Slide 1: Mid-term Business Plan IBI 18 - 2016 Results and 2017 Outlook
Mid-term Business Plan “IBI 18” - 2016 Results and 2017 Outlook - CHUGAI PHARMACEUTICAL CO., LTD. President, COO Tatsuro Kosaka February 1/2, 2017
Slide 2: Forward-Looking Statements
- 2016 Results and 2017 Outlook - 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 trend
Slide 3: Overview of 2016 - Steady Start to Achieve IBI 18
- 2016 Results and 2017 Outlook - Overview of 2016 - Steady Start to Achieve IBI 18 - Achieved Core Operating Profit Target by 113.5% 3 Additional Indications and 1 Additional Dosage Form 4 Filings 2 Breakthrough Therapy Designations by the US FDA 10 New Project Initiation License-out of
Slide 4: 2016 Results
- 2016 Results and 2017 Outlook - 2016 Results Increase of sales outperforming effects of NHI drug price revisions Achieved core operating profit target by 113.5%, despite a decrease in YoY 2015 2016 2016年 achiev. billion JPY Jan -Dec Jan - Dec Growth Jan - Dec (%) actual actual forecast Revenues 49
Slide 5: Priority Agenda of IBI 18
- 2016 Results and 2017 Outlook - 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 Affaires/Safety Continuous creati
Slide 6: Results and Progress of IBI 18
- 2016 Results and 2017 Outlook - Results and Progress of IBI 18 Results/Progress Initiated P1 study for 2 antibody engineered projects (ERY974, SKY59) Drug Progress in establishment of drug discovery technologies for “middle molecules” Discovery Comprehensive collaboration agreement with Osak
Slide 7: Results and Progress of IBI 18
- 2016 Results and 2017 Outlook - Results and Progress of IBI 18 Results/Progress Steady progress in preparing the production for the launch of emicizumab Pharmaceutical Progress in enhancement of CMC development Technology infrastructure Progress in capital investment plan Increase in domes
Slide 8: Domestic System to Provide Solutions
- 2016 Results and 2017 Outlook - Domestic System to Provide Solutions Establish a system to provide advanced solutions adapted to local characteristics • Provision of solutions to meet diverse and advanced customer needs through appropriate independence and cross-functional cooperation among Market
Slide 9: 2017 Outlook
- 2016 Results and 2017 Outlook - 2017 Outlook Increase in revenues and profit led by growth of new and mainstay products and ROOI 2016 2017 billion JPY Jan - Dec Jan - Dec Growth forecast Revenues 491.8 520.5 +28.7 +5.8% Sales 472.7 490.4 +17.7 +3.7% Royalties and other 19.1 30.0 +10.9 +57.1% opera
Slide 10: Priority Agenda of 2017
- 2016 Results and 2017 Outlook - Priority Agenda of 2017 Domestic sales as “Source of Revenue” and overseas expansion of in-house products as “Source of Growth” Strengthen the basis for dramatic growth in the future by enhancing the 2 core sources Overseas Domestic Source of Growth Source of Re
Slide 11: 2017 Target: Priority Agenda of IBI 18
- 2016 Results and 2017 Outlook - 2017 Target: Priority Agenda of IBI 18 Continuous Acceleration of Sales Expansion Creation of New Growth Driver of Growth Driver Innovative Projects Development Products Sales/ Development/ Drug Discovery Pharmaceutical Technology Medical Affaires/ Safety • Establis
Slide 12: Projected Submissions (Post PoC NMEs and Products)
- 2016 Results and 2017 Outlook - Projected Submissions (Post PoC NMEs and Products) NHL: non-Hodgkin’s lymphoma RCC: renal cell carcinoma NME line extension MPM: malignant pleural mesothelioma MIUC: muscle invasive urothelial carcinoma in-house NSCLC: non-small cell lung cancer IPF: idiopathic pulm
Slide 13: FY2016 Consolidated Financial Overview (IFRS based)
FY2016 Consolidated Financial Overview (IFRS based) CHUGAI PHARMACEUTICAL CO., LTD. Executive Vice President, CFO Yoshio Itaya February 1/2, 2017
Slide 14: Full Year Results Summary
