Seikagaku Corporation · TSE:4548
Seikagaku — 1H FY2015 Earnings Presentation
41 slides from Seikagaku's earnings presentation, November 2015
Slide 1: Financial Results for the First Half of Fiscal Year 2015
Exploring the Innovative Promise of Glycoscience Financial Results for the First Half of Fiscal Year 2015 (April 1, 2015 – September 30, 2015) http://healthy-knee.com/ （TSE：4548）
Slide 2: Overview for 1H of FY2015
Overview for 1H of FY2015 Initial FY2015 Forecasts 1H FY2015 Year-on-Year for 1H Results Change % of Change Change % of Change (Millions of Yen) Net sales 15,954 +1,706 +12.0% +204 +1.3% Operating Income 2,050 +486 +31.1% +300 +17.2% Ordinary Income 2,575 +465 +22.1% +325 +14.5% Net Income 1,941 +25
Slide 3: Net sales by Business Segment (1H of FY2015)
Net sales by Business Segment (1H of FY2015) 1H FY2015 Year-on- % of Domestic Pharmaceuticals (Millions of Yen) Results Year Change ARTZ (joint-function improvement agent) Net sales 15,954 +1,706 +12.0% Sales at the prior-year level due to promotion of generic drugs use Pharmaceuticals 13,201 +1,4
Slide 4: Net sales by Business Segment (1H of FY2015)
Net sales by Business Segment (1H of FY2015) 1H FY2015 Year-on- % of Overseas Pharmaceuticals (Millions of Yen) Results Year Change ARTZ (multiple injection) Net sales 15,954 +1,706 +12.0% SUPARTZ in the U.S: Local sales at the prior-year level. Pharmaceuticals Seikagaku sales up due to advance sh
Slide 5: Net sales by Business Segment (1H of FY2015)
Net sales by Business Segment (1H of FY2015) 1H FY2015 Year-on- % of Bulk Products (Millions of Yen) Results Year Change Sales essentially flat, with higher sales of Net sales chondroitin sulfate compensating for lower 15,954 +1,706 +12.0% sales of hyaluronic acid *Bulk Products： Pharmaceuticals 13,
Slide 6: Income for 1H of FY2015 (Year-on-Year)
Income for 1H of FY2015 (Year-on-Year) 1H FY2015 Year-on- % of Operating Income (Millions of Yen) Results Year Change Cost of Sales (-0.3pt): Net sales 15,954 +1,706 +12.0% Improvement due to factors including a volume increase for overseas pharmaceuticals and the Cost of Sales 6,544 +658 +11.2% imp
Slide 7: Results for 1H of FY2015 (comparison with the initial forecast)
Results for 1H of FY2015 (comparison with the initial forecast) Compa. 1H FY2015 % of Net sales with (Millions of Yen) Results forecasts Change Domestic Pharmaceuticals: ARTZ in Japan below forecast Net sales 15,954 +204 +1.3% Overseas Pharmaceuticals: ARTZ in China below forecast, but sales vol
Slide 8: Overview of Forecasts in FY2015
Overview of Forecasts in FY2015 * There is no change in forecast announced on May 12, 2015. FY2014 Results (Reference) FY2015 Degree of Forecasts % of Results Change Progress (Millions of Yen) Change Net sales 30,650 29,522 +1,127 +3.8% 52.1% Operating Income 2,400 2,383 +16 +0.7% 85.4% Ordinary Inc
Slide 9: Trend in R&D Expenses
Trend in R&D Expenses * There is no change in forecast announced on May 12, 2015. R&D expenses to remain at a high level in FY2015 due to progress with an open-label trial for SI-6603 in the U.S. and other projects (Millions of Yen) 27.6% R&D Expenses Ratio to Net sales 25.7% 25.6% 24.8% 8,000 21.9%
Slide 10: Domestic Sales (unit deliveries to medical institutions/Year-on-Year)
Domestic Sales (unit deliveries to medical institutions/Year-on-Year) 1H FY2015 Results FY2015 Forecasts Joint-function improving agent ARTZ Slight decrease as a result of Engage in sales activities in selected key areas the impact of promotion of generic drugs use Take share from competitors AR
Slide 11: Overseas Pharmaceuticals (value basis/Year-on-Year)
Overseas Pharmaceuticals (value basis/Year-on-Year) Overseas Pharmaceuticals FY2015 1H Results Increase on higher volumes and impact of yen Sales trend +56.4％ depreciation *Foreign exchange impact: + approx. ¥560 million (Millions of Yen) ARTZ (multiple injection) Full year <1H Breakdown> SUPARTZ
Slide 12: Product Line Enhancement Measures in the U.S.
