Biosimilars：Acquisition of 4 products from Nihon Pharmaceutical Co., Ltd. ⚫ Overview • December 28, 2021：Concluded an asset transfer agreement to acquire marketing approval for 4 products from Nihon Pharma • February 28, 2022：Completion of the asset transfer related to the acquisition from Nihon Pha
Slide 48: Biosimilars: Leveraging products acquired from Nihon Pharma
Biosimilars：Leveraging products acquired from Nihon Pharma ⚫ Purpose of Acquisition • Foundation for future sales of biosimilars • With the products acquired from Nihon Pharma, we will build relationships with medical departments to secure a foundation for marketing of biosimilar products Product na
Slide 49: Appendix
Appendix 49
Slide 50: COGS, SG&A, and R&D expenditure ratios trends
COGS, SG&A, and R&D expenditure ratios trends（New accounting standards） （¥ million） 40,000 70.0% 35,000 60.0% 62.8% 61.8% 61.1% 60.8% 59.6% Consolidated Sales 58.6% 59.0% 30,000 50.0% COGS Ratio 25,000 40.0% 20,000 30,274 32,972 33,850 36,090 34,391 32,304 32,645 35,966 SG&A Expense Ratio 30.0% （Exc
Slide 51: Impact of NHI drug price revisions
Impact of NHI drug price revisions Drug price revision rate（Drug cost base） Our drug price revision rate (%) 0.0 ▲ 1.0 ▲ 1.4 * * ▲ 2.0 ▲ 2.65 ▲ 2.40 ▲ 3.0 ▲ 4.0 ▲ 5.0 * ▲ 5.57 ▲ 4.38 ▲ 5.8 ▲ 6.0 ▲ 6.7 ▲ 6.5 * ▲ 6.00 ▲ 5.5 ▲ 6.2 ▲ 7.0 ▲ 6.69 ▲ 8.0 ▲ 7.48 ▲ 7.7 ▲ 7.8 ▲ 9.0 2012 2014 2016 2018 2019 202
Slide 52: Sales of key products
Sales of 6 key products (JPY bil) 9/2022 2Q 9/2024 WH 6 Products Adaptation Situation 9/2020 9/2021 (Actual) (Plan) Market expansion due LEVONORGESTREL Emergency to launch of generic 0.6 0.8 0.4 1.5 (the same)* contraception drugs Maintain +80% volume share Favoir® (Ethinylestradiol / Domestic oral
Slide 53: FSN-013 (Japan)
FSN-013 (Japan) Overview ⚫ Next-generation novel dysmenorrhea drugs ⚫ Combination with progesterone (drospirenone) ⚫ Estetrol is a novel unique estrogen ⚫ It is expected and developed to reduce the commonly reported side effects of a combination containing estrogen (ethinylestradiol), which is used
Slide 54: Capex on Toyama Plant
Capex on Toyama Plant 2019 2020 2021 2022 2023 WH Ground PV (Nov.) New tablet building Breaking ⚫ Hormone tablet manufacturing / expand (Dec.) testing capacity ⚫ High containment technology for hormone tablet manufacturing ⚫ Response to PIC/S GMP * inspection standards JPY 3.9 bil Ground PQ (Mar.) A
Slide 55: Note on forecast and prospects / Contact Information
Note on forecast and prospects The financial forecasts and other projections provided in this presentation are based on information available at the time of its compilation and it therefore contains an element of uncertainty and potential risks. Actual results may differ significantly from these for