FY2016 Consolidated Financial Overview Full Year Results Summary Revenues: 491.8 billion yen (-7.0, -1.4% YoY) • Domestic sales excl. Tamiflu: increase due to steady growth of new products and mainstay products (+1.7, +0.4%) • Overseas sales: decrease of Actemra export due to supply price reductio
Slide 15: IFRS and Core Results Jan-Dec
FY2016 Consolidated Financial Overview IFRS and Core Results Jan-Dec IFRS results Non-core items Core results (Billion JPY) 2016 2016 Intangible assets Others Jan - Dec Jan - Dec (Billions of JPY) Non-Core items Revenues 491.8 491.8 Sales 472.7 472.7 1. Intangible assets: Royalties and other Amortiz
Slide 16: Financial Overview Jan - Dec
FY2016 Consolidated Financial Overview Year on Year (Core) Financial Overview Jan - Dec 2015 2016 (Billions of JPY) Jan - Dec Jan - Dec Growth (Billions of JPY) vs. Revenues vs. Revenues Revenues 498.8 491.8 -7.0 -1.4% Royalties and other operating income -11.3 Sales 468.4 472.7 +4.3 +0.9% Decrease
Slide 17: Sales (excl. Tamiflu) Jan - Dec
FY2016 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 * Details of HER2 franchise (Billions of JPY) Herceptin (34.1) +1.4, +4.3% Perjeta (11.9) +1.3, +12.3% 460.2 -1.0, -0.2% 459.2 K
Slide 18: Tamiflu Sales Trends
FY2016 Consolidated Financial Overview Tamiflu Sales Trends Fiscal Term Sales Season (Billions of JPY) FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 (from the second half of FY to Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec the first half of the next F
Slide 19: Operating Profit Jan - Dec
FY2016 Consolidated Financial Overview Year on Year (Core) Operating Profit Jan - Dec (Billion of JPY) 2015 2016 (Billions of JPY) Growth Jan - Dec Jan - Dec Gross profit Revenues 498.8 491.8 -7.0 from sales Cost of sales -238.9 -246.7 -7.8 -3.7 Gross profit 260.0 245.0 -15.0 Royalties and of which
Slide 20: Financial Overview Oct - Dec
FY2016 Consolidated Financial Overview Year on Year (Core) Financial Overview Oct – Dec 2015 2016 (Billions of JPY) Oct - Dec Oct - Dec Growth (Billions of JPY) vs. Revenues vs. Revenues Revenues 131.1 130.3 -0.8 -0.6% Increase in gross profit from sales +7.4 Sales 115.2 125.2 +10.0 +8.7% Increase i
Slide 21: Financial Overview Jan - Dec vs. Forecast
FY2016 Consolidated Financial Overview vs. Forecast (Core) Financial Overview Jan – Dec 2016 Jan - Dec (Billions of JPY) Forecast Actual +/- Achievement Revenues 495.0 491.8 -3.2 99.4% Sales 475.4 472.7 -2.7 99.4% excl. Tamiflu 466.8 459.2 -7.6 98.4% Domestic 379.0 379.7 +0.7 100.2% Export to Roche
Slide 22: Sales Progress (excl. Tamiflu) Jan - Dec
FY2016 Consolidated Financial Overview vs. Forecast (Core) Sales Progress (excl. Tamiflu) Jan – Dec Sales by Disease Area, Actual vs. Forecast Sales by Products, (Billions of JPY) Actual vs. Forecast 466.8 -7.6, -1.6% 459.2 Overseas -9.0, -13.0% Actemra Alecensa +2.3, (overseas) (11.9) 87.8 -8.3, -9
Slide 23: Impact from Foreign Exchange
FY2016 Consolidated Financial Overview vs. Forecast (Core) Impact from Foreign Exchange FX impact Jan – Dec 2016 [Reference] (Billions of JPY) Historical exchange rate to the JPY (FX impact vs. Forecast) Forecast rate JPY -4.6 145 2016 EUR 2016 CHF 2015 EUR 2015 CHF 140 Revenues Sales -2.9 135 1EUR:
Slide 24: Balance Sheet Items
FY2016 Consolidated Financial Overview vs. 2015 Year End Balance Sheet Items < Assets, Liabilities, and Net Assets > ●Increase in net working capital +43.9 2015 2016 Increase in trade accounts receivable +6.2 (Billions of JPY) Change Dec Dec Increase in inventories +24.3 Trade accounts receivable 13
Slide 25: Net Cash
FY2016 Consolidated Financial Overview vs. 2015 Year End Net Cash Total increase in net (Billions of JPY) ●Operating profit after adjustments +98.5 working capital, etc. Operating profit +76.9 -36.2 Depreciation and amortization, etc. +21.6 Operating profit Total investment after adjustments ●Total