Product Line Enhancement Measures in the U.S. ■Share Breakdown of Multiple-Injection Products in the U.S. (2014, Seikagaku estimate) Three-injection Five-injection 75% 25% 0% 25% 50% 75% 100% Three-injection Five-injection product Product SUPARTZ FXTM （NDA filed） Approval for the safety of retreat
Slide 13: Gel-One Challenges and Future Initiatives
Gel-One Challenges and Future Initiatives ◆ Low product awareness Gel-One Challenges ◆ Slower than expected pace of market penetration ◆ Seikagaku : Establishment of organizations focused solely on the U.S. market - Oct. 2014: Opening of the SEIKAGAKU U.S.A. Representative Office - May 2015: Opening
Slide 14: Sales of LAL Business (value basis/year-on-year)
Sales of LAL Business (value basis/year-on-year) LAL Business Sales trend 1H FY2015 Results: +10.9% (Year-on-Year) (Millions of Yen) Overseas Full year Contribution from volume increases for endotoxin-detecting <1H Breakdown> reagents used by pharmaceuticals manufacturers and in-vitro 5,250 diagnost
Slide 15: Basic Policy on Research and Development
Basic Policy on Research and Development Aiming for the rapid, continuous introduction of new products that meet high treatment needs, focusing on glycoscience as an area of specialization. New Orthopedic Products diseases Glycoscience Osteoarthritis(OA) Lumbar disc (GAG) herniation, etc. GAG- Modif
Slide 16: Pipeline List
Pipeline List Appli- Market Development code/ Lead indication(Product name) PI PII PIII cation approval SI-6603 SI-6603 Lumber Disk Herniation (Condoliase) SI-6603 SI-657*Additional indication for ARTZ Enthesopathy SI-657 (Hyaluronic Acid) SI-614 Dry eye SI-614 PII/III (Modified Hyaluronate) Target
Slide 17: SI-6603 Outline (treatment of lumbar disc herniation)
SI-6603 Outline (treatment of lumbar disc herniation) Reduces nerve pressure and alleviates pain by shrinking Orthopedic diseases Japan : NDA filed January 2014: NDA filed, examination ongoing Extruded Trial results announced at academic conferences: pulposus Nov. 2014: NASS 29th Annual Meeting
Slide 18: SI-657 Outline (an additional indication for ARTZ)
SI-657 Outline (an additional indication for ARTZ) Exerts an inhibitory action to improve symptoms of enthesopathy January 2015: Follow-up observation completed Japan : PIII Future development policy now being considered Orthopedic diseases ・ Lateral epicondylitis ・ Achilles tendinitis ・ patellar
Slide 19: SI-614 Outline (treatment of dry eye)
SI-614 Outline (treatment of dry eye) Improves symptoms of dry eye by protecting the ocular surface and promoting corneal epithelial wound healing Ophthalmic Substance：SI-614(Modified Hyaluronate) diseases Improve Indication ：Dry eye symptoms of dry Formulation：Ophthalmic solution eye by eye-d
Slide 20: SI-613 Outline (treatment of knee osteoarthritis)
SI-613 Outline (treatment of knee osteoarthritis) Prompt and long-term relief of severe pain and inflammation associated with knee osteoarthritis Substance: SI-613 Orthopedic *1 diseases (Hyaluronic acid-NSAID conjugates) Indication: Knee Osteoarthritis Formulation: Injection into knee joint J
Slide 21: Basic Policy on Profit Distribution
Basic Policy on Profit Distribution * There is no change in forecast announced on May 12, 2015. Dividends Aim for stable and continuous dividends with a basis of an annual dividend of ¥26 per share. Internal Reserve Appropriated for R&D, and capital investment, etc., in accordance with medium-to