Slide 26: Free Cash Flow Jan - Dec
FY2016 Consolidated Financial Overview vs. 2015 Year End Free Cash Flow Jan - Dec 2015 2016 (Billions of JPY) Change Jan-Dec Jan-Dec ●Operating profit after adjustment -6.9 Operating profit - IFRS basis 86.8 76.9 -9.9 Depreciation and impairment of Property, plant and equipment 14.2 14.8 +0.6 Amorti
Slide 27: Forecast 2017 Jan - Dec
FY2016 Consolidated Financial Overview 2017 Forecast (Core) Forecast 2017 Jan – Dec Actual Forecast Growth (Billions of JPY) 2016 Jan - Dec 2017 Jan - Dec vs. Revenues vs. Revenues Revenues 491.8 520.5 +28.7 +5.8% Sales 472.7 490.4 +17.7 +3.7% excl. Tamiflu 459.2 482.2 +23.0 +5.0% Domestic 379.7 393
Slide 28: Movement of Operating Profit 2015 - 2017
FY2016 Consolidated Financial Overview 2017 Forecast (Core) Movement of Operating Profit 2015 – 2017 (Billions of JPY) Royalties Royalties, and other etc. Operating operating expenses income Increase in One-time -12.0 National sales income Health Royalties volume, Insurance etc. drug price and other
Slide 29: Sales (excl. Tamiflu) Forecast vs. 2016 Actual
FY2016 Consolidated Financial Overview 2017 Forecast (Core) Sales (excl. Tamiflu) Forecast vs. 2016 Actual Sales by Disease Area, Sales by Products, Year on Year Changes (Billions of JPY) Year on Year Comparisons *) Details of HER2 franchise +23, +5.0% 482.2 Kadcyla (9.4) +1.1, +13.3% 459.2 Perjeta
Slide 30: Dividend Policy
FY2016 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 31: Current Status / Plan for Major Capital Investments
FY2016 Consolidated Financial Overview Current Status / Plan for Major Capital Investments - Building of state-of-the art R&D site to create innovative new drug candidates Main Objective - Simultaneous development and quick launch of therapeutic antibodies, etc. - Reduction of manufacturing costs fo
Slide 32: Overview of Development Pipeline
Overview of Development Pipeline CHUGAI PHARMACEUTICAL CO., LTD. Senior Vice President Head of Project & Lifecycle Management Unit Yasushi Ito February 1/2, 2017
Slide 33: Oncology Field Projects under Development
Overview of Development Pipeline Oncology Field Projects under Development (as of 1 Feb., 2017) Phase I Phase II Phase III Filed CKI27 (Japan / overseas) RG435 / Avastin AF802 (RG7853) AF802 (RG7853) - solid tumors - MPM / Alecensa (overseas) / Alecensa (EU) - NSCLC [1L] - NSCLC [post-crizotinib] RG
Slide 34: Primary Field Projects under Development
Overview of Development Pipeline Primary Field Projects under Development (as of 1 Feb., 2017) Phase I Phase II Phase III Filed ED-71 / Edirol (China) Bone & Joint - osteoporosis EOS789 Renal - hyperphosphatemia MRA / Actemra MRA / Actemra - systemic sclerosis - large-vessel vasculitis★ Autoimmune S
Slide 35: Development Status
Overview of Development Pipeline Development Status In- RG7446 / atezolizumab licensed Renal cell carcinoma (adjuvant) Started global P3 in January 2017 In- MRA / Actemra® house Large-vessel vasculitis Filed in November 2016 Giant cell arteritis Filed in November 2016 (overseas) Priority review desi
Slide 36: Other Progress (1/2)
Overview of Development Pipeline Other Progress (1/2) In- AF802 / Alecensa® house ALK positive, advanced NSCLC who have progressed on crizotinib Positive CHMP recommendation in December 2016 (EU) In- Copegus® licensed Hepatitis C / liver cirrhosis except genotype 1 (combination with sofosbuvir) File
Slide 37: Other Progress (2/2)
Overview of Development Pipeline Other Progress (2/2) In- PA799 (PI3K inhibitor) house Out-licensed exclusive rights for worldwide manufacturing, development and marketing to Menarini Group in November 2016 In- PM1183 / lurbinectedin (RNA polymerase II inhibitor) licensed In-licensed exclusive right