Slide 22: Appendix
Appendix 1/4 SEIKAGAKU CORPORATION 22
Slide 23: Ten-Year Vision and Mid-term Management Plan
Ten-Year Vision and Mid-term Management Plan Ten-Year Vision “Global Category Pharma” Converge major R&D resources on Glycoscience and establish global competitiveness ACT for the future Advance・Challenge・Transparency Cultivation of new leads for Achieving the Ten-Year Vision Fostering of basic corp
Slide 24: Trend in Capital Investments
Trend in Capital Investments * There is no change in forecast announced on May 12, 2015. Amounts FY2014 FY2015 Facilities (¥ bill.) FY2010 FY2011 FY2012 FY2013 (Forecast) SI-6603 Bulk Start Production 1.1 '14.10 Facilities No. 5 Production Start Operation Building 9.6 '12.3 '15.1 (for ARTZ Dispo®) H
Slide 25: Trend in Depreciation
Trend in Depreciation * There is no change in forecast announced on May 12, 2015. Depreciation will peak with ¥3,300 million at FY2015 by active capital investments (Millions of Yen) 3,500 Depreciation method has 3,300 been changed to straight- line method from declining 3,000 method since FY2013 2,
Slide 26: Forecasts (Net sales) in FY2015
Forecasts(Net sales) in FY2015 * There is no change in forecast announced on May 12, 2015. FY2015 Year-on-Year % of (Millions of Yen) Forecasts Change Change Net sales Net sales 30,650 +1,127 +3.8% Forecast of higher sales due to the impact of yen depreciation and growth from Pharmaceuticals 25,400
Slide 27: Forecasts (Income) in FY2015
Forecasts(Income) in FY2015 * There is no change in forecast announced on May 12, 2015. FY2015 Year-on-Year Income % of (Millions of Yen) Forecasts Change Change Despite lower R&D expenses, a decrease in net income on higher depreciation and the end of a Net sales 30,650 +1,127 +3.8% temporary tax r
Slide 28: Trend in Financial Index
Trend in Financial Index * There is no change in forecast announced on May 12, 2015. 50% Sales Cost Ratio * 41.1% 41.8% 40% 37.3% 38.4% 38.6% 36.0% 37.0% 37.9% R&D Expenses Ratio 30% 27.6% 24.8% 25.7% 25.6% 21.9% 20.0% 22.0% 22.2% 20% 20% 17.4% 18.5% Operating Margin 17.0% 16.7% 8.1% 7.8% 10% 13.0%
Slide 29: Business Progress & Highlights
Business Progress & Highlights * There is no change in forecast announced on May 12, 2015. (Hundreds of million Yen) 350 Net Sales Operating Income 306 296 300 Net Income Approve additional indication for ARTZ in 276 276 Japan 271 295 272 270 266 250 231 228 Acquire 220 Launch ARTZ Dispo ACC Launch
Slide 30: Trend in NHI Reimbursement Price and Deliveries of ARTZ
Trend in NHI Reimbursement Price and Trend in Deliveries of ARTZ to Domestic Medical Institutions Deliveries of ARTZ to medical instituions 35,000 ARTZ Dispo NHI drug reimbursement price (including consumption tax) ¥1,885(-8.9%) 30,000 ¥1,775(-5.8%) ¥1,637(-7.7%) ¥1,526(-6.8%) ¥1,453 (Thousand units
Slide 31: Trend in Deliveries of ARTZ / OPEGAN to Domestic Medical Institutions
Trend in Deliveries of ARTZ / OPEGAN to Domestic Medical Institutions Joint-function improving agent Ophthalmic surgical aids ARTZ OPEGAN The first HA joint function improving The first domestically HA formulation agent in the world Used in cataract surgery to anterior Knee osteoarthritis (O
Slide 32: Trend in Overseas Sales of Hyaluronic Acid Products