Slide 38: Results of Clinical Trials
Overview of Development Pipeline Results of Clinical Trials In- ACE910 / emicizumab house Hemophilia A (inhibitors) Global P3 (HAVEN 1) study met primary endpoint • A statistically significant reduction in the number of bleeds was confirmed in patients treated with emicizumab prophylaxis compared to
Slide 39: Paroxysmal Nocturnal Hemoglobinuria (PNH)
Overview of Development Pipeline Paroxysmal Nocturnal Hemoglobinuria (PNH) • An acquired hematopoietic stem cell disease associated with intravascular hemolysis by the complement, which results from clonal expansion of hematopoietic stem cells with PIG-A mutations. • Characteristic symptoms caused b
Slide 40: SKY59: anti-C5 Recycling Antibody
Overview of Development Pipeline SKY59： anti-C5 Recycling Antibody SKY59 and C5 in Complement Cascade classical lectin alternative pathway pathway pathway C3 convertase C3 convertase C4b2a C3bBb SKY59 C3 C5 convertase C5 convertase C4b2a3b C3bBb3b • Recycling antibody with a high affinity and suffic
Slide 41: Projected Submissions (Post PoC NMEs and Products)
Overview of Development Pipeline Projected Submissions (Post PoC NMEs and Products) NHL: non-Hodgkin’s lymphoma RCC: renal cell carcinoma NME line extension MPM: malignant pleural mesothelioma MIUC: muscle invasive urothelial carcinoma in-house NSCLC: non-small cell lung cancer IPF: idiopathic pulmo
Slide 42: 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 • 1st round requests: all approved (ten indications, including additional dosages and administrations, of eight products) • 2
Slide 43: Reorganization to Provide a New Solution
Reorganization to Provide a New Solution CHUGAI PHARMACEUTICAL CO., LTD. Senior Vice President, General Manager of Marketing & Sales Div. Susumu Kato February 1/2, 2017
Slide 44: Strategic Approach to Domestic Market
Reorganization to Provide a New Solution Strategic Approach to Domestic Market Spread and penetrate innovative new drugs into advanced medical institution, and expand individual strategy adopted to regional healthcare environment Patient flow / Functional differentiation Values we provide Key succes
Slide 45: Organization System of Marketing & Sales Division from April, 2017
Reorganization to Provide a New Solution Organization System of Marketing & Sales Division from April, 2017 Current 11 branches will be subdivided into 36 branches, and 7 Regional Management Offices (RMO) will be newly established The current Primary Unit (PU) and Oncology Unit (OU) will be abol
Slide 46: New Organization System for Marketing & Sales Division
Reorganization to Provide a New Solution New Organization System for Market & Sales Division (from April, 2017) Current 11 branches will be subdivided into 36 branches, and managed under 7 RMOs to strengthen area management No. of RMO Branch Area Hokkaido/Tohoku Branch Hokkaido/ Hokkaido, Aomori+Iwa
Slide 47: Strategic Resource Shift including MR Allocations
Reorganization to Provide a New Solution Strategic Resource Shift including MR Allocations MR for specialty fields will be shifted further to facilities with high expertise Allocate General MR to cover all fields From 2017.4 Current (Conceptual image) <MR Resource Shift> system Specialty fields Cha
Slide 48: Change in Chugai's Marketing & Sales System
Reorganization to Provide a New Solution Change in Chugai’s Marketing & Sales System Environmental From now on Before Change Easy to maintain expertise, by ・Restructuring to Whole area strategy corresponding prefecture-based to Community healthcare can be focusing on management of each Community exe
Slide 49: 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, Chisato Miyoshi, Yayoi Yamada Investor Relations Group Tel: +81 (0)3-3273-0554 Fax: +81 (0)3-3281-6607 e-mail: i