Trend in Overseas Sales of Hyaluronic Acid Products * There is no change in forecast announced on May 12, 2015. (Millions of Yen) 8,000 Including impact of yen depreciation 7,000 Start of full scale sales for Gel-One Aug.2012 Shipment 6,000 carryover FY06 FY07 Including impact of yen 5,000 appreciat
Slide 33: U.S. Market for HA Products
U.S. Market for HA Products Number of osteoarthritis patients (estimate) Latent patients Actual Patients 125 Million 15 Million 0% 25% 50% 75% 100% Ratio of patients using HA products is less than 10% of patients receiving any treatment for osteoarthritis. There is large room to expand. HA products
Slide 34: Measures for business expansion in the U.S.
Measures for business expansion in the U.S. Measure to increase Measure to increase product awareness product value Advertising targeting physicians and Gel-One/SUPARTZ labeling SUPARTZ FX: Multiple release of a mobile app for patients change clinical trials injection-product Strengthening of sa
Slide 35: Opening of the SEIKAGAKU U.S.A. Representative Office
Opening of the SEIKAGAKU U.S.A. Representative Office Jersey City, NJ Single-injection product Gel-One® ◆ Overview of the Representative Office ◆ Date of opening: October 15, 2014 (local time) Purpose: Provision of product education to local sales Multiple-injection product reps, gathering of in
Slide 36: The LAL Business
The LAL Business What is the LAL business? The manufacturing and sale of reagents used in the quality control of pharmaceuticals and in water quality Control in dialysis at hospitals *Endotoxin detection reagents are reagents whose main ingredient is Limulus Amebocyte Lysate (LAL). *Endotoxins are s
Slide 37: SI-613 Target Patients
SI-613 Target Patients Patients with severe pain and being treated with oral or topical NSAIDs or intra-articular steroid injection Artificial joint replacement SI-613 target area Severe Steroid joint injections Oral and topical NSAIDs Moderate Hyaluronic acid products (ARTZ®, etc.) Oral NSAIDs ¥100
Slide 38: Special Profile
Special Profile Specialization in glycoscience 1st Niche field, market not big enough for the major pharmaceutical companies to penetrate Focusing on this field more than 60 years Unique business model Concentration on R&D and manufacturing 2nd R&D staff comprising one-third of our total emp
Slide 39: Our Business Segment
Our Business Segment Pharmaceutical Business Ophthalmic Surgical Aids 83.5% Domestic Pharmaceuticals Surgical Aids for Endoscopic 57.2％ Mucosal Resection Joint Function Improving Agents Net Sales ¥29,522million Bulk Products 4.8% （FY2014 Results） Bulk Products LAL Business 16.5% Overseas Pharmaceuti
Slide 40: Main Hyaluronic Acid (HA) Products
Main Hyaluronic Acid (HA) Products ARTZ® Knee osteoarthritis (OA) pain relief by multiple injections The first HA joint function improving agent in the world Main distributors: Kaken Pharmaceutical (Japan): ARTZ® Bioventus (U.S.): SUPARTZ FXTM Kunming Baker Norton Pharmaceutical (China): ARTZ® G
Slide 41: Cautionary statement regarding forward-looking information
Exploring the Innovative Promise of Glycoscience Cautionary statement regarding forward-looking information This material includes forward-looking statements based on assumptions and beliefs in light of the information currently available to management and subject to significant risks and uncertaint